SELECT COMMITTEE ON ENTERPRISE AND SMALL BUSINESS debate -
Thursday, 17 Jun 2004

Vote 34 — Department of Enterprise, Trade and Employment.

Chairman

I welcome Deputy John Carty to the meeting. The committee has received apologies from Deputy Conor Lenihan who is unable to attend. We are also joined by Deputy Deenihan who is substituting for Deputy Hogan.

The purpose of today's meeting is to consider the 2004 Revised Estimates for the Department of Enterprise, Trade and Employment. A proposed timetable has been circulated to members. On behalf of the select committee, I welcome to the meeting the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, and Minister of State with responsibility for labour affairs, Deputy Fahey. I also welcome Mr. Martin Shanaghar, Mr. Brian Higgins, Mr. Alan Dunphy and Ms Marie Breen. I now invite the Tanáiste to make her opening statement.

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney)

While I have before me a prepared script and as everybody here can read as well as me, I do not propose to read it as is usual in these circumstances. I am sure members are more interested in asking questions. My officials will circulate the script. The Minister of State, Deputy Fahey, will deal with issues for which he is responsible including industrial relations, health and safety and so on.

I will make a few preliminary comments. The increase in the Estimates for the Department is approximately 3.5% above last year's Estimate bringing the sum to €1,124,471,000. It is fair to say, notwithstanding the difficulties in the global economy, that Ireland has been able to weather the storm extraordinarily well. Members will be aware that the Government is forecasting growth this year of 3.5% while independent commentators forecast a much higher growth figure. Unemployment, as will be noted from this year's household survey published yesterday is, for the first quarter of this year, down to 4.4%. Employment has increased during the past year by 52,300, almost a 3% increase. That increase was across all regions which is very significant.

Unemployment decreased to 4.4% in the Border, midland and western regions. However, it increased by 1,300 in the eastern and southern regions. One of the worrying trends, notwithstanding the great success, is that long-term unemployment is marginally up from 1.2% to 1.4% which means we must look more aggressively at some of our intervention measures. When a person reaches six months in unemployment the State intervenes through FÁS and offers them a number of different initiatives such as training, counselling, job support or employment. That is having a dramatic effect in keeping unemployment down and allows people to access good opportunities.

Some 47,551 work permits were issued last year from which we earned €20 million. We estimate that this year that figure will reduce to approximately €9 million because citizens from the new accession countries into the EU will not require a work permit. Indeed, the spouses of those already here who are not allowed to work will not have to pay for a permit. That, too, will have an impact on fees likely to be earned.

One of the big stories in the Estimates is the increase of 39% in funding for research and development. That indicates the shift Government is making in industrial policy towards innovation and research. That is happening across a number of different headings such as Science Foundation Ireland which has established enormous credibility globally. The Government is providing the largest grants being given by any government in the world for basic research. On top of that, many of the new industries and expansions being announced for Ireland involve significant research or development functions on behalf of companies. Enterprise Ireland's industry support in the research area is up by 11%. We are moving towards rapidly becoming a much more innovative knowledge-based society able to capture the benefits which arise in that regard.

The budget for FÁS, an issue of enormous interest to members, is up from €814.6 million in 2003 to €837.5 million in 2004. A substantial amount of FÁS resources come from the national training fund from which it receives €279.5 million. Currently, there are 25,000 people in training in addition to those involved in community employment and other support schemes. Another issue of particular interest to members of the committee is insurance. Motor insurance has dropped year on year by 13.3%. Employment liability and public liability insurance has deceased by approximately 15-20%. We expect further substantial reductions now that the PIAB has opened for business. Members will be aware that the book of quantum has been published. Whatever issues arose during the recent election campaigns, insurance was not an issue. It was a big issue during the previous election. That is one problem which, collectively, we have been able to solve. I believe we will see very significant improvements towards the end of the middle of this year.

Chairman

Has motor insurance decreased?

Ms Harney

Yes, it has decreased substantially. The IDA published its annual report yesterday. The pipeline for FDI is extraordinarily good at the moment. There will be major new job announcements in the coming weeks. For obvious reasons, these jobs were not announced during the course of the election. Many of the jobs will have significant regional implications. That is a good sign which indicates that Ireland continues to be competitive and that low corporate taxes are important as is investment in education and training.

Ms Lynch

I welcome the Minister and the Minister of State. I appreciate that the Minister agrees that reading out bland statements is never a good idea, especially when the script is available.

I wish to refer to one or two items from the Estimates. We are all agreed that her Department and this committee in particular are vitally important to the ongoing development of the economy. If we do not have a healthy economy, the rest of society will suffer, although I sometimes believe that we are more interested in the cost of living than the quality of life. Perhaps we should take a step back and take a serious look at this issue. The Minister is saying that FÁS's budget has increased. Is that just on the capital side? From what I can see, the funds for FÁS training and integration supports are down by 28%. There is a cut of 4% in respect of the FÁS employment programme.

Ms Harney

To clarify that point, both have increased substantially. There is a decrease in direct Exchequer money and an increase in the money from the NTF. We are trying to have less direct Exchequer input and to have the money come from the training fund. Therefore, FÁS's budget under all headings has increased. For example, funding for the training and integration programme, although it looks like it has decreased by 28%, has increased from €297 million to €306.5 million. The funding for the FÁS employment programmes seems to have decreased by 4% but there has been no decrease. More money is coming from the training fund because the amount of money in this category is substantially greater, and 0.7% of employers' PRSI goes into the training fund, essentially to train the employed. FÁS's overall budget for the year has increased from €814 to €837 million, quite a substantial increase.

Chairman

A sum of €23 million.

Ms Lynch

I thank the Minister for her explanation. When one reads the figures, it looks as if there is a substantial reduction.

I understand the need for re-employment and it is a very good idea that FÁS is involved in this. There is a need for a centralised agency that recognises the needs of the marketplace. The difficulty with FÁS, as I am sure the Minister knows as well as anyone around this table, is that the reduction in community employment and the withdrawal of services at that level are causing huge hardship for schools, community associations and crèches and in terms of care of the elderly. In many ways we have come to rely on that type of employment as a social support and its removal causes considerable hardship.

We had delegates before the committee yesterday discussing work permits and the way in which people are dealt with under the work permit system. The Minister said 47,500 work permits have been issued. We must now recognise that the work permit issue is a permanent one and that we do not have the population base ourselves to fulfil our market needs. Equally, we must surely recognise that communities need the support of the State to function because people are out working; it is not as if they are at home looking for something with which to fill their time. They choose to do the type of work in question, if available. This is crucial, not just to the social economy but to us all. It is vital that the elderly are maintained in the community — this is the way to do it.

I will not even begin to talk about child care and do not understand why we have not come to grips with it. Even given the little child care that is available and the very limited group to which it is available, the people doing child care work are essential. We have now reached the point where we are importing people to supply the market. We should put substantially more money into employing people at community level to maintain schools, community centres, crèches and facilities for caring for the elderly. They are essential parts of what we are as a community.

Has the funding for the Office of the Director of Consumer Affairs decreased by 13%?

Ms Harney

All the financial services responsibilities of the office have transferred to the new Irish Financial Services Regulatory Authority and therefore the cost of the staff has been transferred with them. The actual budget for the office for the remaining activities has increased. The office had responsibility for monitoring and approving bank charges, etc., but these responsibilities have now been assumed by the new authority, just as the insurance division of my Department was transferred to IFSRA.

The decrease is €596,000 or 13%, as the Deputy rightly stated. That sum is accounted for. One will note that the money for all the remaining tasks of the office has increased substantially. For example, the figure for wages and salaries has decreased by almost 2%. This is accounted for by the transfer of staff to IFSRA. Let us consider the other headings: The figure pertaining to human resource development has increased by 63%; that for incidental expenses has increased by 16%; the figure for post has increased by 20% and the telecommunications figure has increased by 11%. These figures are accounted for simply by the transfer of staff to another organisation. The same applies to the insurance division of my Department in that the regulatory insurance function has also been transferred.

Ms Lynch

I am sure the Tánaiste has heard the argument that IFSRA is a very good idea. We are all hoping that it will take off and do its job properly. It is a bit new to make any judgments on it. However, I have certain fears, which I am sure have been expressed to her by others, one of which is that the Office of the Director of Consumer Affairs will play a lesser role in consumer protection and pinpointing the difficulties of consumers and how they interact with the market. I am very worried that, because of IFSRA, the Office of the Director of Consumer Affairs will lose its position. This will begin with a transfer of certain areas into IFSRA. I understand the logic for doing so at this point but there is also a place for a Director of Consumer Affairs. The director should be more visible and vocal. I do not believe her position will be supported and I worry about it.

I hope we have reached the mid-point in the negotiations for a new pay deal. All we are hearing, in spite of its importance, is that there are logjams regarding certain industries. I do not hear that we are negotiating to ensure people's incomes are completely controlled. There is no talk of controlling prices on the other side. If I were negotiating, I would be quite happy with the miserly 2.5% but I would want prices on the other side to be completely controlled also. Producers, retailers and those involved in service delivery are waiting for the increase to be applied and the prices of their services will increase again. It is in this area that the Director of Consumer Affairs is most beneficial, and she should be more vocal and should be supported in that role. This responsibility seems to be moving to IFSRA by stealth. To a great extent IFSRA means nothing to the average person. The director's role would be reduced significantly and I would hate to see that happen.

While Aer Rianta and the country's transport system is vital to the trade union sector — as one who travels I understand that — the notion of controlling people's incomes without doing anything about the cost of living makes no sense. While an increase of 2.5% to a Deputy or a Minister is significant it is very little to someone on the minimum wage. Considering how prices are increasing it will literally mean nothing at all, as it will go into the pay packet and then disappear on transport costs, crèche costs or whatever by the time a worker gets home. The Director of Consumer Affairs needs to be supported and those are the arguments rather than the technical ones IFSRA will address. It is not right to start separating it out at this stage and we should look at ways of supporting that separate office.

Mr. Hogan

I apologise for not being available at the appropriate slot. I thank the Tánaiste for being here to introduce the Revised Estimate. The manner in which Estimates are discussed in the Houses of the Oireachtas leaves much to be desired. We are now debating money that is already largely spent. The system of reform required to ensure we get better value for money requires greater scrutiny and accountability in the Houses of the Oireachtas as well as in the agencies spending the money. For a long time we have paid lip service to this point. We hear glowing remarks about the need for greater value for money and accountability. However, we see no proposals as to how we can achieve that.

During July and September in advance of the publication of the Estimates the committee system in the Houses of the Oireachtas is required to have an input into the Vote for the following year and should have some level of scrutiny in addition to the Committee of Public Accounts over how the money was spent during the year. The discussion of Revised Estimates affords an opportunity to consider some of the expenditure proposals agreed earlier in the year. However, 99.9% of the decisions have already been taken. The system by which we discuss these matters and get accountability leaves much to be desired.

The country has excellent economic statistics but lower disposable income. This has arisen because of many impositions by the State through additional charges and taxation and a failure by the State to investigate the rip-off and overcharging taking place in the private sector and in the provision of public utilities across the board. Those in business here know there is a little abatement in high insurance costs, arising from a reform agenda introduced by the Tánaiste, which I welcomed at the time and is slowly making its way onto the Statute Book. I hope this will also have an impact in lowering public liability insurance costs, particularly for small businesses.

We have seen a small amelioration in motor insurance costs but have not yet seen the same in public liability. While the Personal Injuries Assessment Board was established six months late, I welcome that it is now operational. I would like to see an interim report to this committee and the Houses of the Oireachtas on the operation of the PIAB at the earliest opportunity to determine whether further assistance is required to take on what I regard as a quasi-cartel in the insurance sector that works to ensure premiums remain high.

The State has a direct control over the high cost of public utilities, including energy costs through the ESB and gas provision; the rollout of broadband; telecommunications costs; and waste management costs through local authorities. All these feed into higher than usual demands on business enterprises which, to help balance their books, release employees or go through a work permit system that is open to abuse to acquire cheap labour. Much remains to be done on labour policy to protect individual employment opportunities and rights and effect proper reform of the work permit system.

Competitiveness is a buzzword that is often bandied about. However, competitiveness here is heading in the wrong direction and we are rapidly going down the league. We are now regularly challenged, particularly in the manufacturing sector, by eastern Europe and the Far East because of our lack of competitiveness. This is largely due to the matters to which I have just referred which have contributed to higher establishment costs here for indigenous as well as foreign business.

While yesterday's annual report of IDA Ireland contains a very interesting foreword from the chief executive Mr. Dorgan highlighting the need to refocus and look again at where we are going on these matters, we get this in every annual report. Frankly, I believe Mr. Dorgan should find something different to say because there is increasing competition on the ground that is not yielding any regional policy development through IDA Ireland as promised by him and the Tánaiste on many occasions.

The disgraceful investment in the south-east and the midlands, as evidenced by these figures, is a clear indication that we have failed to make any impact in regional policy terms through IDA Ireland to generate inward investment and job opportunities particularly in those regions. Just because the sun shines more regularly in a region, it does not mean that the people there are necessarily better off although those in tourism may depend on the weather. Mr. Dorgan has not delivered manufacturing employment for the south-east of the country. As the Chairman will know from his experience of the midlands, there have been many announcements, but little delivery. The figures speak for themselves as to whether we are making any meaningful impact on jobs in the sector. While we may have a low level of unemployment, regional development is not working here.

Some months ago the Tánaiste admitted that we had no consumer policy when she established a consumer strategy group. This is another group to tell her what she should know already after seven years in office. The recommendations of this group will be very interesting as I am sure they will merely restate many of the policy initiatives suggested by the Consumer Association of Ireland or by the political parties in Opposition over many years which have not been listened to by the Department of Enterprise, Trade and Employment to date. I have advocated the establishment of a consumer rights enforcer with similar powers to the Ombudsman to allow proper investigation of consumer complaints so that those involved in ripping off others are subject to some investigation and that redress may be made.

The fines that currently exist under the Consumer Information Act 1978 should be reviewed. The maximum fine for breach of price display regulations is €127, which is a joke. Those fines, which have never been changed, should be increased to €3,000 or €4,000. If overcharging exists and redress is required, the offenders must be hit in the pocket. People will certainly take notice if their pockets are deficient as a result of the imposition of a penalty. Only then will they do something. The sum of €127 will not make any retail outlet yawn at the prospect of a failure to put in place a price display system. I ask the Tánaiste to bring forward the consumer strategy group recommendations quickly as it is a very urgent matter. Household incomes have radically reduced as a result of what is happening in the economy. Everyone who goes on holidays can see the extent of the rip-off which is taking place in Ireland with Dublin, for example, being the fourth most expensive city in the world according to a recent survey.

There is a lot done and more to do. I ask the Tánaiste to look in particular at regional policy initiatives to facilitate balanced regional development through the IDA. She should also consider ways in which to speed up the process of implementing major policy changes in the consumer area. A review of the operations of the PIAB should be brought to this committee before the end of the year to ascertain if changes are necessary. If they are, the committee will be constructively helpful to ensure that insurance premiums decrease more rapidly, particularly in the liability insurance area, in the interests of employment.

Chairman

The committee will now proceed to a general discussion of the Estimates. Before we begin, I suggest we proceed through the subheads as outlined in the timetable. Is that agreed? Agreed. We begin with the administrative subheads A.1 to A.12. Are those agreed? Agreed. Subheads B.1 to J.2 deal with enterprise agencies, science and technology.

Mr. Hogan

Will the Tánaiste take on board the remarks made on regional development and IDA performance and provide the committee with some indication of what is in the pipeline about which Mr. Dorgan spoke so enthusiastically in his statement yesterday? Perhaps we could make some announcement. We would like to see things happen in the south-east more often.

Ms Harney

The Deputy will be pleased to hear that there will be a major announcement in the south-east very shortly.

Mr. Hogan

I am pleased to hear it.

Ms Harney

The share of foreign direct investment into Ireland doubled last year and ours was the only EU member state in which that happened. As the committee will know from the household survey published yesterday, employment increased last year by 52,600 jobs. The increase was across all regions. I may circulate to Deputies the interesting details of the information that between the 1996 census and the 2002 census employment rose substantially. In addition, there are a substantial number of immigrant workers nearly everywhere. I do not accept the view that they are not well paid. We have a minimum wage which was introduced for the first time in 1997-1998.

Wages in Ireland are the second highest in the EU. If we pay ourselves at the second highest rate, there will clearly be impacts. There are many areas of activity in which we cannot be competitive where wages form a large proportion of production costs. An example is basic manufacturing which is very labour intensive. Countries like Ireland in which wages are high cannot compete against countries with very low wage costs. The areas in which we can successfully compete are those in which wages constitute a smaller proportion of overall costs. It is no secret that one of the pharmaceutical companies here makes between €4.5 billion and €5 billion per annum selling its products out of Ireland. It can command very high prices for its branded products. While they have highly skilled labour and earnings are substantially higher than the average industrial wage, wages are a very small element of the company's overall costs.

Since Fianna Fáil and the Progressive Democrats came to Government in 1997, the take-home pay of someone on the average industrial wage has increased by €10,800. Inflation and all utility charges take only 25% of that away. We are substantially better off. In fact, a recent survey showed that if one is on the average industrial wage and has two children, one receives more from the State than one gives by way of taxation when child benefit etc. is taken into account. Lower and middle income earners in Ireland are better off than their peers in any other country. It is take-home pay which is important. Due to the tax policies of the Government, disposable income has increased by €10,800 for someone on the average industrial wage. That is considerable.

Ms Lynch

The amount that people take home is not, in fact, the determining factor, it is what they pay out.

Ms Harney

I have just told the Deputy that inflation and price increases take away 25%.

Ms Lynch

The Tánaiste is talking about utilities. An average family with two children pays more in child care than for a mortgage.

Chairman

The Deputy had the chance to make her opening remarks. I call Deputy McHugh.

Mr. McHugh

To follow Deputy Hogan's remarks, the Tánaiste mentioned foreign direct investment and its significance for the country. While that is fine in a global sense, it means very little to the regions. It is about time the Government faced up to that. Report after report from Mr. Dorgan makes apologies in this regard and indicates that it is very difficult to achieve growth in the regions. Mr. Dorgan suggests that it is very difficult to bring foreign direct investment to the regions due to inadequate infrastructure. It is about time the Government acknowledged that it realises this state of affairs exists and made a positive effort to address imbalance. Road standards in the west are absolutely diabolical. If one brings someone who is willing to invest in Ireland to the region, he or she runs away as fast as possible. The same is true of rail infrastructure. The west lacks the level of transport infrastructure to attract people who wish to establish businesses they hope will succeed. One cannot succeed at the moment.

The Government has failed to demonstrate any good intention in terms of its national spatial strategy. The minute it was announced, it was dropped and disowned. It is now an orphan. There is no coherent policy from Government on regional development and it is about time that was admitted. Recently, the Tánaiste visited Tuam and viewed the lovely business park which contains no firms. It has been in existence for a long time but there is no prospect of industry locating there. Can Mr. Dorgan or the Tánaiste explain why it has taken so long or indicate that there is a prospect something will start there within a reasonable period? If one business set up there, it might attract others.

Mr. Callanan

I compliment the Tánaiste and the Minister of State, Deputy Fahey, on the useful work they are carrying out. Growth is up and unemployment is down and where that happens it means a country is doing well. While parts of the country are doing well, unfortunately Ballinasloe and other areas are on their knees. I realise the Tánaiste is doing her best to bring employment to Ballinasloe. Without saying any more, I ask her to continue the good work to ensure that development happens there.

Long-term unemployment has increased and I can understand why. The reason is the curtailment of the community employment schemes. Without increasing the numbers, if one removed the three-year cap to allow those over 55 to continue, the scheme would be a great success. The Tánaiste should give this proposal serious consideration. Nearly every person over 55 who leaves a community employment scheme after three years is not employable. These people are being dumped back on the unemployment list.

I compliment the Tánaiste and Deputy Fahey for the work they have done with this committee to bring down the cost of insurance, of which we see evidence daily.

I want to refer to a hobby horse of mine, namely the cost of wages and pay in general. Percentage increases are not the way to go. Given a 5% increase, a person earning €20,000 would get an extra €1,000 whereas a person earning €100,000 would get an extra €5,000. If the cost of living goes up X amount, everybody should get X amount. I accept that this could not be done before benchmarking came in because people were in different categories. However, they are supposed to be benchmarked into different sections at this stage. Surely, an increase across the board would be much fairer than a percentage increase.

Ms Harney

Tuam is approximately 17 miles from Galway city, which is booming. Boston Scientific alone employs almost 4,000 people in Ireland, with a small number of those in Letterkenny and Tullamore. I can remember the situation when Digital left Galway in 1993. People were devastated at the prospect of Galway going under. However, it was probably one of the best things to happen because the concerted effort since then has worked.

I accept it would be better if many of those driving from Tuam to Galway worked in Tuam instead. However, they would be driving to Boston, Chicago or New York if we were still operating on the basis of the statistics of ten years ago. We would love to make more things happen in more places but, at the end of the day, the companies decide. I agree with the Deputy that infrastructure plays a huge part because much of the activity in Ireland requires a lot of travel. Therefore, proximity to an airport is important and, for this reason, the development of Shannon is important for the west, particularly in regard to access routes to the United States.

However, it would be wrong to suggest that this country is not booming. Of the 1.8 million people at work in Ireland, approximately 180,000 work for companies associated with the IDA. While more than 1.6 million do not work for such companies, many other activities support those companies and much of the indigenous sector exists because it services multinational companies or provides products for them. We must put this in perspective. American companies account for 60% of the output of this economy. Small numbers make a huge contribution. However, in terms of the overall number of people at work, the SME sector is still a huge driver.

Ballinasloe is very close to my heart as I was born there. Nobody more than I would like to see progress in Ballinasloe but it is an extraordinarily difficult situation. To an extent, the town has suffered because Galway city is on one side of it and Athlone on the other, and both are attractive locations in terms of critical mass, with universities and institutes of technology. While I do not want to give false promise and, thankfully, we are no longer in an election campaign so I cannot be accused of misleading anyone, there may be some good news on the horizon. Deputy Hogan will be very impressed with all the job announcements coming shortly.

Mr. Callanan

Yet there is no good news for Tuam.

Mr. Hogan

I do not know why everyone did not vote for the Tánaiste last week.

Chairman

That covers subheads B.1 to J.2. We have now dealt substantially with subheads K.1 to M.5 in the context of the labour force development inquiries——

Ms Lynch

Will the Tánaiste respond to my questions on FÁS and community employment? Is there any good news in that regard?

Ms Harney

We all acknowledge there are issues to be addressed. One of the main issues in regard to community employment, regardless of the number, is that of turnover. For example, the Wheelchair Association may say that a person has worked with them for three years and the association does not want that person to go because it will not be able to find someone as suitable. We mainstreamed the schools, which was very expensive, but I suggest we do not get complaints about the schools. As a nation, we must decide how we are to support voluntary activity. To a large extent, community employment was introduced when we had very high levels of unemployment. While it was essentially a labour market measure, it is now more a community support service.

Unfortunately, I must take the Order of Business in the Dáil. I ask the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Fahey, to deal with further questions, if that is acceptable.

Chairman

I am very mindful of that.

Mr. McHugh

Will the Government honour the commitment in the programme for Government to mainstream community employment positions in the health sector?

Ms Harney

That is not a matter for me but for the Minister for Health and Children.

Mr. McHugh

Surely the Minister for Health and Children will need co-operation from you, Tánaiste.

Chairman

The Deputy should address his remarks through the Chair.

Mr. McHugh

The Tánaiste is well protected.

Mr. Hogan

Is the social economy programme winding down? We expect a lot of announcements on this also.

Ms Harney

I will repeat what I said at the start of the year and in response to parliamentary questions in the Dáil. FÁS does not have money to start new programmes. It is a question of learning from the experience of existing ones. We have had some fantastic programmes which did well but other, difficult ones which did not do so well and cost an enormous amount of money. One programme in west Dublin cost a considerable amount and could not be sustained. Before we begin new programmes, we need to thoroughly assess where we are in regard to some of these matters and consider whether there are better ways of supporting the activities the social economy was supporting. Good projects will continue to be supported but we do not have the resources at present to fund new ones.

Chairman

I thank the Tánaiste for attending. The Minister of State at the Department of Enterprise, Trade and Employment, Deputy Fahey, will continue in her place.

Ms Lynch

I want an answer in regard to FÁS.

Chairman

Is the Deputy referring to subhead K.1 to M.5 on labour force development?

Ms Lynch

Yes, the question was whether there was any good news on mainstreaming what remains of those employed by FÁS either through social employment, what little remains of community employment or otherwise.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Fahey)

There will not be mainstreaming of any people into the health services. This is because, as the Tánaiste stated, the experience of mainstreaming in education has been that costs have gone up significantly. In fact, those employed by FÁS in the education sector are now being left out and others are taking up those jobs. We do not propose to proceed with mainstreaming in the health services.

Ms Lynch

So that proposal is gone.

Mr. Fahey

Yes.

Ms Lynch

To clarify, is the notion of ring-fencing health service jobs now gone?

Mr. Fahey

No, that is a different issue. There is still ring-fencing of FÁS places in particular areas such as child care, drugs abuse etc. Mainstreaming is a totally different issue. It is a proposal to take places on FÁS schemes and make them full-time health positions. That is what is gone or, rather, what was never there — it was only a proposal.

Ms Lynch

The Minister is saying that the jobs in that area will continue on a three year rollover basis and will not become full-time jobs. For example, personal assistants with Enable Ireland would continue on a rollover basis.

Mr. Fahey

That is correct.

Ms Lynch

This is despite the fact that the Tánaiste herself agreed with the idea behind the use of personal assistants, in that they develop a relationship with the person being assisted. To have to go through the whole process again with a stranger within a three year period is quite unsatisfactory. However, this is gone.

Mr. Fahey

Nothing is gone.

Ms Lynch

The proposal no longer exists.

Mr. Fahey

The situation which pertained in recent years will continue to exist. There will not be any mainstreaming of people into the health services.

Chairman

Module 4, subheads N to P, deals with employment rights and industrial relations. Members will remember that we had a long meeting on this yesterday. Is the module agreed? Agreed. Module 5 deals with commerce and consumer competition under subheads Q to S.3. Is that agreed? Agreed. On module 6, subhead T deals with health and safety.

Ms Lynch

It is amazing that the increase in the health and safety programme is only 5%. It started from a low base and we heard yesterday that were not enough inspectors to go onto every site in Dublin, let alone the rest of country. It is derisory.

Chairman

This is the Minister's responsibility.

Ms Lynch

We can do nothing about it. As Deputy Hogan said, it is probably already implemented but it is derisory to increase the budget by only 5%.

Mr. Fahey

The opposite is true. The Health and Safety Authority has a substantial budget of €14 million and while we would all wish to have more inspectors, there are 100 of them and a comprehensive inspection process is taking place. Even if there were 1,000, it would not be enough.

That is not, however, how it works. There is a comprehensive strategy in place between employers and unions — a safety partnership — on all sites and if there are breaches thereof or anyone on either side is not happy with the safety regime on a site, there will be an immediate inspection. The new legislation will give added powers to inspectors to close down sites or to give preliminary notice.

While I would wish to have more inspectors, the inspection regime is effective and the preventative, proactive approach now being taken is the way forward. People must have ownership of their own health and safety and companies and unions must be given a leadership role. With the initiatives now taking place under the auspices of the unions and the CIF, I am satisfied that is happening.

We can do whatever we like in terms of health and safety but I get the accident investigations reports across my desk every week and, unfortunately, when I read them, I remark that if the person in question had been more aware or informed, his or her life would have been saved. To me, the greatest requirement we have is for awareness. I have tried to get the four agencies involved in health and safety together to carry out a more comprehensive awareness programme, along with the industry, that would be an extension of the advertisements we see for road safety that are so effective.

Ms Lynch

I agree with the Minister of State but the reality is that in every accident report that crosses his desk, the person concerned is usually a young man. He is starting off in the industry and is, therefore, unaware.

Also, we are a nation of extension builders. These are built by construction teams of two or three people who do not have safety courses or initiation into safety and procedures. I accept completely that the big companies have moved on in leaps and bounds when it comes to the appointment of safety officers but there is more to be done and it is about coming down the scale to smaller companies.

Mr. Fahey

I agree entirely with the comments about small builders but the problem is that unless they are members of the CIF, there is no association through which we can organise. There is a requirement for everyone to have a safety pass but I have been looking at ways, going as far as getting the records from the Revenue Commissioners of all small builders in the country, to insist on the safety pass programmes being carried out. So far, I have not succeeded but I will redouble my efforts in view of the Deputy's reminder.

Chairman

The inspection level is the correct route to go. Module 7 deals with subheads U to Y — other services including receipts to the Department. Is that agreed? Agreed.