Dáil Éireann debate -
Tuesday, 7 Dec 1999

Vol. 512 No. 3

Written Answers - Job Creation.

Jimmy Deenihan

Question:

79 Mr. Deenihan asked the Tánaiste and Minister for Enterprise, Trade and Employment the measures, if any, she will put in place to attract industry to unemployment black spots outside Objective One areas, for example, eastern and southern regions, in view of the reduction in grant aid for industry set up in these areas after 2000; and if she will make a statement on the matter. [26217/99]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney)

The guiding principles underlying the European Commission approach to the rates of regional grant aid, recently announced, are to reduce the overall geographical coverage and level of aid to industry by member states. This should have the effect of reducing the scope for competitive bidding wars between member states or regions, and effecting a concentration of permitted aid in the lesser developed regions, thereby facilitating their development. The new guidelines provide that identification of aided regions, together with the limits on aid in each region, are to be decided on the basis of objective economic criteria.

Under the new guidelines Ireland moves from being a single ‘A' region for State aid purposes to being composed of an ‘A' region – border, midland and western region – and five ‘C' regions comprising the five regional authorities in the southern and eastern region.

During negotiations with the European Commission the economic structure of the south-west, mid-west and south-east and their problems were specifically recognised. As a result, the level of aid for these regions at the end of 2003 has been set at the maximum allowed for a Community ‘C' region, i.e. 20%, with a further top-up of 10% for SMEs and is higher than regions such as Dublin and the mid-east which have benefited comparatively better from recent economic growth. A table setting out the aid levels for each region from 2000 follows this reply.

The Government is committed to ensuring the most equitable regional distribution of job opportunities and I have impressed on the industrial development agencies – IDA Ireland and Enterprise Ireland – the crucial importance of making even greater efforts to provide employment opportunities throughout the country. The achievement of a better regional distribution of jobs across the country requires a strong co-operative approach between the agencies, the local authorities and infrastructure-service providers, including those of skills training. While the new regional aid guidelines dictate that the industrial development agencies must apply differentials in financial supports to companies located in the two new regions, the level of expertise and assistance will be equally available to all the regions.

I am also confident that the major infrastructural investment programme envisaged in the national development plan will make a decisive difference in the capacity of the regions to compete for mobile investment projects.

Grant aid intensities (NGE%) for new Industrial investment for regions in Ireland

	2000*	2001*	2002*	2003*
‘C' Region
South-East	37	31	26	20
Mid-West	37	31	26	20	plus 10%
South-West	37	31	26	20	for SMEs
Mid-East	35	29	23	18
Dublin	17.5	17.5	17.5	17.5
‘A' Region
Border, Midlands, West	40	40	40	40	plus 15%for SMEs

*For regions south-east, mid-west, south-west and mid-east, the operative date for application of the new intensities is 31 December each year. For Dublin and the ‘A' region, the operative date is 1 January. Accordingly, the intensity applicable during the year 2000 in the regions south-east, mid-west, south-west and mid-east is 40%.