John Paul Phelan (Fine Gael)

I welcome the Minister. The final part of her contribution reflects Fine Gael's position on this Bill, which is largely technical in nature. On Second Stage, at least, we will not be opposing it.

Most of the changes to existing legislation that are put forward in the Bill are extremely technical. However, they provide Members with the opportunity to raise issues relating to regional development and unemployment. The House will be engaging in a specific debate on unemployment at 5 p.m.

The Minister outlined the provisions of the Bill and the Schedule provides a list of the companies the shares of which will be transferred to Enterprise Ireland from Shannon Development. I do not have a difficulty with that list. However, there are a number of matters I wish to raise.

The Minister referred to section 3 and the extension of the geographic region to include counties in the entire BMW region. I wish to reiterate the view I have put forward on previous occasions that I regard the BMW region as somewhat of an anomaly. It was created for purposes that I can understand in order to maximise grant aid from the European Union at the time. However, many of the poorest and most neglected areas of the country into which investment has not been forthcoming are not located within the BMW region.

As stated on previous occasions, the south-east region contains three of the five worst performing counties — in the context of average household incomes, employment rates and a number of other key indicators — in the country. Outside the Minister's home county of Donegal, Wexford, Kilkenny and Carlow have the highest rates of unemployment. As she pointed out, those rates are rising dramatically at present. These counties have the lowest levels of third level attendance and disposable income.

The legislation continues to reinforce the notion of the BMW region when, to all intents and purposes, this does not really exist in the minds of members of the public. The BMW region is statutorily established but it does not have much of an impact on people's daily lives and the concept behind it does not resonate with those who live in poor areas located outside this designated region. I accept that it was necessary to include contiguous counties in the region when it was originally drawn up. However, I must question whether it is necessary to reinforce the position in this legislation. Would it not be better to target our limited resources at those areas which have suffered most and which enjoyed the fewest number of benefits during the Celtic tiger era, rather than reinforcing the somewhat false boundaries of the BMW region? My view on this matter is personal in nature but I again take this opportunity to place it on record.

It is unfortunate that we are discussing the development of the mid-west region when it has just experienced a major haemorrhage of jobs in recent weeks. I refer, of course, to the announcement by Dell that 1,900 people are to be made redundant. The closure of the Dell factory will have major knock-on effects for many companies in the region.

I wish to thank the staff of the Oireachtas Library and Research Unit, who prepared for Members an extremely useful briefing document in respect of the Bill and Shannon Development. In 2005, the Minister's predecessor as Minister for Enterprise, Trade and Employment, Deputy Martin, referred to the new mandate he was putting in place for Shannon Development. A key part of that mandate was to be the establishment of a new independent authority for Shannon Airport. The Government made commitments in this regard on a number of occasions. To date, however, such commitments have not been delivered upon. Another key aspect of the former Minister's announcement in 2005 related to the role decentralisation would play in the development of the regions. I accept that a number of State agencies have been decentralised. However, it is clear the policy announced in the budget in December 2003 is pretty much in tatters and cannot be delivered as originally envisaged and as mentioned by him in those remarks.

The most interesting information I received from the research unit concerned a statement issued by Sean Dorgan as head of the IDA. He spoke of the importance of foreign direct investment in post-Celtic tiger Ireland. I looked at several of the headings under which he spoke and at a number of the issues he raised. He spoke about the importance of achieving an environment in which research, knowledge, high skills levels, expertise, high quality infrastructure and business services are combined in a flexible and creative way to promote job creation into the future. We would all agree with that. He also said, when he delivered these remarks in 2004 or 2005 that a further transformation to being innovation driven will not be instant but will need to progress quickly so that we are recognisably different yet again by 2010. I do not believe we have achieved that. I know it is an objective of Government and the Minister outlined that we have made progress in that regard but I do not believe we could say we are recognisably different.

Most telling was Sean Dorgan's description of what he saw spurred foreign direct investment growth in the economy throughout the 1990s in particular, and perhaps into the early years of this decade. He spoke about the long running boom in the US economy which we all know no longer exists. It is quite the opposite at this point. He spoke of the positive, stable and single-minded policy environment from Government. I know Members opposite might have a different view but we do not seem to have any policy environment from Government. I understand discussions are ongoing with the social partners and perhaps the Government wants to play its cards close to its chest. However, in the absence of any information, we do not seem to have a policy and leadership.

Another point Sean Dorgan made was equally important, although I will not get into a discussion on the Lisbon treaty. He spoke about the perception of Ireland as an integral and committed member of the European Union. Whether one is pro- or anti-Lisbon, our position as a committed member of the European Union has changed since he made these remarks.

He also spoke about the good supply of young, well-educated people. Our education system, which has some difficulties, is still supplying well-educated people to the workforce. Fortunately for other countries but unfortunately from the perspective of the economy, we are not unique within the European Union since its expansion in terms of the supply of young, well-educated people to the workforce.

Sean Dorgan also spoke of the export-led contribution to the economy in those years. We have seen a continuous fall in that export-led contribution over the past ten years. It is an area in which we will have to get our act together if we are serious about reversing some of the decline we have seen over the past 18 months.

He also spoke about the flexibility in the economy and about the relative competitiveness in terms of costs in the economy. This is the nub of the issue. Since he spoke in the early part of this decade, those relative costs have spiralled out of control. There is strong evidence to suggest that we have been haemorrhaging jobs because those costs have increased much too quickly. It has had a devastating effect in terms of employment in the State over the past 18 months, in particular.

Sean Dorgan made several comments about the importance of new technology, which the Minister mentioned. He also spoke about the level of taxation generated by the foreign direct investment companies in the country in terms of corporation tax and additional tax revenues. We have seen that the decline in the number of people employed in foreign direct investment firms has had a very detrimental impact in terms of the Exchequer figures in recent months.

The Minister spoke about the inevitability that we will experience further job losses over the next 12 months, with which we all agree. However, I am not convinced by what I heard from her and from Government that a policy agenda is being put in place which would ensure we can do something to arrest that decline in the coming years.

It is vital as we face into this period that there is a substantial review of how we spend money in terms of enterprise development and enterprise development agencies in the future. I think, in particular, of county and city enterprise boards, the IDA and Enterprise Ireland. I would welcome an opportunity to have a discussion on how we invest that money into the future at the earliest opportunity because it will be crucial if we are to reverse the decline in our competitiveness and the increase in unemployment we have seen over the past 18 months.