I should like to ask the Parliamentary Secretary if he can give an estimate as to how many people will be affected by this Bill.
Social Welfare (Pay-Related Benefit) Bill, 1975: Committee and Final Stages.
Section 1 agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."
Approximately 22,000.
Question put and agreed to.
SECTION 3.
It is suggested that amendments Nos. 1 and 2 be taken together.
I move amendment No. 1:
In page 3, line 9, to delete "thirty" and substitute "forty".
The two amendments in the names of Senator Yeats and me incorporate much the same principle. If the fund is in credit to the extent of £7 million, as the Parliamentary Secretary said in the Dáil, and having regard to the inflationary position in which we now find ourselves, with decreasing value of currency and the rising cost of living, it seems anomalous that the Parliamentary Secretary, who talks in rather emotive terms about social welfare, should permit a situation in which it is written into the Bill that the benefit should be 30 per cent for the three month period following on the six month period in which 40 per cent is allowable.
My colleague, Senator Yeats, will talk on the second amendment that is being taken with this. There is no such provision in section 5, and we are suggesting that by way of order, having regard to the deteriorating rate of the Exchequer returns, the Minister may make a further extension period of three months on the nine months in respect of an infinitesimal rate of 10 per cent or 20 per cent or something of that kind. In case something of that nature is in the Minister's mind, Senator Yeats has tabled a further amendment proposing that if there is an extension beyond nine months, it would be not less than 40 per cent.
What we are saying here is, in effect, in an inflationary situation if the Parliamentary Secretary and the Government are consistent in their devotion to the principle of social welfare, and consistent with the remarks from Senator Higgins—we heard it in the Dáil from Government spokesmen advocating this measure—it must be in the direction of maintaining the existing statutory figure of 40 per cent rather than writing into section 3 30 per cent. If there is any progressive social attitude being adopted by the Parliamentary Secretary and the Government it should be that any such extension should be of the order originally proposed in the Fianna Fáil Bill.
We originally proposed that we would have a gradual improvement and extension of the pay-related scheme introduced by Deputy Brennan which passed through both Houses of the Oireachtas before the last election. It was quite clear at that time that the purpose of the pay-related scheme introduced in that measure was that there would be progressive improvements. We have a situation here where there is a disimprovement being proposed by a Labour Party Parliamentary Secretary, extending the period by three months but reducing the actual payment to be made from 40 per cent to 30 per cent.
Furthermore, the proposed extension in section 5, to be made by ministerial order, is in no way delimited to the basis of 40 per cent that was established in the original Bill. Therefore, an extension beyond nine months, depending on the state of the Exchequer, could be of the order of 10 per cent, 15 per cent or 20 per cent. We propose to fix the figure in regard to pay-related benefits at 40 per cent. That is what I would call practical socialism, and not the sort of mealymouthed socialism that proposes a reduction in the percentage, first of all, under section 3, and under section 5 gives carte blanche, in any further extension to the Minister to order any percentage that the Minister at the time may think fit, in consultation with the Minister for Finance.
With the Exchequer returns now down by £82 million as compared to this time last year, perhaps there is some reason for section 5 being left open. Apart from the Exchequer situation—that merely reflects the flat rate contribution situation that will arise in regard to the fund—the Minister says the fund is in credit to the extent of £7 million, and I wonder if by the end of the year, with this continuing charge on the fund, a minus situation will arise by the end of 1975.
If the Exchequer return situation is reflected in the employee and employer contributions to the social welfare fund, which it inevitably will be having regard to the maintenance of the level of employment of 103,000, I can see some reason behind what the Parliamentary Secretary suggests. It should be made quite clear that what the Parliamentary Secretary has in this Bill is a measure to hedge in and reduce pay-related benefits by 10 per cent for the extension period of three months and also to give authority to the Minister for Social Welfare, in consultation with the Minister for Finance, to allow any percentage he may wish having regard to the deteriorating economic situation. These are basic facts and cannot be denied.
As a speaker for a party that can claim to have more trade union support than any other party in the State, I accordingly move that, consistent with that support of ours and our approach towards the people who work and who, unfortunately in many cases, were made redundant by reason of Government economic policies, a 40 per cent floor be established. Once it has been established in legislation, that 40 per cent floor should be maintained as far as pay-related benefits are concerned.
I should like to deal first with amendment No. 2 in my own name. In section 5 there are two matters of principle that arise. First of all, there is the question of the amount. Senator Lenihan dealt with this in some detail. I shall come back to it. It is highly undesirable that the Minister should have the power by order to vary indefinitely the rate to be paid under social welfare legislation. He could fix it at 100 per cent or he could fix it at 10 per cent. There is, as the Parliamentary Secretary knows, an immense and complicated mass of social welfare legislation, all of which has been through both Houses of the Oireachtas and debated in detail over the past 20 or 30 years. We have a situation here which is totally undesirable and quite contrary to good parliamentary practice. We provide in this section that the Minister, with the consent of the Minister for Finance, can fix any rate he likes, whether it be higher or lower than the rates prevailing in the existing legislation. It is quite wrong. As a House of Parliament I do not think we should approve of a provision of this kind. It is an important matter to which we should have regard.
Apart from that point of principle, there is the general question of the actual amount that is fixed in section 3 which we feel, should also be fixed in section 5. As things stand, in the first six months a worker is unemployed he is entitled to 40 per cent of all his wages over £14. On the computation given to us by the Parliamentary Secretary, and allowing for the effective inflation in the six months during which the worker has been unemployed—in the current six months one can assume that the cost of living will have gone up by between 12 per cent and 15 per cent: I am taking into account the Parliamentary Secretary's computation—it would seem that a worker with a wife and two children, earning the prevailing average industrial wage of £43, is getting at the moment, up to the end of the six month period, around 60 per cent of his former wages. That at least enables the family to live without experiencing starvation. But clearly a 40 per cent drop in income is a very serious matter for any family.
It can be assumed when six months has elapsed that any assets the family have may have been dissipated, and at a time when it would seem likely that the family concerned will have gone into debt, we find the Parliamentary Secretary cutting the figure from 40 per cent to 30 per cent. The reasoning for this is difficult to follow particularly since the Parliamentary Secretary has so far not given any reasoning for it. In his speech he states:
It is expected that the existing contribution income will be sufficient to meet the cost of the improvement...
In other words, in order to pay 30 per cent for a further three months—and whatever further sum he expects to fix for the three months after that—the existing contribution income will be sufficient. Therefore, the £7 million surplus in the fund need not be touched. I have some doubts on this and I will raise them when dealing with the section. The Parliamentary Secretary has told us there is no need to interfere with the £7 million surplus.
In these circumstances it is difficult to follow why there is a deliberate cut from 40 per cent to 30 per cent. The Parliamentary Secretary is not answering this by going back to 1945 or 1955 or 1965 or by saying what Fianna Fáil did or previous Coalition Governments.
The Coalition are now in office: they are no longer in Opposition. These kinds of catch-cries will not solve the problem. The Parliamentary Secretary is now in charge of Social Welfare. He is piloting this legislation through the House and it is not a sufficient answer to a query as to why he has fixed a figure of 30 per cent to refer to what happened in 1945 or 1955. He is now in office and responsible for these matters. We are entitled to be told, in view of the fact that there is a £7 million surplus—he tells us it will not be touched by the provisions in this Bill—why in these circumstances a worker who has already been unemployed for six months should be subjected to a further cut in his standard of living.
I am not accepting these amendments. Senator Lenihan referred to the size of the fund and said we should increase the benefits for the extended period over and above what are provided for in this Bill. It is very hard to reconcile Senator Lenihan's amendment with his contributions in this House earlier this month on the Finance Bill. On that occasion he implied that one of the reasons why we had numbers of people unemployed was that the benefits they were receiving were too generous under this particular scheme and there was no incentive for them to be employed.
I did not say that.
It is difficult to reconcile that attitude with this amendment in Senator Lenihan's name. It can only be reconciled when it is referred back to Senator Lenihan's contribution this morning on the Second Stage when he referred to political gimmicks. In view of what he said in the current month in relation to pay-related benefits and the disincentives because of the generous payments to people——
I did not say that.
The Senator will have an opportunity to contribute again.
——this amendment undoubtedly comes into the category of political gimmicks to which the Senator referred this morning. Senator Yeats reminded me that I am no longer in Opposition. I did not really need reminding of that. I have been very conscious of that in the last two years, particularly in the advances we have been able to make in several fields compared with the time when we were in Opposition. It is relevant that we are in office, it is relevant to our approach to this Bill.
We have a responsibility for the administration of the fund. We have a responsibility to ensure that while extending the benefits from the fund to the fullest possible extent that it should be approached with a sense of responsibility. One of the consolations of being in Opposition is that one does not have to be as responsible when putting down amendments and making political speeches, and during the course of the discussion on this Bill Fianna Fáil have taken full advantage of that. It is difficult for me after spending so long in Opposition to begrudge them that form of consolation.
The fund has been in operation only since April, 1974. We have only 12 months experience of the operation of the fund. Financially it is in a healthy state. We have a responsibility to ensure that it stays in a healthy state. We have a responsibility to ensure that this fund will not meet the same fate as the Redundancy Fund under the Fianna Fáil administration. I do not want to be unfair in saying that because Deputy Joe Brennan was then Minister for Social Welfare and Labour. As Minister for Labour he extended with all progressive intentions the benefits obtaining under that fund within a relatively short time following its establishment. The accounts appeared to have been in an extremely healthy condition, but following a short period of time after the increased benefits had been introduced the fund was on the brink of bankruptcy. It was necessary for the then Minister for Labour, Deputy Brennan, to rush legislation through the House to save the fund from bankruptcy.
I do not wish to take from the sincerity and good intentions of Deputy Brennan in his endeavours to provide better benefits from that fund but he lacked a degree of caution in making available to people what was their own money—after all, it is comprised of contributions from employers and employees—in his efforts to do things which at the time appeared popular. The Government's primary responsibility is to ensure that any extension of benefits be generous and provide as far as possible cushioning against the effects of unemployment or prolonged illness. I accept the point made by Senator Yeats. This is the difference between being in office and being in opposition—the Government have the responsibility to ensure that, in providing these extended benefits, it is done in a manner which will not endanger the existence of the fund itself. That is the approach the Government have taken which, in my opinion, is the proper and responsible one to be taken.
As regards the other amendment on section 5, surely it is a highly irresponsible approach, even from the Opposition benches, to guarantee a minimum rate without knowing how the fund will operate and what will be the financial state of the fund before any further extension is granted? Obviously, it would not be in the best interests of the workers to take that approach. Whatever may be the view of Senator Yeats and his colleagues, our workers have ample reason for having sufficient confidence in the Minister for Social Welfare in the light of his activities over the last two years, that he will ensure that whatever rate might be struck in the future will be in their best interests.
For those reasons, the amendments could not be accepted. They should not be pursued because the matter under discussion is a serious one. Obvious political advantage should not be taken in putting down these types of amendments, in view of the speeches made in this and the other House by Fianna Fáil speakers, on the over-generosity of the present system of pay-related benefits.
I want to make this matter quite clear. What we want in this Bill is a consistent application of principle. As far as we are concerned, this Bill is an extension of the one introduced in both Houses of the Oireachtas and passed by the then Minister for Social Welfare, Deputy Brennan. We are very proud to be associated with the whole idea of pay-related benefit, which was designed to cope with an economy and society in which expansion and increasing employment was taking place. It was designed to cope with the problem of workers in an interim period who move from one form of employment to another; that they be properly and adequately compensated in relation to the income they received from their former employment. It was in that context of an expanding economy that Fianna Fáil introduced this measure. The Government now propose this measure to increase the period from six to nine months. We anticipated that as time progressed there would have to be improvements in regard to pay-related benefits.
To put it mildly, it is anti-social for the Parliamentary Secretary to come into this House and suggest, in a period in which inflation and cost of living are rising at a rate of between 25 and 32 per cent, that in regard to pay-related payments there will be a reduction of 10 per cent from the sixth to the ninth month. There is no point in a Labour Parliamentary Secretary coming into this House and trying to cloak himself in the guise of one who is responsible for the legislation. If the Government are to be consistent in their social attitude the 40 per cent floor should remain in regard to the extended three months or remain in regard to any Order extending the period further in the future. This is the Fianna Fáil attitude. It is completely in accordance with principle and we will adhere to it. That the 40 per cent is fixed already in legislation. What the Parliamentary Secretary now proposes is to reduce that figure by legislation for three months to 30 per cent and by way of order under section 5 if there is to be a further extension, which could be 10, 20 or 30 per cent, any percentage which fits in with the state of the fund at that time.
My assessment of the situation at present is that following on the reduction in the Exchequer receipts—£82 million now compared to this time last year—a similar situation will arise before the end of the year in regard to the state of the social welfare fund. A situation will arise where in regard to the flat rate of contribution from employer/employee there will be a reduced contribution at both levels because of the continuing high rate of unemployment, now 103,000. That is the reasoning behind what the Parliamentary Secretary is doing in the Bill. I would ask the Parliamentary Secretary to be honest and tell the House that that is why he is doing it. Otherwise, there is no other rationale for his action. There was a surplus of £7 million in the fund as of 21st March. The accelerating inflation in April and May have already put that figure out of date. The reality behind what the Parliamentary Secretary is doing is this. Along with a diminishing Exchequer return situation, we are faced with a situation where the fund itself may run into bankruptcy. For that reason the Parliamentary Secretary is now afraid to maintain the floor of 40 per cent, has reduced it to 30 per cent for the extra three months, quite clearly leaving himself open to a situation where, after nine months, by way of order he can award a 10 per cent, 15 per cent, 20 per cent increase, or whatever minimal increase he can make in consultation with the Minister for Finance and that is in realistic accordance with the state of the fund at the appropriate time. Those are the facts. Perhaps the Parliamentary Secretary would come clean with the House and say those are the facts.
Quite frankly, I am somewhat shocked at that contribution from Senator Lenihan. It puts in question the whole motivation behind this amendment. What Senator Lenihan has said just now is that he is convinced that the contributions to maintain the fund are going to go steadily down; that the amount available to pay benefits in the fund is going to decrease very sharply over the next few months, and continue to do so, and, in the light of that—if he believes that to be true—he sponsors a resolution here to increase still further the benefits to be paid from the fund. The logic of that would appear to be that the purpose of this is to ensure that the fund goes bankrupt and there will be nothing to pay out, if one is to take the Senator according to his own contribution a moment ago.
I find it a very strange situation that Senator Lenihan puts down a motion looking for the benefits under this Bill to be further increased, although the provision we make under the Bill allows for an increase over a three-month period of up to £10.80 per week. The Senator wants that further increased although he is convinced that the amount which will be paid into the fund will decrease sharply and rapidly over the next few months and that the fund will get into financial difficulties. I find that very strange. Irrespective of what side of the House one was on, one would expect and hope that, in these difficult times—and when I say difficult times I am referring not alone to the present economic circumstances but the difficult times in which workers have always found themselves as a contingency of being workers, whether through unemployment because of lack of employment or because of disability and prolonged illness—we all have a responsibility to ensure that whatever measures can be taken are taken to alleviate the economic difficulties experienced. In the light of what the Senator has said—and I hope I have misunderstood him——
I am not in charge of the Exchequer.
I know that. I made that point earlier on. But even though the Senator is not in charge of the Exchequer, all public representatives, as I said, irrespective of whichever side of the House they sit, surely have some degree of responsibility.
I do not know what is in the fund.
The Senator quoted what he thought was there on three occasions since 2.15 p.m. For the reasons I have stated, this would not be a responsible thing to do. Under the provisions of this Bill we are extending considerably—by 50 per cent indeed— the time limit for eligibility and the benefit increases for that extended period of three months are up to £10.80 per week. But, in doing that, we must also ensure that the fund remains in a position to provide economic cushioning for workers against these contingencies. I sincerely hope I will have the co-operation of all Senators in achieving that very desirable aim.
Clearly this part of the Bill relating to the 30 per cent is an embarrassment to the Parliamentary Secretary. It is absolutely clear from the way in which he has been speaking, here and also in the other House, that it is an embarrassment to him and that he is extremely unwilling to answer. Instead of answering the points made, the Parliamentary Secretary stands up and reads all kinds of interpretations into what has just been said.
I am not going to make any kind of speech that can be interpreted or misinterpreted. I am going to ask a few simple questions, then I shall sit down and I would be obliged if the Parliamentary Secretary would answer these basic questions of fact. The Parliamentary Secretary himself has told us that the cost of this increase of 30 per cent will be £1.8 million in the year. Basic simple mathematics would suggest that if one changes that 30 per cent to 40 per cent one adds one-third to the cost, which is another £600,000 per year. What I am putting to the Parliamentary Secretary is that, on his own arithmetic, the extra cost of accepting this amendment would be £600,000 annually. The Minister has also said, not in this House but in the other House, that the fund at present is in surplus to the extent of £7 million. What I am asking the Parliamentary Secretary—and I would be obliged if he would give a candid answer—is this. On his own figures accepting this amendment would cost £600,000, and if there is £7 million in surplus in the fund, is there any reason in the wide world why he should not accept the amendment and merely end up the year with £6,400,000 in surplus instead of £7 million?
I shall try to deal with that without going into the figures the Senator has given. The fund has been in operation for a very limited period of time, 12 months in all. I have quoted the experience of Deputy Brennan as Minister for Labour, in relation to a very similar fund and a very similar set of circumstances. I do not believe it would be in the best interests of the people whom this Bill is intended to help merely to make uneducated guesses as to the development of the fund. I think the Senators have sufficient experience to know that 12 months operation of a fund is a very short time. This is a completely new fund.
It is a new approach to the payment of benefits and it would not be responsible not to proceed cautiously with the disbursement of this fund. The main reason the amendment is not acceptable is because it is not felt that it would be in the best interests of the people concerned. Their best interest will be served by ensuring that the fund, which is in a financially healthy state, remains that way and not just linked to the present economic difficulties. As I have said, workers in this country have faced these difficulties for prolonged periods down through the ages. In fact 47 per cent of the expenditure from the pay-related benefit fund is not in respect of unemployment through unavailability of employment; it is in respect of disability benefit.
Of course this last figure the Parliamentary Secretary has produced goes a considerable way to justifying this amendment. He has pointed out that 47 per cent of expenditure under this scheme is not for unemployment at all, but for disability. The problem I can see he faces with regard to unemployment is that unemployment is very high. The Parliamentary Secretary suspects very strongly that it is going to go a great deal higher. I suspect that that is perhaps the rationale behind this. The Parliamentary Secretary is afraid that the expenditure will increase still further. That may or may not be. At any rate, with regard to disability, disability is a factor which remains relatively stable from year to year. Obviously it is not dependent on economic factors. Clearly, in regard to the numbers of disabled this year, next year or the year after the differences will be relatively marginal. They are not dependent on what one hopes would be temporary economic problems. On the other hand, the 53 per cent obviously relates directly to the present economic crisis.
On the face of the Parliamentary Secretary's own figures, the cost of this amendment—and he has not denied this; it is not a question of an educated guess or anything like that, it is based on the Parliamentary Secretary's own figures—would be £600,000 per year. I will raise this matter in more detail when we get to the section. It seems to me, offhand, that the Parliamentary Secretary's estimate of £1.8 million is wildly optimistic and that the cost is likely to be a great deal more. At the moment, and for the purposes of this amendment, we have to take the Parliamentary Secretary's statement at face value. He tells us that the cost of this will be £1.8 million in the full year and that it will not involve any additional contributions—in other words, that the £7 million surplus will not be touched in any way. Therefore, it is not a case of guessing or anything of that kind. On the Parliamentary Secretary's own figures, the cost of this amendment will be £600,000 to be taken out of a £7 million surplus. It is on the Parliamentary Secretary's own figures and I suspect strongly that they are wrong. At any rate for the sake of discussion of this amendment we must take what he tells us which is that the total cost is £1.8 million and that the cost of accepting this amendment is £600,000.
I cannot understand what is the problem. Of course, in spite of all we hear about the social conscience and so on, essentially the position is that the Parliamentary Secretary and his Minister have behind them the hardy visage of the Minister for Finance. Apparently, the Parliamentary Secretary has been told that under no circumstances is he to do anything or accept anything which might, at some time in the future, even mean that 6p will come from the Exchequer for this scheme. He talks about the bankruptcy of the scheme and so on as if it was a kind of national disaster. All that would happen in the event of the scheme having solvency problems is that the Exchequer would have to come to its aid. The Parliamentary Secretary's utter anxiety apparently is to ensure that at no time and under any possible circumstances will the Minister for Finance be asked for any money. With the budget in its present condition, of course, one can understand this. But one cannot understand it in the light of the surplus that we know exists in the fund.
The figure of £1.8 million, which I stated to be the cost of extending the scheme, will come out of the surplus in the fund——
Out of the surplus in the fund?
Out of what is available in the fund. If one has operated on a six-months basis and one has a certain surplus, one is not going to increase the contributions. At the same time if the period of eligibility is being extended by 50 per cent with increases in benefit over that period, naturally it must be paid for if it is not being got by contribution.
But the Parliamentary Secretary said:
It is expected that the existing contributions income will be sufficient to meet the cost of the improvement.
Yes.
It is the income, not the surplus.
That will maintain it.
That is what I am saying.
The other point that Senator Yeats made was that the Exchequer would have to come to the aid of the fund.
The Parliamentary Secretary is afraid it might.
No, not necessarily. If we were to play fast and loose with the fund and it got into financial difficulties, again I refer back to the experience of Deputy Brennan as Minister for Labour—the Exchequer did not come to his aid. As far as I know, the employer and the employees had to come very drastically to his aid to ensure that due to the lack of caution —and I shall leave it at that—on his part it was not the Exchequer was asked to pay the piper for the irresponsible approach towards the fund; it was the employer and the employee. When I was here on the Social Welfare Bill earlier this year I heard about the savage increases being imposed on the employer and the employee. Now we are being told by the same Senators who referred to savage increases: "Go ahead, play fast and loose with the fund and, if it gets into difficulty, go back and levy an increase on the employer and employee." It is not too much to expect a little consistency in relation to this area.
Once again the Parliamentary Secretary is on his good old hobby-horse of misinterpreting what one said. I did not envisage the fund going broke; I suggested the Parliamentary Secretary was afraid that it might. There is no difference in principle that I can see, in the event of any fund getting into difficulties, between the extra money needed being brought in from taxation or from weekly payments by workers and employers. They are the people who pay the taxes anyway. Ministers, whether they have a social conscience or not, do not drag money out of their pockets and hand it out; they call upon the taxpayer, the workers of this country, employers and so on to pay for these schemes. Even if the fund were to go into deficit, those workers who are at present in difficult circumstances and still fortunately employed should contribute some relatively small amount to help those who are out of work over long periods. In any event, on the figures of the Parliamentary Secretary, the cost of this amendment would be less than 10 per cent of the existing surplus. Any deficit that may occur, I suspect, for other reasons than accepting this amendment. He keeps on referring to the experience of a redundancy fund but the sums involved in respect of this amendment are so small relative to the total funds available to the scheme, that there is absolutely no comparison that can be made. It is a very marginal sum which makes a great deal of difference to the workers involved who are unemployed for long periods but could not on the figures of the Parliamentary Secretary, make any serious difference to the viability of the fund.
The Parliamentary Secretary referred to the outcry from Fianna Fáil about the increases early this year in social welfare payments by workers. He did not tell us that the sum involved at that time was £40 million per year. That is a very far cry from the £600,000 which is all that is involved in this case and the £600,000 which on his figures, can be taken out of a surplus more than ten times as much. Not only did we have £40 million, but a number of millions of that were by way of a profit. In other words there was more than was needed by the increase in payments, it was to allow for a possible further increase in unemployment. It is a totally different situation. It is a very heavy impact on workers, far higher than anything that could possibly result from this amendment.
Amendment put and declared lost.
Question proposed: "That section 3 stand part of the Bill."
On this section I should like to go in more detail into some of the figures which the Parliamentary Secretary has produced for us and which I must confess that I do not at all understand. He told me earlier in reply to a question that an estimated 22,000 people were to be affected by this. The cost per year he tells us is £1.8 million. If you give those 22,000 people even £1.50 a week —and one would certainly expect that they would get a great deal more than this as the Minister himself says the sums payable under this section come to £10.80 per week per worker, and I suppose a reasonable average would certainly be £5, £6, or £7 a week, per worker—spread over a year that comes to £1.8 million. The Parliamentary Secretary will of course tell me that this is only for three months, but by the time the three months are up, unless there is a very considerable improvement in the unemployment figures given here, there will be further numbers who have gone on the list who will come under this. If the figure now is 22,000, it seems very likely, as more and more workers become unemployed for long periods, that it will increase rather than decrease. Therefore I am totally unable to understand why, over a 12-month period, the figure should not be only £1.8 million. It seems to me that, if you take an average of £7 per week, that is £154,000 per week, and if you spread that over a whole year, it comes to £7 million or £8 million. The figures simply do not add up.
As I pointed out, some 47 per cent of the payments are in respect of illness, disability. One can only give an estimate in relation to forecasting what the situation will be; it is done in the light of past experience and certain predictions. I am sure the Senator will realise that a number of people are out ill from work or are unemployed for relatively short periods. It does not necessarily mean that all the people who will benefit from this Bill will benefit for the full period of eligibility. Some people will be ill or unemployed for much shorter periods of time than others.
Then the Bill would appear to be a great deal less beneficial than it has been held out to be. The Parliamentary Secretary has been preening himself on bringing in a Bill which will pay people up to £10.80 per week over a period of three months and, under section 5, potentially over a period of six months, and whatever amount per week may be fixed by the Minister, presumably we can take it that six months will be the ultimate period under this Bill. The Parliamentary Secretary has been conveying a general assumption that figures of up to £10.80 per week will be paid to these 22,000 workers, or however many there may be at any particular part of the year. It now seems that the average payment spread over a year for these workers will be only about £1.50.
From the point of view of the workers concerned, this Bill gives only a marginal benefit. If the figures of £1.8 million are correct it will mean that only a relatively small number of people will get anything like the figures of £7, £8, £9, £10 that the Parliamentary Secretary mentions. Many others will either get nothing at all or very little. However, if one takes the figure of 22,000, which is a much higher figure than I had expected, it is quite obvious that, if the Parliamentary Secretary is going to spend only £1.8 million, the sums per head will be very small indeed.
I am glad we are back, on this particular point, to a little consistency, because Senator Yeats's argument now is consistent at least with the line that Fianna Fáil have taken in relation to the whole pay-related benefit scheme. They seem to think that if workers are eligible for pay-related benefit they are going to stay out of work deliberately in order to qualify for the full period of eligibility. What I have said bears out what I have been saying all along, that the vast majority of people here who are unemployed, for any reason, are unemployed either because they genuinely cannot get work or they are genuinely ill. When that period of illness comes to an end the vast majority of them are only too anxious to get back to their employment. They do not want, as some people would seem to think, to sit at home drawing pay-related benefit or any other kind of benefit.
Do not be inventing an Aunt Sally to knock down. Nobody said that.
I accept the consistency of what is being said. Senator Yeats dismisses the benefit under this Bill apparently because people do not qualify for it. All people do not qualify for it for the full period of eligibility. He seems to think less of the Bill because of that. This Bill is designed to cater for a need and that need only arises, in my opinion, when people who are genuinely seeking employment and are anxious to be employed but for reasons outside their control, cannot be.
Agreed. There is no argument about that.
One might not be unemployed for a full period of nine months. That does not take away from the benefits under this Bill. The fact that if one is ill and is fortunate enough not to be ill for a full period of nine months eligibility does not take away from those benefits. One could envisage a man who was unemployed or ill for a period of eight weeks. The normal worker, without this kind of financial cushioning and protection, can get into very heavy debt and great economic difficulties over what Senator Yeats apparently thinks is a very short time.
Under the old system the situation of no wages or greatly reduced income over a period of eight to ten weeks created very severe financial difficulties for the ordinary working-class home. They can survive relatively well under this system. That is the purpose of the Bill. That is the kind of circumstances that the Bill is meant to provide against.
It is really very difficult to try to conduct any kind of a reason able debate. I thought I had succeeded in keeping my contributions to the strict factual level, as I deliberately set out to do, not expressing any opinions, principles, philosophies and so forth. Still the Parliamentary Secretary said that in my last contribution I said that people did not want to work and that I expressed the philosophy that the less that was paid to them by way of unemployment benefits the more quickly they would go back to work. I did not even discuss that topic.
Marxist training.
Sorry?
The Parliamentary Secretary seems to have invented these remarks. If he takes the trouble to read the debate when it is issued, he will find as I suspect he knows already, that I did not say one single word of all the things that he attributed to me.
I should like to get back to some figures. In passing legislation of this kind we have to consider the facts and figures involved. I must assure the Parliamentary Secretary again that I am not expressing any views on philosophies, principles or anything like that. I am simply trying to get down to the basic financial implications of this Bill and, in particular, of this section. I should like him to listen to what I am saying and not what he would like me to say.
He mentioned that there were approximately 22,000 people affected by this legislation. As I understand it, if the average industrial wage is taken as £43.00 per week, each of those 22,000, assuming that he was on an average wage, would be getting approximately £7.00 per week under this section. That would amount, in one single week, to £154,000. A round figure of £150,000 is easier to remember. The Parliamentary Secretary is spending, under section 3, that amount per week. After 12 weeks £1.8 million is gone. I want to know, in the light of that, how can the Parliamentary Secretary claim that the total cost in a full year is going to be only £1.8 million? This is a simple question to which a simple answer ought to be available. He need not worry about what my philosophy is. I am just asking for a statement of the facts of the situation. He says, on the one hand, that the effects of this Bill will be that it will cost £1.8 million in a full year. On the other hand, he is setting out to spend approximately £150,000 per week, or, in 12 weeks, £1.8 million. What is the explanation of this?
I have already given the Senator the explanation. Not everyone who goes out ill or who goes out unemployed remains out for the full period of eligibility. Some people go out for three weeks sick, some for three months, some for nine months, and unfortunately some go out for well over the period of eligibility even under this Bill. The same is true of unemployment. Therefore the estimate is made in the light of experience of the normal duration of illness or unemployment. It obviously cannot be a hard and fast figure. I cannot elaborate any further on that for the Senator.
The Parliamentary Secretary says that he cannot elaborate any further. He has not elaborated at all as far as I can see. On section 2 of the Bill I asked how many were affected and he said approximately 22,000. I think he means approximately 22,000 this week, and I presume that next week there will be 22,000. They may not be the same 22,000. Some may have gone out of benefit, some may have come into benefit. When I asked that question he told me 22,000, and I would say he meant that at any particular time, this week, next week, next month it is expected that approximately 22,000 will be affected. I am not suggesting for a moment that they are necessarily the same 22,000 but the average number over a period that will be covered by this Bill is 22,000. It does not matter whether they are the same people or not, they are still payments to be made under this Bill. As I said an average of £7.00 per week which would seem to be a reasonable average, would mean £150,000 per week.
The question is: "That section 3 stand part of the Bill."
I do not know whether it is ignorance or arrogance or a combination of the two, but we are expected to deal with legislation of this kind; we ask questions, reasonable questions, questions which we are entitled to ask, questions that arise directly out of this Bill, and we do not get the answers. We are told in the end that we are not going to be given those answers. I know, a Chathaoirleach, you cannot make any Minister or Parliamentary Secretary give us answers, but all I can say is that we are expected to agree to this legislation and we are being told quite casually, blandly and arrogantly that we are not going to get the information.
I have nothing further to add. It is neither ignorance nor arrogance. I have tried to convey to the Senator how this figure is arrived at. Apparently he cannot comprehend it. I have given the information. I cannot give him any more information than I have, because I have given him the fullest information possible.
Question put and agreed to.
Section 4 agreed to.
SECTION 5.
Amendment No. 2 not moved.
I move amendment No. 3:
To delete subsection (2) and substitute the following:
"(2) Whenever an order is proposed to be made under this section a draft of the proposed order shall be laid before each House of the Oireachtas and the order shall not be made until a resolution approving of the draft has been passed by both Houses of the Oireachtas."
The reason for the amendment is that it seems to us wrong in principle that a fundamental change in social welfare schemes should be made in this way. Under the previous amendment we have a very wide and elaborate system of social welfare legislation which has been debated in both Houses over the past 30 years and an enormous mass of legislation which one hopes will be codified and consolidated. Nonetheless, it has always been considered that social welfare schemes should be agreed to by each House. Now under this section we have a situation where the Minister by order can extend the payments by three months and he can fix the weekly rate at any level that he and the Minister for Finance see fit. The Parliamentary Secretary can tell me that this section provides that an order may be annulled by either House, but I do not think—and the Parliamentary Secretary was long enough in opposition to be prepared to agree with me on this—that is much of a safeguard.
Hundreds of orders are made by Ministers and Parliamentary Secretaries throughout the year. The number that are debated in either House could be counted on one hand. For practical purposes it means that the Minister has complete control over this aspect of our social welfare legislation. I think that is wrong in principle. If we delete subsection (2) and substitute a subsection which retains to the Minister the power to extend by order the three months in the way he seeks, that requires that a draft of the order should be laid before each House of the Oireachtas and the order should not come into force until a resolution approving of the draft has been passed by both Houses. In other words, it becomes a kind of subsidiary legislation.
There are examples in other legislation, the most recent one being the Bill relating to youth employment, which is still before this House. It has a very useful provision whereby certain orders made by the Minister shall be laid before the Houses in this way and shall not come into force until agreed to by both Houses. It would not deprive the Minister in any way of the power he seeks under this section. It would be just as flexible. He would retain the parliamentary process, which is valuable. I would suggest that the Parliamentary Secretary, with advantage, might accept it.
I do not accept the amendment in so far as there are a number of precedents for this type of provision in legislation. It would allow the Minister to extend the period and the rate payable under pay-related benefits. At the same time it would not take away from the right of the Members of both Houses of the Oireachtas the opportunity to discuss any extension or increase and indeed to annual it if they thought it desirable. There are a number of Bills that have this provision. This one is to provide an increase for social welfare recipients. Another Bill which has this provision is the increases for Deputies and Senators which is laid before the Houses of the Oireachtas for 21 sitting days, and it can be annulled. It is reasonable that we should adopt the same approach towards increases for recipients under this Bill as we would for increases for ourselves. If it is acceptable for ourselves surely it is acceptable for recipients of social welfare benefits.
I am not sure that the example quoted by the Parliamentary Secretary is a very good one. First of all, it relates to increases. This section does not deal simply with increases. It is a question of whether the sums under this Bill should be paid at all. I doubt if Deputies or Senators would have agreed to the proposition that this should be done by order in future if some Minister were to be given the alternative of paying them or not. This is more far-reaching in that way. I would be more interested in any precedents the Minister might have in regard to social welfare legislation. If there are such precedents I might regret them, but I suppose one has to have regard to them. I would be glad to hear from the Parliamentary Secretary whether there are precedents in social welfare legislation for provisions of this kind.
There are quite a large number of matters within the field of social welfare which can be amended or extended by way of Ministerial order or regulation. I cannot recall the actual figure but it is a substantial number, running into the hundreds of items by order and regulation. One of the reasons I would offer to the Senator is that this provision would allow such increases or extensions of payment to take place during a period when the Dáil and Seanad were in recess. That is another good reason why the provision in the Bill should be left the way it is.
Taking the last one first, it is obviously a reason but I am not sure if it is good one, because if the Minister and the Government were doing their business they ought to be able to foresee that an extension of this kind would be necessary and ensure that it was brought into the Dáil and Seanad at a time when they were sitting. I can see that if the Government are doing their business in such a way that they never know until the week beforehand that they will need a provision of this kind, then they will ob viously need to have the maximun flexibility to do it, if necessary in the middle of August. A little bit of foresight would solve that problem.
With regard to precedents in social welfare legislation, I am well aware that there are thousands of different provisions of social welfare legislation that can be changed by ministerial order. It is one of the regrettable facts of life that one has to accept, that there are these innumerable provisions for subsidiary legislation, but I would like to know whether there is any single provision in the whole social welfare legislation where a Minister by order can decide that payments are to be made to certain social welfare classes and what those payments are to be. It may be that there are many precedents. I cannot think of any offhand, but I would be glad to hear from the Parliamentary Secretary whether there are any.
As I said, there are hundreds of items that are dealt with under the social welfare code by Ministerial order and regulation. One which comes to mind is this. As the Senator is aware, among the provisions of this year's budget was a review of social welfare payments. Not only were there increases last April but further increases this October. Provision was made in the Social Welfare Bill, which came before this House earlier this year, to have the October increases paid by order. It was assumed that both Houses of the Oireachtas would be in recess when the payments were due to be made.
It will be a long recess.
I doubt if it will be any longer than some of those we have experienced in the past.
I do not think that qualifies as a relevant precedent. This provision in the budget was required by the positively South American state of inflation in which we now are. For the first time in our history it is impossible to fix social welfare payments on a once-a-year basis. Because costs are rising so rapidly it has to be done twice a year and one hopes that next year it will not be three times a year. Leaving aside the cause of this provision being inserted in the budget, this is not at all on all-fours with section 5 of the Bill. These payments have already been made. It is merely a matter of raising them by order in accordance with the increase in the cost of living between the budget and October 1st. Whatever the percentage increase it will be a known figure and therefore a known and easily assessable increase in social welfare payments.
Section 5 is totally different. Here we have the Minister in doubt as to whether to make these payments at all. He may do nothing and the people concerned will get nothing from this Bill. Or he may decide to pay them and he has absolute freedom as to the amount he will pay them, be it £20, £30 or 5p a week. This section gives him complete authority. I am convinced from what the Parliamentary Secretary says that there is no precedent over the past 50 years giving the Minister this type of power by order in social welfare legislation. In relation to this section where the Minister is given power to decide (a) whether he will pay anything and (b) complete power to decide how much he will pay, I do not believe there is any precedent.
I do not understand the insistence on Senator Yeats's part that there must be a precedent confined to the social area——
You raised the issue. I do not like precedents.
Will the Senator let me finish? I have given a well-established precedent in relation to increases for Members of the Oireachtas. The same conditions apply as the Senator has said. The Minister for Finance decides if they get an increase or not. He decides how much should be paid and when it should be paid. I have never heard any great objection to that procedure with regard to the Members of the Oireachtas. Why must the precedent be confined to recipients of social welfare benefits? This allows the Minister to decide exactly the same things and the same provision applies as regards both Houses of the Oireachtas annulling them as applies in relation to the other increases. The same procedure applies in this Bill as applies in the case of other increases. I am at a loss to know why the Senator is so insistent that the precedent must be confined to recipients of social welfare. They are no different from us. The precedent is there provided it is not isolated. There is also the advantage that if the Houses of the Oireachtas are not sitting there is no unnecessary delay in providing these extensions. At the same time, the safeguards for Members of the Oireachtas are still enshrined in the Bill.
The Parliamentary Secretary says he is at a loss to understand the problem I have. There is a basic and all-important distinction between the salaries of Members of the Oireachtas and what is set out in section 5 of the Bill. There would be exact precedents if the power given to the Minister for Finance with respect to Members of the Oireachtas was that he could decide whether they were to be paid at all. If there was a situation where the Government, by refraining from doing anything, would prevent us from being paid anything, or, on the contrary, by making an order could say whatever amount we were to be paid, then that would be an exact precedent. That is not the situation. The Members of the Oireachtas are paid their salaries. By order, the Government or the Minister for Finance can decide in accordance with cost of living, national pay awards and so on, that they will get increases. But they cannot decide not to pay them. If they take no action Members will continue to be paid at the old level. If the Minister for Finance and the Minister for Social Welfare acting together do nothing, then nothing is paid at all under this section. The workers concerned would not be paid anything under this Bill. On the other hand, by order, they can decide that workers will be paid. They can decide how much they will be paid. It is a totally different situation from the one quoted by the Parliamentary Secretary.
This is the first time in social welfare legislation that a provision of this kind has been inserted. Next year one assumes, with the cost of living increasing up to 30 per cent a year, that there will be a new Social Welfare Bill after the budget providing for increases to all social welfare recipients. The easiest way of dealing with this is for the Minister to introduce a Bill saying that the Minister may by order pay such increases as he sees fit to all the social welfare recipients. That is the end of it. It can be railroaded through both Houses of the Oireachtas.
When we complain about this the Parliamentary Secretary or the Minister, as the case may be, will say: "There is a precedent, look back to 1975: you have a Social Welfare (Pay-Related Benefit) Bill, providing this very thing." That is why I am objecting. If it can be done in section 5 of this Bill then every other Social Welfare Bill to be passed in the future can be treated in this way. It is a much more convenient way. There is not this incredible complexity of getting through social welfare legislation, these amazing Bills which have long, involved sections which I certainly do not understand and I do not think anyone else does either except the parliamentary draftsman. There is not the problem of having to wait until Dáil and Seanad are sitting and, if there is a good deal of business, trying to fit it in with other legislation. All that is needed is a two-section Bill providing the Minister with the power to make these orders. From then on the Minister is able to make orders providing for these payments to all other social welfare classes. It seems to me to be totally wrong in principle and that is the sum of my objections to it in this context. It is a relatively small matter but as a precedent it raises all kinds of possibilities for the parliamentary draftsman and Ministers in future. For that reason we must object.
Amendment put and declared lost.
Section 5 agreed to.
SECTION 6.
I move amendment No. 4:
To delete subsection (3).
I am not quite clear why it is necessary to have subsection (3) in this section. The Parliamentary Secretary has been, as I understand him, suggesting an element of urgency. He was anxious to get the Bill passed this week and he complained in the other House that he was being held up. That being so, one wonders what is the point of subsection (3)? I propose to delete it. In the event of its deletion it means that the Bill becomes law on its signing by the President. The Minister may be waiting with his pen to sign this order the moment the President signs the Bill; if so, it seems a pointless operation. If, on the other hand, the Minister is going to wait for weeks before signing it we should give the Bill to the Minister as soon as possible and the quickest way of doing this is by deleting subsection (3).
Excuse my ignorance, but surely if this section is deleted the Bill will never come into operation.
My understanding of the position is that in the absence of a subsection such as this the Bill becomes law on the President signing it.
As Senator Yeats rightly pointed out, we are anxious to get the Bill passed through both Houses of the Oireachtas and I must say, in fairness, that the Senators were far more reasonable and co-operative than the Members of the Opposition in the Dáil. The Senators can be assured that there will be no undue delay about the Bill coming into operation. However there are certain administrative matters which must be dealt with before it can come into operation. I assure the House there will be no delay other than that which is absolutely necessary. On that basis, it is desirable that this discretion as to the actual date should be left with the Minister.
I should just like to say that we are quite satisfied on that assurance from the Parliamentary Secretary. Our amendment was designed to ensure that the extension of benefit would apply as soon as possible, in case there was any dilatory approach on the part of the Parliamentary Secretary or the Government. The purpose of the amendment was to ensure that on signature by the President the actual benefits set out in the Bill would become law.
I am extremely anxious to meet the Senator's sense of urgency; it is the same as my own, but I do not want to mislead the Senator. I said there are certain administrative matters concerned with the operation of the Bill. I should not like the Senator to think that if the President signs the Bill today it will come into operation tomorrow. There might be a lapse of a few days.
We will tolerate a few days.
There is a period of five days before the President can sign the Bill and it should be ready by the sixth.
An Leas-Chathaoirleach
Is the amendment withdrawn?
Yes, on the assurance given by the Parliamentary Secretary.
Amendment, by leave, withdrawn.
Question proposed: "That section 6 stand part of the Bill."
On a point of clarification, there is a point I raised in my Second Stage speech and I should like the Parliamentary Secretary to deal with it very briefly. I agree that what we are aiming at is a national income-related pensions scheme. I do not want to go into the area I mentioned earlier —that I believed economic development should be sustained at a far greater level before this aim can be achieved—but this is the objective and we must try to achieve it.
I agree with the planning which the Parliamentary Secretary proposes to undertake in this regard. I mentioned in my Second Stage speech that it appeared to be an obvious reform. The Parliamentary Secretary said in his remarks that one should have a contribution-related scheme introduced as quickly as possible, that there are possible injustices at present in having the flat-rate contribution system, particularly in relation to lower-paid workers. That is quite clear and palpable and there is no need to elaborate further. The flat-rate contribution system is a regressive system and hits the lower income levels hardest.
I do not see the need for any further investigation in this area. When the Fianna Fáil Government were discussing the pay-related area, at that time—three years ago—we felt a contribution-related scheme should be introduced as quickly as possible parallel with the pay-related scheme. It would appear to be a rational progression. I am sure the Parliamentary Secretary agrees with me. If that principle is adopted, there is no need for further investigation and the administration can get on with the job and devise the appropriate machinery.
I do not want to cover the remarks already made but I hope the provisions of section 5 will not be treated as a precedent by the parliamentary draftsman in future and that we will continue to have our social welfare legislation passed through the Oireachtas in the ordinary way, that there will be no question of providing for payments to be made by order in future legislation because it would be a dangerous situation from the point of view of the parliamentary process.
I do not envisage the development which Senator Yeats fears. I would very much regret it if that happened because I would miss coming into the House to discuss social welfare on future occasions. I am very encouraged by Senator Lenihan's commitment to the pay-related system. It is very encouraging, having advocated this for two years in office and before that, to find comrades on that side of the House. I welcome this very much and I find it very encouraging that they have come around to this way of thinking. It is a progressive approach to social welfare but Senator Lenihan has me a little puzzled in that a tremendous amount of work has gone and is still going into the preparation of a discussion document on pay-related pensions in the Department of Social Welfare. I initiated that work under the direction of the Tánaiste. Pay-related pensions, as I am sure Senators will accept, are an extremely complex and difficult area in view of the number of pension schemes of various sorts that are in operation at the moment. I find that it would not be possible, as Senator Lenihan seems to suggest, to just go ahead and do it. It is necessary, before deciding on what we want, that the fullest possible opportunity should be given to the public and to interested parties to discuss the matter, to formulate their ideas on it and make their ideas known.
As Senators may be aware we have issued invitations to various bodies who would be interested in this field to make submissions to us in helping to formulate this—I suppose we could call it—green paper which we hope to publish later in the current year. Some organisations and indeed individuals have availed of that invitation and I welcome this opportunity of thanking them for their contributions which will help greatly in formulating a useful discussion document on this whole subject.
Surely if we accept in principle that the contribution-related-to-income scheme should be brought in, it is a very straightforward matter that could be investigated on its own, as a single issue without going to the bother of——
I think they have a very close relationship; they bear greatly on one another, and I do not believe that the approach should be ad hoc. It should be a well-planned approach in the whole area.
Question put and agreed to.
Title agreed to.
Agreed to take remaining Stages today.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."
I should like to say a few words about the Bill on this Stage. First, I think it is in order to do so and secondly people should be under no illusion as to what this Bill is about and what is contains. It should be known as widely as possible that the Bill is effectively a very humane attempt to meet a situation which is at any time difficult and perhaps more especially difficult at the present time. This should be made clear to the community at large and especially to that more fortunate section of the community which is not out of work through disability or through employment. Especially in the middle income groups there is at the moment widespread apprehension about the extension of social welfare legislation and benefits along lines like these among people who feel that they are being squeezed, as it were, in these inflationary times to pay the sort of benefits which are being made available under this and other legislation to a class with whom they feel very little sympathy. I would argue very strongly and would point out to these people that, genuine as their feelings may be, they are labouring under a misapprehension; that at any time, and especially at a time when we are suffering from inflation, it is very much preferable to be in a job earning money no matter how much taxation you are carrying than to have to struggle along under a pay-related benefit scheme however generous in its concept or its implementation.
Question put and agreed to.
The Seanad adjourned at 4.10 p.m. until 3 p.m. on Tuesday, 3rd June, 1975.