SELECT COMMITTEE ON ENTERPRISE AND SMALL BUSINESS debate -
Tuesday, 27 Nov 2001

Vol. 4 No. 11

Estimates for Public Services, 2001.

Vote 34 - Enterprise, Trade and Employment (Supplementary).

Chairman

I am pleased to welcome the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, and her Department officials, Mr. Michael McKenna, assistant secretary, Mr. Ronnie Sheehan, finance officer, Mr. Eugene Forde, principal officer, and Ms Amy Hubbard, higher executive officer.

We have one item on our agenda today, consideration of the Supplementary Estimate for the Department of Enterprise, Trade and Employment for the year 2001. I invite the Tánaiste to introduce the Supplementary Estimate and I will then call on the party spokespersons to make comments if they wish. If they want to make general or specific points on the matter, they can make them now. If not, the Tánaiste may begin.

Minister for Enterprise, Trade and Employment (Ms Harney)

I thank the Chairman. I know everybody is pressed for time and I am sorry the Order of Business delayed my arrival.

This Supplementary Estimate is being sought primarily to provide additional funding for the FÁS community employment programme as well as to facilitate the Government's decision to match re-adaptation aid from the European Coal and Steel Community, ECSC, for the former employees of Irish Ispat Ltd. Additional funds are also being sought for the newly established Irish Auditing and Accounting Supervisory Authority. I am proposing a token Supplementary Estimate of £1,000 as there are sufficient savings in the Department's overall Vote to meet these commitments in 2001.

The proposed Supplementary Estimate for FÁS amounts to £22.48 million. This amount includes £9.48 million for subhead K4 to facilitate the ongoing operation of community employment programmes. Of this amount, a sum of £8.7 million is required to compensate for social welfare allowance increases and a further £1.78 million to provide for Christmas bonus payments to CE participants that were not provided for in the original Vote.

Following the first Committee of Public Accounts DIRT inquiry report, I established the review group on auditing to review the regulation, operation and professional standards in the accounting and auditing profession. The review group finalised its report in July 2000. The report contained 80 recommendations involving statutory changes, particularly to the Companies Acts and the Central Bank Acts, as well as changes to the constitutions and professional standards of the main professional accountancy bodies. It also recommended the establishment of an oversight board to supervise the regulation by the accountancy bodies of their members' professional standards.

Following publication, the Government endorsed the review group's report, approved the establishment of the interim Irish Auditing and Accounting Supervisory Authority - IAASA, the renamed oversight board - in December 2000 and agreed that work should commence in drafting the necessary amendments to company law to give effect to the report's recommendations. I intend to bring a draft scheme of a company law Bill to Government shortly. The IAASA, once established on a statutory basis, will receive 60% of its funds from the accounting profession and 40% from the State. The Government agreed that the full costs of the interim board would be funded by the Exchequer in 2001. However, for technical reasons, only £10,000 was included in subhead S2 at the time of the 2001 Estimates. Since my Department is providing the secretarial support for the interim board, the costs will amount to just £50,000 in 2001. Accordingly, a Supplementary Estimate of £40,000 is required. This funding will be used primarily to cover the costs of meetings and legal costs of the interim board.

When the former State-owned company, Irish Steel Ltd, was sold to Ispat in 1996 and became Irish Ispat Ltd, it was hoped that the future of the workforce would be secured. Unfortunately, mainly because of the difficult conditions in the international steel market, the company went into voluntary liquidation in June this year and the workforce was made redundant. The workers received only their statutory redundancy entitlements, which were paid under the relevant legislation. Lump sum payments have been paid by my Department amounting, to date, to a total of £1.5 million to 341 of the former Ispat employees under the Redundancy Payments Acts, 1967 to 1991.

Many of the workers gave many years of service and dedication to the company and it was with dismay that the Government learned of the situation in which the workers found themselves. Immediately following the closure of the company, the Government approved, at my request, a proposal to seek funding from the ECSC to enhance the statutory entitlements of the workers. Following the Government decision, my Department applied to the European Commission for ECSC re-adaptation aid under Article 56(2)(b) of the ECSC treaty for the maximum available amount of \3,000 per worker. This application was made on behalf of the Ispat workers and also on behalf of certain on-site contract workers who were made redundant from contract companies as a result of the closure of the company.

The European Commission indicated that one of the essential conditions for the receipt of ECSC aid is that the member state concerned should pay a special contribution to the redundant workers, which would at least match the amount to be paid by the Commission. The Government has already agreed to the provision of this matching funding, which would mean a payment of \3,000 to each of the workers. Even though a minimum of one year's service in the company is a condition for the receipt of ECSC aid, it is intended that the Exchequer contribution will apply to all the workers regardless of their length of service. A new subhead, subhead X7, with a provision of £1.2 million is required to provide matching funding for the ECSC aid for approximately 460 workers.

As I indicated already, there are corresponding savings in my Department's Vote in the current year to match the additional spending requirements to which I have referred. There will be a saving of £12.719 million available under subhead C2 - IDA capital grants to industry - as a result of a slower than anticipated drawdown of grants by IDA Ireland companies. This is due to the slow down in the Irish and world economies over the past 12 months.

The social economy programme, funded under subhead K9, provides for grant aid to enterprises established to deliver social services in and for disadvantaged communities. The promotion of the programme was affected by foot and mouth disease as FÁS staff and local working group meetings were constrained. The expansion of the programme has been slower than expected in 2001 and participation rates will not reach the planned levels. Savings, therefore, will arise, amounting to £11 million.

Mr. Perry

I welcome the Tánaiste and her comments on the Supplementary Estimate.

With regard to FÁS employment, there is a need to focus on the unskilled labourers that are entering the country at present. Will part of the allocation be used for the retraining of people who have been granted visas to work here? Training is necessary because some of them lost jobs, particularly in the hotel industry. People were brought in initially to work in that industry. They were deemed capable of doing so, but now they find that work may not be there for them.

I welcome the Christmas bonuses to CE participants, which were not provided for in the original Vote. They are very important and will be very much appreciated.

The future funding of caretaking in schools by the Department of Education and Science is also very important. There will be a clearer job description for caretakers. Does the Minister feel they will have contracts of employment as caretakers in schools as opposed to temporary contracts under FÁS?

With regard to community employment schemes, despite the low unemployment percentage, a considerable number of unemployed people still find FÁS very beneficial. It is welcome that people in the over 35 age group who have been unemployed for three years are now allowed to participate in schemes. FÁS and the community employment schemes have done outstanding work. It is important that the Minister keeps the focus very much on community employment, which has been beneficial over the years.

With regard to statutory redundancies in Irish Ispat, I welcome the fact that the Government is providing funding that matches that of the Commission. It is some compensation that people who gave many years of service are entitled to \3,000, which will be matched by the Government. Obviously, many people are unhappy that it is not considerably higher, but the Government funding, combined with the money granted under ECSC rules, partly addresses the problem.

My next point concerns the reduction in IDA capital grants to industry under subhead C2. In western counties, particularly the north west where there is a high level of opportunity for small enterprises, money could be spent through the enterprise boards. Their current funding is considerably reduced. Funding for the Sligo enterprise board was reduced by £40,000. I think it got £347,000 in 2000 and £304,000 this year, which was for all job related activities. The available funding could be allocated to enterprise boards to facilitate the growth of small companies. The emphasis of the IDA has been very much on the growth of large companies. In terms of Enterprise Ireland and enterprise boards, the level of funding is inadequate given the fact that small companies have a unique opportunity to create jobs.

Sufficient provision is not made for the social economy programme that will facilitate the economic and social regeneration of disadvantaged communities. This scheme was announced recently and it can do much. Despite the growth in the economy over the years, the social economy programme has huge opportunities. It is important to prioritise different areas for that fund.

Acting Chairman (Mr. C. Lenihan)

I will not delay the Minister. I have two brief points on the response by her Department to the Committee of Public Accounts DIRT inquiry. Will the new supervisory authority concerning the accountancy profession put Ireland at world standard in relation to regulation of the auditing and accounting profession? I am impressed by the speed with which the Minister is bringing matters to the Government with regard to that specific DIRT subhead. The other issue is the slowdown in terms of C2, where there is a saving of £12 million. Was that saving made directly? I am almost at a loss to believe that companies are not drawing £12 million in grants. Is that because they are not going ahead with expansions but the grant has already been given? Presumably they are not grants that can be reallocated.

Ms Harney

I welcome many of the comments made by Deputy Perry and share his view about the need to ensure that we prioritise the BMW region. It did not do as well relative to the other parts of the country in the past decade when the economy grew very rapidly. That is why the Government set a target for IDA Ireland in the national development plan that 50% of all new greenfield jobs delivered in the lifetime of the plan would be in that area. That target was on schedule to be met, however, we are experiencing a slowdown and inward investment is not as great as it was.

To answer the Chairman's points, it takes about eight years for grants to wash their way through the system. Grant-aid agreed between IDA Ireland and a client company may not be fully paid for six to eight years. There may be an initial construction project and the bulk of the grants are for either training or employment and are dependent on people being employed. Over the past 12 months it has become clear that companies are not expanding - in some cases they are contracting while in other cases there have been closures. Therefore, moneys that might have been owing to companies for jobs created are not being paid. That is why there is a saving in C2.

Community employment plays a very important role, particularly in rural areas and particularly for categories of individuals who might not have many alternatives. Notwithstanding the fact that there are fewer than 4% of people on the live register, we have sought to adopt a very flexible approach. In the main we have left discretion at local level with FÁS offices, subject to some clear criteria which we must have in all spending programmes. We believe the best decisions can be made in that regard.

As regards schools, the intention is that over a three year period all community employment will be brought into the mainstream and individuals will have contracts of employment with those schools. Very small schools will be given a minimum of £6,000 while larger schools will get £100per capita towards the provision of caretaking facilities. Although this process may take some time, we believe it is the best option. Community employment, in addition to the worthwhile experience it has been for those who participated in it, has filled a gap in providing very valuable services. Clearly we cannot create a vacuum as we reduce the number of people on community employment schemes. We have to ensure the vacuum is filled and the most effective way of filling it is through mainstreaming. We are currently doing that with personal assistants and it is my intention to mainstream as much community employment as possible. I want to do that to give certainty to the organisations and the individuals involved. While having virtually full employment, we do not pretend the community employment programme is an employment measure. It has become a social measure which fulfils social needs in the community as much as it fulfilled employment requirements in the past. A lot of our support for the unemployed is with a view to training them for jobs in the labour market.

Deputy Perry asked if some of the resources would be used to train people who have been made redundant. That is not what I am dealing with in the Supplementary Estimates but there is a very strong focus on it. In recent years the energy of FÁS was directed at recruiting workers from overseas. I want to see them applying their energy to, among other things, retraining people who have been made redundant. In many cases those made redundant have worked in traditional sectors with low or no skills. We want to ensure that we move as rapidly as possible to provide either alternative jobs or retraining and up-skilling for new jobs in different sectors. It is important that we have a very flexible and rapid response. The measures we have put in place in recent times ensure that once a company notifies us of redundancies FÁS moves in to assist those workers. In many cases it helps them develop interview skills or complete job application forms - these are things they might not have done in the past. In many cases it also offers training for new jobs in different sectors.

Notwithstanding the slowdown, we have been getting about 1,200 applications a week for work permits, even since 11 September.

Mr. Perry

The Department receives 1,200 applications a week.

Ms Harney

Yes, it is an incredible number. We have granted about 33,000 permits already this year and that is in addition to approximately 4,000 professionals who have come to Ireland through the working visa arrangement. They work mainly in the IT, building and nursing sectors. That is a very heavy demand. The first priority is to ensure our own people and Europeans are employed. Perhaps with the very liberal approach, for good reason, in the past couple of years, some of our people may have been overlooked. I hope to take proposals to the Government next week that will put in place a new mechanism requiring employers to exhaust all domestic options in the first instance before seeking a work permit for somebody from outside the EEA.

The interim board of the supervisory authority was established some time ago to help with the logistics of establishing the board on a permanent basis and with drafting the legislation. I hope to bring the legislation to the Cabinet soon. The interim board has been invaluable in making suggestions and assisting my officials in the preparation of legislation. Deputy Lenihan asked if we would be operating to a high standard. I hope that will be the case. The supervisory board will supervise and police only the accounting bodies. The profession will still be self-regulated as is the case in most places. The supervisory board is there to ensure the various recognised accounting bodies operate to the highest standards and enforce the highest ethical standards in the profession. The board will be funded 60:40 by the profession and the Exchequer. The additional funds required are to deal with some of the logistics like legal advice and some of the secretarial expenses the board has incurred since it was established on an interim basis.

As for the Irish Steel workers, we were anxious to get as much aid as we can under the European coal and steel community and managed to get the maximum amount of aid. It is not a huge amount of money but I think it was appreciated by the workers and their trade union representatives. I am happy to say a large proportion of the Irish Steel workers made redundant in recent months are in alternative employment. That is very encouraging. There was a high demand for the workers and FÁS played a key role in helping to source that alternative employment.

Mr. Rabbitte

The Minister has ranged far and wide and I do not want to go over territory that she has covered, but given the narrowness of the Estimate it is not entirely possible to avoid that. The Minister relies on the ESRI growth predictions, but I am curious to know what her predictions are. The ESRI predictions are regarded by most commentators as very optimistic. I do not challenge the Minister's fundamental contention that the basics in the economy are sound, nonetheless many economists anticipate that next year the numbers on the live register will be increased by 3,000 to 4,000 per month. I would like to hear the Minister expressly on that point. It remains a concern that on many occasions the job losses occur in areas where they are least likely to be replenished quickly. In addition, they also affect people whose level of skill makes it more difficult for them to be re-employed.

I am not sure I understand the scale of the amount being sought in respect of community employment. It appears larger than is warranted by developments in the programme over the year. I do not understand the £1 million savings made in terms of the transfer to the Department of Education and Science from FÁS. I heard what the Minister said on that, but it is still a cause of considerable unhappiness on the part of people on the scheme because, as I understand it, unless it has changed in the past few weeks, the people who have been doing the job satisfactorily in schools for some time are effectively being disemployed and may be re-employed only at the pleasure of the school management. If we are engaged in the sensible step of transferring responsibility for this area to the relevant Department and if the work that needs to be done should be done in terms of even preserving the actual physical plant, that is the schools that benefit from this scheme, people considered good enough to do the job when they were wearing the community employment jersey ought to be good enough to continue to do the job. It is causing unnecessary grievance and I am sure in practice the bulk of them will be re-employed, but it is an issue that is raised from time to time.

That brings me logically to the point about the social economy unit. That is very disappointing. One cannot watch a television programme or listen to a radio discussion without some Minister or other teaching us how to add two and two euro. The Minister for Social, Community and Family Affairs, Deputy Ahern, placed a full page notice in the Sunday newspapers teaching people on unemployment benefit how to count the euro. There does not appear to have been much promotion done by the Minister's Department on the question of the social economy unit. I constantly meet people who want to know where it is, what it is and what are its terms.

The Minister came in at the end of the year with savings in the order of £11 million on the social economy unit, a limited measure in the first place, but it is unfortunate that we are making the savings in areas where there is greatest need. Theoretically, the idea is a good one. I am not sure I fully understand it because the parameters appear to be a bit woolly. What is and is not included is not immediately apparent, but I would like to know the number of projects involved. I do not believe there is more than a few dozen at most approved under the scheme. The idea is a good one, but it is not promoted. People do not understand that they might be eligible for it. There is a lot of that kind of work being done in the community, the kind of work that, if it were not available, the people doing it might not be at work at all, but it ought to be marketed and people should have their entitlements explained to them because the take-up is disappointing.

The labour force has been sweated down to very minimal rates of unemployment, but there appears to be a reluctance in the Department to accept that there are still people on community employment who would be eligible for the social economy programme and who are not capable of making it in the commercial or private sectors or ordinary employment for a variety of reasons. I do not dispute the wish of the Department that where somebody is job ready and has had the experience of being on a community employment programme for some time, they ought to pass on information on where there is employment prospects in the economy proper. I accept that, but for a variety of reasons, such as education, disadvantage and multiple deprivation of different kinds, there are people who are comfortable with the kind of work they do on social employment schemes. It gives them a sense of dignity and purpose, and they are doing work of some value.

As we head into more difficult times, which I hope will not last too long, we ought to adopt a more understanding approach towards these people. I would have thought there are projects that would be eligible under the terms of the social economy programme, and they ought to be facilitated wherever possible. I do not know if the Minister wants to avoid answering specific questions on the European Social Fund in terms of when that component will be transferred here. I will not press it if that is her wish.

On the question of the take-up of IDA Ireland capital grants, it is difficult to judge what precisely comprises that £12.7 million. I do not know what kind of an indicator that is of the slowdown. Is that a situation where job potential, as announced, is not being realised or is it because of projects that were to be located here but which have not been located here because of the slowdown? I would like to hear the Minister on that.

Where stands the training fund? Has it been established? Who comprises it and is it functioning? It is difficult for a Minister for employment, when someone puts a microphone up to one's face in a conflictual situation, to comment on job losses. The Minister will not have experience of being able to respond to that because she has been happily opening new projects and so on, but the new mantra of cutting out the permits has to be expressed in very careful language. Otherwise, it is an incitement to more malign forces. For example, the situation on housing is now so grim in parts of this city that people believe, without having any basis for it in reality, that they cannot be housed because of the number of people to whom the Minister is giving work permits. That is not the case, but it has little effect on the perception. We need to be careful about the language we use in that this could be taken up as our new response to the situation now that there is some downturn in the economy and the employment situation may not be as bright in coming months.

Does the Minister predict that jobs will continue to be created and that there will continue to be employment opportunities parallel with job losses in the months ahead? I would like her to give some yardstick of how she thinks that will balance out. Even when we had a live register of whatever figure one wants to put on it, depending on whether one goes with the labour force survey or the live register figures in the Department of Social, Community and Family Affairs, there was roughly a comparable number of jobs theoretically advertised in the economy. That is a commentary on the work-ready state of people who are unemployed. Is the Minister saying that will continue to be the case?

The withdrawal of the Cavan project seems to have been a hell of a blow to that part of the country. I do not know whether there are any more like that in the path line about which the Minister knows at this stage. I do not know if there are any more imminent shutdowns of which she is aware, but this is the only opportunity we get to do some kind of audit at the end of the year. I would like her to address those questions.

Mr. N. Ahern

The Minister mentioned that 33,000 work permits were given this year. Is there a record of the number of complaints received in respect of work permits? Cases have arisen of some employers sacking Irish workers and employing foreigners on work permits. Has the Minister a breakdown of the allocation of those 33,000 work permits? Would they have been given mainly to employers or were many of them given to middlemen or agencies? I can give the Minister the name of at least one company that seems to have a deliberate policy of sacking Irish people and bringing in Czechs to do the work. There is an ongoing campaign of intimidation and harassment against the workers involved. The case against the company to which I referred has been in the Labour Court or the Labour Relations Commission.

I note that people participating on the jobs initiative will get the Christmas bonus. What is the rule covering that or is that a new development? If those people get it, we should all get it. I am sure many low paid workers in the general Government services could make a case for that. I am not objecting to this, but what is the rule or clause covering it?

I notice it is stated the main reasons for the overrun of the subheads are X, Y, and Z. That presumably does not prevent me from asking a general question that comes under the responsibility of the Department. I have a problem in my constituency that involves the Health and Safety Authority. No work has taken place on the main civil engineering contract, which is part of the Ballymun regeneration Government project, for eight weeks on the trot. A major battle is taking place that has very little to do with safety. Safety on building sites and elsewhere is very important, but this problem has developed into a big power game between State agencies. Can the Minister and her officials could do anything to push matters along? The trade unions were involved in dealing with lifts in the Ballymun flats about a year and a half ago. They are good at finding a poor, disadvantaged area to use as their battleground because they seem to think there is a higher tolerance level there. A disgraceful situation was allowed develop between the trade union dealing with the lift operators and the employers. The same situation has developed between the Department of the Environment and Local Government, the local authority and the Health and Safety Authority. It is has developed into a power battle between the agencies and it will probably end up in the courts.

We, as politicians, slag court judgments, but it is extraordinary that we have to wait for the courts to adjudicate on such matters when those involved are agencies under the remit of different Ministers. The construction company involved does not give a damn. Compensation claims for millions will be lodged, but the company is not worried. Those who are worried are those committed to carrying out the regeneration project in the area. Has the Minister heard what this power game might cost the taxpayer in terms of possible compensation claims? Can she do something to push it along as what is being allowed to happen is a shame and a scandal?

Mr. Perry

With regard to the £23 million savings, is it possible to reallocate that money within the Minister's Department? There is very little support for small companies which have been the backbone of the economy. The main focus of the Department is the bigger companies. I am disappointed that the only possibility of support for employers who employ one to ten employees is through the enterprise boards. The budget for the 26 enterprise boards throughout the country is less than £24 or £25 million. It would be a major loss if £23 million savings in the Department were reallocated, particularly in terms of the £12 million from IDA Ireland. If this fund was promoted small companies would have the capacity to grow and to create jobs.

Deputy Rabbitte made an important point on the social economy programme. It is important to promote this fund and to make the people concerned aware of what groups are eligible to draw it down. It would be a pity if this £23 million savings were to be lost to the area of enterprise and trade and put into a bigger pool, particularly when small companies can avail of this fund and jobs can be created in them. From speaking to many employers who employ one to ten employees, I am aware they do not get support. It is a pity, therefore, this fund will not be reallocated to this area.

Chairman

I want to follow on from what Deputy Perry said about small business industry and the need for additional supports for those who are prepared to take risks. We acknowledged the role of small industry in our economy. The Minister has met a number of self-employed groups associated with the taxi business who are deeply concerned about the business arising from the regulations introduced by the Minister of State, Deputy Molloy. I understand the Minister has given these people a sympathetic ear, particularly those who are facing financial difficulty and hardship. Are there available funds in her Department to provide for these people? I note that under subhead C2 there was a provision of grants and other financial facilities and there is reference to international service industries. Will the Minister be generous and flexible in that regard to ensure some of the problems facing these people are addressed? We know some of them are facing financial hardship and are not in a position to repay loans or mortgages on their properties. They may lose their homes in an effort to survive. The marketplace has changed in terms of their employment and their ability to generate an income because of the additional number of licences, which have not benefited the consumer. The Minister might like to comment on that.

As regards subhead S2, the new IAASA board, reference is made to amendments to company law. Does that board include all people who are in a position to liquidate or wind down a company? Will that board deal with all professions which may liquidate a company? What professions are qualified under company law to liquidate a company or does the IAASA only deal with the accounting profession?

I recently asked the Minister a parliamentary question about the total number of work permits, not just the weekly number, in the marketplace. On what basis are work permits renewed? Is it a case that existing work permits are automatically renewed if applications are made?

Ms Harney

I have come in on a specific Supplementary Estimate and I find myself dealing with a range of issues. I will first discuss the issues you raised, Chairman, because I know you have raised them in this forum before.

As regards the taxi industry, it was not one person who deregulated the taxi industry but a decision of the High Court. When the Government made a decision on this matter because of the difficulties being experienced by consumers, the procedure agreed was that each holder of a licence would get an additional licence. It was done that way to be as fair as possible to those who had invested enormous amounts of money either by remortgaging their houses or using redundancy payments. That was appealed by one of the groups and the High Court found that it could not be done and that the industry should be deregulated.

Chairman

As you know, I have been associated with this industry for a period of time. When a Government makes such a decision, is legal opinion usually sought to ascertain what might happen in the future if a legal challenge is mounted? Was legal opinion sought on this occasion?

Ms Harney

I do not want to go into the A to Z of taxis because it is a while since I looked at the issue from that point of view. A forum was established. The Chairman may have participated in that process. An effort was made to have an agreed solution because the local authorities which had been given the power by a former Minister for the Environment in a previous Government were not exercising that power. A forum was established to find agreed procedures between existing licence holders and others. It was felt by many, including myself, that that was unsatisfactory. It was not in the interests of consumers and it was a serious issue, particularly in Dublin. The Government made a decision. When the Government makes a decision, the advice of the Attorney General is sought. We felt that in all the circumstances the decision was reasonably fair, particularly to existing licence holders. The State had only introduced regulation in this sector in the late 1970s. There were not any regulations prior to that. The regulations were introduced to regulate the quality, not to regulate the market, but that was their effect. Every Government decision can be challenged. There are grey areas in all these areas. The law is not a definite science. It depends on the interpretation of the courts from time to time. In this case the High Court found that what the Government had done was wrong and, therefore, we did not have an alternative but to go for full deregulation.

The Chairman mentioned the hardship caused to some individuals. I am conscious of that and I, like most fair minded people, acknowledge it. The Government is also conscious of it. Some time ago the Minister of State at the Department of the Environment and Local Government, Deputy Molloy, asked SIPTU to come forward with what he called a mechanism for establishing hardship. Although the taxi people referred to are self-employed, they have joined SIPTU which represents the bulk of the individuals involved. Businesses go to the wall every day and people and their families lose a lot in the process. We cannot have a situation, even if we wanted to, where every business in difficulty can be bailed out. The Minister of State asked the union to come forward with a suggestion. He is still awaiting suggestions. I know he and other members of the Government are anxious for a mechanism to be established to deal with some of these specific cases. We sought to do that through the taxation system. The tax measures introduced in last year's Finance Bill were favourable, but there are genuine cases of widows and others who have been left in a vulnerable position. If it was possible to find a mechanism which could ring-fence and deal with those specific cases, most people would like to see that done. However, that has not happened yet.

Mr. N. Ahern

Was SIPTU the only union which was asked for its views? It is new on the scene as it represents many new people. Has every group been asked for a submission?

Chairman

The Minister said that SIPTU represents the bulk of the individuals involved. I have worked with this industry for a period of time and it is my understanding that the National Taxi Drivers Union represents the bulk of the individuals involved, followed by the Irish Taxi Federation and then SIPTU. Other groups also represent the taxi industry, including the 1,000 independents, as they call themselves, and FAIR. I do not want the record to show that SIPTU represents the bulk of the individuals. That is my understanding, although I am open to correction.

Ms Harney

SIPTU is the largest union in the country and it came forward to discuss the matter with the Minister of State, Deputy Molloy. Perhaps other groups did the same. The Government will listen to all voices in this area. I met the representatives of FAIR in the House last week and it was an impressive group of women who put forward their arguments in a reasonable fashion. We had a good discussion.

As regards the question about who can deal with liquidations and wind downs, the board of a company can liquidate a company on a voluntary basis. The creditors of a company can petition a court for a liquidation. I am not sure if that is the point the Chairman was making. Perhaps he was referring to the phoenix type syndrome. The new director of company law enforcement will now have responsibilities in that area. We will launch his office this evening. From midnight tonight the functions I currently have under the Companies Acts will transfer to him on a gradual basis over the next three or four months. If somebody hives off the assets of a company and incorrectly applies them, he can apply to the court to have them back and to ensure they go back into the company. He can apply to have assets frozen. He has extraordinary powers to intervene under the new Act and to act to ensure company law is enforced and that the stakeholders' and com-panies' rights are protected.

I will deal with some of the issues DeputyRabbitte raised, although he has left the meeting. He asked why only £1 million was saved as a result of the transfer of community employment to the Department of Education and Science. It is the case that perhaps up to 800 persons or more have transferred over to it. However, £13 million was transferred to the Department of Education and Science, in addition to £1 million. The reason it is only a saving of £1 million is that there were higher costs for those retained in community employment than might have been envisaged. In other words, we have a saving of £1 million, not £13 million. Last year was the first time that people in the jobs initiative scheme received a Christmas bonus. The Government felt it was important that they should receive that bonus, like other recipients of social welfare and community employment schemes who get 100% of their welfare payments by way of a Christmas bonus.

I should not have to tell Deputy Ahern that Members of the Oireachtas do not warrant a Christmas bonus, much as we might welcome one. The idea of the Christmas bonus is for those at the very bottom. It is generally accepted that those on welfare - perhaps not in every single case, but by and large - as a class of individuals, are at the bottom in our society.

Deputy Rabbitte wondered whether other companies are in the Terradine situation and to the best of my knowledge there are none. I am not aware of any announced investment that is not now proceeding. Because of the slow down, companies are reassessing their operations and some investments have been delayed for the moment while others have been scaled back. That is why the IDA's capital grants to industry are not as high as we had anticipated. That mainly concerns commitments the IDA had entered into five, six or seven years ago whereby moneys are paid out on a gradual basis as investments are made and jobs created.

Notwithstanding the difficulties, the medical devices industry is doing extremely well. Yesterday I met with the chief financial officer of Microsoft worldwide. That company is currently recruiting 200 people in the Dublin area. Lucent Technologies is also recruiting. Today, the Cabinet approved a job expansion scheme for County Mayo which will create over 200 jobs. So there is good news and that is why it is important to keep matters in perspective.

Deputy Rabbitte asked me what forecast I agreed with. I am not in the business of forecasting. The OECD has said that next year the Irish economy will grow by about 4%. In some parts of the world 4% would be considered a boom. I visited Australia in September and the government there was taking great credit for the fact that the economy was growing by 4% per annum. It was predicted that it would help the Howard government to be re-elected, and that has happened, notwithstanding some predictions to the contrary. So if 4% is good news in Australia, what is happening here is not as gloomy as some commentators would have us believe. The OECD has also said that the Irish economy is in a much healthier state than most other European economies, to be able to recover quickly from the slowdown. It is forecasting growth rates of 6% plus for 2003. Whatever about the percentages, therefore, we are growing and, as I said recently in the Dáil, the car is still moving along. We may not be in the 60 mph zone but we are still moving forward in the 30 mph zone which is important.

Deputies Rabbitte and Ahern raised the issue of work permit allocation. The permits are given to employers who must apply for them on behalf of potential employees. We have come across cases of fraud which have been referred to the Garda authorities. I do not have figures for complaints but we have also come across cases where people were brought to this country and were not treated very well. They did not seem to have been made aware of the conditions of employment by the agency that recruited them. That is why we are now insisting that the potential employee must first sign the application form and must be aware of the conditions of employment. If employees have a bad experience we have been flexible in giving them a permit for a different employer.

We have made it clear that anybody who abuses foreign employees will not be given other permits. We have to take a hard nosed approach to this because we do not want to see foreign nationals who are here legally - yet who, in many cases, come from poor countries, are in a vulnerable position, miles from home and may not even speak English - being discriminated against. Labour laws apply to foreigners among us as they do to Irish people.

When I said the Government would have to be less liberal and more conservative in the manner in which it assesses applications for work permits, that was as much a warning to employers as it was to anybody else. Even since 11 September, we are still getting 1,200 applications a week. It seems that some employers are ignoring the potential locally, or perhaps they are not prepared to pay the market rate. That is why we intend to introduce a new mechanism which I hope to bring before the Cabinet shortly, to ensure that, in the first instance, employers exhaust all possibilities to recruit the personnel they require in Ireland. It is only when that process has been exhausted that we will consider an application for a person from outside the EEA area. Four years ago we were granting fewer than 3,000 work permits a year, but already this year we have granted 33,000. Therefore, one can see that over the duration of this Government's term of office, we have gone from a conservative regime to perhaps the most liberal regime in Europe, but our first responsibility has to be to our own citizens. Anybody who is here with a work permit will obviously stay in place. There is no question of withdrawing permits and sending people home; I am talking about procedures for new permits and new situations as they arise.

Deputies raised the question of support for small industry. The total budget for my Department is about \1.3 billion of which roughly half goes to FÁS, much of it for training people in employment, and as much for small companies as for larger ones. Some 25% of the budget goes to community employment schemes. The remainder, other than the £40 million that goes to pay salaries and administrative costs of my Department and the Labour Court, goes to support industry. The bulk of it goes to small to medium-sized industries. It is a myth that small industry is not supported, although I keep hearing that complaint. We cannot give operating aid to industries but Enterprise Ireland supports small industries. I would say that not all the companies they support are large, by any stretch of the imagination. As a country we compare favourably with our counterparts in other European countries as regards the range of supports available.

The most effective way a Government can support industry is by helping to create the environment that allows entrepreneurship to flourish. The personal income tax, corporate tax and capital gains tax policies that we have introduced, make this a favourable climate in which to reward risk taking and entrepreneurship. That, together with the development of infrastructure, particularly in the regions, will ensure that we can remain competitive and help our companies to grow. I want to see more Irish companies growing and developing, and not just having a situation where we are always importing world class companies. In recent years we have grown some very successful Irish world class companies and we have the potential to grow many more in future. This is because our education system, coupled with the sense of confidence that has grown in recent years, gives us the edge in helping to create world class companies for the future. Hopefully, the support the Government provides can bring that about.

Deputy Ahern has spoken to me on a number of occasions about his concerns regarding the HSA but, clearly, when it comes to health and safety matters, I cannot intervene. It is an operational issue for the Health and Safety Authority which has a board and staff to deal with such matters. In the past, the general criticism was that the HSA has not been enforcing the law. Only last week, however, we saw that a company was fined £250,000 for breaching the health and safety regulations, so the law is beginning to be enforced. If, as the expert body in this area, the HSA takes a certain view about any projects, then clearly it would be wrong of me, or any other member of the Government, to intervene, particularly since there seems to be a legal dimension to what Deputy Ahern has raised. Every problem has to be solved, however, and I want to see whatever issues remain to be resolved in Ballymun being resolved. The Ballymun regeneration project is a very good one and is important for the people who live there and those who represent them. The problems clearly have to be resolved and I hope that can be done quickly. It should not require a huge amount of time to resolve every problem or to get things right. I do not know why, unfortunately, it has not been resolved many weeks on. I will inquire as to why that is the case and revert to Deputy Ahern on another occasion.

Chairman

That concludes the discussion on the Supplementary Estimate. I thank the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, for her participation in today's consideration of the Estimates. I also thank Mr. Michael McKenna, assistant secretary, Mr. Eugene Forde, principal officer, and Mr. Ronnie Sheehan, finance officer of the Department who supported us today and who have also contributed to briefing the committee on the Estimates. I thank the members, especially the spokespersons, for their contributions.

I want to put on record my appreciation of the support of the Clerk to the Committee and his team and, of course, the back-room staff who provide us with all the required support services. I thank one and all.