Closure of Factories in Lisnaskea

Mr Gallagher:

The issues of unemployment and job losses have been discussed in the Chamber before; they will be revisited today. In the constituencies in the west of the Province, unemployment levels are persistently high.

Lisnaskea is the second largest town in Fermanagh; it has a population of 3,500. In the past three years the town has suffered major job losses - there were 70 redundancies when the Adria factory closed, 80 jobs were lost when Fermanagh Creameries shut down, and 196 were lost when the Sir Richard Arkwright textile factory finally closed in July 2001. The loss of those 350 jobs has resulted in hardships for the employees involved, their families and other local people.

Belfast has a population of 352,700. Can Members imagine what would be the impact upon Belfast of 35,270 job losses - one-tenth of the city's population - over a three-year period? The job losses in Lisnaskea were a severe blow to the town and to the wider Fermanagh community. The wages of employees at the Sir Richard Arkwright factory contributed some £2 million to the local economy each year. In the aftermath of the closures, there were promises of renewed efforts to secure more inward investment to the area. To date, however, there has been no breakthrough in that regard. Those who were made redundant were given some support in the form of help to relocate and retrain. Some were able to find work elsewhere, although many of those jobs were located outside the Lisnaskea area and some were situated across the border.

The unfavourable exchange rate disadvantages those who work in the South but live in Fermanagh and pay their bills and mortgage in sterling. For several years the difference in the exchange rate has created a downward trend in cross-border trade in towns such as Lisnaskea. The effects of that have now been compounded by the job losses.

A more hopeful sign has been the resolute action and attitude of the local community. The local development association has put in place a strategic plan to help small local businesses to grow. It has built small business units, all of which are already occupied. There is a demand for extra workspace, and at least one of the present tenants of one of those units is ready to move to larger premises and to increase his workforce. Conveniently located land is available for that purpose, and locals are formulating a plan to help to finance further developments. Their aim is to retain expanding business in the area and to increase employment. As we know, increased employment, in turn, will bring greater social and economic benefits for that hard-pressed area.

That is one example of the approach referred to by the Minister, Sir Reg Empey, at the time. I note that he is present for the debate. He referred to the development of local business as one way of countering the blows of factory closures in the Fermanagh area. Locally- owned, home-grown businesses are a success story in Fermanagh. However, indigenous industry must be nurtured by Government agencies. Therefore, I call upon the relevant agencies to give assistance to local development initiatives and to facilitate expanding businesses at Lisnaskea so that they can bring their plans to fruition.

We want inward investment in the area, and we are entitled to a level playing field when competing with other areas in Northern Ireland to attract new jobs. The area suffers from some disadvantages. For example, it is far from the bigger airports, and its roads are in a poor state. I repeat my demand that the Department for Regional Development includes the upgrading of Fermanagh roads in its plan. In response to a recent question in the House, the Minister for Regional Development, Mr P Robinson, said that it would help Fermanagh if the roads in neighbouring counties were upgraded. The people of Fermanagh will not be fobbed off with that suggestion. We want the roads in our county to be upgraded so that we have a level playing field for attracting inward investment and helping local businesses.

When the job losses occurred at Lisnaskea last summer, there was a great outpouring of concern about the situation. We must remember that the employees who lost their jobs and their families are living with the consequences. Hence, I proposed this debate, and I ask that the creation of jobs in the area be given all the attention and support that it deserves.

It is appropriate that the Assembly should discuss this matter at this time, and I thank Mr Gallagher for bringing it to our attention. About 18 months ago, people living in Fermanagh and south Tyrone read headlines in the local papers, such as, "135 Jobs lost in Desmonds closure"; "Staggering loss to Employees" at the closure of Unipork and "Shock turns to anger for cheesemakers out of a job" when a cheese factory announced its closure.

When the Lisnaskea factory closed, I contacted the Minister, Sir Reg Empey. I was impressed by his hands-on approach and his willingness to do all that he could to try to avert the job losses and create better prospects for the future. I attribute no blame to him whatsoever for his best endeavours. It is right that Members should acknowledge that he is present in the House today. He has again shown that he does not take these matters lightly but wants to adopt a hands-on approach.

At that time, around 18 months ago, when there seemed to be a catalogue of announcements, Sir Reg Empey said that the Malton's closure was another regrettable setback for Fermanagh, one of the regions where the Department of Enterprise, Trade and Investment and its agencies were focusing initiatives to strengthen employment. I look forward to hearing how the Minister has advanced those initiatives since then. It would be appropriate for the Minister to tell the House what the future strategy is for areas like County Fermanagh. We are entitled to be treated like any other part of Northern Ireland. We could be forgiven at times for thinking that we are not treated that way. We will let others be the judge of that.

County Fermanagh is an area of high unemployment. Unless we get investment quickly we could be in a very bad situation. The people of Fermanagh, in areas such as Lisnaskea, are innovative and have made honest endeavours to do things and to stimulate their area. They cannot do it without the support of the Minister and his Department. I call on the Minister to take a particular interest in County Fermanagh and the Lisnaskea area and for his Department to come up with a strategic plan that will directly tackle the recent job losses and, more importantly, stem the flow of redundancies that have come in a glut recently.

I also ask the Minister if he is prepared to consider County Fermanagh for high-tech jobs. Fermanagh suffers more from the lack of that type of investment than any other region in Northern Ireland. I would like to direct the Minister's attention to that particular type of work to ensure that the job losses do not continue in the days ahead. A proper infrastructure and a strategic plan are needed. I hope that the new Invest Northern Ireland board will divert some of its energy and money to tackling the chronic problem.

Go raibh maith agat, a LeasCheann Comhairle. I thank Mr Gallagher for raising this matter nearly a year after the job losses occurred. Not much has changed for those who found themselves out of work in Fermanagh - Lisnaskea in particular, where almost half the total jobs were lost. I have looked at the figures relating to the factories that were closed. We all know which factories lost out. One of the worst cases was Fermanagh Creameries. Food production was something I considered to be fairly high-tech, given the quality of the machinery that was in that factory. I believe that it could have been continued. However, that is not the Minister's fault, or indeed anyone's fault. It is one of the things that happen. Members have no say or control over them. However, we must deal with them when trying to represent our areas.

It was a perfectly good factory, which could have produced for years to come. It is now lying idle. Most of its machinery is dilapidated and can no longer work.

Agricultural businesses outnumber other businesses in the county. Although agriculture is important, it is also a weakness because of the great dependence on it. Farming, for example, is an industry in the doldrums. It is difficult to see a future for farming or a way out of the present situation despite the 'Vision for the Future of the Agri-food Industry' report from the Department of Agriculture and Rural Development. Of all registered businesses in Fermanagh, 58% are agricultural; the figure for the Six Counties as a whole is 33%. That highlights the area's rurality and the importance of farming to its economy.

Unemployment figures from the Department of Enterprise, Trade and Investment in 2001 show that 1,767 people were unemployed in Fermanagh: 1,264 male and 503 female. That gives an idea of the effect of job losses on those who expect to find work in the area.

All job losses have dramatically affected the people of Fermanagh. Such job losses are unacceptable. However, it is even more unacceptable to be told that the situation is improving because the number of people claiming jobseeker's allowance is decreasing. It is not mentioned that the number is decreasing because people are being siphoned off into training schemes, forced to claim other benefits or entering part-time or temporary employment with lower wages.

A recent study by consultants for Fermanagh Economic Task Force highlighted a labour force reserve of 2,829, compared with a Department of Enterprise, Trade and Investment jobless total of 1,766. The Department's figures do not include those who are not claiming benefit because they work in a temporary or low-paid job, are unemployed, or are unemployed farmers. In addition, unemployment in the farming community is high and continues to undermine our economy's ability to grow. There is a considerable difference in those figures, which the Minister can perhaps explain.

It is clear that the peripherality of Fermanagh means that the area requires disproportionately more IDB investment and support to attract and retain inward investment and to develop local indigenous businesses - possibly more than anywhere else. IDB assistance in Fermanagh between 1996 and 2000 was 5% of the Northern Irish total. However, only 2·5% of the jobs that were promoted and safeguarded by the IDB were in Fermanagh.

A recent Department of Enterprise, Trade and Investment labour market bulletin recognised that districts in the west, among them Fermanagh and Tyrone, showed the highest concentration of long-term unemployment. In several districts, over 34% of the workforce were long-term unemployed. In Fermanagh, the figure was 38%, while the figures for Derry and Omagh were both 34%.

LEDU has had an impact on the small business sector with its business start programme. Of the 149 people in Fermanagh who completed the programme, 86 went on to start their own businesses - almost double the Northern Irish average. There is a significantly higher percentage of small business starts in Fermanagh in comparison with Northern Ireland as a whole, which proves that starting and establishing small businesses is one of Fermanagh's strengths rather than attracting larger businesses, as the area does not have a large pool of workers.

Between 1995 and 1999, tourism ranked as the fourth highest generator of money in the local economy. The TSN programme of action is obviously one of the areas of greatest need. The 'Measures of Deprivation in Northern Ireland' report by Dr Mike Noble is significant. Perhaps the Minister and other Departments can look at how that will affect Fermanagh.

If all Departments follow suit, the figures show that among the voluntary agencies - even in health - anyone doing anything in Fermanagh is obviously at a disadvantage. The Noble index is unfair, as opposed to our position on the Robson indicator. We are losing a considerable amount of money. The local strategy partnership (LSP) may operate in respect of some of the new money for the new rural programme, and that impact will continue. I do not know what we can do about it, but the impact on Fermanagh will be severe in comparison to that on other areas, including urban areas.

The current population of Fermanagh is 57,000. That will rise to almost 59,000 by 2003 and to 60,000 by 2008. The population of working age will rise from 33,500 to 37,000 by 2008. Therefore, more people will be available either to look for work or to fill jobs provided by outside bodies. The Robson and Noble indicators will be significant, and that is worrying unless figures can be produced to show something different.

Of the 45 Noble indicators, seven domain deprivation measures are combined to produce one overall multiple measure, with income weighted at 25%, employment at 25%, health and disability at 15%, education, skills and training at 15%, geographical access at 10% and social environment and housing at 5%. Seventeen per cent of our housing is unfit. The ranking is very low for something so important, and Fermanagh will fare badly as a result.

Fermanagh's strength is, as I mentioned earlier, in the small business sector. We have several small but considerable businesses that survive on their own. Whatever profits they make are returned to the business. Through the rural programme, we probably need to start up more small businesses in small villages to provide off-farm jobs. That has been done successfully in parts of County Monaghan.

Our difficulty is that planning policy statement (PPS) 7 permits no commercial development in the countryside. Most of Fermanagh's villages have no zoned areas for development, and that creates a problem for people who have to travel from places such as Rosslea to Enniskillen to start up a business. They are forced to pay for space that they cannot afford, when quite often they would prefer to start a small business in their own back yards or on their own bits of property. Many of our businesses started that way.

That has not been dealt with. Planning continues to be a severe difficulty for us, and it will continue to be so, even in the new rural development programme. It is for those Departments and Ministers to examine that matter and see what can be done; otherwise the new programmes will be a waste of time.

Businesses are more easily started across the border. There is more incentive from the Industrial Development Agency (IDA). Our problems seem to be greater. More business is permitted in rural areas, and that must change. We must encourage investors, together with small- and medium-sized businesses, into all areas. Small business managers must be persuaded of the benefits of staff training versus looking for capital handouts. That is often their chosen route, and it can be bad value for money. It should be explained to them that training their staff in marketing would gain them more.

The aggregates tax is obviously going to put us in an uncompetitive position. Construction is one of our strengths in Fermanagh, and it is a growth industry. It will become uncompetitive with the introduction of the aggregates tax, and I welcome the stay of execution on that.

Fermanagh and, perhaps, Derry also are without broadband services, information and communication technology (ICT) and the superhighway. Other areas have those facilities. I mentioned the matter to British Telecom officials during a recent presentation, and its representatives said that they would look at that in greater detail. However, it puts Fermanagh at a competitive disadvantage when compared to other areas such as Letterkenny. Those services are important to education, and participation in the ICT industry is something that Fermanagh could gain from.

If my figures are correct, then, according to the Noble report, Fermanagh needs to benefit from rural proofing. That is why we have been arguing for rural proofing of the various departmental policies and the effect they have on rural areas.

The Hayes Report raises other issues, and its implementation would make a big difference to a county that is in dire need of jobs. The Erne Hospital is one of the area's largest employers and one of our greatest strengths, and we are hoping against hope for success there.

The report from the Department of Agriculture and Rural Development's vision group can also give benefits. The Executive will need to support their implementation by providing the necessary resources. Without those resources, much of the proposed rural programme will not happen. Agriculture faces a difficult future. Those developments may deliver local jobs, and the Minister of Enterprise, Trade and Investment, and others, should consider them.

I thank the Minister for his consideration of the jobs situation. The job losses that occurred were not his fault, and he was not in a position to do much to prevent them. He did his best, and he worked with everyone, including myself, to try to do everything possible for the people who lost their jobs. Many of those people have had to travel to firms such as Quinn's, to places across the border and to other areas in search of jobs. Even though some of them have found employment, the fact remains that they have had to travel away from Lisnaskea. That shows that if local jobs were available, the people would be there to do them. Go raibh maith agat.

TOP

I welcome the opportunity to respond. The reasons for the debate are apparent, and they have been eloquently addressed by the Members who have spoken.

The substantial reduction in jobs, associated with the closures that have been referred to, is regrettable. However, as Members have accepted, the decisions to cut jobs were taken by the individual companies involved for their own reasons. I do not need to remind anyone of the difficulties that the food-processing and textile sectors in Northern Ireland have faced recently. Lisnaskea and the wider Fermanagh area have not been alone in suffering the effects of changes in the market place.

However, we have been taking action to try to halt the decline in those traditional sectors and to encourage them to become more competitive. Many of the jobs lost were in the textile industry. The Kurt Salmon Associates (KSA) report that we commissioned, and which was published last year, is a clear example of how Government and industry have worked together to identify a way forward for the sector.

There were five themes for sustainable growth in the sector - focusing on branded products; applying e-business and knowledge techniques; the development of strategic alliances between suppliers, customers and centres of excellence; the development of more balanced sourcing of portfolios that include offshore suppliers; and the development of unique and desirable products.

As part of the recommendations of that report, a new industry-led company called Catalyst was established in December 2001. It will provide strong leadership for the sector and continue the work of the report's implementation team. The IDB will continue to work closely with the sector bodies and individual companies to ensure that the momentum that was built up following the publication of the KSA report is not lost. I wanted to mention that, because some people believe that we have given up on the textile sector. That is not true - it is still a significant employer in Northern Ireland and is well ahead of the national average. Between 13,000 and 14,000 people are employed by the industry, so it is a significant sector by any standards. That does not compensate those in the Fermanagh area who have suffered. Nor does it compensate others in that sector, in areas such as County Antrim and County Down, who find themselves under threat. That sector has been under continuous threat over the past decade.

Work is continuing to replace the jobs lost in Lisnaskea and elsewhere in County Fermanagh. One way of doing that is to attract inward investment. I understand Fermanagh's concerns that it has not had its fair share of new inward investment in recent years. There has been a significant number of visits to the county. In the last three years, there have been 13 inward investment visits to County Fermanagh. The IDB continues to encourage people to establish businesses there. Telecom and network service sectors have provided the bulk of new inward investment in Northern Ireland. It has been hard to encourage many of those businesses to establish in areas west of the River Bann. County Fermanagh is no exception, but we continue to try. However, despite the fact that the companies are offered incentives to locate in New TSN areas, they have concluded that a large critical mass of skilled people within a limited travel-to-work area is required for their types of business, and it has been difficult to encourage them to establish in certain areas.

The IDB has been working closely with others, particularly with council and community representatives, to establish how we can best market and promote the area to do our best for inward investors. At the end of the day, it is they who make the final decisions.

We have also been collaborating with LEDU on the council-led economic task force, which was established in March 2001 following job losses. The task force has been very important. It comprises representatives from all Department of Enterprise, Trade and Investment agencies, the council and the local community. It is a good example of how local people can respond, and we are ready to help that task force in any way that we can.

Inward investment is not the only solution. Most jobs in Northern Ireland are created by indigenous companies rather than by inward investment. Much has been done to stimulate and help the development of local businesses, enabling them to become more internationally competitive. One of the key priorities identified by the economic task force was the need to support small local businesses to identify and develop potential for growth. To this end, the Department of Enterprise, Trade and Investment has offered financial assistance for the establishment of the Fermanagh growth programme, which is directed specifically at small businesses.

Many companies from the area have participated on international-led trade activities, such as trade missions, trade development visits and exhibitions. They have also made use of tailor-made consultancy from trade advisors in the Middle-Eastern, European and Asian markets. Competitive assessment and improvement methods are also offered to companies in the area, and several have availed of these services. In addition, the IDB's e-business service helps prepare traditional manufacturing companies to participate in the digital economy by using information and communications technology to protect and enhance their profitability and achieve sustainable growth. Some forward-looking companies have recognised the importance of this and have made use of the service.

Not all has been doom and gloom in the county. While this debate focuses on Lisnaskea, it must be emphasised that there are job opportunities in the wider area. For instance, in December 2000, I was privileged to announce the £2·5 million investment by Belleek Pottery, at a time when traditional companies were under pressure.

So far, that has resulted in the creation of 30 of the 50 jobs that were promised, and I hope to see the speedy conclusion of that expansion. Rye Valley Foods in Enniskillen is another success story: it is investing almost £14 million at its plant, which will ultimately create 130 new jobs in the manufacture of frozen prepared meals for the Irish, British and European retail food service markets.

LEDU also remains active in supporting local industry in the Lisnaskea and Fermanagh area. For example, LEDU has represented my Department on the task force and on the Into the West and Innovation West initiatives. Last year LEDU organised a business growth seminar at which it presented a range of support services available to clients and at which the Fermanagh growth programme was launched. The LEDU western area regional action plan aims to ensure that all small indigenous businesses located within disadvantaged areas of Fermanagh and Tyrone are afforded the opportunity to participate in a range of business development programmes.

Raw unemployment statistics are only one indicator of unemployment levels. Members have pointed out that other issues are involved and that raw statistics cannot be taken on a stand-alone basis. However, they are not insignificant. According to the last set of figures that I have available, some 1,670 people are currently registered on the claimant count. That figure is 100 fewer than Mr McHugh's figure.

This year's pattern has similar highs and lows to last year's. Last August unemployment rose to about 1,900, largely due to the closure of the Sir Richard Arkwright textile factory and the effects of other previously announced redundancies. However, that figure is still marginally below the figure for the same period in the previous year. The subsequent figures show that that pattern is continuing: unemployment is now slightly lower now than it was last year, with a difference of approximately 123. I acknowledge that it is a blunt instrument and that those figures must be viewed alongside other issues. It is true that some people may have moved on to claim other benefits or not sought re-employment. However, many people who lost their jobs last summer have managed to find themselves relocated, many of them in the Enniskillen area. Ironically, several companies complained to me that they could not attract labour and were having difficulties recruiting staff.

So there has been some displacement, and I do not doubt the validity of Members' anecdotal evidence about people having to find jobs across the border and so forth. However, it has not been all negative, because some people have started their own businesses, having been counselled when they were made redundant. Admittedly, that number may not be large; nevertheless, it is significant as it shows that people have taken the opportunity to move on on their own.

As regards LEDU, if all goes well, we expect approximately five projects to be announced between now and the end of the financial year. Those five projects will create approximately 34 jobs. Although I cannot be specific at this stage, the IDB is negotiating with some companies in the county, and I hope to be able to make some announcements before the end of the financial year. However, on the whole, the small business sector in the county is one of the most vibrant in the west of the Province.

Many people there are actively promoting, expanding and starting businesses. The county is taking up a disproportionate share of the available resources in the west of the Province because there is a good core of businesses there. Clearly, there are people in the county who are anxious to progress. There is leadership from the council, and now a new basis and good analysis in the recent Quinn report. I am hopeful that this will send out a message that, despite all the difficulties, the county still has a vibrant, viable small business sector. Indeed, it is clearly growing, as I have outlined, with the projects that we hope to announce between now and the end of the financial year, and I see no reason why this should not continue.

However, I am aware of the underlying fragility in certain areas. There is disproportionately high dependence on agriculture, and we all know that there are clear difficulties there - difficulties that apply right across the Province and further afield. Those difficulties do not often show up in unemployment statistics. Often self-employed farmers have to take a second job, and they do not necessarily show up as unemployed. At the same time, however, there is a reduction in earnings and therefore less money in the economy.

Foot-and-mouth disease had a disproportionate effect on two of County Fermanagh's stable industries - tourism and agriculture. There is no doubt that our tourism industry has not yet fully felt the effects of 11 September; there is a long way to go. We know from experience in the Gulf war that it took three to four years for the transatlantic tourist traffic to return to pre-war figures. I see no reason to believe that we shall not face similar time scales. Tourism is re-focusing its emphasis on the European and Great Britain markets to compensate for the shortfall, and, of course, a major drive will be made in the Republic to encourage more visitors. Those areas will be targeted to supplement some of the anticipated losses from long-distance destinations.

I am concerned that we are talking down the economy of County Fermanagh - almost implying that it is on its knees. It is not on its knees. It has suffered a bad period in its history with these losses. However, I am hopeful, as the county has a good community spirit. Many good voluntary organisations are working in close co-operation with the council and the statutory bodies, and there is co-operation between the statutory bodies, which is absolutely critical. Indeed, County Fermanagh is one of the leading examples of this co-operation in Northern Ireland. It is happening at a structured level. Resources are being put into it, and the council is taking a major lead. There is civic leadership in the area to justify support.

There is also a strong small business sector, which we sometimes underestimate. The announcement of one or two extra jobs somewhere in the country does not necessarily make the headlines. The media gives disproportionate coverage to closures, and I have watched this closely over the last couple of years. If one tries to get a good news story on the economy into the press, one may or may not succeed.

The announcement of a closure will have no trouble whatsoever in achieving headlines. However, it will have a detrimental effect on our ability to give confidence to the business community in the county. People who wish to invest money need to have confidence. They are aware of what is going on around them, so if they hear stories of doom and gloom, they are less likely to invest.

Another key issue that was raised during the debate was planning, and my Colleague, the Minister of the Environment, is in the Chamber.

There is a tug of war between the desire to help small businesses to locate in rural areas and the desire to protect the environment, and permanent tension exists between those two objectives. Many people would not want to see ad-hoc or willy-nilly development in rural areas, because that would spoil one of County Fermanagh's key assets - its beauty. Indeed, that county has a collection of some of the most beautiful landscapes anywhere, and nobody would wish to see that destroyed. Therefore, the Department of the Environment has a huge task in trying to balance the protection of the environment with allowing the economy to grow. We must continue to discuss those tensions, which are reflected in the local community, the district council, communities in the wider county and elsewhere in rural Northern Ireland, because we want to protect our heritage and the environment. However, at the same time, we do not want to stifle economic development.

The tension is reflected throughout the community. It does not have any party political issues attached to it; it is purely a matter of how we see our future. My Department is interested in the matter, but we must be aware of that tension, and we do not want to destroy our heritage. We want to pass on an environment of which our successors can be proud.

Another closely related issue is land and the provision of sites. That has been a live issue in Lisnaskea in particular.

I remind the Minister that thanks to the family-friendly Standing Orders, our cut-off point is 6.00 pm.

I wish to close on the issue of the land. We are negotiating with economic development people in Lisnaskea and await their proposals. I am hopeful that we can achieve a way forward. We are also looking closely at other projects in the county, which could ensure access to sites for industrial development. We want to encourage such development, because Lisnaskea has an excellent record. With several sources of funding, there is the potential to achieve a satisfactory outcome especially given Lisnaskea's track record of success.

I want Members to be aware that we are far from complacent. I thank Mr Morrow for his comments, but I regret that some of the communications concerned negative news. Nevertheless, the county has much going for it. It is beautiful; it has immense potential in the European Union for expansion of its tourism sector. However, people do not want to sit in a museum. They want to be active participants. They want to see businesses that can provide employment so that their children do not have to leave. Our agencies and Invest Northern Ireland, when that is established in the spring, are determined not to take their eye off the ball in County Fermanagh, and I certainly hope to visit the area in the near future.

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