Thursday, 17 December 2020
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
97. To ask the Minister for Enterprise, Trade and Employment the analysis his Department has carried out into the low uptake of the Brexit loan scheme compared to the uptake of the future growth loan scheme; if unexpended Brexit loan scheme funding will be available for repurposing through bespoke supports for microenterprises and small enterprises; and if he will make a statement on the matter. [43941/20]
I ask my question in the context of the Irish Government's economic and evaluation service spending review and assessment of the impact of Brexit and Covid-19 on Údarás na Gaeltachta and its client companies. Specifically, what analysis has the Tánaiste’s Department carried out on the low uptake of the Brexit loan scheme compared to the uptake of the future growth loan scheme?
The Brexit loan scheme and the future growth loan scheme have very different objectives and were both established prior to the onset of the pandemic. The Brexit loan scheme was launched in 2018 to provide SMEs and companies with fewer than 500 employees with an option to access competitively priced working capital finance to help them to mitigate and react to the impacts of Brexit. It was intended that the scheme would be available for one year prior to and one year after Brexit. With the repeated deferrals to the Brexit deadline and the transition period, many businesses, quite naturally, delayed their Brexit preparations. The added disruption of the Covid-19 pandemic has meant that businesses have had to focus their efforts through much of 2020 on successfully navigating this unforeseen crisis. These factors have resulted in a modest uptake of the Brexit loan scheme to date with approximately €57 million in loans approved to 281 businesses.
In comparison, the future growth loan scheme, which was established to provide long-term lending to SMEs and also aimed to close an identified gap in low investment and underinvestment among Irish SMEs, has seen a rapid uptake from its launch in April 2019. The initial €300 million scheme was expanded by the Government through a further €500 million in available lending. There continues to be high demand for the scheme and to date €523 million of the €800 million scheme has been sanctioned for 2,601 businesses. It is very encouraging news that even at this time, so many businesses are seeing opportunities for expansion and are taking steps to invest in their businesses to ensure their longer-term sustainability and growth. However, Brexit will mean change for Irish businesses, and it is imperative that the option of providing access to working capital remains available. In this regard, I have extended the Brexit loan scheme so that it will remain in place through the entirety of 2021.
I ask that the Tánaiste might address himself to the spending review because it is very interesting with reference to the Gaeltacht areas. First, 85% of all of the jobs there are in microenterprises of less than ten employees. Second, they are the most exposed sector to Brexit in all of Ireland. Why is that? It is because most of their exports go to Britain. I know that the Tánaiste is well aware of this but I will give him a number observations from this review:
Gaeltacht companies are significantly more exposed to a disorderly Brexit than the Irish economy in general, due to their reliance on the UK as both an export market and a source of raw materials and other imports ... In 2018 31% of ÚnaG companies exports went to the UK... [and] ...82% of ÚnaG client companies [surveyed as part of the review] had not applied for any Brexit supports.
I could go on. The review identifies the problems in that the packages available are not targeted, which is one of the review's main findings. We need targeted and focused supports for the small businesses in the Gaeltacht areas.
I believe these schemes are targeted. There are many different loan and grant schemes. It may be the case that they are not targeted particularly to the Gaeltacht but they are targeted to small businesses. Microenterprises, which the Deputy mentioned, and enterprises with fewer than ten employees can benefit from the Microfinance Ireland loans, and there has been a very good uptake of that. That is effectively an interest-free loan for the first year and a low interest rate thereafter. I would also encourage small businesses in the Gaeltacht that are trading with Britain to avail of the €9,000 grant which we are making available through Enterprise Ireland to enable them to either take somebody on to do customs, or, if they are very small and that is not what they need, to redeploy somebody in the business towards customs so that they are ready for trading with Britain on 1 January.
Tá a fhios agam go bhfuil an Tánaiste tiomanta don Ghaeilge agus, ar ndóigh, tá éacht déanta aige. Is eiseamláir é ó thaobh na Gaeilge ach maidir leis an gceist seo, tá sé thar a bheith soiléir nach bhfuil an tacaíocht ar fáil do na daoine ar an talamh. Mar shampla, má léann sé an giota seo as an tuarascáil:
Despite the large suite of measures available to companies through Enterprise Ireland to deal with Covid-19 take up by ÚnaG client companies was very low. Feedback from those companies would suggest that this is in large part due to the fact that many of the supports were in the form of repayable grants or low-cost loans.
The report continues:
The feedback from Údarás na Gaeltachta is that the small Local Enterprise Office Covid-19 grants have worked well due to the fact they are easily accessible, with a simple application form and open to the wider business community. This demonstrates that there is an appetite for micro and small enterprises to engage with the development agency when the product offering addresses their core issues.
This is a very interesting review if the Tánaiste has the opportunity to read it. I pay tribute to the writers who have made it very readable and accessible. They are highlighting that the Gaeltacht areas, in particular, are suffering for the reasons I have outlined. We first need a recognition from the Government and then a targeted approach. That is why I asked the Tánaiste what analysis has been carried out.
Tá an tacaíocht ar fáil do na daoine agus do na fiontair ar an talamh. I will take a look at that review. I received a brief summary of it but I have not read it from cover to cover and I will do that over the Christmas break. We have a package of grants and loans. There is, of course, more demand for grants than for loans because grants are not repayable and that will always be the case. Businesses taking on debt need to make a decision on whether they want to do this. One of the reasons the future growth loan scheme has been so successful is because it is long-term money at a low interest rate for businesses that can afford to expand. These are businesses that can afford to repay loans. The other loans are for working capital, which is short-term lending to get over the hump of Brexit or the pandemic, and there has been less demand for them.
It might be the case in Gaeltacht regions that people are not getting the level of information they should be getting on what is available. If one takes the grant for customs, for example, just 300 companies, approximately, have availed of that so far. I will definitely look at that review to see if there is something we can do that is focused on Gaeltacht businesses.