Priority Questions

Job Creation

Richard Bruton

Question:

1 Deputy Richard Bruton asked the Minister for Enterprise, Trade and Innovation the planned net effect on employment of the Government’s four year national recovery plan; and if he will make a statement on the matter. [45798/10]

The national recovery plan published last week presents a detailed strategy for further economic recovery which will restore stability to the public finances, improve our international cost competitiveness and provide the necessary support to our enterprises. A range of actions are set out in the plan aimed at further improving our cost competitiveness and removing barriers to job creation. These actions are aimed at improving the overall business environment so that all firms can maintain and create jobs. There are also actions aimed at supporting labour intensive sectors of the economy including agrifood, retail and tourism.

The Government has prioritised capital investment for the enterprise agencies with an allocation of €2.2 billion over the next four years. This will enable the agencies to support Irish businesses, win new foreign direct investment and support research, development and innovation. The economic analysis summarised in the plan projects a cumulative increase of about 90,000 jobs over 2012 to 2014. It is expected that unemployment will consequently fall to below 10% by 2014.

Is the Minister aware that over the past four years employment created by the State enterprise agencies has fallen by 45,000 jobs? While they may have created just over 150,000 jobs, they have lost 200,000 jobs in that time. The agencies have found employment for 272,000 people. The Minister expects them to double this with 300,000 extra jobs, 150,000 direct and 150,000 knock-on jobs. Is this a credible figure? What allowances have been made for job losses in the next four years?

What specific policy changes does the Minister believe will bring these changes about? Has his prediction for 90,000 new jobs, which includes 20,000 jobs over the next two years, been changed by the EU's downgrading of the Government's growth forecast? Has it forced the Minister to rethink his employment strategy? Has he specific initiatives in areas such as credit for business for example, as they seem to be absent from the plan?

For the first time ever, we have put together an integrated plan. All Departments and agencies have been brought together and challenged to come up with realistic and deliverable plans. I have indicated to IDA Ireland and Enterprise Ireland that the Government is prepared to put the necessary funding in place that would allow them to achieve the targets they have set.

These targets are challenging but the agencies are convinced that with the pipeline available to them, they can attain those targets. The great advantage of foreign direct investment and the indigenous sector is that for each job created, another spin-off job will also be created.

The Government is happy with the predictions for economic growth. I accept there are divergences between the various ones. The ESRI, for example, will forecast a higher growth rate than the Department of Finance. If one takes the individual entities contained in the recovery plan, it is reckoned, for example, the tourism sector will bring 80,000 jobs. IDA Ireland and Enterprise Ireland are determined they will create 150,000 jobs and are satisfied they will achieve this.

Does Deputy Bruton take issue with the projections of the IDA and Enterprise Ireland? Does he believe, even with their resilience, that they cannot match the figures they have stated? Is he aware of the outstanding response IDA Ireland is receiving abroad, particularly in the United States?

The Minister is treating me as the Minister by posing questions. Hopefully, it is a sign of things to come.

Deputy Bruton might give us some answers for a change.

Does Deputy Bruton believe the IDA and Enterprise Ireland have set themselves realistic targets? Is he questioning their ability, integrity and professionalism, all of which have served us so well since they were founded, to deliver what they predicted?

I will have to take extra time to answer the Minister's questions.

That is the danger on Priority Questions.

I am afraid you will have to indulge me a little bit, a Cheann Comhairle.

We were told the plans for the smart economy and the innovation taskforce, for example, were integrated plans. Everything that comes out of the mouths of Ministers is about integration and yet nothing changes.

What level of job losses does the Minister predict in the enterprise sector? Last year, while he presided, there were over 40,000 jobs lost from the enterprise agencies. Now, miraculously, the Minister informs us there will be no more jobs lost and every new job will have a knock-on one. The record stands that for the 150,000 jobs created by the IDA, it has lost even more. The Minister did not refer to this when he launched the national recovery plan. He is trying to pull the wool over people's eyes when the stakes are far too serious for this country.

I believe the IDA and other agencies can achieve high goals if the proper policy instruments are used and the Minister responsible does not stick his head in the sand when it comes admitting jobs were also lost. Can the Minister indicate one planned initiative that will support enterprise? Will we have, for example, the promised credit guarantee scheme? He was the first Minister to admit that the banks were not lending, but now he seems to be signing up to documents that say the problem is cured. Perhaps he has become part of the system and will not listen to ordinary people in business.

I have been around a long time and have spent 20 years listening to what people have to say. I hope that I am well grounded and have a logical, commonsense approach. I need no lectures on not listening to people. When I hear Deputy Bruton talking about jobs and not reaching targets, I think of Fine Gael's NewEra policy, which made fun of creating jobs.

On a point of order, either Question Time is about Ministers accounting for their stewardship or it is not. I asked specific questions but I have not even received an answer to the first one.

I do not have responsibility for the answers that are given.

I know that, a Cheann Comhairle, but you do have a responsibility for the management of time and ensuring that people are not allowed to indulge in some things.

That is what I was endeavouring to do.

The Minister does not want to be accountable to the House.

I am sorry the Deputy is so sensitive.

I am not sensitive at all. This is about holding the Minister to account, not holding me to account.

I wanted to quote back the Deputy's own words to him, as he knows so much about job creation. In that policy document, he said, "The essence of the New Era was not about creating jobs". He was preceded by Deputy Michael Noonan who claimed that the jobs target in the NewEra programme was a public relations add-on. Deputy Bruton now tries to lecture me on what is an outstanding record in job creation. My Ministers of State and I have an outstanding record in involving ourselves with the IDA and Enterprise Ireland——

Since the Minister will not answer the questions, I will lay his record of job creation on the clár so that people can examine it.

We must move on to Question No. 2.

——in terms of trade fairs and initiatives that will bring about the jobs that have been announced by us. We have a commitment and determination to work with those agencies to ensure that the job predictions we have outlined will in fact be delivered.

Is that the Minister's answer?

National Minimum Wage

Willie Penrose

Question:

2 Deputy Willie Penrose asked the Minister for Enterprise, Trade and Innovation the number of persons currently on the national minimum wage; the financial benefits, if any, that will accrue to the Exchequer arising from the announcement in the four year plan to cut the minimum wage by one euro; if he had sought or received any report from the Labour Court before making the decision to proceed with a cut in the minimum wage; and if he will make a statement on the matter. [45683/10]

The CSO's National Employment Survey 2007 provides us with the most recent comprehensive overview of earnings in Ireland. According to that data, in October 2007, 4.9% of employees in Ireland — or 83,700 people — were earning €8.65 per hour or less. Due to methodological difficulties, it is not possible to estimate precisely the number earning exactly the €8.65 rate.

While that proportion is low, those workers are concentrated in a number of vulnerable sectors. For example, some 9% of workers in retail and 11% in hotels and restaurants, earn less than €8.66 per hour. Furthermore, the latest advice available to us states that the minimum wage sets a baseline for wage negotiations. It is assumed that wages up to 1.5 times the minimum wage are impacted by changes in the rate, and up to 30% of wage rates may be affected by a change in the national minimum wage.

The research published last week by Forfás, and advice following from it, is clear when it states that a reduction in the national minimum wage will result in an increase in employment in the medium term. It is important to point out that the reduction in the minimum wage is one element of the labour market reforms outlined in the national recovery plan, which also include the review of sectoral agreements, new labour market activation policies and welfare policy. We all agree that the State must act to remove any legislative and policy obstacles to job creation.

It is expected that there will be a benefit to the Exchequer in terms of savings from reduced transfer payments and increased taxation that will accrue from the increased employment arising from a far more flexible labour market. With regard to the last element of Deputy Penrose's question, I outlined in a reply to a parliamentary question on 13 October, that in November 2008, ICTU requested the Labour Court to review the national minimum wage and to make a recommendation concerning its adjustment. The court subsequently invited submissions on the issue and also held discussions with relevant parties.

In February this year, ICTU requested the Labour Court to defer any further consideration of the matter for the time being, saying that it would be in contact again with the court in the second half of the year when the economic outlook might be clearer. During this period, a recommendation from the Labour Court was still awaited.

On 23 November, ICTU informed the Labour Court that it was formally withdrawing its claim for an adjustment to the national minimum wage. Accordingly, the Labour Court's involvement in the matter has now concluded.

Of all the things that emanated from the Government's four year plan, the 12% cut in the minimum wage was proof positive that the least well off and most vulnerable were fair game. The reduction in the minimum wage of €1 per hour will have the most profound impact on the poorest in society. It will hit women and children particularly hard as the majority to those in receipt of the minimum wage are women.

What is the rationale for cutting the minimum wage? In all consciousness, how can one justify asking people who are on the minimum wage to bear the burden for the Government's profligacy and the bank bailout? This measure will not reduce the fiscal deficit by one cent. Was it introduced as part of a neoliberal economic orthodoxy?

Has any cost benefit analysis been done in this context? The Minister now says that 80,000 odd people are affected, whereas the other day he said the figure was 52,000. Does anybody know what the real figure is? A large number of those involved are under 18 years of age, so they are already below the minimum wage level.

This reduction will have a significant knock-on effect for the Exchequer in so far as it will not save a single cent. It will cost the Exchequer more, in fact, since more people will now be entitled to the family income supplement, secondary benefits, medical cards and lower local authority rents. Has any cost-benefit assessment been made of its impact on the Exchequer, apart from the impact it will have on poor people?

The national minimum wage was introduced in April 2000. At that stage, it was the equivalent in Irish pounds of €5.59. It currently stands at €8.65. Since April 2000, it has increased six times and is now 55% higher than the original level. In contrast, by the end of this year the consumer price index is forecast to have increased by approximately 28% since 2001. We have therefore had a 55% increase in the minimum wage compared to a 28% increase in the consumer price increase in the same period. The current rate is significantly higher in real terms than the wage when it was first introduced. It will still be higher even with the reduction.

I share Deputy Penrose's interest in those who are least privileged. The ultimate aim is to give people a job. Forfás has produced research to show that by reducing the minimum wage we can create employment. As a member of the Committee on Enterprise, Trade and Employment, the Deputy knows that many organisations have appeared before that body to state that the minimum wage is too high. They said they would be in a position to create jobs if it were to be lowered. If we can potentially create 10,000 jobs in the medium term, that will allow people to come out of the poverty trap and into the working environment. In turn, that will increase Exchequer returns and taxation rates, as well as giving people a chance to participate in the labour force.

Is the raison d’être of this minimum wage cut to set off a cycle of depressing wages across the economy? This applies to catering and other sectors that gave evidence to the committee. None of them said that the national minimum wage was of paramount importance, although they did refer to REAs and VROs, which I agree should be modernised and streamlined. Section 41 of the National Minimum Wage Act provides that companies which are unable, or find it difficult, to pay the minimum wage can apply to the Labour Court. Is it correct that not one company has applied to the Labour Court under that inability to pay provision? Is it the Government’s intention to introduce the forthcoming Social Welfare (Miscellaneous Provisions) Bill to effect this? Legislation will be required in the context of setting the minimum wage.

There have been considerable reductions in wages over the past number of years across every sector of the economy, except this sector. I welcome the Deputy's commitment to the reform of the JLC system and we will make proposals on this in the coming weeks. Deputy Penrose is correct that there has been no claim under the inability to pay provisions. However, employers' groups suggest it is because of the restrictive nature of the provision. We are examining this and considering introducing inability to pay provisions in other sectors using the JLC system and making it more flexible. However, this will be done in a way that protects employees. It is important to strike a balance.

Regarding the legislative matters, we are in consultation within the Department and with the Department of Finance to bring forward these changes legislatively in the coming weeks.

Economic Competitiveness

John Perry

Question:

3 Deputy John Perry asked the Minister for Enterprise, Trade and Innovation the additional supports for micro and small enterprises contained in the Government’s four year national recovery plan; the progress made in implementing commitments made at the Small Firms Association annual conference; and if he will make a statement on the matter. [45799/10]

There are a range of actions included in the national recovery plan aimed at improving Ireland's cost competitiveness and removing barriers to employment. These particular actions are not aimed at firms of any particular size, in any particular sector or particular ownership. They are aimed at improving the overall business environment in this country so that all firms can survive and grow, including Irish SMEs and entrepreneurs.

Specific actions have been included to stimulate growth, in particular in labour intensive sectors including agrifood, tourism and retail. I would like to highlight a number of actions of particular benefit to SMEs. The 15 day prompt payment rule will be extended beyond Departments to the wider public sector in order to assist the cash-flow of SMEs.

In order to encourage small business development, the potential for providing access to vacant or under-utilised public property for entrepreneurs or business start-ups to use as incubation centres will be investigated. The business expansion scheme will, subject to European Commission approval, be overhauled and improved into a new and better-focused business investments targeting employment scheme, BITES. The aim of the review is to make it less administratively complex for business. In addition, capital investment for the enterprise agencies has been prioritised with €2.2 billion being allocated to support indigenous firms, win foreign direct investment and support research, development and innovation.

The Deputy's question also refers to commitments I made at the Small Firms Association annual conference. I spoke about a number of issues at the conference. I gave an assurance that measures to further reduce costs to business would feature alongside our policies to reduce the deficit and drive public sector reform. My commitment is reflected in the content of the national recovery plan.

I am ensuring changes that deliver real benefits to business are made. The Companies Registration Office e-filing and e-signature facility has already delivered €29 million savings for companies and has the potential to offer further savings. In addition, the new guidelines from the ODCE on company headed paper will save companies more than €13.5 million in costs. My officials are working with their colleagues in the Department of Finance, the credit review office, Enterprise Ireland and Forfás to address access to credit issues for viable SMEs. A working group has been established to look at a number of possible actions including options for a loan guarantee scheme. The group is due to meet again shortly. I am also finalising proposals for the restructuring of the county and city enterprise boards and intend to bring these to Government shortly.

The Minister has failed to deliver on the commitment on the loan guarantee scheme in September. In light of the fact that many jobs are being lost in small companies while job retention and job creation is at risk, in light of the State ownership of the financial institutions within the State, has the Minister failed to deliver credit to small companies that are closing down as a result of the lack of cash from banks, regardless of the banking guarantee scheme the Minister claimed in September would be introduced?

It is a fair question and I am happy to pinpoint the recapitalisation of the banks. Part and parcel of the recapitalisation was a commitment that Bank of Ireland and AIB would provide €12 billion over a two-year period from 2010 to 2011. That fund was put in place. The Ministers of State and I conducted a roadshow because we wanted to point out that the banks were not dealing with SMEs in an equitable or logical fashion. After the roadshow, we met senior and middle management in the banks and impressed upon them the need to ensure this was put in place. We also charged Mr. John Trethowan with measuring the performance of the banks to see if they were giving out loans. Interestingly, two weeks ago Mr. Trethowan produced his second report. He said he was now satisfied there was a significant level of credit made available to the sector. I do not walk away from the idea that we may need a type of loan guarantee. We have considered particular sectors, such as the ICT and export sectors, that may require assistance. Mr. Trethowan agreed with us and Department of Finance officials indicated there may be a case for a limited guarantee. This may amount to 4% of the totality of credit available to SMEs. We are working on this and we expect a further meeting with Mr. Trethowan over the next two weeks. Over the past number of weeks, with the national recovery plan and the budget, it was not possible to arrange a meeting but it is our intention to have further meetings with him to make progress on this.

I have regard for the Minister's intention for small businesses. Regarding the commitment of the banks and the €12 billion fund, is it not the case that the banks do not have the money in light of the revelations of the past number of weeks? While they talk the talk and they may go on the roadshow, this concerns putting money into viable businesses that can retain jobs. The banks issue many caveats on loans. I know the Minister's motivation with regard to enterprise boards and his plans for rationalisation and change, which I welcome. Being in business, I know the difficulties for so many people who depend on suppliers to bankroll overdrafts. Overdrafts are being withdrawn. I got feedback from the roadshow but on the ground, it is not happening.

I note the point made by Deputy Perry about the banks and the information they provide about the level of loans to SMEs. Mr. Trethowan is an experienced banker and a former chief executive who knows banking business. The banks make quarterly returns to Mr. Trethowan. I can only depend on the intelligence of this man, who I met with on several occasions and with whom I am absolutely impressed in respect of integrity and professionalism. I am satisfied when he says matters have improved over the past six months. What applied six months ago no longer applies. There are businesses that overextended, became involved in development and purchased property. They have a cash flow problem and the reins have tightened in terms of credit. That will make a difference to businesses but he is satisfied viable businesses can have recourse to credit. The number of complaints to our offices reflects the fact that there is a significant improvement.

Industrial Development

Kieran O'Donnell

Question:

4 Deputy Kieran O’Donnell asked the Minister for Enterprise, Trade and Innovation if the cap on the capital expenditures by the enterprise agencies in the National Recovery Plan will impact on the jobs targets; if it is envisaged that the national pension reserve fund can be accessed for investments in four key export areas technology, pharmaceuticals, food and tourism; and if he will make a statement on the matter. [45438/10]

The Government remains committed to investments which make the greatest contribution to economic recovery and underpin the creation of sustainable employment. My Department's revised capital allocation as set out in the national recovery plan is €2.182 billion for the period 2011 to 2014 with €508 million being invested next year and then €558 million annually between 2012 and 2014.

The 2011 capital allocation in the four year plan is 5.7% up on the 2010 allocation of €480.7 million. The 2012, 2013 and 2014 allocations of €558 million are approximately €80 million or 16% above the 2010 allocation. This sends a clear message of our commitment to supporting job creation and enterprise.

The allocation of capital funding will ensure that the enterprise agencies' core programmes are sustained and targeted. This will include actions to position Ireland as a global innovation hub. With export growth underpinning jobs growth, funding will be used to assist companies to grow exports and will focus on supporting companies in key areas such as building competitive advantage, accessing finance, reinforcing leadership and management development skills.

IDA Ireland investment to embed, transform and grow the FDI base in Ireland in support of jobs and exports has been completely protected. Significant additional funding will be provided to drive the development of innovative enterprise through company research and development grants; to enhance the opportunities for commercialisation to ensure that the best use is made of research with commercial and market potential; and to encourage collaboration between industrial and third level institutions.

Enterprise Ireland will receive a capital allocation of €130 million for activity in the area of science technology and innovation. That is an increase of €9 million or 7% on the 2010 level of funding. An increased allocation to Science Foundation Ireland in 2011 will send a very strong message both nationally and internationally that our focus on driving the smart economy is on track. This investment has been critical to IDA capacity to secure RDI-related investments currently running at €500 million per annum. It also supports indigenous companies reliant on knowledge for growth and job creation.

The capital allocation for my Department and agencies and other measures outlined in the national recovery plan will support the achievement of the targets in the Government's integrated trade, tourism and investment strategy, Trading and Investing in a Smart Economy, including the target to create 300,000 new direct and indirect jobs.

On the second part of the Deputy's question, responsibility for the management of the National Pensions Reserve Fund is a matter solely for the NPRF commission. As indicated in the national recovery plan, the Government will help identify public infrastructure investment opportunities for the NPRF and other private investors.

If it was not so serious it would be very funny.

I wanted to be as comprehensive as I could.

The Minister takes the biscuit. If it was a comedy show it would be great but this is about jobs and the economy and people's real lives. The Minister did not answer any of the questions I asked. The first question was about the national recovery plan. The Minister is cutting the capital budget by another €800 million. What impact will that have on the 150,000 jobs?

The amount in the National Pensions Reserve Fund is €24.5 billion based on figures from 30 September 2010 report. A total of €7 billion has already gone into the banks. Another €12.5 billion of that is being poured into the banks as well. How much will be available from the National Pensions Reserve Fund for job creation projects? How many jobs does the Minister expect will be generated from the €12.5 billion that is going into the banks?

Did Deputy O'Donnell quote a figure of an €80 million reduction in the capital budget?

It was €800 million.

If one looks at the capital——

There is a big difference.

If one looks at the capital——

Is the Minister not aware of what is in the national recovery plan?

I wish to advise Deputy O'Donnell of what is in my capital programme. The capital review for 2011 has an allocation of €508 million. A total of €558 million will be allocated each year up to 2014. That is outlined in the national recovery plan. The revised capital allocation for my Department in the four year recovery plan is a total of approximately €2.2 billion over four years. The allocation of €508 million under the four year national recovery plan is an overall reduction of €37 million or 0.97% from the July capital review. Some Departments have suffered a loss of up to 20% in their capital programme but we have protected this sector.

We have commitments from the agencies, that given the moneys and capital available to them and the staff resources, including an increase in staffing resources during the summer, they are more than confident that they can meet the targets they set themselves. We are sending out a very strong message from a capital funding point of view that this country will be an information hub and a smart economy. If the Deputy wants further proof of that he should examine the FDI coming into this country. In 2008 the value of research and development attached to FDI stood at 10%. In 2010 the value stands at 49.9%. That is a dramatic increase. That is extremely important for us because any multinational company coming to this country with a research and development component will stay here as it is satisfied that we have an outstanding skills pool, that we are productive and competitive and that they can export what they produce in this country. That is a very good story to tell. It is sending out a message to the international community that this country is going to stand by its commitment to a knowledge economy and is prepared to invest the required capital funding.

A total of €12.5 billion will be invested in the banks from the National Pensions Reserve Fund. How many jobs will that create? The European Commission has stated that the growth rates the Government has projected of 1.75% will be less than half of that figure, 0.9%. How many of the 150,000 jobs does the Minister expect will be generated given that the growth rates are excessive and there is a cut in the capital budget? How many jobs will be created from the €12.5 billion that the Government is pouring into the banks out of taxpayer's money? The Minister has said it was a judicious decision to use funds from the National Pensions Reserve Fund. How many jobs will it create?

I am very surprised at Deputy O'Donnell, as a deputy spokesperson on finance. We are talking about €12.5 billion being put into the banks to ensure that the banks are in a position to lend and provide credit to customers. A country that does not have a proper, functioning banking system cannot trade.

I asked a direct question.

That is not the purpose of the €12.5 billion.

The Minister should be allowed to speak without interruption.

Who does the Minister think he is kidding?

The €12.5 billion being put into the bank does two things.

The Minister is waffling.

The Minister should be allowed to speak without interruption.

I am not waffling.

Yes, the Minister is.

We are way over time on this question. We have one more question to get through.

We are entitled to an answer.

The Deputy should allow the Minister to finish his answer.

If Deputy O'Donnell stopped interrupting he would get his answer.

Half the builders were down in Kilkenny a few weeks ago at a golf course.

The Minister should be allowed to speak without interruption.

The Minister should answer the question.

If Deputy O'Donnell gives me a chance I will. The important aspect of the restructuring of the banks is that, first, we can now assure depositors that because of the input into that bank that their money is safe, that there is no need to take their money out.

That was the purpose of the bank guarantee.

Deputy O'Donnell. The Minister should be allowed to speak without interruption.

Deputy O'Donnell asked me to answer the question but he keeps interrupting.

What the Minister said is incorrect.

Will the Deputy give me an opportunity to answer? Can I do it without interruption?

Thank you. The second issue in terms of the recapitalisation of the banks is that they become viable entities, lending institutions that support business, trade and enterprise. That is why we support the banks and that is why we put further recapitalisation into those banks so that this country can trade itself successfully out of the difficulties that exist and that the companies Deputy O'Donnell speaks about can have credit available to them through the initiatives taken by the Government.

They are not getting credit. The Government should have introduced a guarantee. What was NAMA supposed to do? The Minister is avoiding the question.

Job Protection

Deirdre Clune

Question:

5 Deputy Deirdre Clune asked the Minister for Enterprise, Trade and Innovation the steps he will take to protect and enhance employment in the biopharma pharmachemical sector; and if he will make a statement on the matter. [45801/10]

The Government is strongly committed to supporting the continued growth of the biopharma sector, which supports approximately 50,000 jobs directly and indirectly and contributed more than €1 billion in corporation tax in 2009.

Ireland is recognised worldwide as a major centre of excellence in the pharmaceutical industry and is now emerging as a leading location for biopharmaceuticals with a strong mix of start-ups, high growth small to medium-sized enterprises, SMEs, and large multinationals located here. The industry in Ireland has flourished because of a combination of strengths, including a highly educated, innovative and resourceful labour force, a proven level of manufacturing and compliance experience, our competitive tax offering and world class research landscape. These factors are still very much in place and should be publicised in a positive way whenever Deputies speak about what Ireland can offer foreign direct investment.

The industry has a highly skilled workforce and 46% of the sector's labour force have third level qualifications or higher. Some 25% of all PhD researchers employed in Irish industry are employed in this sector. The Export Group on Future Skills Needs recently made a number of recommendations on skills needs for the sector, including the need to strengthen business skills within the sector and enhancing industry-academia collaboration. Having people with the right skills and competences will be a key component in driving future growth in this sector and underpinning innovation, productivity and competitiveness.

The sciences are at the heart of the biopharma sector and supporting world class research in our academic institutions, together with our company base, is essential to driving a healthy, vibrant industry. A key focus for Enterprise Ireland, IDA Ireland and other relevant stakeholder bodies is the promotion and building of expertise in biological research and development and manufacturing so that Ireland can continue to develop as a globally recognised biopharmaceutical hub.

Previously, the industry in Ireland has been focused on manufacturing, but there is an increasing diversification into more research and development activity and services such as supply chain management and headquarter activities. Given this diversification, continuing to drive integration across our indigenous and multinational company base will support the long-term development and growth of this key sector. The development of a highly integrated sector is a key competitive leverage globally.

Cost competitiveness is also of major importance and the sector and Ireland have already benefited from improvements in our cost competitiveness in the past two years. The national recovery plan sets out specific actions to spur further improvements in competitiveness across all sectors of the economy, including measures to cut costs in energy, waste, transport, broadband infrastructure, professional fees, property and labour. The plan also includes a commitment to the 12.5% corporation tax rate, maintenance of a competitive tax wedge and a clear statement that the top marginal rates will remain unchanged. These measures all contribute to our overall offering in attracting foreign direct investment.

I raised this question because of my particular concern about this sector. Like the Minister of State and the Minister, I come from the Cork region where there is a high concentration of biopharmaceutical and pharmachemical industries. I am concerned about patent expiration and competition from generic drugs. The research pipeline is shrinking and the industry has seen a great deal of consolidation worldwide. I read the same report of the Expert Group on Future Skills Needs cited by the Minister of State. The expert group claimed the challenge is to retain employment rather than growth, whereas the Minister of State referred to growth. The real challenge is maintaining existing jobs, which currently number 25,000 in the industry with a further 25,000 related positions.

The Minister of State mentioned the report's recommendations, but he gave no indication of whether he agreed with them or how they would be implemented. I am referring in particular to the recommendations on promoting business skills and the continual professional development of operatives.

Like the Deputy, I share an interest in this matter, not only because of its importance to Cork, but because of its importance to the country. It is a large sector and the report in question highlights a few issues we must address. The Government is committed to ensuring the procedures are put in place to upskill and train people.

As regards research and development, the Deputy is right to a certain extent, in that there has been a consolidation of the biopharmaceutical industry worldwide. It is ongoing as we speak. However, Ireland remains competitive. It is important to point out that, in the context of the consolidation of companies, Ireland has won more than its fair share. This is not only down to our corporation tax rate. It is also down to the factors that I highlighted, namely, a skilled workforce and collaboration between research and development and universities. We must build up a strong base of science, maths, technology and engineering so that we can have a strong competency of highly skilled researchers, which would allow additional companies to come to Ireland. For example, University College Cork, UCC, and the Cork Institute of Technology, CIT, have strong collaborative ties with many of the biopharmaceutical companies based in County Cork. This relationship can also be found elsewhere, such as in terms of the National University of Ireland, Galway and medical devices.

Deputy Clune is correct, in that we must continually upskill our people and business management processes. These are key components. IDA Ireland is attracting inward investment and Enterprise Ireland works with companies to support them in putting their business processes in place.

The Minister of State's reply contained much general information of which I was already aware. This specific industry is under threat and changes are occurring across the world. We have already seen some of them in terms of Pfizer and GlaxoSmithKline. Is the Government concerned about this situation? Is the Government doing anything about it? Is it concerned about retaining employment at current levels? The Minister of State said the Government was committed, but in what way? This is a serious issue and many people are concerned about their continued employment and their employment prospects.

The key issue is patents running out. Generic drugs will pose the greatest difficulty facing many of the biopharmaceutical companies in Ireland. The primary purpose of investing in research and development is to stay ahead and produce new drugs and applications. The key component is ensuring a strong body of research and development that can innovate and introduce new products that stay ahead, are complicated and cannot easily be genericised. There are many instances of UCC, CIT and companies based in Cork working together closely in this regard. It is not just about manufacturing.

I understand that.

One must research, develop, design and patent something and then take it to the market. However, everything will be genericised eventually. This is the global challenge facing the biopharmaceutical industry.