I understand I am sharing time with Deputy Conor Lenihan.
The economics editor of The Irish Times writes today as follows:
For some months now, many Irish businesses have been looking at the euro's rise and keeping their fingers crossed that it would soon peter out. But the euro just keeps on going – or perhaps more accurately money keeps flowing out of the US dollar – and the implications for exports and growth this year now look likely to be quite serious. The euro's strength makes life harder for exporters as they must either accept lower profit margins or persuade their customers to live with higher prices.
As Deputy Hogan said, we are talking about a world economy which is in a state of flux at a time when we need to remain competitive. The ESRI in its quarterly economic commentary states:
The terms of the new social partnership agreement, Sustaining Progress, should reinforce the disinflationary trend in the economy. We estimate that the terms of the agreement, including public sector benchmarking provisions, provide for wage growth of approximately 4% and 3% in 2003 and 2004 respectively. These terms should move the economy closer to sustainable, productivity-justified pay rates. Given the tighter public finance position, a more focused sense of national investment priorities is needed to ensure that necessary investment is not restricted given its importance for the economy's long-run growth. The low interest rate environment creates opportunity for economically justifiable investment to be undertaken while respecting the constraints of the Stability and Growth Pact.
This is the context in which this Bill is being introduced to the Dáil. The National Economic and Social Development Office Bill 2002 provides us with an opportunity to give an overview of our position through social partnership and various initiatives undertaken in the past ten years, certainly since 1987 when social partnership was first mooted by the then Taoiseach, Charles Haughey – a process pioneered, of course, by the Taoiseach, Deputy Bertie Ahern.
The strategy has been effective but it is clear that if we do not remain competitive we will lose all the advantages we accumulated in recent years. I am not calling for widespread deregulation but certain areas need to be examined in this regard. For example, deregulation of the taxi industry was not done in the most efficient way. Paradoxically, we have now reached the stage where the industry will have to be regulated if we are to provide a competitive and efficient taxi service.
The cost of insurance is driving small businesses out of existence, many of which I am aware of in my own constituency. Premia are so high that two or three members of a small workforce may have to be let go to avoid closure. In some cases workers are let go while in other cases businesses have to close down. We need to tackle the insurance industry's monopoly more seriously and it is not tenable to long finger any such proposals. While I welcome the working group's proposal, I would also welcome greater initiatives to tackle the real costs of insurance.
A few weeks ago, I was visiting some people in the United Kingdom and I was astounded to discover that the cost of public liability and employer's liability insurance is a fraction of what it is here. Clearly, that is making us uncompetitive. The cost of services has rocketed in the last few years and, while I may not be popular for saying this, there is a rip-off mentality which needs to be curbed. Unfortunately, we are ripping each other off and unless we realise that we are in this together, we will all sink together. It took much hard work and painstaking development for Ireland to become the most successful economy in the world at one point and we have the capacity to regain that position.
There used to be a State telecoms monopoly but now we virtually have a private monopoly in that sector, which is untenable. Sometimes we pick on soft targets and I am not persuaded that either the groceries order or the retail planning guidelines ought to be changed. I am not certain that such alterations would achieve anything at a macro-economic level, although perhaps I could be persuaded otherwise.
The nub of the Bill concerns the issue of social partnership. As other speakers have pointed out, this particular model for industrial peace and development, employment creation and support for the less well-off, is quite unique. We started off with the Programme for National Recovery, which was modest enough, but it was developed at a time when we were the economic basket case of Europe. That programme demonstrated what co-operation, co-ordination and a little bit of economic pain being suffered by everybody could do for the country as a whole. The new programme, entitled Sustaining Progress, is a refined and sophisticated version of what was originally a rather rudimentary approach to solving our economic problems. The various programmes have delivered economic stability and a large measure of industrial harmony.
It is interesting to note that any current industrial disharmony seems to be happening in the public sector rather than in the private sector. Perhaps we need to explore why there is such emerging disharmony in the public sector. I heard that question being debated on the radio today. Wage increases have been delivered that were beyond what anyone could have expected in years past but we will now have to cut our cloth according to our measure. The partnership programmes have protected the most vulnerable, including young people. This Government and its predecessor have delivered significant increases in child benefits and child care supports generally. The amount of money that is being put into child care, admittedly from a very low base, is quite significant, so we are making progress in that area. The partnership programmes have also supported the elderly who will acknowledge that the improvements have gone beyond pensions to include day care and other services. In addition, despite the many criticisms of our health service, if one talks to anybody who has received treatment, they will say that once one gains access to it, the care is second to none.
Our partnership model is unique, although hitherto my colleagues on the Convention on the Future of Europe and I thought that this sophisticated model of social cohesion and development was widespread in Europe. People talk about the economic models of Boston versus Berlin, but I thought that Berlin had a very sophisticated social partnership model. It was only when I sat on the working group on economic governance that I found to my horror that the traditional partners representing the trade union and management interests on the convention were quite determined – and, in fact, they seem to have succeeded in their determination – to ensure that any extension to the model of social partnership that we recommended as Irish delegates, should be resisted. They certainly had no great interest in ensuring that farmers and voluntary or community sectors were on board; it was going to be trade unions and management, full stop. That is something the rest of Europe can learn from us, however.
The draft constitutional treaty on the future of Europe, which has emerged into the public domain in recent days, will underpin much of what we are doing here. Various elements of EU legislation have been available to us in supporting workers and combating social exclusion. I was pleased to be able to support the report of the working party on a social Europe, as were the other Irish delegates, which recommended: the promotion of full employment; social justice leading to social peace; sustainable development; economic, social and territorial cohesion; a social market economy; quality of work; life-long learning; social inclusion; a high degree of social protection; equality between men and women; non-discrimination on the basis of racial or ethnic origin, religious or sexual orientation, disability and age; children's rights; a high level of public health; efficient, high-quality social services; and services of general interest.
Although I did not have an opportunity of analysing it in great detail, I was pleased to note that Part Two of the draft constitutional treaty has come through today. The preamble to section 2, Article III-98 states:
The Union and the Member States, having in mind fundamental social rights such as those set out in the European Social Charter signed at Turin on 18 October 1961 and the 1989 Community Charter on the Fundamental Social Rights of Workers, shall have as their objectives the promotion of employment, improved living and working conditions, so as to make possible their harmonisation while the improvement is being maintained, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting high employment, and the combating of exclusion.
To this end the Union and the Member States shall act taking account of the diverse forms of national practices, in particular in the field of contractual relations, and the need to maintain the competitiveness of the Union economy.
Once some people hear of a new treaty emanating from the EU they will jump up and say they are not supporting it. Anyone who analyses what is being said in that preamble, however, will recognise that no attempt is being made to introduce a uniform arrangement across all EU member states. In fact, the contrary is the case because models that are appropriate to a particular member state can be continued. That is as it should be. We are discussing the principle of subsidiarity, which has worked well. As part of the partnership model, we need to plan and work together. I listened earlier to the leader of the Fine Gael party, Deputy Kenny, saying that the social partnership model adopts the top down approach. I would have thought the case was the reverse where a diverse range of participants work together, painstakingly and carefully, to ensure that in a given set of economic and social circumstances, the best possible outcomes can be achieved for everyone, ranging from the quite well-off to the not so well-off.
The social partnership model here is rather unique in that elements of civil society, who are emerging as an important sector, have a role in developing social partnership and economic and social strategies. For example, the work area-based partnerships have done since they were established is remarkable. I concur with Deputy Hogan that initiatives in the area of education ought to be ring-fenced from any serious cutbacks in funding. The RAPID programmes – there are not many of them in the country – and CLÁR programmes, which target social exclusion in marginalised areas, are unique. They do not have extra money to spend but they are in a position to advance strategies more quickly than statutory bodies normally can. These bodies ought not to be unduly interfered with. Some of us will be involved in city development boards which have evolved partly as a result of the reform of local government and the partnership process. Reform of local government is an initiative of the previous Minister for the Environment and Local Government, Deputy Noel Dempsey. There is a new range of participants involved in community development who had not been involved hitherto, which is welcome.
The National Economic and Social Forum is one of the elements proposed as a participant in the National Economic and Social Development Office. It has done significant work since its foundation. It has examined a number of important issues, ranging from the labour market for older workers, access to hospital care and the whole issue of early school leavers. It had a seminal report published on the issue of early school leavers. I agree that the amount of money being spent on early school leaving initiatives for the educationally disadvantaged has increased dramatically in recent years, particularly with the Taoiseach, Deputy Bertie Ahern, heading up the Cabinet committee on social inclusion. Breaking the Cycle and school completion programmes are important initiatives which have arisen as a result of the support partnership has given to them.
The affordable housing initiative has been examined carefully by the National Economic and Social Forum. This area could be usefully revisited because the cost of housing is getting out of the reach of many average income earners. Reports have been published on the level of welfare payments available to people who are unemployed, those working in the home and those who want to return to education. If it were not for the partnership process, I am not certain the tens of thousands or hundreds of thousands who have availed of vocational training schemes and back-to-education schemes would have benefited and changed their lives through a return to education.
Community employment schemes are being debated at the moment. I am concerned that there is not a widespread understanding of the value of participation in community employment schemes for participants. It has a significant pay-back in terms of support for communities. It is penny wise and pound foolish to cut down on the numbers who can participate in community employment schemes. There are a number of people who are so old at this stage that they cannot return to the workforce. Having enjoyed working for approximately 20 hours per week, and socialising with fellow workers, it is unreasonable to expect them to return, in many cases, to the loneliness and isolation of their homes. Equally communities will suffer, whether in the delivery of community and social services or support for sports clubs and so on. Unfortunately, it is a retrograde step – I will not be popular for saying this – and it is time we considered what we are doing in terms of implementing social policy.
The functions of the forum as outlined in the Bill are to monitor and analyse the implementation of specific measures and programmes identified in the context of social partnerships, especially those concerned with the achievement of equality and social inclusion and a new function, which will be reflected in a Government amendment in due course, and to facilitate public consultation on policy matters referred to it by the Government from time to time.
Perhaps it is time to look at the key participants in the whole social partnership model. I compliment the Minister of State, Deputy Callely, for the work he has done on their behalf. I welcome the inclusion of the elderly as participants in social partnership discussions because I believe they bring a unique perspective to bear on discussions. In Dublin we are well aware of the work the Council on Ageing and Older People and the Senior Citizens Parliament are doing. These groups are doing valuable work.