Dáil debates

Thursday, 16 November 2006

Industrial Development Bill 2006: Second Stage


12:00 pm

Photo of Pat BreenPat Breen (Clare, Fine Gael)

Fine Gael supports this Bill. In accordance with the new mandate for Shannon Development, announced by the Minister for Enterprise, Trade and Employment in July 2005, the indigenous industry functions carried out by Shannon Development under delegated authority from Enterprise Ireland will revert to Enterprise Ireland on 1 January 2007. This is in line with the recommendations of the enterprise strategy group as endorsed by Government.

The purpose of this Bill is to provide legislative authority for the Minister for Enterprise, Trade and Employment to designate the transfer of staff from Shannon Development to Forfás and to provide a statutory guarantee to the staff that their pay, conditions of service and pension arrangements shall be in no way diminished by virtue of the transfer. Forfás is the legal employer of the staff in the agencies established under the Industrial Development Acts, namely, Enterprise Ireland, IDA Ireland and, after the enactment of this Bill, Shannon Development.

The subject of this Bill is one that is very close to me as it directly relates to Shannon Development, an agency which has historic associations with County Clare and is based in Shannon town. Traditionally it has had functions throughout the mid-west stretching to parts of Offaly and covering Clare, north Tipperary, Limerick and north Kerry. It is unfortunate that so much time has gone by since the Minister originally made the announcement 16 months ago that he was stripping Shannon Development of these traditional enterprise creation functions. It was a decision I condemned at the time, not just because of the manner in which it was announced — the crucial decision was buried in a press release — but also because it was done in the middle of the summer when it was most likely to receive least attention. The original decision was made in July 2005 amid widespread criticism, and last month Deputy Martin chose to do a partial U-turn on the issue and decided to allow Shannon Development to retain its enterprise functions within the Shannon Free Zone.

I congratulate Shannon Development on its recent announcement that Digital River will provide 350 jobs over the next five years in the Shannon Free Zone. Shannon Development is to be complimented on that because Mr. Kevin Thompstone and his team have gone to great lengths throughout Europe and the world to find industry suitable to the region and Digital River will be a welcome asset. In between the original decision and its reversal the relevant agencies were left in a limbo about who was responsible for what. That indecision created much uncertainty in the region with few new job announcements. Some 16 months of potential enterprise creation have been wasted through Government indecision and messing.

The original decision to strip Shannon Development of its enterprise creation functions was made under the cover of "an enhanced regional economic development role" for the agency. Deputy Martin also stated at the time that "Shannon Development supports this recommendation and it will be implemented as soon as practicable". That was a surprising statement then, and seemed even more surprising last month when Deputy Martin rowed back on the decision. Not only has none of the enterprise strategy group recommendations been implemented, but it has taken a year for the legislation to catch up. It shows that enterprise creation in Clare is in a mess. It is also doubtful that Shannon Development originally supported the decision if it is retaining enterprise creation in the Shannon Free Zone.

I welcome the fact that a core expertise of Shannon Development is being retained at the Shannon Free Zone. There must be a renewed focus on enterprise creation in the remainder of the county. As I pointed out to the Oireachtas Committee on Enterprise and Small Business recently, Ennis is in danger of becoming a dormitory town while the outlying towns of north, west and east Clare could all do with an employment boost. One good employer in Ennistymon is doing well. It is a digital company that exports signs all over Europe and the world. Ennis in particular is suffering from a stream of job losses and I would welcome some renewed efforts from both the IDA and Enterprise Ireland in reversing some of the losses we have seen in recent years.

Since 2001, 275 jobs in IDA-supported companies in Ennis have been lost with the closure of Overland Bolling, Studio Eyewear, Pacific Scientific, Tool & Mould, and, most recently, Microsemi. In the wider county there has been a net loss of 164 jobs in IDA-supported companies since 2000. Nationally, in the past five years more than 33,000 manufacturing jobs have relocated from Ireland to more competitive economies and more than twice that number of jobs, that might have located in Ireland, have not come.

The danger that Ennis and similar towns face around the country is that such losses will continue and that this trickle effect will not be reversed with any significant new announcement or policy decision. The Government's recent approval of large price hikes in gas and electricity in the absence of a proactive jobs policy is at best misguided and foolhardy, and at worst irresponsible. There is an urgent need for co-ordinated efforts between several Departments. The Government is making our economy less competitive and driving manufacturing industry out of Ireland into more competitive countries.

The recently announced price increases will also hit the already hard-pressed domestic consumer on top of the existing burden of high mortgages, long commute times, and high child care costs, all of which will fully impact only in mid-2007. We should not and cannot allow the destruction of our manufacturing industry here in the same way the Government has allowed the destruction of the sugar beet industry.

It is a welcome development that Shannon Development and Enterprise Ireland are now well advanced in identifying the number of posts to be transferred and that Shannon Development staff and their representatives are engaging positively with the process. This is happening in parallel with a redundancy programme which I hope is offering new opportunities to former Shannon Development staff. Those staying on have expressed strong interest in transferring to Enterprise Ireland. However I question whether the decentralisation programme, particularly for Enterprise Ireland, will ever happen. The Minister said early in his statement that regional offices will be established in the Shannon region and that is welcome. However, Members should remember that the decentralisation of Enterprise Ireland to Shannon was announced by then Minister, Mr. McCreevy, in the 2003 budget. This has not happened. Only approximately 19 jobs were taken up in this at the time and we recently learned that Enterprise Ireland is to move to new headquarters in Dublin with a long lease of 25 years. Enterprise Ireland is one of the least developed decentralisation programmes, in contrast to the movement of Revenue staff to Kilrush in west Clare. I hope this will happen in the near future. Introducing 50 jobs to west Clare is important and will boost the region, where not many jobs are available. We have BillPost, which has been successful. I commend the management on its recent work. I have learned that it is to move into the Revenue office and that will boost Kilrush.

I urge the enactment of this legislation before the end of the year to facilitate the transfer of staff from Shannon Development to Enterprise Ireland. At the same time, responsibility for indigenous industry support functions will transfer from Shannon Development to Enterprise Ireland on 1 January. My party will support this Bill. Two weeks ago I attended a launch of E-Town in Milltown Malbay. This is an initiative by Shannon Development allowing people to work from their homes. The first of these projects has taken off in Milltown Malbay recently and I wish the project success so that broadband can penetrate into regional towns throughout County Clare and the mid-west. The lack of broadband is a handicap for people who want to work from home in their areas. especially when one compares it to the 95% broadband penetration in Northern Ireland.

As I said, my party will support this Bill. The legislative provisions are based on numerous precedents for transferring staff between public bodies and I welcome the fact they provide a statutory guarantee and that there will be no diminution in the pay or service conditions of Shannon Development staff when they transfer to Forfás. It had been proposed to introduce these legislative changes through an amendment to the Industrial Development Act 1993, to be effected by way of a Committee Stage amendment to the Investment Funds, Companies and Miscellaneous Provisions Bill on 28 September. However, as this was not possible for procedural reasons, the only feasible option to enable the staff to transfer at the same time that the functions will revert on 1 January 2007 is to introduce the legislative provisions by way of a stand-alone Bill before the end of the year. In line with the recommendations of the enterprise strategy group, the new mandate for Shannon Development also provides that the IDA will assume responsibility for promoting investment in and providing ongoing support to foreign direct investment companies in the Shannon Free Zone. The reversion of functions relating to indigenous enterprises from Shannon Development to Enterprise Ireland at this late stage needs to be prioritised.

I hope the Bill is enacted quickly. We welcome it and hope the mistakes by this Government on Shannon Development will be rectified giving the IDA a proper job creation role in the mid-west region so we can boost the economy in this fine region. Shannon Airport, in the middle of the region, is an engine for growing jobs in the region. I hope Shannon Development will be successful in the near future.


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