Thursday, 5 May 2022
Nithe i dtosach suíonna - Commencement Matters
I welcome the Minister to the House. I also want to thank the Cathaoirleach for choosing this important matter.
Regional aid is an enhanced form of aid that can be provided to enterprises in more economically disadvantaged areas. It incentivises SMEs and large enterprises to invest in growth and expansion. Most important, it increases the attractiveness of these areas for investment. It is an important aid measure for enterprise agencies and to support Irish enterprises to grow and to expand as they attract foreign direct investment into this country. Grants and other state aid under the regional aid map are funded by the Exchequer. There is no EU or external funding.
I have asked the Minister of State to come before the House today because the Athy municipal district was previously in the regional aid map from 2014 to 2022. Unfortunately, in the map that has been most recently presented to us, the Athy municipal district, along with some municipal districts have been removed. The explanation as to why that may have happened is beyond many people in the region. There has been no great enterprise. There has been no great investment into job creation by the Government in that area since the 2014 announcement. Indeed, the regional aid, as I have said, is enterprise to encourage investment and job creation in an economically disadvantaged area.
The Athy municipal district has seen investment in a long-awaited road. We have been waiting over 40 years for it, but thankfully it has started. It will revitalise the area of south Kildare. There is also the issue right across the bottom of south Kildare that we are lacking investment in job creation and we are lacking the criteria to attract investment into that area. This is the case both for existing businesses and for attracting new businesses into the area. Over the last period of time, I have been contacted by a number of people who would like to invest in Athy. I have also used this regional aid map previously to show that there will be something there for there them when they come there. The fact that Athy has been removed from the regional aid map is worrying to say the least.
There can be no doubt that American Fruits & Flavor's recent announcement that it will invest in Athy is a positive move. We also have a number of attractive heritage trails, including the Shackleton Museum and the Athy Blueway, which will see potential for tourists coming to the town. Unfortunately, though, Athy still has much social deprivation. It still has many social indexes that we are concerned about. They should have shown up on the assessments that were done on this regional aid map.
I worry, too, that the announcement stated that any part of the county that had been previously on the map would still be included on the new map. However, that has not been the case for the Athy municipal district. It is also not the case because they have not actually been scored in the new map. This is because the Government policy is that they are seeking regionally balanced investment.
I would like to the hear the Minister of State talk today about what the Government is doing regarding investment in that particular area of south Kildare. What incentives are the Government planning for the area of south Kildare? We are surrounded by Portlaoise and Carlow. Both of those electoral areas are included in the regional aid map. That will cause serious problems for us in attracting investment into the area in which I live. I look forward to the Minister of State’s reply, which I am sure will encourage people to invest into south Kildare. I thank the Minister of State again for taking this Commencement matter.
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.
I thank the Minister of State, Deputy English, for his reply. I worry when I see that the indicators for Kildare show an unemployment level that does not conform with the criteria set down. I am asking about the Athy municipal district, where unfortunately the unemployment rate is higher. Once again, we have a departmental reply which encompasses the entire county rather than the part of the county to which I refer today. I am worried about the south of the county. Parts of County Kildare have terrific employment. Unfortunately, in the main, we have become a commuter county. The part of Kildare I am worried about is the Athy municipal district. We need to attract employment to it. There is a high unemployment rate there at the moment.
I have gone through most of the nine criteria set down by the Commission. I ask that it would look at them again. The Minister of State referred to the census. Perhaps in his reply he would indicate that he will look again at the issue when the information is available. I know that it only equates to 7.5% funding, but every cent of funding for the Athy municipal district would be welcome. We need to create every job that we can, given the current factors and the need for jobs in the area. I again thank the Minister of State for coming to the House, but I ask him to review the decision based on those criteria.
I again thank Senator Wall for raising this matter and giving me a chance to explain to him and the people of Athy what the situation is. The bottom line is that the area would not have met the criteria. We do not set the criteria; they are set by the European Union. The evidence on which the criteria are judged is not made up either. It is based on facts and data gathered in Kildare and in Athy. The bottom line is that it would not have passed the test. Senator Wall might have a different version of the facts, but I am afraid we must work with the facts as they are gathered.
While it is a positive for Athy that the county is doing so well, I accept that in County Kildare, as in all counties, there are particular areas where we want to see more jobs growth and more opportunities. There is no denying that. However, when we are dealing with European state aid rules, we must fit the criteria and in this case Kildare scores too high, which is a positive in one way, but a negative when we want to secure the funding Senator Wall talks about. Thankfully, it is only one part of the funding, and it is less than 8% of possible supports to businesses that want to invest and create jobs in Athy. I have been through this with the Minister of State, Deputy Heydon, because he was also concerned.
As I have said to Senator Wall, we can work with him on a number of other supports to develop and create jobs in the area, right throughout Kildare and in Athy. We are very conscious that the situation outlined was before the census. The census will be complete this year when we have all the data and there will be a review in 2023. If the evidence has changed and is different - not according to Senator Wall's opinion, my opinion or anyone else's opinion - that will give us an argument to make a different case. That is what the Department will do, because that is our job, but we must work with the evidence and facts as they are. We cannot make them up.
I want to be very clear. The question I have before me has been very clearly debated and answered. It was to ask the Minister for Enterprise, Trade and Employment to explain why the Athy municipal district in County Kildare has been removed from the recently announced regional aid map. I have answered that question in great detail. I take exception if the claim is that I have not. What I am saying very clearly is that we all agree-----
That is a very different situation. I want to ensure what is said in the House is correct. To be clear, and in defence of my departmental officials, they have worked extremely hard on this for a long number of years. They went to great length and in detail to try to protect and get back as much area as we possibly could. If somebody says they have different evidence, I would like to see it presented.