Bernard Durkan (Kildare North, Fine Gael)
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47. To ask the Minister for Jobs, Enterprise and Innovation the extent to which she has put in place, or is putting in place, measures to offset the impact of Brexit here with particular reference to exports and imports with the UK; and if she will make a statement on the matter. [49776/17]

Frances Fitzgerald (Dublin Mid West, Fine Gael)
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The UK decision to exit the EU will have direct and profound impact on many key policy and operational areas across DBEI and its Agencies. In advance of the Referendum my Department conducted a contingency risk assessment of the potential impacts of Brexit across policy areas of my Department. Given that the EU’s initial negotiating position is now clear, all of Government is intensifying its focus on the economic implications of Brexit, including on domestic policy measures to reinforce the competitiveness of the Irish economy, to protect it from potential negative impacts of Brexit, and to pursue all possible opportunities (e.g. foreign direct investment) that might arise. My Department is central to the Government wide effort to prepare our economy to respond to Brexit.

On 9 November, I published “Building Stronger Business: Responding to Brexit by competing, innovating and trading”. This paper sets out work underway, and planned, by my Department and its Agencies in response to Brexit. The paper summarises the impact of Brexit across key policy areas within my Department and outlines the policy and operational measures underway and planned by my Department and its Agencies to respond to Brexit, including supports available to companies to help them prepare for Brexit, regardless of the deal that emerges from the Brexit negotiations.

Building Stronger Business also describes the research programme underway in DBEI to inform that response, as well as new structures put in place to ensure a coherent approach across the Department and its Agencies.

Enterprise Ireland has set strategic ambitions to increase client exports by €5 billion to €26 billion per annum by 2020 and to support clients in the creation of 60,000 new jobs, as well as sustaining the existing 200,000 record level of jobs. EI will achieve these ambitious objectives by:

- Increasing the levels of diversification of EI client companies into new export markets, with two thirds going beyond the UK;

- Improving the competitiveness of EI client companies through Lean programmes;

- Driving the innovation in Irish enterprise through new supports to reach a target of €1.25 billion in R&D expenditure per annum by 2020; and

- Inspiring more companies to have Global Ambition.

IDA Ireland is constantly engaged with clients across its entire portfolio and in the months leading up to the UK referendum it engaged with clients and prospective clients in relation to the potential impact of BREXIT.  The IDA has a Team involved in strategic scenario planning, which continues to work on ensuring that the Agency’s strategy is fit for purpose in light of the referendum results in the UK.

 IDA Ireland will:

- Continue to engage with current and prospective clients on Brexit and the potential implications of the UK’s departure from the EU for their investment decisions;

- carry out updated analysis and research on the FDI risks and opportunities associated with Brexit. This will include assessing new feedback from IDA clients on issues relating to Brexit;

- continue to hold events in key international locations, to promote Ireland as an attractive investment destination in the post-Brexit environment.

InterTrade Ireland provides a targeted portfolio of programmes to help businesses, especially SMEs, develop capacity in the areas of science, technology & innovation and sales & marketing. Given its role in promoting and supporting North- South commerce, ITI is especially well-positioned to help businesses both prepare for and address challenges that Brexit may present for cross-border trade. With that in mind, the Department has put in place two specific ITI Brexit initiatives.

- The Department funded a research project undertaken by the ESRI for InterTrade Ireland. This study provides useful data on the extent and concentration of cross-border trade, including information on this trade by product, firm types and barriers to trade.

- Additional funding was provided to ITI to undertake a range of initiatives for SMEs in the Republic of Ireland who are trading with Northern Ireland, to help them adapt to the changed circumstances following the UK’s withdrawal from the EU. In May, InterTrade Ireland utilised this funding to launch a new dedicated ‘Brexit Advisory Service’. This Service offers businesses a number of supports, including vouchers (valued at €1,000 allowing them to fund specialist advice), technical and commercial advice, information on currency hedging and an interactive information tool explaining the technical language related to Brexit.

In addition, ITI is establishing a Sectoral Advisory Panel, consisting of experts with hands-on exporting experience in specific sectors, to help ITI assess the impact of Brexit changes on particular sectors as negotiations evolve.

In terms of the research projects underway in my Department, studies are being done to enhance our understanding of the possible implications of Brexit on Ireland for enterprise, consumers and trading relations and will take account of potential changes to the conditions facing exporters and importers. These studies examine a range of scenarios and will provide an evidence base to inform Ireland’s policy positions as part of the wider negotiation on the UK’s future relationship with the EU and will help us to continue to develop further mitigation measures to respond to Brexit.

These studies include a study examining the Import Content of Irish Exports: Implications of Brexit for Inputs and Competitiveness and the extent to which Irish firms source intermediate inputs from the UK. This research will provide empirical evidence on the import content of Irish firms’ exports, how firms may be exposed to changes in the trading environment after Brexit and the impact of Brexit on inputs, and competitiveness.

In addition to these studies, the Action Plan for Jobs and Enterprise 2025 are part of a range of policy documents setting out our overall approach to enterprise policy.

Enterprise 2025 sets out a long-term ambition and strategy to encourage and facilitate enterprise growth and job creation. This document addresses the broader enterprise environment and also sets out the rationale for a range of enterprise supports. As part of DBEI’s overall response to Brexit, a review of Enterprise 2025 is currently underway to determine the extent to which the policy framework and priorities set out in Enterprise 2025 remain robust in light of recent significant and potentially disruptive changes in the global environment, with a particular focus on Brexit.

The Action Plan for Jobs has been an essential tool from a competitiveness perspective and has been successful in driving coordinated actions to improve job creation, broaden the export and enterprise base, and enhance competitiveness.  APJ 2018 will provide a platform to develop and implement immediate, short terms actions to support enterprise and address the challenges which firms are already facing as a result of the UK’s decision to exit the EU. 

Budget 2018 contained some important pro-business measures to help companies compete in the face of Brexit including:

- New €300 million Brexit Loan Scheme for Business;

- Doubling of additional DBEI Brexit related agency staff to 100;

- New €25m Regional Fund Competitive Call from Enterprise Ireland;

- Tax package to support Enterprise and investment to attract jobs to Regions;

- Investment in PhD & Research Masters Programme to meet enterprise skills needs;

- SFI Research Centres to increase from 12 to 17 with new Capital funding; and

- Ireland to become a member of European Southern Observatory in 2018.

I also secured an additional €3 million in current funding in both 2017 and 2018 to recruit up to 100 additional staff, specifically to assist in the response to the evolving Brexit situation. As well as supporting Brexit-related staffing within my Department, these resources have been distributed across Enterprise Ireland, IDA Ireland, Science Foundation Ireland and the Health and Safety Authority. These additional resources will be assigned to both overseas offices in markets that are growing and have scale and markets where we are already well-established but with potential for further growth. Irish based posts will address a range of Brexit issues, including the support for internationalisation activities, a strengthening of the LEOs ability to respond locally to help micro-enterprises, and enhanced support for innovation.

It is essential that Government supports are definitively targeted at vulnerable, but viable companies.  My Department is developing specific supports for companies to mitigate these impacts. In response, working in partnership with the Department of Agriculture, Food and the Marine, DBEI has secured Budget funding for a Brexit Loan Scheme which aims to make up to €300 million available to businesses with up to 499 employees at a proposed interest rate of 4 per cent. The scheme is open both to State Agency clients and those businesses that do not have any relationship with State Agencies. The finance will be easier to access, more competitively priced, and at more favourable terms than current offerings.

Additional measures compatible with the EU State Aid framework are also under active consideration:

- A longer-term investment loan guarantee scheme which would focus on Business Development to allow SMEs to invest for a post-Brexit environment and to address potential disruption that might arise (i.e. new market entry and development costs, trade facilitation requirements, new trading arrangements and possible tariffs, transport costs and trans-shipment costs, changes to regulations and standards and border controls and certification). It is intended that the Scheme will operate under the State Aid General Block Exemption Regulation.

- A rescue and restructure scheme was pre-notified to the Commission at the end of August. It is envisaged that this scheme would apply to all SMEs in the manufacturing or internationally traded services sectors, as well as to the fisheries and aquaculture sector, and SMEs engaged in processing and marketing in the agricultural sector.

In addition to these measures, it is proposed that a Business Advisory Hub be established which would focus on business development to allow enterprises to position them for a post-Brexit environment. This would build on the existing supports available and on work being undertaken by Enterprise Ireland, the Local Enterprise Offices and the Credit Review Office.

Bernard Durkan (Kildare North, Fine Gael)
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48. To ask the Minister for Jobs, Enterprise and Innovation the extent to which she has identified the sectors most likely to be negatively impacted by Brexit; the steps taken to alleviate such an impact; and if she will make a statement on the matter. [49777/17]

Frances Fitzgerald (Dublin Mid West, Fine Gael)
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My Department and its enterprise agencies are focused on assisting companies to prepare for the UK's withdrawal from the EU. This includes efforts to build awareness of sector-specific challenges that Brexit is likely to pose.

Much of our broader work so far to help mitigate the impact of Brexit on Irish firms is captured in my Department's recently published response paper to the UK's impending exit from the EU, entitled "Building Stronger Business - Responding to Brexit by Competing, Innovating and Trading". This paper summarises the policy measures already taken, outlines future initiatives we intend to take forward and details the steps the Department has taken already to ensure that we can work as efficiently as possible to support our companies.

To inform policy, develop effective mitigation strategies and help prepare Ireland’s position on our trade priorities, DBEI had already published a number of reports and is currently engaged in a suite of studies. A significant amount of this analysis is undertaken at sectoral level.

Completed research includes the outputs from a series of structured engagements with companies (of different sizes, across different sectors and across the regions) and from a survey of a thousand SME business owners to "Understand the Implications of Brexit for Irish SME’s" which my Department published earlier this year. Additionally, a study analysing the "Potential Impact of WTO Tariffs on Cross-Border Trade" was published by InterTrade Ireland in conjunction with my Department in June. This study provides an understanding of the impact of different trade and tariff regimes which might be imposed following Brexit and includes a sectoral focus.

In terms of ongoing research commitments, the Department is currently working on:

- A  major study examining the "Strategic Implications arising from EU-UK Trading Patterns". This study will provide an evidence base on key trade and investment questions to inform Ireland’s position as part of the wider negotiation on the UK’s future relationship with the EU. It will quantify the possible impact of a range of Brexit scenarios on trade and investment. The study will provide in-depth analysis of key sectors.  It will decompose the potential trade and investment impacts for key sectors and in each scenario identify which elements contribute to the results (i.e. tariffs, non-tariff barriers, transit costs, other trade costs), leading to sector-by-sector understanding of solutions.

- A study examining the "Sectoral implications arising from Brexit" focused on 18 sectors most exposed to the UK is underway and is due to be completed by end 2017. This research examines the implications at firm-level for Ireland’s most exposed enterprise sectors of the UK being outside of the European Single Market and Customs Union. The study is expected to be completed by end 2017.   

- A study examining the "Import Content of Irish Exports: Implications of Brexit for Inputs and Competitiveness" and the extent to which Irish firms source intermediate inputs from the UK has just commenced. This research will provide empirical evidence on the import content of Irish firms’ exports, how firms & sectors may be exposed to changes in the trading environment after Brexit and the impact of Brexit on inputs, and competitiveness.

- A study examining the "Skills needs arising from the Potential Trading and Regulatory Implications of Brexit" has commenced – with a particular focus on sectors such as logistics and freight. This research is being undertaken in my Department on behalf of the Expert Group on Future Skills Needs.

The outcomes of this research will inform policy decisions relating to the immediate support for enterprise, developing effective mitigation actions and preparing our longer term desired outcomes from the negotiations.  

Our State Agencies are already very active in taking forward projects aimed at helping businesses in Ireland prepare for the post-Brexit commercial environment.

Enterprise Ireland and the LEOs are steadily working with companies to make sure that they are better prepared to respond to the challenges that Brexit will bring.  These are the medium term, strategic actions that I know that companies are calling for – things like helping them to drive down costs, diversify into new markets and innovate in the way they do business.

Enterprise Ireland has been systematically engaging with its 1,500 clients that export to the UK and is providing information and guidance, market diversification support and competitiveness and market development support to help companies prepare for the future trading relationship with the UK.

Enterprise Ireland launched the 'Prepare for Brexit' campaign, which features the SME Scorecard tool.  The Scorecard is an interactive online platform which can be used by all companies to self-assess their exposure to Brexit and areas they may need to consider preparing further on in the context of Brexit. EI has also introduced a ‘Be Prepared Grant’ which offers up to €5,000 in funding to support exporting client companies develop a Brexit Action Plan. The 'Prepare for Brexit' campaign aims to encourage more SMEs to prepare for Brexit and start putting in place detailed plans to mitigate risks and leverage opportunities that may arise, now that Brexit negotiations have begun. Additionally, InterTrade Ireland, has introduced a scheme to help SMEs avail of expert advice on Brexit.

While progress is being made in helping sectors to prepare, we know much more work remains to be done. That is why we will remain absolutely focused on our Brexit-related initiatives and will continue to explore new avenues and means of helping our companies plan for the future.