Thursday, 24 October 2013

Questions (129)

Brendan Griffin

Question:

129. Deputy Brendan Griffin asked the Minister for Jobs, Enterprise and Innovation if County Kerry will be a priority county for regional aid from 2014; the efforts he is making to secure this status for County Kerry; the benefits that would accrue to County Kerry compared with the status quo; when he expects to be able to announce the details of same; and if he will make a statement on the matter. [45599/13]

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Written answers (Question to Jobs)

The Regional Aid Guidelines enable the State's industrial development agencies to pay grants, at enhanced rates, to businesses in order to support new investment and new employment in productive projects in Ireland's most disadvantaged regions. This helps the convergence of these regions with the more advantaged regions of the Union. All such grants come from the exchequer, i.e. there is no EU or other external funding.

The new guidelines were adopted by the Commission on 19 June 2013, and will enter into force on 1 July 2014. As a result, the current guidelines that were due to expire at the end of this year are to be extended for a six month transition period.

During the Regional Aid Guideline process thus far, my Department has consulted relevant stakeholders including various Government Departments, the industrial development agencies, Údarás na Gaeltachta, Forfás, the Central Statistics Office, the Border Midland and Western Regional Assembly, the Southern and Eastern Regional Assembly, and the eight Regional Authorities, and this consultation is ongoing.

The initial Regional Aid Guidelines proposal from the Commission, published in May 2012, presented significant challenges for Ireland, in that they proposed a complete ban on aid to large enterprises in all but the most disadvantaged 'A' regions. All Irish regions are classified as 'C' regions, meaning that they are also disadvantaged, but to a lesser extent than 'A' areas. Following sustained engagement with the Commission and likeminded Member States a compromise was agreed with the Commission that will allow Member States to provide investment aid to large enterprises for new economic activities and diversification of existing enterprises into new products or new process innovation.

As things stand, Kerry qualifies for regional investment aid for SMEs under the current 2007-2013 Regional Aid Map, at a rate of 20% for medium sized companies (50 to 249 employees) and 30% for small companies (under 50 employees). Since January 2009, Kerry no longer qualifies for regional aid for investment projects by large companies. Under the 2014-2020 Guidelines, if Kerry, or any other Irish region, was to be designated, aid to all categories of companies would be allowed. The rates for SME's would be the same as those 2007-2013 rates listed above. The rates for investment by large companies would be 10% for certain activities only.

My officials are currently compiling the most up to date economic data for each county in order to determine which counties will qualify for inclusion in a revised Regional Aid Map for Ireland. Relevant data includes comparative unemployment levels and GDP by county. Once this data has been compiled and analysed, qualifying regions up to a maximum of 51.28% of the total population will be included in the new map. This must be agreed by Government and submitted to the Commission by the end of June, 2014.