Tuesday, 25 February 2014
I welcome the Minister of State to the House. He may be aware that a couple of weeks ago there was again an announcement of more job losses in Waterford city from Honeywell Process Solutions. The unemployment figure in Waterford and in the south east is still way above the national average. It is over a year since I published the Southeast Economic Development Strategy, or SEEDS report, which was endorsed by all parties, published in Waterford and supported by the Oireachtas Joint Committee on Jobs, Enterprise and Innovation. The report called for a suite of Government interventions by a number of different statutory and non-statutory agencies to support the creation and retention of jobs in Waterford city and county and across the south east.
Unfortunately, many of the key recommendations have not been delivered. If we are to allow the region to properly grow and develop economically, culturally and socially, we must create a level playing field. An obvious area to consider is regional aid. Currently, the south east is not on a par with the Border, midlands and west, BMW, region. If a multinational company has a choice of investing in Waterford or Galway, there are more attractive grant aid rates available in Galway, which puts Waterford and the south east at a big disadvantage. It is important that there be a level playing field. The regional aid guidelines are being reviewed this year so there should be a progressive move, with Waterford and the south east brought to the same point as the BMW region. Any reverse of this would not be a net gain for the State but instead would be a step backwards. At least there would be a level playing field for the south east.
There are a number of other necessary interventions. We still do not have a regional IDA office, a regional IDA director or a regional strategy. We do not have a university. All of these issues must be resolved if Waterford and the south east are to be put on a level playing field. The Government must not drags its heels on any of the recommendations in my report or the report published by the new city and county council in Waterford calling for very similar proposals, including the roll-out of the dark fibre network, better broadband connectivity and the upgrading of systems, as well as investment in the regional airport, a regional director of the IDA and a proper joined-up regional strategy. There should also be an educational attainment strategy to consider the issue across all levels and how we can increase educational attainment in the region, where the level is among the worst in the country.
The Minister of State would agree there is no silver bullet or panacea for solving the obvious problem in the south east, where the entire region is underperforming. There is no reason for this but it is accepted by the Government that the south east is underperforming for the wrong reasons. If we can get the interventions we need from the Government and State agencies, I have no doubt the people in the south east can turn things around. We can and will create jobs but we need the tools and Government support to do this. One of the clear recommendations I made in the report is to create a level playing field with regard to regional aid, and I ask the Government to follow through in that regard. We cannot continue with the position where Waterford is unfairly treated in comparison with Galway or other cities and counties in the BMW region when unemployment figures for Waterford city and county are so high. I ask the Government to consider the issue and deliver the recommendations made by the Oireachtas committee and the newly-merged local authorities.
I thank Senator Cullinane for raising this important issue. The House is aware that the guidelines for regional aid, also known as investment aid, enable the State's industrial development agencies to pay grants at enhanced rates to business in order to support new investment and employment in productive projects in Ireland's most disadvantaged reasons. This helps in the convergence of these regions with the more advantaged regions. All such grants come from the Exchequer, and there is no EU or other external funding.
The guidelines for 2014 to 2020 were adopted by the Commission on 19 June 2013 and will enter into force on 1 July 2014. At present, Waterford and the wider south-east region qualify for regional investment aid at the rate of 30% for small companies with fewer than 50 employees, 20% for medium sized companies with 50 to 249 employees and 10% for large companies. The companies in the BMW region can currently be aided at rates 5% higher than these rates but this is a transition arrangement from 2007 to the end of June 2014. Due to the BMW region moving ahead of the status it had between 2002 and 2006 as one of the most deprived areas of the EU, for 2014 to 2020 the regional aid guidelines stipulate that all Irish areas designated for aid will have the same rates from 1 July 2014. The same rates will apply in Waterford as the BMW region from 1 July this year.
Departmental officials are currently compiling the most up-to-date economic data for each county in order to determine which counties will qualify for inclusion in a revised regional aid map for Ireland. Once the data has been compiled and analysed, qualifying regions, to a maximum of 51.28% of total population, will be included in the new map. This will be agreed by the Government and submitted to the Commission by the end of June 2014. The most regional employment data from the Central Statistics Office indicates that in the 12 months to the end of September 2013, an additional 10,000 people were in employment in the south-east region, including Waterford, and the unemployment rate fell by 2.8% in that period. This is a very positive development, representing a significant improvement in the numbers at work in the region, and it reflects the success of Government policy, especially the Action Plan for Jobs and various initiatives to enhance competitiveness and boost economic activity.
The IDA south-east region comprises counties Waterford, Wexford, Carlow, Kilkenny and south Tipperary, and I visited Waterford twice recently. IDA Ireland is focused on advancing the economic development of the region, primarily through the gateway of Waterford city, with the other key centres being Wexford, Kilkenny, Carlow and Clonmel. In the region as a whole there are 63 IDA Ireland client companies employing 10,712 people in full-time jobs, with a further 1,207 in part-time employment. That amounts to approximately 12,000 people. IDA Ireland has a long relationship with these companies and works closely with them to ensure their long-term sustainability and encourage growth, development and continuing reinvestment.
Following the closure of TalkTalk in Waterford in 2011, the Government put a particular focus on the region and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, published the south east employment action plan and established a forum of all State agencies and local players to set out actions to increase employment in the area. The Minister has regularly met representatives of IDA Ireland, Enterprise Ireland and the forum to review progress.
Work is ongoing on the implementation of the south-east employment action plan recommendations, with the agencies and stakeholders working together to maximise benefits for the region. The south-east forum, established to oversee the implementation of the action plan, will continue to examine options that will lead to job creation and investment opportunities in the south east. There have been significant gains for the region, including a major investment by Glanbia in Belview on the Kilkenny-Waterford border which will provide 1,600 direct and indirect jobs, as well as an additional 450 jobs during the construction phase. In February 2013, Sanofi announced plans to invest €44 million in Genzyme's biotechnology campus in Waterford. This investment will increase the site's diversity of products and comes on top of an investment of €150 million just over a year ago. This investment ensures that the Waterford facility, which currently employs approximately 500 people, can produce the company's latest products and gives an indication of the Waterford site's value to the company. In March 2013, Nypro Healthcare announced plans to establish an additional state-of-the-art medical device facility in Waterford, which will result in the creation of over 200 high quality jobs in the coming years. Eishtec, the call centre operator, has in the region of 750 staff between its Waterford and Wexford centres. The company aims to bring that total to approximately 900 by the summer of this year. A further 65 Enterprise Ireland-supported new jobs were created by Dawn Meats in Waterford as a result of a five year, €300 million contract with McDonald's restaurants. Danone baby nutrition in Wexford announced an investment in its manufacturing facility which will create approximately 45 new jobs. The two local Waterford County and City Enterprise Boards have created 59 new jobs, while IDA Ireland has announced plans to build new advance, open-plan manufacturing facilities in Waterford in order to enhance the offering in the area to win new business. I am informed by IDA Ireland that the proposed new advance building facility, which the agency is funding in Waterford, will be 2,348 m² and will be located at the IDA technology park on the Cork Road in Waterford. I understand that the procurement process has commenced, with the outcome expected within the next month.
The Minister for Jobs, Enterprise and Innovation, Deputy Bruton, has asked IDA Ireland and Enterprise Ireland to work with the Department to explore what further initiatives can be taken to ensure a better approach to enterprise development in the region. The Minister has done extraordinary work on behalf of the region. I have met the regional directors of both IDA Ireland and Enterprise Ireland, whose commitment to the region is also very evident. This exercise will complement an indepth analysis of our foreign direct investment, FDI, strategy which is currently being undertaken by Forfás and will take account of factors such as the key trends emerging in FDI best practice internationally, Ireland's strengths in attracting FDI as well as state aid rules. The results of these two exercises will form the basis of IDA Ireland's strategy from 2015 onwards. All of the key State players have been actively pursuing initiatives to facilitate development and job creation in the south east and with continued co-operation and collaboration, it is hoped that further benefits will accrue to the region.
I do not doubt the Minister's support for the south east and know that he is aware of the problems in the region. However, the people who live in the south east and particularly in Waterford, will not be clapping the Government on the back, given the very high levels of unemployment in the county. I spoke about levelling the playing field and making sure that a number of promises contained in the programme for Government are delivered upon. These need to be driven over the Cabinet line by Ministers who live in the constituency, particularly Deputies Hogan and Howlin, who have a responsibility to ensure that we get a university, investment in broadband provision and a regional IDA office with a regional director who is working to a regional strategy. There must also be a level playing field in the context of grant aid. This is what the south-east region needs and such developments will need Cabinet support from Ministers who live in the constituency.
The Senator will have to admit that there is a lot of straight talk in the reply I have given him. Action is being taken and it is yielding results, as is clear from various job creation announcements, the plan by IDA Ireland to build an advance manufacturing facility as well as the enormous investment by Glanbia on the Waterford-Kilkenny border. A lot of new jobs are being created in the region, irrespective of the location of the offices of the IDA. This Government has delivered a considerable amount for the south-east region in the short time it has been in office and the Minister for Jobs, Enterprise and Innovation is determined to deliver more. No Government has been as committed to the south-east region as this one.