In the absence of Deputy Byrne and Deputy Shorthall, I will proceed to take Deputy Browne's matter first.
Adjournment Debate. - Industrial Competitiveness.
(Carlow-Kilkenny): I realise this is a difficult problem for the Government and the Minister in that it relates to the whole island of Ireland, but since so much employment in the Republic is involved in the production of concrete products and the delivery of same, I feel it is important to raise the matter.
I am well aware that the producers of concrete products in the Republic are not looking for grants and subsidies. Many of them have invested their own money in setting up plants and expanding their trade as new goods were demanded. We owe it to them to ensure that because of unfair competition or an absence of a level playing field, they will not be at a serious disadvantage when it comes to competing for work.
I was under the impression that in the European Union, one had to have uniformity of support. For that reason, I was surprised to find that many grants available in the North of Ireland were not in the Republic. The North has, for example, employment grants for new jobs created in the industry, interest relief grants for loans in the commercial sector and factory rent grants of up to 100 per cent for five years. It also has grants towards a company development programme of up to 50 per cent for training and development costs such as wages, travel, professional fees etc., and towards marketing development programmes of up to 40 per cent, or £180,000, to help plan and implement a marketing programme. It also has research and development grants of up to £250,000 to define research and develop a product. Tax incentives include accelerated depreciation on plant machinery and building and derating of premises used for manufacturing is also available. Soft loans are also available, including an interest free period.
One concrete company in Northern Ireland was offered £236,000 by way of capital grants and interest relief grants. Another was offered £300,000 capital and revenue grants to promote company competitiveness.
All these incentives and grants are clearly a tremendous help and allow these companies to undercut in a big way those in the Republic who do not get grants. I have been told that up to 50 per cent of some concrete products in Cork are supplied by companies in the North of Ireland. If that is true, it shows the kind of competition our producers are facing.
For this reason I raise the matter in defence of our enterpreneurs who invested their own money to produce goods and create employment. They have their own internal competition which keeps prices at a reasonable level. However, it is impossible for them to compete with outside companies, which are subsidised to the extent that they can travel 200 miles from Northern Ireland and still undercut by almost 50 per cent the prices of their competitors.
It is because of my interest in these companies, which have worked hard to promote the very important industry for the supply of concrete products, that I have raised this matter. I am not looking for subsidies for these companies because they do not seek them but I would like the Minister to ensure some kind of level playing field that would remove the current, very sloped pitch. In the interests of those employed in the industry, I hope the Minister can give me a positive answer.
I thank the Deputy for raising this matter on the Adjournment.
The Minister is aware of concerns in the industry about the effects of competition from the North of Ireland. Representatives of the industry recently met officials of the Minister's Department in this regard and have undertaken to furnish further details of specific concerns.
There has been adequate capacity in the concrete products sector for some time now to meet the demands of the home market. For this reason it is policy not to grant-aid further capacity in the sector. Grant assistance is available for research and development projects. Forbairt is working with a number of companies to develop new added value products for export markets. The Minister hopes that more companies can be encouraged to follow this path.
The Deputy will appreciate that my reintroduction of grant assistance generally would only lead to greater overcapacity and the displacement of jobs. I assure the Deputy however, that the Minister will have the industry's concerns examined and that both he and his Department will pursue any possible productive avenue in their efforts to assist the sector in this regard.'
Many factors interact to determine the overall competitiveness of any economy compared with another. In terms of overall cost increases, Ireland's record on inflation, assisted significantly by wage moderation over recent years, continues to be satisfactory. Our annual rate of inflation has been below the EU average rate and that of the UK every year since 1989 up to end of 1994.
The competitiveness of the North of Ireland relative to this economy is influenced by considerable funding transfers from the British Government towards industrial and infrastructural facilities generally. This State has, however, also benefited substantially from major investment in infrastructural services, principally roads and transport and communications infrastructure.
The Deputy is aware of the continuing efforts of the Government to enhance the competitiveness of Irish industry and business so they can compete successfully in all relevant markets. The Minister is particularly conscious of the competitive difficulties of some of the more labour intensive indigenous sectors in competing with UK and North of Ireland based industry.
In the past three budgets substantial improvements have been made to the employers' PRSI contributions structure with a view to increasing the competitiveness of industry in this economy, particularly in regard to UK and North of Ireland based competition. This year's budget also introduced a lower rate of 30 per cent corporate tax on the first £50,000 taxable profits for non-manufacturing activity. The 10 per cent rate of corporate tax for manufacturing activity already represents a considerable competitive advantage for manufacturing firms in this State relative to the North of Ireland.
I assure the Deputy that the Minister is conscious of the important contribution in indigenous industry to the economy and that both he and his Department will continue to monitor closely and to seek improvements in the competitiveness of Irish goods and services to maximise and protect employment levels in the economy.