Wednesday, 11 October 2006
Question 10: To ask the Minister for Enterprise, Trade and Employment when the IDA industrial park on the Sligo Road, Ballina, will begin operations as an industrial park, bringing much needed employment to the Ballina town and region; his views on whether infrastructure investment is urgently needed to attract industry to this employment blackspot; and if he will make a statement on the matter. [32085/06]
State support for enterprise and job creation is channelled through the industrial development agencies. IDA Ireland has statutory responsibility for marketing Ireland, including individual areas and towns such as north Mayo and Ballina, for overseas investment. Enterprise Ireland has responsibility for the promotion of indigenous industry, while county enterprise boards concentrate on the micro sector. While I may give general policy directives to the agencies under the Industrial Development Acts, I am precluded from giving directives regarding individual undertakings or from giving preference to one area over others.
The management of IDA Ireland's property portfolio is a day-to-day operational matter for the agency and not a matter in which I or my Department have a statutory function. IDA Ireland has assured me it is actively promoting both Ballina and the north Mayo area generally for new foreign investment. Since January 2003, there have been five first-time site visits to Ballina. In addition, the agency is also working with its existing base of overseas companies to encourage them to grow and expand and to further enhance the attractiveness of the county for new investment. The agency is developing new world class business and technology parks in a number of towns throughout Mayo.
IDA Ireland informs me that it has had extensive discussions with Mayo County Council regarding the acquisition of the approximately 27 acre site in local authority ownership on the Sligo Road in Ballina. The agency has completed site investigation works and has obtained planning permission for site development works to ensure that these lands are suitable for industrial purposes, prior to acquisition. I understand that IDA Ireland is currently awaiting contract documentation and a copy of unburdened title from Mayo County Council.
IDA Ireland recognises the need to provide high value employment opportunities in Mayo, including Ballina, which provide sustainable long-term jobs. The agency is working with local groups, utility providers, FÁS and other agencies to ensure that Ballina and Mayo secure the appropriate infrastructure to enable the existing companies to grow and develop and to make the area sufficiently attractive for new projects. IDA Ireland has been deeply involved with local partners in the development of regional planning guidelines. I am satisfied that the strategies being pursued by the development agencies, together with the Government's commitment to regional development, will continue to bear fruit in terms of the creation of sustainable employment for the people of Ballina and Mayo generally.
I thank the Minister for his reply. Unfortunately, it is the same reply I got from the Minister in March. He told me then that the county council was talking to the IDA about this site. It is a sham and a travesty. I do not know what the Minister has been doing, but he has done nothing since I questioned him on this issue in March. We get the same old answers all the time.
I will tell the Minister what I told him before. At 11%, the unemployment rate in Ballina is twice the national average. A net total of 1,000 jobs have been lost to Ballina in the past nine years. There are more people on the live register in Ballina than in the whole county of Roscommon. It is an unemployment blackspot and what the Minister is proposing is disgraceful.
The Minister told us there have been five site visits since 2003. Where exactly did those people visit? There is no industrial or technology park in Ballina. This saga has been going on for seven years. The Minister had better get his finger out and do whatever he must to sort this out. He is not doing his job for Ballina or north Mayo. It is an utter disgrace.
There are no road projects for Ballina to be found on the NRA website. The N26, incorporating the Ballina-Bohola bypass, should be developed. The Minister should tell the NRA that he wants a road into Ballina. How can industry access Ballina without a proper road? We do not have an industrial site. We need one. The IDA told me in no uncertain terms that companies want to locate where roads, railway and broadband infrastructure exists. They want to locate in industrial and technology parks. Where are those in Ballina? What is the Minister doing about this aspect? There is a €3.5 billion under-spend in the national development plan. We need balanced regional development. How can north Mayo be competitive without essential infrastructure? I want the Minister to give me answers and not the same old stuff again.
In 2002, there were 1,976 people on the live register in Ballina. In August 2006, there were 1,448 on the register. In other words, 528 more people were unemployed in Ballina in 2002 than there are today. I respectfully suggest that calling towns like Ballina unemployment blackspots does nothing to enhance the attractiveness of the town for inward investment. It does not create the right profile or image for the town. We need to deal in facts, and those are available in the live register and the quarterly household surveys. They show that the unemployment rate in Ballina has decreased significantly since 2002.
I am not on the county council. I did not select the site. I am not responsible for the complex legal difficulties that have surrounded the site. Far too often the Deputy's reflex action is to blame the Government and the IDA. I have discussed the matter with the IDA and have asked it to make a call, with the county council, as to whether it should engage or look at alternatives. My understanding is the county council selected this site and the IDA agreed, in good faith, to try to develop the site as an industrial park to attract jobs. It is not good enough for people to come here and attack the Minister of the day for decisions that were taken collectively at local level many years ago. However, there is a fundamental issue with the site that potentially involves significant litigation. I have asked the IDA to consult with the county council and examine all the options for the provision of top class industrial park facilities for Ballina.
The Deputy has been active in opposing any development of the Corrib gas field.
I am not so sure that the activities the Deputy has been engaged in sends out a wonderful signal to external investors who wish to invest in Mayo. Far from trying to arrive at a reasonable solution, the quality of the engagement by the Deputy and others on this issue actually sends out a negative signal in terms of trying to attract investment. We should always endeavour to exploit natural resources when they become available, particularly as this country has not had good experience of discovering such hydro-carbon resources — we have only had one before this. As Minister for Enterprise, Trade and Employment, I respectfully put it to the Deputy that I am conscious of the signals the unfolding of this saga is giving externally.
The Minister is talking about an abysmal increase in employment. The actual job loss stands at 1,394, meaning that almost 1,000 jobs net have been lost. No matter what kind of spin the Minister puts on this, he cannot deny this net loss of 1,000 jobs to Ballina over the past nine years. That is unsustainable. Whether he wants to believe it or not, the Minister is responsible and must do something. He has been doing nothing. It is not enough for him to wash his hands and say that the county council is dealing with it. The Minister should go down there and find a site. I do not know where he has been bringing those industrialists to because there is no place for them to go.
I am not, and never have been, against the Corrib gas field. What I am against is the fact that Mayo is getting nothing for it. What the country is getting from this field is abysmal. A social service in a village would provide as many long-term jobs as the Corrib gas field. I would love to see the gas brought ashore in a way that would mean something to the people of Mayo. The people need that.
The N26 into Ballina is disgraceful. The N5 is disgraceful. The road to Belmullet that one must use to reach Bellanaboy and the gas field is a dirt track. The best road down there is the haulage road between two bogs that the Government built for Shell; it is several kilometres long. If the people were getting the same consideration as Shell, we would have a different country.
I did not think the picketing of Deputy Kenny's constituency office suggested a positive outlook.
The IDA will continue to market Ballina. There are other options if a particular site is not available. There are many examples of foreign direct investments locating either in private sector developments or in greenfield sites.
The manufacturing sector — both indigenous and foreign-owned — has been a key component of the economy over the past two decades and it will continue to be a significant contributor to exports, employment and economic growth in the future. Home based enterprises play a significant part in the sector, and the Government is encouraging the development of that element of the economy.
Continuing the economic success of recent years will require indigenous enterprises to overcome complex new challenges and harness a range of new opportunities. Among those challenges are the need for improved management skills, the need to develop international marketing and sales capabilities, the need to exploit state of the art technology and business processes, and the need to forge strategic alliances and partnerships.
Enterprise policy is being actively refocused towards creating conditions that will make possible a sustained shift to higher skilled, knowledge-intensive activities and in which advanced manufacturing expertise will be an important contributor to growth and employment. To that end, in 2005, Enterprise Ireland launched Transforming Irish Industry, its strategy aimed at strengthening indigenous industry. The strategy runs from 2005 to 2008 and Enterprise Ireland will be soon evaluating its impact as it formulates strategy for the period 2008-12.
Enterprise Ireland's effort in this regard will be underpinned by the supports provided by the county and city enterprise boards. The role of the CEBs in helping to generate a strong culture of entrepreneurship and the creation of new businesses is important in its own right as a generator of wealth and employment at local level, but its role in the development of the seed corn from which high growth indigenous enterprises can emerge is also critical.
In 2005, I established the Small Business Forum. The objectives of the forum were to examine the barriers inhibiting small businesses, that is, those with less than 50 employees, identify how those could be addressed and outline measures to assist those businesses to grow and flourish. The forum delivered its findings in April of this year, making recommendations in the areas of reducing the burden of regulation and local authority charges; broadening access to finance; enhancing management capability; stimulating innovation; and driving the adoption of ICT.
To assist industry maintain competitiveness and increase productivity, the economic development agencies are working on an ongoing basis to promote the adoption of new technology and best practice at company level. The agencies provide mentoring and developmental supports to enhance management capabilities and build critical workforce skills in client companies; support the creation and implementation of strategies for market entry, development and growth; and provide strong supports for innovation and research and development.
My Department's strategy is to maximise export sales through the utilisation of applied research, technology and innovation while ensuring economic development is achieved in a regionally balanced fashion. This is reflected in changes to tax rules to encourage more research and development activity to take place here, particularly in the area of high value added and customer driven innovation.
The recently concluded social partnership agreement, Towards 2016, also acknowledges the importance of the manufacturing sector with an agreement to establish a high-level manufacturing group to review the challenges facing the manufacturing sector and identify further measures to meet these challenges. Officials in my Department are currently working on the establishment of this group and I hope to be in a position to make an announcement on the make up of the high-level group very soon.
Is it not obvious to the Minister that we are haemorrhaging jobs because this economy is now an extremely costly one in which to do business? The report issued yesterday by the National Competitiveness Council makes grim reading in terms of the issues regarding the future development of the economy. It reveals that the Government has made little progress in addressing spiralling business costs in recent years and that it will lead to a dramatic collapse in our export market unless that problem is addressed.
The Minister said the Small Business Forum highlighted a number of issues, one of which concerned regulation. Very little has been done to address that issue. The other one concerns local authority charges. Local authority charges have consistently increased during the term of this Government. In fact, since 2002, the Government has introduced over 40 increased stealth taxes. What assurance can the Minister give the House that he will prevent his colleagues from increasing those stealth charges or introducing new indirect taxes? What practical steps does he intend to take now to address the issues regarding regulation, not some time in the future?
I did not interrupt the Deputy. I have already pointed out that we did a useful exercise this year when I commissioned Forfás to do an analysis of employment patterns and trends in both manufacturing and traded services in the past five to six years. The result of that analysis was that approximately 150,000 jobs were created in high-end manufacturing and approximately 440 in services.
I agree there has been a net loss in manufacturing but that is not unusual in developing economies. It is not unusual across the OECD where there has been a decline in terms of manufacturing jobs but an increase in services. Even though there has been a decline in manufacturing jobs, there has been an increase in productivity, value added and production. The production and value added in manufacturing continues to grow, which is a good story for Ireland. We need to get across that message. We should not use rhetoric that suggests manufacturing is in terminal decline; it is not. The nature of manufacturing is changing. That is the key issue.
Two factors will lead to unemployment in manufacturing. One is the application of technology to production and manufacturing processes, which by definition will have fewer people utilising technology, automation and so on to produce a greater number of goods. The positive aspect about Ireland is that we are developing world class capability in innovation in manufacturing. Dell Computers will say its Limerick plant is the world leader in terms of innovation in manufacturing. The people there are the people they use across the globe for the pioneering work they have done at that plant. I was in PepsiCo in Carrigaline, Cork, recently. That is a good example of high-end manufacturing at its best. That plant is a reference site worldwide for Pepsi in terms of quality. The winning of the Amgen contract and the Wyeth plant in Grange Castle are other examples that we are doing well.
There has been an increase in employment in manufacturing in pharmaceuticals, biopharma and medical devices. We have experienced a decline in textiles, office machinery and equipment, electrical machinery and computers, pulp paper and recorded media — radio, television and communication equipment. Those five sectors have experienced the largest number of job losses in the past five years but the trends are very similar to those in developed economies across the OECD. That is the reason we are driving the research and development agenda, both for indigenous enterprise and foreign direct investment. The number of research and development projects we won in the past two years has been significant, which ultimately will embed those companies in Ireland for the long haul, particularly in key areas such as medical devices, pharmaceuticals and biopharma. If we are in at the drug discovery level or the development of new devices, the opportunity to manufacture those given regulatory regimes is greatly enhanced.
I appeal to the House to take an informed view about what is happening in manufacturing. I am not saying there are no cost pressures or challenges because they exist. I have appealed to local authorities in that regard because many of them have the facility to levy development charges. They should use caution in the manner in which they levy charges, particularly on indigenous enterprise and foreign direct investment. There was a time in Ireland when county councils were queuing up to get inward investment into their counties and cities. They must take that on board when they are setting their commercial rate and development levies on industrial development.
The Minister should talk to the Minister for the Environment, Heritage and Local Government in that regard.
I agree with the Minister that there is high-end manufacturing here but the majority of that, and the examples the Minister gave, are in the foreign direct investment coming to this country. We must develop our indigenous companies.
The Minister spoke about research and development. I will give the Minister one figure regarding this country's research and development capacity. We are a primary producer. We are not like the majority of other European countries. We export the vast majority of our food, yet 4% of the Government's total research and development budget has consistently gone towards that area over the past few years. It is only now, nine years into the term of this Government, that the penny is dropping in that regard. Rather than talk around the issue, what will the Minister do in practical terms to deal with the issues of regulation, the need for investment in research and development and the stealth charges his Government has introduced?
On indigenous manufacturing, 87% of manufacturing units in Ireland are Irish-owned. Approximately 60% of those employ fewer than 20 people. The indigenous sector would be characterised by a large number of smaller firms. Those enterprises employ approximately 113,000 people, which is a significant number in indigenous manufacturing. We are keen to support that, as is Enterprise Ireland through its new productivity grant and research and development support. Enterprise Ireland has been very supportive of the food industry. I have presided over a number of initiatives with Enterprise Ireland involving Glanbia, Dairygold, Kepak and Cuisine de France. All have invested substantially in research and development to produce value added products.
The health enhancing food sector offers major potential for the Irish food industry. The research and development strategy, which I co-ordinated in the Cabinet sub-committee on science and technology, identified the agricultural and food agribusiness as key sectors for research and development. There has been much research and development in that sector through agencies such as Teagasc which worked with a variety of universities on centres for science, engineering and technology under Science Foundation Ireland. The food industry is a key indigenous industry that can add higher value jobs. My Department will work with the industry to make that a reality.