JOINT COMMITTEE ON ENTERPRISE AND SMALL BUSINESS debate -
Wednesday, 20 Sep 2006

North-South Agenda: Presentation.

Chairman

We have received apologies from Senator O'Toole. Item No. 3 on the agenda is a discussion on North-South matters of interest with Mr. Seán Farren, MLA, the SDLP spokesperson on enterprise, trade and investment, and other SDLP members. I welcome Mr. Farren and his delegation. He is accompanied by Mr. John Dallat, MLA for east Derry, Ms Dolores Kelly, MLA for Upper Bann and Ms Nuala O'Neill.

Before witnesses commence their presentations, I draw their attention to the fact that while members of the committee have absolute privilege, this privilege does not extend to witnesses. Members are also reminded of the long-standing parliamentary practice to the effect that members should not comment on or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.

It is a great pleasure to have the witnesses at this meeting and I extend to them a céad míle fáilte. I look forward to working closely with their party and the people of the upper half of our country. I ask Mr. Farren to make his submission, after which we will have a question and answer session to see how we can improve dialogue and make progress.

Mr. Seán Farren

Gabhaim buíochas leis an Chathaoirelach as ucht fáilte a chur romhainn. Tá áthas orainn a bheith anseo. Mar a dúirt sé, is ar chúrsaí trasteorann Thuaidh-Theas, cumarsáide agus gnó atáimid ag díriú inniu. I thank the Chairman for his welcome and I am delighted that together with the other members of the committee he found it possible to receive us and hear what we have to say on issues of North-South development, particularly in the areas of trade and enterprise. I understand the committee has a particular remit for small businesses and we will touch on that matter as well as address general issues.

I will not make any statements on the current political situation unless I am prompted to do so by later questions. However, we all hope for a positive outcome on 24 November, although it may not look good at present. Whatever the outcome, it will have implications for North-South relationships and we could explore the possibilities from that perspective.

Since the October 2002 suspension, the SDLP has placed particular emphasis on developing the North-South agenda. We have done this in various ways, such as seminars and highlighting policy issues in publications, notably North South Makes Sense. We have copies of this document for all committee members, which we will distribute at the end of the meeting. This aspect of our work was launched last autumn with a significant seminar in Derry at which all the major political parties here were represented. The document, which was published with quite a degree of publicity earlier this year, came out of those discussions.

The touchstone for the current aspects of the North-South agenda go back to what the Good Friday Agreement itself envisaged with regard to developing relationships and taking all opportunities provided to improve trade and other aspects of our relationship on this island. We tried to refine our thinking as much as possible in that regard.

Before I move on to discuss some of the issues in the document, I wish to refer briefly to the North's economy. The economy generally receives negative coverage in the press because approximately 65% to 70% of gross domestic product is accounted for by the public sector, which is double the figure that applies in the Republic of Ireland. Having said that, unemployment is very low in Northern Ireland and is at a similar level to that in the South, namely 4% to 5%. Employment is at its highest level ever. We have never had more people at work in the economy as we have at present.

Hidden behind those statistics is the fact that, as in the Republic of Ireland, we still have a low level of economic activity in terms of the labour force. In fact, there is a high level of economic inactivity, of approximately 28% to 30%, which means that there is a large number of people on the long-term unemployment register or completely outside of the register. Many of them possess skills which would enable them to contribute significantly if they were at work. We have a growing number of people from the new member states of the European Union, including Poland and the Baltic states of Latvia and Lithuania, in particular, coming to Northern Ireland, as well as a small number of people from various African countries.

Some of the economic features of Northern Ireland are similar to those in the Republic. The main difference is the North's high dependency on the public sector. We are trying to devise approaches to tackle this issue because it is not the healthiest balance for the economy in the long term. We want more wealth-producing enterprises to develop. Not availing of the opportunities presented by the fact that the North shares the island with the Republic and there is a significant level of economic activity taking place in the latter jurisdiction would be very foolish. In most of the official documents published recently, including the First Report on Economic Challenges Facing Northern Ireland, which was produced by the Assembly over the summer period with all-party support, and the direct rule document setting out a vision for the economy, which is in draft form at the moment, one will find considerable emphasis on developing the North-South agenda. North-South trade is growing but the Economic and Social Research Institute points to the considerable potential that still exists for the further development of that trade.

Under the auspices of InterTradeIreland, one of the bodies established under the Good Friday Agreement, a great deal of activity has taken place to try to encourage cross-Border relationships, particularly among small and medium sized businesses. I urge members to acquaint themselves with the overall strategy and programmes of InterTradeIreland. It has programmes dealing with the research, marketing and logistical needs of companies, North and South. They are helping companies in the North and the South to tender for public sector contracts. More Northern companies are now tendering for contracts issued by Departments and agencies here and Southern companies are beginning to participate in the tendering process for business made available by the public sector in the North. These processes are much more open as a result of European directives. Ignorance remains, however, with regard to the possibilities, so we would encourage this committee to use its influence to encourage and foster those programmes and initiatives which come under the auspices of InterTrade-Ireland.

In order for any economy to thrive, certain developmental prerequisites must be in place, such as infrastructure, telecommunications and education and training. We see considerable opportunities for North-South co-operation on infrastructure. My colleague, Mr. John Dallat, has a particular concern for transport development. We need to move away from what has been described as back-to-back planning on transport and other issues pertaining to spatial policy, so that roads which traverse the Border are planned and developed jointly. Other infrastructural developments should also be addressed in a similar fashion. For example, with regard to health and social services, a particular interest of my colleague, Ms Dolores Kelly, if we are planning major hospital or other social service infrastructure in one part of the island, we should find out what is happening 20 miles across the Border so that unnecessary duplication is avoided and the best possible use is made of an integrated approach. The same could be said with regard to many other public services, such as education and training. On infrastructural issues pertaining to telecommunications, health and other areas, front-to-front rather than back-to-back planning is required.

I draw the committee's attention to the impediments we have identified to North-South mobility and trade. Several years ago, under the auspices of the North-South Ministerial Council, an initial report highlighted impediments which sometimes do not occur to people unless they are confronted with them in their day-to-day activities. This is particularly so for people in the business world, where impediments which arise from different regulatory regimes affect banking and insurance, the labour force and training considerations. By and large, many of the questions arising with regard to recognition of people in professional life have been overcome but recognition problems remain with regard to trades. Social welfare payments made by people working here but living in the North can create problems around pensions, for example. While these issues have, understandably, arisen due to different regulatory and statutory requirements, they are nuisance factors and need to be addressed to reduce their impact and to eliminate them if possible. As long as we have different laws and regulations North and South there will be differences in the way they are implemented. Business people, especially those with small businesses, find these issues to be irritants that create hassle. They may choose not to engage in business where this hassle is seen as an unnecessary burden.

There is a range of such issues, which I urge members to consider, and it would not be possible to go into the detail of them now. On the macro level there are issues relating to infrastructural development that I have pinpointed. There are issues relating to co-operation on planning for various services and there is the general encouragement that can be given to businesses, North and South, to seek opportunities to trade with each other and to avail of opportunities presented by the public procurement process.

This is a general indication of some of the issues this committee is ideally placed to investigate and facilitate, where difficulties need to be overcome. Where co-operation is of mutual benefit it should be encouraged and the necessary investment by both regimes, North and South, made.

I will stop at this point because it is better to take questions and to respond to people's interests rather than to ramble on perhaps not touching on points that people want raised. Before doing so my colleagues, Mr. John Dallat and Ms. Dolores Kelly may wish to add to what I have said and make a contribution.

Ms Dolores Kelly

While discussing all-Ireland opportunities it might be timely to mention the police college and funding for it. It has been proposed that the Irish Government might co-operate on an all-Ireland basis on a 21st Century training college for emergency services.

Chairman

That is a very good suggestion.

Mr. John Dallat

I would like briefly to mention the issue of transport. I am pleased we came here today rather than yesterday when the Enterprise train broke down twice. That is nothing compared to the problems faced by the travelling public between Belfast and Derry. I raise this issue because I am very excited by the strategy for a new rail network in the Republic of Ireland, particularly in the west. At some stage that needs to link with Derry, Letterkenny and so on. Reference was made to the traffic jams experienced this morning and we must face the reality that rail transport would play an important part in solving this.

Having had the vision to see the merits of the City of Derry Airport playing a key role in the economic development of Donegal, similar arguments can be made for both rail and road transport. I tend to emphasise rail because roads have supporters everywhere. They are everywhere and there is a concern that rail transport could be left behind.

We were very impressed by the setting up of the Road Safety Authority, of which Gay Byrne is chairman. That is something that will make a significant contribution to road safety in the Republic. I am aware there was some criticism expressed on the day it was launched. That was grossly unfair. The North should be encouraged to become part of an all-island road safety authority on a similar model. Work needs to be done to synchronise penalty points and all the other road traffic laws.

One of the most disappointing aspects in recent times is the fact that the North did not follow the Republic in going metric. As we edge towards an island where political and economic differences fade, it is somewhat of an irritant to find when one approaches the Border that one has to switch from one measurement to another. As the Republic has followed the rest of the world and Britain has not, I am not suggesting it go back to using miles again but I see no reason Britain could not encourage the North to follow the South.

Following a recent visit to a very divided island, Cyprus, I was amazed at the level of agreement on the way everyday life functions to the comfort of everyone. I hope we are much further advanced than that. Anything we ask for, therefore, is perfectly reasonable and acceptable.

Chairman

Thank you. Does Ms O'Neill wish to contribute?

Ms Nuala O’Neill

No.

Chairman

I thank Deputy Martin Brady for chairing the meeting earlier in my absence. Deputy Glennon deputised for Deputy Tony Dempsey.

I have been a Member of the Oireachtas for 25 years and on my first day in the Seanad I had the great pleasure of sitting beside the former Senator Seamus Mallon. I have admired Seamus Mallon for many years. He is a great personal friend and the representatives' party was very fortunate to have a man of his intellect and ability available to it at a very difficult time in our country's history.

On the suggestion of an all-island road safety authority, we will soon have the fifth and final report on insurance of which road safety is a major part, whether through public liability, employers' liability or private or commercial motor insurance. The suggestion is worth considering but I ask the representatives to provide a short written submission because the committee would be pleased to include it in one of our recommendations in our final report. As the representatives are aware, we have brought down the cost of insurance here from 2002 to 1992 prices because of the suggestions and proposals we received on this matter. I would like to have an input from the representatives. My only regret, having listened to the submissions from Mr. Farren, Ms Kelly, Mr. Dallat and Ms O'Neill, is that we did not have this dialogue much earlier in the lifetime of this Government. I hope this is the start of many meetings between our committee and the SDLP on the important work it is doing, although I realise this is just a "getting to know you" meeting. We hope to invite members of the authority to come before the committee and make a submission in a few weeks' time.

As someone who is self-employed I work closely with many companies in the North, particularly Quinn Direct, which it must be acknowledged has had a major influence in the areas I represent in Westmeath up into Longford and in the areas the represented by the delegation. Without Quinn Direct our areas would be much the poorer. We must acknowledge that thousands of people and families have been touched by Quinn-Direct, North and South. The company has also played a major role in reforming the insurance industry.

Another firm, with which I am familiar and which is working for me in my other line of business, is a construction company in Tyrone,McAleer & Rushe which is very involved with the Tyrone football team. It has done incredibly good work down here. A large number of people from the North work in the South, benefiting from the Celtic tiger part II economy.

What has the European Union done or what is it doing for the North? Does it receive Cohesion and Structural Funds which have played a major role in transforming the economy in the South? What will the European Union do to assist the North in the next 20 years?

Mr. Farren has informed us that public service related employment accounts for almost 70% of GDP. There is an enormous opportunity for 25% of the island to avail of what the other 75% has been availing. There is a difference between the level of development in County Derry and that in County Donegal. There is a major opportunity to ensure development in the entire Border region. As I live only 28 or 30 miles from the Border, I know the circumstances. When I was involved in the entertainment business in the 1960s, we looked forward to travelling to the North where the roads were good and the people always paid the entertainers what they had agreed to pay them. There was a business ethic in the North in the 1960s which put it way ahead of the South. It is tremendous 40 or more years on to be able to point out that the South has achieved so much. The North could be achieving just as much if everyone played his or her part.

I am anxious to hear the representatives' response to my point on the European Union, to which Mr. Farren might respond first.

Mr. Farren

My colleagues may add to what I will say in case I overlook an important point. In general, the European Union has made a major contribution in a number of respects. While we avail of all of the funds available, we have not been able to avail of them in the same way as the Government in the South because of the way in which in UK aid is channelled through the national governments which, as members of the committee are probably aware, have a strong say in how aid should be applied for and used.

There is a huge discrepancy in the investment of EU funds in infrastructure on both parts of the island. It would be wrong to say no funds were provided for road development in the North, but they were not invested on anything like the same scale as here. Neither were they heavily invested in rail development. As the Chairman said, if one contrasted the standard of roads, North and South, in the 1960s and early 1970s, the balance sheet favoured the North. However, there has been a quantum leap in the South; the level of development in roads in the North witnessed in the late 1950s, 1960s and into the early 1970s was not sustained. As a consequence, we are a long way behind.

The Strategic Investment Board, established under the Executive in 2002, now has responsibility for major infrastructural projects and there is a renewed energy in planning to update and upgrade the road infrastructure. One will see the road from Belfast to the Border probably being completed within the next 18 months, not before time. That road will be a major boost to trade.

There are other such roads like the one from Donegal, through Letterkenny, Strabane, Omagh and Aughnacloy, heading on south through Cavan, Monaghan and Meath. That road, which is labelled the N3 in the South-----

Chairman

I know the road well.

Mr. Farren

—needs certainly to be seen as one of those which would need to be planned on a front-to-front rather than a back-to-back basis because it will be a significant arterial road. Likewise, veering further west, the road cutting through the western part of the North to Galway certainly needs attention.

Much of the EU money under the Peace Fund has gone into social and reconciliation projects, which are not of an infrastructural kind and therefore are not seen in bricks and mortar in the same way. We will undergo a considerable reduction in EU funds over the next few years.

Chairman

Although this is outside my remit, while both Governments are trying to do everything they possibly can, surely there should be a 20-year EU initiative to give them the same incentives we received to get up and running, get everyone united and back on track, and focus everyone's attention on commercialism and giving everyone an equal opportunity.

Mr. Farren

Yes.

Chairman

I refer to Cohesion Funds, Structural Funds and various incentive initiatives such as section 23 relief which the UK can introduce, but all these must receive the approval of the EU. Whoever has my job, over the next ten months and thereafter, I hope the committee can be in some way the conduit for getting together all the parties in the North of Ireland — Mr. Farren can use his good offices to be the central force and he is the first to make an approach to this committee — to see whether we can get a 20-year action plan of major EU investment in the North just as we have been given the opportunity in the South.

My parish is next to the Ulster border, where Cavan comes in to the bridge of Finnay. These people are at a considerable disadvantage. Anything we in this committee can do to highlight and make the case for Mr. Farren, we certainly want to be a part of in a meaningful way. We probably have eight months because we all will be out trying to get ourselves re-elected after that. Realistically, we probably have six months. If something can be done, it must be with the clear approval of the EU, coming from the UK Government, and we can certainly assist. If there is anything Mr. Farren thinks we can do, we will definitely do it.

Deputy Hogan

I welcome the SDLP delegation. I am delighted to see all the familiar faces again at a meeting here engaged in the process of trying to deepen the involvement of all of our people in enterprise.

I read their document North South Makes Sense which dealt with many of the issues to which Mr. Farren alluded today. It resonated completely on the urgent need for co-operation between North and South on so many issues. I am puzzled about why it has taken so long for the penny to drop, that the only way in which one can get lasting peace in Ireland is to ensure that people are gainfully involved in enterprise and employment opportunities on an equal basis right across the island. Many of the issues raised by Mr. Farren are ripe for North-South co-operation. Ms Kelly will be familiar with the most important, which relates to Altnagelvin and Letterkenny hospitals. County Donegal is isolated and it is experiencing high unemployment. A number of enterprises have been lost, which has had a major negative impact on people’s quality of life and on social services, an area in which much more could be done.

The introduction of an all-Ireland corporation tax rate of 12.5% for all small businesses, which has been very successful in the South, should at least be pushed at the North-South Ministerial Council and between both Governments. The delay in setting up arrangements for an all-Ireland energy network is a significant issue. The ESB indicated recently there would be another delay and the company stated it may begin in four months. It is question of waiting and seeing when it happens. That could make a major difference to business and household customers. The postal service is also an issue, as is the all-Ireland Criminal Assets Bureau. If we are serious about dealing with the issue of criminality, which is covered by the Good Friday Agreement and the various talks since it was signed, independent reports should be published by the Criminal Assets Bureau as well as the IMC. While criminality is a worldwide problem, because we share a border with Northern Ireland, it is a greater problem than people in the South realise.

I agree with the Chairman regarding road safety. Breaching road traffic regulations is an issue on both sides of the Border and significant co-operation is required, particularly as the issue is topical and it should be addressed. I subscribe to the maxim of Mr. Farren's contribution that co-operation will mean integration and less duplication and we should apply that to all our thinking. I recently visited Donegal and over the years I have noticed the county has not enhanced itself economically relative to other counties in the Republic because of the lack of North-South co-operation. Donegal is more in tune with what happens in Northern Ireland rather than in the Republic. Both Governments have a guilt complex in this regard, which is ripe to be exploited, particularly in light of the decision taken on 6 May by the North-South Ministerial Council.

Donegal should very much be taken into account following this decision. Have the National Roads Authority and the corresponding body in Northern Ireland discussed the need for a motorway between Belfast and Donegal? Mr. Farren mentioned a link road between Ballybofey and Strabane with other links to Letterkenny and Derry. It was proposed to link Donegal and Belfast by motorway at one stage. Is that still being considered or is it in abeyance?

Mr. Dallat

One of the craziest things is the lack of a complete motorway between Belfast and Derry. The motorway ends at Toomebridge, County Derry. I refer to the Chairman's remarks. We believe the European Union should have played a greater part in creating the infrastructure to link the two parts of Ireland but there has been a reluctance on the part of the direct rule ministers to discuss issues which appear to be internal to the North but which are clearly part of an overall plan. We have been told repeatedly the railway between Belfast and Derry, for example, is part of the North and has nothing to do with the Republic but it has everything to do with the Republic.

I refer to Deputy Hogan's comments. Of course the absence of a motorway from Belfast to Derry and onward to Letterkenny is of vital importance to Donegal. There has been some investment and there was a recent announcement of further investment in ring roads and dualling but even now when travelling from Belfast to Coleraine, for example, one experiences bottlenecks because the road is not of a proper standard. There are many issues to be discussed by the Government and political parties in the Republic. Any reluctance to raise internal issues within Northern Ireland should be removed. There is no need for any semblance of economic partition. We are mature enough to know this. The rest of Europe got rid of most of that.

It is astonishing, for example, that we still have roaming charges on mobile phones within the island of Ireland. I acknowledge the pressure placed by the Republic on mobile phone companies to remove those charges. Nevertheless, they still exist, not so much for small businesses in the Republic but very substantially for small businesses in Northern Ireland. Last week, I heard of a mobile phone user who, when travelling south, put £30 credit in his phone in Newry and found he had no credit when he arrived in Dublin. That is unacceptable.

Chairman

We have our national development plan for the years 2006 to 2013. Is there a master plan for the North of Ireland?

Mr. Farren

There is. It is currently under review. It was published by the Executive in 2001 or 2002. It sets out the road development plans for the next decade. The strategic investment body, of which I believe there is a parallel body in the Department of Finance, is charged with examining how the funding for major infrastructural projects such as schools, hospitals, roads, the water service and so on is to be taken forward, whether by payments from the current budget, public private finance initiatives or otherwise. That body has been indicating its plans for the next ten years. Unfortunately as far as roads development is concerned, the strategic investment body does not envisage completing the upgrading of the section of the Derry to Belfast road around Toomebridge, where the road crosses the Bann and where the motorway ends, until approximately 2015. That is a long way away and is far too distant, considering our communication needs between the two major cities in the North.

Senator Leyden

I join you, Chairman, in welcoming the delegation from the SDLP. My experience of visiting the North as a substitute member of the British-Irish Interparliamentary Body convinces me that the quicker there is a devolved administration the better for everyone in the North. The recommendations of Mr. Farren and his colleagues will not be implemented until there is a devolved administration in Northern Ireland. The success of the previous devolved administrations is a shining example of how the parties in Northern Ireland can work together and with the Irish Government. I suppose that is one message. I know the SDLP is doing its utmost in that regard. I do not doubt that its commitment and its achievements have been exemplary. I refer to the achievements of John Hume and Gerry Adams, for example. I will not go back much further into history.

Having visited Belfast, I am aware that the situation in north Belfast, in particular, is dreadful. There is a failed identity up there. The people in that area admit they now look south for help and inspiration. That came across clearly to me during my two recent trips, when I examined the economic situation there. The members of the delegation are aware that a report is being prepared by the British-Irish Interparliamentary Body.

I would like to speak about my experience of the British Administration. I refer to ministers who visit for a few days a week. Those of us who are interested in economic and industrial development are aware of what happens when worthwhile projects come to Northern Ireland. If a Secretary of State with his own constituency can choose the location of such a project, human nature will mean it is obvious where the project will go. That is the reality of life. Perhaps it should be made clear to the DUP that this is causing the people of Northern Ireland to sacrifice and lose out on certain things. It is amazing that more business people in Northern Ireland are not exerting pressure on the DUP to take the quantum leap, as it is called, and to go into government. The DUP has worked in government with Sinn Féin over recent years, for example at committee level. It is an absolute travesty that more is not being done to help the people of Northern Ireland.

I would like to speak about the SDLP's submission to the committee. I commend the Taoiseach on inviting business people from Northern Ireland to go to India recently. The Taoiseach led the deputation. I promoted companies in Northern Ireland when I was Minister of State with responsibility for trade and marketing, which was before the Good Friday Agreement was signed. Such an approach has always been adopted here. We have never detracted from the work of companies in Northern Ireland. If it was possible at the time to which I refer for Irish Ministers to promote such companies at trade fairs, we did so. I am speaking about the entire Government at that time. It may not have been recognised that we had an unwritten general policy of ensuring we were available to assist in any way we could.

The great proposals which have been made by the SDLP in its submission will die on 24 November unless a devolved government is put in place. The work being done by the members of the delegation, as members of a legislative assembly, will also be in vain. I emphasise that this meeting offers great opportunities as it will be publicised on the world wide web and in the media. I advise those in Northern Ireland who have influence to get their act together and to put in place a devolved government in Northern Ireland. If they do not avail of the great opportunity that currently exists, by achieving the restoration of the institutions by 24 November, that opportunity will be lost for a long time. I emphasise that point because a great deal can be achieved in Northern Ireland, where there are many enterprising people. I am delighted the SDLP delegation is attending this meeting. I am glad to renew contact with the members of the delegation.

Deputy Callanan

I welcome the SDLP delegation to this meeting. I agree strongly with the Chairman, who said the North should get involved with the Road Safety Authority. This would save lives, perhaps immediately. It is an important aspect of this matter.

As I am from a farming background, I would also like to mention animal health. The co-operation that was evident during the foot and mouth disease crisis seems to have lapsed somewhat since then. At the horse fair in my home town of Ballinasloe in a couple of weeks time, there will be more people with Northern Ireland accents than there will be with southern accents. They will all be very welcome.

Chairman

When is it on?

Deputy Callanan

It is taking place on 1 October next. Our Minister will be there as well. The members of the delegation are welcome to attend. There are differences between the restrictions on either side of the Border. Just as there should be an all-Ireland animal health policy, there needs to be more co-operation in respect of human health, as Ms Kelly said. Such matters need to be taken into consideration when decisions are being taken on the location of hospitals, for example. There should be far more co-operation to assist people who go in and out of catchment areas.

What is the current position in Northern Ireland in respect of rates on houses? Are rates still in place there? Are domestic water charges imposed in the North? Are there college fees there?

Chairman

I forgot that I served with the former Senator, Bríd Rogers. I compliment her on what she did when she was the Minister for Agriculture in the North during the foot and mouth disease crisis. We were all praying morning, noon and night during that dreadful time.

Deputy M. Brady

I welcome our friends from the other part of the country. I am delighted they are here. The meeting is worthwhile and the informative presentation we have heard has been beneficial for all members. In line with an idea of the Chairman's, members travel around the country quite a bit and make presentations at colleges. We had a very interesting meeting in Ennis last week at which students were invited to give presentations on entrepreneurship. One of the students highlighted in her presentation that people who start small business encounter bureaucratic hindrances. They are stonewalled and must seek the information they need on grants and assistance in a great many different places. The first thing a person who starts a business receives, of course, is a clatter of letters from the Revenue Commissioners. What is the scenario in Northern Ireland for an entrepreneur? What support is available and is the process of accessing information a simple one? It would be useful to compare the procedures with those in this jurisdiction.

What is the level of foreign investment in Northern Ireland? Has it decreased or increased lately and what incentives are in place to encourage inward investment in factories and other enterprises?

Mr. Farren

We acknowledge the good wishes expressed for 24 November. Whatever happens, politics will not simply end on 25 November. We cannot fold up our tents and go away, although it might be more difficult for us to exist in the political arena. If there is nothing there for us on 25 November, we will still have our local councillors, Mr. Dallat and Ms Kelly. Local authorities are undergoing a very significant transformation currently. We will also have our MPs and three MEPs, on whom a significant burden will fall. We will not have the Assembly, however, which affords a much greater level of representation and from which is derived the Executive. Not everything is lost yet and there is still some time before 24 November. We will not lift our foot from the pedal in our attempt to make a contribution to ensuring a positive outcome. Whatever happens, politics will not be dead on 25 November, nor will the need for North-South relationships. The Governments have promised they will continue to develop cross-Border relationships which have an imperative of their own which demands development. I hope the committee maintains and develops contacts with Northern politicians with Assembly members and people from other sectors in the North. It might be useful for the committee to hear from agencies in the North, especially IntertradeIreland.

Invest Northern Ireland, or INI, which is the IDA's northern equivalent, operates a set of local offices and makes considerable efforts to reach out to business people and potential business people about the forms of assistance available to them. Only a fortnight ago, I attended in my constituency of North Antrim one of a series of breakfast meetings INI was holding to provide local business people with updates on the support available to them. There is an attempt to create a one-stop-shop service. While some people complain about bureaucracy, often those having difficulty getting through it, others tell very positive stories about their relationships with INI having received all the assistance they needed without encountering any problems. They are probably regarded as winners from the minute they walk through the door because they have a good product or service to develop.

A range of assistance can be provided but EU law has made it increasingly difficult to provide the types of direct financial investment which were available in the past. One must provide support in other ways such as by offering assistance with marketing, research, employment, etc. Direct grants are no longer possible under EU legislation, a change I am sure also affects the South to some extent. The SDLP is trying to determine if it is possible to circumvent this obstacle and considerable consensus has been achieved in this regard. This is reflected in a report drafted by the Assembly sub-committee in recent weeks which addresses a new set of incentives, including the possibility of reducing corporation tax to around the same level as is in place here. While this will be difficult to achieve, it is not outside the realm of possibility. The European Union and the Treasury in London are the major barriers in this regard because, as the First Minister of Wales indicated in an address to the Assembly a fortnight ago, if Northern Ireland is permitted to introduce such a measure, Wales will also seek it. There is no doubt that in such a scenario Scotland and some of the poorer regions of England would also seek to have such a measure introduced.

Chairman

That is not to compare like with like.

Mr. Farren

The Chairman is correct but that is the political reality. If County Galway gains an advantage, County Kerry would seek the same advantage and vice versa. This is a political battle which could be won but would be more easily won if we had devolution. We need to be more imaginative in devising incentive packages.

While the scale of foreign direct investment in the North is not comparable to that recorded here, we have not been without our successes in this area. One sector that is beginning to grow, to some extent as a spin-off of success in the South, is financial services. I note that employment in this sector in the South, which started from scratch in the late 1980s, has reached five figures. The North is beginning to develop some of the financial services. For example, some companies are starting to come to the North because of skill shortages in the South, although growth in this area remains small-scale. Some investment has also occurred in the pharmaceuticals, IT and aviation sectors. Shorts Bombardier, a leading company in the Bombardier Group, employs approximately 7,000 people. There are successes but they are fewer in number than here. Perhaps the North could piggy-back a little more on what is happening in the South.

Chairman

Surely the restoration of devolution would be in the interests of the European Union.

Mr. Farren

Yes.

Chairman

If one takes the point to its logical conclusion, the North cannot be compared to Scotland and Wales. To call a spade a spade, neither of those countries has a Good Friday agreement. To everyone's credit, the North has the Good Friday Agreement and it is working. If the EU is serious about making a meaningful contribution, a 20-year initiative should be introduced along the lines of that which has operated in the South for the past 20 years. The two Prime Ministers should work on this matter as a priority, notwithstanding that only about eight weeks remain before the deadline is reached. None of the parties could walk away from an incentive package of 20 years' duration that would offer the same opportunity to the people of the North that we enjoy in the South if the EU played its part.

Senator Coghlan

I too welcome our colleagues and friends from the SDLP and commend them on the document. I was interested in Deputy Hogan's remarks on the Criminal Assets Bureau. I assume that the CAB and the Assets Recovery Agency co-operate fully.

This morning we adopted a report based on the "High Street Britain: 2015" report. What is the experience of the delegation of the dominance in the North of the large players, such as Tesco and Sainsbury's, in the retail grocery market given their enormous sway over suppliers, producers, competitors and consumers and the parking restrictions in town centres? Are steps being taken to address the issues that arise? The referral of these outlets to the Office of Fair Trading in Britain presumably covers the North as well.

Coming back to the 24 November deadline, am I missing something? Has Dr. Paisley not firmly ruled out government with Sinn Féin and is he not inflexible on this issue? People say there is more time but things do not look good at present.

Deputy P. Breen

I apologise for my late arrival, I was attending the funeral of a great Irishman, Colonel Seán Clancy, who died aged 105 years and was buried today. He was a native of County Clare. Speaking of County Clare, there are great links between it and the Newry and Mourne area, with many SDLP members visiting our county on exchange.

How successful has Northern Ireland been with broadband in comparison to the Republic? How was the successful penetration of broadband achieved? It is vitally important when it comes to the promotion of industry, particularly outside Belfast.

Mr. Dallat

I was interested in the issue of large multiples because they have an impact on the development of small and medium-sized businesses. The Republic was ahead of us some years ago when it capped the size of stores and carried out independent economic impact assessment. Our experience in the North and in Britain is that even large towns have seen small business completely wiped out. In England up to 40% of towns no longer have a single shop so there is a need for Government to create a level playing field for businesses. The apparent advantages offered by large multiples do not stack up. I am not saying they should not be allowed access but they should be rigidly controlled.

Deputy Brady mentioned the involvement of young people in enterprise. A golden opportunity exists to develop and encourage that on an all-Ireland basis. I recall some years ago, when I was a business studies teacher, spending an interesting weekend at the Slieve Russell Hotel with young people from both parts of Ireland under the flagship of Young Enterprise. That was a successful exercise which should be followed up.

Last night Coleraine Borough Council approved awards for young people in industry, which clearly offer an incentive but also prestige in giving them a stepping stone to better things. Young people in enterprise will not be successful unless they receive the right education, a factor widely recognised in the Republic. The regional college and institutes of technology system in the Republic has been highly successful in this regard, as have the colleges of further education in the North. This summer in the East Derry constituency it was noted that at a late moment students from the Republic, particularly from counties Donegal and Monaghan, could not enter colleges in the North without paying fees of approximately £3,500. Deputy Keaveney understands this issue as she was involved in trying to resolve it. There should not be such difficulties. There should be a freeflow of students between North and South for training and enterprise. Students should not be left hostage to difficulties about who picks up the tab. This issue must be resolved before next year. It is grossly unfair to students who already have the anxiety of waiting on their leaving certificate results, not to know whether they have a place in, say, North West Institute of Further and Higher Education, Limavady or Newry and Kilkeel.

Ms Kelly

Up to 99% of the North is broadband enabled with new providers entering the market, apart from BT and TalkTalk. This does not just help businesses but also young people with training and home study. The only outstanding problem with broadband take-up is in the Ards Peninsula.

Chairman

The North is 99% enabled, which is fantastic.

Ms Kelly

A new valuation system for rates will be introduced in the North. Rates will instead be based on the market value of a person's home. The housing market has picked up, with some property prices going through the roof. In some areas house prices are increasing by £600 per week. With the reduction in conflict, house prices in traditional working class areas have risen. For the owners, however, their incomes have not improved. We are concerned as to how the British Government will cap rates and provide assistance for people. It should be based more on ability to pay, as opposed to the value of a house.

Deputy Callanan

What is the level of rates for, say, a house valued at £300,000?

Ms Kelly

It works out at £6.50 per £1,000, with water charges on top of this. More responsibilities will be given to the seven councils. In some parts of Belfast rates could be high as £6,000. This will seriously affect, say, a pensioner who happens to be living in an area where property values have gone up. There is a major issue about affordability and income.

Chairman

It is an election manifesto issue.

Ms Kelly

Recycling and waste management targets are tied into the European Union. Last Sunday several newspapers carried pictures of household waste from a number of Border counties being dumped at amenity sites in the North. This is beginning to have an impact. There are opportunities for co-operation on energy efficiency, landfill and recycling measures. The other impediments are bank charges, the banking monopoly and the interest rates crippling small businesses and rural enterprises.

Regarding the EU, Leader+ and Leader II have been a tremendous success when it comes to promoting and assisting rural diversification, and we need more of that. One disadvantage in the North is that, following the loss of John Hume as an MEP, we do not feel that we are being represented properly. That is not simply sour grapes, since anyone examining the current incumbents' work will see that we have been badly left behind. We are very much tied in with the UK Government, which we feel has no real understanding of Northern Ireland, which is still rural in European terms.

The final question concerned students. Since I have two daughters at university, it is very close to my heart. Scotland recently allowed universities to set their own fees without any cap, the consequence being that the daughter who has just started must pay £6,500 per year for a two-year course. Young people will be leaving university with debts of upwards of £30,000. I do not know how they are ever to afford a home, given the increase and the lack of social development building. Something that we must consider in the Border counties in particular is the housing market and social housing. The ring fencing of publicly owned land should be considered in that context.

Chairman

We have had a great exchange of views.

Mr. Farren

I would like to make a few comments before the Chairman winds up. On behalf of Ms Kelly, Mr. Dallat and Ms O'Neill, I thank the committee for inviting us. I stressed my hope that it would be the beginning of other engagements. I know that we are now moving into the last few months of this Dáil, but we could set an example nonetheless. While I do not know if they would respond, it might not be a bad idea to try to encourage representatives of the Unionist community, which requires its fears and apprehensions to be allayed. They talk about North-South initiatives as if they were driven by an overtly political agenda whose aim is to force them into a united Ireland against their will. I have tried to point out that anything that the Good Friday Agreement suggests be done is to the mutual benefit of communities North and South. Therefore, they should have as much say as we or anyone else in how those developments should proceed.

Regarding the comment about Dr. Paisley, he says many things, and it is up to us to keep challenging him, since ultimately no party, the DUP, Sinn Féin or anyone else, can be the sole arbiter of how a country or region such as Northern Ireland is to develop. We are continuing our efforts to challenge Dr. Paisley and others who have not met their commitments under the Good Friday Agreement. As has been said repeatedly around the table, while it will not be easy, devolution offers the best opportunity for people in Northern Ireland and across the island to come together. If that is to lead to unity, it will do so only because people believe it the best way forward. Surely that is the best and only way of achieving such unity. Forced unity can never endure, and we must work towards it on the basis of mutual benefit.

I thank the Chairman and the committee once again for the opportunity to attend. I hope that the documents that we leave will be considered and that whatever report is issued will address some of the pertinent points to further North-South development.

Chairman

I thank the delegation for attending. It was partly the initiative, following a social encounter, of the Vice Chairman, Deputy Martin Brady, that it should occur. One hopes that it will become an annual fixture and that other members of the witnesses' party will visit. I hope that we have this dialogue at least once a year with the SDLP, regardless of who is in power. We will take up the suggestion to invite all parties in the North to come down and to have dialogue with us. I have no hesitation in saying that we would accept an invitation to attend Stormont and see how we can play our part, everything being equal. I take on board the content of the submission made by the SDLP and I ask the party to make an additional submission on the road safety proposal made this morning. I can see nothing but good coming out of this for the people of the North and the South.

I note that Mr. Farren comes from a good hurling part of the island. As a former Westmeath hurler, I know that Westmeath played Antrim very often and they beat us many times. My son's girlfriend is from Derry, so I know quite a bit about what Mr. Dallat is saying as well. We could never achieve what we have achieved without the support of the EU. Our membership of the EU has demonstrated what a small state can achieve with an open economy. It defies logic that the same principles cannot be extended to the North. The SDLP has made many good gestures and carried out most of what has happened following the Good Friday Agreement. People in public life from different persuasions must be commended because it has not been easy. We can respect all traditions and move forward positively in commerce, tourism, education and so on.

I thank the delegates for their visit. We look forward to having close dialogue with them in the future and the committee's Vice Chairman will ensure that this happens.

The joint committee adjourned at 12.15 p.m. until 9.30 a.m. on Wednesday, 4 October 2006.