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

The Deputy is a patient man, having waited as long as he has. I will try to answer his questions quickly. He knows this Department well.

I agree with the Deputy that the IDA and Enterprise Ireland have done Ireland an extraordinary service, particularly over the past decade or so when the economy was under real stress and pressure. They provided guidance and a supportive and pro-enterprise environment for multinationals to continue growing here and providing significant tax income for the Government to be able to support many families that were under pressure during some of those years, particularly throughout Covid and in the post-recession period of 2011 to 2013. The people leading those organisations have done an incredible job. That puts a great deal of pressure on the new generation of leaders in those organisations to continue that work. I assure the committee that there is no shortage of ambition there.

Regarding low margins and high employment levels, particularly among those employing a large percentage of their workforces on relatively low pay, there is pressure. I am not suggesting that the only solution is to consider the VAT rate again. There are people who are lobbying on that basis, but there are other tools we can use. I would not like to row back on some of the progressive changes to workers’ rights we have made in terms of sick pay, a basic minimum wage, moving towards a living wage, parental leave, etc. All of those individual policy decisions were the right ones and involved a great deal of consultation, with input from employers, trade unions and various representative bodies. There is a pressure point in certain segments of the economy that are feeling the cost increase. Despite the fact that inflation is slowing down and energy and food wholesale costs are falling, those segments are still under a great deal of pressure. From what I have seen, well-run businesses in certain sectors are finding that they simply cannot carve out a margin. We must consider how we can respond to this. We will do so. When it is finalised, I wish to share with committee members the work that the Department has done in this regard.

Regarding the measure of outputs and outcomes, I am told that we have many more metrics in the Revised Estimates. The Deputy will not be surprised to know that. We review our metrics every year. We will take on board some of his suggestions, but we do not accept his comments as they relate to metrics like job creation, innovation, collaboration, etc. Regarding the regulatory measures that are being introduced, I outlined in my opening statement the incredible extra amount of work that the regulatory bodies that my Department is responsible for are doing, particularly on the shift towards the management of a digital single market, online safety and so on. There are many metrics in that space. However, I take the Deputy’s criticism on board.

We should be more upfront about that in the metrics we make available to the committee.

I share the concern on EirGrid. We cannot build an economy that is built on digital platforms if we cannot efficiently manage and store data in Ireland. That means efficiently run and sustainable data centres in the future. There is work to do to provide more clarity to the industry that Ireland is an enterprise-friendly place to invest and will facilitate reasonable requests around grid connection under the right circumstances. We do have a policy statement from Government, which is Government policy on data centres. The Cabinet subcommittee on the economy is looking specifically at this issue at the moment. I will be meeting the Minister, Deputy Eamon Ryan, hopefully in the next few days, along with his officials and mine to see whether we can resolve some of the outstanding issues that are creating frustration among some industry developers and so on from a data centre perspective. That does not mean we have an open door policy for every data centre that wants to be created. We do not. There is an onus on the developers of data centres to show that these centres can be powered sustainably in the future, that they are part of the decarbonisation plan and that they are located where there is resilience in the grid where they can get gas connection and so on. However, the idea that we are sending out a message that if people want to develop a sustainable data centre, they cannot do it in Ireland is something that is not acceptable to me. We need to work with EirGrid, the utilities regulator and, of course, the Department of the Environment, Climate and Communications to make sure we have the right balance there. That work is under way, by the way, and there are good conversations taking place.

It is not just data centres, by the way. It is other high energy users as well, whether it is semiconductor manufacturing or whatever or, indeed, pharmaceuticals. The Deputy suggested that we take an exceptionally narrow view on climate. We do not, actually. That may well be the official answer people sometimes get in response to parliamentary questions but I can assure the Deputy in that regard. The cement sector is an important sector that needs to be part of this challenge as 40% of industrial emissions come from that one sector. Approximately 5% of total emissions in Ireland come from that one sector, so we do have to make progress on cement. However, it certainly is not the only challenge at which we are looking. Both Enterprise Ireland, EI, and the Industrial Development Authority, IDA, have very clearly said they are going to work with their client base to decarbonise. They want to start with the high emitters, which is the obvious place to start in terms of getting results and meeting targets. However, it is right the way down to local enterprise offices now, working with small businesses and helping and advising them in terms of how they can put a decarbonisation plan in place and providing financial supports and vouchers to help them do that and also to invest.

If the Deputy looks at the new solar panel grant aid scheme, for example, that applies to all businesses, a business can get up to €36,000 from the State now in terms of grant aid towards solar panels if its project is big enough in terms of roof space. We are now moving into a space in the Department of Enterprise, Trade and Employment that actually sees decarbonisation and climate targets as part of competitiveness in the Irish economy that should apply to all sectors.

That is why members will hear me talking over and over again about the twin transition of decarbonisation and digitalisation. Any businesses that ignore it will find themselves in a very difficult trading space in the next few years. This is an essential part of the transition that every business needs to think about now. Maybe we need to be a bit more public about that, however. We have travelled around the country talking about the twin challenges of carbonisation. We have had nine or ten different meetings trying to get businesses to focus on this. We are taking a much broader view now with regard to climate and the role we play in it. That is why I insisted, for example, on this Department leading on the industrial strategy for offshore wind. That is central to the broader climate and energy challenge as well.