Vol. 938 No. 2
1. Deputy Niall Collins asked the Minister for Jobs, Enterprise and Innovation the contingencies and supports in place to safeguard Irish jobs and exports for a hard Brexit scenario following the UK referendum decision to leave the EU; and if she will make a statement on the matter. [6507/17]
Will the Minister for Jobs, Enterprise and Innovation outline the contingencies and support she is putting in place to safeguard Irish jobs and exports in view of the hard Brexit scenario the country faces in the aftermath of the decision in the recent UK referendum to exit the EU?
The question tabled by the Deputy was slightly different so I will answer that one.
Brexit will impact on all policy fields of the Department and agencies and I have tasked my Department officials with making Brexit their number one priority.
I am satisfied that all efforts are being made to understand and respond to the challenges and opportunities.
This is reflected in the recently launched Action Plan for Jobs 2017, which contains a special chapter on Brexit and several detailed actions.
I have secured significant additional capital and current funding for my Department in 2017 – a 10% increase on 2016 to support the enterprise agencies of the Department.
Enterprise Ireland, EI, the local enterprise offices, InterTradeIreland, and Industrial Development Agency, IDA, Ireland, are engaging on a one-to-one basis with all client companies to help them assess, plan and act.
We will work to preserve Ireland's fullest market access to the UK in the framework of any future deal between the EU and the UK. This includes a particular focus on the trade implications for the Border region. We will do our utmost to promote the interests of those companies and businesses that engage in cross-Border trade.
InterTradeIreland has a programme of initiatives to deal with the practical consequences of Brexit for cross-Border trade.
I have put in place a structured dialogue with companies of different sizes, across different sectors and regions with the support of various representative bodies, to identify the real needs of firms and develop potential responses. This will give me a clear evidence base for what the various sectors need and want. We are also enhancing our trade and investment missions and events.
We are all very concerned as are business people at Theresa May's confirmation that the UK intends to leave the Single Market and that we are facing a hard Brexit. The Minister is aware that the Department of Finance in the scenario which it produced recently predicted a fall in our economic output of 3.5% that would effectively reduce our exports to the UK by almost one third.
In a reply to a recent parliamentary question, the Minister informed me that, as of 19 January last, only half the Cabinet had engaged in bilateral meetings with their counterparts. That is seven out of 15 Ministers, which is poor. Those figures may have improved since. We have been advocating an enterprise stabilisation fund. The Minister outlined how she has resourced IDA Ireland and Enterprise Ireland but we need a stabilisation fund that business and small and medium enterprises, SMEs can tap into, a fund that they can apply to with a set of criteria. Does the Minister have any plan to introduce such a measure at Cabinet and if not, why?
Senior officials in the Department have explored the stabilisation fund and have discussed it in Brussels with the Commission. That will be difficult. We are conducting a targeted survey and we and EI are finding there are different requests from companies. Some are looking for more credit, some for cheaper loans, some want lean programmes to be initiated, some want to make sure there is more competitiveness. We need these responses and hard information before saying what we need.
The Minister has said that an enterprise stabilisation fund is difficult. She has not expanded on what the difficulties are and whether they can be surmounted. Everything is surmountable if we try to address it. We have to consider our competitiveness. We have a huge deficit in terms of competitiveness in respect of the UK. We have highlighted for example the capital gains rate of tax for entrepreneurial start-ups. Have the Minister or her Cabinet colleagues discussed with their counterparts engagements on a change in the state aid rules? They should be having more of these engagements. The limit is €200,000 but previously it was €500,000. If we work hard and focus on trying to change our state aid rules by way of collaboration and engagement with our EU colleagues we would greatly help our SME sector and could then roll out an enterprise stabilisation fund.
Senior officials in the Department are exploring that. It is quite confidential at the moment. We give grants with EI in accordance with state aid rules. That is not all of what the companies want. We are engaging with them. EI has 1,500 clients on its books and is engaging one-to-one with the companies and the sectors. The answer is not to throw money at them. It is to have a targeted response so that the company and the agencies, EI and InterTradeIreland, will be confident that those companies will be vibrant and successful after Brexit.
2. Deputy Maurice Quinlivan asked the Minister for Jobs, Enterprise and Innovation her views on whether her Department has been allocated enough extra spending to assist and support Irish food and drink companies in 2017 to try to replace UK exports to the EU to compensate for the hit - and potential hit - caused by Brexit; and if she will make a statement on the matter. [6647/17]
While Brexit poses huge challenges, there are probably opportunities of which Ireland can avail. Would the Minister consider putting in place an export fund for us to replace the goods that the UK exported to Europe?
There will be opportunities and the opportunities we are seeing are in financial services and my colleague, the Minister of State at the Department of Finance, Deputy Eoghan Murphy, is responding to that. There have been approximately 100 queries to IDA Ireland and we are working our way through them. I will ensure that we avail of whatever opportunities arise. Is this Question No. 2?
Yes.
I would like that the questions being asked are what I have in front of me.
They are.
They are. That was the question I asked.
The agrifood sector is of critical importance to the Irish economy. Its regional spread means it underpins the socioeconomic development of rural areas in particular.
Ambitious plans under the Food Wise 2025 strategy could see the creation of 23,000 jobs and a growth in the value of exports by 85% over the next decade.
Enterprise Ireland works closely with Irish food and drink companies to support innovation and to build scale and resilience for them to be positioned to compete on world markets.
I have secured additional funding for Enterprise Ireland to respond to Brexit. This includes 39 additional staff with sectoral knowledge and expertise.
While Enterprise Ireland is the development agency for companies in the food and drink sector in Ireland, Bord Bia under the Department of Agriculture, Food and the Marine is responsible for working with such companies to access overseas markets.
The UK remains a key market. Enterprise Ireland is working closely with Bord Bia to help Irish food and drink companies to build on their international reputation for product excellence and to drive growth in other key markets such as the eurozone, Canada, the US and Asia.
People might think from the response we have just heard that the Minister and the Department of Jobs, Enterprise and Innovation are doing enough, but I do not believe that is the case. Brexit has the potential to be the biggest economic disaster to hit the North and the South of Ireland for many generations. We need to meet the challenges that will arise in that frightening context. The provision of €3 million is welcome, as is the allocation of an additional 39 staff to Enterprise Ireland and an additional nine staff to IDA Ireland. We now know what type of Brexit we are facing. We no longer have to wait for the UK to trigger Article 50. Theresa May has made it crystal clear that she is going for a hard Brexit. The Minister will be aware of Ms Patricia King's comments at last week's conference in Carrick-on-Shannon. She said that Irish jobs must not be lost because of a UK decision. I think we need additional funding to help people in the markets that will be affected by that decision. Professor Kevin O'Rourke, who is a professor or economics at Oxford University, recently suggested that the Government should allocate €25 million for a market diversification and product innovation strategy in support of Irish food and drink companies that will have to try to replace UK exports with EU exports and in compensation for the hit caused by Brexit. His analysis of the food and drink sector provides an insight into how the paltry expenditure of €3 million is nowhere near the level of funding needed to meet the challenge of Brexit.
We are also concerned about Brexit. I remind the Deputy that extra staff have gone in from Enterprise Ireland. Further supports for these sectors were provided for in budget 2017, including the €150 million low-cost loan scheme that was launched on 31 January last, agri-taxation measures and the increase in funding under the rural development and seafood development programmes. A €150 million cashflow support loan scheme is available to farmers throughout Ireland at a low interest rate of 2.95%. This loan scheme forms part of the three-pillar strategy in response to income volatility that was announced by the Minister as part of budget 2017. This scheme, along with tax measures and farm payments, will help to alleviate some of the pressures being caused by the recent market difficulties which have been compounded by the uncertainty around Brexit.
We are all aware that the farming and agrifood sectors will be particularly exposed to the effects of Brexit. Some commentators have suggested that we might be able to attract foreign direct investment. However, jobs that are lost in the agrifood sector will be lost straight away. The European Union Committee of the House of Lords recently published a report on the impact of Brexit which included a suggestion that "Dublin’s limited infrastructure and shortage of housing might deter financial firms from relocating there". The relocation of financial services is one of the supposed benefits of Brexit. It is clear that we will fail to realise that opportunity because of the State's failure to invest in infrastructure over a number of years. On Tuesday of this week, members of the Joint Committee on the Implementation of the Good Friday Agreement, the Joint Committee on Jobs, Enterprise and Innovation and the Joint Committee on Foreign Affairs and Trade, and Defence met Dutch parliamentarians who were on a fact-finding mission to Ireland. They were shocked to hear about the concerns we have in this country regarding the Border. They were talking about the North, in particular, when they said that Ireland is not on the radar of the EU. We need to spend more money. We need to get over there more often.
I reject the Deputy's suggestion that we have not invested in infrastructure. When I was first elected to this House in 2011, the Government was having to cut budgets and the IMF and the EU were in here, having loaned us money. I am not sure whether the Deputy remembers that. It was a short time ago. I absolutely acknowledge that we need to improve infrastructure like roads, housing and office space. When I took up this job last year, I was told there was a huge shortage of office space. A great deal of office space is now being provided by private investors. That will be available in Dublin. I am conscious of the importance of ensuring all the regions get a piece of the action when opportunities are presented by Brexit. We will make sure jobs from back offices and middle offices go to the regions. I will continue to push that agenda.
3. Deputy Niall Collins asked the Minister for Jobs, Enterprise and Innovation when there will be a tender for a new Succeed in Ireland programme; if none is planned, the reason therefor; and if she will make a statement on the matter. [6508/17]
The Minister will recall that the Succeed in Ireland programme was developed on foot of the calls for additional job creation that were made at the Global Irish Economic Forum, which was established after this country's economic crash. Will there be a tender for a new Succeed in Ireland programme following the expiry of the current contract?
The Succeed in Ireland initiative has operated on the basis of a contract with IDA Ireland that was originally agreed in March 2012. The contract, which was extended by 12 months early last year, is now set to conclude on 26 March.
When the board of IDA Ireland considered the long-term future of the initiative at its meeting last November, it decided that the agency would not re-tender for the continuation of the Succeed in Ireland programme at this stage.
I have asked my Department to commission a review of the initiative, to include a full assessment of its costs and its contribution to employment generation in the State. Such a review may also consider the development of a new programme, for example through an examination of the experience of similar initiatives in other jurisdictions.
ConnectIreland, which is a self-funded company that was set up by an entrepreneur, secured a five-year contract for the Succeed in Ireland programme from IDA Ireland in 2012. Seventy-nine international companies have been approved by IDA Ireland under the programme, with 2,411 jobs being created over three years. It is noteworthy, given that regional job creation is a big issue for us, that 66% of these jobs are in 15 counties outside Dublin. ConnectIreland has 78,285 connectors based in 147 countries. Some 44 of its 84 projects have involved 20 jobs or fewer. It is getting into our communities. ConnectIreland claims that IDA Ireland has not given it credit for many of the projects and jobs I have just mentioned. It is clear that there is a bit of a dispute between the two. The point is that ConnectIreland is delivering jobs at a fraction of the cost at which IDA Ireland is delivering jobs. The Minister has said she will commission a review of this matter. How long will the review take? Does she agree that the current Succeed in Ireland programme should be extended until that review has been completed? It is bringing in jobs and linking into a huge global network. If we do not use every avenue we have to create employment, particularly through a scheme that creates jobs more cheaply than IDA Ireland does, we will cut off our nose to spite our face.
As the Deputy knows, the Succeed in Ireland initiative operates on the basis of a comprehensive agreement between ConnectIreland and IDA Ireland.
I understand this agreement, which was mutually entered into by both parties, sets out the process by which jobs are verified as having been created. I am informed that as it currently stands, 527 jobs on the ground have been created. I make it clear that IDA Ireland oversees and manages the operation of the initiative. I certainly have no reason not to rely on the data and information provided. I am carrying out a review and it is clearly in the interests of good governance that such a review would be undertaken before determining the future of the programme. We must fully understand how the initiative has functioned, its strong and weak points and how we could potentially improve it in future. This is in the interests of the taxpayer, the State and, ultimately, the programme itself.
It does not make sense to discontinue the programme, do the review and then possibly continue it. It would make perfect sense to my mind to keep the programme running and use those worldwide connections. There are more than 80,000 connected people around the world in the Irish diaspora. It is a large network and we would lose all of it. DKM Economic Consultants has reported that ConnectIreland has created an estimate of 1,028 jobs. The figures are in dispute but the operation of the client companies arising from the scheme has added €123 million to the Irish gross domestic product, GDP, benefitting the Exchequer by €26 million. Those figures are in the DKM report. It is a positive initiative. There is a dispute between the operator and IDA Ireland, which is fine, but it does not merit not agreeing to continue the programme until the review concludes. The review could indicate that the process could be improved or changed but parking it on one side or discontinuing it would be very silly.
ConnectIreland created plenty of jobs in Ireland and the Deputy is correct that there is a dispute. I understand that this week a meeting was held between the chief executives of ConnectIreland and IDA Ireland. It is, however, prudent to do a review as there is much taxpayer money involved. I must understand exactly how that initiative functioned, as well as its strong and weak points, as I mentioned. The experience of IDA Ireland in this area is unparalleled and we must be careful not to risk defusing expertise and awareness of multiple entities and governance arrangements. I want to see the review and the figures.
How long will the review take?
We are appointing someone and I am going to get it done as quickly as possible. A decision on who will author the review, as well as its precise start date, will be taken very shortly.
4. Deputy Michael Collins asked the Minister for Jobs, Enterprise and Innovation the number of Enterprise Ireland and Industrial Development Agency jobs created in west Cork in 2015 and 2016 (details supplied). [6645/17]
Will the Minister please disclose the number of jobs created by Enterprise Ireland and Industrial Development Agency, IDA, in west Cork in 2015 and 2016?
Each regional action plan for jobs targets one of eight regions around the country, seeking to build on the differing capabilities and strengths of each region. West Cork comes under the south west action plan for jobs, which covers counties Cork and Kerry and was launched in July 2015. As of quarter three, the south-west region unemployment rate had dropped to 6.4%, from a high of 14.3% in 2012. The downturn in employment hit the south west heavily in 2008 but there is potential to grow sustainable jobs based on the sectoral strengths, skills profile and innovative capacity within this region.
As part of the Action Plan for Jobs 2017, my Department, through Enterprise Ireland, has committed to support all eight regional action plans for jobs and to provide investment of up to €60 million over the period to 2020 to support collaborative approaches to boost enterprise and job creation across the regions. The regional competitive funding initiative will be launched shortly. It will be aimed at accelerating economic recovery in every part of the country by delivering on the potential of local and regional strengths. The number of jobs created by Enterprise Ireland in County Cork in 2015 was 1,443 and in 2016 it was 1,505. The number of jobs created by the Industrial Development Agency, IDA, in 2016 was 1,675.
I thank the Minister. Good jobs are what any area would want and in west Cork, unfortunately, we have been forgotten for far too long. The Minister provided very rosy employment figures but the bottom line is that is not felt on the ground by many people. They feel there are not enough good quality jobs in west Cork. For the creation of any good employment, we need good road structure, mobile phone coverage and broadband. These are three simple and basic foundation elements for any job creation but, unfortunately, it is not there in west Cork. We have fallen far behind on all these fronts because of Government inaction. Historically, while we have had some great companies like ROWA in Bantry, Ceramicx in Ballydehob and Irish Yogurts in Clonakilty, there is still a lack of good quality jobs. I plead with the Minister to work towards creating these jobs. How does she intend to turn this around for the people of west Cork?
Tourism is very important in the Deputy's area. There is a new 10,000 sq. ft. Ludgate digital hub building that opened this year in Skibbereen, providing up to 75 desks, training and meeting room space. The building has 1,000 MB connectivity. I am definitely in the business of making sure that good quality jobs come to Ireland and are developed and scaled in Ireland by Enterprise Ireland companies and firms that work with our local enterprise offices. We are also announcing a consortium involving University College Cork, Cork Institute of Technology, the National University of Ireland, Galway, and Trinity College Dublin to win the health innovation hub. That will provide good quality jobs. I have attended meetings of all the regional action plan for jobs implementation groups. They all sing from one hymn sheet and we want good quality jobs.
I beg to differ with the Minister about the good quality jobs as very few good quality jobs are coming to west Cork. We find it an uphill struggle in making this happen. Unfortunately, we are turning to work schemes to see if we can make up many of the job losses and the fact that many low-income farmers and fishermen find it very difficult to thrive. Even with that, only 39 came to County Cork and 79 went to Mayo, which is very unfair. It shows how west Cork is being forgotten, even with the lowly case of a community employment or rural and social job. Unfortunately, west Cork has been forgotten. Will the Minister consider a jobs task force for west Cork in order to concentrate on bringing good employment to the area?
My implementation group for the south-west region deals with the regional action plan for jobs and it is why we have seen growth in jobs all across the country. I pay tribute to the work it does. On it working together there are industry partners, local employment offices, IDA Ireland, Enterprise Ireland and all the different educational bodies. We operate a regional plan and not a county plan. That is why the unemployment rate, on average, is at approximately 7.1%, with 190,000 people back at work since 2012.
This has to be targeted at west Cork and not Cork city.
I am not referring to Cork city.
It must cover the region of west Cork.
The regional action plan for jobs covers counties Cork and Kerry.
5. Deputy Catherine Murphy asked the Minister for Jobs, Enterprise and Innovation the number of jobs the Succeed in Ireland initiative has created since inception; the amount of moneys IDA Ireland or other State bodies have paid over to ConnectIreland; the amount of IDA Ireland's potential outstanding liability to ConnectIreland; her views on whether the Succeed in Ireland initiative failed to meet its target of 5,000 jobs; the reason a temporary extension of the contract with ConnectIreland was agreed in September 2016; and if she will make a statement on the matter. [6646/17]
An article in The Sunday Business Post prompted me to submit this question on the contract between IDA Ireland and ConnectIreland, as well as the associated costs and the potential cost to the State relating to the losses sustained by ConnectIreland.
I understand from IDA Ireland that the Succeed in Ireland initiative has so far created a total of 527 jobs on the ground. IDA Ireland has paid €2.069 million to ConnectIreland as a financial reward in respect of those 527 positions. It has also provided ConnectIreland with a further €150,000 for marketing support for the operation of the programme.
As payments to ConnectIreland are dependent on the number of jobs generated through the programme, the final sum due from IDA Ireland will depend on how many positions are ultimately created. This exact figure will not be determined for some time.
I have asked my Department to commission a review of the initiative. This will allow for a full assessment of its costs and contribution to employment generation in the State. Such a review may also consider the development of a new programme, including through examining the experience of similar initiatives in other jurisdictions.
The original contract underpinning the Succeed in Ireland initiative was due to expire in March 2016. In advance of that date, however, the contract was extended for a maximum period of one year. The purpose of that extension, agreed by both parties, was to allow an orderly wind-down of the programme.
Obviously, IDA Ireland has decided not to renew the Succeed in Ireland initiative and it will expire in March. IDA Ireland said it created 527 verifiable jobs at a cost of €2 million but ConnectIreland, and its chief executive officer, Terry Clune, claim it created more than 2,200 jobs. There is a serious dispute about these figures. I understand there are significant tensions between IDA Ireland and ConnectIreland to the extent that it has gone for arbitration. Will the Minister confirm this?
The Sunday Business Post also revealed that, based on freedom of information requests, there have been several meetings with IDA officials and ConnectIreland with the former Secretary General of the Department of Finance, John Moran, lobbying on ConnectIreland’s behalf. There seems to be some dispute as to whether the State agency might be required to disburse further amounts to the company to offset losses. Will the Minister confirm this? If so, will she specify the amounts involved?
Both ConnectIreland and the IDA have entered into a mutually agreed process to address whether differences have arisen between them in the course of the contract. I hope that process will result in an acceptable outcome for both parties. It would be neither appropriate nor helpful for me at this stage to comment on that ongoing process. I stated earlier, however, that the chief executives of both organisations met this week. I am hopeful there will be a successful outcome to the process. An arbitrator has been agreed on by the two parties but is yet to be appointed.
It is welcome a dialogue is going on between both parties. In response to a previous question, the Minister spoke about an orderly wind-down. Does she expect there will be an offset for losses? If so, will it be for significant amounts? Will it be hundreds of thousands or millions of euro?
I am not in a position to discuss that because an arbitrator has been agreed on by the two parties in question. I hope the arbitrator will pull the two parties together and we will get a reasonable outcome.
Will the Minister give a timeframe for this process?
As I said to Deputy Niall Collins earlier, I expect and hope I will be appointing an arbitrator soon.
