Maurice Quinlivan (Limerick City, Sinn Fein)
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38. To ask the Minister for Jobs, Enterprise and Innovation the contingency plans her Department is putting in place for businesses for the possibility of a no deal Brexit. [49573/17]

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.

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. These studies examine a range of scenarios, including a hard Brexit scenario, 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 to understand the implications of a number of Brexit scenarios on our trading patterns, and another study considering the implications of Brexit for our most exposed sectors.

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.