Vol. 1031 No. 1
56. Deputy Louise O'Reilly asked the Tánaiste and Minister for Enterprise, Trade and Employment if his attention has been drawn to the research report entitled, Low Paid Older Workers in Ireland: A Quantitative and Qualitative profile of Low Pay Among Workers Aged Over 50. (details supplied). [62094/22]
All my questions are reasonably straightforward and this one is no different. It refers to a report, Low Paid Older Workers in Ireland: A Quantitative and Qualitative profile of Low Pay Among Workers Aged Over 50, which makes for fairly stark reading. While they do not relate to all workers aged over 50 years, the report raises concerns. I would welcome the Minister's views on it.
I am aware of the report on low-paid older workers in Ireland. It is useful research and I thank Dr. Micheál Collins of UCD and Dr. Catherine Elliott O'Dare of TCD for their work. It was funded by the Low Pay Commission, an independent body under the aegis of my Department.
The report provides comprehensive information on both the commonalities and the differences between older and younger low-paid workers, and new insights on low-paid older workers. It is easy to think of low-paid workers as younger workers who subsequently transition into better paid employment as they get older, but this study draws our attention to the fact that older workers comprise 20% of the total low-paid population. It is also worth noting that older workers are defined as those aged over 50 years and that, relative to all employees, older workers carry a lower risk of being low paid.
Given the anticipated growth in this demographic in the decades to come, it is important to understand its socioeconomic and labour market composition. The Government wants to improve the pay and conditions of all workers on low pay. As the Deputy will be aware, we recently agreed to move to a living wage of 60% of hourly median wages by 2026. This is the latest in a series of improvements in workers' rights over the past five years, including statutory sick pay, the protection of tips and service charges, parental leave benefit and multiple increases in the minimum wage.
The research was, indeed, interesting. I join the Minister in acknowledging the work of Dr. Collins and Dr. Elliott O'Dare and their teams. The specific aspects I would like to raise with the Minister concern the number of participants who believe the pay they receive is inadequate and the manner in which the living wage will seek to address this. The adequacy of pension income is a serious factor influencing older workers' choice to take up or remain in low-paid employment. A point that is interesting and valuable about the report is exactly what the Tánaiste has said: we tend to think of low-paid workers as younger workers or people doing a little bit of work, such as a weekend job, for pocket money, but older people who probably have an entire working life behind them face inadequate pay in their later years. Many of them have indicated that inadequate pension income was a driver in their decision to take up or remain in low-paid employment. People reach a certain age at which they should be entitled to leave work – I believe it is 65 but the Minister believes it is older – but the people I am referring to are being forced back into the labour market.
The objective is to eliminate low pay. There are many ways to define low pay but it is generally defined as the pay of those earning less than 66% of the median wage. With the introduction of the national living wage, the intention is to go to 60% initially and, provided the economy can manage it and businesses can afford it, to 66% thereafter. That would, at least on a statistical basis, eliminate low pay. That is what we aim to achieve. We will have auto-enrolment starting in 2024, which means people will have better pensions, although it will take a while for that to become a reality. Some of the reforms we are likely to see over the next year or two concern collective bargaining legislation, making the joint labour committees operate properly. This is because many on low pay tend to work in retail and hospitality, which are among the sectors where the joint labour committees are not functioning. There is an opportunity to make them work right and better.
I appreciate, as the Minister does, that older people work for a variety of reasons, but that does not mean they should not be fairly paid for the work they do. The Tánaiste announced the living wage will be benchmarked at 60% rather than 66%. I think it should be 66%. We should have a realistic and credible plan to move in that direction because that is the only way those affected will be taken out of poverty. I am glad the Tánaiste accepts low pay is not just, or mainly, a feature of the lives of younger workers. There are those who do not anticipate higher earnings later in their career. We need to move much quicker towards a living wage in consultation with businesses. It is pretty handy to say it will happen but not in the lifetime of this Government. The Minister really should be making a greater effort to move in this direction quicker.
When will we see legislation to abolish mandatory retirement clauses?
The plan initially is to go to 60% by 2026 and then to 66% but that can be speeded up or slowed down depending on economic circumstances. Part of the research behind this, done by Maynooth University, indicated there is a point at which, if the minimum wage is increased too much too quickly, there can be negative effects. People could be laid off, businesses could close and people's hours could be cut back. We all want to avoid these effects, and that is why the plan is not being implemented in one fell swoop.
I acknowledge that Germany has increased its minimum wage by a very large amount very quickly. It will be interesting to see how that pans out. If it pans out well, that is potentially instructive for us. If it does not, it will also be instructive for us, but we will need to examine it.
On the question on mandatory retirement clauses, we do not have a date for legislation but are examining the matter.
57. Deputy Denis Naughten asked the Tánaiste and Minister for Enterprise, Trade and Employment if he will outline the work that his Department is undertaking to fully utilise broadband connectivity in increasing sustainable employment given that Ireland is set to become one of the most connected countries in Europe for fibre broadband; and if he will make a statement on the matter. [58143/22]
Thanks to the Covid pandemic, there is now a realisation that delivering broadband to every home in Ireland has the potential to transform our economy, nowhere more than in rural Ireland. We have witnessed a spike in local house prices as tech jobs have relocated from the Dublin docks to rural townlands, but this happened by default, not design. It is now time to act strategically to bring foreign direct investment, FDI, jobs to every village in Ireland.
Digital infrastructure is one of the four dimensions of the Government's national digital strategy, which was launched in February of this year. A progress report on the cross-governmental implementation of the national digital strategy was published last week. I encourage all Deputies to consider it.
As the Deputy will be aware, responsibility for connectivity and the national broadband plan lies with the Minister for the Environment, Climate and Communications. I agree it is clear that robust broadband infrastructure will be vital in reaching our national digital strategy targets, which will enable businesses to take advantage of digital technologies and increase sustainable employment. Just last week, the Department of the Environment, Climate and Communications published its digital connectivity strategy, which sets out the targets that will be achieved by the telecommunications sector in providing digital connectivity across the State. It also identifies the key enablers that will be implemented to ensure these targets are met.
As outlined in the White Paper on Enterprise, also published last week, sustained investment in digital infrastructure, including connectivity and cybersecurity, provides the foundations for our digital economy. As we said at the launch of the White Paper, it is all about getting good jobs for people and getting those jobs and investment opportunities to all parts of the country.
It is clear that connectivity will be vital in achieving progress in the targets for my Department, namely 75% enterprise take-up of cloud, big data and artificial intelligence by 2030, and 90% of SMEs at a basic level of digital intensity by 2030.
We now have nine regional enterprise plans in place, which will encourage collaboration among all the stakeholders to strengthen the regional offering for enterprise and therefore create an environment for successful economic growth, sustainable employment and development across the country. Digital connectivity will be a key enabler of this regional economy.
I thank the Minister of State for his reply. The reality is that the State is investing significantly in building communications infrastructure right across this country. By the middle of next year, 58% of households in Ireland will have access to a pure fibre connection but the difficulty is that we now need to exploit the investment to bring high-value jobs into every single community. This happened by default during the Covid pandemic. As we know, IDA Ireland is now redoubling efforts to bring the jobs back to the city centres rather than disperse them across provincial Ireland. What is the specific job strategy now in place to try to drive some of the FDI jobs into rural communities?
I assure the Deputy that IDA Ireland is not involved in driving jobs back into any city centre. One of the key targets laid out in the White Paper is that over half of new investments will be in the regions. That figure has been achieved according to IDA Ireland's 2022 figures.
My Department and the Department of Rural and Community Development are developing a national hub strategy for the period 2023 to 2025. Its purpose is to combine the various national policies and schemes into a coherent and overarching development strategy, in a single document, to leverage the national hub network, funded through the Department of Rural and Community Development, as a public asset of significance and scale. IDA Ireland and Enterprise Ireland, in addition to Údarás na Gaeltachta through the development of its gteic centres, are promoting and enabling the uptake of remote working access in the regions, including their most far-flung parts. We intend to continue to support the development of hub space and the roll-out of the national broadband plan to ensure remote working is available to those who want it.
We can play around with words all we like. While 50% of the jobs are outside Dublin, there are very few of them outside the cities.
If we are going to get a proper regional spread, it must be outside centres such as Galway The Minister of State is aware that in our region this is where all the jobs are going currently.
We spent a huge amount of public money on broadband infrastructure. We spent a huge amount of public money, which is being allocated at the moment for urban and rural regeneration, to make our towns and rural communities nice places to live. We have a unique opportunity to attract multinational investment into every village in Ireland. No other country in the world can do it. We need to market that properly.
We are doing that. I have outlined the national hub strategy, which I presume the Deputy is talking about. This will enable remote working and employees working in remote areas. We also secured up to €145 million from the European Regional Development Fund to fund the regional enterprise plans. The Minister of State, Deputy English, and myself are engaged with regional enterprises across the country to ensure we get the kind of development the Deputy is looking at. There is €3.5 million in planning funding for feasibility, announced for 47 projects across all regions, including counties Galway, Mayo and Roscommon. I am more than happy to engage with the Deputy on the west plan to assist the kinds of projects and the kind of employment creation he mentioned.
58. Deputy Louise O'Reilly asked the Tánaiste and Minister for Enterprise, Trade and Employment if his attention has been drawn to research from an organisation (details supplied) that found that 70% of small and medium enterprises in Ireland fear that they may have to close in 2023 due to rising costs. [62095/22]
This is a very straightforward question. The question relates to research by Wise Business, a global fintech group, which found that 70% of SMEs in Ireland fear they may have to close in 2023 due to rising costs. Will the Minister outline the supports that are available for businesses and when they will be coming on stream? Has he read this report and are the results of it concerning to him in any way?
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. We demonstrated this throughout the pandemic, particularly with the employment wage subsidy scheme.
I am very conscious of how worried SME owners and managers are as we go into the winter. Putin's invasion of Ukraine has had massive consequences for the whole of Europe, not just in Ireland. Indeed, we are now facing a global inflation crisis exacerbated by the war.
While I have not been able to locate the Wise Business survey cited by the Deputy, I understand from media reports that it finds a large proportion of businesses fear they might have to close in 2023. On a more positive note, it finds that nearly two thirds of respondents are investing in or expanding their online presence, while more than half are planning to expand their business abroad.
My message to SMEs, professionals and farmers, is that help is now available. The temporary business energy support scheme, TBESS, will provide qualifying businesses with relief on 40% of the increase in their electricity or gas bills, up to a maximum of €10,000 per month and €30,000 in some cases. It is important that businesses get their paperwork and bills in order, register and make a claim on revenue.ie. That is now open.
As we said on budget day, the TBESS needed to be designed and receive state aid approval from the European Union, which it now has. Now that we have all the steps in place, we will shortly be able to issue payments and hope to do so before Christmas. These will be backdated to September.
Will the Minister give a definitive date for when the first payment will be made? I am aware that the scheme is open but people are anxious to know when they will get the payments. The survey from Wise Business covered 250 businesses. What they are reporting is worrying. Notwithstanding some positives in the survey, and while I do not wish to focus on the negative, they raise the concern that two thirds of SMEs believe there is a possibility they will have to close within the next year, while just one in three believe their business will be okay. I have never set up a business but I am married to someone who has done so. Sometimes it works out and sometimes it does not. It is tough when small business owners might be just about managing to pay their staff wages but maybe not to pay wages for themselves. It is hard for people in the private sector at the moment. Many of the businesses surveyed criticised the poor banking solutions that were available and called for greater competition in the banking sector. What are the Minister's views on what his Government can do and is doing to help businesses, specifically in the context of the issues raised about the need for competition in the banking sector and about the banking sector in general?
On the Deputy's first question, I do not have the payment date for the first payment yet. I have spoken to the Minister for Finance about this and he indicated to me that the first payments would land in business accounts before Christmas, but I do not want to swear to that. I will follow this up with him.
Although I have not seen the Wise Business survey itself, from the reports I have seen it is worrying. I was certainly worried when I read the headline figures from it. There are other business surveys that are less pessimistic. A recent survey from Behaviour and Attitudes with a sample size of 1,500 showed that 45% of businesses reported increased turnover in the past six months, with 18% reporting a decrease, and 61% of SMEs reporting a profit this year compared to only 53% last year. Most of the companies surveyed said they were more likely to hire staff than let staff go.
On banking, the main thing we are doing is bringing in Government-backed loans, which allow businesses to borrow at lower rates and for longer periods. As the Deputy will be aware, banks are leaving Ireland, whether people like it or not. They can make more money with the same capital elsewhere. This is the reason they are leaving. Any competition would have to come from non-bank actors in the main.
On the expansion of the rate of payments under the TBESS, is the 40% coverage of additional costs as far as the Government can go? I have pushed the Minister of State, Deputy English, a little on this question previously. I ask this because the current difficulties being experienced by Irish businesses, particularly SMEs and family businesses, are fairly significant. They need to know there will be flexibility in the event they need to go further on it. I am seeking from the Minister an assurance that this can be done.
There was a postponement in the increase in toll fares but that is still on the agenda. On top of the other increased costs businesses are facing, they are paying higher insurance premiums and the cost of fuel has gone up. Businesses are doing their best. I know from talking to them, and the Minister knows, that they are trying to remain agile but they do need some degree of certainty. I welcome that he said the Minister for Finance wants the first payments to be made before Christmas. That would be helpful for people who are trying to plan. The Wise survey specifically relates to their fears for next year, not this year. It would go a long way towards that if the Minister could give people a definitive date.
I am told that the first payments will land in business accounts within the next two weeks. I will check with the Minister for Finance tomorrow and get back to the Deputy if more information is available. At the moment, 40% is as far as we can go under EU state aid rules. In fact, we have stretched it a little. The rules say 30% but we were able to get clearance for 40%. We have done other things like reducing excise on petrol and diesel, and there are other schemes available and certainly for companies that are exporting or manufacturing. They tend to be big energy users. There are other schemes available, in some cases allowing up to €2 million to be provided to companies in the form of grants, loans, and equities. I would encourage those companies in particular to engage with Enterprise Ireland and IDA Ireland to see whether other schemes are available that would help them if the TBESS does not.
59. Deputy Maurice Quinlivan asked the Tánaiste and Minister for Enterprise, Trade and Employment if his Department is considering the establishment of an Irish enterprise agency which would incorporate the individual local enterprise offices into one centrally-led national jobs agency to support and sustain small and medium-sized enterprises. [62096/22]
As a State, we have become very reliant on foreign direct investment. We have done an excellent job in attracting these companies of the last decades. Their taxation contributes dramatically to our finances, which is welcome. Enterprise Ireland also does great work in promoting Ireland's businesses and exports. In 2021, Enterprise Ireland-backed companies employed more than 200,000 people, and contributed billions of euro in exports and billions of euro to the economy as well. This is tremendous work but there is scope to scale up and support a focus on SMEs that are trading domestically. The setting up of an Irish enterprise agency would contribute greatly. That is the purpose of this question, which I have raised with the Minister of State previously.
I thank the Deputy for raising this issue again. I will go back over the information we have. Following the dissolution of the county enterprise boards in 2014, an enhanced national assistance enterprise model was established to be delivered by local authorities on behalf of Enterprise Ireland through the local enterprise offices, LEOs. This structure has allowed the LEOs to effectively deliver national programmes that are aligned with enterprise policy and designed and overseen by the centre of excellence in Enterprise Ireland. Results from them have been immense over the past couple of years and during Covid we have certainly seen the benefits of the LEOs being able to reach a lot more companies than traditionally they would have reached. I spent the past few months visiting all the LEOs to engage with their work to see at first hand the number of companies they were able to reach. That has been a success.
The programmes they operate promote entrepreneurship, foster start-ups, and help companies to prepare and start their export journey.
By being embedded in the local authorities, the LEOs have been able to contribute to local economic development and to our national policy objectives. The LEOs have delivered jobs growth year on year and assisted many high-potential indigenous enterprises to transition to Enterprise Ireland, to further develop their exporting ability and to increase their potential growth. The recent extension of the LEO mandate, based on the framework developed by Enterprise Ireland, will allow the LEOs to target new exporters, while providing direct grants to firms operating in the manufacturing and internationally traded services sectors with more than ten employees. The LEOs also act as a first-stop shop for all businesses in signposting to Government assistance. They provide training, mentoring and consultancy programmes across a broad range of measures and some of these programmes are open to locally traded sectors.
The recently published White Paper on enterprise sets out an ambitious vision for Ireland's enterprise policy. This is to protect Ireland's strong economic position and respond to challenges and opportunities that have emerged as a result of: the pandemic; wider economic and geopolitical developments; digitalisation; and an increased urgency to decarbonise our industries. The White Paper also sets out that the LEOs will continue to enhance their advisory services for locally trading firms and productivity, particularly digitalisation and reducing the energy and carbon emissions. This will help enable Irish-based enterprise to succeed through our competitive advantage founded on sustainability, innovation and productivity, delivering rewarding jobs and livelihoods throughout the country. It is time we worked with the system that is there. It is doing a good job, and the White Paper is going to try to push that system as far as we can in order to reach those extra companies and drive the ambition we have for increased exports.
There is no doubt that the 31 LEOs have done good work to date. In 2021, for instance, they contributed to the creation of 7,400 new jobs. They have supported small businesses through the provision of grants and assisted entrepreneurs in starting businesses. However, we have an opportunity to build on their knowledge and the knowledge of others to create an even more ambitious State body that is focused solely on indigenous business. An Irish enterprise agency could support established retailers on our main streets and help regenerate our town centres. This would support and enhance small businesses and help start-ups. Our reliance on multinational companies that are mostly based in urban areas has contributed to a growing regional imbalance in the economy. An Irish enterprise agency could help in addressing this imbalance. These SMEs, including coffee shops, small fashion stores or retail units, are often the engine of the domestic local economy. There needs to be an agency advocating for them and supporting them in growing the indigenous enterprise sector in a more focused and organised way. Such an agency could be the one-stop shop for both start-ups and established domestic businesses, providing advice and financial support to the indigenous SME sector.
We have discussed some of the issues the Deputy has raised previously. We certainly discussed them at the SME task force that the Tánaiste set up over two years ago to focus and see if we need another agency or if we can reach the companies we want to reach through our existing structures. Our best estimate is that it is best to use the structures we have that have worked extremely well, including IDA Ireland, Enterprise Ireland and the LEOs that are reaching all those companies. We must try to use those structures to reach an even greater number of companies. We can do that. The framework announced by the Tánaiste recently and the White Paper set out the ambition to reach more companies and increase the number of companies exporting by over 2,000.
We have the structures in place. There is no need for another agency because there will be a cost with that, including planning, setting up and legislation. That might just complicate matters. We can strengthen our offering and reach those companies we have been reaching and dealing with in recent years through the Covid supports administered by the LEOs, the local authorities and our agencies. We are doing quite well on that. I am open to seeing where the Deputy thinks the gaps are. We think we have the structures in place and that the changes have been made to reach those gaps and to work with companies that have an ambition to export. The Deputy is right in that we want to encourage more companies to come forward to avail of the offerings and supports there are and to reach new markets. We call out the benefits of the locally traded sector in the White Paper and there is a desire to do exactly as the Deputy has suggested; to better support them. We can probably best do that through digitalisation, the green agenda, the micro green programmes and a number of initiatives that are already on offer to them.
I agree with an awful lot of what the Minister of State said, but we need to establish an Irish enterprise agency for a number of reasons. The Minister of State will agree that our over-reliance on a number of major international corporations is a risk to the State going forward, with ten companies paying a significant proportion of corporation tax. Any changes to this, which would be well out of our control, could put grave stress on our public finances. While it is imperative that we continue to attract foreign direct investment and to achieve export growth, it is equally important that we grow our indigenous sectors to provide balance in our economy and additional security for our public finances. Transforming the LEOs into a larger and more ambitious agency can deliver strong benefits to domestic businesses, workers and the State. That is why I raised this matter previously with the Minister of State. It is an idea we need to look at and we need to do a bit more than what the Minister of State spoke about. We need a stronger and more specific focus on SMEs and small companies. There is great potential for growth in the SME sector in the coming years. We need to protect that and a focused organisation would do that. Some LEOs are excellent but others are not so excellent, to put it mildly.
It is important that we use the centre-of-excellence approach, which shares the data across the various LEOs and is able to compare them. There is that advice and guidance through the LEOs as well. Having visited all the LEOs, I saw the great work they are doing at first hand. While each LEO administers the national schemes and the schemes we have all agreed, they have their own version of the schemes as well and can tweak them slightly. It is important to do that. There is a lot of opportunity to learn across the LEO network and to drive innovation.
The new framework that has been launched and agreed with Enterprise Ireland and the LEOs initially allows the LEOs to service companies that have up to 50 employees. We can build on that. That is the opportunity to reach those companies about which the Deputy is concerned. We all want to see how we can reach and support more companies, how we can help create more jobs in our regions and how we can do that best. We can do that best through the structures that are there because we can use our time, efforts and resources to champion that as opposed to spending a long number of years redesigning something else that might not provide anything better. What is key to me is that we continually devise new support mechanisms and schemes and administer them through the network we have already. That is my sense of it, and the White Paper has given us a lot to think about. We believe we have made the right call, but we are open to teasing out this matter. If there are any gaps, we want to close them.
