Vol. 427 No. 2
12 Mr. Rabbitte asked the Minister for Tourism and Trade the total amount paid out from the market development fund to date; if it is intended to extend the scheme after its present six month period; and if he will make a statement on the matter.
14 Mr. O'Malley asked the Minister for Tourism and Trade the basis on which money from the market development fund was generally allocated; the cost of such funding; and whether he envisages the continuation of such funding.
22 Mr. Barry asked the Minister for Tourism and Trade the total amount of money paid to firms which applied for assistance from the market development fund.
24 Mr. Clohessy asked the Minister for Tourism and Trade the plans, if any, he has in respect of the market development fund scheme.
33 Ms. Keogh asked the Minister for Tourism and Trade the basis on which money from the market development fund was generally allocated; the cost of such funding; and whether he envisages the continuation of such funding.
I propose to take Questions Nos. 12, 14, 22, 24 and 33 together.
On 6 October 1992, the then Minister for Industry and Commerce announced that the Government had decided to make £50 million available over a six month period to help firms whose employment and output were under threat due to the currency crisis and in particular the devaluation of sterling. An allocation of £1 million was made to a number of marketing bodies — An Bord Tráchtála, CBF and BIM — to assist with increased activity under existing schemes. The remaining £49 million was initially earmarked to finance the market development fund.
The approval of the European Commission for the market development fund under Article 92 of the Treaty was sought and obtained. In giving its approval, the Commission imposed certain conditions on the operation of the scheme. The effect of these was that while the market development fund scheme could deal with approximately 75 per cent of applicant companies, a number of applications, particularly from larger firms had to be turned down.
These companies were, however, free to seek assistance from the industrial development agencies under existing approved schemes and I understand that quite a number did so.
The day to day operation of the market development fund has been handled by a special management team led by an assistant chief executive from An Bord Tráchtála and drawn from a number of State bodies. Grants approved by the team are paid by An Bord Tráchtála from its grant-in-aid. In 1992 a total of £8.882 million was paid out and the allocation in the Book of Estimates for 1993 is £18.088 million.
When the then Minister announced the establishment of the market development fund, he indicated that the scheme would last for six months until March 1993. The temporary nature of the scheme was a major factor in obtaining the European Commission's approval.
A primary criterion which applicants for assistance were required to meet was the provision of an action plan which would demonstrate how the firm proposed to maintain and improve its competitiveness and to adjust to the recent significant changes in the marketplace. The Government has consistently indicated that assistance provided by the market development fund would be of a short term nature and in no way relieved firms of the need to make the necessary adjustments to their operations to ensure their long term survival.
The Government at present has no plans to continue the scheme beyond the announced expiry date. Any continuation of the scheme would require the allocation of additional funds from the Exchequer and the approval of the European Commission.
The situation is being kept under continuous review.
That information, although it has taken the Minister some time to impart it, is not very meaningful unless he can give a breakdown of the number of firms and the average number of employees that have benefited. For example, were the larger companies excluded from funding because of European Commission intervention? Will the Minister agree that, in practice, the usefulness of the market development fund fell a long way short of what was intended?
The daily operation of this fund is carried out by a special management team. The details requested by the Deputy will be given in the annual report of An Bord Tráchtála. However, the Deputy can take it that the £50 million provided by the Government has been spent by a number of State agencies alleviating the problems arising from the currency crisis. It is not my function to provide the figures now.
As I recall, the original decision to set up the market development fund included the provision of moneys from Europe specifically for the purposes of marketing products from indigenous companies. What proportion of those funds were used for that purpose? Were companies turned down because they did not have their tax affairs in order and, if so, were those companies given the opportunity to put their affairs in order. Will the Minister give a response to complaints by some small companies that they were unable to comply with the bureaucracy and timescale imposed in the administration of the scheme? The Minister stated that it is not his intention to extend the fund. Will he acknowledge that the same need which existed on 6 October last in regard to the purpose of this fund is still relevant today? If the Minister does not intend to extend the fund, how does he propose to deal with that situation?
The Deputy has raised four questions. In regard to EC funds, the £50 million market development fund was a Government initiative financed by Irish taxpayers. The Deputy may be confused about this. The marketing development fund was financed by taxpayers' money from the Exchequer. In the initial stages of this fund some business people reported that there was a level of bureaucracy thay did not anticipate, but the Government, and the then Minister, must be complimented on the speed with which the fund was set up. The management team must be complimented on the flexible approach which it adopted. The Government was conscious that it should involve a minimum of bureaucracy and that speed was of the essence in assisting firms. Firms which applied to the marketing development fund would, in the main, say that the efficiency of this scheme and the speed with which it was set up was outstanding.
In regard to the extension of the fund, when this fund was set up it was made clear that it would expire on 31 March 1993. In fact, it was one of the conditions in our negotiations with the European Commission — which were long and difficult — that the scheme would not be extended beyond that date. Therefore, there will be no extension of the fund. I appreciate the difficulties Irish firms are experiencing at present, particularly those depending on the British market, because of the way sterling continues to trade. The situation will be kept under review, but there are no plans to extend the marketing development fund beyond the end of this month.
I will allow Deputy Rabbitte a brief question as the time for dealing with priority questions is well nigh exhausted.
May I ask the Minister again whether companies were refused funding because their tax affairs were not in order and, if so, were they given a reasonable opportunity to put their affairs in order? There have been complaints that some companies were not given such an opportunity.
I cannot answer the Deputy's question because the day-to-day operation of the fund was a matter for a special management team. However, if the Deputy wishes, I can have the matter referred to the team and ask them to contact the Deputy directly.
