JOINT COMMITTEE ON THE IMPLEMENTATION OF THE GOOD FRIDAY AGREEMENT díospóireacht -
Thursday, 25 Jun 2009

Cross-Border Infrastructure Priorities: Discussion with IBEC.

Chairman

Is cúis mór áthas é dom fíor-fáilte a chur roimh an tUasal Reg McCabe agus Iníon Paula O'Dwyer ó IBEC. Mr. McCabe is chief executive of the IBEC-CBI joint business council and his colleague, Ms O'Dwyer, is its project manager.

The work of the joint committee is to examine issues arising as a result of Ireland being a signatory to the Good Friday Agreement. North-South economic co-operation is a priority issue of interest. It is remarkable that the IBEC-CBI joint business council was established as far back as 1991, long before the Good Friday Agreement was signed and the North-South Ministerial Council established, with the mission of developing and sustaining cross-Border business co-operation on the island of Ireland and addressing international competitiveness. In many ways it was ahead of its time and is more relevant today than ever before. The council has a high profile on issues of concern to businesses North and South. In addition to providing a single business voice for the entire island of Ireland, it also aims to improve the North-South business environment in which SMEs operate, to challenge public sector policy, where appropriate, and foster a climate of innovation and entrepreneurship. It is funded under the INTERREG 4A programme on territorial co-operation.

Mr. Reg McCabe

I thank the joint committee for the invitation and we are greatly honoured to present to it. Mr. Declan McGrath, chairman, asked me to convey his apologies for not being able to attend. He runs a company as his day job and, unfortunately, was called away on urgent business.

While the two parent organisations, IBEC and the CBI, are large in scale, the IBEC-CBI joint business council has a small executive team consisting of Ms Paula O'Dwyer, our recently appointed executive in Belfast, Ms Julie Jordan, and me. With some administrative support, the council is not a large organisation, but I hope we punch above our weight in terms of our impact.

Since the early 1990s the joint business council has been working to build co-operation between businesses and companies on the island of Ireland. It was started when the atmosphere and outlook for business on the island were very different than they are today. In their wisdom, the two main organisations saw the need for greater levels of personal contact, networking, common enterprises and joint ventures between companies North and South. Instead of the individual business organisations lobbying the respective governments, the council would be a single voice on the island to address cross-Border needs and the needs of the all-island economy, independent of the separate agendas of the respective governments. The council is non-political, with its entire focus on the economic and trade agenda.

Having talked about conditions as they applied in 1991, the big thrust for the joint business council at the time was networking. One could almost have described us as a dating service, getting companies together, running road shows and trying to build co-operation and assist companies in exploiting market opportunities on both sides of the Border. That role continued up to the signing of the agreement in 1998 and subsequently the creation of the cross-Border bodies. Particularly following the creation of InterTradeIreland, there was a need for IBEC and the CBI to recast its role and reconsider how it might fit into the new institutional framework. At that stage the members decided that, rather than being a service provider and getting involved in the detail of co-operation, the role should be given to InterTradeIreland and we were happy to do this because the latter was a much bigger organisation and very well resourced. IBEC and the CBI then switched to the role it maintains up to this day, maintaining the network and acting as a lobby organisation in terms of pursuing the cross-Border agenda. The issues we deal with are familiar to the committee. They have to do with economic development, trade, promoting entrepreneurship, infrastructure issues, particularly cross-Border roads, but, increasingly, the focus is on the energy agenda and renewables. I would identify, as would our members, the single electricity market as being probably the most significant development in terms of the management of infrastructure and energy matters on the island. We recently published a joint business council policy paper on all-island electricity and energy matters which sets out our stall as regards the needs of the all-island economy in terms of energy requirements looking forward to 2020. The report is available on our website and we are happy to give a copy to the committee.

I have described our role and networking focus. One aspect I should highlight as regards the current role of the JBC is the significance of east-west linkages. We refer to east-west linkages in the context of the island as a whole and also in the context of the adjoining island. In terms of the east-west agenda on the island, the JBC has long been associated with the Dublin-Belfast economic corridor. We spent a good deal of time lobbying on economic corridor issues. Members, say ten years ago, would have been enormously preoccupied with the need to upgrade the M1 and the N1 to create a motorway between the two capitals. That vision has now almost been delivered upon. We are very nearly there, thanks to the two governments and the activities of the roads authorities in both jurisdictions. While that is good, we always need to keep an eye on the future. The Derry to Dublin route is recognised, particularly by my IBEC colleagues in the north west, as being an extremely important priority in terms of infrastructure provision. To complement the upgrading of the Derry to Dublin route, we also have a focus on the southern part of the north-west region, particularly the Sligo-Enniskillen route, on which we have been lobbying and expressing concern centred on the N16-A4 economic corridor, a region with many problems, as the Chairman knows. The trade focus in that broad region is on Belfast rather than Dublin in terms of freight and the movement of goods. We should like to see that third corridor addressed as a priority by the two governments. There is, perhaps, some disappointment that this project has slipped off the radar.

East-west linkages are quite important on the island. In anticipation of something I was going to say later, perhaps, under the INTERREG programme, we have a strategic link with agencies in Scotland, about which I can talk more. Certainly, in our work programme we have prioritised the development of better economic and trade links between Ireland, Northern Ireland and Scotland, broadly in three areas, including the promotion of entrepreneurship and infrastructure development, with particular reference to the North Channel Partnership which for a number of years has been lobbying for improvements on the corridor between Larne, Belfast and Stranraer onwards. We see this as particularly significant, as well as the energy and renewables agenda. Interconnection with Scotland and the island of Britain is viewed as a priority and also a very significant part of our programme.

I have prepared a slide to illustrate our work programme. The Chairman has mentioned the fact — we are extremely grateful — that we have a very good working relationship with our two sponsor bodies in Northern Ireland and the Republic, namely, the Department of Enterprise, Trade and Investment and the Department of Enterprise, Trade and Employment. We also have a good working relationship with the special EU programmes body, SEUPB, in Belfast. We have been successful in our funding application under INTERREG 4 which runs from 2007-13. Under the INTERREG programme we are committed to delivering in a number of areas. There is a range of projects for the JBC and the relevant slide sets out our principal focus areas which are grouped under three themes. Theme 1 broadly covers people issues, including skills and training, with labour mobility being particularly important. My colleague, Ms O'Dwyer, will focus on these areas. My colleague in Belfast, Ms Julie Jordan, looks after theme 2 which covers all-island infrastructure, including roads, logistics and supply chain issues, as well as the environmental matters, particularly energy. My focus is on theme 3 which covers innovation and entrepreneurship.

There are some cross-cutting themes. I refer, in particular, to business network development, on which we work closely with our colleagues in InterTrade. As the JBC is a relatively small organisation, our ambitions in terms of business network development under INTERREG 4 are modest. We focus on three areas: a food industry network in the north west linking companies on both sides of the Border; an all-island logistics network which sets an agenda for road haulage and shipping companies; and building a network between renewables research centres on the island of Ireland in the universities and industry. Therefore, we have a focus on three business networks under the 2007-13 programme. We are not delivering all of them but are working in close collaboration with agencies such as InterTradeIreland.

We have covered most of the initiatives in the next slide. We have a cross-Border project that links schools using ICT as a technology platform. My colleague, Ms Paula O'Dwyer, is closely involved in developing this project and we will describe it in more detail during the discussion. The key focus of this project, which we expect to launch formally later this year, is on entrepreneurship. We are trying to encourage our young people in schools in the two parts of the island to get involved closely in looking at issues in the business studies curriculum that deal with entrepreneurship and starting businesses. We see this as the most important part of our agenda. If there is consensus on any economic issue in the island, it is on the need for greater levels of enterprise and the need for new business start-ups as a way of addressing issues of economic development and employment creation. We feel that there is a great need for young people in both parts of the island to be supported and motivated in the enterprise agenda.

Industry traditionally engaged with schools through the medium of what I call "the pack". An industry group might put €20,000 or £20,000 into developing a printed pack of materials and send it to 1,200 schools and hope it would be used by the teachers in the classroom. The pack often ended up in the bin because the schools are getting packs every day of the week.

In our discussions with the departments and with schools, we found that students and teachers were increasingly PC illiterate and Internet platform literate. There is a downside to on-line social networks, and we hear stories about Bebo and Facebook and so on. However, there is also an upside because the children understand these technologies and are interested and motivated. When we speak about using ICT, using computers in the classroom is all old hat. We are now talking about ICT enabled interactive platforms that children use. Using these platforms leads to a level of interaction between teachers and pupils. This approach has been proven to work in other areas over the past two to three years. It is entirely relevant that it is used in the area of enterprise and entrepreneurship.

We are trying to get kids to think about something other than accountancy and balance sheets, such as why it is that some companies succeed while other companies in the same market fail. We try to get them to think about the psychological issues rather than just blaming the banks. This raises the issues of leadership and vision. That is what entrepreneurship is all about and experience has indicated that.

We have key partners and they are listed in the next slide. I do not wish to dwell on any particular group except to acknowledge the support we have been given by the special EU programmes body in Belfast and the North-South Ministerial Council, which has been very helpful to the JBC in recent years. We also have good working relationships with the local authority cross-Border groups, such as the East Border Region based in Newry, ICBAN and the North West Region Cross Border Group in Derry.

We have a partnership with the centre for Irish studies in Boston College, and I have just returned from a study group there and from a group in Boise, Idaho, that was put together by Boston College. It was a North-South group that included civil servants and private sector people, and we looked at entrepreneurship education in the US. We had a very good session with MIT and we also looked at financing start-ups and the role of venture capital and angel funds in particular. This was very interesting and gave us a lot of food for thought on how to address similar challenges on this island.

I wish to mention the key challenges that we the JBC feel need to be met. Unquestionably, we need to build more dynamic, competitive regional economies, not only on this island but also in Britain. There is a role for the joint business council, especially in view of our strategic link with Scotland. There is enormous scope for co-operation in the three regions and in learning from each other about what works. We need to overcome institutional complacency on cross-Border structures and the issue of fragmentation. We have a plethora of cross-Border entities and the vision may be lacking sometimes. We are all about defeating the still prevailing partitionist mindset across the Border. This exists in all communities and is not just a North-South issue but an east-west issue as well.

There is a need to unlock entrepreneurial potential, and this is a critical issue. We have internal issues with the business organisations as well which revolve around building a more dynamic, inclusive business voice on the island and creating a business voice that would have a focus on start-ups, entrepreneurship and the needs of small businesses. There is a degree of fragmentation that is something for us to challenge. Committees such as this one can assist.

For too long, the joint business council has been associated with Dublin and Belfast. We may be late converts, but there is a need for a greater focus on the north west and the west. We also need to focus on the counties on both sides of the Border in the years ahead.

As for the joint business council, instead of having executives in both Belfast and Dublin, consideration should be given to having an office in Enniskillen, Armagh or Newry, as that would be more appropriate.

I wish to mention our launch event for the JBC INTERREG IVC 2007-13 programme. Even though the formal INTERREG IVC programme runs from 2007, our application was only approved in recent weeks and to mark the programme the JBC is running an event next Thursday at the Armagh City Hotel to which I invite all members.

I apologise if I was a little long-winded.

Chairman

There is no limit. I thank Mr. McCabe for his detailed appraisal of the business environment's evolution, both in the future and in recent years, under the joint business council's stewardship. I salute the council for its work and note its judgment has been good. Its emphasis on the Dublin-Belfast corridor was not wrong, as it was a sustainable project that lifted everyone and provided enlightened opportunities for all.

Deputy Caoimhghín Ó Caoláin

I join the Chairman in welcoming both representatives of the joint business council to the meeting and thank Mr. McCabe for his presentation.

As a Deputy from a Border constituency and like many elected representatives sitting around these tables, I have been conscious for a considerable time of the lights that are going out for the last time in small businesses such as retail and service providers in small and medium-sized towns along the entire length of the Border, not least in my own constituency of Cavan-Monaghan. There has been a dramatic increase recently in South-North traffic to access retail opportunities. This is understandable and it is not long since the traffic went from North to South. Moreover, the wheel will turn again. However, this constitutes an unstable basis on which to establish or sustain thriving businesses or on which to create or sustain jobs. It is important to address the major contributory factors. While I was pleased with and welcomed much of the contents of the joint business council's presentation, I refer to some of the key contributory factors to this instability that apply to businesses and those with ideas or an entrepreneurial spirit. These are major factors along the entire length of the Border in all the counties to which Mr. McCabe alluded.

What efforts has the joint business council employed to induce the Government here, the Executive in the North and the Government at Westminster to recognise that three critical areas must be addressed to facilitate real regional development and the emergence of a stable business climate from both the current crisis and the crises that have arisen over many years in the Border regions, North and South? I refer to the need for harmonisation of tax, particularly in respect of value added tax, the need to synchronise business law and regulation on a North-South basis, as well as the elephant in the room, to which there has been no reference as yet, namely, the existence of two currencies on the island of Ireland. This fact gives rise to forces that ordinary people in business cannot possibly either second-guess or contend with. These are movements and fluctuations beyond their control; currency fluctuations and differentials between the euro and sterling are extremely difficult to address. As I noted, this constitutes the elephant in the room. What efforts has the joint business council employed or does it intend to employ to address this need?

This is not a political argument but simply a factual and honest addressing of a situation that cannot be allowed to continue. As I noted, lights are going out along the entire length of the Border that will never again be turned on and this has been an experience on both sides of the Border. People will respond to these points, as they have done for several months, by stating there will be no appetite to address such issues within Unionism or British Government thinking. However, I do not believe this to be the case, because people from the traditional Unionist community to whom I have spoken about these matters are no less affected than are those with traditional Nationalist or republican outlooks on either side of the Border. As pragmatists and realists, such people are just as anxious to have such matters addressed. I believe this to be the case in respect of tax harmonisation, the synchronisation of tax law and regulation and, critically, the need for a single currency, namely, the euro, across the island of Ireland. What has the joint business council done thus far to address this issue? Does it plan to increase its lobby efforts across the three Administrations, namely, the Houses of the Oireachtas, the Executive in the North and at Westminster?

Chairman

I welcome Dr. Alasdair McDonnell from Belfast.

Dr. Alasdair McDonnell, MP, MLA

I will be brief and must apologise because I may be obliged to withdraw for a couple of minutes shortly. However, I wish to raise two issues. First, how can the single energy market be made to work better? I am told that while on paper there is a single energy market, its workings and mechanics are somewhat stuttering and that it could work a great deal more effectively. The delegates should provide a wider or more in-depth view of the single energy market in general. Second, Mr McCabe mentioned a Sligo-Enniskillen corridor.

Mr. Reg McCabe

I referred to a Sligo-Enniskillen-Belfast corridor.

Dr. Alasdair McDonnell, MP, MLA

Would it be possible to describe it as a Sligo-Dungannon or Sligo-Belfast corridor? The difficulty is that our friends in Enniskillen keep complaining that there are defects at the Northern end and that there is a great sense of isolation there. If possible, I would like to see a corridor, which might suit some of the Chairman's interests even further beyond Sligo.

Chairman

It certainly would.

Dr. Alasdair McDonnell, MP, MLA

Many businesses in the North in the construction and development trade perceive the aforementioned corridor to be nearly as important as the other two corridors in achieving cross-matching. The delegates should comment on this.

Deputy Niall Blaney

I thank Mr. McCabe for the broad thrust of his presentation and I am in agreement with the vast majority of it. I was particularly pleased by his emphasis on the need for a balanced agenda in respect of north-west and east-west links, as well as on the expenditure that will be required to bring them into line with the rest of the country. I greatly welcome these points.

Mr. McCabe mentioned the Dublin to Derry corridor. I agree with Dr. McDonnell's point on not using terms such as the Dublin-Aughnacloy-Derry corridor. It is a matter of getting the words right and this should be done from the outset, as the entire route is important. It should be the Sligo to Belfast N16-A4 route. I agree that the route needs to be upgraded, as it has the potential to assist in the development of the area in the coming years. The pity is that, while we in County Donegal cried out for years to have the M2-A5 Dublin-Derry route upgraded, it was only when the Government threw money at it, that it was done. Even though the Executive is up and running and some of its members cried out about the area west of the River Bann being neglected during the years, there is still no sign of a lot of money going to the area. It is time the Northern Ireland Executive stepped up and put together a national development plan showing positive discrimination to ensure balance in Northern Ireland. While it might be seen as a bit much to say so here, it needs to be said. It is our fear that politicians across the Border will soon come knocking on our door again, expecting us to upgrade that part of the road network. While I welcome the money made available for the M2-A5, there must be a balance in Government spending on such projects. It is only fair that the Executive, the economic position of which is no better or worse than ours, should step up to the plate in this regard. Rome was not built in a day and we do not expect the N16 to be funded tomorrow, but a plan should be put in place for the next ten years. Planning should begin now because, as we know, these projects can take quite some time to complete. I would be in favour of having such a plan.

Tourism has much potential in the regions either side of the Border. The Moy region received a great deal of funding in respect of the Ulster Canal, while the Irish Government invested a lot of money in Derry Airport, on which there is not nearly enough emphasis, given its significant potential to assist in the development of the region. A number of UK colleagues and friends who travel to County Donegal now and again are overcome by the scenery and the people. Starting anywhere on the east coast of County Antrim and travelling along the coast to counties Galway and Cork, there is nowhere in the world that has as many beauty spots and beaches.

The region's greatest potential lies in tourism which is untapped. While it may not need a tourism organisation, the area is crying out for a stimulus to assist people who start from a small base such as offering bed and breakfast accommodation. People involved in tourism in County Kerry generally started by offering bed and breakfast accommodation, added on a café, a restaurant and a few bedrooms and slowly developed it into a hotel. Were there to be a stimulus, we have the tourism potential to match this. In respect of attracting tourists from Britain to the region, Derry Airport is waiting to be tapped. If we examine the issue, the industry can be developed. I would like our guests to consider the matter.

Deputy Seymour Crawford

I thank our two visitors. There is no doubt that industry and anything related to it are vital for the Border region and Northern Ireland. If we do not ensure job creation, there will be serious consequences, including from the point of view of the peace process. When people are idle, especially young people out of work, they are more likely to become involved in activities about which they understand little. It is in all of our interests to ensure infrastructure and support structures are put in place to encourage young people to become involved in work-related activities, thereby creating some good for the country.

The comments on road structures were interesting, particularly on the fact that the road from Belfast to Dublin is nearly finished. However, I am more concerned about the road from Derry, the country's fourth largest city, to Dublin, not necessarily the Derry-Aughnacloy area referred to by my colleague who rightly stated money was being thrown at it. The road from Aughnacloy to Clontibret poses a major problem, as there is no commitment to provide a proper structure. I hope some of those present will use their influence to have money thrown at this road. Having a good road to Clontibret but nothing beyond as far as the Border would be pointless. There is a need for joined-up thinking.

The remarks about a lack of cross-Border activity in industry were also interesting. For years I was a committee member of the Town of Monaghan Co-operative. Some 70% or 80% of its creamery's supply comes from Northern Ireland. It has major plants on the Derry side of Strabane and in Monaghan. This is proof that there can be viable cross-Border co-operation. The closure of the Border during the foot and mouth disease outbreak was a problem, for which reason the organisation needed a plant in Northern Ireland.

I support the points raised by Deputy Ó Caoláin, as greater tax synchronisation is required. The problem has been floating back and forward during the years and it is not all one-way traffic. Obviously, we are complaining more now than we did ten years ago when the traffic was from the other direction. It does not help stability or lead to a good situation for either government. I agree with the Deputy in that respect.

There is a jobs problem in the Border region. During the years, they were attracted to Dublin or possibly as far as Dundalk, but from Dundalk to Sligo there was an area to which no outside industry was attracted. We were made promises, received commitments and announcements were made, but nothing was created. In whatever role we play we must emphasise the point that, given the better roads in parts of the area, including the Dublin-Monaghan and Monaghan-Belfast roads, we have access to ports and airports. Given the development of the peace process, there is no excuse.

The suggestion that some cross-Border organisations be based in the Border region is interesting. Enniskillen, Newry and Armagh were mentioned. I suggest an even-handed approach in this respect. The only piece of cross-Border work done in my constituency of Cavan-Monaghan is done in the European office in Monaghan town which was established by my party when in government. At the same time a cross-Border organisation was based in Cork for some reason. It was linked with agriculture and there was a Cork Minister involved. That is how naive we were. We did not get the chance we should have received.

The Ulster Canal is a cross-Border issue in terms of infrastructure. That is a tremendous opportunity for tourism within the island of Ireland. I spoke to one of my colleagues who has never been to Northern Ireland but hopes to go this summer. We have high quality hotels along the Border, such as the Slieve Russell, Cavan Crystal Hotel, Hotel Kilmore, the Four Seasons, the Nuremore Hotel and Country Club and the Westenra Arms Hotel. These are some examples. Hotels are not as plentiful on the other side of the Border but we should be able to link up in this area and develop a tourism package for the Border region and Northern Ireland. This would encourage more people to go there. Aer Lingus and Ryanair fly into the two Belfast airports. There should be more opportunities and we should utilise them. I thank the delegation for the presentation and hope my comments are taken in a positive sense.

The delegation referred to getting the issue of schools up and running. Deputy Ó Caoláin can verify that it is more than 14 years since we established a link between the Protestant school in Aughnacloy and the Truagh parish. I remember being there late on a Wednesday night trying to finalise the agreement. That has gone a long way towards encouraging peace and involvement from all parties in that difficult and critical Border region. I hope the project for industry at the higher level will help. I presume the delegation was referring to second level schools.

Mr. Reg McCabe

It could be at primary level but the main focus initially is on secondary schools.

Deputy Seymour Crawford

That project is up and running and has worked well. The technology was used and the school was linked with Canada and other places. The precedent is in place and we should work to bring it forward.

Deputy Joe McHugh

I welcome the delegation. It is important to have these meetings. That we are focused on the economy today is significant in the times we are in.

I refer to the swings and roundabouts argument. History has a way of marking the future, with past performance being an indicator of future performance, but we must go beyond the argument that eventually southern trade will come back when the swings and roundabouts go the other way. It is not a good enough argument to wait for it happen. The society and the economy, both North and South, have moved on. Cross-Border trade is not a new phenomena. It happens in Europe, with Italians purchasing goods and services from the French. There is cross-border movement across the EU. The problem at the moment, as pointed out by our colleagues, is that it is one-way traffic. It is a dangerous impasse for Border businesses at the local level. The main challenge is survival and being able to pay wages at the end of the week. Many Border businesses find themselves at such a point at the moment. At a meeting last Monday, a small businessman with 15 staff said he finds every Thursday a nightmare because he does not know if he has enough money to pay wages. These are the challenges in the Border area.

Another example is a company that has relocated from Texas to Donegal. Having worked with Enterprise Ireland and Enterprise Northern Ireland, it would be better for the company to locate in Northern Ireland. The company wants to locate in Donegal because of connections to the area but, having done the research with Enterprise Ireland and Enterprise Northern Ireland, it finds it would be economically more favourable to locate in the North. This anomaly must be addressed. This is a protectionist argument from a Donegal man who wants the company to locate there, but every effort should be made to satisfy the wishes of the company on geographical location. There should not be barriers to entry, as seems to be the case.

Small businesses in Donegal do not have a level playing pitch when tendering for Government contracts. This is because of the sterling differential, to which Deputy Ó Caoláin referred, and the cost differential. Companies in the South are at a disadvantage because of cost anomalies and currency anomalies. This is another challenge.

There is no point in politicians, North and South, considering the protectionist argument because it is not the way forward. The way forward is to create synergies, North and South. There are areas where we are more competitive in the South. We should focus on these to try to drive competition on both sides of the Border. We want to become competitive in the EU context, not just in the North-South context. We have the capacity and capability to drive that agenda. Deputy Crawford hit the nail on the head in referring to a jobs plan. The joint business council could drive the jobs plan, in association with this committee and the North-South Ministerial Council. The idea that the situation will turn around again in three or four years, like swings and roundabouts, and that then it will be the time for Northern Ireland to capitalise on the fair wind behind its back, is nonsense. The nonsense that we can build sustainable jobs and businesses along the Border on the basis of swings and roundabouts must be removed from the agenda. We must examine a concrete plan whereby we create sustainable jobs North and South.

I represent a new generation of politics. This is not because I am young or have different ideas. In the past 50 years politicians have focused, correctly, on securing peace. They have done the job in securing peace, although it is in its infancy. That must be commended and this committee has commended the job done. However, the new generation of politics is about securing an all-island economy based on sustainable job creation. That is where we should pitch ourselves. The joint business council is working on this but we must look at the question of survival of businesses that are turning off their lights and are unable to pay wages on Thursday. That is not sustainable job creation and the committee has an obligation to use its voice to push for a joint jobs plan for both parts of the island through the North-South Ministerial Council.

Deputy Fergus O’Dowd

I welcome Mr. McCabe and Ms O'Dwyer. Important points have been made. The key matter is that we need a plan but we must be realistic. We must be realistic about roads and infrastructure when Government cutbacks in the South are very real. We need joined-up thinking. How joined-up is spatial strategy and planning in the North and South? One of the problems in the Oireachtas is that we are no longer members of local authorities or regional bodies. We do not know what is happening in the regions, especially if one is on the Opposition benches, as Fine Gael is. Can the delegation comment on this? It is important that spatial planning, North and South, is joined-up. Where there are limited resources it is important to decide what must happen and what infrastructure must be built. I state this in a constructive way. I have been going to County Kerry for my holidays for more years than I care to remember and every year everybody states the road from Tralee to Dingle is appalling and that it takes an hour and 15 minutes to travel it. However, nothing has ever been done to change it, even though many people go there as tourists and for the quality of life. In a declining worldwide economy what are the key actions we should take to build or maintain jobs and for the people living in the regions, particularly in the western part of the North? I do not know the statistics for population decline or growth, but we need new and focused thinking.

Deputy Michael Ahern

I welcome Mr. McCabe and Ms O'Dwyer. Although I am from the deep south and, therefore, an aberration on the committee, I have an interest in what is happening in the North, having been a Minister of State with responsibility for trade and commerce and innovation policy and involved in InterTrade during the years.

I wish to pose a question to Mr. McCabe on North-South bodies, in which a total of 750 people are employed. Has the joint business council made a critical analysis of how these bodies work and what they add to the North-South relationship and the development of co-operation?

Chairman

I warmly welcome the Minister, Mr. Conor Murphy, MP, MLA, and congratulate him on his recent reappointment as Minister for Regional Development. I wish him every success.

Mr. Conor Murphy, MP, MLA

I have a slight dilemma in that I could end up answering most of the questions directed to our guests whom I welcome and thank for their presentation. I do not intend to go into much detail, except on some of the points raised by Deputy Blaney on the emphasis or interest of the Northern Executive in development west of the Bann. I assure him it was part of our mission statement when I assumed the role of Minister for Regional Development, the plans for which are published in the investment strategy, the regional transportation strategy which is being revised to reflect that emphasis and the regional development strategy.

People have rightly focused on the Derry to Dublin road. I very much welcome the contribution of the Irish Government but it is not carrying the cost on its own. A contribution is also being made by the Executive in the North. It was announced that work on the Derry to Belfast road would go ahead at the same time. With regard to the Belfast to Sligo route, substantial work will be done between Dungannon, Ballygawley and Augher and on our plans for bypassing Fivemiletown and Enniskillen. We have had discussions at our North-South meetings with the Minister for Transport here on trying to secure a plan for the overall route. Quite a bit is going on and co-operation is very good between the Departments and the roads authorities, North and South. In the current economic climate it is very difficult to provide certainty for longer term plans, but it has been recognised that these areas need investment. I presume the committee can pick up on the spatial development strategy, another responsibility of mine, on which work has been done with the Department of the Environment, Heritage and Local Government headed by the Minister, Deputy Gormley, not only in terms of the spatial strategy for the entire island but also on a number of individual projects in the north west and in Newry and Dundalk also. It intended to launch it as soon as it is cleared by the Executive.

Much has been said by a number of committee members about barriers to business. I am a Border representative living on the Northern side in an area benefiting from the influx of shoppers from the South but long enough about to realise that there was a time when we went South to Dundalk for our shopping and people went South for their fuel. It is very much a case of swings and roundabouts. I agree with what has been stated on the ability to plan long term in the Border region. People could invest quite a lot in their businesses but matters outside their control can change overnight and trade can move South or North. The long-term stability of businesses in Border areas is being very deeply affected by all of the issues that other representatives have raised.

I want to bring this down to the individual level. As well as the obstacles for business in terms of taxation and currency, there are also obstacles for individuals in terms of mobility and their ability to work North and South such as personal taxation and pension rights. The North-South Ministerial Council has stated it will establish a workstream to try to progressively deal with these issues. Does the joint business council have any input or interest in this area of work? Has it made any representations or lobbied on it? The ability of business and industry to operate in Border areas is very important, as is the ability of individuals to access employment wherever they choose North or South.

I was interested to hear about Deputy McHugh's experience of the company which found the arrangements more favourable on the Northern side; I dealt with the reverse in the case of a company which was trying to get into my constituency and found all of the arrangements more favourable on the Southern side. This is not something on which we should compete. We should have systems in place, whereby a company can locate in the place where it wants to locate and the facilities are available to support industry. It shows the frustrations in trying to make representations on behalf of people coming into one's area, North and South.

Deputy Ruairí Quinn

My apologies for being delayed earlier this morning.

I welcome the delegates. I have a number of observations to make and specific questions to ask. If there was an Oireachtas committee examining problems west and east of the Shannon, many of the comments made could be replicated. There is a potential danger that we blame the Border for certain closures that are also happening elsewhere. If one drives from Waterford to Clonmel, one will pass through Carrick-on-Suir which has effectively been closed, as has Tipperary Town. This is true of many peripheral towns in clusters around large provincial towns. I am sure Deputy Michael Ahern could speak about south Cork in a similar way. To be productive and creative, let us try to isolate the factors that are unique to the Border, not phenomena occurring throughout the island.

Deputy Ó Caoláin spoke about the two currencies. The greatest fear I would have if I were living in the immediate vicinity of the Border is that sterling would further lose its value. The levels of borrowing in the British Exchequer are excessive and unprecedented. Dr. Alasdair McDonnell, MLA, MP, will be more familiar with this from speaking with colleagues at Westminster. I will not use the type of bar room language that could be used elsewhere, but sterling lost its role as an international reserve currency approximately 30 years ago and is probably heading in the direction of the drachma as a serious currency. In five years' time the exchange rate will probably be £1 to 80 cent, given the mismanagement of the economy in Britain and the collapse of the financial services sector on which the British economy rested for so long. The role of the City of London after the regulatory changes are introduced in the next two to three years will be severely damaged. We must live with the probability that sterling will become even more competitive and I do not see any political possibility that Britain will join the single currency, unless there is a major change. A hung parliament with the Liberal Democrats holding the balance of power is one factor that might rescue the British economy because its currency is up the Swanee.

The impact of what I call the "Tescoisation" on the food sector is more serious than we realise. I am not sure if Mr. Murphy is fully cognisant of the ongoing debate about travelling to the North to shop for short-term value. Tesco has very cleverly taken the opportunity to reduce the cost of its purchases in the South, wiping out a lot of Irish suppliers and brands in the process. It now buys in bulk from UK suppliers and the shelf spaces in its supermarkets are fixed. I know supermarkets because I am the son and grandson of a shop keeper and my cousin is Senator Quinn. The shelf spaces for Irish products are now above or below customers' eye range. The indigenous food sector is so important to both the North and South that we must find ways of confounding the "Tescoisation" of the retail trade. Food producers, manufacturers and retailers across the country are threatened.

I fully endorse what Dr. McDonnell said about the integrated energy market. The Republic's economy is seriously uncompetitive and while wage costs are a factor, they are not the only reason. Energy is deliberately more expensive for nonsensical reasons of competition.

We also have a self-imposed cost, whereby legislators and public servants are screwing up the competitive nature of the economy with excessive zeal in transposing European directives. I refer to the famous example of a craft butcher in Sandymount who was harassed by Food Safety Authority inspectors on the basis of what he was told were EU standards. However, if he visits a butcher in Spain, Portugal or Greece, he will find that different standards apply. I wonder whether one of the roles of the joint business council is to compare the application and interpretation of standards in the retail and health and safety sectors on both sides of the Border. We should strive to have the most efficient and least onerous standards in terms of cost to the economy. I assume that the Westminster Parliament rather than the Northern Ireland Assembly interprets and transposes EU directives, but we should be harmonising our approach to these matters in order that businesses on both sides of the Border will not be faced with contradictory standards. I am not convinced that our civil servants understand the negative impact on the overall market of the overzealous application of EU standards. As a quid pro quo for all the largesse it received from Brussels, the Department of Enterprise, Trade and Employment assumed that we should be better at implementing directives than Germany or France. While we should not abandon standards, that attitude needs to shift towards a lighter and more cost effective touch. Perhaps Mr. McCabe or Ms O’Dwyer can indicate whether regulatory compliance in the North and south of the Border can be harmonised and streamlined in order to reduce costs.

Mr. Reg McCabe

A considerable number of issues were raised and as I am anxious not to take up too much of the committee's time, perhaps I will group members' questions.

Deputy Ó Caoláin and others expressed their serious concerns about job losses and company closures. I will address these concerns alongside the related issue of sterling. Several questions were raised regarding mobility and our agenda on people and entrepreneurship, as well as on infrastructure, transport, spatial strategies and energy.

In regard to the jobs agenda, this is a global issue with which everybody must grapple. Competitiveness also plays a role. Our ability to address the issue in a meaningful way is compromised by the level of resources available to us.

I spoke about the need for a unifying vision of the currently fragmented institutional structures. Deputy Michael Ahern asked whether we had a role to play in improving the effectiveness of these structures. A team of wise men were recruited nearly two years ago to deliberate on this issue and prepare a report for the North-South Ministerial Council. It is unfortunate, however, that the report has never seen the light of day. I am not here to make political points, but I would like to see it. Having made a submission, I am disappointed that we have not yet seen a result. There could be a role for the combined institutions, perhaps with the support of the committee, in coming up with a vision on competitiveness for businesses on the island of Ireland. While clearly other issues arise which are outside the employment and economic agenda, perhaps the single vision should comprise competitiveness, innovation and jobs. However, that is a matter for Ministers and we can only make a request.

Sterling is a difficult and sensitive issue to address for the reasons outlined by Deputy Quinn. Deputy Ó Caoláin was accurate in referring to it as the elephant in the room. The council must be sensitive in dealing with sterling and the euro. Sterling's devaluation cannot be considered in isolation from the highly controversial prospect of joining the eurozone, particularly in the context of Northern Ireland. Therefore, I would prefer not to discuss the issue on the public record. I do not mean to imply, however, that I personally or the organisation I represent do not recognise the enormity of the problem.

In terms of overall vision, several comments were made about competitiveness, costs and companies which were struggling to survive. While we cannot address every issue, we have certainly made a good start in respect of energy. While certain reservations remain, aspects of the all-island energy policy, including electricity, in particular, have been shown to work. However, more investment is needed in expanding the grid to the places where wind resources are available. Most people live well away from where the wind is available. It is very important from the joint business council's perspective that we are not drawn into a distraction on whether cables are above or below ground. That is nonsense.

Chairman

It is nonsense.

Mr. Reg McCabe

Every country in the world has these issues and they get on with putting the grid in place. We need to do the same as a matter of urgency. While we cannot address all the issues, it would be useful if energy were formally adopted as one of the co-operation areas because it is an area in which much progress is being achieved, but the irony, as the Minister, Mr. Murphy, will appreciate, is that it is not one of the formal co-operation areas under the North-South Ministerial Council, and that needs to be addressed.

Returning to the core question of the competitiveness of companies, it is obvious to everybody that wage competitiveness is very important, but if that were the only factor, the economy in Northern Ireland would be excelling relative to that in the South because unit labour costs in the North are approximately 30% to 40% lower than those in the Republic. Statistics are always a little behind the game and that gap is being narrowed. Companies in the South are becoming more competitive. Up to six or 12 months ago there were very big disparities in wage costs, for example.

If all it took for an economy to succeed were lower wage costs, the Northern economy would be booming, but the real issue is lack of demand and a downturn in international demand. There is very little we on this island can do about that. It is a global phenomenon and I am not making excuses when I say that. We need to resource companies and ensure that in terms of a range of functions companies have the capacity to ride the upswing. This is an issue not just for us but for the Government and various bodies.

In the US, for example, house sales were up this morning for the first time since the financial meltdown. They were up by approximately 2% year on year, so I am somewhat optimistic that we will see a resurgence in international demand, but it will not happen any day soon. Companies need the resources and capacity. Those are the issues we need to address. We have touched on some of the issues around innovation, entrepreneurship and infrastructure. I will hand over to my colleague, Ms O'Dwyer who might say a few words on some questions on labour mobility and our work on entrepreneurship.

Ms Paula O’Dwyer

I am very pleased to be here as part of the joint business council delegation. The comments on the mobility of individuals are of interest to the joint business council. The North-South Ministerial Council's work in the area of the mobility of individuals has largely been focused on the development of its Border people website, www.borderpeople.info, which is a very useful resource for people who intend to cross the Border to live, work or study. The joint business council has made an input into the users’ group of that Border people website in terms of its future development and how it can be improved on. We are committed to continuing that.

We are also members of the EURES Cross-Border Partnership, a forum comprising the public employment services North and South, trade unions and business organisations. This group examines the promotion of cross-Border mobility and some of the obstacles to that. In more recent years FÁS and Dell have been successful in linking their two websites together so job vacancies appear on both websites and jobseekers have information on jobs in both jurisdictions. That is the main area of our involvement in labour mobility.

Picking up on Deputy Crawford's comments on ICT in schools, this is another area, as Mr. McCabe outlined earlier, which is central to our work programme. In terms of our activity in this space, the joint business council will be partnering Dissolving Boundaries on this activity. Dissolving Boundaries is an organisation funded by the two education departments, North and South. It has been in existence for the last number of years and has been very successful in linking schools on both sides of the Border. This has been very successful in improving their ICT skills and understanding of the particular subject being studied, as well as their understanding of cultural similarities and differences. We feel the joint business council initiative in partnership with them will support that process.

In addition, we hope to bring greater focus on enterprise among school children at primary and secondary level and foster a bit more innovation in their use of the ICT platform with a move to digital media and moving images, etc. This is something the joint business council hopes to develop and bring forward over the next couple of years. We hope this can lead to the future development of the knowledge economy on an all-island basis.

Mr. Reg McCabe

The final area mentioned was infrastructure and the spatial strategy. The Minister, Mr. Murphy, referred to a number of issues around spatial strategy and there are a number of groups. I mention especially the ICLRD, an academic grouping linking the universities of Maynooth and Ulster. It is part of the Centre for Cross Border Studies and is examining in detail the application of spatial strategies in Northern Ireland and the Republic and looking at how there could be better co-ordination locally in two particular areas, as the committee knows, Dundalk-Newry and Derry-Letterkenny. I mention this because the joint business council is participating actively in those initiatives.

Those two projects are representative of a range of work that is going on, I am happy to say, in terms of better co-ordination and issues on broad spatial planning. Broad spatial planning is the blueprint and everybody's aspiration comes from that. One gets greater co-ordination and co-operation when it comes to the planning, execution and delivery of projects and infrastructure. It is important that all the stakeholders are engaged, and we are. The Minister mentioned his Department's regional strategy, which is being reviewed. I am very happy to say the joint business council was invited to participate in the stakeholders group for that review and we actively participate along with the CBI. It is not all bad news by any manner of means. Much good work is being done in this area.

I accept the point that we should come up with a better way of describing the corridor. It is effectively Sligo-Belfast-Larne via Dungannon and Enniskillen. A number of speakers, including Deputy Blaney, made the point that this should have equivalent status to Dublin-Belfast or Dublin-Derry as an investment priority, and we support that view. We encourage the two Governments to view it in that way, given the economic challenges in particular and the relative peripherality of the counties of Sligo, Leitrim, Fermanagh and Donegal. I will leave it by saying it is extremely important.

With regard to the overall thrust of economic development, the single market on the island of Ireland creates a mechanism and if that market is functioning in a coherent kind of way, there would be a critical mass for companies which are operating on the island rather than addressing a regional market in the Republic or the North. Through an all-island economy, I hope we can build a platform for companies to start addressing global markets. It is my view, and that of the joint business council, that companies with the capacity to go global are the secret to employment growth and success.

Statistics indicate a very significant gap in performance between the two economies in terms of the number of companies which have succeeded in going global. The ratio is something of the order of 3:1 in the Republic compared with Northern Ireland. There are best practice standards to deal with and lessons to be learned. There are also issues relating to industrial policy. All of these must be co-ordinated between the two economies, particularly as to how they involve innovation, entrepreneurship and research and development.

Our two parent organisations have been banging the drum around those two issues for a very long time as we must build the intellectual and innovation capacity in the companies. Rather than addressing regional markets we must address global markets. That has been shown right across the world in dynamic and successful economies.

A task force was set up by the president of the commission a couple of years ago and it reported about a year ago. It delivered that message and we were encouraged by that. We were also under the impression that a significant large-scale initiative would emerge from that around the research and development and innovation agenda, encouraging greater co-operation between companies and universities, etc. We believed that initiative could have an impact in Northern Ireland in particular, where the need is perhaps greatest, but it would also have an impact on the economy as a whole.

I also referred to the report done on institutional structures. These are two very worthy initiatives, with one coming from outside and one developed by the North-South Ministerial Council. We are not political but these are economic issues and to date we have not seen a result, which is a great pity. All I can do as a business representative is encourage the two governments to do everything in their power to execute those two very significant initiatives. We could then see the impact, as there is enormous goodwill out there, particularly from the European Union. That should be recognised.

I will leave it at that. I thank the Chairman and the committee for the invitation to address it and debate these issues on behalf of the business community.

Chairman

I thank Mr. McCabe. To take up the theme of the European Union, I can see much potential on both sides of the Border to create a major economic corridor with European support through both the special EU programmes body and the continuation of INTERREG. I know that over the years the evolution of the European Union has been based very much on transfrontier co-operation. There is much potential to develop economic activity, job creation and mutual opportunities on both sides of the Border. I cannot emphasise strongly enough on behalf of this committee and everybody here how I see the potential in that.

The joint business council is in a crucial position to drive that and it is up to us as politicians to provide the necessary support to achieve that goal. The European Union would be a willing collaborator if we could come up with imaginative proposals on a clearly demarked area North and South of the Border. There is potential for all counties that straddle the Border, particularly in the local authorities and urban areas. There are similarities and logistical capacities, along with new services, and there is much potential for investment. It is important that we capitalise on that. I will leave the committee and the witnesses with that thought.

We spoke about the elephant in the room and Deputy Ó Caoláin referred to it in his opening remarks. The elephant may be in the room but in another way the elephant is a good bit from the room also. An ultimate decision on sovereignty rests with another sovereign Government and we must respect that. I endorse what Deputy Quinn has said and the next five years will tell us much. Ultimately, I hope we get the result that would help everybody on all these islands to get working together to ensure we reach full capacity in a new environment which eliminates all existing impediments. We should leave it at that.

I sincerely thank Mr. McCabe and Ms O'Dwyer for their challenging and informative presentations. There are great examples of success in strengthening cross-Border co-operation and it is clear that much work remains to be done in all these areas. Mr. McCabe, Ms O'Dwyer and all our committee members North and South have clearly articulated those areas of opportunity and challenge and we are very grateful to the witnesses for that and this most useful discussion.

On behalf of the committee I sincerely thank the witnesses for the excellent and positive article which was written about the committee and published in Agenda magazine. We deeply appreciate that very positive profile, which showed the importance of ensuring that committees like this, particularly North-South committees, have a key role to play in the future development of an all-island economy.

As there is no other business, the next meeting will be held on 23 July at 11.30 a.m. Is that okay with members?

Deputy Caoimhghín Ó Caoláin

I will not be able to make it.

Chairman

There is a big event in Ireland the following week and many members would be attending it. I would worry that we would not have too many attendees if we went into the fifth week of July.

Deputy Caoimhghín Ó Caoláin

Could the meeting be moved back by a week to 16 July? Has there been an indication from the proposed invitee of an intention to attend?

Chairman

That date is unsuitable for the people in question. I hope they will come in the autumn. A meeting on 16 July is okay for me if the committee is happy with it.

Deputy Caoimhghín Ó Caoláin

I would be grateful if the change could be accepted. I cannot make a meeting on 23 July.

Chairman

It is very easy for a Chairman to accept change if it is agreeable to everybody.

Deputy Caoimhghín Ó Caoláin

The Chairman is very agreeable.

Chairman

We will see the Deputy at 11.30 a.m. on 16 July.

The joint committee adjourned at 1 p.m. until 11.30 a.m. on Thursday, 16 July 2009.