Vol. 676 No. 1
51 Deputy Terence Flanagan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will amend the Industrial Relations Act 1990 to trigger an immediate review of all Employment Regulation Orders in view of the over-riding need to protect jobs; and if she will make a statement on the matter. [7392/09]
Employment regulation orders are made by the Labour Court on foot of proposals from joint labour committees. JLCs are statutory bodies, established by the Labour Court under the Industrial Relations Acts 1946 to 2004, to provide machinery for the fixing of statutory minimum rates of pay and conditions of employment in particular sectors. JLCs operate in sectors where collective bargaining is not well established and wages tend to be low.
A joint labour committee is composed of equal numbers of representatives of employers and workers in the sector and they meet regularly, under an independent chairman, to discuss and agree terms and conditions to apply to specified grades or categories of workers in the sector. When it reaches agreement on terms and conditions, the JLC publishes details and invites submissions. Following consideration of any submissions, the committee may make proposals to the Labour Court for making an ERO. The making of an ERO has the effect of making the pay rates and conditions contained in it legally enforceable. The terms and conditions set down in the EROs are a matter for agreement by the joint labour committees and I do not propose to amend the legislation to change this.
In the context of the recent review and transitional agreement 2008-09, the social partners agreed to a series of further measures to support the JLC system. These will include the introduction of legislation to strengthen the existing system for the making of both employment regulation orders and registered employment agreements to provide for their continued effective operation; and measures to provide for improved operational procedures to include the nomination of chairmen for JLCs, following consultation with the social partners, for a fixed term of office and the continued enhancement of expertise and competencies through the practice of nominating chairmen on the basis of their experience and qualifications for the role.
I am conscious of the difficulties that many firms operating in sectors covered by EROs are experiencing at the moment. In recent months I have met representatives of employer organisations and heard at first hand of the difficulties with regard to wage costs. I have consistently advised employers to make their concerns known through their representatives at the social partnership table and to pursue the issues actively through the established mechanism of the relevant joint labour committee. In my view, the parties represented on the JLC are best placed to address the impact of the economic crisis on employment levels and the viability of services in the relevant sector.
I hope that sooner rather than later the country will have a Government and Ministers who will make decisions——
We have a Government.
——instead of trotting out legal advice. I know what is in the legislation, I can read it for myself,——
Why ask the question then?
——and I know what is in the Towards 2016 agreement, which the Government has already torn up, so I do not see why it should expect employers and employees to follow it.
This is a disaster. This country is haemorrhaging jobs, we are on the edge of an abyss and it is possible that in a few months time we will not be able to make out debt payments or even pay our own salaries. At the coalface are those industries covered by EROs in retail, hotels, restaurants, security, construction and agriculture. These industries are losing jobs because they cannot meet the terms of the employment regulation orders and they cannot meet the pay increases the Government will not pay but is making them pay. The Government must make the decision to change the system, review the existing employment regulation orders and make JLCs equal so there is a level playing field between employees and employers with no voting rights for the independent chair.
If the Government will not do that, Fine Gael will introduce to the House a Bill to achieve it. If the Government wants to destroy every shop, every security industry and construction site,——
A lot of rubbish.
That is what Deputy Varadkar wants to do.
——if it wants to put all those people out of their jobs, we will make them vote for it and hold them responsible in every hotel and restaurant in Ireland.
Does Deputy Varadkar believe in exploitation as well?
The Deputy has decided that social partnership in all its guises should be thrown out the window.
The Government has already done that.
He has never supported the idea of consensus in this House on the issues of pay and conditions for workers and industrial agreements.
The workers want the agreements changed.
The Deputy has stated that is his philosophy. It might not be the philosophy of everyone sitting around him, but it is definitely his.
The JLCs are made up of employer representatives, worker representatives and an independent chairman.
A biased chairman.
They can meet and discuss issues. In catering, they came up with sensible proposals relating to double time on Sundays and agreed the process. They are now going through the statutory process, striking new rates that will be soon in force and addressing the issue of Sunday trading for restaurants and pubs that serve food.
There is a hotels forum meeting as we speak to strike new rates. The Deputy cannot have it both ways, he cannot come into the House and make things up.
Perhaps we should have a forum on the national deficit.
I was just about to ask the Minister of State when the hotels forum, which is meeting to deal with that issue, will meet. When will it report on how it is addressing employment in that sector? Is there a forum for the electrical sector? When will the Government restart social partnership after its being torn up?
The issue relating to electrical contracts is before the courts and REA so I cannot say much about it.
I accept that.
The hotels forum has met a few times to discuss issues. IBEC, the Irish Hotels Federation and employee representative groups make it up.
Is the Government hoping for an early meeting?
Everyone is conscious of the pressure the hotel industry is under at present. I urge everyone represented at the forum and the JLCs to finalise the issue because it is causing problems.
We have embraced social partnership on this side of the House for many years. The Labour Party also supported it and we will consistently encourage a situation where everyone comes together in the spirit of partnership. Our door is always open for those that come up with constructive ideas to address the serious situation facing the country.
It is because of an ERO that employers in the security industry are obliged to implement a pay increase of 10% to 13% that many of them cannot afford. I have spoken to employers and employees in the industry who do not want to take it because they realise their jobs and businesses are at risk. They cannot afford the pay increases. Has the Minister of State met the security industry? What can he offer to it?
We have no difficulties with both sides of that industry coming together to discuss the serious problems we face.
Their hands are tied.
They can come together, there are representatives on both sides in joint industrial councils and on JLCs. They can come together and strike new rates of pay and impose new conditions at any stage. This sector is under pressure but it must equally be accepted that it is a low wage area. We must be conscious of that. It is in the industry's hands to come together, discuss the issue, strike a new rate and it will be facilitated through the Labour Court.
Does the Minister of State accept the ERO process, through the JLCs, is as fair and reasonable as it gets in terms of reaching consensus between workers and employers? To protect good employers in the current downturn, including the difficult trading environment, will the Minister of State ensure extra vigilance on the part of his inspectors so that all employers are complying with EROs? As I said, this is particularly to protect good employers and ensure that there is an level playing pitch.
The balance must be struck and obviously it is the law of the land. Labour inspectors are actively enforcing REAs and EROs. One must get that balance right, but at the end of the day it is in the hands of industry. For many years, JLCs were not as responsive to the needs of industry because there was a consistently upward curve. Now that there are challenges, however, they need to come together in a spirit of partnership, as has been the case. They are chaired by an independent chairperson and can bring in expertise and get assistance to strike the rates, pay and conditions that reflect the industry. I assure the Deputy that, in the context of enforcement, our labour inspectors are active. In fact, some people in this House think they are too active. It is always difficult to achieve a balance.
I will allow brief supplementary questions from Deputy Timmins and Deputy Doyle.
I said they were spreading across the country like the black plague, but they were only implementing the legislation. Whatever the ideological differences, I am sure the Minister of State would agree that businesses are suffering. Employers and employees want to come to some agreement on this because jobs are being lost. Can the Minister of State use his good offices to bring this matter to a conclusion? Will he indicate when we can expect closure on it? Let us get an agreement and put it to bed.
The hotels?
Yes, the hotels and restaurants.
I accept what the Minister of State said about the JLCs concerning pubs and catering, but how can it be good legislation when there are two separate arrangements? It seems the decisions are based on what the membership consists of. It is the same industry with two separate sets of rules, but that does not seem like good or proper legislation across the country. This matter must be addressed.
Everybody accepts there is a huge challenge and the hotel industry is under pressure because of international problems, including a weak sterling and weak dollar, as well as our own internal difficulties. They are currently discussing the matter and I am hopeful they will come to an agreement quickly to reflect the new realities. I urge all sides to accept that.
In the context of catering, that particular issue has been addressed and is going through the process of being lodged with the Labour Court and then becoming the law of the land.
On the broader issue, we have choices in this House. We could tear up the current arrangements, but I do not believe we should. They can work if they are more responsive in difficult times. I am quite sure that people can come together from both sides — industry and employees — and, more importantly, the chair is independent. That issue is also being looked at in the context of the review of JLCs and the amalgamation of same as a commitment in Towards 2016.
52 Deputy Brian Hayes asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has plans to establish a State guaranteed loan for small and medium enterprises; and if she will make a statement on the matter. [7396/09]
I have no plans to establish a State guaranteed loan for small and medium-sized enterprises, SMEs. The Government's recapitalisation scheme for Allied Irish Banks and Bank of Ireland, announced on Wednesday, 11 February 2009, is a fundamental requirement in restoring stability to our financial sector. Such stability will ensure that the financial institutions can actively contribute to our economic activity and particularly support our enterprise sector.
A key principle of the recapitalisation package is the recognition of the importance of business lending particularly for SMEs. Small and medium-sized enterprises are central to our economy and the provision of bank credit to the sector is a primary target of the overall package. This package contains a range of initiatives that will directly assist our enterprise sector in facilitating access to credit.
Under the recapitalisation scheme, Allied Irish Banks and Bank of Ireland have committed to measures to maintain a flow of credit to small businesses. They have committed to increasing lending capacity to small and medium-sized enterprises by 10% and to providing an additional 30% capacity for lending to first-time buyers in 2009. If the mortgage lending is not taken up, then the extra capacity will be available to SMEs. A €100 million environmental and clean energy innovation fund is also being established by each bank, as well as a further €15 million each to new or existing seed capital funds. Much of this funding will flow to small businesses.
The recapitalised banks have also agreed to fund and co-operate with an independent review of credit availability which will be managed jointly by the banks, Government and business representatives and will report within five weeks.
A code of conduct for business lending to small and medium-sized enterprises was published by the Financial Regulator on 13 February. This code will facilitate access to credit for sustainable and productive business propositions, and will promote fairness and transparency in the treatment of SMEs by banks. The code should strengthen the bank-client relationship and develop greater trust and confidence in the banks' lending practices. Banks are now actively promoting new lending as evidenced by recent press and television advertisements.
The Tánaiste met with representatives of the banks only last week and impressed upon them the need to ensure that credit is available to viable businesses. She has asked the banks and enterprise support agencies to work closely together to facilitate lending to enterprises.
Additional information not given on the floor of the House.
Funding to the SME sector is also provided through my Department and the State enterprise support agencies. The Department's continuous support for indigenous companies arises through maintaining a positive business environment and particular interventions from State agencies such as Enterprise Ireland, FÁS and the county and city enterprise boards. The allocations in my Department's Estimates for 2009 will ensure that we continue to build on this strategy for the future.
SMEs are central to our economic development and the range of measures and supports in place will continue to help the sector adapt to the current economic climate. The services provided by the development agencies are kept under review and will be adjusted to respond to the current economic situation.
I thank the Minister of State for his reply. As regards State-guaranteed loans for small and medium-sized businesses, the Tánaiste alluded earlier to the fact that she met with SR Technics earlier today. The Minister of State also alluded to the fact that the Tánaiste met with the banks. Has such an initiative for SR Technics, where 1,200 jobs are to go, been considered? This is a viable business with 80% capacity booked on one line for the first two months of this year and 50% for the next line for the rest of the year. There is no shortage of orders because the order book is active up to 2016.
The Deputy is asking a general question but he should ask a specific question on this matter.
I will ask a specific question. The Tánaiste alluded to interested parties, but will she inform the House how many there are? Has she considered a management buy-out or a workers' co-operative? Is there a subsidy? This is an important question.
The Deputy will realise that while this is an important issue, it is not relevant to the specific question the Minister of State is taking now. There are specific questions about this matter. I understand the Deputy's concern about it.
The Minister of State saw fit to allude in his answer to first-time buyers. What has that go to do with small grants?
I will determine what is or is not in order. This is a very important matter and there are specific questions about it.
With all due respect, we are not likely to reach those questions, are we?
The Deputy cannot simply piggy-back a question onto another one that is not directly relevant to it.
It is relevant in this regard, a Leas-Cheann Comhairle — that there are State-guaranteed loans for small and medium-sized businesses. Has the Tánaiste considered this as an initiative concerning SR Technics, where there is a viable business and there could be a management buy-out or a workers' co-operative?
An tAire Stáit.
She might, if she could, tell us about the ownership of the hangars.
The Minister of State is answering the question.
If the Deputy had listened to the answer, he would know that I referred to mortgages because if they are not taken up, they can be moved on to the SME sector.
As regards the meetings the Tánaiste had with the banks in terms of businesses, banking and funding, all those issues can be taken up by the private sector in terms of purchasing any company, including the companies the Deputy mentioned. I am sure the State agencies would come to their assistance in terms of whatever they might be able to put into the arrangements. It is a matter for the private sector to deal with that, but the Tánaiste and her Government colleagues are on hand to give the necessary support and direction.
So the Minister has no intention of having any further involvement in SR Technics?
That is not the answer.
I call Deputy Penrose.
Please, a number of Deputies are offering.
I can read between the lines like anybody else.
I have called Deputy Penrose.
The Deputy should stick to the facts.
Minister, please. I have called Deputy Penrose. A number of Deputies want to get in and they will not be bullied out of it by other Deputies.
I gave one example of what is going on. Does the Tánaiste believe what the banks are telling her? Is the protocol she has agreed with them worth the paper it is written on or are they pulling the wool over people's eyes? Are the banks going to support small industries, such as those to which I referred, to ensure their survival or, in the case I cited, an expansion? If the other banks will not do so, we own Anglo Irish Bank. Will the Tánaiste give a direction to that bank to go to the European Investment Bank and drawn down €1 billion of the €30 billion available so that it can be made available to small and medium-sized businesses at a particular rate of interest? That is what will secure the future of our industries.
The banks have already made an application for the money from Europe, so that is currently under way and has been identified.
It took three months though.
As regards the Deputy's other question, there are many examples, such as the one he gave. In response to that, there will be an independent review of banks' lending to ensure that they are responding positively to the SME sector. That has been set up. The banking arrangement with the SME sector will be the focus of attention to ensure that what the Deputy is requesting does happen.
Does the Minister of State envisage a role for Enterprise Ireland in assisting banks to decide which businesses are more viable so as to ensure job retention and which need funding more urgently? Clearly, in recent times the banks have had an interest elsewhere and it was certainly not in business or good practice. Expertise from Enterprise Ireland may assist them in that regard.
IDA Ireland and Enterprise Ireland are interested in the businesses affected in their sectors. The arrangements requested by the Deputy will be put in place.
When the moneys are drawn down by the banks from the European Investment Bank, will the Minister of State ensure they are not attached to existing overdrafts and loans of small businesses? Backdating the moneys to existing loans could easily happen, allowing the banks to shore up their own balance sheets.
The moneys that will be drawn down will be for the SME sector and business in general.
Yes, but they could be attached to existing loans.
The new group will monitor the availability of funding to the SME sector. Deputies English and Penrose are correct that it needs to be monitored to ensure it does what it says on the tin, so to speak.
53 Deputy Pat Breen asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will introduce price controls; the products and services which she is considering controlling; the criteria she will use in making a decision on whether to impose such controls; and if she will make a statement on the matter. [7345/09]
68 Deputy Noel J. Coonan asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on whether she has damaged the retail sector and depressed consumer demand through her recent comments on price controls and her endorsement of the National Consumer Agency’s recent price survey; and if she will make a statement on the matter. [7362/09]
95 Deputy Kathleen Lynch asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on the re-introduction of price controls; the way such a system would work; and if she will make a statement on the matter. [7268/09]
I propose to take Questions Nos. 53, 68 and 95 together.
I am aware of several recent media reports which have speculated on the introduction of price controls as a way of tackling prices. I have not made any commitment to the introduction of price controls. I have said that I will consider introducing legislation if I find certain retailers, or other elements of the supply chain, whose actions are resulting in the consumer not receiving fair value. I am prepared to consider all legislative options to address problems that persist or act as a barrier to fair competition or to the achievement of value for the consumer.
Much media comment in this area has focused on the possible introduction of price control measures as a means of tackling the current differentials in prices between this jurisdiction, Northern Ireland and the UK. Undoubtedly, the level of the differential in prices is giving rise to considerable concern, not only for consumers but also for the economy, given the impact they are having on employment, trade and revenue to the Exchequer.
Notwithstanding the Government's accepted preference of tackling price inflation through the promotion of competition and consumer choice, North-South price differentials have been a matter of concern for some time. Given this, I have been actively engaged with various elements of the retail sector over the past several months to ensure Irish consumers benefit by way of lower prices from the appreciation in the value of the euro, particularly against sterling. Given that the euro has appreciated by almost 30% in value over sterling in the past 18 months, it is unacceptable this has not translated into lower prices for consumers in all cases.
It is incumbent on all links in the retail chain to ensure the greatest degree of transparency possible as to the reasons for the current North-South price differentials. I will continue to pursue this issue with retailers, distributors, suppliers and manufacturers to ensure Irish consumers receive a fair deal and value for money when doing their day-to-day shopping.
I was not referring to media comments but to the words of the Tánaiste and Minister for Enterprise, Trade and Employment in her interview on "The Week in Politics" with Deputy Joe McHugh in which she specifically threatened to introduce price controls. Those were her words and I do not care what was in the newspapers. These were threats made by her and she should not claim it was an impostor on the programme.
Does the Deputy have a question?
The Government sets ESB and gas prices, taxi, bus and train fares, health charges and work permit prices. Nothing has increased more this year than government charges. Why should we trust the Government to fix prices when it is responsible for most of the inflation rises?
Will the Tánaiste and Minister for Enterprise, Trade and Employment withdraw the slur she made against Irish retailers? In the main, they are not responsible for high prices; it is the Government that is responsible. Government charges are the primary reason for high retail prices. Will she withdraw the slur against Irish retailers and her encouragement to consumers to shop in other countries?
I refute the Deputy's remarks. As always, Deputy Varadkar moves off on a whim and goes for the facts afterwards. I do it the other way around. We have established the facts, that is, the cost of doing business. There continues to be a differential between North and South, taking into consideration all the competitive issues the Deputy addressed.
I have met with retailers ad infinitum. Many of them are doing their utmost to reduce prices but cannot do so when they cannot access a sterling price list. Those are issues in the supply chain and route to market which are being investigated. Under section 32 of the Competition Act 2002, the Competition Authority carries out studies on retail distribution and imports. I do not have clarity on this issue and, therefore, I have asked the Competition Authority to investigate the matter and report to me by 30 April in order that I can address the issue.
Written Answers follow Adjournment Debate.
