Priority Questions.

Competition Authority Report.

Phil Hogan


1 Mr. Hogan asked the Minister for Enterprise, Trade and Employment when the Competition Authority will publish its studies on the professions; the likely timetable for implementation of the authority’s recommendations; and if he will make a statement on the matter. [33881/04]

The Competition Authority published its final report on competition in the engineering profession on 1 December 2004 and concluded that the regulatory regime in that profession facilitates competition. The authority previously published a consultation document on the architecture profession and I expect to receive that report by March 2005. The studies of other professions, across the medical, legal and construction sectors are ongoing and those reports will be released during 2005. A consultation paper and initial recommendations on the veterinary surgeon profession will be published in the first quarter of 2005 and the final report in the second half of the year. The authority's initial recommendations and consultation paper in respect of the two legal professions, solicitors and barristers will be published in January 2005 and the final report will be published later in the new year. Initial recommendations and consultation papers in respect of each of the three remaining medical professions will be published during the second half of 2005. On receipt of the final reports, I will examine the recommendations and take any appropriate action as quickly as possible.

Will the Minister agree that a two and a half year gestation period for the Competition Authority to draw up initial consultation papers and final reports on the professions is considerable? The issue regarding competitiveness was brought to the attention of the Taoiseach and Tánaiste as a serious problem facing the economy as far back as 2001. Will the Minister accept that no action has been taken by the Government in tackling lack of competitiveness in certain areas? Today, the Central Statistics Office published a report indicating prices for many goods and services are higher in Dublin than the rest of the country. What timescale does the Minister envisage to ensure the Competition Authority is given the resources, back-up, leadership and direction that it badly needs to ensure action will be taken on the liberalisation of the professions as early as possible?

The Competition Authority has held extensive consultations in compiling these reports. Significant research was also carried out by Indecon and published on 20 March 2003, which was an important part of the process. The Competition Authority's work on mergers has stretched its capacity and, at various times, has created pressures in it achieving its workload. Sanction for six additional posts, specifically dealing with mergers, was recently given to the authority. The Competition Authority recently completed its study on the banking sector, published this week.

I would be worried if the banking sector welcomed it.

Competitiveness is not just about prices but goes across a range of issues in the economy, such as research and development, skills and availability of labour force. With the establishment of the anti-inflation group by the Government several years ago, a significant focus has been brought to inflation and bringing it under control. We must be vigilant with the pricing and competition issue.

Is the Minister happy with the Competition Authority's performances in so far as it has only brought four cases to court? Is this an indication of the authority's will to tackle vested interests in the economy in liberalising the market? Will the Minister comment on the statement by the chairman of the authority that bank charges should be left to the banks and market and that the Irish Financial Services Regulatory Authority, established to deal with these matters, should have nothing to do with the adjudication and notification of charges from financial institutions?

I met recently with the chairperson of the Competition Authority. He has been a particularly energetic force in driving forward the competition agenda. The report on engineers was published on 1 December 2004 and it found that the current regulatory regime in the engineering profession facilitates competition. He went on to make a number of recommendations. However, there are more difficult issues in the pipeline. I am satisfied with the role and performance of the Competition Authority to date. I am relatively new to this office, but I noticed the impact of the Competition Authority on other sectors of the economy and on the public service. I hope its impact will grow over time and be evident in the context of future reports. The consultation process facilitates a variety of groups to respond, make submissions and so on. That in itself creates a lengthy process.

In terms of the banks, I will be in receipt of the report dated 14 December. I would prefer to study it in some detail before making any further comments on it.

Job Protection.

Brendan Howlin


2 Mr. Howlin asked the Minister for Enterprise, Trade and Employment if he has plans for amendments to labour law to provide workers here with some degree of protection in situations in which employers decide to lay workers off and replace them with contract labour from other countries paid at a lower rate and under inferior conditions; if his attention has been drawn to the serious concerns expressed by trade unions regarding the outsourcing of jobs; and if he will make a statement on the matter. [33883/04]

A number of issues have been raised in the Deputy's question to which I will respond as follows. I do not propose to amend labour law on redundancy as there are adequate protections in the Redundancy and Unfair Dismissals Acts. Severance terms are a matter for negotiation between employers and employees. However, there are conditions for such arrangements to qualify for funding under the Redundancy Payments Acts. Under the statutory redundancy payments scheme, where an employee is immediately replaced in the same job by another employee, whether from another country or not, a statutory redundancy situation is not deemed to arise.

In any such situation, the employees concerned who feel they have been unfairly displaced in their employment, can then take a case to the Employment Appeals Tribunal under the Unfair Dismissals Acts 1977 to 2001. There are no distinctions as to employment conditions between Irish and non-Irish workers. All labour law on the Statute Book in Ireland applies to non-national workers working in this country in the same way as it applies to Irish workers. If a non-national worker feels he or she is being treated by his or her employer in a way that breaches any of this employee protection legislation, it will be open to him or her to refer their case for adjudication to a quasi judicial body person such as a Rights Commissioner, the Labour Court or the Employment Appeals Tribunal.

The composition and skill mix of our labour force continues to change in response to the international pressures, affecting both the manufacturing and service sectors. It is fair to say that our strengths and competitive advantages, especially compared with low wage economies, have fundamentally changed. Ireland's economy is now typified by high output and productivity, together with high returns to labour in the form of wages, salaries and better living standards. Ireland has become a more prosperous and wealthy economy, converging with the broad income and prosperity levels of other member states of the EU. I doubt if anyone would have it any other way.

In a borderless Europe, which places no restrictions on where people can work or where investors can do business, there will always be competition for work and investment. One of the Government's key objectives is to develop a competitive economy that will be resilient to the toughest competitive pressures, either from within the EU or elsewhere. It is committed to making sure that when companies decide to invest, Ireland will retain its reputation as a secure, profitable and world class investment location. I am also committed to Ireland having a participatory society based on social justice. We are all committed to ensuring Ireland is responsive to the constantly evolving requirements of international competitiveness necessary for continuing economic and social success.

The Minister of State gave a very long answer and entirely ignored the core of the question, namely, the challenge posed to Ireland and employment here by the yellow packing of Irish jobs. It is not a matter of redundancy payments, because where a worker is satisfied to accept a redundancy package, where that worker is replaced by someone from a new member state, and where the terms and conditions of the new job are well below the terms enjoyed by the previous occupier of the job, it poses a real and substantial threat to jobs across the economy.

I do not intend to go into the specifics of the current issues in Irish Ferries where an entire crew operating out of my constituency has been told they will be replaced by a new member state crew, at greatly reduced rates, in a clear effort to reduce costs. If that becomes a pattern for seafarers — it certainly threatens every seafaring job in Ireland — no doubt it will spread into other sectors of the economy. Therefore, the question I am posing to the Minister for Enterprise, Trade and Employment is what response does the Government propose to make to this real and substantial threat to employment and the standards of employment in this State to protect Irish jobs in Ireland, Irish standards and Irish wages?

The principal issue in the Deputy's question relates to amendments to labour laws. There are seven substantive Acts already on the Statute Book, some of which I mentioned in the initial response and which appeared to deal adequately with the situation outlined in the question. The Deputy also referred to the current dispute at Irish Ferries and I am pleased that the parties to the dispute agreed to enter into talks. I take this opportunity to commend the Labour Relations Commission and the parties to the dispute for having done so, because it is important progress.

I am also aware of the other substantive issue raised by the Deputy, namely, what he referred to as yellow packing of jobs. The remainder of my reply adverted to the fact that conditions in the European and world economies are evolving very quickly and the focus of the Government must be to encourage workers to be up-skilled in order to be able to participate at the highest levels and benefit from the highest levels of pay.

I thank the Minister of State for his philosophical musing, but perhaps he will now answer the question directly. Has the Government a response to the decision of any company in Ireland to yellow pack jobs by disemploying Irish people, employing new member state nationals at greatly reduced standards, wages and conditions, or is the Department and the Government happy to let market forces prevail and talk about up-skilling and so on, while doing nothing specifically to address the real and imminent threat to Irish jobs?

There is well tried and tested machinery in this area that has been used successfully in a great number of disputes over a long period. That machinery has come into play in regard to the specific difficulty in Irish Ferries. I certainly would not want to undermine the attempts to address the very serious issues that arise in this area. Under the NIB proposals, which have been accepted by the parties——

The Minister of State should answer the general question, not the specifics of Irish Ferries. Where does the Government stand on the issue?

The Minister of State without interruption.

It is very difficult to respond. When I responded in specific terms, I was told I should do so in general terms, and when I respond in general terms, I am told I should do so in specific terms.

The situation in regard to the specific issue is one which has progressed considerably and one which I think will have a positive outcome on the basis of a viable service, which is what is required and is the wish of the Government and of both parties to the dispute.

The more general question is one which must be addressed across several levels. At the risk of again being accused of being philosophical, there are, as I outlined in my initial reply, a huge range of forces at work that make it impossible for the Government to provide an answer to every philosophical question, except to say that we need to be aware of the forces at work. Let us not pretend that we are able to address them or undermine them from day one, which is what the Government is ultimately committed to doing.

Retail Sector Developments.

Eamon Ryan


3 Mr. Eamon Ryan asked the Minister for Enterprise, Trade and Employment if he has carried out an analysis of the implications of lifting the cap on retail size with regard to employment and competition within the retail sector here; and if he will make a statement on the matter. [34046/04]

I have received the views of the Competition Authority on the floor size cap contained in the retail planning guidelines. The authority is opposed to a cap on the grounds that it restricts competition in the market and lessens consumer choice.

The consumer strategy group was set up earlier this year to examine a wide range of consumer issues. While the retail planning guidelines were not specifically referred to in the group's terms of reference, the floor space cap may be under consideration by the group in view of its impact on consumers. I expect to receive the group's report after Christmas.

I thank the Minister for responding and for telling me the Competition Authority's views. I was particularly interested to hear the Minister's views. It is interesting that he says he expects to receive a report after Christmas. I thought the Minister for the Environment, Heritage and Local Government planned to make a decision before Christmas. Does the Minister for Enterprise, Trade and Employment hope to use the analysis that has been carried out under the auspices of his Department to influence the decision by the Minister for the Environment, Heritage and Local Government or has he a view on the matter?

Clearly I would favour a relaxation of the retail planning guidelines. My Department has consistently supported the Competition Authority in this regard on the grounds that it would facilitate greater competition and greater entry into the market, and that it would be beneficial to consumers.

And destroy the urban heartlands, the towns.

In the context of the report I referred to, a relaxation will come anyway through the work of the consumer. The consumer strategy group is looking at the matter, particularly from the viewpoint of the consumer.

When the Government introduced the planning guidelines, a study was undertaken by the then Minister for the Environment and Local Government. The issue is how to balance the maintenance and sustenance of economic activity within city and town centres, and on the other hand try to facilitate competition. There are arguments on both sides. Looking around at what has happened over the past few years, even since the introduction of the capping guidelines, the proliferation of major shopping centres on the outskirts of towns and cities has not been halted.

The degree to which one can regulate the marketplace is questionable. One can consider the size issue. My personal observation in recent years is of changing patterns in cities and towns in terms of services and economic activities, compared to ten or 15 years ago. Likewise, on the outskirts of cities, close to the link roads and motorways, we are witnessing the development of major retail stores. Again, the issue is one of convenience and of facilitating the shopper and the consumer in terms of where they want to do their major retail shopping. They might want to go to the city centre to do different things.

This matter has been considered by the Government following the submission by the Minister for the Environment, Heritage and Local Government. He will shortly make an announcement and that is a matter for him. He is talking of a modest relaxation of the guidelines but I prefer to defer to the Minister concerned as it is in his domain in terms of any announcement or ultimate decision in the area.

The Minister is implying that we cannot do anything, that shopping centres such as the Liffey Valley Centre, and the Mahon Centre in his own constituency, simply arrive, that the market allows them despite Government regulation, and that we should therefore go along with that policy. Is the Minister concerned that there is a possible further development of that type of concentration which would lead to perhaps four or five major centres around the country servicing all of Ireland as main retail centres? Under such circumstances there would be less employment created and less competition, where one might have one major centre effectively serving the whole of Munster, another serving all of Leinster and so on? That is the international experience. We are relatively small and could easily have four major shopping centres for the whole country. We would then have less competition and less employment. Does the Minister see that as a possibility?

Obviously, any monopolising that might occur would have to be dealt with in the context of enforcement, competition law and so on. The Government is not about to remove all the existing guidelines. What has been submitted to the Government is the suggestion for a modest relaxation.

We must also be mindful of global trends. We cannot ignore what is happening around us. Having talked to colleagues more seasoned than I, it is clear that the arguments put forward by the Deputy were also put forward when supermarkets came to the fore. Calamity was predicted and it was thought the world would collapse. That did not quite happen. In many respects we have seen the alternative emergence of small effective shopping centres too, notwithstanding the development of major ones. There are high levels of quality and standards in many of these with good delivery services and good responsiveness to the consumer. They developed their own niches. One can look at the Spar group, the Centra and Musgrave groups and so on. Many of those have grown. They provide an interesting illustration of what has happened over time. One can look at the island economy and at what happens around the world. We need to be careful that we do not always try to withstand the forces out there in terms of a changing society and a changing way of doing things. We often overstate the degree to which we feel we can control matters.

FÁS Training Programmes.

Phil Hogan


4 Mr. Hogan asked the Minister for Enterprise, Trade and Employment the company which was involved in the assessment work referred to in a report (details supplied) presented to FÁS on 23 October 2003; his views on whether a fraudulent act has been committed by the company; the amount paid to the company by those seeking the necessary qualifications; the action which has been taken to recoup the money paid to that company; and if he will make a statement on the matter. [33882/04]

The company referred to in the question by the Deputy has issued High Court proceedings against FÁS and these proceedings are currently ongoing. In the circumstances it would be inappropriate for me to comment on the matter raised by the Deputy while these proceedings are extant.

The report to which the Deputy refers was commissioned by the FÁS executive and I understand that progress has been made in the implementation of the report's recommendations. The objective is to ensure that best practice and quality assurance is maintained in the delivery of the construction health and safety schemes operated by FÁS. Any outstanding matters relating to the Deputy's concerns will be addressed when the legal proceedings have been concluded.

I asked the Minister for State to name the company. There is a sensitivity about naming it, but it is Omlink. It operates as an assessment centre in Trim, County Meath, where 250 workers sought training under the construction skills programme which is recognised by FETAC. Those 250 workers who were obliged to undergo training for the purposes of gaining qualifications for working on sites under the building regulations, did not receive that training. Will the Minister for State say if re-training is currently being carried out for workers who should have been trained by the company but were not? How much did each person have to pay to participate in that course? How much did the company draw down from them?

I am informed that 239 people have been offered retraining by FÁS arising from the difficulties relating to Omlink. The offer has been made to the people involved and full training will be made available to them in lieu of the difficulties which came to light. In the interim, FÁS has introduced an entirely new system for the training of people in the construction area and I understand this is progressing satisfactorily.

The Minister for State does not know how much money was drawn down by the company. I understand that Omlink drew down about €100,000 from the participation of those trainees. It is outrageous that the Minister of State should say today that 239 people are being retrained when this matter was brought to the notice of FÁS in February 2003. There are construction skills people on building sites over the past two years who are untrained, which is the direct responsibility of the company involved. FÁS knew about this in February 2003 when it received a complaint from a west of Ireland construction company. Nothing was done.

Was the Fraud Squad brought in? The sum of €100,000 was drawn down by this company. What effort is the Minister making to retrieve this money from the company? Will he confirm what fraud investigations took place, because in effect this is fraud at its worst? What was done by FÁS or by the Minister, as far back as February 2003, to seek redress from the company, to seek the return of the money, to bring this company to heel and take it off the assessment list?

As I said at the outset, this matter is currently subject to legal proceedings and it is a matter for the courts rather than for me to adjudicate on whether fraudulent activity has taken place. FÁS has provided the opportunity of alternative training for the people involved and when the matter before the court has been cleared up, the intention is to pursue the company for the moneys mentioned by Deputy Hogan.

Job Losses.

Brendan Howlin


5 Mr. Howlin asked the Minister for Enterprise, Trade and Employment if his attention has been drawn to the serious economic difficulties facing the Mitchelstown and north Cork area as a result of the decision of a company (details supplied) to shed 1,000 jobs and its proposal to transfer administrative staff to a new centre close to Cork city; the results of his recent meetings with the company management and business and community representatives from the area; if he will elaborate on his suggestion that the industrial base of Mitchelstown must be diversified; if he has specific proposals in this regard; and if he will make a statement on the matter. [33884/04]

I am very much aware of the current situation in Mitchelstown and north Cork generally. I visited the town on 12 November last when I had meetings with the company in question, union representatives and local business and community interests. I had a further meeting with the chief executive officer of the company on 6 December last.

The company in question is restructuring, which is necessary to maintain the viability and profitability of the company and to continue to provide significant employment in the area. It has also, however, necessitated significant job losses over the past 12 months, 500 of them on a voluntary basis. I have had a full and frank exchange of views with all the interested parties and I will continue to keep very much in touch with the developing situation.

On a day to day basis, the industrial development agencies are actively involved in promoting Mitchelstown and north Cork generally for industrial development. IDA Ireland markets north Cork, including Mitchelstown, as one area. A business expansion scheme building has been completed in Mitchelstown and is being actively marketed. The current primary focus of IDA Ireland is nearby Fermoy where a new business and technology park is being developed. Enterprise Ireland is working directly with the company in question both as regards rationalisation and future plans for the company. A capital grant of €200,000 has been approved by Enterprise Ireland for a food enterprise centre in Mitchelstown.

As regards the industrial base in Mitchelstown, I am concerned at the over-reliance on the food and dairy sector. I would like to see the industrial base broadened and expanded to include other industries. I have asked the development agencies to see what can be done in this regard. The initial priority is to secure inward investment for the country as a whole in an environment where we are competing against other countries for decreasing investment volumes. The location within Ireland is a consideration for each project on a case by case basis.

A socio-economic study of Mitchelstown is under way. It is being funded by local interests, including the company in question. An independent chairman has been appointed to facilitate the drafting of a plan for the area. An interim report is due in February 2005. I will continue to be actively involved in the future development of the Mitchelstown area.

I have a number of questions arising from the Minister's reply. Will he accept that north Cork and Mitchelstown in particular is an economic blackspot? There are a number of such blackspots, notwithstanding the overall good economic and job situation in the country, which need specific attention. Has he any proposals to deal with areas, even within the so-called developed regions, that have been extremely hard hit by the contraction of traditional industries.

As regards Mitchelstown in particular, when will the socio-economic study the Minister mentioned in his reply be available? What specific steps has he taken to achieve the diversification of employment that he has indicated should happen to lessen dependence on the food sector for Mitchelstown? As regards the movement of jobs from Mitchelstown in north Cork, to the business park at Cork Airport, has he any views on the migration of employment from areas that need jobs most to places which might need them as much and has he any serious plan to lessen inducements for that type of migration and ensure that it cannot happen?

I do not like to use the term "economic blackspot". Taking north Cork in its entirety, I do not accept that it is an economic blackspot. I accept, however, that the region has suffered significant job losses, out of proportion to the average trend across the country. I also accept the Deputy's basic point that there are certain areas of the country that have not benefited as well as other regions or area in the context of a relatively robust national employment scene, and that this requires specific attention. I have asked both IDA Ireland and Enterprise Ireland as well as the enterprise boards to work together with FÁS on the training side, to examine the profiles in each of these areas. That is important as regards the demographic and skills profiles and so forth for identifying the type of interventions that may be made to support those areas. In terms of foreign direct investment, I would like to see the focus placed on companies to locate in these areas, if possible. That might require the State to ensure that certain facilities are put in place in those areas to facilitate such initiatives, as regards educational and infrastructural aspects. I ask Enterprise Ireland to work with indigenous companies in these regions to see if they can enhance their value-added output. In the case of Mitchelstown, I believe there is significant potential on the food side, linking Dairygold with Moorepark research centre and UCC, we believe synergy can be achieved which would allow new products to be developed. That would obviously be attractive on the export side and in particular on the nutraceutical side, that is, the development of foods with a strong health content and impact in terms of probiotics and ingredients that are beneficial to the body. We believe there is a significant potential for such development in the Irish food industry generally, but not least in the Dairygold area in Mitchelstown.

In terms of the movement and migration of jobs, I was not happy with the decision to relocate the headquarters from Mitchelstown to the airport business park. I communicated that to the CEO of the company. He replied that there were compelling and economic reasons in terms of a deal that was on offer, apparently, in the context of the business park. I understand Cork County Council had difficulties with it because that business park was more for——


Not just aviation, but more for FDI-type projects.

The time for priority questions has concluded.

I wanted to respond to the issues raised by the Deputy. I have been to Donegal and will visit the other area to review their situations.

Will the Minister visit Wexford, too?

It is on my itinerary.

I thank the Minister for his reply as regards Mitchelstown. He did not come back on the socio-economic study, but perhaps he will communicate when that is available. In terms of the division of the country into two regions, one notionally developed and the other under-developed, will he accept that this is not an accurate reflection of Ireland now and that within the so-called east and south region there are blackspots that need a focused attention?

The Deputy should conclude now.

Other than pointing these out to the agencies, has the Minister any particular strategy to look again at the type of structures that exist to develop jobs?

The Minister can communicate with the Deputy as we are well over time.