asked the Minister for Industry, Trade, Commerce and Tourism the changes, if any, he proposes in the grant agreements with multinational companies located in Ireland, in view of the recent failure of some of these companies.
Ceisteanna—Questions. Oral Answers. - Grant Agreements with Multinational Companies.
2.
The nature of grant agreements with multinational companies is regularly reviewed by the IDA with a view to ensuring that they are appropriate to our industrial requirements and circumstances. At this stage, it is not possible to indicate whether any changes will be made in such grant agreements arising from recent developments.
Did I understand the Minister to say in response to Deputy Gallagher that he might be considering some changes in so far as new grant agreements with multinationals intending to set up business here are concerned? Will the Minister accept that it is desirable that the relationship between the multinationals in their marketing strategy should be more closely aligned with our national marketing agency, CTT?
I accept that to the extent possible multinational companies operating out of Ireland should work in conjunction with CTT but it will be appreciated that many of these companies, before they come to Ireland, have in place very sophisticated marketing operations which mean that they do not have great call on the services of CTT. The concern of the Deputy is that we should have early warning of any deviations from marketing performance of these companies which could have an adverse affect on the country. One purpose of the company development approach which has been initiated and in which 50 companies will be involved this year is in the case of domestic and multinational companies to keep in touch with how the company is progressing so that difficulties can be anticipated in good time.
Does the Minister consider it desirable that a small percentage of the net profit made by multinationals from the considerable profits they repatriated to their home base should be made available to a fund to set up our own indigenous research and development programme here? That should be considered as an element of the grant agreements with multinationals.
It is very important that we should push all appropriate multinationals to locate a research and development and a marketing function here rather than simply a manufacturing function. The IDA press this very hard and have been very successful in a number of cases — for instance, the A & D plant which has just been announced. There is a problem that Ireland is a low tax environment so far as manufacturing is concerned and research and development and marketing are costs. Companies want to locate cost creating items in areas where the tax is highest so that it can be offset against the most rather than the least amount of tax. This difficulty is inherent in our present system which we have to overcome, but it is not easy to overcome it.
Would the Minister accept that some disquiet is being expressed about the purchasing mechanisms of some EC countries in that they are giving preferential treatment of purchases to companies located in their homelands, that he should take cognisance of this and bring it to the attention of the relevant authorities so that our multinationals marketing goods on the Continent are not materially affected by this development?
I had a meeting with the Commissioner on Competition Policy in the Community last year to express my concern that in some cases, in particular in the health care area, the prospect of State purchasing opportunities was being used by member states to influence companies to locate in their country rather than in another. That is contrary to the spirit of the Treaty of Rome and I underlined this very firmly at my meeting with the Commissioner. I intend to do everything I can with the present Commissioner on Competition Policy — a man who should understand Ireland's position — that something should be done about this. Of course, it is necessary to have solid evidence before we can take action. A lot of this is not in writing and therefore it is difficult to get solid evidence.
As a matter of urgency would the Minister approach Commissioner Sutherland and ask him to investigate the charges that have been made about Travenol's purchasing in France, the reason for that company moving there and the effect that had on their decision to close their Irish factory?
The Chair deprecates Deputies rising quickly and asking questions before they are called. This is taking control from the Chair.
The unit costs in the French plant were lower than those in Castlebar and that was a critical factor. The purchasing matter would have been a subsidiary item.
But it would have been a factor?
Probably not.
Relating to the original reply regarding the handholding operations of the IDA, how does the Minister relate this to today's announcement of Clarke's closure?
That is a separate question.
I do not think I can relate it.
Would the Minister like to comment now that he has the opportunity?
That is totally a separate question. Question No. 3.
We will give the Minister an opportunity later.
We have already had several supplementaries on this question and the Chair has discretion as to the relevancy and number of supplementaries.
I indicated earlier that I wished——
We have dealt with that question. I am calling Question No. 3.