I note the Minister's remarks. This second increase in the rate of the redundancy contribution will bring it up to 13p or, in other words, will bring the cost of the stamp up to £3.14 per week. This is a fairly substantial amount, most of which is paid now by the employer.
As I said yesterday on the Second Stage of the Social Welfare Bill, Finance are ensuring that their contribution to the social fund will be less than it was in the past by reason of the employer and the employee contributing a greater part than two-thirds, which was the proportion they contributed up to now. However, this is something about which one can only be definite in retrospect.
I would have liked the Minister to inform us what is the estimated expectation of redundancy during the year. The £3,700,000 must be a figure that was measured against some estimate. When I last introduced, by the same type of order, an increase in the cost of the stamp which was made necessary by the amendment to the Redundancy Act. I was accused of providing for mass redundancy which it was said. by my critics, would be due to the incompetence of those in charge of our economic affairs, namely, the Government. The Minister referred to rationalisation at boardroom level. I would point out that the number of redundancies have fallen in the first quarter of this year as compared with the corresponding period last year. In those circumstances, and if this reduction were to be a continuing trend, I would not have thought that any further increase in the rates of redundancy contributions would be necessary.
When the amending Bill was before the House I was subjected to a good deal of criticism from the then Opposition who regarded the provision as being inadequate and not sufficiently generous. At that time there was a reasonable surplus in the fund and on that account we considered that it was incumbent on us to make better provision for those who would be rendered redundant. The amendment reduced the qualifying period while increasing the lump sum as well as making better provision for the weekly payments that comprised some of the benefits of the scheme. At the time I was under heavy pressure to make the provisions retrospective but in view of the experience in the UK I did not do this. In the UK the payments during the first year or two of the operation of the scheme were relatively small. The fund built up a heavy surplus but after a while it became depleted and went into a deficit situation. It was my opinion that we might have the same experience here. The situation that came about in Britain would seem to indicate that when workers became wise to the provisions of the Act, more ways were found for claiming redundancy payments.
I should like to know from the Minister if proper supervision is maintained, particularly at the tribunal level, with regard to claims where persons are in a position to use the redundancy scheme to great benefit if they are nearing the retiring age. A man working for the Forestry Division or some other body, discovers at the age of 64 that while he will be due his ordinary gratuity and pension in a year's time, if he can be discharged or rendered redundant, he will qualify for a lump-sum and weekly payments and in a year's time qualify for his retirement pension. I have always felt anxious to examine the question as to whether this is a device whereby a good deal of the fund is frittered away.
The fact remains that the provisions of the Amendment to the Redundancy Act of 1967 did make rather generous provision for persons made redundant and made it much more easy to qualify. The result was that. while there was not any great upsurge in the number of redundancies—in fact they showed a very substantial reduction in the first quarter of this year, as I have already said—while the surplus was eroded, I thought the last increase in the stamp was a guarantee of sufficient income to keep current redundancies sufficiently in funds. I question whether the Minister is not being overgenerous or else he is expecting a further increase in redundancies towards the end of this year in this increase which will bring in £3,700,000 that is now being provided for.
I did point out at that time that any country, even a country with full employment, has to cope with a high percentage of redundancies, where techniques are changing and personnel is being moved around and rendered redundant as a result of ordinary efficiency methods being introduced. But I would not like it to be accepted that redundancies in our time were due to the economic situation as being managed by the Government and that they are now due to rationalisation taking place at boardroom level.
One would always be prepared to support the provision of a substantial income to the fund because this is one of the most useful schemes that we had produced and it did make very generous provision for unfortunate cases of genuine redundancy. Nobody on this side of the House would wish to see the fund depleted to the stage where payments would be in jeopardy but I did not think a further increase in the weekly contribution would be warranted as yet, particularly in view of the reduction in the number of redundancies in the earlier part of the year which I would hope would be a continuing trend.
There is nothing further one would say at this stage about this increase except that we must be eternally vigilant about any increase in the insurance stamp. I have already said this on many occasions in the House. It is all very well to say it is in line with the EEC countries to make the employer pay the greater share rather than the employee and the State, but in a small country where relatively few people are contributing it is hardly appropriate to make comparisons with highly industrialised countries where there is full employment and a big population and where there is a totally different situation. We must have regard to those who employ the greater number of persons employed in this country, particularly in the services. They are employed by small employers who sometimes find it difficult enough to provide for all contingencies. It is most important that due regard would be had to the amount which the employer would be asked to pay. The employer has to meet many charges in the course of the year. He has to pay income tax and make provision for redundancies and the various other elements in the stamp. There are various other obstacles that he encounters in the course of the discharge of his duties as an employer. One has to wonder at times whether the employer would not feel that he would be better to be an employee rather than an employer. It is not unusual to find that an employer is less well-off at the end of the year than are those he is employing.
We had a very difficult fight in this country to build up an industrial arm. I shall not go back to the days when the Fianna Fáil Government had to suffer the sneers that were levelled at them from this side of the House and were accused of organising workshops in back-lanes and calling them factories. When the tariff wall was built to encourage local investment in industries and to enable them to use the home market to get on their feet, the consumer was being told what he had to pay extra as a result of tariffs and about the inferior products he had to buy as a result of those tariffs. Those were the days when industry was struggling to get a foothold. We have reached the stage when most of our industries can compete against the best manufacturers in the world. Having achieved that standard and having reached that happy situation, they are facing into free trade, with the protection that was afforded them being rapidly dismantled. We must have due regard, in a free private enterprise economy, for the burden we heap on to the employer time and again. People too frequently think of the few wealthy employers in the higher category. These could be counted on the fingers of two hands. The majority of our employers are small employers giving good employment. It is they who feel the brunt of the extra charges passed on to them time and again.
It is not quite correct to say that the redundancy scheme, however good it may be, is entirely to the benefit of the employer. He is caught for quite a percentage of the lump sum he has to pay.
