Dáil Éireann díospóireacht -
Thursday, 5 Mar 1992

Vol. 416 No. 8

Written Answers. - County Wexford Designation Status.

Brendan Howlin

Ceist:

18 Mr. Howlin asked the Minister for Industry and Commerce if, in view of the very high unemployment rates existing in Wexford, he will continue the designation status of the county for industrial grants; and if he will make a statement on the matter.

Ivan Yates

Ceist:

50 Mr. Yates asked the Minister for Industry and Commerce the reason designated status for the higher rate of grant aid was refused to be renewed for County Wexford; if, in view of the chronic level of high unemployment in the county the Government will reconsider this decision; and if he will make a statement on the matter.

Minister for Industry and Commerce (Mr. O'Malley)

I propose to take Questions Nos. 18 and 50 together.

As the Deputies will be aware, under the designation system, industrial projects in designated areas qualify for a maximum fixed asset grant rate of 60 per cent. This contrasts with projects in non-designated areas which qualify for a maximum grant rate of 45 per cent. In addition, industries in designated areas may get a two thirds remission of rates for ten years at the discretion of the local authority. However, the fact of designation does not automatically guarantee support at the maximum rate, nor does it guarantee rates remission.

In 1988, following approval of the EC Commission, the Government agreed to the temporary designation of, inter alia, County Wexford for the higher rate of industrial grant for a three year period from 1 January 1989 to 31 December 1991.

The aim of the temporary designation was to provide a greater degree of flexibility to the IDA to promote suitable industrial projects for those counties worst affected by unemployment. However, the actual grants provided to individual projects depended on the employment and other economic benefits resulting from the projects in question.

The importance and impact of designation in industrial policy has lessened in recent years and maximum rates of fixed asset grants are seldom given. The grant level proposed for any project increasingly depends upon the economic benefits in individual projects. There is also a major shift away from fixed asset grants to supporting other areas are of perceived business weakness e.g. marketing, R & D, and management development. Support and grant in these areas are not differentiated on the basis of designation.

The recent industrial policy review group report proposed amongst other matters that there should be a decisive shift from grants toward equity for indigenous industry and that the grant-aid budget for internationally mobile industry should be squeezed further.

Implementation of these recommendations would diminish the relevance of designation as an industrial policy instrument even further and I do not propose to consider the renewal of designation for any area in advance of completion of consideration of the various other matters in the Industrial Policy Review Group's Report.

The IDA has consistently promoted County Wexford as a location for industry and the Authority will continue to do so with the full array of support available.