I welcome the Tánaiste, Deputy Harney, the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Treacy, and the Department officials, Mr. Michael McKenna, Mr. Ronnie Sheehan, Ms Sandra Hogan and Mr. Robert Drummond.
Estimates for Public Services, 2001.
Vote 34 - Department of Enterprise, Trade and Employment.
Acting Chairman
I want to say something before the Tánaiste commences. I know the Chairman is not a member of the permanent chairmen's committee but somebody needs to examine the position in regard to committee sitting times. I am a member of the Committee of Public Accounts which is running contemporaneous with this committee, the Dáil is in session, Deputy O'Flynn and myself are members of the committee dealing with the mini CTC inquiry which is meeting at 12.30 p.m. and this committee is meeting now. This is not an unusual occurrence. The chairmen need to deal with this matter because it is not possible to go from one committee to another. When several committees meet in contemporaneous session it becomes extremely difficult to do the work involved.
Acting Chairman
I shall bring that to the attention of the Government Whip and the Chairman. I know that Deputy O'Flynn and Deputy Perry have other meetings. I am on the Justice Committee which is to sit at some stage this morning. It is an issue that we will bring to the attention of the Government.
That meeting was timed for 12.30 p.m. It is now scheduled for 1.15 p.m. and I have not yet attended to the people of Cork today.
Acting Chairman
That is even worse. We have one item on the agenda today, namely, consideration of the Estimate for the Department of Enterprise, Trade and Employment, for the year 2001 - Vote 34. I invite the Tánaiste to introduce the Estimates.
I am delighted to be here again with my colleague, the Minister for State, Deputy Noel Treacy, and the officials from my Department.
The total net Estimate for 2001 is £873.712 million, an increase of £80.384 million on last year's outturn. I wish to explain two changes in the way that the funding of certain agencies of the Department is shown in the Estimates volume. The method of disbursing European Social Funds to agencies of this Department has changed. In the past, the agencies received only Exchequer funding through the Department's Vote, ESF money being paid directly to them. This year, both ESF and Exchequer funding are paid through the Vote. However, the net effect on the Vote is neutral as the relevant subheads have been increased by the amount of ESF anticipated, £94.727 million, which will be offset by a pro rata increase in the Appropriations-in-Aid subhead. This explains the large increases in some of the agencies subheads which reflect ESF funding.
The second change relates to the new National Training Fund Bill. The national training fund is a dedicated fund to support the training of those in employment and those wishing to take up employment. It is resourced by a levy on employers. The national training fund is separate from Exchequer funding and is shown as an appendix to my Department's Vote. The total estimated yield from this levy is expected to be £134 million. In addition, a sum of £9.1 million is expected to be transferred to the national training fund from surplus levy grant funds held by FÁS. The total income to the fund in 2001, including interest earned, is estimated at £143.35 million. The national training fund will fund a range of training activity administered by organisations which had previously been funded by the Department's Vote.
On the employment front, the most recent figures available show a continuing strong performance in employment terms with 60,000 extra persons at work by the first quarter 2001 compared to one year earlier. This is equivalent to an annual increase of 3.6%.
Unemployment continues to fall with an annual reduction of just under 16,000. The unemployment rate is now 3.7%, down from 4.7% a year ago.
Funding for an average of 32,500 places in the community employment programme has been provided for the current year at an overall cost in the order of £312 million. This includes funding for the jobs initiative programme which provides 2,870 places on average. The programme is being restructured to take account of falling unemployment levels, the need to better target available places at the more disadvantaged groups and the shift in funding towards the new social economy programme.
The social economy programme was formally launched on 18 September 2000. Its key aims are to support the regeneration and quality of life of local disadvantaged areas and to maximise employment opportunities for long-term unemployed over 35 years of age and other disadvantaged persons. It has an objective to create employment for 2,500 by the end of 2003. To date there have been 278 applications for business plan grant support, 130 business plan grant applications approved and 25 social economy enterprises approved for full grant support. The social economy programme will be phased in over the coming years through the reallocation of funding from community employment and from the remodelling of the FÁS community enterprise programme. When fully operational, the programme will provide for an annual expenditure of £41 million while the National Development Plan provides for overall expenditure of £213 million over the period 2000-06.
The apprentice population has more than doubled over the five year period from 1995-2000, from 10,772 at end 1995 to 23,560 at end 2000, and is expected to rise to approximately 28,000 by the end of 2001.
Lack of child care facilities and child care costs are major disincentives for women seeking employment and particularly so for women who wish to avail of FÁS training programmes to help them into the labour market. The objective of the new child care allowance is to facilitate more people, particularly women wishing to take up employment, having access to FÁS training.
The Government has made a series of commitments in the Programme for Prosperity and Fairness aimed at improving employment opportunities for people with disabilities. The 2001 Estimate for my Department provides funding to support many of these commitments. The Estimates for this year are £32.559 million for specialised vocational training and employment programmes for people with disabilities; £22 million for vocational training programmes and employment supports which were formerly funded under the Vote of the Department of Health.
IDA Ireland continues to win a significant number of investment projects from overseas in an increasingly competitive international environment. The agency negotiated and secured 96 projects in manufacturing and internationally traded services during 2000; 64 of these were new greenfield projects while the rest were expansions. Twenty four thousand, seven hundred and seventeen new jobs were created in IDA supported companies during 2000, which is an all-time record and well ahead of the performance of any of the previous years. Job creation in IDA supported companies is now aiming at over three times the level of ten years ago and over double the level in 1994 when the new IDA Ireland was established.
Of those jobs created, 20,257 were first time jobs, with the remainder being job recoveries. With 8,302 job losses during 2000, mainly of lower value jobs, the net employment impact was an increase of 16,415. This brings to 141,258 the number of people directly employed in nearly 1,300 IDA supported companies.
From a regional perspective the east region recorded growth of 14.7%, while the south recorded growth of 11.7% and the Objective One regions 7.5%. Within the Objective One regions the north-west continued to show some decline while the midlands region is beginning to show recovery. This recovery will be more apparent as the new projects which have been announced make their impact in the years ahead. Exceptional growth of over 20% was recorded in the south-west region, reflecting the success of the IDA's strategies in earlier years when a significant number of new and expansion projects were secured and these are now coming on stream.
The year 2000 saw a 10.1% increase in sales for Enterprise Ireland companies estimated at £19.1 billion, with exports 13% over 1999, to an estimated £8.7 billion. In 2000, total employment in Enterprise Ireland companies was estimated at 146,031, up 6,378.
In the current national development plan the Government has allocated £1.95 billion to research, technological development and innovation over the seven year period of the plan. This level of investment represents the very high priority the Government assigns to the role of R&D in stimulating our future economic growth. From this amount, £1.2 billion is being provided specifically for RTDI for industrial development related activities.
Science Foundation Ireland has been established to implement the technology foresight initiative. The technology foresight fund of £560 million will support projects in key strategic technologies, namely, niche areas within information and communication technologies and biotechnology, and is a vital element in the Government's strategy to move Irish industry higher up the value chain.
During the period 1994-99, the county enterprise boards approved grant assistance to over 11,500 projects worth over £95 million in grants and which created over 20,000 jobs. For the period of the National Development Plan 2000-2006, the mandate for the boards under the two regional operational programmes places greater emphasis on management capability development and less on increasing productive capacity.
The information society fund was set up by the Government in July 1999 for the purpose of kick-starting and resourcing projects or initiatives proposed by Departments or bodies under their aegis. My Department's main use of the fund is for upskilling the business sector into the information society.
The introduction of the single currency is a momentous project for Europe, and one to which Ireland has contributed enthusiastically from the outset. Business must now embrace the new currency and must also prepare their customers. To support this process, the Government has put in place an action plan. This plan is being implemented primarily by the Director of Consumer Affairs. It contains 17 specific actions, which are grounded in a strategy for increasing consumer confidence and empowerment.
The promotion of competition throughout the economy continues to be a high priority for Government and for my Department. Competition is essential for maintaining our competitiveness and for ensuring consumers derive the maximum benefit from the operation of the market.
During the past year, my Department carried out a wide range of actions relating to the promotion of competition including advising the Government on specific competition policy issues, approving more than 100 merger proposals, pursuing the competition agenda with other Departments, supporting the Competition Authority and contributing to the development of EU competition policy. The Department also contributed to the OECD's review of regulatory reform in Ireland.
I am pleased that staffing difficulties in the Competition Authority has substantially improved in the past year as a result of my approval of five additional professional posts and the filling of most vacancies.
The company law review and consolidation section of the Department was set up in late 1999, with a view to the enactment, every two years, of a company law review Bill, which will update, streamline and otherwise bring the companies code in Ireland into line with international best practice on corporate governance. The section also has responsibility for the consolidation of company law, which will bring together the provisions of the companies Acts from 1963, orders and regulations made under the companies Acts and substantive company law set out in regulations made under the European Communities Acts.
The Company Law Enforcement Bill, 2000, was published on 30 June 2000. The Bill completed Report Stage in the House earlier this week. The main provisions of the Bill flow directly from recommendations in the report of the working group on company law compliance and enforcement, which was published in March 1999.
Central to the improvements we are making to Ireland's corporate governance regime are the reforms currently being introduced to the accountancy profession following from the report of the review group on auditing. I established the review group on auditing following the publication of the first report by the Committee of Public Accounts of the parliamentary inquiry into DIRT. I was very pleased with the work of the review group and the comprehensive nature of the final report, which the Government endorsed. This is the first time the subject of auditing has received such detailed attention. My purpose is to achieve an appropriate balance between new and necessary regulations and the cost to and burdens on business, particularly small businesses.
I have established the interim board of the Irish Auditing and Accounting Supervisory Authority. The interim board held its first meeting on 16 May. It will initially advise my Department during the drafting of any necessary amendments to company law to give effect to the review group's recommendations and draw up a business plan to cover the first three years of the operation of the supervisory authority.
My Department, in accordance with the Third Life and Non-Life European Community Directives, carries out authorisation and supervision of both head office life assurance companies and general non-life companies. The main objective is to minimise the risk that any insurance company under the supervision of the Department will be unable to meet its obligations to policyholders and claimants.
Having reviewed the proposals contained in the McDowell report for linking of monetary policy and financial services, the Minister for Finance and I announced the establishment of a new authority, the Irish Financial Services Regulatory Authority. This new authority will be responsible for the prudential regulation of both the banking and insurance sectors and for consumer protection.
I was pleased to sign the commencement order for the Industrial Relations (Amendment) Act on 31 May 2001. This Act gives effect to the fallback procedure recommended by the high level group. Agreement was reached between the social partners and Government on two procedures for dealing with disputes where negotiating arrangements are not in place. A voluntary procedure set out in the code of practice on voluntary disputes procedures - S.I. No. 145 of 2000 - is available to the parties. The special fallback procedure outlined in the legislation can be activated where the code has not been fully availed of.
Despite the growing complexity of the cases coming before them, both the Labour Court and the Labour Relations Commission are continuing to produce a high rate of successful outcomes. The Labour Relations Commission is currently engaging in consultations with interested parties as part of its strategic review. The Commission is seeking to formulate a strategy and operational response to ensure its services adapt to changing conditions, meet the demands of its customers and add value to its efforts to build and maintain best industrial relations practice.
Since the early 1990s the rights commissioner service of the Labour Relations Commission has employed four commissioners. However, the scope and level of the workload of the rights commissioners has increased substantially over the years. While in 1991 this service covered three Acts with a workload of 1,107 cases, by the year 2000, this had increased to a level of 11 Acts, two sets of regulations and a workload of 3,206 cases. Due to the increased workload and complexity of the cases being dealt with, a fifth rights commissioner was appointed to the LRC in March 2001. The National Minimum Wage Act, 2000, came into effect on 1 April 2000 and the national minimum hourly rate of pay was set at £4.40. The 17 inspectors attached to the labour inspectorate of my Department enforce the legislation. Since the commencement of the Act, the inspectorate has carried out a total of 3,862 compliance inspections. Where infringements have been found they have tended to be of a rather minor nature and to be more the result of misunderstanding or misinterpretation of the provisions of the Act than of deliberate intention to defraud.
Since about 1996, the net migration trend to Ireland has turned significantly positive. The inward flows now involve increasing numbers of non-nationals and non-EU workers. The working visa-work authorisation scheme has been operating since June 2000 and in the period up to the end of March 2001 a total of 2,558 permits have been issued for high skilled workers in the IT, construction and nursing professions.
The number of work permits granted under the long standing work permit programme has increased substantially in recent years with 6,215 issued in 1999, 18,006 in 2000 and so far this year 14,377 have been issued. Last year 35% of work permits were issued for nationals of the EU and accession countries of Central and Eastern Europe with Latvia accounting for 12% of all work permits issued in 2000. This trend is continuing in the current year. While the work permit scheme is attracting a range of skilled and unskilled workers to Ireland the high proportion of permits issued in the service, catering and agricultural sectors, which together accounted for 74% of the permits issued last year, suggests that we are now attracting significant numbers of lower skilled, lower paid workers to Ireland.
The admission of migrants has so far been largely market-led, as the onus has been firmly placed on employers to show that a particular individual or group of individuals was required and that no EEA persons were available to fill the job.
The Government has an ongoing commitment to best practice and procedures to underpin workplace health and safety. That is why the Minister of State, Deputy Tom Kitt, requested the HSA to undertake a comprehensive review of the provisions of the 1989 Act, both from the perspective of identifying where improvements can be made and what, if any, additions or amendments should be introduced. The board of the HSA has recently completed this in-depth review. My Department is examining the HSA's submission, and legislative proposals to amend, strengthen and update statutory health and safety provisions are currently being developed.
A comprehensive review of the structure and organisation of the Health and Safety Authority was completed last year. The recommendations of the review cover revised managerial and grading structures within the authority, and the board of the authority has endorsed the recommendations in principle. At the request of the Minister of State, Deputy Kitt, the board is currently preparing a detailed phased and costed implementation plan. This implementation plan will be pursued in context of preparing the Estimates for the HSA for 2002.
Chairman
The agreement with the conveners is that the Fine Gael spokesperson, Deputy Perry, and the Labour Spokesperson, Deputy Rabbitte, will now speak in that order. Is that agreed?
I wish to share time with Deputy Belton.
Chairman
We will have Deputies Perry, Belton and Rabbitte in that order.
I welcome the Minister and her officials. Her Department's budget of £873 million is huge and her report is very comprehensive. I am concerned at the economy's dependence on jobs in the high tech sector. Bearing in mind the change in the American economy where many companies are downsizing, we must not to be too dependent on that sector in the future.
Only 10% of the 32,000 places in the community employment scheme will go to the job initiative programme. From my experience in County Sligo, I know it is very difficult to get people approved on that job initiative programme.
Parents are finding it extremely difficult to get affordable child care places. I accept the Government has announced grants for child care facilities through different Departments, but affordable child care cannot be found in many towns and villages. The provision of child care facilities must be accelerated through county councils, who are to be allocated funding in this regard. Much of the funding intended for the implementation of policy is not spent.
We should not place so much emphasis on the IT sector, as the movement of a pen in the United States can downsize an Irish factory by 10%. As there is little or nothing we can do in such circumstances, a safeguard package needs to be put in place. I am concerned about developments in the services sector. The Minister stated that 74% of work permits are allocated for lower scale and lower paid jobs, the bulk of which are in the services sector. The only assistance this sector is receiving is from enterprise boards. Deputy Belton will refer further to the funding of enterprise boards, but I am disappointed the budget of £873 million has not been increased. Enterprise boards deal with small companies with fewer than ten workers.
I am disappointed the north-west continues to show a decline in terms of development, while huge development is taking place on the east coast. Given that more than 24,000 jobs have been created, the plight of the north-west is particularly regrettable. If one omits Galway, no jobs have been created in the west. There has been a significant number of job losses in Donegal. While the midlands are showing a recovery after a number of difficult years, the north-west is continuing to decline. I ask the Minister to outline her plans for reversing this decline and to inform us of the basis of Enterprise Ireland's new strategy for regional development so that the benchmarking of plans over a period can be followed. Next year we should see the development of plans to facilitate the expansion of east coast companies to regional locations.
The Minister stated that the e-business fund is to be used to adapt the business sector to the information society. The introduction of the single currency will cost business a great deal of money. There is a huge lack of awareness in the business world of the difficulties and confusion that will arise in that regard. The minimum wage inspectorate is poorly staffed, with only 17 employees. The inspectorate must also deal with irregularities in visas given to asylum seekers. Asylum seekers who are capable of working but are not currently doing so should be trained. I will address certain points in more detail as the Minister responds.
The staff of enterprise boards are concerned about funding. The budget of the enterprise board in County Longford has been cut by 30% this year, the largest reduction in the country. The average reduction is approximately 20%. The Minister will say the shortfall is accounted for by money being spent on buildings, but that is no good. Enterprise boards have given great service; I was a member of such a board. While their work does not attract the glamour, expectation or impact of banner headlines in the newspapers and the number of jobs involved is small, jobs have been created in small businesses in a steady manner. This is particularly true in the backbone of the country, the midlands and the west, where jobs are needed. I appeal to the Minister to examine this issue.
Members of the Government do not know whether they are coming or going and that will have a major impact in the United States, where Ireland is seen as a stepping stone to Europe. At one time people knew where we stood on issues like Europe, but nobody knows where we stand now. The Tánaiste says one thing, the Taoiseach something else and the Minister for Finance something else again. A Minister of State can say two different things at the same time. It is extraordinary.
The Minister for Enterprise, Trade and Employment has produced a very comprehensive report, which shows substantial progress during the year. There are a couple of points I wish to make, however. The Minister deals with our healthy job creation performance, but no reference is made to the fact that the good health of our performance conceals the problems in traditional sectors. I was told during Question Time in the Dáil last week that 21,000 redundancies were notified to the Minister's Department since the beginning of last year, a figure which is about to increase to almost 25,000, given the announcements made in recent days. The high rate of attrition is worrying as it is happening in parts of provincial Ireland where it will not be easy to find replacement industries to match the skills of those who have become redundant. The rate of attrition is higher than is generally recognised. Just as economists and journalists are not writing about public spending, there is not much comment about the number of job losses.
The Minister stated that the midlands are recovering and I admit that a recovery is in prospect. The immediate position in the midlands, however, is bad as towns like Tullamore, Mullingar and Athy have suffered badly. Tullamore has lost many jobs and it is not easy to match skills to the jobs that may become available. I do not know if job support agencies can do much more in terms of investment and training in technology and upskilling to retain jobs. While job creation is healthy, job retention is less healthy. No matter how matters progress, we cannot all work in the high-tech sector. Jobs are being lost by people who have been in them for a long time. One could instance the example of what happened this week in Cobh. It is very serious. Can the Tánaiste report whether a meeting is set up for tomorrow with the board of the parent company of Irish Steel? The loss of 400 jobs is a considerable blow in the Cobh area. Can the Tánaiste tell us how many indirect jobs will go with the closure of Irish Steel? I imagine there will be substantial losses in terms of ferry services and supply services of various kinds. Regarding Cobh, does the Tánaiste have any remarks she would like to make about IFI and the latest position on that following the passage of the Nítrigin Éireann Teoranta Act, 2001, through the House? Are there any offers on the table for IFI and where is that issue going?
The Tánaiste's script is comprehensive but I do not see anything in it about FÁS. This is something of an omission as I am curious as to what is going on. I read that FÁS has reinvented itself as a kind of Bord Fáilte for employment and is travelling the globe. I am sure that is meritorious though the Select Committee has not been told what is happening. I do not know when FÁS visited us last and it might be a good idea if it did so again. There are indirect remarks about FÁS schemes but none about the organisation itself. It requires scrutiny and discussion because we have a habit of setting up agencies which have a habit of reinventing themselves, not necessarily in line with the original purpose for which they were established. It is important that the Oireachtas knows what is going on.
It is anomalous to many taxpayers that on the one hand we have these roadshows from Newfoundland to Beijing and South Africa and on the other hand we have migrants here who are denied the facility to work. I saw a chef on television last night who said he had been here for 21 months and we will not allow him to work. I am puzzled as to what we are doing in South Africa encouraging people to come here when we have people here we will not allow to work. There is a need for common sense and clarity on that policy because it does not make sense to the ordinary person.
Talking about FÁS, I have difficulty coming to grips with the new social economy programme and its interaction with the community employment scheme, the job initiative programme and so on. Maybe it is not a bad thing that I am having such a difficulty. Perhaps it has to be handled in the best Irish tradition of the nod and the wink. There are problems. The Tánaiste has said that 32,500 remain on the community employment programme and the objective is to reduce that to 28,500 by 2003. There is a real problem in that many people have grown accustomed to these jobs and they are doing valuable work, albeit on a part-time basis. They will resent like hell being prodded and probed to move into the marketplace proper. Maybe that is not the way it should be, but that is the way it is.
I cannot understand why the Department of Education and Science is taking so long to come forward with the scheme we were led to believe it was going to establish for the employment of caretakers, school secretaries, etc. There are schools for which the community employment scheme provides a valuable service. There are caretakers, teaching assistants and school secretaries without whom the schools could not run. Some of them have grown accustomed to working the hours of such posts. It suits their domestic set up and they are doing a valuable job for the principals and boards of management. They do not know whether they have a future and they do not know if they will have first claim on jobs when the Department of Education and Science comes forward with a scheme.
We have been told, going back to the time Deputy Martin was the Minister for Education and Science, that a scheme would be brought forward to provide for a network of school caretakers and others in primary schools who would be direct employees of the Department. This makes sense. The matter would be resolved and tidied up with the Department of Enterprise, Trade and Employment. That has not happened and like colleagues on all sides of the House I am getting representations from people who are asking if they will have a job next autumn, whether the Department of Education and Science is taking over the scheme and, if so, do they have first claim on the job. We cannot get an answer to that.
Deputy Perry referred to the job initiative programme. It is difficult to get clarity as to whether this programme - in the mind of the Department - has a long-term or medium-term existence. It has been an immensely valuable scheme. My source for that is those on it. They are at the no-hope end of the scale, they are over 35 years of age, more than five years out of work, got these jobs at the going rate and have found themselves eased back into the workforce. They have been a tremendous advantage. I would not like to see that diminished. There was never supposed to be a ceiling of 2,870 on the job initiative scheme. I do not know how that came about. It just happened to be the number of participants at one stage. There are still people out there who are not work ready in the conventional sense of that term and the job initiative scheme was valuable to them.
The Tánaiste said that the social economy programme will be phased in over the coming years through the reallocation of funding from community employment schemes and the remodelling of the FÁS community enterprise programme. Is that meant to convey that the social economy programme is constrained only by such moneys as can be moved from the community employment programme? I still find people - and the Tánaiste must encounter them directly - who ask if I can explain the social economy programme. They are having considerable difficulty with it and I would be greatly obliged were the Tánaiste to let me have a list of the 25 social economy enterprises that have been approved for full grant support. That would give me an idea what they do and what kinds of enterprises these 25 projects are. Might they be replicated elsewhere? I support the social economy programme, but there is great difficulty getting to grips with its various elements.
It appears when Merrion Street loses the battle for a certain scheme, it concludes it has nothing to worry about because the draw-down will be slow, and if it is not, it will ensure it is slow. That reveals an attitude of slowly, slowly catchy monkey. Reading the first chapter of Mr. Eamon Delaney's book on his time in Iveagh House has only confirmed this in my mind. None of the Minister's distinguished senior civil servants would engage in that, but the people who hold the purse strings might. We need to ascertain if those 25 social economy enterprises can be replicated elsewhere.
Without wishing to reopen current political wounds, if the euro changeover proves to be a rip-off for the consumer, it will greatly enhance - if that is the correct word - the Euroscepticism now apparent even in the higher echelons of the Government. I am not aware of the explicit measures being taken by the Department. All the eggs seem to be in the basket of the Director of Consumer Affairs. This is already a very expensive country in which to live. The boom conceals the fact that prices in the economy have risen uncommonly fast in recent years. If it transpires that consumers feel cheated in the wake of the changeover, the Government will have great difficulty winning acceptance of the Nice treaty if it is minded to put it to the people again.
Will the Minister remind us of the legislative position on the single regulator and the national training fund? In the opening paragraph of her speech, the Minister referred to the change in the accounting method for the ESF moneys. This, she says, has a neutral effect on the Vote. Will she give me a practical example, under one of the ESF headings, of how it changes the accounting system? Under heading K.2, for example, the training fund for the employed has fallen from £34 million to £10 million. Is that related to the setting up of the national training fund? Is the decrease in the training fund for the unemployed a reflection of the declining number of unemployed and why is it expressed in terms of the employed?
The Minister of State at the Department of Enterprise, Trade and Employment, Deputy Treacy, will recall that a board was to be appointed to the national training fund. To my knowledge that has not happened. When will it be appointed? My concern is that my colleagues in the social partnership should receive as many board appointments as possible and here we have areas calling out to be filled.
I agree with my colleagues' remarks about child care. In terms of the labour shortage and the migrant and skills issues, there appears to be two indigenous groups which could make a contribution, namely, people with certain disabilities and women who wish to re-enter the workforce but cannot do so because of the absence of child care provision. Both these groups remain a productive source of labour with which to feed the appetite of the tiger economy. The absence of child care is an impediment to re-entering the workforce for a great many women.
Has the Minister been made aware of a submission to this committee some weeks ago by the rehabilitation institute and, subsequently, by other bodies? Unfortunately, I was unable to attend the latter meetings. The rehabilitation institute drew attention to the fact that there are several thousand people with disabilities who would be capable of performing certain kinds of jobs as well as any able bodied person. It is incumbent on us to facilitate people with disabilities to get back into the workforce proper.
There are many issues one could raise under this Vote, but one matter I wish to highlight again, having raised it several times in the House with the Taoiseach, is the DÍON. If we are so wealthy as an economy and so profligate that we can build stadiums for £1,000 million, we have a responsibility and an obligation to our emigrants who left in the dark days of the 1950s and early 1960s, many of whom have fallen on hard times in places like London, Coventry and Birmingham on the neighbouring island. We are encouraging young Irish people in London and other cities who have acquired skills to return to work for this economy, but it seems we do not want to know about people who have fallen on hard times or who are in need of attention. We could do more for those people.
I understand a commitment was made as part of the Programme for Prosperity and Fairness to set up a commission to deal with Irish emigrants. To my knowledge that has not been done. That is remiss and ought to be rectified using the head, DÍON, in this set of accounts.
Acting Chairman
Does the Minister wish to respond at this point?
I will deal with a few points after which the Minister will deal with other issues. I agree with Deputy Belton that the enterprise boards have done an outstanding job since we instigated them in 1992. For value for money, the fact that they have created 25,000 jobs since then is significant. They will deal with the micro-enterprises sector.
We have dedicated chief executive officers and a small cadre of four people, on average, in each enterprise board administrative structure throughout the country. We have huge voluntary input from the professionals, the public sector, the various State agencies of the boards, industrial representatives, etc. It is demonstrative of local democracy at work.
We now have a serious responsibility to take into account the tremors in the global economy, particularly those in the USA. The one thing of which we can be certain is that there is entrepreneurial flair and ingenuity among our own people. If we give them the opportunities, support and flexibility, they will continue to sustain our economic growth. I believe that the enterprise boards have a very important role to play in this regard.
The overall allocation has been maintained in a context where employment has improved dramatically. The feeling, in Merrion Street in particular, is that we do not need to give the same amount of commitment and resources to the enterprise boards at this time. I disagree with that fundamentally and I pledge publicly to fight tooth and nail to ensure the estimates for the enterprise boards are increased in the forthcoming budget towards the end of the year. I know that the directors of the boards throughout the country are very frustrated. I have constant representation and people seeking to meet me. I believe that, while our economy is good, we have to realise we may not always have the foreign direct investment from the multinational sector which has been so important to us.
On that basis, there is now an opportunity to ensure that we can create opportunities in the sub-supply sector, in products and processes, and in the small micro-enterprise sector. The enterprise boards are the only organisations with the necessary capacity and commitment. The other agencies do not have the responsibility for, or the capacity to deliver, in the micro-enterprise sector. I hope the enterprise culture can be enhanced and developed by fostering it in transition year students and maturing adults in order to develop the entrepreneurial spirit.
I hope the forthcoming budget will increase the allocations available. I know there is frustration at the moment. We are examining the allocations that have been made and the new conditions imposed, which have been imposed for good reasons. We hope that, in the review for the second half of the year, we may be in a better position to have some flexibility in that regard.
The euro is very important. Recent decisions have not enhanced the opportunities that exist and will exist. The euro changeover will be on 1 January. The Euro Changeover Board of Ireland is very focused and our own Department is deeply involved, as Deputy Rabbitte said, with matters pertaining to the involvement of the Director of Consumer Affairs. Decimalisation in the early 1970s caused a serious inflation problem. We must ensure that this does not happen again - we must be vigilant so people do not create an unnecessary spiral of inflation in the economy because of the changeover.
Packs are being prepared for the business world. We have had a very strong commitment to the euro. It is fair to say we have done more than any other member state within Europe and the euro zone to address it, and the packs will be available from next month for distribution throughout the country to the various businesses concerned. We hope that, through vigilance on the part of business people, consumers, Government, State agencies and the banks, we will have a smooth transfer and absolute commitment that will ultimately sustain our economy, strengthen our currency and afford us greater opportunities in the future.
I thank the members of the committee for their contributions. I will try to deal with all the issues that were raised.
Deputy Perry forcefully mentioned the need to ensure we have more balanced development in the regions, a point with which I agree. The larger cities of Dublin, Cork, Limerick, Galway and, to a lesser extent, Waterford, are doing particularly well, both from foreign direct investment sources and also from indigenous companies. Seventy per cent of the Irish companies supported by Enterprise Ireland in recent years have been in the greater Dublin area. That is unsatisfactory for many social and economic reasons. With regard to logistics and physical infrastructure, it is also unsatisfactory because, as most people here know, the public services cannot cope with the sheer numbers of people living in the greater Dublin area. These numbers will grow very rapidly over the next few years, as they will in other parts of the country. Schools, post offices, Garda stations and public services in general do not have enough people to support them. This must change.
Change will take time for a host of reasons. The infrastructure in the regions is not of the standard necessary to make it as dynamic as it could be. That is why it is extremely important that the national development plan moves forward on schedule and that, in particular, we have decent transport and telecommunications networks between the main centres of population. Our country is very small but it takes forever to travel between two of the main population centres because of the inadequate roads infrastructure. We do not have a motorway of international standard between any two population centres. Ours is a first rate economy but this has not been matched by our infrastructure.
There are many companies, particularly in the Dublin area, that find it is difficult to recruit and retain staff. Housing costs are much higher in Dublin than elsewhere and there are transport difficulties. We have recently engaged with many of those companies to assist them in their expansion outside Dublin. Last Thursday, there was a seminar in the Stillorgan Park Hotel which was well attended by some key Dublin companies who are seriously considering moving beyond Dublin. I think I mentioned on the Order of Business last week that some have begun software development in places like Letterkenny. The Bank of Ireland has formed a new company with Nova to process credit card payments. That is situated in Arklow and will create 800 jobs. Others have moved to places such as Kilkenny. I hope we will see considerable activity from the indigenous sector as well as from the foreign direct investment sector. That would be good for both Dublin and the regions.
Deputy Rabbitte is correct is saying there is much focus on successes and expansions and that we are doing extremely well. Notwithstanding the downturn in the USA in particular, we are managing to hold our own. There are a number of projects in the pipeline that, I hope, will be finalised and announced in the next couple of weeks, even though there are not as many as there were two years ago.
Ireland is very dependent on the USA for two reasons. It is a huge source of FDI. We win 7% of all American investment in Europe and we win about 23% of mobile investment - investment that not in the expansion of existing facilities. That is a very high proportion. With regard to electronics technology, there has certainly been a huge decline over the past year in particular.
Some companies are holding back while others are restructuring their operations. Intel, for example, has decided to hold back on its Fab 24. They called off construction work also. I had a meeting with the head of Intel this week, Craig Barrett, who was in Ireland. I am optimistic that when we see a change in the United States economy it will proceed with that facility. It is on hold, it has not been called off. Other companies have restructured because of the implications of the slump on the Nasdaq, a lot of that has involved job losses. Thankfully that has not happened to a great extent in Ireland. That is because the aspect of the companies that are in Ireland tend to be stand-alone. They supply the European market and are therefore dependent on market conditions in Europe more than those in America.
America is important for our outward activities. We have had several hundred new indigenous technology companies established in recent years, many of them are focused on the US market. We have opened three incubation centres in the US over the past couple of years to help those small companies get established in the market and deal with the logistics. There is one on the west coast in Silicon Valley and one each in New York and Boston. They have been very successful and we are considering doing the same in some European locations.
Notwithstanding the good news on expansion, there is no doubt that we are witnessing a frightening rate of attrition in some places. Figures do not always tell the story of the people who are behind them. They are no worse that they were in the early 1990s but they are bad given the conditions in operation in the economy. Most people do not expect to hear of such a large number of closures in what is a very successful and buoyant economy. The redundancies notified to the Department were as follows: 1991 - 16,687; 1992 - 18,207; 1993 - 18,238; 1994 - 15,224; 1995 - 13,246; 1996 - 13,008; 1997 - 11,780; 1998 - 12,893; 1999 - 13,664 and 2000 - 13,316.
There have been about 7,000 redundancies so far this year; that is quite an increase on the same period last year. In addition to the difficulties that causes the individuals involved, it is compounded by the fact that many of these redundancies are in relatively small places or places that have not done so well like Wexford, north Tipperary, Laois and Offaly. There are, of course, also difficulties with Irish Steel. It has been difficult to generate activity in those counties, although they are priority areas. Wexford and north Tipperary are not in the Objective One area, so the grant aid is not as great as it is in Laois and Offaly. There has been some movement in Laois and I expect that will continue for the next while as the IDA constructs its next advance factory. There was an announcement recently for a tenant for an advance factory and for a new office block in Portlaoise. That will certainly make Portlaoise attractive because we find that many companies want to get quickly established in the market and if there are no facilities in a town they will move to a town with them. We need to have our industrial infrastructure in place if we want to attract activity.
The national training fund group has not yet been appointed. I met with the ICTU and it will not be a representational group; there is no point duplicating what we have elsewhere. It will be representative in the respect that I want to have people with different perspectives, particularly people who have an employees' perspective. It is important that companies, as well as the State, invest heavily in the up-skilling and training of their workforce.
We often talk about lifelong learning. The task force report on that should be available shortly and published in September or October after Government approval. The purpose of that task force was to determine what we mean by lifelong learning. We live in an world where there will be a constant need for education, retraining and up-skilling. People with a greater level of flexibility in their skills will be required rather than being purely vocational and experienced in one section only. That will require a huge turnaround of our training systems and our attitudes and culture.
Training must be focused. Deputy Rabbitte asked about FÁS. FÁS is undergoing a strategic review of its operations. I have given a preliminary input into that review and would be happy to make that letter available to Deputies. FÁS must now prepare itself for a very different set of circumstances. All of our activities were geared towards bringing huge numbers of jobs here to deal with the high level of unemployment. That is no longer the case. Long-term unemployment is down to 21,000 people or 1.2%. Unemployment is down to 3.7%, that is, in the context of at least 50,000 foreign workers working in the economy. There are very different circumstances and our training agency has to respond in a very different way than it did in an environment where the concentration was on trying to equip the unemployed with the necessary skills for the world of work. FÁS certainly has to change its mechanisms. I have asked it to look at its operation to see what things it needs to do to achieve this.
One of the issues I have asked it to look at is its "Jobs Ireland" activities. I participated in two of those, in London and South Africa, and I am not certain the State needs to do that anymore. There are many private sector recruitment firms and they may well be able to do that. It is expensive both in terms of money and in the time and effort of key staff in putting these fairs together. I asked it some time ago not to proceed with any more jobs fairs until an evaluation of the benefits is carried out.
I have also asked it to look at the logistics of how training is provided. I have met many women who would like to access training during school hours. Traditionally training starts at 8 a.m. or 8.30 a.m. It is not feasible for people to take their children to school and then drive or take a bus to the training centre for that time. We need more flexibility, particularly if we want to attract women into training and back into the workforce. There are about 100,000 who are not in the workforce; I am not saying that they are not working. They are a huge resource and, notwithstanding the changes we have made in the tax system - which are more favourable to working couples - we still have a lot to do.
It is not generally well known - as I have found in my constituency clinics - that if a parent goes on a training course they can get up to £50 per week, per child, if they have genuine child-minding costs. This is something I introduced earlier this year and it is not limited to women only. I found that when workers were made redundant and were encouraged to access training, many felt the training allowance was so small that they could not afford to do it if they had to have their children looked after. That was the reason this allowance was introduced. It is particularly geared towards that group of people who may be losing their jobs. We want to get them into training for new and different jobs. However, it is not exclusively for that group of people; it is generally to encourage people who might not otherwise make the decision to participate in training.
I have also asked FÁS to look at its facilities to see if they can be used more frequently in the evening and at the weekends, and to be more flexible in the manner in which it provides training. I asked it to look at whether training can be provided by outside operators. That is done to some extent but I feel there is greater scope for it.
Community employment, initially social employment, was introduced at a time of high unemployment. In terms of subsequent participation in what is termed the "real" labour market, it has been found that about half of all participants moved on to a "real" job. The others go back to where they were or stay in community employment. That is not a high success rate.
I am conscious that as we reduce community employment there will be huge gaps not only for individuals but a huge vacuum on the ground in terms of the services provided by community employment. Deputy Rabbitte mentioned the caretakers, classroom assistants and school secretaries. A memo on that issue is going to the Cabinet next week and it will be in place for September. It has taken some time to mainstream this issue. It makes no sense for the Minister for Enterprise, Trade and Employment to decide every year whether a school has a caretaker, a secretary, etc. It has to be put on a proper footing. Genuine jobs exist in these areas and the State has to organise and fund them and the Department of Education and Science is the appropriate Department to do so. That decision will be made on Tuesday next and will be put into effect in the autumn. Aside from that, I am concerned that a number of other activities in the health area, some environmental activities, are being performed by community employment. I do not want to dismantle community employment as we seek to move people into mainstream training and to leave a huge vacuum on the ground. I am in discussion with the Department of Health and Children about mainstreaming the activities currently funded through community employment. The question was asked if the existing people would be kept on. I understand that will be a decision for the management and principal of the school. In the main, most schools are happy with the people they have and I anticipate they will keep those people.
On the social economy, I shall send Deputy Rabbitte a list of the projects that have been fully funded for a three-year period. Projects can get up to £150,000 per year or £450,000 over three years. A number of examples come to mind. There are two different areas. The first is the activity needed in a disadvantaged community and which would not be provided by the private sector and is not provided by the State - care of the elderly, child care and working with those with disability. A project funded in one of the regions is to provide a transport mechanism for disabled people so that they can access training, education and social activity. Another area that will be funded is companies that have the potential to become commercial but need that early start which would not be provided by existing agencies. An example is Clarenbridge oyster co-operative. With £150,000 per year and 12 jobs, it will be commercially viable over the three years following implementation of the plan. There is a mix. In the main they are activities that centre on groups who work with disadvantaged and marginalised groups. They include lone parents, Travellers, the disabled and a whole host of activities. There are not many applications from some areas. We have to look at ways of encouraging activity in areas that need it.
The applications are assessed by a localised group representative of the social partners and others at community level who make the decision in conjunction with FÁS. My idea is when we have mainstreamed much community employment and there is sufficient training for those who require it, the social economy will be the one programme that will cover all the disparate parts. We have been good at providing different programmes for different causes. Given that long-term unemployment is down to 21,000, and hopefully it can be reduced further or eliminated except for those in the category of "unemployable" for reasons of substance abuse, I hope we can fund rehabilitative programmes in those areas. To a large extent, the social economy is a piloting exercise. It arose out of a working group in the former social agreement, in which Niall Crowley and others were centrally involved. When I spoke to them about it three years ago I felt it was important to move in this direction.
Different people have different views about what the social economy is. Some people think it is funding activities that will never be commercial while others think it is a mixture of both. Essentially, it has to be focused on the needs of disadvantaged groups, areas and individuals. There is a group of individuals who have been involved in either jobs initiative or community employment. Not only are they not job ready now for the labour market but we have to question whether they will ever be job ready. Yet those individuals have an enormously important contribution to make. It would not make sense if they were to go back on the live register and be treated as unemployed citizens. Through the social economy and through a good model on the ground, I hope we can incorporate as many of those citizens as possible.
In relation to DÍON, I am going to London tomorrow. Among the groups I am meeting is the DÍON group. Its grant aid has been substantially increased this year. I admit - perhaps it is in the agreement - that I am not aware that any examination is under way. If so, it may be under way without my knowledge or through some other Department. It is a good idea.
The main responsibility is with the Department of Foreign Affairs.
Through DÍON we fund staff who work with all kinds of welfare groups in Britain working with Irish emigrants. Some of the statistics that have come to light in relation to that emigrant group are health problems - life expectancy rates are shorter than for the population generally in Britain. Some good research has been carried out. As Deputy Rabbitte said these people left in different times. We have a responsibility to them. Some of them want to come home and we should facilitate their needs so far as we can.
I am meeting in London tomorrow the principals involved in Irish Steel. While a decision will be made I do not want to fuel false hopes because that would be irresponsible as we are talking about 400 people and their jobs. If people want to save Irish Steel, it can be saved. At the Labour Relations Commission yesterday the workers and the trade union movement indicated clearly that they are prepared to go very far to save the jobs. They are prepared to take a radical look at the operation with a view to saving as many of the jobs as possible. That is a genuine commitment and tomorrow we will be able to establish whether that is possible. We have not been able to get a handle on the company's international attitude at this point. That is the reason it is important to have the meeting.
Most of us are old enough to remember decimalisation and how long it took to get the half crown and the shilling out of the psychological system. We still meet people who talk about the old money. The euro will be different because the amounts do not match in any linkage way the equivalent amounts in what will be the old money. It will be a major logistical operation for business. Speaking on the sheer logistics of it, somebody in one of the banks recently said the town of Mullingar will need three articulated trucks full of coins to arrive there in November-December, just to get us over the first couple of weeks. That will have to be multiplied. There are the transport, security and storage elements.
It would be a good job for the Minister of State, Deputy Ó Cuív, as he says he does not have one. He would be an excellent man in charge of that distribution.
That would necessitate a transfer of resources.
Notwithstanding those logistical difficulties there are still an enormous number of people, even on the business side, who do not know it will happen next January and that there will be six weeks to 9 February in which to make the transition. Besides the logistical difficulties, the inflationary possibilities are immense. There is anecdotal evidence that when the old money went out of commission, the price of a box of matches increased from 2d to 2p, and so did chocolate bars. The Central Statistics Office tells us that is not correct, but I cannot remember. If anything like that were to happen, I shudder to think what the inflationary pressure would be. At the end of the day competition and vigilant consumers make the choices, but we cannot rule out the possibility that the State will also have to have its own strategy. I do not want to say anymore about that now, but if everybody were to add a cent here and there the public would be confused and the consequences for the inflation rate and for the economy would be very serious.
Already, the euro has brought enormous benefits. We no longer have 20% interest rates on personal loans, nor frighteningly rapid increases in mortgage rates, nor a defenceless currency buffeted in the international financial waters. I shudder to think where we would be if we were trying to straddle sterling, the dollar and the euro, if we had stayed out of the single currency, as some people seem to think we should have. The single currency has brought enormous benefits to the country in terms of low interest rates and stability. Our international trade and many jobs are dependent on the success of the euro. It is one example of what is called enhanced co-operation whereby 12 countries have pooled their monetary sovereignty in the interests of the wider economy and I believe they have done the right thing. When the euro comes in on a cash basis, I hope there will be a greater understanding of it and that people will begin to see the benefits as they travel. They will certainly be able to compare prices in various countries.
As regards the right to work, I made some comments yesterday but in the current environment it is very difficult to say anything without being put into a box. If one has any views on Europe one is presumed to be a Europhile or a Eurosceptic. One is not entitled to be strongly pro-European while also having strong views on what should happen in Europe and where it should happen. However, I will not give my views on that matter today.
In relation to the right to work, I understand that about 15% of those who are coming to Ireland to seek asylum are what are called genuine asylum seekers. In other words, they are individuals who have been found to be fleeing persecution, or in a situation where there is a high chance that, if they returned to their countries, they would be in danger. The balance of them are economic refugees. One can take two views on this matter. I believe the State should process those applications within six months because anything after that is unreasonable on those individuals. Where the State cannot do that, I believe they should have the right to work. It is a basic right. As Deputy Rabbitte said, we are going all over the world looking for workers while we have some of these people here.
A political decision was made on this issue after much discussion and debate. Some people take the view that if one were to grant the right to work to everybody who had been here for six months, particularly economic refugees who came for that sole purpose, one could effectively get rid of our immigration and work permit regime. We would have virtually an open door policy in this area. That is one view but we have reached a political decision. As I said in the Dáil yesterday, I do not anticipate that we will be able to revisit that issue before the next election. The views in this area are pretty strong and I accept they are sincerely held but there is a fairly wide divergence between the different perspectives.
Deputy Rabbitte asked about training for the employed and the unemployed. Effectively, what we are dealing with here is an accounting exercise, as I explained. My officials have given me a very good note explaining all the extra money we are spending. In subhead K2 for 2000, the Exchequer put in £34.376 million and the ESF amount was £10 million, making a total of £44.376 million. For 2001, the Exchequer, in lieu of ESF, was putting in £10 million and the National Training Fund was putting in £55.94 million making a total of £65.94 million.
Does the National Training Fund have a subhead in Vote 34?
No, it is not in the Vote. It is a separate fund. There is £134 million plus £9 million in it. Effectively, the National Training Fund money comes out of the 0.7% of employers' PRSI, so it goes into social welfare and comes out into the fund.
Does the ESF money go into that fund directly?
No. The ESF money comes into the Department as an appropriation in aid.
So the £10 million encompasses that, say, for the employed?
Yes.
Who will be the accounting officer for the National Training Fund?
I presume it is the Department of Enterprise, Trade and Employment.
Acting Chairman
I think we have covered most of the issues raised by members. We have had a pretty comprehensive debate on the Estimate. If the two spokespersons agree we can bring the debate to a close. Is that acceptable, Deputy Rabbitte?
Yes.
I thank the Minister for a very comprehensive reply. I am delighted she referred to the CE schemes in schools. I was also glad to hear the comments of the Minister of State, Deputy Treacy, regarding the enterprise boards. I hope the Minister will follow through on that matter.
Very much so.
It is important for those who are dependent on small companies. I appeal to the Minister to make every possible effort to bring about change in the north-west. I am happy with the Minister's comprehensive understanding of her remit. I compliment her, the Minister of State, and their officials on an excellent presentation.
I agree, Chairman. Is the £50 per child per week predicated on the mother or the father being at work already? Is it open to somebody who is out of the workforce and who undertakes training for the purposes of getting back into the workforce?
Yes, it is. I explained the idea earlier. I recall, in particular, that when the Fruit of the Loom plant closed in Donegal, I encouraged many of the young people involved to undertake re-training. One of the down sides of some of the activity was that young people saw life after school in the context of Fruit of the Loom. We were making training available and they were saying "I am not going to go into training for £70 or £80 a week, when I will have to have my children looked after". While that was the background against which the scheme was introduced, it is available, literally, for anyone.
It is a very good scheme.
I hope it will make the difference, particularly for women to go back into training. If FÁS reorganises its hours for training courses that would also help.
Is there a cap on the duration of the scheme?
For the duration of the training programme it is up to £50 per week and depends on how much one is spending per child on child care. It does not go to the individual, it goes to the child care provider. One has to show that one is availing of child care.
Maybe we could have a note on that. It could last for as long as six months?
Or a year.
It is important that such schemes are in the public domain. Unfortunately, people are not aware of the benefits of many good schemes that are available.
Good news does not always make the news.
No.
Acting Chairman
I thank the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, and the Minister of State, Deputy Treacy, for their participation in the Estimates meeting, and thank the officials for their briefing. I also thank the spokespersons and other members for their attendance.