I welcome the Minister, Deputy Enda Kenny, and his officials. I circulated the proposed timetable and I understand it is agreed by the Members. The Minister has 20 minutes for his opening statement.
Estimates 1996.
Vote 35: Tourism and Trade.
I am happy to appear before the committee to discuss my Department's Estimate and particularly pleased at the timing — a mere four weeks or so before Ireland assumes the EU Presidency.
My Department, if judged solely on the basis of the number of officials, is very small compared to many other Government Departments, not unlike Ireland itself, whose population is tiny compared to that of the larger EU member states. In the case of my Department and the country, however, judgment should not be based on numbers but on the impact we make and our track record. I am happy to stand over what has been accomplished by my Department since it was set up a mere three and a half years ago. Correspondingly, everybody agrees that on the occasions when Ireland has had the honour to hold the EU Presidency, we acquitted ourselves in exemplary fashion. It has been insinuated that small member states cannot run increasingly complex Presidencies. My response is that it is the unshakeable resolve of every member of this Government to give the lie to such insinuations, and I have already been extremely active in the preparations for my Department's contribution to a successful Presidency.
My Department will chair and be responsible for the conduct of business in 13 groups at Council of Ministers' level. Meetings of these groups and other Presidency responsibilities will entail my officials presiding at in excess of 300 meetings during the period July-December 1996. A considerable burden will also arise in Geneva where the preparation for the first World Trade Organisation meeting at ministerial level will take place. In planning for the Presidency I have made certain that my priorities align with and ensure consistency with our national agenda by advancing the Intergovernmental Conference reviewing the EU treaties, preparing for European Monetary Union, enhancing employment through developing external commercial relations and improving the multilateral trading system through the World Trade Organisation, efficient and effective conduct of EU business by advancing the agenda, brokering solutions where appropriate and vigorous political input.
I have already had meetings with Commissioner Monti in relation to the internal market and with Commissioner Sir Leon Brittan in relation to trade issues and to compare notes on Presidency perspectives. I met Commissioner Brittan for a second time as recently as the day before yesterday to review the current state of play in the lead-in to the Irish Presidency. I also met Commissioner Papoutsis, the Commissioner with responsibility for tourism, to review the agenda for the tourism council. I have had discussions with Mr Karl Von Wogau, the president of the European Parliament committee on economic and financial affairs, and will meet him again in Dublin on 7 June to plan my interaction with the European Parliament during the Presidency. I will concentrate on three main areas during the Presidency — the internal market, EU external trade policy and tourism. I will come back to these issues in greater detail later.
I will now go through the key areas of my Department's Estimates and I will follow the order in which the subheads, A, B and C, appear in the short briefing document I provided to the committee. The first subheads are the A subheads or the administrative budget of my Department. While the sums involved are relatively small when viewed in the context of my Department's overall Estimate, the administrative budget is important in the light of the recent Government initiative "Delivering Better Government". Overall, the administrative budget estimate is up 7 per cent on 1995, but this is mainly due to additional staffing requirements, Presidency commitments, increased consultancy activity in relation to the tourism operational programme and pay increases under the Programme for Competitiveness and Work. The allocation for pay, under subhead A1, is up 7 per cent from 1995, but this is due to general pay increases and additional staffing requirements.
The non-pay allocation, under subheads A2 to A9, is up 6 per cent. I stress, however, that taking account of Presidency requirements, there has been no overall increase from 1995 to 1996. This is as a result of economies being achieved in the Department's day-to-day operations, examples of which can be seen in subheads A4 and A5.
I will now turn to the B subheads, and talk about the tourism sector as 1995 was a record year. The number of overseas visitors to Ireland grew by 15 per cent, to over 4.2 million. This was the fourth successive year of growth and in the last decade tourist visits here more than doubled. Strongest growth in visitor numbers last year came from North America, which grew by 30 per cent. Other long haul markets also grew strongly with a 28 per cent increase in numbers. We also achieved good growth in core markets like Britain, from where traffic was up by 12 per cent, and mainland Europe, which recorded an 11 per cent increase in numbers.
Impressive as these increased numbers are, the crucial test of progress in Irish tourism is how revenue from these visitors grew. Bord Fáilte estimates that revenue generated by overseas visitors matched the growth in numbers at just over 15 per cent. Almost £1.3 billion was spent by tourists in Ireland. Comparing that figure with the £690 million spent in 1989 shows how far we have come and how tourism is making an increasingly important contribution to the economy.
Nowhere is that contribution more important than in the jobs area, in which tourism is performing well. Preliminary estimates are that tourism supported 102,000 Irish jobs in 1995. That represents an increase of 11,000 jobs on the 1993 figure. Sometimes tourist boards and Governments are accused of hyping figures to put the best possible face on the statistics. For this reason, I was pleased to be told that our positive view of Ireland's tourism growth is shared by the World Tourism Organisation, which has produced statistics which show that Irish tourism grew faster in 1995 than tourism in every other European country. Overall tourist arrivals in Europe grew by just 2 per cent in 1995, although tourist expenditure was higher at 9.5 per cent.
Bord Fáilte's forecast for tourism growth in 1996 is for a 10 per cent increase in visitor numbers. Clearly the tragedy of Canary Wharf and subsequent events in London have not helped the promotion of Ireland in overseas markets. However, the latest indications are that we are generally on line to meet the target set. In Britain, inquiry level recovered to pre-Canary Wharf levels when our advertising campaigns were resumed and a 53 per cent increase in inquiries was recorded for the January to March quarter. Inquiry levels in France and Germany are also up substantially and further growth can be expected this year.
On top of the record growth from North America in the last two years, the signs are that we may get double digit growth again this year, bringing the number of North American visitors to over 700,000. Compared to the 400,000 visitors we had from this market in 1993, it is clear evidence of one of the major success stories of marketing Irish tourism abroad. The success of the past and optimistic prospects for the future are a product of many diverse factors. These include the generally high profile of Ireland internationally, the success of marketing efforts by Bord Fáilte and the tourism industry independently but particularly when they have combined resources, and in the improvement in the range and quality of the tourism product on offer here.
The Estimates before the committee contain, under subheads B1, B2 and B3, the provisions for funding Bord Fáilte in 1996. The implementation of the recommendations of the Arthur D. Little review of Bord Fáilte resulted in a fundamental restructuring of the organisation in terms of its future role and its relationship with the industry. The mandate for the new board is confirmed as international marketing. The organisation is refocusing its resources in this key area and has divested itself of its other non-core functions. Consequently, the implementation of the change process is virtually complete.
A new mission statement was agreed for the board and a new organisational structure is practically in place. A new international marketing director with a proven track record in private industry now heads up the international marketing division and a new general manager for Europe has also been appointed. The board plans to take on a number of new marketing executives and graduates to work in the development of overseas markets and some of these executives are already in place. Around 70 employees have left the organisation under the voluntary severance package which was put into effect last year.
In relation to the divesting of functions by the board, Tourism Quality Services Limited was selected, following a tendering process, to undertake the registration and grading functions for tourist accommodation. Bearing in mind the importance of high quality standards for tourism accommodation generally, I am satisfied that the key roles being retained by the board will be sufficient to ensure that high quality standards will be maintained. The board will retain ownership of the standards which means they will continue to set the criteria for registration and grading. It will be involved in the final stages of the appeals mechanisms where registration, or renewal of registration, is refused or where registration is being cancelled. It will also be involved in the final stages of the appeals process for classification.
In the case of the bed and breakfast sector, the recognition of the various associations by Bord Fáilte as self regulatory bodies is on the basis of applying the Bord Fáilte standards. Any changes in the standards must be agreed with the board. I believe the recognised associations will do everything in their power in terms of advising and encouraging operators to keep standards at the highest level.
On the product approvals side, a number of the key industry associations have been recognised by the board for the purpose of self-regulation. The Tidy Towns Competition is now being run by the Department of the Environment and a contract has being concluded with MAC Publishing for the publication of the Discover Ireland brochure series. A steering group has been established to oversee the search for a partner for Gulliver, the electronic tourist information and reservations system developed jointly by Bord Fáilte and the Northern Ireland Tourist Board. The system is now to be out-sourced with the two tourist boards looking to take on an investor/equity partner in the business.
The new direction in place for Bord Fáilte is expected to result in the organisation having a more focused role in the promotion and development of tourism. Its core objective will be to market aggressively and professionally, and in close partnership with the industry, the context of the Irish tourism product world-wide. The new marketing focus will encapsulate product development, ensuring that all development activity is clearly market-led, as well as the aggressive selling of a portfolio of Ireland tourism brands internationally via a network of overseas offices, working in partnership with the industry. The marketing effort will also cover Irish industry marketing support, facilitation, training and co-ordination, as well as the provision and management of an ongoing 'knowledge bank' for enhanced decision-making.
The total allocation for the Tourism Promotion and Development Fund — subhead B3 — this year is £7.121 million. I would like to outline the general areas to which these funds will be committed. By far the most substantial part, around £4 million, of this amount will be directed to the Overseas Tourism Marketing Initiative — OTMI — which is a marketing partnership involving Bord Fáilte, the Northern Ireland Tourist Board and the tourism industry, North and South. A total budget of £6.5 million will be available to the OTMI this year, comprising £1 million from the industry, £500,000 sourced from Northern Ireland, £1 million from the Exchequer and a total of £4 million from the Marketing Sub-Programme of the Operational Programme for Tourism.
Television and press campaigns which promote holidays to the island of Ireland are now being run by the OTMI in our four main markets of the US, Britain, Germany and France. The content and timing of OTMI advertising is carefully selected so that it makes the maximum impact on the target audience for Irish tourism, which is usually in the mid to high income categories. OTMI campaigns feature a variety of response mechanisms such as freephone numbers, coupons or minitel, in France, which have been carefully selected for their appropriateness to the target market in each country. Typically, respondents will receive a holiday kit which includes specially produced OTMI brochures and the Bord Fáilte and NITB market books. The aim is to provide the potential customer with the impetus to holiday in Ireland and a method of doing so in the easiest manner.
I have also indicated to Bord Fáilte that a further £1.235 million from this subhead may be devoted to additional marketing and promotional activities by the board. Some of these funds will be used to advance the branding project with the remainder devoted to special activities in overseas markets. Another area which will receive significant funding this year from this subhead is the promotion of home holidays.
One of the significant achievements of the last Tourism Council, which is made up of members of the industry, representatives from the tourism State agencies and officials from certain Departments under my chairmanship, was its endorsement of the comprehensive report entitled "Domestic Tourism Marketing. This report was commissioned by the council's marketing sub-committee and outlined the value of domestic tourism in economic terms, the increased level of competition, particularly in the short breaks sector, and the marketing opportunities which are emerging. It specifically recommended that a new and reorganised approach to support growth in the domestic market was opportune and put forward a number of suggestions for new marketing initiatives.
Following this, the Government agreed to my request to allocate to the B.3 subhead £500,000 towards the cost of developing a new initiative to encourage greater marketing by the industry of home holidays, particularly in the off-peak and shoulder seasons. This initiative will only succeed, however, if it has the co-operation and involvement, financially and actively, of the tourism industry right across the board. The Minister of State at my Department, Deputy Toddy O'Sullivan, is chairing a working group of industry and State agency representatives to implement the proposal.
Other areas which will receive support from funds allocated to B.3 will be marketing projects which arise from the North/South or Ireland/Wales INTERREG Programmes, special projects recommended by the Tourism Council for support and assistance towards a limited number of sporting events which, it can be assured, will assist in the promotion of Irish tourism in a cost-effective manner.
Shannon Development will continue to initiate and support tourism development as a key element of the achievement of overall economic growth throughout the mid-west region. In 1996 Shannon Development will receive £1 million in grant aid to carry out this activity. It will also receive capital from the Exchequer to complement European Regional Development Fund funds to develop the tourism facilities in the region, such as King John's Castle. I am confident that Shannon Development is in a position to discharge its tourism responsibilities within its available budgets in 1996.
Members are aware that CERT is the State tourism training agency. Its mandate is to promote high standards in tourism through professional training in the industry workforce and business advisory support. In 1995 there was a 25 per cent increase in employer demand for CERT trainees. Unemployed people and school leavers who finish CERT courses are very successful in the jobs market. With a growing tourism sector, there will be an even greater demand for trained tourism staff in 1996. CERT will train approximately 11,500 tourism personnel this year, including programmes for first-time job-seekers, unemployed adults, the existing workforce and managers.
The small business expansion loan scheme — SBELS — which was introduced in the 1994 budget made a £100 million loan fund available to small businesses in the manufacturing, tourism and internationally traded sectors. Approximately £25 million of this fund was allocated for projects in the tourism sector. The scheme, which is administered by the ICC Bank plc., provided low, fixed interest loans — 6.75 per cent per annum — at a subsidy of 3 per cent. In so far as the tourism sector is concerned, the scheme has been very successful, all the funds having been allocated by September 1994. In all, 124 tourism projects were approved for loans under this scheme. The sorts of tourism projects that were eligible for these loans were Bord Fáilte registered accommodation and Bord Fáilte and SFADCo approved tourism products and services.
There is no doubt that the scheme represented a unique opportunity for the tourism industry to expand, develop and significantly improve the county's stock of internationally marketable tourist accommodation, with over 75 per cent of the tourism tranche taken up by accommodation providers. Other facilities which benefited included coach tour operators, equestrian centres and golf courses. I am sure Members will agree that the scheme has succeeded in making a major contribution to the growth of the tourism sector and to the creation of sustainable employment. The 1996 cost of the subsidy on the tourism loans under the scheme is estimated at £725,000 and provision for this amount is made under subhead B7 of the Estimates.
Based on the success of the small business expansion loan scheme, my Department strongly supported the inclusion of the tourism sector, on a similar basis, in the European Union support measure for small business under the operational programme for small business. The new scheme, which was launched on 12 September 1995 by the Minister for Enterprise and Employment, is being administered by AIB, Bank of Ireland, National Irish Bank and Ulster Bank. A minimum of £52 million, 25 per cent of the fund, is reserved for the tourism sector. The interest subsidy is jointly funded by the EU, the Exchequer — via the Department of Enterprise and Employment — and the banks.
Registered and approved tourist accommodation and approved tourism products and services such as water based leisure activities, outdoor pursuits, luxury coach tour and car hire services, English language and craft learning facilities, etc., are also eligible. By the end of January 1996, when the scheme was only four months in operation, tourism projects totalling approximately £31 million had been approved and I understand the scheme is now closed for further applications — an indication that it was as popular as the previous one.
The Finance Act, 1995, made provision for a tax relief scheme for certain resort areas to apply, on a pilot basis, to 15 designated areas. I am confident this measure will have a revitalising effect on the specific towns and areas covered. The scheme is based on the very successful urban renewal scheme and incorporates many of its features. The changes to the scheme introduced by the Minister for Finance in this year's Finance Bill are intended to stop the use of certain tax aggressive schemes which are excessively costly to the Exchequer, and to address an imbalance in developments in these resorts whereby self-catering investments may be proceeded with instead of other more worthwhile tourist projects under the scheme. These changes will affect only self-catering accommodation and the provisions are sufficiently flexible to exclude bona fide pipeline developments.
Due to the tax based nature of the scheme and the normal lead-in time for capital projects, it is difficult to assess the level of investment planning and activity under the scheme. However, I know there are significant developments taking place in most, if not all, the designated areas. Ultimately, the success of the scheme will depend on the commitment and energy of the investors and entrepreneurs who come forward with development projects.
The tourism industry will benefit from a number of general taxation provisions under the 1996 Finance Bill, including increased PAYE and PRSI allowances, the reduction in corporation profits tax and improved capital acquisition tax relief. These measures and the extension of the BES scheme for a further three years, will contribute to continued investment in upgrading and expanding tourism amenities and facilities.
I am pleased to report considerable progress over the past 12 months in the implementation of the operational programme for tourism, 1994-99. The programme has generated great interest among investors and I am confident that by 1999 we will be in a position to offer the most discerning overseas visitor an impressive range of facilities to cater for his or her every need. Almost £100 million has already been committed to product development, while nearly £75 million has been spent on training and marketing initiatives under the programme. Projects selected for grant assistance are carefully selected to maximise benefits for Irish tourism and to help to achieve the targets of the programme — increased foreign earnings from tourism, very significant numbers of new jobs and a longer tourism season. The mid-term evaluation of the operational programme will take place shortly and I am sure it will emphasise the continuing benefits deriving to the Irish economy from this programme of EU structural aid.
The provision of a new national conference centre is among the main priorities to be delivered under the current operational programme for tourism. This matter has been raised by numerous Deputies in the Dáil. To date Ireland's success as an international conference destination has been impressive. However, this serves only to emphasise how much more of this business we could generate if we were able to compete for a greater proportion of the larger international events. Our objective is to deliver, within the timeframe of the operational programme, a centre capable of handling 2,000 delegates, with the potential for the generation of additional annual off-peak tourism revenue of £30 million and 30,000 additional high yield visitors. An assessment of a proposal from the RDS to develop such a conference centre is nearing completion.
I will now address myself to the trade area, and initially to subhead C, the grant in aid to ABT. In the trade promotion area, my overall objective is to double the 1994 level of exports from the non-food indigenous sector by 1999. Within this broad and ambitious target, are a number of subtargets which reflect the strategic approach which underpins our trade promotion efforts. An Bord Tráchtála is aiming to treble indigenous exports to continental Europe and to double those to Britain, both by 2001 and both from 1994 base figures.
Incorporated in those targets, and in no way contradicting them, is the objective of reducing our dependency on the UK market by 2 per cent per annum. When I set out this objective in March, some commentators had difficulty with the notion of increasing our exports to the UK while reducing our dependency on the same market. It is quite simple really: it just means that we expect to perform well in the UK but we expect to perform even better in continental Europe. This is not some groundless aspiration. Already, figures for 1995 show exports from indigenous firms to Europe grew by 17 per cent, while the increase for Britain was 6 per cent — still quite respectable given an overall import growth rate in Britain of 4 per cent.
ABT's Opportunity Europe programme for this year, which aims to assist exporters to commit themselves fully to developing the enormous business potential of the continental European market, and which costs £10 million, is a combination of outward missions of sellers, inward missions of buyers and direct financial incentives for firms, including Europlace, which has been very successful in addressing a traditional weakness of Irish firms: the lack of in market representation.
As I said, giving a special emphasis to Europe will not mean abandoning the British market. Those firms which, for sectoral or other reasons, cannot diversify out of Britain in the short-term are getting assistance through a special task force set up by ABT last March, which consists of marketing specialists in the UK, to help individual companies which are experiencing extreme difficulties. That task force has dealt with over 250 firms with exports of over £1 million to Britain to date and is now moving to deal with firms whose exports are less than £1 million. The task force is working with a core group of companies in an effort to help them diversify into more profitable market segments.
On the related subject of ABT's market place service fees, which has been raised by Deputies on a number of occasions, I am pleased that these have been restructured to reflect the size of the company using the service. Smaller companies now pay less for the same service. In addition, the levels of fees for the UK, North America and continental Europe have been brought into line with each other.
ABT's Exchequer allocation for 1996 has been maintained at £34.5 million. This means that, with its own resources, over £40 million is being injected in the indigenous sector, a very substantial sum. As I pointed out earlier, ABT has been set some very challenging tasks but I am confident it will organise itself in such a way to ensure these substantial sums of money — approaching half a billion pounds for this decade — will yield the maximum results.
Our overall export performance continues to maintain its growth momentum. Figures released last Friday by the Central Statistics Office for external trade for the calendar year 1995 show that total exports exceeded £27 billion — an increase of nearly 20 per cent on the previous year. This performance has resulted in a massive 30 per cent increase in our national trade surplus which has increased from £5.5 billion to over £7 billion. That is remarkable and I hope we can all work together to build further on these outstanding results.
Understanding and co-operation in the context of trade leads to dynamism and new initiatives. The international marketplace is constantly throwing up opportunities for new products, more trade and increased business. In ensuring we make the best of these opportunities, it is crucial that the business community are sensitive to ongoing developments in areas such as the internal market and the evolution of a global trading system under the World Trade Organisation.
I see the Presidency as giving me a unique opportunity to offer Irish exporters a chance to get a bird's eye view of these issues. I intend to establish a national trade advisory forum involving representatives of a range of trade interests which I will chair. I propose to invite the relevant Departments, agencies, organisations and associations to nominate a representative to the advisory forum. In addition, I intend to invite a small number of exporters with direct experience in key international markets. The first meeting will take place on 19 June. My objective will be to keep Irish business up to date and hear their reactions as practitioners in the marketplace to EU Presidency priorities and WTO issues as they evolve up to and beyond the Singapore Conference which comes at the end of the Presidency.
I have already indicated I will be concentrating on two main areas in addition to tourism, which I have already discussed, during the forthcoming Presidency of the European Union — the internal market and EU external trade policy. With regard to the EU internal market, I will share two meetings of the internal market council on 25 October and 26 November. My priorities will be in the first instance to review the functioning of the internal market and to initiate any action required in the light of the Commission's report on the effectiveness of same, which is due to be published later this year. Second, to oversee the completion of the "Citizens First!" initiative, which is designed to inform EU citizens of their rights in the internal market. Third, if possible, to progress and secure agreement on the remaining internal market legislative measures, of which there are a number. Fourth, to progress the work being done to assist the countries of central and eastern Europe to align their legislation to that of the EU as part of their preparations for accession to the EU.
In the external trade area, following the establishment of the World Trade Organisation in January 1995, the first world trade organisation ministerial meeting will be held in Singapore in December. The ministerial conference is the supreme decision making body of the World Trade Organisation and will be held every two years. I will head the Irish delegation in Singapore and I will also represent the EU presidency and expect to address the conference in that capacity. I will preside over any meetings that may be necessary in Singapore to finalise EU positions on items that are to be discussed.
To prepare for the conference and as part of the activities under the Irish presidency, I will host an informal meeting of EU trade ministers in Dublin in September. I intend to work towards a strong and united EU position at the Singapore conference favourable to the consolidation and development of the multilateral trading system.
The tourism and trade sectors have a common element. Both can be aggressive seekers and deliverers of real and significant improvement in this country's foreign earnings and job creation. For this reason I am pleased that both are, for the first time in the history of the State, combined in a single Department where their potential to do that can be pursued in a focused and disciplined way.
I told the committee last year that I intended to provide the drive and leadership necessary to give the promotion of these two vital areas a new focus. It should be clear that I have kept my promise in so far as I can. My officials and I are proud of what has been achieved in the past year. There is no question of complacency setting in simply because the results in both sectors for 1995 have been so encouraging and so strong. On the contrary, we will have to fight even harder this year and in the coming years to maintain and exceed the achievements of last year. As Minister for Tourism and Trade I will ensure this is done. I will be happy to hear contributions from members and will then take questions.
Thank you for your detailed report and for keeping within the time schedule which is important to me as Chairman. I call on Deputy Andrews, who has ten minutes. We will return to the sections, enabling further discussions to take place in the course of the meeting.
It is a pleasure to attend this committee. I wish the Minister and his Department every success in the upcoming Presidency of the EU. All parties have an obligation to ensure the Government, does its best, not only for the country but for the EU. We will co-operate with the Minister in the context of his obligations. In his comprehensive statement he outlined that he has a long haul ahead of him.
The policy of my party is to take whatever action is necessary to maintain growth of the tourism sector at a pace which will ensure its viability as a source of employment. This implies sensitivity, not only to the needs of the tourist, but to the needs of the country. Ireland must not depend on low cost, low margin tourism like other countries associated with sunshine package holidays. To develop tourism we must invest in features which make Ireland so attractive to tourists without sacrificing the quality of the tourism product for what may well be a short term economic gain. This aim is easily articulated but not so easily translated into a policy which can ensure its implementation. For these reasons Fianna Fáil is committed to creating a stand alone Department of Tourism responsible solely for and to the tourism industry and providing the Minister for Tourism and the Government with the legislative and administrative support to harness all available resources to implement policy.
Tourism has become so important in the overall context of our economic development that the need for this concentration of effort is almost self evident. It is perhaps in the environment of Opposition that Fianna Fáil is afforded the time and clarity of vision to identify future policy requirements, uncluttered by the imperative needs of the day to day administration of Government.
Since the Government took office, overall spending on tourism and trade has reduced by 11.1 per cent in real terms. This says something about the Government's attitude to the sectors involved. Its short-sighted view of tourism and trade negated some of the greatest opportunities ever for the State. This is a time to keep investment up, especially having regard to the situation in Northern Ireland.
Some of the greatest potential resides in tourism. As the Minister indicated on other occasions, tourism now supports employment for more than 90,000 people. If it is not already, it will soon be the most important sector in the economy, contributing huge amounts to GNP. One would imagine a sector such as this would be nurtured and encouraged. Instead it appears the Government has taken a negative approach, as is evidenced in the Estimates.
In the 1996 Estimates, the grant for Bord Fáilte Éireann is down by 10 per cent while the grant for tourism development works is down by 46 per cent. The cuts in Bord Fáilte Éireann are taking place at a time when some costs in the Minister's Department have increased. For example costs for consultancy services are up by 79 per cent. Overhead costs in the Department have also risen rapidly in this period. This is an extraordinary situation at a time when we have such high unemployment. Tourism can be the engine for employment because it is labour intensive and can generate huge numbers of jobs. However, if it is to be starved of internal promotion capital and development grants what hope is there for the future?
I also question the pressure the Minister may have applied to Bord Fáilte Éireann. I speculate here; doubtless the Minister will put the record right. When the Book of Estimates was published, Bord Fáilte Éireann welcomed the 10 per cent cut in its budget. In all my time in the House, I have not heard of a major State company, with serious work and plans in hand, welcome a cut in its funding. There is another reason for that statement. Perhaps the Minister will explain it.
There is strong reason to express concern at the Government's treatment of the tourism sector. It was not mentioned even once by the Minister for Finance in his Budget Statement. Given that there have been slowing growth rates the sector must be encouraged; it should not be taken for granted. As the Minister said, there is no reason for complacency.
The fiasco involving the national conference centre competition is another cause for concern. The Government prematurely called a halt to the contest. Thirteen groups who submitted proposals and spent large sums on plans were suddenly told the competition was cancelled. An adequate reason was not provided. This was very unprofessional and may have left the State open to legal action. The project was then awarded to the Royal Dublin Society even though it was supposedly one of the groups that had not met the criteria established by the Minister. Selecting Ballsbridge, already choked with traffic, as a location for a major conference centre appears to make little sense.
The Minister has not been very forthcoming with regard to information on why the RDS was selected. He has also been very slow to provide any details of the plans. The Minister of State recently answered questions on the matter and said a final decision had not been taken on the RDS and negotiations were still ongoing in Brussels. However, he then let it slip that planning permission for the RDS had been applied for. Will the Minister provide full information on the conference centre? Has the Government decision been taken? If not, why has the RDS applied for planning permission? Who is paying the costs of the RDS?
I remain fearful that the project will be botched and a major opportunity for the country will be lost. There have already been great delays in progressing the centre which will be worth £30 million per year in revenue to the Exchequer and will create 1,500 jobs. It is estimated that between 12 and 14 international conferences would come here every year if the centre were available. Could the Minister say if we yet have any bookings for the centre and if he is satisfied that it will be ready by the end of 1999? That is the date when EU funds for the project run out and in his comprehensive speech the Minister said it should be concluded by the end of the operational programme.
Another matter which has raised much concern is the Government's attitude to the World Equestrian Games. There was no support forthcoming from the Minister or his colleagues for the project. It was almost lost and it is still not clear that it will be finally saved, although a new sponsor appears to have come forward. The World Equestrian Games is a major opportunity for this country to promote itself abroad. It is an event which we have the capability, infrastructure and personnel to run. This failure was not only on the part of the Minister, it went right through the Government, including Ministers with equestrian interests. Even the Minister of State, Deputy Mitchell, who wants to bring the Olympic Games to Dublin, was silent for once. I ask the Minister to clarify his position on the games and to say if Ireland will be liable for a £1.5 million bond if the event does not go ahead.
What is the Minister's intention relating to the Tour de France starting in Ireland? What is his attitude to the women's golf competition which will take place in the not too distant future and which RTE apparently does not have the capacity to televise? This is another lost opportunity and the Minister should indicate what influence he will bring to bear on RTE to ensure this valuable women's competition will be televised so that women will not be discriminated against once more.
The Eurovision Song Contest is another event which should be encouraged rather than criticised. I hope the Minister will play an active part in ensuring Ireland hosts the event next year. There has been a long silence since Ireland won the contest. Is RTE prevaricating? What is the reason for the long pause before coming to a decision? A sum of £2.5 million to £3 million is involved and as a small country with a lot to offer to Europe and the world we should not be prevaricating about this important contest. We should take it immediately.
Progress on the EU Operational Programme for Tourism is at a standstill. The medium term review of EU funds is due shortly, yet there has been little headway on the allocation of funds for tourism. Could the Minister outline how much has been allocated as a percentage, how much remains to be allocated and when this will happen? The Minister's inactivity in this area could lead to Ireland being penalised and losing up to 10 per cent of the allocation.
It is also fair to say the Minister has been slow to chart a future for Ireland as an off-season tourism destination. We have marvellous facilities for hang-gliding, abseiling, fishing, walking, hunting, shooting, etc. All these must be marketed and used to increase the tourism spend in the off-season.
This time last year the Minister had just returned from the Washington investment conference. What tangible achievements have resulted and what plans has the Minister followed up one year on?
This year's Estimate contains funding for consultants. What has happened to the Arthur D. Little report? What remains to be implemented? Who are this year's consultants, where do they come from, what are they doing, how much is each being paid? Could we have transparency and openness across the spectrum? Are the consultants individuals or corporations?
The Irish Tourist Industry Confederation's recent report about the tourism imbalance warned that some areas were being overstretched and stated there was a need to examine how a better tourist spread could be achieved. One certain way is to ensure that low cost carriers fly into airports on the western seaboard. I have raised this issue with the Minister time and again but nothing ever appears to happen. Shannon Development's tourism spend has not increased in these Estimates; with inflation, it is effectively down 3 per cent. This is a further cut after a reduction of 40 per cent in 1995. As a man from the west the Minister must understand the importance of the industry to the region, so why is he not acting? Has the Minister no overall plan for the development of the tourism sector?
Is there a plan to grade restaurants and regulate hotels? CERT is doing a magnificent job but there is much concern among restaurants about shortages of staff. Is the Minister addressing this issue and will he come up with plans in conjunction with the Minister for Enterprise and Employment, the Minister for Finance and the Minister for Social Welfare?
The inadequacy of road signs is an issue which arises every year. It is deplorable in 1996 that road signs, particularly on secondary and tertiary roads, are a national disgrace. However, signs on primary roads and by-passes are excellent.
On trade, exporters to Britain have been under sustained pressure for a considerable period owing to the strength of the Irish pound against sterling. This has serious implications and I imagine jobs have been lost. It may be one reason the live register remains so high despite growth. Many companies doing business with Britain have decided not to take on staff due to the pressure. If they have employed people, it has been in their UK operations. Some companies have also shifted part or all of their operations to Britain. Has the Minister studied these difficulties and has he any proposals for action? The Irish Trade Board's allocation in these Estimates is the same for that in 1995, which means that in real terms it is down several percentage points. This is hardly an acknowledgement of the seriousness of the trade situation. Should the Minister not consider waiving trade board charges, so that companies dependent on Britain can spread into markets in Europe and further afield?
The Irish Trade Board and Forbairt both have roles in relation to indigenous industry. Has the Minister considered merging them so that the focus could be sharper? Are there any plans for a study along the Arthur D. Little lines for the Irish Trade Board?
Thank you, Deputy Andrews, for a detailed contribution which posed many interesting questions. I call on Deputy Molloy, the spokesperson for the Progressive Democrats. As I allowed Deputy Andrews to go five minutes overtime I will allow the facility to Deputy Molloy — I believe in equality.
To backbenchers also?
I will try not to be lead-ránach. I welcome the Minister and thank him for his presentation and for his courtesy to us throughout the year, particularly at Question Time when we raise issues we think are in need of attention. We also appreciate his enthusiasm for the job.
He is in the privileged position of presiding over a Department where one can point to some success. Tourism is important for Ireland. It is a growth industry worldwide and happily we are participating in this. What concerns me, however, is the imbalance in the tourism growth within Ireland, which is tied closely to the problem of access to the Irish market. I continually raise these issues with the Minister at Question Time but I do not think I have received a satisfactory answer because access is the responsibility of the Minister for Transport, Energy and Communications, Deputy Lowry. We have urged this Minister, Deputy Kenny, to have more vigorous meetings with his colleague in order to achieve greater competition in access transport to this tourism market but we have not yet succeeded.
In the April 1996 issue of Bord Fáilte's Link magazine there is an interview with Mr. Jim Murphy, the president of Brendan Tours. He confirmed what I have heard about him for quite some time — he is working at the coalface, bringing 10,000 US tourists into Ireland annually. In the interview, he said:
The biggest problem promoting Ireland is the lack of competition, which keeps airline fares high and capacity short. Moving clients over London immediately presents the possibility of a couple of nights in a major world city. Those extra nights come out of the potential stay in Ireland and in the minds of the traveller going to Ireland, over Britain is a negative. Clients are aware that London air fares are low and that the back-haul to Ireland is costing them.
The Minister for Transport, Energy and Communications tells us that he has no direct say in opening up access to Ireland and that it is up to the airlines themselves. However, we cannot sit on the sidelines and allow a situation to continue whereby tourists from the valuable American market have to fly to London to come here. They will not fly into Dublin or Shannon in great numbers because of the cost. I refer in particular to those not residing in Washington, New York or close to one of the major east coast US airports. Those in the southern, western or central states have to fly to a hub, New York for example, to come to Dublin.
American travellers wish to avoid New York's JFK Airport if possible because it is so congested and not a happy start to their holiday. Consequently, they fly to London and then on to Ireland. This adds greatly to the cost of coming here. What positive steps is the Minister taking to improve this situation?
The imbalance in tourism growth has been highlighted in many articles in newspapers and tourism publications. Although there is growth in tourism, it is not evenly spread, it is concentrated mainly in the Dublin region because of the ease of access to Dublin from the English market. The other regions, particularly the west, suffer from difficulty of access. The State and private enterprise have invested substantially in regional airports yet it does not seem to have had an effect in opening up new access facilities for tourists coming here from the UK or European countries.
If the Minister wants to ensure an even distribution of the potential growth, access will have to be improved. This can only be done jointly with the Minister for Transport, Energy and Communications in an overall Government approach. I know the Government recently gave marketing grants to the regional airports. However, if the flights are not available at the right price to the airports the customers will not come and all the marketing in the world will not attract them. The State supported the construction of these airports and, in doing so, it must have believed they would be an asset which would provide an access for tourism and industrial development.
The number of flights to Galway regional airport is minimal -there is an Aer Lingus internal flight to Dublin. There are some charter flights into Knock and UK flights out of Knock although, bearing in mind the fantastic facilities, not very many. The Government allocated a large amount of money to Kerry airport recently. The south west region is faring second best, next to Dublin, and appears to get large investment. Is that because the Tánaiste resides in the region?
Is the Minister of State with responsibility for the west failing to secure a more committed distribution of development funds? The west is more dependent on the jobs and income tourism provides than any other region. We look to the Minister to achieve more than has been the case to date.
The Irish Hotels Federation highlighted in its most recent publication, the ITIC forum report, that the west and mid west regions appear to be losing their share of growing European arrivals through Dublin airport. It states that the total number of bednights in the west has declined by 5 per cent since 1993.
Statistics can look good because tourism is growing globally. However, are we achieving the levels of growth our product is capable of attracting? Analyses carried out by some economists indicate that is not the case and certain regions are losing out. I hope by concentrating my comments on access difficulties and the lack of balance in the growth of tourism in this country the Minister will take note.
I look forward to the Minister's replies on the issue of the conference centre. The Minister talks about this project beginning in December 1996 — only seven months away. How can he see that happening when planning permission has not been obtained and no decision has been made on the award of the Government and EU construction grants? Will the Minister give a definitive statement on the casino? Has the Government decided not to change the law on gambling? Is the Government in favour of it? Will there be a casino or a conference centre in the RDS? What will happen with the Phoenix Park proposal which is causing so much upset in that area?
Will the Minister give an assurance that, in the light of public and EU moneys invested in Celtworld, there will be tighter controls in such matters in future? Is it true that the Celtworld project was insolvent when public moneys were still being provided for it?
As there is no Member from the Independent group present, we have a little time in hand. I propose to allow the Minister to reply to the many points raised and there may be a limited amount of supplementary questions.
I am happy to have a discussion with Deputies on these important matters. Deputy Andrews covered a range of issues. I will deal first with the remarks made on the reductions in the allocation to Bord Fáilte. The reason for the reduction in subhead B1 of the Vote from £24.4 million to £22 million — a reduction of 10 per cent — is that the 1995 figure of £24.4 million included a once off special provision of £1.9 million for severance payments under the voluntary early retirement scheme which I secured from the Government and which is implemented in Bord Fáilte as part of the A.D Little review. Some 70 people left Bord Fáilte under that scheme and, allowing for the recruitment of new personnel, annual savings in pay and salaries are expected to amount to about £1 million. When you make allowance for those two factors, the £1.9 million plus the £1 million totalling approximately £3 million, the actual position is that grant in aid to Bord Fáilte under sub-head B1 actually increased by about £0.5 million in 1996 from 1995.
Subhead B2 covers tourism developmental works. Deputy Andrews in particular will be aware that a once off allocation of £650,000 was made in 1995 for the development of the Dublinia project. That means there is no reduction in real terms in the B2 subhead.
The increase of 11 per cent in subhead B3 has already been referred to. In respect of Shannon Development under subhead B5, SFADCo's other income has increased from £1.4 million in 1995 to just over £3.1 million in 1996. I did not pressurise Bord Fáilte or any member of Bord Fáilte to make any comment in relation to welcoming or otherwise the Estimates.
I wish to deal with the matter of the convention centre. The RDS has not been selected for anything. No contract or condition has been made by the Government. The RDS is finalising a proposal which will be sent to me for analysis and examination. If it were deemed appropriate I would have to get permission from the Government to go to the next stage. I would have to get permission from the European Commission to seek approval for the drawing down of a higher rate of funding because the European Commission would prefer this to be funded at a rate of 50 per cent from the private sector rather than at the 75 per cent rate for a public sector backed project.
I am not aware of whether the RDS has applied for planning permission for any part of that site. The fundamental issue here is that no contract has been awarded and no commitment has been made by the Government. I am waiting for a proposal to come from the RDS which we will take to the next stage. I have to be hopeful that we could get this major centre underway by the year end because the timescale is quite tight. This programme ends in 1999 and as the construction period would be approximately two years one would need to start at the end of this year or very early next year in order to comply with that.
There has been no discussion, nor has any decision been made by the Government in relation to casinos. Any confusion that arises in that regard is hype. I had the matter of the convention centre de-coupled from any issue of a casino licence last year because gambling under casino licensing is illegal in this country and for this reason was not part of the Operational Programme for Tourism.
In regard to the World Equestrian Games, I met the WEG's personnel and informed them that because of inactivity and because of the fact that no funds had been raised and no sponsorship was forthcoming the Government was not inclined to give any further funding. I know that intensive work has been done by WEG personnel since then. I understand that a potential sponsor is available. I have not been approached by WEG personnel since my last meeting with them in regard to money being on the table. This is a major sporting event, the only person to have paid to date is the taxpayer and I could not allow that to continue. I had some very straight discussions with the WEG personnel and they understood that. I have seen some public comments since then about various potential sponsors but I have not yet seen any conclusion to those discussions.
It is for RTE to make the decision about the Eurovision Song Contest itself. It adds to the overall picture of Ireland being a young dynamic country and a centre of music and energy. We await a decision from RTE in that regard.
I had a number of discussions about the Tour de France. This is a major world sporting event and there is an opportunity to hold a number of the early stages in this country. It would cost of the order of £2 million. The question is how would this be funded — sponsorship is not available for the Tour de France — and whether it would be worth it in terms of tourism spin-offs.
The question of CERT has been raised by many people. CERT does a very good job. I am meeting with representatives of CERT shortly to discuss its strategic plan for development. There will be a 10,000 reduction in the available workforce this year because of the introduction of the transition year but CERT informs me it can reach the target numbers.
I will take up the issue of the road signs. I have had an increasing amount of correspondence and queries about this and I will come back to the Deputy on that.
I do not have any intention of commissioning an A. D. Little style report for the trade board. Deputies are aware that a new chief executive will be appointed to the trade board in due course. I understand that interviews are being conducted and that the number of candidates has been narrowed down. I expect a decision on that fairly soon.
Deputy Molloy raised the issue of access and internal growth. The access position from North America is first of all a commercial decision by the airlines involved. It is improving this year. The tables given to me by the Department of Transport, Energy and Communication indicate a 16 or 17 per cent increase in seats coming in here this year against the backdrop of increased visitor numbers of about 12 per cent. It means, for instance, that in 1996 World Airways, a new service here, expects to carry over 60,000 people and American Trans Air, also a new service, expects to carry about 43,700. This would give a total US schedule of about 1.129 million chartered seats here, which is an increase of about 16.3 per cent. There is an increase of about 10 per cent because Chicago has opened up as well. The Juan O'Callaghan based research company prepared a report on this. It is a very difficult area and you can do all sorts of projections. The fact that Aer Lingus will not have a full code sharing arrangement with Delta until next year is obviously something that would have an impact as well.
I suggest that if any questions that remain unanswered you could reply to them in the course of going through the relevant subheads. If that is agreed we can keep on the time schedule. If there are any supplementary questions I am sure the Members will ask those questions under the appropriate headings. We have three sections. They are subhead A, administration, B1 to B8 covering tourism, and C to F covering trade. We have tried to allocate a reasonable amount of time to the various headings. We will now move on to subhead A. If any Deputy wishes to make a comment or ask a question under that heading, please do so.
I was very interested in the EU presidency. Some £52 million is being made available, is that right?
Yes, that is an additional cost.
How can that be done for £52,000 when other Departments are spending huge sums of money? Perhaps it is part of the Taoiseach's EU Presidency costs.
I compliment the Minister's officials for presenting us with a detailed and simplified method of explanation under the various headings in the document accompanying the figures.
Are the administration charges for the Department of Tourism and Trade?
These are the Estimates for the Department of Tourism and Trade.
Does the Minister have a breakdown of the figures? Do these figures cover tourism and trade?
These are the administration Estimates for the Department of Tourism and Trade.
There is not a separate list for tourism and trade?
No.
I pointed that out to the Deputy. The accompanying document gives a breakdown under the three headings.
I take it a decision has not been made about the Royal Dublin Society being used as a location for a national conference centre. It may be awarded the contract, but if it makes a submission which the Minister finds unsatisfactory, will he reject the proposal and locate the national conference centre elsewhere? The Minister of State, when responding to parliamentary questions in the past number of days, said a decision on the national conference centre was imminent, particularly since a committee was set up under the Department of Finance. Perhaps the Minister would clarify that point.
Has the ending of the ceasefire had a negative effect on tourism generally? Wages and salaries are up by 7 per cent, although there has not been an increase in staff numbers. This is well above inflation and the Programme for Competitiveness and Work increases. Why is the increase so big?
The cost of consultancy services has increased by 79 per cent. What contracts have been entered into? What PR consultants have been or will be hired? Under the heading of trade, why have currency exchange losses increased at a time when we are moving towards a single Europe?
Will the Minister agree that a stand alone Department of Tourism would be the proper approach to tourism in the light of the boom time we are now enjoying? It is a good news Department and I do not say that in a derogatory sense. The Minister has been enthusiastic about his portfolio and he has been courteous and forthcoming, which we appreciate. It is difficult to be critical when 4.2 million visitors are expected this year. These are marvellous years for Irish tourism and it would be no harm for the Minister to examine the possibility of a stand alone Department of Tourism.
Deputy Ellis asked what consultants are employed. There is also a carry over of £252,000 from 1995. How does that arise?
We are discussing subheads A1 to A9. Will Deputies ask questions relevant to those subheads?
I thank the Deputies for their investigative questions. As regards Deputy Ned O'Keeffe's question, £52,000 is an additional figure to the Department's administrative budget. One could not run a Presidency on £52,000. As regards Deputy Killeen's question, it is possible to carry this over from one year to another when it can be used for a variety of things.
We intend to hold four EU related meetings in Dublin Castle during the Presidency. There is a Trade Ministers seminar on 18 and 19 September and Article 113 titulaires committee will meet on 18 September. The main discussion at both of these meetings will be the WTO. There will be a meeting of the export credit specific consultations and policy co-ordination group on 18 October and a meeting of the export control co-ordination group on 22 July. Approximately £30,000 of that £52,000 extra allocation will be absorbed by the costs involved in hosting the Trade Ministers seminar, which will include the accommodation costs for each Minister and one official. The airfare and accommodation costs arising from the other meetings will not be borne by this Department.
As regards Deputy Andrews's question about a stand alone Department of Tourism, there are 117 people in the Department of Tourism and Trade, which is balanced 50:60. If we remove one from the other, we will be left with a small group in terms of the overall size of the Civil Service and State agencies.
That is not a bad thing.
The fundamental issue is for this Department to optimise foreign earnings. Tourism and trade complement each other in this regard. The Deputy articulated that on a number of occasions in the past.
As regards the Royal Dublin Society, I am not in a position to award a contract to anybody and neither a contract or a guarantee of a contract has been awarded. I cannot proceed to the next stage until the proposal by the RDS is in the concluding stages and it is examined in the Department. I would then have to go to the Government, get permission to move to the next stage and then seek Commission approval once it is deemed to be a publicly backed project which conforms to all criteria. Then we can move to the next stages. Last year during the decoupling of the convention centre from the casino business, the Department of Finance made its own report. That matter has not come before the Government yet.
The Minister did not mention consultancies.
There is an increase of £66,000 for consultancy services in the 1996 Estimate. The balance of £6,110 due to KPMG Stokes Kennedy Crowley in respect of training needs analysis was paid in February 1995. Arthur D. Little provided advice and assistance to the Department, Bord Fáilte and the Revenue, Implementation Steering Committee at a cost of £100,000. These costs are shared between the Department and Bord Fáilte. The Department has paid its share of approximately £40,000. As this is a fourth schedule service, the Department became liable for VAT of £8,400 to the Revenue Commissioners.
Public Relations of Ireland Limited has been on a contract since 12 June 1995 and a total of £24,000 has been paid to it. Indecon Economic Consultants were paid £11,233 for a consultancy report relating to the national conference centre. Some 75 per cent of these costs are recoupable from the EU under the Operational Programme for Tourism. The total cost under A7 for 1995 was £2,808. Mediawise Limited was paid £1,550 for consultancy services provided to the Minister. Fitzpatrick Associates were paid £5,227 in respect of the evaluation of the Operational Programme for Tourism 1994-99 and 75 per cent of that is recoupable from the EU. The total A7 costs in 1995 were £1,307.
The proposed consultancies, based on the 1996 Estimates submission from the various line divisions, are as follows: the estimated cost of outside consultants to assess such matters as creditworthiness of private buyers, specialist legal advice and project assessment for export credit underwriting is approximately £30,000; the total projected combined cost of the continuation of the contract with Public Relations of Ireland, continued evaluation of the Operational Programme for Tourism, as required by the EU Commission, and mid-term review of the Operational Programme for Tourism is approximately £260,000, of which 75 per cent or £195,000 is recoupable from the EU. The projected A7 costs for 1996 is approximately £65,000. A sum of £11,000 is for contingencies.
I thank the Minister for his detailed reply to Deputy Andrews.
The Minister mentioned Public Relations of Ireland Limited. Is that company privately or publicly owned? Are the other companies mentioned owned by individuals or by corporations?
I understand it is a private company.
Who owns it?
Mr. Bill O'Herlihy.
Will the report by Fitzpatrick Associates on the evaluation of Euro funding be forwarded to the European Commission or has some of it been published here?
Fitzpatrick Associates are external evaluators who do an ongoing analysis of it. It is used by the monitoring committee which monitors the Operational Programme for Tourism.
Will it be published because I am sure it is an interesting study?
It is not published.
That is a pity because it contains valuable information.
I accept the Deputy's point.
We now move to subheads B1 to B8.
As regards INTERREG funding under subhead B3, I ask the Minister to ensure that we receive this money for the fishing and tourism industries because there seems to be little movement in this area. Regional fisheries boards are waiting to spend that money. Under the Programme for Peace and Reconciliation there is substantial funding for tourist related activities over a three year period. However, a year and a half have gone by and no projects have been approved. Recently I asked a Northern Ireland official about funding for cross-Border tourism projects. He said he was not impressed with the amount of money received. More effort should be made by regional tourism boards and by the Department of Tourism and Trade, particularly during the peace initiative. Evidence shows that efforts were not made to help both regions. EU officials even said that this funding should be used to support the peace initiative.
While I welcome the tax relief scheme for seaside resorts, we must introduce a similar scheme for areas which are not traditional tourism resorts. There is a tax relief scheme for seaside resort areas and this should be extended to other tourist areas. I ask the Minister to consider this matter because it would level the playing field.
The Deputy asked that question during discussion of the Estimates at three or four meetings and he had difficulty obtaining the information. If the Minister gives him answers, he will beat four or five of his colleagues who were unable to do so. Deputy Killeen, Deputy Hughes, Deputy Ring, Deputy Boylan and Deputy O'Keeffe may ask questions in that order.
As regards subhead B1, the Minister indicated that the 1995 Estimate included 1.9 severance payments and that Bord Fáilte is up by £500,000. B1 also includes the subvention to the regional tourism organisations and a provision for product development. Perhaps the Minister could give us more information in that regard.
Under subhead B2, the Minister said there was a once-off payment of £650,000 to the Dublinia project. That accounts for nearly all the change. It is disappointing there is no project to replace that, particularly in the west or the Shannon region. The development of tourism in these areas is urgent. I am not sure if the Programme for Peace and Reconciliation was initially included under subhead B3 and whether tourism and development elements of the programme might now be included under the foreign affairs budget. I ask the Minister if that is the case and how much is involved.
I think the Minister indicated about £4 million of this part of the budget relates to OTMI and the promotion of sporting events. Perhaps the Minister could tell me whether the events to be promoted have already been decided. If not, what kind of criteria are in place?
Subhead B4 covers currency exchange losses. Are there any current losses in that area? As Deputy Andrews said, there should not be.
I understand the board of SFADCo is the only regional tourist organisation which does not have a Bord Fáilte representative. There is a vacancy on the board as the chairman resigned this evening, which I regret, though the Minister might not believe me. Two new members were appointed to the board of SFADCo recently. As a body involved in promoting tourism, a Bord Fáilte representative should have been considered for one of these positions, which would have improved the board's weak focus on tourism.
The Minister also indicated that SFADCo's income from other sources has increased substantially. I welcome this, but the success SFADCo had in this area could be mirrored in other RTOs if they were allowed to take the same approach. We would not be jealous in the Shannon region, we would welcome it as strengthening tourism performance nationally.
I welcome the increase for CERT under subhead B6, if it is sufficient. The Minister agreed there is a need for a substantial increase in this area because of the difficulties the trade is experiencing.
In relation to the loan subsidy under subhead B7, does the Minister have any figures indicating how much of the subsidy is taken up per annum? They may not be available but I would appreciate if he could get them for me. I would like to know how that fund is developing and impacting.
The Minister is fortunate he has the challenge of being Minister for Tourism and Trade in a year which I have no doubt will benefit the economy through record growth levels.
Will the Minister ask his relevant colleague in the Department of the Environment — because Bord Fáilte has a responsibility in relation to signposting — to signpost the toll road from the west to Dublin airport? I have difficulty travelling this road unless I do it on a weekly basis. If one does it on an infrequent basis, or if one is a tourist travelling it once, there is extreme difficulty getting to the airport because of the appalling signposting. The European standard signs do not indicate where the airport is. There are small white signs which can be seen only at junctions or roundabouts. I appeal for something to be done about this situation. The least tourists expect, especially when they are rushing for a plane, is a reasonable standard of signposting to our main airport. I do not expect signposting to be up to European standards for a number of years. As a holidaymaker in France, or any other country, one notices the ease with which foreigners can get around by reading route numbers. The road to the airport is a significant example of the appalling signposting. I am amazed that various relevant interests cannot pull together and do something about it, despite the fact there are extensive roadworks. Even as we enter the month of June, it is not too late to do something.
CERT is an excellent organisation and most of its students graduate in May or June. There are a large number of seasonal hotels, primarily in coastal areas, whose bedrooms are filled for the summer months and who cannot get staff from CERT.
A Deputy
They are down in Pontoon.
Apart from Pontoon, many other hotels cannot get staff. This situation should be examined. These hotels are striving for a level playing pitch. If there are trained CERT staff who want work experience, these hotels should be entitled to access these staff like the large hotels, which appear to have a monopoly on the employment of these graduates. I am sure the Minister appreciates the seasonality of these hotels.
Many small, family-run hotels are not eligible for grant aid within the Minister's measures. These hotels played their part in the past in providing a level of tourist accommodation which is now provided by the big players in the market. These small hotels still exist and need modernisation and upgrading. There is no grants scheme available to them. If they decide to undertake an expansion of ten or 15 bedrooms, particularly in rural areas, there is no three phase electricity available although most of the equipment purchased now is marketed on the basis that there is. These hotels must go to the expense of converting machines to make them compatible with the available electricity. I ask the Minister to liaise with his colleague to see what can be done about this situation, particularly in places such as Achill and other areas where there is a plethora of small hotels which need substantial upgrading.
I compliment the Minister on his announcements of funding of up to 75 per cent which require a local contribution, which has yet to be obtained from the local community. I have no doubt the challenge which the Minister has thrown down in his own constituency in Mayo will be taken up in these projects. I remind the Minister there is £700,000 in cash, earning interest in the bank, for a wet weather facility in West-port which is awaiting the approval of the management committee. It would appear there are some people playing around with tourist numbers and figures from consultants' reports. Anybody who visits the prime tourist locations will clearly see the deficiencies and these should be responded to. This is a once-off opportunity to ensure a range of facilities is put in place to encourage the growth of tourism centres and related employment.
I ask the Minister to make an early decision on the wet weather facility applications which have been submitted to him and to be generous with regard to the level of grant aid provided. There is no point providing a facility which will not be in accordance with the original plan submitted. If certain elements are taken out, I am satisfied that in time we will regret that we short-changed the local community.
I often visit Westport as well as Kerry. All those involved in transforming the town of Westport must be complimented. It is a great pity that many other towns do not have the same drive and do not take a leaf from Westport's book.
I compliment the Minister on the wonderful work he is doing. In the past Westport did not get what it deserved. It has progressed well over the years but has done so on its own merits. People had to put their own money up front. I am glad the Minister is correcting this imbalance and that we are receiving the necessary funding. Deputy Hughes spoke about the water world in Westport and the urban council has submitted an application to Bord Fáilte. I have no doubt the Minister will make a positive announcement on this in the near future and that he will not be dictated to by anybody. A large amount of money has been coll�cted locally for this project. I have no doubt that 75 per cent grant aid from EU funding will be provided and the Minister will make an announcement on this soon.
Deputy Hughes spoke about small hotels. I wish to speak about small bed and breakfast providers. Over the years these are the people who have been dealing with tourists because we do not have hotels in place. Many of them have been in business for 20 years but no grants are paid to them to upgrade their facilities. I would like the Minister to consider the needs of people already in the business. Many new people are coming into the business and they are at an advantage, even though some of them are only part-time in the business. I hope grants can be made available to those who operate in the industry on a full-time basis.
I would like the Minister to consider the issue of a tourist office in Westport. I congratulate him for opening a tourist office in Cong this week. In Westport we are waiting for Ireland West and Bord Fáilte to open new offices. James's Street needs this development and I know the Minister will make an announcement about this in the near future. I would like to see tourist offices in every part of the county.
When I was in America some time ago I went into Bord Fáilte's main office in New York but was disappointed with its approach to selling Ireland. I believe the only way to sell our country is for each county to market itself and this is now happening. Bord Fáilte sells the country as a whole but we must sell it on a county by county basis.
I ask the Minister to keep up the good work. He is doing a good job under difficult circumstances and I know he will continue to do so during our Presidency of the EU. If there is anything I can do in the constituency to help him, I will do so.
I compliment the Minister on his marvellous work in promoting the country at all the international fairs he has attended. The reports coming back are extremely good. However, I am sorry to say this is as far as it goes. His good work is not filtering down to ground level.
I have a major complaint to make with regard to the regional tourism organisations. The Minister should look at how they are organised. The North Western Tourism Organisation is not working as far as Cavan is concerned. It is not that Cavan people are difficult to get on with but we have nothing in common with Sligo and Donegal, with which we are aligned. They sell coastal tourism, which is a different tourism package altogether. Our tourism is based on fishing as we have a lake district. We would have more in common with Monaghan and Leitrim. Cross-Border development is important and was referred to by Deputy Leonard. Fermanagh, Cavan, Monaghan and Leitrim could form an excellent partnership to promote the lake district of Ireland, which is unequalled in Europe as a prime location for this type of tourist holiday.
The tourism office in Cavan remains unopened but there is a proposal that it may reopen next week. We are now into the peak tourism season and the office should be opened all year round. The present situation is not good enough for the people who have put money into developing their bed and breakfasts and small hotels. We have the best accommodation not just in Cavan but nationwide. People on the ground are making a marvellous contribution and are serious about their business. They are upgrading their accommodation to the standard required but are not getting support from Bord Fáilte or regional tourism organisations. The Minister should take a serious look at how these organisations operate because they do not distribute their funding fairly across the board.
There was a proposal that there should be a tourism office in every town. We have post offices in every town crying out for business. Every post office should have an element of a tourism package to promote its area. Tourists could obtain in post offices the information they seek and this would further generate business for these offices. The Minister should reorganise the regional tourism organisations in the interests of fair play.
I would also like to compliment the Minister not just with regard to tourism but also to trade. The trade figures which were issued a few days ago are extremely encouraging. The Minister should keep up the good work in this area. Like Deputy Boylan, my praise ends at that.
Deputy Leonard and I were involved in an inquiry by the British-Irish Inter-parliamentary Body last week. The information we are receiving from it is no different from that we understood on the ground. There are grave difficulties in getting INTERREG and peace funds into operation. Cavan/Monaghan has been far behind in tourism in the past and we need to make sure various projects are developed properly and got off the ground as quickly as possible as additional benefits to the area rather than replacements. Unfortunately, because these are not moving, nothing else is happening on the ground.
I urge the Minister and his Cabinet colleagues to make sure the peace dividend, about which we have heard so much, comes into operation. We learned from officialdom North and South that there were great difficulties in setting up committees and structures but they are now in place and it is urgent to make sure things go well. I urge the Minister to visit Cavan and, in particular, Monaghan, to see for himself the potential which exists and what can be done. We know he has the interests of tourism at heart. People are doing a tremendous job on the ground. Deputy Boylan referred to hotel structures. In Cavan/Monaghan we have the best hotels in Ireland but we need back up and initiatives to help the smaller family-owned hotels to benefit more from tourism.
I am despondent that Munster is not getting its fair share of the increase in tourism, especially in the south east and the south west. Cork airport is the gateway to the southern area yet it does not have landing facilities for flights from North America. Recently we saw the introduction of the Boston-Shannon service, but Cork is losing its share of North American tourists. There has been a downturn in Munster despite the increasing numbers elsewhere and I would like to see that corrected. Much money is being spent on marketing this country in North America and elsewhere, yet not sufficient work is being done here. I have Deputy Sheehan's support on this.
Cork airport is ideal for tourism development. We have much to offer in the southern area which is the gateway to Kerry, Waterford and the mid-west. We have a mediocre service to Scotland and Belfast. There is a link between Scottish airports and Belfast, and many American tourists visiting Scotland would come here if links were developed through Cork. The Minister has a role to see that the south get its share of tourism spending. I would like to see fairer play for the greater Cork area and the Cork region generally. The former Taoiseach, Mr. Charles Haughey, made Cork one of the flagship airports in the country. It should be maximised for tourism traffic because that is the big business in the area.
What happened with regard to the currency exchange loss on the CERT/ICC bank loan regarding foreign borrowing for tourism development? I do not know how that arose. It is easy to close the stable door when the horse has bolted, but I would like to have an explanation. I am not criticising it one way or the other because I understand that problems can arise in business.
Under the heading — Loans for the small business expansion scheme, payment to ICC Bank Ltd., — what is the going rate there? I understand it is subsidised at 3 per cent. What is the criteria to qualify for that? Can small family-run hotels and businesses participate in the scheme or is it for larger businesses? How many participate in the scheme? I see there is a Government subsidy of 3 per cent and £25 million is being paid from this subhead. Is this an annual tranche of money or is it a once off payment?
I congratulate the Minister on his presentation to the committee. He has brought some fresh air into the Department of Tourism and Trade. He will be busy during the Irish presidency of the EU, dealing with the demands of both Departments but he can be consoled as he has an effective representative on the home front in Deputy Michael Ring who will make sure that everything will go smoothly when the Minister is away.
Many accidents have occurred in the past few years because foreign tourists drive on the right-hand side of the road. Can Bord Fáilte ensure that information stickers are placed inside the windscreens of hire cars at the ports of entry, and on the steering wheel, reminding tourists to drive on the left? Similar notices could be given to tourists when they arrive off the ferry in their own cars. It is a practical and worth-while idea which would not cost much. During the past week in West Cork three major accidents, which nearly involved fatalities, occurred because tourists drove on the right hand side of the road.
The pilot tax relief for certain seaside resort areas has proved to be a tremendous success. In 1995 it was made available to 15 designated areas. The Minister should urge the Cabinet to continue the scheme in future. South west Cork has the cream of the country's beaches and we thank the Minister for giving us a fair amount of financial support from his Department.
The Minister has provided almost £100,000 for two walks in peninsular areas of my constituency. Walking is proving to be a tourist attraction worthy of development and will continue to be so. Foreign tourists are anxious to explore the grandeur and beautiful views of our rugged countryside.
As regards what Deputy Andrews said earlier, if the Minister has any difficulty in placing the conference centre in Dublin we would be only too pleased to take it in Cork. We could provide a site for such a centre in Cork city or county that would be internationally renowned and would attract conferences from all over the world.
Can I take it it is appropriate to raise questions about the Celt-world project under this subheading because it was grant aided through Bord Fáilte? Will the Minister respond to the point I made regarding the unusual way in which the project was funded with the obvious blessing of Bord Fáilte and departmental approval? Many people are astonished it has not been fully explained how it could be appropriate and correct to operate in that fashion. In his speech, the Minister said funds for the small business expansion scheme relating to tourism had been allocated. Does that mean there are no further funds available for any new applicants and that all the money has been allocated?
That was all allocated.
That one is gone, but what about the present one?
Almost all that has been allocated.
The Minister said the scheme is now closed, so it is not available——
It is not available to new applicants.
Is it the end of that way of promoting tourism product development? Is it intended to introduce expansions or extensions to it?
The allocation under that scheme, operated by the four banks, is closed. We must consider whether we can get another one up and running.
Is any work being done?
Yes. A decision was made by the Department of Enterprise and Employment. Included in the overall allocation given to that Department was the amount for tourism and I am discussing a successor to that scheme with the Minister for Enterprise and Employment.
There has been a lot of parochial lobbying and I ask the Minister to concentrate on questions relevant to this section.
Under the operational programme £100 million has already been committed to product development and £75 million is being spent on training and marketing initiatives, are very significant sums. The total European Regional Development Fund-ESF grants of £370 million are involved over the lifetime of the programme. Deputy Killeen mentioned the amounts under the peace initiative and peace programme which would amount to about £1.281 million, which is transferred back to the Department of Foreign Affairs under headings B3 and B6 to be originally included under this Department. The £872,000 under B3 included 75 per cent EU funding. If Deputy Leonard has particular problems or complaints about issues in his area, I would like to hear about them. I will see they are followed through and that the Deputy gets answers, as everybody deserves that.
Looking at figures under the Operational Programme for Tourism 1994-99 in respect of the capital and private sector training project approvals to the end of 1995, there were 36 approvals in the Border area which came to a total cost of about £11.9 million which included a grant element of £3.482 million under the INTERREG programme. If we add to that the peace and reconciliation and IFI funds, the Border areas, in the Republic will have a substantial amount. An allocation of £0.486 million was available for the Ireland-Northern Ireland INTERREG programme for marketing projects which required Exchequer matching funding. As regards the tourism element with which we deal, the Northern Ireland Tourist Board, Bord Fáilte and the Department are represented on the committee which vets each application. As I said, if the Deputy has any difficulties, I would like to hear from him.
No approvals have been made in respect of the peace and reconciliation programme, which is a three year one.
I understand the Deputy's frustration. He may recall I answered a parliamentary question on this matter. Perhaps the original criteria laid down were not as exact or as clear as they should have been for would-be promoters or maybe there were a lack of ideas or initiatives coming through.
A meeting of that committee is arranged for the Tuesday of Whit week in County Cavan.
Deputy Hughes and Deputy Ring made some comments. When they are in full flight it is a bit like Dodge City and sometimes I must walk the streets with a degree of care and consideration. Deputy Molloy referred to the small business expansion loan scheme. Some £25 million was allocated to the tourism sector and was fully approved by the end of 1994. Some £24.2 million had been disbursed by 18 April 1996 and the remainder by the end of April.
A number of Deputies raised the question of signposting. Bord Fáilte is responsible for tourist signposts, the brown signs, while the Department of the Environment and the local authorities are responsible for directional signposting. Some £92,000 has been included in the budget to Bord Fáilte for tourist signposting under the operational programme, which is a quarter of the total amount. The other 75 per cent is put up under EU funding. A substantial amount is available for tourist signposting and there is a specific programme for that. If Deputies are interested in that or would like to make recommendations, I would be happy to hear from them.
Deputy Killeen asked about the Shannon board. The Minister for Enterprise and Employment makes these appointments. I will take up the issue of appointing someone to the board who will represent the tourism industry. Deputy Boylan said the effects of national tourism are not filtering down and he called for a reorganisation of the Regional Tourism Organisations. My predecessor, Deputy McCreevy, carried out a fairly sensitive and major rejig of these, including the setting up of county tourism committees. If the Deputy is not happy with that, I would like to hear his specific complaints. It is possible for the lake district to be promoted as an entity and that is a job for the RTO. I will take up the Deputy's concerns with them and I will come back to him. Under the marine section of the operation programme for tourism, £19 million is available for the development of angling and angling facilities. A number of the fisheries boards, including Deputy Molloy's which is responsible for the Corrib system, have made comprehensive plans and money is being expended on angling and angling facilities.
Deputy Crawford mentioned the importance of County Monaghan as against County Cavan, the alliance between the two counties and the issue of family owned hotels. I would be happy to visit County Monaghan and County Cavan to investigate complaints.
Deputy O'Keeffe mentioned the regional spread of people. The spend per head in the south west in 1989 was £253, while in 1995 it was £493, which on average is the highest for the country. One million people pass through the Dublin Tourism Office, which is a national office. All the RTOs are entitled to a desk there and to do specific promotions. Some 40 per cent of people who pass through that office want to spend time in the regions. I will send the Deputy full details of the small business loan expansion scheme. I am not sure about the figures as regards North American business. Over a million extra are expected ——
I would like a service from Cork to North America.
I understand that. I will take that up with my colleague, the Minister for Transport, Energy and Communications, and the Americans. Deputy Sheehan mentioned people driving on the left hand side of the road, which is very important. I will tell the self drive car fleet operators that it should be standard in all their promotions. As regards the pilot scheme, I am glad to know the area chosen in the Deputy's county is going well. I would like to carry out a review of the scheme at the end of the year but the question of extending it would be a matter for Government.
Deputy Molloy mentioned Celtworld which is a serious business. The project was handled by Bord Fáilte under the last operational programme for tourism. The Department of Tourism and Trade was not directly involved. I dealt with this issue some time ago on the Adjournment and the Deputy also put down a question on the subject. The Deputy is right to raise the issue of more exact and accurate monitoring of this type of project. Under the new operational programme there is a new system for the assessing of projects, arising from the A.D. Little review, which involves the independent management board. Projects evaluated now are given careful independent assessment and are critically examined in terms of economic spend and the validity of the figures in the proposals. I understand Celtworld has been bought by a private contractor. The Deputy will be aware from the Adjournment debate that as far as Bord Fáilte is concerned, Celtworld will be retained as a tourism entity.
There was a huge loss.
I know that.
A public company went down the drain.
Bord Fáilte has indicated it was strictly a commercial failure. Celtworld was one of the first major developments under the original operational programme. It was a commercial failure, simply because it failed to attract a sufficient number of visitors. We have all learnt lessons from the failure. It is important in any area to have a range of complementary facilities, not just one facility which will stand on its own. I cannot recall all the details, but if the Deputy wants further information I will be happy to give it to him.
Is the Minister satisfied public funding was not put at risk because of the lack of adequate procedures in this case?
When I was appointed to the Department of Tourism and Trade, one of the first issues I dealt with was the implementation of the A.D. Little report. The critical analysis and evaluation that happens now ensures the public purse is not put at risk.
My question relates to what happened.
I have answered that — the Department of Tourism and Trade was not directly involved in this matter.
You were involved.
This was a commercial failure, as the facility failed to attract sufficient numbers of visitors.
We have exhausted our time on the tourism section. We have observed the schedule as set down by the Members.
While trade figures are buoyant and strong, a lot of Irish manufacturers who export to the UK are having difficulties. There is no support for these manufacturers. There are also higher imports into this country because of the currency values. Britain is our largest food and textiles market. It is not as expensive to trade with as other markets. They wear the same clothes, speak the same language, use the same packaging and have the same tastes. For this reason there should be some support mechanism to alleviate the currency problem.
A whole range of British and foreign foodstuffs can be seen on the shelves of our supermarkets because of the currency trend. Irish manufacturers do not have the same opportunity to export into the UK market because of the rate of exchange. There was a market development fund in place a number of years ago and I would like an explanation as to why that cannot be continued. There are a lot of products that do not breach EU regulations and these products should be supported.
Light engineering is another area where quite a lot of products are being developed. I do not want anyone to tell me that because we have strong trade figures we are doing well. That is not the case and that is not the answer.
In relation to subhead D1, there is quite a substantial difference between £103,000 and £23,000. Why is there that difference? Is that £23,000 an outturn or an estimate? I think it relates up to the end of March 1995. Under subhead D2, does the amount provided cover the full risk for the banks? I suspect that it does. Under subhead F, miscellaneous receipts appear to have changed from £130,000 in 1995 to £6,000. Why is that the case?
In relation to trade, a recent statement by IBEC attacked the lack of export policy. I was somewhat concerned about it because I have a great belief in that body and we meet them at different levels for discussions. The IBEC director said that Irish exporters had been hindered for too long by the mentality of Government Departments and State agencies. He then went on to say that the absence of a national trade policy for Ireland was a matter of major concern. He proceeded to talk about Irish business and industry and recommended transferring functions to trade associations from Departments and agencies. The statement was a matter of concern to me and I was disappointed when I read it.
ABT has intensified its efforts in the British market in relation to the sterling matters raised by Deputy O'Keeffe. They set up a special task force at my request to assist companies experiencing difficulties because of the currency differentials. They are working closely with companies to increase their overall export sales and to reduce the cost base for those companies that are more seriously affected. Of the 250 companies contacted by ABT which had in excess of 25 per cent of their turnover exported to the UK, a total of 127 companies requested meetings with the task force. As a result, a number of companies commissioned marketplace services from ABT which involved identifying new business or new customers in new market segments. A total of 21 companies described themselves as being significantly affected by the currency problem. These companies cover a broad range of individual activities with a dependency on the British market ranging from 14 per cent to 90 per cent. Nine are engaged in engineering, five in timber and joinery, four in plastic moulding and packaging and three in computer-related areas. There is a great deal of activity in this area.
I heard claims that food companies lost £1 million on exports to the UK.
An Bord Bia has responsibility for food, which is not dealt with by this Department.
The Minister has done very well and has been open, patient and forthcoming so I will not argue with him.
Thank you. I do not have plans for an A. D. Little type review for ABT as Deputy Andrews requested. There is an ongoing review with continuous monitoring and assessment and a new chief executive is to be appointed there fairly soon. The reduction in miscellaneous receipts from £130,000 in 1995 to £6,000 in 1996 was mentioned. Included in the figure of £130,000 was a once-off receipt from the buffer stock of the international natural rubber organisation for approximately £112,000. If the Deputy wants details of that I can stretch a point and give them to him.
Regarding the liabilities incurred in respect of the export guarantee arrangements, the outturn for 1995 is an actual rather than estimated amount. A sum of £103,000 was drawn down. The provision in the 1996 Estimates is in respect of claims paid in the period between 1 April 1994 and 31 March 1995.
I thank the Members for attending, in particular I thank the spokespersons for their positive and enjoyable contributions on an enjoyable subject. I also thank the Minister for the manner in which he answered questions. He was most helpful to the committee and I also thank his officials who provided documentation and back-up information to Members. In addition, I thank the staff for their help.
The Select Committee adjourned at 4.52 p.m. until Wednesday, 5 June 1996 at 2.30 p.m.