Tuesday, 15 April 2014
106. To ask the Minister for Jobs, Enterprise and Innovation to set out his priorities in respect of the regional aid map recently submitted to the European Commission; and if he will make a statement on the matter. [17461/14]
Will the Minister set out his priorities in respect of the regional aid map submitted to the European Commission? The relevance of this is to ensure IDA Ireland, Enterprise Ireland and other agencies prioritise disadvantaged areas.
The regional aid guidelines established enable the State's industrial development agencies to pay grants at enhanced rates to businesses to support new investment and employment in productive projects in Ireland's most disadvantaged regions. All such grants come from the Exchequer. The priorities during the regional aid guidelines negotiation process were to maintain population coverage, ensure aid could be given to all categories of companies regardless of their size and to maintain aid intensity rates.
The initial proposal from the Commission presented significant challenges for Ireland. The proposal prohibited aid to large enterprises, but the Minister, Deputy Bruton, got this changed . It 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 all levels, Ireland secured entitlement to increase regional aid qualification to 51.25% of the country's population. Another issue in the negotiations was the prospect of not being allowed to grant aid large enterprises. Ireland was part of a group of member states which successfully negotiated a compromise whereby it will be possible to provide investment to large enterprises.
My Department is tasked with developing a single regional aid map applicable from July 2014 to December 2020. An inter-agency group has been working since 2011 to develop an overall position and to assess the implications of any proposed changes. The process is now complete and my Department has issued the proposed regional aid map for Ireland to the Commission for consideration and approval. The Department will publish the results of this submission once the Commission has finalised its consideration of the matter. In essence, the final version of the regional aid guidelines represents an important step in ensuring Ireland, along with the EU in general, is positioned to maintain the ability to strengthen the EU economy and to promote cohesion between regions.
Will the Minister of State publish the submission as urgently as possible? I realise it is under consideration at European level but perhaps we could see the submission. In essence, the most important people to whom the Minister should talk about the regional aid map are the representatives of IDA Ireland and Enterprise Ireland. I met senior executives of both at the Committee of Public Accounts recently. When we asked about regional development, they almost looked down their snooty noses at people, as if to suggest we simply wanted something for our county or region. They said we had to look at Ireland in a certain context. They have zero interest in regional development. They want big projects in the big cities and that is the beginning and the end of it because they want jobs. There is proof of what I am saying in the number of visits last year to the Border, midlands and western, BMW, region, which represents almost half the counties of Ireland. Approximately 58 out of the 300 visits which took place last year, that is, 20%, were to this region. Fully 80% of the visits took place outside the BMW region. Reference was made to job creation in the regions. A total of 7,071 jobs were created in 2013, only 20% of which were in the BMW region. Will the Minister of State ensure IDA Ireland and Enterprise Ireland consider the regions? Europe is not the problem.
Given the presence of local enterprise officers and local county boards, there will be a regional structure. The Minister, Deputy Bruton, is formulating a regional structure. We should remember that aid intensity rates will be maintained at the current levels. It is important to put this on the record.
The current regional aid guidelines and the upcoming 2014 outline suggest that aid intensity in Ireland must not exceed 30% for small enterprises, 20% for medium-sized enterprises and 10% after that. These rates are the same as currently available in Ireland, apart from the BMW region, for which an additional 5% is currently available. However, this was a transition period in which the BMW region moved ahead of the A status which refers to being among the most deprived areas.
One of the key issues for Ireland in securing this deal was that whereas the backdrop was that investment aid to large enterprises had to be prohibited, population coverage had to be reduced from 50% to 25% and aid intensity rates had to be reduced dramatically, the Minister secured outcomes whereby large enterprises would be allowed new activities, population coverage would be maintained and aid intensity would be maintained. We are altogether committed. Let us consider the larger companies.
The level of foreign direct investment, FDI, by larger companies has been high. It is the choice of the company entering Ireland. The IDA cannot direct companies to go to Sligo, Kilkenny or anywhere else.
It is down to the big shots in some other country to decide where a company goes. The purpose of the IDA and Enterprise Ireland is to support balanced regional development but the Minister of State has let the cat out of the bag. The purpose of the incentives is to encourage companies to set up in counties where they might not otherwise go. I do not expect them to set up in areas where there is not sufficient infrastructure.
At Europe, the Minister for Jobs, Enterprise and Innovation secured the status quo. The large companies will still get the large grants and half the population of Ireland - the big cities - will be prioritised again. If he had allowed 25% of the population to be incentivised geographically as opposed to the 75% who are currently better off, there was a chance that areas like the BMW region would have received a reasonable level of investment. The current arrangement has delivered 80% of investment for the well-off counties and 20% for the remainder. The Minister is propagating that situation.
The Deputy has misread the situation entirely. If he had listened to the reply, he would have heard that the larger cities did not get the aid. For example, a large number of companies have entered Sligo and the Border region. The Deputy can shake his head as much as he likes, but that is a fact.
The Government secured a good deal on regional aid. The Government's job is to work with the IDA and Enterprise Ireland. It has been successful, although investment has not been seen in every region. The next tranche of the Government's strategy is to encourage enterprise. The regional aid should be a major help in that regard. Large cities are not getting the aid. That is a fact.