James Lawless (Kildare North, Fianna Fail)
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345. To ask the Minister for Jobs, Enterprise and Innovation the work her Department is engaged in to allow the Government to be in a position to provide State aid to businesses that directly and detrimentally are affected by Brexit; and if she will make a statement on the matter. [5078/17]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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The Government is acutely conscious of the uncertainty created by the result of the 2016 UK Referendum and the need to consider the types of supports that Irish businesses may require to address any adverse trading conditions arising as a result of Brexit. Clearly, volatility in exchange rates has been challenging for exporters who are reliant on the UK market, operate with low margins and have no hedging strategy in place.

Given that Brexit is likely to represent a structural shift in the UK trading relations with partners, short, medium and long term responses are needed. These include market diversification, cost reduction, innovation and price repositioning. My Department, Enterprise Ireland (EI) and the Local Enterprise Offices (LEOs) have measures in place to address these issues for client companies.

The LEOs are working in partnership with EI to ensure consistency in terms of delivery of Brexit interventions which will be based on the fundamental process of information provision, analysis, planning and support mapping and delivery. The LEO Capital allocation was increased by €4m for 2017 and the LEOs will use the additional monies to enhance the competitiveness and longer-term sustainability of start-ups, micro and small firms, which is of critical importance in the context of Brexit. Targeted initiatives will be rolled out through every LEO to develop capabilities in innovation, market diversification, cost competitiveness and business management.

In addition, I secured additional monies for 2017 to provide for 39 targeted posts in Enterprise Ireland to enable it to support its clients across all markets. EI will provide various targeted supports and programmes in terms of management capability, leadership, marketing/sales skills, innovation and R&D to help companies to build market share and create new market opportunities. EI will also deliver a suite of supports that help clients reduce supply-chain costs and drive efficiencies and cost reductions as a means of improving operating margins, thereby increasing competitiveness.

Last autumn, officials of my Department initiated discussions with senior officials from DG Competition to sensitise them to the potential difficulties to be encountered by Irish businesses in the UK market arising from the Brexit referendum result. These discussions are by no means over and will continue to address all relevant issues relating to any proposals emerging from my officials’ engagement with industry.

My Department, working closely with the Department of Finance, the Strategic Banking Corporation of Ireland (SBCI), EI and stakeholders (such as SFA, ISME, IBEC and Chambers), has conducted a structured engagement with a diverse range of companies across sectors and regions. The purpose of this engagement is to construct an evidence base on which appropriate, tailored and targeted responses can be delivered to meet real identified business needs. Work on this is well advanced and we hope to have the results of the structured engagement shortly.

The outcome of the structured engagement, along with market developments as a result of Brexit, will inform further discussions with the Commission and the development of any further initiatives to business.