Tuesday, 25 Nov 2014

Priority Questions

Economic Competitiveness

Questions (96)

Dara Calleary

Question:

96. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation his views on competitiveness in the economy in view of recent inflation data which indicates that the cost of Government-controlled services and utilities is rising much faster than the general prices; the actions he is taking to improve competitiveness in the economy generally, including implementing recommendations from the National Competitiveness Council; and if he will make a statement on the matter. [44526/14]

Oral answers (8 contributions)

Deputy Dara Calleary

The National Competitiveness Council published its annual report in April and the then chief executive for Forfás, now the chief executive of IDA Ireland, Mr. Martin Shanahan, said that we must relentlessly pursue further improvements in our cost competitiveness and that we cannot afford any slippage. What has the Minister done about that report since April? What action has he taken on it? Where does our competitiveness now lie six months later?

Minister for Jobs, Enterprise and Innovation (Deputy Richard Bruton)

That is a slightly different question from the one the Deputy asked. The position in regard to competitiveness generally is one where we have seen a very significant improvement in recent years. Ireland's international competitiveness rankings have improved from 24th to 15th in the IMD's world competitiveness yearbook report and from 29th to 25th in the WEF global competitiveness report. If one looks at the harmonised index of competitiveness, which is tracked by the Central Bank, we have shown significant improvements in our cost position and that is reflected by the surveys of the National Competitiveness Council which look at significant areas where there have been real improvements in our competitiveness in terms of individual costs. However, they underline the need for continual vigilance in the area of competitiveness. Obviously, there are always risks and it has pointed to particular sectors where risk arises.

The original question referred to utilities and Government controlled services. In regard to the cost of those services, the range of goods and services the CSO classifies as "administered" by central, regional or local government or national regulators represent a small subset of the overall CPI basket in the areas of hospital services, gas, passenger transport and postal services. Prices for most utilities, such as waste management and electricity, are market driven and, therefore, not set by Government. Alternatively, in some cases, such as the cost of public transport, prices are approved by an external independent regulator. It is, however, important that we remain vigilant in regard to future price increases. I can assure the Deputy that the competitiveness challenge is a very live one and we are very alert to the need to make continual improvements.

Deputy Dara Calleary

Question No. 96 mentions the National Competitiveness Council's recommendations. I presume we are on the same question. That report showed last April that diesel prices in Ireland are 7% more expensive than in the euro area, Ireland's electricity costs are the fifth most expensive in the euro area, and landfill gate fees are the fifth most expensive of the ten countries surveyed. It is the fifth most expensive location out of 16 for industrial water costs. Our new business interest rates are higher, with loan rates 31% higher than in most of the euro area. The report tracks a big increase in the cost of business services and other inputs. Prices in the third quarter were 3.4% higher than those in 2010.

There is an absolute drift in cost management. Electricity costs are still very out of sync with those in the euro area. Even allowing for our island location, the Minister for Communications, Energy and Natural Resources is still the main shareholder in ESB so the Government has a role to play. It is the main shareholder in all the main banks and has a big role to play in respect of interest rates. There has been so much focus on domestic water in recent weeks we forget the figure for industrial water costs. This is the fifth most expensive location for industrial water. The Government has control of that too but there is no sense of an attempt to tackle those costs.

Deputy Richard Bruton

On the harmonised index of prices across Europe, Ireland’s increase is 1.2% in the past 12 months. That is among the lowest in the EU. They are higher in Denmark, Germany, Spain, France, the Netherlands, the UK, Portugal and Finland. Ireland is controlling administrative costs more effectively than other European countries. I agree with the Deputy that there are areas where we need to continue to attend to competitiveness pressures. In the electricity area, for example, a recent restructuring programme took out cost. The focus in electricity has to be on controllable costs because some elements of electricity pricing are beyond the control of the electricity companies because they are dictated by international fuel prices. There are areas such as property, unit labour costs and professional services where we are making improvements. In the Action Plan for Jobs 2015, we will take on board several recommendations of the National Competitiveness Council.

Deputy Dara Calleary

The National Competitiveness Council’s report was very straight on our costs. That was six months ago. Is the National Competitiveness Council as useful as the Fiscal Advisory Council? Is it just an expensive bauble taken out for the visitors and put back in the press when they leave? It made very clear recommendations in very direct language about our cost competitiveness. Has the decrease in oil prices over the summer been passed on in electricity costs to industrial users?

Four years into its term of office and three years since the Legal Services Regulation Bill, which aims to reduce legal costs, came before the House, there is no sense of urgency about it. I remind the Minister of a website which he was very familiar with ten years ago, ripoff.ie. It was one of his party’s websites. The message is still the same and there are areas that the Government can do something about. The National Competitiveness Council has laid out a roadmap but, unfortunately, its advice, like that of the Fiscal Advisory Council, seems irrelevant.

Deputy Richard Bruton

The Deputy is attempting to be very selective in his quotes. We have improved compared with all our international competitors on the ease of business index and on our competitiveness rankings-----

Deputy Dara Calleary

What about the Government’s National Competitiveness Council?

Deputy Richard Bruton

We have done better than all our competitors on administrative prices, which the Deputy raised in his question. In every area the Deputy addressed we have done better when one considers the global picture. We are influenced by international prices in the electricity area and are dependent on fossil fuels, but the ESB and other electricity companies have been focusing on controllable costs and are making progress in those areas. I am not pretending that everything is correct. We must continue to be vigilant and this year we will consider further improvements that make it easier to compete and do business.

Industrial Relations

Questions (97)

Peadar Tóibín

Question:

97. Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation whether the construction-related enterprise-level agreement proposed in the industrial relations (amendment) Bill 2014 will be binding on the construction sector as a whole; and if he will make a statement on the matter. [44405/14]

Oral answers (6 contributions)

Deputy Peadar Tóibín

I have been raising the Kishogue dispute directly with the Minister for weeks to little or no advantage. Will the construction-related enterprise agreements that are proposed in the industrial relations (amendment) Bill 2014 be binding on the construction sector as a whole? It is clear that the current crisis within the construction industry is pushing hundreds of workers into poverty. I am raising this issue because I do not believe the Government comprehends the scale and the immediacy of the problem.

Minister of State at the Department of Jobs, Enterprise and Innovation (Deputy Gerald Nash)

As the Deputy is aware, I recently published the heads of the proposed industrial relations (amendment) Bill 2014. The heads of the Bill are available and are currently the subject of pre-legislative scrutiny by the Joint Committee on Jobs, Enterprise and Innovation. I will set out the two main purposes of the Bill. First, it will provide for the reintroduction of a mechanism for the registration of employment agreements between an employer or employers and trade unions governing terms and conditions in individual enterprises. Such enterprise-level agreements will not be legally binding beyond the individual enterprise. It would not be constitutionally permissible to legislate in that way. Prior to the Supreme Court ruling in the McGowan case, enterprise-level registered employment agreements were not given general application on a sector-wide basis.

Separately, the Bill will provide for a new statutory framework for the establishment of minimum rates of remuneration and other terms and conditions of employment for a specified type, class or group of workers, particularly in the context of transnational provision of services and in the context of promoting harmonious relations between workers. In effect, this will be a framework to replace the former sectoral registered employment agreements system, which included the construction and electrical contracting sector. In this context, the new framework proposes a mechanism whereby, in future, at the request separately or jointly of organisations substantially representative of employers and workers, the court can initiate a review of the pay, pension and sick pay entitlements of workers in a particular sector. If it deems it appropriate, it will be able to make a recommendation to the Minister on the matter. If the Minister is satisfied that the process provided for in the new legislation has been complied with by the Labour Court, he shall make the order. The standard provisions dealing with the laying of orders before the Oireachtas are proposed. Where such an order is made in relation to a class, type or group of workers, it will be binding across the sector to which it relates and will be enforceable by the National Employment Rights Authority.

This mechanism is constitutionally robust compared with the previous registered employment agreement system, which was struck down by the Supreme Court. Prior to the enactment of the Industrial Relations (Amendment) Act 2012, that system provided for employment agreements between trade unions and employer representatives to be given general application by being registered by the Labour Court. As enterprise-level agreements never were and will not be legally binding beyond the subscribing parties, the same constitutional issues regarding the delegation of legislative authority to the Minister that arose in the McGowan case do not apply in such cases.

Deputy Peadar Tóibín

The Construction Industry Federation has acknowledged that there is industrial relations instability at the moment because of the absence of registered employment agreements. It has said that this is causing reputational damage to the industry. Workers are being forced into bogus self-employment contracts. They are not getting the industry wage. They are being paid below the minimum wage in this State. This practice is rife across Government contracts where the Government is the employer. I know of a young man who works for Kishogue. When he went onto the site one day, he was told he was no longer employed but instead was self-employed and was employing a handful of other workers. He was given a sum of money to pay those workers, who had not been paid for weeks. Of course that sum of money was not near to reaching the minimum wage. The Government has hidden behind the Contractors Administration Services, Scope and the National Employment Rights Authority, all of which have been completely ineffectual to date in dealing with this crisis. We need to know whether the forthcoming industrial relations Bill will deal with cases in which the principal contractor washes his or her hands of the actions of subcontractor companies. Such practices are leading to the creation of bogus self-employment contracts.

Deputy Gerald Nash

The Deputy's initial question asked whether enterprise-level agreements will be sectorally applied. Those agreements would not be sectorally applied, of course, because they are agreed between two contracting parties, in many respects. Broadly speaking, the registered employment agreements would be applied across a sector, as was the case with the registered employment agreements system that was struck down in the McGowan case two years ago.

As a Government, we have worked hard to ensure that the wage-setting mechanisms sought by the Construction Industry Federation, CIF, and trade unions address two matters, those being, to ensure that reputable employers have a level playing pitch when tendering for work and that standards and training in the construction industry are protected. This is important if Ireland is to have a competitive advantage. Wage-setting mechanisms, joint industrial councils and so on ensured that there were always high standards of training in the construction industry. It is also important to ensure that there is not a race to the bottom in terms of workers' pay.

We have worked hard to re-establish a registered employment agreement, REA, system. Six sectors of the economy were covered by the previous regime. Deputy Tóibín and colleagues have engaged heavily in the pre-legislative scrutiny process. I look forward to that continuing.

Deputy Peadar Tóibín

The REAs will not be worth the paper they are written upon if the trend of direct labour within the construction industry being transformed into subcontractor self-employed labour continues. There has been a significant increase in the number of relevant contracts tax, RCT, cases. The CSO figures for the second quarter indicated a 1.14% increase in the number of people working, yet a nearly 4% increase in the number of self-employed persons. Many of the latter are RCT cases. I have with me a notice from a recruitment agency advertising "labour" in the construction industry as having no bank holidays, sick days or redundancy payments to pay. In other words, it is a form of contract that denudes the worker of every labour right that he or she should have. The Department of Jobs, Enterprise and Innovation has an infrastructure that is meant to investigate the false use of these subcontracting certificates, but it is so slow that workers are left on strike on building sites for months on end until the building work is completed and attention moves elsewhere. Those workers never get the justice to which they are entitled. The forthcoming industrial relations Bill will focus on ensuring decent wages for decent workers and that decent employers can be confident that they will not be undercut by unscrupulous employers, but we must also focus on the issue of forced subcontracting.

Deputy Gerald Nash

It is a matter in which I am interested personally apart from the fact that I am the Minister of State with responsibility for it. I understand that the issues involved in the dispute in question have been referred to the Labour Court. From the industrial relations point of view, it is important that the court can make determinations on the relevant questions of employment law.

I have every confidence in the National Employment Rights Authority's enforcement of the minimum wage legislation. I also have every confidence in the scope section of the Department of Social Protection and the Revenue Commissioners, the authorities that will make determinations on whether self-employment exists in a situation similar to the one referred to by Deputy Tóibín. It should be left to them. However, these kinds of situation could emerge in the continued absence of an REA-type system. We are legislating to reintroduce a wage-setting mechanism to ensure that workers are protected and adequately rewarded with a view to promoting harmonious industrial relations and affording employers a level playing field.

Job Creation

Questions (98)

Michael Fitzmaurice

Question:

98. Deputy Michael Fitzmaurice asked the Minister for Jobs, Enterprise and Innovation the position on the Industrial Development Agency investment jobs in the pipeline for the towns of Athlone, Ballinasloe, Carrick-on-Shannon and Roscommon; the dates by which any such project is expected to be delivered upon, as these towns are in urgent need of investment; and if he will make a statement on the matter. [44402/14]

Oral answers (6 contributions)

Deputy Michael Fitzmaurice

As a new Deputy, I thank the Minister and the Minister of State, Deputy English, for spending a bit of time talking to me about a few of my proposals. We need to work together to break down barriers across Ireland.

Next Friday evening, a dark cloud will hang over Carrick-on-Shannon when 160 people lose their jobs. It will not come as a shot out of the blue. There have been warning signs for the past three years. Christmas is approaching for those 160 families.

They will have a sadder house and with young children involved, perhaps fewer presents from Santy. What, if anything, is the IDA doing in towns such as Carrick-on-Shannon, Roscommon, Athlone and Ballinasloe? As everyone is aware of the volume of emigration that has gone on, what is it doing to try to bring new industries to locations across the Shannon and to bring different parts of Ireland to balanced economic stability in order that people can live in all such parts? I ask the Minister to comment.

Deputy Richard Bruton

I thank the Deputy for his question, which asks what projects are in the pipeline. He will understand that any project is commercially sensitive until it is finally announced and I am not at liberty to indicate what might be in the pipeline. However, I am optimistic about projects for the future. There have been a number of good projects and good, strong announcements have been made in respect of Jazz Pharmaceuticals, Alexion Pharmaceuticals, Ericsson and VistaMed. I take the Deputy's point regarding the position since MBNA announced its withdrawal from Carrick-on-Shannon. As the Deputy is aware, part of its book for the Irish market found a buyer in AvantCard and while the other part of its book did not. I can assure the Deputy that both my Department's agencies, Enterprise Ireland and the IDA, are working hard to seek to find whether there are alternative uses to keep together that skill base.

Overall, there has been a growth in employment within the four counties the Deputy mentions, which in regional terms span a number of regions, namely, the midlands, west and north west. At present in those regions, there are 159 IDA client companies employing 27,271 people and there has been an increase of more than 3,000 jobs by those companies over the past three years. Consequently, significant progress is being made in that area. I recognise that while all regions have seen job growth, not all regions are enjoying the same job growth. One initiative being taken this year is that my Department will publish shortly a regional enterprise framework within which it can seek to work with stakeholders in the regions to develop their regions to best effect and the IDA will be intimately involved with the work in that regard.

Deputy Michael Fitzmaurice

While I welcome the initiatives to which the Minister referred, my understanding is the number of visits to the likes of Leitrim, Roscommon and some other countries nationwide has been limited compared with the locations to which the major industries have gone. I believe it is necessary to start dangling an odd carrot and while the financial services centre has been highly successful here in Dublin, it is necessary to look outside Dublin. It is necessary to ascertain where new things can be set up and I believe that if it were possible to dangle the carrot and to get people to set up in different parts of Ireland, it would be highly beneficial for the country.

Deputy Richard Bruton

The Government offers greater aid in these regions. Under the regional aid guidelines, the Government is allowed to provide aid at a higher level in certain regions and in the recent negotiations at European Union level, the Government succeeded in getting new regions within that ambit that were areas of high unemployment. Consequently, higher supports are available. The Government has also taken an initiative in, for example, Athlone where it has built an advanced manufacturing facility because it recognises that regions need facilities. Similar initiatives have been taken in Letterkenny and in Waterford. The Department is active in this regard and is understanding of the need to drive a greater spread on multinational investment. However, I should also note that in most regions, 95% of the employment is not in IDA-sponsored companies. While much regional focus tends to be on the 5% that is IDA-sponsored, I regard the 95% of employment that is not to be just as important and the Department seeks to work with such employers through Enterprise Ireland, the local enterprise offices and so on. That is the intention of the regional enterprise strategy, namely, to look right across the spectrum of multinational and nationally-owned enterprise.

Deputy Michael Fitzmaurice

While one talks about creating employment in this country, I refer to a matter about which I spoke to the Minister in recent days.

I spent the weekend on the telephone trying to get to the get to the bottom of it. An EU directive has been introduced and it has resulted in job losses at a number of the SMEs to which the Minister refers. Rules and regulations are being imposed but information in respect of them is not being provided. When one contacts a particular State body about this issue, one is referred to another. I contacted several such bodies in recent days. We are hitting a wall when it comes to obtaining information and, at the same time, jobs are being lost. When regulations are introduced or changes are made, a message must be sent out to indicate what is happening. In addition, training must be provided in order to ensure that jobs will not be lost. The sad reality is that a further nine jobs were lost at an SME in the west last weekend as a result of the introduction of EU regulations. Basically, people are afraid because they do not know where to turn. If we do not take action, more and more jobs will be lost.

Deputy Richard Bruton

To be fair, the Government has set its face towards reducing regulation. This is reflected in Ireland's improved position in the ease-of-doing-business rankings. We have removed many obstacles. For example, with the assistance of the House we have simplified many aspects of company law. In addition, we have sought to make it easier to do business in many areas. The Deputy drew my attention to an issue relating to a particular directive which is not relevant to my Department but which I am pursing on his behalf with the Department concerned.

This matter is arising on a continual basis. Each regulation introduced is designed to protect a public interest. We must find a way of making it easy to comply with such regulations. The HSA is exemplary in this regard. It has used the BeSMART technique to make it easier for farm businesses and other businesses to comply with their safety obligations, which is extremely important in terms of protecting people. If we can make compliance easier for people, then it is a win-win scenario. In the context of regulation, we are seeking to avoid unnecessary obligations being placed on businesses.

Departmental Policy Functions

Questions (99)

Dara Calleary

Question:

99. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation if he will provide an update on the formulation of policy in relation to enterprise, trade, science, technology and innovation matters since the dissolution of Forfás and the subsuming of its role in to the strategic policy division in his Department; and if he will make a statement on the matter. [44527/14]

Oral answers (6 contributions)

Deputy Dara Calleary

The Industrial Development (Forfás Dissolution) Act was brought into force earlier in the year. During the debate on the legislation, I emphasised the need to ensure that an independent policy function would remain in place within the Department and that this would challenge it on a range of issues. I am afraid I have not seen a great deal of evidence of much independent thought on the part of the relevant unit within the Department. What arrangements have been put in place to maintain the independent policy function?

Minister of State at the Department of Jobs, Enterprise and Innovation

In order to put Deputy Calleary's mind at ease, I wish to state that following the commencement of the Industrial Development (Forfás Dissolution) Act 2014 on 1 August 2014, Forfás's policy functions have been integrated within the Department of Jobs, Enterprise and Innovation. The policy research and advisory functions of Forfás have transferred in totality to the Department of Jobs, Enterprise and Innovation and form the core of its strategic policy division. The former staff of Forfás, together with a number of existing staff from the Department, form the core of this newly-created division. A very strong unit has been developed as a result. The objective of integrating Forfás with the Department's existing resources is to further enhance the formulation and development of national enterprise, trade, science, technology and innovation policy. The integration is ensuring that the best available resources of the Department and Forfás will be collectively harnessed and focused on evaluating, designing and executing an ambitious enterprise and jobs strategies, at this pivotal time in economic and enterprise development.

The key elements of the role of the strategic policy division include the areas of enterprise policy, competitiveness, the enterprise aspects of tax policy, education, skills and labour market analysis and economic infrastructure. It also provides research support in the Department in respect of the areas of trade, innovation and climate change, together with economic and data analysis generally. The survey activity previously carried out by Forfás, which provides a key element of the policy research capability, is now being undertaken by the strategic policy division. The research budgets associated with the former Forfás policy activities continue to be available within the Department. When the legislation was debated in the House, the Deputy was concerned that the research budget would disappear. However, that has not proven to be the case and the relevant moneys are being spent on good research.

The strategic policy division is co-ordinating the development of the Action Plan for Jobs 2015 within the Department and is working with other Departments towards achieving the Government’s objective of the creation of 100,000 jobs by 2016. The division is also leading or contributing to a number of specific policy reviews and evaluations under way in the Department including enterprise policy to 2025, in growth areas of opportunity such as intellectual property management, big data and smart ageing, and to the reviews of our strategy for science, technology and innovation to 2020 and also the review of the Department's statement of strategy for the next three years. The Deputy will be aware that the science strategy document was for the period up to 2013 and it is important that we get a new strategy up and running. We are currently working on a new document in this regard.

The Deputy will be aware that the science strategy ran its course in 2013. The strategy document is important and it is important that we get up and running in this regard. We are currently doing a lot of work on that.

Deputy Dara Calleary

The Forfás website, which is full of interesting reports, directs one to the Department's website. The news releases from August on the Department's website refer to the expansion of Storyful, Danone concluding an expansion programme, the Taoiseach launching a centre, the Minister, Deputy Richard Bruton, urging new impetus, MDS opening international offices, and Minister of State Deputy Gerald Nash making a statement. Minister of State Deputy Damien English has not quite made it. All that is missing from the Department's website are the cheerleaders and the pompoms. There is no sense of independent thinking or challenge, which was the hallmark of Forfás and the kinds of documents it produced. For instance, Forfás highlighted a 12% increase in legal fees in its last report on business costs and pushed the Government to do something about the Legal Services Regulation Bill. Nothing was done in this regard. I fear that, in the context of the cheerleading on the website, independent thinking on policy is lost.

The Minister of State, Deputy English, mentioned the enterprise strategy document published at the end of September. It is very good but its recommendations were immediately ignored by the Minister for Finance, Deputy Noonan, in the budget, despite the opportunities. There should be a little more independence and a little more challenge in the tradition of Forfás as opposed to what is currently on the Department's website.

Deputy Damien English

I will have to review the website to make sure I am on it. I am very disappointed. There is a need for some research on that.

I disagree with the Deputy. I found it useful over recent months to have the Forfás personnel as part of our team in the Department. On a weekly basis, one now has a chance to debate policy and work on solutions. I am highly involved with the staff on the skills agenda and making sure we will not be in a position in a year or two in which we will have many jobs available but no currently unemployed person from an Irish background and who is living here to fill them. The Forfás staff are part of our new policy development work and they are working very closely with us.

The other key area is the science strategy. It is important. The prioritisation agenda, involving the targeting of research and development and innovation moneys over recent years, is very important and has delivered quite a lot for this country. We must ensure the strategy develops over the coming four or five years. I disagree with the Deputy. It is important that the Forfás staff are involved. I note the Deputy's concern that there is no longer independent advice. I can assure him from dealing with the staff around the management table that they are very independent and have very strong views. They have a major role in formulating the Department's plans for budget 2015. In time, the Deputy will see that I am telling him the truth.

Deputy Dara Calleary

I welcome the fact that the personnel are challenging policy within the Department because it is a Department that needs to be challenged consistently, especially internally. However, we are not seeing that. Will we see a National Competitiveness Council report for 2015 in the same way we saw one for 2014, despite the fact that it is being ignored? Will we see the kinds of reports it produced on legal services? The Minister of State said there will be an ICT review. The Department is succumbing to cheerleading. One could never call the action plan for jobs review independent; it has never been. It is the biggest cheerleader or pompom of them all. It is basically a pat on the back for everybody, with a rating of 95%. The Department always leaves room to demonstrate independence but there is none really. It is essential that we see the independent thought published and the policy challenge available in public as opposed to within the four walls of the Department.

Deputy Damien English

As the Deputy knows, the committee presents a great opportunity to discuss policy. There is no problem engaging regularly at its meetings on policy initiatives.

The Deputy touched on the action plan for jobs. Forfás was driving the action plan for jobs from the start. Mr. Shanahan, who has now moved to the IDA, was a key driver of the plan when he was in Forfás. Nothing has changed and the commentary will not change. What Forfás was doing in the past was gathering evidence to make policy decisions. The key people are still doing that. It is recognised that the Department - the Deputy was there himself - experienced a reduction in the number of personnel in the area of policy formulation and research. We now have a very strong unit that brings together the staff of Forfás with the staff already in the Department. From what I can see, I am happy with our daily policy decisions. We have proper information with which to make decisions. They are evidence based and not based on the whim of any Minister. The three of us here want to do the right thing.

The Deputy criticised the action plan for jobs. If we had not lost the whole enterprise agenda during the boom years, we would not need an action plan for jobs. The fact of the matter is that we had lost the basis of enterprise-driven economics in this country. The action plan for jobs comprises 300 or 400 actions across all Departments and it makes it very clear that it is the role of every Department to contribute to the jobs agenda. We must now refocus and in some cases go back to basics, but if the previous Government had done its job correctly we would not have to go back to basics.

Enterprise Support Services Expenditure

Questions (100)

Michael Fitzmaurice

Question:

100. Deputy Michael Fitzmaurice asked the Minister for Jobs, Enterprise and Innovation the strategy he and his Department are developing for smaller towns, such as Castlerea, Boyle, Mohill and Tuam, that will make it viable to live in the west of Ireland; if his Department has a strategy to tackle unemployment black spots in this region; and if he will make a statement on the matter. [44403/14]

Oral answers (7 contributions)

Deputy Michael Fitzmaurice

In the smaller towns in the west, such as Castlerea, Boyle, Tuam and Mohill, there does not seem to be any strategy to create employment. We are back to these obstacles being put in the way. I firmly believe that the Departments need to adopt joined-up thinking. For example, I am aware of a hotel that could have been sold and 15 jobs created but for exorbitant rates. At this stage, we need to think outside the box. No matter how one looks at it, that was worth €300,000 being taken off the social welfare bill. At the same time, we were looking at rates of €40,000 and we lost the sale of a business. Can we not do a bit of new thinking? For example-----

An Leas-Cheann Comhairle

I will come back to Deputy Fitzmaurice.

Deputy Richard Bruton

The ongoing aim of the Action Plan for Jobs is to support enterprise growth and job creation in all regions of the country and in all towns and cities. Recent CSO data show that the number at work has increased by 33,500 in the past 12 months. Compared to a situation where the private sector was losing 7,000 jobs per month, we are now creating 2,800 jobs per month.

Looking at the live register, in the past 12 months 143,000 people left the live register to take up work and the nationwide Pathways to Work initiative aims to support that. In all of those regions of which the Deputy speaks, the live register figure is falling. It is falling in the Border region, the midlands and the west, and when one goes down to individual towns, it is also falling. We are making progress. The general policy has been to support business on a wide basis, with, for instance, the low rate of VAT, the abolition of the travel tax, the access to finance measures, the online trading measures, the reforms in company law and the reforms in income tax. These all are aimed at improving the business environment in towns and cities across the country.

As I have already said, the new structure of 31 local enterprise offices is now in place. They are aimed specifically at the smaller business start-up, to support those and act as a first-stop shop so that anyone seeking to create an enterprise in those towns the Deputy mentioned have access to a full range of supports.

On top of that, this year we will introduce a regional framework for enterprise strategy in each region to try to build off the competitive advantage that those regions have. We will be looking at such matters as the community enterprise centres as an asset in those regions to see how we can we sweat to deliver better value and create new opportunities. I assure the Deputy that we are working actively to seek to create the best possible environment for towns and cities to grow and support the enterprises within them.

Deputy Michael Fitzmaurice

Statistics, when one reads them out, sound great. There are staff in the higher Civil Service who write for the Minister and all these statistics are dazzling. However, the reality is each of us on the ground knows the problems involved in setting up business right across the country. We need to forget about those who love writing a beautiful essay; we need to work constructively together.

I was in contact with three local enterprise offices, LEOs, yesterday. When I was trying to see if training or funding was available, one of them stated it had no funding left. It is grand in here for us all to say the LEOs or whatever can do this, that or the other, but the reality on the ground, which is what matters, is that the funding is not there at present and the problem will not be solved without it.

Deputy Richard Bruton

If Deputy Fitzmaurice wants to draw to our attention a specific office where he is having difficulty, we will look at that situation.

By establishing the local enterprise office, we sought to forge a partnership with the local authorities. The local authorities are one of the most powerful influences in the local area. They have access to property solutions. They provide the environment for many of the business supports, and the planning rules. They are a powerful ally.

Through the local enterprise office, one has access to mentoring support, start-up supports and access to the Revenue Commissioners, who provide seed capital tax relief for people who were PAYE officers. A range of supports is available. If people are experiencing difficulty at local level, the Deputy should by all means draw matters to our attention and we will seek to rectify them. We are trying to ensure there is a network in place in order that anyone who wants to start a business can get access to the support mechanism.

Microfinance is now being run through the local enterprise office and the take-up of that has doubled in the past 12 months. Some of the new initiatives that are being rolled out to new businesses are having an impact.

Deputy Michael Fitzmaurice

I welcome the opportunity to give the Minister this information. When I inquired about funding in a LEO office I visited yesterday, I was told that if the business is not based on exports then it is a non-runner. We need to know where we stand, and we must encourage everyone who sets up a business, whether they sell to their neighbour or to America. We must get it into people's heads that a job is a job and the enterprise offices should deal with everybody.

Deputy Richard Bruton

There is and has always been a distinction between businesses with an export potential and businesses that provide a purely domestic service. The rationale for that is very understandable. It would be considered unfair if one is running an existing business and a Department is providing grant aid to someone down the road with whom one is in competition. However, grants are available if someone is in a business with a potential for export. Supports are also available for domestic businesses. A start-up tax credit is available, as is microfinance, mentoring and a range of other supports. Each business is judged on its own merits.