Damien English (Meath West, Fine Gael)
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I welcome the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, and his Department officials to this meeting to discuss the European Commission country-specific recommendations for Ireland. I invite the Minister to make his presentation to the committee on the country-specific recommendations for Ireland, following which we will have a question and answer session.

Richard Bruton (Dublin North Central, Fine Gael)
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As the members probably know, up to this year Ireland was not involved in these country-specific recommendations because we were within the troika programme and much of the commitments and assessment of our national policy was done by the troika overseen through those quarterly visits. With the new regime we are now back into the general system that applies across all member states where each year the Council makes a recommendation. This comes on foot of a growth survey. A number of documents have led up to this in terms of assessing the state of the European economy. This has been followed by country-specific recommendations. Clearly, these country-specific recommendations are acquiring increasing importance with changes in EU rules in the provisions and the expectations of convergence of countries, particularly within the eurozone. This is an important process and will continue to be an important part of Ireland's relationship with the European Union.

In that context, Ireland welcomes the Commission's package of country-specific recommendations. As members will note, seven recommendations in total are set out, among which there are no real surprises. During the past few years we have been involved in this process and we understand the view from Europe of where we need to improve.

We have been engaging fully in the Semester process, as it is described, which started with the growth survey and went through examination at European level at a previous Council meeting and now we have the country-specific recommendations. They took place earlier in the year and the national reform programme under the EU 2020 strategy and the stability programme were published at that stage. Ireland is involved in that.

Following the publication of these country-specific recommendations, various preparatory committees are looking across the range of all member states and the recommendations being made. These involve the Employment Committee, the Social Protection Committee and the Economic Policy Committee. That helps to give a broad perspective, not only with regard to a narrow financial money market view of the world but also in respect of a social, economic, employment and social protection view. It is important to strike that balance.

In terms of my responsibility and presenting here to the committee, two of the recommendations are in the sphere of employment. Recommendations Nos. 3 and 4 fall into the area of employment policy and social policy, and No. 5 deals with the SME sector and access to credit. There are also two others in which my Department is involved and they deal with banking, access to finance and cost competitiveness. The recommendations issued to Ireland by the Commission this year are consistent with the policy directions that were firmly established in the past. They are also consistent with the national approach being adopted in the medium-term economic strategy, the Action Plan for Jobs, the Pathways to Work and SOLAS in terms of the further education and training strategy that is being developed by the Minister for Education and Skills.

In the course of the coming weeks as we move towards the Council on 19 June, the country-specific recommendations will be finalised and agreed with the various configurations.

We will seek to clarify some of the supporting data with the Commission through those committees and also through COREPER, which is the committee of permanent representatives of member states. This process is ongoing and we do not expect significant adjustments in country specific recommendations Nos. 3, 4 or 5 and expect they will be adopted as they stand on 19 June. ECOFIN, the European Council of Finance Ministers, will meet on 20 June and it will finalise the country specific recommendations on economic and budgetary issues. The country specific recommendations will be sent as a package to be endorsed by Heads of State at the European Council on 26 and 27 June.

Committee members will have seen the country specific recommendations in the packs with which they have been provided. Recommendation No. 3 calls for improvements in active labour market policies with a particular focus on the long-term unemployed, low skilled workers and young people through the youth guarantee. It seeks to progress reform in the further education and training sector and ensure the implementation of the apprenticeship report and the provision of workplace training. It seeks to improve the level and quality of the support service at Intreo offices and the referral process between Intreo offices and the education and training boards. Essentially, recommendation No. 3 endorses the approach adopted under the Pathways to Work scheme and it encourages improvement in the execution and development of that policy. The next phase of work, which will take on these recommendations, will be reflected in the forthcoming Pathways to Work scheme that will be published soon.

On further education, SOLAS was established last October and a significant expansion of the training and work placement programme has taken place. SOLAS has published a strategy that indicates it seeks to become more relevant to employers and its client base. It is an ambitious strategy that sets out the various objectives it seeks to pursue and I understand it will be followed by operational programmes that will put flesh on the bones of those objectives.

These recommendations are aligned with the thrust of existing policy, which has shifted considerably in recent years. For many years in Ireland the system that prevailed saw payments made to people on condition they were idle. The system now seeks to support people to become engaged and active and this has been a feature of the active labour market policy that is being pursued by the Minister for Social Protection. It is evident too in the interlocking changes that are being made by the Minister for Education and Skills.

I will now address the matters of jobless households, child poverty and child care. This country specific recommendation has two aspects. It aims to tackle the low work intensity of households and to focus on the important issue of child care in supporting stronger labour market participation by women. Poverty and social inclusion issues have been highlighted for up to 11 member states. Up to 19 member states have been given country specific recommendations that focus on different aspects of labour market participation such as young people, women, older workers, migrants and so on. Low work intensity is the official EU indicator for households with little paid employment and an above average share of the Irish population, 24%, is in such households. The problem is particularly severe in Ireland in single parent households. Key policy responses include Intreo, reform of lone parent supports and the development of housing assistance payments. Social transfers in Ireland are very effective in alleviating poverty in households with low work intensity but increased labour market participation remains the best route out of poverty. I understand the National Economic and Social Council, NESC, is also working in this sphere and will soon publish research in the area that will shape the continuing policy debate.

It will be difficult to advance significant improvements in child care within the current fiscal constraints. The supports provided in Ireland include the universal provision of part-time care and education for children in the year before they commence primary school and targeted supports for low income parents through a number of schemes that support them in taking up employment, work experience, education and training opportunities. All of this combines to see public spending in these areas reach around €260 million. Responsibility for the implementation of the poverty element of this recommendation falls to the Minister for Social Protection and responsibility in the area of child care falls to the Minister for Children and Youth Affairs. This country specific recommendation is aligned with the Government's existing strategy and priorities, including early childhood care and education and subsidised after-school child care schemes. The issue of welfare benefit reform is also very topical as the report of the advisory group on tax and social welfare is anticipated shortly.

The next recommendation relates to support for small and medium enterprises, SMEs, and includes access to finance. It fully reflects the work on access to finance that is detailed in the Action Plan for Jobs 2014, which has been agreed by the Department of Finance and other parties in the State bodies group. This recommendation has a number of areas. It relates to the availability of bank and non-bank financing and debt restructuring issues. It addresses initiatives to improve the access of SMEs to bank credit and non-bank finance, including three SME funds co-funded by the National Pensions Reserve Fund, NPRF, Microfinance Ireland and the temporary loan guarantee scheme. The key focus is on supporting SMEs, particularly in accessing finance. Responsibility for implementing this falls to the Minister for Finance and I as Minister for Jobs, Enterprise and Innovation. Restoring normal lending conditions for SMEs is a crucial focus of Government policy and we will continue to work towards the repair of the banking sector. We seek to develop a range of non-bank sources of finance and this continues to expand with numerous measures under way. Government oversight of this process is via the SME State bodies group, which is chaired by the Department of Finance and includes senior officials from my Department, the Department of Jobs, Enterprise and Innovation. Senior officials from the Department of Jobs, Enterprise and Innovation are also on the SME funding consultation committee that seeks to strengthen the engagement of stakeholders with the various SME representative bodies.

On 22 May the establishment of the Strategic Bank Corporation was announced and it will help channel credit into SMEs and it envisages a mix of funding from sources including the European Investment Bank, EIB, KfW and the NPRF. It is anticipated that it will make €500 million available to SMEs as a first phase. We are trying to expand options, develop a stronger range of players in the market and develop options for the sector. At the moment I am finalising proposals to improve the operation of the credit guarantee scheme and the review of micro finance will begin soon. Net job creation will mostly come from fast-growing young firms and we have reissued support for the seed and venture capital operated by Enterprise Ireland. This will be pivotal in supporting high-potential start-ups. There is much happening in this area and we have seen general improvement but there is clearly a long way to go regarding access to finance for small and medium enterprises. We must continue to be innovative in this area and this has been underlined by the Commission's recommendations.

The fact that the content of the 2014 recommendations addressed to Ireland is consistent with the thrust of Government programmes reflects the close working relationship that developed during the support programme and was built upon in the three recent bilaterials. The close fit between the Commission's recommendations and Government policy in terms of the Action Plan for Jobs and Pathways to Work also reflects the progress made on the reform agenda. Once adopted, the country specific recommendations will be subject to ongoing multilateral surveillance by member states and the Commission and will involve continual monitoring, mutual learning and peer review.

Dara Calleary (Mayo, Fianna Fail)
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I welcome the Minister and his officials. There is a great deal of motherhood and apple pie about all this. It is like the end-of-term report that many children will soon receive. I will focus on certain areas and outline what I would have said had I written the report. On the third country specific recommendation, can the Minister outline the Government's specific plans to reform our apprenticeship scheme?

I know it is not within the Minister's remit but as the Minister with responsibility for employment, I presume he has an input and an interest. We have fallen out of love with apprenticeships and we need to fall back in love with them for their part in providing labour market opportunities and as part of the preparation for potential labour demand in the market. I ask the Minister to explain the plan. In my view, a dog's dinner has been made of writing the report, CSR5, with regard to SME supports and access to finance.

The Minister is reviewing the credit guarantee scheme and the microfinance scheme which were the central planks of his reform measures. Will the review of the credit guarantee scheme happen before the end of this session? At what stage will it make it to the market? At what stage will it be available to those companies needing credit? I ask the Minister to provide an update on Microfinance Ireland, how much it has loaned and the Minister's plans. The LEO network is being launched. What targets are being assigned to the LEO network to drive microfinance?

The Minister referred to KfW and the new bank which was launched the day before the elections. I ask him to outline the legislative framework for that project. Was it discussed at Cabinet? I refer to an interesting remark made last night by the Minister for Social Protection, Deputy Joan Burton, at the Labour Party hustings that she hoped the announcement would mark the beginning of a jobs plan. I suggest the Minister might brief the Minister for Social Protection on the Action Plan for Jobs. The Minister wishes to encourage diversity between bank and non-bank financing. The members of this committee, from all sides, have really driven this issue hard. We have all raised with the Minister the issue of crowd financing and source financing. Are there any plans to take action on this issue? As a country, we are more dependent on the traditional banking structure than any other EU member state - we are dependent on two banks. It is extraordinary, in light of all the discussion in Europe and in the media about our tax arrangements, that any review of our country's employment and business policies does not reflect that discussion. Has there been any discussion at any stage during the interaction around these country-specific reviews about our tax policy for multinationals and for business support generally and for employment creation?

Richard Bruton (Dublin North Central, Fine Gael)
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The Deputy has raised a number of points in his contribution to which I will seek to respond. The review of the apprenticeship scheme drew together people from all relevant areas. The apprenticeship scheme collapsed because it was excessively reliant on the construction sector and was no longer fit for purpose. This is the reason the Minister for Education and Skills decided to undertake a major programme of reform. The report has been published and the Minister is moving to implement the recommendations of that review. The approach to apprenticeship will be simplified and includes shortening the necessary duration of apprenticeships and making the scheme more user-friendly for employers. The range of skill types will be expanded for which apprenticeships could be developed. The scheme had been too narrow in its focus, and was inflexible. It will continue to be regulated by statute but the aim is to make it more flexible and useable. It is complemented by other SOLAS developments which include traineeships.

As employers emerge from a pretty difficult environment, the long-term commitment to apprenticeship is the long-term ideal. In the shorter term, traineeships are a more flexible instrument and these will probably attract more participation. The Minister for Education and Skills is seeking to put in place a range of measures, not unlike our access to finance challenge, in order to meet different needs of the market place, such as Momentum and Springboard programmes as well as apprenticeships and traineeships. SOLAS is charged with the implementation of a spectrum of options.

I do not accept the Deputy's point that access to finance has not improved dramatically. It is easy to criticise schemes like microfinance and the loan guarantee for not achieving the desired results. However, these were under consideration during the Deputy's time in government and they were never implemented. We have acknowledged that these innovations need to be tested and amended. We will be bringing the report on the credit review group before the joint committee very shortly and we will bring forward heads of legislation for consultation with the committee. We have ambitions to expand microfinance. A total of 240 loans have been approved, totalling €3.8 million, which is a 54% approval rate. The credit guarantee is currently €11.6 million in 88 facilities. These schemes have had a very tangible impact on jobs in that they are helping to increase employment by 445 and to maintain employment in the case of 276. Over 700 jobs are either in place or are protected and these have been saved by the loan guarantee scheme. We can do better by amending the scheme. As Deputy Calleary rightly says, this is one of the new instruments at the disposal of the local enterprise offices when dealing with clients. We are considering amendments to the seed capital scheme, which is a very generous tax break for start-up companies for former PAYE workers who start up companies, but the scheme has not been taken up to a degree. Crowd financing is also included in the pre-budget assessment to ascertain whether changes may be required to make crowd finance more acceptable.

The Commission has an interest in tax policy but it does not arise in the context of the country-specific recommendations. Member states retain rights as to taxation. The Department of Finance and ECOFIN would be better sources of information with regard to tax. Work is ongoing on other issues such as equity finance, retail bonds, working capital for exports and a range of elements to be put in place. At this stage we are not far off €3 billion in new funding sources which were not in place three years ago. These range from microfinance, the loan guarantee scheme, the new national NPRF funds, the continuing development of the seed and venture fund and the strategic investment bank. In consultation with Enterprise Ireland, we are seeking to find out where SMEs are encountering particular difficulties in order to position funds with appropriate partners. This is a smart way of using our money. For example, in the seed and venture fund we put up €1 which attracts a further €3 from the private sector, which amounts to a fund of €4 for our €1. That fund provides finance to businesses and brings domain expertise in the sector in which the businesses operate. The development capital fund has seen a number of interesting players in that area. Some very prominent Irish companies are getting behind those development capital funds and bringing their expertise and access to finance to bear and to help the growth of companies. We are building a range of options. Not all schemes do as well as they might but that is to be expected with innovation.

Peadar Tóibín (Meath West, Sinn Fein)
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I welcome proposals and recommendations from any organisation but I do not welcome surveillance on policies developed in Ireland by any organisation outside Ireland.

The report focuses on issues that we all know are important, including long-term unemployment among young people and low-skilled unemployment. It focuses also on child care. The children's allowance makes it more difficult for a parent to rejoin the workforce. Another factor to have arisen today is that there has been very little regulation of child care since that "Prime Time" exposé about a year ago. That, too, reduces parents' confidence when they want to re-enter the workforce.

SME debt is still a critical mess. The fact that a third of businesses are in debt impairment puts the foot on the neck of possible growth. Another sector, the hotel sector, is in real trouble with debt. I know that some of the positive things that the Government has done on job creation have been in the hospitality sector, yet much of that will be either stalled or reversed if there is not a mechanism to reduce the level of toxicity of some of that debt. We have had many banks and financial institutions before the committee. Some of them have taken positive steps to separate toxic debt and the functioning element of their business, but others have not. Others just see functioning businesses as an opportunity fix their own internal financial problems. I had a meeting earlier today with a number of small traders. Cash-handling costs are putting small traders out of business. The way in which the banking industry is focused on deleveraging, on reducing the level of credit in the economy and on making it more difficult for businesses to function is still having an enormous, negative impact on opportunities for job creation. Will the Minister force the banks to nurture those functioning businesses which have toxic elements to them and to start making it easier for small businesses to function in respect of cash-handling charges etc.?

Has the issue of our corporation tax raised its head in this regard? What is the Minister's view on the European Commission's desire to investigate our corporation tax and what does he see as being the outcome of that? What could be done to increase our competitive advantages elsewhere in the economy so that we are not so reliant on competitive advantage in corporation tax, especially the bargain basement element of it which was highlighted by the Governor of California during the Taoiseach's recent visit?

Richard Bruton (Dublin North Central, Fine Gael)
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Deputy Tóibín makes a general point and says that he does not like EU oversight. We are interdependent and we have agreed that in certain areas of policy, because of that interdependence, we share information and accept recommendations at a general level and seek to implement them. This is a process from which we gain as well as it involving our being under scrutiny. I have no problem with scrutiny either from Oireachtas or from the EU. The EU adds value. It is able to look across other countries. From a micro-examination of what we are doing, it sees trends and patterns, and that is helpful. Before the Government came into office, and particularly before Joan Burton came to the Department of Social Protection, the OECD had said for many years that we did not have sufficient labour market activation within our welfare system. It said that we had separated labour market activation from the payment system, which was inappropriate, and that other countries which were successful in this area had joined them together. She has joined them together. It is as a result of international engagement that that has been seen as a correct way to go. I welcome this process. As in all these matters, there is some pressure from member states. That is part of the arrangement that we have signed up to and it is helpful.

I accept that problems continue to be faced by SMEs in accessing finance. Progress is being made in some areas. The latest Red C survey on access to finance shows that refusal rates for SMEs have come down from 30% to 19%, so there has been a significant improvement in the ability of small and medium enterprises to have applications for finance accepted by the banking system, but, like Deputy Tóibín, I would like to see the amount of new lending to SMEs growing. It is pretty much static at the €2 billion per year. With a number of sectors now growing, we expect to see more growth in funding to SMEs. That is certainly a major subject in my engagement with the banks. We are also putting other, non-bank sources into the marketplace to try to complement that funding. No matter how effective we are, the long-term business of banks has to be in funding SMEs. That is their only future in Ireland. They need to learn those skills and develop the engagement level with their client base to understand their needs.

The Central Bank monitors regularly how banks deal with SMEs that are in distress. It has set targets for the banks, and the banks have engaged in that process. Considerable progress has been made on distressed SMEs reaching restructuring agreements with the banking system. I accept that the banks, despite having cut back on their own staff and costs, are seeking to move to break-even and profit positions. In the long-term, we need a banking system that is able to wash its face. That has resulted in pressure on costs. We are clearly in a bind between our ambition to have an efficient banking system that can survive on its own two feet - with the taxpayer, who has put in a lot of money to support it, having the prospect of getting that back - and the fair handling of customers. We continue to try to get that balance right by having codes of practice in place.

To my knowledge, the issue of tax has not come up in this process. The process has looked at the established areas of engagement between the Troika and us. As members of the committee know, those have not involved tax policy. The engagement is around the areas where we made undertakings in relation to reform agendas. It is a continuation of that reform agenda.

Deputy Tóibín raised the wider issue of how one builds competitive advantage. I would say from my experience that this is a war for talent; skills is the key. We achieve competitive advantage through the quality of the skills base that we grow and the appropriateness of those skills. I have worked with the Minister for Education and Skills, Deputy Ruairi Quinn to double - and we are now stepping up our ambition - the number of ICT graduates. That is why we have put in place the springboard to develop those skills bases. It is why we are looking at big data as the next wave where a big skills edge can be gained for countries which are early movers. It is about looking at clusters and sectors where we can get early-mover advantage. There is range of things that one needs to develop, but skills are often the top of the agenda - there are others of course. There are many areas where we can seek to develop our competitive advantage. The meat and drink of the Action Plan for Jobs is seeking to identify and build out those sectors over time by gradual policy changes and innovations.

In this regard research and development, which is the area covered by the Minister of State, Deputy Sherlock, is crucial.

In broad terms, while it does not deal with tax, it deals with fiscal consolidation. One of the recommendations is to support fiscal consolidation. It states consideration should be given to raising revenues through broadening the tax base but I do not think that is what the Deputy was referring to. He was referring to corporate tax.

Peadar Tóibín (Meath West, Sinn Fein)
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One of the questions was on the focus on the Apple-type deals, on which there is great international focus currently, and that bargain basement corporation tax element. To resolve that, there is a necessity to broaden out the taxation base to ensure there is a better and a fairer tax of business and people.

Feargal Quinn (Independent)
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I found the document very interesting. It dealt with a range of areas, including country-specific recommendations. To touch on the tax issue, it is almost like having one's maiden aunt visit one's house and criticise the furniture or the family. It commented on a list of things. One of them was tax and it referred to the fact VAT is zero rated compared to many other countries. It referred to our public health expenditure and stated it was among the highest in Europe. It stated that the cost of pharmaceuticals and child care was very high. It stated that lending to SMEs was weak and that lawyers' fees were high. It seemed to go on and on and I felt it was like one's maiden aunt visiting and criticising the house. However, that does not give us the answers and in this respect the steps the Minister is taking are admirable and the right way to go but the natural reaction is to ask what we can do other than what we are doing already.

Yesterday, I attended the launch of Springboard, which the Minister mentioned a couple of times. It is very impressive. We met not so much the students as those giving the courses in the colleges and universities. We heard about some of the success stories they have had over the past couple of years. Those participating have degrees but in areas in which there are no opportunities for them, in particular construction. Architects, quantity surveyors and so on are now switching to IT. Some of the stories were great. However, the real challenge is how to encourage them to start up a business. This rests on the Minister's shoulders. How can we remove the barriers and encourage people to start up companies? I am not sure we are doing nearly enough. There must be a system where we could encourage people to set up businesses by removing some of those barriers.

One of the things which was done in Britain was the "one in, one out". Now it has the "one in, two out". If a new constraint was introduced and somehow or other it influenced business, a previous one had to be taken out but now if a new piece of red tape is introduced, two pieces of red tape have to be taken out. That is the sort of thing with which we have to challenge ourselves, although perhaps we are doing something like that already.

The Seanad passed the upward-only rent review legislation. Rents are a huge burden on retail, which is suffering. Most retailers are having a huge difficulty with this. I urge the Government to pass that legislation in the Dáil. It does not have to be enthusiastic about it as the President will not sign it until he gets the Supreme Court to guarantee that it will work and that it is constitutional. This legislation should be passed and sent to the President, who will not sign it as there is a question over its validity from a constitutional point of view. However, he could refer it to the Supreme Court which would decide whether it is constitutional. If the Supreme Court states it is unconstitutional, that is the end of it but if it says it is constitutional, that will also be the end of it but it will remove one of the huge barriers for people who want to set up a businesses and compete, in particular in retail. Others mentioned hotels and other businesses. There is an opportunity to do something there. It is just one of the barriers which could be removed.

Richard Bruton (Dublin North Central, Fine Gael)
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In regard to the concept of one's maiden aunt criticising one, possibly when the troika was here, the maiden aunt was coming in with severe teeth telling one what to do. Now we are involved in what is a multilateral process. Every member state is put under scrutiny and faces country-specific recommendations. There is a meeting of our peers where we can seek to get changes if we do not agree with something. Those changes can be made. We work with one another as colleague member states. There is a large element of peer review and mutual learning in this process. There is also an element of pressure in the process but there is a considerable amount of give and take and learning in it. Deputy Tóibín said he did not like the notion but it is a good process and given the problems Europe has had, we need to do this kind of thing. Not all maiden aunts are unconstructive and unhelpful.

Feargal Quinn (Independent)
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I am not thinking of any one in particular but I think we all have somebody outside the family-----

Richard Bruton (Dublin North Central, Fine Gael)
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The Senator's point on barriers to starting up business are right, although we have put much work into this. We had the Seán O'Sullivan forum, which brought together entrepreneurs, and we are now developing a policy statement on the back of that. We have done a number of things. Recently, we announced a competition to find the best young entrepreneur at county and national level in whom we will invest. That is a very tangible way to encourage young people. We have put in place Knowledge Transfer Ireland which is essentially a central body that will look at every piece of intellectual property scattered around all of the education institutions to see how it can be sweated to encourage start-up businesses. We have the local enterprise offices at local level which are a first-stop shop to provide the very best of what the State can give in an accessible way.

The changes to company law, which are currently going to the Dáil and the select committee and will shortly go to the Seanad, will prove user-friendly for a new entrepreneur setting up a company in a way that minimises the bureaucracy. We are aiming to be the Delaware of Europe in the sense of having the best structures for companies.

Ireland and Dublin, in particular, is a start-up hub. Some of the changes have made it easier for overseas entrepreneurs to come to Ireland. We have removed some of the obstacles and Enterprise Ireland has a fund of €10 million to help to support overseas entrepreneurs who want to use Ireland as a base for start-ups. We have a pretty exciting space in many parts of the country. We can do better in this area and that is one of the reasons the first ever regional enterprise strategies will be developed. We need to spread that enthusiasm for start-ups throughout the system.

In regard to retail, we have sought to simplify the whole retail licensing portal and to have a single portal for retail licensing. That has gone out to tender and we hope to deliver that later in the year. We are doing many things we believe will make it easier for people to start a business.

I looked at the "one in, one out" concept in the UK but it almost has a whole department devoted to nothing else but that kind of work. I took a hard look at it but do not believe it could be applied here. Managing that whole process involves very considerable bureaucracy in the UK. It is a nice idea but in terms of practicality, it is difficult.

I would prefer to ask our Department how it can improve the way it interfaces with business over the next 12 months. It is doing that already. It has cut the time in which to get a work permit, it has cut the number of days in which to start up a company and it has cut the waiting times for employers and workers who are in dispute situations. We are trying to improve every interface we have with business and make it work better.

That is probably a more meaningful set of changes for businesses than the one in, one out. The high level group continues to examine regulation and where to make improvements. The Minister of State in the Department of Jobs, Enterprise and Innovation, Deputy Perry, chairs that group. We are not saying they are mutually exclusive.

Upward-only rent reviews are a problem. I am not a lawyer and that issue is the responsibility of the Minister for Justice and Equality. The then Minister, Deputy Shatter, took a hard look at the problem and did his very best to bring forward proposals. He submitted them for legal scrutiny but they were found not to be robust and the Government could not implement them. We wanted to do it but the view was that if the proposal went ahead, the State would have to compensate those who had lost if the upward-only rent reviews were no longer available. We could not ask taxpayers to pick up the bill. That was the stumbling block for the proposal.

Feargal Quinn (Independent)
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At least three different papers by renowned lawyers offered a different point of view. Given that lawyers are differing, it would be wise-----

Richard Bruton (Dublin North Central, Fine Gael)
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I could find a lawyer to advocate any position one wanted.

Dara Calleary (Mayo, Fianna Fail)
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Lawyers have different opinions depending on their jobs.

Richard Bruton (Dublin North Central, Fine Gael)
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It is not my area of expertise. A major effort was made to find a way to deal with that issue and it did not prove possible at the time. Not much has changed since then. The Senator is free to present his legislation, as he has done, and I am sure it will be taken seriously.

Michael Conaghan (Dublin South Central, Labour)
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I welcome the Minister and the senior staff from the Department. How does the content and tone of our ten country-specific recommendations, CSRs, compare or contrast with those in other countries in Europe, for example, the economically troubled countries in southern Europe, such as Italy, Portugal and Spain, and the more economically stable countries in northern Europe? Where do we sit in respect of our European neighbours?

Richard Bruton (Dublin North Central, Fine Gael)
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I have to confess I have not read all the other country-specific recommendations. The Commission analyses the data sets in each which tend to follow the same sort of pattern. In countries where there is high unemployment such as we had, although mercifully that is improving, it focuses on active labour market policies, retraining and displacement. Countries that have a bigger fiscal problem and are not in a troika process would lay heavier emphasis on broadening the tax base. To judge by last year's process, those issues came up. Some consider wage-setting mechanisms, which was controversial and the extent to which indexation is built in and whether that is appropriate when so much change is happening. It tends to analyse each country and, based on its situation, decides how to respond.

The Commission has high level European challenges, which are not surprising: tackling unemployment, reducing debt, shifting to more growth friendly taxation, boosting private investment, making our economies more competitive, youth unemployment and the youth guarantee. Depending where a country sits on the spectrum of these general issues, it might, for example, say that Austria or Germany has the best example of training and tells Spain to move closer to that model. It says the same to us. For example, the interest in the apprenticeship model and the need to modernise it is focused on a traditional weakness of Irish enterprise and the State's provision. It is a two-way street.

I can show the Deputy the issues it highlights in different countries. It highlights unemployment and contrasts Austria's 4% and Greece’s 27% and makes recommendations based on that.

Seán Kyne (Galway West, Fine Gael)
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I welcome the Minister and his officials. I apologise for having had to step out and hope that nothing I ask has been already covered.

The Minister said there are no great surprises and it does not seem to me that the committee or the Dáil would need to deal with the country-specific recommendations. In the legal context, are they recommendations, directives or directions? Are there penalties for non-compliance? Are they legally binding?

The Commission published its in-depth review in March, stating "the remaining macroeconomic imbalances require specific monitoring and decisive policy action". It mentions specifically private and public sector indebtedness. What concerns does the Minister have about that?

A US Senator and governor spoke last week about the status of American companies in Ireland. Does the Minister think this could have an impact on other multinationals coming into the country, which would affect foreign direct investment? Is there a mood now in the United States to prohibit this to the extent that some multinationals might no longer regard it as the correct thing to do?

Richard Bruton (Dublin North Central, Fine Gael)
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The Deputy’s first question about the force of the recommendations is a good one. Most are recommendations which are jointly adopted before our peers. The CSRs for Ireland will be adopted by the entire Union of 28 states. We are making a political commitment to deliver to one another. There are enforceable clauses in any recommendations that relate to finance because of the obligations under the various fiscal treaties, such as borrowing levels. These include the excessive deficit and imbalance procedures. They could eventually lead to sanctions. The idea is that we seek as a Union to develop reform agendas that are in our mutual interest. We commit mutually to try to improve in those areas, which is mostly a political commitment. There are, however, situations in which there is more power, in the so-called macroeconomic imbalance area. That is the formal position.

Private and public indebtedness issues are not new. Ireland’s public debt peaked last year at 120% of GDP, or whatever the figure was. That is high. We have a long-term commitment to get down to 60% over time and there are various expectations in the fiscal treaties of how we should move in the short term. For example, moving to a 3% borrowing target is the major commitment. The focus on private indebtedness is on the bank work-out of mortgages and small businesses in distress and looking for a way to deal with those problems. We have high private indebtedness as well as high public indebtedness.

That is one of the challenges of this recession compared with other recessions. It is not only a cyclical dip, as people have said; it is also a balance sheet recession. In other words, many households and big companies are impaired with debts. Therefore, it is not only a cyclical dip from which it is easy to recover. Clearly, that is a challenge. The experience not only in Europe but generally is that the quicker one can manage to come to terms with those debt issues, the quicker recovery comes. That is where the level of European concern in this area comes from.

The wider issue of tax policy and pressure to change it is at the heart of the so-called BEPS - base erosion and profit shifting - process where the OECD is examining how some companies have been able to play off features of different tax codes and arrive at a situation where they pay negligible levels of tax. Ireland's position is very clear, that there is nothing wrong with our tax code, but we are fully engaged in a process with the OECD and with other colleagues to come up with what would be multilateral changes to make sure the interaction of these codes does not work in a way that allows companies to avoid paying tax anywhere. We are fully engaged in that process. We can gain as much as lose from engaging in that process. We are not a tax haven. We have a low certain tax code with very clear statute-based provisions. The countries that will come under pressure in this are people who have a roll your own type tax code where they give different tax arrangements to different companies that come along. If we can maintain our straightforward, statute-based, low corporate tax rate, that can be a competitive advantage. Clearly, we have to work to ensure that but we are very engaged. The Minister, Deputy Noonan, and the Department of Finance were very much at the heart of EU work in this area, even before the BEPS process started at the OECD level.

Áine Collins (Cork North West, Fine Gael)
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I welcome the Minister and his officials. Considering what those in Europe are doing in examining the CSR, is it possible for us to examine some sort of regional funding in Ireland? While Dublin is doing very well, some parts of the country are still struggling, in particular rural Ireland, and perhaps in some counties we could consider having a county fund. I would appreciate an update on the mentoring issue, as it is also a key element of promoting entrepreneurship.

We had representatives of the credit unions in last week and they indicated they had €8 billion which they were willing to invest in the SME sector. Perhaps we could find a way for the State to underwrite that, say over a five year period. Is that something we could consider?

Richard Bruton (Dublin North Central, Fine Gael)
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Who was that?

Áine Collins (Cork North West, Fine Gael)
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The credit union movement. With regard to entrepreneurial funds, we had the business expansion scheme, BES, or the employment and investment incentive scheme, EIIS, which replaced it, but there was not much take-up of those schemes. Could it be considered in the upcoming budget with a view to making it more friendly to people and perhaps investments could be made directly by people into a business and tax relief allowed on such investment and the person concerned would pay the capital gains tax on the way out.

There does not seem to have been much take-up of the seed capital relief scheme, which has been in place for many years. Could it be simplified such that the tax a person would get back in terms of the previous five years of tax paid could be invested in the shares as opposed to one having to invest the overall amount? Currently if one invests €100,000 in a company, one must be a director of the company and one can offset one's tax - up to the previous five years of tax paid - against that €100,000, but perhaps it could be provided that a person could invest €100,000 and claim it back if one had paid that amount over a previous period because currently one has to find €100,000 first which is a struggle. The amount could be €50,000, I am simply using the figure of €100,000 as an example, but one has to find the money to invest in share capital and then one can get the tax paid on that claimed over the previous five years which, in theory, works very well but, in practice, is very difficult. That scheme has been in existence since the early 1990s but there has not been much take-up of it.

Richard Bruton (Dublin North Central, Fine Gael)
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What is the Deputy's alternative suggestion?

Áine Collins (Cork North West, Fine Gael)
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That one would be able to claim the tax back and that the tax could be invested in share capital and in that way one would not have to find the overall capital amount as well.

Richard Bruton (Dublin North Central, Fine Gael)
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I do not think there are regional funding models other than the EU ones in terms of Leader and the European Social Fund. There are a number of EU sponsored modules, Structural Funds and so on. If the Deputy is talking about a regional enterprise type fund, I have not seen any measures in that area. A difficulty in terms of regional policy is that much of what we do in the enterprise area is to respond to enterprise application. We support viable business plans and that would be the case in most other countries. They would focus in on how to improve access to finance through COSME, how to improve innovation through Horizon 2020 or how to get a better spread of SME participation. That is the way in which we seek to strengthen the regions. Obviously there are other infrastructural issues that have a regional dimension, but they would not be falling into this process - not at the moment in any event as I do not know of any of those - which essentially is examining reform of institutional arrangements. Much of what is done through the use of Structural Funds and ESF funding has a very definite regional dimension.

A mentoring report is being prepared by Forfás and it is in its final stages. We will probably publish it at the same time as the enterprise strategy which will be in the next number of months or so.

On the credit union issue, we are examining whether these funds can be better utilised. There has undoubtedly been some misgivings about this from the regulator. I am not fully up on those misgivings but my Department is involved with the State bodies group, which has the finance and regulatory people on board. That issue is being examined. The credit unions have potential in this area but there have been some issues with them around business lending.

Both the seed capital scheme and the EIIS are being examined and reviewed in the context of next year's budget. The take-up of them has been disappointing, particularly the seed capital scheme which, as the Deputy said, has been low. That might be partly due to people not knowing about them but also, as the Deputy rightly said, one has to produce the investment upfront to avail of the tax relief thereafter. I will pass on the Deputy's suggestion to the Minister, Deputy Noonan's group, which is examining this. I do not know the workability of it. It would have to be developed a bit further to determine if it is something that could be considered. The EIIS does allow the money to go in tax free, and it is much along the lines-----

Áine Collins (Cork North West, Fine Gael)
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It has to go into a special fund and then the projects have to be chosen and they can be looked at after three years, whereas under the previous one there was a five year commitment but one could not individually pick a company. There is still quite a degree of bureaucracy around it.

Richard Bruton (Dublin North Central, Fine Gael)
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Yes.

Áine Collins (Cork North West, Fine Gael)
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I am not saying we should get rid of it but there should be more options available to people.

Richard Bruton (Dublin North Central, Fine Gael)
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It was broadened two years ago from including internationally traded sectors to include most sectors. If the Deputy has a specific idea, between myself and the Minister for Finance, we will certainly consider it.

Anthony Lawlor (Kildare North, Fine Gael)
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I welcome the Minister. I return to Senator Quinn's analogy of his aunt.

Feargal Quinn (Independent)
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Be careful. She might be identified.

Damien English (Meath West, Fine Gael)
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Did she give the Senator the recipe for the sausages?

Anthony Lawlor (Kildare North, Fine Gael)
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I refer to the analogy of the aunt coming in and criticising the furniture but sometimes we should criticise the aunt because she might not always have her make-up matching her clothes. I compare this analogy to the banking sector, where they are a bit critical of the amount of funding that has been made available to SMEs while there is plenty of funding available to SMEs.

I suggest that we should go to the EU which is all talk about putting together another source of funding rather than the banking system. We are meeting with deputy director Crespo tomorrow who has spoken about this on a number of occasions. I suggest the Government should be forceful in its manner with the EU and say that they should help us out.

There is a difficulty in finding the correct conduit to bring the available funding to the SME sector. AIB is finding it difficult to access the fund and to be the conduit for the funding to SMEs but this does not seem to be a problem for Bank of Ireland. We need help from the EU to be able to provide some form of conduit for that funding. The world is awash with money at the moment and there are lots of investors with funds seeking to put their money somewhere. Bonds are at an all-time low so they are getting no returns from bonds. It is no use having money in the banks because the overnight rate is negative. Maybe the Government should ask the EU to help us to put this funding into proper SME use.

Richard Bruton (Dublin North Central, Fine Gael)
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That is a fair point and it forms part of the thinking behind the establishment of the strategic investment bank which is to provide a vehicle to make it easier for us to draw on funding from the European Investment Bank or KfW, the German equivalent. Investors need to have an appetite for risk with regard to SMEs. These funds may sound great in principle but often the level of risk investors are willing to take on is not as great. There are always issues about how risk is shared and who takes the risk. Ireland has been reasonably innovative in the way we have used money to leverage private sector money and we have done quite well in this regard. The European Investment Bank has been involved in some cases but generally speaking our development capital funds and seed and venture funds have had some Exchequer money and considerable private sector money from those who have an appetite for risk. SME funding requires investors with a risk appetite. The strategic investment bank is to be regarded as the vehicle for attracting more of that sort of money. It will also be a case of having the right financial products. Our banks have not been sufficiently innovative in presenting financial products. We are looking at options such as export factoring and invoice discounting. Some of these instruments could be relevant if they could be produced at the right price for business.

To be fair to the European Union, it has invested SME funding mechanisms in both COSME and Horizon 2020, the two big programmes which have a bearing on businesses.

Anthony Lawlor (Kildare North, Fine Gael)
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We are looking for the EU to act as guarantor for some of these funds rather than actually providing the funds. Could the €500 billion to protect the banking sector or the financial sector be used in some way to guarantee the funds?

Richard Bruton (Dublin North Central, Fine Gael)
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The European Investment Bank will act as guarantor for the likes of microfinance but in the case of most of these bigger funds it expects the State to put up the equity piece so the State is taking the biggest slice of the risk. It is a case of deciding whether this is a better deal than can be achieved with other financial instruments. The Minister for Finance, Deputy Michael Noonan, is more informed on this matter than I am. It has not been as straightforward a source of substantial SME funding as one might think but the strategic investment bank is a major effort to draw down more of that funding. I refer to funds based in NPRF and Enterprise Ireland which have been formed by the Exchequer in partnership with private investors. There may be scope in further areas which the Minister for Finance is exploring. The thinking behind the strategic investment bank is to draw down more of those funds.

Damien English (Meath West, Fine Gael)
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That concludes the discussion on country-specific recommendations.

Last week, Senator David Cullinane and Deputy Dara Calleary asked for a discussion on the restructuring of Bausch and Lomb in Waterford. Talks are currently at a sensitive stage in the Labour Court.

David Cullinane (Sinn Fein)
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I thank the committee and the Chairman for allowing us to raise the issue and to put questions to the Minister. He has acknowledged that the Government stands ready to support the workforce and the company in finding a resolution to what is a difficult set of ongoing negotiations. We all want those negotiations to go well and for the best possible outcome for all 1,100 staff at the plant in Waterford.

I have a number of questions for the Minister. He may be able to outline what practical supports the State can give to support job retention and to deal with the reductions in wages proposed by the company unilaterally two weeks ago. We have heard from IDA Ireland about the supports it can provide. Some of the comments from the chief executive officer of IDA Ireland have been very unhelpful to the negotiations. What tangible, practical supports can the Government put on the table to support and retain jobs in Bausch and Lomb in Waterford?

There seems to be a view that whatever supports the Government will put on the table when the timing is right are separate from the ongoing discussions about the saving of €20 million which is to be achieved with the 200 redundancies and the 20% pay cut for the remaining 900 staff, which everyone regards as unsustainable. Why is no Government support being considered to minimise the job losses and those pay cuts? I am sure the Minister will agree that they would be unsustainable for those workers and that the job losses of any degree would be a disaster for Waterford.

The Waterford economy has very high levels of unemployment. The Minister's backbenchers will have informed him of the widespread anger about the high levels of unemployment in Waterford city and the frustration caused by Government promises which have not been delivered upon. I remind the Minister that this committee recently published a report on the south east economic development strategy which put forward practical realistic proposals and a number of high level interventions by the Government to create a level playing field for the region. Regional aid and a university for the south east were two proposals. It is a real frustration in Waterford that we do not have an IDA Ireland regional office with an IDA Ireland regional director based in Waterford acting on behalf of the south east and working to an overall regional strategy similar to that published by this committee. I ask the Minister to outline the tangible actions by the Government and what future actions will be put in place to help create and sustain jobs in Waterford generally because the anger is huge and genuine and understandable given that the levels of unemployment are so high.

What people want is action. They want the Minister with responsibility for jobs and enterprise to act decisively. What specifically will the Minister and his Department do to support Bausch and Lomb and its workers and, in general, job creation in Waterford city and county, as well as the south east?

It would be useful if the Minister could come back to the committee to discuss the Forfás report and the south east action plan that he published, as well as the committee’s SEEDS, the south-east economic development strategy 2013-2023, report. We spoke earlier about regional development. There is a significant problem in the south east which can only be addressed with political will and high-level interventions for the region, Waterford city and county.

Dara Calleary (Mayo, Fianna Fail)
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I thank the Minister for giving his time on this matter. I am conscious that the negotiations are in a sensitive place, so I will not comment specifically on them. When they are finalised and, hopefully, a good arrangement is in place, the Minister needs to come back to the committee to outline the sequence of events that have led us to this position. We wish the negotiations well. The comments of the outgoing chief executive officer of IDA Ireland were completely inappropriate. For him to interfere in a specific situation, particularly when he was leaving the organisation, was inappropriate and unfair to everyone involved, particularly the workers for whom much is being asked. We have a cross-party report on the south east which needs to be revisited. The Bausch and Lomb episode shows how vulnerable the economy is there.

I have been raising with the Minister for some time the fact that this country heavily depends on the pharmaceutical and life sciences industries and it is one of our major employers. How vulnerable are these jobs to companies such as Valeant Pharmaceuticals which took over Bausch and Lomb? It is currently involved in an aggressive takeover of Allergan, another Irish-based company. Has the Minister a strategy in place for dealing with the vulnerability of jobs with takeovers from companies such as Valeant?

I wish Martin Shanahan every success as the new chief executive officer of IDA Ireland.

John Deasy (Waterford, Fine Gael)
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Obviously Bausch and Lomb is an IDA Ireland-backed company. The issue of the IDA and its contingent in Waterford has been spoken about much, particularly regarding its lack of results. I did a bit of checking recently. Before 1996, there was a regional IDA manager for the south east, based in Waterford. That position was moved to Cork then. At the time, plenty of people, including those in government, sounded a warning that this would have a detrimental and negative effect on Waterford city and county and the south east. When I did some digging, I found it interesting that when those warnings were sounded the then Minister for Enterprise and Employment who made that decision was in fact the Minister, Deputy Bruton.

Since then, those warnings have proved to be absolutely correct. The decision has led to an imbalance in foreign direct investment with most of it going to three particular locations, Cork, Dublin and Galway. Neither is there any argument about the deterioration of inward investment in Waterford since that 1996 decision. In February this year, it was decided to provide funding for 35 new personnel in the IDA. There needs, however, to be a restructuring in the organisation of senior managers in the south east. The situation that existed in 1996 when the Minister was in charge needs to be reinstated. What has occurred with Bausch and Lomb has happened ten times in Waterford over the past ten years. The Government needs to respond positively to this. There will be a change soon in personnel in the chief executive officer and chairman in the IDA. They, along with the Minister, need to take up these points seriously.

Richard Bruton (Dublin North Central, Fine Gael)
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I thank the Chairman, Deputy Deasy and Senator Cullinane for raising this matter. This is an exceptionally difficult situation for the workers affected. This started back in August 2013 when Valeant took over Bausch and Lomb. It was signalled in the media at the time that Valeant was undertaking a root-and-branch examination of costs and that there would be pressure on different plants to show how they could deliver on costs. Obviously, threats to employment were implied in that. That is why we have been actively engaged with this company over a long period. I know there has been some criticism in this House and elsewhere that this should have been shared with other public figures. That is not the way one can work in an early-warning situation. We have worked hard to minimise the impact on Waterford throughout that period.

The package the IDA has put forward seeks to minimise the impact of job losses. The company made a decision that it needed to regain cost competitiveness if it were to retain its operation and re-win its market share. After acquisitions of this nature, there are always difficulties. To take up Deputy Calleary’s point, we are very alert to mergers and takeovers and their effects. There is much change in the pharmaceutical sector. As well as recognising areas of growth as well as of difficulty, we have managed to maintain our employment levels in this sector, a sector in which there has been much downsizing internationally.

I do not wish to comment further on this as it is at the Labour Relations Commission. Both sides are participating in an open and constructive way. I hope an outcome will allow us save the 900 jobs, invest as we plan and, hopefully, win new opportunities.

High unemployment in the south east is a continuing issue, of which I am acutely aware. The closure of TalkTalk was a particular catalyst for me. I have put a decisive spotlight on the south east through all our agencies. I did deliver the regional aid package for the south east which will now put it on a four-square with all other disadvantaged regions in the country, something which had not been the case in the past. The issue of the technological university does not fall into my bailiwick.

I know that the legislative process through which the technological university can be won for the south east is being developed. I am looking at a regional enterprise strategy and I believe we need to put more thinking into where regions' competitive advantages lie and how we develop them and get greater collaboration to deliver that. I am devoting further study to this area and the south east will certainly be a major priority for me in that context.

The issue of the IDA manager in Waterford is undoubtedly an operational matter for the IDA. I take the point that there is much criticism. In terms of where one puts new staff, clearly we are in a very competitive international world and are seeking to build new opportunities in new geographies to win new staff. All of those 35 people are being put into overseas locations to try to win new investment. Obviously, the IDA is undergoing reviews of its overall and regional strategies in conjunction with my Department. We will look at issues raised here in terms of staffing at that level. I would make the point that the person with designated regional responsibility moved from Waterford in 2011. I just noticed that if one takes site visits as a measure, in the period before that person moved from Waterford, there were an average of ten site visits per year. Since that person left, which coincides with my action in putting a spotlight on the south east, the number of site visits has doubled. I see this as being about delivering to the region and am confident that the IDA, under my direction, is giving this the necessary attention it deserves.

I would like to see more wins, but we have had Nypro and Enterprise Ireland had a number of wins, including Eishtec in the south east in Wexford and Waterford. We continue to put major emphasis on this and it is an area in which we need to work together to deliver a successful strategy. The site visits are being increased and I believe that, given time, those site visits and that enhanced effort will deliver results. This year, I again funded through the IDA an advanced facility in Waterford, precisely because I feel that we need something different in the regions to respond to the challenges that IDA has had in getting the necessary regional spread. I am open to whatever is seen to work and we will be taking a tough look at our regions, how we are doing things and how we can do things better. That will be part of both the IDA regional strategy and my work with it, which will embrace the wider enterprise family. I have probably visited the south east more than any other region and have consistently focused on this in all my dealings with the outgoing chief executive, as I will with the incoming chief executive. It is a high priority for me because it reflects a need that is obvious to me.

That document is being reviewed by the south east task force and many of the actions dovetail with ones we are acting upon. As the Deputy outlined, the regional aid is something that I already acted upon last month. We will continue to work with the committee in this area.

David Cullinane (Sinn Fein)
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There is no doubt that a spotlight has been shone on the south east, not just by the Minister but by many people and organisations, but the action has not been decisive. It is not good enough just to say that the absence of an IDA regional director based in Waterford or a regional office is simply an operational matter for the IDA. It has been very clear for a long time that this enterprise organisation has not been delivering for Waterford or the south east. Despite the increase in site visits, we are simply not getting the jobs or the bang for our buck. The matter is urgent and we cannot afford to wait for any outcome of a regional review in which the Minister might be involved generally. The south east needs urgent attention and decisive interventions and has needed them for some time. Many of the high-level interventions in the SEEDS report and the Forfás report have not been implemented. We are still waiting for the university.

To go back to the IDA, we need a regional strategy that has a regional office and a regional director. It is not just about having staff for the sake for it. It is about having a regional focus and a joined-up approach between all stakeholders so that the IDA is anchored in the region in Waterford city. That is what we need, and if we do not get it we will have ten more years of job losses and a further decline in manufacturing. I ask the Minister to accept that there is an urgency about this and to act decisively because, while there is and has been a spotlight, the action has not been as decisive as the Minister would say.

Richard Bruton (Dublin North Central, Fine Gael)
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I do not accept the thesis that nothing is happening. The employment numbers show very clearly that in the past two years, employment in the south east has increased by 14,000. That is substantial progress and as good a performance as that of any region in the country at the moment. I accept that unemployment levels are still far too high. The reason Waterford has been singled out for an advanced facility is precisely because I want to see more delivery there. As I said to Deputy Deasy, I will be reviewing the appropriate alignment of our resources to the challenges we meet in the context of regional strategy with the IDA. It is worth pointing out that since I put a spotlight on the area, the site visits have doubled. The general indicator is that if one can increase site visits and get more companies in to look at the area, one will get the investment in behind. We need to improve the offering and that is why we are improving it by putting in a facility that will lift the offering that is available. We are approaching this in a systematic way. I agree that it is urgent and I will give it urgent attention. That is all I can assure the Deputy of.

John Deasy (Waterford, Fine Gael)
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I accept that good work was done on regional aid guidelines. The Minister has spent an awful lot of time on the south east. I accept that site visits have increased and unemployment figures have gone down significantly. I was trying to pinpoint one thing, and I think I got the answer I wanted from the Minister. This occurred back in 1996 when Deputy Bruton was Minister. Regardless of whether it was a coincidence, in many respects people pinpoint that date as the start of the decline in the city of Waterford, when the transfer of the manager or senior person to Cork took place. If the Minister is prepared to look at this in the structural review that is ongoing in the IDA, which is being conducted by Frank Ryan, I appreciate that. It is something that is absolutely necessary.

Richard Bruton (Dublin North Central, Fine Gael)
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Looking at the south east, it is not as simple as that. There are structural problems in the south east that all we know about and that need to be addressed as well. It is not down to something I ignored in 1997 or whenever it was. We face a much more fundamental issue.

John Deasy (Waterford, Fine Gael)
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It was certainly a factor in the decline.

Damien English (Meath West, Fine Gael)
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I thank the Minister and his officials for coming here today to talk about both issues. In respect of the specific recommendations earlier on, I thank the Department for its briefing notes and for keeping the committee informed on a regular basis about what is going on in Europe before all its meetings, because it is certainly very useful. Our members are very interested in that area, so our relationship with the Department is appreciated.