KERRY ADDED TO NEW REGIONAL AID MAP

KERRY ADDED TO NEW REGIONAL AID MAP

County Kerry Eligible for Investment Aid from July 1st

Martin Excluded Kerry in 2006 – Bruton Puts Kerry Back In

Statement by Brendan Griffin TD (FG) Kerry

Friday 25th April 2014

KERRY Fine Gael TD, Brendan Griffin, is today (Friday) warmly welcoming the addition of Kerry to the new Regional Aid Map, saying that the addition of Kerry gives the county a fighting chance to attract greater investment in the future. Published this morning, the new Regional Aid Map, provides details of areas of the country in which the State can provide investment aid to businesses in order to support new investment and employment, under EU rules and will take effect from 1st July 2014. It has been drafted by the Department of Jobs, Enterprise and Innovation under the new Regional Aid Guidelines adopted last year.

Under the new Map,

•             areas accounting for 51.28% of Ireland’s population will be eligible for State Aid. This represents a substantial increase from the 25% originally proposed by the Commission, and an increase from the 50% under the 2007-2013 Map. This means that Kerry, Kells, Athy, and Arklow can be added to the areas covered;

•             aid to large enterprises is permitted for new economic activities, expansions which involve new products or services, and product innovation. Under the original proposals aid to large enterprises was to be banned entirely in Ireland;

•             aid intensity rates (30% for small enterprises, 20% for medium-sized enterprises and 10% for large enterprises) are maintained at current levels. Original Commission proposals would have involved a reduction in aid intensity rates

Minister for Jobs, Richard Bruton, will make today’s announcement at Dairymaster in Causeway. Dairymaster is a client company of Enterprise Ireland, and is an example of a large company which will from 1st July be able to receive Investment aid which has not been permitted to do so since 2007.

Deputy Griffin, who has been a constant advocate for adding Kerry to the Regional Aid Map, says that the county can only benefit from being eligible for the full range of Government investment aid to businesses.

“It was very disappointing for Kerry to be left out of the 2007-2013 Regional Aid Map by the then Minister, Micheál Martin, but I am delighted that our Government has seen the sense in putting Kerry in to this new map. I received positive indications about this when I raised the matter in the Dáil last October and am glad that the good news has finally been officially confirmed.

“I wish to sincerely thank Minister Bruton for his work on achieving this much improved status for Kerry and hope that it will lead to the retention and creation of jobs for the people of Kerry into the future.”

Further information from Brendan on 087 6528841
NOTES TO EDS

Please see below information regarding Regional Aid & my Dáil Questions/Contributions:

The Regional Aid Guidelines enable the State to grant State Aid, at enhanced rates, to businesses in order to support new investment and new employment in productive projects in Ireland’s most disadvantaged regions. This helps the convergence of these regions with the more advantaged regions of the Union.  All such grants come from the exchequer, i.e. there is no EU or other external funding.

The Guidelines specify rules for the selection of regions which are eligible for regional aid and define the maximum permitted levels of this aid.  In line with EU cohesion policy, the Guidelines continue to focus regional aid on the most deprived regions of the enlarged European Union.

The current Regional Aid Guidelines, which govern the level of State aid which may be granted by Government Departments and development Agencies as regional aid, expire at the end of June 2014.  Typically, regional aid in Ireland is given in the form of capital grants for initial investment in fixed capital for new establishments or extensions and employment grants linked to initial investment.  Regional aid is also provided under schemes for tourism grants, marine tourism, urban and rural renewal and other tax-based development schemes.  Ireland’s Regional Aid Map for 2014-2020 will cover 51.28% of the country’s population, a slight rise on the current coverage of 50%. 

Implication of new Guidelines for 2014-2020

The initial Regional Aid Guidelines proposal from the Commission, published in May 2012, presented significant challenges for Ireland. This proposal prohibited aid to large enterprises, reduced our population coverage from 50% to 25% and reduced aid intensity rates.

Regarding population coverage, following sustained engagement with the Commission and likeminded Member States at Ministerial and official level, Ireland secured entitlement to maintain regional aid qualification for areas accounting for 50% of the country’s population, with coverage actually slightly increasing to 51.28%.

The Commission initially proposed a complete ban on aid for investments made to large enterprises in the more developed assisted areas, known as ‘c’ areas.  The revised guidelines assert that large enterprises tend to be less affected than SMEs by regional handicaps for investing or maintaining economic activity in a less developed area. The Commission believes these firms would make the investment concerned even without financial support, rendering such support both ineffective and costly.

This proposal presented significant challenges for Ireland and the implications could have been very serious in terms of our enterprise agencies being able to attract investment into disadvantaged regions in Ireland                         

Following significant engagement by Ireland, at both official and political levels, the final proposal represents considerable progress from the initial Commission proposal in December 2012. The compromise agreed with the Commission will allow Member States to provide investment aid to large enterprises for ‘new economic activities and diversification of existing enterprises into new products or new process innovation’.

Aid intensity rates were also maintained at their current levels. Both the current 2007-2013 Regional Aid Guidelines and the upcoming 2014-2020 Guidelines outline that the aid intensity in Ireland must not exceed 30 % for small enterprises, 20 % for medium-sized enterprises and 10% for large enterprises.

The compromise agreed with the Commission will allow Member States to provide investment aid to large enterprises for new economic activities and diversification of existing enterprises into new products or new process innovation. In essence, the final version of the Regional Aid Guidelines negotiated by Ireland and likeminded Member States represents an important step in ensuring Ireland, and the EU in general, maintains the ability to strengthen the EU economy and to promote cohesion between regions.

 

April 2nd2014

Brendan Griffin (Kerry South, Fine Gael)

 

124. To ask the Minister for Jobs, Enterprise and Innovation the position regarding the inclusion of County Kerry in the map for future regional aid; and if he will make a statement on the matter. [15657/14]

Richard Bruton (Minister, Department of Jobs, Enterprise and Innovation; Dublin North Central, Fine Gael)

As stated in my reply to Parliamentary Question No. 86 of 27 March 2014, the Regional Aid Guidelines enable the State’s industrial development agencies to pay grants, at enhanced rates, to businesses in order to support new investment and new employment in productive projects in Ireland’s most disadvantaged regions. This helps the convergence of these regions with the more advantaged regions of the Union. All such grants come from the exchequer, i.e. there is no EU or other external funding.

During the Regional Aid Guideline process thus far, my Department has consulted relevant stakeholders including various Government Departments, the industrial development agencies, Údarás na Gaeltachta, Forfás, the Central Statistics Office, the Border Midland and Western Regional Assembly, the Southern and Eastern Regional Assembly, and the eight Regional Authorities.

It will not be possible to include all regions in the map. Instead, qualifying regions up to a maximum of 51.28% of the total population can be included. My officials have compiled the most up to date economic data for each region and county, including Kerry, in order to determine which areas will qualify for inclusion in a revised Regional Aid Map for Ireland. Relevant data includes comparative unemployment levels and GDP by county.

My Department has issued the proposed Regional Aid Map for Ireland to the Commission for consideration and approval. It would be inappropriate to disclose the contents of this submission until the Commission has finalised its consideration of the matter.

It is important to note that all of the Country, including those areas not entitled to Regional Aid, can qualify for other forms of State investment e.g. Research & Development Aid, SME Investment Aid, Training Aid, and Aid for Environmental protection etc.

 

Thursday, 24 October 2013

Department of Jobs, Enterprise and Innovation

Regional Aid

Brendan Griffin (Kerry South, Fine Gael)

129. To ask the Minister for Jobs, Enterprise and Innovation if County Kerry will be a priority county for regional aid from 2014; the efforts he is making to secure this status for County Kerry; the benefits that would accrue to County Kerry compared with the status quo; when he expects to be able to announce the details of same; and if he will make a statement on the matter. [45599/13]

Richard Bruton (Minister, Department of Jobs, Enterprise and Innovation; Dublin North Central, Fine Gael)

The Regional Aid Guidelines enable the State’s industrial development agencies to pay grants, at enhanced rates, to businesses in order to support new investment and new employment in productive projects in Ireland’s most disadvantaged regions. This helps the convergence of these regions with the more advantaged regions of the Union. All such grants come from the exchequer, i.e. there is no EU or other external funding.

The new guidelines were adopted by the Commission on 19 June 2013, and will enter into force on 1 July 2014. As a result, the current guidelines that were due to expire at the end of this year are to be extended for a six month transition period.

During the Regional Aid Guideline process thus far, my Department has consulted relevant stakeholders including various Government Departments, the industrial development agencies, Údarás na Gaeltachta, Forfás, the Central Statistics Office, the Border Midland and Western Regional Assembly, the Southern and Eastern Regional Assembly, and the eight Regional Authorities, and this consultation is ongoing.

The initial Regional Aid Guidelines proposal from the Commission, published in May 2012, presented significant challenges for Ireland, in that they proposed a complete ban on aid to large enterprises in all but the most disadvantaged ‘A’ regions. All Irish regions are classified as ‘C’ regions, meaning that they are also disadvantaged, but to a lesser extent than ‘A’ areas. Following sustained engagement with the Commission and likeminded Member States a compromise was agreed with the Commission that will allow Member States to provide investment aid to large enterprises for new economic activities and diversification of existing enterprises into new products or new process innovation.

As things stand, Kerry qualifies for regional investment aid for SMEs under the current 2007-2013 Regional Aid Map, at a rate of 20% for medium sized companies (50 to 249 employees) and 30% for small companies (under 50 employees). Since January 2009, Kerry no longer qualifies for regional aid for investment projects by large companies. Under the 2014-2020 Guidelines, if Kerry, or any other Irish region, was to be designated, aid to all categories of companies would be allowed. The rates for SME’s would be the same as those 2007-2013 rates listed above. The rates for investment by large companies would be 10% for certain activities only.

My officials are currently compiling the most up to date economic data for each county in order to determine which counties will qualify for inclusion in a revised Regional Aid Map for Ireland. Relevant data includes comparative unemployment levels and GDP by county. Once this data has been compiled and analysed, qualifying regions up to a maximum of 51.28% of the total population will be included in the new map. This must be agreed by Government and submitted to the Commission by the end of June, 2014.

October 2013

Deputy John Perry:   I am pleased the Deputy tabled this question because the Irish Presidency fought with some success on this issue. The regional aid guidelines enable the State’s industrial development agencies to pay grants, at enhanced rates, to businesses to support new investment and new employment in productive projects in Ireland’s most disadvantaged regions. This helps the convergence of these regions with the more advantaged regions of the Union. All such grants come from the Exchequer, in other words, there is no EU or other external funding.

The new guidelines were adopted by the Commission on 19 June 2013. There are no provisions or means for a review of the content of the guidelines.

[Deputy John Perry:  ] European regions eligible for regional aid are divided into A regions which are the most disadvantaged within the Union in terms of economic development and C regions which are also disadvantaged, but to a lesser extent. All Irish regions are classified as C regions, both for the current 2007-2013 regional aid map and for the upcoming 2014-2020 map.

For the current 2007-2013 map, the BMW region was designated as an economic development area because it had moved ahead of the A status that it had in 2000-2006. The guidelines stipulated that areas such as the BMW region would be granted economic development status for the 2007 to 2013 period only. As a result of this designation, the BMW region was effectively given a derogation to grant slightly higher aid rates to assist the transition from A to C status.

Both the current 2007-2013 regional aid guidelines and the upcoming 2014-2020 guidelines outline that the aid intensity in standard C areas must not exceed 30 % for small enterprises, 20% for medium-sized enterprises and 10% for large enterprises.

Additional information not given on the floor of the House.

These rates are all 5% less than currently available in the BMW region, but as I have stated, that region cannot be afforded special economic development status under the next map.

My Department is consulting stakeholders on the drafting of the 2014-2020 Irish regional aid map. Economic data such as unemployment and gross domestic product for all counties, including those counties in the BMW region, will once again be analysed afresh when deciding which counties will be included in the next regional aid map.

The initial regional aid guidelines proposal from the Commission, published in May 2012, presented significant challenges for Ireland. This proposal prohibited aid to large enterprises, reduced our population coverage from 50% to 25% and reduced aid intensity rates. Following sustained engagement with the Commission and like-minded member states at ministerial and official level, Ireland secured entitlement to maintain regional aid qualification for areas accounting for 50% of the country’s population, with coverage actually slightly increasing to 51.28%.

On the key issue for Ireland, aid to large enterprises, a compromise was agreed with the Commission that will allow member states to provide investment aid to large enterprises for new economic activities and diversification of existing enterprises into new products or new process innovation. Aid intensity rates were also maintained at their current levels.

In essence, the final version of the regional aid guidelines negotiated by Ireland and like-minded member states represents an important step in ensuring Ireland, and the EU in general, maintain the ability to strengthen the EU economy and promoting cohesion between regions.

Deputy Dara Calleary:  I thank the Minister of State for his detailed reply. While I acknowledge the progress that has been made, the reality is that everything has been different since 2007. The Minister of State does not need to be told that there are parts of the BMW region that would certainly qualify for A grade. The region itself has grown, with Galway city and parts of Louth having had substantial employment growth, but in other areas there has been no growth. In the north west, agency-assisted employment has fallen by a fifth since 2003, including another 1% drop. The whole regional aid policy needs to be reviewed at European level in light of the collapse in European economies in recent years. Many areas that may have been stronger in 2006 or 2007 have fallen back. We have discussed emigration and the flight of people from many of these areas. The way to get these people home is to promote industry, particularly home-grown industry. The change in state aid affects our ability to do that. We need to go back to these state aids at European level. The Government needs to use the influence it has gained in recent months to drive that campaign. We need to review this because the country as a whole will lose out, and if we do not do this, I suspect the European Union will lose out because investment will go to areas outside the EU.

Deputy John Perry:  More than 51% of the country qualifies for category C regional aid. It was originally proposed that large enterprises would not be funded in the regions. We got that included. The regional aid is not a funding scheme for the EU. It is just a set of guidelines for enterprise support agencies in Ireland to follow.

Following sustained engagement with the Commission and like-minded member states at ministerial and official level, Ireland secured entitlement to maintain regional aid qualification for areas accounting for 50% of the country’s population, with coverage actually slightly increasing to 51.28%.

On the key issue for Ireland, aid to large enterprises, a compromise was agreed with the Commission that will allow member states to provide investment aid to large enterprises for new economic activities and diversification of existing enterprises. The possibility of large enterprises not being supported was on the table. Companies that were previously supported and were to be excluded—–

Acting Chairman (Deputy Terence Flanagan):   I ask the Minister of State to conclude because Deputy Griffin wants to contribute.

Deputy John Perry:  —– included, in Louth, PayPal and eBay; in Mayo, Allergan and the Lafferty Group; in Sligo, Abbott; in Galway, EA Games, Mylan and Cisco; and in Donegal, Abbott Ireland and Seatem. The Deputy is talking about getting regional development and getting people into the regions. Dublin and other large populated areas do not qualify for any of this assistance so we have that advantage. We can still get up to 30% for small companies and 10% for larger companies, which was taken off the table meaning that the west would not have been entitled to any aid if the Minister, Deputy Bruton, had not fought for it to be included. People see regional aid as money; it is only the guidelines to qualify for funds. Ireland has done very well to secure the deal we did during our Presidency.

Deputy Brendan Griffin:   I commend the Minister, Deputy Bruton, on his work on this to date. Wearing my constituency hat, all along people in Kerry felt disadvantaged because we were left out of that region. In the future we feel we should have a level playing field with everyone else. We have suffered. Tralee and other parts of Kerry have large areas that are industrial wastelands at the moment. A large factor in that has been that we were left out previously. We need to look at this from both sides of the argument. There are counties such as mine that have suffered. In future we need to be given an equal opportunity.

Deputy Dara Calleary:  I never heard a Kerry man say he was disadvantaged.

Deputy John Perry:   I am delighted this question was raised because it will come up in the European Parliament elections. People perceive regional aid as a pot of money from the EU. The Deputy has stated very clearly that certain areas of the country that were previously excluded are now included. The Minister, Deputy Bruton, is to be commended on his negotiations. If we had conceded, there was a significant possibility that no large enterprise would have been included in the regional aid map, which is not now the case. We have only dropped the marginal 5%. The BMW region benefited considerably through the companies brought into the region. There is still a substantial benefit – up to 30%, 20% and 10% for large companies. The fact that the area has been extended to include Kerry will enhance the opportunities. Deputy Calleary asked how we can attract foreign direct investment. We have a bigger map with bigger potential for aid to go into those regions. It is a huge benefit with regard to the employment grants for the employment of staff. It is a considerable advantage for the Minister, Deputy Bruton, in attracting foreign direct investment, given that more than half the country is included.

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