Seanad Éireann debate -
Thursday, 1 Jul 1976

Vol. 84 No. 9

Employment Premium Bill, 1976: Second Stage.

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

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

The basic objective of the premium employment programme is to get as many disemployed workers restored to employment as quickly as possible. The State pays a subsidy of £15 per week to an employer for additional unemployed workers taken on over and above the number employed as at 20th June, 1975. It is a condition of the scheme that the unemployed worker must have received unemployment benefit at least once since June, 1974, and was signing-on at an employment exchange or attending an AnCO training centre for at least the four weeks prior to being re-employed.

With the co-operation of employers, thousands of people can be returned to gainful employment by means of the extended premium employment programme. I would ask all personnel managers and production planners to consider seriously the advantages which lie in PEP.

I have directed all manpower offices throughout the country to contact local employers to examine afresh the steps by which the premium employment programme may at the new rates, with co-operation from employers, succeed in reducing local unemployment.

Trades councils and chambers of commerce may assist by informing their affiliated members and organisations of the advantages of the programme. While I am especially anxious that the premium should be availed of by those industries most seriously affected by the recession— textiles, footwear and engineering— PEP can also assist such relatively new industries as pharmaceuticals, electronics and petrochemical activities which are still in their growth stages.

By providing an incentive to employers to increase their work force now, ahead of requirements, we can be better placed to expand production quickly. There is some evidence that the level of stocks in some of our industries has now been reduced to a level consistent with the slowdown in overall demand. We should not allow this situation to persist for so long that we are unable to meet the initial surge of demand which will surely come.

The programme will make it easier for the employee to get a job again and for the employer to offer the employment. For the employer who is delaying taking on workers until he sees further positive signs of an upturn in the economy, PEP, by reducing the cost of taking on new workers, gives him a substantial inducement to do so now. In previous recessions here unemployment has tended to last longer than necessary because employers traditionally have met improvements in demand after a recession by increasing the overtime available to existing staff instead of taking on new workers. In present circumstances this could be a short-sighted and expensive practice. The programme enables employers to take on workers now in anticipation of the improvement already evident in certain of the major economies.

The prospects for international recovery are brighter now than at any time for the last two years. The major economies such as the United States, Germany and Japan are growing at increasingly faster rates. There are signs also of a new level of international co-operation in the management of the world economy. Agreements reached on planned growth in the OECD and EEC areas suggest that the recovery can be sustained without a recurrence of extreme inflationary pressures though of course it must be noted in this connection that the 5 per cent rate agreed at the meeting would not settle our unemployment problems in the years ahead even if those targets were achieved fully. In the EEC it has been agreed that a growth rate of 5 per cent per annum should be targeted for with the objective of reaching a satisfactory level of employment by 1980.

In Ireland, unemployment seasonally adjusted has stabilised during the second quarter of this year. In absolute terms the numbers on the live register have dropped by about 9,000. This pattern is in contrast to that prevailing in Northern Ireland and Great Britain where unemployment continues to rise. This would seem to confirm that the pattern of unemployment here is more closely related to that in the EEC rather than Britain which was traditionally the case. Of course it is essential if we are to maintain this more hopeful tendency of our economy that our industrial costs must be held at levels which will facilitate a significant and early reduction of present unemployment.

The total number of workers who have been re-employed to date under the programme is over 5,000. The vast majority of these workers were re-employed in manufacturing industry including 2,000 in textiles. I am encouraged by the fact that these workers might otherwise be still without a job but for the operation of the scheme.

I must say, however, that I am far from satisfied about the extent to which the scheme has been used up to now. However, with growing evidence that there is now a prospect of a recovery in the economy, there should be a greater incentive for employers to take on additional workers in the expectation that the level of demand both in the domestic and export markets will increase. A survey which was taken in May showed that the recovery in economic activity had in the main continued. The level of exports had continued to improve and over the next few months the forecast was that production would continue to increase as would exports. Home sales were expected to remain stable.

It is imperative that we should capitalise to the greatest extent possible on any opportunities to take up the slack in our productive capacity and thereby reduce unemployment. The Government, as an earnest of their determination to take postive action to help those who are without jobs, have decided to seek the approval of the Oireachtas to extend the duration of the premium employment programme schemes until the end of the year. Under the programme, two separate schemes were launched—one for certain manufacturing industries and the other for agriculture. The currency of both schemes expired on 26th June, 1976.

As announced in my speech on 26th May, 1976, on the Estimate for my Department, I propose to extend the duration of both schemes for a further six months. The purpose of the amending legislation, as indicated in section 1 of the Bill before the House, is to obtain statutory authority for the proposed extension. The proposed new termination date referred to in the Bill —8th January, 1977—was adopted so as to coincide with the four-week payment cycle up to the end of December, 1976. The reason for prescribing the commencement date—26th June, 1976 —in section 2 of the Bill is to preserve the continuity of the schemes from the previous termination date, as prescribed in the 1975 Act, up to the new termination date on 8th January next.

During the past year certain modifications have been made in the original programme. For instance, the scope of the programme for manufacturing industries was extended to include food processing, which had been excluded initially, with effect from 5th December, 1975, after the seasonal peak in that industry had passed because, again, the programme was not designed to simply supplement a seasonal upturn in extra jobs. It was intended to bring fresh, permanent jobs into the industries designed to be helped.

In addition, the premium rates were improved. Initially, the premium rate per worker was fixed at £12 per week up to 3rd April, 1976, after which it was to be reduced to £6 per week for the period 4th April, 1976, to 26th June, 1976. As I have already announced, the amount of the premium has been raised to £15 per week with effect from 4th April, 1976, instead of being reduced to £6 as originally envisaged. The second-phase rate, which has been increased from £6 per week to £7.50, will now apply from 19th September, 1976.

While the increase in the amount of the weekly premium to £15 should help to make the programme more attractive, I have also arranged, in addition to a publicity campaign in the newspapers, for the National Manpower Service of my Department and for the training authority, through its advisers, to undertake an intensive canvass of employers to again bring to their notice details of the programme and to encourage them to take advantage of it over the next six months. I also arranged to have employers in manufacturing industry circularised by post about the improvements and extension of the programme. These promotion drives should produce a renewed interest in the programme, which, I believe will lead to a further increase in the numbers returned to work.

Expenditure approved to date under the programme is approaching £750,000. Because of the higher rate of premium now applicable and in anticipation of an increase in the volume of payments, the provision of £1.25 million in my Department's Vote for the current year may be inadequate. If it is, I shall be happy to introduce a Supplementary Estimate before the end of the present year to meet the extra financial commitments involved, because it will be sure evidence of the effectiveness of the programme.

The Government's strategy for 1976 was to give priority to expenditure that would promote growth and sustain or increase employment. The premium employment programme is one consequence of that strategy. One of the programme's attractions is that its effects are immediate inasmuch as people are immediately restored to gainful employment as a result of the programme.

Senators will note that the Bill provides for retrospection of the programme to 26th June, 1976, on which date the original programme expired. I am anxious to avoid any interruption of payments to employers which might be occasioned by possible delay in enacting the new legislation. For that reason, I would urge the House to give this measure a speedy passage.

I commend the Bill to the House.

Mr. Lenihan

Of course, there will be no opposition to this Bill. I should like the Minister not to have clothed it in such grandiloquent terminology as a strategy to end unemployment or anything of that kind. Let us be realistic. This is a very necessary stop-gap measure in a very serious state of economic recession to prevent further disemployment. That is what it is about. In so far as it is about that, we welcome it as a limited attempt to deal with a problem, particularly in the areas of the manufacturing industry such as textiles, which the Minister has mentioned, where 2,000 people have been prevented from being disemployed.

In so far as it prevents further disemployment—and it has to the extent of the Minister's figures of 5,000 people over the past 12 months —this Bill is, of course, welcome. It in no way grapples with the massive problem of continuing unemployment which now appears to be stabilised between 110,000 and 120,000, averaging out over the year. It does nothing to deal in particular with the main sector of male unemployment which is in the building and construction industry with which neither this Bill nor the existing Act deals at all. It completely ignores the major employment industry in the country, an industry giving male employment, in particular and which is an absorber of about 70-75 per cent of home materials.

The building and construction industry is completely untouched by this legislation. In my view, that represents a massive gap in the Government's strategy to deal with unemployment, and I am using the Minister's own phraseology. Had the Minister confined himself to the purpose of the Bill, I would not go into this broader area; but the Minister in his introductory remarks did go into the broader area of planning to deal with unemployment. This is not planning to deal with unemployment. This is a limited measure to deal with disemployment in certain areas that have been affected by our economic recession, certain manufacturing areas and, in particular, in the textile field. Some other manufacturing areas have benefited from it.

The whole broad area of services is excluded. The hotel industry is excluded and, in particular, the industry that will really give a fillip to our economy—the building and construction industry—is not included in this Bill and has so far not been referred to by any Government Minister in regard to whatever strategy they may have to deal with unemployment. In our sort of economic situation this is the industry that needs the injection to get the economy going. It is an industry that can be injected, whether by way of grant, loan, finance, tax incentive or remission and yet not do harm to our balance of payments position because of the high home-produced and manufactured content involved in all the various materials and ingredients that go into the building and construction industry, directly, and indirectly in the various ancillary industries involved in the production of modern homes.

Having said that I want to again emphasise that we will give this Bill a speedy passage. It is necessary until the end of the year. I should like to fully support the Minister in the sort of public relations drive that he proposes to put into it, to bring home to employers the fact that this £15 a week grant in respect of extra employees is something practical that they can avail of, that it obtains until January next. It is no harm to have that time limit even though I would hope that, if the serious unemployment problem is still with us in December—and, unfortunately, it looks likely—the Minister would come in with legislation of this kind again. That would be my hope. I still think that the time limit incorporated in this legislation is a good idea because it does bring home to people the urgency of the matter; it brings home to employers the importance of getting on with it now, because it may not be there after January 6th.

I fully support the Minister in every effort that he and his Department may make to bring home to employers the importance of making use of this scheme, the importance from their own point of view by way of a practical benefit, the importance from the point of view of their employees, and the limited help it will give the economy. But let us keep this in context and in perspective. It is a very small stop-gap measure to deal with areas of disemployment within the limited field of manufacturing industry and does not get down to the real root of the economic problems that beset us.

Dr. West

I also support this employment premium measure as I did when it was introduced some time ago. It is a useful scheme which has been operated with success in other parts of the world. I find it hard to judge from what the Minister has said how successful, relatively speaking, it has been in Ireland. The Minister has given us a figure indicating that over 5,000 people have been re-employed under this programme to date. I do not know what his target figure was when——

Mr. M. O'Leary

Ten thousand.

Dr. West

So it is about half of what was the target. I have no doubt that it is a worth while scheme. We have got to push it on, give it the maximum amount of publicity and do everything we can to get employers and the organisations involved, the trade unions, trade councils and so on, to realise the benefits and to utilise the scheme and the money available.

I have to take issue with the Minister in another part of his speech where he paints a glowing picture of the prospects of international recovery. But I notice that he does not depart from the international scene to talk about the prospects of Irish economic recovery. An international economic recovery would help our economy but in this morning's papers there is the gloomiest forecast yet of our economic prospects. One of the things that both Government and Opposition should start to do is to cut out some of the political play-acting that goes on—one can say this as an Independent—and talk in more realistic terms about our situation.

Mr. Lenihan

Hear, hear.

Dr. West

That applies to the Opposition just as much as to the Government. In a recession period it is probably easier for an Opposition to talk, but I would ask the Opposition to refrain from the wilder type of political allegations——

Mr. Lenihan

I have been talking about the building industry for years and if that is not constructive, I do not know what is.

Dr. West

——and try to stick to the figures. One cannot place entire reliance on the forecasts, even forecasts from bodies with such repute as the ESRI. Their forecast this morning for the remainder of the economic year is so gloomy as to almost put one in a permanent state of depression with rates of inflation now anticipated to exceed 18 per cent and perhaps 135,000 people jobless and so on. If I may quote one phrase of an article by the economics correspondent in The Irish Times of today:

... "faced with difficulties which seem to be insurmountable" and that the goals of economic policy— lower inflation and higher employment—"seem further from realisation now than seemed possible six months ago".... The ESRI's message therefore is that the economic recovery is over almost before anyone knew it had begun.

Those phrases would depress anybody. I do not want to be a prophet of gloom but I would ask for a bit more realism when Ministers come into the House, spelling out the prospects of an international recovery. Then one of the major institutes in the State on the very same morning predicts the prospects of something totally different taking place here in the next six months. However, forecasts are only forecasts and one hopes that we will do better than this. As an Independent it does hurt me to hear this constant emphasis that the boom is just around the corner and then read something like this in the daily papers that it is further off than it ever was.

I should like to ask the Minister one other substantive question. During the Second Stage debate on the Principal Act I referred to the scheme operated in Canada. The Minister's Department showed some interest in this. The employment premium scheme in Canada is operated by a civil servant who is an Irishman whom I happen to know very well. He is a fellow countyman of the Minister's and myself. I went to some trouble and got a great deal of literature and information for the Minister's Department which I sent to the Department of Labour for comparative purposes. I should like to know if the Minister's Department consigned this collection of literature to the waste bin; if the Minister himself has ever seen it; if he has ever made any comparative study of the situation in Canada; if any of our people have looked at the employment premium programme as operated in Canada.

It is a rather different scheme but certainly one that is worth while. It is a scheme directed specifically towards smaller industries in outlying areas. Its area of operation was restricted. It was specifically designed to increase employment in the less well off regions in Canada. Therefore, it was a scheme rather different in its scope from the one we are trying to operate here. It is full of ideas which are readily applicable in Ireland's case. I went to a lot of trouble to get this information and passed it on. I wonder if the Department, in their wisdom, have ever bothered to consider any of this information, to assimilate it, make comparisons with the Irish scheme, or to investigate how some of the Canadian ideas could be fitted into the Irish context.

Mr. Yeats

As Senator Lenihan has already said, we welcome this Bill. We welcome it without any undue enthusiasm because—as we pointed out when the Principal Act was going through last year—this is a limited measure which would, in any event, be limited but which is still more limited by the narrow way in which the Principal Act was framed. I suppose one should make what seems to be a perennial complaint about the legislative programme of this Government; one gets tired of saying it and perhaps people get tired of listening. Yet again we have the situation that this Bill is introduced five days after the previous Bill had expired. The Minister says he will make it valid retrospectively so that nobody will lose out. One wonders why, when it has been clear for the past 12 months that the Bill was due to expire on 26th June, 1976, it is necessary to wait until five days after that before coming into the Seanad with this Bill. It seems to be quite impossible for Ministers of this Government—and, mark you, the Minister for Labour is one of the worst offenders—to introduce Bills in time and have them processed in any kind of reasonable manner. Indeed, there are a couple of important Bills of this Minister hanging around—one in the Dáil and one in the Seanad—which have made no progress for the past ten months or so.

One can only marvel—as indeed Senator West has already marvelled— at the manner in which the Minister introduced this Bill today. Anyone coming to this country from Mars who, on his first day of arrival was forced to listen to the Minister introducing this Bill in the Seanad, would have come to the conclusion that whatever problems any other countries might have we, in Ireland, were sailing ahead in an optimistic way with things improving, unemployment falling and, generally speaking, an attitude that all is well in the world. But Senator West pointed out, it is unfortunate for the Minister that, on the morning that he comes in with this wildly unrealistic and over-optimistic speech, he is shot down— even if he needed any shooting down though I think everyone realises the position without it—by the report of the Economic and Social Research Institute which deals with the state of the country in a more gloomy fashion that I personally can ever remember a State body of this kind doing. Even the Central Bank in its most gloomy days never used some of the phraseology that this institute now uses.

The phrase "almost insurmountable" is one I have never seen in an official document, and one marvels and is appalled to see it. Indeed, reading the details of their submission, one feels that whatever about the phraseology, the actual facts they produce are in no way exaggerated. When they say, for example, that inflation this year is going to be 18 per cent, in view of the fact that for the first six months of the year it has been running at 14 per cent, that figure is certainly the least one would expect. I think we will be lucky to get out of it as easily as that.

Nonetheless, in spite of the gloomy facts that present themselves, the Minister has succeeded in preserving an invincible optimism, even to the extent of suggesting in his speech that the pattern of unemployment here is now more closely related to that of the EEC rather than Britain which was traditionally the case, at a time when our percentage unemployment is between two, three or even four times that of the continental members of the EEC. What is the point of producing this kind of completely inaccurate information?

One of the great problems from the start with the Principal Act we are amending today was that the target date for the industries concerned was fixed like a kind of lottery. In other words, the position was and remains that an industry could only benefit from these premiums if it took on workers in addition to the number that were employed on the 20th June, 1975. In other words an industry that was doing well on the 20th June, 1975 and has since then fallen on evil days and has had to let off workers and would now like to take on additional workers can in no way benefit from the provisions of this Bill. It is a purely notional date, a kind of lottery and one wonders why the Minister did not at least update it to, say, instead of 20th June, 1975, let us take 20th June, 1976 which would have more relevance to present-day conditions. Under this Bill an industry that since then has suffered economically and has let people off cannot benefit from these premiums. Of course, the number of unemployed is now greater than this time last year. Therefore industries have had to let off workers since then but this is not provided against in the Bill.

The Minister speaks of the increase in the premium to £15 a week and talks about the increase in the amount of the weekly premium to £15, helping to make the scheme more attractive. As I understand the position, he raised the figure last April, by order, under the Principal Act, from £12 to £15 which, of course, did little more than cover the fall in the value of money since then. The position now is—as he told us in the previous sentence, having said that the scheme had been made more attractive by the raising of the amount to £15 which apparently he had forgotten by the time he got to the following paragraph —that the second phase rate, which is being increased from £6 to £7.50 per week, will apply from the 19th September, 1976. In other words, at the same time as we are told that the scheme will be more attractive because the premium is going to be £15 instead of £12, we are told that from 19th September next, immediately after the summer holidays, the figure will be cut again to £7.50.

In view of the need to persuade industry to take on workers, one wonders, indeed one marvels, as to why it is necessary to cut the figure to £7.50 in September. Surely it would be more sensible to keep the increased amount of £15 because, whatever attraction the scheme may have now, obviously that attraction will be halved as from 19th September next. One must bear in mind that, according to the Economic and Research Institute, there is going to be a very heavy increase this autumn and winter in unemployment, up to perhaps 135,000. These unemployed are going to be helped by only half the rate of premium available up to September. One wonders at the reason for this. One can guess at the reason but certainly, other than a purely financial budgetary one, there does not seem to be any point to it at all.

Indeed, one wonders why this scheme has been only extended briefly until 8th January next. In the circumstances it would appear that at least 12 months' extension ought to be brought in. We have now had over 100,000 people out of work for a year-and-a-half, week after week consecutively. There is absolutely no reason to believe that between now and well into late spring next year, perhaps even later, the figure will fall below 100,000. In these circumstances one wonders why such a brief extension of the Bill is being brought in. I know the Minister may say that he can come back in January with another Bill but it would appear, in all the economic circumstances, that a 12-month extension is the least that ought to have been implemented.

I am very puzzled by the figures the Minister has produced for the cost of these schemes and the number of people involved. As I understand them, he says that approximately 5,000 people have benefited from these premium payments. With regard to that 5,000 it will be interesting to know from the Minister if he has any information as to the number actually taken on on foot of the Principal Act, on the operation of the premium scheme and the number that would have been taken on anyway. Obviously some industries would take on workers irrespective of the premium and they can benefit from it. One wonders what has been the actual net increase in employment as a result of this Bill, whether the Minister has any information about this.

There is another point that puzzles me considerably. The Minister says that about 5,000 people have benefited and that getting near £750,000 has been spent. I have done a rapid calculation and, as near as I can make it, that means that the average payment per worker has been approximately £144-£150. In other words, the average number of weeks, if one takes an average of £12, in which these premiums have been paid is about £12. This scheme has been in force just over a year now. Therefore, how can it be that the 5,000 employers benefited, on average, from these premiums only 12 weeks per worker? Does it mean that employers are taking on workers, getting the permium, letting them go and then in due course taking on further workers? I would be interested to hear from the Minister with regard to that.

Although it is unnecessarily limited, this Bill is potentially a useful one and we are certainly not going to hold it up.

Mr. Harte

I agree that all possible efforts must be made to assist the employment situation in these very difficult times. That does not mean to say that we believe that this is the panacea for all ills. In fact, one could describe it as something similar to the Fóir Teoranta Bill we discussed yesterday, a sort of rescue operation. It is clear that the only reason that makes necessary any piecemeal legislation of this nature or of the type we discussed yesterday, is the fact that there is a recession. That is what justifies it to a large extent. Fianna Fáil, the initiators of Fóir Teoranta, saw that this type of operation was very necessary. They engaged in employing similar measures over the years to deal with unemployment problems. They did so at one stage when we had 76,000 unemployed and we were considered to have never had it so good. The idea of incentives, inducements and rescue operations is nothing new; it was, in fact, inherited and has to be pursued because we work within a system that is mainly supported by both sides of the House, the private enterprise system. This seems to influence the policies and approaches that we make. One wonders if this type of piecemeal approach even in Fianna Fáil's time could not be considered by a lot of deep thinking people, particularly in the field of economics, as schoolboy adventures into the realm of economics and is not really tackling the problem of unemployment in general.

I am not referring just to the present situation. I am mentioning this in the context of the system we work in and the system we inherited and the means by which we deal with problems within that system. This is the means by which it has been dealt with over the years. We can talk around it but that has been the practice; there was always the need, because of the system, to have this kind of rescue operation and the lifebuoy being thrown out every now and again. It would be interesting to know how far those who have what I consider an unwarranted confidence in the private enterprise system to solve all our problems would be prepared to go to support a detailed economic plan, supported by socialistic legislation—socialistic in its content. We would have a different kind of an argument if that was the case. That is not a condemnation of the private enterprise system, it is an indication that this is the way it functions, works and is approached. I do not want this to be taken as sarcasm, but the nature of the private enterprise system is that jobs go out of existence. For example, a boy who wants to be a tram driver might find that the trams have gone out of existence when he grows up. That is the nature of the system.

In close on 60 years of our own activities under the private enterprise flag we never have been in a position where any detailed economic plan was put forward outlining full employment. We had programming and a lot of attempts similar to this. We had rescue operations because the system does not lend itself to considering in detail any long term plan of a detailed economic nature. We go for this other kind of system and, therefore, a person like me has to accept the inevitability of working within that system and support it as best I can when it is in difficulty. That is the basis on which I would support the Bill. It is necessary and I do not think anybody can say it is not welcome in the present circumstances. We should bear in mind that if somebody makes an attempt to solve the problem in another way, by having legislation that is socialistic in this content, we might have a different reaction. I take it the Bill is welcome for the good reason that the only way the advocates of the private enterprise system have been dealing with the unemployment situation over the years is by the same method, by public expenditure, grants, rescue operations and piecemeal things to get over the current problem. That is the system we are working, and until such time as we get around to stronger socialist legislation we are going to have this problem and we will all support it.

Dr. Martin

I agree with Senator Harte that the basis of our problem here is a collision of interest within the Coalition. If we had an all out socialistic attack on our problems there is a chance that we might have a consistency. I am not pleading for it, I am not a socialist and I do not particularly believe in it, but if there was a consistency of approach towards the unemployment problem which this measure seeks to alleviate, it is possible that this benighted economy of ours might begin to recover. Or, if we had the application of a consistently free enterprise philosophy towards it there might be the chance that it would recover.

The trouble seems to be that the Government are going in two directions at the same time and also trying to convince themselves that they are moving forward in a unified way. The pronouncements by Professor John Kelly, on the one hand, and former Senator Halligan, on the other, are in total collision. It is amazing that this is not acknowledged. This Coalition Government is in serious trouble ideologically. This measure is good. Everything about it is good, but it dramatises for any of us who read the papers the state of despair and doom that grips the commercial, industrial and economic life of the country at the moment. It is not going to change that. Several Senators have said that it is merely a piecemeal job, a stop-gap job. It is a kind of a plaintive cry for sanity and a compassionate gesture of help in a situation where the Government are becoming increasingly impotent in a situation where we have a small country which should be manageable enough, where we have daily this clenched confrontation between management and trade unions while Government Ministers plead, look on and hope for the best, and then, in despair, introduce measures like this.

What does it do? The State will pay a subsidy of £15 per week to an employer for additional employed workers taken on over and above the number employed as on 20th June, 1975—that against the background of Gouldings, for instance, going into liquidation. In other words, 300 or 400 workers are going to be unemployed so the taxpayer has to take them up. They have to be paid unemployment benefit and if they are re-employed the taxpayer pays £15 towards their being re-employed. Of course that is an advantage; it is better than having them unemployed. It means that at least they will be earning money and that money will be taxable.

I am not blaming the Government because what seems to be happening to the Government is what happened to Governments elsewhere: they have become increasingly impotent, they can do nothing; they are not governing any more. The Government of the country has fallen into the hands of the trade unions, on the one hand, and of management, on the other. I would not put all the blame on the trade unions, but, certainly, it was an exemplary sight to see in England, when Chancellor Healy brought in his last budget and made his appeal to the trade unions, how they came to heel and helped. The situation in the country began to improve. Is it possible that the Labour element in the Coalition have any influence on the trade unions as such?

An Leas-Chathaoirleach

I am not sure that question, directed through the Chair to the Minister, is very relevant to the Bill.

Dr. Martin

It is not very relevant, indeed. It is because the Leas-Chathaoirleach is such a distinguished member of the Labour Party and so skilled in these matters that I yielded to the temptation of putting the question.

An Leas-Chathaoirleach

The Senator should always resist temptation.

Dr. Martin

It would have been the more correct approach to put it to the Minister directly.

I do not intend to make any heavy weather of this in weather which is already excessive, oppressive and heavy. The Coalition should take a look at itself and the manner in which it is divided between two philosophies with regard to employment and see this Bill as a symptom of goodwill. Are the Government trying to do the best they can? They are divided internally, at war with themselves and involved in a community where social and industrial confrontation and a damnable determination not to co-operate on any level is really wrecking us. The Bill is a good Bill. I sympathise with the Minister; he is doing the best he can. Seeing it against the gloomy backdrop of our present economic situation, one can only see it as a well meaning and extremely limited operation.

Mr. Butler

I did not intend speaking on this Bill but having listened to Senator Martin, one would think we are living in a perfect world. One would think that every person was equal to another and that when decisions are made those decisions can be carried out fully. We are not in a perfect world and this country is a small portion of that imperfect world. Therefore we cannot have a perfect system, and anyone who advocates a perfect system must be more foolish than those he has condemned. I welcome the Bill because it gives an opportunity to industry to increase its workforce. That is the whole reason for this Bill: to encourage industry to take on those who are on the unemployment list, something that is needed at present.

We have a substantial unemployment problem, like the rest of the world. When we look across the water we see the unemployment problem there and the encouragement Conservatives and Socialists and all other grades are giving. Yet that has no great influence on the reduction of the unemployment figures in that country. We know the problems in America. Theirs is not just a national problem it is a world problem. We can condemn the Americans for putting themselves in that position, but we must speak of our own country. This excellent Bill has been introduced by the Minister to encourage industry to employ people who are on the unemployment list. When the Bill is passed we should encourage industry to reduce the unemployment list.

Industry is not just a group of one section of people, but a group of all sections, conservatives, socialists and trade unionists working together. If they work together we will have better industry. We should not knock one section without taking into consideration what affect that condemnation has. The trade unionists recognise the problems and I hope they will make the right decision next week. I am a member of a trade union and still a member of a conservative party. That can happen, and in our party we have members of a trade union who would be socialistic in certain ideas and conservative in others. I see no conflict there. I was brought up in that field; my family belonged to trade unions and, at the same time, we were conservatives in our ideas. I could not understand the case Senator Martin was making.

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

I thank Senators for their reception of this measure here. In one sense any piece of legislation can be regarded as piecemeal. I do not make the claim that this legislation constitutes an effective answer to the present large-scale unemployment we suffer from in any circumstances.

When Senator West asked if this had fallen from target, I explained to him that the original target figure for re-employment under this programme was 10,000. We have achieved only 5,000. Had we achieved 10,000 it would not in itself have constituted an effective answer to the problem of unemployment facing our economy. Indeed, it is a debate that belongs to a wider scale of reference than we have in this Bill. We have not throughout the 1960s or in any part of the 1970s achieved anything near the target. We have not succeeded in reaching that figure of 25,000 new jobs per year. As Senator Harte said, perhaps a socialist answer might improve matters. Perhaps it would. I believe from my own politics it would, but it is a fact of life that the society we live in gives only a certain amount of support to socialist answers. That means for socialists that we must co-operate with others as we do now in this Government. It means also that we must address ourselves to the realities of the society that exists around us.

Reference was made to the ESRI report this morning and Senator Yeats contrasted the gloom of that report with the optimism of my speech. Perhaps, Senator Yeats sees optimism where I do not, but it was legitimate to point to certain hopeful signs in our economy—with of course certain cautionary remarks about the future.

Certainly, I would place a great deal of emphasis on the fact that, if our industrial costs are not kept down, unemployment will go up. That follows as dawn follows night. There is no doubt about it. If our industrial costs continue to rise more and more investment in this country will be based on capital replacing labour. There is a very close connection between the kind of incomes we award ourselves and the number of jobs that can be provided in our economy. This is a problem that will not be settled this year or, perhaps, not even next year. Certainly it was not settled throughout the 1960s. When the ESRI report today comes to the conclusion that only statutory incomes control can settle the matter, they know, just as all other Administrations know, that that answer is neither effective nor desirable.

This is a question to which our community will have to address itself to again and again before there is any satisfactory answer to the question of providing adequate employment levels in our community. The position is that the Irish community, in its behaviour on the profit and incomes side, does not appear to be conscious of the connection between the kind of incomes we award ourselves and the effects that may follow for good or ill on employment. That belongs to a larger debate and we do not have the basis in the debate on this limited measure, to go into that.

We have improved the terms and this should lead to employers utilising the scheme more. To revert to the economic situation and the grounds for some encouragement in our economic situation, there has been an improvement in our export position in the first quarter of this year. The gloomy parts of the ESRI analysis are based on their prediction of a falling consumption pattern. If they are right in that prediction, then other parts of their analysis would appear to be correct. They admitted in previous publications that they have been wrong in their predictions. I cannot be accused of selectivity if I suggest that I treat that report with some caution in its gloomier passages. I agree that, unless industrial costs can be kept down, undoubtedly the improvement in employment will not take place. Without a recovery in the economy no scheme of this nature can close the gap. I do not claim that this scheme or any other scheme on its own can do so. This is a limited response for those industries that have been most grievously affected by the recession.

Senator West referred to the Canadian scheme. I must tell him that I do not recall his own communication with me and I will certainly investigate it. Perhaps it has been lost.

Dr. West

It was massive. Straight into the wastepaper basket.

Mr. M. O'Leary

I will investigate what happened to it.

Dr. West

Perhaps, the Minister could award a premium to anybody who can dig the papers up. It would take them three weeks.

Mr. M. O'Leary

I should tell the Senator that, whatever about the fate of his communication, which I will certainly investigate, we have closely investigated the Canadian scheme and other schemes. There are differences. Their scheme was based more on young disadvantaged people and I would see more similarity between the Canadian scheme and our own community youth project scheme. The scheme before us is designed not for any social group but crudely as a response to certain industries which have been badly affected during the recession.

I said we did not achieve the first target of 10,000. I hope that, if the consumption pattern we have seen so far this year is maintained throughout the rest of this year, we should see employers here availing more freely of the scheme than they have in the less expansive position that obtained when the scheme was first introduced. Because of that I am moderately hopeful that the targets can be improved upon up to the period of January.

In reply to Senator Yeats' query about whether the rates coming down in September adversely affect it, we can always look at this and vary the rates. We have the flexibility within the scheme to keep the rates at their top level and to extend the top level rate, in consultation with the Minister for Finance. We can and will do this.

Senator Lenihan raised the point about the exclusion of the construction industry. That has been excluded, as has the service industry. The construction industry is already in receipt of very heavy grants from the Exchequer and the appropriate assistance for the construction industry is, of course, through these capital measures announced in the budget. That is the way to assist that industry and that has been done.

Mr. Lenihan

That is the trouble. The capital measures have not increased in real terms.

Mr. M. O'Leary

They have. At any rate, that is the appropriate measure of assistance for the construction industry. This scheme is administratively impossible in the construction industry. I looked at it very frequently to see if it could be applied there, but it is quite impossible because of the subcontracting features of that industry, the diversification of a firm's interest between different sites, the high degree of inter-firm mobility and the seasonal nature of the industry. All those factors make it impossible to apply it.

With regard to the exclusion of the service industries, service has not been the area most grievously affected during this recession. It has been the industries like textiles and footwear which have been most affected and it is towards them that this scheme has been directed.

Senator Yeats referred to the arbitrary way we had selected a base level date and said that was unfortunate. I can tell him that, in the circumstances of firms who were able to give us a case for extra workers coming on just before the base date, we have been extremely flexible and we will continue to be flexible.

I commend this measure to the House.

Question put and agreed to.

Agreed to take remaining Stages today.