Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

Lots of questions from someone who understands pretty well how this Department works. The loan schemes have been a response to market failure at different times. We have looked at the State de-risking lending in targeted areas, whether that is linked to business supply chains that have been impacted by the war in Ukraine or whether it was rebuilding businesses post Covid and so on. Sometimes loan schemes need to be tailored for the conditions in the economy at the time. Sometimes that happens at short notice because significant disruptors make the availability of capital and finance more difficult. I acknowledge what the Deputy saying, that having a more consistent and permanent availability of finance is also necessary.

Regarding the setting of KPIs for green preparedness, it not a surprise there is a lot of discussion in Government on how we facilitate data centres rather than whether we do so. We have a Government statement, which is effectively policy on the facilitation of sustainable data centres in the future, which requires data centres to have a plan to move to renewable fuels in the future and requires data centres to have a backup should there be difficulties on the grid from an energy security point view of providing power. In my view, there will be no digital economy in Ireland without data centres in the future. They are essential to the decarbonisation of our economy regarding how we manage energy and how we manage, store and protect data.

The uncertainty and ongoing discussion around the contribution of data centres to pressure on the grid and the emissions as a result of the electricity generated that is needed for data centres is something the Government is very focused on. Many new data centres being built in Ireland are funding significant onshore wind projects as proof of sustainability. This is to be consistent with the Government data centre statement. This is a good thing and it is driving the development of renewables. If we look at where Ireland wants to be over the next few decades, we have a plan to have power generation capacity offshore of approximately 37 GW and approximately 10 GW onshore. That is, from wind alone, never mind other renewable power sources. At the moment, Ireland's grid only uses about 5 GW. The whole point of decarbonising our electricity generation and moving away from carbon-based fuels to more renewable and clean power generation capacity is to do what we need to from a climate perspective to reduce emissions and meet targets but also to make sure we have an abundant, clean source of power to enable us to build new industries and a stronger, more resilient economy. A big part of this is data centres.

The uncertainty and ongoing discussion around the contribution of data centres to pressure on the grid and the emissions as a result of the electricity generated that is needed for data centres is something the Government is very focused on. Many new data centres being built in Ireland are funding significant onshore wind projects as proof of sustainability. This is to be consistent with the Government data centre statement, which is a good thing and it is driving the development of renewables. If we look at where Ireland wants to be over the next few decadese have a plan to have power generation capacity offshore of approximately 37 GW and approximately 10 GW onshore. That is, from wind alone, never mind other renewable power sources. At the moment, Ireland's grid only uses about 5 GW. The whole point of decarbonising our electricity generation and moving away from carbon-based fuels to more renewable and clean power generation capacity is to do what we need to from a climate perspective to reduce emissions and meet targetsis It . also to make sure that we have an abundant, clean source of power to enable us to build new industries and a stronger, more resilient economy. A big part of this is data centres.

We have challenge in this transition period from where we are today to where we will be post 2028 in terms of renewables that we have to find a way of managing sustainably within the targets we are setting ourselves from a climate perspective. The idea that we simply stop building data centres to meet targets would be very counterproductive from an economic development and enterprise development perspective. The world will be driven by digital data management in the future, whether it is healthcare, education, industry or manufacturing. If we cannot manage and store data in Ireland and use data safely and appropriately, the growth potential for the Irish economy will be severely constrained.

Regarding business start-ups, the OECD is currently doing a study for us to examine what more we can do for start-up accelerator programmes. We are already doing quite a lot of work in this area. The Deputy may have seen the extraordinary growth in the innovation hubs around the country. There are approximately 300 of them now. The State has put more than €200 million into some 270 innovation hubs. This is about providing local ecosystems for start-ups, founders and entrepreneurs to enable them to develop businesses in their own communities, with high-speed broadband access while being surrounded by an innovative ecosystem. Can we do more in terms of start-ups and scaling? I believe we can. Many Irish businesses grow to a certain point and then become very attractive in terms of acquisition. Some brilliant businesses are effectively subsumed by multinationals as opposed to continuing to grow as Irish businesses. We are trying to interrupt this. Enterprise Ireland is very focused on how we scale Irish businesses and keep them supported.

We are doing quite a bit on funding as well.

The Deputy will have noticed in the budget that the Minister, Deputy McGrath, and I launched a new initiative around business angels, making it more tax efficient for business angels to invest in high-potential start-ups. We will see more coming from the Department of Finance and from this Department in that space between now and the next budget.

There is quite a lot happening in start-ups but we can constantly do more. Start-ups and scaling are slightly different challenges but they are interconnected and there is quite a lot of focus on that. We are looking at new initiatives in the start-up space to try to make Ireland a place where international start-ups would look to locate and build a global business. Ireland should be more competitive in that space than we are today and so we are looking at other projects around Europe where, perhaps, we could learn lessons. These include places like Station F in Paris, and so on. However, do not underestimate what is actually happening in Ireland. As a percentage of the population in businesses, Ireland is developing more unicorns than most other economies, certainly in Europe. We are achieving positive outcomes, but can we do better? Of course we can, and we are constantly trying to do that and look for new ways of doing it.

Regarding apprenticeships, first of all, a lot of positive things are happening. The Minister, Deputy Harris, would say he hopes to have an extra 9,000 apprentices in place by the end of this year. Perhaps my Department needs to focus more on what we can do to work with employers to create more spaces and opportunities for apprentices. It is something we will take a look at and come back to the Deputy on. There has certainly been a significant number of new apprentice areas and opportunities that the Department of higher education has been driving. I would like to think that industry is responding to that, but if there are sectors where it is not, perhaps we can work through our agencies or directly with business bodies to get better outcomes.

On business costs, some of the increased business costs we have seen in recent years are driven by issues that are completely outside the control of the Government: Covid-19, Ukraine, dramatic increases in the cost of doing business, significant disruption in supply chains, and much more expensive finance options. Then there are other areas where Ireland is effectively modernising its workplace and protecting workers and their incomes to make sure work pays, which is a big mantra for Government. One of the biggest challenges that many small businesses face today is that they cannot get people, which is why we are signing off on nearly 40,000 work permits from abroad. We have to make sure we are attracting as many people into the workplace as possible. Interestingly, the decisions that have been made in the UK in recent weeks mean that, unusually, the minimum wage in Great Britain and Northern Ireland will be significantly higher than that of the Republic of Ireland. I am not sure whether that is the first time but that certainly has not been the case in recent years. With the exchange rate as it is at the moment, the minimum wage in Northern Ireland and across GB will be more than €13 per hour.

Of course, sick pay in the UK has been well beyond what we have provided for many years, and auto-enrolment has been in place for quite some time. It is true that the cumulative impact of these changes is putting pressure on businesses but we are also trying to focus on making sure the workplace in Ireland is attracting skills and workers. There is a balance to be had but I take the point that has to be paid for by employers and, to a certain extent, employees in auto-enrolment.