Written Answers. - Industrial Development.

Michael Finucane

Question:

73 Mr. Finucane asked the Tánaiste and Minister for Enterprise, Trade and Employment the steps she proposes to correct the ever widening gap in economic performance between Dublin and other major cities in the rest of the country. [7002/01]

John Browne

Question:

99 Mr. Browne (Carlow-Kilkenny) asked the Tánaiste and Minister for Enterprise, Trade and Employment the steps she proposes to take to ensure balanced regional development in an effort to tackle rural poverty. [6992/01]

I propose to take Questions Nos. 73 and 99 together.

On the question of a gap in economic performance between Dublin and other major cities in the rest of the country, I feel that Cork, Limerick and Galway can, in common with Dublin, be regarded as successful from the point of view of industrial and economic development. Waterford is an exception to this as far as attracting new investment is concerned, and IDA Ireland is to target Waterford as a priority for new investment.
The challenge of achieving balanced regional development is a multifaceted one which is addressed in many aspects of the national development plan for the period 2000 to 2006. These policies, which have a particular focus on infrastructure development, human resource development and the stimulation of productive investment by the private sector, are being implemented across a range of Departments. Expenditure under the plan is significantly biased on aper capita basis in favour of the Border, midland and western regions.
In so far as my Department is concerned, the main emphasis in securing balanced regional development is in relation to industrial development.
The maximum grant aid rates payable by the industrial development agencies in respect of new industrial investment are becoming increasingly differentiated on a regional basis, under the regional aid rates approved by the EU Commission for the period 2000 to 2006. Under this regime, the maximum aid rate for firms in the Border, midland and western regions is 40% for large firms with an additional 15% for SMEs. The maximum aid rate in Dublin is 17.5% for large firms with an additional 10% for SMEs. The rest of the country is currently in transition from rates which were close to the BMW rates in 2000 to rates of 18% to 20% for large firms with an additional 10% for SMEs by 2004.
The regional differentiation reflects the relative positions of the regions in terms of economic development. In conjunction with it, a focus on regional development is being implemented by the industrial development agencies. IDA Ireland has intensified its efforts to achieve a better distribution of overseas investment into the regions. Overall, 50% of all jobs negotiated by IDA Ireland during 2000 in new green field investment projects have been secured for the Border, midland and western region, which is ahead of IDA Ireland expectations for the year. Enterprise Ireland has also developed a comprehensive approach to achieving balanced regional development. It is on four distinct pillars, developing existing business, building the environment for business, encouraging new high potential start-ups, and exploiting new opportunities – which involves facilitating the expansion of Dublin-based companies to regional locations.