Vol. 834 No. 3
6. Deputy Denis Naughten asked the Minister for Jobs, Enterprise and Innovation the steps he is taking to secure jobs at the MBNA site in Carrick-on-Shannon, County Leitrim; and if he will make a statement on the matter. [12226/14]
While the sale of the Irish credit card business in Carrick-on-Shannon to AvantCard (Apollo) has secured more than 200 jobs in the town, the failure to have a long-term strategy on the UK credit card business is leading to a shedding of jobs in Carrick-on-Shannon. Two years ago, some 400 people were employed in managing the UK credit card business but that number has decreased to approximately 200 people. I want to know from the Minister what is happening to secure those jobs and to secure additional investment in Carrick-on-Shannon.
The position regarding the potential developments at the two operations which formerly formed part of the original MBNA-Bank of America facility in Carrick-on-Shannon is essentially unchanged over recent months. The former MBNA credit card processing facility in Carrick-on-Shannon now comprises two operations. First, a new operation called AvantCard was established following the purchase of part of Bank of America’s credit card portfolio by Apollo Global Management. This operation employs approximately 250 staff who manage the Irish card customers. These staff transferred from Bank of America to AvantCard (Apollo) under the EU transfer of undertakings regulations on 13 March 2013. This was a very positive development and provided more certainty regarding this part of the business. The second operation remains in the ownership of Bank of America and employs approximately 200 people who manage the credit card customers located in the UK. The process regarding the possible sale of this UK credit card business remains ongoing. Bank of America continues to look for a buyer for this unit.
On another positive note, Apollo has acquired the entire building in the town and has leased office space back to Bank of America. We welcome this investment in Carrick-on-Shannon by Apollo.
My priority is that any decision taken by Bank of America will have minimal impact on employees at the Carrick-on-Shannon operation and will ensure jobs are maintained at the facility. I emphasised this when I met senior executives of Bank of America in their headquarters in Charlotte, North Carolina. The IDA is in regular contact with Bank of America management in Dublin and with the parent company in the US to monitor developments. The IDA met senior executives of Apollo in London in September last where the transfer of the Carrick-on-Shannon facility and staff to Apollo and further investment opportunities for the group in Ireland were discussed. The IDA also keeps in touch with Apollo in Carrick-on-Shannon and held discussions just last month with the new manager of the AvantCard operation there. The IDA will remain in contact with the companies and will continue to highlight the strengths of the Carrick-on-Shannon operation to a broad range of potential investors.
The MBNA Bank of America-Apollo operation in Carrick-on-Shannon is not only a local employer but a significant regional employer. As the Minister said, he continues to highlight that to potential investors. In the past two years, however, there has been only one visit to County Leitrim supported by the IDA and four visits to County Roscommon. Is it not more important at present to try to hold on to what we have? In that context, originally Bank of America said it was moving out of its international credit card business because its intention was to focus on its core business. It pulled back from that in regard to the UK credit card business and has expressed its intention to dispose of it, but this limbo that has been created, from the initial announcement to the current situation, has led to significant job losses in terms of the operation of the UK loan book in the interim.
Clearly, any decision by Bank of Ireland in America of this business is one that it takes. We take every opportunity to seek to ensure we protect the employment there. I met senior executives of Bank of America only a few months ago to again take the opportunity to stress that. We make every effort to promote the employment package in Carrick-on-Shannon and to try to protect those jobs but ultimately it is the company that will decide the timing of sales and that decision.
In respect of the wider IDA regional development, we recognise that generally the midlands and that area has been a difficult one and one of the decisions taken this year, as I indicated, was to build in Athlone. That is the first time in many years the IDA has started to build facilities. It is based on our belief that there is a competitive edge in the region and that we can build there.
I thank the Minister for his response. It is great to see the development in Athlone but the development there is in a completely different sector. It is a long way from Carrick-on-Shannon. That is not of much reassurance to the communities in the west and the north west, or to the community around Carrick-on-Shannon or to the employees. Can the Minister provide some assurance to the employees and businesses in Carrick-on-Shannon regarding the long-term job prospects for that UK business? Can he clarify if it is still the intention of Bank of America to dispose of that particular operation as an ongoing concern? Perhaps he could throw some light on company's intention? Is it trying to sell the loan book or sell the business in Carrick-on-Shannon as an ongoing operation?
I will take a final response from the Minister.
Clearly, I would have to say that from our discussions with the senior executives of Bank of America, they have been very positive, very well disposed towards the workforce and very pleased with the quality of work that is done there. They want to retain that. The Deputy will note that during recent years, although having announced their intention to sell, they have stuck with the business and continue to operate successfully.
Clearly, that signals their commitment to Carrick-on-Shannon but they are in a commercial world in which they make decisions and they continue to look to sell the loan book. Our determination is to ensure no stone is left unturned in making sure that whatever decision is taken, the town is part of the decision. That is what we seek to guarantee. We have worked with Bank of America staff on this and their intentions have been positive towards the people of the town. They know the relationship that has been built there and they have a great level of commitment but we continue to work with them. I cannot give guarantees.
The only reason I mentioned Athlone was the Deputy raised the wider issue of the IDA Ireland role in respect of the region.
It is only about 70 miles away.
8. Deputy David Stanton asked the Minister for Jobs, Enterprise and Innovation the research his Department, or bodies under the aegis of his Department, have carried out into enterprise and employment in regional towns; and if he will make a statement on the matter. [12213/14]
11. Deputy David Stanton asked the Minister for Jobs, Enterprise and Innovation the strategies and policies in place to encourage enterprise and employment in regional towns; and if he will make a statement on the matter. [12212/14]
The questions relate to regional towns around the country such as Youghal, Midleton, Cobh and Fermoy in my area. They historically were the economic hubs of enterprise, business and employment but that has changed dramatically and they have become dormitory towns. Has the Department carried out research into the employment and enterprise provision and potential of these towns?
I propose to take Questions Nos. 8 and 11 together.
My Department tracks the agency supported enterprises in regional towns and their hinterlands. Our agencies have regional offices who seek to promote the assets of the region and develop their enterprises. Forfás has conducted research on the regional strengths and weaknesses’ from an enterprise perspective. However, most of our policy tools are enterprise focused and sector focused rather than taking regional towns as their starting point.
In 2014, we are seeking to enhance local enterprise support by the roll-out of the local enterprise offices, LEOs. They will deliver a first-stop shop point of access and specific support to the development of regional towns. They also include the local enterprise support services of the local authorities and will publish a local enterprise plan.
The aim of Action Plan for Jobs is to support enterprises to create employment throughout the country and in all regions. Regions that support strong and dynamic enterprises are crucial to Ireland’s return to overall economic growth. The action plan contains a number of actions to strengthen enterprise development at the regional level. Action 177 mandates my Department and its agencies to develop a framework for a regional enterprise strategy to better integrate and develop new ways of working, further collaborations and enhance the efforts and activities of the enterprise agencies and the other regional stakeholders in building enterprise based on sustainable competitive advantage of the region. Regional towns as the drivers of regional economies will obviously be central to the development of these strategies to further enhance the activities of the agencies and the soon to be established LEO network across the regions.
With regard to research and data analysis, this work will draw among others on the Forfás suite of studies on the Regional Competitiveness Agenda, published in 2009, updated by the regional strategies of Enterprise Ireland and IDA Ireland.
I thank the Minister for his comprehensive reply. What are the timescales for these actions? Has he set deadlines for results? He acknowledged that these towns are the drivers of the regional and local economies. Has a list of these towns been compiled and an analysis carried out of what has happened in them? Business and enterprise has collapsed to such an extent in some of them that they have become dormitory towns. Does the Minister agree that people leave them in the morning to work elsewhere and do their shopping elsewhere, which means that even retail outlets in them are beginning to be impacted? It is important to know the timescales for the positive actions that have been outlined.
The timelines are published but I do not have them with me. It is either the third or fourth quarter this year. This is the first time there has been an attempt to develop a strategy with a number of county LEOs. We will also have the IDA and Enterprise Ireland strategies and we will seek to have a genuine forum in which other stakeholders such as local authorities can engage with us on the development of that strategy. We collate the SWOT analyses for an IDA region and what are the strengths and weaknesses of the region and how we can build them out. That is one part of it but we also examine the enterprise infrastructure, including the network of enterprise centres, LEOs offices and incubators in regional institutes of education, and the assets of the region and seek to build them out.
We do not focus on towns per se; we focus on enterprises and the infrastructure and assets around them. However, as I said in reply to Deputy Tóibín, the LEOs have a broader remit now and they will examine mentoring and other entrepreneurship supports for domestic businesses as well as export-oriented businesses. It is region-focused rather than town-focused.
Is there a risk that some towns could be left out of the loop if the strategy is regionally based? Some regions, and some areas within a region, may have more potential and may be stronger than others. How big will the regions be? Will they comprise a single county or multiple counties? The Minister said towns are the drivers of regional economies. Will he narrow the focus to towns because many of them have enterprise centres, chambers of commerce and so on, which are anxious to work with and engage with State agencies, but they could lost in a big region? Will he examine this again?
This is our first iteration of this and we have to be realistic. We must build on what we know about, which is enterprise start-up, attracting foreign direct investment, mentoring and running enterprise centres. The question will be how we do a better job of driving enterprise growth in the region. Regions will be based on the traditional IDA model. We recognise towns and the LEOs will seek to build networks with chambers of commerce or other players. Local authorities are experimenting with 700 initiatives aimed at supporting enterprises. Much of the work will involve seeking to mainstream some of them and drawing best practice from some others. Cork has been exemplary in engaging in innovative initiatives as have Tipperary and other counties.
This is part of a learning process and I am not setting out that my Department and I can draw up a big strategy for every town in the country. I am not capable of doing that but I would like to draw up a meaningful enterprise strategy that towns, villages and stakeholders can engage with and around which we can build a genuine dialogue.
There has been too much focus on attracting FDI rather than trying to support our indigenous sector. I propose three initiatives. First, will he focus on towns, as Deputy Stanton has suggested, and get the agencies to assist them to examine their assets and build an enterprise strategy based on that? it has been done successfully by Louth County council and that could be replicated throughout the country.
Second, will the Minister ensure the same incentives available to attract FDI are made available for our own people who want to create a job or develop a business?
Third, many businesses face problems with energy costs. A successful carbon loan scheme operates in Northern Ireland and Wales under which a company receives a loan of £1,000 for every 1.5 tonnes of carbon saved. Could the Minister examine these three initiatives to support local employment, towns and businesses?
I do not accept that there has been too much focus on FDI. We had to have an export-led recovery. The domestic economy has been on the floor for the past four years and this has not been easy to correct because of the State finances and finances of individuals and so on.
Our focus on Irish companies exporting abroad and attracting new investment continues to be absolutely vital. I agree with the Deputy that by putting the local enterprises offices into the local authorities, which has been criticised, it does give us an opportunity to engage differently with local communities. We hope that over time it will be exactly like that - seeing more bottom-up initiatives from local authorities engaging with stakeholders in their areas.
It is not true that the IDA gets more generous support. As we have been discussing, a lot of those go to Dublin and Cork where there is zero per cent regional aid available. It is a myth that the IDA receives a whole lot of supports. The truth is that we have supports for indigenous companies across the whole range, including start-up, innovation, technology support, management development, graduate placements and export supports. We have a big range of supports for export-oriented Irish companies, which is much wider than we offer elsewhere.
One needs to get off the ground before one can start the courses.
9. Deputy Seán Kyne asked the Minister for Jobs, Enterprise and Innovation the steps that have been taken to ensure the numerous positive measures from the 2012 and 2013 Action Plans for Jobs, many of which have proven their effectiveness with the recent positive employment figures, are continuing to be implemented; the evaluation process which monitors the progress of the action plans; and if he will make a statement on the matter. [12114/14]
I wish to ask the Minister what steps have been taken to ensure that as many positive measures from the 2012 and 2013 Action Plans for Jobs continue to be implemented. In addition, what steps are being taken to monitor the actions listed?
Since the first Action Plan for Jobs was introduced in 2012, the Government has implemented over 500 actions to support job creation across all Government Departments and a significant number of State agencies. The aim of the action plan is to create a supportive operating environment for businesses in order to allow employment to grow across all sectors.
The 2012 action plan contained 270 actions and 92% of these were delivered by the end of that year. The 2013 plan contained 333 actions and had a 90% implementation rate. Those commitments which were not implemented on schedule in 2012 and 2013 were carried forward to the subsequent year’s action plan or replaced with more targeted measures.
A key strength of the action plan process is its cumulative impact. Each year’s plan builds on measures which have been initiated in the previous year. The 2014 plan was launched on 27 February and continues to build on many of the actions contained in the 2012 and 2013 plans. Successful initiatives are mainstreamed or extended where their performance is positive. It contains 385 actions for delivery across all Departments and 46 agencies, including measures to continue developing six of the disruptive reforms and many of the sectoral initiatives launched in 2012 and 2013.
Go raibh maith agat, a Aire. I acknowledge the success of the action plan, whose format is an innovative inter-departmental and inter-agency initiative. This novel approach is working despite some detractors. Some 270 actions were initiated in 2012 and it is important for the Department to continuously monitor them to ensure they are followed through to the fullest extent. It is important to move away from the culture of the past, although we must acknowledge that this new approach can take time to be implemented and become fully embedded. The Department should continue to monitor the performance of the action plans. Is the Minister planning to review the 2012 action plan to ensure that all those actions are still being implemented to the fullest extent?
I fully agree with the Deputy that monitoring is vital, although it is not done by my Department but by a monitoring committee, including the Taoiseach and the Tánaiste. It is a whole-of-Government approach to monitoring. As they say in the United States, biting with the president's teeth is very important in delivering performance across all the silos.
This year we have had discussions with the OECD to see how we can better develop this process and ensure that not only are we delivering it, but are also getting good outcomes. As we discussed at the Committee on Jobs, Enterprise and Innovation, we will be examining a wider range of outcome indicators as well as the headlines one of jobs and rankings in terms of a good place to do business. We are seeking to develop that so that across the sub-sectors and various elements of the plan we are seen to be making progress. That becomes a feedback loop to inform better decisions.
If anything was missed in 2012 because we could not achieve it, we sought to discover why. We thus changed the target. Not everything achieves all that is hoped for. If it did we would be living in a strange world. We therefore modify targets based on experience, but we always seek to stretch the targets.
It is important to acknowledge the fact that the OECD has cited the jobs action plan as a positive model for other countries.
I apologise for interrupting the Fine Gael Parliamentary Party meeting here, but one of the commitments in the jobs action plan was about small and medium enterprise finance. We have had this discussion already. Last year, the pillar banks, AIB and Bank of Ireland, were supposed to loan €2 billion each to SMEs - that is, a total of €4 billion. Yet the Central Bank report, which has been published since the Committee on Jobs, Enterprise and Innovation last met, shows that only €1.9 billion of new lending was done by all banks to the SME sector. In addition, the ISME survey showed that 50% of companies have been turned down for loans.
In the context of monitoring the jobs action plan, has the Minister made any inquiries as to the difference between the €4 billion of new lending that was supposed to go into SMEs and the €1.9 billion of new lending noted by the Central Bank? We continue to have a major problem concerning finance for SMEs.
This continues to be a central concern for me, as it does also for the Deputy. I monitor the new lending figures by sector as well as the refusal rates which thankfully have shown some signs of improvement. I also monitor the decisions of the Companies Registration Office and the picture remains one whereby the banks have not properly adjusted to their role in supporting SMEs. They still have a long way to go in this area. We continue to press them and I meet with them regularly. We seek to drive up the use of alternative funding mechanisms, as well as seeing them build up sectoral expertise so they can have a genuine relationship with management sectors in a growth phase. I agree with the Deputy that we need to do better in this area and we will continue to press for that.
Question No. 10 is in the name of Deputy Derek Nolan but he is not present in the Chamber, so we will go on to Question No. 12.
12. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation the steps his Department has taken to implement the south-east economic development strategy; and if he will make a statement on the matter. [12164/14]
This question continues today's theme of regional development. One of the regions that is not performing is the south east where the unemployment rate is 15.5% versus 12.2% nationally. The Joint Committee on Jobs, Enterprise and Innovation appointed Senator David Cullinane as a rapporteur to produce a cross-party report including a series of actions on how the problem can be addressed. I would like the Minister to explain the current status of that report.
I am conscious of the challenges facing the south-east and that is why I commissioned Forfás to undertake the south-east regional employment action plan. I initiated the south-east forum which bring together the agencies and stakeholders involved. Work is going on to implement that plan and significant progress has been made. Since 2011, there have been 79 IDA-sposored site visits by potential investors to the region which is almost double the number which took place in the 2008 to 2010 period.
An additional 15,000 jobs have been created in the region, resulting in the unemployment rate having dropped from 18.8% to 15.5% in 2013. There have been significant gains for the region, including a major investment by Glanbia in Belview which will provide 1,600 direct and indirect jobs, as well as an additional 450 jobs during the construction phase. In 2013, Sanofi announced plans to invest €44 million in Genzyme's biotechnology campus in Waterford. Also last year, Nypro Healthcare announced plans to establish an additional state-of-the-art medical device facility in Waterford, which will result in the creation of over 200 high quality jobs. Eishtec, the call centre operator, has in the region of 750 staff between its Waterford and Wexford sites. The company aims to bring that total to approximately 900 by this summer.
The local enterprise offices have been busy, as well. We are committed to the construction of a 2,348 sq. m facility in the IDA technology park on the Cork Road in Waterford. We are proceeding across the spectrum of initiatives that were outlined in the plan. We have a long way to go but clearly the improvement in employment is encouraging.
The difficulty is that there is a long-term problem there, although I accept that a lot of progress has been made. Has the Minister pursued the appointment of an IDA regional manager for the south east and the establishment of a regional operation so that the IDA would be based in the community?
Can the Minister explain why Waterford was excluded from a series of "better business" seminars around the country? They are getting a huge response and I gather there was a very successful one in Limerick.
If we are taking seriously Waterford, its potential for jobs creation and business development and its status as a regional capital, why was it excluded from the roll-out of these seminars? Local businesses in Waterford might want to access some of the opportunities the Minister outlined. They could have come and engaged with the Department's agencies.
Waterford certainly has not been excluded. I have held two Action Plan for Jobs meetings there and intend to have more. In the first phase of the support for business pilot initiative, just one meeting is being held in Dublin. We will look at Waterford in the next phase. I see the merit of that. There is no region I have visited more often in an effort to understand the needs of enterprise and to respond to them than the south east. It is certainly not being overlooked by me. The IDA's approach was raised. I am convinced by the effort we have made to increase the focus on the region, which has resulted in a significant increase in site visits. I am satisfied with the pipeline that is building up, which will deliver additional investment in the region. I am satisfied with the IDA's response. Its deployment of resources is delivering improved performance, which is what I seek.
I accept and welcome that progress has been made in the south east, but there is a long way to go. The Minister's remarks contrast with his earlier response on regional policy to the effect that he cannot corral and force the IDA. A political decision has been taken to prioritise the south east, which has resulted in increased activity. I hope the Minister will take that political decision for other regions.
The point I was making to Deputy Tóibín was that we cannot look to the capacity of the IDA to provide for every town and village. The IDA cannot fill that gap and never will. A large region like the south east with a significant educational asset in the Waterford Institute of Technology and its established company base in food, pharmaceuticals and other sectors is a cluster we must build out. That is why we are building in Waterford where there is a cluster that will attract investment. This is an additional strengthening of that cluster. There is no contradiction.
13. Deputy Mick Wallace asked the Minister for Jobs, Enterprise and Innovation if he will consider banning zero-hour contracts; and if he will make a statement on the matter. [12175/14]
The problem with zero-hour contracts is that they do not provide a set number of hours in the week. A person might get 20, 30 or 35 hours one week and nothing the next. It is very hard to plan a life under those conditions. I understand that the Minister does his best to make it as easy as possible for people to create work, but there must be a balance. We must also consider workers' rights as well.
Zero-hour contracts are covered by contract law and must be entered into freely by the employer and the employee. They cannot be forced upon an employee. Zero-hour contracts are normally found in sectors such as retail, health care and hospitality. I am very conscious that in certain circumstances they may be of great benefit to both employers and employees. They allow greater flexibility for both by reducing the employer's pay costs and allowing workers to decide when and if they want to work. Such contracts may be preferred by employees who require flexibility to facilitate educational or other personal necessities. Banning such contracts could do a disservice to these workers. However, it is a matter I will keep under review.
Section 18 of the Organisation of Working Time Act 1997 contains a specific protection for employees who are employed on zero-hour contracts. The zero-hour protection applies to all employees whose contracts operate to require them to be available regardless of whether they work on a casual basis. It covers situations where, for example, an employee is sent home if things are quiet or is requested to be available for work and is not asked to work on the day. Where an employee suffers a loss by not working hours he or she was requested to work or to be available to work, the zero-hour provisions of the Act ensure he or she is compensated for 25% of the time during which he or she is required to be available, or 15 hours, whichever is the lesser. The level of compensation may be impacted if the employee gets some work. Claims of breaches of section 18 may be referred to a rights commissioner.
An expectation of work does not, however, entitle an employee to compensation. The zero-hour provision does not apply to lay-offs, short time, emergency or exceptional circumstances, employee illness, employee on-call situations or where the employee is paid wages for making him or herself available for work. Section 17 sets out the requirements regarding notification to the employee of the times at which he or she will be required to work during the week. Generally, an employee is entitled to 24 hours' notice of his or her roster.
Research carried out by Mandate in 2013 found that 17% of people living below the poverty line worked in precarious jobs with zero-hour contracts. While the Minister has responsibility for jobs, not social protection, it is relevant to note that where employees have good working conditions, it works even better for the employer in the long run. It is to adopt a very short-term vision to think otherwise. It is not in an employer's interests to be able to treat a worker poorly. Zero-hour contracts are not good for Ireland. They are certainly not good for the employee or, in the long run, for the employer. The Government should move on them. They are not fair.
I add my voice to that of Deputy Wallace. There has been an increase in underemployment under the Government, including in the last set of figures. There are thousands of workers who work to seven day, zero-hour contracts with no guarantee of work, which is exploitative. It disproportionately affects those who are on very low incomes, in particular women. We must value care work in our society, which this type of contract does not do. Many of those on zero-hour contracts are carers who work for people with disabilities and the elderly. If we do not value their work, we are doing a disservice to their livelihoods, ability to survive and to the people for whom they care.
Clearly, part-time work does not provide a full-time income support, which will always be the case. There has been a pattern in the recovery whereby there was an initial growth in part-time work whereas now 90% of increased employment relates to full-time positions, which is encouraging. Part-time workers are protected by employment law and must get the same terms and conditions as full-time workers. There is a protection in statute whereby zero-hour workers who are required to be on call must be compensated to the tune of 25%. They also have rights in relation to annual holidays.
I will keep the area under review. One must strike a balance. Such contracts suit certain people and banning them will close out opportunities for people to supplement income in ways they find beneficial. I will bear in mind the points the Deputies have made.
