John Deasy (Waterford, Fine Gael) | Oireachtas source

I have raised this issue because of comments made by the chief executive of IDA Ireland, Mr. Barry O'Leary, last week. He said that even with regional incentives, it was becoming increasingly difficult to convince companies to invest outside of Dublin or Cork. He was speaking on an occasion when he was announcing a net 6,570 jobs resulting from 145 investments by multinationals. Where those developments went was not surprising. In fact, where such developments go has become entirely predictable. Of the 167 job announcements made by the IDA in 2011-12, 79 were centred in Dublin, 24 in Galway and 20 in Cork. We are getting used to that trend. Based on recent research, it seems that as much of 82% of jobs created by overseas firms in the past six years have been centred in those three urban areas. This trend has hardened since Mr. O'Leary took on his position in the IDA in early 2008. I would go so far as to say I do not believe there is a serious policy in the IDA for attracting foreign direct investment into the regions. My constituency of Waterford city and county has become an afterthought for the IDA and is effectively a foreign investment free zone.

This brings us to the issue of regional or investment aid and the incentives that are intended to incentivise foreign companies to move outside of the three urban areas which have been getting the bulk of foreign direct investment. The objective of the regional aid scheme is to provide support to enterprises that seek financial assistance to establish an initial investment and-or job creation link to an initial investment project in Ireland. It lists the categories which can get a grant, salary costs, second-hand equipment, lease land and buildings, etc.

The regional aid incentives are not working and have not worked for some time. As far as I understand, the existing framework for regional aid and the regional aid map cover the years 2007-2013. I understand also that the Department of Jobs, Enterprise and Innovation is putting together new guidelines, in conjunction with the European Commission, for the post-2013 period. How is the Minister going to incentivise foreign companies to invest in areas under the new regional aid guidelines he is drawing up with the European Union? Under the current regional aid map, the highest rates are afforded to the Border, midlands and west, BMW, region. For the period 2007 to the end of 2010, the region qualified for a rate of 30% for large firms, and 40% and 50% for medium and small firms, respectively. In accordance with the guidelines, a reduced rate of aid for the BMW region came into being in 2011, reducing to 15% for large companies, and 25% and 35% for medium and small firms, respectively. The maximum current aid rates for parts of the south and east region remains at the lower level of 10% for large companies and 20% and 30% for medium and small companies, respectively.

It is worth pointing out that the CSO recently reported that unemployment was highest in the south east, at 18.7%. The south east does not qualify for the highest levels of regional aid. The Minister should amend the regional aid guidelines immediately, as has been done previously, to reflect the current economic landscape in the different parts of the country. If the Minister accepts that these incentives are not working - it would be hard not to - what plans does he have to incentivise foreign firms to develop in the regions outside of Dublin, Cork and Galway?

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