Seanad debates

Thursday, 5 May 2022

Nithe i dtosach suíonna - Commencement Matters

Regional Aid

10:30 am

Photo of Damien EnglishDamien English (Meath West, Fine Gael) | Oireachtas source

I thank Senator Wall for tabling this Commencement matter for discussion. I am happy to address it and to explain to him the reasons and the rationale behind this, as well as to discuss what we are doing with working with the local enterprise offices, LEOs, in Kildare.

As the Senator will know, the mid-east regional enterprise plan brings together the three counties of Wicklow, Kildare and Meath, to work together with all the business development agencies, LEOs, local authorities, education systems and chambers of commerce. All of these are involved in promoting counties such as Kildare, Meath and Wicklow in the area of job creation. It is working with existing companies and with new companies coming in. I know that the Senator probably read the committee’s regional enterprise plan. I would encourage him to go through it again so that he can see all of the various actions that are set out within it to help to develop jobs in the sector. He should also look at the plans by Enterprise Ireland and the IDA to bring investment and jobs right throughout the country, hitting all of our counties.

At the outset, it should be pointed out that the regional aid map is decided by the European Commission and not by the Government.In negotiations with the Commission, the Government sought the inclusion of much more of the country. We will do so again at the mid-term review in 2023 when the data from the census are available.

As Senator Wall indicated, it is true that regional aid does not involve any European money or grants and should not be confused with Structural Funds, which Ireland qualified for in the past. Rather, it limits the amount of regional State aid that the Irish Exchequer can provide to certain geographic areas based on specified criteria. That is where the issue arises in regard to Athy in County Kildare in terms of the criteria that are set down by the European Commission.

The regional aid map for every member state must be developed within coverage levels set by the Commission and criteria laid down in the European Commission's regional aid guidelines, issued in April 2021. Ireland's economy has shown strength and improvement since 2014, including Senator Wall's county of Kildare. As a consequence, the European Commission initially proposed to reduce the overall coverage of Ireland's map, as a proportion of total population, to 25.6%. Following intensive negotiations with the Commission, this was increased to 35.9%. Of course, we would like it to be higher, but it was a significant improvement on the proposed 25.6%. This is, however, still a significant reduction of almost one third from the 51.3% which applied previously. This adjustment was part of a European-wide review and Ireland was not unique in facing a reduction in coverage.

With a more limited population coverage, and the strict criteria set by the Commission, it was important that the optimal allocation was achieved. To achieve this, the Department of Enterprise, Trade and Employment, working with stakeholders, including Enterprise Ireland and IDA Ireland, developed a multidimensional model that provided a depth of analysis within the Commission's set criteria. This was an objective and impartial approach, although final approval of the map, for Ireland and for all member states, rested with the European Commission. The Commission announced its decision on 22 March 2022.

It is important to note that areas can only be included on a regional aid map if they meet the Commission's strict criteria. Conformity to the criteria must be supported by socioeconomic data. The criteria must be met for contiguous areas at NUTS 2 or NUTS 3 level. To meet the Commission's criteria for inclusion on the regional aid map, an area needs to have a GDP per capitabelow or equal to the EU-27 average, an unemployment rate above or equal to 115% of the national average, be undergoing major structural change or in serious relative decline. The socioeconomic data available for Kildare indicates that the county does not meet these criteria.

It is important also to recognise that regional aid is only one form of assistance available to enterprises. Only approximately 7.4% of Ireland's state aid is in the form of regional aid. There is still plenty of opportunity to work with other companies that want to bring investment and jobs to the Athy area. Athy can benefit from all other types of state aid that remain available to enterprises, irrespective of their location. We want to be very clear on that.

Senator Wall says he spoke to other companies and interested bodies. I am very happy to engage with them with him. If he wishes, he may bring them to the Department or the development agencies, which are very proactive when it comes to any opportunity to create jobs or investment for any part of the country, and they target various areas as well. From talking to the Minister of State, Deputy Heydon, as well about Kildare in general and Athy, I know that there is every opportunity to create jobs there. Recently, there were some very significant announcements in Athy, and the food hub is very important too. We must build on the success of those announcements and continue to provide jobs in the area as well. I thank Senator Wall for his time.


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