Vol. 784 No. 1
6. Deputy Denis Naughten asked the Minister for Jobs, Enterprise and Innovation the progress to date on protecting employment of staff working on the UK loan book at Bank of America, Carrick-on-Shannon; and if he will make a statement on the matter. [51774/12]
The process regarding the sale of Bank of America’s card businesses is ongoing but there have been no significant recent developments and the employment levels at the facility in Carrick-on-Shannon have been maintained.
Earlier this year negotiations regarding the sale of the Ireland portfolio culminated in its sale by Bank of America to Apollo Global Management, a leading global alternative investment manager headquartered in New York. This transaction involves approximately 250 employees in Carrick-on-Shannon currently supporting the Irish portfolio transferring to Apollo. Under the terms of agreement between Apollo and Bank of America, the property in Carrick-on-Shannon will be officially transferred into Apollo ownership by mid-December 2012. The employees in Carrick-on-Shannon currently supporting the Bank of America Irish portfolio are then expected to transfer to Apollo by March 2013.
Bank of America has not yet sold the UK portfolio which is the other business supported out of Carrick-on-Shannon and approximately 400 staff continue to be employed in this operation.
IDA Ireland is in regular contact with Bank of America management in Carrick-on-Shannon and Dublin and at corporate level to monitor developments and is also in contact with Apollo. IDA Ireland last met representatives of Bank of America management in Carrick-on-Shannon on 9 October 2012 and senior executives of Apollo in London on 5 November 2012 where the transfer of the Carrick-on-Shannon facility and staff to Apollo, and also further investment opportunities for the group in Ireland were discussed.
It appears that while Bank of America does not now expect to sell this UK portfolio in the short term, the process remains ongoing and a potential deal could materialise at any time. I appreciate that this uncertainty is unsatisfactory for the employees working on the UK card business, but a sale depends on wider commercial factors and the ultimate decision will be made by Bank of America, taking into account all relevant factors for the company. IDA Ireland and I will keep in close touch with the issue and will use whatever influence we can to seek to ensure a satisfactory outcome.
The ground rules are four minutes for supplementary questions, with strictly one minute for each and one minute for the reply.
I thank the Minister for his reply and I acknowledge the work to secure the jobs of the 250 people working on the Irish loan book and its sale to Apollo Global Management. What is happening regarding the possible sale of the UK loan book? While I acknowledge what the Minister said, some 400 staff are employed on the UK loan book in Carrick-on-Shannon at the moment. Does the Minister agree that the sense of urgency this time last year to dispose of the Irish and UK loan books by Bank of America seems to have dissipated since Apollo Global Management decided to purchase the Irish loan book? There is local nervousness given the announcement in August that 15 staff working on the UK loan book were to be let go. On foot of the discussions that have taken place with Bank of America and Apollo Global Management, can the Minister assure the House that those 400 people will have a job next year and into the following year?
I would love to be able to give all those categorical assurances about the future of this loan book. However, as the Deputy knows Bank of America was badly affected by the financial crisis and it announced extensive restructuring throughout its organisation. At that time it announced its plan to exit entirely the international credit card business. That was a strategic decision to focus on core business. It sold its Canadian and Spanish credit card business and of course it sold its UK business-lending portfolio and the Irish credit card book. As I said in my reply, Bank of America's decision on its UK book does not now seem to be imminent. There has been a slowing down in the pace of the marketing and sale of that. Of course we are not authors of the final decision, which is for Bank of America. We make sure that we are very closely aligned to that decision process. I, personally, have been in contact with representatives of Bank of America on numerous occasions to keep across it. IDA Ireland officials in London and elsewhere are alert to the concerns. We will leave no stone unturned to protect this, but I cannot give categorical assurances.
I thank the Minister for the communication he has had with the two companies involved. Is the apparent slowdown in selling the UK loan book because of a change in policy or focus in Bank of America regarding the disposal of its international credit card business, or is it for some other reason? The Minister will acknowledge that MBNA in Carrick-on-Shannon is a major regional employer which employed up to 1,000 people at one stage. Coming up to Christmas it is a very anxious time for people. Any reassurance the Minister can give or any additional efforts that are being made by IDA Ireland - if not to progress this particular initiative then to look at alternative sources of employment for Carrick-on-Shannon - would be very welcome coming up to Christmas.
Leitrim has received one of the lowest levels of grant aid in the State, which is indicative of a bigger problem. Leitrim has not had a single IDA Ireland client company visit in the past three years. There is a swathe of rural counties that is not receiving any visits from IDA Ireland client companies.
If they are not even receiving visits from these organisations, how in God's name are they expected to attract foreign direct investment? The Government must also recognise needs with regard to economic disadvantage, unemployment and deprivation and tackle those needs by focusing FDI visits to those areas.
To take Deputy Naughten's point. As recently as in the past three weeks the IDA met with the company. We are keeping alert to any possible developments. I will not speculate on what is the strategy of Bank of America. It has made significant decisions and disposals already but we are ensuring that we seek to protect this.
Deputy Tóibín raised a much wider issue about regional strategy and how successful the IDA can be in terms of a regional spread. The flow of investments in which the IDA is involved has tended in recent years to focus on high skills and deeper labour pools and that makes it much harder to promote rural parts of the country as effectively. We have to focus also on developing indigenous enterprise. That is the reason the discussion on small business, indigenous enterprise, Enterprise Ireland and exporting is important.
I must interrupt the Minister as we have to move on to the next question.
7. Deputy Pearse Doherty asked the Minister for Jobs, Enterprise and Innovation his actions to date to ensure that the small and medium enterprise sector has access to credit. [51879/12]
21. Deputy Sandra McLellan asked the Minister for Jobs, Enterprise and Innovation in view of the fact that the loan balance of the banking system in Ireland has been shrinking since the Government has come to power,his views on whether the credit provisions created by his Department are sufficient. [51886/12]
I propose to take Questions Nos. 7 and 21 together.
My Department has introduced two targeted initiatives to support an additional flow of credit into the economy by filling gaps where specific market failures exist – the credit guarantee scheme and the microfinance loan fund. The guarantee scheme has been live since 24 October and is expected to provide an additional €150 million in lending for small businesses per year over the next three years. Ulster Bank, AIB and Bank of Ireland are participating in the scheme. The guarantee scheme is intended to address market failure affecting commercially viable micro, small and medium-sized businesses in two specific situations, namely, where businesses have insufficient collateral and where businesses operate in sectors with which the banks are not familiar. It provides a 75% State guarantee to banks against losses on qualifying loans to firms with growth and job creation potential. For every €150 million of additional lending, the scheme is expected to benefit more than 1,800 businesses and create more than 1,300 jobs.
The second important initiative which we have developed and delivered upon this year is the €90 million microfinance loan fund to address access to credit and support lending to the most vulnerable cohort of our SME sector – the microenterprises. Microfinance Ireland opened for business on 1 October 2012 and is providing loans primarily to newly established and growing microenterprises across all industry sectors, with commercially viable proposals that do not meet the conventional risk criteria applied by banks.
Loans are for amounts up to €25,000 and will generally be provided for business start-up costs, expansion costs and working capital. The thrust of the lending policy will always be focused strongly on the potential sustainability of the business, its ability to repay the loan and the creation and maintenance of jobs. It is intended that the fund will provide loans to some 5,500 microenterprises over time and will, over a ten year period, generate close to 8,000 jobs at a cost of approximately €2,500 per job, which is very good value for the State’s investment.
My Department is keeping a close eye on developments in respect of both schemes as matters unfold to ensure their ongoing relevance and will adapt the parameters if, following review, it is deemed necessary. In addition, my Department is working closely with the Department of Finance and the Credit Review Office to evaluate evidence on credit availability and to ensure that the amount of credit flowing to the SME sector is maximised to facilitate sustainable job creation and retention.
I welcome some of the changes the Government has introduced with regard to finance. The scale of the problem is that approximately €40 billion in private sector investment has come out of the economy in recent years. The Government set up the credit guarantee scheme which cost it €6 million over three years. It is putting in €2 million on an annual basis through that scheme to try to solve the problem in the credit area and it is putting in roughly €2 million on an annual basis through the microfinance fund. Given that the State has the second worst credit environment in Europe, just behind Greece, and given the vast problem we have, this amounts to tinkering around the edges of it and it is not enough to deal with it.
The real elephant in the room is the banking industry, an industry most of which the Government owns at this stage. The fact that it has not been able to orient the banking industry to carry out its responsibility is a disgrace. The Credit Review Office has dealt with 150 or 200 applications in recent times and has overturned the decisions in 55% of the refused applications. That means that the office is dealing with a number of applications on an annual basis and is overturning the decision in 55% of them. That, by definition, determines that the system in place under the Minister's stewardship is malfunctioning.
On the level of funding, the Deputy has not been correctly advised because the Government is investing €50 million over three years.
In the credit guarantee.
Yes. The loan guarantee is €450 million, the innovation funding is €200 million, there is also NPRF funding and €150 million is being put in from the innovation fund. Therefore, considerable funding is being provided. With regard to the difficulty in terms of opportunities for business, the microfinance fund is a good start-up fund. It was very successful in Dublin previously. People who were refused a loan were given a start-up loan under it and the fund will be operated from a centre of excellence in every county. Some €3.5 billion has been put into the two pillar banks. I have sought to simplify the application process within the banks. The obligation is on the applicant to appeal the decision if his or her loan application has been refused and to go to John Trethowan's office.
There is only so much we can do. We are benchmarking the banks on what they are doing. It is a matter for people to go through the application process and I went through some of them myself. If one's application is refused, one can appeal the decision within 21 days. The code of banking has been modified to ensure that applicants will get a reply within 21 days. If one's application is refused, one can go to the Credit Review Office.
It is very easy to come in here and say nothing is being done for small business. We can only encourage those in business to submit a business application, there is a due diligence examination of the application to assess the viability of the proposal. Banks will not give out money for projects on which they will not get their money back, and the Deputy knows that better than anybody. He has been on this case for some time making the same attack all the time, namely, that there are no funds available. The Government will put in the best part of €500 million, €700 million and €850 million in funding into small business during the next three years.
I interrupt the Minister of State to advise that Deputy Wallace is waiting to ask a question.
I would like to ask a supplementary question.
I also want to ask a question.
I would like the Minister of State to address an important question. The Credit Review Office has overturned the decision in 55% of the applications it has received. It, by definition, is saying that in the sample size of the applications with which it is dealing there is a breakdown in more than half of the applications with which the banks are dealing. I believe that the Minister and the Minister of State are powerless to act in this. I ask them to ask the Ministers on the Economic Management Council to allow them be members of it in order that they can try at least to bring an enterprise orientation to it.
Deputy Tóibín, I have to be fair. I call Deputy Wallace to ask his question. The Minister of State might hold off answering until Deputy Wallace has asked his question.
The Minister is probably aware that five months into his time in government President Hollande of France has fulfilled his election promise of setting up a strategic investment bank which is making €42 billion available to small and medium sized businesses. I asked the Taoiseach yesterday the position regarding our strategic bank and he said it was ongoing. When I said that nearly two years has passed he replied that it takes a while to do that. Does the Government intend to set up a strategic investment bank or has that idea been abandoned? The Ministers can say the banks are open all they like but I know many people in good, sustainable businesses who cannot get money. A strategic investment bank, as promised by the Government, would be a godsend.
I understand the strategic investment bank is with the five point plan somewhere in the ether. The credit guarantee scheme is welcome. As the Minister of State said, it has been open since 24 October. Can he give any indication of the application level to date?
The microfinance scheme set up on 1 October is welcome. I asked about that because there appears to be no promotion of it. Those of us in the House know about it and the enterprise boards are talking about it but what is the position in terms of the wider public?
I ask the Minister of State to react to the figures given to the finance committee some weeks ago.
The Minister of State has been trumpeting the figure of €3.5 billion all day but three weeks ago at a meeting of the Joint Committee on Finance, Public Expenditure and Reform AIB admitted that only €600 million of this is new lending. What are the views of the Minister of State on changing the format of Credit Review Office reporting? It reports on money approved as opposed to money actually drawn down, and a very significant problem exists in the banking sector whereby a loan is approved but the hurdles to be faced when drawing it down are bigger than what one would see in the Grand National.
A review of the Credit Review Office is being undertaken and when we receive the report, we will examine our options for enhancing it. With regard to Deputy Tóibín's point on the 55% figure, I will not defend the banks because it is clear they must do better. The fact the Credit Review Office has overturned 55% of decisions shows how effective it has been.
Nine hundred cases.
We are working with the banks. With regard to AIB and the €600 million for new lending, we must also take into account the fact that people are opting out of existing loans from other banks. With regard to Deputy Tóibín's point about Greece, the report in question was from the Central Bank which included all banks not giving money.
The Central Bank.
The report included all banks. We must remember the main players for small and medium-sized enterprises are Bank of Ireland, AIB and Ulster Bank. The report included all banks, including those which do not fund small and medium-sized enterprises.
Deputy Wallace made a point on an investment bank. Years ago the ICC bank was very effective and had a niche market for business. The State practically owns one bank and is a major stakeholder in another and one must see them in operation first. The Taoiseach and the Minister, Deputy Bruton, are putting considerable pressure on the banks. We must remember that to make money banks need good small and medium-sized enterprises. How else will they make a profit for their shareholders? Last week, Bank of Ireland advertised enterprise week throughout the country. Perhaps the bank gave people ten reasons it could not give a loan, but it invited business people in to make loan applications and AIB is doing the same. We are taking the banks at their word that they are facilitating small and medium-sized enterprises. Banks want successful business people and we are clearly benchmarking the banks on this to ensure they support viable small companies in the micro sector. Enterprise Ireland's high potential start-up unit has an in-house bank adviser, and big companies have ways of obtaining money.
To respond to Deputy Calleary's point, retail services are under huge pressure at present. The easiest way to give a loan at present is to increase the overdraft of a business person by €50,000 because after two years, this overdraft will be a long-term loan. Business people may be sorry they obtained an overdraft because it becomes a long-term loan. In certain cases people are extending credit limits for suppliers and it is very difficult.
8. Deputy Dessie Ellis asked the Minister for Jobs, Enterprise and Innovation his plans to safeguard and promote jobs within the faltering indigenous small and medium enterprises retail sector in the State. [51895/12]
14. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation the action he will take to assist the retail sector; and if he will make a statement on the matter. [51836/12]
I propose to take Questions Nos. 8 and 14 together.
As I outlined in response to an earlier question from Deputy Calleary, the Government recognises the importance of the retail sector to the economy. It is employment intensive and covers every community in the country. Combined with wholesale, the sector employs 258,000 people in Ireland, which is almost 15% of our total workforce. The sector straddles a range of operations, from one person online set-ups to multinational chains, and the types of assistance needed vary throughout the sector.
The measures I outlined for the retail sector as a whole will support SMEs and larger enterprises in the sector, as well as the more general measures in the action plan for jobs aimed at supporting employment throughout the economy. In addition, small businesses in the retail sector will be able to benefit from ambitious reform of the delivery of services to small businesses generally. This will include the dissolution of the county and city enterprise boards and the establishment of local enterprise offices, LEOs, to create a high quality, innovative, one-stop shop support service for small businesses. Key local authority services will be integrated into the LEOs to promote a local environment within which enterprise can thrive.
It is useful to note that while the retail sector in Ireland has been struggling as a result of the economic downturn, lack of confidence and a lack of credit, it compares relatively well with the retail sector throughout the EU. In September 2012, compared with September 2011, the retail sales index fell by 0.8% in the euro area, while it rose by 1.3% for the same period in Ireland.
I am aware that in recent weeks a number of retailers have made announcements that more than 2,000 seasonal retail jobs will be available for the Christmas season in a range of both part-time and full-time roles throughout the country. This is very welcome.
The Nevin Economic Research Institute has indicated 30,000 jobs have been lost in the retail and wholesale sectors in recent years and the knock-on effect of these losses in local areas has been greater than this. Some parts of the State and some retail sectors have experienced a lift in recent months, but the main streets of many provincial towns have a significant number of shops boarded up. Many retailers are struggling with a number of issues on which the Government could focus, including upward-only rents. These have been mentioned in the House on many occasions and will be mentioned again because as long as businesses are forced to pay uncompetitive rents, the issue must be raised in the House. The Government has stated it cannot act on it, but I urge it to show the information received from the Attorney General in this regard. It is stated governments do not do so but on occasion I have seen other governments detail Attorney General evidence.
The cost of energy is crippling. I know of a bar which pays an electricity bill of €2,000 every month which makes it very difficult to operate. We have urged the Government to introduce progressive rates which would take at least some consideration of the profitability of a business. Will the development of the new small enterprise sector allow for a level of grant funding for the retail sector? I understand displacement is a problem in this area. Will further funding supports be available for the retail sector in the shake-up of enterprise development?
To take the last point, very effective soft supports exist for small businesses, such as educational and mentoring supports. With regard to electricity, people do not realise commercial electricity charges here are cheaper than in Northern Ireland and Britain. People do not fully recognise that VAT is reclaimable and this reduces the unit cost to a very competitive rate. Business people do not make one fully aware of this.
With regard to upward-only rent reviews, it might be different on Grafton Street but in Castlebar and smaller towns landlords believe some money is better than no money and if a tenant states he or she can pay only half the rent paid in 2007, many landlords will accept this. The commercial reality has surfaced and most business people will accept lower rents regardless of the legislation. The Minister, Deputy Bruton, has stated on many occasions that new rental agreements have an option for downward rent reviews, but the Attorney General has stated we cannot retrospectively deal with rents.
The Minister of State knew that before the election.
There was much known that was clarified by the Attorney General when we came into government and there was much more information we found out afterwards that we did not know about the disaster of the previous Government.
Returning to my previous question on a promotional campaign - before the Acting Chairman gets excited, it is applicable to the retail sector - and a knowledge campaign for the two new schemes, these are not known of among the general business community. Would the Minister of State give me any idea of the drawdown of the facilities?
The Minister of State will not convince me that he is doing anything serious about retail. I would encourage him to look at the record of this debate. On manufacturing, in the case of specific initiatives and specific time lines, we got the jobs action plan. The Government threw the kitchen sink into initiatives on retail.
On the local enterprise offices, LEOs, we had a worthwhile engagement at the Joint Committee on Jobs, Enterprise and Innovation with Enterprise Ireland, a fantastic organisation which will bring an entirely different edge to this. However, retail is not in Enterprise Ireland's mix. It is not on its plate at all. At the committee, we have started on a cross-party basis conducting a review of the retail sector. Some committee members will be in Kilkenny and Waterford at the weekend and we will travel the country to get first-hand experience. I would encourage the Minister of State, who is a retailer, to bring his experience to the table in the design of the LEOs so that, as well as soft support, there is also some real support so that retail is part of the LEOs remit from their outset, not something to be pushed off as an AOB item.
Perhaps the Minister of State would give us an update on the following matter which, I accept, is a budget decision. Has the Department engaged with the proposal of the Minister for Social Protection, Deputy Joan Burton, to put another burden on business around sick pay and is there any update since the previous debate on that?
Finally, I repeat that the Minister of State, as a Member of this House, was aware of the constitutional blockages on upward-only rent reviews prior to the last election and prior to him making the promises that his party made, and he completely reversed his position when he went into government. In rural economies rents are not the problem but in the cities upward-only rent reviews are a major issue. They are causing serious job losses. Only two weeks ago, an iconic retailer in Dublin closed because it was not in a position to re-negotiate its rent. If the Minister of State goes down Nassau Street, he will see the empty unit.
To put the Minister of State on notice, Deputy Wallace wants to ask a question and there are nearly three and a half minutes left.
When it comes to the reality of business in the retail trade at present, if one takes small business, while retail is under considerable pressure, it is about confidence and credit. There are many spheres in the economy affecting small business, while Deputy Calleary gets hung up on the retail trade.
The previous Administration fuelled shopping centres in every village and town, far beyond what was needed. Deputy Calleary may have a big issue, which he has raised time and again, with rents. It is not as big an issue as he makes out. There may be one exception, but the bulk of landlords have vacant units in every large town and city, not only here in Dublin, and are happy to renegotiate, and that is now taking place.
With the promotion of the micro-loan fund, every county and city enterprise board has launched a plan of action. The Department is conscious of that and there will be promotion of that in the new year. We have a clear plan.
It is important to recognise that 258,000 people work in retail and wholesale. There is the proliferation of the large multiples. People are now selling alcohol below cost. It is the 80:20 principle. It is driven by value. When one looks at the tourism sector, there is a revitalisation as a result of the lower VAT on hotels. We have done more in 18 months for small business than the previous Administration did in 14 years. The previous Administration did nothing for them.
The Minister of State is in cloud cuckoo land.
Deputy Calleary did nothing for them.
The Minister is in some other land.
Deputy Calleary does not want to recognise what was done. The Government to which he was party did nothing. I was here in opposition asking it time and again. Deputy Calleary had no respect for the domestic economy.
I want to respect-----
The Government has an understanding, concern and respect for small business which the previous Administration did not have.
I want to respect Deputy Wallace's opportunity to ask a question.
The Minister of State stated that there were too many retail units anyway. With seven a day going out of business in Ireland at present, I would say that we have gone past the mark at this stage of what should be sustainable.
Returning to finance and the retail sector, should I take it from the Minister of State's last reply that we should forget about the strategic investment bank?
He stated that banks should not give money to someone who would never give it back, and I agree. If I had a bank, I would like to get it back as well. Given that the State owns the banks, if the banks were to go for their best option they would be investing outside the country, which many of them are doing, rather than giving it to local enterprise or businesses.
As Deputy Perry will probably be aware with regard to retail, rates are being revised in Dublin at present. I have one particular unit, on which I got word two weeks ago and on which the rates were already one third of the rent. I have just been told that my new rate is 40% higher. How, in God's name, is that realistic? Do those coming up with these figures know anything about the problems businesses face?
There is only half a minute left.
On the revaluation of rates, that is why it is so important that there will be centralisation of services in the one business desk where local government will be very much involved. On the revaluation of rates in Dublin, it is hard to justify such a 40% increase. It does not stack up. I would certainly appeal that decision.
If Deputy Wallace was raising the role of the investment bank, the Minister, Deputy Richard Bruton, has stated that there are many opportunities for the micro-finance fund, the loan guarantee and the banks. We are very much benchmarking the banks to give out the money. One must remember that our banks are now domestic banks. They are back here in the local domestic economy. Clearly, it is about supporting the role. However, I am not disagreeing with Deputy Wallace. An investment bank is something that was in the Action Plan for Jobs. It is something on which the Government must make a decision in the future.
We are now asking the banks to do better than they are doing. I am not here condoning the difficulties business people are encountering where they are experiencing considerable difficulty in getting loans from banks. We advise going through the process, appealing the decision, going to the Credit Review Office and noting the loan options provided by Government, such as the microfinance fund and the loan guarantee, which facilities those in business should use.
9. Deputy Niall Collins asked the Minister for Jobs, Enterprise and Innovation his plans to develop Ireland's manufacturing capacity; and if he will make a statement on the matter. [51840/12]
15. Deputy John McGuinness asked the Minister for Jobs, Enterprise and Innovation the way Ireland can expand its manufacturing base; and if he will make a statement on the matter. [51865/12]
I propose to take Questions Nos. 9 and 15 together.
To some extent, I dealt with a good deal of this answer in the earlier reply where I outlined the establishment of a manufacturing development forum and its ongoing work to produce a strategic plan in the new year. Rather than repeat that, I suppose it is worth saying-----
Does the Minister want to read it into the record?
I will read-----
No, we have it. I am satisfied with that.
I would like to ask a question.
I apologise for interrupting.
To amplify that, it is worth saying that both Enterprise Ireland and IDA Ireland continue to develop policy interventions to support the manufacturing sector. As I stated, under the Action Plan for Jobs there are a number of measures to improve productivity, extend innovation, introduce lean systems, enhance management skills, develop collaboration in new technologies and enhance access to finance. For example, the development capital fund is a specific new initiative for access to finance targeted at companies that have a weak balance sheet but have the capacity to grow.
This week, I visited the Irish Centre for Manufacturing Research which is promoting collaboration. It works with a significant number of both SMEs and multinationals. There have been four spin-outs, between that centre and the energy efficiency centre, where they are using the research being done in these centres with manufacturing and other companies to develop applications to achieve better energy efficiency, achieve better use of equipment and introduce more efficient systems.
The lean programme has been successfully rolled out for a number of companies. It has allowed them strip out cost effectively and achieve the competitive edge which has enabled the driving of significant growth in exports from manufacturing companies.
There is much worthwhile work going on through Enterprise Ireland in promoting this sector and supporting its transition.
The Minister mentioned another fund, the development capital fund. It brings me back to my previous question to the Minister of State, Deputy Perry, on the knowledge of these schemes. It is an issue that we have spoken a great deal about at the Joint Committee on Jobs, Enterprise and Innovation. There are many schemes and many funds, but there is no one place in which to get all of that information. At the committee, Deputy Lawlor is particularly strong on this. There is a need for one place where somebody in any sector can go to find what supports are available, and this is merely another example.
Returning to manufacturing, is the Minister happy that the apprenticeship scheme is fit for purpose to deal with the opportunities there will be in manufacturing over the next number of years?
I agree with Deputy Calleary. One of the results that came out of the national tour we did with the Action Plan for Jobs was that there is insufficient knowledge out there.
On foot of that we have produced a simple and easy-to-use brochure which we have online. We have been promoting it through the Company Registration Office, chambers of commerce and county enterprise boards. We are promoting it everywhere we can and it includes micro-finance and loan guarantees. We will seek to take further initiatives.
As the Minister of State, Deputy Perry said, the one-stop shop in the local enterprise office is the aim, so that there will be one place to go and access revenue, seed capital or micro-finance. One will be able to use that as a single source of information.
The Deputy is correct in that apprenticeships need to be re-examined. One of the tasks of SOLAS, which has now gone to the Department of Education and Skills, is to look at the weaknesses or strengths and changes that are needed as a result. As part of the manufacturing forum, my own Department is looking specifically at manufacturing skills and the changes required. It is clear that we do not have enough traineeships embedded within the various sectors. We need therefore to build a much closer alliance between training and industry to get an embedded training culture.
Last Monday, we took a trip to see approximately 25 businesses in County Donegal to get an understanding of their status. We were at an engineering firm on the Inishowen Peninsula, whose management made the point that the way in which lean management and lean manufacturing programmes are delivered through Enterprise Ireland is very awkward for them. They end up not accessing them from Enterprise Ireland but privately. The firm's management also told us that the electricity costs it pays are at a higher unit rate than domestic costs. Perhaps the Minister can look into that issue because the manufacturing firm in question is being charged higher costs than in a private household.
The businesses we spoke to said one key issue that is creating difficulties with regard to employment is that when people take jobs for €14 or €15 per hour they often fall off a welfare benefit cliff. They would therefore lose medical cards and education allowances completely. Consequently it meant that they do not take up those jobs. If such allowances could be maintained for a higher level of income, such people would not find themselves in that position. They would then be able to resume paid employment within the manufacturing industry.
I fully agree with the Minister's point about training and apprenticeship schemes in the manufacturing sector. The success of manufacturing after the Second World War was very much based around major investment in training and apprenticeship schemes. However, the Government should consider imposing measures to compel different sections of industry to improve themselves in this respect. In the construction sector, there has been a huge fall-off in the apprenticeship scheme. It has become a big problem so direct action should be taken. Even though the construction sector may be flat at the moment, it will not stay that way forever. We should therefore be imposing rules and regulations on the construction industry to come up with a framework whereby businesses are compelled to invest in apprenticeships and training.
As regards Deputy Tóibín's point, I will investigate what the problem is with lean for that company in Inishowen. I am not familiar with a difficulty but if the Deputy provides me with the details I will follow it up. While electricity costs are not a matter for my Department, they obviously depend on the power and continuity required by a customer.
There are problems with benefit withdrawal but most people who have been on the live register for over a certain period - if, for example, they are availing of revenue job assist - will get significant compensation both in the tax code and the ability to retain some of their allowances. Nonetheless, I accept that we need continually to seek to unwind those. I am aware of the impact of rent supplement in that area, although only a small proportion of the live register is affected by that.
Deputy Wallace raised the issue of making training compulsory. At the moment, the Government must be careful about imposing obligations - or what effectively would be levies - on employers at a time when they are struggling, particularly in the construction sector where they have experienced downsizing. We need, however, to create a culture in which industries actively plan the longer term development of skills that are needed in their sector. There are segments within industry that are going through a good growth phase. We should develop better arrangements for them for permanent placements and alliances with institutes of technology or the vocational education committees in order to have a regular flow and work experience. That would be our ambition.
