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Dáil Éireann debate -
Wednesday, 30 Apr 2008

Vol. 653 No. 3

Priority Questions.

Consumer Protection.

Leo Varadkar

Question:

1 Deputy Leo Varadkar asked the Minister for Enterprise, Trade and Employment when he will make a decision on the commencement of section 48 of the Consumer Protection Bill 2007 which states any trader should not impose additional charges upon consumers who wish to pay by credit card; and if he will make a statement on the matter. [16947/08]

The Deputy will be aware that sections 48 and 49 of the Consumer Protection Act 2007 seek to restrict the manner in which traders impose additional charges on consumers solely by reason of the method of payment chosen by the consumer. This issue first arose in the course of the passage of the Consumer Protection Bill through the Oireachtas. An amendment was proposed in the Seanad which sought to prohibit traders from imposing charges solely related to the payment method chosen by the customer by way of an extra amount of money, commonly referred to as a credit or debit card surcharge, a different price depending on the payment being made in cash or by credit card or debit card, or a handling fee for purchases made on the Internet depending on the method of payment.

The Deputy will also be aware that on the commencement of the Consumer Protection Act 2007 in May last year I did not commence sections 48 and 49 as I advised that it was my intention to conduct a public consultation on these provisions. In the course of that consultation my Department received almost 50 submissions on the impact of sections 48 and 49. The submissions gave rise to a number of complex matters which required legal advice, particularly regarding the compatibility of sections 48 and 49 with provisions of EU law.

These responses raised a number of specific issues upon which the Department sought the advice of the Attorney General. These issues related to the compatibility of sections 48 and 49 with EU law, specifically with the EU directive on unfair commercial practices and the EU payment services directive. The Attorney General's advice is that sections 48 and 49 are not compatible with the maximum harmonisation nature of the unfair commercial practices directive in that the sections seek to legislate within the field of consumer protection approximated by the directive. He argues that by going beyond what is permitted by the directive, the sections are not compatible with the maximum harmonisation nature of the directive.

As the Attorney General has advised that sections 48 and 49 are not compatible with EU law, I have decided not to commence these provisions. I am, however, committed to the importance of consumers being made aware of the fact that a trader imposes an additional charge based on the method of payment before transacting with that trader. My Department is currently examining the possibility of making regulations under the Consumer Protection Act obliging traders who impose payment method charges to include information on those charges in any advertisements for their goods and services.

In the course of the public consultation process retailers, in opposing the introduction of section 48, maintained that they were merely passing on to the cardholder the cost imposed on the retailer by the card companies for facilitating card transactions. The Deputy may be aware of the recent decision of the competition directorate of the EU banning Mastercard from requiring retailers to pay its multilateral interchange fee for facilitating Mastercard transactions. It is understood that the competition directorate has recently commenced similar proceedings against the other major payment card scheme Visa. In that context, I have sought the advice of the Competition Authority as to the implications of this decision and its effects in Ireland, particularly in terms of the likely impact on the costs to retailers of accepting payment by particular payment methods.

I am a little taken aback by the Minister's reply. It was not what I expected and I imagine it was not what the Minister expected when the legislation was going through the House.

I have a very strong objection to credit card surcharges. Lots of retailers do not impose them. One can go to Brown Thomas and buy a suit for €1,000 and one will not be charged extra for using one's credit card. In fact, one will be given a discount if one uses Mastercard. Some retailers, particularly in the travel and airline industries, are imposing this unacceptable surcharge of 3% or more. Ticketmaster charges for credit card payments. NTL is doing something similar with debit. If their customers do not agree to pay by direct debit, they are charged more.

It was my understanding that when the Consumer Protection Act became law last year, such practices could become illegal. It appears from the Minister's reply that this is not the case because the relevant sections are in contravention of European law. If that is the case, then the Minister obviously cannot commence sections 48 and 49. When the legislation was originally drafted, was this not anticipated? When the Consumer Protection Bill was going through the House, why did the Minister not ensure that it was consistent with European law? That would have been a pretty obvious and basic step for the Minister and his Department to take.

Is there potential for a way around this problem? Can we amend the Act or introduce new legislation that would allow the Minister to ban the aforementioned practice. If the current legislation is inadequate, could alternative legislation be brought before the House? The Minister would have my party's co-operation in passing any such legislation very quickly, if possible.

I share the views of the Deputy regarding the unacceptability of these surcharges. During the course of the discussion and debate on the Bill in the Houses, a specific Senator raised the surcharge issue and pleaded with us to include a provision on it in the Bill. As the Deputy will understand, the timeframe was not as long or as wide as one would have liked in terms of going into the detailed legal implications of that move. However, the Bill went through the normal parliamentary processes.

There was a desire on all sides of the House to include such a measure, which is important to note. One must try to respect the cut and thrust of parliamentary debate and endeavour to facilitate the capacity of Deputies and Senators to propose amendments in the course of debate. Further, one must be open to accepting such amendments. If one was to take an overly-cautious view on everything, we could end up in a scenario where Parliament becomes virtually redundant.

In essence, we included sections 48 and 49 and——

Did the Minister not seek advice on them?

We did, of course. We then sought a public consultation on the sections because many people, external to Parliament, felt that they should have a say on the matter and be consulted on the provisions of these sections. My own view is that Parliament is supreme in these matters, ultimately, but we facilitated the consultation. In the course of that consultation, detailed questions arose about compatibility with the EU directive on unfair commercial practices.

Job Losses.

Willie Penrose

Question:

2 Deputy Willie Penrose asked the Minister for Enterprise, Trade and Employment his views on the continuing level of job losses in the manufacturing sector; the steps being taken to reverse this trend; and if he will make a statement on the matter. [16575/08]

The manufacturing sector in Ireland has evolved noticeably since 2000 in terms of the composition of industry and the nature of activities and is likely to continue to do so. Manufacturing continues to be a significant employer accounting directly for 11% of total employment and a significant amount of associated services employment. In order to sustain and grow the sector, the Irish-based manufacturing enterprises will have to continue the progression to high value-added sectors and activities and continue to increase productivity through investments in human capital, technology and innovation. Irish manufacturers who engage in specialised, sophisticated, high technology and value-added activities can continue to compete successfully on international markets. These sectors require specialised skilled staff, specialised technologies and flexible operations and other factors which are not readily available in many low cost economies, such as modern intellectual property protection laws, a business-friendly regulatory environment and so forth.

The latest available data on manufacturing employment are those compiled by the Central Statistics Office in its earnings and labour costs release, published in March 2008. This release indicates that at quarter three 2007 there were 227,300 persons employed in the manufacturing sector, which represents a small decrease of 700 on the numbers employed in the corresponding period in 2006. It is important to keep this in perspective both in terms of global economic conditions and the continued strength of the euro. Our manufacturing sector continues to perform strongly and 2007 represented a very good year, with production growing by 7.5%, the highest annual change since 2002.

Over the last number of years there has been a significant churn in employment as is typical of a developed, open and dynamic economy such as Ireland's. Ireland is no longer a low cost economy and manufacturers in particular are facing increased competition from producers in lower cost areas. Nevertheless, Ireland continues to attract high-value manufacturing activity as evidenced by recent announcements by companies such as Zimmer, Green Isle Foods, Thermo King and others to establish or expand their facilities in Ireland. Other sectors, especially the services sector, are providing significant new employment opportunities. Since 1997, over 500,000 new jobs were created in Ireland and the number in employment now exceeds 2.1 million.

Additional information not given on the floor of the House.

As part of the commitments included under the partnership agreement Towards 2016, I established the high-level manufacturing group to review the challenges facing the manufacturing sector and to identify further measures to meet those challenges. The group's report, which was published earlier this month, contains 27 recommendations directed at key areas of innovation and productivity leading to transformational change, reskilling and management development for the innovative firm, increasing awareness and the take-up of existing supports. In addition, the group recommends the establishment of a manufacturing forum to take responsibility to progress the implementation of the recommendations outlined in the report and to act as a strong advocate and champion for the manufacturing sector to ensure that manufacturing remains central to current and future industrial policy. Follow-up to the report will be discussed with the social partners as part of the review of Towards 2016.

The programme for Government contains a range of commitments focused on maintaining and enhancing our framework competitive conditions and promoting new areas of competitive advantage, including developing our research and development base, investing in critical physical and communications infrastructures and promoting tertiary education and lifelong learning. Over the period of the national development plan, the Government will provide total investment of over €25 billion which will be of direct benefit to the enterprise sector, including manufacturing. A total of €8.2 billion is earmarked for the strategy for science, technology and innovation to assist in achieving our goal of becoming a leader in research, development and innovation. An investment of €3.3 billion will specifically support the development of the indigenous and foreign direct investment enterprise base, while €13.7 billion will be devoted to skills development.

I call on Deputy Penrose to respond.

The Leas-Cheann Comhairle should be more lenient because in fairness to the Minister, his entire alma mater is in the Public Gallery and they would like to hear him speak.

I am sure there will be more scope for him to answer questions.

As a former teacher, the Leas-Cheann Comhairle should understand.

In any event, I thank the Minister for his detailed reply. It is time that we shocked ourselves out of our absolute complacency. We have been on auto pilot. We have been so used to the good times that we have virtually no idea how to deal with the difficult times. I do not intend to talk down the economy because the fundamentals are sound. However, there are problems that may well create difficulties for us.

Recently the Central Statistics Office published live register figures indicating that we currently have 5% unemployment. However, the situation in individual towns is much worse. Survey data on 28 towns with a population of more than 10,000 shows that 18 of them had more than 10% of their populations on the live register. For example, 21.52% of the population of Newbridge is on the live register. Is that not a cause for concern? Does the Minister agree something must be done to tackle that issue? Will he confirm that the live register figures on Friday will indicate more than 200,000 unemployed?

Does he agree that action is required if the rapid climb in the numbers on the live register is to be halted and reversed? The first action required is a change of attitude on the part of the Government to recognise the seriousness of the position. Every time job losses are announced, the Government appears to be caught unawares. Are we chasing the horse after it has got out of the shed with no one to bolt door? Where stands the early warning unit in the Department, which is responsible for identifying plants at risk and intervening to ensure retention of the maximum number of jobs? If it is not in operation, will he take steps to reactive the unit?

The Minister referred to the upskilling of 500,000 people over the next number of years. Will he bring forward an accelerated programme of training opportunities to ensure people who lose their jobs can take up alternative employment? Apart from the construction slowdown, is it not the creeping closure of long-term local employers engaged in the manufacturing sector that is the nub of this issue? It is important, therefore, people in this sector are afforded the opportunity to retrain without much ado or fuss.

The question dealt with the manufacturing sector and I was anxious to outline the correct position, which is important.

Sometimes people use general and simplistic catchphrases such as "manufacturing in decline". Due to the high capitalisation and more specialised nature of manufacturing, it is a changing story but, between 2000 and 2006, manufacturing output increased by 35%. We are performing well in this sector but the same numbers will not be employed as ten years ago due to the nature of the change. Manufacturing employment has reduced from 16% to 11% over the past ten years but the key issue is how the sector is performing in terms of output, longevity and so on.

I accept in the broader employment context, the number on the live register has increased but we were anything but on autopilot. Inner anxiety has defined us over the past number of years because our economic success is recent and unprecedented. We are, therefore, not sitting on our laurels complacently. We are endeavouring to put in place the policy platforms that will enable us to compete for and retain jobs into the future. That means implementing the science, technology and innovation strategy, which my Department co-ordinated with eight other Departments and which was generously funded by the Department of Finance in the Estimates to the tune of €8 billion over the next six years, because we want investment in science and research to underpin jobs and to show the world Ireland will discover new products and services and ways to doing things. That is our future. We cannot compete for low cost, low skilled jobs in the manufacturing sector.

We are active in the services sector, which has contributed significantly to jobs growth over the past decade. We are close to finalising a strategic approach to maximising the number of jobs and the value we can achieve through services over the next number of years. The Deputy correctly mentioned the skills issue. FÁS has a very good approach to intervening in circumstances where redundancies occur and matching people with new job opportunities, training and programmes that facilitate the reorientation of workers in new jobs and that will continue. The IDA and Enterprise Ireland monitor their client companies, particularly those that may be in difficulty. However, ultimately, a company's corporate headquarters far removed from Ireland determines its decision-making, the timing of its decision and the degree to which it will inform us about its plans based on global issues

Proposed Legislation.

Damien English

Question:

3 Deputy Damien English asked the Minister for Enterprise, Trade and Employment the way he will implement the 25% reduction in the regulatory burden upon business; the way he will assess the level of regulatory burden; the legislation in the 30th Dáil that has been assessed for regulatory impact on business; and if he will make a statement on the matter. [16948/08]

In March 2008, the Government decided to reduce the administrative burden of domestic regulation on business by 25% by 2012. This target was set in response to the invitation to member states by the European Council to set national targets in line with the European Commission's 25% target reduction in the burden of EU regulations. My Department is responsible for devising the methodology to be used across Government, for co-ordinating the work across Departments and agencies and for reporting to Government on progress. Initially, all Departments will be required to list the information obligations which their regulations impose on business. From that listing, Departments will assess which requirements are the most burdensome and will then measure the cost to business of the most burdensome requirements. At that point the most appropriate approach to achieving the 25% target will be re-examined.

The Government also agreed that, in regard to future regulations, all Departments should measure the administrative cost on business and specifically examine the impact on small business. The approach to identifying and measuring administrative burdens will be kept simple and not overly bureaucratic, while at the same time being robust and applied consistently across Departments. The regulatory impact analysis, RIA, of new legislation is a matter for individual Departments. In the case of my Department, the following RIAs have been undertaken on current legislative proposals: Employment Law Compliance Bill 2007, Safety, Health and Welfare at Work (General Applications) Regulations 2007, European Communities (Ecodesign Requirements for Certain Energy-using Products) Regulations 2007, Control of Exports Bill 2007, the Chemicals Regulation and Enforcement Bill, the general scheme of the companies consolidation and reform Bill; and the EU shareholders' rights directive.

I thank the Minister for his reply. We are glad the Minister has finally set a target because we have repeatedly asked for this over the past six months. As late as February, no target had been set but we welcome the setting of the target in March. The Minister stated previously the employment Bills due before the House would not be assessed but I am glad there has been a change of heart and it is important he has set down the way forward. He has asked for a number of reports and he will then outline a plan. When will he announce a date for the plan? What baseline cost will he use? Will he announce the cost to business, according to his assessment, in order that we will have a figure to work with and we will know in two years what has been achieved? Will the Department direct this plan? Will he outline progress to the House in two or three years?

If he is still in the job.

I ask the question because he may not be in the post. We would like the Minister to outline the mechanism for this quickly. He said he has asked various Departments and agencies to assess and report back to him. Yesterday the Financial Regulator was asked at a joint committee meeting the cost to business of the regulations he oversees and he did not know. He has not even assessed them. However, the Minister appointed a departmental working group to investigate this issue but the Financial Regulator has not even assessed the cost of his regulations. I am concerned that, although the Minister is discussing the issue and has replied to parliamentary questions saying the plan will be announced, nothing is happening. Will he elaborate on this?

The Deputy was anxious that I would set the target and that has been done.

We wanted the plan with the target.

I recall telling the Deputy that when we set the target, we must have an idea of the future path in progressing the issue. We are endeavouring to avoid a scenario where we over-bureaucratise the reduction of bureaucracy, which is a danger.

The Minister has appointed three groups.

In Germany 110 civil servants are working to allegedly reduce the burden of bureaucracy. In the UK, the process cost is almost £27 million. I am conscious of how other countries have approached burden reduction and not yielded the concrete results we all desire. Ireland is lightly regulated compared with other EU member states. The World Bank ranks Ireland eighth out of 178 countries in ease of doing business while the Heritage Foundation and The Wall Street Journal ranked it third out of 153 countries in terms of economic freedom .

We need to keep this in perspective. However, the 25% target is ambitious in that context. We have circulated Government with a memorandum and we have asked that a structure managed at principal officer level be established in each Department to liaise with my Department which will be the lead Department in co-ordinating this Government wide endeavour to reach this target. To establish an initial list of the information obligations arising from legislative administrative requirements means going back over all the existing legislation. This is a significant task in itself to establish in particular those administrative requirements relating to business. We are using the month of January 2004 as a base line.

The best course of action would be to share with the Deputies the timeline that has been indicated to me to show how the Department intends to proceed. It will be a three to four-year process in terms of the 25%.

We would appreciate the timeframe information. I suggest a common-sense approach to this issue. The leaders of the various different business groups met us this morning and they admit they are under significant pressure. We discussed employment legislation, but in general they are under pressure and they need us to cut as much of the red tape as we can.

Rather than just proposing a cut of 25% in five years' time, I suggest we set an interim target such as a proposal of a cut of 15%. We could immediately cut out the obvious red tape without having to undertake major assessments and talk to the small and medium business sectors. We could then make some progress within the next 12 months on this issue.

The acronym SARS was coined during our deliberations by an official and I think it is excellent. It stands for sudden acute regulatory phenomenon or whatever. This means that there can be very acute and urgent calls from within this House for legislation and we are the worst offenders at times.

It is a reactionary response.

When something happens and it is publicised on radio and television we are all here in the House some morning shouting and demanding to know when the Government plans to introduce regulation A, B and C. This House needs to adopt a mindset as does the Civil Service and the public service, that people in the real world have to get on with life and we cannot overburden them. We must decide how we can reduce the unavoidable burdens on such business. I am in agreement with the Deputy in that regard.

We moved quickly on the audit of the exemption threshold. We did not wait for reports but decided to raise it to the European level which took the majority of small and medium businesses out of that burdensome requirement. We cut to the chase. A group within the forum dealing with this issue came up with the idea of taking quick action. While this was happening I invited business groups to suggest good ideas for simplifying the situation quickly in certain areas. I told them I was open to such suggestions and invited them to bring forward proposals.

The Joint Committee on European Scrutiny could also scrutinise legislation and apply the same logic. I suggest the Minister correspond with the committee.

I am trying to keep it simple.

Before we——

Please, Deputy, this is Deputy English's question.

——make the employment law, could we——

Please, Deputy, this is Priority Questions.

This is also an EU target but if the Minister is co-ordinating——

Deputy English asks parliamentary questions like he plays football.

I could not hear the Minister's answer.

We are two and a half minutes over time. Has the Minister the answer to the question?

The question is if the Minister were in charge of co-ordinating this, would he not also work with the committee to ensure that a committee which scrutinises EU legislation would also have a role.

The Deputy is correct; the EU directives are very important.

We are running out of time for Priority Questions.

If a question is good we never run out of time.

I know that Deputy Penrose is most anxious to speak, whoever is in the Visitors Gallery.

Consumer Protection.

Willie Penrose

Question:

4 Deputy Willie Penrose asked the Minister for Enterprise, Trade and Employment his views on the increase in prices of a broad range of goods, which has resulted in a further jump in the level of inflation to 5% in March 2008; if he is satisfied that appropriate procedures are in place to prevent exploitation of consumers; and if he will make a statement on the matter. [16576/08]

The recent increase in consumer prices is clearly a matter of concern. While the increase in the annual rate of inflation to 5% as recorded in the Central Statistics Office's most recent bulletin is particularly disappointing, the factors giving rise to this increase are mainly being driven by international developments such as the global increases in the price of oil, food etc.

While our ability to influence the various global factors underlying recent increases in the price of various consumer goods is somewhat limited, it is most important that we exercise vigilance over those areas which we can influence so as to ensure that we do not undermine our competitiveness. Government policy in the area of consumer prices is concentrated on promoting competition and empowering and raising the awareness of consumers to the importance of achieving the best value for money.

In the area of competition, the Competition Authority is responsible for enforcing competition law and advocating and informing the Government and the wider public about competition matters. As regards the grocery sector, the Competition Authority has been requested, following the abolition of the groceries order, to review and monitor developments in the grocery sector in light of the new regulatory environment. The authority recently published two reports on the grocery sector which include an analysis of developments in the sector focusing on pricing trends, market structures and barriers to entry. The authority is committed to keep under review the impact of the regulatory environment on the grocery sector particularly in the context of abuse of dominant positions, including excessive and predatory prices.

Aside from the importance of promoting a competitive grocery sector, consumer power can also exert a significant influence on the price of goods and services. To do this, it is important that consumers have all the necessary information to enable them to make informed decisions about the goods and services they buy.

The Deputy may be aware of the various campaigns undertaken by the National Consumer Agency to raise awareness among consumers. In particular, the agency, through its price check surveys, has sought to raise consumer awareness about the price of grocery products being charged by different retailers and the value that can be achieved by consumers making considered choices as to which retailers they give their custom. In this regard, I note the recent statement from the agency's chief executive that a significant number of consumers have changed their shopping behaviour based on the published results of the agency's surveys. It is clear that when given the information, consumers can make the necessary strategic choices to ensure they get the best value for money.

The recent increases in consumer prices are a matter of serious concern, notwithstanding the fact that the reasons for these increases are due mainly to international rather than domestic factors. It is important, however, that we continue to aggressively tackle the issue of inflation both from a consumer and a competitiveness point of view. In this regard, I am firmly of the opinion that promoting competition and empowering consumers are key policy instruments in this area and I fully support the work of the Competition Authority and the National Consumer Agency in their efforts to ensure that the Irish consumer is not exploited and receives a fair deal.

I thank the Minister for his reply. This is a position that has been a cause of concern not just for consumers but also for the economy at large. The manner in which inflation has risen to 5% is the latest in the growing band of adverse statistics. The consumer price index figures are also of great concern in light of the forthcoming talks because the trade unions will argue for significant increases to protect their members from the impact of inflation.

The Minister will be aware of one big bang idea which the Government proposed, the abolition of the groceries order. Why has this failed to deliver the significant promise attendant upon the abolition of that order? I remember the Leas-Cheann Comhairle and others dealing with this issue. Where has the €500 on average gone? What has happened since the groceries order was scrapped? The Competition Authority reckoned that grocery bills would fall by €500 and this has not happened. Where is the black hole of savings that was promised? That is one question.

There have been significant increases in transport costs and the cost of clothing and footwear. Food prices have risen by 10% and this impacts upon lower-income families and makes it difficult for them to survive.

Where are the savings arising from the increase in the value of the euro against sterling and indeed against the dollar? What black hole has this saving gone into? It certainly has not been passed on to consumers who are being ripped off and fleeced. Where has the money gone? Whose function is it to ensure that consumers are protected and that those savings are reflected in their shopping baskets, particularly in the cost of clothing, pharmaceutical items and newspapers, and trade of that nature? There is a need to become and to remain competitive. However, we must also worry about the tourism industry and its competitiveness. Has the National Consumer Agency enough teeth to try to deal with this issue?

Food imports have become cheaper but where is this reflected in the consumer price index basket of goods? Will the Minister arrange for somebody to monitor what is happening with food prices and the price of international tradeable goods? Why are the savings from currency appreciation in this country versus other currencies not reflected in the price of goods? This question is bugging every Irish consumer today.

The Deputy asked what has happened since the abolition of the groceries order. We are all aware that the price of oil went through the roof in that period.

Yes, that is an external factor.

This had a significant impact on global prices. Food prices have increased significantly, particularly in the last six months, and various explanations have been put forward for this. Since the abolition of the groceries order, the monthly consumer price index information from the Central Statistics Office has included a comparison of price movement in respect of goods previously included under the remit of the order versus non-groceries order products. The clear indication is that the international increase in food prices has fed into the situation here. Notwithstanding that, I did not make any specific promises in respect of the abolition of the groceries order. I took a sensible approach in the knowledge that one can never predict unforeseen events and circumstances. I considered foolish the excessive claims that were made on both sides of that debate. The world did not come tumbling down in the ways predicted by some on either side. It may be a salutary lesson to all concerned that debates can be conducted in a more constructive fashion.

The Minister is telling us all to keep our nerve.

I refer to society in general. We all recall the various representations and so on.

The Deputy has raised the important issue of the impact of exchange rate movements, particularly in the case of sterling and the United States dollar, on the price of goods in this jurisdiction. The National Consumer Agency has raised this point with retailers. Some retailers make the case that they have entered into long-term agreements with suppliers and so on but that we can expect the situation to adjust in the coming weeks or months to reflect exchange rate movements. However, the National Consumer Agency shares the Deputy's concern that, in some instances, the prices charged by retailers reflect the price level that the latter anticipates the Irish market can bear as opposed to taking into account the movement in exchange rates. The agency will continue to exert pressure on retailers to ensure they pass on to consumers the benefits of the euro's appreciation in value. We will continue to undertake price surveys to ensure consumers are aware of the types of savings that can be made.

Will the Minister ensure that all goods are priced in euro rather than having a situation where goods in some retail outlets are priced in sterling or other currency denominations? There must always be a clear indication of the cost in euro. This might seem a strange inquiry but I have a reason for making it. The euro price of every item must be plainly visible to the consumer.

I will get back to the Deputy on that.

Skill Shortages.

Deirdre Clune

Question:

5 Deputy Deirdre Clune asked the Minister for Enterprise, Trade and Employment his views on the reported shortage of skills in the financial services sector; if, in view of the recent global downturn, this shortage still pertains; and if he will make a statement on the matter. [16949/08]

In December, the expert group on future skills needs published its report, Future Skills and Research Needs of the International Financial Services Industry. This report identifies the skills requirements of the international financial services industry in Ireland and sets out a blueprint for the future skills development required to ensure the continued growth and success of that industry.

According to the expert group's report, companies are experiencing shortages or difficulties in sourcing qualified staff, with several skills shortages identified, including shortages of fund accountants, accountancy staff, financial analysts and actuaries. In addition, the report also found that there was a shortage of people with adequate skills in maths, economics, risk management and compliance.

The research underpinning the expert group's report was undertaken before the recent economic downturn, which has affected the global financial services industry. It is too early to assess the impact of the international credit crisis on the demand for financial skills in Ireland. The Government is monitoring the situation on an ongoing basis. As the expert group's report focuses on the long-term development of the international financial services industry in Ireland, it is likely that the skills shortages identified by it are ones that require to be addressed irrespective of the short-term economic outlook. The skills identified are highly specialised and in short supply worldwide. It is a global phenomenon.

I ask this question in light of the report of the expert group on future skills needs to which the Minister referred and the recent announcement by the Tánaiste and Minister for Finance, Deputy Cowen, in Belfast of what was described as a win-win situation. Recent media reports point to an estimated 8,000 to 9,000 vacancies in the financial services sector. This is alarming. If the international financial services sector in Ireland is to remain vibrant, we cannot afford such a shortage of skilled personnel. That will only contribute to the erosion of our competitiveness and productivity.

The Minister acknowledges that action must be taken to address the skill shortages in this sector. We have spoken before about the skill shortage in the science and technology area. What are the Minister's plans in this area? In both cases, part of the solution lies in encouraging students to take up maths, science and business subjects. The expert group also issued recommendations in regard to the research agenda, encouraging communication between academics and the industry. A similar approach is required in the area of science and technology. We do not have time to delay given the level of shortages.

The international financial services sector has grown dramatically in this State in the last two decades. For example, banking assets have trebled from €422 billion in 2001 to €1.2 trillion in 2006. The numbers employed in financial occupations had grown to 148,000 in 2006, approximately 22,000 of whom are engaged in international financial services. I meet the representative group for financial services companies, Financial Services Ireland, on an annual or biannual basis. Last week, I accompanied IDA officials to the United States where we met representatives of some of the financial services companies with significant operations here. I also attended a meeting in Milan with representatives of Italian financial services companies operating here.

Skill shortages are a global phenomenon. We are working with several third level institutions on the research side. For example, Enterprise Ireland supported the business information systems programme in University College Cork with a view to developing a financial services centre that would work on particular skill levels for the industry. On a nationwide basis, we are working to develop and enhance capacity in financial services programmes in universities so that we can attract those seeking to obtain advanced qualifications.

We have asked the Higher Education Authority, HEA, and the financial services industry to agree on short-term priorities in regard to skills needs. The HEA has already consulted the universities and institutes of technology to provide them with an opportunity to respond to its report. The HEA and Financial Services Ireland are currently organising a joint seminar designed to respond to the expert group's recommendations on education and training. Once that has been held and agreement reached on the types of course provision required to address the skill shortages, a call for proposals to provide such courses will be issued. The work is in progress, therefore, in terms of identifying what is required and who can best provide it.

The Minister said he met representatives in Milan and the United States of companies with operations here. Did these representatives draw his attention to particular skill shortages? In regard to the Tánaiste's reference to a win-win situation, does the Minister envisage that the more than 8,000 vacancies in the financial services sector will be transferred to Belfast? Is it the case that the main offices will be based in Dublin and the back offices in Belfast?

What has occurred in the last three years is a regional development of financial services. Companies whose representatives I have met include State Street in Kilkenny, Citco in Cork and IFS in Drogheda and Naas. There has been a significant churn in financial services in Dublin. The representatives of every company we meet highlight skill shortages. It is a significant problem in the United States, for example.

Our green card system is important in this regard because it provides reassurance to investors that we have the wherewithal to provide personnel with the necessary skills, whether among the indigenous population or among those who obtain a green card. The accession of ten new member states to the EU has created a critical mass to which we can point when seeking investment from abroad. Our partnership with the North can work to the advantage of both jurisdictions. We are anxious to develop the Border areas in Donegal and maximising the mutual strengths in Northern Ireland and here to create a greater volume of economic activity has obvious advantages for both jurisdictions.

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