Priority Questions
1. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation to set out his views on the fall in the rate of growth in employment in the first quarter of the year as highlighted in the quarterly national household survey; and if he will make a statement on the matter. [23849/14]
View answerThe quarterly household survey published last week showed a dramatic slowdown in the level of job creation. I seek the Minister's views on the matter.
I imagine Deputy Tóibín would agree with me in respect of my next question. With leniency from the Leas-Cheann Comhairle, I call on the Minister to update the House on the current situation at Bausch and Lomb. We have sought to raise this as a matter - I can speak for Deputy Tóibín - as a matter for the Topical Issue debate. We have applied again today but we have been unsuccessful. Will the Minister outline his involvement, his knowledge of the situation and when he became aware of it?
We have made significant gains over the past two years and employment has now grown on an annual basis for six quarters in succession. By comparison, when this Government came into office the economy was losing an average of 1,600 jobs per week. Furthermore, the seasonally adjusted unemployment rate has fallen from 15.1% at the start of 2012 to 12% in 2014.
The quarterly national household survey headline figures show an annual increase of 42,700 people in employment in the 12 months ending in the first quarter of 2014. On a seasonally adjusted basis, employment in the first quarter of 2014 increased by 1,700 on the previous quarter. This represents a year-on-year increase of 2.3% in the number of people in employment and the highest percentage increase in employment in quarter one since 2007.
Many indicators give grounds for confidence that job growth can be sustained. Nevertheless, the first quarter figures are a reminder that we need to work relentlessly to improve our competitiveness, increase productivity and develop sectoral opportunities where Ireland has particular strengths. We are doing this through the Action Plan for Jobs process, which this year places a particular focus on supporting entrepreneurship, manufacturing and strengthening our platform overseas for winning new business.
The 2014 Action Plan for Jobs includes targets for the IDA Ireland, Enterprise Ireland and the new local enterprise offices to support a total of 30,500 direct new jobs during 2014. At this point in the year the indications are that these targets are on track. The work of the enterprise agencies will be supplemented by our efforts to support the recovery of the domestic economy in areas such as construction, retail and tourism. The action plan has also placed a strong emphasis on yielding job gains through new disruptive reforms introduced in 2014 and, as I have already mentioned, entrepreneurship, winning abroad and a national step-change in manufacturing.
The Government recently published a new strategy for the construction sector and we are reviewing our national tourism policy following a public consultation process. The new retail consultation forum has been established and will hold its inaugural meeting next week.
Of the 14 sectors which provide data for the quarterly household survey, a total of nine recorded quarter-on-quarter declines in seasonally adjusted terms, four showed increases and one showed no change. It shows a particularly big hit for those aged under 35 years and the lowest age cohort.
The Minister referred to retail. Fully 5,000 jobs were lost in retail in the first quarter. I got a sense during the election campaign - it was one of the lessons and was evident in the feedback - that despite all the talk of economic recovery, it is not being felt. The notion of more self-employed people has far more to do with a quirk in and a consequence of social welfare legislation than people actually setting up their own business. People are classifying themselves as self-employed to try to get benefits because the system is forcing them to do so. That is where the growth is coming from.
When we speak to people away from the spin, action plans and task forces we can see that people are suffering the consequences of unemployment and they do not see these jobs or any job creation. The quarterly household survey is the broadest measure and shows that the reality is also relevant to that survey.
Did the survey act as a wake-up call to the Department, the Minister and his colleagues in government? I realise it came on a day when people were distracted with other news and in that context I wish the Minister of State, Deputy Sherlock, every success in his quest for a new job.
I remind the Minister that we asked about Bausch and Lomb as well.
I assure Deputy Calleary that neither I nor my Department needs any wake-up call in terms of the scale of the employment challenge we face. One of the features of our work has been to systematically engage an all-of-Government focus on this singular national challenge.
Let us consider the performance to date. We have in the past 18 months seen 70,000 extra people at work, the vast majority of whom are in full-time jobs. That puts us at the top of the OECD league in terms of jobs growth. Certainly, it is not enough to impact on the scale of the problems we face. I agree with the Deputy when he says that people do not yet feel the impact of this change. I agree that we need to continuously challenge the way in which we approach development in the jobs area. That is one of the merits of the Action Plan for Jobs process, in that every year we expose it to public consultation and every year we initiate new actions to respond to the challenges that different sectors are experiencing.
On the positive side, we should recognise that various surveys of business confidence, business intention and order books show that there is still a positive direction in growth. We believe we can build on that positive thrust.
That confidence is not translating through. The difficulty is that people are getting very frustrated when they continue to read about it. There is also difficulty when the chief executive of a job creation agency, a man for whom I have a good deal of regard and an organisation for which I have superb regard, comes out as a rallying agent for pay and wage reductions. That represents money that will be taken out of the domestic economy. It will affect the jobs we are talking about, such as those in retail and services. Furthermore, it will affect the ability of Waterford to ride this wave of confidence of which the Minister speaks. When the chief executive of a State-funded agency is acting with a rallying call for that kind of decision being taken by corporate companies, it sends a rather poor message.
The chief executive of any State agency must respond to the challenges that he experiences. I do not seek to control or influence that. We need to have people speaking honestly to power, as has been said often. Clearly, we need to improve our competitiveness all the time.
This is not an optional add-on. We are competing in a tough global environment but this year we have put new people into the field in overseas markets through the IDA and Enterprise Ireland. We are on a journey to move away from an economy that became too dependent on property, which was underpinned by bad policies. It will take time for new policies to deliver results. The 70,000 jobs represents genuine progress and we want to build on it. I have set a target of 100,000 extra people at work by 2016.
2. Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation the number of jobs that were lost in the wholesale and retail sector in the first quarter of this year; the causes of the job losses; and his plans to reverse these losses. [23953/14]
View answerThe question is in a similar vein. Over the past number of weeks, the Labour Party has said that 60,000 new jobs have been created and the Minister of State, Deputy Fergus O'Dowd, referred to 5,000 jobs every week being created. The reality is shockingly different. The job creation tentatively experienced last year has ground to a halt and a number of sectors are under fierce pressure. The question is how the Government seeks to reverse it.
The question as tabled relates to the wholesale and retail sector. The latest quarterly national household survey published by the CSO on 26 May showed that the number of people employed in the wholesale and retail sector fell by 2,200 in the first quarter of this year. We acknowledge that fall.
It is a very diverse sector and it appears the experience is different in different parts. In April, overall, the volumes and value of retail sales were up by 6.8% and 4.4% on the same period last year. Growth was concentrated in the motor, furniture, clothing, hardware and electrical sectors. By contrast, declines were recorded in the volume of activity in groceries, books and newspapers, and pharmacies.
Structural changes, such as trading online, are occurring in the sector and are undoubtedly playing a role. On the other hand, an increase in the KBC-ESRI consumer sentiment index for April, which put Irish consumer sentiment at its strongest level since January 2007, is encouraging. However, the key challenge is to translate these improvements into jobs in the retail sector.
This year’s Action Plan for Jobs includes a number of measures to support the retail sector. These measures include the establishment of a retail consultation forum to provide a platform for a structured engagement between the retail sector and relevant Departments and Government agencies. Its purpose is to allow key issues of relevance to the sector to be discussed, with a view to identifying practical actions which could be taken by the Government, or by industry itself, to support the sector. The first meeting of the forum will take place on 9 June.
The Action Plan for Jobs also includes measures to address issues that impact on cost competitiveness in the sector, the introduction of a number of structural measures to support the retail sector, and the continuation of the online trading initiative and the integrated licensing application system for the retail sector.
I welcome those initiatives and particularly the ability of the retail industry to feed into Government policy. Until now, the retail industry has been the forgotten sector of society. Some 250,000 people work in it and it has lost 50,000 jobs in the past few years. It is the weathervane of the economy and it is very sensitive to expectations. I spoke to retailers who say that when the Government talks about cuts, property taxes and budgets, there is a fall in retail sales. With the property tax, it was evident. Retailers also tell me that all the talk about the water tax has lowered people's expectations of the level of disposable income they will have in the future, which leads to them changing their behaviour and their spending. There is a resultant effect of lowering jobs in the retail industry. If a policy has the effect of losing jobs in a specific area, it is an anti-jobs policy. Is the water charge not an anti-jobs policy? How will the Government, after listening to the election and the problems people have with water charges and the difficulty within the retail industry, ameliorate the issue?
We must acknowledge that Irish shoppers spent €3.8 billion in online trading in 2012. Some 75% of the revenue goes outside the State. While I acknowledge the points made by the Deputy, we must tackle this through Deputy Tóibín's committee, which will do some work on town centre planning. If we are talking about retailers, which he mentioned, it is a question of how town centres are structured and how we encourage greater trading. I am sure the work of the Deputy's committee will feed into the retail consultation forum. It is important to state that the retail consultation forum comprises retail Retail Ireland, Retail Excellence Ireland, RGDATA, Chambers Ireland, the Small Firms Association and individual retail practitioners. Through that consultation process, we will address issues like town centre shopping, e-commerce, driving more business online from Irish retailers, and the cost to business of retail. There are specific issues in the grocery sector that require to be addressed. We must look at budget 2015 to see if there is any way of enhancing demand through the process. We must also look at the Action Plan for Jobs 2015, the home renovation incentive scheme and the impact of the 9% VAT rate.
I would like to focus the attention of the Minister of State on the accuracy of the figures. I raised this point in the first part of the question. The CSO figures released at the end of last month suggest the increase in employment was not as great as had been stated in March. A number of times, we have seen contradictory figures. Professor John FitzGerald of the ESRI said that this was the first time in 60 years that reliable sectoral employment figures are not available and that unfortunately this was happening just as we are experiencing major problems in a range of other data. That leaves the problem of the system being incorrect or the figures being massaged. The shocking truth is that three years into this Government we have figures that are hard to analyse, volatile jobs figures and where there are trends in job creation, they are, at best, anaemic. I would like to hear the views of the Minister of State. I am sure it is hard for him and his Department to analyse the effectiveness of policy when the sectoral information is, in many cases, untrue.
The question tabled by the Deputy concerned the wholesale and retail sectors and I am confident that, through a process of consultation involving all the stakeholders, thorough engagement and giving effect to many initiatives that arise from the retail consultation forum, we can work towards increasing the number of people employed in the retail sector. We wholeheartedly acknowledge that, year-on-year between 2013 and 2014, there has been a drop of 5,900 in the number of people employed in the sectors. We must do something to address that decline and the decline of our towns through the doughnut effect. The Deputy referred to the retailers he is meeting and the level of confidence. Through engaging with those retailers and their representative organisations, we can arrest the decline. I am confident that, once the process starts on 9 June, we will take action.
3. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation his views on the operation of the credit guarantee scheme to date; when it will be re-vamped to improve its take up; and if he will make a statement on the matter. [23850/14]
View answerAs I introduce my second question of the morning, I ask the Minister to have some respect for the Chamber and to update Members on the Bausch and Lomb issue. We have been trying to raise the matter but it was too late to table a question for this morning's business. It is a serious industrial issue and perhaps the Minister can update the Chamber.
With regard to the credit guarantee scheme, this is the baby of the Minister and he knows it is not working. It will take 48 years to reach the target on the basis of the current roll-out.
It is indicated in the legislative programme that amending legislation is intended. Can the Minister provide us with a flavour of that legislation and the changes it will involve?
I am quite happy to update the House on the situation in Bausch and Lomb, but I am not sure it is in order.
It is not in order. We must deal with the questions that are put down.
We tried to raise it as a Topical Issue matter.
I replied on an Adjournment matter in the Seanad last night. There is no reluctance on my part to respond. I have met Deputies and have been trying to accommodate the House.
The SME credit guarantee scheme, or CGS, was established under the Credit Guarantee Act 2012 to address specific market failures in lending to SMEs and in response to calls from business interests. It is a novel scheme in an Irish context and is continuing to develop a position in the Irish financial arena. My Department, the CGS operator, Capita, and participating lenders have committed significant time and resources to the establishment and operation of the scheme. While demand for the scheme has been lower than anticipated, the figures as at 31 March 2014 show that it has nevertheless supported additional lending of some €11.7 million to 89 enterprises and supported 479 new jobs, while maintaining 255 jobs. This is lending and employment which would not be in place had the scheme not been implemented.
The recently completed review of the scheme has recommended some changes which should lead to increased take-up. We are nearing completion of the review process, having consulted widely with stakeholders on the proposed changes. I will shortly bring a memorandum to Government seeking approval to amend the Credit Guarantee Act. I am confident that the necessary legislative amendments will be made by the Oireachtas in the coming months with a view to the earliest possible implementation of the necessary changes.
We have been pointing out the difficulties with this programme for some time. The Joint Committee on Jobs, Enterprise and Innovation is currently discussing SME financing and had the pillar banks in a couple of weeks ago. We got the sense that this was an add-on and that the credit guarantee scheme was not being taken seriously. This was something that was there but the banks were not pushed by it. When one looks at the target announced in October 2012, it was €450 million over three years. We have got to €11.6 million since then. All the indications are that the scheme is not working and no amount of tweaking will change it. It sends a bad message about the new State investment bank announced in the run-up to the local elections.
Does the Minister see the legislation being introduced before the recess? What was the flavour of the review? What weaknesses and difficulties were identified which will be reflected in the legislation?
I am happy to discuss this further with the joint committee. To be fair, this was something that was considered in the Department during the term of the previous Government and not implemented. We decided to take it on. It is novel. The changes people have spoken of involve looking at the range of lending products the scheme covers, the range of lenders who can participate, the duration of loans, the level of loans and the caps that operate. Those are the sort of changes that are being considered.
I look at the experience of other countries with these schemes and they have had difficulties in implementing them. We are not alone in finding it difficult to roll out successful schemes of this nature. We are seeking, however, to improve it. It is fulfilling an important requirement and if we can expand it to make a greater impact, my ambition will be fulfilled. For those who have benefited, it has been useful.
I have no doubt people have benefited, but €450 million has been budgeted for the scheme. Another scheme I have pointed out to the Minister, which has the support of the joint committee and of many Members in the House, involves crowd or source financing. We have been encouraging the Minister to put a pilot scheme in place. Surely, money is going to waste while we wait for a review of the scheme. As it cannot now deliver €450 million, it would be sensible to put a source financing pilot scheme in place using some of the money from the credit guarantee scheme. That would probably have a greater impact on job creation and enterprise development.
The budget in this regard is in respect of losses that might be incurred. We have not budgeted for the lending by the banks. We have budgeted for losses which might have to be met. Crowd-funded financing is certainly worth looking at. I understand the scale at the moment would be tiny, however, and much tinier in any event than the credit guarantee scheme. While there is merit and the matter is being examined in the context of the review of various seed capital and other schemes by the Department of Finance and my Department, we need to see many different instruments. We have been too reliant on a very narrow range of banking products and need to see a broader range of instruments to support business start-up and growth. Crowd funding can have a place in that.
