Priority Questions.
70 Mr. Hogan asked the Minister for Enterprise, Trade and Employment the changes he will make to the community employment scheme and training schemes generally; and if he will make a statement on the matter. [28623/04]
View answerFollowing his recent appointment, the Minister reviewed the policy on the operation of the FÁS employment schemes, which comprise community employment, job initiative, and social economy programmes. In undertaking this review, he took fully into account the views and concerns expressed by various interest groups and other key stakeholders, including the social partners.
On foot of this review, the Minister decided that the following changes would take effect as and from 10 November 2004. There will be no compulsory lay-offs on the job initiative scheme and participants who remain on the scheme will have their contracts renewed. People who leave it voluntarily will be replaced by community employment participants to support the service being provided. There will be no compulsory cessation of social economy programmes which play a valuable role in communities. In situations where an enterprise decides to cease activity, the employees affected will be assisted by FÁS in finding alternative employment. The three-year cap will be removed for community employment participants aged over 55. This category of participants will be eligible to participate on the schemes for a maximum of six years. In the case of people advancing beyond 55 years during their normal period of service on community employment, participation can be extended for up to a maximum of six years. The ring fencing and prioritisation of the essential services of child care, health related services and drugs task force clients will be maintained.
Community employment will remain as an active labour market programme with the emphasis on progression to employment. Despite the buoyant labour market, the continuing high level of inward migration and low unemployment, there is still a need for these schemes for people who find it difficult to secure employment. Thus, in 2005 there will be 25,000 places overall on community employment schemes, job initiative schemes and social economy programmes. These employment schemes have made a major contribution towards the provision of a network of valuable community services throughout the country. Equally, they offer participants the opportunity of work experience in a wide range of disciplines which equips them in time to progress to full-time employment in the open labour market. There are no plans to make any changes to existing FÁS training schemes.
I welcome the Minister of State's announcement of changes to the community employment schemes. I do not know why the Government took two years to make those changes. There was a 50% reduction in places over two years. Although I am sure the Government Deputies, and certainly all of us in Opposition, were being lobbied by community groups for many years, it has only now come to the Government's notice that it must act to preserve some of the schemes and the valuable work they do. How many places are there in 2004 on community employment, social economy and job initiative schemes? What was the budget allocated for 2004 for those schemes?
The most recent figures available are participation levels as of 24 September 2004. There were 20,643 places on community employment, 1,994 on job initiative and 2,189 on social economy. The budget for this year was of the order of €351 million.
The total number of places for 2005 will be 25,000, which is the same as the number at the end of September 2004. When one adds the three schemes together it comes to approximately 24,826. Despite the 50% reduction in the number of places, an effort is being made to create an impression that community employment schemes are increasing in number. That is the type of spin put on this reform. Does the Minister of State accept that there is a need for additional places to continue the work in resource centres, tidy towns and the various activities that have helped rural and urban communities and, more particularly, have helped participants receive training and gainful employment at a time when they might find it difficult to find employment elsewhere? Does he agree and accept that there is a need to provide an additional 5,000 places for the community employment schemes in line with the final outcome for 2003 to maintain the existing level of service in the community employment programme?
Two points about community employment schemes were that there were specific difficulties regarding people aged over 55 years, and the review findings and the Minister's announcement address that difficulty. They also go some way to address the second difficulty about which individual schemes complained, namely, that they had great difficulty in recruiting participants and schemes frequently had approval for a substantially greater number of places than there were eligible and available participants in their immediate areas. The improved situation for the people aged over 55 years is one measure to address that difficulty.
The rural social scheme announced in last year's budget is still available and there are 2,500 places, of which approximately one third have been taken up. Approximately 67,000 people participated in a wide range of active labour market and training programmes under FÁS.
I agree with the Minister of State that the rural social scheme exists but nobody wants to take it up. The proof of the pudding is in the eating where the number of places is concerned. Will the Minister of State indicate how many new posts were created at the FÁS head office in the past year and how many supervisors had to be made redundant at the same time to pay for them?
I am not sure that is included in this question.
It is certainly not the kind of information specifically available to me at this stage. I will see if it is available and if it is, I will make it available to the Deputy.
71 Mr. Howlin asked the Minister for Enterprise, Trade and Employment the steps he intends to take to introduce measures to provide legal protection for whistleblowers who wish to expose illegalities or wrongdoing on the part of their employers; and if he will make a statement on the matter. [28324/04]
View answerThe Whistleblowers Protection Bill 1999 was a Private Members Bill introduced in the Dáil by Deputy Pat Rabbitte on 15 June 1999. The purpose of the Bill is to provide protection from civil liability to employees who make certain disclosures "reasonably and in good faith" regarding the conduct of the business and affairs of their employers. The Bill aims at prohibiting employers penalising their employees in such circumstances. It also sets out the extensive range of bodies to whom disclosures may be made and the categories of matters where such disclosures are permissible.
The provision of statutory protection for whistleblowers on a sectoral basis would provide a better and more focused approach to dealing with this issue such as in section 4 of the Protections for Persons Reporting Child Abuse Act 1998 and section 50 of the Competition Act 2002. The Safety, Health and Welfare at Work Bill 2004, which is currently before this House, provides for protection against dismissal and penalisation of employees who, in good faith, take steps to protect themselves or others in a workplace situation.
I thank the Minister of State for such a comprehensive analysis of the Labour Party Bill. However, I did not ask about that Bill but about the measures he intended to introduce. By and by, he eventually got around to answering that part of the question by stating that there would be a sectoral approach. Is the Minister aware of the success of the British legislation in this area, known as the Public Interest Disclosures Act 1998? It has spawned a public interest body called Public Concern at Work, which is widely accepted as a very important tool for protecting the public interest in the UK. That public interest group has been recruited by Allied Irish Bank to advise it on procedures, following the damning disclosures about overcharging at that bank that came about because of a whistleblower. Will the Minister consider the urgent need for overarching legislation, similar either to the Labour Party Bill or to the British model which has worked so successfully there in recent years? A sectoral approach means that some sectors will be decades away from being encompassed and that whistleblowers who come up against issues such as that which happened at AIB, would not have the protection of law. I speak with some personal experience of the need to protect whistleblowers who bring matters of public interest into the public domain.
The Government has taken the view that a sectoral approach is likely to be the more successful in this instance. I referred to the Labour Party Bill because it is the legislation that is de facto currently before the House and was examined at considerable length by Parliamentary Counsel on how it might be amended. The view was ultimately taken that a sectoral approach was likely to be considerably more effective and would deal with some of the issues. I take the point made by the Deputy on the apparent success of the British initiative. It is worth keeping an eye on. I am also aware of the Deputy’s personal experience in this regard. Having served with him on the Members’ interests committee of the Dáil, it is one of the issues we examined in considerable length. The current view is that the sectoral approach is likely to be more productive and more positive in the short to medium term.
Since the Minister of State and the senior Minister are both new to the Department, I ask them to look again at this issue. A sectoral approach is a way of long fingering real change. There is no obstacle to having one overarching piece of legislation that automatically protects all employees at the same time, rather than waiting for an appropriate piece of legislation which in some areas might take a decade to implement. This is an important matter for whole sectors of the community. It is important to shine the light of public knowledge into dark crevices in the way business is done in this country. It should be part of that phalanx of legislation, which includes freedom of information and the electoral Acts, which have improved public confidence in the operation of business and the operation of public administration. Will the Minister at least indicate his willingness to have an open mind on this issue?
I acknowledge the value attached to having effective legislation in this area, as does the Government. In the legislation to be discussed on Committee Stage next week, I am pleased we will be having a sectoral approach, which we believe will be effective. I will certainly raise the issues with the Minister that were presented by the Deputy.
72 Dr. Cowley asked the Minister for Enterprise, Trade and Employment if he will undertake a root and branch review of the IDA, Enterprise Ireland and other job creation agencies in view of their abysmal job creation record in Mayo; his views on whether IDA Ireland has failed miserably to implement the Government policy that 50% of new jobs be in the BMW area; if he will take steps to make Mayo more attractive for enterprise and industry in view of the recent losses of 325 jobs in Westport; if he has other suggestions such as increasing incentives to locate in the west, fewer incentives for the overpopulated Dublin area and supply of natural gas to all major towns in Mayo including Belmullet; the steps he is taking to replace the lost jobs for balanced regional development; and if he will make a statement on the matter. [28581/04]
View answerSupport for job creation and investment on a regional or local basis is a day-to-day operational matter for the industrial development agencies. The agencies are actively promoting all areas, including County Mayo, for new investment and jobs on an ongoing basis. The number of jobs in IDA Ireland client companies in Mayo has increased from 3,170 in 1998 to 3,468 in 2003. The number of jobs in Enterprise Ireland client companies in Mayo has remained relatively steady since 1998, with a slight increase in the numbers employed by client companies, up from 2,820 in 1998 to 2,842 in 2003. Since the beginning of 2003 to date, Enterprise Ireland has approved funding of over €2.5 million and made payments of approximately €1.4 million for projects for client companies in Mayo. Since its establishment the Mayo County Enterprise Board has paid €3.5 million in grant aid to 495 new businesses which between them have created 1,030 full-time jobs and 242 part-time jobs. The board has also provided business advice and training programmes to over 2,000 people involved in the operation of micro enterprises in Mayo involving an expenditure of over €1.3 million.
The Deputy made specific reference to the recent job losses in Westport. Regrettably, while some job losses have also been experienced over the period, in reality this is a recurring feature of economic development in all countries as various sectors expand and contract in response to market demand for goods and services, competitive forces, restructuring and technological change. The above statistics on job creation and employment in companies in Mayo indicate that the trend in job losses in the county has been arrested. This is due in no small part to the work of the development agencies and is all the more laudable when considered in the context of global difficulties experienced during the period. With regard to the geographical spread of foreign direct investment, IDA Ireland is seeking to achieve 50% of all new greenfield jobs in the BMW region over the 2000-06 period and substantial progress is being made. Since 2000, a total of 46% of all new greenfield jobs have been created in the BMW region. In 1999, prior to the start of the Government's current national development programme, 25% of all new greenfield jobs were locating in the region.
Additional information not given on the floor of the House
As County Mayo is an integral part of the Objective One, or BMW region, maximum grant rates to companies are at a higher level than those applying to many other parts of the country. This Government fought for such a concession in the lead-up to the launch of the national development plan and the related EU-funded operational programmes. The aid limits that apply in Mayo are at the highest possible level and are an additional attraction for companies to increase job complements in Mayo.
The issue concerning the supply of natural gas to all the major towns in Mayo is one for the Minister for Communications, Marine and Natural Resources. I am confident the strategies and policies being pursued by the development agencies, together with the ongoing commitment of Government to regional development will bear fruit in terms of additional sustainable investment and jobs for the people of all regions.
I thank the Minister of State for his answer, but he is just giving figures. The reality is that our area has suffered tremendously. We cannot keep our graduates as only 9% of them can stay and the rest have to move to the greater Dublin area to get their first job. The reality has been spelled out by the Western Development Commission, which states that there has to be balanced regional development. Unless this occurs, it is a waste of time. We will just get the dirty jobs that no-one else wants and not the jobs that every other place is getting. These are the jobs we need to keep our people.
The figures in the national development plan on roads prove that our area has not done well. What is the Minister going to do about IDA policy? The bottom line is that it has not delivered for us. There is natural gas coming into our county. A large part of IDA policy should be to ensure that the infrastructure is there, including the gas that is needed. Will the Minister make a commitment on that? Westport has lost 325 jobs, so how about decentralisation to Westport? The people are in Dublin and they think they are riding the Celtic tiger, but they are going at ass and cart pace. Our people are in Dublin and they need to be in the west. What is the logic in giving money and jobs to the eastern and southern regions? They already have too many people and balanced development should be ensured. Incentives should be given to ensure jobs will head west and the industrialists will follow the money. Otherwise, there will be no jobs. We are getting the jobs that no-one else wants and we do not want to be a dumping ground for the rest of Ireland. We want proper jobs and we will not get them unless there is balanced regional development.
Only 69% of what should have been spent on the roads in the west has actually been spent. There has been a gross overspend in the south and east of 134%. It does not even compare. We are not at the races because the money is not being allocated. Will the Minister of State give a commitment to investing money in the west, where balanced regional development is needed? Such investment is also in the interests of the south and west. What is the logic of continuing to give big incentives to companies to help them to establish in Dublin and elsewhere? The Government should try to take people out of such regions rather than putting more people there.
Some 400,000 people are passing through Knock Airport each year, 18 years after it opened, but 20 million people will go through Dublin and Cork airports this year. It is no wonder that Dublin is congested. The Government will not invest the same amount of money in Knock Airport as in the international airports. Will the Government provide the €40 million that Knock Airport needs this year but has not yet been given? It is giving Knock Airport the same petty cash that it is giving other small regional airports. The Minister of State should think of Knock Airport as the catalyst that will drive the development of the west.
Balanced regional development and proper jobs, as opposed to dirty jobs, are needed in the west. I ask the Minister of State to address this serious matter. If he does not do so, the level of congestion in Dublin, which cannot take any more people, will increase.
The Deputy should acknowledge that the percentage of this country's jobs created in the BMW region increased from 25% to 48% over the period of the plan, which is a little more than half-way through. It will be possible to achieve a much better spread if the agencies continue to pursue the policies they are pursuing at present. There is a fairly widespread understanding of the need to spread the development of industry and other matters. The Government has made a commitment in that regard. The Deputy also asked about natural gas and Knock Airport, which are matters for the Ministers for Communications, Marine and Natural Resources and Transport, respectively. The agencies have delivered more jobs to the BMW region, under the guidance of the Government, since the focus was more clearly placed on delivering jobs in the region.
The report of the mid-term review of the national development plan contradicts the Minister. There needs to be a change of tack if we are to stop being totally unbalanced. Will the Minister of State take steps to ensure that there is a public service obligation? Will he apply to the EU to ensure that major towns in County Mayo that had gas 80 years ago, will get gas again? I hope the Minister of State will do that.
I will undertake to raise the matter with the relevant Minister.
Go raibh maith agat.
73 Mr. Hogan asked the Minister for Enterprise, Trade and Employment the action he will take arising from the recent publication of the report from the National Competitiveness Council in relation to the cost base of doing business here; and if he will make a statement on the matter. [28624/04]
View answerI welcome last month's publication of the National Competitiveness Council's 2004 annual competitiveness and competitiveness challenge reports. The key findings of the reports are that the economic environment for 2004 has been encouraging, significant improvements have been recorded in GNP growth and employment, there has been a reduction in the unemployment rate and foreign direct investment, business confidence and industrial output have recovered strongly.
The council makes a number of recommendations, which are necessary to sustain Ireland's competitiveness, in respect of matters such as the business and work environment, economic and technological infrastructure, education and skills, enterprise and enterprise development and innovation and creativity. The council recommends that Ireland should improve its cost base by removing barriers to competition in key parts of the economy, such as the retail, pharmaceutical, transport and energy sectors. It raises the possibility of the use of fiscal policy to promote economic stability and emphasises the need to make the social partnership process more sensitive to developments in international competitiveness.
Market forces are the best determinant of prices. A robust competition regime and an informed consumer are essential if the market is to work properly. The Government has shown its commitment in such areas. It has strengthened the powers and resources of the Competition Authority, taken determined action to introduce regulatory reform in the insurance sector and established a consumer strategy group to advise on the development of a national consumer policy. The Competition Authority is undertaking reviews of certain building, legal, medical and construction professions to address competition issues in sheltered sectors of the economy. Sustaining competitiveness, including cost competitiveness, will continue to be a high priority for the Government.
With respect to the Minister of State, I am afraid he has ignored a great deal of the National Competitiveness Council's report. The chairman of the council, Mr. William Burgess, has said that the issue of costs is the major economic challenge the Government faces. Many stealth taxes have been imposed in the past two years. The managing director of Tesco Ireland recently told the Joint Committee on Enterprise and Small Business that waste disposal costs 250% more in Ireland than in the UK. The rate of VAT is 21.5% here but just 17% in the UK. VAT on diesel and other fuel products increased by 1% in the last budget. The regulator in the utilities and energy sector, Mr. Reeves, constantly increases energy prices on the spurious basis that he needs to increase prices to bring about more competition.
Will the Minister of State acknowledge that the Irish economy faces a difficult challenge, in respect of its cost base, as it endeavours to cope with its competitors? What action would the Minister of State recommend the Minister for Finance to take in the budget to address that challenge? Is he studying the Single Market of the European Union to increase competition in various sheltered sectors of the Irish economy and to ensure that customers can benefit from the presence of European companies?
The Deputy referred to the role of the regulator, which was debated at some length during Taoiseach's Question Time. It is clear that the Government is examining that matter. Considerable progress could be made in this area if the examination is successful. The Deputy is aware of the work of the anti-inflation group, which has been meeting for a long time and has enjoyed considerable success in getting its proposals dealt with.
Most of the Government's progress in respect of cost competitiveness has been made in the insurance market. Many people strongly believed the initiatives taken in that regard could not and would not work, but it has been proven that it is possible to deal successfully with the difficulties in this area. The Government, which is aware of the competitiveness challenges that arise from the report, is continuing to address the recommendations in that regard.
The Minister of State is correct to state that the insurance market has stabilised. He is aware that the Tánaiste received all-party support in the Oireachtas when she brought legislation to it to facilitate that change. The Personal Injuries Assessment Board has not yet properly come into focus because it is being challenged in the courts. A case was taken on the first day of the new law term to prevent it from doing the work it has been charged with doing. I am sure all Deputies are keen to ensure that the body will be up and running as soon as possible, so that it will have a chance of having a major impact on the cost of processing claims. Does the Minister of State agree that genuine competition will not be seen in the insurance sector and small businesses which are being quoted huge premia will not be assisted if the Single Market of the European Union is not completed to enable small business to shop around the EU for more competitive quotes? I ask this question in light of the fact that just six general insurance companies are prepared to give quotes to small businesses in Ireland.
An examination of the insurance area illustrates well the challenges we face in this regard. The Deputy is right to suggest that competition affects prices and value in this sector more than in many other sectors. He is also right to point out that the Personal Injuries Assessment Board has been challenged in the courts. The court challenge highlights the difficulty of dealing with the problems in this area. The National Competitiveness Council report contained good news about costs in areas such as food and clothing and emphasised Ireland's positive position in that regard. It addressed the areas of competition and consumer policy in considerable detail. Despite the ongoing difficulties in the insurance sector which were mentioned by Deputy Hogan, it is fair to say that considerable progress has been made. I do not doubt that similar progress will be achieved in the other areas if the report's recommendations are adopted.
74 Mr. Eamon Ryan asked the Minister for Enterprise, Trade and Employment if he has carried out an analysis of the implications for capital investment here of the US corporate tax amnesty proposed in the American Jobs Creation Act which was signed into law by President Bush in the last week of October 2004. [28585/04]
View answerOn 22 October last President Bush signed into law the American Jobs Creation Act of 2004, which provides for the amnesty in question. It gives US multinationals a one-off chance to repatriate to the US accumulated profits held outside the US, by availing of a special effective corporate tax rate of 5.25%. Non-US profits repatriated to the US are normally taxed at between 35% and 40%. As the legislation has just been signed into law, full details of how it will be interpreted by the US Inland Revenue Service and implemented in practice are not yet available. I have been informed that IDA Ireland is not overly concerned that this one-off opportunity to repatriate accumulated profit in the US will affect the level of ongoing US investment in Ireland. Companies committed to existing spending plans can still avail of the US opportunity and proceed with existing investment openings. However, given the significance of US investment to Ireland, IDA Ireland will manage it over the coming months. As part of the process, IDA Ireland and Forfás will undertake a joint review of the legislation, the possible implications for Irish foreign direct investment and how it is structured.
Will the Minister make available to Members such a report and analysis, given that it is a very important issue for many Irish companies and others based here but held abroad? Is the Minister aware of the figures recently quoted in various media that in 2001 $26 billion in profits was made by American companies? Given those figures and since a large part will not have been repatriated because of the tax arrangements, we could be looking at a very significant, multi-billion, transfer of capital back from Irish funds and accounts to home ones. Is the Minister concerned in that regard about the implications, even though IDA Ireland has assured him that there are no immediate implications for investment policy?
The issue of whether the report will be published is for the Minister, Deputy Martin, and I will mention to him the Deputy's interest in that regard.
On the profits currently enjoyed by US companies in Ireland, it is not at all clear — and not likely — that much is reinvested in Ireland. The taxation regime undoubtedly makes it difficult for the profits to be repatriated to the US, but it is considered likely that a substantial proportion of the profits of US multinationals are invested elsewhere and not necessarily in Ireland. Nevertheless, IDA Ireland and Forfás will keep a very close watch on developments when the blue book has been completed at the end of 2004 and the implications become clear in early to mid-2005.
Is the Minister aware that, in tables showing repatriated and overseas profits, Ireland, a relatively small country on the world stage, is at the top, with far more significant overseas profits than any other industrialised country with which we might like to compare ourselves, including Germany and Britain?
Does he agree that, while the Taoiseach obviously cheered on the re-election of President George W. Bush as being, as he saw it, good for Irish business, we are exposed in a changing cultural climate in the United States and elsewhere in which overseas investment and the movement of jobs overseas will lead to pressure on the US Government, regardless of who is in power, to cut back on what are seen as tax havens? While we are not a tax haven in the sense of Bermuda, it will be seen, when the figures are shown that a country the size of Ireland can attract $26 billion a year in profits, that there will ultimately be great political pressure in the United States to amend the tax regime so that we are no longer able to use the advantage of which we have availed for many years. Is the Minister concerned that Ireland is now at the top of the league in that regard and might come under pressure to amend some of its tax haven rules?
I had reason to read all the statements made by the Taoiseach on the US election, both before and after the event, and I found no evidence that he was cheer-leading either candidate. On the contrary, he took an extremely neutral view. I take the Deputy's point on the importance of foreign direct investment in Ireland and that this country has been the biggest beneficiary of American direct investment. That is one reason for Forfás and IDA Ireland to review the impact of the US decision for investment. The view has been strongly expressed that this economy's success regarding foreign direct investment, particularly from the US, has been driven by factors other than those that will be affected by the decision, but it is very important strategically and economically for this country, and it will certainly be kept under review.
The time for Priority Questions has expired. We must, therefore, take the other questions in ordinary time.
