Denis Naughten
Question:6 Deputy Denis Naughten asked the Minister for Enterprise, Trade and Innovation the steps he is taking to support local enterprise start ups; and if he will make a statement on the matter. [45444/10]
Other Questions
Enterprise Support Services
The growth and development of small Irish businesses, is central to economic recovery and it is essential that Irish enterprises continue to be supported. As I have stated previously, my priority is to ensure that the business environment is supportive of enterprise and encourages growth in all areas of the economy, including entrepreneurs in both the start-up and development phases.
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 to business in energy, waste, transport, professional fees and property. The plan also includes measures to ensure that barriers to employment creation are removed. Specific actions will benefit start-up companies, including the review of the business expansion scheme, extension of the 15-day prompt payment rule and the use of public property for incubator centres. In addition, the State continues to support local enterprise start-ups directly via the supports offered by the enterprise agencies. The complementary remit and activities of Enterprise Ireland and the county enterprise boards, CEBs, ensure that as broad a suite as possible of State supports are available to start-ups. The CEBs provide a range of supports to micro-enterprises and I recently secured an additional capital allocation of €3.3 million for the CEBs to enable them to support additional business projects this year.
Under the auspices of Enterprise Ireland, the Government has invested significantly in the broader environment for business start-ups. This includes investment in incubators, seed and venture funds, angel networks and mentors, as well as specific funding for high-potential start-ups. Enterprise Ireland also provides support to community enterprise centres, CECs, and business innovation centres, BICs. These centres provide a range of facilities that enable entrepreneurs to establish new businesses, provide employment and grow their businesses in their own localities.
The supports offered by the CEBs and Enterprise Ireland should be as seamless as possible and should facilitate further the transition from an innovative micro start-up to a high-potential exporting SME. I intend to table proposals before the Government on this matter shortly.
What are the Minister's proposals for the future of county enterprise boards? He has been discussing this matter for a long time, so it would be important to know what he is proposing. He will be aware that, last year, the demand for micro start-ups was up by 20%. Unfortunately, his budget dropped by approximately 10%, so many people needed to be turned away. Will the Minister consider specific initiatives that have been proposed to him? The Commission on Taxation proposed unincorporated businesses should have a start-up tax holiday but the Government has not given any indication in that regard. Does the Minister support that and will he be seeking its inclusion in the finance Bill? Its costs would be extremely low, I understand. Furthermore, his Department has had small business credit initiatives in the past. Would he consider introducing small business credit initiatives? It seems bizarre that two years into the most severe financial crunch we have ever had, his Department has not come up with one initiative in the area of credit. The guarantee, which the Minister has been peddling for months, still has not got into the starting traps and we do not know whether he even has the authority to do it since it appears to have been delegated to the Department of Finance. We all know what will come from that quarter.
I am just wondering about specific initiatives because yesterday there was a report to the effect that lending to non-financial corporates was down €2,500 million in 12 months.
Regarding the county enterprise boards and the Leader programme, I believe there should be a seamless transposition between the two. I am not satisfied that the two entities are working as well as they might. For that reason the Minister of State with responsibility in this area, Deputy Pat Carey, and I have set up a group to look at where the two entities are working. There is €450 million——
I thought the Department had proposals prepared. Surely we are not talking about another study.
There is €450 million available up to 2015 for the Leader programme, and obviously that has to do with enterprise development. CEBs on average got €18 million this year. I want to ensure there is proper interaction and development of start-up businesses, particularly in rural areas.
The Deputy says there was inadequate funding for CEBs this year and I want to nail that to the cross. When I came into this office I asked the CEBs to let me know what jobs they could create before the end of the year. I wrote to them all and asked them to let me know exactly what could be done. They indicated to me that they could create 450 jobs by the end of the year, and I provided the funding. I assured them that regardless of the numbers they could come up with, we would find the funding to create those jobs. Therefore, we answered the calls of the CEBs. Surely Deputy Bruton is not expecting me to provide the money for jobs they cannot and are not creating. Whatever they wanted in terms of job creation, it was a question of ensuring that the necessary funding was provided so that those jobs were put on the ground.
In the context of the satellite town study in which the Acting Chairman, Deputy Cyprian Brady, and the Minister of State, Deputy Calleary were both involved, I can identify at least one good feature of the four year plan, namely, that IDA Ireland could be squeezed to release its land banks across the country. I know the Minister referred to market value and all that nonsense, but that land is doing no good just lying there. Is it not possible to make this land available for business incubation, start-up units and so on right across the country? Otherwise this could represent a significant impediment to people getting out of the traps.
Is it possible to look at a licence system — something else we considered — rather than full grant schemes, because of the initial costs that can be involved? Much attention has been focused on high-potential start-ups, and that is extremely important in a job creation strategy. That will have to be focused on, regardless of what government is in power. I am talking about small firms growing into larger firms. In that context, has any consideration been given to scale-ups, especially in the IP areas that the Minister of State, Deputy Kelleher, spoke about, where many of them are developed and then sold off? Is there any policy to try to retain such initiatives within Ireland by allowing for such scale-up mechanisms? That would be important for the future regardless of which Administration is in power.
If there are good initiatives in prospect, from my point of view and those of the Ministers of State, we are very willing to examine them to find out how sustainable they might be. Enterprise Ireland is examining and pinpointing start-up firms which contain a research and development element that could be geared to the export market. Instead of having 75 of such companies, which was the norm formerly, we are now targeting and growing that figure to 100 because we see great potential there. We must develop the indigenous sector with research and development attached to ensure we create the type of employment at home that is necessary, and the exports that will ensure the long-term viability of the sector.
Regarding the previous discussions on the county enterprise boards, is the Minister ruling out their integration with Enterprise Ireland and will he address the question about when it is proposed to bring in the bank guarantee scheme?
We have two reports on the CEBs, one of which is the McCarthy report, which states it should all come under Enterprise Ireland, while another report, in the context of the restructuring of the local authorities, states that the CEBs should come under the local authorities. Obviously, I am going to make a recommendation to Government, hopefully within the next two weeks. I do not want to anticipate a decision of Government, but I have my recommendation. I have indicated I want a seamless transfer from micro-enterprises into Enterprise Ireland and also in terms of the operation of Leader and county enterprise boards. That would be very welcome because there is a view to the effect that if one goes to Leader, the enterprise boards have no time for one and vice versa. This is a small country and we are going to have to work together in partnership and co-operate. It is all about people and enterprise and generating jobs to ensure people can get off the live register and obtain meaningful work. As far as I am concerned, I will be practical, insisting that they form a partnership in the best interests of Irish people in general and young people who want to start up businesses.
Employment Rights
Frank Feighan
Question:7 Deputy Frank Feighan asked the Minister for Enterprise, Trade and Innovation the framework for the review of registered employment agreements and employment regulation orders and if new legislation is necessary to facilitate this review [45392/10]
Emmet Stagg
Question:38 Deputy Emmet Stagg asked the Minister for Enterprise, Trade and Innovation the process for the proposed review of the framework registered employment agreements and the employment regulations orders arrangements, as promised in the National Recovery Plan 2011-2014; and if he will make a statement on the matter. [45534/10]
I propose to take Questions Nos. 7 and 38 together.
The National Recovery Plan 2011-2014 sets out in detail the measures that will be taken to put our public finances in order and provides a blueprint for a return to sustainable growth in our economy. The plan identifies the areas of economic activity which will provide growth and employment in the next phase of our economic development. It specifies the reforms the Government will implement to accelerate growth in those key sectors.
I have consistently held that we need to ensure that statutory wage fixing mechanisms work effectively and efficiently and that they do not have a negative impact on economic performance and employment levels. I have urged all parties to these mechanisms and agreements to recognise the need for more responsiveness and flexibility in the operation of these wage determination procedures. The House will be aware that I have proposed to introduce an inability to pay mechanism for both registered employment agreements and employment regulation orders in the Industrial Relations (Amendment) Bill 2009.
It is within this context that the Government has decided that a formal independent review of our statutory wage setting mechanisms, employment regulations orders and registered employment agreements should be undertaken within a short timeframe. The precise terms of reference and process for the review are currently being worked out and will be agreed shortly in consultation with the European Commission. It is expected that the review will commence early in the coming weeks. While no new legislation is necessary to facilitate the review, the Government is committed to taking urgent action, including making any legislative provision which may be necessary, following consideration of the recommendations from the review.
My only question is about what the precise mechanisms were and that is the one question the Minister of State did not answer. I know about the plan and the memorandum of understanding and that there is a commitment to deliver this within three months. However, I want to know how it is to be done.
At present, we are finalising the mechanism——
Tell me what is the mechanism and I will comment on whether I consider it to be good or bad.
An tAire——
We have a number of options. The Labour Court can be involved, although there is some discomfort among employer organisations with regard to the role of that institution. The Department is considering an independent review from within the Department, based on its knowledge and involving all the parties who are signatories to these various agreements, as well as other interested groups that may have an interest in the economy but may not be a signatory to such agreements, such as, for instance, chambers of commerce on the employer's side or general bodies.
Another option that is open is to conduct a review confined to all those who are directly affected. The Department is finalising exactly how it intends to do this as I wish to do so in a manner that will get an efficient and rapid response. In addition, it is the Minister's intention to involve all the parties in this House in the review.
I thank the Minister of State for his comments because my impression is that this is more of a difficulty than is the minimum wage, on which all the attention has been devoted and for which legal instruments are being introduced to cut it. The problem lies with inflexibilities, such as Sunday working premiums and being obliged to redesignate workers from one category to another on foot of a simple placing of a stool into a shop. I welcome changes in this regard, which should be accelerated. I am glad this will not require legal mechanisms and look forward to learning what the Government has decided on because this is an important area in which to move forward.
The Minister of State knows my views and I always have been in favour of modernisation and streamlining those agreements because some aspects of them acted as inhibitions. They were made for a different time, when nothing opened, or when there were no shops to open on the Sabbath in particular areas. However, time has moved on in respect of weekend working. Is it not the case that many such mechanisms inhibited private agreements between the employer and the employees? Some such agreements may have been facilitative but were caught.
The implementation and application of these mechanisms appears to have been a focus of NERA. Have any contacts been made with the trade union movement? I am concerned that any denigration, deprecation or diminution in any form of workers' rights should be avoided. That is important. However, a good corpus of labour law exists to protect workers rights in that regard. It will not be interfered with, which will ensure that such workers are protected and may obtain the rights to which they are duly entitled under law, both common and statutory. Has contact been made with any bodies, of either an informal or formal nature, with regard to this proposal? According to the memorandum of understanding, this matter must be addressed over the next three months or so.
It is the Government's wish to proceed quickly. There have been no formal contacts with anyone with regard to this matter since the publication of the four year plan. There had been many informal contacts before that, for instance the Minister of State, Deputy Kelleher, initiated some contacts during his time in this position with regard to reform. Everyone is agreed that the current procedures do not work. They are too slow to introduce changes, particularly in the challenging economic climate in which we operate. Changes must be introduced while ensuring that protection is in place for vulnerable workers.
I have two brief questions. When does the Minister of State expect the terms of reference for the review to be finalised and when does he expect the formal review will get under way? Will any agreement that is due to come into effect within the next three months be deferred, subject to the review being concluded?
The Department seeks to finalise the terms of reference as soon as possible, within days. As for the specific question the Deputy has asked, I must consult the Minister and departmental officials as to their impact. However, it is also a matter for the parties to the agreement, that is, for the employers and trade unions that have signed the agreement. They can make a decision in their own right without Government intervention. I understand the case to which the Deputy alluded pertains to the retail joint labour committee, where an increase is expected to be paid in January. They can make their own decision within that JLC to defer. However, the Department is engaged in consultations in that regard.
Is it not fair to state of the trade unions, workers' representatives and employees' representatives that, where issues have arisen in respect of these agreements, they have been highly facilitative and constructive to date with regard to reducing wages? I believe that one concerning construction workers is before the Labour Court at present and SIPTU is showing a highly constructive attitude in that regard.
Many unions have shown themselves to be highly responsive, as have many individual officials within unions. However, for those who do not wish to be responsive, on either side of the agreement, the structures allow for delay and prevarication and we cannot afford that in the current climate.
Prompt Payment Rule
Aengus Ó Snodaigh
Question:8 Deputy Aengus Ó Snodaigh asked the Minister for Enterprise, Trade and Innovation the way the 15 day prompt payment rule will be extended beyond government Departments to the wider public sector, as referred to in the Government’s four year plan; the parts of the public sector to which the rule will be extended; if he will be monitoring and enforcing this rule; the mechanisms put in place where prompt payment has not been met; and if he will make a statement on the matter. [45498/10]
The Government has decided to extend the 15-day prompt payment rule beyond central Departments to the wider public sector to assist cash flow within the SME sector. The Department of Enterprise, Trade and Innovation is currently working on the arrangements for extension of the 15-day prompt payment rule. This includes reporting requirements for public sector bodies and my officials will consult other Departments on the matter shortly.
The 15-day prompt payment rule was introduced to Departments on an administrative basis and the extension to the wider public sector will be implemented in a similar manner. The existing legal situation will apply, whereby public sector bodies are subject to the European Communities (Late Payment in Commercial Transactions) Regulations 2002, SI 388 of 2002. Under these regulations, it is an implied term of every commercial transaction that where a purchaser does not pay for goods or services by the relevant payment date, the supplier shall be entitled to interest, that is, late payment interest, on the amount outstanding. In the absence of any agreed payment date between the parties, that is, specified in the contract, late payment interest falls due after 30 days has elapsed, provided the invoice is not subject to query. Interest applies until such time as payment is made by the purchaser.
Any question of late payment penalty interest will only arise in the context of delayed payments beyond 30 days. Accordingly, no penalty interest will apply in cases where payments are made outside the 15-day administrative period but within the 30-day period. All Departments and public sector bodies will be required to continue providing details of late payment interest paid after 30 days in their respective annual reports. Departments currently report on the processing of payments on a quarterly basis and I expect these arrangements will also be extended to public sector bodies. It is my intention that the 15-day prompt payment rule will be extended to as many public bodies as possible.
What is the Minister of State's estimate of the cash flow gain to private companies and businesses on foot of this decision?
The Deputy should table a full parliamentary question.
With respect, the Minister of State has just stated that he received quarterly reports.
I can provide the Deputy with some detailed figures if he wishes.
The Minister of State is taking a lead from his senior Minister.
A total of 54,099 payments were made within 30 days by the Departments in the period, amounting to €947 million. A total of 46,949 payments amounting to €920 million were paid within 15 days——
No, I refer to the extension beyond the Departments.
I will get to that as well.
The Minister of State is getting there.
I will give the Deputy all the information. I like to be as helpful as possible.
The Minister of State is taking the scenic route.
Deputies, through the Chair.
These payments represent 86.8% of the total number of payments made by Departments. In value terms, 97.2% were paid within 15 days, compared with 97.1% in the second quarter. A further 7,150 payments, or 13.2%, were made between 16 and 30 days. I would be obliged to get out my calculator to work out the actual cash flow in monetary terms——
The Minister of State is learning how not to answer questions from his senior Minister.
I am providing the details to the Deputy in percentage terms and given his experience as an economist, I am sure he will be able to work out the arithmetic involved.
The Minister of State has not mentioned the group to which he is extending these provisions.
What comes to mind is Bertie and playing handball against a haystack.
Deputies, through the Chair.
As this is important, I did state it was my intention that the 15-day prompt payment rule would be extended to as many public bodies as possible.
When?
That was what the entire question was about.
Again, the memorandum of understanding contains a list of those bodies to which it will be extended. The Deputies are lucky that I spent until 2 a.m. last night reading it
The Ministers obviously did not consult the memorandum of understanding before coming in.
Another casualty of weather.
Deputy Penrose.
Exactly. The weather suited as well.
To be helpful to the Deputy, there is no point in rehearsing what is already on the public record.
No, in the memorandum of understanding. Will this be extended to the HSE and other bodies, including local authorities and everyone else? Was this not critical to the recent collapse of companies? Is it the case that companies collapsed while money was owed by public authorities?
Leaving joking aside, the Minister, Deputy Batt O'Keeffe, spoke earlier about start-ups. Some such enterprises deal with State companies, local authorities, the HSE and so on and it is of critical importance that money be paid quickly. Will the 15-day prompt payment rule have statutory backing? Will it be extended in statutory form or will it simply be a directive or an encouragement process?
It has been implemented through the Department on an administrative basis. This will continue unless there is clear resistance to it, although I am quite sure that will not be the case.
In the broader context, delays in payment are not necessarily the fault of the Department. They often relate to a query in respect of an invoice. Other issues may also arise. We must be conscious that we are dealing with public moneys and every issue must be addressed before payment is made. The intention is to move with this as quickly as possible. This decision was made a long time ago and has been discussed in the House previously. It was not decided by anybody other than the people on this side of the House.
When is it proposed to extend the 15 day payment to other public bodies? Many companies have gone into liquidation because they were not paid on time by public bodies.
Departments do make payments. It is not right for the Deputy to suggest that companies go into liquidation because Departments are withholding payments for goods and services provided.
I referred to other public bodies. The Minister of State has misinterpreted what I said.
Deputy O'Donnell, please.
All public bodies are obliged to pay their suppliers in the timeframe laid down under the EU directive. Interest in respect of late payment can be charged. It is critical that people who are invoicing Departments or agencies provide all the necessary documentation in the first instance. Most of the queries arise in the context of a lack of supporting documentation.
When is it coming in?
We envisage moving on this quite quickly.
Departmental Strategy Statements
Michael Ring
Question:9 Deputy Michael Ring asked the Minister for Enterprise, Trade and Innovation if he has set new goals for his Department in the strategy statement which was due to be completed in September 2010; the reason he has not published the strategy statement to help inform the Houses of the Oireachtas on choices that have to be made in budgetary planning in 2011 and subsequent years [45432/10]
In fulfilment of the provisions of the Public Service Management Act 1997, my Department has prepared a draft statement of strategy 2011-13 for my consideration. The Department has arranged for this draft to be forwarded to the Department of the Taoiseach for consultation, in accordance with the revised guidelines for the preparation of strategy statements issued last July.
In preparing the draft statement of strategy, my Department gave considerable time to determining appropriate goals, objectives and strategic actions for the Department for the three years ahead. The range of actions identified in the draft covers all aspects of the work of my Department, aimed at, among other things, growing employment and foreign earnings through enterprise and trade, and through building the smart economy; better regulation of markets and enhanced consumer welfare, and fostering good industrial relations, employment rights and health and safety awareness and compliance.
The statement reflects the need to achieve greater efficiencies and effectiveness in the delivery of these actions and will provide a range of indicators against which performance can be measured over the period covered by the strategy. The strategy statement also takes into account the actions identified in the Government's integrated trade, tourism and investment strategy, Trading and Investing in a Smart Economy, which was published in September. Having consulted with the Taoiseach and taking account of any necessary amendments arising from the actions included in the national recovery plan and budget 2011, I will arrange for a copy of the statement to be laid before each House of the Oireachtas within 60 days of my formal approval of the draft document as required by the 1997 Act. I will also arrange for the appropriate dissemination of the statement at the earliest opportunity.
I do not suppose the Minister would say when he proposes to publish it. Is the Minister disturbed that last year his Department failed to meet 40% of the targets set for it and that his Department is singularly failing to achieve the targets set in its annual output statement? The position is similar in respect of 2007. What are the consequences in the Department of Enterprise, Trade and Innovation for officials who make commitments to deliver certain targets and fail? Does the Minister cut their bonuses or assess their failure in any way? Is there any form of sanction or reward for particular performance? People are getting exasperated with Government publishing glossy plans and public servants committing to targets, in respect of which when they fail everyone stands with one arm as long as the other as if it was an act of God.
Is the Minister planning or has he already taken action against officials who have consistently put up targets that they do not deliver?
On the Department not meeting its targets as set out in the last strategy, it must be accepted that last year was an extraordinary year.
They did not achieve them for the previous year or the year before that.
Across the world, Departments did not meet targets because of the fall-out from the recession.
With respect, this is the usual response.
What did Deputy Bruton do when Minister?
The Minister should answer the question.
Please allow the Minister to conclude.
How many bonuses did Deputy Bruton cut when Minister?
How many people did he sack at that time?
Please allow the Minister, Deputy O'Keeffe, to continue without interruption.
How many officials did Deputy Bruton sack?
Bonuses have been removed from the public service. I thought given the controversy surrounding that issue that Members would be aware of that.
I am aware of it.
We must set realistic targets. This year, all agencies and officials in the Department were involved in drawing up the strategy. Deputy Bruton is correct that it is important the targets we set are realistic and achievable. The procedure has been changed in that now for the first time the public have been invited to make submissions on the strategy. Six submissions on the strategy made to my Department have been taken into account. A further change is that the strategy must now be sent to the Taoiseach's office for final consideration in terms of the targets set. The Taoiseach wants to ensure that the targets set are realistic and achievable. The consultation process between myself and the Taoiseach must take into account the national recovery plan and budget provisions. It is therefore sensible that we await finalisation of these matters before we sign off on the strategy.
Will the Minister agree that if there is no sanction for failing to meet targets and if Ministers offer blanket forgiveness in this regard because, say, it was a hard year there is no chance that targets will be taken seriously? There is a link between what one commits to deliver and what happens afterwards. If one fails, there must be some level of accountability. The Minister has simply stated that last year was a difficult year. Some 40% of the targets set for the previous year, which was not such a difficult year, were not met. The same applies in respect of the year before that. Does the Minister not accept the principle that one must have some system of accountability with consequences within his Department or we will continue to go around in circles?
I, with my three Ministers of State, ensure my officials are accountable. We ensure the targets they set are achievable. Provision has now been made for public consultation and consultation with the Taoiseach on the matter.
Perhaps Deputy Calleary will comment. We might get a better response.
There is no point setting targets unless they are realistic. On the basis of the ingenuity that resides within my Ministers of State and the common sense that prevails, the targets we set will be achieved and people will be held accountable.
Written Answers follow Adjournment Debate.