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Dáil Éireann debate -
Thursday, 17 Jun 2004

Vol. 587 No. 4

Priority Questions.

Insurance Industry.

Phil Hogan

Question:

1 Mr. Hogan asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on whether the establishment of the Personal Injuries Assessment Board will reduce insurance premium costs; her estimate of the amount by which they will be reduced; and if she will make a statement on the matter. [18153/04]

The establishment of the Personal Injuries Assessment Board is a significant milestone in the Government's insurance reform programme, which I am confident will lead to reduced insurance premia to the benefit of both consumers and business alike. By eliminating the need for litigation costs where legal issues are not in dispute, the PIAB will significantly reduce the cost of delivering compensation. The PIAB will also offer speedier assessments to the benefit of claimants.

It is generally recognised that litigation costs add between 40% and 50% to the cost of a personal injury claim. It is intended that the PIAB will make significant inroads into this figure. The PIAB will, however, carry out a cost benefit analysis of the new system as against the system prior to the introduction of the board and this will indicate the reduction in the level of litigation.

The pricing and underwriting of insurance is a matter for individual insurance companies and EU law prevents governments from intervening directly in regard to premia levels. However, it is expected that reductions in litigation costs will lead to corresponding reductions in premium levels.

Members on all sides of the House welcome the introduction of the Personal Injuries Assessment Board and are prepared to give it a fair chance to achieve the objective, as set out by the Tánaiste, of reducing insurance premia. There was an unexpected delay of six months in it commencing operation. We had expected that it would be in operation by 1 January.

There is considerable concern among those operating small businesses about the increasing level of premia being charged by insurance companies for employer's liability and public liability insurance. There is a levelling out of costs, but arising from the serious increase in insurance premia over the past four or five years, to the tune of 200% or 300% in many cases in many categories of business, will the Minister estimate the amount by which insurance premia are likely to reduce following the successful implementation of the Personal Injuries Assessment Board?

As the Deputy is aware, the Bill establishing the board was passed towards the end of last year. It was signed into law on 28 December by the President. I signed the ministerial order on 13 April, which was just under four months from the start of the year. We wish we could have done that sooner, but the board had to have the necessary expertise and personnel in place before it could open for business to deal with personal injury claims arising in the workplace, which began on 1 June.

According to the CSO, motor insurance premia are down 14% year on year and it is estimated that level could be reduced by that percentage again or perhaps more. I have anecdotal evidence from people I know of insurance premia having decreased by 30% or 40% but the average is 14%.

On the employer's liability side, the reduction in premia is moving towards 15% to 20%, with some companies experiencing higher reductions. A number of companies have applied for licences to do business here, and I understand there will be some significant announcement in that regard during July. If we can attract one new company to enter each market, that will have a dramatic effect on reducing the cost of insurance.

I acknowledge the support of Members on all sides of the House, including Deputies Hogan, Howlin and others, for the Government's reform programme, a key part of which is the courts and civil liability Bill which the Minister for Justice, Equality and Law Reform has promised me he will have ready before the summer recess.

Is the Minister prepared to indicate her estimate, which she would have gleaned from personnel she had appointed to the Personal Injuries Assessment Board, Ms Dowling or others, of what small businesses are likely to expect in a reduction in their insurance costs during the year? They have to proceed with financial planning.

I welcome more competition in the market. I also welcome what the Minister said regarding potential new licence holders who will trade in the market. That is an important step.

Given all the planning that has taken place to establish this board, it was indicated that there would be a 31% reduction in the event of the insurance reform agenda being fully complied with and fully completed. I am disappointed the Minister is not prepared to give an estimate of the likely reduction in insurance costs, particularly in terms of employer's liability and public liability insurance for small businesses arising from the establishment of the PIAB. That is what matters, namely, what the establishment of the PIAB will mean in terms of the reduction of insurance costs for the consumer. The Minister might be more forthright in indicating what she expects from the establishment of PIAB in terms of a reduction in insurance costs.

It is the market and competition that will drive down the costs. Given my recent estimate on figures in advance of the local elections, the Deputy will understand that I am hesitant to give any more estimates.

I am not surprised. The Minister got the multiplier wrong.

Yes. We could see the same levels of reductions again. That is what most experts in the field believe is likely when the courts and civil liability Bill takes effect to deal with exaggerated and false claims. I am meeting lawyers throughout the country who have informed me that their salaries will fall by 40% or 50%, if we can factor that into the costs of insurance.

I do not know if that would help.

I think the Deputy can take it that we will see further substantial reductions. Employer's liability and public liability insurance premia are only beginning to reduce. I understand it is expected that by the autumn the reduction will be fairly significant.

Semi-State Bodies.

Brendan Howlin

Question:

2 Mr. Howlin asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the serious concern expressed by trade unions, commercial firms in the region and the board of the company itself regarding her proposals to break up Shannon Development; if an independent assessment has been done of her proposal to transfer the company’s rental income from the Shannon free zone to the Shannon Airport authority; the reasons behind her proposal to transfer 100 jobs from Shannon Development to Enterprise Ireland; and if she will make a statement on the matter. [18151/04]

As the House is aware, a number of recent developments will impact on the mid-west region and the State agencies located there. First, under decentralisation policy, some 1,210 staff from Departments and State agencies will transfer from Dublin to the mid-west region and the headquarters of Enterprise Ireland involving 300 of the agency's Dublin based staff will be moved to Shannon.

Second, it has been agreed that the management of Shannon town should be transferred from Shannon Development and vested in Clare County Council. The proposal by the Minister for Transport, which is again supported by the board of Shannon Development, to establish an independent Shannon Airport authority is also important in this context.

In light of these changed circumstances, I met the chairman, some members of the board of Shannon Development and the chief executive of the company on several occasions recently to explain and expand on matters under consideration. At the meetings, I also asked the board to bring forward detailed proposals in regard to the role that Shannon Development can play in the future development of the region and this discussion is ongoing.

I am aware of concerns expressed by trade unions, companies in the region and other interested parties. In this regard, I wish to stress my commitment to the future of Shannon and the mid-west region as a whole. My concern is to ensure that we put in place the most dynamic, sensible and efficient structures and manage the region's most valuable and strategic assets so as to optimise their benefit for the entire region.

Will the Minister agree it is unusual for a Minister to break up one of the most successful semi-State companies under that Minister's control? Will she accept that the track record of Shannon Development is without parallel in the country, that it is the only statutory regional development engine, that it has achieved the industrialisation of the mid-west, which is second only to Dublin, and that its break up will have an enormous negative impact on regional development, particularly the development of that region?

Does she agree with the comments made by the managing director of Avocent, the computer firm, when he said the region needed a strong airport but also a strong regional development authority and that one should not be at the expense of the other? What coherent reason is there for breaking up Shannon Development?

Change is often resisted. The reality is that since the early 1990s Shannon Development only helped indigenous companies on an agency basis for Enterprise Ireland. That role was removed from it in the reforms put in place after the Culliton report. On an agency basis, it was given the role of supporting indigenous companies.

Obviously, when Enterprise Ireland was moving to Shannon, it did not make sense that the work being done by Shannon Development, on an agency basis, for Enterprise Ireland should continue to be done by Shannon Development. In fact, the board of Shannon Development wrote to me stating that since Enterprise Ireland was moving to Shannon, it proposed that the staff doing the work for Enterprise Ireland should move to the new agency. That involves up to 100 people, although the exact number is not clear. Frontline project management staff may account for 50 or 60, while the remainder are background, clerical, administrative and information technology staff. That was going to happen in any event.

When the 12.5% tax rate was introduced for the entire country, and when the Shannon Free Zone no longer had a favourable tax regime compared with any other area, there was no longer a need for a licence to enter the zone. The Revenue authorities have now taken over the responsibility for those matters. An economic development agency should not run a town. It is more appropriate for the local authority to do so. All these matters were happening with the support of Shannon Development.

The most important asset in the region is the airport. Unless we can get more passengers using that facility and provide more services to Europe in particular to help business and tourism, the region will not be able to grow to its potential. In that context. the free zone is under the aegis of the Department of Transport which owns the property. Shannon Development leases it and this matter has not been resolved. It is by no means a fait accompli and has not been agreed. Contrary to much speculation, both today and on earlier occasions, these matters have not been finalised.

There is a need to strengthen the asset base at Shannon Airport. Shannon Development has an asset base of approximately €260 million. The Government must focus not on how it organises itself in the region but on what needs to be done to make the region vibrant. We need a strong Shannon Development with a new focus and role. Last Friday, I had a good discussion with the chief executive and a number of board members about the new scenario. We must have an open mind on the best way of organising the State's assets in that region, to bring the greatest benefit to the area and, in particular, to the airport which is the largest asset in the region.

The Tánaiste's first reply was more characteristic of the Taoiseach, in talking about extraneous matters such as decentralisation and the amount of jobs that are being located in the area. Her second response, however, was more forthright and focused. The real reason, however, is to give some economic justification to the break-up of Aer Rianta and the stand-alone policies of the airport. Is it not a fact that the only reason the Tánaiste is taking this decision is to transfer the rental income of the Shannon Development Company to the airport to put a gloss on the economic situation? In that way, the proposals by her colleague, the Minister for Transport, to break up Aer Rianta and establish each of the airports on a stand-alone basis have at least some semblance of economic sense. The Tánaiste should simply state that that is the only reason. All the rest is only fluff to hide the motivation which is purely ideological.

No, it is not the only reason. Shannon Development will have no role to help indigenous companies. That role is reverting to Enterprise Ireland which will operate from the region, so Shannon Development will not be dealing with companies. Both Cork and Dublin airports have industrial development parks, which is not unusual. Aer Rianta has serious problems and even if it were to remain intact, those problems could no longer be masked. We need three vibrant airports competing with each other, doing deals with airlines, getting passengers in and opening up more access routes. We must keep an open mind about how the State organises its activities to bring about the most vibrant and dynamic set of circumstances in the region in so far as the State can do so. Shannon Development has played a crucial role in the development of the mid-west region and there is no doubt about that.

It is true, as Deputy Howlin said, that no other region has done as well as Shannon. There is no other regional authority equivalent to Shannon Development. We all know the history of how and why it was established.

We must move on to the next question.

It has been extraordinarily successful.

The Tánaiste should replicate it, rather than damaging it.

As it goes forward, however, it must have a clear remit as regards what it is supposed to do and what its targets are so that we can measure the outcome. I am working with the company to achieve that and I believe we will achieve it.

Regional Development.

Jerry Cowley

Question:

3 Dr. Cowley asked the Tánaiste and Minister for Enterprise, Trade and Employment if, in view of the fact that west and north Mayo is the most socio-economically affected area of Ireland according to the previous census, she will take steps to rectify the situation and ensure survival of the area into the next century; and if she will make a statement on the matter. [18154/04]

Much of the area referred to in this question falls outside my remit as it is part of the remit of Údarás na Gaeltachta. However, in so far as my area of responsibility is concerned, the State development agencies under the aegis of my Department — IDA Ireland, Enterprise Ireland and Mayo County Enterprise Board — continue to promote the establishment and expansion of enterprises in north and west Mayo. These areas come within the Border, midlands and west region, which is eligible for a more favourable incentive package compared with the rest of the country.

IDA Ireland has made substantial progress with regard to the proportion of new greenfield jobs locating in the BMW region and is fully committed to achieving a target of 50% of all new greenfield projects over the 2000 to 2006 period. This is consistent with the regional policy objectives set out in the national development plan.

Enterprise Ireland has concentrated much of its attention on providing community enterprise centres in County Mayo and, as a result, Mayo has a greater number of such centres than any other county in the western region. A total of ten county enterprise centres have been approved to date in the county.

Mayo County Enterprise Board is also working with the other development agencies in promoting enterprise in the area generally. Where appropriate, the county enterprise board provides grant support to eligible enterprises.

The services of FÁS are also available, if required, to assist workers to find alternative employment if the need arises. Placement officers from FÁS have met employees who have been made redundant in recent years to discuss other career opportunities or further training.

I am satisfied that a combined agency approach, together with the involvement of local and community interests, will assist in the ongoing development of north and west Mayo in the future.

I thank the Tánaiste for her reply. When I asked the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, about this the other day, he said it was the responsibility of another Department. It must be somebody's responsibility. At a time of unparalleled growth, north-west Mayo has lost 1,600 of its population in six years. If that area had shared in the growth that occurred everywhere else, north-west Mayo would have doubled its population. It is the largest area of country which is in such a crisis, as shown by the 2002 census. If that level of depopulation continues into the future, north and west Mayo, from Killala to Newport, will be deserted by the end of the century. If any other species was declining in that region at the rate of homo sapiens, there would be an outcry.

What specific plans does the Tánaiste have in mind to arrest the population decline that is occurring in Mayo? I am not making these figures up; they are real. What special incentives will be given to the region, which is larger than many counties? Is the Tánaiste considering a special tax incentive scheme? Will she stop IDA grants to the east coast and the south until the west, particularly the north-west Mayo area, can achieve balanced regional development?

Promises have been made to supply natural gas to Mayo, but will that happen? I would be interested to hear the Tánaiste's reply. Two hotels have already closed in the Achill area, along with three flagship restaurants and dozens of bed and breakfast establishments, because insurance costs have quadrupled. The summer season is down to only four weeks at its peak, so how can hotels compete when they face the same overheads as establishments in Dublin, including rates, heating and insurance? The Tánaiste should explain what is going to happen in this respect.

According to last year's census, there were 12,184 more people working in County Mayo than when the 1996 census was published. The population of Mayo has risen by 5.3% to 117,466. Last year alone, I issued 788 work permits to companies in Mayo because they could not find local employees. Some 1,431 new houses were built in Mayo over the past year, which represents an increase of 41%. For example, 401 Mayo people were treated under the treatment purchase fund.

Many positive things are happening in Mayo but, as with other counties, the towns are doing better than the more peripheral regions to which the Deputy has referred. We must be realistic because it will not be easy to get economic activity to the some of the more remote places in north Mayo. The focus is around places like Ballina, Castlebar and Westport, as well as Knock Airport where some decentralisation will take place.

These places will do best but it is to be hoped the whole county will benefit as a result of the economic activity which will be generated there.

In regard to the IDA not giving any money to the west coast, when the Good Friday Agreement was being negotiated, it was suggested that we should have a single agency for inward investment for the island which would operate on the basis that, for every two projects we gained for the South, one would have to go to the North. In theory, this sounds fair but the reality is that if we gained two projects for the South and could not get one for the North, we could not progress the existing projects. Some things do not work in reality.

The €1.6 billion Intel plant which we recently negotiated will benefit the entire country, including the revenue base and education system. We must be realistic. The target is for 50% of the new greenfield jobs to be located in the BMW region. Now that the IDA pipeline is so good, we believe we can reach that target by 2006.

I am not talking about rural areas but rather an area of Mayo which comprises half the county and is larger than many counties. I am not referring to urban centres alone but rather half of County Mayo where the population has dropped significantly.

Central Statistics Office figures indicate that disposable income in the west was 7.8% below the State average. In Mayo and Roscommon the figures were, respectively, 15.5% and 14.7% below the national average. When the 2000 figures are compared with five years earlier, Galway has improved but Mayo and Roscommon are slipping all the time. When one examines the gross value added of goods and service, GVA, in the CSO data, the average output level per person in the west is significantly below the national average at 23.8%, an increase of 0.3% over the 1996 level. This is further evidence that the western region is not attracting its share of high value growth employment.

Some 62% of our graduates must find work in Dublin, Kildare, Meath and Wicklow. Would it not be better to end supports for the high population areas, which already have so many people that they are travelling at the pace of an ass and cart, and instead invest in Mayo, particularly north-west Mayo, which needs it? The Tánaiste referred to Shannon Development. In that context, why can we not have a Shannon Development-type scheme for north-west Mayo? Otherwise, no one will be left there by the end of the century. It is not only I who state this fact. The census figures prove it.

I referred to the ten enterprise centres, some of which are in north-west Mayo, as the Deputy knows. There is also an institute of technology in Castlebar which is helping to get companies interested in investing in the area. However, the investment will be in the larger towns because that is where we have acquired the land and have installed technology facilities. We could put bricks and mortar into some of the places the Deputy suggests, but if we do not get an occupant, it is a waste of public money. The population of Mayo is rising and the numbers at work are rising too.

Consumer Issues.

Phil Hogan

Question:

4 Mr. Hogan asked the Tánaiste and Minister for Enterprise, Trade and Employment the details of the work programme of the consumer consultative panel; the efforts the panel has taken to be inclusive in its consideration of issues of relevance to consumers; and if she will make a statement on the matter. [18150/04]

The consumer strategy group launched its new website, www.irishconsumer.ie, earlier this month. The group has also announced its public consultation on consumer issues and invited individual consumers, representative organisations, businesses and any other interested parties to contact it with views and submissions by 9 July next. The group has produced a consultation paper, Components of Consumer Policy, which should assist those wishing to make a submission. The group is focusing on the key principles guiding the consumer agenda, namely, access, safeguards, advice and support, redress, consumer power, business interest and consumers.

The group proposes to obtain detailed research on consumer attitudes via focus groups and face-to-face interviews to ensure that all issues of concern are identified. The results of this research together with the responses to the public consultation will form the foundations for the group's work. The group is due to produce a final report by the end of 2004 and it may also produce such interim reports to me as it considers appropriate. I encourage all interested parties to make a submission to the group and thereby lay the foundation for a strong national consumer policy, which will further empower consumers and enhance Irish business competitiveness.

Does the Tánaiste agree it is disappointing that, after seven years in office, she has discovered she needs a new consumer policy because she has none? Why has it taken her seven years to discover that people were being overcharged and ripped off, that prices were going out of control and that household incomes were being challenged on that basis?

Were it not for the pressure being applied by consumer groups and Fine Gael, through the establishment of its own website, to highlight these issues, the Tánaiste would have continued ad infinitum without discovering she needs new consultation with various groups to devise a consumer policy. It is an important area which has been neglected by the Tánaiste over that period. After seven years in office, the Tánaiste should feed in her own proposals rather than have another advisory group make recommendations to her about issues she should know about anyway.

Let us put matters in perspective. At the Estimates meeting this morning, I stated that we pay ourselves the second highest wage rates in the European Union. If we think we can continue to do so and have the cheapest prices, we need to get real. This is a question of supply and demand and the economic development which has taken place in Ireland has fuelled increased prices for housing and other commodities. One sure way of driving prices down would be if Intel and Hewlett Packard closed in Leixlip — it would take €100,000 or €150,000 off the price of every house in Lucan, Leixlip, Celbridge, Maynooth and so on. Recession is one way of driving prices down.

Nonetheless, according to recent survey, Spain and Ireland have the cheapest petrol prices. Therefore, it is not the case that Ireland is the most expensive in every category. I examined Fine Gael's suggestions in its local elections manifesto. It wants local authorities to employ consumer gurus to go into companies and check margins. I would love to see the guru in Kildare going into Intel and asking to have a look at the company's margin. It is a Kremlin-like activity.

I will send the Tánaiste a copy of the document.

Perhaps the Deputy could send it to the consumer advisory group to see what it thinks of it.

I will send it to the Tánaiste instead.

No. I have read it and I think it is daft. The Deputy also knows it is daft.

The Tánaiste has no policy.

It is competition that drives down prices and nothing else. Where there are monopoly suppliers, whether they are private or public, prices are always higher. Where we have introduced real competition, we have seen the benefit for consumers and I hope we can continue to introduce even more. However, one cannot control prices through legislation, which we all know. Moreover, in certain categories such as footwear, prices have fallen substantially in the past decade.

It is hypocritical of the Tánaiste to state that competition is the basis upon which we can reduce prices given that she has approved many mergers and monopolies in the past seven years.

I have approved no monopolies.

The Tánaiste has ensured that there is no competition between insurance companies, in particular, through the number of mergers she has approved since she became Minister for Enterprise, Trade and Employment.

Will the Deputy name the mergers I approved?

Norwich Union and Hibernian merged during the Tánaiste's term of office.

Where was that decision made?

The Tánaiste approved it.

Was that decision made in Dublin or Brussels? The Deputy does not know the facts.

The Department of Enterprise, Trade and Employment approved the mergers.

The Tánaiste is supposed to answer the questions.

I will answer them if the questioner has the correct information.

Does the Tánaiste agree that the 27 stealth taxes introduced since the previous general election have contributed to higher costs? There is no competition in the electricity or gas business or in many of our public utilities, yet the Tánaiste is the leader of a political party which has supposedly made its name on its stated desire to liberalise the economy and create more competition.

Ireland is the most expensive country in Europe, Dublin is the fourth most expensive city in Europe and our level of competitiveness is falling all the time which, unfortunately, is the political outcome of the Tánaiste's seven-year term of office. Now I know why she is anxious to move on. Some 27 stealth taxes have been introduced along with a 1% increase in VAT on electricity and to be added to excise duty. A total of 75% of all the costs and charges associated with inflation are Government-related and the Tánaiste has been a member of that Government for the past seven years.

As I stated this morning, the take-home pay of the average industrial worker has increased by €10,800. Inflation, including utility charges——

Their disposable income has not increased.

Total income is €29,000. Disposable income is up by nearly €11,000. Inflation and the utility increases——

What are the costs?

I will tell the Deputy if he will let me answer. Inflation and utility bills take up some €2,500 of that figure, but people are better off to the tune of €7,500, even when one discounts all the items to which the Deputy has referred.

The Tánaiste has learnt nothing.

This is the second most competitive and most successful economy in Europe. We gained twice as much foreign direct investment last year as any other European country.

Prices rise when there is economic growth.

The people do not believe the Tánaiste.

We have rising prices.

Yes. One way of making sure prices fall would be to have a recession.

I do not know why the party of which the Tánaiste is a member did not double its number of seats. The Tánaiste is never wrong.

The Deputy does not understand basic economics.

The Tánaiste understands better. She knows everything. She knows best. That is why the party of which she is a member lost half its seats.

We did not lose half our seats.

Oil Prices.

Eamon Ryan

Question:

5 Mr. Eamon Ryan asked the Tánaiste and Minister for Enterprise, Trade and Employment if her Department has carried out a review of the implications for industrial policy here of the doubling of oil prices in the past two years and the likelihood of further dramatic increases in energy prices, as a peak in worldwide global oil production is being approached. [18236/04]

The price of oil has traded at significantly high levels for some time reflecting a number of interacting factors including unanticipated strong demand, tight capacities, geopolitical uncertainties and some market speculation. Disruption to supply has not been a factor, though anxiety about possible disruption has fuelled the market. However, since OPEC's announcement on increased production at the beginning of June, crude prices have fallen back slightly from their recent high levels, although market volatility and concerns about supply and demand issues could mean that relatively high prices will remain a feature of the international oil market for some time. It remains to be seen if OPEC's recent announcement of expanded production will have a calming effect on the market in the longer term.

The situation will be taken into account in the Economic Review and Outlook which is prepared by the Department of Finance and due to be published later this year. If energy costs continue to rise I would be concerned about their impact on growth, employment and inflation but it is difficult to assess the longer-term outlook until OPEC's recent market calming initiatives have worked into the market.

The International Energy Agency has warned that a sustained increase in oil prices will have an adverse effect on GDP in eurozone economies. We have no control over international factors that influence world oil prices, but their impact re-emphasises the critical importance of strengthening competitiveness and energy efficiency. Our ability to adapt and remain competitive is a key issue for Ireland in the face of sudden or prolonged adverse global economic conditions over which we have no control.

The reply mirrors the response I got from the Ministers for Transport and Communications, Marine and Natural Resources on what they see as our future prospects. It appears all three say there is no long-term analysis. The Minister for Transport said he was not even predicting to the end of this year and, therefore, why would he predict ten years down the line. Most international indicators suggest the peak in oil production is close, following which there will be significant increases in oil prices that will make the recent increase look like minor blips.

We are uniquely exposed given that 60% of our prime energy consumption is in the form of imported oil — the European average is approximately 45%. Has the Tánaiste's Department any intention of planning for that? It could be on the basis of the investments we make in our science foundation, finally deciding to invest in sustainable technologies where there will be future markets or changing the policy on carbon taxes. If the revenue was returned in the form of lower employers' PRSI one could try, in advance of the oil shock, to turn the Irish economy towards labour intensive rather than energy intensive industries. That would be a clever preparation for such an event given our exposure.

Why does the Government have no long-term plan in this area? The only response I ever get to that question is that the market is up but it is hoped it will be down in a few months' time. Why is it the Government does not look five or ten years down the line? Would the Tánaiste consider it a clever idea to adjust some of the other policies within her Department to take into account that a peak in oil production is due and that the Irish economy is uniquely exposed?

It is an inaccuracy to say Ireland is uniquely exposed. In 2002 the economy grew by 6.9% whereas energy consumption grew by0.1%. We have been extraordinarily efficient users of energy. By way of comparison, Finland uses twice as much energy to produce one unit of GDP as does Ireland. While we are energy efficient there is no room for complacency. Energy has a huge role to play in industrial success and competitiveness. It is important to bring on stream the gas find off the coast of Mayo to help our energy needs. The party of which the Deputy is a member was not supportive of the Government's efforts in that regard.

Is the Tánaiste aware that gas supply might meet our gas needs for a maximum of one and a half to two years? Is she concerned that a 9 km. pipeline there is exposed and is unique? No other country in the world is laying a nine kilometre onshore pipeline from an offshore facility.

It would be terrible if it lasted longer.

The Tánaiste does not need any help from the Minister of State, Deputy Fahey.

Please allow Deputy Ryan who has submitted the question to continue because time is running out.

I would be delighted if that happened. Ireland is uniquely dependent. We import 87% of our energy needs in the form of fossil fuels. No other country in the European Union has as high an input.

I have to draw this question to a conclusion. Perhaps the Deputy has a simple question to put to the Tánaiste.

Is the Tánaiste doing any long-term planning for future price increases?

Many of the countries to which the Deputy has referred depend on nuclear power for a large amount of their energy.

That is the same answer.

These are the facts.

Every Minister gives the same answer.

During the past 12 years our energy intensity has fallen by 9% per annum, which is unique in the European Union. The price of oil will be determined in the international marketplace and not in Ireland. Hopefully, we can find our own source which would be terrific. If it can supply our needs for longer than two years that would be even better.

Semi-State Bodies.

Pat Breen

Question:

6 Mr. P. Breen asked the Tánaiste and Minister for Enterprise, Trade and Employment her plans for Shannon Development following her decision to move 100 jobs to Enterprise Ireland; and if she will make a statement on the matter. [17939/04]

Dan Boyle

Question:

54 Mr. Boyle asked the Tánaiste and Minister for Enterprise, Trade and Employment the Government’s strategy for the Shannon Development in view of the proposed transfer of 100 staff from the agency to Enterprise Ireland. [18121/04]

I propose to take QuestionsNos. 6 and 54 together.

As I have indicated in response to previous similar parliamentary questions and the earlier question from Deputy Howlin, Shannon Development at present performs a range of functions on a delegated authority basis for Enterprise Ireland. Under the decentralisation proposals, the headquarters of Enterprise Ireland, involving 300 of its Dublin based staff, will move to Shannon. In these circumstances it has been decided that these functions should revert to Enterprise Ireland. This is an entirely practical development as it would make little sense to have two agencies in the same town performing the same functions. The decision, which is fully supported by the board of Shannon Development, will result in the transfer of between 50 and 100 Shannon Development staff engaged in these functions to Enterprise Ireland.

There have been other developments impacting on the mid-west region which necessitate a review of the role of Shannon Development. First, it has been agreed that the management of Shannon town should be transferred from Shannon Development and vested in Clare County Council. This is a decision that has been made for practical reasons and both Shannon Development and Clare County Council are in agreement.

The Minister for Transport proposes to establish an independent Shannon Airport authority and this proposal also has the support of the board of Shannon Development. Without an independent and viable Shannon Airport, the task of guaranteeing the entire region's future as a tourism destination and as a location for investment would be made considerably more difficult. In that regard, one of the options under consideration is to transfer the assets of the Shannon free zone to the new airport authority. No decision has been taken on this issue. The transfer of the assets would mean no change to either the status of the zone or its attractiveness as an investment location.

In light of these changed circumstances, I met with the chairman, some members of the board of Shannon Development and the chief executive of the company on several occasions to explain and expand on matters under consideration. At all of these meetings, I also asked the board to bring forward detailed proposals in regard to the role Shannon Development can play in the future in the context of the changes under way.

I have already asked a similar priority question. I am intrigued by the Tánaiste's response to this question in which she said her proposal, "is fully supported by the board of Shannon Development". I was looking for a public comment by the board. The only one I could see was from Mr. Liam McElligott in The Irish Times of 21 May 2004 in which he described the Government’s proposals as flawed.

It is not appropriate to quote on Question Time.

I refer to his comments where he said it would seriously undermine Shannon Airport's capability to play a meaningful role in regional development. That was the attitude of the chairman of Shannon Development to the Tánaiste's proposals at the end of May. I understand that reflected the view of the board. Has the Tánaiste managed to persuade the chairman of a different view? Are there any public utterances to support her contention that the board is fully supportive of what it described as "flawed" a few weeks ago?

In case there is any misunderstanding, what the board fully supports is both the transfer of the town to Clare County Council and the transfer of the staff working in Shannon Development on an agency basis to Enterprise Ireland. I will send the Deputy a letter to that effect. The board does not support the asset issue in relation to the zone. As I said earlier, the Department of Transport is the owner of the property and the zone and leases them to Shannon Development. What is important is that we use the assets in the region to make the region dynamic and vibrant.

Every fair-minded person who has looked at the Shannon region from a business perspective believes the airport must be supported as an independent autonomous airport so that it is in a position to be able to do deals with airlines and others. If the Shannon Development asset base can make a contribution to that, we should be open-minded about it. In case I misled the Deputy, I do not want any misunderstanding that the chairman is in favour of that, because he is not.

Is it not a fact that the only reason for the asset transfer is simply to give a veneer of economic credibility to the plan to break up Aer Rianta? Does the Minister agree that a proposal was never put to the Dáil to destroy one of the most successful companies under her control?

In the early 1990s when the Culliton proposals were being implemented the foreign direct investment, FDI, role was taken from Shannon Development, for the very good reason that it was very hard to explain to companies in north America that one agency in Ireland called Shannon Development was knocking on their door and another agency called IDA Ireland was also knocking on the door from a small island with fewer than 4 million people. The only FDI piece that was left was the zone. The role for supporting indigenous companies was also taken from it and given to Enterprise Ireland or, as it was then known, Forbairt, but it was allowed to continue to do the work on an agency basis. The reality is that supporting indigenous companies will be entirely a matter for Enterprise Ireland and it will not be a matter for Shannon Development. Supporting foreign direct investment is a matter for IDA Ireland with the exception of the zone and with all those changes.

In the context of 2004, we must look at a new role for Shannon Development. The agency has described itself to me as the glue that makes things happen in the region. I agree that it has done so. There are fantastic people on the board and fantastic, committed executives and staff in the organisation. My Department and the board of Shannon Development are seeking to agree a remit for Shannon Development as we go forward so that it is clear what it will be doing. Shannon Development has a major role in tourism, as the Deputy is aware, but it will no longer have a role in supporting indigenous companies, and that is a fundamental change. We were in discussions with Shannon Development on its new role long before the issue of the airport. Shannon Development has been undergoing a process of internal review in the organisation and that is continuing. I hope it will come to a conclusion before the recess, which is only three weeks away, if not sooner.

Employment Legislation.

Brian O'Shea

Question:

7 Mr. O’Shea asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has satisfied herself with the level of implementation of the Organisation of Working Time Act 1997; and if she will make a statement on the matter. [18066/04]

The Organisation of Working Time Act 1997 came fully into effect on 1 March 1998. If an employee considers that his or her employer has contravened the provisions in this Act governing holidays, rest breaks, rest periods and maximum average weekly working hours, he or she may refer the matter to a rights commissioner for adjudication. The number of cases referred to the rights commissioner service under the 1997 Act in the period 1998 to 2003 is set out in the following table.

The labour inspectorate of my Department has a limited role in regard to the keeping of records provisions of the 1997 Act. In this connection, when inspectors pursue complaints concerning alleged infringements of other employment rights entitlements, they will also check that an employer, in accordance with the prescribed format required by the 1997 Act, is maintaining relevant records. During 2003, inspectors undertook 1,005 such inspections and the figure to date in 2004 is 360. In all of the circumstances, I am satisfied with the level of implementation of the Organisation of Working Time Act 1997.

Year

Number of cases referred to rights commissioners under the Organisation of Working Time Act 1997

1998

395

1999

526

2000

620

2001

740

2002

967

2003

631

Will the Minister confirm that there were no prosecutions or convictions under the Organisation of Working Time Act 1997 last year and so far this year? Is that an indication of full compliance or inadequate policing of the Act?

In regard to amending directive 2000/34/EC which extends the original working time directive to doctors in training, where exactly do we stand as it must be transposed into Irish law by 1 August 2004? I accept that some of the responsibility for that will fall to the Minister for Health and Children. Where do we stand on the review of Directive 93/104/EC concerning aspects of the Organisation of Working Time?

I have no information on convictions at present, but I will provide the information to the Deputy. The working time directive as it applies to doctors in training is a matter for the Minister for Health and Children. I am not aware of the up-to-date situation, but I am aware that negotiations have been ongoing. There are discussions on the implementation of the directive as it applies to the Department of Enterprise, Trade and Employment. The proposals made by the European Commission have been submitted to the social partners for consideration. When the process of consultation with the social partners will be completed, the council will make a decision on the matter.

Directive 2000/34/EC is the extension of the original directive to doctors, and the Taoiseach indicated on the Order of Business that there may be a proposal for a derogation from it. Has there been an agreement at council for any such derogation or will that apply from 1 August 2004, as originally intended?

The matter is under discussion but no agreement has been reached.

County Enterprise Boards.

Denis Naughten

Question:

8 Mr. Naughten asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans she has to review the eligibility criteria for funding from county enterprise boards; and if she will make a statement on the matter. [17955/04]

My Department, through Forfás, recently commissioned an independent review of the role of the city and county enterprise boards, CEBs. This review was conducted by Fitzpatricks Associates. It involved consultations with all relevant interested parties and represents an in-depth, objective study of the work of the boards.

Notwithstanding the success of the county enterprise boards in promoting entrepreneurship and development of new micro-enterprises over the ten years of their existence, it was considered timely to review their operation against the background of the major economic changes which took place in Ireland over the period. The review largely endorsed the role of the boards and concluded that there is justification for continued State support for micro-enterprises and that the county enterprise board network should continue to play a useful role in the overall national enterprise development policy.

There are a series of recommendations contained within the review relating to the future activities and structure of the county enterprise boards. These include recommendations for county enterprise boards to renew the focus on the core enterprise mission, tighten the criteria on the provision of financial support so as to address the issues of potential deadweight, displacement and duplication more systematically, and move more towards the use of repayable funding.

The City and County Enterprise Board Network represents only one element of the national enterprise policy and I am considering the Fitzpatricks report and its findings with a view to bringing recommendations to the Government at an early date.

I welcome the conclusions of the report that there is a role for county enterprise boards in micro-enterprises in various counties. We are aware of the opportunities that have grown from small beginnings, particularly from seed capital from the county enterprise boards. I hope the Tánaiste will be recommending to Government a role for the county enterprise boards.

Several enterprise boards have been in contact seeking greater certainty about their future and their financial viability. Would the Tánaiste consider, in the context of the 2005 Estimates, that there will be an increased role and extra funds available to county enterprise boards? Could they be brought more into the mainstream of local authority activities and become more directly accountable to local authorities? There is representation.

I am in favour of accountability through public representatives but not through people who are unelected. Public representatives have a role and are directly elected by the people. Would the Tánaiste consider that in the context of the devolution of powers and greater accountability through public representatives regarding the work being done at county enterprise board level?

I cannot anticipate how the 2004 Estimates process for 2005 will pan out. There will be a great deal of competition for the resources in health and education, and several other areas, including this one.

There are plenty of resources coming from the Revenue Commissioners.

For what Department is the Tánaiste arguing?

I will be arguing for all the appropriate priorities.

It will be a trade mission.

Interesting.

One of the interesting conclusions in the report is that the boards need to be more focused on supporting enterprise that does not displace other enterprise. It cites several examples of where it was simply dead weight, the activity would have happened anyway or it affected someone else nearby. It said that the retail sector should not be supported.

That happens in Kerry.

It says hairdressers and gardeners should not be supported, or accountants and solicitors who, believe it or not, were supported in some places. Professional services such as gardeners were supported.

That is why I asked the question.

If I had answered this question six months ago in advance of the report which I read only last week, I would have been very favourably disposed to seeing the responsibility go to the local authorities. When the local development committees were being established I expressed the view that they be amalgamated with the county enterprise boards. This report strongly suggests that the accountability should be in a national rather than a localised process if we are to achieve uniformity and best value for money. It suggests bringing it into the wider family of enterprise policy, keeping the boards separate but having them working more closely with Enterprise Ireland, for example, so the two fit in together.

So much for devolution.

It may be a good idea for me to submit this report to the appropriate Oireachtas committee.

That is a good idea.

Before the Tánaiste leaves office.

I would be interested in hearing the Deputies' views before I bring proposals to Cabinet.

The Deputy's party won so many seats in the local elections it wants to take over the enterprise boards.

I feel strongly about this particular issue. I do not say this in a political way but if we are to have any respect for public representatives we must give them a role. There will be no respect for public representation at local level if it is not given a meaningful role. Many of the actions identified in that report such as the funding of endeavours that should not be funded, do not come from local government. They come from central government without proper procedures being adopted. There is no virtue in going over that at this stage.

Deputy Hogan has won that one already.

There are many quangos in local government

I suppose that is because Fine Gael has won so many extra seats.

I am trying to be constructive but the Minister of State does not want to listen.

We know what the Deputy and his party are at.

If the Minister of State has learned nothing from his party's experience in the past week, that is fine but at least we have a slightly stronger mandate with which to address the Government.

Deputy Ahern should allow Deputy Hogan to ask a question.

Would the Tánaiste consider all the groups associated with enterprise and local government in the context of the review of the county enterprise boards? If there is an amalgamation, public representatives might play a meaningful role in terms of accountability, through local authorities, in the context of the recommendations she will make on foot of the report. I welcome her assertion that she will bring the report in draft form to the committee before final decisions are made.

It would be useful given that the boards have existed for ten or 12 years. It is estimated they have supported 16,000 projects and 30,000 jobs and received grant aid of €179 million, which is very good value for money if that is the case. They need, however, to be more focused. I am aware of examples where a nursing home was supported because it was on one side of the road in County X, but the home on the other side of the road was not supported. One can imagine the confusion, upset and difficulties that causes. We need greater uniformity. The report is finalised and I will send it to the Oireachtas Joint Committee on Enterprise and Small Business for consideration.

Research Funding.

Eamon Gilmore

Question:

9 Mr. Gilmore asked the Tánaiste and Minister for Enterprise, Trade and Employment the response she has received to her recent call for improved collaboration between private industry and universities to allow Europe to catch up with the US on research and development; if there are specific steps she intends to take here to facilitate such co-operation; and if she will make a statement on the matter. [18048/04]

At European Union level it is clear that industry in most member states, including Ireland, needs to improve its levels of research in order to compete more effectively on global markets with the US and Japan. A major part of the focus of Irish research, technology and innovation is centred on developing the capacity of the higher education system. This development encompasses all aspects of the national system of innovation including basic research, the development of graduates with high level skills, the commercialisation of university research and direct collaboration with industrial partners, nationally and in the context of the EU framework programme.

The Irish EU Presidency has encouraged all member states to respond effectively to the Barcelona summit target of 2002 that overall spending on research and development in the Union should be increased to 3% of GDP by 2010. This March a snapshot of the state of progress towards the 3% across the EU was made by the European Commission. A cross-departmental group which I set up last year to identify the actions which Ireland needs to take to reach this 3% target, is due to report to me over coming weeks. We already have several important policy actions focused on this linkage from a research and industrial development perspective.

Enterprise Ireland spends some €35 million per annum on its national collaboration programme. This is made up of a range of separate schemes promoting links between companies and the research infrastructure at national level. Enterprise Ireland has also committed a further €30 million in support of the universities and institutes of technology in providing incubation spaces for campus enterprises to grow. Support is included where needed for research space. Science Foundation Ireland has invested almost €79 million in funding to centres for science, engineering and technology in third level colleges. There is also an important educational perspective in promoting industry-third level linkages. The programmes for research in third level institutions administered by the HEA offer third level institutions an opportunity to build infrastructure and to develop the careers of Ireland's brightest researchers. The facilities and schemes put in place under the programme are attracting industrial interest and its researchers have already made some 60 patent applications. An independent review of the programme is under way.

There is a general acknowledgement that this is a time of change and development for Ireland's universities. Factors impacting on this include changing demographics, the increased emphasis on research and growing interaction with the enterprise sector and outreach to society generally. Against this background, my colleague, the Minister for Education and Science, has commissioned a wide-ranging review of higher education in Ireland by the OECD to be completed later this year. The review will include considering the role of higher education in contributing to national economic goals in the knowledge area.

The question asked whether the Tánaiste had received a response to her call in Galway to know how we could do better to capture that raw research. It was not quite an alarm bell but an expression of concern at the news that 40% of research and development funding from European companies had gone to North America. What has happened since she made that call? In regard to achieving the objectives set out in her initial response, for example, the commercialisation of intellectual property, who is looking at that now? Is there any direct link between her Department and the Department of Education and Science? Has she sat down with the Minister for Education and Science to see how raw research which is very good here can be better commercialised? Is there any particular overarching structure to deal with thorny issues like intellectual property rights and patenting? Is this matter getting the attention it needs on a cross-departmental level? Does she see a role for herself in driving such co-operation?

The first factor is that 40% of the research of pharmaceutical companies in Europe is now done in America. The figure was 26% approximately six or seven years ago so it is going in the wrong direction. During our Presidency of the EU we have succeeded in obtaining some agreement from member states in respect of the funding of basic research. Heretofore, such research was not funded on the basis of excellence but rather on a pro rata basis across a number of different programmes. The only basis on which EU money should be invested in research of this nature is that they should be the best projects involving the best people and should be internationally peer group reviewed to ensure that this happens.

The second factor is that, regardless of how the financial perspectives pan out, more of the European Union budget must be invested in the area of innovation. Commissioner Busquin has had a great deal to say about that matter. During our Presidency we have taken a hands-on role in respect of EU funding and programmes. We have, in particular, urged that there be a reduction in the bureaucracy surrounding the programmes. For example, the sixth framework programme, which is the current programme to support research in the European Union, is so bureaucratic that many researchers have stated that they would go anywhere for funding but to the EU because they are obliged to spend so much time completing forms and dealing with bureaucratic issues at the expense of their research.

The Irish Council for Science and Technology has an overarching role and it recently produced a code of practice for the commercialisation of research because one of the issues that arises is who owns the intellectual property.

Deputy Howlin is correct that we need greater coherence. I have just circulated a memorandum to my colleagues in the Cabinet suggesting that, similar to the position in other countries, we appoint a new scientific adviser to the Government. In addition, I have recommended that we put in place a new structure, including a Cabinet sub-committee that would be chaired, for example, by the Taoiseach, so that there would be an overarching role across the areas of education, health, agriculture etc., and that matters would not be merely confined to one area. I hope we can win support for that. Just as the Attorney General advises us in respect of legal issues, we need a scientific guru to advise the Government in respect of research and to act as a driver of coherence, particularly as we are spending such enormous sums of money. I am of the opinion that my proposal will receive the support of the Cabinet in the near future.

I wish to ask a brief supplementary question in light of the fact that I have no competition from other Deputies.

The Deputy has the House to himself.

I regard this as one of the most pressing issues for our future, not only in terms of enterprise and employment in this country but also in terms of education. I heartily welcome the notion of a science adviser to the Government. However, does the Tánaiste accept that consideration might be given to having, as is the case in Northern Ireland, a Minister for higher education who could focus exclusively on issues that go well beyond the education sphere? Subsequent to our visit to Canada, has she given consideration to how universities in that country develop intellectual resources, commercialise them on campus and use the existing infrastructure to support all aspects of that commercialisation? Is there a need for a fundamental partnership change in this country for that model to be replicated here? Does the Tánaiste believe that this could be realised under the education structure in place in Ireland?

Deputy Howlin is correct to state that the link between industrial development and prosperity in education is enormous. It will be even greater in the future. One cannot have too much education. I believe it was the former president of Harvard University who once said: "If you think education is expensive, try ignorance." There are a number of serious issues about the funding of higher education. I cannot remember the name of the university the Deputy and I visited in New York but it obtains $100 million per year in licensing from activities that are generated on the research side. If we can get it right, Irish universities have the capacity to make a considerable amount from the intellectual activity under way on their campuses. We are looking at best international practice in this area.

It is interesting that the Deputy should refer to a Ministry for higher education. As I was entering the Chamber, my press officer advised me that he had received a telephone call from a journalist speculating that higher education and training must be put together. That was the first time I ever heard that assertion. In my experience, breaking things up is not a good idea. If we want coherence in education, we should ensure that the system remains whole. That would be my strong advice. Even if it was felt that it might be desirable to establish such a Ministry, it would take years to put it into effect. I would not be in favour of breaking up the Department of Education and Science because we need coherence between the various levels in education. However, we need to ensure that there are appropriate resources for higher education in order that we can produce the intellectual brain power we need for our society and our economy as we go forward.

Public Holidays.

Seán Ryan

Question:

10 Mr. S. Ryan asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of public holidays enjoyed by workers here and the way in which this compares with the EU average; if she has plans to increase the number of public holidays; and if she will make a statement on the matter. [18088/04]

The Organisation of Working Time Act 1997 provides for the entitlement of employees to the following nine public holidays per year: New Year's Day; St. Patrick's Day; Easter Monday; the first Monday in May; the first Monday in June; the first Monday in August; the last Monday in October; Christmas Day and St. Stephen's Day. The average public holiday entitlement in the EU at present is approximately 11 days annually. There are no plans to increase the number of public holidays in Ireland.

Does the Minister of State accept that Ireland is among those member states with the lowest number of days' leave and that countries which are highly successful economically, such as Austria and Finland, have considerably more day's leave than Ireland? Has he considered the impact of our paucity of paid public holidays in the context of the initiative that he and the Tánaiste have taken in balancing work and family life? The Tánaiste made a clear expression on the public record that such a balance is key to a prosperous, balanced future for our country. Does the Minister of State, therefore, accept that the entire focus cannot be placed on matters such as economic growth and number crunching, particularly if people's physical, family and social well-being will be negatively impacted upon? In that context, would he not consider increasing, at least by one, the number of paid public holidays in this country to bring us closer in line with the average, which is two days more than in Ireland, throughout the EU?

There has not been any great demand for an increase in the number of holidays——

If I was the Minister of State I would put it to a vote and the level of demand would become apparent.

——among the social partners. I concur with the views the Deputy expressed about the work and family life balance. The Tánaiste and I have endeavoured to continue to support the further development of all aspects of providing for a good work-life balance. As the Deputy stated, a person who is happy at work tends to produce more. There are nine public holidays. I suggest that increasing that number would be better dealt with in the social partnership discussions than it would be by a Minister.

Does the Minister of State accept that at least one of his predecessors, Deputy Quinn, dealt with the matter when he inaugurated the May Day holiday, the most recent additional public holiday to be created in this country? There are new and evolving pressures on family life in this country and to achieve the objective of the balancing work and family life initiative, which is being promoted strongly by his Department, the Minister of State should open his mind to change in this area. Does the Minister of State not accept that this is not exclusively a matter for others, such as the social partners, to deal with and that it should be part of his agenda to achieve a balance, particularly in light of the fixed school year at primary and secondary level introduced by the Minister for Education and Science, in order that people might spend certain days with their children?

The reaction of many people on the employer's side to the addition of 1 May as a public holiday was that it would have a costly impact on our competitiveness. While everyone would welcome further public holidays, we must be careful in terms of matters such as competitiveness, productivity etc. Given that progress has taken place in the talks on Sustaining Progress and previous national agreements, the appropriate place for discussion for any further improvement in public holidays is in that forum. I respectfully suggest that is the place where it should be dealt with.

National Minimum Wage.

Michael D. Higgins

Question:

11 Mr. M. Higgins asked the Tánaiste and Minister for Enterprise, Trade and Employment if it is intended to review the level of the national minimum wage during the current negotiations between the social partners; and if she will make a statement on the matter. [18051/04]

Discussions regarding the national minimum wage are taking place in the course of the current talks on the second phase of the pay element of Sustaining Progress. As the talks are still ongoing it would be inappropriate for me to comment further on this issue.

I do not accept it is inappropriate for the Minister of State to divulge Government policy to this House. Does he not accept he has a duty to keep the House informed about Government thinking on matters? Does he further accept we have lost sufficient authority in the House to mechanisms that have worked well for the economy but have impacted on our democratic accountability processes?

What exactly is his view regarding IBEC's contention that, as I see referenced in its initial statements, not one extra cent should go to the low waged? Is it Government policy that there should be a focus on low pay and that the balance of any increase in wages should be received by those on the minimum wage or those in receipt of the lowest wages in the State? Is that Government thinking and what is the Government perspective in regard to these talks?

It is certainly Government policy that there should be a national minimum wage, unlike the policy of previous Governments. It is for that reason the Tánaiste introduced a national minimum wage in April 2000, which was a most welcome development. The increase from £4.40 to €7 since then has been reasonable.

Does the Minister of State think so?

The Government is anxious to ensure people on lower pay are adequately rewarded and that every effort is made to ensure the minimum wage increases in line with the consumer price index or by more. That has been happening to date and this issue is being considered in the talks.

It is Government policy to ensure the minimum wage increases to protect the interests of workers on lower wages. It is significant that it was in the lifetime of the previous Government that the minimum wage was first introduced. I accept Deputy Howlin is concerned but that concern was not apparent when his party held the finance Ministry.

I thank the Minister for his historical lecture but I would rather he focused on the questions that are current and affect the lives of people today. Does the Government support the strategy put forward to close the gap between those on the lowest level of pay and those on higher levels of pay, or will the Government allow that gap to increase after the conclusion of the current pay round? What attitude of mind does the Government bring to the current talks?

It is important the gap does not widen. The thrust of Government policy has been to ensure people on low wages are brought up to speed and, in addition, that the tax burden for people on low wages continues to be decreased. The Deputy can take it that it is Government policy that this should continue. That is the position regarding the current talks, in addition to a desire to further decrease taxation and take more people out of the tax net in the forthcoming budget.

I have a brief question.

It is now 4.45 p.m. and the time for Question Time has concluded,

I have about 30 seconds.

There will not be 30 seconds for the Minister to answer it.

In ten seconds, does the Minister accept 52% of PAYE employees on the average industrial wage pay the higher rate of tax, which is unprecedented in the State? This needs to change if there is to be a real focus on those on the minimum wage and low pay.

Written answers follow Adjournment Debate.
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