Theresa Ahearn
Question:27 Mrs. T. Ahearn asked the Minister for Enterprise and Employment the reason the industrial programme of the National Development Plan, 1994-1999, did not adopt net job targets, as recommended by the ESRI.
Ceisteanna — Questions Oral Answers - National Development Plan Industrial Programme.
The importance of targeting for net job creation is fully accepted by me. To this end, the National Development Plan sets as a goal the achievement of an annual net gain in manufacturing and international service employment of the order of 5,000 jobs. The achievement of this target will depend on improved annual growth rates in international markets compared with those that have prevailed in recent years and the adoption of appropriate pay and other policies in Ireland which impact on and improve the competitiveness of firms. The Government, for its part, will strive to ensure that the elements over which it has control will continue to make a positive contribution to net job creation.
Does the Minister recall the ESRI's warning that it would be absurd to ignore the causes of jobs attrition and to point only to gross job creation figures, as happened in the past week, with a figure of 200,000 jobs being mentioned? Would he not agree that the key reason the ESRI wanted to see net targets as the central objective was that there was a lack of effective policies to protect employment? The national plan fails to address the task of protecting existing jobs. This year there will be almost 20,000 redundancies. Would the Minister not agree that we need to concentrate on effective strategies for job protection, which is at the core of the ESRI's desire to see net targets being used?
I do not accept that the Government has been concentrating exclusively on gross job targets set out in the plan. The Taoiseach was criticised for being too modest and pessimistic in stating that we are facing in the order of 130,000 job losses, some due to technological redundancies in the industrial manufacturing sector and some to the continued loss of jobs in the agricultural sector. From the outset we said there would be job losses, over some of which we have no control. There are others over which we have a certain degree of control.
I have set up in the Department of Enterprise and Employment the competition and employment protection unit which is designed to identify in advance those jobs at risk due to lack of competitiveness, technological redundancy or other factors. Given sufficient advance notice, corrective action could be taken to ensure the preservation of jobs for a period of time during which they might not otherwise survive. We are aware of the ESRI analysis. The Department has taken specific steps to set up a competition and employment protection unit to assist firms and employees who feel that their jobs are under threat in the short to mid-term. We recognise that competitiveness in the broadest sense is essential if jobs are to be maintained in those sectors.
Does the Minister accept that the target for net jobs as outlined by the Taoiseach in the National Development Plan is extremely modest? Even without the £8 billion being provided from Europe we would be expected to achieve this level of growth. Is the Minister happy with the figures that have been outlined? Does he not think that net growth of a more substantial nature will be required if any impact is to be made in reducing unemployment?
One of the characteristics of the national plan, referred to by most independent commentators, is that it is factual and the figures contained therein are on the modest side rather than the over optimistic side. We have to start by telling people the truth, and the truth is, as Deputy Bruton indicated earlier, that redundancies in the private sector — that is where redundancies take place — will be in the order of 19,000 to 20,000 this year. In the past ten years or so more than 200,000 jobs have been lost in this sector. These are the facts and I am far from being happy with them, but to try to conceal or modify them will make nobody happy in the long run. We must deal first and foremost with the present situation. I suggest to Deputy Bruton that the way to proceed is to provide an early warning system for those firms individually at risk so that there would be sufficient time to respond. In overall terms costs in the national macro-economic structure, particularly labour costs, would be reduced.
I find extraordinary the Minister's comment that redundancies occur in the private sector. To suggest that there are no redundancies in the State sector is extraordinary, given what is happening at the present. It would be reasonable to suggest that redundancies occur right across the board.
I said that redundancies occur primarily in the private sector.
I do not know what that comment is based on.
I am sure the Deputy wishes to ask a supplementary question.
I am making the point that the State sector is as susceptible to the waves of industrial change as the private sector and the Minister should not exclusively focus on the private sector as opposed to the State sector.
It is interesting to see the Progressive Democrats lecturing the Labour Party.
In terms of the figures that have been enunciated, did the Minister and his Department have an input into these figures and, if so, will the Minister explain why my priority question dealing with this matter — the Minister has now replied on this matter which I raised as a supplementary question — was overruled earlier today? When I raised the matter with the Ceann Comhairle I was told the Minister had no responsibility for the job targets in the national plan.
I answer the questions that appear on the Order Paper and I do not intervene or attempt——
I appreciate that, but I am notifying the Minister that there is great difficulty——
Please allow the Minister to answer the question that has been asked.
I do not attempt to interfere and I am more than happy to answer whatever questions Deputies put down to me.
I accept that, but the Minister should suggest to whomever is concerned that he needs no protection on priority questions.
The Minister should be allowed reply without interruption.
Most redundancies have regrettably taken place in the private sector, but that is not to infer that redundancies have not occurred in the public sector. I was trying to convey that the scale of the problem is even larger than statistics suggest.
Will the Minister agree that the new unit set up in the Department is a phantom considering that 400 jobs per week are being lost? There is no evidence that this unit is active in saving jobs. Will the Minister agree, bearing in mind his figure of 5,000 net jobs in the industrial sector, that on the basis of the Culliton figures the net cost would be £120,000 per job per year? Because the Minister is not considering the issue of how to strengthen the companies that are in danger of losing jobs, that will be the result, with huge costs for employment.
I do not accept what the Deputy has said. The employment protection unit of the Department was established in July of this year, less than six months after the new Department was established on foot of a commitment in the Programme for Government. It will take some time for the work of this unit to take effect because it will operate an early warning system. Regrettably some jobs are currently being lost because when people woke up to the problems it was too late. We hope to learn from the lessons of the CIO reports of the sixties which identified potential areas of job losses but subsequently took little or no action to avert such losses.
The provision of such a unit in the Department is the first step in providing an early warning system for employers and employees in an area of sensitivity. It will enable them to seek the assistance of the IDA, FÁS, Eolas and any other body capable of assisting them to upgrade their technology and improve their position so that their current jobs can be protected. That is an advance on any previous arrangement. I would encourage Deputies who may be aware of companies concerned about their viability to advise them to contact, on a confidential basis, that unit in the Department to seek whatever assistance is available to them.
The Minister referred to the Programme for Government and the early warning system. I suggest that that system is not working. This can be seen from the recent case involving Telemara Teoranta in the Connemara Gaeltacht where 85 jobs were lost. Despite the fact that two Government Ministers represent that area, no early warning system was in operation. We do not seem to have learned any lessons from the Digital case last year. I should like to ask the Minister the number of people working in the early warning system unit.
An early warning system works only if the people for whom it is designed push the button, so to speak. Perhaps the Deputy, with his intimate knowledge of the company can find out at what stage Telemara Teoranta contacted the Department regarding the difficulties which it regrettably experienced.
It has been in trouble for the past two years.
I suggest to the Deputy that he, more than most people, knows exactly what happened in the case of Digital, knows the Government's response in that case and knows the number of replacement jobs to date.
We have not learned any lessons.
Please, Deputy.
We have learned lessons from that case. There are approximately eight people working in that unit in my Department.
I am sure the early warning system is operated on a voluntary basis. Obviously we all regret the loss of 140 jobs at Aughinish Alumina. Will the Minister comment on the £500,000 allocated by Aughinish Alumina for an enterprise fund to encourage its former employees to set up——
That is a separate and specific question, Deputy.
It is a general question. Is the Minister in favour of encouraging companies, particularly large multinationals, to set up similar funds? There have been a number of company closures in the clothing and footwear industries. In relation to the early warning system, if companies pinpoint the level of VAT on clothing and footwear as one of the reasons for closures, will remedial action be taken to rectify that situation?
The Deputy has asked a number of questions to which I will try to reply. His first question related to Aughinish Alumina. I regret the overall deterioration in international circumstances which led to the reduction in the number of employees in that company. I would certainly welcome any efforts by employers to assist employees who avail of either voluntary redundancy packages or other packages to find alternative forms of employment. FÁS and the IDA——
And the county enterprise boards.
——would work closely with such companies to ensure the best effective redeployment of those employees.
With regard to the clothing industry, which is a complex and separate question, we have taken a number of initiatives, none of which, to be frank, I am fully satisfied with. We are getting to grips with the problems but we are not doing so quickly enough due to the international circumstances which prevail in that area.