Other Questions.

Insurance Industry.

Jan O'Sullivan


6 Ms O’Sullivan asked the Minister for Enterprise, Trade and Employment the progress made to date with regard to the implementation of his action plan for the insurance industry; and if he will make a statement on the matter. [23664/04]

Following the establishment of the Irish Financial Services Regulatory Authority and the coming to an end of my Department's lead role in the insurance reform programme, my colleague the Minister for Finance retains overall responsibility for policy and legislation as regards the provision of financial services in Ireland. My colleague, the Minister for Transport, in light of broader responsibility for road safety, will take over the lead role as regards policy and legislation on the availability and cost of motor insurance and any related interdepartmental co-ordination. The transfer of responsibilities to the Minister for Transport has been agreed and will be activated shortly following the completion of logistical issues relating to the transfer of an agreed number of posts from my Department to the Department of Transport.

An Agreed Programme for Government includes a commitment to tackle the high cost of insurance. The action plan outlined how the 67 recommendations contained in the Motor Insurance Advisory Board report of April 2002 were to be implemented. To date 41 of the recommendations have already been fully implemented with a substantial proportion of the rest either partly implemented or progressing. All the measures relevant to my Department have now been fully implemented and my colleagues the Minister for Transport and the Minister for Justice, Equality and Law Reform and IFSRA, under the aegis of the Department of Finance, continue to progress measures that are relevant to their own Departments. For example, a new road safety strategy was launched on 24 September last and the enactment of the Civil Liability and Courts Act 2004 introduces significant changes to the manner in which claims are dealt with, including introduction of new offences to deal with fraudulent claims.

A number of significant measures have been introduced by my Department. A key initiative was the establishment of the Personal Injuries Assessment Board, PIAB. The Personal Injuries Assessment Board was established by ministerial order on 13 April 2004. From 1 June 2004 all personal injury claims arising from workplace accidents, where an employee is seeking compensation from his or her employer, must be referred to the PIAB before legal proceedings may be issued. From 22 July 2004 all motor liability and public liability claims must also be referred to the Personal Injuries Assessment Board before legal proceedings may be issued.

By eliminating the need for litigation costs where legal issues are not in dispute, the PIAB resolution of cases will significantly reduce the cost of delivering compensation for insurance claims. The PIAB will also offer speedier assessments to the benefit of claimants.

A book of quantum, for assessing the level of compensation based on the type of injury involved, which is essential for the successful operation of the PIAB, was published by the board on 2 June 2004.

Additional Information

The Motor Insurance Regulations 2002 require that insurance companies provide motor insurance policy holders with the terms upon which renewal is offered and their "no claims bonus" documents a minimum of 15 days before the end of their current policy. This allows consumers sufficient time to "shop around", which is helping to improve competition.

My Department and the Competition Authority have undertaken a joint study into the insurance market. The study will identify and analyse barriers to entry and limitations on rivalry in the insurance marketplace. The bulk of the study was completed in 2003 and a preliminary report and consultation document on competition issues in the non-life insurance market was published by the Competition Authority on 18 February 2004. Following consultation a final report will be published later in the year which will contain recommendations based on the findings.

Clearly the action plan is contributing to reductions in insurance premiums. The CSO consumer price index statistics show that there was a reduction of 15.2 index points, 14.1%, in motorcar insurance between the months of April 2003 and August 2004, the latest figure available. The CSO index is based on averages but many individual policyholders have done much better as may be seen from data provided by the MIAB. Examples provided by MIAB for three specific companies between March 2003 and March 2004 indicate the following reductions: 10% to 16% in comprehensive insurance for a 30 year old male; 10% to 41% in comprehensive insurance for a 50 year old female; and 10% to 45% for third party, fire and theft insurance for a 21 year oldmale.

Recent reform measures taken have led to a better functioning insurance market. We are seeing enhanced profits reported by the Irish Insurance Federation and significant premium reductions which must continue as the full impact of the reform programme is felt. These new operating conditions in the insurance market enhance its attractiveness for prospective new entrants.

The insurance market is growing. Gross written premiums increased to over €4 billion in 2003 compared to just €2 billion in 1998. As the economy continues to grow, the insurance market will also continue to grow in size. Competition from new entrants attracted by better market conditions will be an important element in ensuring continuing downward pressure on premiums.

I do not know whether my colleagues heard, but I express my surprise that responsibility for insurance is to be broken up among a number of Departments. The notion that the Department of Enterprise, Trade and Employment should not have responsibility for motor insurance is wrong. Much more is involved than the safety aspect, important as that is. Neither is it a transport issue. It is an insurance business matter. The issue of brokerage, the PIAB and the cross-subsidising of insurance are all insurance matters that rightly are the responsibility of the Minister for Enterprise, Trade and Employment. It causes me great concern to hear that. Will the Minister say when that decision was made and whether he is in full agreement withit.

Will he say, specifically, how that will work as regards his monitoring of insurance premiums? Does it mean that his Department will have no responsibility in terms of watching how the motorist is charged for insurance? It would be wrong if that was the case. Finally, as regards the operation of the PIAB, established through ministerial order by the Tánaiste, which is specifically within his remit, has he had the opportunity to make an evaluation of its working to date and is it on target with regard to processing the volume of claims that was anticipated? Is it having the impact that we all anticipated in supporting its enactment through this House in the teeth of stringent enough sectoral opposition from the industry itself?

The Department of Enterprise, Trade and Employment took the lead role in the insurance reform programme, but it was very much an interdepartmental exercise, with individual Departments having clear lines of responsibility in terms of their respective functions. For example, the Minister for Justice, Equality and Law Reform brought in legislation in terms of the fraudulent claims issue, the Minister for Finance had certain responsibilities for financial services regulations etc. It was a good exercise as regards how Government worked in this instance. The recommendations were made and the interdepartmental group met under the chairmanship of the Tánaiste and progressed its business effectively.

There comes a stage when the recommendations are implemented that one moves on. Basically, some of the areas will come under the Minister for Finance who will have overall responsibility for policy and legislation as regards the provision of financial services. It was agreed prior to my appointment that the Minister for Transport would take the lead role in terms of policy legislation on matters involving the cost of motor insurance and interdepartmental co-ordination. The Department of Enterprise, Trade and Employment obviously retains competition issues. My Department and the Competition Authority have embarked on a joint study of the insurance market. That study has already commenced and will analyse the barriers to entry, limitations and rivalry in the insurance marketplace. For the record, the bulk of that study was completed in 2003 and the final report is to be published later this year. It should be stressed that the action plan worked as regards the subject matter.

Has the Minister any indications in his file about the number of recommendations of the MIAB that have been implemented and will he give some indication as regards those that have yet to be implemented?

There have been 67 recommendations to date and 41 have already been fully implemented, with a substantial proportion of the remainder either partly implemented or progressing. All measures relevant to the Department of Enterprise, Trade and Employment have been fully implemented. The Minister for Transport, the Minister for Justice, Equality and Law Reform and IFSRA, under the aegis of the Department of Finance, continue to progress measures relevant to their own Departments. For example, a new-——

They are dragging their feet somewhat.

No, the new road safety strategy was launched on 24 September last. The enactment of the Civil Liability and Courts Act 2004 by the Minister for Justice, Equality and Law Reform introduces significant changes in the manner in which claims are processed, including new offences, to deal with fraudulent claims. The important point is that the programme is working. The consumer price index statistics show that there was a reduction of about 14.1% in motor car insurance between the months April 2003 and August 2004. The example provided by the MIAB for three specific companies between March 2003 and 2004 indicate the following reductions: 10% to 16% in comprehensive insurance for a 30 year old male; 10% to 41% in comprehensive insurance for a 50 year old female; and 10% to 45% for third party, fire and theft insurance for a 21 year old male. That is a significant improvement on where we came from. By and large we have a better functioning insurance market at the moment. There is significant interest from outside in terms of new entrants to the marketplace, which should improve competition. Better competition should enhance price reduction.

I would like, first, to congratulate the Minister and wish him well in his new position. I hope it is successful for him. When may we have sight of the details of his proposals in terms of segmenting the insurance industry into the various Departments? I am not sure that it is a bad idea, by the way. I would like to consider it more carefully instead of giving an instant reaction to the proposal. However, it occurs to me that transportation is now a fundamental cost on business and clearly insurance is a major element of that. I would like details. When may we see the detail of these proposals?

Much of the relevant information was to be found in the reply to the parliamentary question this evening but I can forward further documentation the Deputy may require.

Will I first have to submit a parliamentary question?

I do not have an issue about the insurance on Louth hospital. I have dealt with the Deputy on many occasions as regards that matter. When I saw him I immediately had a flashback.

I think he said we had moved on.


National Minimum Wage.

Eamon Gilmore


7 Mr. Gilmore asked the Minister for Enterprise, Trade and Employment if it is intended to review the level of the national minimum wage, following the completion of the talks with the social partners on the second phase of Sustaining Progress; and if he will make a statement on the matter. [23656/04]

The parties to the mid-term review of part two of Sustaining Progress, Pay and the Workplace, have agreed to request the Labour Court to review the national minimum wage and to make a recommendation to the Minister for Enterprise, Trade and Employment in accordance with the National Minimum Wage Act 2000, to apply with effect from 1 May 2005. On receipt of such a Labour Court recommendation, the minimum wage legislation provides a three month period for the Minister to consider the recommendation.

I welcome the Minister's response. I hope the review will be completed and that the good progress made on the minimum wage will be continued. I commend the Minister and his Department on the work they have done on this issue, which in some respects goes beyond more so-called progressive countries, but I want to ask a specific question on enforcement of the minimum wage laws. In a number of high profile cases recently the law of the land in that regard has been flouted, in particular in respect of non-national workers. Is the Minister satisfied there is adequate policing and resources at his disposal to ensure the minimum wage laws are enforced and that people in vulnerable employment in particular have easy access to make complaint in the event the law is not being complied with? Will the Minister ensure this area is fully implemented because it is vitally important for the people on the margins of our society?

I thank the Deputy for his comments on the performance of the Government and this Department regarding the minimum wage issue. We have moved from €4 an hour in 2000 to approximately €7 an hour as of February of this year. There has been a significant reduction in the percentage of workers on the minimum wage, from approximately 21% in 1999 to approximately 4.5% in 2002. That may be reflective of the general economic position, increased incomes and good economic management of the economy by the Government, but I will not invite responses to that.

In terms of enforcement, approximately 950 inspections were carried out in 2002. An additional four labour inspectors will be appointed to bring up the complement to approximately 21. That should provide additional strength in terms of enforcement and inspection.

I accept the Deputy's comments on non-nationals who come into the country. It is important they are afforded the same rights as anybody else. That will be a particular focus for our activities.

Industrial Development.

Róisín Shortall


8 Ms Shortall asked the Minister for Enterprise, Trade and Employment the rental income the Shannon Development Company currently earns from the property in the Shannon free zone that is proposed to be transferred to Shannon Airport Authority and if he will make a statement on the matter. [20401/04]

Joan Burton


11 Ms Burton asked the Minister for Enterprise, Trade and Employment if he has received proposals from the board of Shannon Development on the role the company can play in the future development of the region; if he will report on such proposals; the position with regard to the proposal to transfer the company’s rental income from the Shannon free zone to the Shannon Airport Authority; and if he will make a statement on the matter. [23649/04]

I propose to take Questions Nos. 8 and 11 together.

There have been a number of developments that will impact on the mid-west region and the roles of the respective State agencies operating there. I draw attention, in particular, to the proposed relocation of the headquarters of Enterprise Ireland, involving 300 of the agency's Dublin based staff to Shannon, as part of the Government decentralisation programme. Shannon Development provides support for indigenous businesses in the Shannon region on behalf of Enterprise Ireland, there is the decision to establish an independent Shannon Airport Authority and the enterprise strategy group, which reported in July, has recommended that Shannon Development should disengage from industrial development functions which should be left to the national agencies, that is, Enterprise Ireland and IDA Ireland.

A number of meetings took place between my predecessor and Shannon Development in recent months to discuss these developments and their implications for the future of the company. I emphasise that Shannon Development fully supports the decision to establish an independent airport authority which it sees as vital to the economic development of the region. Furthermore, it has agreed that the company should refocus its activities on the airport with a view to generating business for the airport and the company's assets should be used to support the airport authority particularly in its early, vulnerable years. A working group representative of my Department, the Department of Transport and the Department of Arts, Sport and Tourism, Shannon Development and the Shannon Airport Authority was also set up to examine the specific issue of how Shannon Development could best contribute to the development of the new independent airport in this regard.

A number of options have been under consideration by the working group, including a possible transfer of responsibility for managing the Shannon free zone industrial estate to the new airport authority. I stress that no decisions have been taken. I am in the process of reviewing the deliberations of the working group in the context of the overall developments I have outlined.

In terms of the specifics of the question, I understand the Shannon free zone yielded a gross rental income of approximately €10.4 million in 2003. The costs associated with the management and operation of the zone have not been taken into account in the calculation of this figure.

I tabled two questions to the Minister to give him an opportunity to review a very important strategic decision his predecessor had made, I believe, for ideological reasons in co-operation and consort with the former Minister for Transport, who, again for ideological reasons, was in the process of breaking up a very successful public company, Aer Rianta, into three component companies. I believe the only reason the assets of Shannon Development were being transferred to the stand-alone Shannon Airport was to give a veneer of economic viability to Shannon Airport because it would not be economically viable without some additional asset transfers.

I had hoped this Minister might not have regurgitated the old script. Unfortunately, we got the old script but I do not give up hope yet. Careful consideration should be given to this matter. Does the Minister acknowledge that Shannon Development has been the most successful stand-alone regional development company in the State with the specific result that the Shannon region is the most industrially developed region outside Dublin? Had we such a company in the south east and another in the north west, those regions might have thrived in the same way yet the approach is to dismantle a success story, so to speak. What does the Minister see as Shannon Development's role if it is not to have its traditional industrial development role? Since the gross generated income of €10.4 million was a significant part of the €25 million operating costs of Shannon Development, what resource base will be available to it to perform whatever function is now agreed or is it simply to be left as a token sinecure under the umbrella of Enterprise Ireland until people forget about it and it can wither away? Does the Minister see a role for Shannon Development into the future?

Let us be clear. I have read the file on this matter and I have examined the options. Further consultation will have to take place but a number of events have happened that changed matters, and I am not reading from the script. That is a fact. The independent airport authority, whether the Deputy agrees or disagrees, has been established.

Is being established.

It is a key issue which highlights the future——

The Minister has to see the economic development potential.

The airport has always been a centrepiece in terms of economic development in the mid-west. An airport is a central infrastructural issue in terms of the development of any region and it would be foolish not to utilise a transatlantic airport like Shannon. The relationship between that and surrounding industrial development is clear, they are inextricably bound through the evolution of the industrialisation of that region over the past 30 or 40 years. It is interesting that Shannon Development believes the establishment of the independent authority will have a beneficial economic impact on the region. As the Deputy is aware, north Kerry came in under Cork-Kerry Tourism. That has changed that side of the equation. Shannon town, which was set up by Shannon Development, has come in under Clare County Council. There has been a number of developments which, by definition, are changing the role of Shannon Development as we move forward. It promotes investment in the Shannon free zone. Even the taxation changes changed the attraction in that respect. Life has moved on.

The key issue for the future is the role it will play. Clearly, there is a role in the context of the airport. That was the perspective of the working party but it had a particular structure in mind as to how it would continue to support the airport. Others might have had a different structure in mind as to how it should support the airport, whether it should be within the airport structure overall, continue to invest or invest its assets and have a separate independent role. It manages a significant property portfolio, not just in the Shannon free zone but in Thurles, Tralee, Ennis and Limerick. That is a continuing function. It promotes the development of indigenous industry in the Shannon region. What we are saying is that there is an opportunity now to bed down the future role, given the changes that have occurred.

What is the role?

We will not unilaterally impose that on Shannon Development or the region. There are further consultations to be held and I am keeping an open mind.

I am tired of old words being repeated from the script the Tánaiste delivered the last time we discussed this. I still do not know what the new Minister has in mind for the future of Shannon Development. If it will not have industrial development, or an international or domestic role, and its assets in the upward zone are to be transferred to the airport authority depriving it of an annual income of €10.4 million, what will be its role and what resources will it have to implement that? Last month, Shannon Development signalled its total opposition to the Government's proposals to transfer the Shannon free zone to the airport authority. It is the driver of a successful strategy. Allowing for inevitable changes, what role does the Minister see for Shannon Development in the future?

The role for the future is centred on the airport. Shannon Development will continue to have a significant role in terms of supporting the airport.

There is an airport company and an airport authority.

The airport is critical to the economic underpinning of the region.

What role does the Minister see for Shannon Development?

That has yet to be determined. It has a view on how it could continue to support the airport and others have a different view. It is not straightforward. The Department of Transport is involved and has its own perspective on it. The working group was formed to get all the parties together to see if they could hammer out an agreed position which has not emanated from the working group. There is work to be done.

When will there be a conclusion?

I will consult the parties first and make a decision in due course. I have been in office for a week.

I thought the Minister had all the answers.

Has the Minister met Shannon Development?

Not yet.

Does he intend to?

Enterprise Strategy Group.

Thomas P. Broughan


9 Mr. Broughan asked the Minister for Enterprise, Trade and Employment the steps his Department intends to take arising from the report of the enterprise strategy group published on 7 July 2004; and if he will make a statement on the matter. [23644/04]

Caoimhghín Ó Caoláin


27 Caoimhghín Ó Caoláin asked the Minister for Enterprise, Trade and Employment if he intends to implement the recommendations contained in the report of the enterprise strategy group (details supplied); and if he will make a statement on the matter. [23606/04]

I propose to take Questions Nos. 9 and 27 together.

I do not want to repeat all I said in response to Question No. 9 during Priority Questions. The high level group was established on foot of the recommendations of the enterprise strategy group which will report to me in the next week or so. I have met the chairman of the strategy group and the next step is to bring an action plan back to the Government to develop the issues contained in the enterprise strategy group report.

I accept that the Minister answered Question No. 9 in Priority Questions although I could not participate. The strategy group recommended joined-up government to ensure that any decision of a Department would not adversely impact on Ireland's enterprise culture. Unfortunately, there are many examples of this, for example, when the Department of Social and Family Affairs restricts access to participants in education and training as it did through some cutbacks. This runs counter to the need for upskilling. How is the joined-up government concept to be achieved? Will there be an overarching committee chaired by the Minister? Government memoranda refer to the implications for women of any Government decision, should the question of impact on enterprise strategy be posed in response to any Government decision or Minister's change in policy? This could ensure that we are at the cutting edge of winning jobs, growing our economy and making it competitive and fit.

The report recommends an overarching structure involving six Departments with six Secretaries General and four outsiders to advance the recommendations. No decision has been made on that. I had a good discussion yesterday with the chairman who outlined the background to the proposal. The committee refers in the report to the benefit Ireland has derived from having an agile Government. That is the Government's capacity to get things done quickly, a can-do attitude when multinationals or other outside players want to invest here. In those cases there is a good relationship between Departments and we resolve these cross-cutting issues fairly quickly. That achievement is attributed to successive Governments and the political structures.

The report said there is no longer a clear focus on enterprise.

Sometimes society does not give credit enough to the political system in terms of economic progress. Politicians are the last group ever considered to have an impact on any aspect of the economy and the political system.

Except when it goes wrong.

Except when it goes wrong. The report identifies the significant role played by agile government in the past in getting rid of obstacles and advancing matters. There is concern that we retain that agility and even enhance and improve it.

That is why the Taoiseach appointed Deputies O'Dea and Roche as Ministers. They are the agile wing.

The Minister, Deputy O'Dea, is very agile — he always has been. I told the chairman that I am interested in a structure that has an impact on a joined-up group. I am open to the issue but there is no point in simply forming another committee that has no impact. Whatever structure or mechanism we put in place must have an impact in terms of outcomes and involve genuine proofing of the issues as Deputy Howlin suggested. The group should have an effect on decision-making in each Department responsible for creating the enterprise environment we require. I am very positive about this. It is a matter of finding the structure that will get us the best result in terms of joined-up government.

I welcome what the Minister has said but I fear structures, meetings and Secretaries General.

So do I, that is my point.

I would like to hear that when a decision is made in the Department of Social and Family Affairs, the Department of Transport or elsewhere, it must go through some vetting procedure to say that it has no impact, or some impact, on enterprise culture or on Ireland Inc. in enterprise terms. It would act as a sort of clearing house from which the proposal goes to the Department of Finance whether it resides in the Department of Finance or another place. There must be a box that someone must tick to weigh that against its impact. It is daft to make an economic cut in training that looks good on the balance sheet at the Department of Social and Family Affairs but is bad for preparing people who are unemployed for getting jobs.

As Deputy Howlin knows from his experience as a member of Government, when a memorandum goes to Government there are several items included, such as gender-proofing or the impact on poverty. We could apply that to the impact on enterprise. There was a ceiling on all the social welfare and back-to-education schemes. From my experience in the Department of Education and Science we never quite reached that ceiling even in the good days. The take-up rarely matched the estimate.

That is not something of which to be proud.

No, it is a reality. People try to save face about the estimations made when it was a fluid marketplace. I suppose the Celtic tiger also reduced the numbers. However, I take the Deputy's general point, if something is happening in the education area how does that affect enterprise and so on. I have no difficulty with that idea. We do not want to create an obstacle that blocks Department decision-making or initiatives.

I wish to address the competitiveness element of the report. Is it not the case that the report fails to address the house prices which have a sharp negative impact on our competitiveness in a host of areas, for example, the obvious pressures on wages or the hours people must spend travelling to and from work because they cannot afford a house close to their workplace? The same applies in terms of the need for child care. For example, the lack of child care resources prevents people from being involved in the labour market. Does the Minister propose to deal with that? Will he talk to the Minister with responsibility for housing? We have talked about cross-departmental relations, does the Minister have any plans in that regard or does he accept that it is an important area that must be tackled?

The Deputy is correct that the cost base is a significant issue in terms of our competitiveness going forward. The strategy group identified that, as has the Competitiveness Council which will be publishing its report next week. The report refers to wages and energy costs, particularly those relating to electricity, and states that Ireland is a very expensive location for food and drink. The latter probably reflects that we have a very developed economy.

There is clearly an issue as regards young people, particularly those living in this city and other major centres of population, being in a position to purchase housing. The level of house construction in the past decade has been phenomenal. In the past five to seven years it has outstripped anything that happened in the past in terms of the number of houses built here. We will again reach record levels this year. There is major demographic pressure on the system at present in terms of the numbers coming forward to purchase houses. Housing policy is designed to try to reduce prices and the rate of increase attached thereto. That is the clear objective of Government policy on the housing front. The Minister for the Environment and Local Government has particular responsibility in this area and is pursuing a range of initiatives that is designed to increase supply. The latter will then reduce the rate of overall increase.

I am concerned by the Minister's answer. He is stating that we will allow the construction sector to produce more houses and that this will hopefully resolve matters. It is clear that it will not do so. I refer, for example, to the Ninth Progress Report of the All-Party Committee on the Constitution which deals with the price of building land. Does the Minister agree it will take a proactive policy on the part of Government to reduce house prices? I agree with him regarding the other elements — fuel, etc. — which are damaging competitiveness. However, house prices could be tacked quite quickly. The Minister does not seem to have proposals for a cross-departmental task force to deal with the issue in general terms. Is simply allowing the building industry construct more houses the only answer at our disposal in terms of reducing the cost of housing? Such a policy is unlikely to solve the problems.

I assure the Deputy that I am not going to become Minister with responsibility for housing but I accept that we have a cost-cutting role and responsibility for highlighting the issues. Anyone who considers the past five years will know that the rate of construction has been phenomenal — they will also be aware that people are under huge pressure — and if one looks at it from one perspective it has been a significant achievement. On the other hand, it is extraordinarily difficult for young people to purchase houses.

Prices are still going up.

They are slowing down.


Compared to the position in 1999 and 2000, it is evident that there is a difference now. That will continue to be the case. As we move on, the level of increase will ease. A range of initiatives has been undertaken to date in terms of trying to increase supply. The rate of supply will ultimately affect the price.

As regards land policy and trying to set aside sites, all Departments were asked to offer up land to ensure the Department of the Environment, Heritage and Local Government and local authorities could develop new social housing units. Efforts are being made on a range of fronts to try to improve the situation. I have no doubt that those efforts will continue in terms of trying to improve matters for those purchasing houses. I accept this is a significant issue.

Job Creation.

Dinny McGinley


10 Mr. McGinley asked the Minister for Enterprise, Trade and Employment the measures being taken to find replacement jobs for County Donegal following the announcement of job losses at a company (details supplied); and if he will make a statement on the matter. [23627/04]

Pat Rabbitte


18 Mr. Rabbitte asked the Minister for Enterprise, Trade and Employment if his attention has been drawn to the serious level of job losses announced in County Donegal in recent months in such plants as those of companies (details supplied); the steps he intends to take to deal with the job losses which have potentially serious consequences for the county; if, in particular, he will consider reactivating the Donegal jobs initiative, which was established after similarly serious job losses in 1998; and if he will make a statement on the matter. [23675/04]

I propose to take Questions Nos. 10 and 18 together.

It was with regret that I learned of the closure announcements by Unifi Ireland and Fruit of the Loom of their manufacturing plants in County Donegal. Finding alternative employment for the workers affected is a priority for FÁS and the State development agencies. In the case of Fruit of the Loom, FÁS contacted the company and offered its full range of support services to those who will lose their jobs. In the case of Unifi, the agency, during the three separate phases of redundancies, has offered its full range of support services to those affected.

IDA Ireland is committed to the development of the north-west region and continues to strive to secure new investment for Donegal. Both IDA Ireland and Enterprise Ireland are working closely with their existing base of companies in the region. In its efforts to secure investment, IDA Ireland is working with Invest Northern Ireland on a virtual cross-Border park which will involve joint marketing efforts and planned improved telecoms infrastructure on a cross-Border basis. Construction of the Letterkenny business park has been completed and construction by Donegal County Council to extend Letterkenny ring road to this part is well advanced. Work has now been completed on the provision of a second 25,000 sq. ft. advance factory at the park and planning permission has been granted for a third advance facility.

Planning permission has been obtained for a new facility at Ballyshannon and IDA Ireland has recently undertaken a significant amount of site development work recently there. In addition to this, further land has been purchased in Buncrana and planning permission has been obtained for a 20,000 sq. ft. factory. IDA Ireland is currently working with a local private developer in the provision of advance space within this estate.

Enterprise Ireland works with companies in Donegal and in the north west to assist them grow their sales and exports and improve innovation in order that they can compete on world markets. It is encouraging these companies to adopt new technologies and move up the value chain. Its range of supports includes strategy development, production and operations, marketing, human resources development, finance and research and development.

In 2000 the Donegal County Development Board was charged with implementation of the employment initiative task force report. The county development board, which includes the State development agencies, local interest and representative groups as well as the local authorities, was generally viewed as the most appropriate vehicle for taking forward the task force recommendations.

Additional Information

I understand that a review of the original 1998 task force report is currently being finalised and will be considered shortly by the Donegal County Development Board.

At the request of my predecessor, the Tánaiste, the expert group on future skills needs, which operates under the aegis of Forfás, is, in conjunction with IBEC, undertaking a detailed analysis of the education and skills requirements of the north-west region. I understand this work will be completed shortly.

In conjunction with the ongoing work of these agencies, other issues need also to be addressed to promote employment creation in the north west. These include the development of infrastructure in the area, in particular roads, water, energy — electricity and gas — air access and broadband communications. Recent developments on these fronts include the provision of funding for the Letterkenny water supply scheme and the approval of a feasibility study grant for the extension of the natural gas pipeline from Derry to Letterkenny.

It is clear that the economy has been undergoing substantial change for some time now, which has impacted on both the manufacturing and service sectors. A fundamental shift in our strengths and competitive advantages has taken place and our economy is now typified by higher output and productivity together with high returns to labour in the form of wages, salaries and better living standards. Ireland has become a more prosperous and wealthy economy, converging with the broad income and prosperity levels of other member states of the EU. I doubt if anyone would have it any other way.

I assure the Deputies that the Government, along with the State development agencies, is committed to balanced regional development, particularly through the implementation of the national spatial strategy and the Government's decentralisation programme, which will see 380 civil servants moving to Gweedore, Buncrana and Donegal town. County Donegal is one of the areas to which priority is being awarded and that will continue to be the case.

Written Answers follow Adjournment Debate.