Select Committee on Enterprise and Economic Strategy debate -
Wednesday, 12 Jan 1994

SECTION 1.

Question proposed: "That section 1 stand part of the Bill."

Mr. Kemmy

I am grateful for the briefing we received but the scope of the Bill should be much wider because while it is right to say that the arrangements for apprentices have been changed only some trades have been designated under the new apprenticeship system, including the trade I am most familiar with, the brick and stonemason trade. However the changes have not worked in the way envisaged. For example, this year in Limerick, for the first time in more than two decades, there is no apprenticeship course in brick and stone laying.

There is a number of reasons for this; the main one being that the course under the new apprenticeship system comprises six modules the first of which is of ten weeks duration during which the apprentice engages in on-the-job training; on a building site in the case of building workers. The second module is of 22 weeks duration and is provided in a FÁS training centre. During the third module the apprentice works for an employer and during the fourth takes part in a vocational education committee block release course. He returns for the fifth module to the building site and completes the course, the sixth module, by taking part in another block release course in a vocational education committee centre. That appears fine on paper but it has not worked out that way. In Dublin the second module of 22 weeks is not being done in a FÁS training centre but by the Dublin vocational education committee as heretofore. The second module to which I referred is listed as being carried out by the FÁS training centre and the other two modules are being carried out by the vocational education committee. These modules seem to be higgledy-piggledy, and not in accordance with the new regulations.

There are no facilities available in the Limerick FÁS training centre to carry out the second module of apprenticeship training. Therefore, the class has not commenced because the vocational education committee claim it has discontinued the training of apprentices in so far as it is now the responsibility of FÁS. This has meant there has been no block laying class in Limerick for the first time in 20 years, despite the fact that the Minister for Enterprise and Employment, Deputy Quinn, is sympathetic to the problem. There is a large amount of money available in FÁS for the training of unemployed apprentices which is acknowledged by the senior member of FÁS. It is far greater than collected in the levy scheme we are discussing here. It makes no sense to have a very small number of apprentices being trained in all industries; it is the lowest number that has been trained in the past 20 years. In that regard these regulations must be flexible and seen to serve the industries, not the other way around. There is no point in laying down the other five regulations unless they can be used in a practical way to ensure the supply of apprentices to the building industry.

For the first time in 20 years in Limerick there is no apprenticeship classes even though there is a willingness by Limerick City Trust to take on six apprentices and employers, through the CIF, have raised £6,000 for the first module of ten weeks to ensure 12 apprentices would be taken on. In practice 12 apprentices are being denied work opportunities because of the way this legislation is framed.

I will be talking about this issue at a meeting in Limerick on Friday. It is nonsensical that red tape should frustrate the deveelopment of this scheme. FÁS was originally known as An Ceard Comhairle, then became AnCO and is now called FÁS. Unfortunately, the apprenticeship scheme has become marginalised in the work of FÁS. It was originally set up to serve the industry with training but it is now more concerned with retraining adults, sometimes for jobs that are not there. It is important that apprentices are put back in the mainstream of training because, without properly trained people, the future of the industry is uncertain. There must be quality — rather than quantity — of training.

This scheme may look all right on paper but it is being done piecemeal. Certain trades have been designated to see how the new scheme will work out. I would prefer if it were done in a more uniform way in replacing all trades. Unless apprentices are available talking about apprenticeship levies serves no purpose because apprentices are the mainstream of any industry. The future of the industry will depend on people being trained now. For the first time the smallest number of apprentices are being trained here. I hope the Minister will investigate the problems in this area, otherwise our discussion will become irrelevant and artificial because unless we have apprentices, there is no point in talking about levies and grants.

It does not make sense that the second module of the apprenticeship scheme will be carried out in a FÁS training centre while the other two modules, which involve education, are carried out by the vocational education committee. A number of centres have been carrying out apprenticeship courses for the vocational education committee and they are now being marginalised. If there are facilities in the vocational education committee or a FÁS training centre, they should be used in a practical and flexible way rather than hiding behind bureaucracy. I hope we can recommence the apprenticeship classes that had been operating in Limerick and other areas before the end of this year.

Mr. Costello

A great deal of what Deputy Kemmy referred to should be addressed by the Minister, perhaps in a more comprehensive Bill. The Bill before us is concerned largely with the .25 per cent levy to ensure that the employer contributes on a regular and standardised basis towards the cost of training and educating apprentices. One of the problems is that employers have fought shy of being properly involved, in the same way as they have been in other countries, in funding the training and taking on of apprentices.

This is a new Bill to fund apprenticeship schemes. For example, we are talking about the Principal Act referring to the Industrial Training Act of 1967, and, therefore, it refers to the scope of the Bill to a degree. The Bill incorporates the training side of the scheme in later sections where it refers to the possibility of training in a FÁS or a vocational education committee centre. I would be very reluctant to see the present system changed dramatically whereby the existing vocational education committee centres, which have been used and have stood the test of time very well in the context of the education and training element, would be taken care of in any of the Dublin Institutes of Technology such as Bolton Street or Kevin Street. That is an important aspect of the system and I would be reluctant to see it removed from the scope of the apprenticeship training.

We should examine the existing craft categories because they are very rigid and male oriented. It is a sad reflection on the scheme that fewer than 2 per cent of 13,000 apprentices are females. We have made little progress in this area and we must look at the whole area of trades, how it is designated in the 1959 legislation, and whether we can more properly address that issue. Obviously industrial workers who have a skilled background and who have gone through the apprenticeship process are more likely to get a higher industrial wage. That militates to a large extent against us being able to narrow the band between the earnings of the average industrial wage for a female and the average industrial wage for a male.

Another aspect which is causing a major problem at present is the question of access. The number of apprenticeships is dropping, many contractors are not prepared to take on apprenticeships, particularly in the area of subcontracting. The levy will be imposed on various designated categories of employers and I would not like to see the subcontractors miss out in this particular regard but it will be difficult to achieve.

Finally, in the context of the scope of the Bill and other work that the Minister is doing, the question of standards for apprenticeships is extremely important. For too long we allowed a situation to continue whereby we only dealt with the length of time that was served in an apprenticeship and there was no proper certification based on the standards that had been attained. That is a welcome development and I would see it as a critical one for the future.

Mr. R. Bruton

I had not intended making a Second Stage speech, but given that the Government backbenchers are coming in and then departing having made their foray, perhaps the Opposition should make some points. I would prefer, Chairman, if you could in some way restrict discussion on the interpretation section of this Bill so that we could get on to the issues on which Deputies have tabled amendments.

Chairman

May I interrupt? I assure the Deputy that each Deputy who has tabled an amendment will be afforded a full opportunity to present his amendment and I will not restrict him in any way.

Mr. R. Bruton

You will accept, Chairman, that it is ludicrous to have Government backbenchers who failed to appear on Second Stage now making essentially Second Stage contributions.

Minister of State at the Department of Enterprise and Employment (Mrs. O'Rourke)

As a point of information, we were short of time on Second Stage.

Mr. R. Bruton

There was no queue of people looking to get in and it will be interesting to see if they are still here when we are discussing the last amendment.

Mr. S. Ryan

That comment is totally inappropriate in the context of the contributions that were made on Second Stage by backbenchers.

(Interruptions.)

Mr. R. Bruton

I can stay here all night.

Miss Coughlan

We can stay with you.

Mr. R. Bruton

We should concentrate on the central issue, which is the levy. The question I would like to ask the Minister about the levy and its interpretation in section 1 is this. Why is it when every business in the country is heaving under the burden of an existing PRSI cost of 21 per cent, the Government proposes to introduce yet another levy upon them? We know that we already have an employment and training levy which is raising £150 million this year but that is not being earmarked for the purpose for which the Government sought and obtained the approval of the Oireachtas, of raising £150 million under the employment and training levy. It is not being put back into training.

The Government is now looking for an additional levy and the question must be asked: why was the last levy not dedicated to the purpose for which it was intended? Is it necessary for the economy at present to increase the levy, albeit by only a quarter lof 1 per cent, on employers who are already experiencing difficulty? At a very mimimum the Minister should seek to structure the levy in such a way that low paid employees do not bear the brunt — in other words, we should have an exemption similar to the income tax code so that employers who are predominately employing people in the lower paid sector, which unfortunately comprises the bulk of our indigenous sector under particular pressure, should not find that they will have to pay this additional levy on top of the 21 per cent already there. It is that principle the Minister should address on section 1 of the Bill. Why does she think it essential that having already obtained £150 million, which the Government did not see fit to put into training and employment, she should go back to the pot and look for more?

Miss Quill

I will be brief as I have spoken already on Second Stage, but I will make one key point since others have spoken in general terms about the Bill. In my experience young people of either gender are experiencing difficulties getting places in any apprenticeship schemes. Clearly we have a scheme which is reassonably well designed but does not appear to work on the ground and that is a matter of concern. It is valid to raise the problem here this morning because we are now seeking to create an additional fund — a good deal of money has been allocated already through FÁS and other sources to training and education for young people — and allocate more money to that. What return are young people getting for that money? In my city young people are failing to obtain apprenticeships inevitably and frequently and all they are being offered are short courses that often have no long term prospects and that are of little benefit in the long term.

There is a particularly difficulty with the construction industry which was a traditional area for good, solid apprenticeship training. The reason for that is obvious to everybody. A whole seachange has taken place in the construction industry in recent times with the subcontracting and the further subcontracting of different divisions of any one project. We now have a situation where everybody's business is nobody's business and the training of apprentices in the construction industry is beginning to be nobody's business. We must confront the problem as we find it on the ground and as it now is and try to put in place some kind of system that within the chain situation we would again get the construction industry to a point where they would take some responsibility for training within their own industry, a far greater degree of responsibility than they have been willing to take in recent years.

On Monday morning of this week a number of us in Cork, including the Chairman, had a briefing with the construction industry in that city. This is an annual event at which a pre-budget submission is made to the local representatives and then we discuss matters of concern to the industry in relation to budgetary provision. At the end of that meeting I raised the matter as I see it now, of the difficulty which young people are experiencing in getting any kind of admission to apprenticeships within the industry and I asked them what changes could perhaps be brought about to make the industry more responsive to creating opportunities again. They cited two reasons for the present situation; first, they said it was due to the uncertainty within the industry. Since about 1987, as we all know, there have been a number of recessions and setbacks that hit the industry hard. In that kind of climate tendering is so competitive and every penny counts and the last concern would seem to be provision for apprenticeships. Second, they said they were uncertain about what they called the new scheme and how it is operating.

I accept there is intense competition among builders, whether they are main or subcontractors, and nothing is likely to change that. However, even in those changed circumstances there is an obligation on the industry to train workers for the future of the industry and if they fail to do that and to co-operate with schemes, sooner rather than later we will experience skill shortages. It would be a strange irony if we reached the stage here where we were drafting in workers from England and other countries to work in the building trade because we had failed to make proper provision for the training of our own apprentices. It is crucially important for the Minister to use her position, sooner rather than later, to talk to the industry and initiate some kind of activity within the construction industry because it is a very important one where skills and trades have traditionally been passed on, where they will continue to be passed on and where elements of the practical experience on the ground will have to be gained.

I am concerned about standards of training and the personnel we will allocate now to assess and monitor standards. It is crucially important that our trainees be brought to the same level of expertise as their equivalent in other countries. We are living in an age of competition. We refer to that constantly and we must be very mindful to ensure that our trained workers have the same level of skill and expertise as thier counterparts in other countries. It is important at this stage to be mindful of how we set criteria, monitor standards or ensure that standards are upheld in all cases. It is fundamental that a young person beginning training has the skill to be able to learn. In Germany, where there are highly developed training and apprenticeship systems, they look on learning as a train journey. One can get on a train at station A, do a certain amount of training while travelling to station B and then get off the train and do some work, but that person can get back on that train and continue the journey. In other words, in Germany learning is considered a life long process. The nature of the initial training is such that it teaches young people the skill of learning as well as basic identifiable skills. The main skill for them is to be able to learn new skills throughout their working lives.

Mr. Deenihan

I welcome this debate on the apprenticeship scheme and thank the Minister for initiating it. I am sure the Minister would agree that this Bill looks at only one aspect of the apprenticeship scheme and, as Deputies said, the problem of access to such schemes must be addressed. It is easier to get into a profession such as medicine, engineering or teaching, than it is to be accepted for an apprenticeship. Young people of both sexes are being discriminated against because they do not have the family or other connections to secure an apprenticeship with an employer. One of the most frustrating aspects of our education system is that young people cannot take up the trade of their choice. Most of them have the qualifications and, in many cases, may be better qualified than most of those who do obtain an apprenticeship. I appeal to the Minister when examining the overall problem to address the question of access to apprenticeships. Discrimination against young people in that area is blatant. I would like to see fair play for everyone and those who have an aptitude for a skill or trade obtaining the apprenticeship.

Funding is only one aspect of the apprenticeship scheme, and not the most important. Now that the Minister has started this process, she should go further. While I welcome the proposed new module — something I called for some years ago — it will not benefit a large number of young people who should be pursuing the trade of their choice. I hope the Minister will address that matter in the overall sense.

Deputy Quill referred to the construction industry. It is becoming increasingly difficult to secure an apprenticeship in block laying, carpentry or other trades associated with the construction industry. There must be incentives for employers to take on an apprentice, but this Bill will be more of a disincentive to employers. Rather than being penalised, employers should be given tax relief or a reward for taking on an apprentice.

I welcome the opportunity to discuss the whole aspect of the apprenticeship scheme, but I hope the Minister will address the broader question in the future. I welcome the Bill.

Mr. McCormack

One of the criteria for qualification for FÁS training schemes is that the applicant must know an employer who will take on him or her as an apprentice when the training period is completed. This is proving very difficult for a large number of applicants for such schemes. Many well qualified people with enthusiasm and an aptitude for the skill or trade they wish to learn do not secure a place on the scheme because of that criterion. That is very frustrating for applicants. Some are getting relatives to say they will employ them after training, but that should not have to be the position. Will the Minister address that matter? From my experience as a public representative that is the main problem for applicants.

As suggested by Deputy Deenihan, there should be an incentive, such as a tax break, for employers who take on apprentices. That would ease their responsibility. Naturally employers who find it difficult to keep all their workers at work are reluctant to commit themselves a year in advance to taking on an apprentice. If that matter is addressed it might be easier to get the training to which Deputy Quill referred. Will the Minister examine that aspect of qualification for such schemes?

Mr. Creed

At the outset, it is important to refer to the introduction in the explanatory memorandum which states that the Bill provides for the introduction and collection of a payroll levy from 6 April 1994 in certain sectors of industry to fund the FÁS apprenticeship programme. At a time when industry is creaking at the knees because of levies and other contributions which they are obliged to pay to the Exchequer, it is an unfortunate departure by the Minister to add another layer, burden and bill on those to whom we look to resolve the unemployment crisis. It is important also to put on the record the apparent contradiction where we as public representatives and most parents of children who sit leaving certificate or junior certificate examinations, find it practically impossible to secure apprenticeships for our children and at the same time, as consumers frequently find it impossible to get a tradesperson to do some work. Recently I needed a plumber in an emergency but had to wait almost 24 hours. We should try to resolve that contradiction where it is almost impossible for young people to enter a profession where there is plenty of work.

Unemployment is the biggest problem this country faces and employers consistently complain about the costs which the State imposes on them when attempting to create jobs. It is an unfortunate departure, however small the levy we are placing on additional sectors of industry, to approach this problem by adding further costs to employers.

My colleague, Deputy Bruton, referred to the existing 1 per cent levy on employment and training which yields approximately £150 million annually. What contribution, if any, is that making towards employment and training, or has it just become another Exchequer substitute? What is to prevent the levy the Minister is imposing now from being used as a further prop to the Exchequer? Will this money definitely be targeted at resolving the problems the Minister has rightly identified? I believe this is the wrong remedy and prescription for resolving those problems.

We are led to believe that there is significantly increased funding available from the ESF and other European Union sources for education and training. Given the existing 1 per cent levy for employment and training, the quarter of the 1 per cent levy which we are now imposing on certain sectors of industry to resolve the apprenticeship problem and the increased funding which is available for educational purposes from the European Union, is there a case to be made for an efficiency audit to be carried out by agencies acquiring this money to see if we are getting value for money in terms of the enormous amounts which now appear to be available? We appear to be floundering in our efforts to resolve the problem of apprenticeships identified in this Bill. There are many examples of money being thrown at problems and failing to resolve them and of infrequent audits or examinations of the efficiency of agencies empowered to spend that money to carry out their duties.

Mr. Flood

I compliment the Minister for her work in this area. This important legislation will make a major contribution towards the development of apprenticeship schemes. There have been difficulties in recent times for people who wished to enter apprenticeship schemes. This is becoming increasingly obvious to all working in the public arena because we are in touch with parents or young people who express their frustration at their inability to enter apprenticeship schemes. We must question why this is so and examine the old traditional apprenticeship schemes which were established to train young people for particular industries and individual companies and on completion of their training, they would remain in those companies and contribute towards the long term welfare of the business and the employees.

That practice is changing dramatically because there is specialisation in most of the areas that once were traditional apprenticeship areas. For example, as regards carpentry, there is major specialisation. Individual workers now specialise in the installation of windows, roofs, floors and the old scheme of apprentices taking up a career as a carpenter no longer exists. Major changes have occurred. Industries involved in construction tender for a job or a contract but, regrettably, nowadays they do not know if they will be in existence when the next project comes along. That is an example of the changing times in which we live. Individual companies in the construction industry were established 40 or 50 years ago but there were dramatic changes in the fifties, the sixties and the seventies. All that change militated against access by those who wished to take up apprenticeships. That is why the issue of providing incentives from industries to become more involved in establishing a scheme of apprenticeships and monitoring the apprentices through their training, will have to be looked at. If not, legislation such as this will not necessarily improve the opportunities for young people to acquire skills through the apprenticeship schemes. That would be unfortunate because it has been shown that the demand for specific skills is cyclical. That will happen here unless businesses and industries come together to tackle the availability of apprenticeship places for young people.

There is an onus on industry to support the Government. This legislation will put in place a system whereby more young people can take up places in apprenticeship schemes either through development of the industrial base where the schemes are likely to be available or the support of the legislation now available and which, with the support of FÁS, may make a better contribution to a more regular apprenticeship scheme than has heretofore been the case.

I compliment the Minister for her work so far. I support the Bill and look forward to discussing the matters mentioned this morning.

Mr. Crawford

I thank the Minister for the opportunity to discuss the important issue of apprenticeships. However, I question the imposition of additional costs, in the form of a levy or otherwise, on either apprentices or employers. At present the access to employment for apprentices is a major issue. The position has changed dramatically. Employers are trying to cut back on their costs and with the burden of PRSI, taxes and so on it simply costs too much to take on an extra worker, through an apprenticeship or otherwise. That was revealed in the figures published last week highlighting the fact that almost 300,000 people are unemployed. It is easier for people to enter third level education than to get jobs in a trade.

Because of the cyclical nature of the work, the construction industry is very slow to take on workers on an annual basis. It is more inclined to opt for contracts where it can employ people as required and let them go when they do not need them. In industry individual companies no longer employ workers; they employ subcontractors who, in turn, employ workers who are not interested in taking on apprentices. They are mainly interested in getting the work done as cheaply as possible by skilled workers.

There are two problems facing young people; first, they cannot learn the trade of their choice and, second, when they apply for a job, they are asked about their experience. If they have no experience their chances of getting employment are very slim. The apprenticeship issue is of major importance. We must look at the roots of the problem that deprive young people of the opportunity to get on the first rung of the ladder. If they have acquired sufficient points in the leaving certificate examination they can get into a third level college. However, some of them enter third level education cannot get an apprenticeship but they would prefer to work in industry. As a farmer I have some experience of taking on apprentices. Some years ago I had to stop recruiting apprentices because the cost was the same as employing a skilled person.

We must get to the root of the problem. I do not accept that imposing an extra cost or extra levies will solve the problem. If the decision is made to impose a levy it will be because the Government has a large majority. However, I hope such a levy would not go into the Exchequer's bottomless pit, as other levies have in the past but will be used to provide the necessary apprenticeships.

Mr. S. Ryan

I compliment the Minister on the work she has done to date, but this is just the first phase. We need to update the process of apprenticeships and there are a number of aspects involved. The Bill defines the levy as an employment contribution.

I would like to home in on the difficulties being experienced by unemployed apprentices and I would ask the Minister to take my views on board. In the past it was understood that a person was under contract and on completion of training one became an apprentice. Nowadays young apprentices in their first, second and third year may not have the opportunity to finish their apprenticeships. This problem should be tackled.

The levy is to be used as a contribution towards employment. I ask the Minister to consider using some of proceeds from this levy to retain the apprenticeship scheme under FÁS and to enable employers to take on apprentices. There must be equitable access to the apprenticeship scheme. We are seeking to provide increased participation in apprenticeships by females. Given the opportunities for jobs world wide we should provide more apprenticeships.

There has been a reduction in the length of apprenticeships. Apprenticeship schemes in the past worked well but if the number of years apprenticeship is reduced, it could result in less qualified personnel in overall terms.

Mr. R. Burke

I join the previous speakers who complimented the Minister for introducing this legislation. It is vitally important that we have an adequate apprenticeship scheme at a time when there are 300,000 unemployed. The best way to tackle our unemployment problem is to provide for and have a skilled workforce. It has been proven that those with skills have a greater chance of securing gainful employment. We should strive to ensure that we have a proper apprenticeship scheme available for our young people. It is unfortunate that this has to be funded by way of a levy but that is a reality. At present there are many levies and charges on employers and we need to encourage employers to take on not only apprentices, but staff generally. In an ideal world there would be no levies but somebody must pay if we are to create employment. It is vitally important that we have an adequate apprenticeship scheme.

My colleague mentioned the problem of young people who get an opportunity to start an apprenticeship with a company which subsequently goes bust or lets them go midway through an apprenticeship — and this means they cannot complete their courses. That is tragic and needs to be tackled. I look forward to the Minister's response in that regard. Apprenticeships mean training and there is a suspicion, rightly or wrongly, that many of the existing courses provide some training, not directly through the apprenticeship scheme but through further FÁS courses. Sometimes the unemployed try to secure a place on one of these courses to improve their chances of getting a job. I meet people who having completed FÁS courses, find they do not have any qualifications. These courses help people to fill in a number of hours each week; they provide them with the opportunity to get out of their houses for a few hours each day, but what have they at the end? I would have more faith in a full apprenticeship than in some of the existing courses.

I compliment the Minister on her work to date and I look forward to contributing on Committee Stage when we get to the nitty-gritty of the Bill.

Mr. Rabbitte

Is there an amendment before the House?

Chairman

No. We are dealing with section 1. I thought I would be more accommodating for the new year, but when we get down to dealing with individual sections we will stick to them and, hopefully, there will not be any repetition.

Mr. Rabbitte

I apologise to the House in that case; I thought we were dealing with Committee Stage. I will refer to the point that has been made by a number of Deputies about imposing additional costs on job creation. An exception can be made in this case. Apprenticeships and the cost of training ought not to be seen in a similar light to other levies. Specific reference has been made to the 1 per cent employment levy imposed in the last budget. One of the difficulties we have, and an important consideration in terms of competitiveness and so on, is the quality of training and investment in training available in industry.

In comparison with any of the other OECD or European Union countries, our employers are most reluctant to make the necessary investment in training. Deputy Quill referred to the German experience. Employers regard investment in training as a benefit rather than a cost. In this economy, we see it as a cost. If we are to stay competitive and ensure that we have a pool of skilled labour capable of competing with any workforce in Europe, then training is important. Somebody must pay for it and the contribution envisaged in this Bill of a quarter of 1 per cent is a very reasonable one. I do not know whether the Minister intends to comment on how that figure was arrived at, whether there is any scientific basis for it or whether it has just emerged from a process of haggling and bargaining. The recommendation initially was that it ought to be .5 per cent and I know that the employers offered .2 per cent. I do not know whether .25 per cent emerged from a process of bargaining or whether it is constructed on some model that suggests it will be adequate. I certainly would be prepared to make an exception in this case because this is money well spent and since it is an imposition on the employer it is likely to eliminate some of the abuses that occurred under the old system, just as the introduction of the graduated system of payment for apprentices has served to eliminate some abuses. At a time when apprentices were available at £10 per week, as I am sure Deputy Kemmy will bear out, there was serious abuse in that they were regarded as a source of cheap labour; they were there to make the tea rather than to learn their craft in some cases. That is at an end now. I apologise again for rising inappropriately, but I hope we will get on to Deputy Bruton's amendment now.

Mrs. O'Rourke

I wish the Chairman and the Members of the committee a very happy and profitable new year in terms of discussion. It is my first time to attend one of these committees, which allow us free ranging discussion. Perhaps the Chair might be a little cross at the way the discussion has developed but it is no harm. The Bill was debated before Christmas and perhaps memories have faded a bit.

This is the introduction section and Members have legitimately seized the opportunity to speak about the lack of scope of the Bill. Although the Bill is about a levy, I recognised on Second Stage that it would give rise to many other discussions.

Some Members, particularly from the main Opposition party, said that they did not see why employers were constrained to pay this levy. As the officials from the Department who were here earlier outlined, this arose because of an ageement on Wednesday, 25 March 1992, at a sub-committee meeting on the Programme for Economic and Social Progress programme whereby the levy was agreed. It was arrived at by a bargaining process and a particular model was not used. In answer to the Members here who took up the cause of employers, on this occasion the employers agreed quite willingly. It is all very well to say now that they do not want it but they agreed to it.

The purpose of introducing the levy was touched upon by some Members, particularly by Deputy Rabbitte. Employers are reluctant to take on young apprentices, but I am working steadily on it. In answer to Deputy Quill, I have met the CIF three times in the last four weeks. I have met IBEC about the same number of times and I have met ICTU. Much of our talks will be based on the construction industry because that is where the difficulties are. I have met with the relevant organisations and I felt at the last meeting two days ago I had brought them along the path. Indeed, they had had several meetings with their constituency groups around the country and were endeavouring to bring forward plans to take on more apprentices. I appreciate the fact that from ouright reluctance at the beginning of my forays into the apprenticeship arena, industry whether as a result of some sort of sledge hammer approach or cajolery is beginning to accept my view, but it is very early days and much remains to be done. Just to recap on that, the levy was agreed.

I would have called this Bill the apprenticeship contribution Bill as I knew that the word "levy" sent negative signals to people but the draftsman would not have it, because in technical terms a levy is what it is. The levy is to impel employers to take part in the whole apprenticeship scheme by this very modest contribution which will raise between £3 million fnd £4 million. The total cost of apprenticeship is £30 billion. They are not funding the whole scheme but are making a contribution. As we all know, when one pays for something, one has a slightly more proprietorial interest in seeing its advancement. This is a beginning and I am determined to make the apprenticeship system relevant.

Other Members referred to the German system and I want to dwell on that briefly. In anticipation of this debate I went to Cologne last week to meet 24 young Irish people from Cork city and county on electrical apprenticeships. They are getting on fine and it was amazing to hear them talking in German with strong Cork accents after four months with their tutor. Perhaps the Cork accent is suitable for the pronounciation of the German tongue.

They had become very fluent. They were home for Christmas and have just gone back. I talked to some of their employers who are very pleased with their imagination, brightness and their quick learning skills.

While I was in Cologne I did a very quick induction lesson, with the chambers of commerce, on how Germany runs its training and particularly its apprenticeships. Employers want apprentices. It is a market led system because there are huge numbers of vacancies, even in current bad economic times in Germany. FÁS is now arranging a processs whereby 25 young bakery apprentices will soon be going there. Our systems cannot be compared because in Germany there is a shortage of apprentices. Even before there were vacancies, German employers wanted apprentices. I was in two firms, one employing 35 people and the other employing 38 people. The first had four apprentices and the second had six apprentices in their cohort of workers. In Germany there is a sense of kinship and ownership of the scheme, a sense of wanting it to work. There is also a sense of vision about it and it is not a short term thing. It goes back to the old journeyman system, the craft guilds and the industrial revolution. They had to rebuild Germany after World War Two so there was constant activity. They want apprentices and they give certification. I acknowledge the clear need for proper certification of skills and for lifelong training. Training is not meant to be static. Clearly, a trainee now is a multi-skilled person with a base of knowledge which can be added to as skills and needs change. It is quite ridiculous for us to talk about low cost wages. We can never reach the rates at the Pacific rim and neither do we want to. For employers to say that we have to get the rate of wages which are in Singapore, or wherever, is ridiculous and as those countries emerge the workers in them will get a bit of sense too. However, training will lead to competitiveness because it will lead to motivation to have more skills. Out of that will come new products, better types of marketing and a move towards niche marketing. We must certify, but it must be for training that is certifiable so that somebody can have a passport, if you like, to employment.

Several Deputies referred to the construction industry. The main difficulty at the moment is in the construction industry because the construction industry as we knew it has changed. When I was growing up, in the town of Athlone there were a couple of major building contractors who would take on a quota of apprentices who would learn their trade and in turn stay with that firm or set themselves up in business or work with another firm. It seemed an assured path, a way that could continue, but it has not continued. The competitive nature of tendering now has meant cut-throat activity and the break-up of major contracting into sub-contracting and the milieu, of which Deputy Kemmy and others spoke, in which there was a need for apprentices and a ride in craftwork has decreased. We are bemused by technology which has its place but only if it is used to enhance skills. The breakdown in terms of the construction industry will be addressed in upcoming amendments, but it was raised so often that I wanted to speak about it now. I will follow up what was asked by Deputy Kemmy about the modules not being carried out as per the arrangements in Limerick. I was surprised to hear of that.

Mr. Kemmy

And Dublin.

Mrs. O'Rourke

Dublin was catered for in that, the arrangement for Dublin was not to be changed. I certainly did not hear about the Limerick case and I certainly will look into it.

The construction industry constantly quote uncertainty in business. That story has been around for a fair while and it cannot always be the case. There are still many buildings going up and now with the Structural Funds which will be coming on stream over the next six or seven years, I am considering — I am going to talk to my colleagues in Government about it — making it mandatory on firms who are tendering for public works, such as bridges, roads, hospitals, water schemes and sewerage schemes for which considerable European and State money will now be provided, that there be not just a commitment in apple pie terms to apprenticeship and training but a commitment in real number terms per scheme on the number of apprentices to be taken on. The construction industry federation are to come back to me on that.

I would like to see this being implemented and built into the tendering process so that the lowest price, including on element of the take-up of apprentices would secure the job. I am quite sure when that gets into the public arena, there will be all sorts of obstacles put up but when there is a will there is a way and it might address some of the difficulty within the construction industry.

Other questions that came up related to access. The levy was to get ownership by the employers. We have only started and we have not yet got any money because the Bill has not been passed. One cannot get access without an employer. To date, access in many cases has meant increasingly knowing somebody who will take one on. I emphasised in the Dáil that I would not stand for favouritism, that I would stand for standards and not for favouritism. There is a sum of £30 million between the Department of Enterprise and Employment, the Department of Education and Europe all together in a pot and only the lack of places has allowed that procedure to creep in whereby there is not equity of access and it has become who you know rather than your skills and your qualifications that gets one the place. On Second Stage in the Dáil I determined that I would have measures in place at this stage of the debate and I have while remembering that one cannot talk about access without talking about employers. Access first of all, relates to the number of places and then there is the sub theme of seeing that those places are allocated properly under a code of entry which is open a scrutiny and which is fair. As Members said, it is easier at this point to get into third level, than it is to gain an apprenticeship.

The problem of redundant trainees was brought up by Deputy Seán Ryan and Deputy Ray Burke. It is a very big problem. In the old days employers felt a proprietorial interest in their apprentices and apprentices would be the last to go because they were learning skills, they were learning their trade and it was felt that they should be allowed to finish their learning experience. That ethos has gone too.

I am not just wagging the finger at employers as I know that times are difficult. At the same time that that commitment and that pedagogical overview of apprentices is progressing employers gain so much. One need only look at the vigour and determination of youth. What would one not give to have what young people have when they start off in trades? So, employers gain as well.

As in all interchanges in any society, there is giving and taking within a set-up such as that. To answer Deputy Ryan and Deputy Burke who made the point, FÁS recently set up a fund whereby redundant apprentices will be enabled to be helped in further training or in placement. The full details of the fund will soon be out. Very early on, I kept meeting young people who could not get apprenticeships or who had been made redundant. To those outside the Houses of Parliament who would say Dáil Deputies should be at legislation all the time and should not do constituency work, every one who has spoken today, spoke from what they learned from people they met in their clinics each day.

Deputy Bruton queried the levy and its scope. Deputy Deenihan queried access and in particular access to the construction industry. He wanted to know what had happened to the previous levy, the "pot" that came out of the apprenticeship and training levy. That goes into the Exchequer. I do not know the exact total but the FÁS budget of £250 million is far in excess of——

Mr. R. Bruton

On a point of order, if you combine the employment levy, the youth levy and the EC contribution it exceeds FÁS expenditure by a substantial amount.

Mrs. O'Rourke

That is only a point of information. The Deputy asked me directly where the levy went and I am telling him. It goes into the general Exchequer. This one because of a provision in the Act cannot. Section 10 provides that it goes directly to FÁS. Another Deputy said he wanted paid employees exempt from this levy. It has nothing to do with the employees.

Mr. R. Bruton

Low paid employment.

Mrs. O'Rourke

That means employees surely. The Deputy is talking about employees and they do not pay it.

Mr. R. Bruton

The point is that many of our traditional industries are employing people on relatively low pay. They make the case that because PRSI comes off the first pound it is particularly burdensome on those who are employing low paid workers. We are introducing another levy now that is loaded against people on low pay. There is a very respectable case for having a baseline above which the levy starts to click in.

Chairman

I wish to inform the Minister and the Members that I would like to move on and I ask the Minister to conclude.

Mrs. O'Rourke

No employees are paying this levy. This levy is paid by employers who have freely entered into it and if there is to be a commitment to a levy you cannot say some should pay it and that others will not pay it. Employers will be paying it and that is the agreement that has been made. I will take your advice.

Question put and agreed to.