Mr. Paul Clancy:

It is our great pleasure to appear before the committee and I thank the Chairman for his invitation. I am chief executive of the Londonderry Chamber of Commerce and I am joined by Mr. Aidan O'Kane, president of the chamber. We will share a brief update on the key issues and priorities facing the north-west business community and will be happy to answer any follow-up questions members may have.

The chamber represents more than 350 businesses throughout the north-west city region, providing support and advocacy at a local, regional and national level. As the largest business network in the region, the chamber promotes strong business engagement to support the development, growth and sustained economic viability of our members and the wider north-west business community. With our unique position on the Derry-Donegal border, Brexit has posed significant challenges to north-western businesses in the past five years. Amid continued uncertainty over the status of the protocol, the Brexit withdrawal agreement and Covid-19, it is imperative local businesses have the stability, certainty and support they require to meet current challenges head on.

Recent surveys, including the chamber's membership surveys, have shown the desire among business owners here to make the protocol work. In fact, 80% of our members urge the Executive to take advantage of the unique trading position Northern Ireland now has. We also have a strong relationship with Letterkenny Chamber of Commerce, with which we have signed a memorandum of understanding. It is a partnership that reflects the shared goals and objectives we hope to achieve through cross-Border collaboration.

A strong, prosperous all-Ireland economy is a key priority for our chamber members. The growth in cross-Border trade since the start of the year reflects the shared economic prosperity and opportunities we can achieve under the current trading arrangements. It is imperative that, through the likes of the shared island unit and fund, much-needed investment be granted to Border regions to support the growth of our island economy. While regional infrastructure and connectivity continue to improve, the pace of change is slow, with several projects needed to be prioritised to support Derry's links with other economic hubs in Northern Ireland and beyond.

The City of Derry Airport ensures air connectivity between the north west, the UK and Europe, a road and rail network ensures links with Belfast, Dublin and the rest of the island, and the A6 dualling project, expected to be completed in spring 2022, is estimated to cut journeys to Belfast to about one hour. Other projects such as the A5 and the north-west transport hub must continue to be supported as part of our property-funded investment programme to bolster transport connectivity for the north west. I congratulate the Northern Ireland Minister for Infrastructure, Ms Nichola Mallon, and the Minister for Transport, Deputy Eamon Ryan, on their all-Ireland strategic rail review and the co-operation and leadership they are showing in that regard.

The city deal, which was launched in February 2021, is an historic and exciting intervention that will contribute to building a stronger, more competitive, resilient and inclusive economy, deliver higher paid jobs and contribute to creating a more regionally balanced economy over the coming years. In all, the capital investment package will total about £250 million, making it one of the most generous city deals in the UK.

Succeed North West, an event we ran in Belfast on 4 November at the Merchant Hotel in conjunction with our city partners, sought to encourage business leaders to invest in the north west. Through this approach, we have sought to market the Border region to employers that may not have thought about investing in it. We seek to work with the Government and bodies such as the shared island unit to further market often overlooked Border regions and to unlock the true potential of the north west.

The chamber advocates for a joint, all-Ireland approach to working together on environmental issues facing employers on both sides of the Border. In light of COP26 and the challenges we face, a co-operative and cross-Border approach is needed, and we are keen to see the climate resolutions we need on a regional level.

As a chamber, we are committed to working with employers to support them in the movement towards net-zero emissions and to realise the business opportunities accompanying this transition.

On current issues, the Covid-19 pandemic is one. In addition, energy costs and inflation are rising, and our members are facing unsustainable increases in production and material costs, which pose significant challenges for their finances. Nearly half of all respondents to a recent chamber survey cited a lack of access to a skilled workforce as one of their dominant concerns, as well as the continued expansion of Magee campus at Ulster University, as agreed in the New Decade, New Approach Agreement, which must be implemented.

In conclusion, this is an exciting and optimistic time for the north-west city region. Our continually-growing economic offering, coupled with our strong connectivity and infrastructure, promises to bring sustained prosperity to local businesses. Our regional economy continues to grow in strength, and while pressing challenges remain, there is a strong feeling of optimism among our local traders.

Given our proximity to the Border, it is imperative that tax regulations North and South are fair and harmonised and that cross-Border workers have the flexibility they need to meet the demands of the local economy. On that topic, I hand over to the president of the chamber, Mr. Aidan O'Kane.

Mr. Aidan O'Kane:

It is my pleasure to present to the committee today. As Mr. Clancy said, being in the Border region presents nuances and challenges, as well as great opportunities. I am a director of one of the largest foreign direct investment, FDI, enterprises that came into Northern Ireland as a result of the Good Friday Agreement. Allstate in Northern Ireland employs 2,400 people, of whom 900 are in the Derry and Strabane area of the north west. More than a decade ago, Allstate realised that there was a challenge in implementing some of our HR policies on remote working. This was due to tax legislation governing the Revenue in the Republic of Ireland. It prohibited any work carried out for a foreign employer being done in the State. All those duties had to be undertaken within Northern Ireland.

This was an issue that many members of our chamber faced and dealt with over the last decade, after it became apparent that this situation was an issue and whenever employees had greater expectations about remote working and work-life balance. This issue really came to the fore, though, when the pandemic started. In March 2020, a group of individuals dotted around several companies in the north west decided that it was a prime time to try to tackle this issue once and for all in respect of allowing our employees to work from home. When directives from the British Government and the Northern Ireland Executive asked everybody to work from home, if they could, we were left with a dilemma concerning some of our employees. Thankfully, a waiver was in place during 2020 for employees and employers. The waiver for employers ran out at the end of 2020, while that for employees has continued to operate throughout this year. We were facing an issue coming near the end of this year, because that waiver could have run out.

I would like to go over some of the Cross-Border Workers Coalition's engagements on this issue. We met with the Minister for Finance, Deputy Paschal Donohoe, on three occasions this year, in June, September and October. The June meeting was concerned with laying out an awareness of the foundations of this issue and the impact it was having on employers and employees in the north-west region, and right across the Border necklace. The issue was presented to the Minister and his team, and there was a clear recognition of its importance and the impact of the situation on people and businesses. The Minister committed to having the tax strategy group, TSG, produce a paper on this issue. We met with the Minister after that was produced. We had drafted our own respectful rebuttal of the contents of the TSG's findings, two of which were of chief concern to the Minister. In conjunction with tax experts from Grant Thornton and following engagement with Rose Tierney, we produced a rebuttal of both of those aspects.

One point concerned equity in respect of residents in the Republic of Ireland potentially being encompassed within two different tax systems, if they were to work from home full time. The other point involved competitiveness, and whether a change in the relevant legislation would leave employers and businesses in the State at a competitive disadvantage. In our rebuttal paper that we submitted and presented to the Minister and his team in October, ahead of the budget, we respectfully challenged some of the findings and contents of the TSG's paper as being one-dimensional. For example, regarding the equity, and the potential for residents in the State to be in two tax systems, we produced figures that showed those being employed by businesses in Northern Ireland would be no better off. Those with incomes up to £60,000 would experience no benefit at all. On competitiveness, after again having consulted with Grant Thornton, there is much more data to be considered and more work to be done before arriving at a conclusion that any competitive disadvantage would result for businesses domiciled in this State.

To make change in this regard possible, and as easy as possible, we recognise that we must bring in some controls in respect of any legislative changes on remote working. For that reason, we brought some pragmatic suggestions to the Minister and his team. Those were intended to ensure that there would be exposure for the Revenue in respect of the introduction of changes in the legislation governing this area. Some of these controls include limiting the number of days during which employees can work from home for companies based in Northern Ireland. We recognise the international standard of 183 days per year as a maximum. We sought a measure within those limits, which would not set a global precedent. The other control we suggested was having salary caps. Employees who could avail of working from home would need to be under a specific salary threshold. Again, this is a control that we suggested to limit the potential exposure of the Revenue in respect of any changes in the tax system. The third control we suggested was to have specific roles categorised as being able to avail of remote working. That provision would mean we would not be opening this possibility of working from home to those proprietary directors or senior executives who make corporate and strategic decisions from the State, thus inducing a corporate tax presence. Therefore, we have presented pragmatic controls in this regard to the Minister for Finance and his team for consideration.

In the context of all those controls, we have also suggested that any changes could be made and rolled out as a scheme that is time-boxed and trialled to ensure that the concerns highlighted by the tax strategy group could be monitored, controlled and, if need be, revised or, in a worst-case scenario, retracted.

There are ways of changing the rules to allow and not disadvantage those who work for Northern Ireland-based companies.

Within the last couple of weeks we have heard of a further extension into 2022. We have asked for clarification on the associated timescales. At the moment it seems a little open-ended, so a bit more certainty around that is required.

I will finish by giving practical examples of what is happening at present. Employees or prospective employees of businesses like Allstate, Seagate and many other companies around the Border regions are now asking what are the remote working opportunities. To be perfectly honest, we must be straight down the middle and say that while the waiver is in place that is permitted but if there is no certainty going forward then we must be clear that it is quite possible that they will have to be office-based permanently in the absence of something more certain going forward. We are now also seeing businesses north of the Border put out job postings and advertisements for roles, and highly-paid roles in some cases, that state remote working is available to UK residents only. This brings a huge concern in terms of the free movement of people, skills and talent across the Border region, which is absolutely essential to feed businesses in Derry, for example. If that trajectory goes forward with prospective employees making a decision to work for companies that are based in the Republic of Ireland, and Northern Ireland-based companies making decisions to employ Northern Ireland-based employees, then suddenly we are on a path where there is going to be a people border in terms of the economy around the Border regions.

Mr. Aidan O'Kane:

That is not clear and there is uncertainty around that. We have written to the Minister as part of my role. Obviously this matter is really important to members of the chamber. I also hold a position within the Cross-Border Workers Coalition. As part of that role I have written to the Minister to get clarification and certainty around the associated timescales but as of today we do not have that certainty.

Mr. Aidan O'Kane:

That is accurate and that is real life. I have a person, who will hopefully be a future member of our staff, who is making that exact decision. In terms of when this runs out, then he or she is unable to commit to joining our organisation.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Senator Niall Blaney will speak first.

Niall Blaney (Fianna Fail)
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I extend a warm welcome to Mr. Clancy and Mr. O'Kane and thank them for their presentations. As someone who is from the north west I am very much in favour of their proposals and a lot of what they said.

First, I completely concur with what Mr. Clancy said about the cross-Border issues concerning Brexit. I am very much aware that his organisation has a strong relationship with the Letterkenny Chamber of Commerce. That relationship is also quite beneficial to the Letterkenny Chamber of Commerce.

Mr. Clancy made a strong point about the all-Ireland rail review. It is one of the most exciting things to happen in recent decades in terms of the possibilities that exist. Has his chamber done anything, in terms of its own membership, to make submissions to the review? Can it up the ante? I ask because there is great potential for Derry in a scenario where there is speedy rail connectivity between Derry, Belfast and Dublin, and maybe beyond. It is a very exciting time for the north west because we have been cut off, on both sides of the Border, for far too long.

Mr. Paul Clancy:

Yes.

Niall Blaney (Fianna Fail)
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There are a number of tax issues. I agree with what was said by the Chairman. I am very much aware of individuals on both sides of the Border who work on both sides of the Border. As some of them are in an awful position taxwise and are really crippled, I very much favour the proposals made by Mr. O'Kane. I suggest to the Chairman that we write to the Ministers for Finance and Public Expenditure and Reform, and send a copy to the Taoiseach and the Tánaiste. In this era of a shared island, and I know that we are very much in our infancy as a shared island, it is issues like that which need to be dealt with. It is the everyday issues for the people on the ground that are really important in a shared future and this is one of them. While this issue is complex, we need to bang heads together and find answers. I do not think that we have reached the stage where we are focused on this yet but maybe this is the start. Any help that we can be or if the witnesses feel the need to contact us offline at any stage then please feel free to do so, particularly from my perspective and the same applies to my Fianna Fáil colleagues.

My colleagues, Deputy Brendan Smith and Senator McGreehan, also want to ask a few questions.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I wish to join with the Chairman in welcoming our guests and thank them for outlining the issues that they believe face Derry and Donegal, which is an integral part of that wider economy. I endorse the comments made by my colleague, Senator Blaney.

Some years ago this committee visited Derry and Letterkenny, where we met different interest groups, local authorities, the mayor of Derry, the chair of Donegal County Council and the chief executives of the councils along with the president of the Letterkenny Institute of Technology and senior personnel of the University of Ulster. The one message that I got that day was the powerful influence for good generated by the third level education colleges in the north west, including Letterkenny Institute of Technology, Magee College and the University of Ulster. I come from a part of Ulster where, unfortunately, where we do not have as good a level of co-operation or as good an education infrastructure. The message was driven home to us that day how powerful a catalyst the education provision was in attracting investment to the region, as well as a very strong selling in strength to potential investors and people with particular knowledge and skills to come to live in the area, which I sincerely hope can be built on.

Recently, the Government announced that for the first time, the provision is being made under the new PEACE PLUS programme to deliver certain skills and initiatives on a cross-Border basis. That is a welcome development and it ties in with what Senator Blaney said about the shared island initiative, which is about promoting both third level and further education on a cross-Border and all-Ireland basis.

We hear of plenty of job vacancies at present. Do the witnesses see any particular skills issues in the north west that need to be addressed at present? I am a great believer in the further education sector. We should be delivering that sector and it should be more structured on an all-Ireland basis as well. Progress has been made at third level in terms of colleges, universities and institutes of technology co-operating with one another on an all-Ireland basis, and substantial funding is committed under the shared island initiative for research on that basis, between the different colleges in our State and in Northern Ireland.

Are there any issues the witnesses believe we should be pursuing at that time with regard to upskilling and equipping people for jobs the witnesses see emerging in the new green economy and the different economy we will have post Covid? If we are to tackle the many challenges we, as an island, will face post Covid, we need to be doing as much as possible on a cross-Border and all-Ireland basis.

Erin McGreehan (Fianna Fail)
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I will make a brief contribution because my colleagues have covered much of it. I have been working with Dundalk Chamber of Commerce on that tax issue. It is a huge problem and it is not only for Ireland to deal with. We have to push that at European level because harmonisation is needed for all cross-border workers. I lend my support to that and Dundalk Chamber of Commerce is working hard on it. I thank the witnesses for their contributions. It was very interesting to learn more about the north west as an east coast dweller, and I appreciate it.

Mr. Paul Clancy:

I will take Senator Blaney's question about the rail review. That is something we will do. We will work with Letterkenny Chamber of Commerce and will put a joint survey out and get feedback from a cross-Border perspective on that with our members. We have found a very strong voice when we get the two memberships and do a collation of the report back from that. We certainly will do that.

I will let Mr. O'Kane answer on tax, but I will cover Deputy Smith's question on third level education. A masters student starting in Letterkenny Institute of Technology, LYIT, who is working with it and Magee University on behalf of both chambers. The student started in September on a two-year programme to look at cross-Border fintech clusters. The student will gather these data over the next two years to see how that looks from a cluster perspective, copy and paste that cluster and use that knowledge we have to look at and investigate other clusters from a cross-Border perspective. We sometimes find the data finish at the Border, so there is a cross-Border approach to this project. It is a two-year funded masters programme with a potential PhD afterwards. That is an example of the two chambers and institutions working together again, which is very positive.

Mr. O'Kane can also answer the question on the jobs shortage. However, the Deputy hit it right on the nail there in that we find, from a North West Regional College perspective, we are not on the trajectory of investigating what opportunities there are in the new skills bases that will be required in the future. If you are talking about passive houses, air source heat pumps, electric vehicles and things like that, there is a huge opportunity to get ahead of the curve from a north-west perspective.

We have a fabulous institution in the North West Regional College which, along with the other institutions, is doing tremendous work, for example, in providing welding courses. There is a shortage of welders. Academies are also feeding into the fintech businesses, within North West Regional College and Ulster University. We have a great ground base of educational establishments to provide those skills we need. However, we need to plan ahead of the game to get ahead of the curve in order that we have the right skills in place when those technologies are needed. We have youth, experience and manufacturing background to capture some of those things.

Mr. Aidan O'Kane:

I am very pleased that Deputy Smith mentioned about the recognition of the partnership and how it seems to be all joined up, and that is absolutely the case. We see engagements between our business community with LYIT, for example, in the development of fintech-related courses, which is helping build out that higher level pipeline of skills, which many of fintech, insure-tech and regtech companies are crying out for.

Skills is the number one item on our agenda in terms of concern about sustainability of our business and future investment, but we are very joined up. We see indigenous companies such as Alchemy and FinTrU leveraging the university and college to build out bespoke courses to fulfil their needs in terms of creation of that talent pipeline. That is working very successfully.

With regard to the skills shortages in the north west, fintech is a growing cluster. A centre of gravity is certainly forming in the north west between the likes of Allstate, Alchemy, FinTrU, Tata Consultancy Services and Optum. There is a groundswell there and a demand for those skills going into the future. I know, looking into the future, the skills around big data, machine learning, artificial intelligence and automation and robotics will all be essential skills to sustain future businesses. The roles that do not exist today but will exist in ten to 15 years' time are the ones we need to be developing and thinking about now.

Senator McGreehan mentioned the tax issue on a European basis and I thought it was quite interesting to take a look at some other countries around Europe. For example, the tolerance threshold agreements between Germany, Belgium and France were for in or around 19 days going up to a maximum of 34 days for border countries without triggering any tax obligations. That has changed as a result of Covid and all of those countries have substantially increased the number of days working, which demonstrates that, despite taxing rights and obligations under EU and OECD models, there is an appetite to permit higher thresholds. The current Irish legislation allows for zero. That is the reality.

Niall Blaney (Fianna Fail)
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I thank the witnesses for their replies and recognise, as Deputy Smith said, the activity that takes place, especially between the two colleges mentioned, LYIT and Magee University. We had Malachy Ó Néill and the LYIT president in at the start of last year and we had a very good presentation on collaboration from both of them. I met Mr. Clancy two weeks ago. There is further engagement and projects in the pipeline, and that collaboration is great. At some stage, I would hope to get the heads of Letterkenny University Hospital and Altnagelvin Area Hospital before the committee, because a bit more takes place on a cross-Border basis, health-wise, as well. I will not ask any more questions. I thank the witnesses for the collaboration they are doing and if we can be of any help, they should be sure to get in touch, especially from a north-west perspective.

Mr. Aidan O'Kane:

That is a great question. Her Majesty's Revenue and Customs, HMRC, is more flexible than the Revenue Commissioners, so there is a degree of flexibility in respect of a Northern Ireland resident working for a company such as Tata Consultancy Services in Letterkenny. I believe that is permitted for up to approximately 60 days.

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I thank Mr. Clancy and Mr. O'Kane for attending the meeting. It is fantastic to hear about the fintech opportunities that are developing. It is a great body of employment to be developed. It is what is needed. I have two questions. Will Mr. Clancy outline the different experience, sector by sector, of the protocol over the last 12 months? When the committee was in the North the members met different political colleagues from Northern Ireland and they gave us quite a mixed picture, sector by sector, of how people were experiencing it. Some had no difficulty and some had great difficulty. Perhaps we could get a sense of that from Mr. Clancy on behalf of his members. That would be very helpful for the committee.

Second, will Mr. O'Kane outline the experience business leaders and business owners have had in respect of the quality of the communication of the British Government directly with business on some of the complex issues that are emerging both in legislation and with the protocol and how that is going? Yesterday, there was a significant decision that affects Irish exporters with the change to the 1 January rules. That came on 14 December and, while welcome, it was not particularly timely. I am interested in how that direct communication is going. I will give the reason. One of the things we hear a great deal is how difficult everything is and would be for business in Northern Ireland as a consequence of the difficulties in the protocol, but I am not hearing anything or enough from the British Government about the opportunities created by the particular situation given to business in Northern Ireland. I wonder if, privately, there has been more communication on that to businesses in Northern Ireland than there has been publicly.

Emer Currie (Fine Gael)
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I do not mind.

Mr. Paul Clancy:

I will take the first question from Deputy Carroll MacNeill. With regard to the surveys we have conducted with our membership, the overwhelming majority say that the protocol is working for them. From a business perspective, they know there are some challenges in terms of additional paperwork, costs and the like, but that would be the broad brush on it. In terms of the individual-----

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I am sorry to interrupt, but the overwhelming majority of the respondents to the survey say that the protocol is working for them.

Mr. Paul Clancy:

Yes, the protocol is working for them. They say there are some issues with paperwork and additional costs, but they are working through those and they see the opportunity as a bigger opportunity for them than a hindrance. I will put it that way. It is not that they would have liked to have been in that position, but they are now and they are saying they want to make it work in its current form. That is the overwhelming message we are getting from our members across all the sectors. In fact, it would be fair to say that when I met with other membership organisations as well, and we met the Tánaiste in Belfast six or seven months ago, the overwhelming feeling from all those other membership organisations was that stability was needed and it was necessary to make it work. I believe that is the general consensus within membership organisations from a business perspective.

Mr. Aidan O'Kane:

I thank the Deputy for her questions. There are two perspectives the business community in Northern Ireland deals with - directly with the Executive and for whatever other aspects in terms of communications directly with the British Government. First and foremost, the quality of communications with the Executive and access to our elected representatives and Ministers is relatively easy. It is good, direct and accessible from the Northern Ireland Executive perspective. As a larger business, in the all-state context, we have doors opened a lot more freely than perhaps some of the smaller businesses. We are not hearing any challenges. This is where the chamber plays a fabulous role in representing small, medium and large businesses in regard to access to government. With regard to access to the British Government and the communications there, I agree that accessibility is just not there to the degree that we would hope for and seek. I believe there are other priorities, as it were, with regard to what is going on either in England, Scotland or Wales rather than what is happening in Northern Ireland. That is our view.

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I thank the witnesses.

Emer Currie (Fine Gael)
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I welcome Mr. Clancy and Mr. O'Kane. First, they know that I support the cross-Border workers' campaign and I am glad the Minister has agreed to meet with the witnesses again in the new year with regard to giving some clarity about that timescale. However, that is a temporary position and what we need is a permanent solution or something that we can trial and give us hope for the future. What is interesting about the tax strategy position on it is that it is firmly about tax and revenue and does not necessarily involve the bigger picture. Do the witnesses agree with that? For example, the North now has dual market access and, hopefully, that will remain. Looking at the north-west region, is there the opportunity for the South there as well and for the entire region growing together? The labour market has to be set up to do that. Is it beneficial to address this so the entire region can grow and take the opportunities from dual market access? The tax strategy document does not take that into consideration.

With regard to equity, I wish to take up some points the witnesses made and ask them to elaborate on them further. On the equity piece, paying a higher rate of income tax could mean that two people in the one household are paying different levels of income tax because one has Northern Ireland based employment and the other has Republic of Ireland based employment. What is that in reality? The tax might be different but there are salary differences. What other factors contribute to the witness saying that his figures show that it does not make much of a discrepancy? I wish to understand that more. Again, there is the tax strategy paper's point about making it more attractive for employees to work and pay tax in the North and needing a lot more data on that. What kind of data are being referred to? The witness is absolutely right about producing pragmatic solutions here. The North has allowed 60 days. Could we look at a greater number of days, such as up to 180 days that people can work from home? The two other issues were salary caps and the roles. That is definitely the place where the witness is giving solutions and I hope the Minister can make those work.

Mr. Aidan O'Kane:

I can respond to Senator Currie.

There is quite a bit to unpack but they are great questions and comments. Regarding the question about the opportunity for the north west to access the dual markets, the essential piece of that is the ability to staff and resource those opportunities with the people residing in the north west. Derry is the fourth largest city on the island and the second largest in Northern Ireland but it does not even have the footfall to attract major FDI by itself. Regarding the talent pool in the Donegal-Tyrone hinterland, I agree there are opportunities there if we get this right and harmonise in some sort of way to allow access on both sides of the Border to the resources, skills and talent to sustain and attract FDI and help to build the start-up community, which is really important for our economy in the north west. FDI companies do their homework before investing. There is no doubt about that. Companies like Seagate do not accidentally set up in Derry without taking a look at where its talent will come from and how it accesses the skills. There is opportunity there. The Senator is right that the tax strategy group does not take any of those matters into consideration. In many ways, it is very one-dimensional regarding what it concluded.

In and around the equity piece raised by Senator Currie, there are findings and we worked with Grant Thornton on this. We have discovered that a worker earning £30,000 and subject to UK tax actually has less net income than a worker subject to Irish tax. It demonstrates that a wider investigation into the tax impact needs to be considered prior to arriving at any conclusion that workers with UK employers are subject to a more advantageous tax system. It is just not correct. It is not complete. It is not sufficient to conclude that a more beneficial tax system is the only factor as well that will impact a worker resident and working in the State for a UK employer and make him or her better off financially. Studies have been done. A study was carried by Seamus McGuinness and Adele Bergin entitled "Who is Better off? Measuring Cross-border Differences in Living Standards, Opportunities and Quality of Life on the Island of Ireland". There is really no threat to the State or Revenue regarding the matters raised relating to equity.

Regarding competition, it is a bit more difficult to really get to the nub of what the tax strategy group is referring to with regard to any solid evidence that this would be an issue. It is more protectionist regarding how any changes may or may not impact. The tax strategy paper briefly discussed the impact on employers in the State of a more favourable UK tax system available to residents working in the State and concluded that extending the concession puts employers in the State at a competitive disadvantage. We do not agree with that based on the evidence available to us. The north-west city region is a prime example where we have really strong collaboration, which has been alluded to. We have the likes of Catalyst, which is a Northern Ireland entity, setting up conversations about establishing in Letterkenny. These are the things we want to encourage. A prosperous Donegal is a prosperous Derry and vice versa. It is about the north west region.

Emer Currie (Fine Gael)
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I agree and thank Mr. O'Kane for answering my questions so comprehensively. I agree with him that the tax strategy group paper is one-dimensional. I have said previously in the Chamber that I am uncomfortable with using language like the North and South being in competition with each other and competitive advantage. Everything should be about collaboration and harmonisation to grow the region and that should be the starting point.

Mr. Paul Clancy:

There is an option to do that. We are just looking for the right project and should have that discussion. It is a very good suggestion. We have been part of the shared island unit discussions. We would love to get a project that would show how it can work from a co-operative cross-Border point of view in the region. It is just about finding that project. We have not done the work on it yet so we need to do that and see if we can identify something that will work for us.

Ms Órfhlaith Begley:

I welcome Mr. Clancy and Mr. O'Kane to the meeting and congratulate Mr. O'Kane as I know he has only recently been elected as president of the chamber. As a representative for the north-west region, it has been a very exciting time, particularly in terms of the city deal and the inclusive future fund. It has provided huge opportunities for the region. I had the privilege of representing the Strabane district, which comes under the north west. We will really see the fruits of that in terms of the regeneration of Strabane town but it will be transformative for the entire north-west region. I know the chamber has done a lot of work behind the scenes and participated in a lot of collaboration with the different partners to achieve and secure that funding. I commend Mr. Clancy because I know he has put many hours into securing that funding for the north west.

In terms of challenges for the north west, while it is great to see that investment, there are still a lot of challenges and much delivery is still needed for the region. Reference was made to the expansion of the Magee campus. While there has been progress on that, more work needs to be done. I have been harping on in this committee about connectivity and the need for the A5. We have seen progress on the A6 and, hopefully, the all-island rail review will reap rewards for the north-west region. There is a lot of work to be done but I know there is great collaboration in the north west. It is great to see the progress that has occurred to date. It is a really good example of how we can see the rewards of North-South co-operation between Donegal and the Derry-Strabane district.

I want to pick up on Mr. Clancy's point about the protocol. I know he said that a lot of members of Londonderry Chamber of Commerce have not really experienced too much difficulty in terms of the implementation of the protocol as a whole. I was in contact with some of the chamber's members from the Strabane area and Invest Northern Ireland about trying to profile the north-west region in terms of attracting investment and the benefits the protocol can bring. We have already seen that some businesses have relocated to the Strabane area as a result of the protocol and the benefits it offers in terms of access to the British and EU markets. Have the witnesses seen any growth in businesses locating to the north west as a result of the protocol? Do they see any potential for that in the time ahead?

Do the witnesses see any potential for that in the time ahead? The chamber has been working on the Succeed North West campaign. That is so welcome. I hope it will attract investment to the area. Well done to the chamber on all the work it is continuing to do. I congratulate Mr. O'Kane on the cross-Border workers' coalition. I am sure we would not be at the point we are at today in respect of the short-term measures had it not been for the campaigning. I hope there will be a long-term solution. I fully support the sending of correspondence to the Minister to highlight this issue once again for cross-Border workers because a significant number of people are affected by the double tax.

Perhaps Mr. Clancy would like to answer my question on investment since the advent of the protocol.

Mr. Paul Clancy:

The Succeed North West campaign, to which Ms Begley referred, was run in Belfast in November. We are planning to have an event in Strabane on 4 or 5 February next year. The campaign is about considering inward investment and encouraging people from all over Ireland, but particularly those in the Belfast region who went to the gig in Belfast, to come to Strabane to see what is happening, with a view to encouraging them to invest and grow. We are working very closely with the Strabane BID team, chaired by Mr. Kieran Kennedy, to sell what is going on in Strabane, particularly regarding the city deal, and to generate an air of optimism and opportunity for business.

On the specific question on the protocol, our feeling, which we hear from certain investors, is that, because of the uncertainty that exists, many businesses seeking to invest in the region are holding back a little until they have clarity regarding the protocol. They want more stability and to know exactly what the future outlook will be. That seems to be the main issue. I have heard of one or two companies in Strabane - but one in particular - that did move, but there are one or two others whose representatives I have spoken to that would also like to do so but that are a little uncertain. The sooner we can have a stable approach on a way forward from an executive point of view, the sooner we will see much more opportunity.

From speaking to people in Dublin, I note that they are also looking north to see the opportunities and the marketing plan we have for the region. There may be a unique opportunity for southern businesses to gain access. It is very difficult for people to have these conversations until they have clarity on the future. There is a great opportunity not only to look into this but also to make a business case for it. The shared island unit and the associated co-operation can help us to pull that business case together.

Ms Órfhlaith Begley:

I have one more question. Has Mr. Clancy had much engagement with the shared island unit, mainly in respect of investment? The likes of the A5 would be included in that. With regard to looking forward to projects, we had said it is early days and that people need to come together to produce something to bring to the table. I am just wondering what engagement Mr. Clancy has had.

Mr. Paul Clancy:

It is more from an information-sharing perspective at this stage. We have not brought our own projects and thoughts to the table yet. We have been working with the universities. Ulster University Magee Campus has a potential research project working with the chamber. From memory, I understand that Cork Chamber might also be involved. Therefore, we are working on the matter. Our chamber and the board would love to have some projects that we can say come from the shared island initiative but we have not got that far yet. We understand, however, that good ideas are always welcome. We are involved in the regular communications with the shared island unit on what is happening. As late as last week, the Taoiseach gave an update on what was actually happening. There is more to be done.

Ms Órfhlaith Begley:

No problem. That is great. I thank Mr. Clancy.

Rose Conway-Walsh (Mayo, Sinn Fein)
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I thank the witnesses for their presentations. The good work they do on collaboration is widely known across the island and internationally. Many other areas have a lot to learn from them. I commend everybody involved on the great work they are doing, the North West Strategic Growth Partnership and the positive cross-border collaboration that exists. The benefits can been seen in every area. The witnesses outlined many of them in their answers and presentation.

I have a couple of questions. Coming from Mayo, I do not buy into focusing solely on the Derry, Belfast and Dublin circuits. We are considering the western economic corridor and what can be developed along it. We are very enthusiastic about the possibilities and opportunities related to the Atlantic Technological University. My first question is on that. I note everything the witnesses said about the opportunities associated with the market of 500 million people in the EU and access to the British market, but the real challenge will be having a skilled labour force. It is a matter of how we can work on that. What are the opportunities, and what can we do from this end regarding the Atlantic Technological University? What are the opportunities associated with the green agenda, including the opportunities for investment in, and the growth of, renewable energies in the north west and west?

Mr. Paul Clancy:

Mr. O'Kane will take the question on the western economic corridor and the Atlantic Technological University, and I will take the one on green energy.

Mr. Aidan O'Kane:

That is great. I thank the Deputy very much for her questions. I absolutely agree with her on the economic corridor. I had a meeting with the Dublin–Belfast economic corridor folk this week. What is happening in that regard is very exciting. The cross-Border element features really heavily in making the whole thing work. On the western corridor, we can see the green shoots. The Atlantic Technological University is a really welcome asset for the region. Letterkenny has worked very hard to get to that stage, including by engaging with businesses to help develop the courses and research projects. The magic ingredient in all this is the tying together of three strands that need to work: the business community; academia; and government, whether it involves councils or the regional or national governments, such as the Irish Government, or the Assembly. If those three strands are tied together, the magic happens.

What is happening gives us a great opportunity. In Donegal, there is certainly ambition. Things are changing. We are hearing more inquiries about Derry. We are seeing a levelling up from a Northern Ireland perspective in the sense that there should and will be more investment in the north west. We are hearing the same sort of narrative from the Irish Government, which is talking about levelling up, with Donegal, from a regional perspective. When it all comes together, we will have a really good recipe for success in respect of economic growth.

To address the Deputy's point on having a skilled labour force, that is the number-one priority. It is what we have to get right, and that is why academia is so important.

Mr. Paul Clancy:

Maybe I could jump in here and complement the remarks of Mr. O'Kane. We had an energy conference not so long ago in City Hotel Derry. It was very interesting to hear from manufacturers, transport organisations and waste management companies on the challenges they face. Representatives of SONI, which is the distributor of electricity in Northern Ireland, gave a presentation. The Deputy is right that there is a great opportunity to develop wind energy in the north west and in her region. If we are producing energy there, however, we should use it locally rather than lose it through transporting it somewhere else. There is a great opportunity to change the way we consider how and where we produce energy. If we have a strategic plan, we should be encouraging manufacturers to be as close as possible to where the energy is produced. We should change the whole mindset.

There is a business opportunity that we are certainly wrapping businesses around. What we are doing is starting a conversation on where the opportunities exist from a business perspective. On foot of the medical school coming to Magee, some businesses have emerged already. The medical masks operation has started. One of our members has started a new business in parallel to its own business. Once the discussion is started and people are made aware of it, people look at the region in a different way and have a different mindset. With hybrid working and the energy aspect, there can be a great joined-up approach to putting the business case together for the north-west region. Energy plays a huge part in the overall solution. It could bring new types of jobs to the region. Again, it is a matter of tapping into education to ensure we will have the right skills to be ready to embrace the technologies when they come on board and when we make the transition.

Rose Conway-Walsh (Mayo, Sinn Fein)
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I could not agree more. There is GMIT and the Mayo campus and the collaboration between Mayo University Hospital and Magee. We have successes and successful programmes which Mr. Clancy knows, some of which he was involved in, some of them across the island. How concerned is Mr. Clancy about student mobility across the island, whether North-South, South-North? There are so few students. I know they do more in the north-west region but overall, what can we do more to encourage North-South student mobility at undergraduate and postgraduate levels?

Mr. Paul Clancy:

Having the right courses and attracting students is important. An example is the medical school. There have been some announcements on that. When there is a course that people want to do, they will travel and live in the location and some actually stay there and continue to live with their families afterwards, or if they do leave, they come back. It is about creating those courses. I do not doubt that if we created a bunch of courses in the north west around green energy people would come to those because they are the jobs of the future and the skills that we are going to need. It is having an overall strategic plan that skills gaps can be filled and making sure that the colleges, further education institutes and universities, are providing the courses that the businesses need in order to develop and grow. If one creates the courses the students will follow.

Rose Conway-Walsh (Mayo, Sinn Fein)
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The Enniskillen equestrian college is a good example of that. It has 50-50 North-South students. It has developed a niche course. I do think of green energy and the courses that can be done there, specifically to attract people in. I hope that the Cassells report will address the funding model we have for third level and the issues that are there that prevent some of the third level institutions from being as creative and innovative as they might be, were the core funding to be looked at, so that we are not always looking at international students as cash cows and that we look right across the island for the opportunities that are there.

I am pleased that Mr. Clancy has such an interest in the all-island strategic rail review. The western rail corridor and the developments there will be hugely important for us in the west in giving us the connectivity.

Our 15 minutes is up. I thank Mr. Clancy for the work he is doing.

Mr. Paul Clancy:

I thought it might come up at some stage today and I was going to mention McGinley's buses. Only for it I do not think we would have any connectivity in the north west. There is Translink too. We owe a lot to that company for keeping everything in the whole economy going over the years.

Rose Conway-Walsh (Mayo, Sinn Fein)
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But I want to be able to catch the train from Castlebar to get to Belfast and go by Derry.

Ms Claire Hanna:

I thank the Chair and the witnesses. It has been a really interesting conversation. It is good that they are so technically engaged in all those issues, particularly the cross-Border tax. Colum Eastwood and I met with the group before. It is important generally to guard against borderism, wherever it comes from, and barriers to trade and life on the island, and to realise the big opportunity of people changing how they want to work and live after the pandemic. There are real regeneration opportunities from the north west as a result of people being able to work remotely and live there. I agree entirely on that. I also agree about the importance of the rail review. Nothing more nakedly lays out the impact of partition and under-investment in the west and north west generally than looking at the rail map. It is crucial for connectivity and the economy of the future. It is a really important piece of work by the two Ministers, so I am really glad that the witnesses are on to it.

I do not want to go over what colleagues have already raised. Two specific questions flow from the Brexit outworkings. We do not anticipate that the grace periods will end any time soon. We hope that the level of checking is as unobtrusive as it can be into the future but we know that there will have to be some checks. Are the witnesses still operating with temporary infrastructure in its checking capacity? Are there issues around that and the installation and provision of more permanent infrastructure in relation to any protocol and post-Brexit checks that have to be made?

We were discussing how workforce and access to people is so critical to businesses and the dynamism of the region. I do not know the whole ETA issue and EU nationals and other non-British and Irish citizens requiring electronic certification to cross the Border. That has a potential to be absolutely devastating to many. It creates a border for different categories of citizens. One can see many ways by which it would impede businesses in the movement of their own human resources and have huge impacts for tourism with all the visitors who go north but arrive in through Dublin. Is that something that is on the witnesses' radar or have they any thoughts on this?

There are different views on the potential free port concept. What are the witnesses views? How would it work for the region?

Mr. Paul Clancy:

I believe Mr. Brian McGrath will be on the call after this. The free port is not something that I have a lot of expertise on. I do not have a lot of detail on it. Does Mr. O'Kane have anything to say around Foyle Port?

Mr. Aidan O'Kane:

The expert on that is coming on shortly. I would not like to contaminate the discussion with any information that is not coming from an area of expertise. Ms Hanna's point about EU citizens is very much on our radar. It is less an issue than our Republic of Ireland colleagues who are working from home but it still has the potential to have an impact. We have companies such as Seagate in Derry which have very niche skills requirements. They look well beyond the island of Ireland for those skills. They go to Europe, to France, Italy and Spain, for very specific skills around physics, material science and so on. That is one of our members which would certainly be concerned from the skills perspective and having people able to continue to work for them. It could very well be that their staff work on either side of the Border. Because Seagate is in Derry it does not mean they are all living in Derry.

Ms Claire Hanna:

I know that infrastructure is also a port issue so Mr. Clancy and Mr. O'Kane should not feel the need to respond.

Mr. Paul Clancy:

Ms Hanna is right. Anything that stops or is a barrier, whether visible or invisible, to movement from the hinterland, if we call it that, is not good. We want freedom of movement on both sides of the Border for all nationalities because we need everybody to make this place work. We do not want any obstacles like certification. It has come on the radar. We have not done anything as a chamber yet. We have not made an official response but it is in the ether and being discussed. We are watching it closely as a watching brief.

I do not have a lot of information on the Brexit outworkings and the checking and temporary arrangements. The SPS checks have been reduced. I hope that from the perspective of our members we get a resolution as soon as we possibly can to give the stability that we so badly need to get the investment that we spoke of earlier where businesses want to invest in the region. They will not do so until they have that certainty.

Ms Claire Hanna:

Absolutely, and political stability. I thank the Chairman. That is all from me on this section.

Dr. Stephen Farry:

On Brexit, and picking up on Mr. O'Kane's last comments on accessibility to labour, as all present are aware, the protocol only covers the free flow of goods; it does not cover the other three of the four freedoms, that is, the service economy, capital and the movement of labour. What are the reflections of our guests in respect of the service economy in particular? Are there particular challenges of note in that regard? Building on the labour point, is there anything further they wish to say in respect of the new UK immigration policy and how difficult it will be to source labour from the European Union or elsewhere, given that Allstate in particular, as well as Seagate Technology and FinTrU, have a very diverse workforce?

My second question is also on the labour market, but entirely at the other end of the spectrum. Derry in the north west has by far the worst economic activity levels in the entire United Kingdom. From memory, close to half of the 16 to 64 age group population are not part of the labour market. How big a challenge is that in the context of developing the economy in Derry and the north west? How can that particular issue be addressed in order to ensure that we are providing opportunities for people, but also fully utilising everyone's potential for the local economy?

Mr. Paul Clancy:

On the issue of economic inactivity, Dr. Farry is absolutely right. Unfortunately, it is one of those statistics in respect of which one does not wish to be on the leaderboard. It is approximately 30% here and it is 9% less in the UK on average. It is a major issue. Mr. O'Kane and I have discussed this. One of our ambitions for his presidency relates to how we can encourage people back into the workforce. We do that by providing the right training courses, giving them hope and being active and saying there are jobs and businesses out there. There are many manufacturing jobs out there, such as for welders and painters and things like that, that are really struggling to be filled. If people are encouraged to come out from being economically inactive, there are jobs available for them in those skill areas. For example, there are courses available at the North West Regional College that are paid. The students get an allowance and will have a guaranteed job at the end of the course because they are working in cooperation with local businesses. It is actually creating that sense of opportunity.

Mr. O'Kane and I are really going to try to push this year to raise awareness that there are opportunities out there and that we do not want people to leave the area or be economically inactive. There are jobs out there. People need to put their head above the parapet. There is support available and we, as a chamber, wish to work with our members to encourage them to get on board to offer opportunities to people who are economically inactive and to try to target those regions, areas or schools or whatever we wish to do with career guidance and so on to try to create that discussion. We are currently very much at the embryonic stage in that regard but it is certainly one of Mr. O'Kane's key objectives. He may wish to jump in because I know he is passionate about this.

Mr. Aidan O'Kane:

Outside of cross-Border tax, this is my passion. As Mr. Clancy stated, we do not wish to be on the leaderboard in this context. There are other leaderboards on which we wish to be represented. Intervention at earlier ages in terms of career advice, businesses getting into schools, offering support to teachers and parents, providing guidance and identifying what are the jobs for the future is absolutely essential in terms of getting to the people who will be in the economically inactive category in five or ten years' time and putting them on the right path. There is a role the chamber can play in helping the business community to make that intervention. The businesses will help themselves in the meantime as well. They will help to carve out a skills pipeline that will match their needs going forward. It is a slow burner but it is absolutely essential.

Not every child should go to university to do a law degree or become a doctor or a nurse or whatever it is. There are many really great and well-paying jobs that do not require the standard path through university where one comes out with significant debt and may not even get a job. There are other roles that we, as a business community, can put in front of parents and teachers and say that wee Johnny or Mary will have a great career and a great life on this particular journey. I refer to academies and things like that. FinTrU and Alchemy Technology Services are prime examples of taking individuals who do not have science, computer science or engineering degrees and training them, putting them in particular roles and giving them all the support and skills needed to do the job. Those people are building fabulous careers. There is a different way. There is no doubt that intervention is needed in the north west.

Ms Michelle Gildernew:

I thank Mr. Clancy and Mr. O'Kane for their comprehensive contribution to the meeting. I offer my congratulations to Mr. O'Kane on his elevation. We knew him before he was famous. He has done great work on the cross-Border coalition. That issue has been extremely worrying for us all. The conversation has moved. Our guests referred to economic inactivity. Back in the days before the Tories got into power, when the economy was doing really well but we did not fully appreciate just how well it was doing, in my constituency, and particularly in the south Tyrone end of the constituency where there is a very strong engineering base, economic inactivity was zero. Anybody who was able to work was working but we still could not get enough staff. Since then, we have had Brexit and all the challenges that has thrown up. From the moment the decision was taken to go ahead and have the referendum, people voted with their feet and went home to Poland or Lithuania for Christmas and did not come back. We have lost a significant chunk of economically active people who wanted to live and work here and make this their home. Brexit has been extremely difficult in my constituency, especially in the Dungannon area. Manufacturing, meat processing and all of that have been really badly hit. There is no firm that is not now recruiting on an ongoing full-time basis.

There are issues relating to the cost of keeping businesses running. I received a letter today from a very high-profile company in Fermanagh in respect of issues around CO2 availability, the cost of energy and all the other issues with which it is dealing and the difficulty it has keeping the lights on. We have a worrying time ahead of us. I appreciate what Mr. Clancy and Mr. O'Kane have said on the protocol.

I refer to my constituency and the range of issues affecting it. Like Deputy Conway-Walsh and others, I am not fixated on the Belfast-Derry-Dublin axis. It is very important that every boat rises with an economic tide. We in the Border community feel every challenge and difficulty first and we are the last to recover from them. There have been things that have given us great hope. We started the conversation by speaking about the medical school in the north west. It has the ability to be transformative in terms of delivering primary, secondary and tertiary care in my area. There is much for us to be hopeful about, but there are still significant challenges. There are infrastructural challenges, such as the fact that there is no motorway in County Fermanagh. The county does not have even five miles of dual carriageway.

It is a county that does not have any rail connectivity. We have issues with the high cost of energy and how far away we are from economic hubs.

We face extremely challenging times and I would like to draw from the witnesses how important they see the protocol in this with everything else that is going on. Is it still as essential as it was? I noted with disappointment that John Kyle resigned today. He had an alternative view of the protocol from most unionist politicians. I would love to hear the witnesses' point of view on the necessity for maintaining the protocol and ensuring those issues we have do not become insurmountable.

Mr. Mickey Brady:

No.

Mr. Paul Clancy:

From members' perspective, which is what we represent today, I do not think anybody wanted the protocol. Nobody wanted Brexit in the region, for starters. It is the journey we are on together. It is not where we would have started from but it is the situation we are in.

The feedback from members is that the protocol is an obstacle for many reasons related to paperwork and cost. It is hard to identify that because other things have been going on in the global economy because of Covid. There is a challenge in understanding what is and is not a contributor to the additional cost. We have issues regarding HGVs, transport, fuel costs and there is a global issue there. It is hard to pinpoint if the protocol is the issue or not.

The feedback from our members is that having this unfettered access is a golden opportunity that should not be missed. Many people are prepared to say it privately but maybe not publicly because they want to carry on with their business and work through it. They see the opportunity and are taking conversations with people they may never have worked with before because they need new supply chains and things like that as a consequence of many GB businesses not being prepared properly. That created a vacuum and they had to look for alternative supplies. Now they are working with different people and have created relationships. That falls out into the Central Statistics Office and the flow of goods north and south of the Border.

There are many benefits but it is challenging. I do not know if there is an alternative solution. When you speak to everybody they say this is the only thing we have and we need to make it work. From members' perspective, we are looking at the day-to-day running of business and they are getting on with it, dealing with the issues and working through them. In the main it has been positive for them so far in terms of being able to access both markets unfettered. It is a good place we are going to, we hope, if we can get stability.

Mr. Aidan O'Kane:

We are asking how important it is and if it is still necessary. We have to pose the question, "What if it wasn't there?" It is the best of a bad deal, if you like. We have got something we can work with. It is not perfect. Can we iron out the kinks? That is where our energy should be spent. We should iron out the kinks and try to make it work the way it is intended to work. Then we can take stock of what the future holds. We cannot just decide right now that it is bad and we need to scrap it. That would not be good for our businesses.

Mr. Brian McGrath:

I thank the Chair. I am pleased to join the committee today. Foyle Port has a strategic location at the mouth of Lough Foyle. We are the primary marine gateway for the north west of Ireland for commerce and tourism and the largest bulk port operating in this region, and we handle around 2 million tonnes of cargo. We are a key economic driver for the region on both sides of the Border, where we handle around €1 billion of commodities each year, supporting around 1,000 direct and indirect jobs and 20,000 regional farms. In addition to our cargo operations, we are a major marine tourism asset for the region. Until the demise of the cruise industry through Covid, we had an increasing presence in that market for the international cruise industry.

Our jurisdiction covers about 180 sq.km, extending over the entirety of Lough Foyle on both sides, making us unique in the UK and Ireland in that sense. Our jurisdiction stretches from the Craigavon Bridge in Derry north to the line between Greencastle in County Donegal and Magilligan Point on the northern side. We have infrastructure and operations on both sides of the Border and are a truly cross-Border entity in that sense. We are a trust port operating independently of government. All our operations are self-financing, our profits are all reinvested for the benefit of the region and our stakeholders, and we have no shareholders.

In that context, I am delighted to meet the committee and explore how Foyle Port might play our part in that intergovernmental regional piece for the north west.

Niall Blaney (Fianna Fail)
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I welcome Mr. McGrath to our committee today, albeit online. I would rather see him in person, but this is the way things are presently. Foyle Port has quite an impressive portfolio. There is certainly much activity going there and it does an awful lot of good work for the north west.

I also live on a lough, although it is the next one over, Lough Swilly, so I recognise how much potential the port in Derry could have as we develop as a region now with city status. I believe, however, the port is underutilised.

I am particularly interested regarding what was said about cruise liners, and Mr. McGrath mentioned Greencastle. What is the position there? I have not heard of this before. Are there plans afoot, and if there are, who is involved? Is the council involved? There is a harbour group there as well. Will Mr. McGrath give an update on that?

The way the port operates is quite impressive, as is the fact its profits are reinvested. Mr. McGrath is to be commended on that. If there are ways we can try to help develop the port through the Taoiseach's office and the shared island fund, I would very be happy to work with Mr. McGrath on doing that. As we saw in the previous presentation from Derry-Londonderry Chamber of Commerce on the development of the north west, it is an area that works very well on a cross-Border and intercounty basis. We are all big enough to say there is not one part that should develop ahead of the rest. By helping each other, we are helping ourselves. What are Mr. McGrath's views on that? I thank him for his presentation.

Mr. Brian McGrath:

We had very advanced plans for developing the cruise product for the region, essentially based out of Greencastle, which was developed in conjunction with Greencastle stakeholders as well. It was not that we were trying to do something without agreement. It was something we had very close contact with.

Brexit and, in particular, Covid put those plans on hold. We had identified that Greencastle is a natural deepwater harbour. It lends itself very naturally to exploiting our tourist products on both sides of the Border. Consistent with Government and executive policy, we were looking to plug the gap that exists in the north west. The cruise industry in Ireland goes from Cork to Dublin to Belfast, and then there is a lack of infrastructure in the Foyle, where we currently have around 12 or 13 cruise ships, notwithstanding Covid, and tender people to either side, either to Magilligan or Greencastle. We do not have a physical asset big enough to bring the ships alongside. The idea was that we would look to develop an asset that would not only deal with the cruise potential that is being lost at the minute but also develop links with Killybegs as well. Rather than being in some kind of competition with other areas around Ireland, it would be very complementary.

The upshot of it was that we were in close contact with Donegal County Council, and just around the time when lockdown came, we were keen to develop the detailed design for this project. It is fair to say these things were pretty much put on hold at that point, through no one's fault. We should be looking not only at cruise tourism but also at offshore renewables and other innovative ways in which we could use an asset in Greencastle. We should look at how we could develop innovative ownership and operational models with the council and the Government and see how we can really use this as a flagship project for regional development.

On the other side of the water, we are also taking ownership of the Magilligan terminal, which is currently owned by Causeway Coast and Glens Borough Council. We see a way in which Foyle Port can link up the Wild Atlantic Way with the Causeway Coast side of things as well. This gives opportunities to come into Ireland, to go to Glenveagh, the developments around the Republic, the north Antrim coast or to come into the city of Derry as well. It is a very joined-up approach, but it needs an Anglo-Irish approach and a partnering approach in terms of funding for this. In truth, this would be beyond the harbour commissioners, but we are very keen to participate to the full extent we can. That is where the idea is. I would like to see it being reinvigorated, as we come out of these Covid arrangements, in a way that would really hit the ground running. There is no doubt the cruise tourism market will come back. I would like to re-engage on that with the Irish stakeholders as a matter of some urgency.

Niall Blaney (Fianna Fail)
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That is very good. It is an exciting project. On cost, I imagine Mr. McGrath is looking at a major development in Greencastle at a pretty serious cost. Did he get that far?

Mr. Brian McGrath:

Yes, we got that far. It will probably cost more now than it would have if we had done it before when we could have. In relation to bang for your buck, you get a lot of return on this. While there is a need for some inherent infrastructure improvements around Greencastle on the land side, it naturally lends itself to putting a terminal, quay or whatever adjacent to the natural hinterland there. We previously estimated that this probably could be done in the order of between €30 and €50 million. While I hesitate to call it a modest amount of money against regional development budgets or the budget in the shared island fund, because it is a huge amount of money, it could invigorate an essentially underdeveloped - from both sides - asset and could do something significant in the eastern part of Inishowen. It would greatly enhance products in Derry and Northern Ireland as well.

Niall Blaney (Fianna Fail)
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I agree completely. It is something I and others have advocated for many times before. The Antrim coast into Derry and Donegal is certainly some of the most spectacular scenery in the world. However, the areas are completely virgin to the type of infrastructure we need to attract and keep people here. The proposal is a very good one. Certainly, I will talk to the council in relation to the plans on its side and see where it is at. I thank Mr. McGrath for his presentation.

Erin McGreehan (Fianna Fail)
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I thank Mr. McGrath for his interest and contribution. As an east coast dweller, it is good to hear about what is going on in one of the most beautiful parts of the country that has been underdeveloped. It is an untapped resource waiting to be used, appreciated and valued. The work Mr. McGrath is doing is absolutely fantastic. Senator Blaney and I will do anything we can to help him get the funding this project needs and deserves for the entire region of the north west.

The work that is planned and ongoing is very exciting. Well done.

Mr. Brian McGrath:

I will add that part of the reason we are so committed to developing the Irish side of what we do is that 30% of our staff travel from Donegal every day. The integration of business and people in everything is such a cross-Border enterprise. When we made a number of submissions in 2019 and 2020 to the draft national maritime framework - we also made other submissions to the Northern and Western Regional Assembly - we were presenting to the Irish Government our intention to be seen as part of its national infrastructure, which is something that we do not get credited with. Foyle Port is a national asset. The fact that we are a UK trust port on the one hand and an Irish port on the other is a simultaneous and unique feature that should be embraced by both Governments in a way that it has not been hitherto. We have made our own ground on that. We could take it to another level completely with policy support.

Mr. Brian McGrath:

What we have done in terms of policy is to respond to the draft national marine planning framework and to the Northern and Western Regional Assembly on the spatial and economic strategies. We were working closely with Donegal County Council on the details around the cruise terminal. Before the hiatus, if we want to call it that, I offered that we would put the design through planning. That is pretty much where it got to. There needs to be an agreement in respect of ownership and operation, in addition to a cocktail of funding around this with the various partners, stakeholders, councils, governments and so on.

Emer Currie (Fine Gael)
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The Chairman has just asked my question. There is a lot in this. The potential of Foyle Port is significant and the breadth of what it does is mind-boggling. It has the bulk side of business as well as the tourism side. It would also be useful to hear about energy and what the port does in the sustainable energy space. There is definitely an opportunity to develop the port for more tourism, which is a no-brainer, but as we know these things can take years. It would be good for us to have bullet points on how the witnesses want us to help them to progress that. That has to take in the wider picture, which the Chairman mentioned earlier, of shared island projects in the area that do not just relate to the port but to tourism as well. It is about how we continue to develop a north-west tourism proposition that will straddle Fáilte Ireland and Tourism Ireland and how it will work.

Mr. Brian McGrath:

I will add to the point around energy. We need to try to remember that Foyle Port is a multisite and multiterminal operation. When we talk about cargo operations at Lisahally, for instance, which is close to Derry, or the tourism product that could use Greencastle as a base, we also have a hinterland. One thing we have at the port that is unique within the British Isles is access to a land bank of approximately 1,000 acres. Ironically, this is because of the industrial demise of Derry over the past 40-odd years. We have now acquired close to 200 acres at the port and, on the land side of the cargo operations, we have a renewable energy power station that is fuelled by biomass. That is where the centre of our decarbonisation activities will take place. Industrial growth and things such as data centres are in planning at present.

We need to respond very quickly to the climate emergency because the predominant cargoes we have brought in over the years are coal and, to a lesser extent, oil. Many agriproducts that will be affected by fertilisers and so on will be impacted by methane, nitrates and all the rest of it. We have to be very mindful that we need to change our business model over the next few years in readiness for a paradigm shift. We cannot stay the same. That is why we are looking at tourism development, renewable energy development and innovation projects, which will move away from and decentralise the kind of activity that is largely based on coal.

We already have a 17 MW biomass power station in the harbour complex. We are hoping to do a couple of deals with contractors which will come on site and be part of the land bank in respect of renewables before Christmas. That is also going extremely well. It is about how we link up in policy terms on both sides of the lough to look at where these main themes are regarding cargo, tourism and renewables. That is where our master-planning thinking is at.

Mr. Chris Hazzard:

I thank Mr. McGrath for his presentation. It is good to see him again. I was reading Foyle Port's accounts in the annual report that was put up online. They are very impressive, given the very challenging situation that the port has had to come through this year, similar to other ports, with Brexit, Covid-19 and all the rest of it. I would like to get an idea of the master plan Mr. McGrath touched on. Is it in the pipeline? I see that the port's strategic plan up to 2020 is complete. What do the next ten years look like? I am also thinking about modernisation of the port. Warrenpoint is in my part of the world and I am familiar enough with the challenges for the port to be able to modernise to meet the needs of the global industry and not just our local industry. Will Mr. McGrath give us a flavour of that?

How do the representatives envisage that master plan fitting in with the wider economic and strategic aims of the north-west region? For example, I have a criticism of our local port in that a master plan was developed almost in a silo without speaking to the local community or local council. It was more to do with the port itself and did not take into account that the port is an economic engine for the local area. I would like to think that will be part of the conversations in future. I commend the witnesses on the fact that the social responsibility fund profits go into mental health charities, etc., in the local areas. That is very good to see and, hopefully, that will do well in the future.

Mr. Brian McGrath:

I will pick that up from a master planning perspective. We completed the third of three strategic plans. There has been a 15-year period where we have transformed the port in terms of its diversification and everything. We just delivered the most recent plan as the Covid-19 lockdown pretty much hit. We had already written what is the outline of a 30-year master plan for the port. We are just about to work on the next five-year plan as a subset of that 30-year master planning.

What we did instead was that we put a strategy bridge in which would take us to 2023, because we recognised that there was no point in moving forward into a long-term strategic plan in view of the fact that there were so many variables in the emergency situation. In addition to Covid, there are the matters of COP26 and the climate emergency. The latter are to the fore in terms of our concerns about the need to shift from carbon-based products to different things. Our master plan is sitting there ready to go. We have planned for an extensive community engagement in that master plan and that will include community engagement in the Republic with the community in Greencastle and our other stakeholders around the Derry area and beyond.

I take Mr. Hazzard's point about silos. We have learned the lesson that we need to align our strategy and master planning with programmes for government and policies. We were complaining to our Department for Infrastructure asking why it was not using the ports as a major leverage for regional economic development because it sometimes works in silos too. We are now saying that we need to look at where the policy vehicles are that we can attach to and that we can use for our benefit so that we are in concert with Government policy. We also need to make the arguments from the bottom up as to why we should be a good partner for Government in these enterprises. That is where we are with it and we are making good progress on that but perhaps we sat back too long and thought that other people would recognise that it might be worthwhile to use us. Then we were put out a bit when nobody called us. We need to be proactive on that, and we are keen to do that in both jurisdictions.

Ms Órfhlaith Begley:

Mr. McGrath is welcome; it is good to have him. A lot of the questions have already been covered. It is welcome and good news to hear of the potential in tourism opportunities that may flow from the port. What engagement has the port had with the local council on that? Could that be further developed through the council, perhaps with the council as a partner?

I note Mr. McGrath’s extremely positive comments on the protocol. He said that his experience of it has been largely positive and seamless. How does he see the bigger picture around what protections the protocol has offered? Has Mr. McGrath seen an increase in North-South trade as opposed to trade going to Great Britain?

Mr. Brian McGrath:

On the protocol, we put in an awful lot of effort and energy from 2016 right through, promoting our case. If there had been a no-deal Brexit, Foyle Port would have potentially lost 40% of its trade overnight. That is why we are so pleased to see how the protocol was drafted and how it was written. Had we written it ourselves we could not have done a much better job. The reason for that is the majority of trade we bring in comes either from Europe or the rest of the world. Only about 20% of what we bring in comes from the UK. It is in that area that we have the bureaucracy and friction. Given the scale of it, and compared with the rest of our imports, it is not too big a problem for us. That is not to say that we underestimate the challenges for people involved in industry with east-west transactions. The North-South transactions we experience are seamless at the minute so we are delighted about that.

On council involvement, three councillors from Derry City and Strabane District Council are board members of ours. The councils we look to engage with are Donegal County Council, Causeway Coast and Glens Borough Council and then Derry City and Strabane District Council, which is the one we have most engagement with. We recognise that the port cannot just look at Derry the way it might traditionally have done. We are a regional player and we need to make sure we fully engage with the other stakeholders. We have a good relationship with Donegal County Council and with the people working as executive officers there. As we prepare to come out of the lockdown arrangements next year, we need to rekindle some of those contacts. It would definitely help if we had political buy-in regarding some of the ideas we have that would give a steer to officials and encourage them to engage as fully as possible. I cannot complain about any of the contacts we have; we have a good network and we are as outward looking as we can possibly be.

Ms Michelle Gildernew:

I will come in. I thank Mr. McGrath for his comprehensive presentation. I would like to ask about the opportunities there are for tidal and renewable energy. Can Mr. McGrath talk more about the renewable energy opportunities that Foyle Port is looking at? Has the port collaborated with South West College? I know it has done great things in bringing training to local companies and in blue-sky thinking on renewable energy and the possibilities that are out there. I ask Mr. McGrath to elaborate on that a wee bit.

Mr. Brian McGrath:

We have not looked at tidal energy. The other areas we have looked at are hydrogen and offshore renewable energy. The problem with tidal energy in Lough Foyle is the location of shipping channels and so on. The Foyle is a fast-flowing river and could potentially have some tidal energy application but it is not an area we have looked at in particular detail. However, we are open to it. Our sense of Greencastle as an asset base is more to support offshore renewable energy as a support and logistical base rather than necessarily locating some of those renewable devices within Lough Foyle. That is something I am open to looking at but we have not done much on it yet.

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I have learned a huge amount today. I do not have further questions for Mr. McGrath but I thank him for his time.

Mr. Brian McGrath:

It is my pleasure.

Mr. Brian McGrath:

I thank the Chairman for that. I will look to collate a summary document for the committee and for the shared island unit. We have looked with anticipation towards the development of the all-island budgets and I know that ports are mentioned therein. I would urge that Foyle Port is seen as an Irish port the same as Shannon Foynes Port, Dublin Port and Killybegs Harbour in a way that opens up its potential. For years we might have been overly parochial about it.

The economies need to get some sort of stimulus. We would like to table our ideas in that regard, and if the committee is prepared to be a conduit for that, then I will appreciate it very much. I thank the committee for allowing me the time to come here and make a pitch.