Dáil debates

Tuesday, 12 June 2012

Topical Issue Debate

Unemployment Levels

5:00 pm

Photo of John DeasyJohn Deasy (Waterford, Fine Gael)
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We must examine the unemployment figures for the south east. The national employment rate is 14.8% and the corresponding figure for the south east is 19.7%. Let us call it 20%, which is 25% above the national average. To put it in perspective, the national unemployment rate in Ireland in 1989 was 18.7% and today, in the south east, it is 1% above the 1989 figure. In my constituency, Waterford, 15,000 people are unemployed. The figures are horrific and the latest Investing in Ireland report made the case that Ireland's position as location of choice for foreign direct investment has been consolidated and could yield 20,000 extra jobs over the next three years. Since the start of the year, we have seen a number of significant job announcements, including Allergan Pharmaceuticals Ireland in Westport, Abbott, Big Fish Games, Hewlett-Packard, PayPal in Dundalk, Eli Lilly and Apple in Cork, and Mylan and Cisco Systems in Galway. It is all good news but, in the south east, we are feeling a little left out of the loop and not just because of foreign direct investment this year. We are feeling isolated because the trend has been apparent for many years. A recent study of the national spatial strategy found as many as 82% of jobs created by overseas firms in the past six firms were centred around Dublin, Cork and Galway. The south east of the country is in a slide towards chronic long-term unemployment. Despite some infrastructural additions over the past ten years, the south east has become the regional poor man of Ireland. It is fair to say we are in a crisis situation.

I want to raise a matter I have come across over the years, the perception that Waterford city, in particular, does not attract foreign investors because of the perception of a reputation for militant unionisation. This could put off potential companies coming to the city. It has been raised with me by officials in State agencies like the IDA. I do not know if it is true but the perception exists and it is time the perception is addressed. If it is a factor in Waterford city not attracting a reasonable ratio of foreign direct investment in Ireland, it must be acknowledged. It has been raised with me too many times to ignore it any more.

This brings us to the response of the Government to the 20% unemployment rate in the south east. Following the loss of hundreds of jobs in TalkTalk in Waterford, the south-east unemployment action plan was launched in December 2011. At the time, the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, said "compared to other regions the south east's industrial base has not developed strong clusters in specific sectors that can then help attract future investment. The multinational sector is proportionately smaller than in other regions". Forfás produced a report on the south east but the problem is that Forfás has produced reports like it for every region in the country, including locations I listed earlier that have received the bulk of foreign direct investment in this country over the past ten or 15 years. There would not be much difference if one took the south-east action plan and compared it to an action plan for somewhere else. There is a massive difference in the south east and the gap is widening.

What further action does the Government intend to take regarding the 20% unemployment rate in the south east? Does he agree that, as far as the regions are concerned, we have a major unemployment crisis in the south east? The figures speak for themselves.

Photo of Richard BrutonRichard Bruton (Minister, Department of Jobs, Enterprise and Innovation; Dublin North Central, Fine Gael)
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I thank Deputy Deasy for raising this issue and I understand his concern. The figures show the south east with the highest rate of unemployment in the country at 19.7%. That was a feature even in the good times. It was an area with high unemployment even while there was strong performance in the rest of the country. Unemployment blackspots, which disappeared in many parts of the country, persisted in Waterford. That was the background to my decision last December, following the closure of Talk Talk, to set up a south-east action plan. It is in recognition of the structural problems Deputy Deasy recognises. There is a mixture of problems with education and physical infrastructure, many of which have been debated. Other structural problems include those spelled out by Deputy Deasy. New industry has not taken hold a strongly in Waterford as it has in other regions.

The positive point in the action plan is that it has identified strengths as well as weaknesses. The Deputy referred specifically to the activity of the IDA and the sense of neglect or a lack of attention. Since I gave a direction to the IDA to give clear priority to the region, there has been a significant step up in site visits to Waterford. In the year to date, and we are not yet halfway through the year, there have been more site visits than in the past three years. There is a significant increase in activity. I visited the region on three occasions and plan to meet the stakeholders in the south-east action plan later this month, which is roughly six months after it was launched, to review progress. Solid progress has been made on the plan but it is not spectacular. Against the background of the problems, we need to continue our focus and I am determined to do so.

The question of a bad perception of industrial relations in Waterford has not been an issue on my book. All of the fault was on the employer side and not in any way on the workers side in respect of how the TalkTalk closure was handled. The workers behaved with great dignity and it was an encouraging sign of confidence building for potential investors. I refer to the establishment of Eistech by three former employees of TalkTalk. This is a company with potential for significant growth and it can be counted as an early success of the south-east action plan. I accept the Deputy's well made point that we need to continue to work on this agenda. Many factors contribute to build the environment - or ecosystem - for stronger growth in sectoral opportunities. The Waterford Institute of Technology has been very impressive in its technology centre with regard to telecommunications, pharmaceuticals, the food and environmental area. These are significant bases which it is hoped will help when companies are brought on site visits in an attempt to market the region successfully. The bringing together of interested parties and sectors has resulted in a sense of shared ownership of the problem and this is helpful. It was heartening to see the groups working together. I accept the Deputy's point that progress remains to be made in this area and this against a background of very difficult conditions in the domestic economy and which impact on Waterford in particular given the variety of its industrial sectors. The economic conditions probably impact to a disproportionate degree on the south east because it does not have the sectors which have proved themselves to be more resilient in these difficult circumstances. I reiterate my commitment to working with the region in order to ensure the agencies under my remit maintain their focus on the region. I will review the progress and I hope to add further initiatives which can build on the current action plan.

Photo of John DeasyJohn Deasy (Waterford, Fine Gael)
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The south east was ahead of other regions over the decades with regard to the historical trend but it should not be accepted that this will remain the case. The region's unemployment rate is 25% higher than the national average and it is becoming one big blackspot. Since the action plan was launched there is a consensus of opinion that the State agencies such as IDA Ireland have been working a little harder and I note there are more site visits and itineraries. The different sectoral groups in the agencies have brushed up on Waterford, so to speak. They have visited Waterford and the region and they have acquainted themselves with the strengths and weaknesses. The view resulting from this activity is that the life sciences area such as pharmaceuticals, medical devices, may provide a possible cluster of industries which could be developed more strenuously in the south east.

However, what has not happened is a commitment to pull together the local development forum consisting of the local authorities, academics and Departments, on a quarterly basis. I ask the Minister to examine why this has not happened. The Minister has visited the region on three occasions since December but I have been asked why the quarterly meeting of that forum has not happened. I suggest there have been no tangible results in a macro sense for Waterford and the region from the action plan for the south east. There has been no net effect. To be blunt, the efforts so far, even though well intentioned, have not been sufficient.

Large numbers of job losses affect communities to their very core. Such events result in emigration, there is a higher level of crime and they destabilise and undermine the positive work of Government and other groups in many areas of community life.

The Minister must look at the hard facts and acknowledge that the south east requires a different response. The feeling in my constituency is that there is no national imperative to deal with the situation in the south east. There is an imbalance in responses and this is obvious in the figures. In my opinion, the Government needs to address and correct this imbalance even if it means providing additional incentives to potential foreign investors. An unemployment rate of 20% is not just disastrous, it is dangerous and the Government needs to take this on board.

Photo of Richard BrutonRichard Bruton (Minister, Department of Jobs, Enterprise and Innovation; Dublin North Central, Fine Gael)
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I acknowledge Deputy Deasy's point that the agencies have increased their activity in the region and I note his acknowledgement of the sectoral opportunities for development such as in the life sciences. I will pursue his query as to the reason for the lack of quarterly meetings by the forum. My impression is that there is quite an amount of bottom-up commitment in the region. I will raise those questions and see what can be done.

The enterprise agencies are treating Waterford as a special case and this needs to be reflected elsewhere across Government in order to meet the infrastructural and structural problems. I have no doubt that the Pathways to Work initiative under the remit of the Minister for Social Protection, Deputy Burton, will focus on the south east because of its high levels of unemployment.

Deputy Deasy makes the point that six months on, we have not reversed the trends but it will take longer than six months to address these problems. However, in my view, with consistent attention to the challenges, we will make progress here. Nationally, improvements across many areas will be required under the action plan for jobs, such as access to finance and the encouragement of start-up companies and competitiveness, the resolution of broadband access deficiencies and other infrastructural factors. We need to continue with the agenda of work in order to undertake an economic transformation nationally. It will be a difficult period but the action plan for jobs process which is an annual programme of actions that will make a difference, is vital in tackling not just the south east's problems but also the wider problems. The Government has a policy vehicle which will bring together all Departments in a more meaningful way in order to address the employment challenge. I believe this will help in the south-east region which has been affected by many challenges other than enterprise challenges.