Since 1965 the country has undergone major social and economic changes. In particular, we have moved from a situation of rapid economic growth into a prolonged period of recession and extremely rapid structural change. This has led to a large increase in unemployment from 7 per cent in 1965 to 17.9 per cent today. The unemployment problem has been exacerbated by demographic and social factors. In the 20 years since 1965 the population has grown by 653,000, an increase of almost a quarter, while the labour force has grown by about 150,000 influenced, to some extent, by the participation of women in the paid labour force.
The current level of unemployment remains unacceptably high. The growth in unemployment has, however, levelled out and seems to be stabilising. The increase in unemployment must be seen in the context of an increase in the labour force of 27,000 between April 1982 and April 1985.
Certain groups in the labour market such as the young unemployed and the long term unemployed suffer particular difficulties. As regards young people, employment and training programmes are at high levels since the introduction of the youth employment levy in 1982. In Ireland, the proportion of total unemployment accounted for by youth is now one of the lowest in the European Community despite our having proportionally the highest youth population of the member states.
Long term unemployment is now a major problem. Between April 1980 and April 1986, the number of long term unemployed in Ireland increased from 31,000 to 104,000 and now represent 44 per cent of all registered unemployed. I should explain the term "long term unemployed" is used to denote people who are 12 months or more without a job. About 25 per cent of the unemployed have been out of work for three years or more.
The general employment problem, and the particular problems of youth and long term unemployment, are not unique to Ireland. In the EC there are 16 million out of work and the figure for the OECD area is a staggering 31 million, nine times the population of Ireland. As a small, exposed and export-led economy, our ability to tackle the problem is greatly dependent on improvements in the economies of our European partners. For the EC and the OECD the projections are for an increase in the growth rate during the coming years. This will not, however, be adequate to reduce unemployment significantly. In Ireland the outlook is similar. In spite of increased growth there will be little prospect of a large scale decrease in unemployment in the immediate future.
In the 21 years since 1965 there have been major changes also in the occupational and industrial composition of our workforce. The numbers employed in the service sector have increased by over 160,000 and industrial employment has grown by 11,000. Agricultural employment, however, has fallen by a staggering 165,000.
All indications are for a continuing difficult employment situation accompanied by major changes with consequential effects for the labour market.
Quite apart, however, from the changes in the economic and social situation, the last 20 years have seen major changes in what we are doing in the manpower and related area. For example, in 1965, with the exception of CERT and vocational education schools, there was little or no training being done and AnCo were only on the drawing board. Today, AnCo are training nearly 15,000 people at any one time. In addition, we have the comprehensive and community schools, the regional technical colleges, the national institutes of higher education, and increased engineering and scientific capacity in the more traditional third level educational institutions. There has been the most extraordinary expansion in educational opportunities in that period.
There have been significant developments also in the assistance we provide to the young unemployed through permanent and temporary employment schemes, work experience and training. In 1981, the year before the establishment of the Youth Employment Agency, employment and training schemes catered for 22,500 young people. In 1986, employment and training schemes and the vocational preparation and training programme will cater for 66,500 young people.
In the period since Ireland joined the European Economic Community the form and orientation of our manpower programmes reflect not only domestic policy on maximising our resources, but also the influence of the European Social Fund and its structure. In the current year the inflow of about £120 million shows how the fund has served to increase the capacity of our employment and training schemes to a level that could not be sustained from our own funds.
Our manpower agencies have done and are doing a lot to facilitate the general economic development of our country and in particular, to help the unemployed. Despite the high unemployment rate, our labour force are better educated, trained and individually and collectively more productive than in 1965. In addition, a significant range of measures have been developed to assist the less advantaged and the unemployed. In 1986, on average over 40,000 are being assisted on various employment and training schemes.
On my entry to office as Minister for Labour, I undertook to put our approach to manpower policy in this country under the microscope. I recognised that this called for more than just another change of emphasis within an existing policy framework.
Manpower policy has a major contribution to make in reducing unemployment through the provision of a trained workforce and the administration of employment schemes. On its own, however, it cannot solve the problem and is but one element of an overall employment policy. New policy measures and new working methods are obviously needed to cope with the demands created by the labour market conditions I have described. On the basis of the policy objectives and the streamlined institutional arrangements contained in the White Paper, I am confident that manpower policy will in the future play a more central role in the development of our workforce and the continued fight against unemployment.
A number of important innovations characterise the integrated approach which will determine how our employment and training services must be planned and organised in the context of an active labour market policy. The White Paper has signalled eight important developments. These are: first, the significance of the emerging change in labour force structure as between different age categories; second that the allocation of training grants to industry will be based on a more selective and strategic approach; third the development of a more flexible, cost-effective, and relevant system of apprenticeship training; fourth that an integrated, comprehensive training system is necessary to provide the skills training necessary to meet the needs of our economy; fifth the practical arrangements which are needed to achieve greater co-operation between the education and manpower authorities in the transition from school to work and in the provision of vocational training and preparation; sixth how changes can be made in the range of employment schemes to improve their effectiveness and in the manner in which conditions reflect labour market circumstances. The Direct Action Programme is an example of how a consistent and systematic approach can target support to a particular category, like the long term unemployed, on the basis of co-ordination on the part of all the manpower services and the Department of Social Welfare; seventh, the need to develop a comprehensive programme of action to improve the level of access and the range of options available to women in the labour market and, eighth, the development of arrangements to decentralise and devolve the effective delivery of manpower services so as to improve their effectiveness at regional and local levels.
I am convinced that the new policy directions I have identified — and the improved penetration and effectiveness of existing services — can only be achieved by integrating the existing manpower agencies into one body. I know that I have the support of the vast majority of Members of the Dáil, if not all Members, in my belief. We have had very productive and constructive debates in this House on this topic over the last two to three years. This is in no way to be interpreted as a criticism of existing bodies, all of which were set up to do a particular job by different Administrations at different times.
There are compelling arguments supporting a single integrated organisation. There is confusion in the minds of the public as to who does what. At present manpower services are provided by four agencies, namely AnCO, CERT, the National Manpower Service and the Youth Employment Agency. The existence of four bodies makes it more difficult to establish clear priorities between various programmes and to place these activities within a comprehensive economic and social framework. The increasing rate of change demands quick decisions and points to the need for a single body rather than a four-pronged response. Finally, the establishment of a single body will lead to economies of scale and better integration.
The major part of the Bill before us is concerned with the establishment of this new body which will be called the National Employment and Training Authority. The new authority will take over functions at present exercised by the four existing agencies. Once the new authority are established, the four existing agencies will cease to exist.
It would be remiss of me during this address not to pay tribute to the excellent work done, and continuing to be done, by the staff of the existing manpower agencies. Many take legitimate and justifiable pride in the work of their organisations. Concern has been expressed over their entry into the new larger authority and whether it might affect their commitment and loyalty. It is my policy fully to maintain the high level of morale and dedication that is already there and utilise it to the fullest extent for the benefit of the country in a fully integrated body.
In brief, the functions of the authority listed in the Bill are training, retraining, administration of employment schemes, work experience programmes, placement services, assistance for co-operatives and small enterprises, and the operation of the EC free movement of worker provisions.
We are also taking the opportunity of providing for the possibility of using existing training expertise to help the economic development of newly industrialised countries. There are legal doubts as to whether AnCO has the power under the 1967 Industrial Training Act to operate abroad. The Bill contains a specific provision which gives the new authority power to undertake the provision of consultancy and manpower-related services overseas, but only on a strictly commercial basis. To ensure that this activity is carried out according to commercial criteria the authority is obliged to set up a separate subsidiary company for that purpose.
The structural weakness at the core of manpower policy has prompted criticism of the failure of Ministers and their Departments to exercise an effective policy-making role in relation to the State-sponsored bodies under their control. This criticism, familiar to Deputies, maintains that the policy role has been allowed by default to be discharged in practice by executive bodies. Such a failure results in the functions of the body not being properly located within a comprehensive economic and social framework. In parallel with the establishment of the new authority, I recognise that the Department of Labour need to be strengthened so as to assume responsibility for developing policy as envisaged in the White Paper and for monitoring performance and providing policy specifications to the new authority. In future, the central control and direction of policy will rest with the Minister and the Department of Labour. The authority will be responsible for the execution of policy already determined.
I accept that the distinction between policy formulation and policy execution is easier to draw in theory than in practice. The reality is that policy tends to evolve in part, at least, in the process of its execution. In that context the authority will also have an important input into policy and a legitimate role to play in advising on policy. In order to enable the Minister to exercise ultimate control, provision has been made in the Bill to enable him to issue directions and to request information in relation to any of their activities or expenditure.
In the legislation we are providing for the transfer of the staff in the existing four agencies to the new authority. We are also saying that there will be no lessening in pay or terms and conditions of service. It is my intention to minimise any uncertainty over the transfer. For this reason, I have asked the chairman of AnCO and the Youth Employment Agency, who is also the chairman designate of the new authority, to prepare an organisational structure for the new authority. This organisational structure will be available soon and will be communicated to the existing chief executives for discussions with their respective staffs early next month. The structure is not intended to pre-empt a decision by the new authority. Rather it is intended as a basis to minimise uncertainty and to assist the planning that will allow the authority to become operative as soon as possible. My intention is that the staff should be treated fairly, consistent with the proper functioning of the new authority.
The Government have also decided to convert the youth employment levy into a general employment and training levy. This decision was taken in the context of the changing age structure of the labour force and those who are unemployed. By 1990 over half the workforce will be in the 25-44 age group. This does not mean that there will be a consequent reduction in the provision for youth. The employment and training activity of youth will be determined in the light of prevailing levels of unemployment. The removal of the age restriction will, however, ensure a greater degree of flexibility in the allocation of resources in the years ahead and will enable programmes to be adjusted to take account of the changing needs of different unemployed age groups. It will also reduce the cumbersome administrative constraints required in the operation of schemes for those under and over 25 years old. In the foreseeable future, I would foresee a major youth dimension in the work of the authority.
Finally, I come to the question of the composition of the board of the new authority. In deciding upon this question I was influenced by the need to have those bodies active in the labour market represented on the board and, at the same time, ensure a small board consistent with effectiveness and efficiency. I have balanced these two objectives by opting for four employer representatives, four representatives from the Irish Congress of Trade Unions, one youth representative, one representative each from the Departments of Education, Social Welfare and Labour, two employee members and two other representatives, including the chairman, to be appointed by myself. The employee members of the board will be elected by the staff of the authority as soon as possible after the establishment of the authority. Initially, therefore, the board will consist of 13 ordinary members. There are other options but this composition in my view, represents the best compromise between being representative and being effective.
I believe that enactment of the Bill before us will make a significant contribution to the development of our workforce and I commend it to the House.