Seanad Éireann debate -
Tuesday, 29 Jul 1975

Vol. 82 No. 10

Employment Premium Bill, 1975: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Labour (Mr. M. O'Leary)

The purpose of this Bill is to enable effect to be given to some of the Government proposals in the budget regarding the stimulation of employment. It is our aim by means of this legislation to provide for the creation of 10,000 jobs in the period to June, 1976, for workers who have lost their employment as a result of the current recession. This is the basic objective of this premium employment programme. In our past efforts to create employment Ireland has relied exclusively on grants for capital expenditure, and though this has worked by and large reasonably there has been the recent report of the OECD on Manpower Policy in Ireland to suggest that perhaps other methods might be more appropriate for our present situation. That report of the OECD questioned the appropriateness of this policy, that is of a policy that had relied on support for capital expenditure and argued that a:

...scheme of employment premiums might, for a given injection of funds, lead to a greater incentive to increase employment.

Therefore, this premium employment programme receives support from that quarter and, of course, has been attempted by other countries facing the effects of the recession such as we are having at present. This therefore is the first active intervention, through wage subsidisation, in the area of direct job creation.

Since the Bill was in the Dáil the Government have given further consideration to the employment areas at which the Bill was directed. We have decided to include agriculture, including horticulture, within its scope. I am submitting appropriate amendments to the Bill to achieve this. Agriculture is a major industry and if its inclusion in the Bill can lead to the creation of employment in that area over this period of increased unemployment, then the benefits to our economy should assist other sectors in the recovery process. We are, of course, in relatively uncharted territory in terms of what may be possible under such a programme. I propose to monitor very closely the progress made in this area and make use of this review on how it progresses.

As regards manufacturing industry, it is proposed under the programme that (i) Premiums will be payable in respect of full-time employment of persons who (a) were in receipt of unemployment benefit at any time after 20th June, 1974; and were (b) continuously on the live register for not less than the four weeks immediately preceding their first employment under this programme; or (c) were attending a training course under the National Training Authority full-time immediately preceding their first employment under this programme or (d) were employed by the same employer on a short-time arrangement in the PAYE week beginning on 15th June, 1975. (ii) Additional employees recruited on a part-time or short-time basis will not be regarded as eligible for the purpose of the scheme.

The inclusion of agriculture in the Bill will, of course, entail some administrative differences between the industrial and agricultural sectors. Nevertheless, broadly similar conditions as to qualification for payment of the premium will apply. However, in the case of agriculture, I have to ensure that a minimum period of employment in agriculture will ensue. The minimum period proposed is nine months from the commencement of the additional employment. The purpose of this period is to overcome the seasonality element normally present in agricultural and horticultural employment.

The programme will be administered through the National Manpower Service of my Department and the staff of that service, which has a national network reaching into every county throughout the State, are in contact with employers on the operation of the programme. Preliminary information has been made available to interested employers. Over 400 inquiries have been received at departmental level though this does not include contacts made at local level. As might be expected, the largest volume of inquiries so far received came from the textile sector. We feel that, in this industry in particular, the scheme can be a significant factor in stimulating the re-employment of workers who have been laid off during the present recession. Inquiries have also been received from employers in such sectors as plastics, footwear and engineering.

The amounts of the premiums will be those announced in the budget statement of the 26th June, 1975, that is, £12 per week per eligible employee from 29th June, 1975, until 27th March, 1976, and thereafter £6 per week per eligible employee until the termination of the scheme on 26th June, 1976. There will be no ceiling on the funds available for the employment programme. The target I am working towards is the return of 10,000 people to full-time employment.

The purpose of the section 3 of the Bill, insofar as manufacturing industry is concerned, is to enable a decision to be made on the industries and persons to whom the programme will apply. Section 4 which is the heart of the Bill, gives me power to pay premiums to eligible employers. Section 5 would give power to require an employer applying for payment under the scheme to provide information both as regards the industry carried on by him and an employee or class of employee in order to enable me to determine whether the scheme applies or not. It would also enable me to provide forms for the purpose and generally to provide for the effective administration of the scheme.

Under Section 6 I have power to appoint inspectors who would generally have similar powers to those appointed under the Holidays (Employees) Act, 1973. Section 7 contains the usual provisions relating to prosecutions. Section 8 is a standard provision covering expenses.

I want to emphasise that the Bill and its provisions are aimed at getting people back to work, now out of work, who but for the occurrence and provisions of this Bill would remain unemployed longer. It is not designed to subsidise the employment of those who would be employed anyway. It is designed to help that part of employment which has been most hit during the current recession, that is, manufacturing industry, in the main, and because of the importance of the agricultural industry and the possibility that useful, productive work might be obtained for people in that industry over the coming months I have decided, with my colleagues in Government, to extend the benefits of the scheme to agriculture, given the provisions that those who would qualify must work for the nine-month period. I commend the Bill to the House.

Mr. Lenihan

Any Bill emanating from the Government that makes any attempt to deal with the massive unemployment problem at present must be given a chance. That is a sine qua non. We agree with the principle of the Bill. Any of my criticisms directed towards it will be directed firstly at its inadequacies; secondly, the fact that it has taken such a length of time to make some move in this direction, when we have been living for six months with an unemployment rate in the region of 100,000 people. So far as we have some action being taken now towards dealing with this problem the Bill is to be welcomed.

I do not think this Bill will stimulate the creation of 10,000 new jobs in the period of the next 12 months. The Bill is too inadequate to do so. I would like to point out a number of ways in which this type of inadequacy is reflected in the Bill itself and, in my view, will inhibit and restrict the Minister in achieving the objective he has set himself.

First of all—and we will be putting down an amendment on this—the Bill does not deal with employment in the service industries. Straight away there is a major omission because it is in the service industries such as transportation or the hotel industry, to mention but two big employers, where I feel immediate stimulation could be given and immediate employment provided, particularly at this time of the year. The starting date is June. In the interests of stimulating immediate employment during the summer and autumn months, from the 29th June onwards, the service industry would appear to be an obvious target for this type of premium grant help. I should like to hear from the Minister on that point. Indeed my view is reinforced by the fact that the Minister, rightly so, is introducing an amendment to include the agricultural sector. If the agricultural sector is being included along with manufacturing industries, surely it highlights the omission of the service industries. There is no mention of why this obvious omission occurred. It would appear to my mind, unless there is some better answer, that the whole range of service industries would offer, in the summer and autumn months, an obvious area for stimulating further employment.

We propose to put down an amendment so that the enabling part of the Bill will allow employment premium grants or payments to be made, not alone in respect of manufacturing industries, but other economic activities as well.

The second restriction in the Bill which will prevent the stimulation of 10,000 jobs is an old one with which we and indeed anybody in any parliament is familiar; that is, the Minister has tied himself, under section 3, to determine industries or activities which would qualify for premium payment with the consent of the Minister for Finance. If ever there was a way to spoil a scheme of this kind, that has the seeds of some imagination in it, to frustrate its development and spoil it ab initio, there is provision here in section 3, by tying the Minister's hands behind his back, in regard to determining the industries or activities in specified industries to which the scheme applies, and the persons or classes of persons to whom it applies.

With all respect that makes nonsense of what the Minister says in page four of his speech, as handed to us, and I quote:

There will be no ceiling on the funds available for PEP. The target I am working towards is the return of 10,000 people to full-time employment.

There is a very real ceiling written in here, by providing for the consent of the Minister for Finance. The Minister and this House is very well aware that if one wants to get an imaginative scheme going quickly—it has to be got going quickly as it is for a year's duration only; with the high unemployment rate there is the need for speed to get it off the ground quickly; applications are already in, as the Minister has said himself—there is no need to elaborate on the need and the one way to inhibit, or corral the development of proper ways and means of dealing with that need is to provide that the Minister cannot move in any direction in the way of a flexible determination on his part of the industries, activities in specified industries or the persons or class of person to whom the payments are to be made if he can do so only with the consent of the Minister for Finance. That is a built-in ceiling already written in to section 3. In my view, it will be far more effective in restricting the scheme and rendering it inadequate than any ceiling that might be written into the scheme itself. Ceilings can always be removed.

I am glad that no ceiling has been written in but I believe that a far more effective ceiling has been introduced, as it were, by the back door, in providing for the consent of the Minister for Finance in the administration of the scheme under section 3. It is the same sort of restrictive thinking that is involved in not including the service side of industry in the Bill as it stands.

Similarly—and again it is symptomatic of the inadequate approach to what could be an imaginative way of dealing with a very serious problem— there is restriction in section 4. Section 4 deals with the payment to employers of employment premiums. The Minister has stated that he proposes that these premiums should be at the rate of £12 per week until the 27th March and, thereafter, at £6 per week per eligible employee. That may be attractive up to a certain level of employee. A far more flexible scheme could be introduced under section 4, subsection (1), by providing that the payments should be regarded as a percentage of the wage rate current in the particular industry to which the scheme relates. This would appear to be the logical and more flexible way of approaching it, rather than have a hard and fast grant payment that may be adequate in the case of badly or lower paid employees but is certainly not relevant in the case of wage rates which run, as they do now, at a level far ahead of £12 per week. I am thinking in terms of basic wage rates around £50 per week. In that sort of situation, say £40 per week, surely the more flexible approach would have been that the Minister should determine what payment should apply as a percentage of the wage rate related to the industry and the employment to which the Minister is giving help. It is part of the lack of flexibility which I see in the scheme, combined with the necessity to obtain the consent of the Minister for Finance, that will lead to this being a restrictive, inadequate scheme rather than an imaginative, immediate and urgent scheme which we want it to be.

Similarly, with regard to fixing the date, here there is an inbuilt restriction. Under section 2, subsection (3), the scheme shall be deemed to come into operation on the 29th June, 1975. There is no flexibility there to enable the Minister to deal with serious unemployment situations that have arisen since the 29th June and which will arise undoubtedly in the coming months of autumn and winter.

The Minister is immobilised within the straitjacket of what the unemployment position was on the 29th June. Should the Minister immobilise himself in this manner? Would it not be a far more sensible approach to ensure that if a later date would appear to the Minister to be the date which should be specified in respect of a particular industry, surely the Minister should have that power in the Bill without inhibiting himself by relating the unemployment to the level that obtained on the 29th June this year.

I do not want to go through the numerous cases where this is unjust. There is the case of the employer who tries to ensure employment right through to 29th June and who, coming into autumn, may face problems. What is his position? He did have a substantial labour force, probably due to his own efforts, enterprise and resolution in keeping going despite losses and troubles. He is finally forced to the wall now or sometime later in autumn or winter. What will be his position? There is the other extreme of the man who took the easy way out at an earlier stage. He did not fight with any resolution against the difficulties and trials of time. Instead he packed it up and closed his factory. That man is in a position, when he was so closed on the 29th June, to reap some benefit, benefit which, under this scheme as it stands now, deprives the hard-working entrepreneur who kept going through the trials and tribulations and was functioning on the 29th June, if with difficulty. He may find that he must close now, or some time later, and is omitted from the scheme.

In all seriousness the Minister could, if he got the consent of the Minister for Finance, have written in there a provision for a later date as may be determined by the Minister in respect of certain industries. We propose to put down an amendment of that kind. No Department is better fitted to deal with that problem than the Department of Labour, by reason of the expertise available to them, both in the Department, in AnCO and in the various machinery that has been developed by the Department in recent years. I would have the utmost confidence in giving that Department and the Minister for Labour the widest possible flexibility to deal with what is an emergency.

The Minister's optimistic target— the stimulation of 10,000 jobs over the next 12 months—which I would like to see achieved, is being severely inhibited and restricted ab initio by reason of the matters I have mentioned: restricting the Minister for Labour to a certain date, 29th June; restricting him to manufacturing industries, although this has now been extended to include agricultural industries but not including the major area of service industries; confining the Minister to the £12 a week ceiling for nine months and thereafter to £6 per week, and the provision requiring the Minister for Finance to consent to his determination in regard to the details of the scheme. That sort of narrow, straitjacket thinking will be the death-knell of this potentially good scheme. I would suggest to the Minister—we will put down amendments to help him—that he stand up and fight this matter because this is the most crucial social and economic problem, practically at catastrophe stage now, that has ever faced our economy. It cannot be approached in a niggling manner. Rather, it must be approached in an imaginative manner.

My main criticism of this Bill is firstly it is unimaginative, inadequate and unduly restrictive and secondly, —which has been illustrated today in the attitude of the Employer-Labour Conference—is too late. The Minister seemingly was in a position to do something in April, but allowed negotiations to proceed on the whole pay settlement area without any comment. The horse of inflation is galloping. The stable door is now being sought to be closed. My real criticism is that, along with this measure being too late, it is not even attempting to deal with the enormity of the problem facing us. I would have preferred far more dramatic legislation giving the Minister sweeping powers. And sweeping powers are needed in this day and age to deal with this problem in our society. The Minister should not be circumscribed in this matter by the heavy hand of the Minister and the Department of Finance. I am saying this to help the Minister. I hope that the Minister, even if he is circumscribed in the Bill, will for the sake of unemployed people and our economy stand up to the Minister for Finance and insist that the appropriate finances are made available to achieve the target he seeks of 10,000 more people being encouraged into employment.

The Bill as it stands shows very little evidence of that. Rather it shows every evidence of being too little, too niggardly, too inadequate and bears the heavy hand of the Department of Finance throughout. We will look at the Bill on that basis and seek to improve it by way of amendment. I can assure the House and the Minister that the amendments we will put down will be amendments to give the Minister more power and greater authority to deal with this problem.

Mr. McCartin

I welcome this provision by the Minister for Labour to improve the unemployment situation. I do not agree that this measure is too late. It is difficult now to see what will be its effect eventually. It is the sort of measure one would not have expected a responsible Minister to introduce until he felt the gravity of the situation warranted new thinking and a new approach.

I think the Minister's approach is very commendable and imaginative. As I say it is very hard to say what the eventual result of the scheme will be. It is hard to judge the mood of the people involved in industry, to know in how many instances just £12 a week will mean the difference between retaining a job and losing it. I would suspect in manufacturing industry probably not all that many.

While I welcome the Bill for the industries where the measure can give effective relief, I would nevertheless say to employers and to industry to beware of the danger of employing more people than are required to do the particular job that is to be done. If you put 11 men on the shop floor where ten men should do the job, you are putting the job of the other ten at risk by employing the eleventh man. Not only do you create a situation for the time being where there is less work per man to be done but you create a precedent where people learn to move at a slower rate and in the long run when things take the other turn, as they will, we shall end up being less competitive.

However, I know there are a number of industries in the country, perhaps more than might appear obvious where even £12 a week comes to a sizeable figure and an industry could fall short by £50 a week to make ends meet; that £50 could be the last straw and it could mean the breaking point. In addition, it will give encouragement to the smaller industries where the weekly wage is a big percentage of the turnover. They will come to realise that the Government are concerned about their position and have taken steps to help not only the employment situation but the manufacturer and the employer. I feel sure that in many instances the scheme will be welcomed by employers, will save jobs and help to get many industries over the present recession.

At the present time the Department of Labour are doing a good job. In the past couple of years I have been very impressed by the sort of organisation that has developed, the sort of aids to employers, particularly in the West of Ireland, where we have to many new people in industry, where we lack the tradition and skills that are so important and where we have the Manpower Service and the facilities that AnCO provide. It is entirely new, and some people have the experience of starting up industries and working in manufacturing industries for five years. There is a tremendous improvement in the services that are available through the Department of Labour.

It is very heartening to know the Manpower Service is there at the end of the line and can be contacted. They are developing very fast the expertise required to help industrialists in difficulties. They provide the right people for the right jobs and the contacts and also show concern, for instance, when individuals in the staff they ring up, industrialists, say "We have two or three men qualified. They are very good and we would like to know could you fit them in?" They have the knowledge of where jobs might be available, the knowledge that good men are available, and concern for the men they have trained. Other measures the Department of Labour could very well take are to intensify the efforts of AnCO. There is nothing as bad at a time like this as to sit back and say: "We cannot sell what we have already produced; what is the point in training people?" If we will just sit tight and wait until this blows over, when times improve we may find that we have not sufficient trained staff. This has happened before and I feel sure it will happen again.

This employment premium is very good, but it is much more important to take a man into training now and have him in a position to take up the job when the time comes. I have seen fellows going off for courses out of factories and workshops when the industry could not afford to let them go, when in fact more work needed to be done than there were semiskilled people to do it. I would say now is the time to avail of the lull to prepare ourselves for the new situation which we feel certain will come in two or three years' time. If there is a recession in industry, there must be men who can train, and certainly there are young people in industries who can take training. Finances may be tight and scarce, but I would ask the Minister for Labour to make every effort, if it goes to the setting up of emergency training centres, temporary places where men could be trained now. This is very relevant to what is under discussion, and I am sure the Minister has this in mind as well.

I am very glad the Minister decided to extend this to the agricultural industry, because I feel, from my own experience, that agriculture could avail of this more quickly than some of the manufacturing industries. I expect to see a good result from this. In the past we had a remission of rates to the extent of £17 where a farmer had an employee. In the most recent past this became very small as time went on. Representatives of farmers were never slow to point out that some years ago even the £17, small and all as it might appear to be, was a contributing factor in the employment of many people. This new premium will encourage farmers. This is an industry where we need not be afraid to have work done to have goods produced.

There is so much to be done in the reclamation of land, the provision of better farmyard facilities, that I am absolutely confident that many farmers who just could not see their way to pay the full amount of a man's weekly wages will avail of this premium to take men into employment. They will improve land and buildings. They will turn out more produce and, as a result, there will be more jobs in industry.

The Minister has been very wise to extend this to the agricultural industry, which I believe will above all industries respond to this as they have always responded in the past to any programme of economic expansion. One always found that the agricultural industry could measure up to whatever targets of expansion were set for it. I am glad that the Minister has seen fit to add this incentive. No more than in industry, things have not been good in agriculture for the past couple of years, but in any industry when things are at their worst, we should turn the recession to whatever advantage we can and prepare for the day when things will be better.

I welcome the Minister's Bill as an effort to get us out of the present recession, to improve the position of industry and agriculture, and I hope it gets from industry the response it deserves.

Mr. Yeats

As Senator Lenihan has already said, we on this side of the House welcome this Bill. We are particularly glad that the Minister has decided to change it slightly from its somewhat unsatisfactory form, so that now it is to include agriculture. In doing this, he has reacted to the urging of the Fianna Fáil Party in the other House. The fact that he now comes in at the last minute in order to amend the Bill—we have not yet seen the amendments—shows how outrageous was the procedure in which the Government forced this Bill through the other House. To have allowed a Bill of this importance and complexity two hours for all stages was a scandalous performance. It is impossible to discuss this Bill without—I do not intend to speak at length on the subject—a passing reference to the manner in which it has reached the House.

An Leas-Chathaoirleach

Senator Yeats is well aware that it is not in order to refer to the procedures of the other House.

Mr. Yeats

With the greatest respect, a Leas-Chathaoirleach, I think it is in order to refer to the Government's handling of legislation. I do not intend to go into any great detail, but only two hours were allowed for discussion. I am aware that extra time was allowed but the offer was not acceptable because it was at the expense of other Bills which, in turn, had two hours. However, I am pleased the Minister listened to the urgings of the Opposition in the other House and has decided that this time their pleadings should be acceded to.

We welcome the Bill, although it is somewhat doubtful how effective it will be. The Minister is excessively optimistic when he suggests in his opening speech that his aim is to stimulate the creation of 10,000 jobs in the period up to June, 1976, for workers who have lost their employment as a result of the current recession. It is unlikely that the Bill will be that successful. It will have beneficial effects and it is welcome from that point of view. But the success of schemes such as this in Germany and other countries has not been such as to suggest that this type of legislation on the whole is very effective. It is well worth while trying and one commends the Minister and the Government for their endeavour, but one must not be over-optimistic about its effects.

One is particularly glad, due to the introduction of this legislation, that the Government at last realise the seriousness of the unemployment situation. While there are over 100,000 unemployed, this has been the case every week since last January. There is nothing new about the situation. Six months have elapsed with the unemployment figure at this level. It was obvious for a considerable time prior to January that this would be the unemployment figure, with the way things were going. The Government had plenty of time to introduce this kind of legislation. It is only now, at this very late stage, that they have done something about it. Although it is a late recognition of the facts of the economy, we are glad they have seen the light.

The difficulty has been that, while accepting, as they had to, that unemployment was running very high, they have at the same time tried to salvage their position somewhat by suggesting that, while it might be high here, it was not that bad; that other countries in the EEC were in an even worse position. The fact is, as the Government are well aware, we have by far the highest rate of unemployment of any EEC country——

Mr. O'Leary

That has always been the position.

Mr. Yeats

——and we have almost the highest percentage increase in unemployment within the EEC since this time last year.

Mr. O'Leary

With the exception of Denmark.

Mr. Yeats

The Minister doubts this. I will put it this way: it does not cover the situation to take the Irish live register and say it has gone up by 46 per cent. as it has in round figures, since last year. Unlike the live register in any other country, we have a considerable number of people who are on unemployment assistance, among them large numbers of small farmers who are not unemployed in the normal sense of the word. Since this time last year, the real figure for unemployment is up by almost 90 per cent.

Taking the position of our colleagues in the EEC, we find that this compares with a figure of 80 per cent for Belgium; 61 per cent for Great Britain; 41 per cent for Northern Ireland; 89 per cent for France— about the same as us although the actual number unemployed is far lower in relation to the population— 60 per cent for Italy; and 60 per cent for Holland. In the case of West Germany and Denmark, the percentage increase since last year is considerably greater than ours, although the actual numbers are much lower. Not only have we the highest number unemployed in relation to our population—the Minister is correct in saying that unfortunately it is a normal situation in this country—but we also have very nearly the highest percentage increase since this time last year.

Mr. Halligan

Does that include the UK figures since last Thursday? The unemployment figures were up by 200,000 in one month. I doubt if these figures are included.

Mr. Yeats

The figures for Britain and Northern Ireland together were 870,000.

Mr. Halligan

It is now 1,050,000.

Mr. Yeats

That brings them up from 61 per cent to around 80 per cent, which is still a little below us. I do not think that Senator Halligan will suggest that we should pride ourselves on being no worse than the sick man of Europe. The state of affairs in Britain is such that we would not match them in that respect.

Mr. Halligan

I am just trying to steady the Senator's usually unerring sense of accuracy.

Mr. Yeats

I am quoting from a newspaper of two days ago and I cannot be much more up-to-date than that. It would appear, in the light of the figure which Senator Halligan mentions, that probably the British percentage increase is 80 per cent, whereas with us it is nearer 90 per cent. I shall refer to the British figure later because it bodes ill for what is likely to happen in our case in the coming months. This is an important factor in relation to certain sections in this Bill.

In some ways this Bill is unsatisfactory. It is extraordinarily vague. There is nothing in it to suggest who will receive these premiums, how much they will be, or what industries will benefit. It gives the Minister power, at his complete discretion, to fix the rates of premium. The House has been told in the recent budget statement, and again by the Minister today, that initially the figure will be £12 and during the last three months it will be reduced to £6, but this is not contained in the Bill. The Minister can decide what workers will or will not qualify. That information is not contained in the Bill, except that the Minister has the complete power to decide these matters; not even by order or regulation but by an administrative decision which need not be referred back to the Oireachtas. He can decide what employers will qualify. Up to now he has limited himself to manufacturing industry. He has now said he is going to extend this, but nonetheless within the limitations that, in manufacturing industry, on the one hand, and agriculture, on the other, he can pick out individual employers anyway he likes and say they qualify or they do not qualify. Even where he has picked out groups of workers, groups of employers, industries and so on, he can vary his decisions on these heads in individual cases. In effect, the Minister can spend public money as he pleases without any element of legislative control.

As Senator Lenihan has already said, we would be very glad to give the Minister greater powers if he had taken greater powers than these to deal to a greater extent with the massive unemployment with which we are faced than is proposed in this relatively limited field. However, any such powers ought to be set out in the Bill and therefore be subject to legislative control.

We have heard today from the Minister some very brief details of how these proposals will work. Until today we had to rely on a handout from the Government Information Services. One wonders why this handout was not circulated to Members of the Oireachtas. Apparently anybody else in the country can get it but not the people who are supposed to be enacting this legislation. This handout, issued on 26th June, by the Government Information Services begins rather curiously by saying "Subject to Dáil approval the following provisions will apply". Whatever about the Seanad, the Dáil have never been asked to approve any of this because it is not in the Bill. Neither the Seanad nor the Dáil have any power of approval of the details of a scheme which are sent around the country in this form by the Government Information Services.

The only information we have about these measures is when they will start and when they will end but we have no information about the intervening 12 months. Therefore we have to assume the statement from the GIS is correct, together with what the Minister has told us today. It is on this basis that we have to consider the Bill and on that basis one must accept that the scheme is disappointing. There are varied respects in which the proposed scheme is entirely unsatisfactory. Because of these deficiencies it will not achieve anywhere near the effect in relieving unemployment that it should.

First of all—and this has been referred to by Senator Lenihan—the date fixed in the scheme relating to the level of the work force is June 29th, 1975. This is almost making a lottery out of this whole affair. A factory employing, say, 200 people on June 29th, will be paid premiums only in respect of workers taken on beyond the figure of 200. A factory that closes down in July, September or November of 1975 or anytime next winter cannot qualify for the premiums unless at some stage it passes the level of its work force on June 29th. This deals, in other words, with past history only, not with the future. It does not deal with the true life situation of increasing redundancies, increasing unemployment which, for various reasons, is almost certain to hit us during the coming winter.

Even if it is the past history, it is very much a case of hit or miss. Take the case of a factory that closed in May and happens to re-open briefly towards the end of June; if it was employing its normal complement on June 29th and then after a month or so closes down again, perhaps in July, it does not qualify. It gets no benefit in the Bill. What is more important, its workers get no benefit from the Bill. The assumption all through the scheme is that June 29th, not merely in the country as a whole but in relation to each individual industry, is the bottom of the trough, that there will be no cuts in the work force after that date. There is no evidence that this is the position. Unfortunately, there is a great deal of evidence to the contrary.

Last month the Confederation of Irish Industry—the people who are very much affected by the operation of this scheme—issued a bulletin called Economic Trends in which they suggested that the prospects for the rest of this year are that production and employment will continue to decline. They said that demand is not expected to pick up and home sales will decline still further; that there is some hope that exports will show some slight increase but that even this measured optimism must be tempered by the deflationary effect of the proposed British counter-inflation measures which were announced recently. In the centre pages of this document, the CII produced four extremely gloomy graphs. The first is of production trends, and in each case these graphs are the result of the expectations expressed by the various industries taking part in the survey. Where the figures are available they show the actual result as opposed to the results of the surveys, and in each case the actual results were shown over past months to have matched very closely the survey expectations of the industries concerned. Production trends are expected to continue to decline, a straight graph down the page. It is the same with employment trends and export trends. This survey, of course, was made before the announcement of heavy deflation by our neighbour, Great Britain, so that the actual figure there will probably be even worse than it is expected to be. We know that manufacturing exports so far this year have been well below last year in volume. The expected trend for home sales is down, and they point out that here there are particular problems because the final 4 per cent average tariff against British imports was removed on July 1st, and then next winter the import prices of the old EEC and other non-British products will fall by 10 per cent on January 1st next.

The indications are that things will not get better in the employment field but in autumn and winter they are likely to get worse. Indeed, the CIF Newsletter of 15th July said:

It is evident that Irish industry is facing exceptionally difficult trading conditions. These are likely to get worse at the end of 1975.

Under these conditions it is very difficult to understand why the base stage, if one can use the term, of June 20th has been fixed in this Bill. It simply means that any deterioration—and a deterioration is almost certain to take place—this autumn and winter means that the industries concerned would not qualify for these premiums, except in the restricted cases where they can show an actual increase of employment over June 20th last.

At this stage I might mention, as Senator Lenihan already has, that apart altogether from manufacturing industries and agriculture, which are not being brought in by the Minister, there is very serious unemployment also in service industries, particularly of course those related to tourism. There is also very severe unemployment—perhaps more severe than in any other single sector—in the building industry. One can see obviously that there are practical difficulties in covering these, but now that the Minister has decided to cover agriculture the practical difficulties of covering these other sectors would appear to be no greater than those for agriculture.

In the present emergency the Minister should face the risk that possibly some public money might go astray. If it is not possible to frame a cast-iron scheme which would cover every possible eventuality, he should certainly leave himself at least scope for covering any aspect of the economy. I have not seen his amendments so I do not know what form they will take. I hope they will take the form not merely of adding agriculture to the existing provisions of the Bill relating to manufacturing industry but that he will leave himself in a position whereby he can extend this scheme to any section of the economy. It does not commit him to doing so, but he should give himself the power. He would be very unwise to limit himself in any way in this respect. We will certainly try to draft amendments for the Committee Stage which will secure this result.

I doubt if the cost will be very great, particularly in the light of the obvious saving of those who come off the register. Every man and woman off the unemployment register saves the State money. The actual total cost of this to the State will probably be small. The basic point is that this is intended to deal with the very serious evil of massive unemployment. The Minister should if necessary even take risks in order to ensure that no section of the economy that might otherwise be covered fails to be covered.

Another point in this Bill which is difficult to understand is the provision that no worker should be entitled to be covered by a premium unless he has been four weeks on the register as a general rule. This is not in the Bill but it has been stated in the various announcements made about the form this scheme will take. This is difficult to understand. Take the position, for example, of a man perhaps in some provincial town who loses his job on a Friday in one local industry and another industry, perhaps the only other one there may be, offers him a job starting the following Monday. Normally he would be delighted to take it, but under present circumstances with the £12 premium payable the other industry could not afford to take him. That industry would, if necessary, go 20 miles away to take on a man who had been four weeks on the register. It is difficult to understand what the purpose of this is, particularly in view of the fact that the first few days, the first week or so, of unemployment is always the most traumatic. One would have thought that there would be a very good case to be made on that ground alone for allowing a man to be taken off the register at once rather than make him wait four weeks.

As I have already said, it is difficult to understand why the actual figures of £12 and £6 are not mentioned in the Bill. One wonders if the Minister intends perhaps to vary the figures? Does he intend to give himself that power? If he does, then perhaps he can put up a case for that. But if he intends to stick rigidly to the £12 and £6 which have already been announced— £12 up to March 31st next and £6 thereafter—it is very difficult to understand why he cannot put these in the Bill.

On the other hand, one wonders why it is intended to have fixed figures of this kind at all. The problem with the fixed £12 and £6 is that in the case of low-paid workers particularly —in the case of women working in textile industries for example—the £12 is obviously a very considerable incentive for an industry to take in workers. On the other hand, in the case of skilled workers, who might be earning £45, £50 or more a week, the £12 is of relatively minor importance and would only have a marginal effect in encouraging an industry to take in a worker. Here again one feels that the Minister should allow himself more flexibility. We propose to put down an amendment to try to devise some system whereby the Minister would have the power to fix a percentage of the wage rather than an outright figure of £12 or £6. As things stand it seems that certain industries may well benefit considerably from this, but others could benefit very little.

There is also the point that from the point of view of the workers, those who are on the unemployment register, who when at work earn a low wage—perhaps in a textile industry or something of that kind—under the pay-related scheme would come out relatively well and in some cases not far off 100 per cent of their former wage, whereas skilled workers on a much higher wage get a smaller proportion of their wage. To this extent skilled workers suffer still more when unemployed.

There is a strange provision in section 4 that I find difficult to understand. It is subsection (3) of section 4 which states that:

... the Scheme may provide for the reduction or non-payment of an employment premium in a case where the Minister is satisfied that the employer concerned is in receipt of, or has received, moneys by way of a grant or loan from any body established by statute for the purpose of promoting, encouraging or assisting employment or industry.

The Minister, of course, has discretion here but nonetheless he is given the power, in effect, to withhold premiums from industries which have benefited either from the IDA or even, which is still more extraordinary, from Fóir Teoranta. I am not saying that he proposes to do this but he is giving himself the power and one wonders what the purpose of it is. I can hardly believe that he proposes to eliminate industries benefiting from Fóir Teoranta because obviously one might forget about the Bill in that case. It appears from some remarks he has made in the course of the passage of this Bill through the other House that he proposes to eliminate in some cases the payment of premiums where money is still being paid by the IDA. I find it difficult to understand the purpose of this. After all, we are interested in this scheme in providing employment. I cannot see that the niceties of the Department of Finance relating to public money being spent in industry should affect this in any way. I would be glad to have some kind of an explanation of the meaning of this part of the Bill.

However, in relation to the points of the Bill which, as I suggested, are less than satisfactory, if the Minister is prepared to make changes in these, the scheme could well have a real chance of cutting, to some extent at least, the number of jobless in the country. As it stands, with the Minister's new amendment, we can certainly support it as a relatively small step forward, but one must accept that it is no substitute for the really radical and energetic steps that the Government ought to be taking.

Mr. Halligan

Paradoxically, this might be one of the few Government measures that will actually not cost the Exchequer any money at all in its implementation. In fact, the more successful it becomes, the less costly it will become. It seems to me that a proper cost-benefit analysis of this scheme would indicate a great number of hidden savings to the Exchequer when the people are given the benefit of the employment premium, taken off the unemployment register and put back into productive employment. This is one of the reasons why the measure has obvious attractions for the man in the street, who sees it as a very commonsense way of employing State funds. Apart from the immediate and obvious savings in the State's share of social welfare payments, there is of course, the recoupment of some part of the premium through VAT and also in some instances, there will be recoupment through PAYE.

If one were to approach this Bill in a truly global fashion, from the point of view of looking at both the income and the expenditure side of the Exchequer, I do not think that the strictures of Senator Lenihan should be taken too seriously into account. I must say, in passing, that the Senator in constantly inveighing against Ministers for Finance, tempts me to encourage him to do a Crossman act and to publish what will obviously be very intriguing diaries indeed. He is constantly complaining about Ministers for Finance and their heavy hand. As Minister he worked with three very intriguing Ministers for Finance, to wit, Deputies Lynch, Haughey and Colley. His diaries would make a pretty marvellous exposé indeed. Perhaps he might offer them by way of an academic, as well as a political contribution, to the history of our time.

I very much welcome the shift in emphasis evident in this Bill, away from the subsidisation of capital and towards the subsidisation of labour. I am glad the Minister has quoted from the special OECD Report which argued that a scheme of employment premiums might, if given an injection of funds, lead to a greater incentive to increase employment than the subsidisation of capital.

It may be that as one of the beneficial side effects of the current crisis we will, increasingly in the future, question the subsidisation of capital when examined against the loss in the labour force. For example, in a society in which there is an excess labour supply relative to capital, is it economic sense to employ labour saving devices, generally imported capital expenditure, while men are on the unemployment queue? What really is the economic sense of having JCB's cavorting around, engaged in local employment work, when men who could be employed on direct employment schemes are probably holding up the walls of villages and town squares and the gable ends of walls in our cities.

I am reminded of this factor practically daily when driving here because I pass a local authority scheme which appears like something almost out of an American war movie, given the amount of plant and equipment in use. The amount of men employed on this project must be no more than ten or 20. But one could visualise that same type of scheme actually giving employment to 100 to 150 men using the more traditional means. Clearly the present method of doing the job is criminally wasteful of the labour force and this situation is repeated all over the country today. In the midst of apparent efficiency we have waste of humans.

It is true that during the 1950's and the 1960's there was a great vogue in terms of efficiency in the form of cutting back on the labour force and of employing more labour-efficient means of production. But, we are now beginning to pay the penalty for some of these short-sighted and in some cases ill thought out investment plans. There was a great vogue towards bigness, towards cutting down in terms of the employment content prevalent in management philosophy. One measured the efficiency of management practically by the number of men and women that it could make redundant and that it could shed. If a company could produce the same output with 1,500 rather than 5,000 men, it was held to be efficient and effective and its management were lauded to the sky. We are now paying some of the penalties for this. There is no less spectacular example than the Jumbo jets, in which the entire aircraft industry invested so heavily throughout the world. This is now a very questionable investment project indeed and can be seen as part of the malaise of bigness and labour eliminating devices that has affected managerial science and attitudes throughout the last two decades. The emphasis of managerial thinking was on capital at the expense of labour. For that reason, I strongly underline and endorse the emphasis given to the OECD comment on manpower policy in Ireland by the Minister in that it helps partially to redress the balance.

It seems that a lesson for the third world and for developing nations has been that they should invest primarily in their labour force rather than try and imitate the capital intensive economies of the western world. To a certain extent we, too, are analogous to the Third World countries and the path which was followed in other countries with labour shortages was not the path we should have followed in developing our economy. We are now paying the penalty for imitating economies with problems of labour scarcity in having plant and equipment lying idle at considerable expense, both to public and private enterprises. For that reason, I very much welcome the decision which lay behind the introduction of this Bill. I know that, as the Minister has said, it was a leap in the dark and I am aware of the administrative apathy which must have existed in opposition to such proposals, particularly when they run counter to what has been the prevailing and conventional wisdom for the last quarter of a century.

I find myself, unexpectedly, in some sympathy with, and to a certain extent I support some of the criticisms of the Bill which have been offered by Senator Yeats. I said, in a small contribution last week on the Finance Bill, that it seemed to me that the Employment Premium Bill should also have given consideration to firms which were about to suffer redundancies. I mentioned that the anti-inflation and anti-unemployment package put together by the United Kingdom Government had contained such provisions. In their case, of course, they are dealing with industry on a much larger scale than us, and I believe that in their case a firm will get special assistance of this sort when the number of redundancies involved is 100 or more. It seems to me to go somewhat against the commonsense element in this Bill that one should permit men to become unemployed because a failure to sustain an industry through a particularly bad period and then subsidise them for being employed, perhaps next door or down the road, in some other industry. I trust that this Bill can be seen as a first tentative step in the general direction of the subsidisation of labour rather than a once and for all and final shot in that direction. For this reason, I regard the Bill as an experimental investigation of the possibilities which underlie the subsidisation of labour rather than capital.

On the basis of the experience to be derived over the next six to nine months the Minister will, I trust, return and give more consideration to the possibility of assisting firms which are threatened with redundancies, particularly those firms which are labour intensive and which have suffered grievously from the recent inflation and drop in demand. In addition consideration should be given to the granting of these premia to local authorities for works of community development and also for public works programmes. In the current OECD Observer there is an inventory of what is being done in the various states in terms of stimulating employment. I was struck by one scheme in Canada where local authorities are given assistance along the lines of the employment premium scheme in respect of work programmes of a community improvement nature, with particular reference to those with a large youth content.

It seems to me. given the very low level of civic responsibility which characterises Irish social life, that one might turn the present crisis to benefit by tapping the idealism which normally resides in the young by getting them to tackle many of the local and communal problems which exist throughout the country. For example, one can think of the enormous urban jungles of this city with their paucity of community amenities and of the many schemes which might be embarked upon by employing young people and by using the skills, and social commitment in community associations and by putting all their resources to work in conjunction with the local authorities and the system of financial assistance available in this scheme.

My view on the Bill as I have stated previously is that it should be regarded as experimental and not simply as a once and for all and final response to a very serious crisis. I agree with Senator Yeats, and I am sure so do other Members of this House that the current unemployment situation is not one which will disappear very quickly. The unemployment figure in the United Kingdom, as we have been reminded, is now one million. The forecast, as I said last week, for the middle of this winter is one and a half million and it is anticipated that unemployment in the United Kingdom will continue to grow to two million over the next 12 months. In these circumstances it is virtually inconceivable that unemployment in this country will drop in the next 12 months. At the moment, unemployment, as I understand it, in the eight other EEC countries is increasing substantially. Ironically, we are the one economy in which, temporarily at any rate, unemployment has been stabilised. Given the fact that there is now general recognition of the seriousness of the world depression, I think it is optimistic beyond the point of minimal reasonableness that we should anticipate a decrease in the rate of unemployment in the domestic economy over the next 12 months. We heard today a trade figure which was profoundly depressing from the point of view of a political upturn in the world economy. The trade figures for the United States are now showing a surplus in balance of payments when in fact they should be, if the rest of the world economy was to become in any way healthy, showing a fairly hefty and massive balance of payments deficit. The difficulty is that, at a time when all economies are looking for export led growth, each economy is resorting to measures restricting imports. In this way we are all going to plunge ourselves into collective and self-perpetuating unemployment. It seems that the United States is, as it has been over the last decade, serving the world very ill through the policies pursued by its respective Presidents.

There is, therefore, a great necessity for the Minister and for the Government to look upon this Bill as a venture in a new area of economic policy and not to reject what has been done in the past through the IDA and through other State agencies, such as Gaeltarra, in the subsidisation of capital, but to regard this measure as the development of a totally new development which would supplement, complement and add to the more traditional means of stimulating economic growth. I ask the Government in tackling unemployment in manufacturing industry and agriculture by looking for increases in employment over the base date to approach this Bill from the point of view of engaging in an experiment upon which they will draw, say, in six months time, for experience in framing a mere permanent policy of labour subsidisation.

I am convinced that in the near future the one thing which will become evident is that this measure, far from being temporary, will become a permanent feature of our economic apparatus and weaponry in fighting unemployment. There is not going to be any significant improvement in the world economy for two years so, therefore, there is not going to be any dramatic upturn in our trading performance and, for that reason, there is not going to be any significant improvement in our employment situation. Consequently there cannot be a situation in which we turn on a tap of aid and assistance and then in six months begin to slow it down to half and then 12 months later cut it off altogether. I think we have to regard this employment premium scheme as a new method of social experimentation and encouragement of employment. I do not believe that we should be deterred by the possible unscrupulous exploitation of the money potential in this Bill. As Senator Yeats said, we have to be prepared for a certain amount of that. I would agree with him it would be far better if we permitted a certain amount of this to go on rather than have the dole queues lengthen even further.

As I said in the beginning, I do not really see that in the terms of cost benefit analysis the Exchequer can prove there will be a cost in implementing this Bill. In fact I suspect quite the contrary. I welcome the statement by the Minister that there is going to be no financial ceiling on the employment premium programme. I say also that, in so far as he and his Department are concerned, they should regard the scheme as an experimental measure. I hope that Senator Lenihan is not more accurate in looking into the future than I am. I hope that the heavy hand of the Department of Finance, as he described it, will rest very lightly indeed on the Department of Labour over the coming months because it is upon the success of this measure, the vision of the Minister, the energy and imagination of his officials that the happiness and livelihood of so many countless thousands of people are going to depend. We can only wish them well in their endeavours.

Dr. West

I welcome this measure too. As Senator Halligan has pointed out it is a reflection of new thinking in an attempt to stimulate employment. It is new thinking as far as this country is concerned. It has been going on in other countries for some time now, I regret that we have not introduced a measure of this type previously. Senator Halligan is right in his assessment that this will not be a temporary measure. I believe it will be permanent and that it will be more widespread. It is worth trying because the attempts in other countries have shown a very worthwhile result in job creation.

One country in which this has been tried with considerable success is Canada, where the scheme is administered from Ottawa by a distinguished Irishman—in fact a fellow county man of mine and the Minister —Dr. R.H. Johnston. The scheme there has exceeded the expectations of the Canadian civil servants. It is a more wide ranging scheme. One of the main differences in the Canadian scheme and the scheme put forward here is there is a good deal of regional flexibility. It is operated on a regional basis and the needs of the respective regions, which vary greatly in Canada, are taken into account. The money, which of course comes from central funds, is administered on a regional basis when the projects have been checked out by Ottawa.

Could we look at things on a regional basis in this Bill and in many other areas of administration, because there are great differences in our regions? For example, the needs of the west and south-west of Ireland are greatly different from those of the Dublin region. Sooner or later we will have to start taking these things into account in all our legislation. This is a worthwhile attempt at stimulating employment. I know it will be necessary to make amendments to a scheme like this after it has operated for a period of a year. If as Senator Halligan predicts—I believe he is right—the scheme shall cease to have effect on 26th June, 1976, then this time next year we will have to have another piece of legislation which, I hope, will make the necessary amendments to the scheme as it is set out here. I am certain it is a good way to stimulate employment. One of the things which will have to be looked at again—perhaps the Minister will look at it now—is the class of industry included in the Bill and also the class of employee who will receive a grant or a premium under the Bill.

I am pleased to join with Senator McCartin in welcoming the fact that the agricultural industry is to be included. Here we have an area which could benefit greatly from an employment premium. As Senator McCartin said, it is the sort of industry which creates other employment. If we improve our agricultural position, then we automatically create jobs in manufacturing industries, food processing industries, and in the service industries. This is a very welcome measure and I am sure the agricultural industry will respond to these premiums.

There are a few other small points I should like to make. The Minister mentioned that AnCO trainees who are full-time workers at AnCO training centres will be eligible for the premium. Perhaps the Bill could be extended to those other trainees who are in community workshops, for example. These are mainly run by voluntary organisations such as the Rehabilitation Institute. They are financed partly through State funds from the Departments of Health, Social Welfare and Labour, and financed to a considerable extent by funds raised by the organisations themselves. These are organisations which take people who have a minor handicap, a mental handicap or physical handicap. They train them in a community workshop or a training centre for full employment in normal industry. They manage to do a terrific job by taking people who are receiving benefits from the Department of Health if they stay at home, by bringing them out and taking them off the unemployment and the socially handicapped registers and putting them back into full productive employment. There again the State is not losing anything. If they are off social welfare and back in employment, or if they come into employment for the first time, then this is a positive and creative thing for the community as a whole. I hope the Minister will consider extending section (c) on page 2 to include trainees who have been full-time trainees at community workshops for a sufficient period before receiving their first employment.

I disagree with Senator Lenihan when he talks about a percentage of the wage rate instead of a fixed premium. I think it is better to work on a flat rate. There are too many percentage tied attempts to balance things out. We have seen an interesting piece of legislation in the U.K. with a flat rate increase on wages. That is the way to really deal with a problem such as the wage control problem. It is better to have a flat rate and, in this way, the people with lower wages and salaries do not feel aggrieved by seeing people higher up the scale getting huge increases in kind, even though they are only the same percentage of their salary as the person lower down the scale has got. The flat rate is the way to deal with this situation. It certainly makes it easier to administer.

We will know in a year's time how this has worked and whether the flat rate is the best rate. We can only work by hindsight and by examining how programmes in other countries of a similar nature have succeeded and where they have failed and where they have been exploited.

Another point I should like to see referred to in 1976, when I am sure we will have continuing legislation of this type, is how the target which the Minister has set himself has been measured up to. We had an example last week where the IDA put out the targets for job creation. I complained —I think it was a fair complaint— that these targets are always being thrown around as if they were balloons bouncing around in hot air. We very rarely see in a year or so whether there has been a shortfall, whether the target has been met, or whether the scheme has done better than the target figure.

I would like the Minister when he is dealing with this problem in a year's time to let us know how close to the target he has got, exactly how many jobs have been created, and what the breakdown has been in the various range of industries. There is no point in putting out airy-fairy targets at this stage and never referring to them again. It is a trick we tend to use. When the Minister comes back in a year's time, it is important that he should give actual figures for jobs created.

I have some further points which might be better discussed on Committee Stage. I welcome this measure. It is a step in the right direction even though part of it is a step in the dark. We do not know how it will work. I hope it will succeed in relieving this great problem which the economy faces.

Mr. Whyte

I welcome this Bill. It is encouraging to know that the Opposition welcome it also. It is new thinking on employment in industry and other areas. I particularly welcome the fact that the Government, due to a certain amount of agitation behind the scenes on the Government side of the House, have agreed to include agriculture in this measure. I believe there is scope for much more employment in agriculture. Very many people employed in agriculture have been putting off work that badly needed to be done because of a shortage of finance in the industry. In the past couple of years things have been difficult in the agricultural industry. I hope people will take this opportunity to do very necessary work on farms and on land in general. There is a considerable amount of unemployment in the country areas. Unfortunately a considerable amount of unemployment always existed there.

It is depressing to see the areas of the country—in the West and, indeed, the Midlands—where people have been unemployed or under-employed for a long number of years. These are the parts of the country where a lot of extra work needs to be done. The roads are not as good as we would like to see them. Hedges need to be cut. It is a pity there was so much unemployment and that so much necessary work was never properly tackled.

I am very pleased to see that AnCO trainees will be eligible under this scheme. As Senator McCartin already pointed out, this is a particularly good opportunity to ensure that as many people as possible get training with AnCO. Very many of the old trades and skills which were useful are no longer available. Many people will have to adapt themselves to other ways of work, so they will need extra training. This is a particularly good opportunity to avail of that and I should like to see the training facilities in AnCO expanded if that can be done.

As Senator McCartin also pointed out it has happened in the past, and it had to happen, that people who were productively employed in industry had to be taken away from the job for further training. Now that they can be retrained without taking them out of productive work the most use possible should be made of this. I do not think the Minister's target of 10,000 cannot be attained. I am hopeful that it can be attained. I welcome the fact that this is open-ended as far as finance is concerned because, as has been pointed out already, it need not cost the country money at all. The more people re-employed under this scheme, the bigger the saving in finance. Putting people into productive employment is the really important part of this scheme.

Senator Lenihan said this scheme ought not to be restricted, as it is, and that the date of 29th June should not be the final date for accepting people. I agree with some of his sentiments. The scheme will have to be amended over the months and maybe, in fact, over the years. If all the people who were let off can be taken on again under this scheme, it will be open-ended. There are people who might try to cash in on this type of aid. Not everybody would do it, but some would. Human nature being what it is, it would be very easy for industrialists and people engaged in agriculture to give themselves the benefit of the doubt and say: "I just cannot carry on without aid and I will avail of the £12 the Minister is putting up." I am afraid the Government would find themselves subsidising all work after a very short time and, because of that, the Government could not accept an open-ended date on which this scheme would start.

Of necessity this has got to be a short-term scheme. It is, in fact, £12 for the first six months and £6 after that. The principle is good in general —and this has been referred to by many Senators already—and it is something which will be used to a greater extent in the future. We have a lot of unemployment at the moment. We have over 100,000 people unemployed. This is a very big figure. It is big because of the fact that we always had far too many people unemployed. We were prepared to go along over the past 30 or 40 years with 50,000, 60,000 or 70,000 unemployed. Those figures were far too high. They were accepted as the normal up to the past couple of years. They should never have been accepted as being normal. The type of assistance we gave to people who were unemployed or under-employed was actually a hand-out. They were encouraged to do nothing further only sit on their fanny and draw the money: a subsistence rather than an existence. That type of approach to unemployment was wrong. If this new approach encourages people to work or encourages industry to employ more people, it will have a very good effect. I would like to see it used in the future to a far greater extent than it has been in the past.

It was deplorable to see parts of the country where a great deal of work needed to be done and, at the same time, a great many people were unemployed or under-employed. Governments never have money just to hand out. The Government have what they collect from the people in the way of taxes. People who are unemployed have an absolute right to the necessities of life and to a reasonable standard of living, but they can only get them at the expense of people who are working. No matter whether it is pay-related benefit, dole or what have you, it comes from the section of the community who are working as of now and from people who put by a certain amount when they were fortunate enough to be employed. Able-bodied people who are unemployed are not acting in their own best interests, through no fault of their own in very many cases. This type of scheme which encourages extra employment, at a smaller price than unemployment has been costing, is a good scheme and is to be welcomed.

I have to disagree with my friend who said we have too much machinery, too many modern ways of doing things, thereby knocking people out of employment. Modern machinery is doing a job it took many people to do. I do not think that is what is wrong. If a machine can do the work of six people, there is nothing wrong in that. First of all, it takes a number of people to manufacture that machine. Secondly, it probably does work that is difficult, tedious and troublesome, at which six men might be employed. It is not wrong that that machine is doing that work. What is wrong is that the benefits which accrue to humanity because of that machine have not been properly distributed and, on occasions, this has resulted in a loss of employment. If any job that is being done now by six people can be done by a machine in a shorter time, the result is that those six people have that much more leisure, and a happier life, and continue in employment if we work out our calculations property. We have not done that on a national scale nor, indeed, on an international scale in the past.

I hope we will reach the Minister's target of 10,000. While our figure of 100,000 unemployed is far too big, it has been enlarged by the fact that we already had too many people under-employed or unemployed. I welcome the Bill and I hope it achieves the aims it sets out to achieve.

Mr. E. Ryan

In so far as we can understand what the Minister proposes to do, we can welcome the Bill in a general way, but it is an extremely vague Bill. We are told that the Minister is going to introduce a scheme and that is really the beginning and end of it. Even before we are told what the Bill proposes to do, or what the terms of the Bill are, we are told that it is to be amended. The Bill which, to start with, is very uncertain and vague is already in the course of amendment before we get a grasp of what is proposed to be done. Nevertheless, it appears to be a Bill which will do some good, which will make some contribution to a very serious problem and, to that extent, we must welcome it.

The Minister said: "We are, of course, in uncharted territory and I propose to monitor very closely the progress made in this area and to make use of the results of this." It is quite clear, if he is in uncharted territory, we are even more so. I hope that, as time goes on and he monitors the situation, he will be able to make a real contribution to this problem. It is somewhat surprising that we only have this Bill at this stage because we have had 100,000 unemployed since the beginning of the year. We have not significantly any more now than we had many many months ago, but it is only now that we have this small contribution to the problem. I think the reason must be—apart from the fact that the Government are very slow to take any action in problems of this kind—that the Government really believed the economic situation would improve towards the end of this year. A number of economists said it would probably improve towards the end of the year and the Government were hoping against hope that the position would improve and that they would not have to do anything about the problem. They have probably come to the conclusion now that things will not improve very much before the end of the year, whatever may happen next year or the year after. Consequently this may be the reason for the Bill's introduction.

The real position is that the high level of unemployment, the continuing level of unemployment and the fact that we will probably have a higher level of unemployment, are due to inflation and to the failure and inability of the Government to do anything about inflation. Inflation is the most serious factor in contributing to unemployment and in making it difficult to deal with unemployment. Inflation means there is no confidence in business circles, no confidence among employers in expanding industry or continuing at past levels.

There is no confidence because the employer cannot plan for the future. With every effort he makes to expand or continue his business he immediately finds himself up against the problems created by inflation. He is no longer sure of what the effect will be if he embarks on certain courses, or expands or even continues at the present rate. Every estimate he makes is vitally affected by inflation. Consequently, he has no confidence and he is unable to plan for the future. This immediately affects the level of employment in his business. For that reason also he is reluctant to invest any money in expanding his business and this again affects employment. He finds it impossible to make any costings either for a new product or for the export of some product. Therefore he is reluctant to go ahead.

Senator Halligan talked about equipment and the advantage or disadvantage of having elaborate intensive equipment as opposed to employment. One of the effects of inflation is that an employer is inclined to invest in a machine because he knows exactly what that machine will cost and he has some idea of what the costing of that machine will be in the future, whereas in the present situation, with inflation at its present rate, he has no idea what it will cost him to employ the equivalent number of employees to do the same job. If inflation was not running at its present rate, the employer could employ men to do the job rather than buying a JCB or whatever machine Senator Halligan mentioned. To that extent also, inflation affects the employer in the way he tackles a job and in deciding on the number of employees he will have to do a particular job.

When the employer is thinking in terms of exporting goods, of competing in the international market, he realises that, with the high level of inflation here and the fact that it is getting worse rather than better, he will probably be unable to compete satisfactorily with any product he exports. Consequently he is reluctant to decide to embark on any export programme to produce goods for which he feels he will not be able to find a market. Without going into all the ramifications of inflation, and they are immense, it is the most serious factor affecting employment and employment levels in the future and is extremely difficult to deal with.

In saying that, I am not saying that that is merely a fact of life and that nobody can do anything about it. The Government should be doing something about it. Of course, they fall back on the current international situation and say that this inflation is due to the international situation and, consequently, they can do little or nothing about it. It is true that we have inflation internationally at present throughout Europe. It is true also that inflation is being dealt with in most of the countries of Europe. It is true that a very considerable improvement in the position has taken place in most European countries and that ours is still the worst in Europe and shows little sign of any improvement. To that extent the Government must accept responsibility for the current rate of inflation here and for the effect that is having on unemployment. Unemployment is very largely the result of inflation and the level of inflation here is largely due to the failure and apparent inability of the Government to take measures to deal with it.

There is a distinct lack of confidence in the Government among the business community and among the employers. There is a distinct lack of confidence in the ability of the Government to take measures to bring down inflation, in their ability to give the necessary lead so that business can expand and prosper and that unemployment can be dealt with. Mr. Donal Carroll, the chairman of P.J. Carroll & Co. Ltd., one of our biggest employers, said at a conference last week:

Enterprise in these islands is being constrained, inhibited and stifled by the short-sightedness and ineptitude by Governments which are failing either to recognise the essential needs of the economy or to supply an environment in which it can flourish.

He referred to the British Government and said:

But the Irish Government, he argued, was an equal failure in its inability to solve economic problems and create an environment which encouraged growth.

That quotation is from The Irish Times of 24th July, 1975. Admittedly, inflation is a phenomenon which is widespread. But it is something which is being dealt with in most European countries. It is something which the Government in these countries have been able to control and improve. Unfortunately, our Government have not shown any signs of being able to deal with it, to face up to it, or to take the measures that are necessary. Because of this we have the present unemployment situation. Because of this we have over 100,000 people unemployed. Because of this it looks as though we are not only going to continue to have that number unemployed but, if anything, the figure will go higher. Therefore, the situation cannot be blamed on international factors. The Government cannot say this is something about which we can do nothing. They must do something about it. It needs every possible effort to deal with the situation. If the Government are going to say, and continue to say, that they can do nothing about unemployment, that they can do nothing about the inflation that is causing unemployment, then they should get out and allow some other Government to deal with it.

In regard to this Bill, the underlying factors, the underlying causes of unemployment are very serious and need to be tackled quickly. This Bill is not getting to the root of the problem, rather it is only tinkering with the problem. In its own way it is making a small contribution. The idea of paying a premium to a firm to bring back somebody, to give them employment again is a good idea, and deserves to be tried. The experiment is a good one and will probably pay some dividends. To the extent that it will effect some small improvement in the situation, to the extent that it will ensure that some few hundreds, or few thousands—I think the Minister is somewhat optimistic when he said 10,000—to the extent that it provides employment for any number of men, it is to be welcomed. Certainly we wish the experiment success. The Government cannot merely shrug off the problem by saying that they have now introduced this Bill which will do something to deal with the very serious problem of 100,000 unemployed.

Mr. Ferris

It is fair to say that this imaginative Bill was received with acclaim by all sides, workers and employers, in the country, on the day it was announced in June. It is to be hoped that this programme will have the desired effect of taking off the live register some 10,000 unemployed workers and put them into productive employment, which of course will be of tremendous benefit to our economy and the country as a whole.

I am pleased that the Government have decided, after consideration, to extend this Bill to include those engaged in agriculture and horticulture. I had hoped—and still hope—that processing industries, particularly agricultural processing industries, firms like co-operative movements who are involved in the processing of agricultural produce, milk, cheese and by-products of these, possibly would also be included as agriculture.

Perhaps the Minister when replying would clarify whether that section of the agricultural industry would benefit under the scheme. "Benefit" is the operative word in a Bill such as this. Only good can come from something which helps to stem the tide of unemployment which economic forces from without and within our country have brought upon us at present.

I had a long meeting with one of our important farming organisations last night. They mentioned the importance of this Bill to the agricultural community. The expressed the hope that it would and could be extended to the agricultural sector. Therefore, it is with great pleasure I welcome that additional extension to cover the agricultural community. On farms there is a lot of very important work to be done irrespective of the changes that have taken place in agricultural production, particularly in the dairving industry. Because of the rationalisation and improvement in production in the agricultural sector with particular reference to dairying these changes have brought about less need for agricultural workers. In turn, because of that, the numbers engaged in agriculture have been dropping for a considerable number of years and are continuing to drop. Apart from this drop there is much important work of another type to be done on farms, that is, the increasing production in crop and animal husbandry. There will be improvements to buildings, lands; cutting of hedges, cleaning of ditches— all these are important matters which have been left in abeyance for some years because of the cost factor involved in employing labour. I sincerely hope that this Bill will bring about an improvement in that situation. It will give a very welcome upsurge to work on farms and will be a stimulant to employers in that sector to bring in people to do this important work. That kind of important work on our farms would benefit our entire economy.

Irrespective of the improvements I have outlined that will accrue to the agricultural sector, any help that any industrialist can get to re-employ people can only be a very welcome measure and should be treated as such by all sides of the House. Credit must be given to the Government for having initiated the scheme. It takes a good Cabinet and team work to devise machinery to stimulate employment. The improvement affected by the announcement of the Bill is illustrated by the Minister's remarks concerning the number of people who have already shown an interest in this scheme. I would also expect that by the end of the special period to which the Bill relates the world economic situation would have improved to such an extent that the need for this scheme would no longer be evident and that a situation of full employment here would ensue.

Of course, we are not all suffering from a loss of memory. It must be admitted that even in the boom years of other administrations, Ireland always had a very high unemployment rate reaching almost the current peak, which is occurring in a world economic crisis situation. The Opposition in merely castigating the present administration for the total number unemployed is not being impartial. There were boom years in which everything in the garden was reputed to be lovely, but many a worker was unable to get a job and even when he did had very poor recompense for his labours. At that time also workers were forced to turn to the emigrant ship. Many of our boys and girls, the lifeblood of our country, emigrated to England, America and elsewhere to earn their living. Nowadays this exodus does not take place. They expect, quite rightly, that their own country and Government will provide a means of livelihood for them from the time they leave school until they die. This is as it should be in any country.

We should not have to depend on the economy of any other nation to ensure that our boys and girls will enjoy always a certain standard of living and the opportunity to get employment in their native land. That is why the Industrial Development Authority which I complimented last week, because of their development of industries, particularly the pharmaceutical industry, which can compete on the European market, can predict a net gain in new jobs over the next couple of years.

Therefore in the interim this Bill will help industries which are in difficulties, industries such as the textile industry and others referred to by the Minister as being in need of help at present. This Bill is particularly welcome in that it can assist such industrialists. In addition to the advantages of increased production and its resultant benefits for our economy, having men at work is good for the men themselves, good for them physically and mentally. I know of no man who, having lost his job through no fault of his own, would not prefer to be gainfully employed.

Business suspended at 5.30 p.m. and resumed at 7 p.m.