I welcome the Tánaiste and Minister for Enterprise, Trade and Employment to the House.
Job Creation and Role of FÁS: Statements.
Thank you. When I heard the Seanad had decided to discuss the role of FÁS and job creation and training and labour market issues this morning I wondered if it was a case of sending in the women while the men got ready for the big match this afternoon. Since I became a Member of this House in 1977, the occurrence of a major sporting event has meant a slot for women in both Houses. That was in the days when women did not follow or have any interest in sport. However, just as politics has changed, so too has the role of women. I hope all Members of the Seanad will be in a position to cheer on the Irish team at 2 p.m. I know the Opposition does not have a great deal to cheer about these days, but I hope it, too, will be able to cheer on the Irish team.
The Minister will leave me with nothing.
Well done.
In fact, during a presentation to him by the Taoiseach and other party leaders to commemorate his 40 years in the House, the Ceann Comhairle remarked that when he first became a Member women were not allowed to go into the bar. That is not all that long ago.
We have come a long way in a short time.
Yes, we have come a long way. Despite recent setbacks the medium and long-term outlook for the labour market remains positive. In the very short-term there is a great deal of uncertainty about growth in the economy and the impact on employment. Unemployment is already showing signs of increasing from the current very low levels. However, over the medium term most commentators are of the view that the economic fundamentals are strong enough for very respectable growth rates to resume with a consequent return to full employment.
In the longer term the Central Statistics Office is predicting a total labour force of approximately two million by 2011. This implies that the employment and labour force growth which we experienced in the 1990s will slow significantly due to a reduced natural rate of increase as our demography changes and modest increases in female participation in the workforce. This slowing in the growth of the labour force creates new issues and challenges for labour market policy. Not alone will there be fewer young people entering the labour force, but these young people will be much more highly educated and trained than their predecessors. In 1970, 60% of the workforce had just a primary education. By 2010 only 10% of workers will be educated solely to primary level and 40% of all workers will possess a third level qualification. These higher levels of education and training will be needed as most of the increased demand for labour in the years to come will be for skilled workers with the demand for unskilled workers continuing to fall.
This will have significant implications for companies in the years ahead. It will become progressively more difficult for companies in low value added sectors to pay the wages required to attract and retain workers. They will find themselves competing with much higher value added sectors better able to afford the high wages which our better educated and trained workforce will demand. In the future the key to business success will be the ability of companies to compete for that valuable economic resource, labour.
Before looking at the role and activities of FÁS we need to look at the job creation side of the equation. A fundamental reason for our enviable record in terms of increased employment and decreasing unemployment in recent years is that we have been able to boost job supply and match it with the appropriate labour supply. The general pro-business, macro-economic and competitiveness policies which the Government has pursued have contributed substantially to job creation in the past five years, as have our industrial development agencies, whose supports and expertise have led to many highly qualified and sustainable jobs being created with wider employment benefits to the economy at large.
Despite the global economic slow-down the IDA's pipeline of projects is healthier than the circumstances might suggest with a number of significant new projects or expansions from clients already located here. The rate of new inward investments will, on current trends, be slower in 2002 than the years up to 2000, but IDA Ireland believes that there are real prospects of winning valuable new investments in the next six to 12 months. The healthcare, pharmaceutical and international services sectors seem to offer the best prospects in the short-term.
Where there have been closures or lay-offs it has been made clear to the agency that for the most part these were attributable to sectoral and global difficulties, not to problems inherent in the economy. The key world class ICT companies with significant activities here have assured the IDA of their immense confidence in this country, its positive business environment and the flexibility with which they can operate here. If, as a country, Ireland can maintain its competitiveness and build the skills and infrastructure needed for the knowledge economy, the IDA will be well placed to win a disproportionate share of the next wave of their knowledge-intensive investments.
Enterprise Ireland, too, is responding to the changing economic environment and the challenges facing its clients in a number of ways to help them to adjust to the changing circumstances. Enterprise Ireland places a strong emphasis on growing competitiveness in its clients and the business environment. Specifically, this has meant increasing investment in research and development at company level and working towards improving products and processes to ensure clients are in the best position possible to maintain market share in the short-term and grow in the medium term. The sub-supply sector is likely to be seriously affected if the US slow-down is prolonged. Enterprise Ireland's sub-supply team is monitoring the sector closely and working with its clients to find alternative markets and opportunities outside of the electronics sector, specifically in the medical and healthcare sectors.
Turning to FÁS, its objectives can be summarised under three headings: to help employers meet skill needs and fill vacancies; to assist unemployed people to get back to work; and to provide workers with the training and skills necessary to compete in a global marketplace. In the coming five years FÁS will play a central role in the implementation of the national development plan by delivering many of the measures in the employment and human resources development operational programme. This will involve expenditure of almost £10 billion on upgrading the skills and training of our people, our most valuable economic resource.
FÁS provides a wide range of services for job-seekers and employers. This year, with a budget of over £650 million, it will provide guidance for 150,000 people who register their employment and training details with the agency and training or employment support for over 90,000 people. FÁS operates the National Employment Service or NES which provides job-seekers with a guidance and placement service designed to help them find work or acquire necessary skills. Through the use of new information and communication technologies, including call centres and its Internet-based jobs bank, FÁS provides both employers and job-seekers with a flexible service. It also plays a major role in the successful strategy to prevent long-term employment delivered under the Government employment action plan. This provides a proactive referral service to all unemployed people before they become long-term unemployed. More than three-quarters of those on the live register who have been referred to FÁS under the plan have subsequently left the live register.
Specific target groups including women, the long-term unemployed and young people have particularly benefited from the activities of FÁS. Through its action programme, Women in Focus, it is committed to ensuring that women have every opportunity to participate fully in its programmes. Over half of those commencing its non-sponsored programmes are women. The long-term unemployed also benefit from activities and programmes which have been tailored to meet their requirements. The success of such measures can be seen in the reduction of long-term unemployment from 9% in 1994 to its current level of 1.2% or just under 20,000 people. FÁS also fulfils a role in terms of groups who have particular labour market difficulties. It has taken responsibility for the training and job placement of people with disabilities and the new social economy programme provides meaningful employment opportunities for the older long-term unemployed.
FÁS has played a very positive role over the past few years in helping individuals threatened with redundancy. With the industrial development agencies and relevant local organisations it has made major contributions to various local task forces set up to address company closures. An example of this approach is the plan being finalised for the north Dublin area where the scale of the lay-offs, in the context of the current economic slowdown, will require an enhanced response. I have established an initiative under the Fingal county manager, William Soffe, to bring together all the relevant agencies including FÁS, the Department of Social Community and Family Affairs, area partnerships, local authorities and enterprise boards. The role of FÁS will be to establish one or more quick-response teams with a full time manager and staff experienced in employment services and training. The team will, in conjunction with the affected companies, provide information, advice, training and other services to those facing redundancy.
When I appointed the new FÁS board for a five-year term at the beginning of 2001 I was conscious of the need to reappraise its activities in the light of the labour market outlook. I was pleased, therefore, to learn that the board intended to undertake a strategic review. The process is now nearing completion following extensive consultation with staff and other relevant stakeholders and I expect the new strategic plan to be launched very shortly. As part of the strategic review process I conveyed my thinking to the board on its future role. Business operates in an ever-changing environment. This implies much greater attention to, and innovation in, areas of skills development, adaptability and lifelong learning, to the benefit of both individuals and firms. In this context I expect FÁS to work closely with the other mainstream industry support agencies with a view to identifying trends and skill requirements and to be responsive to the training and skills needs of workers, especially where downsizing or closures occur.
The overall strategic response by FÁS to labour market trends should be to meet current and future needs by mobilising labour supply from all available sources through matching, training and integration and at the same time continually upgrading the skills and competencies of the workforce and those seeking employment. There are a number of key elements within this overall strategy that need to be addressed for the future. The NES is the front line in the FÁS strategy in terms of filling vacancies or referring job-seekers to suitable training. I welcome the range of new initiatives introduced in this area including the work of the local employment services. For the future FÁS should ensure that the activities and resources of the NES are adequate to carry out these essential functions.
One of the Government's key objectives is effectively to eliminate long-term unemployment. I am proud that great strides have been made in this direction in recent years. Clearly the barriers to those who remain in long-term unemployment are severe. I hope to accelerate the transition from training and employment schemes to work and I would like FÁS to ensure that its future strategy continues to focus on the problems facing the long-term unemployed.
Between registered unemployed and women not in the labour force, there are some 100,000 women available to work. FÁS has an important role in this area. I am pleased that the new allowance for child care costs for persons on training programmes introduced earlier this year will be a help in that regard. I have also urged the organisation to explore more flexible options for delivering training. As well as long-term unemployed persons there are others who suffer from severe forms of disadvantage, for example people who have misused drugs, ex-offenders or people lacking in basic skills. The goal here is the same as with other groups, to help people to find and keep a job in the open labour market. This will remain a key priority for FÁS.
We also need to ensure that people with disabilities have access to more and better jobs. The integration of training and employment for these people within FÁS is designed to achieve this. I am pleased that it has made this a particular priority and is developing innovative approaches.
In years past, leaving school early meant immediate unemployment. There are still some young people who leave the formal education system without any prospect of finding or keeping a job. I would like FÁS to work with the education system to ensure that it is able to offer suitable training or support to those people. At the same time the availability of jobs has acted as an attraction for some young people away from full-time education. Often these jobs are low-skilled and dependent on consumer spending in the economy. Unless young people continue to develop their skills while in employment they are very vulnerable. I have asked FÁS to review its services for young people as well as its training for people in employment to cope with this.
Any review of future strategy must take account of the major levels of activity and expenditure within the community employment programme. CE accounts for half of the FÁS budget of £650 million and half of its annual clients. CE schemes have made a very positive contribution to the quality of life not only of those who participate but also of the wider communities that benefit from the services provided. Following a restructuring of the CE programme approved by the Government in 1999 participation levels are gradually being reduced. This reflects the falling numbers of long-term unemployed and the shift in emphasis away from work experience programmes to training, from which there is a greater level of progression to employment.
The mainstreaming of school services currently under way and the proposed mainstreaming of other essential services, including the health and environmental sectors, will further reduce the numbers employed in the programme. Mainstreaming involves the transfer of CE funds for specific services to other Departments with functional responsibility for those services. The valu able contribution which active labour market programmes such as CE make to persons experiencing long-term unemployment and to community services is fully recognised and the labour market needs of these groups will continue to be supported through community employment and other initiatives such as the social economy programme and the job initiative programme for as long as is appropriate. However, the dramatic improvement in the level of long-term unemployment in recent years, which is now below 20,000, and the demand levels for workers in the economy mean that the pool of potential CE workers is inexorably diminishing, for very good reasons. Accordingly, essential community services may in the future be required to be provided by other means. In considering eligibility for future participation in CE, I have been very conscious of the particular needs of older participants. This is especially the case in parts of the country where there may not be alternative sources of employment. I was happy to announce last August the more flexible arrangements for such persons.
Migration has become a very topical subject in recent years and there has been some misunderstanding about the nature of recent economic immigration, the reasons people come and the terms on which they are brought here. Ireland does not have a formal quota-based immigration policy with country or sectoral quotas. The instruments of economic migration currently operated are the work permit scheme and the working visa-work authorisation scheme. The role played by my Department is to facilitate the entry of appropriate persons from outside the European Economic Area in response to requests from employers. The admission of non-EEA persons is largely market-led as the onus is placed on employers to show that a particular skill is required and that no EEA persons are available and willing to do the job.
The work permit scheme is unrestricted in terms of the categories or skills of workers for whom application can be submitted. The number of work permits granted under the work permit scheme has increased substantially in recent years and the number of permits issued in 2001 to date is in excess of 32,600. This compares with 18,000 last year. Preliminary analysis in the Department suggests that up to 70% of the persons coming here on work permits are going to relatively low skilled, low paid jobs. They are mainly in the rapidly growing labour intensive sectors in areas of services, including the hospitality sector and horticulture, but also basic factory operators and, increasingly, personnel for the retail sector.
The working visa authorisation scheme has been operating since June 2000 and in the period up to August 2001, a total of 3,870 permits have been issued for highly skilled workers in the IT, construction and nursing professions.
The recent setbacks in the economy and the rising level of domestic unemployment raises the question whether the market-led policy is still appropriate to deal with these changes in labour market supply and demand. At a policy level, therefore, I have been examining how we can flexibly adjust the work permit scheme to prevailing labour market conditions. I expect to be in a position in the very near future to announce new arrangements for processing and deciding on applications for processing work permits which will take full account of the changing circumstances
There are different challenges facing the labour market in the short and medium term. There are still significant vacancies to be filled in the economy, while the current uncertainty and the threat of increased unemployment means that we will have to engage those losing their jobs so that they can quickly find new ones. With a return to economic growth and employment in the medium term, the challenges will be to mobilise labour supply and to provide the skills to meet the needs of the economy. In both scenarios, FÁS has a major input and will be required to operate flexibly to meet the changing circumstances.
I welcome the Minister to the House. I am glad she is looking so well. I enjoyed her opening remarks and the little history lesson she gave us about times past in this House and in Leinster House generally when, on the occasion of a major game, the women were sent to the Seanad. Thank God things have changed since then.
They were sent to the Dáil as well, by the way.
They still have not got to Tehran.
I knew the Minister would not discriminate. She has two men marking her here this morning, Senator Glennon and myself. I am also glad to know that despite the downturn, the Minister talked about the future, and I hope she is right.
The FÁS mission statement is to increase the employability and mobility of job seekers and employees to meet labour market needs, thereby promoting competitiveness and social inclusion. In light of the recent unfortunate trend in the economy, this was never more important. There have been huge numbers of job layoffs and, sadly, many more redundancies are in the offing. FÁS needs to play a positive role in helping all those who have been laid off and those under threat of redundancy.
The FÁS role of training and upskilling people was never more important. At a time when the ESRI is predicting that employment will double in the next two years, FÁS should concentrate its resources on retraining and reskilling those who are made redundant, and this must continue while there is a serious issue of chronic, long-term unemployment. FÁS must continuously update and improve its training resources to this source of labour.
I trust that FÁS has ceased its overseas recruit ment programme for job vacancies here in the light of the economic uncertainty facing the country. The Minister stated that process has been wound down and FÁS is adopting a flexible approach. There was never much economic sense in FÁS providing a recruitment service for overseas workers, although the Minister stated these were largely low skilled, low paid jobs. FÁS should stick to its own role, in line with its mission statement, of training and employment services for our own people rather than grandiose overseas schemes.
At a time when community based schemes throughout the country are suffering due to the tightening of eligibility conditions for FÁS schemes, particularly in rural areas, it seems extraordinary that the FÁS budget allowed so much for overseas endeavours. I realise FÁS supported the attempt to meet the skills needs over the past few years by running its Jobs Ireland campaign, which consisted of a special recruitment website and fairs and exhibitions in a number of countries. In the light of labour market changes during the year, FÁS has stated that it ceased running such fairs and exhibitions from April this year. Perhaps the Minister will confirm that it has ceased the remainder of its overseas operations as well. I might have missed that point in her contribution.
In light of all the layoffs, closures and threatened redundancies, now is the time for FÁS to play its most positive role to date in helping all individuals in need of its assistance. With the development agencies and relevant local organisations, FÁS has a major contribution to make to various task forces and I was glad to hear the Minister outline what will happen in north Dublin. I am sure that is part of the reason for Senator Glennon's presence this morning. I look forward to listening to his contribution and to hearing whatever constructive criticism he will make. FÁS needs to develop, redefine and adopt its role to meet the particular circumstances of each situation. The approach will be different in rural and large urban areas because of the greater numbers in the latter and, I hope, the greater availability of jobs.
FÁS described the process it is engaged in as typically involving the following components: a top level agreement with the company and other organisations on responsibilities and actions; intensive interviews individually and-or in groups with affected workers, these interviews to outline the range of supports and services available; preparation of a skills analysis report based on identified workers' needs and local opportunities; referral of redundant workers to jobs, training courses or other functions; establishment of special or customised training courses where necessary; and ongoing support and action to keep redundant workers in touch with the labour market.
FÁS states that if workers are to succeed in the months following redundancy and not drift towards long-term unemployment, they will be picked up under the national employment plan preventative strategy. I would like to hear the Minister further on that point when she responds.
Community employment is restricted to those who are most in need of special measures and FÁS does not believe that everyone should be allowed to participate on community employment. Specifically, FÁS says it is aimed at those who are known to have difficulty getting normal jobs. The principal target groups for community employment are the long-term unemployed, lone parents who have been in receipt of benefit for over one year, travellers, persons with disabilities and eligible refugees. Other categories who may be eligible are deserted wives, ex-offenders, carers, widows and dependants of the long-term unemployed. FÁS has stated it is not its intention to widen eligibility to other groups.
There are also restrictions in place concerning the duration of participation in community employment. According to FÁS, that reflects the intention that community employment should be a mechanism to help disadvantaged people develop skills, experience and a work record that will enable them to obtain normal jobs. The duration rules vary depending upon the severity of the disadvantage faced by the participant. Earlier this year, FÁS decided to increase the flexibility of the duration rules for persons aged over 50 and, in certain circumstances, younger people.
I urge the Minister, in these difficult times, to examine closely the policy priorities and budget of FÁS because, as the national training agency, it needs to introduce much greater flexibility across the board, particularly in regard to community employment schemes. There are often particular difficulties in outlying and rural areas where many worthwhile projects can only be undertaken through such schemes. Given the circumstances we face, we should not allow red tape to block worthwhile projects. I am pleased to note the Tánaiste's comments on flexibility. She has left no doubt that the matter is under constant review. I urge her and the Department to keep in touch with it.
We all know of many excellent environmentally oriented schemes which have come to fruition, some of which are probably part completed or awaiting completion, but may be tied up in red tape and the tightening of eligibility criteria. They are hanging fire, so to speak. I have a particularly worthwhile project in mind, the lovely low stone wall which runs alongside the Deenagh river close to my patch.
Worthwhile schemes in the pipeline in villages such as Scartaglin, Barraduff, Rathmore and Kilgarvan are waiting for people to undertake them. Again, however, the tightening of eligibility criteria has meant the people in charge cannot obtain the requisite number of eligible personnel. There are, however, other people in those communities who, while not eligible, would be willing to take part in schemes which would be of great benefit to their communities. I, therefore, urge the Tánaiste to redirect FÁS and encourage it, even for a short-term period of perhaps 12 months, to take a more relaxed and flexible approach and allow many schemes which are valuable to local communities to proceed.
I wish the Tánaiste well and hope that we will get through the difficulties, which may become more pronounced, in as effective and efficient a manner as possible. North Dublin in particular is in a very difficult position. I hope other jobs will become available and, with the help of FÁS, people will be able to retrain, reskill or upskill to become suitable to fill them.
I join my colleagues in welcoming the Tánaiste to the House. She will be pleased that, since her time in this House, the days of consigning women anywhere have gone. Certainly my colleague, Senator Ormonde, would not take kindly to being consigned in any direction on any day.
I particularly welcome the positive tones of the Tánaiste's address. I make no bones about being parochial. I congratulate the Tánaiste on the manner in which she has dealt with the particular difficulties we in north County Dublin are encountering. She devoted a passage of her address to the matter, to which I will return. It is indicative of the mature, realistic, measured and efficient response emerging to what, in any terms, is an employment crisis, even though it is taking place in one of the more buoyant parts of the country.
It is very important that debates such as this are held in as calm a manner as possible. There are obviously vested interests which, for their own purposes, seek sensational headlines and hype. The reality is that hype only generates heat or cold at either extreme of an argument. I hope we will have a measured and reasonable discussion today. The Tánaiste and Senator Coghlan have set the tone. This is the environment in which these issues can be properly teased out in a mature way that supports the people most directly affected in their difficulties and does not exacerbate matters, as can and, unfortunately, has happened as a result of certain contributions to the debate which, I add, have not been in this House, but in public and on the airwaves.
The country is obviously going through a difficult time. We are just emerging from a period of almost unprecedented boom, certainly for the younger Members among us, a group in which I include Senator Ormonde and the Tánaiste.
I am a new boy here.
Chronologically.
All things are relative. The horrible phrase, Celtic tiger, and some other clichés which grated on my nerves in recent years have, fortunately, become a thing of the past along with all the rest of the hype. The Celtic tiger is being laid to rest. I hope it will be given the dignified burial it deserves, due respect will be paid to the changes it has brought to the country and that its as yet unidentified descendants, wherever they may be, will come forward in the relatively short-term and carry on the work of their predecessor.
I like to think we are going through a glitch rather than the crash with a hard landing that has been described. While I have no particular expertise in economics, I believe this is a natural period of adjustment. It is probably a welcome natural evolution of the process, which has been exacerbated by foot and mouth disease and, later, the horrible events of 11 September.
When these horrible events are mentioned, we should always be at pains to refer to the people directly affected. Since 11 September we have heard an awful lot about the events, but all too often we pass over them as merely another date in the calendar before proceeding to discuss the difficulties they generated for us. The reality is that these difficulties are minimal in comparison with those facing the people directly involved. We should never lose sight of this.
To be parochial again, when the real difficulties – provoked, I believe, by the announcement by Celestica of 450 job losses – hit north Dublin over the past few weeks, the usual requests were made for task forces. This term has become a national cliché. When difficulties arise in the employment sector, regardless of their scale, 'task force' is the standard catch phrase used for sorting out matters. I believe the term dates back to the difficulties of Digital in Galway, where the number of job losses was around 1,500. I stand to be corrected on that by the Tánaiste. The problems at Digital seem so long ago now, but it was a major event at the time. It was the precursor of the task force.
When the Celestica announcement was made I requested that a task force not be established. The difficulties of north Dublin are most particular and unusual. The task force has become the standard response and, well as that option has served various areas during the years, this is not a time for one. North Dublin is the seat of particular circumstances dominated as it is by the international aviation industry and the secondary and peripheral industries which develop around a major international airport. There are IT and pharmaceutical companies for which ready access to aviation is essential. I was delighted with the Tánaiste's rapid response to the effect that a task force was not the way to go. She immediately announced her consultations with FÁS, the outcome of which I am delighted to see. I thank her publicly now as I have not had the opportunity to do so before.
In her address today she referred to the initiative she has established under the Fingal county manager which brings together all of the relevant agencies. That is certainly the way to go. We are lucky in north County Dublin to have a dynamic and proactive local authority. I look forward to a very positive outcome from the initiative under the leadership of the county manager. I do not know if the VEC is involved, but if not, I urge that it be included. County Dublin VEC is particularly active. Senator Ormonde is very familiar with its workings. It plays a major role and has done so historically in ongoing education, particularly of adults. It is a body which has something particular to contribute to the current circumstances in Fingal and I look forward to its involvement.
I acknowledge the establishment of the quick response teams and emphasise that in this instance speed of reaction is of the essence. This is not the same scenario as obtained in my younger days in Balbriggan, which was synonymous with a very long established hosiery industry which had been in place for upwards of 100 years. When the recession of the late 1970s hit, the town was cleaned out and hundreds and hundreds of people lost their jobs and were left with no prospect of re-employment. Times, luckily, have changed with the birth of the mobile workforce. Unfortunately, there is global mobility of industry also, of which one of the downsides is the redundancies we are now seeing. That mobility demands a rapidity of response. Not only is the speed of the response important, its efficiency is vitally so also. All haste and no speed are a recipe for further difficulty. State and semi-State agencies are not perceived by the public to be synonymous with efficiency. I would like to think that we are moving into a new era in that area and look forward to FÁS moving positively to set a benchmark for other State agencies under the leadership of the Tánaiste. If north Dublin is to be the immediate beneficiary, all the better.
I was going to apologise for being particularly local, but I will not. When we speak of the number of redundancies everybody tends to deal with it as another project, another part of the job. That is only natural, but we must never lose sight of the personal tragedies that ensue. Fingal is the fastest developing local authority area in the country and while it is one of the most buoyant areas in terms of employment, a hit of the size we have taken in the last year is enormous in any context. We should never lose sight of the personal difficulties arising. In many instances both earners in a household in a new residential area with a mortgage to pay have no immediate possibility of re-employment. I emphasise the word "immediate" because it describes what is needed, the natural demand on the part of such people. "Immediate" for two partners being made redundant by the one firm has a completely different meaning than it does for a State agency. We must allow for entirely human and natural reactions when we deal with these matters.
In that regard I refer to a particular difficulty that has arisen in Aer Lingus in relation to the package available to the more senior employees. There are many employees with upwards of 30 years service. Unfortunately, because of the hard commercial reality of the rescue package their service has not been recognised in a tangible way in the incentives to take redundancy. It is highly unfortunate in a company such as Aer Lingus which has had such a tradition of loyalty from its employees which by definition it has enjoyed from employees who have given 30 years service. As they are due to retire within the next few years, the hard commercial reality is that it is not worth the company's while to incentivise an early retirement package for them. I understand the matter is under discussion at the LRC and will not say any more on the subject. However, it behoves us, as legislators, regardless of the cold commercial realities, not to lose sight of the human aspect. We must recognise what, in the vast majority of cases, has been lengthy and distinguished service.
Listening to the Tánaiste I was struck by the changing nature of FÁS. In the bad times it was almost a recruitment agency. It had waiting lists for people to go on courses and everything was done on a very general basis. It was a seller's market and there were people queuing at the doors to get in. In the more recent past the experience has been contrary to this and I hope that will continue to be the case regardless of the glitches of the present. I note the Tánaiste's comments and agree that FÁS must also change. The job market is changing at such a rapid rate that FÁS has to change its direction and become more locally specific in terms of industry.
Better access to and from the workplace may be something of a pipe dream, but it is worthy of mention in this context. It takes a great deal of time to commute and places a great deal of pressure on infrastructure. Supporting that infrastructure imposes huge expense on the Exchequer. While beggars cannot be choosers in terms of the location of their employment, there is significant scope for a more positive and proactive role to be taken by all concerned in the locating of industries. They should eliminate, where possible, what has now become the almost daily occurrence for too many people of having to spend an hour and a quarter or an hour and a half getting to work, and the same time returning in the evening. A balance must be struck and quality of life must be maintained. Over the years, we have been very proud of the quality of life we have had in this country. It is something we must preserve where possible.
It is worth referring to the allusions to the community employment schemes in the Tánaiste's address and that of Senator Coghlan. The schemes have served this country remarkably well and have been one of the great successes of the past 15 years. Adjustments have been made to them recently to cope with changing circumstances.
In the context of the comments I made earlier on more senior employees currently going through the redundancy process, I believe there is a place for them on community employment schemes. They, by and large, have a lengthy record of service to their companies. Loyalty is an important feature that characterises the vast majority of them. In many instances, they are people who have served their community through their being active in various community organisations. They would be very interested in becoming involved in a semi-retirement type scheme. Certainly, the community employment schemes have flexibility in that regard. I urge that this be examined closely.
I welcome the Minister again and congratulate her on the manner in which she has dealt with the issue, not only in the House today but also in my area over past months and weeks. I wish her well in her endeavours. While we are probably witnessing the demise of the Celtic tiger, I hope it has left a progeny somewhere, the effects of which will be evident to us all in the near future.
As always, it is a pleasure to welcome the Tánaiste to the House. I was in my office on the telephone with one ear cocked on the monitor and I think I heard her making quite a good crack about the position of women. When there is a big match on – perhaps I heard her incorrectly – it is usually the women who are put in to bat. I speak this morning as an honorary woman. It is a pleasure, as always, to have the Tánaiste in the House, and we are lucky to have someone of her qualities doing this job at this time because it is not just a question of initiative, intelligence and political skill, but one of stability and balance, not losing one's nerve and being able to hold on to things.
We are certainly going through a little bit of turbulence at present. Previous speakers referred to the Celtic tiger. I got a bit of a jolt the other morning when I picked up the newspaper and saw a headline which said, "Celtic Tiger dead: officially confirmed". It turned out to be a racehorse called Celtic Tiger. I am not sure the Celtic tiger economy is entirely dead, but it was never something that was to last in its full vigour. Economics, my understanding of which is fairly limited, is composed of cycles. I remember being in Croatia earlier this year where the president received us and asked us a number of questions. He expressed his admiration for the Celtic miracle and asked us to explain it. My colleagues did their best to explain it in the most positive terms possible. When my turn came to speak, I said to the president: "Well, you have just put it exactly as it is – it is a miracle." The thing about miracles is that people do not fully understand them, but once they have occurred everybody claims credit for them. However, I was able to say that I thought there were certain factors involved. One was the education system in Ireland, which is particularly good.
It is a pleasure this morning to see bright eyed, well-conducted, smartly turned out younger people in the Gallery listening to these debates and admiring the beautiful 18th century ceiling in the House. They are very much our future. There are certain demographic features to be noted in this regard in terms of the birth rate, which is dropping, and in terms of the increasing invest ment by successive Governments in education. I am very glad the Minister is fully supportive of FÁS. It does not surprise me and she is right to be so.
My colleague on the Government benches almost apologised for being local in his focus, then withdrew the apology and said he would be so. Of course, he is perfectly right. I remember the late Frank O'Connor saying there is a great difference between being provincial, which is negative, narrow and inward looking, and being parochial. If one is parochial and knows one's own parish and back yard, by a process of universalisation one knows everybody else's. The most telling stories that come to us from the coalface of the economy are those that have been experienced personally or at a kind of direct second hand by pressure from the local community.
As colleagues on both sides of the House have spelt out, human situations are most affecting, especially concerning people with mortgages. Such people may lose their jobs and may be lucky enough to get new ones – I compliment the Minister and the IDA for seeking out these opportunities to fill in the gaps that have been made – but there can be a nerve-racking few months or a year while finding another job if one has commitments in terms of a mortgage. Many in such circumstances felt they were riding on the back of the Celtic tiger. Many young couples took out enormous mortgages that required both partners to have an income and they are now facing considerable pressure and trauma. It is important that we try to do something to help.
Considerable emphasis was placed on youth in the Minister's speech. This is absolutely appropriate, but must be balanced a little in terms of elderly people. I was contacted by a constituent, whose vote I now believe I have lost, because I did not manage to pull even a Celtic cub out of the hat for her. Her particular gripe – one we should be aware of – is that she was very happily involved in some kind of community employment scheme through FÁS, but once she reached a certain age she was told it was terminated. I am not sure if she was 60 or 65, but I will give her the benefit of the doubt and say 60. That is a pity in terms of the quality of life of elderly people who have experience and the wisdom of age and who need both the social contact and the feeling of worth derived from contributing to their community. It is rather cruel to put them onto the scrap heap just because they hit a particular age limit. I ask the Minister to examine this, particularly in light of cases which I know have been drawn to the attention of her Department. We can benefit from these people and they can benefit by being employed in this way.
I have spoken a little about the negative circumstances we are in. They are by no means as bad as those when I was growing up, when there was appalling unemployment, the country was drained by emigration and income levels were astonishingly low. In this light, there is more to the Celtic tiger than just our native initiative, intelligence, education system and geographical position in terms of our being attractive as an offshore point from Europe for American companies etc.
Despite the fact that there is a fairly negative blip on the horizon, we still have a great deal of which to be proud. Our position, compared with the rest of the world, in terms of employment figures is something of which we can certainly be proud and satisfied, even given the recent job losses, about which we are all aware. Some of them, indeed, are tragic, especially with regard to Aer Lingus, which is a superb airline that gives first-class treatment to all its passengers. One may not get one's champagne if one is down in the steerage with me, but one is certainly treated as a human being. That is not the case on many airlines. I sincerely hope that Aer Lingus will be able to continue this tradition of Irish hospitality.
While there have been job losses, we still have the most dynamic labour market of any country in the OECD, including the United States, a record of which we can be justly proud. With the labour market likely to remain tight for the foreseeable future, FÁS is in the vanguard of efforts to ensure economic growth is not hindered by labour or skills shortages. This was one issue with which the Minister had to deal. The problem was we had what was almost an overheating economy and did not appear to have sufficient indigenous skills. We had to begin looking for people and bringing them in from abroad. I know this is in the process of being restricted and that criteria are being applied that it must be shown that the person employed from a foreign country does not replace a person similarly qualified from Ireland. That is reasonable.
A general point on this issue is that we are moving into a much larger pool in the European Union and sacrificing our insulation. That is good, but it must be extended gradually in the next century until it comprises the entire world. It is unsatisfactory that we exclude people in a snotty way and slam the door on them by saying they are only economic migrants. I will give one example as a reason this is unsatisfactory.
There is a company in the west whose success I admire which built an enormous trawler or factory ship in the past year which hoovers up fish from the ocean bed. There is a considerable amount of waste. It has a negative impact on fish stocks and, as a consequence, is not permitted to fish inside European Union waters. It fishes off the coast of west Africa instead and displaces and drives out of employment a whole series of communities along that coast. They then come to Europe in distress because their livelihoods have been wiped out and we say they are no use because they are just economic migrants and that they can hump off. That is unfair. We must recognise our common bond as citizens of a comparatively tiny little lump of rock flying around an insignificant star. We are literally all in this together.
The labour market is undergoing a number of changes and, so far, they have been positive. Since 1993 the unemployment rate has fallen from 15.7% to a mere 3.7%. This is a terrific achievement. The number of unemployed has fallen from 220,000 to 65,400 over the same period and, despite recent setbacks, we are in a position which would be regarded in most countries as almost full employment. Some 4% of the labour force are still unemployed, but most countries would be very happy to have such an unemployment rate. In the past eight years an extraordinary 533,000 new jobs have been created, and about one third of the jobs which exist today did not exist in any form a mere eight years ago. This is positive. The proportion of young people aged 15 years or over in the labour force has replaced the unemployment rate as the key statistic. In other words, we are not looking so much at how many people are unemployed as how many younger people are actively engaged in the labour market.
In 1993 the participation rate in the labour market was less than 45%, but by the middle of this year it had risen to more than 59%. Most of this increase in the participation rate has been the result of a greater proportion of women choosing to work outside the home. In 1993 just 34% of women worked or were seeking work outside the home, but by last May 47.5% were doing so. Women took up more than half the new jobs created in the past eight years. I know this is something which goes to the Minister's heart because I remember her as a brilliant debater in Trinity, the first auditor of the college historical society and the youngest Member of the House of either sex when she was appointed a number of years ago.
There have also been changes in emigration. In the late 1980s it was running at more than 40,000 a year, but now there is net immigration. In the past year 26,000 people returned to the country. That is very good.
The country has been the most successful creator of new jobs in the developed world in the past decade. By May 2001 an estimated 1.716 million people were at work in Ireland compared with 1.183 million in April 1993. Although the rate of employment creation is slowing, almost 46,000 more people were at work last May than one year earlier. That does not take into account the tragic events of 11 September which have had a disproportionate effect on this country because of our dependence on sectors such as tourism.
Americans are notoriously nervous travellers. We have known this for years. I remember 20 years ago being sent to the United States because they wanted a certain level of humour and anecdotage to replace the fear of Americans who could not distinguish between Dublin and Belfast and thought everyone here was under siege. It was thought that, if I made them laugh, they might realise that matters were not as bleak in the South as they had previously imagined.
When agricultural and public sector employment is excluded from the figures, total employment grew by a remarkable 72% between 1993 and May 2001. This has led to a tightening of the labour market and the type of problems to which I adverted previously about skills. I welcome the fact we have access to some of these skills. I have had to visit people in hospital recently and noticed that the profile of certain jobs is changing within our culture. It is rather sad that nursing no longer appears to be as attractive to young people of either sex, because we had a wonderful contribution to make in this area. The proportion of men within nursing is growing which I am sure is a good and balanced development, but many young women are not interested in the profession. One of the reasons is that there is much too high a demand within it for academic standing and record. The vocational aspect is being minimalised and marginalised. Instead a significant number of Filipino nurses are being employed, and they do a splendid job. They are happy, cheerful, kind to elderly people and considerate. To use an old Irish expression, we would be rightly swept without them. It is very good they are in this country.
The number of young people entering the labour market for the first time is falling rapidly. This is as a result of demographics. It could be said we are over the bulge in terms of population. The birth rate is falling for various social reasons and has been since 1980. Throughout the 1970s the number of births averaged more than 69,000 a year before peaking at 74,388 in 1980. The number of births then fell rapidly to just under 53,000 by 1990.
I welcome this and wish the situation were repeated all over the planet, especially in Asia and India. The prospect of demographic distortion by the enormous increase in the world population is frightening and daunting. Although people in European countries may consider that it does not matter because we can afford to have all these extra children, it must be asked if the planet can. One western child does about ten or 20 times the amount of damage to the environment in terms of using resources and creating waste as a child in the less well-off and less fortunate parts of the world.
By 1994 the number of births in Ireland had fallen to just under 48,000. There has been a slight increase with the number of births climbing to 54,200. The average number of births for the period 1991 to 2000 was more than 25% lower than the period 1971 to 1980. This is a good development which has had a significant impact on the jobs market. In the mid-1990s the national demographic increase in the labour force was running at approximately 35,000 a year. This year it will be 25,000, which represents a significant drop of 10,000. It will have fallen to just 12,000 by 2008 and, if this trend continues, which is likely, there will be no natural increase in the lab our force by 2014. That is a positive position in which to be because we can then begin to refine the type of jobs we want in the country. We will not be under pressure to create jobs for the sake of it. We can target specifically the type of employment and standards we want.
The Tánaiste referred to the involvement of women in the workforce and I welcome the fact that there has been a significant and positive change in that regard. Irish labour force participation rates for younger women are among the highest in the developed world. Current figures show that 66% of women aged between 20 and 24, 76% of those between 25 and 34 and 65% of those between 35 and 44 are involved in the labour force. It is only among women aged 45 or over that labour force participation lags behind other advanced economies, with 55% of women between 45 and 54, 36% of those between 55 and 59 and only 21% of those between 60 and 64 involved in the labour force. I return to the argument I made to the Tánaiste to consider ways of including these elderly people in the workforce. I use the word "elderly" advisedly because I am 56 years of age and I describe myself by using that word. It is not intended as a negative description, it is a wonderful tribute to our capacity to survive that those of us over 55 are still alive.
FÁS has undertaken the upgrading of training and skill levels among the workforce in recent years. The number of apprentices has doubled since 1995 to 25,000 this year. It has also targeted the long-term unemployed. It is noticeable that there is less of an edge in the voices of those who represent the long-term unemployed when they are being interviewed on radio or television. They recognise that although the number of people on long-term unemployment is small and dwindling, the prospect of being without a job for an extended period remains an awful prospect. If FÁS can do anything for these people, its action would be welcomed as socially constructive.
The Tánaiste is right to be positive about the prospects for the economy and for employment. Being cautious is prudent, but being alarmist is destructive. We must be particularly careful in that regard at this time.
It is said that the appearance of a photograph in the media is worth 1,000 words. One of my abiding images of the Tánaiste is of her wearing a hard hat. She has attended the opening of many factories and other business enterprises throughout the country. In fairness to her, however, she has also been at the coalface when hiccups occurred. I witnessed that in south Tipperary to which she travelled when assistance was needed. The Tánaiste provided leadership, gave people a morale boost and put structures in place which have proved effective in the short-term. The lesson we should learn is that if we are positive in our response to the difficulties that have arisen, there is every opportunity that we will succeed.
I am an unrepentant advocate of FÁS. I have seen, first hand, its work and success at local level. The Tánaiste has been a very pragmatic politician, not merely in dealing with matters of particular interest to Dublin but also those relevant to other parts of the country. That is one of the reasons she is held in such high regard by the public. Due to her exposure to issues which affect the entire country, she is also aware of the ongoing importance of FÁS. The contribution of that organisation to the rearing and nurturing of the Celtic tiger has been underplayed and underestimated. Perhaps that is good. I am not stating that FÁS did not receive credit, I am suggesting that it was so successful in blending in with communities that those communities took responsibility for their own initiatives and innovations. FÁS provided the impetus for such initiatives and innovations on many different occasions.
I have developed a relationship with FÁS at local and national level, through the community response scheme and I am aware that it achieved replacement rates as high as 95% during periods when unemployment was particularly high. Many of the people who availed of the community response scheme came to it directly from third level education or secretarial colleges. They had already obtained their basic qualifications and training, but they had not yet gained exposure to or been actively involved in the real world. FÁS schemes operated as halfway shops where these individuals could be introduced to work practices and disciplines and allowed to use their own initiative so that when they eventually applied for positions it was evident from their CVs that they were not entering the labour market as raw recruits. They could show that they had proved themselves for six or nine months on a scheme. I do not believe the position has changed.
Even if there was full employment, the halfway shop concept would still be an important part of education and training. Any prospective employer interviewing a person – who may have a glowing CV listing diplomas, degrees or whatever – for a job will always be cautious because they inevitably want someone with experience to avoid their having to provide additional training. FÁS has provided such training for people and that has been its major contribution to the so-called Celtic tiger economy.
FÁS is an asset to the country, particularly with regard to the way in which it is structured. The people who work for FÁS have worked at the coalface and, unlike many of those who work for agencies which protect and insulate them from the real world, they do not inhabit ivory towers. As a result, they have been able to design procedures and a method of interaction with the community which does not bring with it any sense of cynicism or sarcasm. That asset has been developed over a long period. Despite the hiccups that have occurred recently, we are living in an era of almost full employment. However, there will always be a need for FÁS, even if it involves a change in its role.
Other Members referred to community employment schemes which have served us well. Perhaps there is still a need for such schemes. I was particularly glad the Tánaiste responded to the needs of older people by encouraging the use of greater flexibility. In that regard, we should not underestimate the experience and expertise older people have gained throughout their lives. It is not always a question of employment, it is a question of using such expertise when it is most needed. As the Tánaiste stated, one of the challenges facing businesses in the future will be their ability to compete for the professional labour that is available. Older people can provide some of that labour. Perhaps FÁS and the Tánaiste, when examining the organisation's role, will consider that aspect.
I recall attending a debate involving the Joint Committee on Education and Science where many people bemoaned the fact that adequate numbers of teachers were not coming on stream and that it might be necessary to bring them in from outside. I do not wish my comments to be misinterpreted but if teachers came in from outside they would bring with them a different ethos and emphasis and would lack exposure to the communities they would be expected to serve. Many teachers who may have retired at 65 or taken early retirement and who could offer great experience and expertise were available to work and it would have been worthwhile considering bringing them back into the labour market. I suppose certain adjustments would have been required for them to do that.
The situation is similar in other areas of employment. The social economy programme has a great deal to offer because it focuses on the creation of full-time jobs. In that regard, FÁS has fitted into a role, intentionally or unintentionally, where it often had to service the infrastructure which, in the past, certain Departments might have considered servicing. These services were provided by heritage centres, charity centres, schools and so on.
That infrastructure is vital to the community and it is very often the engine of the motivation which will provide further employment. If that is endangered in any way, the community will suffer as will the confidence of the community. It may not be possible under the social economy programme to satisfy the need by saying that at the end of a three year period, a full-time job will be available because very often the bodies involved are subventing bodies and are dependent on voluntary subscriptions and voluntary service. To put extra pressure on them might be difficult. I am not saying it is not possible in certain cases but I suggest there should be an open mind in that regard.
Likewise, many of these services also help in the field of tourism. A county heritage centre, of which there are many, provides an information service and a focus point for the tourist in a non-commercial way, which is often regarded as one of our strengths in tourism, that is, the manner of the service provided, the approach we have to people and the fact that the bottom line is not always about money. I emphasise very strongly that the infrastructure we have helped to sustain through FÁS is vital to the community, and that should always be kept in mind.
In addition to the areas of retraining, preparation for work and helping to bridge the gap for those who have been made redundant, there are two other areas we should seriously consider. One such area was referred to by the Governor of Mountjoy Prison, John Longeran, yesterday or the day before. He said habitual offenders are serving life because when they return to the community, it is very difficult for them to find employment. I know the Tánaiste has focused on this. I reiterate the old dictum, there but for the grace of God go I. In fairness to those people, they must be treated with humanity because society benefits when one helps a person. If one helps a person to successfully reintegrate into the community, the community, the person's family and society benefits.
The other area concerns emigration. The emphasis is being placed on the overseas programme but I would like to focus on Irish people abroad. I saw statistics recently which suggest the majority of homeless people in London are Irish. I referred to this last Christmas. Irish people who emigrated from here in the 1950s and 1960s and who have no pension scheme very often live in deprived conditions outside this country. When our economy was weak and there was no cash flow, they worked on building sites in England and whenever they had a few pounds to spare, it was stuck in an envelope and sent back to Ireland at a time when it was needed. We should not forget them now.
Other people who have been very successful abroad, people who have been successful in the building industry and in other jobs, want to return to Ireland. I see FÁS using their expertise. Very often they have financial backing and we should facilitate their reintegration back into the workforce here, as has been done, incidentally, by Roinn na Gaeltachta which has extended its grant schemes to people from the Gaeltacht who have emigrated and who want to come back to Gaeltacht areas. They are now eligible in this regard. I would like FÁS to always serve that role.
We should be very cautious in thinking that the only role FÁS played was helping at a time when unemployment was very high. The experience and expertise of and appreciation for FÁS in the community will be needed in the future. When we face a difficulty or a closure – I saw this in south Tipperary when the Tánaiste visited – FÁS is called upon immediately to undertake fire brigade action. In addition to the coalescing of agencies in Dublin, which the Tánaiste mentioned, perhaps she will consider similar action in other parts of the country not when a difficulty arises but in preparation for difficulties or changing roles which may apply.
I did not intend to speak on this subject but having listened to some of the debate, there are a few points I would like to make. Senator Ó Murchú mentioned the social employment scheme of FÁS. I reflected on that, on the uses to which it was put and on the abuses of those schemes. However, we often lose the good in the bad. I am sure the Tánaiste is aware of Maree in Oranmore where the local authorities held on to land to build a park outside Galway city. The FÁS schemes were to be used to try to develop the old castle, the grounds etc. The local community was called on to work on the schemes but the resistance was unbelievable. I received many telephone calls from people asking if I could get them off the scheme and saying that they did not want to do the work. Some said it was a form of employment like that at the time of the Famine when one lifted stones from one place to another. I told them there was no way out of it and that if they were not available for employment, they would not get social welfare. I told them it would last for a few months and that after that, they would be off the hook.
After a few months on the employment scheme, they started to get involved in the projects. They started to acquire new skills which they could use, such as stone building, stone cutting, roofing and other general skills. When the scheme finished, they came to me to ask if it was possible for them to continue on but, unfortunately, it was not. It was a community project and they took personal pride in it. Skills were used and developed and people had a sense of accomplishment. They could stand over what they had done and say, "This is what we have done". Unfortunately, many of the schemes were abused in the past, although they were put to uses such as the above and FÁS did an excellent job.
It is important we realise the nature of the labour market and that the demands on labour are changing. It is not that everybody needs third level education because that would be impossible. There are jobs which do not demand that high level of academic skills, which are repetitive and perhaps even boring. There are people who are content to do jobs like that and do not want to involve themselves in the industry. We have to ensure such jobs are available.
The nature of labour is changing so dramatically that we need multi-skilling and multi-faceted education whereby a person can do a six week or four month course and can go in and out of education, where the facilities are there for them to learn and develop new skills in a short period. The nature of technology is changing so rapidly that the education system must keep apace with it. The old system will not work anymore.
The contribution FÁS made in the past in teaching those skills was marvellous, as was that of the regional colleges, now institutes of technology. They have changed their role also. In the early days, their role encompassed third and second level but the second level role has been diminished. I think FÁS has taken that over, and perhaps rightly so because it is aware of the market forces.
We must concentrate on teaching people how to learn, not teaching them skills which they may not use or which will change within a short time. We must teach people how to continue to learn, and to do that we must put in place the structure to enable them to do so. I am glad to note the Minister is emphasising a number of aspects, including the disadvantaged.
As Senator Ó Murchú said, there are recidivists who will always be recidivists and irrespective of what is done with them it will not work. Eamon McKeown, of whom I am sure the Minister is aware, who works with FÁS and the Great Southern Hotel Group wanted to employ people from the area and teach them skills. This is an area of high unemployment. The people concerned were being trained in the skills through CERT, but gradually they dropped out. I asked him the reason for this given that they would earn a good income, have pride in what they were doing and be able to move from one job to another once they had acquired the skills. He said when the girl or boy concerned goes home the other members of the family have gone out, and when they get up in the morning the other members of the family are lying in bed. It is in the nature of man to say, "Well, why should I, when they are not pulling their weight?" Any education or skilling would have to be interventionist. It involves not just the individual, but the whole family and the community. Therefore, it has to be done at a community level as that is the only way it will work.
I compliment FÁS on the work done in the past. There is no doubt that the so-called tiger would never have got off the ground or out of its cage were it not for those people trained by FÁS and others. I commend the Minister on her commitment to the disadvantaged and those in wheelchairs, particularly those women who get them into the workplace. I know that commitment is genuine.
I will not delay the Tánaiste as she indicated she was leaving at 12.30 p.m. I will be brief and take only one or two minutes to make my contribution. I do not like when this happens. We should try to share our time given that many Members are making the same points. As one who initiated this debate many times on the Order of Business and asked, particularly in the light of the downturn, for a debate on the role of FÁS to see how best we can equip ourselves to deal with the redundancies that have taken place, I compliment the Minister on establishing a task force to address the issue of redundancy and create links between employers and job skills with a view to upgrading skills to deal with the numbers who have become unemployed in recent months.
As a career guidance counsellor, I dealt closely with FÁS and would have some criticisms of it. Had I read the Minister's speech before asking for this debate on the Order of Business I would not have asked for it because I am pleased with all the activities in which FÁS has been engaged. It has come a long way. It is a credit to the Minister that she looked at the duplication aspect of programmes and how they were not linking with the other agencies. I found this to be a huge disadvantage. It should be reinforced that the roles of education and training go hand in hand. Senator Coogan referred to this when he said people must be taught how to learn.
I congratulate the Tánaiste on her role and great work in regard to female participation and the disadvantaged. South Dublin County Council plays a role with the county development boards, FÁS, the county vocational education committees and other agencies to reflect local needs. That is the way forward to see how best we can serve them. The Tánaiste has done this through the social economy and the placement and guidance activities within FÁS. I reinforce those points and if we can think globally in our communities, we will overcome the blip in the economy.
I welcome the Minister of State at the Department of Arts, Heritage, Gaeltacht and the Islands to the House.
I will certainly advise the Tánaiste of the Senator's renditions.
I understand she will peruse the copy during the match this afternoon. We have all sought a debate for some time on the economy, job creation, the training agencies etc. They are important matters that need to be addressed considering the events that have taken place this year. Nobody would have expected the incidence of foot and mouth from which we had just recovered when the international crisis occurred on 11 September. The severe ripples in the economy as a result of the foot and mouth disease and the events of 11 September are shattering. We have to adjust to the new situation and look at where we are. Week after week job losses have occurred. One of the primary items on every news bulletin is further job losses throughout the length and breadth of the country. There is a downturn in the economy, but as to whether it is a recession is not yet clear. Certainly, the economy is suffering and we must look at the position.
In the aviation industry worldwide, already there have been 180,000 job losses. This shows that the effect on one major industry which has a carry-on effect throughout the globe in terms of tourism, job potential and so on is colossal. A further 20,000 jobs losses are expected in the European Union as well as 2,000-2,500 in Aer Lingus, not to mention Aer Arann and the consequent job losses in the tourism and service industries. The loss of even more major industry can have a huge negative effect on the economy.
The Government came into office in 1997 after the first year of a budget surplus in the history of the State. The former Minister for Finance, Deputy Quinn, produced the first budget surplus. Since then we have had four years of budget surpluses. It now appears as if this is the first year in which there will not be a budget surplus. It would be a shame if the Government had to leave office with its first negative equity in terms of the running of the country.
We have to look at what happened in those four and a half years. There were many bad things as well as good things. One of the good things that must be emphasised is the reduction in unemployment and obviously people have had increased spending money. The downside is that we have made no progress on infrastructural development. The Luas was ready to go when we left office four and a half years ago, yet we still get a presentation of a carriage on Merrion Square from the Minister for Public Enterprise, but no indication as to when the work will be done. We do not have a clue as to what will happen to the major line that is supposed to go underneath the city from Harcourt Street to Broadstone. Traffic in Dublin is chaotic and the quality of life has deteriorated.
Hospital waiting lists are longer than ever before and the incidence of homelessness is at an all time high. The numbers have doubled in the last four and a half years of this Government. There is a major downside and we must ensure that something is done about it in the present circumstances.
The Minister for Finance, Deputy McCreevy, says that the good times are over and that we have to cut back on the infrastructural provisions of the national development plan but one has to ask what happened to all the money in the good times. Where was it spent? How did it disappear? Funding has evaporated, so where has the money that the economy produced gone? The economy has been quite good for most of the year, yet the money seems, like snow in the summer, to have evaporated. The Minister for Finance is throwing his hands in the air saying that he does not know where it has gone. If he and the mandarins in his Department cannot tell us what has happened to the money that has been generated in the economy throughout most of the year, questions need to be asked about the accounting practices.
I would like to get an answer from the Minister for Finance on that. I do not expect the Minister of State to provide it here but I would ask that she bring it to the attention of the Minister for Finance and that he would let us know where the black hole is. If it is not in the economy it is certainly in the finances. I am sure there are no more offshore accounts being created but money seems to have disappeared.
The last thing we should do in these circumstances is panic and decide that projects under the national development plan, which is to cost about £46 billion, should be cut back. This is exactly the time that public service and infrastructural projects should go ahead. They will continue to create employment and boost the economy and are absolutely essential. The per capita income is in excess of the European average but our infrastructure, whether it is road, rail or waste management, is laughable. It is of Third World quality. We need to begin the work properly in this area. Investment in the national development plan should be maintained and continued because it will provide a boost to employment in any lean years that might lie ahead.
It is important that we shift the focus, with which I have never agreed, that the Minister for Finance has had, the main thrust of which has been Progressive Democrat policy. They can take credit for that. I wish the Tánaiste was here to preen herself on the main aspect of this policy, which is the reduction of the tax rates. However, the tax rate reductions have disproportionately benefited those who were already well-off. Sales of new cars, which are imported, have soared in recent years. The maintenance of them and the fuel they use has added further to imports. This is a drain on the economy. Luxury goods always will be.
Money from the budget should be diverted towards the less well-off: those on the minimum wage who are still paying tax, those on social welfare benefits and single parents trying to earn a living with poor or very expensive child care provision. All that money would in turn be spent within the economy. It would not be spent on luxury goods which take the money out of the economy. This would create further jobs and this is what the Minister should do with his surplus. If he has borrowing to make, that is where the proceeds should go too.
I wish the Tánaiste was here to take account of my points relating to CE schemes. She seems to be hell-bent on abolishing every one of those, which is a disgrace. There are about 30,000 people on community employment schemes now and the proposal is to reduce places by 5,000 by the end of this year. Those are all geared in the educational arena of which the Minister of State is well aware. Some 5,000 jobs would be lost where people are actually looking to bolster an already under-resourced educational sector. In many schools there are no caretakers or classroom assistants and these were wonderful resources that were provided by the CE schemes. To target this sector alone and, in one fell swoop, eliminate 5,000 CE employees is totally wrong. It is the only area where they are being totally eliminated. The Minister for Education was putting half-baked measures in place to retain them for a period of time but they are being done away with.
The principle of community employment, when it was originally devised by Deputy Quinn in the mid-1980s, was to try to bring people into the economy, who were outside it or in the sub-economy. The long-term unemployed were given half a week's work and an income while retaining their benefits. Single parents were allocated 10% of the places. By eliminating this, one is eliminating a huge area of a social economy that is required. People can do many useful community activities in urban and rural areas that would not otherwise be done. I ask the Minister to think twice before she reduces the number of community employment schemes. Only 2% of single parents can avail of the CE schemes although there is provision for 10%. It is a wonderful opportunity for lone parents to take their children to school and work for a number of hours for an income while retaining most of their benefits. It is a great avenue for re-entry to the workforce. This should be examined very carefully.
The Tánaiste has been around the world with FÁS, inviting guest workers, through recruitment fairs, to come and work in Ireland. Now she is saying that people who have been recruited overseas will be sent home. That is very unfair. She should say that all these guest workers are welcome and we will endeavour to retain them and ensure that mechanisms are in place to do so. We cannot have a disposable workforce that is recruited from abroad and drop them if and when circumstances change. This is separate from asylum-seekers and refugees. These are people who are recruited from South Africa to the tip of Finland and into eastern Europe.
Job creation is, at the best of times, difficult to achieve. Until recently we, as a country, did not believe we were capable of doing that. We never saw ourselves as an entrepreneurial nation, but as one that would always be poor and would need assistance, capital and expertise from outside. We depend too largely on the multinationals. We invited them in and much of the Celtic tiger had to do with multinational investment here. That is why we have a tax regime that is more attractive than any other in the western developed world.
The issue of entrepreneurial skills and development is an important one which needs to be addressed in educational terms and in a proactive fashion by the Minister. The inputs into education are extremely important, but the direction given by the Tánaiste in terms of supports and assistance towards entrepreneurial development is also extremely important in the domestic field. I would like the position to develop where we would be able to stand on our own two feet and do everything the multinationals have been doing here, and that we would have the necessary means and resources to do that.
Like Senator Costello, I am disappointed the Minister is not here. However, I welcome the Minister of State.
I will accept the Tánaiste's praise from the Members.
I am sure the Minister of State will do that. Senator Costello, who has just left the Chamber, spoke about community employment schemes. He said that rather than cutting back on them, we should expand them. Before coming into the Chamber I contacted the FÁS office in Carlow to get its views on the latest figures for those on community employment schemes in Carlow. The number seeking help from FÁS in this area has been falling at a rate of 5% or 6% per annum. It has difficulty getting people to participate in these schemes. That does not tally with what Senator Costello said about wanting to expand them.
The moves made by the Minister are a realisation of the fact that people now have alternative employment and are not necessarily as dependent on community employment schemes as they were in the past. That is to be welcomed. However, I am aware there were some difficulties in handing over the running of community employment schemes from the Department of Enterprise, Trade and Employment to the Department of Education and Science, which occurred recently. I hope they will be sorted out in the near future because a number of people were confused as to whether they would be able to remain on those schemes.
I join Senators who congratulated FÁS on its role over recent years and through the difficult times. It has played a fantastic role in job creation, directing people with certain skills into appropriate areas of employment and working with employers to find people best suited to positions. That approach which is focused very much at the coalface is a model that will lead to the linking of creativity with business skills in the setting up of future enterprises.
I will be parochial and speak about the current level of unemployment in my area. We are all aware of the downturn that has taken place in the economy in the past six to eight months, particularly since the events of 11 September. That has affected some people in obvious ways in that they have lost their jobs. From my point of view, nowhere is that more noticeable than in Carlow town where I live. Recently a bakery, which was in existence for over 50 years, closed. In Braun, up to 100 people have been laid off recently. In Oglesby and Butler, people have been put on short-time work. The people involved and their families are immediately hit by the consequences of that.
However, these matters must be put in perspective. With regard to the bakery that closed, competition led to it being much more difficult for the bakery to compete than was the case in the past. The premises that family bakery had on the main street of Carlow town has enormous development potential. I have no doubt the family in question has a close eye on the potential that exists for it in the future and I am sure the effect of that development will lead to further employment.
Likewise, with the laying off of up to 100 people in Braun, there is a cyclical pattern of employment in that company whereby part-time workers are taken on every now and then and let go as demand fluctuates. There is absolutely no threat to that company. Having regard to the management of that company over the years, I am confident that many of those people will be taken on again in the not too distant future. I heard this morning that it is hopeful that those in Oglesby and Butler who were put on part-time work recently will be in full-time employment within the next two or three weeks.
There is a positive story to be told, and that is one of the main points I want to make. We have heard the negative story. From reading the newspapers and listening to the radio and television reports in recent weeks, one would imagine we were back in the dark days of the mid-1980s. It is outlandish for the media in general to adopt that approach. If one picks up a local or national newspaper, one will read of doom and gloom and recession, but that is not the case. Over the past five years, more than 300,000 extra people have been employed. The unemployment level has fallen to 3.7%, which is the envy of most other countries in the OECD. The position is positive. The fundamentals of the economy are said to be strong by acknowledged experts in the area. When the international downturn recedes, Ireland will be well placed to develop from this.
With regard to the position in Carlow town, which is currently growing at a phenomenal rate, a large number of people commute daily from Carlow to Dublin, but are seeking employment in Carlow. Carlow is on the threshold of a large development in a new technology park. There are great prospects for employment expansion in Carlow town in the not too distant future. That is the message I would prefer the media to put forward.
What is being reported is being read by our competitors and international investors. If we put ourselves down, we cannot expect others to prop us up. We must state the situation as it is, that this is a strong economy, one in which jobs are and will continue to be created, even though there have been lay-offs. When the situation improves, we will benefit again.
I referred earlier to linking creativity with business skills. The role of education in job creation is extremely important. We have reaped, and continue to reap, the benefits of the very good education policy which has been in place for many years.
Various Senators, on the Order of Business this morning and on each sitting day for the past few weeks, have sought a debate on education, in particular the deficiencies centred around the science subjects which are creeping into the educational system. It is an issue of great concern. The creative element of our economy, and those likely to drive the economy into the future, particularly in the hi-tech jobs, are people with a background in the sciences. We must grasp this situation quickly and try to turn it around. What we must do, and do very quickly, is introduce science subjects at junior cycle level. We must help people to understand the basics of science. Unfortunately, we are experiencing another problem in the educational system in this regard as a result of the points race. It is generally acknowledged, when taking one's leaving certificate, that it is more difficult to obtain high points in the science subjects than it is in others. Consequently students are taking what they perceive as easier subjects to obtain as many points as they can. That is perfectly understandable but we need to address this problem.
FÁS has been responsible for linking and aligning people with particular skills to employers requiring them. It is important that people who have the capacity to set up a business and thus generate employment are given the supports they need. Very often these creative people do not have business acumen and skills – a necessity for any new company. Most people starting up businesses have invested all their efforts in the product they are trying to produce. It is important that we look at the possibility of setting up a fund to enable emerging companies, involving a creative element, to avail of business skills through a particular organisation. I intend to take up this point with the Minister. Many companies start up with very good ideas; people put all their energy into generating the idea and getting it off the ground but they fail after a number of years because of a lack of business acumen. The introduction of the fund would create a much healthier environment for emerging businesses.
While I am disappointed the Minister had to leave, I very much welcome the Minister of State, Deputy Jacob, to the House.
Most of what I was going to say has already been said at this stage of the debate. I would like, however, to make a couple of points regarding community employment schemes. We all accept that developments in our economy will continue to dictate the changes which must take place in FÁS and the community employment schemes in particular. We have to look at how we can make the schemes more flexible for older people. I would like to add lone parents and those in receipt of disability allowances and other social welfare payments to the list of those to whom such schemes should be opened up. Many individuals who have spent a great deal of time in community employment schemes are unable to continue doing so because they are in receipt of a disability or lone parent's allowance. Places on community employment schemes – which are available throughout the country – should be opened up to lone parents and those on disability who are in a position to take them.
Coming from a rural area, I am advocating that we make some of those positions available to small farmers whose farms are no longer viable. Many such people would not even have completed second level education and may never have been a member of the workforce or been in paid employment outside the farm. A move towards off-farm employment is a huge step forward for them. We must look towards the future regarding FÁS schemes such as the community employment scheme which must be opened up to people.
I welcome the Minister's intention to make the schemes more flexible to older participants. There is no doubt that older people who have participated in the workforce have a wealth of experience of work and life. It would be sinful to miss out on the opportunity to include them in such a scheme and we must ensure we do so. There are many people who are not very well educated academically and are unable to partake of full-time employment. Community employment schemes are particularly beneficial to such people. We sometimes lose sight of the fact that many communities remain in existence because of the work undertaken by community employment schemes.
I welcome the new child care allowances which are being introduced to try to encourage lone parents to take part in training programmes. I met with a number of young girls over the past couple of months who are availing of these opportunities. Some of my colleagues mentioned that only 2% of those partaking in community employment schemes were lone parents. Without incentives to encourage such people to get into training and jobs the vicious cycle of poor education, poor social contact and so on continues into another generation.
Job creation is another aspect of the debate today. I will be parochial in this regard. One could say, from an industrial and business point of view, that Monaghan has not benefited as well from the economic boom as many of its adjacent counties. Monaghan continues to be totally reliant on its indigenous industries – food, furniture and poultry. It may be a good thing we did not experience the unprecedented growth experienced by other counties because we may not be affected to the same extent by any down-turn.
I have a particular criticism of the IDA – I am sorry the Minister is not present to hear what I have to say – that because of the level of industry which we had generated within Monaghan, we were passed over on many occasions when trying to attract foreign industry into the area. We need to look after our own industries. My colleague, Senator Gibbons, referred to entrepreneurs who have an idea and want to use it but who may not have the necessary business ability. We need to put a greater emphasis on looking after our own industries. It is all very well to try to attract industry into the country, which is essential, but where there are indigenous industries we must continue to support them.
In Monaghan we have our own industries and through the years many of our young people have obtained employment at a time when other areas were not in that happy position. However, we now have the highest numbers of early school leavers and the lowest uptake of third level education. If anything were to happen to any of our agri-businesses, which is possible as they are continually under pressure due to competition, regulations and restrictions from forces outside our own country, we could be faced with job losses in our food, furniture or textile industries and have nothing for our unskilled or semi-skilled labour force.
While it may not be relevant to the Minister for Enterprise, Trade and Employment, we must focus on areas such as County Monaghan and target those people who have left school early or have no third level education. There is a proposal at the Department of Education and Science to establish third level institutes in other parts of the country but we must target blackspot areas such as this. I urge the Minister of State to pass that on to the Minister for Education and Science. In the future, while we should not be totally reliant on our own industries, they should be encouraged.
I have one query regarding workers from non-EU countries who are here on a work permit. If a worker loses his job in the IT industry, for example, does he have a grace period before he must find further employment in that field or does he have to leave the country? How long does he have before this happens?
I welcome the opportunity to speak about job creation and the role of FÁS and I hope that the Minister of State has accepted that we should not be totally reliant on inward investment. We should look after our own and let the others look after themselves.
The Seanad adjourned at 1.15 p.m. until 2.30 p.m. on Wednesday, 21 November 2001.