Vol. 679 No. 2
27 Deputy Willie Penrose asked the Tánaiste and Minister for Enterprise, Trade and Employment when she will introduce the legislation promised (details supplied) to ban cross-directorships and to prevent chief executives from becoming chairmen of their companies; and if she will make a statement on the matter. [13646/09]
I assume the Deputy is referring to comments made by my colleague, the Minister for Finance, concerning the establishment of a new central banking commission, possible inappropriate cross-directorships and circumstances where the appointment of a chief executive as chairman may not be in accordance with best corporate governance practice.
The House will be aware that the Taoiseach recently announced that a new central banking commission will be established, which will incorporate the responsibilities of the Central Bank and the supervision and regulatory functions of the Financial Regulator. This will build on best international practice and it is intended that the banking commission will have the necessary powers to ensure the financial health, stability and supervision of the financial sector.
In the area of company law, which falls within my responsibility, the Deputy will be aware that the companies consolidation and reform Bill, which is currently being drafted by the Office of the Parliamentary Counsel, sets out the corporate governance duties of directors, company secretaries and auditors on a general basis for companies across all sectors. The Bill will implement the recommendations of the Company Law Review Group in that the fiduciary duties owed by directors to the company will be stated in the new companies' code.
At present, company law does not prohibit cross-directorships, whereby a person is a director of more than one company at the same time. Any consideration of a change in this position for the general cohort of companies operating in Ireland would need to take account of the contribution that non-executive directors make by imparting their mix of expertise and the cross-fertilisation of ideas from other areas of the business community.
On the issue of a chief executive becoming chairman of a company, at present there is no prohibition in the Companies Acts that would prevent that taking place in the case of companies generally. However, this issue is dealt with on a "comply or explain" basis in the combined code of corporate governance that applies to companies whose securities are listed and traded on the Stock Exchange.
The Government and I are committed to ensuring that our corporate governance regime for the financial sector and the corporate sector generally accord with best international practice. I will be working closely with the Minister for Finance to take account of the lessons which emerge from current inquiries arising from recent developments and we will address, as appropriate, any concerns in this area.
Additional information not given on the floor of the House.
Separately, the Deputy will be aware that, yesterday, I announced that the Government has approved my proposals to make immediate amendments to the Companies Acts to ensure that the annual accounts of companies that are licensed banks will disclose loans made to named directors, rather than the aggregate of such loans as applies at present. The amendments will also ensure that the maximum amount of each director's liability during the year is published, rather than just the outstanding balance at the end of the financial year.
The Deputy will also be aware that I asked the Director of Corporate Enforcement if, arising from his current investigations, there were any legislative amendments that he considered of immediate importance for the carrying out of his work. The amending Bill will, as a result, also include provisions requested by the Director of Corporate Enforcement: clarifying the right of access of his office to certain records of a company under investigation and to certain related third party records; reducing the evidential requirement on the Director of Corporate Enforcement so that he will not have to prove a director was wilfully in breach of the loans to directors provisions of company law; strengthening the provisions dealing with search warrants; and providing a mechanism for the courts to determine whether legal professional privilege attaches to some seized material. I hope to bring the Bill before the House at the earliest opportunity.
Finally, I can also confirm to the Deputy that I have granted the Director of Corporate Enforcement's request last week for additional staffing and that I have instructed my Department to put these resources in place as a matter of urgency. This will facilitate the carrying out of ongoing investigations and allow his office to continue to perform its other functions to the highest standard.
I thank the Tánaiste for her reply. I put it to her that for the ordinary person corporate governance and the cross-over of directorships must remind them of the old song "Lanigan's Ball" — "I stepped out and you stepped in again". That is about the height of it. One could meet a small cohort of people on nearly any board. When one individual resigned from a board, he also had to step down from positions in four other places. It is all right to talk about the cross-fertilisation of ideas.
A person whom I have not met in years, but who is from my town, is the managing director of Grant Thornton, Mr. Paul Raleigh. As its managing partner, he urged the Government to introduce new legislation to incorporate into law key provisions of the combined code of corporate governance and serious sanctions for non-compliance with the code. I think what he was saying is that one can complain but as long as one can explain, everything is all right. Does the Tánaiste agree that it is important in the context of regaining our international credibility, which is most important after the recent controversies?
Will the Tánaiste ensure that, first, chief executives do not go on to become chairmen and become combined executive chairmen? That happens a lot. Second, if I am on two or three boards of listed companies at the same time how can I, as an independent director, be effective in terms of the amount of time I am able to devote to each company? How can I dot the i's and cross the t's? How can one carry out one's fiduciary duty as a non-executive board member if one is looking after one's own business and sitting on three or four boards? Some of them are shaking hands with one another as they leave. Let us not talk about cross-fertilisation; it is the cross-directorships that are important. If a board wants particular expertise it would be better for it to buy it in. It has been said that corporate cronyism has reached a height in this country. Has the Tánaiste examined how the system operates in other countries, for example, the London Stock Exchange?
In the context of this discussion, I wish to identify the area about which the Deputy is inquiring. I assume the Deputy does not refer to small to medium-sized enterprises?
Family businesses——
No, there is never any problem with them.
I am just trying to seek clarity. The second issue is the combined code of corporate governance for listed companies, plcs in the main.
That is what I am inquiring about.
That matter is being considered in the context of company law. It is important to be careful. The Minister for Finance is also considering this issue in the context of banking institutions. It is within those confines that I agree with the Deputy that we can progress this matter from a "comply and explain" basis into a legal framework.
Deputy Penrose is aware that I announced amendments to the Companies Acts yesterday arising from my concerns that the Director of Corporate Enforcement would have robust legislation available to him arising out of those issues. After my initial inquiries, he reverted to me and indicated that he needed some matters facilitated. That is what I announced yesterday. Equally, I asked whether he had the relevant resources to have that carried out and that this would be provided. We are ad idem on this issue in the differentiating of the companies to which the Deputy referred.
Will the Tánaiste take——
The time is up.
We have bundles of time.
Will the Tánaiste consider limiting the number of directorships of boards which people can hold?
The time for the question has expired.
Was the Tánaiste surprised at the Stock Exchange's response to Mr. Raleigh's report? It said there appeared to be a disconnect between the findings of the report on corporate governance for Irish plcs and commentary contained in the study. Has the Tánaiste examined that? Basically, Grant Thornton was recommending that the Tánaiste introduce new legislation to incorporate those key provisions, in particular, relating to the roles of audit committees and directors. I found the comment of the Stock Exchange puzzling to say the least.
I would not care to comment on that because we have not come to finality on the issue yet. I am sure Deputy Penrose is aware that we are only a small country with a certain number of people available to participate on many of our boards. We should be cognisant of that point. The initial inquiry regarding the change from a code to a legislative framework is being carefully worked through between the Minister for Finance and me.
28 Deputy Deirdre Clune asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on recent comments (details supplied) regarding skill shortages in engineering and technology areas; the steps she has taken to address this situation; and if she will make a statement on the matter. [13740/09]
As a leading knowledge economy, Ireland has a significant demand for the key skills of engineering, mathematics and information technology. In the competitive labour market over recent years supply side constraints and strong demand did create some difficulty at times for individual companies in recruiting suitable personnel.
The recent expert group on future skills need report — Future Requirements for High-Level ICT Skills in the ICT Sector 2008 — concluded that the market for high-level ICT skills is tightening and that projected demand is set to exceed domestic supply. The report identified a range of actions that can be implemented in the short, medium and long term to maximise career opportunities and jobs within the sector. The higher education sector in Ireland has responded to the demands of the labour market through a series of skills initiatives arising from this and other analysis by the expert group. On the basis of the expert group's recommendations for new courses, the Higher Education Authority invites proposals from higher education institutions to provide courses in targeted disciplines.
In addition, a number of measures to promote science, engineering and technology in schools and colleges, as well as raise awareness of the importance of these disciplines in wider society, are being taken by the Higher Education Authority, ICT Ireland and Discover Science and Engineering.
I thank the Minister of State for his reply but he seems to be on a different planet to me. The Tánaiste attended a jobs announcement by Intel recently at which it announced it was investing €50 million in jobs in research and development. Mr. Walsh of Intel said on that occasion that the State was not producing enough graduates or postgraduates in computer science and electronic engineering. Management at Havok, which is owned by Intel has also said it cannot get adequate numbers of quality staff here. These comments contradict the response of the Minister of State.
There is a shortage of qualified workers. We have a problem in that we do not attract enough students into the mathematic, science, electronic and engineering areas. Fine Gael put a question to the Minister for Education and Science on this last week but his response was less than satisfactory. Will the Tánaiste or Minister of State outline what engagement their Department has had with the Department of Education and Science to address this serious issue? We have a significant shortage of students and graduates in this area. Companies like Intel, Havok and Google have all said there is a problem in attracting and sourcing graduates in these areas. The Government has announced plans for a smart economy but if we do not have the students and graduates to deliver that, where are we going?
What specific action is the Department taking to deal with the issue? The Minister of State mentioned the Higher Education Authority but he seems to be looking backwards rather than concentrating on encouraging the take-up of science and engineering. He mentioned the discover science and engineering programme but it has not provided measurable numbers of students. Instead, we see a fall-off year in and out in the numbers of students attracted to these areas.
The problem was identified over the past number of years and that is the reason we commissioned the expert group on future skills needs to examine the area. The group came forward with a report on future requirements for high-level skills in the ICT sector. Currently we have an upskilling co-ordination group and an interdepartmental committee, which I chair, working to bring about co-operation between the two Departments. They also aim to bring about an implementation plan for the national skills strategy. That work is continuing.
Figures just released show there has been a 20% increase in first-choice applications for science to the CAO for the forthcoming academic year. That said, we continue the work to deal with the situation. A number of Government actions are being taken to promote science, technology, mathematics and engineering, including various postgraduate programmes; the ICT champion programme; the discover science and engineering programme; and the project maths programme, which will yield great results and which was introduced by the Department of Education and Science on a pilot basis and will be rolled out nationwide. Measures have also been taken by the industry advisory group. We have too the national centre for excellence in maths and science, mathematics support centres and the Strategy for Science, Technology and Innovation 2006-2013. A number of recommendations are being implemented in that regard.
I assure the Deputy that the expert group on future skills needs has issued a document identifying shortages and what we need to do up to the year 2020. Measures are being taken to deal with the situation. The interdepartmental committee is finalising an implementation plan for the national skills strategy. Work is continuing and the various programmes have been put in place to deal with the situation.
The report of the expert group on future skills needs was produced in December and the National Competitiveness Council supported many of its recommendations. However, last week the Minister for Education and Science did not indicate he would implement any of the recommendations, specifically the ones recommending bonus points for maths to encourage a take-up of maths or reconsidering the methods of teaching maths and science. It is only by addressing the issue at primary and secondary level that we will get the necessary feed for third level. Will the Minister of State respond to that?
The overall view emerging with regard to the position on bonus points for higher level maths is that the introduction of bonus points is unlikely to dramatically increase uptake of higher level maths. A report from the points commission on this matter in 1999 came out against this recommendation on the basis that it would lead to a narrowing of the range of subjects taken by students and create pressure on students to make early career choices.
That was ten years ago. The future skills group has now recommended it.
The 1999 report suggested it would also give rise to equity issues where the subject was not available and that this would lead to distortions in third level access and provision. The issue has been given serious consideration again in recent months, but the overall view emerging is that we should not do it. It is only one recommendation. I mentioned already the project maths programme is being rolled out.
The National Competitiveness Council recommended it be implemented immediately.
It is a matter of getting agreement following discussion and consultation. I do not agree that the Minister for Education and Science is not in favour of implementing the recommendations of the national skills strategy.
29 Deputy Willie Penrose asked the Tánaiste and Minister for Enterprise, Trade and Employment if, in view of the further increase in the number of people on the live register, published on 4 March 2009, she will indicate the steps she is taking to stem the number of job losses; if she has plans to provide new training opportunities for those who have lost their jobs and to encourage the creation of new employment opportunities; and if she will make a statement on the matter. [13647/09]
The total number of people on the live register for March 2009 is 371,300, a monthly increase of 16,863. It should be noted that the live register is not designed to measure unemployment and includes part-time, seasonal and casual workers entitled to unemployment benefit. Based on the live register figures, the CSO estimates the standardised unemployment rate in March to be 10.9%.
The rise in unemployment is particularly unwelcome and is a sign of the difficult times that all economies face. The Government is determined to do all in its power to tackle the issue of the rising number of people who have lost their jobs. My Department, and its agencies are working together to respond quickly and effectively to the rise in unemployment.
In terms of job search supports, FÁS employment services, together with local employment services, have put in place measures designed to provide increased capacity for the rise in referrals from the Department of Social and Family Affairs. The implementation of these measures has increased the monthly capacity of job search services from 6,500 to 12,250 persons per month. In order to assist individuals through the provision of education and training opportunities, I announced 51,000 new training places under the FÁS training initiatives strategy. These places are in addition to the 27,000 previously planned for 2009 under the bridging foundation training, specific skills training and traineeships programmes and are specifically tailored for individuals who wish to add to their existing skills level and improve their prospects of re-entering the labour market.
In response to the significant downturn in construction related activity since the beginning of 2008, FÁS, in addition to the usual supports that it provides to redundant workers, has established a training fund to enable them to provide a timely response to identified training and retraining needs for low-skilled and redundant craft workers from the construction sector. The Government is also determined to assist redundant apprentices complete their apprenticeships. We have initiated several measures, which will see over 2,700 redundant apprentices being able to progress their apprenticeships this year. The measures to assist redundant apprentices include the employer based rotation scheme, which will assist up to 500 individuals, the agreement between ESB networks and FÁS to provide training opportunities for up to 400 redundant electrical apprentices and the interim changes introduced by FÁS to enable 1,200 redundant apprentices progress to their next off-the-job phase without having completed the previous on-the-job phases.
The Government remains intent on achieving greater capacity to meet the ongoing challenges in the labour market. In this context we will continue to bring forward further measures to make training and education services available to a greater number of unemployed persons to ensure timely and comprehensive access to the full range of services provided by FÁS.
Additional information not given on the floor of the House
While activation measures will assist individuals in securing employment and enhancing their skills, the key to addressing our unemployment problem is the creation of more jobs. That is why the Government remains strongly focused on supporting and promoting enterprise development to create new jobs. In this regard the enterprise development agencies of my Department, including IDA Ireland and Enterprise Ireland, are working to ensure that we continue to grow the economy and jobs even in the current more challenging climate.
I thank the Minister for her reply. Is it not time to start afresh with new thinking? For example, can we not eliminate all the lead-in times for the determination of eligibility for the back to work allowance scheme, the back to work enterprise allowance scheme and the back to education scheme? We should get rid of the lead-in times or reduce them to three months. The Minister heard a man from Dundalk refer on "Prime Time" last night to what I have spoken about for the past few months. The lead-in times and such measures should be eliminated. New thinking is required.
SR Technics is seeking €25 million for a management buyout. Nine hundred jobs multiplied by €20,000 per job amounts to €18 million. This does not take into account secondary benefits and the 60% the Department will have to contribute for redundancy payments. If these were taken into account along with the loss of spending power in which the loss of 900 jobs would result, the cost would amount to approximately €40 million. It therefore makes good economic sense to invest €25 million in this necessary industry. We need aviation and aeronautical engineering and technology and the 900 employees have the necessary skills. Why would an island nation do away with an industry in which these people are needed? Let us start thinking outside the box. If we invested the €25 million we would have 900 people at work. The Minister should start thinking in this way.
Consider the issue of VAT on insulation materials. Some 40% of our housing stock was built prior to 1963 and virtually none of the houses in this category is insulated. While there is an insulation scheme worth €300 million, it is negligible. Windows and doors need to be included, not just insulation. VAT must be removed from insulation products.
If the Minister got a job tomorrow, she would be involved with the VAT regime as soon as she had a turnover of €37,500. A rate of 21.5% or 13.5% applies if one is supplying services. If one's turnover is over €70,000, the same provisions apply. The threshold of €37,000 should be increased to €60,000 or €70,000 while the €70,000 threshold should be increased to €140,000. Let us be innovative. The Exchequer is losing money at present and the addition of people to the unemployment list is costing the State a huge amount. I would say the Minister of State, Deputy McGuinness, agrees with me. I know he is examining county enterprise boards but he should do so quickly. We heard last night about micro-enterprises and these must be borne in mind. Some 750,000 are employed by 250,000 small and medium enterprises.
The Minister is working with Mr. Barry O'Leary, Mr. Frank Ryan and others, which is great, but she knows the difficulties that exist and that there is a lead-in time of a year and a half or two years. People are now willing to start up enterprises. The Minister, who is a rural person like myself and knows what I am talking about, realises such jobs comprise the structural fabric of rural Ireland. We need them and should start thinking outside the box.
On SR Technics, I hope we can get to the question and that I will be able to address the issues raised.
The Minister will not address my question.
I hope to address the House on it.
On the insulation scheme, those of us who were local representatives will know there was no grant aid for insulation. This is why it now comprises a specific energy measure and why it is outside the remit of all other schemes.
With regard to the back to work enterprise allowance and the back to education scheme, the late Minister for Social and Family Affairs, Séamus Brennan — God rest him — introduced a change to the back to education scheme whereby those who were made redundant could enter the system automatically. That has been progressive and one will see a considerable number of new entrants to education. The Minister for Social and Family Affairs stated in the Chamber last night that she is evaluating the schemes on the basis referred to by the Deputy, namely, activation measures in respect of which there has been keen interest by people who have been made redundant.
We are in the middle of a budgetary framework and are dealing with our public finances. We must therefore evaluate how we can do this in the best way.
Is there good news for the people to whom I refer?
Yes, the Deputy is correct to talk about new, innovative schemes. Within my Department, the Minister of State, Deputy Kelleher, and I have been working very closely to reorientate the emphasis of our investments, particularly within FÁS, from people within work to people who are unemployed. It is a question of ensuring people still have contact with the labour force. It is a question of linking in with the views of the Minister of State, Deputy Haughey, on skills needs and of providing skills for the future as opposed to having them evolve in the normal way. This work is ongoing and progressing quickly.
I appreciate making progress can be frustrating, it is as frustrating for me as everyone else. With regard to county enterprise boards, the Minister of State will be making an announcement in the near future, in his reply to a parliamentary question, on how he believes we can support micro-enterprises. We are acutely aware that these new activation measures will have to encompass the realities that exist. The ratio between the two types of unemployed persons is nearly 50:50. Some 50% are in the highly skilled and motivated category while 50% are in the semi-skilled and low-skilled category. In normal circumstances during my 23 years in this House, we dealt with only one category. It is on this basis that new suites of initiatives are being worked through by all of us in the Departments of Education and Science, Social and Family Affairs and Enterprise, Trade and Employment.
30 Deputy Damien English asked the Tánaiste and Minister for Enterprise, Trade and Employment the financial support or grant aid schemes from her Department and State agencies under her aegis that are available to businesses here; the number of businesses that have applied to date in 2009 for such schemes; the number of applications that have been successful, unsuccessful, subject to payment and not processed to date for each scheme; the way in which this compares to the same periods in 2007 and 2008; and if she will make a statement on the matter. [13741/09]
My Department, primarily through our enterprise development agencies, funds a range of enterprise support programmes and initiatives aimed at assisting businesses to grow and maintain jobs in Ireland.
At any given time, Enterprise Ireland has approximately 3,300 active client companies. Supports to these companies include funding for exploring new opportunities; high potential start-ups; research and development; capital assets; management development; the growth fund; and innovation partnerships and the innovation voucher scheme. Funding is provided for local business infrastructure, including through the community enterprise centre scheme. In addition, Enterprise Ireland operates a number of programmes that provide direct supports to companies with the purpose of transforming research and development activity in enterprises under our strategy for science technology and innovation for the period 2007 to 2013.
IDA Ireland offers a range of grants as part of the marketing strategy of the agency to attract foreign direct investment into Ireland. The four main types of grant offered by IDA Ireland to its clients are employment grants, fixed-asset or capital grants, research and development grants and training grants.
Financial support is provided by Shannon Development to companies investing in or relocating to Shannon. In addition, the county and city enterprise boards, CEBs, support individuals, firms and community groups provided that the proposed projects have the capacity to achieve commercial viability. The CEBs deliver a series of programmes to underpin this role and provide both financial and non-financial assistance to a project promoter. The forms of financial assistance that are available, subject to certain restrictions, include capital grants, employment grants and feasibility study grants. InterTradeIreland – the North-South enterprise body — also provides business support programmes under two broad headings, namely, sales and marketing supports, and science, technology and innovation supports.
My Department funds the FÁS competency development programme, which provides financial support for the up-skilling of employed people and in particular low-skilled workers and managers of SMEs. Further enterprise supports are delivered through the national training fund, Skillnets, disability supports and through our work-life balance initiative. All these are funded through my Department.
With regard to the detailed statistical data sought by the Deputy, my Department has not been able to collate all the information in the short time since the question was tabled. In that regard, the allocation of grants to individual businesses is a day-to-day matter for the agencies themselves. However, I am arranging for the information to be collated and made available to the Deputy at the earliest possible opportunity.
I thank the Minister of State for his reply and look forward to the data. I was hoping the Minister of State might be able to tell me about proposed new schemes but they may be announced in the budget next week. We need new schemes and businesses need new forms of help.
The Minister of State said FÁS is under his Department and that training is provided to businesses and business managers. Word went out from regional managers yesterday that there will be no additional funds this year for FÁS training for businesses. Can this be confirmed? The training providers are very annoyed and small businesses contacted me yesterday on this matter. If it is true that there are to be no additional funds, it is disgraceful. The managers are being told they can only spend on their training programmes money that was committed last year. That seems to be very serious. Will the Minister of State comment on this today or revert to me at another time?
Businesses are under immense pressure. Enterprise boards received additional funds, which I accept, but they need more. They have now been told that there could be a delay in receiving the funds and that they may have to seek approval from the Department of Finance if they approve a project at board level.
How many grants have been paid? There are unnecessary delays in making such payments to businesses. I urge the Minister of State not to support the requirement that every small capital grant for employment will have to be signed off by the Department of Finance. We need fast decisions and money to be made available quickly. I had hoped the Minister of State would speak about making available more grant money for businesses to employ people. This involves a cross-over with social welfare. If a business needs a person for one or two weeks' work, much red tape and paperwork is involved in taking people off the dole, putting them to work and putting them back on the dole again. Can the Minister of State invent a scheme to facilitate a business which wants to employ people for a number of weeks but cannot guarantee them full-time work which will make it simpler to take people off social welfare, provide them with work and let them go back on social welfare? It is wrong when there is work to be done that people cannot do it because it is too awkward and involves too much red tape or that they lose out. Can a new scheme be introduced to straighten this out?
It is a very serious matter if FÁS has no money for training. The Minister of State will probably tell me that training is going to unemployed people but businesses still need training and so do managers. On numerous occasions here I have stated that they need professional help and advice and business coaching to get their businesses through these tough times. Do not pull this plug on small businesses.
Many of the questions asked by Deputy English relate to the budget.
No, they do not. They are related to my question.
The Deputy should relax. I will answer him if he gives me a chance.
I care about this.
Allow the Minister of State to answer.
Many of the questions Deputy English asked about innovative new schemes are part and parcel of the discussions about the budget and he will receive the overall answer on these schemes on budget day.
I was told that in October.
With regard to money already allocated, Enterprise Ireland has €291 million and it is dealing with it in the normal course of events. With regard to the IDA, this time last year the payout was €3.1 million as against its budget of €74 million. This year it is €5 million against its budget of €75 million. The enterprise boards have had an increase so let us acknowledge it.
I acknowledge that, but what about payment of it?
I share Deputy English's concern that approval for proposals in the schemes are on hold until budget day. While businesses are under pressure, they must work with the Government and understand what we are about so we can put a shape on the finances. On budget day we can deal with these issues through a short-term measure.
With regard to training, if the county enterprise boards obtain approval for training it is in principle and they must wait for the finance department to clear it. Again, this is a short-term measure and will be dealt with in the context of the budget. FÁS is the same.
Yesterday, a regional manager stated that it is not a short-term matter and that no money is being allocated for training for businesses.
That is not true.
That is what we are being told.
Is Deputy English speaking about county enterprise boards?
No, I am speaking about FÁS.
I stated that FÁS would be dealt with in the budget.
It is not as simple as that. Word went out yesterday that no new money is available for training or up-skilling people in business. Is this true? It is a serious matter.
Time is up for this question but the Minister of State may reply.
All programmes are being reviewed and there is no question about this. The Cabinet is dealing with in the context of the budget which will be announced by the Minister for Finance. I cannot give the Deputy a direct answer by stating that funding has been withdrawn.
