Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I thank Senator Conway and all the Senators who contributed to this debate. It will be very difficult to do justice to all the issues raised but I will deal with a few thematic ones. Senator Ó Domhnaill raised the issue of regional development. This is a really serious issue that we need to discuss. First, we should start from a factual basis. Every region in the country in the past 12 months has enjoyed employment growth. Contrary to what Deputy Cullinane said, some of the regions that enjoyed the greatest growth were the south east, which had over 15,000 net new jobs, and the Border regions, which had over 14,000 net new jobs. We are getting regional spread and that is a feature of the recovery. Of course, it is not driven predominantly by IDA projects. The regional spread is driven by the competitive advantage of regions. One must look at what the competitive advantages of regions are but in some cases, they will be tourism or food. These are natural sectors that have an absolute fit with the region. Too much of the debate about regional development in this country is conducted around how many site visits the IDA made to the region. The reality is that employment in foreign-owned companies represents 8% of total employment. A total of 92% of employment throughout the country is in other sectors. In some regions, particularly those that are more remote from urban centres, the proportion of foreign direct investment is probably down to around 4%. Yes, we need to have a debate about regional development but it should not be a debate about 4% of employment where we pretend that this is what we really have to solve. The 96% is far more important. One of the commitments we have made in this action plan is to develop a regional enterprise strategy, which we have never had in the past. The building blocks are being put in place. We will have our local enterprise offices which will each have their own plan. We will develop Enterprise Ireland and IDA plans for the regions. We can meld those into a strategy into which other stakeholders can have an input.

A successful regional strategy is often driven by entrepreneurs who decide to make a commitment to support their region, who step out from the pack and decide to create an environment which will encourage enterprise in his or her region. We want to create a framework to help such people to participate. It is not a case of all the State agencies sitting around a table, tugging at their beards and talking about things; we want to create ambition, to develop new tools and invite people to come in behind that. This is what I would like to see.

For example, the 200 companies chosen by Enterprise Ireland and IDA Ireland to be given a step-up will be regionally based. We will examine what companies in each regions have the capacity to grow to the next level. As Senator Keane said, the developing capital fund is one of the instruments. The local enterprise offices will be used to organise competitions to encourage entrepreneurs, in particular, young people, women, the under-represented groups, who could step up to the plate. We are interested in developing regional innovation. Some of the funding for enterprise offices will be held back to stimulate new thinking about the region and its capability. That is how we need to think about regions, about competitive advantage, about the assets available and what tools can the State and the region adopt to drive that forward. Such a discussion has been absent from our discussion about regional progress.

I refer to Senator O'Keeffe's comments that different parts of the country have assets which have to be sweated, exploited and developed. We focus on the Atlantic Way which is a real asset but one cannot expect a company like Google to set up on the Atlantic Way. I am not criticising the Senator's comments but it is a case of having a more intelligent discussion about how to make a region competitive and that will include winning foreign investment. In Senator Ó Domhnaill's area of Letterkenny we are committing to building an advance production space because we believe the area has the capacity to grow, based on what the region has done. The last couple of years have been good for foreign investment in Donegal. There can be strong beacons in different regions but they have to be built on a solid foundation that will be a magnet to attract foreign investment.

This recession has hit younger people hard. There has been no public service recruitment and it is a case of last in, first out in other sectors. The other factor at work, apart from emigration, is the decline in the numbers in the younger age groups. The next population bulge will increase the numbers in the future. Youth unemployment is the challenge and this is the thinking behind the youth guarantee scheme. It is also the reason for the introduction of the youth entrepreneurship initiative. I refer to the programmes from the Departments of Education and Skills and Social Protection, such as Momentum and Springboard, also the traineeships and apprenticeship review, all of which recognise that we need to ensure that young people are equipped with the best skills to give them a fighting chance. One of the casualties of the recession, besides the collapse of banks, was the fact that people made career choices in an artificial economy which had been created. Employers did not invest in apprenticeships and parents wanted a different type of path for their children. Now it is hoped that we will return to having a small open economy that can create a sustainable competitive advantage in which skills will be important.

Senator Mary Ann O'Brien raised a number of issues about tax and regional aid. My view is that we will have regional aid advantage in certain regions dictated by Europe. Half the number of regions will have the added regional aid available to them. The debate about regions and their growth is not about extra grant aid but it is about creating a competitive advantage and how it is to be endorsed, but regional aid is one of the tools.

We need to examine the incentive structure associated with entrepreneurship. I would like a simplification of schemes such as the seed capital scheme. I am interested in the development of start-up companies. Serial entrepreneurs may be thinking about exiting. Last year's Finance Bill included provisions to encourage serial entrepreneurs. I would be in favour of a simplification of the seed capital scheme and the new BES because the take-up of those schemes is deplorably low even though they have the potential to be very valuable schemes for start-up and emerging companies.

My initial focus will be on the start-up entrepreneurs rather than those who are exiting. However, I accept that the exit will need to be examined and the Minister for Finance, Deputy Noonan, is willing to look at this whole area.

I agree about the challenge presented by businesses migrating to the web. Irish people spend €6 billion in trading on the web and 75% of that expenditure is lost to Irish companies because it goes overseas. It is predicted that in five years' time the expenditure figure will be €20 billion. The web will no longer be a bit player in Irish consumer spending but rather it will account for a significant amount of the Irish consumer spend - it could be more than one third in that short period of time. If we are not players and our businesses have not migrated to become players they will miss the boat and someone else will eat their lunch, literally. The 2,000 innovation vouchers have been based on a number of pilot schemes in partnership with the Dublin Chamber of Commerce and with one of the software associations. We have refined the scheme and we have a better idea of how it can be used. We will provide 2,000 vouchers but more than 2,000 businesses need to make the commitment. It is a case of making them aware of the scheme. If use of the web is not included in a business model that business will miss the boat. It is a case of understanding technological equipment and big cost savings can be achieved by ironing out problems.

I agree with Senator Lorraine Higgins that banking continues to be a problem for us. New banking players are needed in the marketplace. I will certainly consider the metro bank. There is a commitment to consider alternative funding sources such as crowd funding and all the alternatives. The European Investment Bank is examining whether we can do better in trade finance. KfW bank is in the market. The EIB has invested €200 million in AIB. The NPRF has €850 million invested in alternatives and Enterprise Ireland has €1 billion as an alternative to bank financing. There is about €2.5 billion available in alternatives to bank financing. These are not being fully utilised; it may be that the people do not know about them or perhaps the programme is not properly designed. We plan to revise the credit guarantee scheme this year because it was too restrictive in its initial design.

We would be delighted to receive details about the metro bank and how it works. There is a standing committee - it has some awful name to do with State bodies or something like that - on finance, the Central Bank and such worthy organisations. It examines this area and therefore if there are models we need to examine, that committee is examining those.

On the quality of jobs, which Senator Cullinane, who is not present, raised also, there is some misinformation being put out about that. The vast majority of the jobs created n the past 12 months have been full-time jobs. They are not part-time or yellow pack jobs. Nine out of the ten occupations have seen growth. They go from very low skilled, through the high skills up to the top skills; it is spread across the skill levels. It is not the case that we are seeing yellow pack working or a lot of part-time working. That is not to say there is not a problem. There are problems with people exploiting the live register rules to get cheap fits, so to speak, into the live register. There are issues in this area and we will examine those but, by and large, we are seeing quality employment in sectors that have been targeted and that are sustainable. That is encouraging but there are problems.

One of the issues that continues to be a concern is that in important sectors such as food and hospitality, we do not seem to have got an approach yet that provides a career path in these sectors that will attract people long-term into them. In France and some other countries this is considered a cherished profession to which chefs, waiters and everyone involved in food commit their lives. Even though it is a huge area of competitive advantage for us we do not have the right skill mix and the career paths, and there is more consideration to be done on that. Our colleague, the Minister of State, Deputy Ciarán Cannon, is very interested in that area and has taken initiatives to try to make changes in it.

Senator Sean Barrett raised a number of issues. In particular he said he would like to see more deregulation. Progress is being made in this field but there is always room for more progress to be made. I have substantially strengthened the Competition Authority. It has more resources, tougher penalties and the capacity to take on barriers to entry or any anti-competitive behaviour. There is an opening up in these sectors. Ten per cent of bus routes may not be a big figure but it is big compared to the large zero that applied, as the Senator rightly said, in the previous years. There is progress happening in that area.

On whether the construction boom could lead to another collapse, I do not believe we will repeat that collapse. The banking controls and the mistakes in the way the credit was driven based on external funding, and the way the banks deserted any sensible loan to deposit ratios, will not be made again but we must be conscious of not allowing over-heating in any sector. In many parts of the country the building cost is still higher than the sale cost, therefore, a builder will not start building. Seeing some recovery in price is part of seeing a return to normalcy in the construction sector but we must be alert in that regard. At a time when, by all common admission, the banks are not lending hand over fist, there is not a fear of a boom.

The Senator made the criticism that Bill lacks numbers and that it will not result in agencies being closed. We are closing down 35 county enterprise boards and creating an integrated structure within the local authorities with a centre of excellence from Enterprise Ireland. That is reform that will deliver better and remove 35 boards from the system. We are making changes.

In the employment rights and industrial relations area we are reducing five agencies down to two, and we believe we will deliver a better service. The evidence exists already that we are doing that. As the Senator acknowledged, we brought Forfás into our Department because I believe we need a policy engine within the Department. For too long we have had strong agencies and a weak policy capability in the Department. We are trying to reverse that and have an intelligent, capable policy arm within the Department. Imbued through all the divisions, and it is not just about one unit but about our entire Department having stronger policy capability, we are working more collaboratively across the Department and having those skills in-house. That is healthy both for the Department and for the agencies because it puts agencies under more scrutiny, and we can be more demanding of our agencies. That is very valuable.

The Senator is right about the need for new blood in the public service and to be fair to Deputy Brendan Howlin, that is an area he has addressed and will address increasingly in the future. The Senator will be pleased to know that economics was the first area he picked to strengthen the economic base of the public service. Obviously, he is listening to what the Senator is saying.

On the issue raised by Senator Michael Mullins, the February unemployment rate figure is down to 11.9% today. It was 12.1% at the end of last year and is now down to 11.9%, therefore, the trend continues to be in the right direction.

Senator Mullins talked about the domestic economy. He will have heard the Minister for Finance, Deputy Noonan, and the Taoiseach emphasise, with our forthcoming construction strategy, that there is an opportunity now to see the domestic economy recover. For the past four years the only source of growth in our economy was in exports. The Senator is right that we must continue our focus on that. It is not a question of letting up on the drive for competitiveness because we need to build our export base. If we can continue, as we did last year, to add 12,000 net jobs in export-oriented companies that will have a knock-on effect in the rest of the economy. We must keep our focus on exports but there is room to look more creatively at some of those other sectors, and that is what we are doing.

Senator Mullins also raised the issue of rural towns. I hope that the establishment of our local enterprise offices will start to bring local authority thinking into the enterprise space. Many people see local authorities as the drag on enterprise when it is probably one of the most powerful assets a county has in driving enterprise. If we can win over the local authority, and the local enterprise office is part of that campaign, to become a driver of enterprise, that would be very welcome. I would love to see the different counties vying to be the best county in Ireland in which to create a business, just as we are saying that to our European colleagues. That is the sort of thinking within our local authorities that would result in them being more innovative on areas such as rates or parking. It is to get them to think about those issues more creatively.

To be fair to local authorities, they have taken a big hit in resources. No one will be their fairy godmother, therefore, they can only give rate concessions as they achieve efficiencies. That is the reality in which we all live but the report of the city and county managers has shown that over 700 initiatives are being taken by different local authorities to support enterprise. Many of those could be mainstreamed. I do not know if there is a Senator here from Cork but Cork County Council has 1% of its rate set aside for enterprise support. It uses that every year to promote interesting projects in the Cork region, and it does that year in, year out. That is a very interesting approach, and there are many other examples of people who have played to their strengths.

Senator Cullinane is not present but we certainly will continue our focus on the south east. As I stated in my earlier remarks, there are an additional 15,000 people at work in the south east. Its unemployment rate came down by three points from 18.8% last year to 15.5%. It still is the highest rate in the country but that is very significant progress in a year, and we will continue to focus attention on that.

I will not venture to comment on the role of the Western Development Commission but my ambition is to create a regional enterprise framework where we can bring in more stakeholders in other parts of the State and non-State environment to back what we are trying to do in the Department of Jobs, Enterprise and Innovation.

We need to give people a clear statement of the views of IDA Ireland, Enterprise Ireland and the local enterprise offices on the areas for development and try to enlist support behind them. That is what we can do to try to create the environment.

We are preparing for the year of design in 2015. I believe it has the potential to be an interesting area, dipping into a wider range than we might be considering as our areas of competitive edge.

Senator Quinn is nothing if not persistent on the issue of upward-only rents. The truth is that it is not just the opinion of one lawyer, but of a series of lawyers, including the present and previous Attorneys General. Certainly the two parties gave it their very best shot to find a solution that is constitutionally sound, but we were unable to find one. Considerable effort went into it. At this point we are moving on to tackle other issues.

The issue was that to deal with a contract and remove the rights that a person had in a contract would require compensation and the taxpayer just does not have the money to be providing compensation. One man's rent that is too dear is another man's rent for a property on which he cannot afford to pay the mortgage. It is not always as simple as saying that the people who get the rents are wealthy and that the people who are paying the rents are poor; that is not the way. That is why the Constitution affords people rights that have to be protected.

However, we are doing the following. Through NAMA where a case is presented, NAMA landlords will adopt an approach of being flexible. Increasing flexibility is being shown and landlords are doing deals with tenants.

Clearly we are now trying to do things for the retail sector. Trading online is a lifeline and essential for the long-term future of retail. Taking up another of the Senator's themes, we are creating a single portal for retail businesses to be able to access all the licences - approximately 25 of them - with which they must comply. That will significantly reduce their costs.

We take into account the World Bank's ease of doing business tables. The Senator is right in pointing out that we are pretty competitive on starting a business when compared with most countries. New Zealand is undoubtedly better. We look at those rankings with a view to moving up. This year the National Competitiveness Council, on which we have put some new industry partners, will report quarterly to the Cabinet committee on these or other issues it has identified as having the capacity to give us an edge. If any Senator wishes to suggest any regulations he or she believes are redundant or should be changed, we certainly have the appetite to consider them.

There was an exercise up to 2012 in taking out administrative costs. It was designed to deliver a 25% reduction in administrative costs. In many areas it did so; in some areas it did not. A lot of things are happening. The House will shortly have before it a simplification of the companies legislation. That is a big dollop of work running to 1,500 sections, designed to make setting up and running a company easier. It will be easier to comply and provides for many simplifications relating to AGMs and boards of directors. That is coming the Senator's way and he might regret his enthusiasm for it when it arrives in the House because it is quite a Bill. We are definitely up for any simplification we can deliver. Senator Conway raised the same issues.

I have dealt with the issues as best I can. I again thank the Senators for their support for what we are doing here. This approach has the merit that there will be another plan in 2015. Between now and late summer we will be trying to glean new ideas and refine them to proposals we can implement. I am working with the Oireachtas Joint Committee on Jobs, Enterprise and Innovation under the chairmanship of Deputy English, which is doing considerable good work. This provides a vehicle for continually adapting to changing circumstances, which is a real merit of the approach. We are all in learning mode trying to deal with this crisis.