Dáil debates

Thursday, 16 November 2006

Industrial Development Bill 2006: Second Stage

 

12:00 pm

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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I move: "That the Bill be now read a Second Time."

In accordance with the recommendations of the enterprise strategy group and the new mandate for Shannon Development, the indigenous industry support functions carried out by Shannon Development, under delegated authority from Enterprise Ireland, will revert to Enterprise Ireland on 1 January 2007. The reversion of these functions will also involve the transfer of approximately 40 staff from Shannon Development to Enterprise Ireland.

The purpose of this Bill is to provide the legislative basis to designate the transfer of the individual staff members concerned and provide a statutory guarantee to the staff who are so designated that their pay, conditions of service and pension arrangements shall not be diminished by virtue of the transfer.

The context for the new arrangements for indigenous enterprise is that by the start of 2005 a range of developments had occurred which necessitated a review of the role of Shannon Development. These included the enterprise strategy group recommendation, accepted by Government, that Shannon Development's enterprise development functions should be brought within the remit of the national enterprise development agencies; the establishment of an independent Shannon Airport Authority; the proposed relocation of the headquarters of Enterprise Ireland to Shannon as part of the Government's decentralisation programme; the transfer of responsibility for Shannon town from Shannon Development to Clare County Council; and the abolition of the licensing requirement for companies setting up in the Shannon Free Zone.

Against the background of these developments, I asked Shannon Development to submit proposals to me for a new strategy for the company. These proposals, which included exiting the role of support for indigenous enterprises, are reflected in the new mandate I have authorised for the company. Shannon Development will now have a more focussed strategic role on the broader regional economic development of the Shannon region. The company will work in partnership with key public and private sector organisations in the region to identify and bring forward new initiatives, projects and programmes to maximise the development potential of the region and help create a viable counter-pole to the more developed eastern region. In this context I have specifically instructed the company to give priority to addressing the needs of less developed parts of the region.

Shannon Development will use its extensive property portfolio, located throughout the region, as a lever to drive the delivery of the economic development infrastructure that is essential for regional development. The company will also continue to work closely with Enterprise Ireland and IDA Ireland in identifying and addressing the property needs of both indigenous and FDI companies and in promoting the Shannon Free Zone as a location for foreign direct investment. The company's activities as the regional tourism authority for the Shannon region will also continue to have a key role to play in the economic development of the region.

I have recently approved a new three-year corporate plan for the company which reflects the terms of the new mandate. The specific activities that Shannon Development will undertake will be selected on the basis of its potential to generate significant economic impact locally, regionally and nationally. For example, included in the plan are projects such as the e-towns initiative, designed to build the knowledge economy of the Shannon region, the development of the Kerry deepwater zone and the regeneration of the Shannon Free Zone as a location for high value added, knowledge age investment. Shannon Development is uniquely placed to meet the challenge of regional economic development and specifically to maximise the development potential of the Shannon region in line with the objectives of the national spatial strategy. For more than four decades, initiatives developed and delivered by the company have been adopted and reproduced successfully in Ireland and internationally. With the more focussed remit that it now has, the company will be in a position to meet the new challenges the region faces.

The reversion of responsibility for indigenous enterprises support to Enterprise Ireland will also provide a more logical delineation of responsibilities between the two agencies in the mid-west region. As the support programmes currently provided by Shannon Development to enterprise clients in the region are operated under delegated authority from Enterprise Ireland, and provision has been made for Shannon Development staff to transfer with the functions, it is anticipated the transition to the new arrangements will be seamless from the perspective of the company's clients. As Enterprise Ireland is a significantly larger organisation than Shannon Development, the staff who will transfer from Shannon Development will consequently have access to more career development opportunities.

I will now briefly outline the main provisions of the Bill which are set out in a new section 21A to the Industrial Development Act 1993. These provisions are based on numerous precedents for transferring staff between statutory bodies. Subsection (1) of the new section contains a number of definitions. Subsection (2) is an enabling provision. It provides legislative authority to designate the transfer of staff from Shannon Development to Forfás. Forfás is the legal employer of the staff in the three agencies established under the Industrial Development Acts, namely, IDA Ireland, Enterprise Ireland and Science Foundation Ireland. Subsection (3) provides that staff designated for transfer by the Minister will be appointed to the staff of Forfás. Section 3 of the Bill subsequently amends the Second Schedule to the 1993 Act to include staff transferred from Shannon Development, in the categories of staff that Forfás may second to the agencies. Subsections (4) and (5) of the new section contain the terms of the guarantee that is being provided to the Shannon Development staff who will be designated for transfer. Specifically it provides that staff who are designated for transfer may not receive a lesser scale of pay or be subject to any less favourable conditions of service than they were entitled to in Shannon Development. The superannuation benefits of the staff concerned may not be less favourable than those to which they were entitled to in Shannon Development.

It has been normal practice to include the type of provisions contained in this Bill in legislation providing for the reorganisation of State agencies. In this instance no new body is being established and both Enterprise Ireland and Shannon Development will continue to operate as separate agencies, each with its own distinct remit.

Shannon Development and Enterprise Ireland are well advanced in identifying the number of posts to be transferred. Shannon Development staff and their representatives are engaging positively with the process and I understand that a strong level of interest is being expressed by staff in transferring to Enterprise Ireland. Enterprise Ireland has also recently announced that it intends to move both its regional development headquarters and the newly established city and county enterprise boards unit to Shannon. Enterprise Ireland plans to have interim office accommodation in Shannon to accommodate both the Shannon Development staff and the regional headquarters staff by mid-2007. It is anticipated that approximately 70 Enterprise Ireland staff will transfer into this new accommodation as soon as it is available.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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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.

1:00 pm

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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While the Bill is relatively short with quite simple content, it represents an historical moment for Shannon Development and it would do no harm to use some of my speaking time to acknowledge its work over the years. Especially worthy of praise has been Shannon Development's innovative approach to regional development, which did not exist in Ireland until the body was created. Shannon Development has provided an excellent example of what can be done where there is a regional focus. I pay tribute to the current chief executive, Mr. Kevin Thompstone, his predecessors and the staff who have worked and will continue to work in Shannon Development. Given that the Bill represents a milestone in many ways, it is a good time mark the company's record.

Many positive developments in the mid west, due in no small measure to the work of Shannon Development, have been innovative but they have not happened in other parts of the country. It is a pity we have not followed the regional model elsewhere in Ireland rather than pursued the destruction of regionalism through the creation of various forms of boundaries. The House should consider the example of the Shannon region for which the Shannon Free Airport Development Company has responsibility. The political geography for voters in the part of County Clare just outside Limerick city which is in my constituency requires them to vote in local elections in Clare County Council's area, general elections in Limerick East and European elections in Connaught-Ulster. Their situation is just one example of the craziness of regional divisions politically in Ireland, but such divisions pose problems in other ways. Regional authorities are broadly based on what were the original regions in Ireland while the HSE administers larger regional areas than were administered under the health board system. My constituency is in the western area for HSE purposes. Traditionally we have considered the mid-west to be composed of Limerick city and county, Clare and north Tipperary, but Breastcheck for Limerick people will be run from Cork while for Clare people the service will be run from Galway. These examples are indicative of the obstacles to proper regional planning in Ireland, a problem we need to address. The model we had in the Shannon region was an excellent one which should have been maintained and extended to the rest of the country instead of being destroyed.

The Bill contains specific provisions which relate to the return from 1 January 2007 to Enterprise Ireland of functions assigned to Shannon Development. As Deputy Pat Breen outlined, serious political and other objections were made initially to the proposals the effect of which would be to deprive SFADCO of its wealth and powers through the removal of the Shannon Free Zone from its remit. SFADCO would have been left with few resources with which to carry out its initiatives. Thankfully, the policy was reversed on foot of the pressure brought to bear on the Government, which had every intention of going ahead with its original proposal but had to respond to local demands. The original decision was intended to sustain and prevent the bankruptcy of Shannon Airport on its detachment from Aer Rianta by taking money from regional development, which is no way to do business. The Labour Party has opposed that approach and would not have supported the Bill had its provisions included the removal of the zone from Shannon Development.

While the staff of Shannon Development will do what is required of them under the new legislation and are anxious to continue to do the good job they always have, they are somewhat concerned that there is a lack of clarity about their enterprise mandate for the future. I noted in the Minister's speech his contention that Shannon Development will now have a more focused strategic role on the broader economic and regional development of the Shannon region; and will work in partnership with key public and private sector organisations in the region to identify and promote new initiatives, projects and programmes to maximise the development potential of the region and help to create a viable counter-pole to the more developed east. The policy is welcome in many ways. The current trend in development is good for neither the eastern region nor the western part of the country. The east cannot cope with the demands of its population on road and other infrastructure. The M50 is a prime example of the pressure on eastern infrastructure and it will be an even better one when the Dublin Port tunnel is opened.

It would be positive for everybody if a balance were struck between the east and west. Those of us who represent western constituencies have argued consistently for more Government attention to our needs. Western rail and road corridors to connect the west with the south east through Limerick would represent a means of connecting the rest of the country; all roads should not lead to Dublin. However, the Government has persisted in thinking that while we should all be linked by great roads to Dublin, there is no great urgency about linking us to each other in the west and south east. Shannon Development and universities in the west, mid west and south have proposed these links and advanced a blueprint to strengthen them to provide people in the regions with what they need. If one is to nominate gateways and formulate a strategic plan, one is required to provide the resources to make those policies effective. While Shannon Development is in a position to play a very positive role in this context, it must be provided with the clout and teeth to be effective, which means the provision of resources. According to Government spending proposals, however, approximately 90% of resources for infrastructure will be provided in the eastern side of the country. This policy is unacceptable and will perpetuate developmental imbalance by failing to recognise and address the needs of the west.

Shannon Development has been very involved in planning a rail link to Shannon Airport from the Ennis-Limerick line. While a feasibility study is being carried out, Transport 21 contains no commitment to provide the money to construct the line should its viability be established, which I have no doubt it will. There is a great deal of potential for expanding rail infrastructure, not only through a western rail corridor but through the development of commuter services in Limerick along the Ballybrophy line to north Tipperary, the Foynes line to west Limerick and the Ennis line with connections to Shannon. Stations should be built at places like Moyross and other parts of the city which are adjacent to local railway lines. Shannon Development has played a key role in developing many useful concepts and needs to know it will have the clout and resources it needs to continue its work. People in the mid-west need to know if the region generally is to get the resources it requires also.

Shannon Development has also been involved in the infrastructural project on waterways development. I note that the Ulster Canal is to receive funding which should make it possible to travel from Belfast to Limerick and on to the Atlantic by inland waterway. There are obstacles which must be addressed if this is to happen. For example, Shannon Development have been considering the opening of the Erina Canal to allow boats to bypass Ardnacrusha. While these projects are of future rather than immediate concern, we are used to planning ahead in the mid west, not least because we have had the services of Shannon Development. We are used to thinking ahead and developing innovative strategies as Shannon Development has proved. I hope it will be given the power and resources to continue to operate in that way.

Deputy Pat Breen referred to the number of jobs lost in global companies in Clare. A similar problem exists in Limerick city and county. We must focus on jobs for people in the mid-west. Shannon Development and the higher education institutes in the region are involved in networking in respect of research and development. When funding for higher education research projects was announced recently a network was set up between University of Limerick, Limerick Institute of Technology, Mary Immaculate College and Tralee Institute of Technology. The group received a large amount of that money. This shows how the mid west has the potential to bring added value because institutions in the area are used to co-operating and thinking regionally. While I accept the content of the Bill, we must maintain the flexibility and innovation in the mid west generated by SFADCO. I do not see the same level of innovation in any other region. Perhaps I am biased because I represent the region.

Photo of John BrowneJohn Browne (Minister of State, Department of Communications, Marine and Natural Resources; Wexford, Fianna Fail)
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Never.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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Shannon Development has set up the Plassey Enterprise Centre, giving indigenous companies the opportunity to develop and link with the University of Limerick. There is room for considerable development around that area. The riverbank could also be developed, a project in which Shannon Development has been involved. I hope it continues to be a company that directs matters in the mid west. The Minister of State should clarify what the Government expects the authority to do.

He should also be more specific in his reference to the company's strategic role on the broader regional economic development of the Shannon region. Its role was quite specific in that area and its role is quite specific in other areas. The worst case scenario is that the mid-west falls between two stools, with uncertainty about the roles of Shannon Development, Enterprise Ireland and the IDA.

I commend the staff at Shannon Development and support this Bill with the proviso that the Minister must ensure appropriate levels of resources for SFADCO to continue its work.

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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I propose to share time with Deputy Catherine Murphy.

Photo of Joe CostelloJoe Costello (Dublin Central, Labour)
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Is that agreed? Agreed.

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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Deputy O'Sullivan spoke of the innovative success of the Shannon region over the past decades. I have often wondered what makes the Shannon region special. Perhaps it was the O'Malleys, the Noonans, the Kemmys, the O'Deas or the O'Sullivans who pulled one stroke after another to ensure preferable treatment for the region. Perhaps there is a cuteness in the air in Kerry, Limerick and Clare that lends itself to an enterprising nature. Whatever it is we should bottle it and spread it around the country. The Minister of State, Deputy Browne, could do with it in the south east. Statistics about wealth in this country suggest that the north west and the south east could do with the development achieved by Shannon Development in recent years.

Perhaps we should examine this on a national basis to ensure each region is developed in a fair manner. I do not know if this would mean a development body in every part of the country. I welcome the intent of this Bill, to implement the recommendation of the enterprise strategy group. Those working with the Shannon Development agency on enterprise development could join Enterprise Ireland.

Questions must be asked about the development of our enterprise and innovation strategy. We have a successful economy but much of the economic growth and development comes from property development or foreign direct investment from overseas. Exports from indigenous manufacturing and service companies are declining, despite the Celtic tiger economy. There is concern that, under this Government, we have failed to develop real innovation and new enterprise success stories. We have failed to increase our level of productivity in traded companies. This requires a reappraisal of our enterprise strategy, including the roles of Forfás, Enterprise Ireland and the IDA. We must examine how these agencies develop technological, marketing and employment competence.

A bureaucratic system may be left by the transfer of some staff to Enterprise Ireland. The remaining entity, Shannon Development, may continue without recognising the change. This may result in replication of bureaucracies. A regional development agency linked to strong regional or local authority could examine strategic issues across county boundaries such as tourism development, enterprise development, services and infrastructure provision. This could be replicated across the country. We have a unique application of the principle at Shannon and we could knit such a regional development organisation into a reform of regional and local government. There is no point in such bodies without strong development of local and regional government to ensure joined-up thinking. Shannon Development should become the norm rather than the exception.

I agree with Deputy O'Sullivan that regional development requires a change of thinking in central government. The transport policy has not been based on analysis, consultation or debate in the Dáil. A national roads programme was agreed on the principle that all roads lead to Dublin. Ministers claim this is to facilitate regional development. However, international research and analysis shows that such a centralised transport system around the capital sucks life into the capital and sucks the population towards the east coast.

The effect of the Government's transport policy has been to oppose proper balanced regional development. First, it set out a national spatial strategy that included too many centres. It did not concentrate growth in real alternative city centres, such as Limerick, Galway, Waterford and Cork, that could provide the back-up facilities such as universities and other resources that would attract foreign direct investment. In failing to so do, it weakened the entire case for regional development.

The Government then went further in undermining the case for regional development by scattering the Civil Service throughout the country. Some of the main cities on which we must concentrate development were ignored. The fact that Cork city will not acquire a single agency or new job under the decentralisation programme demonstrates what a disgraceful mistake it has been on the Government's part. It was dreamt up by Charlie McCreevy on the eve of budget day because he was bored or could not think of anything else to do after seven years in office. It will leave a legacy that will harm regional development and the overall development of the Civil Service.

The Shannon region of Limerick, Clare and north Kerry has enormous assets that should be protected and developed. For instance, the deep water port at Shannon is a great asset. My party will seek to develop such assets in the best possible manner. Shannon Airport is an asset that would be greatly enhanced by a proper rail connection. When I worked as a tour operator in the region, if tourists arrived after lunchtime on any given day it was impossible to get them to Killarney by public transport before the next day. It took more than 24 hours unless one shunted them to Dublin and back down again. This lack of basic public transport infrastructure was remarkable in a country that was supposed to be trying to develop the region.

The Green Party believes the Shannon region should be strengthened by the provision of additional rail services such as fast-tracking the western rail corridor and the rail links to Shannon. Although Limerick city has four rail lines running into it, services on them barely exist. This is a remarkable example of the poor short-term thinking applied by the Government. While the region covered by Shannon Development should be developed, I am unsure whether responsibility for so doing lies primarily with Shannon Development. It lies with local and national Government. Hopefully the Green Party will have a say in that regard in future and will be able to help.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Independent)
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I agree with the Deputy's point regarding balanced regional development. I also echo the sentiment that if one were to pick an example of good industrial development on the entire western coastline, one would select Shannon. However, it is important not to give the impression that all spending takes place on the east coast and none on the west coast. One finds the highest pupil-teacher ratios, lowest proportion of gardaí to population and similar pressure points on the east coast. One should differentiate between capital expenditure and day to day expenditure on services. It is important to note that a negative imbalance applies to the east coast in this regard because this has a bearing on quality of life. Companies, particularly those from outside the country that are considering whether to set up here, often state that high quality public services are an issue of concern to them.

As for the Bill before the House, I endorse the idea that the employees should be protected. However, I wish to draw attention to another group of workers who were given a similar endorsement ten years ago, although it may not have been statutorily based. The workers in question were obliged to go to the Supreme Court this year to press home their entitlements and still have not received them. I refer to those Aer Lingus employees who were seconded to TEAM Aer Lingus. I have the parliamentary debates from 1997 to hand. The former Minister, Senator O'Rourke, was categoric in her statements to the effect that a letter of guarantee or comfort was a letter of employment and that people would continue to be employed by Aer Lingus. I wish to focus on this issue because it matters that two sets of employees, both of which are State or semi-State employees, are being treated entirely differently. This raises issues of fairness.

In 2006, the Supreme Court found against Aer Lingus when it rejected the airline's contention that the Aer Lingus workers were transferred to TEAM Aer Lingus in 1991. The Supreme Court found that the Aer Lingus workers in question were seconded to TEAM Aer Lingus and were Aer Lingus employees at all times. The then Minister for Transport endorsed the letters of comfort given to Aer Lingus workers who were seconded to TEAM in 1990 to convert their guarantees concerning their position as Aer Lingus employees into an irrevocably legally binding form, such as if TEAM did not exist. This is highly significant. The contract was accepted by the Aer Lingus employees on the basis of such ministerial assurances and endorsements. A comparison can be made in this regard.

As for the Bill before the House, I again stress that I agree entirely that employees should be given guarantees that their pay, conditions, service and pension arrangements shall be in no way diminished by virtue of the proposed transfer.

In respect of the aforementioned Supreme Court judgment, this matter has been brought back to the courts to press home the point for a small number of employees. In a debate during the summer, Members from the Government benches from north Dublin stated they would be taken care of in the context of the sale of Aer Lingus. However, they are back before the courts and such unfairness is dishonourable. The Supreme Court found that the ministerial endorsement formed part of the heads of agreement reached between the Irish Congress of Trade Unions and Aer Lingus and is enforceable under Irish law.

Essentially, much of the debate that took place in 1997, when Senator O'Rourke was the Minister responsible, is similar to the debate in respect of the current Bill, in which guarantees are being given. However, when one can cite an example such as that of the TEAM Aer Lingus employees, seeing such guarantees in legislation does not reassure people that it will actually happen. The Government has an obligation to finalise this matter and not have such a situation, in which people have been extremely unfairly treated persist. Both the High and Supreme Courts have endorsed their case and have dismissed the case put forward by Aer Lingus. The courts found in favour of the employees. The endorsements were provided by both Aer Lingus and Ministers.

I ask the Minister of State to accept there is an outstanding issue to be addressed in this regard. I raise this matter in the context of this Bill because of the degree of similarity between the proposals. However, the proposals worked out very differently for the TEAM Aer Lingus employees who are still suffering its consequences.

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

2:00 pm

Photo of Jimmy DeenihanJimmy Deenihan (Kerry North, Fine Gael)
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I am glad to have an opportunity to speak on this Bill. The Minister outlined the purpose of the Bill, which is in accordance with the new mandate for Shannon Development announced by him 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. I commented on this decision when it was first announced by the Minister. Shannon Development is the most successful regional agency in this country and was the only integrated regional development agency.

We examined regionalisation when it was the buzzword in the 1980s and early 1990s. At that time, Shannon Development was held up as an example of how a regional agency should be structured and managed. Its role was deemed to be the proper role for a development company. As the Minister stated, "For more than four decades, initiatives developed and delivered by the company have been adopted and reproduced successfully in Ireland and internationally." Why break up something so successful? I am all for change and I realise we must adapt our strategies and structures to measure up to the competition and be more efficient. However, is it the right decision in this instance? I question the motivation for the decision and will ask questions on the real motivation behind the dismantling of Shannon Development.

The Shannon region, particularly the Ennis-Shannon-Limerick axis, is one of the most dynamic parts of the country. Before the present boom was experienced in Dublin, the Shannon region was always held up as a shining example. Despite what happened in the rest of the country, it was always successful even during the bad times of the 1980s. Because of the airport and the University of Limerick, Shannon Development attracted some of the first electronic, technology and pharmaceutical industries into the region.

Although some people would state otherwise, I always regarded Shannon Development as an extremely dynamic instrument for development in the area. Without its presence, I doubt the greater Shannon region would be as vibrant as it is today. The executive and the board of Shannon Development will do what the Minister tells them. However genuine concern exists within the organisation about its reduced role.

In the late 1980s, I promoted the idea of Shannon Development taking over responsibility for north Kerry, where it made a major impact. It created Kerry Technology Park in Tralee, which is on the same site as the institute of technology. The successful synergy operating between the college and the technology park spawned some of the country's top entrepreneurs.

Recently, Jerry Kennelly developed a product, Stockbyte, which he sold on for approximately €130 million. At the Entrepreneur of the Year competition, Alan Scroope was recognised as one of the top young entrepreneurs. The park has several success stories and would not be there without Shannon Development.

In Listowel, Shannon Development created a business park where most of the units are now occupied. The money for this came from the rental of its own property portfolio. It was not Government money although I see Ministers coming to Kerry and claiming responsibility.

Because of the break up of Aer Rianta, a Shannon airport authority will be created. As a subsidy from Aer Rianta will no longer be received, from where will it receive funding? I fear revenue from the property portfolio of Shannon Development will be directly invested in the airport authority. That is not good economics. Will the Minister clarify the matter? How will the revenue which was used to regenerate industry and provide technology parks and business centres now be used? Will Shannon Development still have the use of that money or will it go to the airport authority?

Shannon Development is extremely creative and through its initiative created the e-town concept whereby it designated a number of e-towns in the region, one being Tarbert, County Kerry. Tarbert is a small community which will be affected by the closure of Tarbert power station with the loss of 129 jobs. I hope Shannon Development will continue to support the e-town initiative and that it will mean the provision of broadband connection and other facilities in Tarbert which will create alternative jobs when the power station closes.

Until last year, Shannon Development had responsibility for tourism promotion in north Kerry, but the Government decided to remove that responsibility from Shannon Development. However, while the decision was made, the structures for transition were not put in place. Despite the extremely good people appointed by Fáilte Ireland to administer tourism in north Kerry, I am convinced we lost out. The fact there was some turmoil within the Cork-Kerry tourism authority did not help either. The presence of Shannon Development and its hard-working offices provided a major boost to tourism in north Kerry. It was only when the remit was taken from Shannon Development that people realised how effective it had been locally. That is an aside, however, which does not concern this Bill. It is all part of the dismantling of Shannon Development, which was a dynamic regional authority that was held up as an example to authorities not only in this country but all over the world. I hope it is being dismantled for the right reasons, but time will tell. I hope this development, for which we are providing a legislative basis, has been well thought through and will not diminish in any way the dynamic that was created within the region.

Shannon Development has also been involved in the Shannon LNG project to import natural gas to the Shannon Development landbank in Kerry. Shannon Development held on to this landbank of 600 acres between Tarbert and Ballylongford. Some time ago, there was a proposal to sell this land but the company held on to it and took it over from IDA Ireland. It has now succeeded in getting this important project not only for north Kerry and specifically the Tarbert-Ballylongford area, but also for the country at large.

Natural gas is imported mostly from the UK and is becoming the global fuel of choice for electricity generation and other industrial energy consumption. This project on the Shannon Estuary, which has been driven by Shannon Development, will be very important for the region. I wonder, however, what Shannon Development's future role will be in attracting industries, such as the LNG project, into the Tarbert-Ballylongford landbank. I understand Shannon Development has attracted another interested party, which has connections to similar projects in Europe, with a view to doing another project. All of that has arisen because of Shannon Development's marketing expertise, presentation, experience and the confidence the organisation has developed over the years.

The north Kerry area has lost many of its traditional engineering companies. From Tralee to Tarbert we have probably lost approximately ten to 15 such firms over the past ten years. These companies employed from 50 to over 200 workers but they are now all gone. We have had little or no foreign direct investment in the area in that period. IDA Ireland has brought five itineraries to the area in the past five years. We have had to depend totally on Shannon Development to provide important jobs such as those in the technology park in Tralee. Hopefully, new jobs can also be created at the landbank. During its construction stage, this project will bring in about 400 people and about 50 permanent staff later. The proposed project is close to the Tarbert power station, which employs 129 people but is due to close shortly. Under the new arrangement, I hope the dynamic created by Shannon Development in the region will continue.

North Kerry and west Clare must be the most peripheral and marginalised region in the country. There is a national secondary road servicing north Kerry, which runs through west Limerick, the port of Foynes, into Tarbert and via Listowel on to Tralee. Very little funding is going into national secondary roads. Kerry accounts for 13% of all national secondary roads in the country. The National Roads Authority is concentrating its funding on national primary roads but north Kerry does not have such a road so the area is disadvantaged, marginalised and suffering as a result.

In any new overview of the region, I hope the N69, which is our national secondary road, will be prioritised for funding. The road services one of the busiest ports in the country at Foynes. Now that it will also service the new development on the landbank, which hopefully will take place, the road should be earmarked for major investment. I agree with connecting the main cities with a state-of-the-art primary road network and, as someone who drives regularly from Kerry to Dublin, I value the major developments along that route. Funding must continue for the national primary road network if we are to have a proper spatial strategy. If we are to achieve balanced regional development, however, we cannot allow places like north Kerry and west Clare to fall behind just because they are not on the national primary road network. In view of the new brief the Minister has given to Enterprise Ireland for the region, and the fact Shannon Development will have a different type of brief, I urge the Minister to ensure the road network and other infrastructure, including broadband, will be part of the new brief.

In his speech, the Minister said Shannon Development will address the needs of less developed parts of the region. If my interpretation of that new role is correct, there will be an important role for Shannon Development in pulling together all the strands concerning underdeveloped areas such as north Kerry. The Minister should designate north Kerry and west Clare for pilot projects under the new arrangements. It should be possible to do so. The Minister should provide that reassurance to people in that region in which case they would be less concerned about the future role of Shannon Development there.

I am glad to have had the opportunity of making a few points on the record concerning Shannon Development. It represents a success story going back to the great Mr. Brendan O'Regan. The organisation has done so much for industry and tourism, in addition to establishing the University of Limerick. It also developed the free zone around Shannon Airport, which was unique at that time. That model has been used since then, not only here but also in other parts of the world to attract industry. Its role in attracting industry to the region at an early stage should be acknowledged. Hopefully this will not be diminished

The Minister occasionally appears in Kerry when he has a positive announcement to make. One of his party colleagues recently announced a new call centre for Tralee and he has been invited by the chamber of commerce there to visit some time in January. I call on him to designate the Tarbert-Ballylongford land bank as an energy park and give Shannon Development, in its new role, responsibility for developing that property.

I am delighted to have had the opportunity to speak on this Bill as it is very important for the area and will hopefully lead to better things for the region. I hope the Minister will address the points I have raised.

Photo of John EllisJohn Ellis (Sligo-Leitrim, Fianna Fail)
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This Bill gives me an opportunity to raise some issues relating to the area I represent, particularly recent Glanbia decisions and the Green Isle food plant in Boyle. Glanbia, despite being a public company has totally abdicated its responsibilities with regard to the plant it took over from the Hanley family in Rooskey some years ago. Once the fire took place there and the decision was made not to rebuild it, Glanbia decided to take the proceeds of its insurance claim, to which it was entitled, and use them in its operations elsewhere in the country.

The final straw for the people in the area came this week when the cannery which had operated since the fire, and provided 85 jobs, was closed. We should examine the options that were open to Glanbia. It is a public company that operates in the agri-sector which means it should have some responsibility to people in rural Ireland. In the case of Rooskey, Glanbia had the opportunity to support a management buy-out that would have continued to run the plant as a going concern. The board decided it would not support this option and I would appreciate if it would give the details concerning how this decision was reached. The management buy-out was critical to the development of the business and I believe Glanbia has been trying to run down the business for the past 12 to 18 months. Questions must be answered as to why the buy-out was not supported and jobs saved.

In the wake of the fire at the Glanbia plant Rooskey saw the loss of 500 jobs leaving only 85 in the cannery. I feel the State agencies would have supported the management buy-out to develop the business but it is obvious Glanbia decided selling the property would be preferable to maintaining the business. I feel this is wrong because the project would have had a future if the buy-out, which was supported by a Dutch company, had received Glanbia's support. I suggest Glanbia make the site available to Enterprise Ireland to seek an alternative industry serving the people in the area. If it does not do so Glanbia must explain why it will not consider the management buy-out. I believe the option is still there and, if taken, could save 85 jobs.

Some might say 85 jobs is not a significant number. However, 85 jobs in Roscommon, Leitrim or anywhere in rural Ireland is probably equal to between 400 and 500 in one of our major cities. The effect of the loss of these jobs on the local economy is frightening and we have seen the effect of the fire which saw the loss of over 400 jobs. It is easy to say redundancy will be paid and other opportunities will arise but we are talking about people with skills relating to the meat industry, such as boners. Such skills may not be easily redeployed as new opportunities arise.

Boyle saw a similar situation recently when the Green Isle plant closed with the loss of 80 jobs. Despite the best efforts of all involved, nothing has been done regarding the provision of alternative employment. Enterprise Ireland, in conjunction with Roscommon County Council, the local chamber of commerce and other voluntary bodies in the town, is seeking an alternative industry for the area.

Both cases concern projects that received substantial State aid and it may be necessary to examine the period a company must remain in a region to qualify for such support. If a company decides to relocate, the State should recoup a larger amount than it currently does in such circumstances. If something is not done on this issue the agri-based industry in the country will suffer. The co-ops were producer friendly but the public limited companies, PLCs, in question nowadays are anti-producer and every reduction in price comes at the expense of the primary producer. The farming organisations and interest groups must remain vigilant to ensure primary producers receive a reasonable price.

The arrival of the PLCs has not been in the best interests of producers because they are driven solely by the profits they create for shareholders. I accept rationalisation must take place in certain industries but not with primary producers and workers bearing the brunt of cuts because they have always been the first to lose out as PLCs focus on the bottom line.

There is a need for balanced development. Major developments are taking place in cities and many areas of rural Ireland are finding their lifeblood drawn there. Some rural communities are suffering due to a lack of employment opportunities, particularly for graduates. Our rate of third level education is extremely high and we produce a large number of graduates every year who rarely return to the community from which they came. Graduates tend to join companies based in our large cities and towns. Enterprise Ireland and the Industrial Development Agency should seek projects, perhaps small ones in some cases, that can grow in rural areas. Most areas now have broadband and the necessary developments which allow businesses operate. Our infrastructure has improved a great deal and I can now safely drive from Dublin to Carrick-on-Shannon in less than two hours due to the new N4 road which bypasses several towns. In that context, there is no reason this region should not be considered as attractive to major industrialists deciding to locate here as our major cities. The area also has the advantage of being less than one hour from Sligo and Knock airports. Enterprise Ireland and the Industrial Development Agency are not pushing companies to locate in areas which are regarded as peripheral because they are more than one hour from an international airport. In the case of south Leitrim, however, Knock International Airport can be reached in only 50 minutes. Enterprise Ireland and the IDA must ensure they achieve regional balance in terms of the location of new jobs.

While we all accept the market for attracting inward investment has become much more competitive, Ireland still has considerable advantages over other countries as regards industrial development. Corporation tax rates are the lowest in Europe, the wage system is attractive and the personal tax system is the envy of many other countries. We should be able to encourage inward investors to locate in areas some distance from Dublin, Cork, Limerick or Galway.

In levelling criticism it is also important to applaud success. My constituency has successfully attracted a number of major companies. Masonite, for example, established operations near Carrick-on-Shannon in the mid-1990s. This was the first large investment in the area by a non-indigenous company in my lifetime. It has made a major contribution to the economy and workforce and should be complimented on the way in which it runs its business and on successfully expanding its operations.

In the past ten years, productivity has significantly increased. The recent Forfás report entitled, Overview of Ireland's Productivity Performance 1980-2005, would make good reading for many people. The report stresses the need to improve productivity and notes that Ireland has enjoyed substantial economic growth since 1990. It states that whereas growth in other OECD economies over the same period was driven more by increases in productivity than employment, Ireland's growth has been built on gains in both areas. Productivity increases, it argues, must be the key driver of future growth.

Upskilling will be required to deliver increases in productivity and incentives must be introduced to ensure people receive the necessary training to upgrade their skills on a continual basis. While the economy continues to achieve significant annual rates of growth, much of our employment continues to depend on the manufacturing sector, which is finding it increasingly difficult to compete with companies from eastern Europe and the Far East. For this reason, Enterprise Ireland and other State agencies must provide funding for upskilling. FÁS has done much good work in upskilling people but this issue must be examined in the context of future economic development.

The most significant recent industrial development in south Leitrim and north Roscommon was the decision by MBNA to locate in Carrick-on-Shannon. Recently acquired by the Bank of America, this credit card company employs approximately 1,100 people in a town with a population of approximately 4,500 people. It is, therefore, a major employer in Carrick-on-Shannon and the surrounding district. We must support efficient companies such as MBNA because they provide employment for our highly skilled young people. I appeal to Enterprise Ireland and the IDA to try to attract other companies offering similar employment to locate in the area. The region has the advantage of third level IT colleges in Sligo and Athlone and a number of smaller third level colleges elsewhere, all of which produce highly skilled graduates suited to this type of employment.

It has been suggested that MBNA plans to move into the insurance business. I appeal to the company to consider establishing its base in my region. Its experience in the area has been good and local people have been supportive of its efforts.

In discussing industrial development, we overlook another major sector, namely, tourism. It is argued that tourism is the main prospect for certain rural areas. Tourism Ireland, the Minister for Arts, Sport and Tourism, Deputy O'Donoghue, and others have done their utmost to support tourism programmes and promote projects. For example, the tax incentives available for the provision of hotel accommodation were welcome and made a significant contribution. In my constituency, however, tourism projects are facing a new problem. In Boyle alone, An Bord Pleanála has refused permission for four or five major tourism projects for minor reasons, including, in one case, the presence of bats. The proposed €250 million investment in question would have created major opportunities for Boyle and the Lough Key area. An Bord Pleanála's decisions send out the wrong signal to those who want to invest in tourism. They will result in additional investment in areas that are already over-subscribed in terms of tourist numbers and in which planning is not an issue. Tourism projects that would make a major contribution should be fully supported by all State agencies. As we are all aware, one individual can overturn the best laid plans for developing projects.

The problem of objectors also applies to industrial development. The not in my back yard — NIMBY — attitude has played a major part in many proposals for industrial development. The consultation process must be weighted against opponents of developments because we cannot afford to allow international or national companies seeking to expand their operations to be held to ransom by objectors using the planning process. In recent years, a number of major projects have been delayed by objections lodged with An Bord Pleanála, the national courts and the European Court of Justice. The most prominent of these was probably the repeated delays to the M3 motorway project. While the objectors finally raised the white flag, they did so only after they had added significant costs to the project. Delaying the construction of an infrastructure project by three years will probably double its cost. It is unfair that people can lodge objections and hold up progress without being required to make a contribution towards the cost of the delay they cause. This tactic has been used to delay other projects and prevent the development of infrastructure which will give opportunities to peripheral areas to develop and become attractive for industry. The Minister has taken an initiative in Glanbia in Rooskey but we still face the serious situation where many agri-based projects find the processing industry is controlled by PLCs, which is having an adverse effect.

We support the Minister's efforts in this Bill but the Departments, Enterprise Ireland and IDA Ireland must look at the regional areas that have suffered most due to population decline and a lack of industrial development. They must seek out projects to replace those indigenous projects that are vulnerable in the global economy today.

Photo of Seymour CrawfordSeymour Crawford (Cavan-Monaghan, Fine Gael)
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I welcome the opportunity to speak in this debate but, like the previous two speakers, I will not dwell on the Bill. Shannon Development has a proud record and I wish it well in its change over to Forfás. It created jobs in a difficult areas.

Many years ago the previous Minister visited us in the Lough Egish area. We were seeking a similar tax regime to the Shannon or Cork areas to develop industry. The proposed closure of the Lakeland Dairies milk powder plant in the summer of next year brings the issue of the Lough Egish development park back into focus.

Through no direct fault of the Minister or IDA Ireland, Cavan and Monaghan have not made much progress. The situation in Northern Ireland and the lack of infrastructure have caused many difficulties. Thankfully, infrastructure is improving and the Northern situation, which has improved dramatically, should be finalised within the next few months. There will be no further excuses then for those involved in inward or national investment from seeing Cavan, Monaghan and Donegal as areas for industrial provision.

All parties visited the milk powder plant in Lough Egish. There was still some hope at that stage that four of the co-operatives in the north east might come together to establish a cheese factory using the plant's premises. We got the good news that the Minister for Agriculture and Food had provided grant aid of €100 million for such projects. Unfortunately, within weeks of that announcement, the situation was changed and a ceiling of €12.5 million grant aid or €25 million investment was laid down. As anyone involved in the sector knows, that would kill off the idea of a cheese factory. I hope there may be a way around it because there are cold stores and drying plants that could be used for whey and other products, minimising overall costs. It is hard to understand why such changes happen in middle of the process.

I pay tribute to the Molloy and Sherry families who owned the premises next door to Lakeland Dairies in this rural area. They own a cold store and a number of factories and have undertaken a major investment programme that was visited by the then Minister for Enterprise, Trade and Employment, Deputy Harney. We never heard a reply, however, to our request for a tax benefit. It was unfortunate that Mr. Sherry felt he had to sell out because of the lack of support he got for the number of units he provided.

It has since been taken over by another industrialist, Mr. Paul Shortt, and I hope the Minister and the Minister for Agriculture and Food will ensure the necessary help is given to this establishment to allow for full use of the existing buildings and the erection of new buildings. This man has provided employment in the Castleblayney area, working with Heinz in Dundalk and the Kerry Group in Carrickmacross to bring in raw material and export the final product. He would offer a great service to any industry that set up in Lough Egish. He is an Irishman and should enjoy the same support as any foreigner who comes in.

The closure of CPV in Clones was a blight on the area. The then Minister's main interest was in getting back the few hundred thousand euro in grants she claimed was owed to IDA Ireland, instead of encouraging someone else to take over the factory. It has been bought by a number of different groups but little progress has been made in replacing the 150 jobs in this depressed area. More interest in the area should be shown by IDA Ireland and Enterprise Ireland.

Deputy Ellis mentioned the co-operatives that had become PLCs. There is doubt this has had a major impact. The difficulties in Lakeland Dairies, although it is not a PLC, are more related to the banks than to farmers, which makes me worried for the future. It is strange to see that water, which costs a nominal amount to bottle, is more expensive than milk. My farm produces liquid milk and it is scandalous that this high quality product which has served the country so well has been failed by the co-operatives, particularly the PLCs. They deserve a great deal of criticism for the way they have failed to sell it compared with companies like Coca Cola. There is a factory on the border between Cavan and Monaghan. I gave a graph it provided to us to the Irish Farmers' Journal, and it is published on the second page of this week's edition. It clearly shows we are no longer competitive with regard to power. It is difficult to understand that in a world economy, the price of electricity for 2007 will be €1.10 per kilowatt hour in Ireland. The price is 62 cent per kilowatt hour in the Netherlands, where this company has another factory, and a factory belonging to the company in France pays 55 cent per kilowatt hour. In other words, France is half the price of Ireland for power in 2007.

There are 300 jobs at risk in the Wellman plant in Mullagh, County Cavan, on the border between Cavan and Meath. There is a cost to that plant of electricity alone, compared with France. We are not talking about China or the Far East, but another EU country. The cost is a 50% difference, 55 cent per kilowatt hour in one and €1.10 for the same unit in the other. Some €2 million is the charge to Wellman for that alone.

Returning to the situation in Cavan-Monaghan, where the Minister has been in the not too distant past, I advise that we are at last getting the infrastructure there right. I pay tribute to everybody concerned. It was one of the issues I stated clearly would be a priority when I entered this Chamber 14 years ago. I congratulate everybody who has brought us this far.

The Acting Chairman, Deputy McGinley, may not be here long enough to see the full benefit of the Castleblaney bypass, as he is retiring, but it will leave us within an hour from Dublin at Carrickmacross and within two hours from Dublin in Monaghan town. The road will bring the trip down to approximately an hour and 45 minutes. Infrastructure is no longer an issue. We are within that journey time from the airports. By 22 December, we will be closer to Dublin Port, and we have access to Larne and others already.

I beg the Minister to spread the message, especially to those interested in setting up here, that we have the availability of land. We have some advance factories built by the private sector, and we have personnel and staff who would be willing to come back to live in Cavan or Monaghan if they got the opportunity. Thankfully, we are getting a small level of decentralisation in Monaghan, and I hope it will be a greater level in Cavan.

We need high-tech jobs. For whatever reason, most of our young people seek third level education. The opportunities for these people to return and work in Cavan and Monaghan are not as they should be. The Minister's predecessor reminded me several times that we have one of the higher levels of immigrant workers in Monaghan. That is because we are in the food and furniture industries, for example, which deal with manufacturing jobs. That is not acceptable, and we need real help from IDA Ireland.

The only outside jobs created in Monaghan in recent years came through Associated Packaging, outside Carrickmacross. I was directly involved in the process. That company did not take any capital grants from IDA. The buildings were constructed for them by a private entrepreneur, being changed from another business. That is the only major group to come in.

I am told by Deputy Deenihan that the Minister visits Kerry and such places. We would welcome the Minister to Monaghan and I guarantee him a safe journey.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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I have been there this year.

Photo of Seymour CrawfordSeymour Crawford (Cavan-Monaghan, Fine Gael)
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We want something delivered.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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I visited one of the area's better companies, Combilift.

Photo of Seymour CrawfordSeymour Crawford (Cavan-Monaghan, Fine Gael)
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I apologise, the Minister was there. Again, that was a private individual who started off in a farmyard many years ago. Today, a planner would tell anybody trying to start off in a farmyard that it is not allowed. That shows how negative our personnel are.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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The Deputy is speaking about county councils now.

Photo of Seymour CrawfordSeymour Crawford (Cavan-Monaghan, Fine Gael)
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I have one case where the enterprise board gave a grant towards setting up a small company in a farmyard, yet the council is telling the person in question he will not get the planning permission to change from agricultural to industrial use. That shows how negative and out of touch some of these people are. The Quinn Group in Cavan is another example of a local person giving tremendous employment through his group's insurance and other operations.

I have major anxieties over the farming and pig industries. Unless we can act to safeguard those from the nitrates directive, we could lose more jobs in Cavan-Monaghan. Tourism and conference centres are doing well in spite of the Troubles.

There is a commitment from the UK Government towards the peace process in Northern Ireland in real financial terms. I wish to ensure our Government has the same proud record as it had at the Anglo-Irish Agreement and the signing of the Good Friday Agreement. Money was made available through IFI and EU funding. Thankfully, our Government now has sufficient funds for this as a result of the Celtic tiger etc.

Money must be invested not just in the Six Counties, but in at least some of the six Border counties. Sligo and Louth have received fairly major investment in one way or another, such as through colleges, industry etc. The likes of Cavan, Monaghan and Donegal have not. I urge the Minister for Enterprise, Trade and Employment, as well as the Government as a whole, to ensure they use the next few weeks and months to make a major commitment to re-stabilising that area, which suffered so much over the past 35 years. It suffered in many ways over which we had no control.

There is goodwill and opportunity there. The UK Government has already made a commitment of sorts. I urge our Government to do the same. We on this side of the House will give the Government any support required to get that package through.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I welcome the opportunity to speak on this piece of legislation, the Industrial Development Bill 2006. I wish to share time with Deputy Nolan, whom I expect in the Chamber shortly.

This is a short piece of legislation dealing specifically with the new mandate recommended by the enterprise strategy group for Shannon Development. It indicated the indigenous industry support functions carried out by Shannon Development under delegated authority from Enterprise Ireland will revert to Enterprise Ireland on 1 January 2007. The reversion of these functions will also involve the transfer of approximately 40 staff from Shannon Development to Enterprise Ireland.

The purpose of the Bill is to provide a legislative framework designed to facilitate the transfer of the individual staff members concerned and provide a statutory guarantee to staff, where so designated, that the pay and service conditions, as well as pension arrangements, will not be diminished by virtue of the transfer. That is very important to staff.

It is important to state that there have been a number of recent developments which have necessitated some of these changes. There has been the establishment of the independent Shannon Airport Authority, an important step which gives a real mandate to the people in the mid west to develop international air transport to an extent not possible before. In the past year, I noted that people from the midlands have gone to Shannon when they wanted to fly to the United States or even Europe and the United Kingdom as it is much easier to get to Shannon from the midlands region than to go through the traffic jam that is involved in getting to Dublin Airport.

The proposed relocation of the headquarters of Enterprise Ireland to Shannon as part of the Government's decentralisation programme, the transfer of responsibility for Shannon town from Shannon Development to Clare County Council and the abolition of the licensing requirement for companies setting up in the Shannon free zone form the background for this legislation.

This Second Stage debate provides me with an excellent opportunity to speak on the subject of industrial development and to refer to matters that flow from this legislation. This Bill will affect the Offaly part of my constituency of Laoighis-Offaly which used to be under the aegis of Shannon Development, even though it is a little removed from the area. The number of employees of foreign-owned multinational companies is at approximately 200,000 people out of a workforce of approximately 2 million, amounting to 9% or 10% of the total workforce. This is a vital form of employment provided by companies with an international perspective which help Ireland's promotion on the international stage. Ireland has been very successful in attracting foreign investment due to the good work of agencies such as IDA Ireland, the Minister and the Department.

The statistics show that Irish people will invest more funds abroad than foreign companies are investing in Ireland. This is attributed to the fact that Ireland is a mature economy. For many years Ireland was the beneficiary of money from the European Union but now that we have made a good fist of managing our own resources we are strong enough to be less dependent on people coming to help us out. Ireland's open market economy attracts foreign investment but there is an equal number of Irish people investing abroad.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I thank the Fine Gael Whip for calling a quorum and bringing the Taoiseach into the House to hear my important intervention on behalf of County Laois and industrial development in the midlands. I am very pleased with the audience and I know the point is well taken.

Enterprise Ireland has a particularly good track record in County Laois. It has been responsible for Irish companies increasing employment in Portlaoise and in the county. I also note the good track record in this regard of the county enterprise board.

Modern industrial development is no longer to be associated with physical development and jobs in industry. I regard jobs in the tourism industry as industrial jobs because tourism is one of our major industries and remarkable development has taken place in that sector in County Laois. Seven new hotels have been built in County Laois in the past seven years, six of which are brand new buildings while one of them replaces an existing hotel. The situation has changed from a single hotel in Portlaoise to having three major hotels in the town and seven new hotels in the county. IDA Ireland would always have stressed the importance of having such facilities when industrialists are coming to a region to visit the IDA Ireland park such as that in Portlaoise. It is a top class facility on a 47-acre site which is very close to the centre of the town. It is landscaped and finished to a high standard. It contains a fine office block which, hopefully will soon be occupied by an Enterprise Ireland or IDA client. If that is not possible, perhaps another suitable business could be allowed to use the facility.

Another industry also operates on the site and recently the Minister and IDA Ireland agreed that part of the 47 acres will be used for the decentralisation of the Department of Agriculture and Food. There will be much activity on the site in the coming years. An office block to house 800 people in the Department of Agriculture and Food will be a major development for that part of town. I hope it attracts other developments into this first class IDA Ireland site.

We have other sites in Portlaoise for development, such at the Togher interchange near the motorway. If heavy industry is not to use such sites, I would like to see financial services companies coming to County Laois. Quinn Insurance recently announced a large new operation in Navan and the VHI is operating successfully from Kilkenny, as are other banking and financial organisations. Laois is as equally well-placed as those counties for such employment. We have the motorway and a first class train facility. There is plenty of scope for IDA Ireland to bring industry into the county.

We are working on improving third level education in the county. Many Laois people currently attend Carlow Institute of Technology. We are examining the possibility of opening a campus attached to that institute in Portlaoise. Should it go ahead, it would be called the midlands, or south-east, institute of technology.

I firmly believe that the midlands region needs an airport. Traffic to and from Dublin Airport can only be described as horrific. On the radio yesterday, someone said it had taken him five hours to fly to Dublin from Boston, but two and a quarter hours to get from the airport to Ballsbridge. That is off putting. It would be welcome if, in conjunction with its military facilities, Baldonnel could be used as a commercial airport. The entire midlands could be served by such an airport. Dublin Airport has major development plans, but the number of passengers is increasing enormously. People in the midlands are now travelling to Shannon Airport where there is greater ease in accessing the terminal building and the car park; one need not worry about negotiating the M50. One can predict the journey time to Shannon Airport with much greater accuracy. I accept that any new airport would have to be funded by private investment, but I do not have an issue with this prospect. I would like to see such investment attracted to Baldonnel on the south side of Dublin. It would be within 40 or 50 minutes of much of the midland region.

I encourage IDA Ireland, Enterprise Ireland and the local enterprise boards to continue their work in Laois. We would like to see greater activity from IDA Ireland in the county than we have had recently.

3:00 pm

Photo of M J NolanM J Nolan (Carlow-Kilkenny, Fianna Fail)
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I welcome the opportunity to speak on this legislation. I understand the Bill is designed to facilitate the transfer of functions and to guarantee staff rights from Shannon Development to Enterprise Ireland. This debate provides Members of the House with the opportunity to outline the concerns and difficulties they may be experiencing in their counties regarding employment and the sourcing of direct investment by IDA Ireland.

We in the constituency of Carlow-Kilkenny, but particularly in County Carlow, are hugely disappointed with the efforts IDA Ireland has made to place foreign direct investment in Carlow. I recently saw a report that showed the number of IDA Ireland-created jobs in Carlow to be minuscule. I have discussed this with the Minister in the past. Ireland's economy has performed strongly in recent years and the type of jobs we are attracting has changed. The town and county of Carlow has provided prospects for potential employers. We have a third level institute that is willing to accommodate potential employers with suitable courses. We have outlined this to potential employers, but for some reason there seems to be a lack of interest or commitment from IDA Ireland to pinpoint Carlow as an area for investment.

County Carlow has reinvented itself to attract this type of business. I commend Enterprise Ireland and Carlow's indigenous entrepreneurs who have been singularly successful in creating well paid, highly skilled jobs in the county. It helps ensure that people who were born and educated in Carlow can continue to live and work there. There have been many contributors to the transformation, but the presence of a third level institute in Carlow has been a major factor in ensuring the local people who have a record of creating jobs have done so.

However, we can only do so much ourselves. We need the assistance and commitment of State enterprises such as IDA Ireland. I regret to say that this has not been forthcoming to date. Carlow is sited in an important and pivotal location. Indeed, the Minister's Department is relocating 320 jobs there. We hope to see an advance group of up to 90 civil servants moving to Carlow in the coming months. The county has everything a family or individual needs. Yet, for some inexplicable reason, the IDA is either not prepared, not committed, or does not want to see Carlow as a gateway for job creation. It is unfair on Carlow people who can see the number of jobs being created in other large urban centres.

The strategy in recent years has been to avoid congestion in cities such as Dublin, Cork and even Waterford. To pick up on Deputy Fleming's point, we need a regional airport in the south east. While there is an airport in Waterford, regrettably, it is on the wrong side of the city. People are not prepared to use it because they have to traverse the city and with bridge openings and congestion that can take as long as it would take to travel from Carlow or Kilkenny to Dublin Airport — that is time consuming too.

Only two weeks ago, we met with a potential investor in Carlow. One of his main concerns was that many of his staff would be coming from overseas and there would be significant interaction between overseas branches and the proposed Irish operation. One of the downsides he identified with locating in the south east was that it would take so long to get there from Dublin Airport. There is a strong case to be made for locating a new airport in the south east, perhaps somewhere on the Kilkenny-Carlow-Portlaoise axis.

I again highlight the need to get a commitment from the IDA to invest in Carlow, which has suffered significant job losses in recent years with the closure of Irish Sugar and a significant employer in the laundry business. We have had the downsizing of international companies Braun and, more recently, Lapple. It is incumbent on the agency responsible for bringing foreign direct investment into the country not to forget small counties such as Carlow, which have a tradition of enterprise and which will not let the side down when it comes to giving 100% on employment. We have a skilled workforce and everything a foreign company locating in this country needs.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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I thank the Chair for this opportunity to speak to the Industrial Development Bill 2006. I welcome the debate. It is important we have an informed debate on industrial development in this country and the direction in which it has gone over the past number of years, particularly with our strong economy. I want to put an alternative view to some of the mainstream economic issues being debated. I welcome any sensible legislation on industrial development in the State. It is an opportunity to open our minds to creative and clean investment. This is important.

The purpose of today's legislation is "to amend the Industrial Development Act 1993 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".

This is important in light of what has happened in the past 24 hours. Yesterday, there was a serious industrial dispute between the Bank of Ireland and Amicus workers. I support the Amicus workers who took a brave and strong decision to fight to defend their pensions. All Members of the Oireachtas should stand up and be counted in favour of them. It is important to respect and support Amicus when it takes a stand against the fat cats in senior management in the Bank of Ireland who want to wipe away the terms and conditions they had. I challenge those who spoke about the Amicus workers on the national airwaves. To them I say, "hands off destroying their pensions". It is up to legislators and Ministers to keep a close eye on these issues. We cannot have a situation in which a company like Bank of Ireland, which has extensive resources, fails to deal with the issue and look after its staff pensions. It is important we nail our colours to the mast on this issue.

Recently, certain sections of society, particularly the well-off, have constantly undermined the power of trade unions. This is worrying. They seem to think that because it is an employers' market, one can ride roughshod over workers throughout the country. Let us remind them that the workers built the Celtic tiger and the strong economy. It is important when we discuss industrial development that we have a special respect and treatment for trade union members. Many new industries are hostile to trade unions and this is a sad day for the country. The problem lies with those who feel threatened by people who want to improve their pension rights, not with the trade union members. This must be mentioned in this debate and incorporated into the debate on efficiency. Any sensible person in human resource management knows that if one treats people with respect and dignity, one will get more productivity from them. If constantly puts the boot in and erodes their power and pensions, one will undervalue them, reduce their self-esteem and get nowhere. This is evident in examples from other industries that have collapsed, but also in successful companies.

According to the explanatory memorandum of the Bill:

Section 1 of this Bill contains a definition of the Industrial Development Act 1993.

Section 2 amends the Industrial Development Act 1993 by inserting a new section 21A into the Act.

Subsection 1 of section 21A defines the term "Company", "recognised trade union or staff association concerned" and "transfer date" for the purpose of the new section. [Any terminology with which the Bill refers to staff organisations is good enough for me as long as people are treated with respect and dignity.]

Subsection (2) of Section 21A contains an enabling provision that provides legislative authority for the Minister to designate the transfer of staff from Shannon Development to Forfás. Forfás is the legal employer of staff of the agencies established under the Industrial Development Acts, i.e. Enterprise Ireland, IDA Ireland and Science Foundation Ireland.

From this we have all learned the importance of planning for the future regarding the teaching and development of science education. Sensible planning of education and targeting of science and information technology has given a tremendous boost to the economy. It is important we use the talents that exist. It is essential that these people are recognised properly.

The explanatory memorandum continues:

Subsection (3) of section 21A provides that a staff designated for transfer by the Minister will be appointed to the staff of Forfás. Paragraph 2 (2) of the second Schedule to the Industrial Development Act 1993 gives Forfás the power to second staff to the agencies.

It is important that the staff are brought with them and treated fairly and with respect.

This raises the issue of decentralisation. Most sensible people agree that decentralisation is important, strong and sensible, but let us do it by working closely with people, in a planned and phased way and with people's consent. There is no point trying to force out of Dublin people who have elderly parents or whose children are at school there and moving them to different parts of the country without giving them a choice. If one plans decentralisation properly, one can have staff support. However, there seems to be misguided direction on this aspect.

The issue of the Cadbury factory in Coolock has arisen in my constituency over the past few weeks. Cadbury has long been a major employer on the north side of Dublin, has been a good employer and has recognised and supported trade unions. However, a rationalisation plan has been put in place and most sensible people understand and accept that one must change and adapt in the modern economic climate. It appears that the 450 job cuts will be voluntary redundancies. This is essential because many people who have come towards the end of their working lives might be interested in this package. I am concerned that the day the change was announced, the management spoke about putting €100 million into the development of the Coolock plant. However, they are forgetting to tell the voters that of the €100 million, €30 million to €40 million is being put into pensions and the same amount into the redundancy package. Therefore, the development investment could amount to only €20 million.

I raised this aspect with the Minister this week in a written parliamentary question. It is important the Minister monitors this issue. I urge caution. We must have planned negotiations with the trade unions. The Coolock staff will hold a large meeting next Saturday. I urge the Cadbury management, having been a good employer to many people on the north side for many years, to be careful on this issue. We must ensure everybody is protected in a proper and caring way.

Some say that due to the Celtic tiger we are in a different, modern society that has replaced the caring society. We cannot allow this; we can have both. We have the financial resources and we must use them sensibly and distribute them fairly. It is essential that the Government targets the extra resources available in the budget at the most needy. I welcome the hints on the Estimates today that there will be a strong emphasis in the budget on health, education and disability. It is a focus we must have. There is no contradiction between the Celtic tiger and a caring society, despite the contrary line which certain Members and right-wing economists outside the House constantly sell. They contend that this is a modern, macho society in which everyone should try to get rich before walking on the weak. I put down a marker to the effect that there is no need for that view. We should face up to reality.

Education has a vital place in the debate on economic and industrial development. It is time to take serious action in this area. OECD education indicators demonstrate that countries which invest in education and skills benefit economically and socially. If one puts one's money into education, one will benefit from it in future, as we have already proved in Ireland with our highly skilled workforce. However, warning signs indicate that Ireland is falling behind its competitors in educational investment, which is a serious issue not only for the Minister for Enterprise, Trade and Employment, but also for the Minister for Education and Science. At each stage of education, Irish spending per student is below the OECD average, especially at primary and second levels. Ireland's expenditure on education, whether expressed as a percentage of GDP or GNP, fell in the period 1995 to 2003.

Despite the fact that Ireland is one of the wealthiest countries in the world, our paltry expenditure on education of 5.2% of GNP in 2005 leaves us languishing among the bottom half dozen OECD countries. We are placed 24th out of 30 countries. We have a great deal to do in the education sphere. The OECD country mean for the ratio of students to teaching staff is 16:6 compared to Ireland's 19:5. It is important to focus on education in the context of the Bill. Those who take a cynical view should wake up and smell the coffee. We have demonstrated clearly through investment in IT and science that jobs develop when educated personnel become available.

Spending on initiatives to combat educational disadvantage must be refocused to benefit children when they are young. Most people accept that educational disadvantage must be tackled early rather than when a child is 12 or 13 years of age. Resources should be provided at pre-school level to break the cycle of disadvantage. Government reports emphasise the importance of early intervention to tackle disadvantage, but initiatives are not funded on that basis. Only a fraction of spending to combat disadvantage benefits primary school children — €60 million compared to more than €300 million at third level — which is often forgotten. The result of this policy is that many children experience failure and drop out early due to the Government's refusal to provide adequate support when it is most needed.

I challenge those private, fee-paying schools whose representatives have been making a great fuss lately, but who have kept young children with disabilities out of the system. I commend the schools which are radical, creative and brave enough to take on the poorest children in society as well as those with special educational needs. Certain other schools, however, many of which are fee-paying, have behaved disgracefully by taking the cream while excluding people from broader society. They then tell the world they top the league tables for secondary education. It is time for those schools to be told that society is bigger than that. Elitist schools should be challenged to ensure they include children with disabilities, especially at second level. Some of them have been operating a form of apartheid as the Minister for Education and Science is well aware. She knows the schools involved and I hope she does something about them.

Ireland ranks 29th of 30 countries in its investment in each second level student relative to its GNP per capita. Any increases in staffing have been to mainstream special educational needs education and cater for international students. There has been no increase in the ratio according to which teachers are appointed to second level schools since 1999, which means classes of 30 teenagers, including special needs and international pupils, are common. While I call on the Government to focus on primary level, it must not forget the children in second level education.

Education is increasingly important to economic performance. Research has demonstrated that high levels of investment in education lead to personal and social benefits, including increased social inclusion, lower crime rates, reduced welfare dependence and improved health. The old notion that to educate is to liberate is true. If a person is educated, no matter where he or she comes from, it represents a significant step towards preventing crime, reducing welfare dependence and improving health. We miss out on the contributions of many creative children because of weaknesses in the education sector, which is a problem we must address. There are many people who dropped out of education early and did well economically. We should not be afraid to recognise good practice in the case of those people too. These are important issues in the context of a debate on an Industrial Development Bill and is essential that we deal with them.

As an island nation, air and marine transport represent a strategic question of great importance. The national carrier, Aer Lingus, and Dublin Port are essential to the development of the economy. We require choice and quality in air services and proper investment in the development of the island as an economic unit through a sensible all-Ireland approach. In Dublin Bay, scandalous attempts to fill in 52 acres continue. Dublin Port Company claims it requires more capacity and space but a visit to the docklands reveals numerous empty sites, some of which the company is trying to sell.

Nevertheless, the company claims to the people of Clontarf, Fairview, Killester and Raheny that they want to fill in 52 acres of the bay without giving the matter sensible thought. I record my opposition to the plan and ask those involved to consider the proposals to develop Bremore Port further up the coast. We must forget the notion of blocking up the city centre as a result of a congested port. We must adopt a creative approach, move up the coast and consider the development of a proper port at Bremore as an economic base.

A number of Members across party lines are open to the idea and even the Taoiseach indicated in a recent interview that he is interested in it. I push the idea strongly. Seán Dublin Bay Loftus, who used to be the Independent Deputy for Dublin North-Central and who represented the people in my constituency very well for many years, put forward the idea that the bay should be kept for our citizens. We should not interfere with the natural operation of the tides and local sea levels by creating land which is out of balance with the environment. We must consider the naturally advantageous Bremore Port and be unafraid to invest in a creative and radical plan. Fresh, important ideas like these are relevant to the debate on this legislation.

The Bill's proposed amendment to section 21 of the 1963 Act provides that Shannon Development staff who are transferred to Forfás may not receive a lesser scale of pay or be made subject to less favourable conditions of service than they are entitled to in the original body. The provision is important to maintain pay rates. We must ensure that all staff are supported strongly in this context. It is a question of rewarding labour and good practice. While there are a number of industries in the State which have created great wealth, the issue of low pay must be tackled.

Trade union officials and the Minister for Enterprise, Trade and Employment must ensure the question of low pay is put to bed once and for all. I will not accept the drift to the right by right-wing economists and Senators concerning economic investment. We must listen to the voice of workers, who created the Celtic tiger and who are entitled to an equal distribution of resources.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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I thank Deputies who contributed to the debate. The Industrial Development Bill has a narrow focus. It is an enabling Bill that provides security for employees who transfer from Shannon Development. Their terms and conditions of employment are protected, in line with the views expressed by Deputy Finian McGrath, in respect of employee rights. The transfer from Shannon Development to Enterprise Ireland follows a comprehensive consultation process in which all relevant interests in the mid-west had the opportunity to make their views known. Implementation of the new arrangements will provide clarity on the respective roles of the industrial development agencies in the region. The agencies will welcome this position.

Many Deputies referred to industrial development and how it applies to their regions. All parties welcomed the Bill and were supportive of the role of Shannon Development in the region. The national development plan will have a strong regional development focus that will underpin the objectives of Shannon Development. It will also reflect the views articulated by the Deputies on the importance of regional development.

The national spatial strategy is a key instrument in terms of the regional spread of population and industrial development. Enterprise Ireland and IDA Ireland will work closely with Shannon Development to ensure the mid-west continues to enjoy economic success. The number of people in employment in Ireland has increased by 350,000 since 2000, an increase that has been replicated across all regions. Employment in the mid-west grew by 20% since 2000. The unemployment rate for the region is 3.9%, below the average for the State. One does not often hear that in discussions on jobs in the mid-west and the Shannon region. The numbers are provided by the CSO, the live register and the quarterly household survey. The area has a strong industrial base and heritage.

The new project, Digital River, will involve the creation of 350 new jobs. We pay tribute to Shannon Development in this regard. It will be located in Westpark Shannon, a €150 million joint venture between Concre Developments Limited and Shannon Development located in the Shannon free zone. I visited the facility recently. It offers the possibility for further development, including job creation, inward investment and indigenous enterprise. Regeneration of the Shannon free zone is one of the key flagship projects in the new corporate plan of Shannon Development. The objective is to create 1,500 jobs at the top end of the knowledge and information technology market over the next three years.

Halifax Insurance and Sykes Enterprises announced expansions in June. This will generate 285 new jobs. The 30-acre information age park in Ennis was opened in May 2005. It is at the early stage of a long-term development to cater for high-potential start-up companies. Foreign direct investment companies that IDA Ireland can attract will be located there. This has the potential to create 3,500 jobs in high-quality accommodation over time.

The Shannon Development E-Towns project, bringing knowledge-based enterprise activity to towns with populations of 1,500, is well under way. Four towns were selected, Miltown Malbay, Cappamore, Tarbert and Newport. The project at Miltown Malbay is the most advanced. Shannon Broadband connectivity is a project involving eight new towns in the region selected for MANs in 2005. Delivery is expected in 2006. A related project, Shannon Connect, will provide services to 80 communities in the region.

Shannon Development has engaged in these substantive projects and will continue to do so. Links will be developed with Shannon Airport, which is key infrastructure in terms of economic development in the region. The role of the University of Limerick, in conjunction with industry and the agencies, will be central to developing a centre of research excellence. The omens are good because we have had significant success, such as the recent appointments of Dr. David Parnas and Dr. Martin Caffrey. They will add to the reputation and attraction of the region. The computational science project at the University of Limerick is another example. Significant research and development investment has taken place in four projects in 2006, providing long-term sustainability. In 2005, €19 million was committed to nine IDA Ireland projects in the region.

The Enterprise Ireland decentralisation programme is on track. A site for the new Enterprise Ireland headquarters has been identified. The regional development unit and a county enterprise board co-ordination unit will move to Shannon in 2007. An interim office has also been found.

Deputy Ellis referred to the food industry. Enterprise Ireland works with a number of food companies to develop value added activities to support research and development. Significant announcements of investment have been made by food companies over the past 12 months. These will add to exports and employment. I note what Deputy Nolan stated in respect of Carlow. IDA Ireland is not ignoring Carlow. I went on missions with IDA Ireland and we are conscious of the business park developed by IDA Ireland. We are anxious to secure an overseas company to use it.

Question put and agreed to.