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Seanad Éireann debate -
Thursday, 20 Oct 1994

Vol. 141 No. 3

Long-Term Unemployment Report: Statements.

The spokesperson from each party has 15 minutes while other speakers have ten minutes.

I welcome the opportunity to debate this report. I am particularly looking forward to hearing the views expressed by the Senators on the contents of the report and the subject itself — long term unemployment. I am especially pleased to see two members of the forum, Senator Henry and Senator O'Sullivan, here.

First, a word about the forum itself, on which I am the Government's representative. The National Economic and Social Forum is different because, for the first time, representatives of the unemployed were invited to sit around the same table as the so-called "social partners", employers, trade unions and farmers who have traditionally been part of the concept of the social partnership. It is also different in that what is known as the "third strand" has actively set out to represent the views of those normally excluded — the disabled, travellers and women, and they are members of the forum. It is different because Members of the Oireachtas join with the traditional social partners and the third strand. This report represents a consensus of their views.

The forum's highest priority is to examine the problem of unemployment in Ireland and in that context, the delivery of its fourth report, "Ending Long-Term Unemployment", was particularly welcomed by the Government. At the time of its publication, the Tánaiste, Deputy Spring, said the report would not be left on the shelf, and it has not been. A high level group made up of senior civil servants and people involved in local community development have already been meeting to examine ways in which the report's recommendations can be best implemented. As the report says, it deals with the nuts and bolts and puts flesh on the bones of the forum's recommendations. In particular, the report's recommendation to establish a locally based employment service is being explored.

This high level group has been charged with producing a report by the end of November and that is witness to the Government's commitment to ensuring that the views of the members of the forum are taken on board and that the forum itself is taken seriously.

Long-term unemployment is a major problem in Ireland — I do not need to tell Members that; the figures speak for themselves. Out of 135,000 people who have been out of work for more than a year, 65,000 of these have not worked in the past three years. That represents 10 per cent of our labour force.

Ireland has the highest rate of long term unemployment in the OECD. To put it in stark perspective, our long term unemployment rate is greater that the total unemployment rate in most OECD countries. On the other hand, short term unemployment in Ireland is almost the same as other OECD countries, suggesting that we have normal turnover and job replacement rates. Some 30,000 jobs change hands in Ireland every month, but studies have shown, and we also know from experience, that the long term unemployed are not considered for vacancies that arise. If one is out of work for more than a year, one has a much greater chance of remaining out of work. The figures show that those who have been out of work for more than a year have an 80 per cent chance of being unemployed at the end of the following year.

Long-term unemployment affects men more than women but the rate is increasing faster among women, reflecting the increasing number of women re-entering — or not leaving — the labour market in recent years. Of course, the figures for women do not give the full picture as many are not registered as unemployed. Indeed, a majority of the 44,000 lone parents, 70,000 dependent adults and many of the 28,000 on disabled persons maintenance allowance are women and as the forum's report notes, many of these women are effectively unemployed.

Long-term unemployment has hit hardest in local authority areas. Indeed, 80 per cent of tenants in local authority housing in the greater Dublin area — the picture is similar around the country — are families where there is no income from employment. Almost two-thirds of long term unemployed are heads of their households. There is also a close relationship between employment rates for husbands and wives where one partner is unemployed. If one partner is out of a job, the chances are that the other partner will also be unemployed. These are harsh facts and stark statistics, but behind each one is a story of an individual, a family or a community effectively excluded from playing their full part in life.

There is the individual cost of long term unemployment but there is also the price we all pay. Unemployment is the single most important cause of poverty in Ireland today. The cost of unemployment to the State in 1993 was £2.16 billion, or 7 per cent of our total GDP. These figures do not even begin to take account of the indirect costs which include higher usage of health services, greater psychological distress and higher crime levels among the unemployed.

We as a Government and we here as Members of the Oireachtas have a responsibility to those left outside by unemployment, poverty and disadvantage. We have a responsibility to communities in urban and rural Ireland which have been blighted by unemployment and poverty. In particular at a time when the economy is doing well, we have an increased responsibility to ensure that those left outside, now get a chance to share in economic prosperity. We can only achieve this by active intervention. It is now widely accepted that the rising tide — and indeed the tide is rising at the moment — does not lift all boats, that economic prosperity does not reach those who need it most.

It must also be accepted that we have not been doing enough to tackle long term unemployment, or at least that our strategies have not been the best ones. There is no shame in re-examining our approaches, in looking for new solutions, better ways of tackling what often seems an intractable problem.

The forum has come up with more ideas and the high-level group I talked of earlier is looking at them, in particular the notion of an employment service. The forum has suggested, and I agree with them, that the most important policy objective must be to provide employment opportunities for every citizen who wants to work.

The ending of long term unemployment is the ambitious target suggested by the forum to counter the current air of defeatism. They point out that in the early 1980s the public finances appeared to be in a hopeless state. Since then we have taken firm policy decisions based on social consensus which have led to a dramatic turnaround. If, similarly, we put the issue of long term unemployment at the top, we can begin to use our human and financial resources to tackle this problem, which is one that can be solved.

In arriving at its optimistic target the report identifies the key to the problem. This key involves preventing more people becoming long term unemployed while helping those currently long term unemployed to escape the trap. In doing this they believe that long term unemployment could be reduced to 20,000 by the end of the century.

The forum specified a number of approaches. Firstly, we know that today's early school leavers tend to be tomorrow's long term unemployed. Obviously, that is one important intervention. Secondly, we need macroeconomic and structural policies that provide more jobs in the economy. That is happening. This year we have seen a reduction in the live register of over 14,000. The economic forecasts to the end of the century are very good. Our task is to ensure that the long term unemployed get a fair share of those jobs that are becoming available and of the jobs — some 30,000 a month — that become available through normal job turnover. The third issue highlighted by the forum's report is the prevention of long term unemployment, and the fourth is reintegration of the long term unemployed.

The forum's main recommendations are early intervention strategy in the education sector, and that is already happening. Resources, freed up by the falling birth rate, are being retargeted at schools in disadvantaged areas whose pupils are most likely to lose out unless we intervene. The report recommends an employment service targeted at what needs to be done to build up the skills and confidence of people who are unemployed as well as what we need to do in talking to employers to get them to take on the long term unemployed. It recommends separate purchase and delivery of training, education and employment options and the linkage of training to jobs. It also recommends provision of temporary job placements in certain circumstances as well as revamping community employment and increasing the demand for labour of the long term unemployed.

The forum proposed that "a national, comprehensive, locally based employment service should be put in place". Available to all employed, unemployed and lone parents, it would tackle both prevention and reintegration issues. It would act as a gateway to all employment and training programmes and establish links with local employers as well as mediating on behalf of clients. It would be based on a ratio of one mediator to every 125 unemployed persons. Registration, as envisaged by the forum's report, would be voluntary.

In our experience of the area-based partnerships we have seen how crucial the support and commitment of local employers is to the success of locally based employment services. They must be involved and committed at both local and national level in the design and administration of the service. The involvement of trade unions is also indispensable.

The service has to be delivered at local level so that we can start with the needs of unemployed people themselves and match those to what jobs are available. We need to look not at what skills the unemployed lack but also at the skills that they have. We need to look at traditional job descriptions and see what the components are that make up those job descriptions and build on the potential that our long term unemployed have. That has to be done on an individual basis. One of the things that is highlighted in the forum's report is how our conventional approaches are missing a majority of the long term unemployed. If we are serious about tackling the problem we must bring them into the picture.

In the area partnership areas the forum anticipated that the service would be provided by the area-based partnership company or a unit thereof. In other areas similar structures might be put in place. For example, we have already seen in the Northside partnership the great success there has been in placing long term unemployed people through a partnership with local employers. In building up the skills, confidence levels and giving the job experience, both sides see the pluses that are involved. Last year over 400 people who were long term unemployed were placed by, for example, the Northside area partnership in Coolock. There are other examples of that kind of locally based employment services working around the country. The task of the high-level task force is to build on those experiences that are working well and to try to apply those lessons on a nationwide basis.

The forum recommended that a group such as that which has been set up should look at the resources currently available in areas like FÁS and the job placement services of Social Welfare to build on what is there and what is working. The forum also recommended that the employment service should have the autonomy and resources to carry out its functions.

The proposed employment service would give priority to those unemployed for six months or more. The mediator and the client would meet and discuss an action plan to get the unemployed person back into employment. The thrust of the service, as envisaged by the forum, is moving the emphasis away from a service which is focused on the providers to one that is focused on the needs of the customer, the unemployed person themselves.

For people unemployed for between six and 12 months this service would be obliged to offer an option which prevents that person becoming long term unemployed. This is based on the belief that those who are unemployed for more than a year end up becoming long term unemployed and find it difficult to escape from the unemployment trap. So if we stop the flow into long term unemployment, we can substantially solve this problem of long term unemployment.

While the focus of the employment service would be to find jobs for the unemployed, other options, such as education, training and temporary employment experience, will also be required. Therefore it is essential, in the forum's view, that this service is in a position to offer an acceptable option to an unemployed person and that they must not be confined by the supply of places available through FÁS and other agencies. The mediator, in consultation with the client, must be able to choose the best and most relevant option. Such an option would require a reallocation of resources to the employment service. The central message of the forum's report is to put the unemployed person centre stage rather than the service deliverers. The forum points to the success of the counselling route in various international studies and to its endorsements by the EU Commission White Paper and the OECD's job study.

An employment service will be the key to the integrated operation of all aspects of active labour market policy, including an overall strategy to prevent long term unemployment. This service shifts the focus of policy to a demand driven approach based on the needs of the unemployed rather than an approach driven by the supply of places on programmes. The long term aim of this service would be to help to ensure progression across the various options. By working closely with employers it can break down resistance to employing the long term unemployed and it is cost effective.

However, this is not the only strategy proposed by the forum. The forum has already made recommendations last year about macroeconomic and structural policies to help create more sustainable employment and thereby reduce overall unemployment. Many of these were implemented in the Programme for Competitiveness and Work.

As I have already said, the forum has drawn attention to the importance of applying the demographic dividend of falling schoolchild numbers to target those most at risk of early school leaving. Those children are more likely to enter the ranks of the long term unemployed than any other group in Irish society.

Targeting such early interventions is essential. There is no great gain for those most at risk if we merely reduce the pupil teacher ratio by one or two across the board. It is far better to concentrate resources on children in disadvantaged areas who have traditionally left school as soon as possible due to the lack of support in their environment, peer pressure and limited options and facilities.

Overall, the forum's report contains an integrated package which addresses the main causes of this country's long term unemployment problem. The proposals deal with both supply and demand side dimensions. On the supply side, recommendations deal with the prevention of long term unemployment and the improvement of the skills and general employability of the long term unemployed. It is also felt that direct advocacy with employers will improve access to the labour market for the long term unemployed. As I said, we already have experience of that happening on the ground. The forum's recommendation on the employment service is a key to this underlying approach for bringing the long term unemployed back into the labour market. On the demand side, the forum's recommendations seek to directly provide jobs for the long term unemployed and indirectly increase private sector demand through ongoing reforms in taxation and PRSI systems.

I wish to acknowledge the tremendous degree of hard work put into this report by Professor John O'Hagan, the members of the forum's employment and economic policy committee and the forum secretariat. I also thank the Senators who are members of the forum.

This report is, and will continue to provide the Government with, a very useful analysis of the problem of long term unemployment. However, more than that, the report provides options, a set of possible solutions and a number of new ideas which are deserving of immediate and serious examination. That is being undertaken with the greatest of seriousness by our high level task force. The outcome of the task force's preliminary report before the end of next month will be considered in the context of this Government's overall strategy for integrated development and for putting long term unemployment at the top of the political agenda. This strategy recognises the creation of sustainable jobs as our number one objective.

Second, we need to develop the capacity, confidence and skills of local communities to ensure that the people who live in them can compete on a level playing pitch for available jobs. We also recognise the need to facilitate and provide resources for the involvement of local communities in the development of their areas. I made that a cornerstone of the national plan.

Third, we must continue to ensure that those who for so long have been outside the consultative process now have an opportunity to have a real input into policy formulation. We are listening to the voices of local communities and responding to them. The forum itself is a concrete example of this policy in action.

We have brought the unemployed, representatives of the disadvantaged, the traditional social partners and Members of the Oireachtas of all shades of political opinion to the table. This report on long term unemployment represents that powerful consensus across Irish society on practical measures which we can take to tackle long term unemployment. I look forward to seeing these recommendations put into practical effect.

I welcome the Minister, who is a member of the forum, to the House to discuss the forum's report. I am pleased that the Seanad is discussing this very important report and that the Minister has spoken so positively in relation to a number of aspects where the Government has already taken and intends to take more positive action on the report's recommendations.

As the Minister has said, this forum was established for a variety of reasons. In particular, the social and economic policy committee of the forum, of which I am member, when addressing which issues to examine, decided that the issue of long term unemployment was one of the most serious problems in this country and one of the most important tasks to be faced by this or any future Government and that unless very direct and clear policy changes were made, this problem would not be resolved.

The forum has made recommendations in its report, some of which may be considered quite ambitious and revolutionary, given the existing structures. However, it must be pointed out that unless very definite and decisive policy changes are made, this problem will not be resolved. In examining this we recognised that in the early 1980s there was a very serious economic crisis in this country. If it was not for very positive economic policies under the leadership of the then Taoiseach, Garret FitzGerald, our economy would not at this stage be on a sound footing. We felt that unless the public, the Government and all those who deal with the unemployed recognise that a drastic change has to occur in relation to policy, the issue cannot be tackled seriously.

I know the Minister is extremely concerned about this issue, has done a great deal of work in this area, has been closely examining this in her Department and is very committed to it. I am pleased therefore that she is here to listen to the discussion.

The central recommendation, as the Minister said, is the recommendation in relation to an employment service. That is the one recommendation which the committee felt would cost more money than the others. We were very aware in making our recommendations that the cost factor would be open to public analysis from all quarters. We estimated that it would cost in the region of £30 million to put this service into place. However, as the report rightly states, we must recognise the huge cost of unemployment. We know that the direct cost of unemployment is about 7 per cent of our GDP. But there are additional costs which we did not have the opportunity to examine, such as the cost to the health bill, education and other areas. There are indirect costs which we were not in a position to examine but which we hope to examine in the future. We recognised the enormity of the task of tackling that, so it was not done. Given the indirect cost, in the overall budgetary context £30 million is not huge money.

This report is very firmly founded on the examination of the situation at European and international level. It has been clearly found that where an employment service has been put in place, there have been huge advantages for the long term unemployed. Preventing people from falling into the category of long term unemployed is the major ethos behind this proposal. It is important that we recognise that and that prevention is better than cure in all areas.

It has been shown that somebody who has been unemployed for over two years has a 74 per cent chance of being unemployed the following year. Needless to say, one must recognise the terribly deflating effect which unemployment has on a person's temperament, ego and self confidence. That has to be addressed, because we cannot afford not to avail of people's abilities, talents and resources.

This report is very much geared towards individuals and their needs, abilities, talents and skills. It is important that it is based on the person rather than the bureaucratic structure. That is a fundamental change. In making this proposal we recognised the success of the counselling route. This was supported by work done under the ERGO programme, which is referred to in detail in section 3 of the report. It was also recommended by the EU Commission in its White Paper, which also recommended a substantial increase in public employment services.

I know that there may be difficulties with this and I appreciate that when the Minister speaks with other Ministers, particularly the Minister for Finance, the cost comes down to pounds, shillings and pence. However, there is much material in this report to support the argument that this scheme should be put into place. There was much discussion in the committee about how this would be put in place. The first issue was registration for the scheme and I am delighted that the Minister of State raised this point.

The question as to whether registration should be voluntary or compulsory generated debate and I believe the right approach has been taken. Initially, it will be on a voluntary basis but if the number of people registering voluntarily is very low, the matter will be examined further. That makes sense and I am delighted that the Minister recognised this.

The scheme is based at local community level. Each counsellor is to be attached to 125 unemployed people. That may be a rather high number but it is necessary to ascertain how successful the scheme will be and the level of co-operation it will receive. Co-operation between the public and private sectors will be an important factor. The public sector comprises the Government and local authorities and the private sector comprises employers who are in a position to employ people in a private capacity.

The major problem which must be overcome is the inherent reluctance of employers to employ somebody who has been long term unemployed. The counsellor will be able to make a great difference to the situation between the potential client and the employer. This mediator should be able to address any prejudices which the employer has about employing a long term unemployed person. This is extremely important.

The Minister for Enterprise and Employment, Deputy Quinn, put a pilot project in place in Tallaght recently. I will not say that he ran ahead of the forum; maybe he ran along with it but people were not very pleased about the manner in which it was done. However, we will not go into the details now.

The Minister of State stated that the setting up of this scheme is being explored. I hope she will be more definite and say that it is being explored with a very definite view to establishing schemes across the country and that it will be on a national rather than pilot basis. There is much international evidence to suggest that establishing the scheme on a national basis would be wise, prudent and beneficial to everybody in the long run. I hope the Minister will proceed down that route.

We were fortunate on the sub-committee of the forum to work with people such as Professor John O'Hagan who did an excellent job chairing the sub-committee. He is very committed and skilfully manoeuvred and compiled this report. There are many people representing a variety of areas and it is not an easy task to find a common denominator and compile a report such as this. There were many interest groups who want their issues addressed but the chairman managed to steer an extremely skilfull course. I compliment him for the work he has done.

It is not fair to name individual members but we were fortunate to work with Brendan Butler from Coolock who had expertise, knowledge and on the ground experience of the success in the employment centre in Coolock. We were also fortunate to work with Fr. Seán Healy who always has a tremendous input to make. I do not want to name others but everybody had an input to make with serious concern. We were particularly fortunate to have the benefit of Brendan Butler's direct experience. Recognition must also be given to the work of the chairperson of the forum, Maureen Gaffney and the secretariat.

The report first details the nature and consequences of long term unemployment. It goes on to set out the causes which I do not intend to detail here. We then summarised the international thinking on policy responses to long term unemployment. The Government has a responsibility to respond to the recommendations and we look forward to that response. These recommendations were thought about seriously and did not just come off the top of somebody's head. They involved much discussion where many points of view were put forward and eventually compromises were made by some groups in order to facilitate our arrival at a conclusion.

Some of the recommendations may be viewed as ambitious but if one reads behind the lines one will recognise that they are based on sound fact. I am delighted about the Minister of State's announcement that a high level group has been set up. The report recommended that an interdepartmental group be established to examine the recommendations. This high level group will include senior civil servants and people involved in local community development, and the Minister wants their report before the end of November. When concluding, she might indicate the Departments and local communities from which the members are drawn.

The Minister of State mentioned that the possibility of a local based employment centre is being explored. I hope that after the debate she will be in a position to say that it is being explored with a view to positive action and that it will be established on a national basis and not in isolated instances.

This is an important report which will demand courage in Government and from employers. It will also demand courage from the unemployed who are sometimes sceptical or scared about changes. If people are encouraged to register, they will immediately ask what is happening and will fear that their unemployment assistance will be taken from them. It is important that the publicity surrounding the establishment of the scheme will allay those fears and clearly outline what is proposed. We will then have a high rather than low level of registration. The only reason for a low level of registration would be the fear people may have about placing their names on the register.

The Senator has one minute remaining.

I thought contributions were open ended. I am delighted the Minister is here. I know she is fully committed but I urge her to impress on her Government colleagues the need to act on all the recommendations.

There are many recommendations particularly dealing with the need to make it more attractive for employers to take on employees by changing PRSI and taxation policies. That is a big and awkward step but if employers are to take on long term unemployed people, specific attractions must be offered to them. This is fundamental to the success of the overall recommendation.

I have every confidence that the Minister of State will do her utmost but I will be depending on her to impress on the Government the need to act positively on the recommendations.

Acting Chairman

May I point out that spokespersons have 15 minutes and other speakers have ten minutes?

I welcome this report which stands out from others we have received because of its focused analysis. It is very clear and easy to understand. It does not shy away from controversial areas and they are not covered in woolly language. It is a fine report and everybody associated with it is to be congratulated. The fact that it is such a fine report makes even greater the challenge to Government to implement it.

In a culture such as ours where a person's sense of identity is defined by what that person does as opposed to any other individual quality, unemployment is a particularly traumatic experience and long term unemployment more so. Not only does long term unemployment deny the individual access to the tangible rewards of work but it undermines the person's sense of self worth. The long term unemployed are entitled to more than our sympathy. They are entitled to all the ingenuity the State can muster to overcome what has become a plague on our nation.

Long-term unemployment not only stigmatises the individual but also deprives the individual and his or her dependants of the capacity to participate fully in all that modern society has to offer. It is a corrosive undermining of the dignity of the person. Material deprivation for the individual and their dependants is not the only down side. For society as a whole, long term unemployment means that a valuable resource, the ingenuity and creativity locked within every individual, is effectively underutilised and is doomed to become a cost rather than a contributor.

Long-term unemployment is corrosive to society, it creates an underclass. The Minister touched on that point in her contribution. It is important for us to understand how complex the web of interrelationships is. This report is a key to understanding that; it helps to emphasise the importance of the task we face in this regard. The Minister said we should not despair, and I take the analogy she raised in relation to the crisis which existed in the nation's finances less than a decade ago. Who would have believed this nation by combined effort could have turned that around? I hope that type of effort and focus can turn this particular problem around.

The geographical focus of long term unemployment or underemployment creates ghettos, pockets where unemployment is the norm. In parts of my constituency, for example, a third generation of families have never known employment. There is something horrific about that in a modern developed society. As the development of facilities and infrastructure goes hand in hand with economic activity, the lack of economic activity in an area contributes to physical decline. A vicious spiral is soon set up and we can see this in the cities. As has happened in many parts of Ireland, particularly in large urban areas, when spending power declines, shops, banks and even basic public facilities are withdrawn. This adds to the sense of physical deprivation and entire communities rather than individual families are affected. In these areas the cost of even rudimentary services which remain in place escalates because on a unit basis it becomes harder to deliver them. Unemployment, as much as bad planning and anything else, creates the "Barrytowns" in our society which we should seek to rid ourselves of.

The forum report No. 4 spells out in the most measured terms the cost and consequences of long term unemployment. It forces us to face certain realities. The first reality is truly frightening in that the rate of long term unemployment in this country is greater than the total unemployment rate in most, if not all, OECD member states. That is an extraordinary statistic. It was only when I read it that I realised how big the problem and the scourge is and how big is the indictment on all of us. Even if we were to ignore the impact of this reality on the individuals concerned, which in a civilised society I suggest we cannot do, this gives us some measure of the vast opportunity cost to the nation which is involved in long term unemployment. Besides the innate talent and capacity of those concerned, there has been a huge investment by society in their education, training and development, yet all of this talent and investment is underutilised.

The second striking feature highlighted by the forum deals with the reality facing the unemployed person, which Senator Taylor-Quinn referred to. The longer a person is unemployed, the harder it is to break into the world of employment and the greater the barriers of prejudice. It is a frightening statistic that three out of every four who have been unemployed for two years face at least another year of unemployment. It gets progressively worse and that really is a challenge.

Long-term unemployment is shown to be ruthlessly focused on persons who are in their prime years and who have already been the subject of social deprivation in that they are often poorly educated and have not had the opportunity to develop their skills and talents. In a society which prides itself as one where education is valued, this is surely an indictment and it raises fundamental questions about the way we approach education, particularly education for life.

This country has not been blessed with natural resources. We have not been given great mineral or hydrocarbon wealth and we suffer from the problem of geographical peripherality. However, we do have a wealth in our people and this report makes it clear that we have been profligate in the way we have approached that wealth. Unemployment has become another major economic cost which we must bear. In economic terms, the report finds that the cost of unemployment amounts to a staggering 7 per cent of GDP. It is a frightening statistic. As the previous speaker said, that is not the full cost; it is only part of the cost because one must add to that the cost of support services, health services and poverty, which can never really be measured, the cost of underachievement, deprivation and all the ancillary State machinery which must deal with that pool or spiral of deprivation.

The net effect of this is that Ireland can be equated to a marathon runner forced to run a gruelling and competitive race carrying a heavy weight, while the other runners can approach the course unencumbered. We are in a race and we must compete with our neighbour nations for employment. However, if we have this burden, we fetter ourselves.

A particularly valuable aspect of the forum report is the analysis of the factors which contribute to long term unemployment. Like many Members of both Houses, I admit I have never given the idea of long term unemployment, as opposed to unemployment, separate consideration. The analysis is clear in this profoundly valuable document because it shows there are two stages and points to the particular and unique policies which we must adopt in dealing with the long term unemployed. I compliment all involved in the forum on that analysis, because it thoughtful, provocative and clear-cut.

Five main causes of long term unemployment are identified in the report. The impact of employment protection legislation, the benefits system and the changing nature of work, an area we have discussed from time to time, are highlighted. The low level of skills, education attainment and the barriers facing the long term unemployed entering the jobs market and the barrier of prejudice are touched on. The loss of skills, the lack of influence and, I presume, the loss of individual motivation must be the lot of a person condemned to unemployment. These factors conspire and come together and the synergy of the five factors is far greater than the impact of any one individual factor.

The impact of the employment protection legislation and the benefits system is something which should be of particular concern to both House of the Oireachtas. The legislation and the benefits schemes in question are public policies enacted by both Houses of the Oireachtas. It is important that the down side of these schemes is fully understood. It is equally important that the fact that there is a down side should not be used by anybody to look to unpick the benefits of those schemes. It is almost a cliché among employers to argue that it is positively unwise to expand the workforce. If we are honest we must accept there are major disincentives which arise from public policy and which discourage the creation of jobs. That is a frightening dilemma which faces policy makers.

Employment protection legislation was put on the Statue Book for the best of reasons and I would not like to see the clock turned back. For equally positive reasons a redundancy payment scheme was put in place and compensation for those without jobs has improved. That is how it should continue. However, it must be accepted that beneficial as these polices may have been individually, the combination has had a negative impact.

We do not have to depend on anecdotal evidence for this. Recent statistics on the level of overtime worked have been disturbing. Most notably in some public sector employment, overtime has become almost endemic. Two factors are responsible for this. First, on the supply side there is the problem of workers faced with a high tax burden who wish to defend their living standards and who must seek overtime in order to retain those living standards. Second, employers face a problem in taking on additional staff. Besides the tax burden, employers face the reality that in a rapidly changing business world it is impossible to forecast two or three years ahead. That is why the forum's suggestions and it's discussion about contract employment as a way of breaking a particular chain are valuable.

Employers are fearful of taking on additional people because of the inflexibilities which we, as legislators, have introduced into the equation. It might not be politically correct to voice opinions such as this, but if we were to be truthful to the people who are long term unemployed, we have to face the realities of all of the causes of long term unemployment.

I would like to see the impact of redundancy law on long term unemployment reviewed. While cushioning the impact of redundancy for the individual worker, redundancy law has facilitated healthy firms who wish to ruthlessly downsize their operations in terms of workers. The same redundancy packages still the trade unions, who might have some views to express on it, were it not for the fact that some of their members, particularly members who have served for long periods, find it financially very rewarding to avail of redundancy packages.

Some Irish companies have grown to full multinational status. These have a responsibility to the people of this nation which goes beyond keeping their corporate eyes on the bottom line. I accept that major operators have to stay competitive, however, I cannot escape the feeling that some of our major Irish companies have adopted rather overzealous employment practices which have grown up in other cultures. They have applied these practices and policies in a manner which is inimical to the public interest.

In some cases redundancies have been created in a manner which is highly questionable. I am thinking in particular of one major Irish firm — I will not mention it here as it would be unfair to do so — which has used its pension funds in conjunction with the social welfare system to retire workers and to shed jobs. While individual hardship may have been avoided in such cases, society is definitely impoverished because jobs which would have been there are not there for the next generation of workers. The State has helped unwittingly by putting mechanisms in place to support this type of activity.

The fact that this activity and the whole issue of protection legislation is honestly mentioned here as a factor in long term unemployment gives us the responsibility of analysing our own actions. The changing nature of work and the barriers facing the long term unemployed are also mentioned. I do not have time to discuss each of them, but the report's analysis, particularly on the barriers in a society that regards itself as civilised, is poignant, to say the least. It is bad enough to be unemployed, but it is terrible to be unemployed over a long period. It is simply unacceptable that those people have to face real barriers and prejudices that are put in place by people who regard themselves as informed and civilised.

I wish to record my personal support for the central recommendation here, the concept of an employment service. That is absolutely vital. I heartily concur with the comments made by Senator Taylor-Quinn on the advisability of the one-to-one relationship, the fact that case workers would be dealing with a targeted group of individuals and would at the end of the day have a personal commitment to helping those people to find a way through the difficulties of getting back into the workforce. This is a very fine report. It is a provocative report. There is a great deal in it. It is a pity, perhaps, that we are not going to have a livelier debate, but I welcome what the Minister has said here. She has indicated clearly that her mind is open to all that this report recommends. She has also indicated clearly that the Government's collective mind is open, and that is very welcome indeed. I wish to see early progress on this report and I hope that in the not too distant future individual elements of legislation or individual schemes to implement the report will be coming before this and the other House.

I am glad to welcome the Minister to the House and I am also glad to see that the chairperson of the forum, Ms. Maureen Gaffney, is here with us this afternoon. This is an extremely important report. One of the criteria when the forum was set up — and I had the honour of being on the forum — was that we should look at equality and social justice in Ireland.

This report begins to address one area where there is appalling inequality in this country. What degree of inequality are we prepared to accept between various groups in Ireland? We are talking about equality and that idea seems pretty remote to me. We might consider looking at it from the point of view of equity, which I hope we want for all our citizens. We must realise that equity comes with a cost. The Minister was quite right when she said that economic prosperity does not necessarily reach everyone. I am delighted she said that, because the theory that a rising tide will lift all boats is simply not correct. Many boats will still be left in the mud.

Senator Quinn said last night that he would not speak against the property tax because he felt that there had to be a broader spread of taxation within the population. Many people are paying very high tax and I do not think that Senator Quinn, having had the pleasure of visiting his lovely home, is one of those who are not paying property tax; but we have to realise that if we are to spread taxation more equitably, some of us are not going to get a reduction. Senator Roche was quite right when he focused on this in the area of employment. A huge area of inequality must be addressed there. I hope the Government does it with much more urgency in the next budget.

As well as the fact that we have long term unemployed, we have an appalling situation where high numbers of the long term unemployed are concentrated in certain areas within the country. This has a terrible effect on those areas because it affects not just the person who is unemployed but, as the other speakers have said, it also affects the entire family and the community. There is a tremendous lack of opportunity at the moment to get out of this situation, both for the long term unemployed person and that person's family. Being long term unemployed carries with it a huge social cost. When people become unemployed it has been described to me as being like a bereavement. It has been as bad as that. There is a tremendous sense of loss, tremendous bitterness in the beginning, then there is an increased feeling of lack of self worth. As other speakers have said, there is increased likelihood of illness, and of course we have not looked at the costs of this at all.

I was at a meeting in Bonn last week with various people from the European Union and outside and we were discussing the social effects of unemployment on ill health among other topics. Life expectancies are a pretty good indicator of the health of a country and some of the points that came up there were extraordinarily interesting. The difference in the mortality rates between social class one and social class five, especially for men, is now seven years. In other words, a person in social class one is likely to live for seven years longer than a person in social class five, where the unemployed and the very poor are. What is really fascinating about this statistic is that it has got much worse between 1931 and 1981, so they are making no progress at all. I am not quite so sure of the figures here because they are not as clearly divided. No progress in equity in this area has been made in Britain.

There has been a dramatic increase in the longevity of those in the higher social classes but there has been no change at all after the age of five for those in the poorer sections of our society which is quite incredible. Mortality inequities in the United States and the United Kingdom have increased dramatically since the late 1960s. We all know that the policy pursued there has been the one of the rising tide lifting all boats, but it has not been successful. There has been an improvement in mortality rates over all social classes in other countries — for example in the Scandinavian countries and in Japan — and we would not describe any of those as being less successful than the United States or the United Kingdom.

The fact of being unemployed seems to make it so much more likely that a person will have all the usual diseases like arthritis, respiratory diseases, tuberculosis, obesity and everything associated with smoking. I sometimes find myself wondering what on earth I am saying when I tell patients that they should not smoke, because I am sure these women see a middle class, middle aged woman who does not know that smoking is the only thing they do for themselves. So, apart from when they are pregnant, I try not to make too much of a lecture of it.

A colleague asked a man in his fifties, who requested sleeping tablets from him, at what time he went to bed. The man replied that he went to bed at approximately 4 a.m. He then asked the man if he would not go to bed earlier, to which he replied why should he as there was nothing to get up for. There is no structure to the day of such people. The man went on to advise that his main occupation was to watch four videos per day. Apparently, the video shops are good about providing videos at a very cheap rate during the day to those who are unemployed, and I presume they should be commended for that.

In addition to the serious situation regarding health, the area of education must be addressed. I am aware that a start is being made to address it now, but enough is not yet being done. The Minister for Education is targeting areas of deprivation with pre school opportunities, which is important, but it must be fed on up through the entire system.

Those in deprived areas have parents with little social structure to their lives. For example, if somebody is up until 4 o'clock in the morning, it is difficult to get up again at 8 o'clock to ensure that the children get out to school. Such children have a tremendous disadvantage in that their parents see no reason why they should get up and go to school. Enormous efforts must therefore be put into liaisons between the home and the school and other such areas, because it is the prevention of people becoming unemployed which is important.

Much is spoken about graduate unemployment. However, speaking of my constituents, such unemployment is much less than for those who have left school at 15 years of age. Most graduates do not have the feeling of coming from totally deprived areas and having little self worth before they start looking for jobs. I find that many of them make extremely determined efforts in this respect. We must therefore begin by preventing long term unemployment from starting by concentrating on the various areas where there is educational and social deprivation.

All studies produced, be they European or Irish, emphasise the fact that those who have the most problems with obtaining jobs are those with an inadequate education to begin with. Maintaining people in education is an integrated operation, because there must be liaison between the home and the school. For example, more may well have to be undertaken regarding meals at school, because I have discovered that poverty of nutrition is extremely important. In this respect, while the report of the forum is good on education and so on, the matter must be considered in a broadly based way.

I would have preferred if the forum had addressed the issue of child care facilities a little more in the report. The Minister is correct in saying that the long term unemployed are mainly men, but the number of women is increasing. In this respect it is interesting to consider the age structure of the long term unemployed, where the usual age groups are 15 to 25 years or from the fifties onwards. Child care facilities are therefore extremely important, especially for the younger age group. We cannot hope for women, especially lone parents, in whom I have a special interest, to avail of the opportunities which are now being presented by FÁS schemes and so on, including general education which is very important also, unless we establish such care facilities.

Pious hopes expressed by the working group on child care facilities for working parents to the Minister for Equality and Law Reform are all very well, but they are not enough; they must be acted upon, and there is not a sufficient sense of urgency in this respect. If the sense of urgency is going to be the same as getting a creche for the Oireachtas, it will probably not happen in my time. However, recommendations 12 and 13 of the report are extremely important in this respect. They make clear that the operational programme for human resources should make explicit provision for the national training bodies, FÁS, CERT and Teagasc, to assign funds in fulfilment of child care obligations as objective three of the revised Structural Funds, 1994 to 1999. In addition, it is recommended that training agencies and employment officers should inform prospective trainees of arrangements for support for their child care needs. The take up of such support should form part of the evaluation of the new community support framework. The report makes similar recommendations regarding preference being given to the creation of child care facilities in community centres.

In addition, the provision of child care facilities in employment centres, or unemployment centres as they are too often termed, may have to be considered. The counselling service is excellent. To have people specifically in charge of a person is the correct way to proceed, and it was obvious that this approach had to be adopted. There have been constant complaints in the health service regarding people seeing different doctors on each occasion, so why would there not also be complaints about the fact that every time people attended the centres to talk about their unemployment situation they were seeing different people? The provision of child care facilities may therefore have to be established in employment centres, especially the large centres, because it would be impossible for those undertaking the counselling to deal with the prospective employee otherwise.

The other area which has not been addressed enough in the forum, but which presumably will be addressed later, is the situation regarding credit facilities for people who have been long term unemployed. Is it possible for the counsellors to become involved in this in any way? Quite often, if they could obtain credit facilities, especially women from the older age group, they may have a greater opportunity to establish quite small projects between themselves or another few people.

This issue is constantly described to me as a problem, but I am aware that some people have succeeded very well in this area. Senator Roche spoke of redundancy money. When redundancy money has been put to good use, such as starting off some small business, I have seen quite a number of people do well. All such businesses have been services established by women, such as a pressing agency, curtain making and dress making. In this respect I am pleased to note that repairs are coming back into fashion again. It is an area which also needs to be addressed by the counsellors. I am not sure whether they could become middlemen with the banks, guarantors or some such, but it is an area which should be considered.

While I commend the report, it is only a beginning. Without funding, its recommendations will be impossible to implement. The Minister is in the correct Department to ensure this, so hopefully the Government will press forward with the report. The work put into it by the Members of the Oireachatas and representatives of the social partners has been important, but of even greater importance has been the work put into the report by the voluntary agencies, which the Minister so wisely included in the make up of the forum.

I welcome the debate in the House today. I also welcome the Minister to the House, and the chairperson of the forum, Maureen Gaffney. The debate is taking place in the context of unemployment being at the top of the agenda for everybody in the country, especially the Government. A number of measure are being taken, especially in the Department of Enterprise and Employment, such as structural changes, including the division of the former IDA into Forfás and IDA Ireland under the umbrella of Forbairt, the establishment of the enterprise boards, the National Development Plan, which was recently launched, the community employment scheme expansion, changes regarding the services sector, tourism, and so on.

All of these measures are designed to tackle the unemployment problem in a broad way. What is different with this report is that it focuses on the endemic and difficult problem of long term unemployment. Much talk is made of the rising tide. There is such a tide, and the economic forecast is bright, but it does not lift up all the boats. The other Government measures are designed to keep the tide rising. This report focuses directly on the problem of long term unemployment. In a way it is revolutionary, and this is not too strong a word to use.

As many people pointed out and as the figures show, even if there is an improvement in the employment situation — and there has been a slow and steady improvement over the last year — it does not impinge much on the problems of the long term unemployed. As the Minister said, we have the highest rate of long term unemployment in the OECD. Other speakers pointed out, and quoted figures, that the longer one is unemployed, the less one is likely to get employment. I have some figures from the Youth Council which show that a young person who was unemployed for over a year in October 1991 had a 74 per cent risk of still being unemployed a year later. This focuses on the problem of youth employment, but it holds across the board.

I was a member of the forum and although I was not on this committee, but rather the social policy committee, I agree with all that has been said about the importance of the forum in bringing together Members of the Oireachtas, the social partners and what is described as the third strand. This represents various other interests which have not always had a voice at the table in the past. The forum enabled a distillation of views from around the country and from all shades of opinion. I compliment the members of the economic committee who have been able to distil all the ideas into this report. It has since been discussed by the committee of which I am a member and adopted by the forum in full. It brings fresh and original thinking to the area of long term unemployment and real hope for change. I described it as revolutionary and I will return to this point later.

Many Members referred to the cost of unemployment in terms of how it affects people's health and their well-being, families in poverty and society at large. In focusing on the individual rather than structures and agencies, it is, for the first time in this country, looking at and trying to deal with the human side of the problems of unemployment. When one tries to analyse why someone in long term unemployment has more difficulty getting a job than a person who recently went onto the live register, one must look at one's individual experiences.

In common with many other public representatives, I occasionally accompany people who are appealing to the Department of Social Welfare after they have been cut off the live register. One must be available for and actively seeking work to be on the register. People produce letters from factories stating that they cannot give them a job. People must produce these letters to show that they have been seeking work. Without exception, people who are long term unemployed do not have any feeling of hope that they will get jobs when they apply for them. They feel they must go through the motions but that they do not have much hope of getting the job. This illustrates how long term unemployed people feel about their chances of getting back into the jobs market.

Community employment schemes have made quite a contribution. However, the problem with such schemes is that they do not lead to anything. One is on a scheme for a year and it can be extended in some circumstances, but people do not see them as a road to permanent employment. This is why this scheme is so different. It suggests 800 mediators in a ratio of 1:125, which means they would deal directly with 100,000 people throughout the country. Its budget, as Senator Taylor-Quinn said, would be approximately £30 million and the scheme would involve using services that exist, such as FÁS and the vocational training opportunities scheme, and liaising directly with employers. The mediators would put unemployed people in touch with the system as it exists, whether this is through education, training or direct opportunities for employment. This has been tried on a pilot basis in other places, such as France, and I understand it has been quite successful.

It also involves an intensification as time moves on. If a person has not been successfully placed after a period of months, their contact with the mediator and others who would be in a position to bring them into employment, training and education, becomes more frequent. The emphasis on education is most important. Statistics show that if one has a poor level of education, one's chances of being in employment are much lower than if one has full second or third level education. It will be interesting to see how it affects the education system. There has already been a major expansion of the vocational training opportunities scheme. There may be a much greater demand on it in the future if this scheme is put into operation.

It will put pressure on the systems and structures that exist at present. I said I would return to the point about it being revolutionary. In that sense it might be very revolutionary. As people will have direct liaison with systems, holes will show up and the need for change will emerge. If the systems do not meet the needs of the people dealing directly with the mediators, there will be pressure to change them. This would be a good thing if it turns out that there is a need to change the systems. It might require the setting up of new approaches to enterprise, such as more co-operatives, for example. There is much good feeling towards the concept of community co-operatives, but in practice there are not many in existence. If there is a facility for long term unemployed people to come together and to be put in touch with the systems, one may find that their needs will involve many changes in and expansions of programmes that already exist. It may be a challenge to many organisations and I hope it will be a challenge to many employers.

Unfortunately, the economic facts of life encourage a tendency for people to adopt labour saving methods and principles rather than taking on new people. Some changes in the budget last year encouraged employers to take on new people and this is good. However, the nature of economic competitiveness means that employers still tend to bring in new technology at the expense of a new person. This shows the need to adapt to the way people are trained. It also poses a challenge to employers not to take the easy option of shedding employees by bringing in new technology. A mediator system will put the unemployed more in touch with employers and it will have an effect in that area also.

A number of Members mentioned European policy. I have two White Papers before me — the Social Policy White Paper, which was published in July, and the Growth, Competitiveness and Employment White Paper, which was published previously. Both papers refer to the need to change our structures. The first deals with the need to break the cyclical system, of which the cycle of long term unemployment is part. The European Social Policy White Paper also talks about the need for more guidance and a direct placement approach in terms of how we deal with long term unemployment. Although Ireland has the most serious difficulties, the problem of long term unemployment has been identified throughout Europe. We can feel confident that we will have the support of our EU partners for whatever measures we take.

The Minister of State, Deputy Fitzgerald, had a strong input into the drawing up of the National Plan, particularly in relation to its community and local development aspect. I am sure there will be strong support for the type of suggestions which have been made in that area. It is important that the community aspect of this is stressed. Others referred to the fact that high levels of long term unemployment are particularly evident in certain urban areas. There is a need for a community based approach in those places and this will probably link into the system proposed by the forum.

I also wish to refer to the point made by Senator Henry regarding child care. It is an example of the point I made that if this system comes into operation it will point up needs in society, one of which is the need for more child care facilities. There have been some developments in that regard but there is a need for more emphasis on child care. If more parents come within the scope of the mediator system the need for child care will become apparent. In that sense this system will have broad effects.

The particular and most important effect it can have is to give people who are long term unemployed a real opportunity to get onto the jobs market. They have had the opportunity on paper but many individuals have felt they do not really have the same opportunity as those who have better education or a more recent employment record. This is a revolutionary proposal and as a member of the forum I am pleased to speak on the report. I hope it will be carried through and that the money will be found to put it into operation.

I welcome the Minister to the House and I am glad to see the chairperson of the forum, Ms Maureen Gaffney, in the Visitors Gallery. At the launch of the report on ending long term unemployment the chairperson emphasised that, unless existing policies are changed, long term unemployment, which is already a major economic and social problem, will continue and the number of people unemployed will be no lower at the end of the decade. I was pleased to hear the Minister go through the report and indicate that the Government told us it would be implementing its recommendations because if we did not do so, the future would be bleak for the large numbers who are unemployed, particularly the long term unemployed.

Previous policies have led us to a jobless total of 300,000. Growth in employment in the 30 years — from 1961 to 1991 — is only at an annual rate of 0.3 per cent. For every nine people in employment 30 years ago, all our efforts at industrial policy have created only one more job. This is a frightening statistic. At present there is a definite upswing in the world economy, and it is during such times that levels of consumer expenditure are increasing and firms are given the opportunity to expand into new areas, to increase their resources in terms of technology and to build up a skilled labour force. If industries do not develop in improved economic climates there is little hope for their long term prospects.

Many firms in Ireland have, unfortunately, shown anything but the developments expected during a recovery period. If firms do not survive and prosper there will not be jobs for the long term unemployed. When we see other countries feeling confident because of an improved economic climate, recurring reports of failing firms and calls for compulsory redundancies in firms in this country indicate that there must be something radically wrong here. We have the second highest annual average unemployment rate, only exceeded by that in Spain. Successively the annual average has been almost twice that in the UK and in three of the last six years it has been more than double that in the UK.

We must look at Government policies and their effect on unemployment. We must look at the cost of employment, for example. While interest and inflation rates are at their lowest levels in 30 years, the costs to the employer of employing people are crippling employment opportunities. Instead of promoting employment the existing exorbitant employer PRSI rates force firms to switch to more capital intensive production methods. Numerous capital allowances are available for expenditure on machinery and plant but if an employer is considering recruiting another worker the typical rate of PRSI an employer faces is 12.2 per cent on the employee's earnings.

While it is acknowledged that capital allowances are necessary and reduce the costs of the firm and allow it to become more competitive, when faced with a choice between a new machine and a new worker the present system of allowances and charges is anti-worker. I accept that the Government has tried to address this and has introduced a reduced rate of PRSI for people earning under £173 per week. However, more changes are necessary.

The exorbitant income tax rates force up the costs facing employers. The tax wedge created by these high rates creates a disincentive for the unemployed to take up employment which may be offered to them at rates which they find unacceptable but which the employers may find extremely difficult to increase. That is not to say sympathy should be given to employers who may wish to offer the lowest wage rate they can get away with, particularly in times of high unemployment. The gross figure which the employer has to pay the employee combined with the PRSI he or she has to pay is vastly different to the pay the worker gets into their hand at the end of the week. This problem must be addressed if employment levels are to be raised.

Our party has always believed that pro-jobs tax reform is necessary. Politicians give out publicly about unemployment but support our present tax system by doing nothing but weeping crocodile tears. There is a vicious penal tax rate on work and on investment in job creation, and until we have radical tax reform there will be no solution to the joblessness and no hope for the huge numbers unemployed. I accept that pro-jobs tax reform is not the only solution but the Culliton report made it clear that without job related tax reform no progress would be made.

In 1973 fewer than 2 per cent of employees paid tax above the standard rate and there were 60,000 unemployed; in 1989 43 per cent of taxpayers paid tax at the higher rate and we now have 300,000 people unemployed. There is a simple message here — if we tax work and employment at penal rates then we are taxing away jobs. If there is to be any change in unemployment it will only come about with radical tax reform.

Recent ESRI reports estimate that overall employment growth is to average 1 per cent but they also predict that employment would grow in high-tech sectors by between 2 and 4 per cent over the next three years and that there would be a growth rate of 2 per cent per year in the service sector until the end of this decade. We must make a greater effort to encourage industries in these areas into the country to provide jobs.

We must support and develop opportunities for those who wish to establish their own employment. We must promote an environment of enterprise, particularly in areas for which forecasts of high growth rates have been established. There is a need to give those who wish to create jobs for themselves through self-employment the opportunity to do so by giving them experience and training them in the practical skills necessary; providing them with information on grants and how to successfully apply for them, how to undertake a feasibility study before setting up an enterprise and how to market their products. This will help aspiring entrepreneurs and those who have already set up to seek assistance to stand on their own two feet. This would, hopefully, reduce the number of people who are on the unemployment register.

Such training and enterprise should not be limited to the unemployed. Those who are already active in the labour market can establish new firms and industries and they will be creating employment in the future. In view of the huge numbers on the dole and those who are long term unemployed we have to provide training for young unemployed people and some form of voluntary third sector employment for the long term unemployed. The public and the private sectors cannot absorb the present number of unemployed. The State must devise a third sector in which the resources of the jobless is matched to the needs of society. It is not beyond the wit of all of us to devise and implement such a scheme. Our present policies that exclude the jobless from making any real contribution to society are totally immoral and unjust.

The Progressive Democrats came forward with a proposal for tackling the unemployment crisis, particularly as the sheer scale of the crisis in Irish society means that whatever the level of economic growth we would still have hundreds of thousands with no jobs or gainful activity to pursue. A radical approach is essential. The Minister said that some of the proposals in this report are radical and I accept that. However, in the short term, despite the aspirations of the report for full employment — and all of us would hope for that — that will not happen. In the meantime we cannot tell the long term unemployed that they must remain that way. They must be given some means of participating in the economic life of the community.

The Minister outlined the details of the report and I agree with what she said. I accept that she is committed to implementing this report; she is committed to tackling the problems of the unemployed. We, as a party, support the recommendations of this report and we hope the Government will implement them in full so that everybody who wishes to can participate in the economic life of this country.

I welcome the report and compliment Maureen Gaffney and the members of the forum on their work in its preparation. It is a comprehensive document which highlights a number of important policy issues that must be tackled. I am glad to note that the Tánaiste and the Government have indicated that this report will not be left on the shelf. Unfortunately, over the years many reports on unemployment, labour force opportunities and the like have been left on the shelf and action has not been taken to deal with the problems they highlighted.

Many important initiatives are highlighted in this report. I will not unduly delay the House in discussing them but this report will be compulsory reading for many of the people who are involved in this area. Although the report has been in circulation since June it has received, to my knowledge, very little publicity aside from that surrounding its launch. The Minister has an opportunity now to involve the social partners and others in discussion of this document and to make the critical decisions necessary to enable the objectives in the report to be implemented.

There has been talk today of courage in the context of dealing with other situations. However, the difficulty I anticipate is an absence of political courage to tackle some of the issues dealt with in this report. I encountered this during the short period I was Minister in the Department of Social Welfare. When important decisions were made which would have an impact in dealing with these issues there was such a hue and cry, especially from Opposition politicians purely for short term political purposes, that it was almost impossible to take any meaningful action. In the Department of Social Welfare — which I compliment for its efficiency in modernising its service and the effective way it has regionalised its service and streamlined its decision making process — there was a possibility, which I understand is being undertaken at present, of matching unemployment figures with taxation figures. It would have had a big impact in many of these areas. However, there was huge resistance to this proposal.

I hope that in coming to grips with the issues that have been highlighted in this report the political courage will be available to deal with them. There might be short term political disadvantages in doing so but in the long term it will be to the benefit of the economy, the people seeking employment and in the overall national interest. This is more important now than ever before in view of the dramatic changes taking place in Ireland. There will undoubtedly be more communication and dialogue between us and the people of Northern Ireland and many changes will be necessary arising from these developments.

Long-term unemployment, as is borne out by surveys which were carried out heretofore, is the main cause of low incomes and poverty in Ireland. Unless we undertake initiatives to tackle this, the prospect of dealing with the many people who are suffering in the poverty trap will not be possible. While I compliment Maureen Gaffney and her team on their valuable research, it is important that the Government not ignore their work and that the specific action that is necessary be taken speedily to deal with the issues highlighted by this report.

I wish to refer to the area of guidance, counselling and information which is mentioned in this report. To put it mildly, the present situation is chaotic. It must be examined and cries out for urgent remedial action. Not only is this a disadvantage to the unemployed, who are at the bottom of the scale if you like, but it is also a serious disadvantage to many people in the counselling and guidance sector in particular who have good qualifications but who find that they are forced to seek employment opportunities outside this country with a resultant huge loss to our economy. There is no proper guidance counselling service in place to deal with these problems. How soon is that likely to be dealt with? Can the Minister give us an indication if there is a willingness on the part of the Government to deal with the issue of counselling and career guidance, especially for young school leavers?

The report indicates that there is a lesser rate of long term unemployment in the over 55 bracket. However, everybody knows that this is because people are on pre-retirement allowances. There is also an urgent necessity to look at the unemployed figures. On a previous occasion I pointed out to the House that while a huge construction project was under way which employed 1,100 people in my constituency, the unemployment figure at the exchange at Kilrush never changed by a single figure; in fact, I think it increased. Many of the people who were signing on as long term unemployed were doing so for income supplement rather than out of a desire to seek employment opportunities.

There is evidence that many people sign on in local exchanges to secure an income supplement to their unemployment assistance or benefit and do not have a genuine desire to find long term work. Many of them are employed on a temporary basis and they are looking for supplementary income. The unemployment figures could be substantially reduced — I would say by about half — if there was a thorough investigation. It could be carried out in co-operation with those who are signing on if it could be shown that they would not suffer any loss of income because of recategorisation or whatever.

This report highlights — and it is important that we continue to highlight — the fact that women in employment are still doing very badly. The fact that males constitute 72 per cent of the long term unemployed might tend to create the impression that women are not seriously affected by long term unemployment. Many women do not register as unemployed because they know there is no employment available anyway. Many of them could be employed and this is borne out in European Union reports and in studies by Commissioner Flynn and others. We must look carefully at a range of issues, such as child minding and the provision of care for families who require it. They are not being dealt with by the present system.

I welcome the forum report. The report will only be valuable if the Government makes the policy changes identified as being necessary; introduces the package of initiatives recommended; sets up the guidance, counselling and placement services; and undertakes the special measures for young school leavers and women that are necessary if we are to tackle this in a meaningful way. The report is valuable but while we can speak about it I would prefer to see action.

This is a valuable opportunity to concentrate on the conditions and difficulties of the long term unemployed. The Minister and most of the contributors have shown a clear understanding of their difficulties and also of the difficulty in doing anything for them. The latter is the key; sympathising with them and understanding them is not enough, we must try to get them back to work.

I am concerned that research and the EU Commission's attitude indicates that officialdom has written off the long term unemployed. From an examination of the Community support framework published in the recent past and from discussions with European officials it is clear that what the Government wanted to spend on programmes for the long term unemployed and what eventually appeared in the published document were quite different.

The Government agreed with the Commission and reduced the amount to be provided in the human resource section by a substantial amount. The emphasis was moved from the long term unemployed towards retraining people at work and giving them more skills so they can better adapt to changing conditions. The Minister was supportive in her contribution but the Government agreed to that strategy. It may not be widely known but the emphasis has moved from the long term unemployed. The change is because the Commission's research has shown that once a person becomes long term unemployed he or she tends to remain in that status. The long term unemployed do not get work and any new jobs created go to new entrants with more modern skills, or to women who have not appeared on the live register. That is a grave worry.

If the best we can do is to employ part of the new entrants who appear every year, what kind of growth rates do we need to give meaningful support to the long term unemployed? It is mind boggling to think about that, when we cannot provide enough jobs to accommodate new entrants to the labour force. How can we do anything meaningful for the unemployed within the strategies applied up to now?

Another worry is that the Government is spending 10 per cent more this year than last year. This seems an erratic approach. We can pay lip service to certain ideals, but actions speak louder. If the Government increases spending by 10 per cent at a time when inflation is about 2 per cent, that means it is not serious about creating new jobs in the economy.

A large employer in the Border corridor carried out research recently showing that the average cost of employing a person in that company was about £22,000 per year; the corresponding cost in the North of Ireland was about £15,000. The company owner was concerned about his ability to compete with companies in the North and his analysis suggested there was a huge imbalance.

The Government must be serious about such factors. Many people are aware this is the case and it is especially hurtful to those of us in Border areas who have to fight competition from companies in the North. We are all in favour of healthy competition which is good for the economy but when we conduct an analysis we find it is not fair. Conditions must be made right for companies here which want to employ people. Only then will we make an impact.

I welcome this discussion. We have only been given a short time to analyse this problem but I am sure we will be given another opportunity at a later date.

I would like to share my time with Senator Quinn.

Is that agreed? Agreed.

I welcome the Minister's contribution on the report of the National Economic and Social Forum on Ending Long Term Unemployment. The points she made were worthwhile and should be noted.

I praise the work of the enterprise boards because they pick up local strands. The Minister mentioned locally based unemployment services and it is important to have a mediator to deal with many unemployed people. The mediator could find out from the local development organisations and local bodies who is available for work, what kind of work is being sought and find employers who are looking for one or two new employees. Unemployment can be reduced by filling small numbers of jobs locally through the enterprise boards. They are crucial in the effort to get people off the dole.

I want to highlight the plight of new age travellers, which is connected with unemployment. Many people from foreign countries are coming to my area, west Cork. They are registering as unemployed and also with the health board for supplementary welfare allowance. It is only right to raise this in the House and bring it to the attention of the Government. Will the problem be tackled? Our country has always suffered from emigration and we are not geared for the mass immigration which is currently taking place in many of our rural communities. It puts a heavy strain on our services and constitutes an employment problem. Our young people have gone abroad looking for work; we have never had people coming here looking for work before because there is no work here. This problem will have to be firmly tackled in the not too distant future. With the new laws about to come into force in England, a flood of new age travellers will come into Ireland.

Unemployment has always been a tragedy and the biggest danger is for older people who lose their jobs. They feel they have no hope of gaining employment again. Unemployment leads to poverty, disadvantage, the growth of moneylending and a general depression. The Minister mentioned figures for unemployment among lone parents, adult dependants and those receiving the disabled persons maintenance allowance. We should take these people into account.

The local authorities have a big part to play in relieving unemployment. There should be a good deal of contact between locally based employment services and the local authorities because people want to work. Last night when the Minister of State, Deputy O'Rourke, was in the House, I said that people employed on SES and CES schemes take great pride in their references from that work. It gives them dignity and honour and indicates they want to work.

The unions will have to play a big part. Many people work long hours and are badly paid and this will have to be looked at carefully. Schools in rural communities are idle at night and during the summer and other holidays and they could easily be used for training the unemployed.

Thank you, Sir and, particularly, Senator Calnan, for giving me the opportunity to speak. I welcome the Minister and the report and the opportunity to speak on it. It is a marvellous sharp analysis of the problem and its recommendations are practical and sensible. My principal point is that the report does not bury the problem of the long term unemployed in the overall problem. We cannot do this because the broader problem of unemployment is so big. It is partly because we have done this in the past that the problem exists at this stage. The report points this out and suggests solutions. If we do not take the long term unemployed out of the overall problem, the rising tide we hope will lift all boats will lift this boat last and the problem will be the last to be tackled.

I was delighted with and wholeheartedly support the link between education and the long term unemployed. Our education system has failed the unemployed, it is not that they have failed to get through it. We must do something about this. From that point of view I am delighted with a number of the steps that have already been initiated. I have an involvement with the new leaving certificate applied programme which is aimed at catering for those in secondary school whose talents have not been satisfied by the present leaving certificate. I hope this programme will make achievers of them, give them the opportunity to blossom and succeed and a much better opportunity of working in the future.

The problem is so big that we are in danger of being paralysed by it and saying it is hardly worth tackling because it would appear we cannot solve it. This is clearly not the situation. The forum recognised the problem and made a range of proposals for its solution. I am delighted that these proposals have been recommended. At their heart is the idea of an employment service which would take an individual handson approach. This is an exciting aspect. The problem of each unemployed person is separate and the concept is that it would be handled through the medium of what the forum refers to as mediators. This is an excellent approach.

The report leaves open whether this new employment service should be operated through the existing FÁS or whether a new organisation should be set up for this task. I very strongly believe we should not waste time and resources setting up yet another organisation. We have a strong organisation in FÁS, which is competent, capable and sufficiently able to do this task. We should agree to provide and resource this service and give the existing set-up the task of getting on with the job. We established enough new bodies in the past few years to last us a lifetime and I know the problems they create.

The proposed one on one approach is precisely the sort of special treatment the long term unemployed need. The report uses the word "mediator" to describe the people who will provide this individual service. What is envisaged is a mentor. We used the term "mother hen" in the old days but I am not sure if it is now regarded as acceptable. The word "mentor" is precisely what the forum means. It is somebody who will be able to hold the hands of an individual unemployed person and act as a listener, a sympathetic body and a support. Each of the unemployed will have a single person to whom they can relate. This person will know the situation of the unemployed person, will be committed to finding a solution, able to provide the support and encouragement which are such vital psychological parts of the whole need of an unemployed person and be a prop to that person. This is important, new and exciting and I congratulate the forum for coming up with this.

I am delighted that Ms Maureen Gaffney is in the visitors' gallery. She and the forum must take a large portion of the credit for all the work it has done. This concept directly addresses one of the central problems, which is the demoralising effect of unemployment and the way it destroys motivation, incentive and the belief and confidence of people to be able to help themselves. It creates almost a fatalistic and dependent outlook on life in general, not just on work. This is not a completely untried idea. It works successfully in some of the local area partnerships. We must dramatically extend and expand it very quickly because it is necessary to make a real impact on the problem. I believe it can do this. There are previous examples of this working and succeeding. The forum has touched on and grabbed hold of an idea which can work and it must make sure it does work.

The publication of this report provides the focus to create a national consensus on the importance of tackling this problem. I was delighted at the speeches made here today. Senators O'Sullivan and Henry focused on the areas of how this can be achieved. This report recognises the importance of the problem and makes recommendations with which we can do something about it. With this consensus and the recognition of the importance of tackling the problem, the report also gives us specific ways to solve it. The main need now is for action not just talk. The report has given us not just food for thought but fuel for action. This is an exciting prospect which we should grab hold of at this stage. We should not be frightened of the scale of the problem. If this problem is as big as it seems, there is a danger that we will say it is so big that we are not able to tackle it. There is the tradition of how to eat an elephant. This is quite a challenge but the way to do it is to take very small bites at a time. This problem is elephant sized and if we are to tackle and solve it we must take it bit by bit. The forum's report has given us not just the rational analysis of the problem but also solutions. We should move on these solutions immediately.

When it is proposed to sit again?

At 2.30 p.m. on Wednesday, 26 October 1994.

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