Vol. 1026 No. 2
5. Deputy Joe Carey asked the Tánaiste and Minister for Enterprise, Trade and Employment the measures that he intends to introduce in order to help businesses deal with the cost of energy; and if he will make a statement on the matter. [45076/22]
10. Deputy Fergus O'Dowd asked the Tánaiste and Minister for Enterprise, Trade and Employment his plans to assist businesses across the country that are being hit with exceptionally high running costs due to the energy crisis; if the Government will be introducing support schemes similar to those introduced during Covid to ensure that businesses are not forced to close their doors; and if he will make a statement on the matter. [45053/22]
11. Deputy Thomas Gould asked the Tánaiste and Minister for Enterprise, Trade and Employment the supports that are currently in place for businesses struggling to pay energy bills. [45087/22]
18. Deputy Aindrias Moynihan asked the Tánaiste and Minister for Enterprise, Trade and Employment if his attention has been drawn to the increased pressure that the increased cost of energy is putting on smaller local businesses such as shops and hospitality; his plans to support same; and if he will make a statement on the matter. [45074/22]
I want to ask the Minister the measures that he intends to introduce in order to help businesses deal with the cost of energy.
Deputy Gannon is here to deal with Deputy Catherine Murphy’s question, which is similar to these questions, so perhaps he wants to come in on this. I have no objection to that.
He can certainly come in on it. We will check in regard to Deputy Catherine Murphy’s question.
I propose to take Questions Nos. 5, 10, 11 and 18 together.
I think it is fair to say that the Government has not been found wanting when it has come to helping businesses get through difficult periods and saving the jobs of people who work in those businesses. The multibillion euro financial assistance provided by Government during the pandemic was unprecedented, whether it was help with businesses' wage bills so they could keep staff on, their overheads, the introduction of cheaper, easier ways to restructure and survive, the small companies administrative rescue process, or SCARP, scheme, the commercial rates waiver or the reduction in VAT for the hospitality and retail sectors.
I am conscious of how worried businesses are as we go into the winter and they see the high energy bills. Putin's invasion of Ukraine has had massive consequences for the whole of Europe, not just Ireland. Indeed, we are now facing a global inflation crisis. We are working on new proposals to help businesses with rapidly rising energy prices and I expect to be in a position to make a positive announcement about that on budget day. We will be looking to raise awareness around energy efficiency, helping businesses reduce the amount of energy they use in the first place and improving take-up of the approximately 20 existing schemes that we already have in place for business to help them reduce their energy costs. For example, in June, we announced a new €55 million green transition fund to help businesses move away from fossil fuels and towards more sustainable alternatives, which, increasingly, are cheaper alternatives as well.
I thank the Tánaiste. I get a huge number of contacts from companies, firms and retailers in County Clare in regard to the cost of energy and the impact it is having on their business, their ability to trade and their ability to retain employees. We are seeing a doubling and a trebling of costs. It is not before time that a significant package is put in place to help these traders.
The Tánaiste mentioned a €55 million green transition fund. That is very welcome but the retail sector is not eligible for that. I would ask that strong consideration be given to amending that and allowing retailers into that particular scheme. I would also encourage the Tánaiste to look at introducing a grant scheme for accelerated capital allowances to enable retailers in particular to upgrade their refrigeration so they are more efficient. The Tánaiste might come back to me on that.
I agree with Deputy Carey. I welcome the action that the Minister and the Government have taken in regard to Covid, which was praised universally. We need to be in a position to praise a new dynamic response, which the Minister appears to be promising right now.
This is having an effect right across my county and my constituency. I know of a company that has 140 employees whose bill has gone from €15,000 to €50,000 per month. I know of a well-established Drogheda company whose electricity bill has gone from €10,000 to €25,000 per month. There is a food hall in Dundalk which is 38 years in business and its bill has gone from €3,674 to €9,000 per month. It is unsustainable and they will not be able to meet the increasing cost. They are looking at reducing workers’ hours, lay-offs, increases in prices, closing temporarily and, in the case of manufacture, possibly moving to another jurisdiction.
I believe that all and every opportunity must be grasped in regard to all other possible supports, like reducing other taxes that may be on these companies and subsidising wages if there is a proven bill and there is now an excess on that. There might be other ways of finding supports for companies other than what is happening right now. It is unsustainable for these businesses.
We are inundated with calls. I appreciate and acknowledge the Tánaiste's concern.
Go raibh maith agat, a Theachta.
We lost 50 jobs in Premier Periclase in Drogheda due to the rise in energy prices. The Tánaiste did his best. It was down to world prices and issues, as he addressed.
Like householders, businesses are seeing a dramatic increase in their energy bills. Owners of supermarkets, hotels, restaurants and many other businesses locally have been highlighting to me the threefold increase they are seeing in their electricity and gas bills. It is just not sustainable for them. Not alone is it wiping out any profit but it is costing them to open the door and do business. Many of them have already taken a number of different steps, including reducing their energy costs by changing fridges, for example, reducing opening hours and closing their deli counter. That is having a knock-on effect on staff and their income, putting them under further pressure. The cost of installing any new energy-efficient equipment will put huge pressure on businesses as well. There will need to be support for them to do that.
I remind the Tánaiste that many of these retailers worked through the pandemic. Local businesses are an important part of the fabric of a community. They provide the first job for many people and they sponsor community groups and others. It is essential that they are kept operating.
I thank the Leas-Cheann Comhairle for accommodating me. I had a meeting yesterday with a group of business owners in the city centre. They painted a very bleak picture of what trading may look like there. With the rise in energy costs and the need for efficiency that will come with it, we will see businesses turning off their lights at earlier hours. The city will become darker and, therefore, less safe, with people choosing not to come into it. Is that being factored into the Government's considerations? What can we do to ensure we keep our city centre bright and vibrant, particularly coming into the festive period, when energy demands will soar?
I thank the Deputies for their questions. As we all appreciate, businesses are going to be affected in very different ways. Some businesses are very energy-intense; for others, labour costs outweigh energy costs many times over. Some have been able to recover their costs, often through price increases, which are unwelcome. Some businesses are very profitable and will simply face lower profits, while others are barely profitable at all and face being pushed from profit into loss. That is a very serious situation indeed. I think the big impact on retail is because of refrigeration and the enormous cost of running fridges.
The Minister of State, Deputy English, and I will examine the proposal by Deputies Carey and O'Dowd to extend the green transition fund to retail and the issue of accelerated capital allowances. However, we all appreciate that doing that kind of work will pay back at some point in the future, but it is not going to get businesses through the winter period. Therefore, we are working on a number of schemes we think will help businesses. One is a low-cost, low-interest loan, similar to what we had in place for Brexit and the Covid pandemic. The second is a grant scheme, in essence, which already has state aid approval from the European Commission and will be targeted at manufacturers and exporters with high energy bills. In addition to that, we need a broader measure that will help SMEs, particularly in hospitality and retail, which are facing very high costs.
It is going to be a real challenge. I have seen some extreme examples of bills going up when people have come off contracts or they are with a discount supplier. It is typical now to see bills trebling; not doubling, but trebling. That is quite typical and it is a huge increase in electricity and gas bills for businesses. I would love to be able to say the Government is going to be in a position to pay those bills or pay two thirds of those bills indefinitely, but I cannot say that and I cannot promise that. What I can say is that we will help and it will be a significant and meaningful intervention. We hope to have that in place for budget day.
I share Deputy Gannon's concerns. If our towns and cities, including Dublin city centre, are darker, they will be less safe. Of course, nobody is talking about turning down the streetlights, which will remain on as they are now, but the general streetscape is illuminated by lights in shops, businesses and public buildings. We need to be careful about that in terms of our messaging around it. While we are encouraging people to use less energy, we do not want to make our streets less safe. That is something I am very concerned about too. Luckily, most lighting, particularly LED lighting, does not use up a huge amount of electricity. It does use electricity but nothing like the electricity that is used for heating things up or cooling things down. We need to get that balance right.
I thank the Tánaiste for agreeing to look at the proposal for accelerated capital allowances for retailers, in particular, to upgrade refrigeration units. I very much welcome that. There is a need for an immediate response for both the short and long term because this issue will not go away any time soon.
There is a chance for some premises to install solar panels on their roofs and get energy supply into their units, but they are being prevented from selling that electricity back to the grid. We need to cut up the red tape that prevents them from doing so. Will the Tánaiste look at proposals in that regard?
I welcome the Tánaiste's reply. In the case of manufacturing industry in my county, this is a very significant issue if a company has 140 workers and is considering lay-offs. It cannot increases its costs because it is tied into contracts internationally. The problem is that if people are laid off, they will be making claims on the State by way of supports. It is terribly important to try to add in those supports now and keep people at work if at all possible. There is not one formula to fit all the problems but I go back to what the Government did during the Covid period. The opportunity is there to do now what it did then. I know these are different problems and would involve different schemes and opportunities, but the Government must tackle this. People have confidence because it did it in the past. We need to prove our capacity as a Government and a State to respond to this dreadful international crisis. It was not caused by the Government but we must attempt to solve it. We must pull out all the stops on this.
I thank the Tánaiste for his response and overview. I draw his attention to the hospitality sector. Often, when money is tight, eating out and staying somewhere overnight are things people will tighten up on as early as possible. Those businesses will possibly see a dramatic drop-off in their income. They are going to be pushed from both sides because many of their costs will remain high even if their restaurant or other facility is only half full or two thirds full. They will still have to run the same demand on fridges, heating, lighting, staff and so on. Will there be particular measures for businesses that are going to be hit from both sides? Will the Tánaiste give an outline of the scale of supports and whether those measures will be in the form of direct supports to enable such businesses to continue to operate? They are essential businesses in that they are providing jobs for people locally, including, in many cases, the first job for students and younger employees. It is essential that we keep them operating.
We could be facing economic carnage. We have all heard from the owners of small businesses and industries. We need to deal with the cost of energy at both a domestic and international level, where we can do so, but we will also have to look at grant schemes. I refer to Suretank in Dunleer and Castlebellingham. To lay it out cleanly, the company is looking at its cost of €15,000 per month for electricity going to €50,500, and gas going from €3,200 per month to €18,000 per month. It is saying this will mean all its profits are gone and it will be out of action in a number of months. Anglo Printers in Drogheda is looking at its electricity bill going from €160,000 per year to half a million euro, which is an approximate cost of €10,000 per worker. As I said, it is absolute carnage. We need to act as quickly as possible, as was done during the Covid period to keep the ship afloat. I accept this is an issue that is happening across Europe, but we need to deal with it domestically and internationally. We have no choice.
This is a very real issue and I am delighted it is being discussed. I met with members of the Irish Hotels Federation, IHF, in my county recently. While they prepare monthly accounts, many smaller businesses in the hospitality sector, such as coffee shops and cafés, only prepare annual accounts. It will only be in October they will get the real shock factor. The costs of utility bills are spiralling through the roof. We must do everything possible to ensure, just as we did during the Covid-19 pandemic, that these businesses stay afloat. They are part of the fabric of Ireland, part of the employment sector and significant employers in the economy. Outside of greater Dublin, the tourism and hospitality sector is the greatest employer in the west. Therefore, I ask that everything possible be done in this context in the lead-up to the budget.
I thank the Deputies for their questions and their advocacy on behalf of small businesses and the retail and hospitality industry in their constituencies. I agree a response of scale is required. I cannot put a figure on that now. It may not be possible to put a figure on it, because we just do not know how long this situation will continue. We probably will be able to put a figure on it for this year, but I am not sure about next year. That will depend on how things develop. The objective, however, is clear: it is to protect viable but vulnerable businesses from failing and to protect the jobs of the people who work in those businesses. There must be an adequate response, because if there is not such a response, then there is no point in having a response at all. I would rather spend enough and achieve what I want to achieve than spend a lot and not achieve what we need to achieve. This is going to be our guiding principle.
This is a very different crisis from Covid-19. When the virus arrived in Ireland, we were talking about somewhere between 20,000 and 80,000 deaths if we did not act the way we did. The response to the Covid-19 pandemic, of course, was not just about providing money to people and businesses; it was also about taking away people's freedoms. This is a very different crisis. We will not be doing things like that, for example. It is, though, comparable in some ways. It is comparable in respect of the anxiety and fear people have when it comes to being able to pay the bills. It is also comparable in respect of the uncertainty, because people just do not know how bad this crisis will be or how long it is going to go on. This is why it does require a comparable response.
6. Deputy Joe Carey asked the Tánaiste and Minister for Enterprise, Trade and Employment if he will arrange to carry out an urgent review and reform of the work permit system with a view to introducing a more effective and streamlined process to facilitate recruitment for the private and voluntary nursing homes sector given the severe challenges being experienced by private and voluntary nursing homes in terms of staffing; and if he will make a statement on the matter. [45077/22]
Will an urgent review and reform of the work permit system be carried out with a view to introducing a more effective and streamlined process to facilitate recruitment for the private and voluntary nursing home sector, given the severe challenges being experienced by private and voluntary nursing homes in respect of staffing?
I thank the Deputy for raising this issue, which is at the forefront of our minds as Deputies in each area trying to support those who need care in the home. Ireland's employment permits system is managed through the operation of the critical skills and ineligible occupations lists, which determine roles that are either in critically short supply or are ineligible for an employment permit. These lists undergo regular, evidence-based review, guided by relevant research, public and stakeholder consultation and the views of the economic migration interdepartmental group.
My Department chairs the economic migration interdepartmental group to oversee the review process, which includes membership drawn from senior officials of key Departments, including the Department of Health in this case. The aim of the group is to promote an integrated approach to address labour and skills shortages in the economy. This includes assessing proposals received through the public consultation for changes to the occupations lists.
We announced changes in June 2021 to assist in the shortages being experienced in private and voluntary nursing home establishments and hospital settings. These employers can now apply for the general employment permit for non-European Economic Area, EEA, nationals wishing to take up employment in the State. Since January this year, about 1,873 employment permits for healthcare assistants have been issued to more than 193 nursing homes. Therefore, this scheme is working quite well. It involves a great deal of training and upskilling as well, and an ongoing commitment to training, which will help the sector overall.
In addition, to help alleviate some of the ongoing skills shortages, we announced further changes in June this year to enhance access to employment permits for other key professional roles in the health sector. These changes included roles that may be employed in the private and voluntary nursing home sector, such as occupational therapists, physiotherapists, podiatrists and chiropodists etc. Employment in these occupations is now eligible for the critical skills employment permit, which again should help to bring more people into the sector.
Officials of my Department are now actively engaged with the Department of Health regarding recruitment challenges for the care sector. A major focus in this regard is care in the home. My Department is a member of the cross-departmental strategic workforce advisory group. It is chaired by the Department of Health, and the Minister of State, Deputy Butler, is in charge of that and tasked with considering the recruitment and retention challenges faced by the care sector. The Department continues to keep the employment permits system under review in light of changing labour market circumstances. We will respond to the advisory work group when it presents its findings. I understand it is due to report in September. We have engaged directly with the Minister of State, Deputy Butler, on this issue and she is very concerned about the shortage of talent in this area. Resulting from that, we will be able to adjust the work permit schemes, if need be, to accommodate this situation. As I said, we do have the ongoing review quite regularly. This issue was examined in the previous two reviews. There were issues around the contracts on offer and terms and conditions, and we must work on these aspects too as best we can.
I recognise the work of the Minister of State on this issue. I refer to the changes and reviews. He is a very hands-on Minister of State. I recall him facilitating a workshop with members of the Shannon Chamber of Commerce several months ago. It was very informative for the businesses that engage in the context of the work permit issue. A particular issue, however, is emerging regarding recruitment for our nursing homes sector. Basically, there is a shortage of healthcare workers in Ireland and throughout the EU. We must streamline this process.
To give an example, some of these people get their work permits, but then they must wait for the critical skills permit to come on stream after that and it may take several months to happen. Those people may also have to wait for an entry visa. More co-ordination is needed between the Department of Enterprise, Trade and Employment, the Department of Justice and others to ensure this process can be streamlined.
The Deputy raised two important issues. The first is the reform of the overall system. In recent years, especially in working closely with the Tánaiste and the Department over the past year, we put extra resources and staffing into that area. The number of staff available to work through the backlog in permits has nearly trebled. Thankfully, the processing time has been reduced. We had been seeing timelines of nearly 20 weeks, and more in some cases. In most cases now, though, the waiting time is back down to four or five weeks, which is correct. We will continue to drive on with this work with more forms and more changes, including using IT and more skilled staff to enhance this process and to reduce the waiting time even more.
Legislation will also be coming through the Houses this autumn, which will again help to streamline the process. Therefore, the process itself is being addressed. The Deputy, however, also raised two other issues. One was our engagement and work with the Department of Justice on this issue, because it can be complicated for certain sectors and for people from certain countries coming in as well. Therefore, we have regular engagement with the Department of Justice. We have made changes that have worked quite well in the medical profession in general, and we will home in on other areas that have been identified in this regard as well. The Tánaiste, the Minister for Justice, Deputy McEntee, and I will be meeting in the next week or two to focus on some of the changes also coming through at EU level which might help us to align our two systems. We do, however, try to respond.
A working group specific to this sector, involving representatives from all the relevant Departments, has been established to focus on this issue. This has been done because this is not just about finding an answer to this problem involving work permits; other issues are involved. We must put in place permanent solutions, and I will be very happy to work with Deputy Carey to make this happen very quickly.
On that review group, when does the Minister of State expect it to report and when will its recommendations be implemented? I ask this because I can see on the ground that this is an issue now. Nursing home proprietors are contacting me regarding this issue. They have managed to get some people, but the delay in trying to process applications is what is in question here. I welcome the addition of occupational therapists and physiotherapists to the critical skills list. The important aspect, however, is to ensure people get critical skills permits in a timely fashion after they get work permits. Perhaps the two processes should happen together.
We have spoken before about the operation of the work permit scheme. Streamlining is needed across the board, in respect of everything from healthcare workers to chefs. Beyond that, the Minister of State spoke about the task force. We all know the issues, whether we are talking about healthcare workers in nursing homes or home carers, which is a particular issue. The Minister of State mentioned a level of engagement with this task force. My understanding is that, to a degree, there has been some sort of draft interim review report. I imagine that is with the Government now. This is an issue we really need to be dealt with. Many families cannot get care for their loved ones at home to keep them in their homes. We know the necessity of doing this. Therefore, I would be grateful if the Minister of State could give us any update in this regard and perhaps even a preview of what is going to be proposed in the budget. We will keep it in the room.
I support the other speakers on this matter. In the previous budget, €666 million was allocated to this area.
An unprecedented amount of money was committed to the home help sector but the problem over the past 12 months has been that they have not be able to fill many of these roles. They simply cannot get the people. I suggested at the Fianna Fáil think-in - this feeds in also to the Tánaiste's Ministry - that we would look in budget 2023 at special taxation which would allow people, after doing the school drop-off in the morning, to be able to provide home help in the community and be able to fulfil the school collection obligation in the afternoon without penalising that person or his or her spouse or partner from a taxation point of view. Taxation treatment here could unleash the potential of people to serve in their community, provide home care and keep people out of the acute hospital setting. I hope it can be considered by the Department and, indeed, the Department of Finance in the lead into budget 2023.
In response to Deputy Carey, first of all, the permit regime change we made for the healthcare assistants is of major assistance to nursing homes and we work closely with them around that. Close to 2,000 permits have been issued. We have streamlined our process and we focus in, whether it be on home-care assistants or chefs, at different times of the year when there is a high priority. I think we have managed to do that, but the simple question the Deputy asked was on whether we can align that better with the Department of Justice. That is something I would agree with the Deputy on. We are trying to do that too and it is trying to focus its resources where we are to match up with the individual sectors. Nursing home care and home care are the two key areas.
We were able to make the change in the case of the healthcare assistant issue because the evidence was there. The same evidence was not there to address the shortage in the home care sector. I have engaged directly with that sector outside of the strategic advisory working group as well to hone in on the contracts that are on offer, the subsistence and the terms and conditions because the Tánaiste is very clear on this. Work has to always pay and we have to make sure that we are working with high-quality jobs here. The permit is not the solution to everything and we must see good contracts on offer that deal with all the issues concerned as well.
That advisory group, I understand, is to complete its work in September. The Minister of State at the Department of Health, Deputy Butler, is anxious that it does. We can respond to that as well.
On the third point in relation to the tax regime, we would agree that there are quite a high number of people who for whatever reason are not available to work in this country. I do not mean people who cannot work or are on social protection, but that there is a large number of people who might have retired early or have not gone back to work. We need to find new ways to unlock that potential. This is one area where there is a great deal of potential for it. That is something that is being looked at by the advisory group.
8. Deputy Cathal Crowe asked the Tánaiste and Minister for Enterprise, Trade and Employment if he is supportive of the industrial hub around Shannon Airport being a base for major parcel distribution and transiting centres; and if his Department has made any effort in attracting large multinationals in this sector to the region. [45168/22]
I wish to ask the Tánaiste and Minister for Enterprise, Trade and Employment if he is supportive of the industrial hub around Shannon Airport being a base for major parcel distribution and transiting centres and, specifically, if his Department has made any particular efforts in attracting large multinationals from this sector to the Shannon Airport and wider mid-west region.
I thank Deputy Crowe for the question.
Shannon Airport is a really important infrastructure asset for foreign direct investment, FDI, and indigenous enterprise in Ireland.
As part of IDA Ireland's current strategy, it is proposed to target 76 new investments for the mid-west region in the period between now and 2024. The FDI performance in the region has been consistent over the past five years with employment by IDA Ireland clients increasing by almost 30%.
The mid-west is now recognised as a global cluster location of choice for advanced manufacturing, including both life science and semiconductor manufacturing multinationals. With the completion of the Advanced Manufacturing Centre in the National Technology Park this value proposition is further enhanced.
Additionally, the Future Mobility Campus Ireland based in the Shannon Free Zone, which I had the pleasure to visit a few months ago, is home to several existing IDA Ireland clients with activities linked to smart mobility. The continued development of the connected and autonomous mobility sector is positive with great companies, such as General Motors, Jaguar Land Rover, and recent investments from Exida and Renovo benefitting the mid-west region.
IDA Ireland will continue to engage with multinational online selling and distribution companies as part of their strategy to attract investment. Several IDA Ireland client companies manage supply chain and distribution from Ireland already, including DHL and DB Schenker which have operations in Shannon.
The mid-west has also developed a strong professional services and technology ecosystem including companies like Dell, Extreme Networks, Fiserv, IQEQ and Waystone.
As the Deputy will be aware, the Shannon Estuary Economic Taskforce was formally established on 21 April 2022 following an open expression of interest. We have our regional enterprise plan for the region as well.
The work programme for the task force is focused on an assessment of the strategic strengths and potential areas of opportunity for the Shannon Estuary across four sectors, including transport, logistics and connectivity, which is the matter the Deputy is raising. This strand is looking at interconnectivity, sustainable transport, innovation and development, and alternative fuel sources such as synthetic aviation fuels, as well as the potential for the Shannon Estuary region to be developed as a logistical hub, serving not just the region but the entire country.
We were happy in the summer to see the Tánaiste down at the future mobility hub. Shannon and the mid-west is only scratching the surface of its potential there.
Many people are shocked in Ireland to discover that only 1% of cargo leaves our country via the air. Given the number of planes that crisscross this country every day, we are uniquely geographically positioned between Europe and the United States. We have so many natural advantages and we should be capitalising on that.
Luxembourg has Cargolux. It is a small country but, minute though it might be, it is a world leader in terms of Cargolux and getting cargo shipments throughout the world.
I look with envy every time I pass Baldonnell in Dublin. The new Amazon facility there of 58,000 sq. ft. employs 500 people. Only two weeks ago, it shipped out its first parcels from its Ireland facility. There are 30 of these facilities in the UK. It is inevitable that Amazon will want more facilities in Ireland. We would like to know, I suppose, specifically, has the Tánaiste advanced proposals for it to locate in Shannon Airport, particularly given the new facility that will soon be built there for cargo handling and shipment.
I very much share the Deputy's vision and aspiration for what we can do in Shannon into the future. The zone around the airport has been an enormous success in the past couple of years. There has been a huge increase in employment, and the quality of employment, there as well. For the airport itself, it is always a bit more of a struggle but we all want to see passengers numbers increase. I was pleased to engage with Deputy Carey, as head of the airport group, and to see also that the flights to Paris have resumed, which is really positive news as well.
Luxembourg is a little different. One should bear in mind that if a plane lands with a cargo in Luxembourg, it can be transhipped by road or rail to almost anywhere in Europe. That is not the case for Ireland. If something lands in Dublin or Shannon and is taken off the plane, it has to be put back on a ship to get to Europe. It is a different proposition in Luxembourg. However, when it comes to air transhipment, there is a great deal of potential in Shannon going from one plane to another. There is a great deal of space there as well and very few objections to development, which is really important too. We have had some discussions and conversations with particular companies involved in this space. I cannot get into the detail of them here. I might be able to talk to the Deputy off-line. We are pursuing a number of opportunities.
Some months ago, permission was granted to Shannon Group to construct a new air cargo hub logistics facility at Rineanna South, Shannon. This will be a massive facility. It is right by the runway. It is perfectly positioned to receive transit cargo and take it worldwide. We really want to see this happen. I am sure there is a tenant in mind for this. We would love to see Amazon there. I would imagine every Deputy in this House has the Amazon app on his or her phone. It is how people shop these days. A pair of jeans comes in from the UK. Tops come in from America. There are Prime vans on every road in Ireland in the mornings but we really need a second facility. The facility in Dublin is fantastic but Shannon still has huge advantages over Dublin. In spite of the new runway opening in Dublin in August last, we still have Ireland's longest runway. We have incredible hangarage. We are uniquely positioned, as I say, as a stepping stone to the United States and the European Union. With Brexit having happened and with all its woes, Shannon and the mid-west are positioned perfectly for a new cargo facility. Let us not get to the point in 12 months' time where we are still talking about 1% of air cargo leaving Ireland. We need to increase that. It is far more sustainable in terms of shipping things worldwide.
The Government decision over a decade ago to establish the Shannon Group led to a transformational change in the Shannon Free Zone itself. I look forward to the official opening of MeiraGTx tomorrow by the Taoiseach. It is a progressive company. It is a real example of what has been done in Shannon over the past decade.
Many of those firms have been in touch with me in relation to the question of energy, the issue of blackouts and the Government message around that. They are looking for assurances around this question of how will the Government deal with it and I would like the Tánaiste to give some assurance to those companies that provide so much employment in the mid-west on our policy in that regard.
I thank the Deputies again for their questions. I must confess, I do not have the Amazon app on my phone. I use Amazon from time to time and have nothing against it but I like to support local too and, particularly in the run-up to Christmas, will try to buy as much as I can in retailers in west and central Dublin. I know that Deputy Carey is a big supporter of local businesses in Clare as well.
I am familiar with the plans Shannon Group has. They are really exciting. I can certainly say to the Deputy, without giving away any commercially sensitive information, that the IDA, Enterprise Ireland and Shannon Group stand ready to incentivise any large company that may want to make use of that facility. We are definitely working on that.
As for Deputy Carey's question about energy security, we anticipate that the Minister, Deputy Eamon Ryan, will publish in the coming days, if not in the next week or so, the analysis that has been done on energy security in Ireland. It is largely favourable. We are fortunate in Ireland in that we do not rely on gas from Russia and that we have two other ways to bring gas into the country, that is, from the Corrib field and across the two interconnectors from the UK. However, I share Deputy Carey's view that having gas storage and another way to get gas into the country, whether through Cork or Ballylongford, but having a different source of gas should something go wrong with the UK interconnectors, makes a lot of sense.
9. Deputy Louise O'Reilly asked the Tánaiste and Minister for Enterprise, Trade and Employment the measures his Department is taking to uncover, to tackle and to reduce bogus self-employment, especially in State-funded agencies or where public moneys are being spent, in light of a recent judgment of the Workplace Relations Commission against a company (details supplied); and if he will make a statement on the matter. [43743/22]
I have raised this issue with the Tánaiste in different guises on a number of occasions. On the one hand, when there is an industrial dispute, he and others in government will advise people to use the third-party machinery of the State, and that is entirely appropriate. On the other hand, however, we have agencies funded by his Department that then ignore these rulings in some instances. This case relates to bogus self-employment. It relates specifically to Design & Crafts Council Ireland - this has been reported in the newspaper - and a judgment, a ruling, made against it. I want an update from the Tánaiste, if I could, in light of this judgment specifically, on what is being done to tackle the scourge of bogus self-employment.
I thank Deputy O'Reilly for raising this issue.
It is important to ensure that workers are correctly classified in a way that matches the reality of the relationship between the worker and the business. Therefore, we take very seriously any bogus employment. The Tánaiste is very clear on that and has set up a working group on the matter.
In Ireland, mechanisms exist for the determination of the employment status of individuals or groups. Where an issue arises in respect of the employment status of an individual, cases are forwarded to the Revenue Commissioners and-or the scope section of the Department of Social Protection for investigation, either solely by the recipient or jointly with the labour inspectorate of the Workplace Relations Commission. The WRC may also determine employment status as a preliminary issue at an adjudication hearing dealing with an employment rights dispute.
In July 2021 a revised code of practice on determining employment status was published by the Minister for Social Protection. This code is the key guidance document for employers and workers and others on deciding the employment status of a worker. The code was revised to take account of newer labour market developments, including platform work.
The misclassification of workers as self-employed when their terms and conditions mean that they are, in reality, employees is a matter of concern to us. However, in the changing world of work, correct classification of the relationship between employers and workers is not always a straightforward matter, and each case must be judged on its individual circumstances. That is the system we have operated here very successfully for a long number of years.
Regardless of the complexities in this area, it is important that false self-employment is tackled wherever it occurs, and we are very clear on that. To that end, the Tánaiste has requested our Department to convene a working group consisting of officials from the Department, the Department of Social Protection and the Revenue Commissioners as well as representatives from ICTU, IBEC, the Construction Industry Federation of Ireland and ISME to examine closely this issue. I chair that group and we have met on a number of occasions.
Ireland has a broad suite of employment rights legislation. All businesses including those in receipt of public funds - we are very clear on this - are obliged to adhere to the law of the land, including those obligations arising under employment rights legislation. The WRC is the organisation within the State which is mandated to secure compliance with employment rights legislation and it does a good job in doing so.
Deputy O'Reilly raised a specific issue. I cannot comment on any individual case-----
That is okay.
-----but we are absolutely clear that, regardless of whether public money is involved or not, the rules of the State must be followed.
The Minister of State referred to the changing world of work as if it is something that has just recently happened. Of course, it has not. I was trying to work it out there, but I think it is about 17 years since the first time I heard the phrase "no mutuality of obligation" in a Labour Court recommendation. The Minister of State will know what that phrase means. It has been knocking around for a very long time. For years people thought that the bogus self-employment issue was something that existed only in certain parts of the economy. It is now invading every part of the economy.
What the WRC found in the case to which I referred was that the employer had been evading their legal responsibilities under employment law, namely, that they had sought to force a worker into bogus self-employment in respect of her job as an instructor. That just denies her permanent employment. It is not just a case of not getting a contract; the worker does not have access to sick leave, does not have access to a pension and does not have access to paid time off. It is a really serious issue. The Minister of State will be aware of this.
I would appreciate an update on the consultative group and the work it is doing. It is good that it meets but we want to hear what is actually coming out of that group.
I have no doubt but that the Deputy is well plugged into that group. It is representative of all parts of society. It is important we continue to focus on the area to see if we can enhance and strengthen our legislation and our regime. Part of the work of that group over recent months has been to assess the situation at the moment and the numbers that we believe are in this sector and to see if Revenue and the Department of Social Protection have the right staff and the extra staff they need to be able to deal with the current situation. They say they do.
There are delays in the system when a case goes into a review, an appeal or suchlike, which can be very lengthy. Most cases are now dealt with in, I think, less than six weeks. That is the initial judgment. It is always an individual assessment of every individual case. The working group is trying to see if we can add to that and make it better.
In fairness, the initiatives in this area have been updated over many years at different times to reflect changes in work. The big change at the moment - it has been going on for the past couple of years - is platform work. There are changes afoot at EU level as well. We will take all that on board with the new EU directive and bring it through that working group and back, with a recommendation to the Tánaiste through the Labour Employer Economic Forum, LEEF, as well. It is important that we will act on that if need be. A part of that is gathering the evidence and seeing what sectors we can focus on. Phrases are often used like those Deputy O'Reilly has just used that this is a major problem. The research does not always show that, but wherever the issue arises we want to stamp it out. The Tánaiste is very clear on this. It denies people their rights when it comes to supports from the Department of Social Protection or any other bodies. In addition, it causes loss of revenue to the State.
It is a serious problem, a growing problem and one that needs to be tackled absolutely head-on. As I said, there was a time when people thought it was a niche issue. It is not. It is in the gig economy, IT, construction, universities, journalism and broadcasting. We know that it is happening; what we do not know is what the Government is actually going to do about it. The workers themselves miss out on so much when they are misclassified. I am talking about things like maternity benefit and other stuff that is really important. Workers are being excluded from that. They are coming into work. There is a mutuality of obligation that has to be established, but even when it is established, and if we take the case I have outlined, which has now been appealed by the employer, the employer now, presumably a State-funded agency, is spending the State's money to fight one of its workers because that worker has been forced into bogus self-employment. As part of the group, the Department should look at that and at how much money is spent by the State fighting workers who have an entitlement through the machinery of the State. That has to be looked at, but where the State is facilitating it, it is especially egregious.
To be very clear, the State does not facilitate it. The State expects anybody who is in employment to have the full protection of our employment legislation, and we are very clear on that. There are two agencies, Revenue and the Department of Social Protection, that do a well-recognised good job in this area. Our regime in Ireland is well recognised for protection of employees. It is something we are very proud of and put the resources into, and we will strengthen that.
We have also extended a lot of the benefits to self-employed people through social protection, and rightly so, because we have seen how they were left behind at the last financial recession, so we have made sure to extend that. That is something we have worked very clearly on and it is an agenda the Tánaiste has driven through the Department of Social Protection previously and now in our Department as well. That is very clear. The State will never support bogus employment or self-employment or anyone being forced into it. That is why this working group is carrying out a review to see if we can enhance that. We have sat down with Revenue and the Department of Social Protection to see if they need more resources to tackle the cases that are there, but we are very clear on this. As part of the work, we will end up with a much stronger communications campaign. There are certain key areas Deputy O'Reilly and others have identified, as the Government has as well, and there are certain areas that need to be addressed. We will deal with them. It is not the case, however, that we are sitting back and doing nothing. The legislation is there already, and we want to be very clear on that.
Question No. 11 is a simple one and I am conscious this was discussed earlier. I refer to an earlier comment made by the Tánaiste in which he said that viable but vulnerable businesses need to be prevented from failing. I understand this issue was discussed already. I ask this question on behalf of Deputy Gould.
Was it taken?
Yes, it was. I was substituting for Deputy Gould and was not included in the grouping, which is why I am asking it now.
It was grouped. The Deputy should have come in at that time.
I was not called and I did alert the Leas-Cheann Comhairle to it.
Actually, the Deputy is down on the list. I am sorry about that.
If the Tánaiste and the Minister of State are agreeable, we could cut the time for the question. My question is fairly straightforward.
My instructions were that Deputy O'Reilly was down for this question and that it was grouped. I should have pointed that out to the Deputy.
I did approach the Leas-Cheann Comhairle because I was not certain and just wanted to be sure.
I said I was aware you were taking the question but I did not see the grouping. Anyway, we will let you go ahead.
I will be quick because I know Deputy Ó Ríordáin has a question.
There is time for Deputy Ó Ríordáin.
The question relates to the supports currently in place for businesses. However, I want to ask about the Tánaiste's remarks, that he wants to prevent viable but vulnerable business from failing. How will he identify those businesses and how will he ensure the supports get to the business that are struggling with their energy costs?
"Viable-vulnerable" is a commonly used term when it comes to the various schemes we have. It is designed to ensure we do not provide taxpayers' money to businesses that we know will fail, regardless of what support they receive. We take a liberal approach, which sometimes involves supporting businesses that cannot succeed, but we err on the side of supporting a business or protecting jobs any time we can. For example, we provided the sustaining enterprise fund during the pandemic. We will have something similar for the energy crisis. We would expect businesses receiving large amounts of taxpayers' money to present a plan to show how they will survive, bounce back and reduce their energy costs if they can. That does not apply to every scheme. For example, in the commercial rates waiver we did not ask businesses to prove whether they were viable, but when it comes to other schemes we will. That is for a very good reason; to make sure we do not give hundreds of thousands, or even millions, of taxpayers' money to a company that does not have a realistic plan.
When the provision of this money is eventually announced, the Government should not give it to companies also that are viable. There was an issue during the pandemic when companies were on the one hand in receipt of State aid and on the other hand paying massive dividends to their shareholders, and that is not acceptable.
The Tánaiste referred to the need for businesses to reduce their energy costs. I am aware of a hotel which used to have a monthly energy bill of €21,000. That has now risen to €71,000. You can bet your bottom dollar that the people in that hotel are doing everything they can. Growers in north County Dublin have no choice but to use gas to keep their tunnels warm. They are doing everything they can to cut their energy use but they are energy-intensive companies and are worried their businesses will fail. What they want to hear from the Tánaiste is that the money will be directed directly to them, that viable businesses will be kept afloat and that money will not be funnelled into businesses that will come through this unscathed.
Those are exactly the kinds of things we have to take into account when it comes to any scheme, for example, a clawback mechanism to recover money from businesses that received it but did not need it in the end. Many companies paid back money they received through the employment wage subsidy scheme. I am glad we gave it to them because at the time it looked as though they might not succeed. They were able to keep on their staff and make profits during the pandemic, and they gave the money back. It is important that we have clawback arrangements in that regard.
I appreciate that businesses are facing huge energy costs. Two days would not pass that I do not meet someone in business who shows me their bill and tells me all the efforts they have made to reduce their energy costs and, notwithstanding that, the bill is triple what it was only a few months ago. We want to help businesses to move towards more modern ways of providing heat and light, such as using LED lights which cost a lot less. I visited the Iveagh Garden Hotel on Harcourt Street not too long ago where they have a heat pump. It is a massive thing in the basement of an old building. The hotel can have much lower energy costs than the vast majority of hotels that traditionally rely on gas and electricity. However, I understand one cannot install a heat pump in a week or two, or even a few months. We have to help now but also help in the long term.
That is very welcome. The Tánaiste is right; they have to be helped now. The longer-term solutions can wait. What businesses want to hear and what I want to hear from the Tánaiste is what that will look like because there is so much uncertainty. There are things far beyond the control of any person in the Chamber and we fully accept and appreciate that. Notwithstanding that, as much certainty as can be given should be given. We hope when the schemes are announced they will be simple and easy to access.
I am sure the Tánaiste does not mean this when talking about helping people to reduce their energy costs. I have spoken to business owners in my community and beyond who say they are doing absolutely everything. If there is something the Tánaiste believes can be done that those businesses are not doing, perhaps he should share that with them sooner rather than later. He should accept it is part of a longer term solution and that a short-term solution will be needed.
The way we do that is by assisting businesses to get professional expertise in this area. Long before the current energy crisis, we provided about 20 different schemes through my Department and its agencies, and through the Sustainable Energy Authority of Ireland, SEAI, not just to help businesses reduce their carbon footprint and invest in modern energy systems but also to enable them to carry out an energy audit. I have met many businesses that have availed of those vouchers that have had the audit done. Even though they are progressive businesses that have done a lot to reduce their energy costs, they often find out things they had not considered. That is a programme put in place by the Government. It is not about us hectoring them and telling them that they need to reduce their energy costs. It is about us providing them with vouchers, support, and professional advice that shows them how they can reduce their energy costs, which is more relevant now more than ever.
12. Deputy Aodhán Ó Ríordáin asked the Tánaiste and Minister for Enterprise, Trade and Employment the action that he will take to ensure that wages for workers increase to meet the rise in the cost of living. [45081/22]
The Labour Party has been saying for some time that Ireland needs a pay rise. What actions will the Tánaiste and his Department take to ensure workers across the board will get a pay rise? Not least of which the reason would be to tackle the cost-of-living crisis and energy bills they are facing in their households.
The latest numbers, as the Deputy is aware, indicate that wages are rising in Ireland but not rising as fast as inflation. The Government does not centrally control wages but there are different mechanisms by which we can influence how much people are paid. In the public sector, for example, we have negotiated a new pay agreement, which will go out to a ballot. That agreement has been made by the Government and recommended by various unions. I hope it will get through. That would see people receive pay increases this year and next year to help them with the cost of living.
In some sectors, the Government also has a role to play. The Deputy will be familiar with the childcare sector. The Minister of State, Deputy English, has just signed off on a new employment order, which involves significant and well-deserved pay increases for that sector. I recently signed off on an increase to the national minimum wage, which mainly covers people in the private sector, but in some public sector agencies as well. That was an increase of 7.6%, just below inflation. In other parts of the private sector, it is negotiated at individual level. I am not telling the Deputy anything he does not know but they are the kinds of measures we are taking: a public sector pay deal to increase the pay of our own staff, increases in the national minimum wage, and wages in the sectors that are covered by employment regulation orders, EROs, and sectoral employment orders, SEOs. What is happening in the private sector depends on the enterprise.
Maintaining standards of living is not just about pay rises. Pay rises have to be part of it. At a time of high inflation, people need a pay rise to help them with the rising cost of living but it is not the only thing. The Government can also help by reducing income taxes, which is something I am very much in favour of.
The Government can help by increasing welfare payments. For example, the working family payment can help some people. It is also helping to reduce costs, such as the cost of childcare. It is not just about how much people get paid, it is about how much people get to take home after taxes and government levies and about how much it costs to get by on the money people have. It requires these three approaches of pay increases, tax reductions and reducing some costs of living such as childcare.
Herein lies the debate. What we have had for a very long time in Ireland is a disproportionate number of people on low pay. We also have a disproportionate number of people in insecure work. Perhaps the more we say this the more people will notice. A statistic I always tell the Tánaiste, and I know that he knows it, is that 23% of Irish workers are on low pay. He does not have to accept the recommendation of the Low Wage Commission. He could just decide to go immediately to a living wage of €12.90. It would have a knock-on effect throughout the economy. Many employers do not want to be accused of being a minimum wage employer. It would also increase wages all the while. There are also other issues. As the Minister knows, workers here are expected to pay for services for which other European countries do not expect their citizens to pay, such as GP care and childcare. Back to school costs are a classic example. We are in a bind as we have a disproportionate number of low-paid workers and families have disproportionate costs. On top of this will be an extra layer of expense during the winter. The pay rates of those on the lowest level are within the Minister's remit.
I thank the Deputy. We both know how statistics work and it depends on how they are measured. I appreciate the figure the Deputy has used on the proportion of Irish people on low pay but it is skewed by the fact we have such a high number of people on very high pay. This brings up the median. It is equally true that average pay in Ireland is 30% to 40% higher than in the average European country. Of course the cost of living is also higher. Our national minimum wage is in the top three or five in cash terms. Even when we adjust for purchasing power parity the cost of living is still in the top five or six of European countries. These are other facts. What the Deputy said is true but what I have said is equally true.
When it comes to the national minimum wage governments, including governments the Deputy's party was involved in, have always accepted the recommendations of the Low Pay Commission. It is true that we do not have to and we could reject it. We could say it did not matter that there was a very clear majority in favour of a recommendation and that we were rejecting it. I have to have regard to small businesses also. Many of them say they will struggle to pay the increase in the minimum wage. I think I have made the right call. If the number of people in work in Ireland this time next year has not fallen then I have made the right call but if it does fall I have to have regard to it.
The Minister mentioned again that he does not have to accept the recommendation. My point is that he could take it as the minimal rate by which he could increase it. He could increase it by more. He has to recognise the number of people on low pay and the costs they already have. We have had a cost-of-living issue in Ireland for as long as I can remember. There are various costs I have listed that people in Ireland are expected to pay that those in other countries do not. Those who come down from the North to live here are stunned by the fact they have to pay for school books and GP visits. These are very real things in the cost of living in Ireland. I have not mentioned housing or accommodation. I did mention childcare.
The point on the minimum wage increase is that the Minister could take the recommendation as 80 cent at a minimum. He has already made a commitment to move to a living wage so let us do it. We recognise now that all of these elements in the Irish economy are building up on families who are not able to afford them. Those at the lowest level will need extra support from the Government. The living wage would be a realistic measure to take to address it and give comfort to those workers at the lowest level in our economy. Most of them are women and they are disproportionately migrants.
The Tánaiste referenced in his remarks the public sector pay deal and the increase in the minimum wage. There is a cohort of workers not covered by either of these who are being creased by inflation. They desperately need a pay rise. The Minister and I both know, whether we say it publicly or not, that the best way for a worker to achieve a pay rise is not to wait around for the Government to grant it but to join a trade union, get active in that trade union and bargain at local level. In this regard I ask the Tánaiste for an update on the transposition of the directive on collective bargaining. When can we see legislation for the right to collective bargaining before the House?
I thank the Deputies. The directive is still under negotiation at European level as far as I am aware. It has to be agreed at European level before it can be transposed. I cannot give the Deputy a timeline on it unfortunately but we will transpose it once it is agreed. We are supportive of its general principles.
With regard to the increase in the national minimum wage, it is an 80 cent increase. It is the biggest single increase that has ever occurred other than the reversal of the €1 cut but I do not consider that to have been an increase. It is worth approximately €1,600 a year to somebody on the minimum wage who is working full-time. It brings us closer to the target of a living wage, which is recommended to be set at 60% of median wages. That would be €13.10. We are indicating to employers that this is where we would be if we had a living wage today if they could afford to pay it. It is an increase of 7.6%. It is not at the rate of inflation but it is not that far behind it. Other help is on the way, and Deputy Ó Ríordáin will see that the other help on the way in the budget will be of particular benefit to people on low incomes. When we add this help to the 7.6% it will fully protect people on the minimum wage from inflation. I agree with the Deputy's fundamental point that it is not just about pay but about how much of it people get to take home. It is also about how far that money goes. This is why we need pay rises, income tax reductions and a reduction in the cost of living in areas such as childcare and education.
We are almost out of time but with the co-operation of Deputies we will squeeze in one more question.
13. Deputy Jennifer Murnane O'Connor asked the Tánaiste and Minister for Enterprise, Trade and Employment the status of the recruitment of a full-time replacement as south east regional manager for IDA Ireland; and if he will make a statement on the matter. [44773/22]
The Leas-Cheann Comhairle is very good and I thank her. What is the status of the recruitment of a full-time replacement for the IDA Ireland south-east regional manager? Will the Minister make a statement on the matter?
I am glad to inform the House that following the completion of the recruitment process, IDA Ireland appointed Brian McGee as the new south-east regional manager in July 2022. This appointment will enable IDA Ireland to promote regional development in the south east, which is at the centre of IDA Ireland's 2021 to 2024 strategy, Driving Recovery and Sustainable Growth. IDA Ireland will seek to deliver half of all investments from 2021 to 2024 to regional locations. IDA Ireland is committed to the pursuit of more balanced, compact regional development which can deliver complementary efficiency and equity gains, with the overall impact of helping to advance national development. I hope this is of use to the Deputy.
Is there someone for the job?
Yes, Brian McGee was appointed in July.
When will he start? What is the update on this? I met-----
I hope he is at his desk working because he was appointed in July.
This needs to be clarified. I have been working with various businesses and there has been a misunderstanding about this. Will the Minister of State send out to businesses the name of the person? We welcome the appointment. It is very important. I want to highlight that as the Minister of State knows, Carlow and Kilkenny are very important to me. When there are IDA Ireland visits I ask that Carlow is part of them. We have so much to offer. I always feel that Carlow is always forgotten in the south east. I will always say this. We need to work to make sure that Carlow and Kilkenny are not forgotten.
I will absolutely make sure that Carlow is not forgotten. We could not possibly forget it with the Deputy here. As the Deputy knows, in IDA Ireland's strategy there is a target to complete an advanced building solution in Carlow in 2022. It could end up being early in 2023 but it is a commitment and it will happen. There is also a commitment to bring additional investment to the south-east region. There are clear targets. Construction of the third advanced building solution in Waterford will also benefit Carlow as will the various developments in Kilkenny. There is a lot going on in the counties represented by the Deputy from IDA Ireland's point of view and rightly so because it is very committed to the regions. The Department is also working on this.
I thank the Minister of State. It is great to get the clarification and I will let the businesses know.
