Vol. 743 No. 2
1 Deputy Willie O’Dea asked the Minister for Jobs, Enterprise and Innovation the number of persons employed in the economy at the end of quarter four in 2010; the number employed at the end of quarter one in 2011; the number employed at the end of quarter two 2011; the estimated number of persons that have emigrated in each of these quarters; and if he will make a statement on the matter. [28951/11]
The latest quarterly national household survey, published by the Central Statistics Office, CSO, on 15 September, shows that 1,823,200 people were in employment at the end of the fourth quarter 2010. At the end of the first quarter of 2011, 1,804,200 people were in employment. At the end of the second quarter of 2011, the numbers in employment had increased to 1,821,300. This increase of 17,100 is the first increase of significant scale. It is influenced by seasonal factors. However, even on a seasonal basis it represents an increase in private sector employment for the first time since the recession started.
Data on emigration is available from the CSO only on an annual basis. Net emigration in the year to April 2011 was 34,100, similar to the level in 2010. However, gross emigration in the year to 2011 was 76,400, an increase of almost 11,000 on the previous 12 months. Almost half of these were non-Irish nationals, reflecting the diversity of our population and labour force in recent years.
Net migration has always been a characteristic of Ireland's labour force. Movements reflect the state of the Irish labour market and the availability of job opportunities. The past three years have seen a major loss of employment which has been reflected in rising outflows and falling inward movements.
The slowdown and reversal of the employment trends in the course of 2011 is encouraging. However, the recovery is fragile. This is why the Government has set economic recovery and job creation at the heart of its work programme. This drives the work of my Department and other key Departments, as we seek to provide a better future for our young people and our society.
It would appear from the figures given by the Minister, in which he takes a great deal of satisfaction, that fewer people are in employment now than when the Government introduced its jobs initiative. When the initiative was introduced the rate of unemployment stood at 14.2% while now it stands at 14.4%.
What percentage of those on the live register have been unemployed for more than a year? What percentage of the total unemployment figure comprises the under-25 age group?
With respect, the Deputy's original question related to the number of people at work and that is the data with which I provided him. I do not have to hand the percentages he is seeking on those out of work.
Will the Minister make an educated guess as to the figures?
I do not regard these figures as a cause for great adulation. However, in the past three years when the Deputy's party was in government, 350,000 jobs were lost. While the small increase of 17,000 jobs in the last quarter does not represent a source of great joy, it shows the labour market is stabilising. I am also encouraged by growth trends in exports and manufacturing output and other significant indicators of a pick-up. This is a fragile recovery and more will have to be done to bolster our efforts in this area.
Will the Minister accept his jobs initiative has failed? In net terms, no new jobs have been created while the unemployment rate has gone up. Will the Minister agree it is not too far off the mark to say one in two on the live register has been unemployed for more than 12 months? Am I far off the mark saying youth unemployment now stands at over 30%? Will the Minister agree every projected rate for economic growth over the next two years will still be insufficient in creating more employment?
The Deputy is not correct as most forecasters are predicting a turnaround in employment. Growth projections are fragile and are very uncertain. The job trends are not evidence than the jobs initiative is not working. Up to 17,100 extra people are at work at the end of September compared to the end of June. The jobs initiative began in July, so the employment trends do not prove it has been a failure.
The jobs initiative includes various schemes, such as Jobstart, involving 2,000 people, and Springboard, with 6,000 in education projects, which are recording successes.
They are not jobs, however.
All I am giving the Deputy is what he asked for in his question. I am not trying to be smart in pretending there are successes through some subterfuge. These figures are signs of a fragile recovery and need to be built on.
2 Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation the contact he has had with the management and staff of Aviva Ireland; and if it is his priority to retain these jobs in the economy here. [28928/11]
Aviva is undertaking a review of its operations in response to a significant reduction in demand for insurance and pensions products. Aviva has found it necessary to review its Irish operations to ensure its cost base is in line with domestic demand to ensure sustainability.
Industry figures show that motor and home insurance has dropped by over 20% in the past two years. Also, life assurance and pensions have dropped by over 30% due to concerns over long-term savings, people cancelling or reducing pension policies. This has impacted greatly on Aviva's operations in Ireland. The fall in the Irish market has led to the present restructuring review which the company's European management is leading.
Aviva has been undertaking major restructuring across of all of its markets. In recent years, Aviva staff numbers in the UK have dropped from 33,000 to 20,000 and the company's total workforce has dropped from 56,000 to 36,000.
I have met with Aviva's chief executive officer for its worldwide operations, its European director as well as the chief executive officer of Aviva Ireland. The meeting was part of an ongoing process of contact between senior Aviva management and myself. I expressed the Government's concern about the impact on employment and urged the company to seek solutions that minimised the impact on jobs. I also offered it the support of my Department's agencies.
The company briefed me on the ongoing review of the Irish business and the challenges and opportunities that present themselves in the light of market conditions here and organisational changes across Aviva Europe. The company confirmed Aviva remains committed to the Irish market and would seek to minimise the impact on jobs as a result of the review. It also reiterated that no final decisions had yet been arrived at.
IDA Ireland is in contact with the company at both corporate and local level with the intention of mitigating the impact of any potential negative outcomes following the review. IDA Ireland is also in dialogue with the company concerning potential future opportunities around the company's significant international business.
I will continue to keep in close contact with the company as this review progresses.
Morale is very low among Aviva staff who have been left in a financial and economic limbo. UNITE, the trade union, contacted Aviva management over a week ago but still has had no return contact. Employees are still awaiting the publication of the company's review. Will the Minister agree it is important management consults fully with the employees as soon as possible to let them know what will happen to the company's Irish operations?
It is important to be proactive in this matter. There is no point shutting the gate after the horse has bolted. Has the Minister considered working with Aviva to address other costs which negatively affect the company such as upward only rents and rates? The Aviva Stadium is paid for by the Irish end of the company's operation when it is creating marketing benefits for Aviva Europe. Can Aviva Europe take on some of the stadium's costs?
I understand and appreciate the anxiety of the company's staff. There has been much media speculation about this matter, which is one of great concern. I urge the company to consult with its staff. The review process is not yet complete according to my clear understanding from the company, but I see no reason for not engaging with staff.
We are taking a proactive approach to this matter and cost issues relating to property have been brought to our attention. In this respect, the IDA will assist the company in any way it can. We will seek the best outcome, but this is a difficult time for the company and its market has soured.
I seek clarification on the upward-only rent reviews in which the company is engaged. I do not want to be defeatist, as these jobs can be saved even at this point in time. Given the example of Dell, has the Minister a plan B for these workers and has he consulted the European Global Fund, EGF, in any preparatory sense?
An application to the EGF would be premature at this stage. It depends on the content of any restructuring. For the fund to be involved, outsourcing beyond the EU would be required.
I will not discuss a commercially sensitive matter, but the company has alerted us to some cost issues. We are attempting to assist it in that regard. This matter is not related to the upward-only rent review legislation on which the Minister for Justice and Equality, Deputy Shatter, is working.
3 Deputy John Halligan asked the Minister for Jobs, Enterprise and Innovation his strategy for job creation in County Waterford in view of the 575 job losses announced at the TalkTalk call centre in the city and almost 3,000 redundancies in the city in the past four years; if he will establish a dedicated task force to address Waterford’s local economy; the estimated time frame for the establishment of such a task force; and if he will make a statement on the matter. [24431/11]
As the Deputy is aware, I held a series of meetings with company management, workers, public representatives and business following the TalkTalk closure announcement. The message from local stakeholders was clear, in that County Waterford had not benefited from advances in the good times and had been badly affected in the more difficult times of late. On foot of that I instructed my agencies to put together an action plan for the south-east region to assess its strengths and weaknesses, identify sectoral opportunities, carry out an audit of activities and structures of the agencies and assess the scope for collaborative initiatives with local bodies.
It is clear that the region, despite all of its strengths, has not been as successful as we would all want. Job losses and unemployment levels are above average. Both short-term and long-term action is necessary.
The agencies have reported back and I am considering their responses with a view to introducing actions to address the specific employment problems affecting the south east. This approach is more appropriate than establishing a task force, given the timeframe of the site closure, the need for swift action and the fact that a large amount of analysis has been undertaken in the past.
I am determined to give Waterford the priority it correctly deserves. We need to take a hard look at this to see how we can better support enterprise in the south east and set out the actions we can take in the near and longer terms. As the various reports from the State agencies include commercially sensitive information, I will not be able to publish them as received. However, it is my intention to make known the additional activities and plans for enterprise support in the near future.
I acknowledge the support of Cabinet colleagues, in particular the Ministers for Social Protection and Education and Skills who responded immediately. FÁS and the Department of Social Protection's staff immediately engaged with TalkTalk workers. The Minister for Education and Skills indicated that work on the proposal for a technological university, which is to be explored as part of the programme for Government, is being accelerated. Clear criteria will be developed for that opportunity, which arose in discussions.
Additional information not given on the floor of the House
The Minister for Education and Skills has submitted an application under the European Globalisation Adjustment Fund, EGAF, to assist workers who lost their jobs.
While it is clear that Ireland is operating in a difficult economic environment, there are still investment opportunities in global markets and the IDA will continue to compete vigorously for projects for Ireland and the south east. In particular, the IDA has begun marketing the TalkTalk facility and the skill sets of the workers internationally.
As the Minister is aware, the 575 jobs are gone. Of the workers and their families I spoke with last week, 12 people had found new employment.
I am not levelling direct criticism at the Minister. He is relatively new in the job and he went to County Waterford and did his best. This debate will be broadcast on WLR FM shortly. I do not hesitate to state that there is no criticism of the Minister, but there appears to be an abysmal failure on the part of the job creation agencies in Waterford. In particular, the IDA has been unable to deliver substantial or sustainable jobs to Waterford. The statistics laid before the House last year say it all. Of the 190 prospective investors that visited Ireland last year, only three were brought to Waterford by the IDA. This was in spite of the IDA's considerable budget. The south east is losing more jobs than it is creating. This situation must be examined.
A question, please.
I have two questions. I welcome that there will be an action plan, but I would like to see a more detailed analysis of it. I hope it will involve business people, job agencies and trade unions. When will the action plan be ready to be laid before the House or the relevant people in Waterford?
My second question is on a broader issue. It appears that many companies, even though they are in profit, are leaving the State to make further profits. TalkTalk is an example. It made €160 million in profit. TEVA Pharmaceuticals made a profit of €600 million in the six months prior to the day it announced it would let 300 people go.
I will revert to the Deputy.
We give companies finance to start off. Can anything be done to stop those that are making profits from leaving the State for no reason and making people redundant?
I thank the Deputy for his comments. I have found the support of public representatives — Deputies Coffey, Conway, Deasy and Halligan — council members and the general business community helpful in this process.
Deputy Halligan asked a number of questions. I am concerned about the statistics on the performance of IDA site visits. It would be appropriate to consider designating Waterford in the way Limerick was designated, as that brought advantages. I hope to introduce proposals in the near future. I will introduce actions to be taken rather than discussions to be held with different interests. I hope some of those actions will involve collaboration with other groups in the region that could assist.
The wider question on companies moving is a difficult one. Regarding the IDA's performance, there is a turnaround. Over time, lower skilled positions have tended to move out. For Ireland to remain strong, we must add new skills, research and development and product lines. In this way, we will remain relevant and competitive for companies. We cannot stop movement or outsourcing, as we live in a global economy. We must seek to position ourselves to be competitive. Overseas companies drive significant levels of dynamic development in Ireland. We need their investment and we must keep abreast of trends to take maximum advantage.
I welcome the Minister's action plan, but it must be seen. Time is not on Waterford's side. Given the substantial job losses in recent years, we need an action plan now. It can be a task force or an action plan — I am not tied to either — but it must show the thousands of unemployed people in Waterford that there is some hope for the future.
Another blow this past week saw the VEC relocated to County Wexford because of cronyism.
That is a different issue.
That move would have sat well with the previous Government. It was disgraceful.
There must be balance in this debate. Yesterday, I visited Genzyme, which is investing €150 million in an incredible state-of-the-art plant. It is being regarded by the parent company taking it over as a jewel in its crown, to use the CEO's words. The mayor, Councillor Pat Hayes, was very clear that Waterford is very much open for business and wants to see opportunities developed. The actions I will take will be to try to build on the strengths of Waterford. It is easy to be negative about what is happening in Waterford but really good things are also happening there and we need to emphasise these also.
The following revised reply was received from the Department on 26 October 2011
As the Deputy is aware, following the Talk Talk closure announcement, I held a series of meetings with company management, workers, public representatives and business. The message from local stakeholders was very clear in that Waterford has not benefited from the advances in the good times and it has been badly affected in the more difficult times of late. On foot of that, I instructed my agencies to put together an action plan for Waterford and the South East region to assess the strengths and weaknesses of the region, to identify sectoral opportunities, to carry out an audit of activities and structures of the Agencies and to assess the scope for collaborative initiatives with local bodies and based on that analysis to put together an action plan for Waterford and the South East region.
It is clear that Waterford and the region, with all the strengths it has, has not been as successful as we would all want. Job losses and unemployment is above average. Both short term and longer term actions are needed.
The agencies have now reported back and I am considering their responses with a view to putting forward specific actions to address the specific employment problems affecting the South East. I consider this course of action more appropriate than establishing a Task Force given the timeframe of the site closure, the need for swift action and the fact that a large amount of analysis has been undertaken in the past.
I am determined to give Waterford the priority it correctly deserves. We need to take a hard look at this to see how we can better support enterprise in the South East and set out the actions we can take in the near term and in the longer term.
As the various reports from the State agencies include commercially sensitive information, I will not be able to publish them as received. However, it is my intention to make known the additional activities and plans for enterprise support in the near future.
I acknowledge the support of Cabinet colleagues, in particular Ministers for Social Protection and for Education and Skills who responded immediately. FÁS and the Department of Social Protection staff immediately engaged with Talk Talk workers. The Minister for Education and Skills indicated that work on the proposal for a technological university, which is to be explored as part of the programme for Government, is being accelerated. Clear criteria will be developed for that opportunity, which arose in discussions.
The Minister for Education and Skills is preparing an application under the European Globalisation Adjustment Fund to assist the workers that have lost their jobs.
While it is clear that Ireland is operating in a very difficult economic environment, there are still investment opportunities in global markets and IDA will continue to compete vigorously for projects for Ireland and for the South East. In particular, IDA has begun marketing the Talk Talk facility and the skillsets of the workers internationally.
4 Deputy Willie O’Dea asked the Minister for Jobs, Enterprise and Innovation his plans to introduce the home to export programme, local trade and investment teams to develop better trading relationships with emerging economies; and if he will make a statement on the matter. [28952/11]
The programme for Government sets out clearly that Ireland's economic recovery must be export-led and commits us to achieving the maximum growth in exports. Enterprise Ireland will spearhead this work.
A potential exporters' unit is currently being operationalised in Enterprise Ireland. It will offer a new service delivery and model of engagement for new and existing client companies. Along with the provision of business-related toolkits, including export toolkits which will be delivered in part on-line, the division will provide tailored export capability building workshops, modules and programmes for companies entering new markets as well as access to mentors. A new series of guides to markets is also being introduced with a focus on practical information aimed at new exporters. This will be available even to companies who do not meet Enterprise Ireland's normal employment test of having at least ten employees. The intention is to widen the range of companies which can graduate to other established programmes focused on exporting opportunities.
Such programmes are tailored to a company's stage of export development. They include the international selling programme and the excel at export selling workshop series as well as first flight workshops and mentor services. As well as training programmes, Enterprise Ireland helps companies retain the services of industry experts to support market expansion and development. The going global fund also supports established but domestically-focussed companies to explore opportunities on the international market. Through its client knowledge services offer, Enterprise Ireland allows client companies and potential exporters access to a comprehensive library of sector and market intelligence and information on doing business overseas. Enterprise Ireland has also developed detailed third-party legal and tax contacts in priority markets which can be accessed by new exporters, as well as organising and engaging business networks in all markets wherever possible. It recently launched the second call of its very successful graduates 4 international growth programme.
I thank the Minister of State for his reply. I am very interested in what is happening in Enterprise Ireland. The reason I raised the question is that the programme for Government contains a number of specific commitments to improve our export performance with particular reference to the BRIC countries, such as the establishment of an export trade council, a home to export programme, a source Ireland protocol, and local trade and investment teams interacting with people in the BRIC countries to expand our export footprint there. Perhaps this has more to do with the Minister for Finance, but there is also a specific commitment in the programme for Government to exempt service companies from value added tax if they export more than 90% of what they produce. Where are we with regard to these specific commitments in the programme for Government?
Enterprise Ireland has a dedicated high growth markets unit in Dublin to provide further assistance to client companies doing business in a range of countries including Brazil, Russia, India and China. Trade missions support this work. Under the programme for Government, the Department of Foreign Affairs and Trade has taken particular responsibility for trade promotion. This means the diplomatic service is fully engaged in promoting trade and plans have been developed for each of Ireland's target markets. The Tánaiste chairs the new export council which brings together the focus of this work.
The Department of Jobs, Enterprise and Innovation is engaged in developing trading opportunities in emerging economies through the negotiation of free-trade agreements between the EU and third countries and improved opportunities for exporters can also emerge from reductions in tariff and non-tariff barriers through trade and regulatory discussions between the EU and China, Russia and Brazil.
To answer the question, it is an ongoing process and one must speak to the figures. Between 2004 and 2010, merchandise exports from Ireland to Brazil, Russia, India and China rose by approximately 122% and in the same period services exports to those countries rose by688%. Another key example of this success is the fact that Ireland now has a significant trade surplus with China, which is a dramatic turnaround from the position only four years previously when we had a deficit of approximately €2.9 billion.
I thank the Minister of State for acknowledging the success we enjoyed as a country during the administration of the previous much maligned Government with regard to building up trade with the BRIC countries.
The latest figures available to me for July — the Minister of State may have more recent figures — show exports were worth just over €7 billion which is a decrease of 10% compared with the same month last year. When adjusted for seasonal factors, exports in July were down 12% from June. In addition to this imports increased which narrowed our trade surplus. Is the Minister of State concerned about this? Is it just a blip or has the situation turned around?
I understand that for the year to date exports have increased by approximately 6%——
There was a dramatic drop in July.
The overall year to date figures show an increase from last year and exports from indigenous industries have increased by approximately 10%. The omens are good on the export side. The creation of the export trade council, which arises from the trade, tourism and investment strategy, signals a clear intention by the Government, as per the programme for Government, to drive exports even further in the countries I mentioned earlier. The new council's membership includes the Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, and the Minister of State at the Department of Foreign Affairs and Trade, Deputy Jan O'Sullivan, and senior representatives from the relevant agencies and Departments. This derives from a previous policy which was borne out of common sense and will continue. There is greater emphasis, and the figures bear this out, to drive exports in the so-called BRIC countries.
5 Deputy Peadar Tóibín asked the Minister for Jobs; Enterprise and Innovation the steps he has taken to reform the public procurement process in order to allow Irish business a better opportunity at successfully applying for public contracts. [28929/11]
Last July, the Minister, Deputy Bruton, established a steering group on SME access to public procurement, to examine what more can be done to improve SME participation in tendering for public contracts. The steering group comprises the key players in the public procurement arena, including the Department of Public Expenditure and Reform, the National Procurement Service, Enterprise Ireland, InterTradeIreland, and the Department. It is tasked with identifying the failings in the current system and driving changes that will further open up the process and provide a level playing field for SMEs.
The group is examining concerns from the SME sector which points out the procurement process has been shown to impose unnecessary or disproportionate obligations on tendering companies that can see them fail at the first hurdle, when a more pragmatic approach on the part of the contracting authority might allow an experienced company to tender. Sometimes the tendering companies are disqualified on the basis of a very rigid application of criteria, with little hope of having the buyer's decision overturned. Indeed, no formal appeals mechanism is in place in the public procurement system, although this is now being addressed.
The high level group on business regulation, which I chair, has also been examining barriers — of which there are many — to participation by SMEs in public procurement and has provided direct input from the SME sector to the deliberations of the steering group.
On receipt of the steering group's initial report, the Minister, Deputy Bruton, asked my officials to develop a number of actions for implementation which could improve SME access to procurement in the short term. These include the identification of specific areas in the public procurement guidelines which continue to present difficulties for SMEs, the strengthening of Enterprise Ireland's engagement with procuring authorities, and the identification of areas where collaboration between tier 1 principal contractors and pre-qualified tier 2 SMEs could be developed in the procurement process.
Initiatives already in place to help SMEs get more opportunities in public procurement include guidelines from the Department of Public Expenditure and Reform for procurement with practical suggestions and a ten step guide, a dedicated procurement team in Enterprise Ireland, the website www.procurement.ie and a standardised suite of procurement documents. I hope these allay concerns.
It is often stated the Government does not create jobs. However, it does, and €16 billion worth of public contracts in the previous year created tens of thousands of jobs in the market.
This had a multiplier effect of approximately one to three. Some 25% of State contracts are awarded to small and medium enterprises whereas the European average is 38%. With all due respects to the Minister of State, I heard much about the existing problems, the reasons for them and the steps that are to be taken to ameliorate them, including trading supports. Will he consider creating a key performance indicator for public procurement organisations to ensure that 40% of all contracts are awarded to small and medium business?
In 2008 a total of 70% of Irish public procurement contracts were awarded to foreign companies. A significant number of contracts which are below the EU threshold are advertised at national level and notice of contracts worth €25,000 or more are placed on the Government's e-tender website. A multiple of further contracts worth less than €25,000 are advertised more locally and this provides opportunities for small and medium enterprises. I acknowledge the significant difficulties. A majority of contracts are in the health sector.
I refer to the issue of opening up access to contracts to small companies. Of the total of 65,000 companies registered on the e-tender portal, 75% are Irish small and medium enterprises. The perception is that they are not winning contracts and much needs to be done to open up access to the contracts worth €15 billion and to allow sub-contractors to qualify. It is to be hoped that the criteria which includes a pre-qualification of having done work with the main supplier can be removed. There are significant opportunities for small and medium business. The Minister, Deputy Bruton, is working closely on this issue of opening up opportunities to enable the participation of small companies.
The EU has stated that 25% of public procurement contracts should be awarded to small Irish business with 38% being the EU average. In the North of Ireland, Conor Murphy, MLA, stipulated that a certain number of local apprentices should be employed on such contracts and in Scotland it is stipulated that a certain amount of the contract must be sub-contracted to social enterprise. It is in the gift of the Government to decide that a certain percentage of contracts are given to SMEs. Since our percentage figure is so low as against the European average of 38%, the Government should stipulate that 40% of all public procurement contracts go to SMEs.
Deputy Tóibín is correct. Many issues will have to be dealt with such as, risk aversion of contracting bodies, buyers committed to procurement processes, focus on the lowest cost and the long-term value, overly restrictive pre-qualifying criteria, no policing of guidelines and further training requirement for procurement officers. The Government is aware of the issues that have prevented that important EU average figure being achieved and is working decisively to address the issue. I chair the high level group on business regulation and the Minister, Deputy Bruton, has a task force working on reducing the restrictions. I assure the Deputy there will be dramatic changes and his concerns will be taken on board.
