Dáil debates

Thursday, 16 November 2006

Industrial Development Bill 2006: Second Stage


1:00 pm

Photo of Cecilia KeaveneyCecilia Keaveney (Donegal North East, Fianna Fail)

I am delighted to be able to speak on the Industrial Development Bill. I know it pertains to Shannon Development in particular and much of what I wish to say relates to the contributions of other Members regarding regional development. This constitutes one of the good examples of regional development. I agree there is a need to examine the regions to ensure their development potential is reached, strengthened and supported. In accepting and acknowledging the work that has been done in the Shannon region, I also wish to relate this to my constituency. The Shannon area is facing particular difficulties and changes which are probably due to the changes in the airport, which had a significant positive impact on the region. Our area had a very good textile industry which had a very positive impact on the region. In a time of change, it is important that the relevant State agencies are aware of the new potential in every region. I am confident that every region has the potential to deliver significantly in terms of jobs.

Through education, Irish people are given a great opportunity to excel. Across the world, Irish people are sought for many jobs, most of them high quality, and are recognised at the high end of the scale due to the investment in education in Ireland. This emphasises the importance of not bringing everyone into a particular centre or hub, as has happened in the past. Past development has tended to gravitate towards Dublin. A previous speaker spoke about the lack of decentralisation to Cork. With all due respect, the major centres have attracted a considerable amount of industry because they are accessible major centres with supporting infrastructure. I agree with the decentralisation of Departments and Government support agencies to regions that do not possess the natural tendency to draw investment, as is perhaps the case in centres such as Dublin, Cork and, probably, Galway.

The Minister spoke about identifying and bringing forward new initiatives, projects and programmes. That is one of the points I will address. The Minister also announced that he will examine the extensive property portfolio that Shannon Development will use. In his speech, he pointed out that Shannon Development's property portfolio is located throughout the region. That is a key point. The Minister stated that Shannon Development would use its extensive property portfolio as a lever to drive the delivery of the economic development infrastructure that is essential for regional development. I will address the last point.

Donegal was considered almost as a test case for mass redundancy in the case of Fruit of the Loom. I do not wish to focus exclusively on Fruit of the Loom because it also involved the overall textile industry as a number of companies found it uneconomical to remain in the region. This was not the legacy we wanted to promote when thinking of industrial Donegal. Fruit of the Loom received substantial investment and grant aid from the Government and many textile companies received support to locate in Donegal. To be fair, these companies created a considerable amount of wealth in the Inishowen Peninsula, which I represent, and throughout my constituency. This wealth trickled out throughout the entire north-west region. In most of the cases involving redundancies, the companies concerned treated their staff very well, although that was not true in all cases. However, Fruit of the Loom is long gone.

The Minister's comments about Shannon Development and recognising the importance of having extensive property portfolios are crucial to what I would argue for in my region. One of the lessons of the Fruit of the Loom legacy relates to the disposal of assets. Remnants of the Fruit of the Loom era, such as a number of factories, were dotted throughout north-east Donegal. However, many people feel very sore, and rightly so, that those assets were not taken back, or should I say, bought back by State agencies. I believe the company owned its own properties. As the factories closed, the relevant State agency should have moved in and taken on the responsibility of adding these properties to its portfolio. Many people believe these assets could have been used to attract other companies to the area and, just as importantly, they could have been adapted to provide enterprise space for local companies, either for business start-ups or business growth and expansion. Ultimately, in some instances, the factories are empty or have been sold to businesses that did not create as many jobs. I acknowledge that did not take place in all cases. In other words, the number of people employed at any given time in any one of the factories has not been replicated at this time.

We felt that if State agencies had property portfolios in the region, it would keep the pressure on them, but that has not always been the case. An IDA Ireland advance factory has been located in my home town for approximately 30 years but has not really been used and has not opened its doors for any long-term venture. I am aware that IDA Ireland and Enterprise Ireland always worry about having property in their possession. They would argue that if a property in their possession lies empty, it is merely a white elephant, but I would argue that it is very important for extensive property portfolios to be in place so that people who come to the region have the opportunity to look at various factories and move in straight away. I regret that we do not have the significant property portfolio possessed by Shannon Development, as indicated by the Minister in his speech. This factor has not helped when we brought people into the regions because we have not been able to point to potential opportunities for immediate start-ups.

I have advocated and continue to advocate the need for industrial units, both in selling the area to prospective companies thinking about coming to the area and selling an enterprise culture to our home-grown companies to let them know that we have faith not only in their efforts but also in their ability to grow a sustainable and profitable company. We certainly cannot make a mistake about it in the north west. Home-grown companies are by no means looking for hand-outs and I am sure the same is true in the Shannon region. These companies have been quietly tipping away sustaining local jobs for local people in a small but reliable way. While I commend the work of IDA Ireland, Enterprise Ireland and county enterprise boards, many small companies, particularly indigenous companies, fall between two stools in terms of agency support.

I noticed that the Minister said that Shannon Development works with Enterprise Ireland and IDA Ireland to identify and address indigenous and foreign direct investment companies in promoting the area. It is very important that this co-operation is replicated in every region. Situations arise where indigenous companies are falling between stools and are left ineligible for support.

Given the rising prices of land and limited pockets of land zoned for industrial use, I strongly advocate the need to put in place supports to assist small businesses to purchase land to build premises at reasonable costs, rather than the over-inflated costs of land experienced around the Border areas due to the strength of sterling and the influx of developers from Northern Ireland who have more buying power for their pound. In one instance, when I approached the local authority in respect of a consultation process it had carried out to dispose of land zoned for industrial use in a small town in my peninsula, I learned it was considering auctioning this land to the highest bigger. In one way, one cannot tell the local authority it was wrong to do this because, as it would argue, it is not a development agency and must make money so it can provide services. I vehemently argued against the idea of auctioning the land. The county council in my area has been very proactive in trying not only to maintain jobs but also to support new industry and work alongside the county enterprise board, Enterprise Ireland and IDA Ireland.

There is little or no industrial zoned land in the town in question, which is my home town. This is because of the pressure to build more residential developments. This effectively would exclude existing companies from expanding and reaching their full potential and, ultimately, prevent them from employing more people. I was informed by Donegal County Council that it was not a development agency, which I fully accept. I am aware that Shannon Development will have a very strong link with Clare County Council. The local authority has the same responsibility as anyone else to aid local economic development, particularly in respect of the disposal of land and premises. The Government should be actively pursuing this area. While on one hand, there is the disposal of large capital assets and the making of a profit, on the other, there is an argument for beginning to accrue land in small towns specifically for industrial and commercial development by local small businesses so that the potential for job creation measures exist even within regions.

In regard to enterprise development space, we have listened in recent months to new and exciting plans for the north west. I am glad these are being unveiled in regard to infrastructure and all-island co-operation through the interdepartmental group and the north-west gateway initiative. I acknowledge the Minister has visited the north-west region on a number of occasions in this regard.

In as much as we are seeking new exciting initiatives for the Shannon region, on an island basis this is probably one of the most opportune times for pilot initiatives and for an initiative that will be marked as historical. This can be seen to be tied up in many respects to the current debate on whether the Executive will be re-assembled in March. Ultimately, the success of our region relies on the peace process that commenced a number of years ago but which has still not realised its full potential. We have seen the potential for road and other basic infrastructural investments in the north west. I accept the Minister cannot do this single-handedly.

Many of our problems are related to accessing the region. The Minister is not responsible for a number of the counties in Ulster. Therefore, the regional development and economic potential of our area rely heavily on the outcome of the current debate in the Six Counties of Ulster where hopefully the peace process will be cemented. I call again for the people in charge of driving that process, the two main parties and their supporting other parties to stop prevaricating and realise that their people need the investment that is being offered by Gordon Brown and by the Government. In that sense, our region needs them to, pardon my use of the phrase, get their finger out and face the reality of what they should be at, namely, local politics.

In regard to the north-west gateway initiative, there is a real opportunity to harness and attract development into the north west. A key area for this provision is enterprise units in Bridgend, Burnfoot or Muff. This is a prime location in terms of three-way access between Letterkenny, Derry and Buncrana. Our regional development must be simply that — spread throughout the north-west region. Letterkenny is booming not least from a commercial perspective but it has also virtually burst at the seams. It is good to see that. We have a role in encouraging and pushing prosperity into other small towns, encouraging them to develop and grow.

In regard to developing an enterprise culture, it is a case of which came first, the chicken or the egg. To develop an enterprise culture, the infrastructure must be there and to develop the infrastructure, the enterprise demand must be there. We must be proactive and take responsibility for creating an enterprise culture and driving it forward. Developments such as the north-west gateway initiative and the work the Minister is doing in co-operation with the Letterkenny Institute of Technology, the Sligo Institute of Technology and the colleges in the Derry area are important in this respect.

There is a need for higher standards of infrastructure in my county and elsewhere throughout the country. Roads and water and sewerage schemes need to be progressed. Energy provision and reliability of services must be guaranteed. My area is one of the 10% to 15% of areas that still does not have rural broadband access. Such access is needed as a priority in County Donegal, given that the county is being promoted as a work-life balance destination. Given that Shannon Development also has a tourism dimension, the people there will understand when I talk about the need for the provision of basic infrastructure throughout the region to ensure that these opportunities are realised.

Connectivity used to be the buzzword and some would say it will be a phrase of olden times by the time broadband is rolled out to Inishowen, but I do not believe so. The Minister for Communications, Marine and Natural Resources is progressing broadband access to the remaining 10% to 15% of areas that do not have it. We are well on the way to being fully covered and connected.

While we have done a considerable amount to raise living standards through the introduction of and increase in the minimum wage, we must be mindful that this adds to the burden of companies. This aspect is as relevant in Shannon as it is elsewhere. It is particularly more difficult for smaller companies to absorb those increased costs and the costs associated with PRSI contributions. Many companies are struggling to make payments and cover wages on a weekly basis as their cash flow is being squeezed by slow payment by larger suppliers while their tax burden remains a weekly bill that must be paid.

There are many pressures in my region in regard to the sustainability of companies, which must bridge the gap between receipt of payments due and the payment of moneys owed. The decrease of our rates base following the closure of many large textile industries has put pressure on county councils to increase rates every year and the burden of that cost falls on the small number of companies in place, which is a vicious negative cycle. The Minister might discuss with the Minister for the Environment, Heritage and Local Government the possibility of increasing the basic payment from that Department to the local authorities in recognition of the pressure they are under. In towns such as Buncrana, approximately 48% of the rate base has been lost with the demise of the textile industry. That puts untold pressure on the smaller industries that are trying to maintain themselves. This probably also applies to other regions but it is particularly relevant to my region given the loss of textile industries there.

In our recent history we have been known to offer tax breaks as incentives for various initiatives. The tax breaks for the arts are important and should be targeted at the right people. Sometimes it is argued they are not given to the people who need them most. I would like to see the Government, particularly when we are seeking to maintain our competitiveness, take a more creative view of assisting small businesses in terms of tax and responsibilities as an employer. Often an important employer, albeit on a small scale, particularly in rural communities can be the one that is under most pressure.

I fully commend the work of the county enterprise boards. They have introduced low interest loans and softer supports. I also commend Enterprise Ireland on its work with specific sectors. However, I would like to see more co-ordination in terms of supports for local industry, less movement of the goalposts and satisfying criteria and more practical assistance with tax and PRSI contributions.

While I may stand to be corrected in this respect, I would like IDA Ireland to encourage more companies to locate in our region, as we have much to offer. I would like the region to be better promoted and more companies to locate there such as AssetCo, PowerBar, PowerBoard which located there recently and the other small number of companies that are based there.

In some respects some of the education issues are pertinent to my area rather than to Shannon Development. We are pushing forward in government the debate on third and fourth level education. It is important we continue to maintain an outturn of highly qualified potential employees and business people because employers elsewhere in the world are seeking to recruit Irish people as they recognise that they are well educated and their ability to perform internationally is high. Therefore, we must ensure that we retain a number of these high-fliers in our regions.

To that extent it is important to ensure that if people in areas such as County Donegal want to attend the university closest to them, namely, the universities in Derry, Coleraine and Belfast, they should be alleviated from the burden of the payment of cost of third level fees. The cost there is £3,000 per child per year, which places a heavy burden on people, particularly those who would qualify for a maintenance grant. For example, if students were to qualify for a maintenance grant and a family has children in college, the payment of £9,000 a year in college fees would be a substantial body-blow. If a student applies for a loan for maintenance, he or she might be granted a loan for the cost of fees but I am informed that the student would not be granted a loan for the cost of maintenance.

These issues are pertinent. If we want to keep good people in our regions to attract other companies to build indigenous companies, we must be assured that the debate on third and fourth level education becomes a reality and that all people on this island get an opportunity in that respect. We have relied on people migrating from other parts of the world to fill the gaps in employment terms. It is important that we always focus on our indigenous people and ensure they have the opportunities here rather than having to go abroad while other people migrate here to fill the gaps in employment. I hope the Bill will be of benefit to the south-west region and I look forward to a continuation of expansion of employment in the north-west region.


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