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Dáil Éireann debate -
Thursday, 26 Mar 2009

Vol. 678 No. 4

Industrial Development Bill 2008 [Seanad]: Second Stage.

I move: "That the Bill be now read a Second Time."

I am pleased to introduce the Industrial Development Bill 2008 and outline its main provisions. The Bill provides for the transfer of shares held by Shannon Development to Enterprise Ireland and it amends sections of the Industrial Development Acts of 1986 and 1993. These amendments relate primarily to the statutory limit on aggregate payments by the Minister for Enterprise, Trade and Employment to the enterprise development agencies, and to certain thresholds above which agency grant payments to individual companies require Government approval. The amendments also seek to address an anomaly that has arisen regarding grants to small companies in parts of the BMW or Border, midland and western region. Finally, the Bill provides for the transfer of all property of the Minister for Enterprise Trade and Employment held under section 19 of the Industrial Research and Standards Act 1961 to Enterprise Ireland.

It is important to stress at the outset that the changes proposed in the Bill are of a technical nature in line with the policy already set for the period 2007 to 2013. They do not reflect a new policy direction. Principles and policy for the period are set out in the national development plan and were discussed and approved at political level at that time. They are also considered annually by the enterprise and small business committee when it examines the annual Estimate and by the Committee of Public Accounts when dealing with the appropriation account or with other industrial development issues. The agency programmes for the period are also set out in the national development plan and were thus adopted when the plan was approved.

The amounts and thresholds proposed in this Bill will allow us to efficiently and effectively implement the principles, policy aims and programmes set out in the national development plan for the 2007 to 2013 period. Whereas the provisions of this Bill are of a technical nature, they are important in that they facilitate implementation of the national development plan and the Framework for Sustainable Economic Renewal — Building Ireland’s Smart Economy. Overall the Bill will allow the enterprise development agencies to continue to respond to the needs of industry, thereby adding to the policies aimed at increasing employment and reducing unemployment.

The Irish economy is one of the most globalised in the world. As a consequence, the global downturn created by the current international financial crisis has had a very significant impact. We have seen significant job losses over the past 12 months as the ongoing turmoil in the financial markets leads to a significant contraction in global demand for goods and services. The Irish economy is now expected by commentators to contract by about 6% in the course of 2009.

It is inevitable that we will experience further job losses in the next 12 months. My Department and its agencies have a vital part to play in ensuring the country is well positioned to progress when the global economy starts to pick up. Although any job losses are deeply distressing for those concerned and are very regrettable, we still have an historically high number of people at work today compared to a decade ago, with over 2 million people working. We are still creating high-value jobs across the economy, as evidenced by Hewlett Packard's recent announcement of its intention to create 500 jobs this year in an expansion of its plant at Leixlip, County Kildare, and plans to double the new jobs created with a further 500 positions over the coming two or three years.

Despite the current global turbulence the Government is committed to maintaining and enhancing our framework competitive conditions and promoting new areas of competitive advantage, including by developing our research and development base, investing in critical physical and communications infrastructures, and promoting tertiary education and lifelong learning. Over the period of the national development plan the Government will invest significantly to support the development of the indigenous and foreign direct investment enterprise base.

Over recent years, economic growth in Ireland has been driven by domestic demand not by international competitiveness. As domestic demand has weakened we must look to exports for a sustained economic recovery. Exporters are and will continue to be critical in the achievement of future economic stability and job maintenance and growth in the Irish market.

A principal focus, therefore, is on supporting the growth of a cohort of Irish companies with the ambition, leadership and innovation necessary to achieve global scale. To support industry and the economy as a whole, a targeted focus must be placed on sustaining and creating exports. In directing this focus, the development agency Enterprise Ireland has a dedicated task force which is actively working to respond to the changed economic environment. This will ensure that the supports offered to companies are the most relevant and effective in addressing the current realities facing businesses across the manufacturing and internationally traded sectors throughout Ireland. It is critical that we continue to invest in the companies upon which our economic recovery depends.

To that end, an enterprise stabilisation fund was announced by the Taoiseach in early March. This will allow for meaningful additional assistance to be provided to basically sound internationally traded companies that would otherwise struggle to survive the global downturn. The fund will operate in conjunction with the banks and will supply direct financial support to eligible internationally trading enterprises which are undertaking development expenditure to reduce costs and gain sales in overseas markets. The fund will complement the banks' commitment to small and medium-sized enterprises under the recapitalisation scheme and should facilitate much of the restructuring needed for viable companies selling on the home market.

Enterprise Ireland client companies are estimated to have achieved exports gains of up to €1 billion in 2008 despite the unprecedented global economic environment. That this was achieved in the face of contracting international markets and a negative currency environment is a credit to the tenacity and resilience of those Irish companies that compete for and win new business overseas. In the coming year, international sales will be hard won and it is innovation, quality and value that will set Irish companies apart from their international competitors. Continuing focus and investment in these three areas will be crucial. Those companies that combine value-adding, innovative products and services with efficiency and productivity are the ones that will thrive in the face of the challenges of 2009.

Irish companies continued to invest in research and development in 2008. Strategic targets for the numbers of companies engaged in research and development projects involving investments of €100,000 and €2 million annually will be met or exceeded. The year 2008 saw the biggest investments to date in research and development by large companies and a greater number of small companies engaged in high level research and development.

Building competitiveness in existing industry has become a priority in the face of growing international competition. The newly established €60 million growth fund is designed to assist Enterprise Ireland's small to medium-sized clients achieve greater competitiveness by improving their export potential. This will be achieved by increasing gross output and productivity while also providing new employment or maintaining existing employment levels in clients throughout all counties.

Job losses, precipitated by recent factors such as the global credit crunch and economic downturn, are a significant concern. Job retention and creation is a priority for the Government and Enterprise Ireland. The agency strives to retain and create jobs in existing companies by improving their competitiveness and access to overseas markets. It focuses on the creation of new jobs through supporting entrepreneurs in setting up new high potential start-up companies. Start-ups continued strongly in 2008, with 70 new high export growth potential companies established. These were in sectors as diverse as life sciences, medical devices, software, services and food.

With regard to foreign direct investment, the Industrial Development Agency Ireland has continued to be successful in attracting new investment to Ireland, even in the current economic climate. In 2008, a total of 130 foreign direct investments projects were won, with new investment up 14% on 2007 and the number of new companies investing in Ireland for the first time up 16% on 2007. There was a 22% increase in research and development and innovation projects, while the overall level of investment secured in 2008 was approximately €2 billion. More than 8,800 new jobs were created in a variety of sectors, across a range of skills and spread throughout the country. Regrettably, however, 10,000 jobs were lost in the same period, giving rise to a net loss in 2008 of 1,200 jobs. Many of these job losses are due to the move from low value manufacturing and we are also seeing an increase in short-term working arising from the credit crunch, for example, in the motor components sector. At the end of 2008, full-time employment in IDA Ireland-supported companies stood at 136,043.

It is particularly encouraging to see many of the world's leading companies continue to invest in Ireland in areas such as high-end manufacturing, global services and research and development and innovation projects. Leading companies investing in Ireland for the first time include GOA, a subsidiary of France Telecom, and Facebook in Dublin, Zimmer in Shannon, PPD in Athlone and Lancaster Laboratories in Dungarvan. Existing IDA Ireland clients undertaking significant expansions in their manufacturing operations included Cook Medical in Limerick, Coca Cola in Wexford, Genzyme and TEVA in Waterford, Cameron in Longford and Microsemi in Ennis. A strong growth in research and development and innovation investments included information and communications technology companies such as IBM, EMC, ON Semiconductor and Business Objects-SAP. Life sciences companies such as Boston Scientific and a part of the Johnston & Johnston company, the cosmetics company Oriflame and financial services companies Citi and Aon also made significant research and development and innovation investments.

The global economic turmoil makes it difficult to predict the outcome for foreign direct investment in 2009. Global foreign direct investment will decline and almost all economic commentators are predicting an extremely difficult year in 2009. At the same time, it is important to recognise that even in turbulent economic times there is still foreign direct investment to be won and our competitors will not be slow in targeting opportunities. Building on the successes achieved in 2008, IDA Ireland continues to see good opportunities for foreign direct investment and is confident that a number of key project announcements will be made over the next three to four months.

Maintaining the competitiveness of the enterprise sector in Ireland is a priority issue for my Department and our development agencies. In order to sustain and grow the enterprise sector, Irish-based enterprises will be encouraged and assisted to continue the progression to high value added sectors and activities, and to continue to increase productivity through investments in human capital, technology and innovation. Our comparative advantage will increasingly lie in the production of knowledge-intensive goods and services. With that in mind, a range of policies are being pursued to enhance competitiveness and improve the business environment for both manufacturing and services.

Creating the best framework conditions to enable innovation to flourish, which in turn leads to increased productivity and competitiveness, will continue to guide our overall policy approach to tackling the competitiveness challenges ahead. Current Government policy contains a range of commitments focused on maintaining and enhancing our framework competitive conditions, and promoting new areas of competitive advantage, including developing our research and development base, investing in critical physical and communications infrastructures and promoting tertiary education and lifelong learning.

The national development plan projects a total investment of over €25 billion, with €8.2 billion earmarked for delivery of the strategy for science, technology and innovation 2006 to 2013 to achieve our goal to become a leader in research and development and innovation. A €3.3 billion investment is proposed specifically to support the development of the indigenous and foreign direct investment enterprise base, while a €13.7 billion investment is proposed on skills development. Due to the current shortfall in Exchequer resources, the strategy for science, technology and innovation is now running at about €160 million behind national development plan projections. These reduced allocations will create challenges in ensuring that the benefits arising from the strategy for science, technology and innovation are maximised. The economic environment is more challenging than we have seen for many years. However, the implementation of these strategies will ensure Ireland remains a key location for leading edge research and development and the quality jobs it can deliver. Achieving higher growth rates in productivity than our competitor countries will be important for international competitiveness and securing sustainable wage growth.

To underpin long-term competitiveness, the Government's objective is to ensure that we build up the productive capacity of the economy through investing in people. We are doing this directly through the skills strategy. We will continue to pursue policies to promote lifelong learning and upskilling to improve labour market flexibility. Where necessary, we will ensure that appropriate training supports are provided for workers in sectors that are no longer competitive, should they need to find alternative employment. Our priority remains the creation of high quality, sustainable employment, driven by companies with higher profitability that are more technologically advanced and fit with the competitive characteristics of our economy.

Innovation, and the productivity gains that flow from it, are the foundations for maintaining competitiveness. The enterprise development agencies under the aegis of my Department, Science Foundation Ireland, Enterprise Ireland, IDA Ireland, FÁS and the city and county enterprise boards, will continue to focus on productivity enhancing investments such as research and development, innovation, better use of information and communications technology, and training and management development. The next few years can be seen as a period where we seek to reposition ourselves in terms of our national competitiveness and to place ourselves in the optimal position to benefit from an upturn in the international economy as well as from our longer-term investments.

We must all realise that these are the most challenging of times for our economy. It is, therefore, vital that the right mix of good macroeconomic and sound enterprise policies are in place to restore our public finances and confidence in our economy. The Government is committed to taking the necessary difficult decisions over the next few weeks to ensure the economy overcomes the current challenges and is placed on a secure and more sustainable footing. Through our pro-enterprise policies, ongoing investment in critical infrastructure under the national development plan, low taxes on business and workers, and our balanced regulatory regime, the Government is committed to ensuring that we continue to build an environment for enterprise that remains among the most favourable in the world.

I will now summarise the main provisions of Bill, which will be examined in more detail on Committee Stage. It is important, as I said at the outset, to stress that the changes proposed in this Bill are of a technical nature aimed at updating monetary limits in line with the policy already set for the period 2007-13. They do not reflect a new policy direction. Principles and policy for the period are set out in the national development plan and were discussed and approved at political level at that time. They are also considered annually by the Committee on Enterprise and Small Business when it examines the annual Estimate and by the Committee of Public Accounts when dealing with the Appropriation Accounts or with other industrial development issues. The agency programmes for the period are also set out in the national development plan and were thus adopted when the plan was approved. The amounts and thresholds proposed in this Bill will allow us to efficiently and effectively implement the principles, policy aims and programmes set out in the national development plan for the 2007 to 2013 period.

Section 1 sets out a number of definitions relating to specific terms used in the body of the Bill. Section 2 makes arrangements for the transfer to Enterprise Ireland of shares currently held in 28 companies by Shannon Free Airport Development Company Limited. Up to 2007, Shannon Development, in addition to its responsibilities in the Shannon free zone, provided various supports, including taking shares, to indigenous companies in the mid-west region. Following a change in the Shannon Development mandate in 2007, Enterprise Ireland took over Shannon Development's responsibilities in regard to indigenous industry in the region. Shannon Development holds shares in 28 client companies and it is now necessary to transfer ownership of this equity to Enterprise Ireland.

The majority of the 28 companies subject to the draft legislation are designated by the agencies as high potential start-up companies, HPSUs. The flow of innovative HPSU companies into the economy is deemed critical to the future growth of the economy. Taking shares in these companies is one of the methods used to provide financial support to them. Due to the technicalities surrounding the transfer of shares by a shareholder to a third party, it was deemed necessary to enact legislation as the only practical means of effecting this transfer, and of substituting Enterprise Ireland for Shannon Development in the various shareholder agreements and other documents relating to those shares. Shannon Development and Enterprise Ireland are in agreement with this approach.

Section 3 amends the Industrial Development Act 1986 by increasing the thresholds above which Government approval is required on grants paid by the development agencies. The grant instruments provided for in the 1986 Act which are updated are for use by the enterprise development agencies to support spending by individual industrial companies on building or extending factories, employing additional workers, training workers or carrying out research and development work. It is important to note that the decision to award a grant and the amount of grant in each case is made by the board of the agency involved. While the Government must approve larger grants before the agency can finalise the grant agreement with the company, it does not have power to initiate or increase the grant proposed. The purpose of the requirement for Government approval is to allow Government to monitor the implementation of the scheme and to draw any appropriate conclusions on enterprise policy or on the scheme concerned rather than in respect of a particular case.

Section 3 proposes an increase in the current thresholds above which Government approval is required from €5 million to €7.5 million in each of the following cases — employment grants to industry, training grants, power to purchase shares and total investment grants to one company. I should mention at this point that for the sake of dealing with related provisions of the Bill together a similar threshold increase in respect of capital grants is contained in section 4(b).

Previously, research and development grants of €2.5 million or more to any one company had to be approved by Government. The new threshold of €7.5 million reflects the growing importance of research and development activities to the Irish economy and the fact that research and development grants above existing thresholds have become more commonplace. This increase will ensure the correct number of research and development grants are subject to Government approval. Research and development grants above the threshold are now quite common and it is considered appropriate to apply the same threshold as applies to other similar types of grant.

Research and development grants provided by enterprise development agencies to their clients are now a key component of the strategic objective of encouraging companies to move up the value chain. Such grants help to embed overseas companies in Ireland, thus helping to ensure their long-term survival and growth in Ireland. They also serve to increase the strategic importance of the Irish operation within the parent group. When making investment grants, namely, grants towards the cost of building or extending a factory, the Industrial Development Agency and Enterprise Ireland often use a number of the above grant types in combination, namely, capital and employment grants. The 1986 Act also contains an aggregate threshold for Government approval in such circumstances, which it is now proposed to amend by substituting €15 million for €10 million.

On resolution of an anomaly in a BMW region by extending the designated areas, the relevant subsection addresses an anomaly that has arisen regarding grants to small companies in parts of the BMW, Border, midland and western, region. It extends the designated areas in the BMW region to the entire region by adding the counties of Laois, Louth, Westmeath and most of Offaly, which up to now have not been designated areas. The 1986 Act provides that the maximum capital grant that can be given to a company outside the designated area is 45% of the cost of the assets. The counties of Laois, Louth, Westmeath and Offaly, apart from the townland of Derrinlough, are not designated areas as defined in the 1986 Act but are in the BMW region.

Under EU state aid law and the Regional Aid Map for Ireland for 2007-2013 approved by the European Commission in 2006, the maximum grant rates for capital assets varies between 0% and 50% depending on the size of the company and the region of the country in which its undertaking is situated. EU state aid rules permit capital grants for small companies in the BMW region of up to 50% of the cost of the assets. As a consequence, although EU rules would permit capital grants of up to 50% in these counties, national legislation limits the maximum grant to 45%. The proposed amendment is to deal with this anomaly and to ensure that small companies in these counties obtain the same treatment as small companies in the remainder of the BMW region.

Section 4 proposes two amendments to the Industrial Development Act 1993, namely, increasing aggregate grant limits and, increasing the threshold for capital grants referred to earlier under section 3. This section of the Bill amends the Industrial Development Act 1993 by increasing the existing legislative limit on the aggregate amount of money which can be paid by the Minister for Enterprise, Trade and Employment to Forfás and its agencies, Enterprise Ireland, Industrial Development Agency and Science Foundation Ireland for use in discharging their obligations and liabilities. This increase is necessary because expenditure to date is now nearing the existing statutory limit set in 2003 at €3.4 billion. It is proposed to increase the limit to €7 billion to bring it into line with spending proposed in the national development plan up to 2013.

It has been the practice that aggregate spending for these purposes is capped in legislation at a level which is raised from time to time to allow the agencies' operations to continue. The cap ensures that the Houses of the Oireachtas have an opportunity to review policy and spending on industrial promotion. However, there are also other legislative controls, including the upper limits on individual grants to companies approved at agency level and these are addressed in section 3. Also, there are further Oireachtas controls, such as the annual Estimates process and the work of the Committee of Public Accounts. In the Estimates process, the Dáil takes decisions which determine the annual allocation of money to the agencies for the purposes covered by the longer-term legislative aggregate limit set in this section. In setting this higher aggregate there is no irrevocable commitment that the money will actually be paid to the agencies. Legislative clearance for aggregate payments up to the level of £7 billion is proposed but annual spending under these headings will still have to be agreed by the Government and voted by the Dáil. The aggregate grant limit of €3.4 billion currently in place will be reached in April of this year. It is expected that the new ceiling will be reached in four to five years time on the basis of the programmes in the national development plan.

Section 19(1) of the Industrial Research and Standards Act 1961 provides that any discoveries-inventions resulting from research carried out by or on behalf of Eolas, Forbairt, Forfás and Enterprise Ireland and the Institute for Industrial Research Standards are the property of the Minister. There are a small number of cases where patents arising from research covered by section 19 were applied for by the agencies and were granted in the names of the agencies rather than in the name of the Minister. A number of such patent applications are still pending. Some of these applications-patents and associated intellectual property rights, also covered by section 19, have been licensed to Irish companies carrying out further research based on the applications-patents. It may create a serious problem for these companies if their title to any new intellectual property rights subsequently developed is shown to be defective. In some cases, the Irish companies have sub-licensed aspects of the intellectual property rights to other companies. In most of these cases the licensee will have relied on a warranty that the licensor had good title to the rights being licensed.

While the provisions of this Bill are of a technical nature overall they will allow the development agencies to respond to the needs of industry, thereby supporting employment and reducing unemployment. These provisions are important in that they facilitate implementation of the national development plan and the Framework for Sustainable Economic Renewal — Building Ireland's Smart Economy.

I commend the Bill to the House.

I wish to share time with Deputy Olivia Mitchell.

Is that agreed? Agreed.

First, on behalf of the Fine Gael Party I would like to confirm that we will be supporting the Bill. Obviously, we understand the necessity for the Bill to be concluded by the middle to end of April. The Minister of State can be assured of our co-operation in dealing with this Bill in the Chamber and on Committee Stage which I understand is scheduled for 1 April 2009.

The Minister of State mentioned in his contribution that the Bill includes a number of different sections and is, in many ways, a composite Bill dealing with various issues. I have just realised a further section was inserted in the Seanad. I was not aware of that until now. Section 2 deals with the transfer of shares from Enterprise Ireland to Shannon Development. This reflects the changing role of Shannon Development and the manner in which the enterprise functions of same have been passed over to Enterprise Ireland. Obviously, it makes sense that those shares be transferred from Shannon Development to Enterprise Ireland. However, this raises questions as to the Government's intentions for Shannon Development as its enterprise and other functions are removed.

Section 3 relates to the raising of limits on grants from €5 million to €7.5 million without Government approval. As time goes on it will be necessary to raise thresholds. Even in a period of deflation it may be necessary to raise thresholds. It seems a little unusual that this Bill proposes to raise to €7.5 million the threshold above which Government approval is needed for a grant. It seems that thresholds are being lowered in all other areas of government, in light of the current budgetary situation. The level of expenditure that can be approved by a local authority has decreased significantly. My own local authority has been told it cannot approve projects of between €50,000 and €500,000 under the parks improvement or capital works programmes without Government approval. At the same time, this House is being asked to pass legislation in another area that will raise a threshold from €5 million to €7.5 million.

When a few years have passed, and we learn more about the grants that will have been awarded by State agencies without Government oversight, I hope we will not regret the decision to raise this threshold. When that time comes, I am sure Ministers will use the excuse that the awarding of the grant was an operational matter for the agency in question. They will say they could not have made an input into the process because the amount of the grant was below the threshold set out in the relevant legislation. If a lower threshold — perhaps €1 million — had applied to FÁS, millions of euro would not have been spent as they were on Jobs Ireland and Opportunities Ireland. At the very least, Ministers should have had to take responsibility for how millions of euro in taxes were spent in their own Departments.

The section of the Bill dealing with designated areas seems to recognise the existence of the BMW region in a coherent manner. It is obvious that the Industrial Development Act 1986 predated the development of the regional structure. This legislation refers to the entire BMW region as a single designated area, which makes sense to me.

This legislation provides for an increase from €3.4 billion to €7 billion in the amount the Minister can allocate to certain agencies. I am not sure that it is necessary to have an overall limit of that nature. We do not set overall limits in other areas. For example, we do not limit overall health spending or overall spending under the capital transport budget. Expenditure in certain areas can continue to increase as the years go by without recourse to this Chamber. Legislation of this kind would not be needed to spend a further €40 billion on social welfare or a further €12 billion on roads. I suppose it is appropriate for the Dáil, from time to time, to consider how money is being spent. The amount of money paid in grants should not be allowed to increase without some form of parliamentary review. I suppose the flaw in our system is that it does not facilitate proper oversight of the manner in which grants are paid.

The Oireachtas committee system has been much maligned, largely because of the payments that are made to Chairmen and Vice Chairmen, etc. While such criticism is legitimate, there is a definite role for Oireachtas committees. They do not have enough power to scrutinise the overall and day to day operation of State agencies. Parliament would work much better if it could examine how grants are paid to businesses and how they are spent. For example, we should take an interest in the manner in which equity investments are taken up by Enterprise Ireland and, in particular, the success of such investments. We get annual reports from the agency. In most years, representatives of the agency attend a meeting of the Joint Committee on Enterprise, Trade and Employment. As a Parliament, however, we have not forensically scrutinised the manner in which the €3.4 billion fund has been spent over the years. We do not know whether it has been spent wisely and fully in the interests of the public. That is not a criticism of the Government as much as a criticism of our political system.

It is appropriate to refer to the role of the State agencies in promoting industry. As I have said, the future role of Shannon Development is increasingly unclear to me. What are the Government's intentions in respect of Shannon Development? I would be interested to hear a little more about that later in the debate on this Bill.

The role of Enterprise Ireland has largely been to promote high potential start-up companies and export companies with significant potential. When it comes to supporting businesses, there is a definite gap between the work of the country enterprise boards and the work of Enterprise Ireland. A question can reasonably be asked about the return we get from the money that is invested in Enterprise Ireland. The return we get from the money we invest in IDA Ireland, as an agency, is clear. I have yet to see a clear summary of the benefits to the taxpayer, and to the economy as a whole, of the operation of Enterprise Ireland. Of course there are some examples of successful companies that have been supported by Enterprise Ireland. I have not seen a convincing academic analysis to the effect that such companies would not have succeeded anyway. Can we be sure that the €150 million that is spent on Enterprise Ireland every year produces public goods worth €150 million for our people? Members will be aware that just €50 million of Enterprise Ireland's €150 million budget is spent on business supports. The remaining €100 million is spent on the agency itself, for example on its training activities. I have yet to see a convincing peer-reviewed academic analysis of the value of Enterprise Ireland's work, much of which is duplicated by a plethora of other agencies that offer similar supports.

Yesterday, I worked out how much it would cost to support all new Irish start-up companies, regardless of whether they are export businesses or high-potential companies, by exempting them from rates for three years and giving them half-price electricity, water and utilities. I was working on the basis that at a time like this, when many people have no option other than to set up their own businesses, we should give support of this nature to all start-up companies across the board. I estimate that it would cost between €25 million and €30 million per annum, or one fifth of Enterprise Ireland's budget, to provide such support. I wonder whether it is time for some new thinking in this regard. Rather than being fixated with high potential start-up companies, export potential and the knowledge economy, perhaps we should consider what the Government can do to support all businesses, from start-up newsagents to companies manufacturing medical devices.

Fine Gael has been considering the future of the county enterprise boards as it reflects on where the economy is going. Our new policy on the future of semi-State companies is being launched in the Merrion Hotel as we speak. When my party was in power in the early years of the State, one of the first things it did was to understand that the State has a role in providing an impetus for growth. We established a number of State companies, including the ESB and Bord na Móna, which became agents for growth and development. Many of the semi-State companies in question have outlived their usefulness. Fine Gael is proposing today that the existing cohort of State-sponsored bodies be reinvented and that a new group of such bodies be established. We are proposing that Bord na Móna and Coillte be merged and that the new company be transformed into a bioenergy company, essentially to grow bio-fuel on the bogs. We are suggesting that the turf power stations in the midlands could be transformed into biomass power stations. We are essentially advocating the transformation of the old semi-State companies into companies that are more appropriate for modern times.

Fine Gael is also proposing the establishment of a new Irish broadband company, essentially to take over the role that has been abdicated by Eircom. Such a company could be funded in many ways. It could be partially funded from the National Pensions Reserve Fund, but also from the privatisation of some of the older companies that no longer necessarily need to be in State ownership. The most obvious example of such a company is ESB International — the State gains no particular benefit from its ownership of a company that does not even operate in Ireland. Bord Gáis Éireann is another company that could be considered in this context. My party's idea is to transform some of the old semi-State companies, which have served a role in the past, into new State companies that can provide the kind of industrial infrastructure we need for the future. I refer to infrastructure like alternative energy facilities and a next-generation broadband network. This visionary idea will stimulate a great deal of debate. I hope the press conference is going well. I should be there, but I am not.

I would like to speak about competitiveness. The State's entire industrial policy is designed to promote enterprise, industry and competitiveness. The State agencies have an important role in attracting investment into the State, in the case of IDA Ireland; developing new Irish companies with export potential, in the case of Enterprise Ireland; and improving skills and providing training, in the case of FÁS and Skillnets. We should consider how the State can do more to assist industry and business. State supports, whether provided by IDA Ireland, Enterprise Ireland, the country enterprise boards, FÁS or Skillnets, do not in themselves foster a pro-business and pro-enterprise environment. To develop such an environment, one has to get the fundamentals right. I have yet to see any sign that the Government plans to get the fundamentals of this economy right. While it seems that the Government is starting to take action in respect of the public finances, at long last, action is also needed to make Ireland competitive again.

One can provide as many subsidies to businesses as one likes. It is easy to forget that State agencies like Bord Bia and Bord Fáilte are in the business of providing State subsidies. These are all State subsidies. This is public money being given to the enterprise and business sector. Of course, it is appropriate to do that, but none of that will work if one does not have a fundamentally pro-enterprise and pro-business environment in the country in the first place. What is missing from the Government is a much more comprehensive strategy as to how it will restore competitiveness and make Ireland competitive again. The Government will not get value for that money if the fundamentals of the economy are not right and the country is not competitive. Part of that, of course, is a matter of bringing our infrastructure up to 21st century standard and the Fine Gael Party has proposed ways to do that. The second part is bringing down costs. These are matters from which we cannot run away anymore.

The National Competitiveness Council identified the three key costs concerns as being property, utility and services. Property costs are certainly coming down — there is no question about that — but they need to come down further. We also need to take a tougher line, particularly on rents and the provision in contracts that allow for only upward rent reviews, which in my view should be outlawed. Utility costs are not coming down and that is largely due to a failure of the Government's regulatory system. ESB prices have come down 10%, but they went up 30% as well. The same applies with gas. There has been a real failure of Government and regulation in that regard.

One obvious step would be to essentially throw out the regulatory system and set a new benchmark. The Minister should state that within two years we will bring down gas and electricity prices to the EU average and, essentially, demand of ESB and Bord Gáis, both of which are State assets, that they bring down their prices to those levels. Of course, these companies will argue that it will bankrupt them but it will not — they will just have to reform and modernise.

Another area is Government charges which continue to rise. Rates continue to rise. Water charges continue to rise. A much heavier burden of regulation on smaller businesses continues even though there has been a failure to regulate large ones such as the banks.

The final area is labour costs. We are starting to see labour costs come under control across the economy, but there is no clear plan to do that. One option that could be useful in the talks which will resume with the social partners is, on the private sector side, to replace the concept for the time being of pay increases based merely on a percentage of salary and move towards a system of pay increases that are essentially profit sharing or employee dividends. This would involve saying to private sector companies which are making a profit and could afford to give their employees more money, that they should do so under a profit-sharing system, for example, a person could receive a pay increase of between 3% and 5% depending on the profits of the company. That is a matter that should be considered in the talks.

As I stated, Fine Gael is happy to support the Bill and I look forward to its speedy passage.

I, too, welcome the opportunity to speak on the Bill. Albeit fairly technical, the Bill deals with the system of supports and incentives that have been fundamental to our industrial development over the years and that, hopefully, will be in the future.

I agree with my colleague, Deputy Varadkar, that there is and always will be a certain tension between the need for oversight by Government, because we are raising spending thresholds, and the need to allow the agencies flexibility to be able to respond to changing situations. My concern is that viable projects will come forward that will be able to avail of the higher thresholds, a concern which I am sure many of us share.

When the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, introduced this Bill in the Seanad she stated that to sustain and grow the enterprise sector, Irish based enterprises will be encouraged and assisted to continue the progression to high value added activities and to continue to increase productivity through investments in human capital, technology and innovation, and our comparative advantage will increasingly lie in the production of knowledge intensive industries. I refer to my brief, tourism, because in no sector is it more true than in tourism that we need to move up the value chain. This industry is the largest employer in the country, a fact often forgotten, but it contributes only between 3% and 4% to GDP. It should be a net export service industry but since 2003 income from tourists is less than Irish tourist expenditure abroad.

In the tourism industry, we need to become much smarter in what we offer and in how we market and deliver the product. We are simply not getting the contribution from tourism we should in terms of bang for our buck. We need to not only reduce costs to attract more visitors, which of course will be a considerable challenge when the tourist market is contracting anyway, but also to add value to the product so that we become a quality destination selling what is a unique holiday and experience for which visitors are willing to pay more.

A value-for-money holiday does not necessarily mean a cheap holiday. We need to move from providing the sliced pan of holidays to the black olive focaccia of holidays. Of course, we need the cheap holidays but we also need to move up the value chain if we are to provide quality jobs in the future and if tourism is to become a net contributor to the Irish economy. As has been stated on many occasions by Ministers, the future impetus for growth, if we are to ever have growth again, will come from the services sector generally. I often wonder has the Government forgotten that tourism is a service industry giving more employment, as I stated, than any other indigenous industry. I recently read the Government strategy for services, “Catching the Wave”, in which tourism hardly got a mention. I appreciate that the Minister promoting this Bill is not responsible directly for tourism, but she is responsible for employment and for enterprise. It is not often there is an industry that gives us the opportunity to import new taxpayers, which tourism does, and it is certainly not a gift horse that we should be looking in the mouth.

The time has come to look again at the structure of State agencies which support the tourism industry. The current structures lack leadership and cohesion, both of which are vital to an industry which is intrinsically fragmented. I appreciate the provenance and the motivation behind the separation of the marketing and product development agencies, Tourism Ireland and Fáilte Ireland, but this arrangement is not serving us as well as a single agency could. When one adds Shannon Development and Dublin Tourism, not to mention the five regional bodies, it is not possible to have the unity of purpose and single-minded focus which is badly needed. We must consider if our interests might be better served through a single agency.

The regional divide, let us face it, is not being closed; it is widening. Ever fewer tourists and jobs are going west and the economic viability of Shannon Airport is now very much in question. It is difficult to believe that we are getting the optimal use of funds when there is such a fragmented approach. It is accepted that the region's indigenous manufacturing industries — this is what the Bill is about — formerly under the remit of Shannon Development would be better served by the backing of a single nationwide large enterprise body such as Enterprise Ireland and the same sort of move to a single agency would offer similar benefits to the region's tourism industry. Somebody must be in charge of the multifaceted problems of regional tourism and a body needs to take responsibility.

This Bill's purpose, technical as it is, aims to equip the State to deal with rapidly changing situations and emerging economic problems, and the Department of Enterprise, Trade and Employment must be the spearhead of meeting those challenges and, crucially, of trying to stem the flow of jobs out of the country. I am increasingly of the view that responsibility for tourism should be within the Department of Enterprise, Trade and Employment. Somewhere along the way sight has been lost of the fact that this industry is our biggest provider of jobs, and being amalgamated with arts and sport contributes to that view. Arts and sport are significant contributors to tourism and they have a significant job content, but State support for them is motivated not solely by commercial or economic considerations but because of their intrinsic value. We must increase our support for arts and sport and aim to widen participation, but the reality is the policies and the skill sets required to do that are wholly different from those required to produce and sell a modern tourism product.

In this Bill the level of supports, which reflect European policy as much as our own, are much larger in the BMW region for the good reason that is where industry and jobs are most needed, but it is also where the tourism jobs are most needed. It is also where there is the greatest potential for expansion. We already have the basic infrastructure in our natural environment and in recent years there has been great investment in the built environment. The sight of hotels and restaurants closing around the country, perhaps never to be revived, is tragic and unnecessary.

I fully support the concept of the State taking shares in high-potential start-up companies and I support increasing the thresholds above which direct Government approval is required by State agencies. It makes sense that the Cabinet should not have to bother itself except with the larger, more strategic projects and that the grant-aiding agencies such as IDA Ireland and Enterprise Ireland should be able to get on with the bulk of such decisions. Like my colleague, Deputy Varadkar, I find it ironic that we are legislating for this provision today while every other agency in the State, the local authorities, the NRA, Departments, including the Department of Education and Science, as I read in today's newspaper, must get direct approval from the Department of Finance before they can spend virtually anything. One wonders what that will do to the Department of Finance in terms of clogging up its workload. If any Department has enough to do, it is the Department of Finance.

The thresholds for individual research and development grants are to be raised by up to €7.5 million, representing a trebling of investment. This is highly desirable and is exactly the kind of business we must chase. If we get it, it is the kind of business most likely to stay. Companies involved in research and development are inclined to cluster so there is great potential for us to build on some early successes we have had. We are already beginning to make a name for ourselves in medical and health technology. The Bill updates a number of monetary thresholds. That is its primary purpose, as well as transferring the shares to Enterprise Ireland. Although the Minister says it does not reflects a change in policy direction, it underpins such a change. It reflect the fact that we no longer assume we will chase after inward investment on the basis that any job is worth chasing. We have to target jobs that are higher up the value chain and sustainable. IDA Ireland and other agencies appreciate that.

It will take more than generous grants to make Ireland an innovation and knowledge-driven economy. We must raise the standards in our universities and there is much discussion on that area. Crucially, we must invest in our schools, and even in preschools, particularly in science and maths teaching for boys and girls. It is particularly worrying that the numbers choosing the maths and science subjects are still falling because we will never build a smart economy if children do not take up these subjects. Education is fundamental to a research and development economy. We cannot begin by giving training grants at company level, welcome as they are. The kind of training we need for the future must begin in the teacher training colleges and our primary schools.

I would like to give ten minutes of my time to Deputy Morgan.

Is that agreed? Agreed.

I am a late substitute for my colleague, Deputy Penrose. In the short time I have had to examine the Bill, it seems it is not one of very great moment. It seems merely to give legislative underpinning to a decision that has already been taken on the change of mandate for SFADCo and a few related technical matters including the raising of the grant thresholds, the bringing of the BMW region into more consistent formation and so on. However, this debate also provides an opportunity to point out that the weakness of the indigenous sector in Ireland is again highlighted in the present crisis.

All the reports from Telesis right up to Ahead of the Curve have highlighted the weaknesses in the indigenous sector and that is nowhere more evident than in the Shannon region. If a major multinational withdraws there is still devastation for the region. We recently saw the incredible damage the decision by Dell has done to employment there. Notwithstanding this being identified back in the 1980s by the Telesis report and a number of reports since then, including the Culliton report and Ahead of the Curve, we still have not managed to build an indigenous sector in this country that one would expect in a modern, European state that has been in the business of industrialisation, albeit coming to it late, for a number of decades.

SFADCo was the first and only attempt at regional development in Ireland. Although there were costs associated with it, it has made a valuable contribution. It probably makes sense to give Enterprise Ireland the role on indigenous industry in that region. Over the years SFADCo went through many changes of mandate and remit and this is only the latest one. The inherent tardiness in our being able to construct a vibrant indigenous sector is still at issue. The Minister of State said the Bill has the support of Enterprise Ireland and SFADCo, therefore I presume that it is no longer an issue in the region. The question is how we make it work.

I have no great issue with the structures and changes set out. However a number of issues arise from what the Minister of State has said. Do we, as he says, have more than 2 million people in work, or has that information come from the word processor before Christmas and does it need to be updated? Has the enterprise stabilisation fund made available any grants yet? Is it operable? The Minister of State claimed the fund will complement the banks' commitment to small and medium sized enterprises under the recapitalisation scheme and should facilitate much of the restructuring that is needed for viable companies selling on the home market. I wonder to what extent the Minister of State and the Department are fooling themselves that SMEs are getting reasonable access to credit lines from the banks.

The Minister of State cannot construct a position on the basis of anecdotal evidence but some of it is very worrying. This week I have been dealing with a small company involved in energy-efficient public lighting and which won two significant contracts, as close to blue-chip contracts as one can get, and intended to employ four more people. However, it required credit of €30,000 for four weeks and was refused by Bank of Ireland. That is not the only case I have come across, and colleagues on all sides of the House have had similar experiences. I do not purport to know everything in all these cases about what might be in the bank files and I acknowledge other considerations must be taken into account but it is disturbing when one sees testimonials to quality and evidence of the contracts, some of which are significant, that small amounts still cannot be accessed by companies such as this, as well as the implications that will have for us in the worsening employment climate.

When he replies I would like the Minister of State to elaborate on the claim that client companies of Enterprise Ireland, EI, chalked up additional export gains of €1 billion in 2008. We are in the hole we are in not only because revenues from the construction sector have fallen out of the system, but because of what has happened to exports for more than five years. When the Minister of State refers to "export gains", does he mean additional value in excess of the €1 billion in 2008?

On the question of his canter over the global economic turmoil and his somewhat tentative confidence that "a number of key projects will be announced by the IDA in the coming three or four months", he seems to suggest that the pipeline has dried up and 2009 will be a particularly baleful year, as many of us have anticipated. I would like him to address this when he replies. He might also take time out to give me the Ladybird guide to the difference between the growth fund and the new stabilisation fund to which he referred because I am not as familiar with this area as I used to be. I am not sure I understand the difference. The latter fund seems to be intended to assist client companies of EI that win export contracts but I do not know if that is the difference between them.

Several times in his contribution, the Minister of State referred to the investment, changes and developments that have happened in research and development in recent years. Research and development helps to anchor companies in the State, which is a valuable and important policy objective. I published the first White Paper ever on science, technology and innovation in 1996. With all due respect to my colleagues at the time, including the Leas-Cheann Comhairle, and the Opposition of the day, the amount of attention given to innovation in those days politically or administratively was thin. I welcome what has happened in the interim, particularly the establishment of Science Foundation Ireland, the development of PRTLI, the significance attached to research in our universities and so on. However, what assessment has been conducted over the years of the net value in terms of commercialisation and job creation arising from the significant investment in research? I do not know off the top of my head of any academic assessment of the value for money we are achieving in this area.

I raise this issue because of the focus currently on the initiative by Trinity College, Dublin, and University College, Dublin, and their new alliance. I welcome the direction in which the initiative is going but I am not sure having read reports of the announcement that there is anything new in the initiative other than the co-operation between the two universities but perhaps there is. I was struck that 30,000 jobs were promised in the announcement, although the statement issued subsequently referred to "up to 300 companies and thousands of smart economy-based jobs". The reference to 30,000 jobs is not in the statement. I wonder if there is a reason behind that.

I draw the Minister of State's attention to an article in The Irish Times yesterday written by Dr. John Scanlan, who is described as “the Director of the commercialisation office at NUI Maynooth”. The article is relevant to the Bill and to the role that will be given to EI in respect of the Shannon region. Essentially, he called for commercialisation to be put on a par with research. That gear shift is necessary in policy making in this area. He outlined the mission of SFI, which it was founded in 2000 with the aim of “helping build in Ireland research of globally recognised excellence and nationally significant economic importance”. He stated the universities have tended to do quite well with the first part of the remit but perhaps less well with the second part. He said traditionally it “was not seen as their role to commercialise that research or to work with companies”.

The two university heads referred to the new enterprise corridor between UCD and TCD and the State investing €650 million but I do not know what element will be provided by the private sector. In any event, it will be a significant investment of public money. We need to be assured that we are moving in the direction of putting commercialisation on a par with research. There must be a drive in innovation and commercialisation of research to ensure investment is turned into jobs, ultimately, and that is the purpose of the investment. I would welcome the alliance that the two universities have announced if it is a statement of a move towards funding universities directly to engage in commercialisation. It is overdue. Some of the institutes of technology, the former regional technical colleges and the Dublin Institute of Technology, also do valuable work in this area. I am not exactly sure where the new alliance was born. It appears to be less a creation of the Minister for Enterprise, Trade and Employment or her Department than of the Department of the Taoiseach. I presume there are good reasons for that. It is important to get a grip on how we get best value for the significant sums of taxpayers' money we are spending in this area, how the investment in research is commercialised to create jobs, how to spread the money and assess it, what oversight mechanisms are in place and so on.

Dr. Scanlan says that our total research expenditure for 2009 will be approximately €500 million. The Massachusetts Institute of Technology, MIT, spent approximately €800 million on research in 2008, setting up 20 new companies. We could spin out companies at the rate of one per €20 million compared to MIT at one per €40 million. We all hope that one of the companies spun out will be another Iona Technologies, which came from Trinity College, or another Google, which came from Stanford, both of which Dr. Scanlan mentions. That happens, however, at best once in a decade. This investment will spawn more conventional small and medium-sized enterprises, SMEs, but is no less important for that and if we get a new Iona or international company, so much the better.

Will the Minister of State tell us in his reply what role he envisages for the Shannon Free Airport Development Company, SFADCo? Has the enterprise stabilisation fund paid out any grants and, if not, when does it intend to commence doing so? Are the export gains a net addition to exports in the previous year, which is a meaning one could take from the Minister of State's script? The Labour Party will support the principle of the Bill although there may be some technical matters to discuss on Committee Stage. Deputy Varadkar made a reasonable point in focusing on the conflict between the project size and approval mandated for some other State agencies and the arrangements we are making here. It has always been accepted, however, in Irish governance that when IDA Ireland comes calling, it gets what it wants. I suppose that, to some degree, is because it has performed well on behalf of the State, but oversight is no less important.

The point about committees is also well made. The raging fury manufactured outside the House about committees has nothing to do with the number of committees. Our friends in the media would be quite happy to see 166 committees here provided the chairperson did not receive a stipend. That is the problem. The mock fury about how many committees there are in the House is manufactured indignation. We need committees that are properly resourced and do their job. Never has that been more relevant than in this case and science investment in particular. People ought to be informed and skilled to do their jobs. In a House of 166 Members, it is probably the case that there are too many committees, but we could focus and resource them better.

I thank Deputy Rabbitte and the Labour Party for sharing time with me. We broadly welcome this Bill and recognise that it is largely a technical one to give effect to decisions already made. I welcome the increase in the grant threshold which is more practical and realistic than the previous one. We will support that provision. Another important provision is the proper designation at long last of Louth, Laois-Offaly and Westmeath as part of the Border Midlands and Western, BMW, region. We have been regarded as part of that area for some time but I welcome its formal designation in this Bill.

I hope the Bill will bring recognition to indigenous enterprise and enhance the Government's view of that sector because successive Governments made a mistake in not dealing more with it. The construction sector was the be all and end all. It has been an important part of the economy for more than a decade, but it is unfortunate that it was allowed to run riot. I do not want to accuse the Government of ignoring the indigenous sector because that is not strictly true. Enterprise Ireland and FÁS have offered substantial support to that sector but, unfortunately, not enough. Many indigenous enterprises are owner-managed and often the owner-manager is so busy trying to keep up with day-to-day activity that the notion of innovation does not arise because he or she has no time to pay attention to that important element of enterprise. I know of several indigenous enterprises that operate within the confines of the State and believe that many of them have an export capacity but cannot set their sights in that direction.

It is more than a coincidence that our two biggest export markets, Britain and America, are English-speaking countries. That suggests that language is an issue for indigenous enterprise trying to get into the export market. While I am aware that embassies are diplomatic rather than enterprise entities, although I am sure they report on what is happening in their respective locations, would the Government consider using the embassies to support indigenous enterprise? I know they have other important responsibilities but an office could be allocated within the embassy to assist indigenous enterprise with, for example, translation. Another important element would be if embassies were to assist entrepreneurs with information on local regulatory regimes concerning taxation or legal issues that might arise from the Irish enterprise engaging in their respective states. Such assistance might cost little and would allow significant additional movement by Irish enterprises seeking to gain some of the edge in export.

It is difficult to find an international customer for anything at present, given the credit crunch, the depression and the lack of economic activity but sometimes that is the best time to get in and get going. Doing so might enable businesses to get in on a lower threshold, get started and prepare themselves for the upturn when it comes.

Deputy Rabbitte raised the issue of credit to enterprise. That has virtually dried up and there are businesses such as small supermarkets that are finding it difficult to stock their shelves because of lack of credit and difficulty with turnover. The banks are not playing ball.

They are not playing ball with small and medium-sized enterprises. People are being laid off needlessly from those enterprises. I appreciate that capitalisation has come into place only recently but there is no sign yet of that credit squeeze being unplugged and capitalisation flowing out to business. It has not happened to any of the people who have been talking to me about the difficulties they are experiencing. The Government must be more proactive in ensuring the banks get the finger out and deal with this issue once and for all.

A previous speaker, perhaps Deputy Mitchell, referred to the one-stop shop in respect of assistance for indigenous enterprise and entrepreneurs. I raised this matter more than a year ago because I see a significant gap here. If a person is even considering starting a business, he or she might go to the country or city enterprise board and have a chat. Often that person is directed to FÁS, because a training element might be necessary and, by and large, is given the runaround.

Recently, I came across a businessman who employs seven people. He is an very enterprising man, has built a very solid business in a five-year period and now has the prospect of doubling his workforce. He was told by Enterprise Ireland that it could not deal with him because he has only seven employees and its threshold is ten or more. I had to intervene and point out that if a person from China or Germany turned up with seven employees, wishing to extend within that threshold in a couple of months, that person would get assistance. However, because this man happens to be Irish he does not get the golden glove treatment some others get. I am not opposed to such people getting golden glove treatment as long as they produce the goods but our indigenous entrepreneurs and business should get the same. The Government must direct significant additional focus in that area.

I am glad this Bill is being introduced because although it is purely technical in nature, as the Minister pointed out, it gives us an opportunity to discuss various business matters. The Minister himself did so as did several speakers and that, in itself, is important.

I also welcome that the anomaly regarding grants to small companies in parts of the Border, midland and western, BMW, region has been dealt with by the inclusion of counties Laois, Louth, Westmeath and most of Offaly as designated areas in that region. I am particularly glad to see County Westmeath included.

The Bill shows that various fundings are available now for small companies, or companies geared towards export. That is all very well and admirable but I wish to take up a point mentioned by Deputy Morgan. There are very many small companies for which banks are not loosening their purse strings. People say that politicians do not know what is happening on the ground but we do. Not a Saturday goes by without two or three such companies approaching me. They outline their business which might employ three to five people, is thriving reasonably but needs to get cash to advance. I have a particular business in mind. The owner, a haulage contractor, was subcontracted by a major haulage contractor to make deliveries to all ten Dunnes Stores outlets in the midlands region. The moneys for the work he is doing will come in during mid-April when he will start to get regular payments from the main contractor. However, he must exist until then and the banks have said "No". To carry him from now until mid-April he needs a small amount of bridging money similar to what one gets when buying a house. He has supplied all the accounts, letters from his main contractor, letters from Dunnes Stores, yet he cannot get the bridging finance to enable him to continue. It is a good little industry. He employs some people, works hard himself, drives his trucks day and night. He is at his wits' end.

We were told that the scales had fallen from the banks' eyes but they have been clipped firmly onto their eyes. Recapitalisation has not oiled the purse strings of the banks. Frankly, I am amazed that despite the fact that one speaks up, makes a case for them and goes to the next layer of accountability, the answer is still "no, no, no".

There is another instance of a small joinery works which is doing fine. It may not export but works within its own area of expertise. It, too, needs some bridging finance to continue. I do not take up lame ducks because there is no point in doing so as one only wears oneself out. If one sizes up a situation, sees the books and talks to the people one can recognise who has a chance. It is those who have a chance for whom I have made representations. I am dismayed to find they are neither listened to nor heeded.

People listen to the Taoiseach and other worthy people saying there are funds of €100 million and €50 million, this fund and that one. When statements are made it appears there are funds but when a business tries to avail of a fund it cannot do so. That is of considerable interest and is a matter that IDA and Enterprise Ireland should examine. I shall talk presently about those two bodies.

I wish there were the same emphasis on retaining jobs as there is on the sexy talk of new jobs. Of course, it is great when we get new jobs. In Athlone we have been fortunate to have a most active IDA regional office with most active personnel in it who work day and night to bring in new firms. One of those firms was mentioned in the Minister's speech. That is very good and we are fortunate to be in the middle of Ireland, located at the end of a most wonderful road. One sets off from Dublin and before blinking three times one is in Athlone. The industrialists cannot complain about getting to Athlone and the IDA has built a most magnificent industrial park there. It is not huge but is beautifully laid out, well appointed and nicely landscaped.

Businesses are able to set up in the park in a semi-incubation way and can move to other IDA Ireland facilities as they grow. In the meantime, they can almost immediately begin operating in the hinterland of this excellent industrial park. I am sure other regions have similar facilities.

We have had a hair-raising time recently with a certain large firm which was deciding between cutting staff in its Clonskeagh or Athlone operations. Sadly, the staff in Clonskeagh were let go but the remaining staff in Athlone worry constantly that the call will be made to them someday. I wonder if a unit could be established between the IDA Ireland and Enterprise Ireland to support job retention in advance of redundancy announcements. Is it possible to constantly monitor firms which were welcomed here with State aid and which are pursuing their paths to productivity? I am aware that issues arise in respect of intrusion and interference, but it is too late for a firm to send warning signals one week before it announces losses. A job retention unit would make itself aware of what is likely to happen to a firm rather than waiting to hear the sad news on the local radio station.

Retention should be as strongly emphasised as invention because otherwise we are being somewhat feckless and IDA Ireland will arrive at a worse situation than this year's net loss of 1,200 jobs. That figure is reasonable in the present circumstances but it will increase if attention is not paid to retaining jobs and supporting companies in their ongoing training and product development needs. Aid and support must be available to firms which are struggling to survive.

The downturn has resulted in a reduction in science and technology funding, although investment is continuing in this area. This funding represents the future for the jobs and smart businesses we want to create. Regardless of how this crisis affects us, we must strive to maintain our funding for science and technology.

In the context of this debate on jobs and development, I am pleased that ICTU and the Government have agreed to embark on another phase of getting to know each other or renewing their friendship. I have been an advocate of partnership since my time as shop steward in the school in which I taught. I have always believed industrial relations should be conducted through jaw-jaw rather than war-war. I do not see the purpose of strikes in these terrible times and was not surprised to hear about the outraged e-mails sent to "Today with Pat Kenny" on Tuesday morning. Every house in the land is facing or experiencing unemployment. Thankfully, therefore, the strike has been averted.

Before I left my bolt hole in the Leinster House 2000 warren for the Chamber, I read once again the ten points of the social solidarity pact. It is difficult to disagree with any of the points because they are all motherhood and apple pie but I failed to find in them a single solid proposal which would enable us to get over the debt hump. I was nonplussed to learn that Mr. Begg, who is a very worthy person, is advocating a longer period in which to repay our debts. That will mean lumping our grandchildren with debt repayments. I do not approve of this suggestion but I hope it will not be a stumbling block to the parley among the social partners. We have to repay our debts before the deadline set by the EU because we cannot shirk our responsibilities in that regard. To advocate that we lengthen the repayment period is to act like Judy Garland in "The Wizard of Oz". There is no merit in the suggestion and it will not produce a good outcome. A small amount of pain might be spared now, but the suffering will be worse as our borrowings double.

By and large, however, I am supportive of social partnership. Elected representatives do not often enough acknowledge the inestimable contributions that the partnership process has made to Ireland's industrial and social relations over the past 20 years. When we were coming into our glory years, people asked me during my ministerial visits to other countries the reason for the arrival of the good times in Ireland. I always cited our education system, in which I am a firm believer. I am aware that the Leas-Cheann Comhairle was also a teacher. Good education is the foundation for whatever way of life one embraces. The social partnership model is equally important to our success. It can appear cumbersome at times and one can groan at the long faces that appear after meetings in Government Buildings, but we need negotiations to flourish regardless of the budget's outcome. I assume that the decisions on the budget have already been made, although we are told that further frenzied meetings are to take place.

I wish all parties luck in their deliberations, even if the budget will be on paper by the time the social partners get to grips with it. I wish all parties to the talks fair weather and honesty on both sides. That is what is needed. I am aware that often people have to throw shapes and say and do things for, perhaps, a wider audience. At the same time there is no need for that carry-on. We all know one another well enough now to be able to say, within those talks, that throwing shapes is not enough. I heard on the radio this morning that there is great social unrest in France. We constantly hear of strikes in France, with all airports, bus and railway stations closed and many thousands on the streets. They seem to be able to wear it well, although I do not know how. I was once in Paris when it was impossible to get out of it, and that was an awful situation. There is talk of a revolt. I do not know whether it will be à la Marie Antoinette, a peasant revolt or whatever, but President Sarkozy had better get his boots on and try to manage matters. I am quite sure he can do so, as he showed when he visited this country.

I also believe we need the social partners for another purpose. I am not deviating, as this is still part of industrial life. It seems we are to have another Lisbon treaty referendum, even though I had advocated that we could not have another referendum for many years. However, I now realise that if we do not do so we will be humped. If we are to have another referendum we need——

The Deputy is straying well beyond the Industrial Development Bill.

Yes, but we need the social cohesion engendered by the social partners.

I am sorry to interrupt the Deputy.

Is the Leas-Cheann Comhairle telling me to stop?

He would not dare.

That is all right.

I should like the Deputy to stay within the broad parameters of the Industrial Development Bill.

The Industrial Development Bill depends on workers. There cannot be industry without workers and there cannot be workers without social cohesion. I should prefer that we have our own social cohesion and not be like France. I may have deviated when I referred to the situation in France.

We are broad Europeans.

Yes, we are broad Europeans. We need the social cohesion which the worker and employer representatives bring to the table as we start to prepare for a second referendum on the Lisbon treaty.

This is a good technical Bill. It allows us here to talk about various matters. There is the fine work done by Enterprise Ireland and the county enterprise boards. There is also the enormous importance attaching to job retention in tandem with the good news about new jobs. We need to have more industrial parks such as the one at the regional centre in Athlone, as these provide a great focus for industry. I am also pleased that the social partners have again come on board with the Government.

I wish to share my time with Deputy Jimmy Deenihan, with the permission of the House.

Is that agreed? Agreed.

I welcome the opportunity to speak on this Bill. At the outset, however, I am disappointed with its contents, since I believe many people living along the Shannon always held Shannon Development and the work it had done in the highest esteem. In July 2005, the then Minister for Enterprise, Trade and Employment, Deputy Martin, said that under the new arrangements, Shannon Development would be given an enhanced regional economic development role, with specific emphasis on addressing the needs for the less developed parts of the Shannon region. I regret and am worried that Shannon Development is now effectively leaving the pitch, because I do not have confidence in IDA Ireland or Enterprise Ireland in terms of the regional basis on which they are bringing industry into the country.

Looking at the track records in respect of the announcements and the job creation efforts and endeavours over the last five to ten years, there is a clear indication that the conferring of status on those cities and towns that became the main gateways and hubs for industry was based, in the main, on politics — with the exception of Dublin, Cork, Limerick and Galway. In view of this there is a clear deficit with regard to proper regional development. Take the four towns of Ballinasloe, Loughrea, Gort and Tuam in County Galway, for example. Tuam, for whatever reason best known to the person who made the announcement which I believe was political, was classified within the previous categories in terms of gateway and hub towns. Over the past three years IDA Ireland has made one visit with potential investors to the three other towns. This was not one visit to each but rather one to the three towns. Tuam has had a couple of other visits.

Many parts of Ireland have been forgotten by the IDA, as we have known for a long time. They have been forgotten because they lie between Galway city and Athlone. I am sure this example can be replicated in many other areas throughout the country. It is regrettable. We look across the Shannon in envy at the development work done by the regional development company, Shannon Development, including as it does the Tipperary and Clare borders nearly as far as Birr. It is regrettable that this agency is now leaving the pitch because if, as proposed, Enterprise Ireland replaces it, given the share allocations as provided for in this Bill, the same pattern I have outlined will happen.

The main responsibility of Enterprise Ireland is the support and development of indigenous Irish industries but I believe it has also lost the plot on this. There are many instances of this, even where it has supported industry. However, it claims its hands are tied when industries get into trouble, even with companies it has supported from the start-up phase. When difficulties arise, Enterprise Ireland says, as in the case of a Loughrea company recently, that the only support it can give to an indigenous Irish enterprise is a consultative grant of about €5,000 to €7,000, depending on whether it is developing new products.

In view of the difficulties in which many indigenous Irish industries find themselves Enterprise Ireland is not being helpful. I am aware that certain industries in east Galway are in difficulty and I have asked Enterprise Ireland to be proactive rather than reactive. The agency should go into such companies before something happens to determine whether they can be nurtured through the difficult periods they are facing, in terms of industrial development and employment, and helped to a greater extent than heretofore. State agencies are failing to do this. As a result of my exchanges with Enterprise Ireland when 180 jobs were lost in Cigna in Loughrea not too long ago — it was a complete shock to the small town — I wondered what it did. It visited a trade fair in New York city from 3 to 16 February 2008 entitled Kidscreen 2008 and TV Bootcamp. One wonders if it has lost its focus. Many other visits abroad were undertaken but that one highlights the insignificance of Enterprise Ireland. This Bill presented an opportunity to restructure the IDA and Enterprise Ireland and to focus on the difficulties in the area of job creation.

Galway and Limerick are two university cities. Were it not for the initiatives of the personnel of the universities in those cities — mainly their presidents and professors in the areas of job creation and research and development — they would not have received funding from abroad and would not have been able to establish a link between that funding and research and development in existing industries in Galway and in Limerick. The IDA was irrelevant but jumped on the bandwagon. The initiatives of the universities and their personnel, who were progressive, have led to many of those industries developing. The link between the universities and job creation has been tremendous, and I hope it continues.

There is a need for the Minister to reassess the situation and how those organisations go about their work in job creation. They are not doing so fairly and they are neglecting the concept of regional development. Not too long ago when Deputy Richard Bruton was Minister in that Department, he gave a clear directive, not a request, to the IDA to be fair to the regions. That has all gone wrong. I hope the Minister will take an initiative, if not in this Bill, in another Industrial Development Bill which will clearly outline that for the IDA and Enterprise Ireland.

At regional level, the county enterprise board is the only agency which makes a tangible response to requests for help in job creation, albeit in a small way. Galway County Enterprise Board recognises that need and that there is talent out there and it responds in a positive way. However, it has been neglected and rubbished by Enterprise Ireland and the IDA. That is a regrettable situation. There must be co-ordination in regard to job creation and industrial policy from here on.

I am glad to have the opportunity to speak on this Bill but I do not welcome it because of the effect, as the previous speaker said, it will have on the future role of Shannon Development. If one were looking for an example of an instrument of rural development in any part of the world which would create a dynamic in a region, one would decide on Shannon Development as a very good one. It has worked very well over the years and I will cite a few examples later.

The Government has stripped it of some of its powers and functions. I am convinced that because of the reduced role of Shannon Development in the mid-west region, the region is not as dynamic as it used to be. Shannon Development is now just a property manager. If it is not broken, why fix it? The attitude is mind boggling. Taking north Kerry tourism from Shannon Development and reducing its role to a property manager in Tralee and the Shannon landbank has definitely taken the dynamic out of north Kerry and reduced the visibility of people trying to do something there. I will refer to that again later.

I refer to the time Shannon Development was founded in 1959, and it is no harm to mention some of its achievements. In 1960, it founded the first world industry free zone. That has been an amazing success and it now employs 7,000 people. That was as a result of visionaries like Brendan O'Regan and others. It produces sales of €3.5 billion and it has one of the highest concentrations of American businesses in the country. What thanks did the people who created that get? The role of Shannon Development has been reduced.

Shannon Development created its own town, Shannon, and concepts such as medieval banquets at Bunratty Castle. It was very much involved in setting up the University of Limerick which has been a key economic driver in the mid-west region. It set up one of Ireland's first business innovation centres. It set up the national technology park in 1984 beside the University of Limerick. Shannon Development had the vision to see there was a direct link between technology and universities. That had not happened in the rest of the universities at that stage because they were still concentrating on the humanities whereas the vision was there in the mid-west region.

In 1986 Shannon Development set up the Limerick food centre and it also has achievements such as the Doonbeg golf resort. It set up a series of business and technology parks in a number of locations throughout the region, some 57 in total.

Deputy Ulick Burke alluded to the IDA's performance in his part of the world. In the past ten years, the IDA has not been responsible for the creation of one new job in north Kerry. Reference was made to Aetna in Castleisland, about which the IDA made an announcement last summer. I do not know if those jobs have come on stream yet. In a period of five years, the IDA brought only 13 itineraries to Kerry but in the same period, it brought 156 to Cork. The former Minister was from Cork and Kerry did not have the clout.

Kerry has been totally neglected by the IDA. I have said that to IDA people and will continue to do so. The present administration in the IDA in the region is showing more interest in Kerry but the IDA has shamefully neglected Kerry over the past ten years. That goes without saying. It did not even make an effort to bring something into the county. That is a sweeping statement but it is the reality.

In County Kerry, Shannon Development, using the funding it gets from its own rental spaces across the region — there is no Government liability or involvement because it is not taxpayers money — set up a technology park in Tralee. It cost €8 million and now employs 300 people within 30 very progressive companies, none of which have closed in recent times. One company was sold off to an American company two years ago for €130 million. These companies have links all over the world, with Silicon Valley and elsewhere and are doing very well. The credit for this lies with Shannon Development, not IDA Ireland.

Shannon Development built a business centre, currently fully occupied, in Listowel, again from its own and not Government money, which cost €1.7 million. It has created an e-village in Tarbert, which is also operating in County Clare, where people can come and work from their own houses. It is rigged up with broadband and so on. As result of its careful initiative and planning it now has HESS Corporation which, it is hoped, will build an LNG plant in the Shannon estuary. It provided the land and is now working with the HESS Corporation. The project was ongoing for more than two years.

This is success. I have given only a small overview of this dynamic group of people. It could have been streamlined and nationalised or rationalised. What has happened to it? It has been stripped of its powers. The original idea was that it would be amalgamated with the Shannon Airport Authority and its revenue stream would go into it to keep the airport going. The airport is very important but compromising the Shannon free development company to buttress and make up for the neglect of the airport over a period of time by the Government was unfair and the wrong approach to take.

Reducing the role of Shannon Development in this country was a retrograde step for real regional development. In the 1980s, when we looked at regional development as an instrument to bring up all parts of Ireland at the same time, everybody cited the midwest region as a region all other places should replicate. The Government has lost sight of regional policy. It no longer matters. During the leadership of the former Taoiseach there was only one place which mattered to him and that was Dublin. That is reflected around the country. Some of the Deputies from his side of the House would probably accept that. There was no balance at all in developments across the country. Perhaps, because of the halt in building and the closure of industries, it may not affect some of the peripheral regions because there was nothing to be closed — they had all already closed.

Another area where Shannon Development took a very important role in north Kerry since 1989 is its involvement in tourism promotion and development. It built a totally new product in Tralee, made it into a tourism town and provided a museum and several other facilities. It was also involved in a number of initiatives in north Kerry.

Following very little debate and consultation with the main players, north Kerry was brought into Fáilte Ireland for tourism promotion and development. What has happened? Fáilte Ireland has no presence to any great extent. There is no development work, despite the fact it has a representative there who is doing his best. It took the focus off the area. As a result, products which were developed through hard work and the efforts of people such as my former team-mate Denis "Ogie" Moran, who spent hours and weekends promoting tourism products and meeting groups of people, have all now dissipated. All that good work is gone. There is no promotion left. We have products in the area but Fáilte Ireland is not promoting them to the extent that Shannon Development would have done.

There are other issues involved in this debate regarding raising grants, which I welcome. However, reducing its role and consigning Shannon Development to the scrap heap, which I hope will not happen, is bad for the region. This action by the Government has taken the dynamic out of the region and has not helped the midwest. I appeal to the task force, set up under Denis Brosnan, to look again at changing the role of Shannon Development and giving it more of a dynamic leadership role within the region so we could be back here in a few years looking at perhaps redefining its role for the sake of the totality of the region.

I wish to share time with Deputy Dooley.

Is that agreed? Agreed.

I welcome the opportunity to speak on Second Stage of this Bill, particularly on our industrial development agencies. I have heard the criticisms since I have been in the Chamber. It is important to reflect that the two main agencies, IDA Ireland and Enterprise Ireland, have been incredibly successful in the past number of years. The role of IDA Ireland in the growth and development of the economy has often been underscored. The organisation and its staff members have never been given credit for what was achieved during that time.

We need to reflect, even in incredibly difficult years such as 2008, that 130 FDI projects were won for Ireland by IDA Ireland, an increase on 2007. Even though in these times of credit crunch that performance will probably deplete this year, we still have talented people and an organisation that has refocused its activities in recent months in order to deal with the change in the climate with which we are dealing. There was a €2 billion investment in this economy through FDI sourced by IDA Ireland last year. I share the frustrations expressed by Deputies regarding regional performance. It is not what it could or should be. They have developed a comfort zone by going into the large cities of Dublin, Cork and Galway.

One of my concerns is that the Bill highlights the increase in the designation area for the BMW grant which was done through Europe but not here in Ireland. Those of us in the west believe IDA Ireland is deliberately using the Government guideline of 50% investment in the BMW region to develop places nearer to Dublin to try and reach that target, but at the same time it is not serving the spirit of what it was intended to. I hope that changes in the coming days.

There was some criticism earlier of Enterprise Ireland which is also unfair. It has a focussed role in supporting specific projects such as start-up companies which would often never get a start in the market place. Another of its roles which is often unheralded and unheard concerns its attempts to support community organisations and enterprise.

There is a gap in our industrial policy between the county enterprise board client and the EI client. We debated this at length but it needs to be addressed. I hope the Department will produce proposals. I agree with Deputy Varadker's comments in that the climate in which we now find ourselves requires a change in the designation of start-up businesses. Every business which is starting up should get some sort of support, be it from the enterprise board or Enterprise Ireland.

Enterprise Ireland has done much good work. Many of the missions on which it embarks, such as the telefairs to which Deputy Burke referred, are focussed on getting jobs and investment. Those of us who saw the images from New York last week of the EI-hosted event at which the Taoiseach spoke saw a very focussed event and a group of Irish business people meeting people who matter and have the capacity to make decisions for the benefit of the country. They are not just on a junket or a St. Patrick's Day holiday. Enterprise Ireland has a very strong role in this area and is an organisation we probably do not give enough credit to.

The role of regional policy has been well ventilated in this debate. There is enormous frustration, particularly among those of us who represent the regions, at the very patchy performance outside the key gateway cities. Coming from a hub town, I have seen little benefit from the national spatial strategy. Whether or not it was a political decision, we have seen little practical benefit from it and it may even have become detrimental to us at this stage.

It is important to acknowledge the global environment within which we operate. We are competing for industrial investment against cities the populations of which are a multiple of the population of this State. The days of scattering industry to every corner are gone. Equally, however, the policy of centralising it in Dublin, Cork and, to a lesser extent, Galway is also unacceptable. IDA Ireland has consistently challenged Members of this House in regard to the shortfalls that exist in terms of regional infrastructure. Its hands are tied to some extent. When visiting delegations are brought to regional areas, they see that the infrastructure is not what it should be.

The Government has taken action to address this infrastructural challenge in the last 12 years. Another Member referred to the significant investment in roads infrastructure. This is evident in my own constituency of Mayo. The change of Government policy when the Minister for Transport, Deputy Dempsey, was at the Department of Communications, Energy and Natural Resources allowed Mayo to connect to the gas network, thus offering an alternative to electricity as the sole energy source. Significant work has also been undertaken on water and sewerage schemes throughout the State. This work, which the House has undertaken on a cross-party basis in order to develop infrastructure and underpin industry, continues. We must work in co-operation with the development agencies. If we meet them half way, they too must begin to address the concerns we have offered in a constructive fashion.

I welcome the move by IDA Ireland finally to begin development of the enterprise park in Ballina, although I was concerned to hear Deputy O'Rourke talking about stone walls and lovely gardens but no industrial activity. We will deal with that issue when it arises. There is frustration at the way this project was handled and that it was not done in a more efficient way. I acknowledge the work done in recent years by Ms Maura Saddington and Mr. Jim Murrin to bring this project to fruition.

The environment in which the development agencies will have to work in coming years will be incredibly difficult. One wonders where globalisation stands in the wake of the credit crunch. The manner in which we have driven our economy in the last 15 years was with the objective of establishing ourselves as a player in the global market, as an economy offering a gateway to Europe and open to all the large international markets. The focus of our agencies will have to change until such a time as the dust settles on the current global difficulties.

Section 3 contains provisions relating to the various research and development grants, all of which will have to be refocused. For example, employment grants must be made less cumbersome and more employment-friendly. I hope the budget on 7 April will include measures to incentivise employers to retain and recruit staff. Likewise, training grants must be focused on keeping people at work as well as training those who have lost their jobs.

A review must be undertaken of the shareholdings vested in Enterprise Ireland and IDA Ireland in order to ascertain whether they are still relevant. Shares were purchased in the 1980s and 1990s in companies some of which no longer exist or are no longer relevant. This may be constraining the development of these companies. Those shares will never be cashed and we were never going to strike oil in most of these companies. This should be done as part of a general bookkeeping and tidying-up exercise.

Much concern has been expressed about a perceived dilution of the role of Shannon Development. We in Mayo always looked enviously at the work done by Shannon Development and the attention it was able to secure nationally. However, it is important that we examine the role of all the development agencies. It is undeniable that we have a significant number of these agencies on this small island. With a greater regional focus on the part of the agencies and a more targeted approach to regional development, we may all achieve our objectives in terms of developing our areas.

It is important to emphasise that the House is fully supportive of IDA Ireland and Enterprise Ireland. We all have our own regional concerns and frustrations but we must acknowledge that these organisations have done extremely important work in the last ten years and that their contribution will be vital in the years ahead. They are best placed to get us through the employment crisis we currently face. They best understand the international economy and what is required to promote the State as a location for investment. They have very talented people working both in the State and throughout the world on our behalf. They are delivering well to their target companies within the powers bestowed upon them under legislation. We must make that legislation more relevant to the current climate in order to give the agencies a brief that is less restrictive in terms of the types of companies in which they can invest. The development agencies have delivered well in the past and we can have trust and confidence that they will continue to do so in the years ahead.

I welcome the opportunity to contribute to this debate. I begin by welcoming the Bill but I also take this opportunity to clear up some of the inaccuracies and misinformation that have been generated in the House today. I am sure this misinformation has arisen because Members have been anxious to put forward the best interests of their constituencies. However, it is important to set the record straight.

The role of Shannon Development is a function of this Bill, albeit of a technical nature. Rather than being reduced, that role is enhanced in many ways by Government policy, particularly in regard to the recent announcement of the creation of a task force to deal with the fallout from the job losses at Dell and associated industries within the region. The role of Shannon Development is now quite broad and is encompassed within the role of the task force. Shannon Development will provide the task force's secretariat, with the chief executive of Shannon Development, Dr. Vincent Cunnane, acting as the chief executive of the tack force and Mr. Denis Brosnan acting as chairperson. They and their colleagues on the task force board represent a dynamic team that will be charged with dealing with the fallout from the significant volume of job losses associated with Dell's decision to move to Poland.

When discussing the development agencies, we must recognise their tremendous success. Politicians on all sides sometimes seek, for naked political reasons, to diminish the role of IDA Ireland, Shannon Development and Enterprise Ireland simply because no factory has been established in their parish or village. This approach belies the tremendous work and great success of our development agencies in attracting foreign direct investment and encouraging indigenous companies to become world leaders in their various fields. Like Deputy Calleary, I acknowledge the great work of IDA Ireland, Shannon Development and Enterprise Ireland, particularly on the international stage. It was a great source of pride to this nation to see representatives of these agencies highlighting their work during the St. Patrick's Day festivities in the United States.

We must recognise that they are competing against other countries, both near and far, for foreign direct investment. They do so with great skill and success. We should not, in focusing too much on parochial concerns, take from the tremendous successes they have enjoyed, many of which have been announced in recent weeks. Despite the significant global downturn, including the banking crisis and various other pressures, they have been successful in winning foreign direct investment for the State. It does not always follow that this investment goes to the place one might wish it to go from a political perspective. Ultimately, however, it is for the companies themselves to decide where on this small island they wish to locate their investment. There have been numerous examples where companies have been attracted to Ireland and their investment has been secured but they did not necessarily choose the location IDA Ireland or the Government would have liked. We should be grateful such companies have decided to invest in Ireland rather than Wales, Scotland, Greece or one of the eastern European countries. There are significant challenges in the current climate but also opportunities. Our agencies are working hard to meet those challenges and avail of those opportunities.

The changed role of Shannon Development will be beneficial both to the region it represents and to the agency itself. From the beginning, Shannon Development has been a pioneering agency which sought to develop new ideas and new enterprises and to take them to the next level. More recently, it may perhaps have become more of an operational entity, which was helpful neither to its own charter nor to the region it represents. Its strength and success was based on a pioneering nature and in being dynamic, generating new ideas, assisting and developing new and emerging technologies and manufacturing techniques, and bringing the process to a self-sustaining level. That is the benefit of an agency like Shannon Development, and there is a tremendous role for it in moving beyond that.

There was also some commentary here that, under a previous leader, the Government had sought to ignore the mid west or regions outside Dublin. In my constituency alone there has been investment in the N18 between Limerick and Shannon, the Ennis bypass, the Limerick tunnel, the inter-urban motorways, new terminals at Shannon and Cork and the visitor centre at the Cliffs of Moher.

The Shannon industrial zone is still the second largest industrial base outside of Dublin and all of the supports which went into developing that infrastructure belies the notion that this Government or any previous Administration led by Fianna Fáil failed in its duty to protect or promote balanced regional development. It did the opposite; it spent a phenomenal amount of money in developing that infrastructure to ensure the employment base was protected and investment was continued in order to protect that investment.

Members on both sides of the House have sought to diminish the role of Shannon Development but this would have been a foolish decision, had it been taken. It was correct to better identify and protect the role of Shannon Development. It is not possible to change the notion of taking away from a region like the mid west a support or development agency like Shannon Development. That area is different for others that are effectively greenfield locations. A development agency is required to protect what is already there.

The Shannon region has changed over the decades since the inception of industrial areas. At the outset, the businesses were involved in light engineering, manufacturing and assembly, and that was the profile of the companies located there. The companies located there at present, and the services and products they provide, are more high-tech. We have moved to a point where we are delivering sophisticated IT services, multilingual call centres, high-tech engineering and the development of next-generation microprocessors. Intel made an announcement recently in regard to developing at nanotechnology level the next generation of microprocessors. This is one of the most leading edge companies in the world developing the technology in Shannon, which is a tremendous recognition of the foresight of people in Shannon Development. These include Dr. Vincent Cunnane and Mr. John Brassil, the chairman of Shannon Development. In recent months and years, Shannon Development has built a close working relationship with the University of Limerick. Working in such a way, the area can continue to develop into the Silicon Valley of Ireland. I wish all concerned every success in that regard.

It is often said that Ireland is no longer competitive or capable of attracting manufacturing jobs. We are not a low-cost economy and we are unable to do the light engineering. We are not competitive in assembly or low-grade manufacturing like we were in the past, but we are capable of attracting high end high-tech manufacturing. The announcement by Zimmer last year is an example, as it develops medical equipment and artificial hip, knee and other joints. It is a high-tech company and I hope it will help to build a necklace of medical device companies between the Shannon and Limerick regions. Stryker is already providing a similar manufacturing technology in Limerick and we must work to ensure the region develops a particular skill set in the same way that some pharmaceutical companies are based in the southern part of the country.

Shannon Development is also considering moving from being just an operational base to pioneering the next wave of technologies. As a result of the proximity to the Atlantic and our desire to become more conscious of green technology with the tides, waves and wind off the west coast, there is an opportunity for Shannon Development to involve itself in developing the next generation of green energy. Working with the Government and universities in Limerick and Galway, there is a real opportunity to harness the Shannon estuary as a green park.

These are the types of ideas that must come from Shannon Development, rather than it resting on its laurels and remaining as a property management company. That is not the ethos of the body, and the management team, along with the board, is very focused on getting back to basic principles and the pioneering charter it had at the outset. That will ultimately lead to sustainable development and will ensure we have companies providing employment in a new economy, recognising the existing demands and requirements. This Bill takes cognisance of that.

Some people bemoan the fact that there is movement and change in the Bill. The changes proposed in the Bill have received strong support from the board and executives. They see it as the way forward and a way to get back to base principles in starting to develop for the future. I wish them well in that and I recognise the tremendous work done to date. I also recognise the significant efforts made by the IDA and Enterprise Ireland in working more cohesively.

I have noticed over the past 12 months a much greater level of cohesion between all the agencies in the region, although there is no doubt there were difficulties for some time relating to demarcation of the roles of Enterprise Ireland, IDA and Shannon Development, for example. That has been sorted out and the three bodies work well together to the benefit of the region. They now have a much closer and better working relationship with the Shannon Airport Authority. If they work together, we can deal with the significant fall-out from the decision of Dell. If we work together, we can achieve the success we need.

I am delighted to be able to speak to this Bill. I welcome many of its elements, including the increased grants and their direction towards research and development, which is extremely important. Enterprise Ireland will take over the indigenous business remit from Shannon Development in the mid west. Shannon Development's role has been beneficial to the mid west over many years and it was a blueprint organisation in terms of balanced regional development. It dealt with foreign direct investment through the Shannon free zone, indigenous industry, tourism and a range of other areas, which worked very well.

Enterprise Ireland has now taken over the indigenous industry remit in the mid-west region. At this juncture, it is critical that we examine the future role of Shannon Development. It has a very important role to play in the regional development of the mid west and it can take on the role of integrating all the services in the region through its CEO, Dr. Vincent Cunnane. Dr. Cunnane has been also appointed as the CEO of the employment task force, following in the wake of large-scale job losses arising from the decisions of Dell and other multinational companies in the mid west and Limerick.

It is critical that Shannon Development is retained and given an enhanced role. Its role in the Shannon free zone is vital with regard to foreign direct investment and tourism and it must become more active in the promotion of Limerick city. The gateway innovation fund was discontinued. That fund was vital for the mid west, which sought approximately €100 million for the development of Limerick city and other areas in the wider region. I ask the Government to consider this fund, which is vital to the region.

With regard to overall development, the Government has established the employment task force under the able and excellent stewardship of Mr. Denis Brosnan as chairman and Dr. Vincent Cunnane as chief executive officer. I called for a task force as far back as last November for a reason, namely, to be proactive and to deal with the situation that has evolved. In the past week, Denis Brosnan sent out a stark warning to those in Limerick and the mid west when he said that by the end of this year there will be more than 50,000 people out of a job and on the live register in the region. Furthermore, unemployment in the region is increasing at a faster rate than in any other area in Ireland at present and we will be looking at approximately 15% or 16% unemployment by the end of this year.

More than 2,000 people in Dell will lose their jobs in the next 12 months, 450 of them by the end of April. It is ironic that when the 1,900 manufacturing job losses were announced by Dell, the local Minister, Deputy Willie O'Dea, stated that negotiations where under way between Dell and the IDA, on behalf of the Government, that would bring 750 high-end jobs to Dell in Limerick. However, in the past week, we find it has been announced that, at a minimum, 100 jobs in the high-end area are to go.

The one issue of which I have been repeatedly critical is that no representative from the IDA is on the task force. The task force was established in the main because of foreign direct investment jobs being lost to Limerick and the mid-west region. I cannot understand why the IDA is not on the task force but the way the IDA has operated in the mid west and Limerick shows a lack of commitment to the region. If one compares Limerick to the other cities in Munster — Cork and Waterford — Limerick received 374 IDA-backed jobs in 2008 in comparison to nearly three times that number in Cork, which received almost 1,000 jobs, and Waterford, which received nearly 600 jobs. IDA-backed jobs only increased by 39 in a four-year period up to 2006 in Limerick and, furthermore, there were no new start-ups in Limerick between 2002 and 2004 and only one new start-up in 2005 and 2006. In 2007, 150 IDA-backed jobs came to Limerick and, as already mentioned, 374 in 2008.

This is a grossly inadequate response from the IDA and the Government when one considers that the live register figures for Limerick at end of February were 17,223 and, of those, nearly three quarters relate to Limerick city and its hinterland, almost 12,000 people. The Government and the Minister need to give a commitment, first, that the IDA will join the employment task force headed up by Denis Brosnan and Vincent Cunnane and, second, that the IDA will designate Limerick and the mid-west as a priority area. The figures do not suggest this is the case, given that Cork got nearly 1,000 new jobs through the IDA in 2008, Waterford got almost 600 and Limerick just over 370.

While it was known the Dell jobs in Limerick were at risk, it took the Government at least two months to set up the task force I called for back in November. People were being told by the Minister, Deputy O'Dea, on the day they were losing their jobs that the Government through the IDA had secured 750 high-end jobs with Dell. The people of Limerick and the mid west deserve better. The Tánaiste, Deputy Coughlan, and the Minister of State, Deputy McGuinness, must ensure that the IDA joins this task force and that we see a flow of jobs because we have seen no jobs in 2009. We need to see real commitment from the Government.

My understanding is that the employment task force headed up by Denis Brosnan is due to make an interim report to the Tánaiste in the first two weeks of May, little over a month away. It is critical that this interim report be elevated to a report that is actionable and that, whatever recommendations are made, the resources are put in place. Denis Brosnan, who is universally regarded as one of the greatest businessmen of his generation, is telling the Government there will be 50,000 unemployed in the mid-west by the end of the year and an unemployment rate of 15% to 16%. We need action and resources, and the report needs to be published. I understand it will be presented to the Tánaiste but it should be published because there is nothing to hide and we need transparency. We have a problem in that job losses in the mid-west and Limerick are escalating at a rate that no other region is experiencing in terms of acceleration and scale. It is critical, first, that the Government would insist or order the IDA to become part of this task force and, second, that it would ensure the IDA makes Limerick and the mid-west a priority area.

With regard to grants, we are members of the EU and, while I believe in the open market, I am also aware of the situation where the Polish Government was able to give Dell approximately €50 million to locate in Lodz in Poland, which certainly had an effect in terms of the Irish operation. I expect this will be examined at European Commission level to ensure this country is able to retain its comparative advantage in terms of bringing IDA-backed jobs and foreign direct investment jobs into the region. Shannon Development has a key role to play in terms of jobs in the Shannon free zone. Many people living in Limerick work in Shannon, as they have traditionally done. This is why the mid west must be made a priority region for industrial development by the Government.

To conclude, it is important we increase the grants that are available to industry, particularly in the area of research and development. The Bill will be scrutinised in greater detail on Committee Stage. I welcome the increase in research and development grants and the increase in the limited grants being given to industry. However, I want to take two warning shots. First, Shannon Development must be retained and given an enhanced role in terms of development for the region, particularly with regard to the Shannon free zone, tourism and the development of industrial parks. Any dilution of its role will be resisted by Limerick and the mid-west. Second, Enterprise Ireland is doing great work in the region but it needs to be given extra resources to prioritise where people are losing their jobs in companies like Dell. There is a wealth of expertise in these companies that could be utilised to set up small businesses. This needs to be co-ordinated between all the agencies, including Shannon Development, the IDA Ireland, Enterprise Ireland and the city and county development boards in terms of providing funding to enable people to set up in business. Feeding into this would be Tuas Nua, the retraining agency.

In terms of the task force, I am aware of the fantastic work Mr. Denis Brosnan and Mr. Vincent Cunnane, along with members of the task force, are doing. The task force, while great, does not include a representative of IDA Ireland and this needs to be rectified. I ask the Minister to state that this will be rectified immediately. I would also like IDA Ireland to commence looking after Limerick and the mid-west. Limerick has gained only one third of the number of jobs gained in Cork and half the number of jobs gained by Waterford. There were no new IDA Ireland start-ups in Limerick between 2003 and 2004 and only one between 2005 and 2006. Also, Limerick gained only 151 new jobs in 2007 and 274 in 2008 with no new jobs for Limerick in 2009 so far. The Government must acknowledge that IDA Ireland has neglected Limerick and the mid-west. This needs to be remedied.

The task force has a vital role to play. I would like the task force's interim report, when published, not only to be presented to the Minister, but also brought before the House for discussion. Furthermore, resources must be put in place to enable it to be an actionable report. Eighteen months is too long to wait for a final report given the circumstances now presenting and the resultant loss of high end jobs. Negotiations must be ongoing between IDA Ireland and companies like Dell to retain existing high end jobs and to secure further such jobs. I would like a response on this matter from the Minister, Deputy Mary Coughlan.

We were led to believe by the Minister for Defence, Deputy Willie O'Dea, following the announcement of the loss of 1,900 manufacturing jobs in Dell, that negotiations were already under way with Dell and IDA Ireland on behalf of the Government for 750 high end jobs. We were told this on the same day as 1,900 workers in Dell were told they would lose their jobs during the forthcoming year. The Government needs to show commitment to Limerick and the mid-west. The way to do this is to provide resources, based on the report from Mr. Denis Brosnan, Mr. Vincent Cunnane and the task force which will be produced in the first or second week of May. IDA Ireland must give priority to the Limerick region and Shannon Development must be given an enhanced role in terms of regional development for the mid-west and Limerick regions.

I look forward to hearing from the Minister that real commitment will be shown by way of resources in terms of the development of Limerick and the mid-west.

I wish to share time with Deputy Fergus O'Dowd.

This Bill seeks to put on a legal footing a policy decision taken two years ago that responsibilities for indigenous industry held by Shannon Development be transferred to Enterprise Ireland. This has been happening at an operational level for some time. This legislation gives legal effect to that decision and transfers shares and assets in various companies from Shannon Development to Enterprise Ireland. As the decision has been taken, I have no quarrel with the main thrust of the Bill. The legislation also deals with a series of miscellaneous items which, although interesting, are not central to the policy and can be dealt with on Committee Stage.

I would like to speak about Shannon Development's contribution and commitment to the region down through the years, which has been strong. Since its establishment, with Dr. Brendan O'Regan as the first chief executive, Shannon Development has contributed a great deal to the economic life of and job creation in the region. It has been innovative. For example, the Shannon free airport concept has been imitated all over the world. It was, in its early days, a great driver for jobs. It created innovative measures such as castle tours. Places like Bunratty Castle and other castles in Clare became magnets for the tourism industry, particularly tourists from the United States coming to Ireland through Shannon. This, too, was imitated throughout the world.

It was the first Irish region to establish strong links with the local university. It developed a strong IT industry in the Plassey Industrial Park and Shannon Airport with links to the university being the essential component. It is time now for more innovative thinking in this region. It is with some regret that Shannon Development's role has been diminished. While Enterprise Ireland is a worthy State organisation, nobody is jumping up and down applauding its success in maintaining or creating jobs in indigenous industry.

We have a serious problem in Limerick and the surrounding regions. The level of unemployment in the region is serious. Following the announcement of redundancies at Dell, workers there remain at work. The first redundancies are expected in April. Some 1,900 people, with a further 100 added following last week's announcement, are to lose their jobs. In addition, the sub-supply companies have announced redundancies of 600 to 700 workers. Mr. Denis Brosnan, following a preliminary look at the task facing him as chairman of the task force, has estimated that by Christmas 50,000 people in the Limerick region will be unemployed. This will make the region the worst affected by unemployment. We are not an independent republic. The unemployment levels in Limerick are a subset of what has been happening nationally. There is a serious jobs crisis nationally which is also reflected locally. I merely make the point that the incidence has struck harder in the Limerick region than anywhere else.

The difficulties of manufacturing industry in Ireland have been well recited as has our lack of competitiveness in comparison to Asian and European countries. Obviously, if one can get competent workers who will work for €4 per hour in Poland, one will find it hard to pay them €12 an hour for working in Limerick, which is one of the key problems. There is a further issue I would like to address this afternoon. Leaving aside manufacturing industry, the problems of which we are all aware — the Minister of State, Deputy McGuinness will be aware of this — hundreds of jobs are being lost week after week in our economy, including in the retail sector, garages, the entertainment industry and in small businesses.

These jobs are not being lost owing to a lack of competitiveness. There is no one, except one other pub down the street, competing with my local pub. People are not going to Poland or India to drink or for a weekend away in a hotel. These job losses can be put down to two crises, the fiscal crisis and the banking crisis. So far, the Government has failed to deal adequately with either of them. The issue is one of confidence. I know of many people who are as well off this year as they were last year. They may even be better off than they were the previous year but they are afraid to go out to dinner in a restaurant at night. People fear something dreadful is going to happen and believe they need to keep their money in their pockets and their savings in the bank. People are not spending. Perhaps the Acting Chairman will say how many 09 registered cars he has seen in County Louth?

Only Fianna Fáil ones.

Those who usually buy new cars can just as easily afford to do so this year as they could last year. It is a question of confidence. It is up to the Government to commence the task of restoring confidence. We have already had several budgets. I hope next month's budget will restore confidence. Confidence is seeping away because the Government is handling this crisis in an uncertain manner.

A plan is needed if we are to deal with the fiscal situation. When the Taoiseach announced earlier this week that he would implement the Brussels agreement on the debt-GDP ratio between now and 2013, he said he would ensure that Ireland adheres to its stated target, which is to limit borrowing to 9.5% of GDP, this year. I understood at that stage that a four-year plan was to be put in place, but the Taoiseach drifted away from that position when he spoke in the Dáil yesterday. It now seems that the relevant figure will drift upwards from 9.5%. I suggest that he is giving himself some elbow room, so that he will not have to hit the people so hard with tax increases or spending cuts. However, his actions are creating the impression that the Government does not know what it is doing. If the target is 9.5%, the Government should say that it will stick to 9.5%. If it intends to drift up to 9.9%, that is well and good. We know why that would be done. If the debt-GDP target were to drift from 9.5% to 10%, that would give the Government an additional €900 million to play with. When Ministers are sitting around the Cabinet table, it would be useful for them not to have to make cuts of almost €1 billion, or raise that much in taxes.

The Government's approach is creating uncertainty. The Minister for Agriculture, Fisheries and Food, Deputy Smith, said on television last Sunday night that a shortfall of up to €6 billion, rather than €4.5 billion as previously suggested, will have to be made up. Neither the Minister nor his advisers were able to explain it. We were given a confusing explanation of what is going on. I suggest that the Minister was confusing the effect of the budget over a nine-month period, which will amount to €4.5 billion, with the effect of the budget over a 12-month period, which will amount to €6 billion. When he was pressed, he could not explain it. As we try to encourage people to invest in the economy by buying houses or cars or by supporting the entertainment industry, it does not help that one member of the Cabinet, at least, does not have a clue what is going on. He proved in public that he does not know the difference between the nine-month effect of a measure and the 12-month effect of that measure. It is another example of the kind of behaviour that is sapping confidence.

The inability of the Government to deal with the banking crisis is also sapping confidence. The introduction of the guarantee scheme, the nationalisation of Anglo Irish Bank and the recapitalisation of the other banks helped to stave off a collapse. They kept the show on the road, but they have not restored confidence. Real action to sort out the banking situation has to be taken around the same time as the budget. The inability of the banks to provide working capital to businesses is costing jobs day in, day out and week in, week out. I have spoken to people from big industries and small industries. A representative of one of this country's major co-ops told me it cannot get working capital from the banks this year on a 12-month basis. The banks wanted to negotiate a flat-rate working capital arrangement in February. They will not admit that people in the milk business have to pay for an awful lot of milk in June and July, and therefore need a great deal of additional working capital in those months.

The co-op to which I refer is one of the biggest in the country. It will have to let people go if the banks do not give it working capital. They are not getting it, however. There is no confidence in the sector. When we have been trying to explain the jobs crisis, we have concentrated on the lack of competitiveness in Irish industry. However, I suggest that more jobs are being lost because confidence is lacking as a consequence of the inability of the banks to provide working capital to sound firms that used to get it in the past. That must be dealt with as well. If we are to restore confidence and protect jobs, tough action should be taken in the forthcoming budget to resolve the fiscal crisis. We may need to nationalise Allied Irish Banks and Bank of Ireland or take a majority stakeholding in them. I understand that the Minister for Finance is seriously considering the bad bank concept.

As I am keen to protect my constituency colleague, Deputy O'Dowd, I should inform Deputy Noonan that his ten minutes have expired.

Fine. I will come back to my——

Lean ar aghaidh. I can speak in a separate slot.

I will be brief. We need to resolve the fiscal crisis by taking action in the banking sector. We cannot afford the kind of stimulus plan that is being implemented in other countries. We do not have the resources to do what is being done in the United States, for example. We need to invest in certain sectors to stimulate them and increase confidence. In my home city, for example, the Government is regenerating the bad areas. Four major housing estates are already half-knocked down. If the construction phase of the redevelopment were to be commenced, some 1,500 people who have been made redundant could immediately go back to work.

I have already spoken about the lack of 09-registered cars on the roads. It is time to introduce a new scrappage scheme. The big advantage of such a scheme is that it would cost nothing. It is clear, taking into account the current rates of VRT and VAT, that the average tax take on each car must be approximately 48%. I suggest that between €2,500 and €3,000 should be made available as part of a scrappage scheme, as the Government would subsequently get almost €15,000 on every €30,000 car that is sold. A scrappage scheme would be a self-financing mechanism. I accept that this measure would encourage imports, but I suggest that in light of the way cars are being sold at the moment, we could afford to tolerate a small level of importation of cars. This scheme is necessary to try to keep people in garages working and to get cars sold again. People want to change their cars, but they are afraid to spend the money they have. A scrappage scheme might encourage them to start spending.

I propose that a similar scheme could be introduced to assist businessmen who are prepared to export some of this country's over-supply of cars. It is not that long ago since boatloads of cars were coming into this country from Japan. I understand that India, where people drive on the left hand side of the road, is in a position to take cars from Ireland and the UK for the use of its emerging middle class. I estimate that 400 million Indian people might soon be in the market to purchase second-hand cars. It is possible that an export market from Ireland to India could be developed. Our forecourts, which are full of cars that cannot be sold, need to be cleared out. If one tries to trade in one's car while buying a 09-registered car, half of all garages will not quote one a price. They will sell one a car on a cash basis but they will not do a trade-in. The pressure on the domestic motor trade has to be relieved. The lack of confidence in the marketplace is clogging everything up.

I ask the Government to consider providing a couple of million euro to promote home holidays. Too many hotels were built all over the country. Holiday homes are lying idle and hotels are empty at a time when people are wondering what they will do for the summer. If home holidays were promoted — perhaps hotel packages could be offered to Irish families — things might start working along the west coast. If we create a bit of activity, we will help to restore confidence. Much of what is happening in the county at the moment is self-inflicted. In the absence of consumer confidence, people will continue to save rather than start spending, which will leave us in desperate shape. We cannot afford a big stimulus package. It is possible to use small amounts of money as seed capital to get activity going in different sectors.

FÁS is not the answer for those out of work. It would be a good idea for the Minister of State to remove every barrier in the social welfare code and in employment law that prevents unemployed people from going for education and training. People who want to improve their skills should be encouraged to do so. I have seen various estimates of the amount of money each unemployed person costs the State. I have seen Government figures suggesting that the cost is €20,000. I have seen other Government figures suggesting that it is closer to €15,000. Regardless of the exact figure, it seems to me that unemployed people who improve their skills in regional technical colleges, while receiving social welfare payments, will be in a much better position to help themselves, their families and their country in the future than people who are signing on the dole and drawing welfare but not upskilling in any way.

The Government needs to put in place a four-year plan to solve this country's fiscal problem. It needs to be a plan to which everyone can stick. Initiatives need to be taken to restore a real banking industry here and to make credit lines and working capital available to small businesses. If such initiatives help to restore consumer confidence, people will begin to spend again. If a seed capital mechanism is used to kick-start activity in certain sectors, people will begin to spend again. One would still have job losses in manufacturing industry, but the Minister of State will be aware that located down along the main streets of every provincial town in Ireland are takeaways, small restaurants, coffee shops, bookies' offices, pubs, auctioneers' offices and building societies. They employ a great many people who are losing their jobs at present. It is happening every week and it is not even reported in the newspapers. Every Friday four and five people are let go, and in some towns the figure amounts to a couple of hundred in the week.

There is a way to stop this and it is the Government's responsibility to do so, but my main concern is about the Government. I exempt the Minister of State, Deputy McGuinness from this, because I know from our days on the Committee of Public Accounts that he is far-seeing, listens to ideas and is innovative. However, there are Cabinet Ministers who are like rabbits caught in the headlights of a car, paralysed in inactivity. They have a fatalistic approach to the country which amounts to, "We'll all be rooned," said Hanrahan, "Before the year is out.", but what can we do about it?

There are things that can be done. It is predicated on getting the fiscal package right and getting the banks working properly. If the Government gets that much right, and it takes the innovative steps I and others suggest, it could stop this and we might get people back to work again. At present, we are going down hill so fast it is scary.

Does Deputy O'Dowd wish to exercise 20 minutes?

B'fhéidir nach mbeidh mé chomh fada sin. Déanfaidh mé mo dhícheall.

I compliment Deputy Noonan on his practical, constructive and positive contribution and I want to build on a couple of the points he made, particularly in the context of County Louth.

The first point I will deal with is the figures for unemployment. A year ago there were 7,941 unemployed in County Louth and today there are 14,524. The following goes to the heart of Deputy Noonan's point. Of those 14,524, there are only 262 who are on the back to education allowance and 189 on the back to work allowance. That shows the failure of the system to encourage people to go back to work and to go back to education. Of those 14,524, there are 4,655 under 25 years. There is a failure of Government policy in this respect and I agree wholeheartedly with Deputy Noonan. We must change the way we think about these matters. We must open all doors to get people back to work and back to education. We have many queries. There have been some changes. One of the changes was that if one got a redundancy package and took the first available opportunity, one could get the back to education allowance, but in some cases that does not happen due to technical reasons. Throw away the red tape and let the people back to education.

Being from a Border county, it is important to say this. I can speak for the main street in Drogheda, in particular, and I am sure the Acting Chairman, Deputy Kirk, can speak as well for the main streets in Drogheda, Ardee and Dundalk. In Drogheda, there are 27 vacant premises in what was called the golden mile, the business centre of the town in terms of retail and bank activity. At this stage the traders and the business people of West Street in Drogheda and in the town centre are seeking a meeting with the local authority to discuss the fact that they cannot pay their rates. They are not getting the income and more businesses will close.

The Government needs to look again at what is happening in local government, and particularly in terms of ratable valuations. In the past the centre of a town was a much better location for generating income than it is at present, and that is why such rates are higher. The nearer one's business premises is to the centre of the town the more rates one pays. However, with out of town shopping, shopping centres and commercial activities now on the outskirts of towns, the focal point has changed to some extent and we need to re-evaluate how these centre-of-town business premises are rated. We need to consider issues such as a mandatory rates cap, a rates reduction and a rates holiday. Businesses in the centre of towns, particularly in the Border counties, a theme with which the Acting Chairman, Deputy Kirk, will agree, are being put to the sword. They are being put out of business because they cannot pay their staff and they cannot pay their rates, and hundreds of thousands of shoppers are going across the Border to buy products in towns such as Newry and Banbridge. All the activity is going north of the Border. The Government is not doing enough to tackle this serious issue in the Border counties. This applies everywhere, but it is particularly bad in Border counties. The Minister of State should examine that issue, meet with the chambers of commerce and the people involved in the commercial and business activity and ensure there is a new policy to get shopping back into the counties from where the people come, and to address, in particular, the issues that are driving people across the Border.

Another issue the Government needs to address is a simple matter, the planning system. If, for example, a new business of a different type sets up on West Street in Drogheda, one must apply for what is called a "change of use". A change of use application can take up to three or six months to process. In one case recently in County Louth, because there were objections of a commercial nature, it took up to 12 months for a person to open the door of a new premises in an area designated and used for hundreds of years as a business centre. Why does the Government not examine ways to fast-track planning issues, particularly around the change of use of business premises located in business areas? The process should be much simpler. One should be able to notify the local authority of one's intention to change the use of a business premises in a business area, stating the nature of the new business and, within a month, one should receive a letter to proceed. There could not be objections related to noise, for instance, in what are generally designated areas for businesses. There should be an open-door policy to let people in provided they meet the business criteria, for example, that their businesses are not noisy, dusty or smoky. Once the business meets the general designation needs, it should be allowed to locate immediately. That would certainly create jobs and free up availability.

Not enough is being done by the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, on cross-Border trade. There is no agenda to change the situation for business people south of the Border. She should be much more proactive in this regard. With respect, there is a laissez-faire attitude to the issue — let it happen, we can do nothing, we will bury our heads in the sand and maybe it will all go away. It is not going away; it is getting worse. The Government should meet the business people, change the VAT rate, change the way rates are levied on businesses in those areas and think outside the box about how we can make these matters easier and better for people.

Another problem arises for those who shop south of the Border when they deal with retailers such as Tesco and Marks and Spencer. I acknowledge that Tesco recently announced a change of policy on its sterling and euro mark-up, but that is not good enough because it has been ripping off millions of euro from Irish shoppers south of the Border over the sterling difference. Marks and Spencer do it in my home town. I challenged the company recently because the sterling price was on the product. Allowing for the euro, the product should have costed approximately €6.50 but it cost approximately €8. People are being ripped off. People shopping in some of these stores south of the Border are bringing with them, not just money or their Laser cards, but a calculator because they are concerned about being ripped off. Worst of all, suppliers from different parts of the country who may already have a business arrangement with some of these companies, particularly Tesco, are being asked to put up front in some cases hundreds of thousands of euro, or tens of thousands of euro for a smaller supplier, before that arrangement is renewed. This affects employment and good employers who supply to Tesco. The retailer says if the suppliers do not come up with that money by the close of business this week, it will not renew their contracts. That is happening and must be investigated with a hands-on approach. Representations have been made through the political system on some or all of these matters.

When people approach one with a problem about creating employment one wonders whether to telephone the IDA, Enterprise Ireland or the county enterprise board. Sometimes the agency one telephones says another agency is responsible and one goes from Billy to Jack. It is my personal view, not my party's view, that all the agencies should be amalgamated into one job creation agency, a one-stop shop with one telephone number. That organisation could allocate responsibility for issues internally. It makes no sense to have them split and wastes money and resources. We are not focused enough on how we can address all the employment creation problems people may have and to open up the blockages in a one-stop shop way.

The Government comes across as being unable to make a decision. It brought forward the budget and it did not work. It blamed international circumstances. We have had a very long lead-in time to this budget that will happen early next month. Cabinet meeting after Cabinet meeting is reported in the press. However matters are drifting and the Government is not showing the leadership, clarity of thought and decisiveness it ought to. Excluding the present Minister of State, Ministers are arrogant, out of touch and, as Deputy Noonan said, are like rabbits caught in the headlights of cars. The people are deeply unhappy with how this country is being run. While everybody acknowledges that there is a worldwide economic crisis, only one country has gone from boom to bust so quickly.

The Government predicated its expenditure over recent years on the sale of housing and property, which ultimately had to fall. It was the biggest con job of all. We often talk about pyramid selling and somebody at the end being caught. This country has been caught in the pyramid selling of houses. The people at the bottom of the ladder are the hundreds of thousands of people who have lost their jobs as a result of Government policy in this area.

The Minister for Finance, Deputy Brian Lenihan, has been on air recently telling the Opposition it should not tell the truth, that the world is listening to what we are saying. The world was listening to us and reading about what this Government did during the boom times. The world was listening when former Taoiseach, Deputy Bertie Ahern's stories were being recounted in the national press about the money being put in different safes and changing from sterling to euro and back again. The world listened to reports of all the rank planning corruption there was in the political system, all those who appeared before tribunals and some who will still appear.

It is a shame and a disgrace that this country has been run by the Minister of State's party for 18 of the past 20 years. I do not direct these remarks at the Minister of State personally. The people want and need a change. The only solution is a general election. The Government has lost its mandate. It is at sea in dealing with the economic crisis, is refusing to face reality and is missing out on the fundamental, practical and realistic suggestions people such as Deputy Noonan have put before us today. I look around here and the only speakers I hear are from the Opposition. I do not know why that is, but it is a shame.

It is timely that this Bill comes before the House as it gives everybody an opportunity to speak on a very pressing issue. I expressed my concerns on this on the Order of Business in the last few days. Our constituents are telling us about it. We need an opportunity to speak about restoring confidence in the economy. One of the things hampering this economy nationally and internationally is a lack of confidence. Previous speakers have mentioned that various factors have led to this erosion of confidence. One of these, unfortunately, is the fact that despite the best efforts of the Opposition and several Irish economists over the past ten years, nobody wanted to take any precautions against what might happen when the economy levelled out.

For some unknown reason the message was brought forward again and again that the fundamentals were right. However, as the Minister sitting opposite well knows, the fundamentals have not been right for nearly ten years. The whole thing was gone crazy. It was like a circus, a show ground. Everybody had their go. Everything was go. Every light was green. The problem is that when all the lights go green together, there is a crash. This is not new. People should not say, as they have done that nobody knew and we did not see it coming. I cannot understand why people did not see it coming because I, in my small, humble way, put down parliamentary questions to the relevant Ministers eight years ago asking them to address the issue of competitiveness in the economy. At first there was a slight recognition that there was a problem, but that eventually went away. It was boom time, we were all having a party, the Government wanted to party on, and this is where we have ended up.

The problem is that when reality dawns and suddenly people realise that measures must be taken, everybody gets frightened. People have been frightened for a number of reasons. One is that Government failed to manage. It is as simple as that. There is nothing complicated about it. There are statistics available everywhere through the IDA and the various development authorities all over the country which showed trends over the past number of years. Somebody convinced the Government, and it convinced itself, that we had become a high wage economy. Some Ministers were saying this. We were into high-tech business and value-added products of the future. We did not have to worry about where we were or where we were going. We were going to put it up to everybody else.

This was absolute rubbish. Once any country relinquishes its grip on manufacturing, a slackness on the grip on service areas automatically follows as night follows day. Any country in the world which has had a slackening in competitiveness in manufacturing will shortly afterwards find itself in difficulty. This has happened over the past ten or 15 years in various other economies in Europe and outside it. I cannot understand why nobody seemed to recognise this was going to happen here. Was it because we are the Irish? Are we special, a race apart, a chosen people? I do not think so. It should have been common sense to see what was coming.

We have two options. We can live in cloud cuckoo land, or we can take serious steps to recover lost ground. We can become competitive again, restore confidence in manufacturing and in those providing services and encourage competition within this economy that would be beneficial to our consumers and exporters as they compete for market in the world space.

In the past number of years the trends have shown that our exports were beginning to slip on international markets because they were not competitive. This has been looming and well flagged. We could not compete. Everything comes back to competitiveness. I echo the comments of previous speakers that the Government has a job to do, which is not to destroy the economy because that would have a further devastating effect. It must restore confidence, ensure competitiveness and, at the same time, encourage the population to support the measures that must be taken. The line emanating from the Government parties is tough decisions must be taken, hardship must be imposed and there will be no gain without pain. However, their policy is all pain and no gain on the basis of all the steps taken over the past six months. Who told the Government parties to proceed in the fashion it has? Did they not know their proposals would have a negative impact? If billions of euro are extracted from the economy, there will be a vacuum, which will lead to further erosion of confidence and tightening of the domestic markets.

Many commentators said we should await stimulus packages, which will resolve everything. A similar crisis occurred in the 1930s following the era known as "The Roaring Twenties". Everything was allowed to run riot in the 1920s, following the First World War. Confidence was restored and everybody was happy to spend. Then there was a massive economic crash with major implications. Many people say the crisis was resolved by President Roosevelt's inspirational New Deal and the Hoover plan. However, tragically and harshly, a war in which approximately 60 million died addressed the crisis. Was that not a high price to pay to restore confidence in the global economy? That happened because in the 1920s everybody thought everything would be easy and they would not have to work and so on. They could dream and get paid for it.

The crash happened and nobody, sadly and understandably, wanted to give up what he or she had because one cannot take from people readily and expect to be applauded for it. The war diverted people's attention. Suddenly it dawned on them that they were in a tight spot and they had to concentrate all their energies on the major danger on the horizon. That massive onslaught and human tragedy has been forgotten and nobody wants to hear about it anymore. Hopefully, we will learn from history and we will not have to go through that process again. Stimulus packages did not work in the 1930s when several attempts were made. When the war happened, everybody recognised they would have to survive together or not at all.

The Government parties must inspire the people at this time. They must lead and encourage them to bring them along. The Opposition has an important role as well. Our job is to challenge and to be in the Government's face at every opportunity to make it stand up its case and not to acquiesce. I do not want to hear lectures from Government Members about the Opposition bringing forward proposals. They have access to consultants and massive Departments. They claim we have been allowed access to Exchequer returns and, as a result, we should know what we are talking about. They have been looking at the figures for the past six months and every week they have come up with different conclusions. What are they looking at? They expect the Opposition to be suddenly inspired following a quick "now you see it, now you don't" examination of the figures. It is about time the Government parties got real. What are they at? This is a serious problem, which does not require such frivolity. The time has come for the Government to put its hand up and say, "We are very sorry. We got it wrong. We misled the people. We could have told it differently. We saw it coming and we did not tell you". The situation will be much worse if they did not see it coming.

The economy and the budget were debated yesterday. I question their relevance to industrial development.

This is a preamble.

I appreciate the Chair's assistance on the path to national recovery.

From hereon in, it will be important that we can rely on the information we are given and draw up plans, make projections and act on the basis of that information. I presume it is in order to refer to the competitiveness of the economy and the investment required to create employment for the people the Acting Chairman and I represent.

That is totally relevant.

During the Celtic tiger era, approximately 1,000 jobs a week were created, inflation was low and confidence was high but the reverse is the case now. Approximately 1,000 jobs a week are being lost, confidence is non-existent and while inflation, thankfully, is low, one can never depend on it. A number of commentators suggest it is too low.

Confidence and competitiveness are necessary for job creation and there is also a need to encourage manufacturing industry. Investment in value added products is positive and important, as it generates employment. Everyone would like a high wage economy but a medium wage economy can offer medium and high wages. The two groups, employees and investors, can coexist without difficulty but, in a high wage economy, nobody is happy unless everybody has high wages. Why did nobody recognise that? Provision has been always made in every other economy for investment in manufacturing. Perhaps it is not as lucrative for investors but manufacturing generates jobs and keeps money flowing in the economy, which is the problem we face currently.

Deputies Noonan and O'Dowd referred to the need to generate movement in the economy. Strange things are happening of which I am sure the Minister of State is aware. The lending institutions, which have the power to move the economy forward, are sitting on their hands, particularly in respect of small businesses which can give some employment in manufacturing or services and keep the wheels of the economy turning.

I spoke to a business man in the past few days who has been dealing with the same financial institution for as long as it has been around, but in order to renew his overdraft he had to produce his passport and various other credentials. He requires a substantial overdraft to run his business. He had to go to the ends of the earth to reassure the financial institution that he was genuine. Was that not rich given the recent history of some of the financial institutions? It is difficult for hard-headed business people who have been working all their lives to provide jobs for themselves, their families and others in their communities, to be asked by someone who in their eyes has no credibility to comply with certain requirements before according them a particular status.

The local planning process obstructs job creation and investment in jobs. That has been always the case as my colleagues across the House know. It might be timely to remind the local authorities of the need to encourage investment, to get things moving, even in a small way. Every little helps. I cannot understand why there is not greater emphasis on this because local authorities have a meaningful role through the county development boards and their other ancillary facilities and services.

Deputy O'Dowd referred to the markup in various supermarket chains. The Minister of State may wonder how that relates to industrial development but it all relates to jobs. I met somebody in the past couple of days who found that by importing spare parts directly, instead of purchasing them here, he could save 50% of the cost. I did not believe that but I checked it and found that it happens regularly. Deputies O'Dowd and Noonan compared markups in the commercial area. It appears that we are at a serious disadvantage, allegedly because of currency fluctuations, and higher costs that we cannot identify. We can contend with higher wage and transport costs although we do not welcome them. Where are the hidden costs that cause some imports to be so much more expensive when sold commercially here? The Government might initiate some inquiry into this important area.

The biggest job losses have occurred in the housing bubble that burst. I know the Minister of State will tell me that has nothing to do with the Industrial Development Bill but it could mean 100,000 jobs. The Taoiseach and the Minister for Finance have said repeatedly that we must return to traditional banking and lending practices. Let us for God's sake go back to them and start selling some of the houses at affordable prices. Instead of hankering after the luxury we lived in for the past six to eight years at the peak of the boom, we must try to sell the products we have now which in turn will lead to further job creation in the housing market and the manufacturing and services areas too.

I thank Deputies Varadkar, Rabbitte and Morgan and all the other Deputies who contributed to this debate. It was a very worthwhile and interesting debate on the Bill as was the journey on which Deputy Durkan brought us for the past 20 minutes.

It was a very important journey.

It may bore him somewhat that I must return to the sections of the Bill but if he waits he will find that interesting too. The comment that all of the debate came from the other side of the House was not exactly accurate. There were several contributions from this side as there were from the Opposition, expressing the same level of interest.

In respect of section 3, I too support the Oireachtas committee system. It is a great place to scrutinise legislation in detail and to deal with annual reports on money granted and spent under legislation passed, and the records of Enterprise Ireland, the county enterprise boards, my Department and other Departments. Maybe it should be used much more in respect of this type of legislation. There is oversight and scrutiny. I was a member of the Committee on Public Accounts under the chairmanship of Deputy Noonan. It is extremely important to take time at that level to scrutinise every aspect of a Department's expenditure. Those checks and balances exist in the committee system. It is a matter for us to use it.

The Shannon development agency exists for grant purposes, to manage tourism-related property and so on. Mr. Martin Cronin, the chief executive of Forfás, is a member of, and available to, the task force to which he responds on behalf of IDA Ireland, Enterprise Ireland, the Science Foundation of Ireland and FÁS. He has an input relevant to these bodies and feeds information to them from the task force. I hope that functions well.

I was asked about proof of job creation and maintenance by county enterprise boards and Enterprise Ireland. I was a member of a county enterprise board since they were first set up by former Taoiseach Albert Reynolds. This week in Dun Laoghaire-Rathdown we recalled that over that 15-year period the board supported 800 projects with €7.6 million in grants, creating almost 1,000 jobs. The same can be said of enterprise boards in my constituency and elsewhere. That is relevant for the micro and SME sector. They have expanded their activities to provide mentors and courses for upskilling management and staff. They engage constantly with chambers of commerce and other business agencies or representative groups. They are a positive feature of any local economy. Enterprise Ireland's remit takes in the county enterprise boards. There is now a seamless transfer of companies through that system right up to Enterprise Ireland level. A company can achieve this, as was demonstrated recently in a presentation by 71 high-potential start-up companies. The majority had come through the county enterprise board system and ended up as high-potential start-up companies. They launched their products and services recently at an exhibition attended by banks and other investors interested in supporting such companies. Enterprise Ireland invested approximately €22 million over the range of companies taking part and, on top of that, €169 million was leveraged. There is potential within the 71 companies to create 1,000 jobs over the next three years.

That is a measure of the activity of enterprise boards and Enterprise Ireland in this area. This story is told, not by politicians or Ministers, but by the market and by business people who, unlike many in this House, must put their money where their mouth is. They have to stand up every day and take on the banks in the current environment, as was mentioned in the debate. They must go to foreign places to create that marketplace, and access to it, in order to sustain jobs at home. There is a successful side to the economy and what is going on, even now. This is relevant to research and development and to job creation but is particularly relevant to the successful story that Enterprise Ireland and the county enterprise boards can tell.

Foreign direct investment was mentioned, as was the notion that the indigenous sector is weak. The indigenous sector has created approximately 800,000 jobs. If one includes Enterprise Ireland and foreign direct investment, each body has created almost 150,000 jobs. That is a good representation of the jobs being created by all those bodies. Each one makes an effort and I believe they give value for money. They give Ireland international representation and they create those jobs in a very confident way, bringing other jobs back to Ireland by way of foreign direct investment. They sustain and create such jobs through Enterprise Ireland and its activities. There is a lot going on and a strong engagement with Enterprise Ireland and the enterprise boards is required to understand that success story. Let us not lose that story in the course of this debate, while acknowledging these are challenging times.

Deputy Mary O'Rourke and others made points about the banks. I spoke about this matter in the Chamber yesterday during another debate We recapitalised the banks and they tell us they will make €100 million available for enterprise and to create seed capital funds and so on. We have oversight now in that we can look into the banks and see exactly what are their lending criteria. Many more millions of euro have been made available through the European Investment Bank and are now included. Money should be made available to the micro and small and medium-sized enterprise sectors in this country to encourage them to do business and to bridge the gap between these very difficult circumstances and the success that can follow after this downturn begins to pick up. We can play a role in the global market.

This message clearly has to go to the banks. I do not mind saying this, either as a politician or in my role in business. Strong evidence has been given in this House and outside that banks are not lending freely. We do not want them lending as freely as they did hitherto but within normal banking criteria. They are not lending as they should to the business sector. As Government, we must say to them that we want a clear line of action between the banks and the SME sector and business. We want them to ensure that businesses are able to continue and to create jobs while sustaining their current jobs. The group formed to examine the banks' lending criteria must take a firm hand. The banks are not lending the way they should. I have plenty of evidence of this from my business, from other business people and from stories that have been told in this House. We must continue to put pressure on the banks to ensure they deliver in a sensible way to sustainable businesses. These must not be locked out and when businesses approach banks for loans or new facilities we must ensure they do not walk out without the new facilities but with increased interest rates and bank charges.

I agree with the former chairman of the Committee of Public Accounts, Deputy Michael Noonan, and with Deputy Fergus O'Dowd, who made very worthy suggestions about kickstarting various sectors of the economy. I made the same point as Deputy O'Dowd with regard to local authority charges and fees. We need to examine them. Each political party in this House must talk to its representatives on local authorities and we must again consider a radical overhaul of the funding of local authorities. I have no difficulty with that. That is what we should be doing. As businesses continue to reinvent themselves quickly to catch up with the market and play their role there, Government, in turn, must make similar decisions to support that course of action. Like businesses, it must make decisions in real time. That is a challenge for Government. Governments do not operate that way. They usually chase the problem and then try to deal with it.

That is the radical shift we need to see here, just like the one we should see in the debates in this House, namely, acknowledging what is said by opposing parties. I did this last night in response to Deputy Coveney. A contribution can be made in that way. I am thankful for the Opposition's support for this Bill which will shift it through the House and through Committee Stage. Our new approach will benefit the work of Enterprise Ireland, the IDA and the other agencies.

Deputy Mitchell spoke of tourism and adding value to it. I was at an exhibition in Scotland recently that was visited by 37,000 people in one day. The challenge for us in this part of the country is to encourage an all-island approach. When Tourism Ireland or Enterprise Ireland take that approach — in Enterprise Ireland's case working with companies from Northern Ireland — there is an added curiosity abroad about what we are doing here. There is greater support for the package of companies we have on offer and for their services and products abroad. There is an almost immediate forthcoming in terms of support and purchasing. We must trade more on this factor.

Deputy Rabbitte asked some specific questions. The €1 billion I mentioned refers to the 2008 export performance as against the 2007 performance. He spoke about research and development and the commercialisation that arises from that. This week I launched a guide to good practice in innovation and product development processes which describes what commercialisation is about. We must explain what we do with research and development, how we commercialise our product or service and how it is funded to get to the marketplace. There is a need for support in research and development but also in commercialisation. The latter involves internationalising a company in order to sell its product abroad. That means the high-potential start-up and all it entails. The document I launched explains this. I hope it will encourage Government to continue funding not only research and development but all the steps required afterwards to bring a product to the marketplace and make it happen for the company involved.

Deputy Rabbitte also asked about the figure of 2 million persons at work, to which I referred. That is the latest figure. The next figure might be short of 2 million but whether it is above or below that line it is a hell of a lot different from the 1.1 million it was some time ago. We are starting from a different base. I offer that information as answer to his question. The article on commercialisation in The Irish Times concerns the same issue and the same answer applies.

Deputy Morgan mentioned the use of embassies abroad. The greatest success Enterprise Ireland meets abroad is when the embassy and the agency offices work together. I saw this done in Russia and one sees it constantly in London across the sectors. The embassy staff are involved and the embassy building is used. Business people are there working on behalf of, and for, Ireland abroad, attracting new markets. That work goes on constantly within Enterprise Ireland on their trade missions abroad.

In answer to Deputy Morgan's question regarding interpreters and assistance for companies in accessing markets, Enterprise Ireland and the IDA maintain a number of offices throughout the world which can offer these services. They offer particular assistance to companies wishing to enter difficult markets. The most recent example of this is Enterprise Ireland's first toe into the Latin American market, which helped Irish companies to win orders worth €25 million. We expect to build our way into these markets from this base. Irish food companies such as Glanbia and the Kerry Group are operating very successfully and employ some 5,000 people in the region. The accumulated value of goods and services sold in Japan during this period was €60 million. There is huge potential to internationalise relevant research and development conducted in Ireland in the area of food, technology and farming. We can also attract companies back to Ireland as foreign direct investors because we are seen as an innovative, creative and enterprising nation.

Further collaboration is needed between Enterprise Ireland, the IDA and academia. We must persuade large and small companies to engage with third level students so that they understand what is required by the market and can thereby meet their educational and employment needs. County enterprise boards are expanding that engagement to secondary level and I would like to see a similar engagement at primary level because otherwise we will not serve the next generation well in terms of building a knowledge economy.

I look forward to discussing the Bill further on Committee Stage and thank Deputies for their contributions.

Question put and agreed to.
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