Dáil Éireann debate -
Thursday, 9 Jul 1981

Vol. 329 No. 4

Employment Guarantee Fund (Amendment) Bill, 1981: Second Stage.

Minister of State at the Department of Finance (Mr. B. Desmond)

I move "That the Bill be now read a Second Time."

The second national understanding provides for a Government contribution to a new Employment Guarantee Fund, and the previous Government were committed to making £10 million available for that purpose. This Government are prepared to fulfil that commitment.

While the text of the second national understanding speaks of a new Employment Guarantee Fund, no practical purpose would be served by setting up an entirely new fund, rather than extending the existing fund, and there would be considerable administrative complications in doing this. I am satisfied, there-fore, that the best way of fulfilling the commitment under the second national understanding is to provide further resources for the existing fund.

The purpose of this Bill then, is to amend the Employment Guarantee Fund Act, 1980, so as to permit a further Exchequer contribution of £10 million to the Employment Guarantee Fund under the second national understanding. It is proposed to amend section 4 of the 1980 Act so as to increase the limit on the amount which may be paid into the Employment Guarantee Fund out of moneys provided by the Oireachtas from £10 million to £20 million. Amendments to section 7 of the 1980 Act are also required so as to provide for:

(i) an increase of the limit on aggregate payments out of the Employment Guarantee Fund from £20 million to £30 million;

and

(ii) the winding-up of the Employment Guarantee Fund when the aggregate expenditure from the fund reaches £30 million, instead of £20 million as provided for in the 1980 Act.

The Employment Guarantee Fund under the first national understanding comprised a Government contribution of £10 million and an employer contribution —also of £10 million. This latter contribution was collected by means of a 0.35 per cent surcharge on the employer social security contribution for the period 6 April 1980 to 5 April 1981.

The £20 million which accrued to the Employment Guarantee Fund under the first national understanding has all been allocated for a very wide variety of job-creating projects. Some of the more important of these were the following:

Five million pounds was allocated for the employers' temporary subvention scheme for the textiles, clothing and footwear sectors. This replaced the employment maintenance scheme, which had been terminated following objections to the scheme on the grounds that it represented a distortion of competition contrary to the Treaty of Rome. It operated from April to December 1980 and both employer and labour interests have testified to its importance in securing employment in sensitive and vulnerable sectors. It has been succeeded by the employers' employment contribution scheme, which I will further comment on shortly.

£3.5 million was allocated for the national programme for the provision of sports and recreational facilities throughout the country. In recent years there has been an increasing awareness of the value of physical recreation in our daily lives and the response to the national programme at local level has been extremely enthusiastic.

£2 million was allocated towards an exchange risk guarantee scheme operated by the Industrial Credit Company in respect of borrowing in foreign currencies to provide additional working capital for small-to-medium sized firms in manufacturing industry. This scheme had the purpose of facilitating the creation and maintenance of employment in small manufacturing concerns and in labour intensive industries and was adopted in response to repeated demands for such a scheme from the Confederation of Irish Industry and other bodies.

£2.3 million was made available for the environment improvement scheme which provided valuable employment opportunities for young people on work designed to improve local environmental amenities thus making Ireland a cleaner and more attractive place in which to live and, equally important, to visit.

£1 million was made available as supplementary finance for the temporary grant scheme for youth employment which is administered by the Department of Education and was introduced in early 1977. This money was distributed through the national governing bodies of youth and sports organisations for the employment of young people on desirable small scale projects in youth and sports clubs throughout the country.

Almost £1 million was given to Bord Fáilte for the creation of employment through the provision of a wide range of tourist and recreational facilities. The most important of the projects being undertaken under this heading is the development of a caravan and camping park in Curraghchase Forest Park, some ten miles south of Limerick city. This development is sponsored by Shannonside Tourism and will provide a focus for visitors to that part of the country, especially young visitors.

A total of almost £1 million was made available for the development of airport facilities in Sligo and Waterford. Both of these new regional airports will be operational by the end of this year and will enhance the attractions of Sligo and Waterford as centres for industrial development and for tourism.

There is a total of 33 projects aided from the original provision of £20 million in the Employment Guarantee Fund. Those which I have mentioned are the most important and they show, I believe, the positive contribution which the Employment Guarantee Fund has made and will continue to make.

Employment created as a result of expending the original £20 million accruing to the Employment Guarantee Fund under the first national understanding will amount to 2,800 man-years of employment approximately. Of these, 1,800 man-years arose in 1980 and 1,000 in 1981. Employment arising from the further Exchequer contribution to the fund of £10 million will be additional to this.

In deciding on the uses to which the further sum of £10 million for the fund provided for under this Bill, the Government will consult with employer and trade union representatives. The close involvement of the social partners in the allocation of the original £20 million accruing to the Employment Guarantee Fund under the first national understanding partly arose because, as previously mentioned, the employers were contributing 50 per cent of the available moneys. There will be no employer contribution to the Employment Guarantee Fund under the second national understanding; the Government will alone contribute. However, employers will contribute voluntarily 0.2 per cent of payroll towards financing a further new scheme of aid to sensitive and vulnerable sectors. This scheme, which will be known as the employers' employment contribution scheme, replaces the employers' temporary subvention scheme funded from the Employment Guarantee Fund. It received the approval of this House before the dissolution. It operates independently of the Employment Guarantee Fund and is administered by the employer organisations themselves.

Finally, I would like to say that this Government look forward to fruitful dialogue with the social partners. There are many features of the common programme agreed by the two parties represented in this Government which meet concerns felt by either or both employers and workers. The appointment of my colleague, Deputy Kavanagh, as Minister for Labour and Minister for the Public Service is further evidence of this Government's determination to approach our dealings with the social partners in a realistic and constructive manner. I would hope that, given the seriousness of our economic problems, we will meet with a similar response.

I am pleased to see Deputy Fitzgerald in the House this morning. I appreciate the enormous pressures he must have been under in relation to previous disbursements from the fund. On behalf of the Minister for Finance I must say that at the moment we are not entering into an absolute commitment in regard to the £10 million disbursement. We must have a look at the situation.

I was one of those who brought great pressure to bear on the previous Minister. I was chairman of Dublin County Council and we were screaming for additional moneys from the Department of Finance. Dún Laoghaire Corporation were also looking for money, temporary subventions. Now there is a new situation because there is an additional £10 million. The Minister will have to assess any outstanding demands and any new claims and we will endeavour to put forward in the near future a complete list of proposals for the expenditure of that money. I thank Deputy Fitzgerald for his understanding, and for his work when he was faced with a similar situation.

Mr. G. Fitzgerald

Needless to say, I support the Bill but before going on to speak on it, a Cheann Comhairle, I wish you success in an office which is at all times difficult, but probably more so on this occasion with a hung and uncertain Government. I wish you every success in that exalted seat. Likewise I congratulate Deputy Desmond, the Minister of State. For a number of years we spoke to each other across the House and although we may have crossed swords I do not think we ever sank them too deeply. Some within the House, and outside, are probably disappointed that Deputy Desmond did not get a higher posting because his contribution here over the years no doubt appeared to have entitled him to a senior Cabinet post. I wish him well in his new role as a Minister of State.

As regards this Bill, one could say the Employment Guarantee Fund has been the baby of the national understanding. The first one which was negotiated in 1979 produced the Employment Guarantee Fund and, as the Minister says, a different concept of joint funding by Government on one hand and the employers to a contribution of .35 per cent from the other side. In the second national understanding, which I had the honour of negotiating, a further commitment was made in the Employment Guarantee Fund. I agree with the concept of this Bill, being an amendment of the 1980 Act, to add an additional £10 million. It is an extremely important aspect of funding today. I have described how it was introduced and I would ask the Minister of State to convey to the new Minister for Finance the view that it is a method of funding that could be described as a strategic arrangement. There is a reference in the original Bill, in section 3, that the Minister should apply the moneys to the credit of the fund for the purpose of defraying expenditure on projects or schemes which in his opinion would result in the creation of additional employment or maintenance of existing employment. That is why I say that one could describe it as a strategic fund, not funding in the normal way. It has been used well already and I sincerely hope it will be used just as well in the future. On this side of the House we shall be acting as watchdogs to ensure that the Government have meaningful consultations with both sides of industry in regard to initiatives of this nature. I have no doubt about the commitment of the Minister here in that regard and I hope that all his Cabinet colleagues subscribe to the same idea to the same extent as I know he does. Time will tell if this is so. We shall keep a very close eye on the disbursement of this fund, on consultations regarding it and other aspects of the national understanding itself since this fund was born of the national understanding.

Perhaps I should refer to some points mentioned by the Minister in his introductory speech. He said that in last year's fund £5 million was provided for the temporary subvention scheme for employers in the clothing, footwear and textile industries. I say with pride and claim credit for the fact that in 1978 we in Government introduced a scheme of this nature. We had some difficulty with it on the ground of its acceptability to Brussels. After a period of operation subsequently with the co-operation of trade unions and employers we succeeded last year in having acceptance again in Brussels of the employers' temporary subvention scheme.

This year another difficulty arose because specifically the allocation under this fund and the acceptance of it in Brussels had come to an end and could not be renewed. Many hours of difficult and delicate negotiations took place, here with the employer organisations and in Brussels with the Community. I thank all concerned there for eventually reaching an arrangement whereby £6.5 million is being provided through employers' contributions to a separate employers' fund to aid ailing industries. Having experienced the effort put in by those people I want to pay a very sincere tribute to all concerned because we had many difficulties to overcome and many delicate situations to negotiate, involving many hours of effort. I compliment and thank all concerned for their help and co-operation in the introduction and implementation of this scheme.

There is a voluntary contribution of .2 per cent. The .35 per cent we spoke about died with the expiration of the original guarantee fund. I wonder how much more we shall hear in the coming weeks about contributions because we have had a number of manifestos and we had talk of a 1 per cent employment contribution—I am not sure by whom or whether it is to be confined to the PAYE sector or will it include others—a health contribution charge of 1.5 per cent and a contribution of 3.75 per cent on earnings over £8,500. The public and this House are very interested in all these and want to know what will be the likely outcome in the coming weeks. Concern is being expressed. We all agree about the necessity for job creation and maintaining employment. Our young, growing population need it. But because of confusion existing from two manifestos, one presented by each party in Government to the electorate and another which was never voted on by the people prepared at the Gaiety Theatre, it is time that the House and the public were made aware of all that is meant by these charges.

There was another very valuable contribution from last year's fund to sports facilities and youth amenities so badly needed in urban and rural Ireland. I got acceptance and agreement for it and I do not think the Minister opposite can avoid it. I made a commitment that money would again be available this year for such facilities because I believe they are a top priority. It is extremely important that we provide as far as possible for our young and growing population and support particularly communities that are doing something themselves. We should provide all the facilities we can for all groups in our society but particularly for the young. A happier and healthier society can prevent the type of development we have seen in places such as Liverpool recently.

I gave my blessing in other areas such as that involving Córas Tráchtála. The Minister will have seen how our exports have grown this year and how much more potential for export growth there is and the contibution this can make towards employment as it is making and has been making. In my time as Minister for Labour there was another institution I respected because of its type of administration and its governing body drawn from trade unions and employers. I refer to the Irish Productivity Centre which have been doing and continue to do valuable work in many different areas. They act in an advisory capacity to small and medium companies and engage in exploratory work, advisory work and in worker participation schemes. Other projects were assisted also.

I believe the concept was a good one. It formed part of the national understanding and it is important that this year meaningful consultations take place with the participants in the national understanding. We need not have a tripartite committee operating the fund as we had in the past because of the new arrangement with a Government contribution only but that does not mean that worthwhile and meaningful consultations should not take place. The disbursement of the fund to date has been wise and I should like to take the opportunity of thanking both bodies for their assistance and co-operation in the disbursement of the fund to certain projects. I have no doubt that pressures will be brought to bear on the Minister, as happened in the past. How does one advise the Minister in this regard? He should use his expertise and experience to see how best the most deserving and productive project from an employment and maintenance point of view can be supported.

That is the best advice I can give the Minister and I should like to remind him that in regard to such matters he will find us, as always, constructive in our approach. We may be critical at times but we will not be critical for the sake of being critical. I should like to repeat the words used by our Leader on the opening of the Dáil, "without personal rancour". We saw too much of that from those now in Government when they were in Opposition. We will never sink to such depths and the Minister can rest assured of our support for any worth-while projects. We will criticise those we consider not worth while but we will tell him how they can be improved. Above all, we will adopt a watchdog role to ensure and insist that efforts are made to assist in the creation of employment at all levels and for all age groups but in particular for our young and growing population.

Mr. Sherlock

I welcome the Bill which seeks to provide necessary finance. There is a need to ensure that the finance when made available is utilised in conjunction with the National Manpower Service. That body should play a greater role in ensuring that young people who have not yet drawn a wage packet—I am referring to those between the ages of 17 and 21—are employed on environmental schemes or other schemes operated by local authorities from this fund. The National Manpower Service should have a say in placing young people who are deprived of work in employment for a period. If that is one of the results of the establishment of the fund I will accept that it is worth while. The National Manpower Service is engaged in a cosmetic exercise rather than being in a position to place people in employment. The service should have a say in the placing of people in employment when money is made available by the State to create jobs. I do not agree with the system we have whereby employers advise applicants that they must register with the National Manpower Service.

Mr. Nolan

I should like to join in congratulating the new Minister on his appointment. I assure him that we will be constructively critical as he was when he was a very active Member in Opposition. I was following his script in the course of his delivery and I noted that he said, "Finally, I should like to say that this Government look forward to continued fruitful dialogue with the social partners" but the word "continued" was not in the script. It is a great tribute to the Fianna Fáil Government that they had excellent working relations with the social partners, the Irish Congress of Trade Unions, the Federated Union of Employers and the farming organisations. We held regular meetings with those groups and discussed all the problems of the economy. I have no doubt that the Minister will ensure that such dialogue will continue because unless there is a proper working relationship between the Government and the social partners the Government cannot work properly.

I welcome the measure before the House. Each year approximately 64,000 young people come on to the labour market and when we realise that at the other end of the scale the number of people who retire, leave employment or die is not sufficient to cater for the number coming on to the labour market, we must admit that we have a social problem. It was for that reason that Fianna Fáil in Government introduced various programmes to create employment for young people. One of the reasons why the number of unemployed is so great today is because of a growing population. Even though the number of new jobs created by Fianna Fáil in the last four years was the highest since the foundation of the State, it did not take up the rapid growth in our population. While in office Fianna Fáil introduced five special schemes which I should like to refer to, the Community Youth Training Programme under AnCO, the Temporary Grant Scheme for Youth Employment, operated by the Department of Education, the environmental improvement schemes, the work experience programme of the Department of Labour and the employers' employment contribution scheme.

The AnCO training programme was established to give extra training opportunities to young people. It was designed specifically to supplement AnCO's existing training programme by offering opportunities to young unemployed people up to 20 years of age with no previous work experience. When they took full-time employment they had experience of work. In 1980, 2,071 people availed of that programme and most of those remained in employment after the period of training. The temporary grant scheme for youth employment operated by the Department of Education provided for the payment of grants to youth and sports organisations. I do not think anybody knows more about that scheme than the Leas-Cheann Comhairle. I should like to pay tribute to him for the wonderful work he did in that field. In 1981, 1,850 people participated in that scheme.

The other schemes implemented by local authorities are well known to the Members of this House. We also had the work experience programme administered by the National Manpower Service. That programme was designed to help unemployed young people under 25 years of age but particularly those in the 18 to 20 age group, who were experiencing difficulty in securing suitable permanent employment to gain practical experience of working life which is a valuable asset to them when seeking full-time employment. The throughput in that field in 1980 was 7,258. I do not want to go into any further detail in connection with the most recent scheme introduced where employers will provide a total of approximately £8 million towards funding employment and preventing redundancies in what we call the sensitive industries such as textiles, footwear, leather and so on except to put on the record our appreciation of the fact that they are providing that fund. We know that the net figure will be £6.5 million because a portion of that must be paid by way of tax to comply with the community regulations. But we on this side of the House appreciate the wonderful co-operation we got from the Federated Union of Employers in preventing further redundancies and a further number of people going on the unemployment register.

Recently of course the OECD have been carrying out a survey in connection with the problems of youth unemployment. Indeed they are doing it in several countries. It was one of my last functions as Minister for Labour to have the pleasure of meeting Mrs. Shirley Williams with her team of advisers to discuss in general the problems in relation to youth unemployment. I will be looking forward, and I am sure the Minister will, to the report of the OECD when it becomes available.

Mr. Lyons

Ní mór dom ar dtús comhghairdeas a dhéanamh leat as ucht gur toghadh thú mar Leas-Cheann Comhairle ar an Dáil seo. Déanaim comhghairdeas chomh maith leis an Aire Stáit. Tá súil agam go ndéanfaidh sé sár-obair san Roinn sin.

I wish to make a few observations on the relevance of the Bill before us now. It is welcome for a number of reasons but principally for its ongoing commitment to activity that was provided for by the previous administration. Many aspects of the Bill commend themselves. I am glad the new administration is honouring the increased commitment of £10 million made by the Fianna Fáil administration. The amount of activity and work created by this Employment Guarantee Fund and the input by the social partners to it must be one of the best things that has happened to this country for a number of years. National understandings, as negotiated by the social partners, were so effective and so beneficial to so many people that I certainly hope that we will be able to continue to have these agreements and understandings for the economic benefit of all of us.

Mention has been made of the young people in our society of which there are growing numbers year by year. In making reference to national resources I contend that one of the best national resources we have here is our young population. I believe that other nations around the world, though they may not say so, are envious of that national asset that we have. But it is incumbent on the Oireachtas to provide for the future of those young people. The Employment Guarantee Fund of which we are speaking today, and the activity of the Department of Labour, will have to be watched very carefully and constructively criticised where necessary to ensure that all of its activities are designed and are followed through to help these young people. As one associated with young people for many years through sporting activities, I truly realise the need to provide an outlet for their energies and also an outlet for their education. Many of them now have access to these at third level. My generation did not have free access to these. It is a good thing that we can now have available free second level education for our young people. It would be a pity if with the expense incurred in the provision of that, the employment structure did not adequately and sufficiently cater for these young people, whether they leave school at second level or pursue third level education.

It is necessary and totally desirable that the trend of graduates leaving the country to seek employment in other countries would be stopped and that we, beyond the economic sense, would have the benefit of the education that we have provided for them and that they too would have a bit of national pride in a nation that was well prepared and is being prepared for them. It will be up to us to see to it that they are properly provided for and cared for.

It must be said that in the past few years, with the changing style of technology here and around the world, the efforts of the Department of Labour through the National Manpower Service and the AnCO Training Service, have filled a void in technical training. Technology that was needed had not, perhaps been provided for before then. In this respect the Department have done tremendous work in recent years.

In talking about young people. I am convinced that there was a loss to the programming for the development of our nation because of the inability of the previous administration to take a census when it was due to be taken. We have suffered in the calculations and the projections that would accrue from the taking of such census. I hope we can recover from that unfortunate incident. With such a rapidly changing shift of population and the increase in the number of young people, it is vital for Departments of State to have the relevant data available to them in order to plan ahead. The fact that the census was not taken at that time was damaging to the economy. I hope we will never again refuse to have a census of population conducted just for the sake of £1 million.

I should like to refer to the allocation of £1 million in respect of the temporary grants scheme for youth employment administered by the Department of Education. The Leas-Cheann Comhairle had responsibility previously for that scheme and the money was well spent. Getting young people to involve themselves in the provision of their own community centres and recreational facilities is of tremendous value of them. I am glad to see that the scheme is being continued. With regard to money from the scheme that was given to local authorities — I am speaking of a local authority of which I am a member — they failed to spend all of the money. I was disappointed that happened and the necessary steps will be taken at local level to ensure it does not recur.

The Bill is worthy of our support. It is a continuation of the work of the previous administration. That good work was started by the two former Ministers in the Department of Labour with the assistance of the former Minister for Finance who gave the money. We will pay special attention to ensure that work on the various schemes is continued. I hope the money guarantees will be kept and that the Employment Guarantee Fund is extended and developed.

Money has been provided to help the textile industry. As far as I know the relevant scheme was introduced in 1979 and, if I may be permitted to be a little parochial, I am sorry it was not introduced earlier. In the area I represent a textile industry that had existed for 250 years of trading went to the wall in the mid-1970s. If a scheme such as the Employment Guarantee Fund had been in existence at that time some 500 jobs could have been saved. However, that is history. I wish the Minister of State every success. I assure him of our support and of our constructive criticism when it is necessary.

Minister of State at the Department of Finance (Mr. B. Desmond)

I should like to thank Deputy Fitzgerald and my colleagues in the House for their good wishes in my future work. They were much appreciated. I should like to make some general observations on the overall operation of the scheme to date. With regard to future disbursement of the £10 million, there is a serious need to re-examine the general criteria under which disbursements are made. It might be argued that in regard to the maintenance of employment at local authority level the appropriate disbursement would be through the Department of the Environment and that the Estimate for that Department would be the most appropriate budgetary method of meeting shortfalls in employment targets within local authorities or in dealing with major dangers of loss of employment in local government. It might be argued that where major job maintenance crises arise within industries the disbursements and assistance should be administered by State agencies. With regard to the provisions of sports and recreational facilities, it may be that the allocations concerned would be most effectively dealt with through the Department of Education.

I say this because it is inevitable that, where a fund of this nature is established, where it is administered by a tripartite standing committee of Government, employers and trade unions and where the Minister for Finance is subjected to enormous pressures from a range of interests and when he has a limited amount of money available, inevitably political criteria and pressures build up to such an extent that the fundamental purpose of such a scheme which should relate to job creation and particular aspects of job maintenance is changed. There is need to re-evaluate the criteria of disbursement. In relation to previous commitments entered into by the former Government which did not necessarily have formal sanction for payment these will have to be examined by the Minister. He asked me to make that point and it is important that I should so stress.

In relation to various State agencies seeking money, whether CTT, or Bord Fáilte, the appropriate method of disbursement is through their respective Departments and departmental Estimate. I speak as one who has recently examined the situation. I was one of the culprits in seeking support from that fund as chairman of Dublin County Council. We could have a situation where the real purpose of departmental Estimates, disbursements and assistance to State agencies in the work of job maintenance and protection could become so diffused that one would literally have Ministers sitting around trying to get a few bob for their areas. That is not the way to do it. Perhaps there are areas where there is no other recourse available except through the fund and then the fund could usefully come into play. We must distinguish between the areas of job creation, which are unique in themselves, job protection which is different and job maintenance which is again different.

If we are caught up in a situation where we spend some money on building an airport, a few bob in helping one industry to maintain employment and some money to build a sporting complex, the original purpose of the fund as set out under the national understanding, to meet shortfalls in employment targets, becomes diffused and subjected to political criteria rather than objective criteria for the development of job creation. I make these points in a general response to the overall position. I am speaking in a rather ex tempore fashion. That kind of fund, the operation of the national understanding, the £20 million which is disbursed and the additional £10 million, is purely an ad hoc measure unless it is integrated into a national planning strategy.

I can say, without any political rancour, to the former Minister for Finance that I was very taken aback and rather appalled that on going to the Department I found that the former Taoiseach, Deputy Haughey, had dismembered and scattered to the four winds the economic planning functions of the Department.

Mr. G. Fitzgerald

That is not true and the Minister knows it.

Mr. B. Desmond

I make that as a political point——

(Interruptions.)

An Leas-Cheann Comhairle

Order, please.

Mr. G. Fitzgerald

The Minister should not mislead the House.

Mr. B. Desmond

It is a point on which I shall elaborate in due course. I make it in a broad response to this Stage of the Bill. I am grateful to Deputies and thank them for their anxiety to have the £10 million sanctioned as quickly as possible. I should like to be given the remaining Stages of the Bill today and then we shall get down to work in assessing the criteria for allocation in consultation with the social partners. It is Exchequer money and there will be consultation with employer and worker organisations. Other views will be taken fully into account in any further disbursement. I thank Members for their co-operation on this stage.

Question put and agreed to.

Agreed to take remaining Stages today.