Dara Calleary (Mayo, Fianna Fail)
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8. To ask the Minister for Jobs, Enterprise and Innovation if he will request a review of the decision that the Border, midlands and western region will no longer qualify for preferential regional aid from the European Union from 2014; and if he will make a statement on the matter. [42706/13]

John Perry (Sligo-North Leitrim, Fine Gael)
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I am pleased the Deputy tabled this question because the Irish Presidency fought with some success on this issue. The regional aid guidelines enable the State's industrial development agencies to pay grants, at enhanced rates, to businesses to support new investment and new employment in productive projects in Ireland's most disadvantaged regions. This helps the convergence of these regions with the more advantaged regions of the Union. All such grants come from the Exchequer, in other words, there is no EU or other external funding.

The new guidelines were adopted by the Commission on 19 June 2013. There are no provisions or means for a review of the content of the guidelines.

European regions eligible for regional aid are divided into A regions which are the most disadvantaged within the Union in terms of economic development and C regions which are also disadvantaged, but to a lesser extent. All Irish regions are classified as C regions, both for the current 2007-2013 regional aid map and for the upcoming 2014-2020 map.

For the current 2007-2013 map, the BMW region was designated as an economic development area because it had moved ahead of the A status that it had in 2000-2006. The guidelines stipulated that areas such as the BMW region would be granted economic development status for the 2007 to 2013 period only. As a result of this designation, the BMW region was effectively given a derogation to grant slightly higher aid rates to assist the transition from A to C status.

Both the current 2007-2013 regional aid guidelines and the upcoming 2014-2020 guidelines outline that the aid intensity in standard C areas must not exceed 30 % for small enterprises, 20% for medium-sized enterprises and 10% for large enterprises.

Additional information not given on the floor of the House.

These rates are all 5% less than currently available in the BMW region, but as I have stated, that region cannot be afforded special economic development status under the next map.

My Department is consulting stakeholders on the drafting of the 2014-2020 Irish regional aid map. Economic data such as unemployment and gross domestic product for all counties, including those counties in the BMW region, will once again be analysed afresh when deciding which counties will be included in the next regional aid map.

The initial regional aid guidelines proposal from the Commission, published in May 2012, presented significant challenges for Ireland. This proposal prohibited aid to large enterprises, reduced our population coverage from 50% to 25% and reduced aid intensity rates. Following sustained engagement with the Commission and like-minded member states at ministerial and official level, Ireland secured entitlement to maintain regional aid qualification for areas accounting for 50% of the country's population, with coverage actually slightly increasing to 51.28%.

On the key issue for Ireland, aid to large enterprises, a compromise was agreed with the Commission that will allow member states to provide investment aid to large enterprises for new economic activities and diversification of existing enterprises into new products or new process innovation. Aid intensity rates were also maintained at their current levels.

In essence, the final version of the regional aid guidelines negotiated by Ireland and like-minded member states represents an important step in ensuring Ireland, and the EU in general, maintain the ability to strengthen the EU economy and promoting cohesion between regions.

Dara Calleary (Mayo, Fianna Fail)
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I thank the Minister of State for his detailed reply. While I acknowledge the progress that has been made, the reality is that everything has been different since 2007. The Minister of State does not need to be told that there are parts of the BMW region that would certainly qualify for A grade. The region itself has grown, with Galway city and parts of Louth having had substantial employment growth, but in other areas there has been no growth. In the north west, agency-assisted employment has fallen by a fifth since 2003, including another 1% drop. The whole regional aid policy needs to be reviewed at European level in light of the collapse in European economies in recent years. Many areas that may have been stronger in 2006 or 2007 have fallen back. We have discussed emigration and the flight of people from many of these areas. The way to get these people home is to promote industry, particularly home-grown industry. The change in state aid affects our ability to do that. We need to go back to these state aids at European level. The Government needs to use the influence it has gained in recent months to drive that campaign. We need to review this because the country as a whole will lose out, and if we do not do this, I suspect the European Union will lose out because investment will go to areas outside the EU.

John Perry (Sligo-North Leitrim, Fine Gael)
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More than 51% of the country qualifies for category C regional aid. It was originally proposed that large enterprises would not be funded in the regions. We got that included. The regional aid is not a funding scheme for the EU. It is just a set of guidelines for enterprise support agencies in Ireland to follow.

Following sustained engagement with the Commission and like-minded member states at ministerial and official level, Ireland secured entitlement to maintain regional aid qualification for areas accounting for 50% of the country’s population, with coverage actually slightly increasing to 51.28%.

On the key issue for Ireland, aid to large enterprises, a compromise was agreed with the Commission that will allow member states to provide investment aid to large enterprises for new economic activities and diversification of existing enterprises. The possibility of large enterprises not being supported was on the table. Companies that were previously supported and were to be excluded-----

Terence Flanagan (Dublin North East, Independent)
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I ask the Minister of State to conclude because Deputy Griffin wants to contribute.

John Perry (Sligo-North Leitrim, Fine Gael)
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----- included, in Louth, PayPal and eBay; in Mayo, Allergan and the Lafferty Group; in Sligo, Abbott; in Galway, EA Games, Mylan and Cisco; and in Donegal, Abbott Ireland and Seatem. The Deputy is talking about getting regional development and getting people into the regions. Dublin and other large populated areas do not qualify for any of this assistance so we have that advantage. We can still get up to 30% for small companies and 10% for larger companies, which was taken off the table meaning that the west would not have been entitled to any aid if the Minister, Deputy Bruton, had not fought for it to be included. People see regional aid as money; it is only the guidelines to qualify for funds. Ireland has done very well to secure the deal we did during our Presidency.

Brendan Griffin (Kerry South, Fine Gael)
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I commend the Minister, Deputy Bruton, on his work on this to date. Wearing my constituency hat, all along people in Kerry felt disadvantaged because we were left out of that region. In the future we feel we should have a level playing field with everyone else. We have suffered. Tralee and other parts of Kerry have large areas that are industrial wastelands at the moment. A large factor in that has been that we were left out previously. We need to look at this from both sides of the argument. There are counties such as mine that have suffered. In future we need to be given an equal opportunity.

Dara Calleary (Mayo, Fianna Fail)
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I never heard a Kerry man say he was disadvantaged.

John Perry (Sligo-North Leitrim, Fine Gael)
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I am delighted this question was raised because it will come up in the European Parliament elections. People perceive regional aid as a pot of money from the EU. The Deputy has stated very clearly that certain areas of the country that were previously excluded are now included. The Minister, Deputy Bruton, is to be commended on his negotiations. If we had conceded, there was a significant possibility that no large enterprise would have been included in the regional aid map, which is not now the case. We have only dropped the marginal 5%. The BMW region benefited considerably through the companies brought into the region. There is still a substantial benefit - up to 30%, 20% and 10% for large companies. The fact that the area has been extended to include Kerry will enhance the opportunities. Deputy Calleary asked how we can attract foreign direct investment. We have a bigger map with bigger potential for aid to go into those regions. It is a huge benefit with regard to the employment grants for the employment of staff. It is a considerable advantage for the Minister, Deputy Bruton, in attracting foreign direct investment, given that more than half the country is included.