Written answers

Tuesday, 28 January 2014

Department of Jobs, Enterprise and Innovation

IDA Site Visits

Photo of Arthur SpringArthur Spring (Kerry North-West Limerick, Labour)
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330. To ask the Minister for Jobs, Enterprise and Innovation his views on whether the number of Industrial Development Agency-led visits by potential investors to County Kerry will be increased in future years; the changes to regional aid grants that are required to make County Kerry more attractive to potential investors; and if strategies to rectify the imbalance between the number of IDA led visits to major cities in comparison to designated hub towns will be implemented. [3578/14]

Photo of Arthur SpringArthur Spring (Kerry North-West Limerick, Labour)
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335. To ask the Minister for Jobs, Enterprise and Innovation his views on whether the number of Industrial Development Agency led visits by potential investors to County Kerry will be increased in future years; the changes to regional aid grants that are required to make County Kerry more attractive to potential investors; and if strategies to rectify the imbalance between the number of IDA led visits to major cities in comparison to designated hub towns can be implemented. [3991/14]

Photo of Richard BrutonRichard Bruton (Minister, Department of Jobs, Enterprise and Innovation; Dublin North Central, Fine Gael)
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I propose to take Questions Nos. 330 and 335 together.

The arrangement of IDA Ireland sponsored site visits by potential investors to individual locations throughout the country is a day to day operational matter for the Agency. I understand from IDA Ireland that there are many complex factors influencing investor location decision-making such as the increasing preference of investors globally for cities of scale with 1 million plus population, significant challenges from lower cost locations in the UK and Eastern Europe and attractive regional aid. While IDA Ireland does try to influence the location decisions of prospective and existing client companies, the decision relating to where to visit and where to locate are ultimately a matter for the investor.

As I have said on more than one occasion in this House, I am of course concerned at the lack of investment in certain regional locations and I have, accordingly, requested IDA Ireland and Enterprise Ireland to work with my Department so that we can explore what further initiatives we can take to ensure we have a better approach to enterprise development in regional locations. This exercise will complement the in-depth analysis of our FDI strategy which is currently being undertaken by Forfás and which will take account of factors such as key trends emerging in FDI best practice internationally, Ireland’s strengths in attracting FDI and any changes to the EU’s State Aid Rules, which will come into effect on 1 July 2014. The results of these two exercises will form the basis of IDA Ireland’s strategy from 2015 onwards.

However, that having been said, it must be acknowledged that some locations outside of Dublin and the main urban centres already facilitate the presence of a large number of multinational companies who have invested over the years, span multiple sectors and employ significant amounts of people. The primary opportunity for regional locations is in respect of the existing client base and potential further investment opportunities from same. Approximately 70% of all FDI investments won by IDA Ireland is from the existing client base. I should also point out that 72,500 people, roughly 44% of the total employment in IDA Ireland’s base of companies including those that were former clients of Shannon Development, are located outside of Dublin and Cork.

The Regional Aid Guidelines enable the State’s industrial development agencies to pay grants, at enhanced rates, to businesses in order to support new investment and new employment in productive projects in Ireland's most disadvantaged regions. This helps the convergence of these regions with the more advantaged regions of the Union. All such grants come from the exchequer, i.e. 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. As a result, changes to Regional Aid grant rules will not be possible until 2021.

As things stand, Kerry qualifies for regional investment aid for SME’s under the current 2007-2013 Regional Aid Map, at a rate of 20% for medium sized companies (50 to 249 employees) and 30% for small companies (under 50 employees). Since January 2009, Kerry no longer qualifies for regional aid for investment projects by large companies.

For the 2014-2020 Irish Regional Aid Map, economic data such as unemployment and Gross Domestic Product for all counties, including Kerry, will once again be analysed afresh when deciding which counties will be designated for Regional Aid.

If Kerry, or any other Irish region, was to be designated, aid to all categories of companies would be allowed. The rates for SME’s would be the same as those that apply in 2007-2013. The rates for investment by large companies would be 10% for certain activities only.

My 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 this data has been compiled and analysed, qualifying regions up to a maximum of 51.28% of the total population will be included in the new map. This must be agreed by Government and submitted to the Commission by the end of June, 2014.

It is important to note that all of the Country, including those areas not entitled to Regional Aid, can qualify for other forms of State investment e.g. Research & Development Aid, SME Investment Aid, Training Aid and Aid for Environmental protection etc.

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