Vol. 960 No. 3
6. Deputy Thomas P. Broughan asked the Tánaiste and Minister for Business, Enterprise and Innovation the number of microfinance and loan guarantees under her Department's indigenous enterprise development division which were granted in 2015, 2016, and to date in 2017; the value of the finance and loans in each of these years; the areas and sectors receiving this support; and if she will make a statement on the matter. [42767/17]
9. Deputy Éamon Ó Cuív asked the Tánaiste and Minister for Business, Enterprise and Innovation the amount drawn down under the microfinance scheme for businesses since its inception; the number of businesses assisted; the number of jobs created to date by this scheme; and if she will make a statement on the matter. [42761/17]
When the Minister and the Minister of State are rambling around the country, they always say that access to working capital is the key issue for SMEs. How are Microfinance Ireland and credit schemes for indigenous companies performing, in particular the credit guarantee scheme, CGS, 2017? The counter guarantee scheme still awaits the publication of a statutory instrument.
The Government announced a new €300 million Brexit fund. How will that operate in particular to support SMEs?
I thank the Deputy for his questions. I propose to take Questions Nos. 6 and 9 together.
The Board of Microfinance Ireland, MFI, provides me with quarterly reports of progress and these reports are published on the websites of both Microfinance Ireland and my Department.
The latest available figures, up to end of quarter 2, 2017, show that there have been 2,966 applications received with €19.6 million worth of loans approved and 1,172 drawdowns of loans worth €16.6 million in total. The fund has supported 3,145 jobs. Support activity is widely distributed both by geography and sector. Activity by county and industry is published in the quarterly reports. I will send a copy of the quarter 2, 2017 report to both Deputies for their information.
A total of 22% of all loan approvals has gone to Dublin; 16% to the south east; 13% to the Border region; 11% to the west; 11% to the mid-east; 10% to the south west; 8% to the mid-west and 9% to the midlands.
The most popular sectors supported are wholesale-retail trade, repair of motor vehicles and motor cycles at 22%, manufacturing at 12% and construction at 8%.
There were 357 loans approved in 2015 totalling €5.4 million, 397 loans approved in 2016 totalling €5.4 million and 178 loans were approved up until the end of June this year totalling €2.5 million.
During 2015, in line with the Microenterprise Loan Fund Act 2012, the performance of MFI was reviewed in detail by my officials, and the implementation of changes led to better performance, flexibility and advertising of its products. A key change was the removal of a previous requirement for a microenterprise to have been refused a bank loan before recourse to this channel.
Microfinance Ireland is guided by its new strategy, The Way Forward 2017-2021. At the centre of the new strategy is the strategic vision which provides for the need for MFI to create a value proposition by being the best in class micro-lender, creating and supporting jobs and fulfilling the borrowing requirements of microenterprises across Ireland. The strategic vision also aims to exceed the strategic objective of the fund of supporting the creation of 7,700 jobs in Ireland.
This new strategy is bearing fruit as the organisation was recently awarded a certification of compliance with the European code of good conduct for micro credit provision. This certification confirms MFI's position as a best in class micro credit provider in Europe, being one of the first institutions in Europe to qualify and the only organisation in Ireland to receive this award.
With regards to loan guarantees, 108 facilities were sanctioned under the CGS in 2015 totalling €20.4 million, 131 facilities sanctioned in 2016 totalling €22.8 million and in 2017, up until the end of June of this year, 70 facilities have been sanctioned totalling €9.2 million.
The percentage of sanctioned lending breaks down as 55% to the east, 10.6% to the mid-west, 10.2% to the south west, 8% to the south east, 6.6% to the midlands, 5% to the west, 2.6% to the north east and 2% to the north west.
The most popular sectors in receipt of support include information and communications technology at 20.8%, wholesale-retail trade and repairs at 16.8%, manufacturing at 13.9% and human health and social work at 9%. I will provide the Deputies with charts showing the full breakdown of the regions and sectors supported by Microfinance Ireland and by the CGS.
I thank the Minister of State for his comprehensive reply. He indicated that Microfinance Ireland processed 3,000 applications to the value of €19 million in loans. The average loan was €15,000. The approval rate, however, over the five years is less than 46% and that includes some applicants who were turned down originally and later approved. There is, therefore, a large gap for small businesses and young entrepreneurs that are struggling to get going. According to the regional breakdown, the west and north west have received a relatively small level of support. I acknowledge the Department is adopting a regional approach. In particular, is special support provided for women entrepreneurs given two thirds of the successful applicants were men?
Was there much uptake of the credit survey by the Credit Review Office? What feedback is the Minister of State getting? As he said when he visited our small business centre in Coolock, access to working capital is critical. The Minister has also made similar comments.
I thank the Deputy for his questions. The microenterprise loan fund was set up in 2012 in difficult circumstances when many SMEs and microenterprises were unable to secure loans from the traditional banks. A review was conducted in 2015. According to the breakdown, 24% of the loans go to women and the figure is the same for Microfinance Ireland.
I have given the Deputy a breakdown of the statistics on where the loans are going. Some 78% of the loans are going outside Dublin. It is important that we are creating more jobs outside Dublin as well. It has a role to play, although in recent times since the review there has been a slowdown on that. Officials in the Department are meeting with MFI and the local enterprise office to see how we can fill the gap the Deputy has spoken about because that gap exists. Hopefully, they will come up with a resolution to ensure the viability of microfinance into the future. When Microfinance Ireland was established there was a different climate. Commercial banks are obviously lending a little more now as well. Incidentally, today is National Women's Enterprise Day and there are many events around the country. It is an appropriate time to expand.
The Brexit loan scheme amounts to €300 million. Obviously these small businesses are critical as we go through the next couple of years, regardless of what happens. Perhaps the Brexit situation might not happen but if it does this is a core area of the economy that we must strongly support. I note that the bulk of the funding is coming through the Strategic Banking Corporation of Ireland, but the Minister mentioned, and it is referred to in the Estimates, that there would be resources there for SMEs, that is, companies that have fewer than 500 employees. The Department is providing €23 million of the initial seed fund and the Department of Agriculture, Food and the Marine is providing €9 million. What targets does the Minister have to shore up what is perhaps the most important area of our indigenous economic performance?
First, it was very good news for our Department that we got this Brexit loan scheme in the budget. We are looking at the counter guarantee scheme that the Deputy mentioned as well. It is expected that another statutory instrument will be made providing for the Minister to share the risk with SBCI in such a way that the SBCI can in turn access and draw down EU funding for Irish SMEs. With regard to the €300 million fund, 40% of that will be guaranteed by the European Investment Bank, so it will cut down our guarantee. We are guaranteeing 80%. We are providing €14 million and the Department of Agriculture, Food and the Marine is providing the other €9 million. The details will be worked out. The Tánaiste gave some details on the Brexit loan scheme earlier. I have a limited amount of time now so I will forward that information to the Deputy. It will be useful for him to have it. It is an important incentive for small and medium enterprises that are facing the challenges of Brexit. Having that cushion is important. The fact that the funding will be co-guaranteed by Europe and Ireland is also important. It is a €300 million fund and, as the Tánaiste said, it is the first of a number of other schemes we will be considering to ensure that the SME sector will grow. It is a very important part of the Irish economy comprising 97% of enterprises in the country.
7. Deputy Brendan Smith asked the Tánaiste and Minister for Business, Enterprise and Innovation the plans her Department and the State's industrial promotion agencies have to assist in job creation in 2017 and 2018; their further plans to maintain existing employment in County Cavan; and if she will make a statement on the matter. [43133/17]
20. Deputy Brendan Smith asked the Tánaiste and Minister for Business, Enterprise and Innovation the plans her Department and the State's industrial promotion agencies have to assist in job creation in 2017 and 2018 and in the maintenance of existing employment throughout County Monaghan; and if she will make a statement on the matter. [43134/17]
I have raised previously with the Tánaiste the concerns in areas such as Cavan and Monaghan about the adverse impact of Brexit. Employment in our area is dependent on indigenous enterprise. The agrifood, construction and engineering sectors are the main sources of employment and they are heavily dependent on the Northern Ireland and British market. Already the weakness of sterling has had negative impacts on those companies so there must be specific programmes of assistance to help the companies to try to maintain existing levels of employment and, where possible, to grow. Sector-specific programmes are required to deal with the adverse impacts of Brexit and those programmes must be put in place at the earliest opportunity.
I propose to take Questions Nos. 7 and 20 together.
I recognise the particular challenges that Brexit can pose for some of the sectors the Deputy mentioned. One of our core ways of dealing with the challenges in different areas is the action plans for jobs. The north east-north west regional action plan is a key response to try to deal with the challenges and to support employment growth in the region. Its aim is to support job creation across the region, including in counties Cavan and Monaghan, by ensuring there is collaboration between the public and private sectors and that Enterprise Ireland, the IDA and so forth are supporting that work.
The core objective of the action plan is to have a further 28,000 at work in the region by 2020 and to ensure the unemployment rate is within 1% of the State average. The sectors being targeted include the traditionally strong sectors in the area such as agrifood, manufacturing, engineering and tourism. The second progress report is being finalised and is about to be published. Over 96% of the actions due to be completed under the plan have been done and 6,000 jobs were created in the Border area since the regional action plan for jobs initiative was launched in January 2015. The unemployment rate in the region has fallen from 10.2% to 6.6%.
Clearly, we must continue this work but it is important to note that at this point in time live register numbers have fallen in County Cavan by 16.5% and in County Monaghan by 14% in the past 12 months. That is good progress but we cannot be complacent given the challenges that may be ahead, particularly for the sectors that are reliant on the UK market. Any changes in sterling would particularly affect them. This is a key focus for Enterprise Ireland in working with clients and the sectors the Deputy mentioned. The main message is to prepare for Brexit by business and by sector to ensure that firms can diversify and be supported in doing that. EI has a plan in place to focus more on the eurozone and that means supporting the firms mentioned by the Deputy to diversify to the eurozone. However, that will not be done overnight which is why a transitional phase in Brexit is very important. That is why the supports that are available for firms must be used at this point. This is what we probably should be doing anyway irrespective of Brexit, but there is a great deal of support available.
There is also the regional enterprise development fund. There was an announcement in the budget that the second tranche of that, €25 million, will be available. People can apply to that fund from January and decisions are currently being made in respect of the first tranche. Regional development was one of the criteria that had to be taken into account so all parts of the country will benefit from the fund.
In terms of firms that could be vulnerable in the context of Brexit and which need working capital, that is, firms that would be viable if they had access to capital in the short term, the Brexit loan scheme we have announced will be available to those firms in the Cavan, Monaghan and Border region as well.
We have had difficulty over the years in attracting foreign direct investment to the Border region. One of the key ingredients in ensuring we were not successful was the fact of the Troubles on our doorstep for many decades. Thankfully, since the signing of the Good Friday Agreement in 1998 there has been a huge growth in trade between the North and South and a huge growth in companies expanding both North and South. The sectors about which I am concerned in particular are the agrifood, engineering and construction products sectors. Many of them, thankfully, have developed on an all-Ireland basis. They might have started in Cavan and Monaghan but they expanded and grew north of the Border. Similarly, some companies that were established in the Six Counties have expanded their sites and processing facilities south of the Border. In the context of dealing with the challenges of Brexit it is most regrettable that there is no Northern Ireland Executive and Assembly. There is a huge and urgent need to have the authorities in this State and in the North working together with regard to whatever programmes of assistance are put in place.
We have to ensure co-operation and that such assistance is made available to companies that have a presence on both sides of the Border, even if it is for work or activities they carry out north of the Border. A border cannot be introduced for truly all-Ireland companies. If the Department or one of the industrial promotion agencies has a programme of assistance available, I urge the Tánaiste to make it available to companies that are situated north of the Border but have a presence on this side of the Border.
The Deputy makes a strong case on the importance of cross-Border trade and companies which operate North and South. Ensuring this trade continues is an absolute priority. I agree with Deputy on the importance of having an executive in place in order that the needs of the North, including the points made by the Deputy, can be articulated at an international level. Brexit is the most significant challenge to face businesses, North and South, for decades.
I take the Deputy's point on the importance of providing specific supports for companies that trade North and South. The most important issue is that they are allowed and able to continue to trade without a border. Ensuring normal trade can continue is a priority for us in the negotiations on Brexit. I hope sufficient progress will be made in the next few weeks to allow the negotiations on Brexit to move on to the very important trade and business issues that are preoccupying companies. The great uncertainty surrounding Brexit makes it difficult for businesses to know what they should do at this point. However, the message remains that they must innovate, diversify, examine the specific impact Brexit will have on their business, make preparation plans and engage with the agencies whose role is to help them.
State agencies will be contacted by some companies and enterprises that have never approached them before. I know of small companies that will approach their local enterprise offices. We are fortunate to have two excellent local enterprise offices in Cavan-Monaghan. I hope the Tánaiste is in a position to provide additional funding for the work of these offices in 2018 because the work of and support for local enterprises will be critical.
Financial services has been identified as a sector where companies may choose to relocate to Ireland as a result of Brexit. If companies choose to relocate, will a particular effort be made to try to bring some of this investment to the Border region, which has already been adversely impacted and will be further negatively affected by Brexit? There has been a history of some financial services companies operating in the Border region. County Cavan, from where I come, has had a strong insurance industry over the years and the region has a pool of talent with the relevant skills. If companies relocate to Ireland as a result of Brexit, I sincerely hope the Department and all the industrial agencies will try to persuade them to locate in areas that have been hit hardest by Brexit and face the most difficulties post 2019.
I assure the Deputy that attracting foreign direct investment to the regions is very much a priority in the work IDA Ireland is doing, which includes having suitable properties available. IDA Ireland is progressing a property plan for next year that takes in many parts of the country. This issue is also a priority in my discussions with companies. I and all the representatives discuss opportunities in regional areas and the advantages available in different parts of the country, including the Border region and counties Cavan and Monaghan. Ensuring balanced regional development is a priority and goal the Government will support in the national planning framework and capital investment programme. Companies' decision making is impacted by many criteria, including the skills available, employment, access and so forth. We will continue to focus on ensuring IDA Ireland will make sure, where possible, that companies locate in the regions. This issue forms part of all of the agency's discussions with firms.
8. Deputy James Lawless asked the Tánaiste and Minister for Business, Enterprise and Innovation her views on the introduction of a scheme to incentivise small businesses to innovate without risking scarce capital reserves (details supplied); and if she will make a statement on the matter. [43135/17]
Before I introduce Question No. 8, I refer to Question No. 25, tabled prior to the budget, which refers to Ireland joining the European Southern Observatory. I acknowledge that Ireland has commenced the process of joining the body. This is a welcome and positive step for Ireland's astronomy community and presents many commercial opportunities. I thank the Tánaiste and her Department for their role in this matter.
Question No. 8 refers to the possibility of introducing an innovation scheme that would provide Government support to allow small businesses, with their limited reserves and cashflow but unlimited energy and enthusiasm, to innovate.
I thank Deputy Lawless for his remarks on Ireland's decision to become a member of the European Southern Observatory.
In December 2015, the Department published Innovation 2020, Ireland's five-year strategy on research and development, science and technology, which sets out the roadmap for continuing progress towards the goal of making Ireland a global innovation leader. Funding has been provided to Science Foundation Ireland for additional research centres, including the research centre announced in the budget.
The Deputy is correct that there is a need to drive up the innovation capability of Irish companies in order that they can compete internationally. I would go so far as to say that if they do not innovate and diversity, Irish companies will find it difficult to compete in the current trading environment. Advance manufacturing centres have an important role in allowing manufacturing companies to adapt to new technologies, which are dramatically changing the face of manufacturing.
While the benefits of innovation to firms in terms of increasing new products and services are well understood, innovation can involve upfront expenditure. As the Deputy pointed out, this can impact on cashflow for firms. The research and development tax credit specifically recognises this issue and has been improved to help address this cashflow issue for companies.
Enterprise Ireland operates a range of supports to help companies mitigate the issues associated with undertaking innovation by providing funding and support to undertake these activities in-house, where appropriate, or helping them to engage with third level researchers.
Enterprise Ireland's innovation supports help companies of all scales and capability levels. Even the smallest firm can avail of an innovation voucher, with 418 such projects completed to date under this scheme. They can also engage with academic research groups which are aligning more closely with industry and business. Enabling small companies to make links with the various research centres is a positive development. We are seeing very positive engagement in the manufacturing centres.
The Tánaiste referred to Innovation 2020. I am very concerned about progress on this strategy, although I acknowledge that it is a national strategy and my question is directed at a lower level. We learned during the week that Ireland spends approximately 1.45% of GDP on research and development whereas the figure is supposed to be 2.5%. I am very concerned about this. I reviewed Innovation 2020 last night and we are very far from meeting the objectives set out in the strategy.
The Tánaiste also referred to Science Foundation Ireland's research centres and the funding provided in the budget for a new research centre. While these centres do great work, they are not applicable to small business, which is the focus of my question.
I met representatives of the Small Firms Association and ISME recently. As a former chairman of a small business association, I know that small firms find it difficult to access supports, particularly high-level supports such as Science Foundation Ireland's research centres and fiscal measures such as the research and development tax credit and knowledge box tax credit, to which I had amendments made earlier in the year. We must try to assist small businesses to avail of these schemes. Small business groups inform me that while such initiatives are fantastic and make sense, large companies with significant reserves can take the risk of receiving a tax credit or having a tax audit done later in the year, which may involve a clawback. However, a small firm struggling daily with cashflow will find it much more difficult to do this because it cannot risk this type of capital expenditure upfront in uncertain circumstances.
I take the Deputy's point about companies taking the risk of putting time and money into innovation. We have an important role to play in supporting companies in that regard. Many companies tell me they get so caught up in their challenging day-to-day work that it is difficult to take any time out to innovate. Sometimes, companies do not use the available range of supports. We need to publicise further the research and development fund as well as the innovative high-potential startup fund, which has received a large allocation from Enterprise Ireland.
While I take the Deputy's point that the big research centres are more connected to large-scale business, there is potential for collaboration. Enterprise Ireland will connect companies with particular researchers and institutes in order to develop their products, and its commercialisation fund provides supports for academic researchers to pursue research outputs with commercial potential. There are a number of schemes.
Cashflow can be an issue for firms undertaking research and development. In this context, the research and development tax credit has been amended to meet the needs of SMEs.
Indeed, those supports and schemes are useful. I will propose two potential practical solutions if the Tánaiste is minded to adopt or consider them, the first of which addresses difficulties experienced by small firms. Some of these can be startup enterprises of one to ten people, so we are not discussing established companies with capital and reserves. Under the JobsPlus scheme, a person is hired from the live register and the employing company receives a cash credit for every month that he or she remains in employment. Would the Department consider an "R&DPlus" scheme? Along similar lines as JobsPlus, where demonstrable innovation takes place, an actual cash credit or financial advance would be made to the company to support that work. It is a real measure and companies would not have to wait until the end of the year or face the uncertainty of it being clawed back. Rather, they could avail of it in the same way that employers do under JobsPlus.
My second proposal is the idea of a mentoring scheme in which lean processing, such as Lean Six Sigma, and other advanced business practices can be brought to bear on smaller companies that may not be aware or availing of them. This could be done simply and cheaply. It would involve pairing up retired industrialists with SMEs in their sectors through local enterprise offices, LEOs, and education and training boards, ETBs. This could solve the problem without requiring significant capital investment.
The Deputy might write to me about those two initiatives. I would be happy to raise them with Enterprise Ireland and consider them within my Department to determine whether we can progress them.
I would encourage small businesses to use another somewhat underused scheme, namely, the innovation voucher. The budget has allocated €4 million for it. It promotes a transfer of knowledge between Ireland's public knowledge providers and small business companies. Vouchers worth €5,000 each are provided to enable small businesses to seek assistance, be it in terms of skill or knowledge, from publicly funded researchers to address problems or proposals in respect of their business activities. This could be an important initiative for the small businesses of up to ten employees that the Deputy mentioned. It is meant to get them started. They may have ideas about how to innovate or diversify their businesses but do not know where to start. The innovation voucher is useful, but somewhat underused. It is important, in that it helps smaller companies to deal with the cashflow issues the Deputy mentioned. The amount is small, but it might have a good impact if used.
To explain to Deputy Ó Cuív, Question No. 9 was taken with Question No. 6, which was the Minister of State's prerogative. However, I understand that the notification of the questions being grouped went out yesterday at 4.40 p.m. Obviously, Deputy Ó Cuív did not get that notification.
May I explain exactly what happened? Yesterday evening, we got a list of the questions that were being grouped. On yesterday's Order Paper, my question was not No. 9, but No. 4. I read the list, which referred to Nos. 6 and 9, and thought that I was fine because I was No. 4.
When Deputies are given the groupings, do they refer to the numbering on the Order Paper at the time the listing was received or do they refer to the Order Paper that will be issued at midnight for the following day? That is where the confusion arose. I was careful to check.
Obviously, the grouping was for today's Order Paper, on which the Deputy's question is No. 9, but he would not have been aware of that. We will have this matter clarified to ensure that, in future, Members will know in advance if they are being-----
On a point of order-----
What is the point of order?
It could not have been No. 4 because No. 4 would have been a Priority Question.
It was No. 4 on yesterday's paper because there were no Priority Questions on that list.
I do not know.
If it was No. 4 yesterday, then it was No. 4 and we should not doubt that. This is not a matter for the Minister of State. It is a matter for the-----
I would have no problem answering the question again.
No, we are running out of time.
It has been taken already and the Minister of State got four minutes to speak on it at the time because it was grouped.
The Deputy wants it to be answered.
If the Deputy wants it, I will do it.
No. It has been taken. The Minister of State had four minutes at the time, so we will have to-----
It is not a question of me getting four minutes. It is the Deputy's Priority Question he wants-----
Hold on. We have to move on to Question No. 10 in the name of Deputy Niall Collins. At least when there is clarification, this situation can be resolved in future.
I will ensure that Deputy Ó Cuív gets the additional information that I said I would forward to Deputy Broughan.
It does not answer the question that I was going to ask, which related to a much more fundamental point.
The Members can have a one-to-one later.
If the Deputy wants a one-to-one, I would have no problem answering his question for him, if that is okay.
I thank the Minister of State.
10. Deputy Niall Collins asked the Tánaiste and Minister for Business, Enterprise and Innovation the Department that has the lead remit for the Workplace Relations Commission, WRC; and her views on the fact that employment policy and enforcement are now divided between two departments. [43165/17]
In moving the employment rights and minimum wage agenda to the Department of Employment Affairs and Social Protection, we are effectively aligning employee-based rights with the welfare to work agenda and focusing on ensuring that our policies encourage people into the workforce with fair terms and conditions. That Department has responsibility for Intreo, the national contact point for employment and income supports that also acts as a pathway to employment for many jobseekers.
My Department retains key functions and policies central to employment, including economic migration, industrial relations, health and safety in the workplace and the range of Government services available to workers and employers, such as those offered by the WRC and Labour Court.
There is no conflict in the fact that a function of my Department, through the WRC, is to enforce employment legislation when policy responsibility for employment rights resides with another Department. As the Deputy knows, the WRC is an independent statutory body that acts in a stand-alone manner in respect of workplace relations issues.
I am satisfied the separation of the function of policy responsibility for employment law from the function of enforcing that law will not impact in any way on the ability of employees to enjoy the full protection afforded by employment law. We will work closely with the Department of Employment Affairs and Social Protection to ensure that policy and enforcement functions operate in a manner that meets all of the expectations of employers and employees.
Following changes in departmental functions, certain responsibilities formerly within the remit of my Department have transferred to the Department of Employment Affairs and Social Protection. A schedule sets out the functions that have transferred to the Minister for Employment Affairs and Social Protection.
I will try to sum up this situation. The Department of Employment Affairs and Social Protection has responsibility for regulating some of our employment legislation, for example, employment rights regulations, the Low Pay Commission and the minimum wage. The Tánaiste's Department of Business, Enterprise and Innovation has lead responsibility for employment legislation, workplace health and safety, equality, the WRC, the Labour Court and the Employment Appeals Tribunal. As such, two Departments are now crossing over labour policy, labour law and labour affairs.
It makes the situation a little bit more complex when there are two Government Departments dealing with the area. I have been asked to ask the Minister if any practitioners, groups or representatives in the area of employment, trade unions or workers' rights were consulted on the decision to split the area of labour affairs between two Departments.
The areas that transferred from my Department to the Department of Employment Affairs and Social Protection included the Low Pay Commission and the national minimum wage as well as lead responsibilities for EU policies around employment, social policy and engagement with the European Foundation for the Improvement of Living and Working Conditions. If one thinks about employment policy, it covers a very broad range of areas across Government including taxation, innovation, education, skills needs, economic migration and enterprise supports. By moving the particular sections we moved, we are aligning employee based rights with the welfare to work agenda. It is a reasonable action to have taken and is very much in line with how other European countries deal with these issues. In the European Commission, these issues would be dealt with by the committee that deals with social protection as opposed to employment law. It is very much in line with what the stakeholders the Deputy speaks about would be used to at European level. There is very close engagement between the two Departments.
Is the Deputy happy with that?
Yes.
11. Deputy Charlie McConalogue asked the Tánaiste and Minister for Business, Enterprise and Innovation her plans to minimise the impact of Brexit in County Donegal; the engagement she has had with the IDA and Enterprise Ireland to ensure they secure new investment in County Donegal in view of Brexit; and if she will make a statement on the matter. [42763/17]
What are the Minister's plans to minimise the impact of Brexit on County Donegal? What engagement has she had so far with IDA Ireland and Enterprise Ireland to ensure they secure new investment into the county particularly in view of the challenge of Brexit? Will she make a statement on the matter?
As I said in reply to one of the Deputy's colleagues earlier, I am very conscious of the threat of Brexit, particularly in the Border region and Northern counties. We have free trade at present both sides of the Border. As Deputy Smith said earlier, we really want to see that situation continue unchanged. The North East-North West action plan for jobs is the key policy response for supporting employment growth in the Border region, including Donegal. We have seen the unemployment rate in the Border region fall from 10.2% in the first quarter of 2015 to 6.6%. Clearly very good progress has been made in terms of job creation and in terms of supporting employment in Donegal and the Border region. The key point now is to ensure this continues and that we support enterprise to deal with any challenges that may be ahead.
I have already outlined to the House the initiatives we are taking to make sure that counties such as Donegal continue to see job creation. Additional funding of €150 million is being made available to IDA Ireland to support its regional property programme and to drive job creation. That is one response. Another response is making sure capital is available to companies at a low interest rate. The €300 million fund will help companies that may be experiencing temporary cash flow problems. The results of the applications to the regional development fund will be announced very shortly and there will be a new tranche in January. There is no doubt companies in Donegal have applied for it. There is a regional criterion for it. Enterprise Ireland is doing work on the Brexit scorecard, various supports and reaching out to companies. We have to make sure the companies that perceive themselves to be at risk have plans, that they diversify, work with the supports that are out there at present and face up to the potential challenges that Brexit will bring and that they are realistic about it and working on the issues.
I want to try to get in a couple more questions.
The Minister's response is very disappointing and disheartening. My question specifically referred to the engagements she has had with the State agencies, IDA Ireland and Enterprise Ireland, with regard to trying to ensure they can up their game to deal with the challenge of Brexit. The Minister did not deal with that in her response. We need the Government to totally change its approach to the prioritisation of County Donegal by IDA Ireland in particular. In 2015 and 2016, there were 11 IDA Ireland visits to the county while in the same period there were 446 in Dublin. Just two of the approximately 600 new companies that have come to the country in the past nine years have come to Donegal. Existing companies in the county, such as Optum and Pramerica, do well and continue to bring in new employment but we are not being prioritised by IDA Ireland for new employment. What engagement has the Minister had with IDA Ireland and Enterprise Ireland to try to improve that situation?
The Deputy will have another minute to respond. I hate cutting across Deputies.
I have constant engagement with Enterprise Ireland and IDA Ireland on job creation across the country. Both agencies are very conscious of the need to attract regional investment and, importantly, to support jobs that are already here. If one looks at the figures, 70% of all new FDI comes from existing IDA Ireland client companies. Site visit activity does not necessarily reflect investment potential. Donegal is now home to 12 IDA Ireland companies employing 3,039 employees. That is important. It is a 37% increase since 2012. There are things happening and there are improvements. One can see that from the employment figures for Donegal. It is a 37% increase. It is important. It is going in the right direction.
I take the Deputy's point that this is a particularly challenging time in terms of the potential Brexit challenge. The Deputy should be absolutely clear that IDA Ireland is focused on regional development. We can work so far in terms of supporting a company to go into a regional area but at the end of the day the company decides where it wants to locate. What all of us working together have to do is make sure our regions are in a position to continue to attract and support foreign direct investment. Indigenous business is extremely important as well in terms of the future growth of job creation in Donegal.
I want to keep to the times because there are other Deputies waiting to ask their questions.
I will try to shake the complacency of the Minister's reply. She believes there has been a certain level of achievement by the State agencies because existing companies in the country are increasing employment. They are and they are continuing to grow because they are thriving in the county and it is a place they can do business. The point I am making is that we are getting no new investment. It is something the Minister needs to address. Companies such as Optum and Pramerica, which are growing, came to the county in the 1990s and 2000s and grew from there but we are not getting new investment by new companies. They are not coming and we need to get our fair share of that. It comes down to the Minister with responsibility and the Government driving it. There is no point in telling us there is a policy of regional development when it is quite clear the policy is failing and not happening on the ground. We need it to be addressed by the Minister. On the threat Brexit poses to our county, the fact our economy is so dependent on Northern Ireland plays a big part in that. It makes it even more important that we see a change of approach from the Government. It is crucial that the Minister takes control of that and ensures we do not continue to be neglected which unfortunately has been the case with regard to new investments over the past number of years.
More can be done and it should and will be done but there is no complacency, especially in the face of the Brexit challenge. It is important to recognise the improvements that have been made. I am simply pointing that out. There have been recent investment announcements which the Deputy seems to be disregarding such as the opening of the new SITA premises in Letterkenny, Optibelt Urethane Belting Limited is moving to new premises in Letterkenny with associated capital investment of €7.7 million over five years, and the expansion of Pramerica with the creation of 330 new jobs.
Of course, more can always be done. We undoubtedly need to continue to have a focus on Donegal and other regional areas. There were seven site visits by IDA Ireland to Donegal in 2016. IDA Ireland will do its utmost to encourage clients to locate in areas that are most in need of investment. At the end of the day, companies decide where they will locate having considered all the issues. Thankfully, the majority, over 71%, of jobs created last year were in regional areas outside Dublin.
12. Deputy Maurice Quinlivan asked the Tánaiste and Minister for Business, Enterprise and Innovation her plans to establish a co-operative development unit to increase the number of worker co-operatives. [43035/17]
The Leas-Cheann Comhairle will probably be interested in this question on co-operatives. I was disappointed that the Ceann Comhairle took out one line of the question we tabled, which referred to the Sinn Féin alternative budget. We were advised that it would be argumentative, which I find disappointing. I wanted to reference that in what I planned saying. Will the Minister consider establishing a co-operative development unit to increase the number of worker co-operatives?
Many enterprise supports are already available. Grants and supports are available to a wide variety of businesses at different stages ranging from establishment to growth and beyond.
The co-operative model is one of a number of legal options that are available to those considering establishing themselves in business, and the different models have their own distinct characteristics. It is, of course, up to each individual operation to choose the model that best suits the nature of the business and the desired ethos of the entity. The Department supports co-operatives in the same way as we support other enterprises. I have no plans to establish a co-operative development unit in the Department at this time.
The Friendly Societies and Industrial and Provident Societies (Miscellaneous Provisions) Act 2014 was aimed primarily at easing the regulatory burden on co-operative societies, making it easier to start up and run a co-operative as an alternative form of enterprise organisation. It addressed particular problems that were identified in the co-operative sector and helps to ensure this model thrives and grows to its potential to promote appreciation of the co-operative as a form of enterprise organisation.
The Department has a strong focus on developing indigenous businesses. We are obviously working with SMEs, which account for 99.8% of all enterprises in the State, and adopting policies which respond to their needs. There is a range of tailored supports for businesses of all types and includes access to finance, management development, mentoring supports, business development programmes, market supports and so on.
There is a structured dialogue with the SME sector. The same supports are available to those who choose to establish co-operatives as are offered to all enterprises and to small and medium-sized businesses.
Obviously, I am very disappointed at the Minister's response. I asked if she would establish a co-operative development unit and obviously she said she would not. I commend Senator Gavan on a policy he developed over the summer and launched last month on the issue of co-operatives which, if implemented, would make significant progress in delivering sustainable jobs in local communities.
As the Minister will be aware, the Department previously had a co-operative development unit. It was established by Government in 1988 but was subsequently dissolved in 2002 by the then Minister. Ireland has had a long history of co-operative businesses since the first one was established in 1889 by Horace Plunkett. However, we have never realised the potential that this kind of business can deliver. Many of these companies have proven to be more resilient and productive and to provide greater social benefits to the workers, their families and their communities. I urge the Minister to work on plans to encourage expansion of the co-operative network. To do that I believe a co-operative unit should be established in the Department.
I know the Deputy has spoken about this previously. His point is that he would like to see more networking and development between the existing co-operatives. I agree with him that co-ordination of the work done by co-operatives would be worthwhile to examine common issues and the kinds of supports that might be needed. My Department will have no difficulty in responding to any particular needs that such a network among co-operatives would identify. If that should emerge and such a network could support the establishment of new worker co-operatives through advice and networking, we would certainly be very happy to respond to them and see if there are particular initiatives that either Enterprise Ireland or the local enterprise offices, LEOs, could take in response to such a move. Many LEO supports are available to co-operatives, including feasibility grants, priming grants and business development grants.
I understand the supports they can access, but it does not answer the question. With Brexit approaching, it is more important than ever that we have a strong indigenous company base, especially considering how multinationals can be vulnerable to the tax base. Does the Minister agree that building that sector could have distinct advantages for the economy?
I also want to raise the issue of allowing workers to buy a company if a succession issue arises. As the Minister will be aware, this has caused many problems over the years with potentially profitable companies closing because of succession problems. When a new owner dies with no succession plan, we are not protecting jobs.
I am anxious to get in another question. I call the Tánaiste.
If no plans for expansion of the co-operatives exist, how does the Minister plan to protect jobs if such succession situations arise?
I did not get the last part of the Deputy's question.
If the Minister has no plans for the set-up of a co-operative unit in the Department, how does she intend to protect jobs if such succession situations arise in such small companies?
There are a range of initiatives to support job creation. If the co-operative firms, as with any other firms, are in need of particular support, particularly in the Brexit context, those supports are available to co-operatives in the same way that they are available to enterprises. It a question of ensuring that they realise that supports are available to them, as they are to other enterprises, and that they access them. If they do the kind of networking the Deputy suggests and if particular issues arise, I am very happy for the Deputy or the co-operative movement to communicate with my Department and for us to respond to the particular issues they identify as being essential to help them cope with any current threats.
We will have a final question from Deputy Wallace and I will give him one supplementary question.
Why? It started late.
13. Deputy Mick Wallace asked the Tánaiste and Minister for Business, Enterprise and Innovation the measures she is taking to address the below average growth of foreign direct investment job creation, the lack of progress in stimulating indigenous industry and the deficit of IDA Ireland and Enterprise Ireland activity in County Wexford; and if she will make a statement on the matter. [43170/17]
As the Tánaiste is probably aware, the south east is the only region not meeting the Action Plan for Jobs target of bringing unemployment to within 1% of the national average. Within the south east, Wexford is performing worst of all the counties. In 2015, only 2.4% of the net IDA Ireland supported jobs created were in the south east despite the region making up almost 11% of the population. In 2016, the figure was 5.7%, which is still well short of 10.7%. The figures for Wexford are probably the worst in the country. Does the Minister have any direct action plans to deal with Wexford itself or will it continue to be lost in an underperforming south-east region?
It is important to examine precisely what has been happening in recent times. It suggests that the initiatives that are under way are having an impact. There has been a substantial increase in job creation in the region since the commencement of the national Action Plan for Jobs in 2012, with an additional 33,600 in employment in the second quarter of 2017. As the Deputy knows, the unemployment rate in Wexford has decreased from 16,170 in 2011 to 11,478 in 2016, a reduction of almost 5,000 people.
Clearly, more work remains to be done. I take the Deputy's point on the comparison with the average rate of unemployment. A lot of work is going on. There is a strong base of agency supported jobs in the county. Currently, 2,630 people are employed in IDA Ireland supported companies, 4,816 in Enterprise Ireland client companies and 1,192 in local enterprise office supported businesses. Considerably more than 8,000 people are in agency supported employment in County Wexford.
Many things are moving in the right direction but I take the Deputy's point, he wants to see an acceleration of those actions. I refer to the continuing work by indigenous companies, which have a strong presence in County Wexford. Enterprise Ireland-supported companies in the county employed almost 5,000 people. It also supports two community enterprise centres. These serve as important enterprise hubs. Local enterprise continues to perform well. The local enterprise office in Wexford successfully secured funding for five projects under Enterprise Ireland's competitive fund. These projects will begin to create more jobs in the period ahead. Two other projects from within the county were also awarded funding under Enterprise Ireland’s community enterprise initiative scheme.
Looking ahead, I assure the Deputy that IDA Ireland is targeting an increase of investment in the south-east region of 30% to 40% by 2019. It is focusing on the region and will work with companies which come to Wexford.
I have been listening to replies such as this since before the Minister's time. The fact remains that over 16% of the labour force in Wexford is still on the live register. Most of the jobs that have come on stream in the past 18 months have been part-time and of low quality. Low job quality is holding the region back severely. Income tax returns for Wexford and the south-east region are half the national average on a pro rata basis. How shocking is that? There is huge underemployment in the region.
Recently, Dr. Ray Griffin of Waterford Institute of Technology was asked why things are still so problematic in places in the south east. He was talking about the south-east region, but County Wexford is by far the worst off of the counties in the south east. He said there are two main drivers of these problems. He said the weak labour market is driven by very low levels of educational attainment and poor service from the national agencies tasked with enterprise development. He says that it is national policy and that one can see that it is an unfavoured region. I am not blaming the Minister, as she has just started in the job, but specific help is required not just in the south east in general, but in Wexford in particular. The Minister knows I am not a parish pump merchant but when I canvassed during the last election two years ago, I went to approximately 20,000 houses and I was shocked at the level of poverty in the county. Wexford needs strong, specific help or it will remain in the doldrums. The N11 is packed with cars filled with fellas driving to the building sites in Dublin for work. There is no work in Wexford.
Time has expired but I will allow the Minister to respond.
I thank the Leas-Cheann Comhairle. He is too good.
Obviously work needs to be done on an ongoing basis, but more than 13,000 people have returned to work in the south-east region since the launch of the regional action plans initiative in the first quarter of 2015. That is a central pillar. We need a continued focus on the situation the Deputy has described through the regional action plans. The initiatives which are in place have shown results, as can be seen from the figures in respect of people who have become employed but there is still work to be done.
With regard to the institutes of technology, the Technological Universities Bill will be important because it has been shown that things come together when there is such engagement between universities and the technology sector and when young people are provided with the skills necessary for work in foreign direct investment supported companies. Work needs to be done on an ongoing basis. The Action Plan for Jobs will continue to focus on the initiatives which are needed to ensure continued job creation. I expect we will see the improvements which we have already seen being replicated in the period ahead given all the indicators in terms of continued foreign direct investment in Ireland and the indigenous business sector. We are seeing job creation from our own indigenous base here all of the time. I have no doubt that County Wexford will benefit from that, as have other counties.
