First Report of the Joint Committee on Employment: Motion.

I move:

That Dáil Éireann takes note of the First Report of the Joint Committee on Employment.

I will be sharing my time with Deputy Wyse.

It is my privilege as Chairman of the Joint Committee on Employment to open this debate on the committee's first report, which was adopted last July. It is a measure of the priority attached to the problem of unemployment that the Joint Committee were established, that their recommendations are being acted upon and that five and a half hours of Dáil time today has been set aside in such an unprecedented way to debate the contents of their first report, with the participation of four Ministers.

The Joint Committee are unique for several reasons. It is the first time in the history of the State that outside organisations were invited to nominate representatives to assist an Oireachtas Committee and serve on its sub-committee structure. These representatives include nominees from the Irish Congress of Trade Unions, the employer and farming organisations and other relevant bodies such as the Combat Poverty Agency, the Irish National Organisation for the Unemployed, the National Youth Council of Ireland and the Conference of Major Religious Superiors. It provides a forum for elected representatives of both Houses of the Oireachtas to discuss in depth the issue of employment at national level with the social partners and other interest groups. This is the first Oireachtas Committee to concentrate solely on the jobs issue.

The first meeting of the Joint Committee was held on 12 May and by 23 July we had adopted our first report. In that period 18 meetings had been held at committee and subcommittee level. As chairman of the joint committee and an agreedex-officio member of all three sub-committees I attend each meeting and at all times I have been heartened by the shared concern and cross party consensus we have been able to achieve and sustain. I pay tribute to the commitment and co-operation of my fellow Oireachtas Members, to the very welcome contributions from the subcommittee nominees and to the dedication and expertise of the Secretariat.

The committee is a forum for ideas and in this respect we have received over 100 submissions from individuals and organisations throughout the country in response to our advertisment. We remain open to ideas from all sources and look forward to receiving submissions on an ongoing basis. This committee have established their credibility through the results they have had so far. I would call on any individual organisation with worthwhile suggestions to use the committee as a conduit for Government action.

I would remind the House of the purpose for which it established the committee. Under their terms of reference the Joint Committee are enjoined to examine and make recommendations on all aspects of economic and social policy which have a bearing on employment creation and which can contribute to alleviate unemployment. The committee are also to consider and make recommendations on any other issues or subjects which the Joint Committee consider relevant to their task. One of the reasons why we are succeeding in this task can be attributed to the true cross party spirit of the committee, where the Members are focusing solely on the job in hand and not on political or ideological differences. The Joint Committee's first report does not claim to be an in depth analysis of the problem of unemployment. It is an interim progress report which is short and to the point. It is the result of the initial ten week's work of the Joint Committee. It contains concrete proposals for action by Government and indicates areas on which we will focus in future reports.

I turn now to the background against which the committee are working. While total employment over the past two years had been broadly stable — and that is an important point when compared to the decline in employment in the UK — there are nonetheless 287,100 people on the live register, an unemployment rate of 17.6 per cent. At the last count there were 118,510 people on the live register for one year or more, of which over 54,000 were there for three years or more. We face an enormous problem. In economic terms unemployment on this scale represents a huge waste of human resources and potential wealth creation. Of course, one cannot look at employment purely from the economic view. There are enormous human cost associated with unemployment, particularly long term unemployment. In many ways having a job is the key to wider participation in society. For many unemployed persons participation in society is limited by them not having a job. Not only that, but there inevitably follows a loss of dignity and self worth which carried with it its own social consequences.

My purpose in drawing attention to the economic and human costs is to paint a clear backdrop to the issue so that all the actors on the political stage will see the need for cross party agreement and co-operation to tackle unemployment. We need fresh thinking as to how we tackle the dimensions of unemployment. How can we give unemployed people the opportunity to use their skills and talents for the benefit of themselves and their local communities? At the moment we spend about £1 billion in income support for unemployed people who have to prove that they are not working and that there is no work available. Why not use this money in imaginative ways to provide an option of working, not a compulsion, but an option to work in their local communities with voluntary agencies and public sector bodies like county councils and health boards?

It is quite clear that there is no shortage of useful work that could be done from the perspective of unemployed people and the communities they live in. For example, there is obvious potential in areas such as recycling, tourism-related activities and the development of recreation facilities. What is needed is something to bring together the skills of the unemployed and these very obvious work opportunities. The committee are currently examining various ideas on work for the unemployed with a view to coming up with some practical proposals for action. This is something which could be put into action in the short rather than in the medium or long term.

The committee have been particularly conscious of long term unemployment. We see the need for action across a range of fronts to tackle this problem. That is why we are looking at new ideas along the lines I have just mentioned but our first report which is now before the House also contained a number of specific proposals for more immediate attention and action.

We looked at the social employment scheme which provides paid work to participants on a part-time basis for 12 months. There are many such schemes around the country providing valuable experience for the unemployed and carrying out work of social value. There are however difficulties in the operation of the scheme such as the lack of continuity and the uncertainty for both participants and sponsors. These problems need to be addressed.

In our report we recommended an expansion of the numbers on the social employment scheme in the context of a more planned approach to tackle the problem of uncertainty. I am glad to see that the Government and the Taoiseach underlined this in the Dáil yesterday. The Government are acting on this recommendation with the provision of an extra 1,000 places on the community employment development programme and an additional 4,000 places on the social employment scheme.

In looking at the problem of long term unemployment the committee were also conscious of the link between the level of educational attainment and job prospects. We recognised the need for measures which would assist unemployed people in acquiring the qualifications which would enable them to get back as viable candidates in the labour market. It is worthy of note that some 45 per cent of unemployed people have primary level education only. This is why we recommended an expansion of the vocational training opportunities scheme which provides second chance education based on training and personal development opportunities to long term unemployed persons. We recommend in the report before the House that the numbers on the scheme be increased by 1,000 to 2,000 by the end of the year and the Government are acting on this recommendation. Looking further ahead we favour the expansion of the numbers on the scheme to 10,000 as soon as resources permit.

I have concentrated on our recommendations relating to unemployment but the key to addressing the unemployment problem remains the creation of sustainable jobs. My committee believe that wealth creation is the key to sustainable job expansion. In Ireland's case, economic growth will always depend largely on how successfully we can compete on international markets. Our export trade represents no less than 70 per cent of GNP, so the concentration of our industrial policy must be on ensuring that Irish firms, as underlined in the Culliton report, develop and maintain a competitive edge on export markets by more investment in management skills, international marketing skills and technological know-how.

My committee, in recognition of the difficulty which clearly exists for small firms in obtaining start-up and working capital, recommended that an equity for jobs fund should be established to meet this need, an essential factor in the drive to create jobs. It is gratifying for the committee that our recommendation was taken up by the Government and incorporated into the £150 million jobs fund which was established recently and about which we expect to hear more detail.

The kind of partnership of resources represented through the new county enterprise boards should make a significant contribution to easing the particular difficulties experienced by smaller firms and I welcome it, but the committee believe that further steps may need to be taken so that companies can be confident that they will continue to have access to equity finance in the longer term, and we will make the recommendations on that matter. Indeed, we expect to make further recommendations on this subject in our next report. We need to ensure that capital is available not only for risk taking enterprises but also for those which are seen to be productive and employment-intensive.

It is clear that taxation and all other policies must be consistent with the goal of increasing sustainable employment. The committee have pointed out that there is a need to stand back and assess the overall direction in which all the various policies which affect employment and unemployment are actually going. In the absence of a clear overview there is a danger that individually well directed schemes may have less than their full impact. What we are saying, for example, is that all Government Departments should consciously have an employment element in their policy decisions.

Let me now turn briefly to deal with our autumn work programme in which we are vigorously engaged at present. We have outlined our work programme for the autumn in our first report. In addition to developing proposals on work for the unemployed and equity finance for the longer term we will also be exploring how we can best utilise our EC membership to tackle unemployment. There are two main channels for action, one is through the Structural Fund mechanism and the other is by raising the unemployment problem to a higher priority on the EC agenda. We have a series of ongoing consultations to focus on the opportunities available. I should say that the chairpersons of the three sub-committees will elaborate on a number of the issues that I have just touched on in my introductory remarks.

Our autumn programme will also include an examination of the upcoming NESC report which seeks to throw light on one of the more frustrating features of the economy, that is, how the economic growth rate, particularly in the late eighties, has not led to a corresponding increase in net employment. Other elements of our autumn work agenda will involve the examination of opportunities that we have been advised of in the commercial semi-State and local authority sectors as well as tourism and the internationally traded services sector. The committee will be working through this agenda in the course of the autumn with a view to coming up with concrete proposals for action in our second report in December.

In conclusion, all in all, we have a full programme for the next few months. I know that I speak for all my colleagues on the committee when I say that we are determined to find genuine, lasting solutions to the problem. We aim by Christmas to publish our second report which will contain a series of solid recommendations on how we can significantly reduce the number of people who are registered as unemployed.

As a member of the Oireachtas Joint Committee on Employment, I particularly welcome the constructive consensus approach which has been adopted by the members of the various parties participating in the committee in seeking to resolve the scourge and cancer of unemployment in our society. It is common cause between all parties that this is the greatest social and economic evil which we face in the Republic. There is also a growing and accepted awareness among the various political parties that there is no magic solution. I believe that in a non-partisan and collective approach to the problem lies the best chance of progress and success. It is important that we do not reduce the unemployment crisis to a political football between the parties but rather seek to combine the best efforts and ideas from all sides of the House to alleviate the problem.

The interim report spells out in stark detail the enormous challenge facing our society in the battle against unemployment. It is summed up in the extract from the NESCStrategy for the Nineties document which pointed out that, assuming zero migration and no further job losses in the economy, employment growth of over 20,000 per year would be the minimum requirement if unemployment were not to increase. Of course, one of the grim implications of this is the continuing problem of over 280,000 people unemployed.

The interim report also correctly highlights the vital importance of expanding native industry. This was the particular objective taken up by my party leader, Deputy Desmond O'Malley, when he instituted the Culliton inquiry just over a year ago. Undoubtedly, the performance of native industry has been very disappointing notwithstanding the huge amount paid in grants to that sector. The core of the problem is summarised in paragraph 24 of our report which highlights the fact that many Irish firms have introduced new technology which has enabled them to maintain viability but the unfortunate consequence has been that the number of jobs has not increased while in some cases the number has declined.

The report points out rightly that policies and programmes have been based primarily on providing finance for investment projects. What we need, therefore, is greater investment in jobs in native industry. We warmly welcome the initiative spear-headed by our leader, Deputy O'Malley, to create a new super agency through amalgamating the home industry section of the IDA with the trade board and sections of FÁS and Eolas so that we will have a one-stop-shop approach to supporting Irish industrialists in all forms of assistance from employment grants, job training, marketing and research and development. Development in this regard is absolutely essential and greater attention needs to be devoted to the development of home industry. While the IDA are to be congratulated on their success over the years in helping Irish industry and in providing investment here by overseas companies, too much of their human and other resources have been devoted to the more glamorous task of promoting overseas investment in Ireland rather than helping Irish entrepreneurs.

In that context too it is absolutely heartbreaking to find that when we need to secure a major expansion of home industry the recent sterling currency crisis put so many Irish industries under pressure. The difficulties arise in particular in labour intensive value-added sectors such as food production, clothing, textiles and various engineering enterprises. I warmly welcome the speedy reaction of the Government in providing assistance in this sector. The measures announced this week by our leader, the Minister for Industry and Commerce, will be a source of great relief to hard-pressed Irish industrialists and to the thousands of workers who are desperately concerned that their jobs could be on the line in face of the sterling crisis. I am quite confident that, as indicated by the Minister for Industry and Commerce, there will be a minimum of bureaucracy and delay in implementing the assistance programme which should support up to 30,000 workers in the next six months in industries vulnerable to pressure from sterling.

Finally, I warmly endorse the proposals in the interim report for a greater expansion of the social employment schemes and similar measures to provide the long term unemployed with the opportunity and dignity of work, if only on a part time basis. It is tragic that, as the interim report points out, more than 100,000 of those on the live register have been unemployed for more than a year and more than 50,000 of them have been continually unemployed for more than three years. This sector on the live register experience unique problems which must be addressed urgently. Measures such as the social employment scheme provide an opportunity for those people to make a real contribution to society and to enjoy the dignity and sense of belonging which going out to work can bring. In that context too the Government must work to achieve a massive and rapid expansion of the whole social employment concept and it should be possible to develop schemes of this nature throughout the country. An enormous amount of useful social, community and environmental work could be done to enhance the quality of life of everybody in the country, particularly the unemployed.

I have read this report with great interest, but, although it is an interesting read I would have to express disappointment that there is no indication in the report of any fundamental reform of the type of economic strategy we have been pursuing. I listened this morning for some radical critique of existing Government strategy but heard none.

I have not spoken yet.

Both speakers who have contributed endorsed — in some cases it was a ringing endorsement — what the Government are doing. The report is deeply stuck in the mind set of existing policy and that is one of its fundamental weaknesses. It has worked on the soft fringes of economic policy in relation to jobs. It has worked on help for small businesses — everyone wants to help small businesses — it has looked at schemes — everyone wants to see better schemes; it has looked at EC responsibility — everyone wants the EC to do more for us, but it has ducked the issues that are fundamentally preventing employment. It has not embarked on the issue of tax reform, reform of our welfare system or reform of the operation of State enterprise. Its comments on State enterprise are of the need for equity capital, suggesting that this will come from Government, but Members know that the Government will not dip into their coffers to produce equity capital for the hoped-for improvements in employment by the State sector.

This pales as a report when compared with, for example, the Labour Party's most recent economic statement. While I might not agree with everything in that statement it is certainly a radical appraisal of what is going on — I am sure that will also be true of the statement from the Democratic Left Party. Our statement is also a radical appraisal of what is going on. To some extent this is an inherent weakness in the way the committee were put together. There are no bonuses for parties to get into the real controversial issues on which they have genuine political differences. There is no advantage to a committee such as this who make controversial proposals which they cannot implement and there is no benefit of the follow-on results of employment creation. That points to the fundamental weakness Fine Gael have found with this committee from the start. They do not consist of decision makers and they cannot produce an action plan. This report is perhaps slimmer but similar to reports from the NESC, ESRI and other bodies that comment from a distance on economic policy.

There are interesting suggestions in this report, to which attention was not drawn by the chairman of the committee or Deputy Wyse. Some suggestions seem to be out of favour with Government policy. I was interested to read that the committee have little support for the concept of employment subsidies which seem to be a significant pillar of the most recent response from the Minister for Labour who is in the House. The committee said that such schemes have a limited role and where they did have a role they should focus on the disadvantaged and long term unemployed, which is quite different from the schemes introduced by the Government. I support the view of the committee that such a scheme would be vulnerable to criticisms of displacement if it is not focused on a disadvantaged group by which we can test its success against very clear standards of what we are trying to achieve.

The chairman of the committee praised very highly the Government's response to the committee's work but I cannot agree with him that it has been a great or worthy response. In view of the fact that in the last two years 74,000 unemployed have been added to the live register the promise of 6,000 temporary places in vocational training and social employment schemes, which the chairman points to as a response to the report, is just a drop in the ocean. It will perhaps stop the wind down of the social employment scheme — of the last couple of months — we all know of schemes in our constituencies that have been whittled down in size or eliminated. The latest inclusion of 4,000 in the scheme will perhaps stop that run down of it, but it seems absurd that FÁS should run out of money for their social employment programme in the months of July and August. The agreement to provide money simply makes up for very poor budgeting in the earlier period.

Few unemployed people will be rubbing their hands with delight at the response from the Government to this report. It is interesting to note that the committee are critical of the existing scheme.

We are also unhappy at the continued unwillingness of Ministers to attend. As our party leader said yesterday in the House, Fine Gael would be more than happy to participate in a meaningful committee if Ministers attended. If the Minister for Labour, Deputy Cowen, who is in the House, would participate we would also do so.

The Taoiseach made a very complacent statement yesterday about our economic performance. He said that there has not been massive job losses and that during his period in Government we had seen a great leap forward. Nothing could be further from the truth and his statement was a misleading interpretation of what happened over the last five years. Yesterday the Minister for Labour seemed to be very uneasy regarding the facts of the last five years and he wanted to go further back to throw something at the Opposition. However, the reality is that since 1977 we have had massive job losses; 102,000 job losses were notified to the Minister's Department during that period. Since 1987 137,000 people left our shores in search of work elsewhere; since 1987 unemployment has grown by 65,000 and during that five year period there was employment growth in only two years. The net increase in employment over the whole period amounted to fewer than 7,000 per year while 25,000 people came on the labour market each year. We are not meeting even one third of the jobs needed.

As I said, it is misleading for the Taoiseach to suggest that we have been performing strongly in relation to employment. The past two years in particular have been disastrous in regard to employment. The numbers at work have declined. Of course the Taoiseach did not advert to this yesterday. He said that employment had increased. However, we know that the numbers at work have declined and the figures are in official publications which Ministers can read. Unemployment has risen by 90,000 over the last two years, if it is measured on a consistent basis. Among young people unemployment has grown dramatically. In the last 25 months there has been a 55 per cent increase in youth unemployment and we are heading towards a figure of 100,000 young people under 25 years of age out of work. Those are startling figures of failure on the unemployment front and if we as a Dáil and community are to address our problems of unemployment realistically we cannot continue to talk about an economy performing well in relation to jobs. Our performance is one of the poorest in Europe on jobs. Among PAYE workers — the real test of unemployment — the numbers unemployed amount to 25 per cent. When you cut out employers and self-employed you find that one in four PAYE workers is out of work, which is the background against which we must approach this problem.

The Taoiseach also said yesterday that we had high economic growth and that living standards for those at work had grown by 10.5 per cent. It does not seem to dawn on him that there is something fundamentally wrong in an economy which in the last five years has had a cumulative 30 per cent growth in output and a pitifully small growth in jobs. That is the reality of the present policies. If the Taoiseach does not see that there are fundamental weaknesses in our economic policies which have produced this situation, we must despair of the Government's ability to handle this crisis. We must start by accepting the reality that our problems are not linked to demography and with our young people being too fecund — having too many children — and that this means too many people coming on the labour market each year. Indeed a high birth rate is the source of the strength of countries with good economic growth. They have young, vibrant, well educated workforces and they have economic policies which ensures they will have employment.

The passage to reforming our economic policy will not be simple, but we must recognise that existing policies have failed us. Indeed, the Culliton report made a significant contribution in highlighting the failure of the traditional policies. At present it takes over 4 per cent growth in any year to produce any increase in employment or reduction in unemployment. The only year in which there was significant employment growth was in 1990, when the recorded figure was 7.2 per cent. It takes those dramatically high rates of growth to produce employment. Why is it that we are strong on growth and in our balance of payments and have low inflation, yet we do not have employment growth? The answers will have to be found in our taxation and industrial promotion policies. A Cheann Comhairle, how much time is left?

The Deputy has four minutes left.

If Deputy Bruton joined the committee there would not be any time restrictions on him.

We must reform our policies. The recent visit of the Taoiseach to the US was highly publicised, but it suggests to me that he has not learned the lesson of Culliton. It was precisely those companies from non-EC countries, particularly US companies, who came to this country and who have extremely shallow roots in the economy. They have five times higher growth, their profits are predominantly repatriated and predominantly tax free; but for every pound of exports those US companies send from this country only 19p is coming into the pockets of Irish workers or in the form of new orders for Irish businesses. Those US companies, which the Taoiseach is pursuing so avidly, will not reform our policy.

Yesterday's defence of the Government's handling of the currency crisis made me feel extremely uneasy. Any critic was portrayed as a pariah or a saboteur. Those who moved their money to avoid what they saw as a loss to the pension funds or small savers' money they were managing were seen as faceless speculators at the root of our problems. This is a very unhealthy attitude. If we cannot bring some honesty into this debate and discuss what is happening, we will be in a bad way. The reality is that the Government's policy has brought about a 5 per cent revaluation of our currency on a trade weighted basis and an increase of 3 per cent in our interest rates. Falling prices for goods which can be traded and rising interest rates spell ruin for our manufacturing industry, a very fragile sector which is the key to our success. It will cut investment and create problems for the Government in regard to their public finances. The gains will be enjoyed predominantly by the non-trading sector.

The Taoiseach said that one of the major gains in this policy was to see investment in Irish Government loans going up to £4.2 billion. However, he then expressed dismay and amazement that these people would pull out their money when they felt that the profits for which they invested here were better elsewhere. We must be realistic about our policies.

I would be grateful if the Deputy would bring his speech to a close.

I shall certainly do so. The Government's rejection of the Fine Gael approach to try to prevent the rise in interest rates was very extraordinary and demonstrated a strange set of priorities. We have no inkling as to what the Government's policy is to get us out of the present mess that has brought about an unhealthy upward valuation of our currency, which we do not need, and an upward thrust in our interest rates, which we certainly do not need.

Deputy Bruton bemoans the fact that the report of the committee contains no fundamental reforms. All I can say to him in response is that it is regrettable that he and his party declined the opportunity to participate in that committee and make an input into it.

Hear, hear.

The Fine Gael Party had that opportunity and they still have that opportunity. Quite frankly, the Fine Gael complaint about non-ministerial participation, while valid in so far as it goes, is no reason for them to remain aloof to the most important issue facing this country today, the unemployment crisis. It behoves every party in the House and every Member of the House to make an input and to make a contribution on the issue. That is not to say that Fine Gael policies on employment or on the economy would appeal to me or to the rest of the Labour Party — they certainly would not and the Labour Party would be very much at variance with those policies. Nonetheless, one has to recognise that Fine Gael should have an input in relation to the major issue facing this country. In my view, it is a poor reflection on the Fine Gael Party that they choose to remain aloof from the key issue to so many people in Ireland.

In speaking to this first report of the Oireachtas Joint Committee on Employment on behalf of the Labour Party, I make it absolutely clear that the reason for the participation of our party is to try to persuade the Government to radically alter their current policies on both employment creation and the reduction of unemployment. The initial report contains several recommendations that the Labour Party have no difficulty in endorsing. In particular, we welcome the emphasis in the report on the need to change direction from relying on mobile international investment as the main source of new jobs. The report states that in future the main concentration of State support should be in assisting Irish firms and that that is the only realistic way to ensure the long term success of the industrial sector in generating employment and wealth.

The events of the past three weeks have focused attention on the external shocks that can threaten tens of thousands of jobs. Despite every effort this country has made — at very great cost in social terms — to meet the financial criteria to keep Ireland within the narrow ERM band, there is a grave danger that the temporary assistance to exporting firms dependent on the United Kingdom market will prove completely inadequate.

We are now told that interest rates will have to remain high until the Bundesbank feels it appropriate to reduce German interest rates — and by "appropriate" I mean with reference to the needs of the German economy. Such a strategy, even if it continues for a period of six months, will leave a trail of collapsed business, lost orders and lost jobs. What about the effect of the appalling interest rate increases on the rate of inflation? The increases in interest rates permeate every aspect of the economy and will surely have a drastic effect on inflation right across the board.

The Labour Party have refrained from issuing any statement that could be construed as in some way giving an incentive to those speculators who are attempting to force a unilateral devaluation of the punt, but I should like the Government to convey, in the most trenchant terms possible, to the German Government at the summit meeting in Birmingham that we cannot live with real interest rates in excess of 10 per cent to maintain our position in the ERM. There are other countries in the same difficulty. It is simply not good enough for the German Government to expect the ERM to be maintained in its current form and without a realignment of all currencies, including sterling, to facilitate return to the ERM. The price of complete inflexibility on the part of Germany will be lost employment throughout the Community and permanently lower economic growth.

As long as the European Monetary System allowed for exchange rate adjustments by agreement, there was merit in controlling fluctuations in currencies and giving stability in international trade. However, the unification of Germany and the likely permanent increase in related Government expenditure necessitate changes in the operation of German monetary policy to take account of the interests of other member states. A policy which in practical terms involves the export of deflationary monetary actions to the rest of the European Community is not sustainable. Unless the ERM is restructured to enhance economic growth, rather than impose the monetary policy of Germany on other member states, exchange controls and restrictions on the movement of capital will become inevitable, which will threaten to disrupt investment in trade and undermine the prospects for further integration.

There is now a growing contradiction at the heart of European economic policy. The Maastricht Treaty was intended to increase economic growth and provide the framework for increased co-operation in macro-economic policy. Instead, there is now a real danger that the divergence of the requirements for fiscal and monetary policy in Germany from the rest of the Community will result in economic stagnation, rising unemployment and permanent speculation against currencies perceived as targets for devaluation. If Ireland had not been able to allow the punt to move downward against the Deutsche Mark through agreed realignments, we could not have remained within the ERM. It is now abundantly clear that the political will to provide for a major increase in transfers to the weaker economic regions of Europe as part of economic and monetary union has weakened considerably in Germany. But the development of European Monetary Union in Europe is bound to be a slow process and cannot be achieved through shortcuts. Had the central banks of the EC member states already pooled their reserves, it is likely that the speculators could have been held at bay, rather than forcing Italy and the United Kingdom to devalue. However, the need for a realignment of currencies to prevent the export of German-led deflation would have remained.

It is in the interests of Ireland that the ERM should be made more flexible so that interest rates are not maintained at the current crushing rates. A realignment of currencies, as has occurred on several occasions, is the only way that that can be achieved while retaining a framework of co-operation in monetary matters.

Interest rates in the United States are now more than 5 per cent below those in Germany yet the US economy has shown no signs of recovery to date. How can the European Community hope for an end to the recession in Europe if interest rates remain for any length of time at current levels? TheFinancial Times yesterday contained a grim analysis of the deflationary policies now being pursued in most European countries. Reductions in public expenditure and increased taxes are estimated to produce a net contraction in 1993 of 1.25 per cent of the combined GNP in nine European countries. Fortunately, some alarm is being expressed among some bankers in relation to the implications of that policy. One banker described the policy as “Europe fighting deflation with deflation”. Any recovery in the European economy must involve a new monetary order which does not require the subordination of a fiscal policy to a single objective of lower inflation. It will be no consolation to those who lose their jobs next year, either in Ireland or throughout the Community, that inflation will be reduced close to zero. The policy being followed will ultimately result in a European depression that will threaten the very foundations of the European Community.

I should now like to turn to the strategies to reduce unemployment. The issue of the 108,000 long term unemployed people has been referred to in the report. I do not agree with the statement contained in the report that there should be a limited role for employment subsidies for that group. The Tansey Roche report on training revealed that employers do not consider the long term unemployed when filling vacancies. It follows that substantial subsidies well in excess of £54 a week would be necessary, combined with a national agreement between the Government, employers and trade unions to allocate a quota of vacancies to be filled by the long term unemployed.

Paradoxically the Government's new employment subsidy scheme is likely to increase recruitment among school leavers and those on the live register for a relatively short time. It will add to the disincentive among employers to recruit from the long term unemployed. If we are to develop a serious national policy to reduce unemployment no interest group can be allowed to wash their hands and refuse to participate. That must include private sector employers.

In relation to any programme offering work through local authorities or voluntary agencies as an alternative to unemployment assistance, I want to make it quite clear that this would have to be voluntary and provide similar pay rates and conditions of employment as apply to the regular workforce.

Social employment schemes have provided a short term but beneficial relief from unemployment for those participating, but is anyone suggesting that this represents in any sense a long term answer to the problem? On behalf of the Labour Party I want to underline that our continued participation in the Joint Committee on Employment is on the understanding that recommendations jointly arrived at will be implemented and not meet the fate of the various inquiries and studies on industrial policy commissioned by the Government.

As I said at the outset, all parties in this House have a role to play and must have a role to play in this issue. Policies of the various parties vary and are diametrically opposed on many key issues so far as employment policy is concerned. They all have to be expressed. But the primary responsibility for providing employment in this country rests with the Government parties. They have to recognise for starters that their policies have failed dismally. It is no good saying that inflation is low; it is no good saying that the balance of payments is this and interest rates is the other. The fact is that the country is carrying the burden and the misery of 300,000 unemployed people. The responsibility for that rests with the Government parties and their policies. It seems to me that we will get nowhere on this issue unless at the outset the Government recognise that the policies they have been following, or not following, are a failure. That is not a political criticism or comment; it is a fact. Read the registers and read the figures.

If the policies are intended to create employment and bring about a level of unemployment reasonably commensurate with comparable countries in the rest of Europe and the western world, they are a complete and utter failure. The Labour Party and Democratic Left have a different view on how policies of employment should be directed. The Government should begin to accept the fact that perhaps a dose of the alternative medicine proposed — a more interventionist role in the economy — will do better. Let me put it this way: it can hardly do worse.

Do not tell me simply that things are difficult, that the world is in recession, that Europe is in recession, that the United States is in recession and we will just soldier on and create the conditions for employment. I know all that is true, but it does not get away from the fact that even in that context we are doing the worst. Even in those conditions our record is at the bottom of the pile. Others are doing better in those difficult circumstances, so there is something wrong somewhere.

If the Government think they can sit back and say they will create the conditions, have a proper interest rate and expect that by some magical process that the wonderful private sector on which we have relied over the years will produce the jobs — they are not doing it, they never have done it and will not do so in the foreseeable future — then they are doing a disservice to 300,000 people in this country. The attitude to companies such as ACC and ICC that are doing well and providing employment, and that could with encouragement do better is to sell them off and get rid of them. I realise, a Leas-Cheann Comhairle, that my time is almost up. I intend to conclude by calling on the Government, in regard to this committee and the formulation of economic policy, to recognise that the policies they have been following up to now have been a failure and that an interventionist policy and a more active State sector are required. That is the key that can give some hope for the future to those people who are anxiously waiting outside this House to see what will become of them and their families.

On publication of the first report of the committee aSunday Independent journalist gleefully quoted me — in recent times a rare occurrence in itself — as saying there were no blindingly new insights in the report. I did indeed say that, but not because I was seeking to disparage the first report of the committee of which I am a member — although disparagement was the objective taken on with some relish by the journalist concerned. I made that remark because I am familiar with some of the body of literature produced over the last decade on the subject of employment creation. I do not expect the Joint Committee on Employment to do very much original research on this issue, nor do I believe that such original work is its primary objective. Rather I believe the main purpose of the committee is to prepare the political environment for the urgent implementation of the very many policy initiatives on which there has been a broad measure of consensus for some time.

That is the real challenge facing our committee and it is this critical question of early implementation by the Executive of agreed recommendations that will be the acid test of whether the exercise has been worthwhile. There is little point in our endlessly regurgitating from the many fine studies that have been published since Telesis in 1982. It could spell the end of the experiment if the only visible result of our endeavours — for the Opposition parties, in any event — is an unsolicited role in helping to author the general election manifesto for either Government party. I believe the process we are involved in is worthwhile. I believe it could be more fruitful if there was a direct non-partisan link to the Government. I regret that it has taken until the fourth year of the Dáil to convince the Government of the merits of resourcing 19 members of the Oireachtas to work on what is our greatest challenge as a society.

At the first meeting of the committee I stated on behalf of my party that what we need "is a series of short snappy well-directed proposals with follow up appraisal and implementation strategy". In the short time available to me I want to take the opportunity to put on the record of the House my original letter of 12 May setting out that in the view of Democratic Left the Joint Committee on Employment should have three functions, and I quote:

It must focus public attention on the seriousness of the unemployment crisis and mobilise public support for giving top political priority to tackling this crisis.

It must obtain the views of all relevant interest groups on how long term employment creation can most effectively be promoted in Ireland.

It must provide a strong political mandate for radical action to tackle the unemployment crisis.

Our overall objective must be one of creating a climate for an active State interventionist approach in the market economy to remove the many obstacles which currently obstruct job creation and economic activity. The committee must provide a continuous process of evaluation, not a once off report, which systematically addresses the many areas requiring attention over a long period.

We need to create a general urgency about job creation at a number of different levels — at the social level through local authorities and development groups, at national level through the Dáil and Seanad and employment related agencies and at European level through the EC dimension and wider international contacts.

The committee should set out a work schedule involving, as we have done, hearings and submissions; commissioning research, where required; meetings with local groups; sponsoring local initiatives on job creation — for example, local jobs fora — a review of the performance of existing agencies and consideration of the many factors, such as incentives, tax policy, training, education, research and PAYE/PRSI, which impact on job creation.

It would clearly not be possible for the committee to meet every individual who might wish to make a submission. However, the establishment of subgroups on a local, industrial or sectoral basis to prepare reports for consideration by the full committee could also provide for an input by individual citizens.

If the committee are to succeed they require high visibility, good media coverage and a sense of urgency in their work. We must ensure that they do not become an expensive talking shop. They must plug in on all the existing agencies and organisations, whether they be employer organisations, research establishments, employment agencies of one sort or another, trade unions or development groups. There should be a formal request from the committee to the political parties, the IDA, ICTU, FIE, CII, ESRI, the Revenue Commissioners, the Combat Poverty Agency, technological institutes and major employers to submit suggestions. On an EC level, we should demand a meeting with the Commission on the concept of a common industrial policy and seek a debate in the European Parliament on such a major initiative.

Ideally, the committee need the attendance of important and responsible figures such as the Taoiseach and his Ministers, heads of State agencies and the social partners. I agree with the points made by Fine Gael in that respect. Most important, however, is the role of stimulating the widest possible public involvement in this issue; it must percolate down to every aspect of sustainable job creation and job protection activity. What we do not want is another major weighty report which is left to gather dust in some department back room. We want short, snappy and well directed proposals with follow-up appraisal and implementation strategy involved. Indeed, the purpose of this committee must be to aspire to talking themselves out of business as soon as possible.

Ideological purity has dogged the pursuit of full employment in Ireland. As long ago as the period from the thirties to the fifties intervention was limited in such a way as to prevent its success. In recent times, from the Telesis Report in 1982 through to the current Culliton Report, numerous pieces of advice have been offered to Governments dominated by one or other of the conservative parties. These have rarely been acted upon sufficiently to offset the negative impact of world events on Irish employment. Even official statements, through apparently positive and progressive, ring hollow to those who continue to waste time on the dole queues. For example, in the most recent review of industrial performance, the Department of Industry and Commerce state:

The policy objective of indigenous industry is to build companies of sufficient quality, scale and strength to win and sustain profitable positions in international markets, and by doing so to generate jobs and wealth in Ireland.

That objective, and industrial policy generally, will be the inevitable casualty of the fundamental divisions now at the heart of Government between the Taoiseach and the Minister for Industry and Commerce.

The most dramatic example of this is the £150 million proposal for enterprise partnership boards which the Taoiseach has taken into his Department, thus effectively removing small enterprise from the remit of both the IDA and the Minister for Industry and Commerce. The proposal has no regard to the experience of the IDA in funding small enterprise and it bears little similarity to the venture capitals fund recommended by our committee. Rather than a concession to devaluation of power to the regions, it is rooted in the traditional Fianna Fáil rural ethos and represents the worst kind of localism. Small enterprise will be funded irrespective of the displacement effect; in other words, similar small enterprises in the same town, same county or elsewhere in the country will be put out of business. The IDA have discovered that without overall planning and direction this displacement phenomenon undermines any net additional employment.

The proposal is not designed for the regions in the planning sense but imposes a structure which exposes the taxpayer to the risk of wasteful public spending. I am satisfied that this is not the best or most productive way of spending £150 million. The structure does not allow for the overall assessment, monitoring and planning which is necessary. In breaking up the focus of the Department of Industry and Commerce in this manner this proposal runs directly counter to the recommendations of Culliton. It lets the IDA off the hook in one important area where the Culliton Report sought to give them a more concentrated role for the development of indigenous industry. As a result of the Taoiseach's anxiety to rub the nose of the Minister for Industry and Commerce in the political mire, the proposed new body, Forbairt is now dead in the water.

We should look very carefully at what is being done here; we should look at the heading for the Department of Industry and Commerce, a sum of approximately £230 million. A sum of £150 million is being taken out from under the aegis of the Minister for Industry and Commerce and being brought under the aegis of the Taoiseach who will appoint one of his favourite junior Ministers to head up the new organisation. What is going to happen? Rather than concentrating on the indigenous effort, on which I thought we were all agreed, the IDA are rubbing their hands with delight as small enterprise was a nightmare for them. It is now being taken out from under them and being given to this new body. This most fundamental area of indigenous industry will be removed from Forbairt who will not be able to get off the ground. The IDA will return to their old ways and what they are best at marketing this country abroad in terms of attracting foreign industry and the efforts which Deputy Wyse and others have spoken about of developing the indigenous sector of this economy will suffer as a result. It is regrettable that the divisions within Cabinet have now reached such a level that we are prepared to sacrifice the future shape of industrial policy so that one or other of the parties can win out.

I hope the committee will keep a close watch on the recommendations made and the allocation of this £150 million so as to avoid the problems about which Deputy Rabbitte expressed concern. I should like to be associated with the compliments paid by the chairman to the parties who participated in the committee. The committee have begun to focus the minds of members of the Government and people generally on just how real, major and devastating a problem this really is. I represent two new satellite towns where, I suggest, the problems are much greater than those in many other areas. The unemployment levels of 50 per cent, 60 per cent and 70 per cent in certain parts of my constituency reflect the problems which have been building-up over a number of years.

In order to tackle the unemployment problem we have to put those receiving unemployment assistance into certain categories. As was said earlier, special consideration will have to be given to the long term unemployed. Many skilled and unskilled personnel and young educated people are unemployed. These people will have to be categorised in an effort to help them get back into the jobs market. Hopefully, this will be part of the next phase of our work.

The equity for jobs fund arose directly out of the many views expressed to the committee. We also had face to face discussions with the four main banks who outlined in some detail their method of operation in terms of funding job creation projects. There was a cult of requiring personal guarantees and the taking out of second mortgages. Qualified people who wanted to leave the security of permanent employment and set up in business on their own faced a very daunting and difficult financial task. I hope the fund of £150 million will have a real and lasting impact in helping these people.

I do not agree with Deputy Rabbitte that the IDA should be excluded from participating in county level. For many years they co-operated with the county development teams and there was never any fragmentation. However, I found in our deliberations with the IDA that they did not provide the small enterprise supports necessary. Deputy Rabbitte will recall that they moved from those policies. There was a suggestion that the FÁS centres, which are community based and spread throughout the country, with assistance from the IDA and "hands on" support, under this county development concept can be streamlined and made to work. I hope we can play a part in ensuring that the doubts and fears expressed do not hinder equity for jobs projects. The displacement factor will have to be considered. The suggested future structure of the IDA highlighted the fact that in the fifties and sixties the Lemass concept was to support semi-State structures.

We moved into the big bad world in the late sixties and chased the international mobile industry. We succeeded in that regard. Telesis suggested that, perhaps, we should redefine that and recommended that we should proceed in the direction of indigenous industries. We did not take that suggestion on board and follow it through dynamically. We are now at a crossroads with vast numbers unemployed and we need to redefine industrial policy for the future. We should be honest and frank with our electorate about what we cannot achieve, and do what we can in the shortest possible time. We should take some real steps in the right direction.

The next phase of our work on the sub-committee, will be a job creation strategy, and the follow-up to the equity for jobs fund, will probably be an equity fund for investment. There are some very successful food conglomerates, mainly in the dairy sector, whose fine products are being placed in the refrigerated cabinets and on the shelves of our supermarkets, but we must score substantially with brand names on the international market. Continued fragmentation in the dairy sector, for example, will not bring about permanent, high quality jobs.

The quantum leap involved in rationalisation will cause problems. It is heartbreaking that in that vital sector over the years, after creating a brand name, Kerrygold, the big co-operative movements wanting to export, fragmented the marketing effort and are going it alone while still under the structure of An Bord Bainne. Instead, they should have all broadened the range of cheeses and other products and sold at a premium price under the Kerrygold brand name. We will not reach the successful, high quality, multi-investment requirements of projects with large numbers employed until we make that quantum leap. Yesterday, in my constituency, Gilbeys announced the opening of their new complex. That is the success story of an international brand name. Many millions of pounds went into the development of that project, mainly from a multinational organisation, and we have seen what can be achieved when a concentrated quality marketing effort is undertaken.

The food sector has been studied in depth but there has not been enough action to implement recommendations. The IDA attempted to amalgamate Avonmore Foods and Waterford Foods, a logical, intelligent and commercial step forward but, sadly, they did not succeed. There should be rationalisation with a view to enhanced product development and major international exports of premium products. I do not believe any of the large Irish food combines will be big enough to compete in a European context. The cost of launching a branded product on the German, French, UK or other markets is astronomical. The language, colour, marketing, promotion and advertising must be taken into account. Our home-based companies should cease carving each other up on the home market.

In any of our supermarkets one will find a multiplicity of plastic containers with different brand names containing similar products, all produced from the farmer's gallon of milk. We must consider the overheads associated with individual marketing. If we are to promote indigenous industries that must be tackled. The idea of An Bord Bainne becoming a major international plc, supported by the milk producers, and a rationalisation of the dairy structure, will result in major job creation.

I am concerned that if we continue major infrastructural investment under the next allocation of structural and cohesion funds we will end up with a great infrastructural network but not enough large manufacturing job creation complexes.

We must direct our energies in that direction in the next few months. An equity for investment fund of substantial proportions will probably have to be earmarked in the next tranche post-Maastricht. Substantial resources should be invested and tilted towards our taxation and fiscal policy. Hopefully, the Cement Roadstones and other major Irish companies will cease to look abroad and, with a commercially led type of fund, will invest at home to bring our industry to the level recommended in the Culliton report.

I have had a very short time to deal with this major problem. A great deal more work needs to be done. I suggest to Fine Gael that if they do not wish to participate in this committee, they should at least make a presentation of their best ideas. We would welcome constructive criticism from them.

The sub-committee which I chair deals with strategies for the unemployed. We are proposing policies and State measures which relate to providing work training and education for the unemployed. We are also looking at a possible new radical approach in this area with which I will deal later.

Of particular concern to the work of my sub-committee is the fact that 118,000 are long term unemployed who have been on the live register for a year or more. We are even more concerned about the 54,000 people who have been continuously out of work for three years or more.

Long-term unemployment and the figures I mentioned, are having a devastating effect on our society. Long-term unemployment tends to be concentrated in certain communities with adverse consequences for the quality of life in those areas. Tackling this problem will require new and imaginative thinking on a range of issues including social welfare, education and direct employment programmes.

We have now proposed to Government a work programme strategy which will change the social welfare ethos which has bedevilled Irish society and consigned certain communities and families to long term unemployment to the point where it has become hereditary.

I want to emphasise that that is one approach only, with which I will deal in a moment. We must also develop a strategy in favour of the unemployment black spots nationwide where we discriminate in a very positive way against people coming from places like Darndale, Neilstown and so on. The sad reality is that young people from those areas have no chance of employment given that discrimination. In addition to that strategy I wish to outline in the short time available to me today that there is need for a comprehensive approach in dealing with the series of problems obtaining in such areas.

The most important requirement of our committee was to endeavour to get more information about the unemployed, their skills, previous employment history, if any, and their educational background. We need this information so that we can devise programmes which will meet their needs. Therefore, it will be seen clearly that it is vital that we improve our information gathering systems on the unemployed.

We have adopted a fairly radical approach to the thinking that has obtained in this area to date. For example, we pay £1 billion to people on social welfare on the basis that they will do no work but will seek jobs which are non-existent. At the same time we expect an employer to pay £50, largely to the State, before he can pay wages of £100 to an employee. Clearly there is a major conflict between those two strategies. Our approach has been to propose a work programme under which people in receipt of unemployment assistance be given an opportunity to work — let me emphasise on a voluntary basis — because such people are not unemployed through choice; by and large they are unemployed because they have no other option. Our approach is to reinstate the dignity of work to such people, to pay them the unemployment assistance they now receive for doing nothing and, through that approach, enhance their lifestyles.

To date we have had a very positive response to this proposal right across the board, for example, when talking to local authorities nationwide. Let me reiterate that this work will be confined to the public voluntary sector, whereby local authorities, health boards, vocational education committee, community associations, youth and sporting organisations will be allowed to recruit such people on a part-time or full-time basis. It is proposed that they would work the requisite number of hours, which would afford them the hourly rate for the job undertaken and would correspond to their present dole payments. In our discussions with local authorities to date we have had an interesting and enthusiastic response.

There are a couple of aspects to the programme and proposals I should like to outline briefly. First — this is something the committee are at present discussing and on which no decisions have yet been taken — we recommend that whatever authority employ such people they must incur the overhead costs of that employment, that cannot be a cost to the Exchequer. We have found that whenever such a programme has been offered to some public authorities — on a voluntary basis — they have been quite willing to take up the offer. To date the feedback from them has been that they are prepared to examine the possibility of raising overhead costs of equipment and of the allowance that would have to be paid to any such employee in order to recruit extra employees to undertake a significant amount of work needing to be done. When one considers that a town like Leixlip of 14,000 people has only one outdoor operative one readily sees the absolute necessity to deploy more people to do so much needy outdoor work of a maintenance and improvement nature. Indeed, that would apply to towns everywhere.

Second, we have examined the possibility of extending work programmes to other areas, such as the education sector, health boards and so on. For example, if one looks at the education sector one finds that every primary and post-primary school nationwide is seeking a caretaker and/or secretary, perhaps on a part-time basis. Many of the management boards to whom I have spoken have said they would be delighted to subsidise the dole payment the State would pay them in order to recruit such people. They have said they would be delighted to carry the overhead costs, which would be minimal, in order to recruit them.

The same would apply in the case of child care requirements, the overall area of literacy and numeracy, where there are vast opportunities for people to be employed, again on a part-time basis. For example, there are vast opportunities for the employment of people within the health services in the care of the aged, mentally handicapped and so on, where the feedback has been quite substantial also. The public, voluntary sector is also an area in which there is considerable potential, through community organisations, in the management of community and sport centres nationwide, who are at present seeking to deploy people through social employment schemes which they have been unable to do to date. They, too, would be delighted to recruit such people under this programme.

I should say I have discussed the concept with some people from the trade unions at local level. While accepting that unions have experienced major difficulties in this respect in the past, I have found a readiness on their part to consider this proposal and indeed an enthusiasm therefor on the part of many people involved in unions nationwide. Let me emphasise that this will be a programme which will be implemented with the involvement and co-operation of the unions. There will be no question of its being imposed without their agreement and consent.

The problem of long term unemployment will not be solved until such time as we implement the radical changes proposed. I put it to the Government that we could take up to 50,000 people off the live register on 1 January next through this type of work programme if we can get their agreement to the proposal hammered out and finalised by our committee. That is just one aspect of the overall unemployment problem which can be resolved quickly and effectively in a common sense manner. Most important, it would afford those people who may not have worked one day in their lifetime, the dignity of working and give others the opportunity of being reinstated into the mainstream workforce.

First, I should like to pay tribute to the work of the Oireachtas Joint Committee on Employment to date and particularly to our supporting staff. Frankly I do not think any of us would have been as well prepared, or maintained our level of commitment and enthusiasm, were it not for their constant input. There is a precedent here — which could well be noted by other committees of the House which may be established in the future — in that we drew not just on the staffing resources of the House itself but also on the staffing commitment and resources of the relevant Departments. That point should be made clearly and put on the record.

As chairperson of the sub-committee of the Oireachtas Joint Committee on Employmentvis-á-vis the role of the EC I want to commend the first report of the main committee to the House, in general terms. I welcome in the Chamber the presence of a representative of the Fine Gael Party whose absence from the main committee is missed. It would be my hope, when this debate has concluded, that the various well-meaning, non-partisan invitations being offered from all sides of the House to participate in the work of the committee, in whatever way they choose, will be taken up by the Fine Gael Party, Perhaps, as Deputy Lawlor said, even minimally, to make a formal submission on the ideas to which Deputy Fennell referred yesterday and Deputy Richard Bruton referred this morning.

As stated in the first report of the Oireachtas Joint Committee on Employment, unemployment is a major problem at EC level. Within the overall EC area there were almost 13 million people unemployed in 1991, one in ten of the workforce, before one adds the 1.3 million unemployed workers in what used to be East Germany. Approximately half of the 13 million to which I have referred are what we would describe as long term unemployed, that is unemployed and without a job for over a year.

Unemployment is a major problem at EC level and there are two strands to that dimension. In the first place almost every member state has an unemployment problem. Unemployment rates range from an Irish high, in excess of 17 per cent, to the low in Luxembourg of less than 2 per cent. Italy and the United Kingdom have rates just over 10 per cent, Denmark and France have rates just below 10 per cent and the Spanish rate is closer to our own. Figures for Greece and Portugal are unreliable in this regard. In my view it is too simplistic, however, to say merely that in the EC ten or 11 member states each have individual unemployment problems. There is a second strand to the question. As the European economy becomes more open and more inter-connected and as we move towards increased integration of economic policies, unemployment becomes a European Community issue at Community level and not just a national issue. This transnational aspect of unemployment must be forcefully stated because of the recent emergence of a new interpretation of "subsidiarity" which could seriously impede development of an EC role in assisting in the creation of an EC employment favourable environment and in tackling unemployment. The sub-committee will be looking next month at EC employment and industrial policy and at the EC role in relation to State aids. I hope that the sub-committee will have some useful recommendations to make on these issues in the committee's second report.

As an international Community the EC is committed to an open market economy with free competition, a commitment shared by Ireland. This commitment limits our scope, and to a degree the scope of our large and wealthier neighbours, for independent action. Indeed, the EC as a whole is subject to the international market forces of a global economy. However, it beggars the imagination to suggest that the EC as the largest trading bloc in the world cannot take co-ordinated action with the aim of reducing unemployment. One possibility might be a co-ordinated growth strategy across EC member states. There may be other possibilities. I want to say to the House and to those who may read the deliberations of the sub-committee that this is an area the sub-committee will consider with some vigour in the coming weeks and months.

The blueprint for the European Community of the future has been drawn up in the Maastricht Treaty and endorsed in no uncertain terms by the Irish electorate. I have asked myself a simple question about the Maastricht Treaty in the context of the employment committee and that is whether the Community envisaged in the Maastricht Treaty commits itself sufficiently to job creation and to tackling unemployment. My answer has to be yes, provided that the member states carry through the noble aspirations contained in that Treaty, and that of course is in itself a noble aspiration, given the relative uncertainty with regard to "Maastricht I" as it is now being referred to.

Among the tasks of the Community outlined in Article 2 of the Maastricht Treaty are the promotion of "a high level of employment" and "economic and social cohesion and solidarity among member states". There is scope within the Treaty, with political commitment and goodwill, to make major inroads on the unemployment problem. I think the present questioning of the Treaty in various member states can have a positive out-turn in relation to the type of Community we build within the context of Maastricht. Are we merely going to construct a Europe of the Economic and Monetary Union and of the ECU or are we merely going to establish a glorified trade union as would appear to be the objective of the conservative forces in a number of member states including that of the member state now holding the Presidency of the EC? That is not acceptable to us and I do not think it is acceptable to other parties in this House either. Members of this House share a common commitment to building a European Community of European people, a social Europe. One very important way to build such a European Community is to tackle one of the problems which confronts so many millions of people of the EC, either directly or indirectly, namely unemployment.

It is incumbent on us as politicians of whatever party, and on us as a country, to press the case for European Community action. The alternative in terms of unemployment, long term unemployment, alienation and social dislocation is not and must not be acceptable.

The sub-committee will be looking, in particular, at the way in which the social cohesion of the Community is enhanced by the Structural Funds. We will be looking in particular at the impact the spending of the next round of Structural Funds will have on Irish employment figures. I will give some statistics in relation to the scope there is for this area in the context of the next few years for Ireland. The total current EC budget accounts for only 1.2 per cent of community GDP as compared with 4.6 per cent to 9.4 per cent of national GDP on similar expenditure in five mature federations such as Canada, Australia, the United States and so on. The present Structural Funds account for only 0.3 per cent of the entire GDP of the Twelve member states of the Community. There is a proposal to increase those funds but that proposal is being severely opposed by the British Presidency and by others.

Having said that, however, we must acknowledge that without the current level of funding the situation would be worse. The committee have, therefore, firmly underlined the importance of gaining as high a commitment as possible of Structural Funds for Ireland post-1993. It is important that a strong political message be sent from this House in that regard. There must also be concerted political activity to support the Delors II budgetary proposals, and to secure an appropriate share of these funds for Ireland. This is all the more important in the context of the many existing and emerging demands for these funds.

Let me sum up in four sentences. It is the view of the sub-committee that we can no longer afford to deal with unemployment as a party political issue. We must deal with it in a unified way as one of the most important national questions now confronting us as a democratic society. We cannot continue as individual member states of the European Community creating jobs in, for example, Italy at the expense of jobs in France or creating jobs in France at the expense of jobs in Denmark and so on. We cannot allow for what Deputy Rabbitte referred to on a local level — as displacement. We cannot allow for Community displacement if the net effect of our spend at Community level is simply to transfer jobs from one part of the Community to another. Instead we must develop Community policies at European level to create jobs in the European Community for the citizens of the Community.

I recognise the criticisms that have been made of the Committee's first report. That report was produced very quickly and against a background of competing demands. The committee set out a summary of recommendations of which Deputies are aware. We are committed to a fairly demanding schedule of work between now and Christmas. I suggest to Members of this House that when the committee have completed their work at Christmas, the public be invited to a series of public sessions to be held either in this House or at another appropriate venue at which they might present their submissions directly to the committee. In this way the committee would be able to obtain the views of the public on their work to date and would be able to discuss any submission made to the committee. It is very important that there be public debate on this matter so that we may achieve the political consensus that will support some of the radical political changes that are necessary. I recommend the report to the House.

I am pleased to contribute to this debate. No one is immune from the effects of unemployment which is the most crucial issue facing the country. Our high unemployment level is eroding and undermining normal community and family life. I would like to put some questions to Deputy Frank Fahey, chairman of the sub-committee dealing with strategies for the unemployed. I was interested in the outline the Deputy gave for the new scheme for social employment. It has been said often over the years that it would be good to have people who are in receipt of unemployment benefit engaged in some useful employment. Many people would subscribe to that view but, I would issue a word of caution in that regard. In do not know if that is part of the plan but if it is, any such scheme should operate at all levels in all constituencies and it should be undertaken as a pilot scheme as I could see difficulties arising in regard to it. For instance, I could envisage it leading to a two-track people who, for the best of reasons would opt to go to work, might be regarded as a better class of unemployed than people who, for other reasons — personal reasons or whatever — would opt not to take up the scheme. I do not know whether there is any such scheme in operation in other countries: if there is, perhaps we could ascertain how successful or otherwise the idea has proved to be. There could be difficulties and it would be much better to identify those difficulties in a pilot scheme and make a report before it was broadly accepted and put into place.

We must be concerned about getting the unemployed back to work. We must help the job seekers. Again and again relatives and friends telephone to say that a son or daughter has just lost a job or cannot get a job. Most people do not think that we will be able to get them jobs, but it is helpful if we talk to these young people. There are many very depressed and demoralised young people who are experiencing things in their short working life which their fathers and mothers would not have experienced in 30 or 40 years of employment. This includes exploitation, short term jobs and being made redundant. Last week I talked with a girl who has third level education and has been made redundant twice. Perhaps we should have career guidance for these young people. Career guidance is important at school and college level to help to focus students' minds and direction. I suggest it is also needed at a further point. Young people will talk to their families but they are usually emotionally involved and cannot see the broader canvas. An independent, skilled career guidance counsellor could help.

There must be practical assistance in job seeking. Young people are in receipt of a minimal income and they cannot get CVs copied cheaply. Neither can they avail of cheap postage. I am proposing that FÁS should take over the task of copying CVs for the unemployed. Of course there would have to be controls but that should not be too difficult. I have written to An Post, asking them to consider introducing a special CV envelope for job seekers which could be posted at half the normal charge. These things would be helpful and I hope my suggestions will be taken up. People in their twenties and early thirties need more help then they are getting. They are not directed.

It is important not just to let the people who elected us see that we are aware of their stresses and difficulties; we have to come up with some positive policies. No one will be helped by our collective hand wringing in the Dáil or continued expressions of concern. We must be seen to be involved in real political action. I wish I could see the Joint Committee on Employment as anything more than a minimal exercise. It is not impressive. The fact that the Committee's first report is not impressive either is not to do with the people who put it together. It is to do with the basis of the Committee itself. I accept the good intent of those serving on the Committee but it is not the answer which this awful crisis deserves.

I am not saying that governments should create or provide jobs. I never believed that. We have good evidence of how that policy backfired in the late seventies. We cannot see the solution in providing more civil servants or semi-State workers, but governments should never stop their efforts to create an environment in which wealth will be created, with the consequent creation of jobs. The creation of wealth and the creation of jobs go hand in hand.

We have never created enough jobs for all our people. Except for one very short period in the late sixties and early seventies, we have had to depend on emigration to keep unemployment at acceptable levels. Some reasons exist for our high jobless figures. One is our birthrate, which in the past 20 years has been among the highest in the developed world. It has been too high and we are in part paying the price for the ill-advised policies of the sixties and seventies when contraceptives were illegal and most couples had little option but to have numerous children. This fact should be remembered by the good bishops who criticise our high unemployment and emigration levels.

Deputy John Bruton deserves credit for his single-minded concentration on our unemployment crisis and his constant reiteration of recommendations and proposals towards a resolution. No one has the total answer. The problem we face can only be resolved over time by a broad range of measures, such as making changes in our social welfare code to deal realistically with the poverty trap. I hate to say that unemployment is attractive to anyone but it can be more attractive financially to the unemployed because people cannot afford to take jobs. We have to change that. We also have to change policies on income tax. It is ludicrous that anybody earning £4,000 or under should have to pay tax. Tax should not be payable at that level and the tax inspectors involved should be redeployed to pursue people who are not paying their taxes. We must look again at the BES which was such a valuable source of investment but has now been capped.

I regret that I do not have time to speak further but I appreciate the opportunity of contributing.

Listening to Government Ministers one would think that unemployment was something beyond our control, like the weather. This defeatism has paralysed Government thinking. Of course, we live in a small, open economy and are subject to international trends, but this does not mean we are helpless in the face of unemployment and poverty.

This Government have long given up the fight against unemployment. They are now resorting to palliatives and statistical sleights-of-hand. They gave us Jobsearch to force people off the live register and then claimed they were reducing unemployment. They gave us employment subsidy schemes which have never been proved to create a single new job but they have been shown to subsidise employers for jobs they would have created anyway, without the subsidy. I hope the Government will not listen to right-wing economists who demand that the jobless be forced to join education courses and so-called retraining schemes. It seems the Government will provide anything to anybody to reduce the numbers on the live register, but they will not invest in real employment creation. They cannot create real jobs with useful work. This Government are a total failure in the job creation arena.

One reads in the newspapers about submissions which have been made to the committee. The newspaper reports give prominence to statements made by Professor Brendan Walsh of UCD who had the outrageous gall to call for the penalising of the unemployed after six months. He said they should be told that if after six months they are still registered as unemployed their entitlement to income support will become contingent on enrolling for a full-time training course. Does this learned professor not know that by law a person is entitled to 18 months of unemployment benefit, for which that person has already paid dearly in pay-related, social insurance contributions while working? If the committee were to listen to the likes of Professor Brendan Walsh they would immediately be in conflict with EC law which states as follows:

Every worker of the European Community shall have a right to adequate social protection and shall, whatever his status and whatever the size of the undertaking in which he is employed, enjoy an adequate level of social security benefits. Persons who have been unable either to enter or re-enter the labour market and have no means of subsistence must be able to receive sufficient resources and social assistance in keeping with their particular situation.

The Government proposals to date on job creation have been an abysmal failure. The county development enterprise boards, for instance, are a gombeen, wing-and-a-prayer type scheme such as we have come to expect from Fianna Fáil.

While some positive development may come from the voluntary sector, the scheme's reliance on bank loans to small businesses shows just how seriously the Government take unemployment. Whatever effect a handful of new small businesses who have the collateral to satisfy the banks might have, it is a drop in the ocean when compared to the unemployment crisis. This scheme does not guarantee one long term sustainable job in this sector. It does not guarantee training. The county development enterprise boards are an insult to thousands of unemployed people and their families.

Thepiece de resistance before the committee is the Workfare concept. Workfare is economically laughable and potentially fascistic. To force people to work for the dole is abhorrent in a democratic society. Even if the scheme is termed “voluntary”, people will undergo tremendous administrative coercion to sign on to Workfare, just as they do in relation to Jobsearch. Workfare workers would lose money since they would not be reimbursed for expenses such as travelling costs, lunch, child care costs and so on. There is no guarantee training or education and the jobs would be part-time and second rate. The great thing for the Government is that with one stroke and at no extra cost it would wipe thousands off the live register. People would still be living below the poverty line without any long term hope of a job.

Democratic Left do not believe that we have to wait for sterling to improve, for the American economy to pull out of recession and for world trade to pick up before we can do something about unemployment. While we must seek EC and international co-operation to fight unemployment, we do not have to wait for outside agencies to bail us out.

Yesterday we launched our proposed community employment programme which would create 50,000 jobs in the voluntary and public sectors, real jobs with full-time wages and proper training and education which would last for a minimum of three to five years. This programme, subsidised by the EC and paid for by a proper wealth tax, would target the long term unemployed, would give them the skills necessary to compete on the open market, would substantially increase their income and would fully integrate them into the labour market. That is a practical and realistic proposal with definite targets and minimal costs.

We will vigorously campaign against the introduction of Workfare and other schemes which exploit the desire to work while not providing the jobs, training or income deserved. We can come up with programmes that while not solving the unemployment problem, can begin to bring hope to the majority of long term unemployed people. We do not have to wait for the weather to change. A change in Government employment policies is all that is required.

I am pleased to have an opportunity to participate in this debate on our economy at the start of this autumn Dáil session. Since Deputy Albert Reynolds, was first elected as our Taoiseach on 11 February, he has shown great personal courage, a keen intellect and outstanding leadership ability. He has been particularly consistent in his total attitude to and outlook towards our national economy despite a ravaging world recession and a very unstable international currency situation. Due to the solid and prudent management of our economy by us in Government since 1987, our punt has withstood the international currency pressures and will continue to do so. Correspondingly, the Minister for Finance, on behalf of the Government, has put in place with his colleagues, a series of remedial measures for our exporting companies which are designed to assist them in their efforts to maintain a competitive position in the international market place.

The Government are absolutely committed to economic progress and job creation. Each and every citizen of Ireland has an obligation to make a contribution in our time, to our beloved country. This goes for everybody — politicians and people alike. That is the reason which motivated the Taoiseach to establish an Oireachtas Joint Committee on Employment. This committee, established in April last, held their inaugural meeting on 12 May. This dedicated group of parliamentaries set about their task immediately under the leadership of Deputy Brian Hillery, and produced their first report on 23 July. This report made 12 excellent recommendations, which are feasible and practical. I commend all the members of the committee for their great work.

On 26 August the Taoiseach, on behalf of the Government, announced a series of specific measures designed to generate more jobs and improve the climate for investment in productive activity in Ireland. Drawing on the great work in a very short time by the Oireachtas Joint Committee on Employment, the Taoiseach announced a major county enterprise initiative, to assist the job creation effort.

A Government sub-committee, consisting of my ministerial colleagues, Deputy Hyland, Minister of State responsible for rural development; Deputy O'Rourke, Minister of State responsible for trade and marketing and myself, along with senior civil servants, was established to create the enterprise structure. We held our first of several meetings on 1 September and after much discussion and dialogue with many interests, the Government sanctioned the new County Enterprise Partnership Boards on 1 October. The new enterprise boards will have a board of directors of 16 people at county level in rural areas and 12 directors in city areas. Their main task will be to support the creation of jobs at local level, by stimulating economic growth and community development. The new boards will consist of five public servants and ten people from the broader community sector, with an independent chairman, who will be an employer representative. In some places, the membership of the board may be expanded to take account of certain local situations.

Through the constitution of these new boards, the Government have given a clear signal of the importance of two of our major industries to job creation and economic opportunity. Agriculture, our primary industry, has been the backbone of our economy for a long time. Confirming its importance, agriculture will have three representatives on the new rural boards, in each county. The chief agriculture officer from Teagasc, a professional manager from manufacturing or processing co-operative and a practical farmer representing the farming organisations, will each sit on the new boards.

The Government regard tourism as an industry with great potential to contribute to economic growth and job creation. Consequently, they have amalgamated the regional tourism organisations and the county development teams in the new enterprise partnership structure. A member of the regional tourism organisation will be appointed to the new boards in each county, which will be the primary area for tourism promotion in the future. Each board will have a new county tourism manager as one of its key staff. He will also cover adjoining cities where appropriate. The existing regional tourism managers will have first choice of these new posts. Similarly the present staff of the regional tourism organisations and the county development teams will be accommodated in the new structures. Consultations have already commenced with existing interests at both local and regional level, on those matters.

The new county tourism manager will prepare a tourism development plan for his area of responsibility. He will consult with all relevant local tourism interests and with all relevant State and semi-State agencies, in regard to the county tourism plan. This plan will finally be sanctioned by the county enterprise partnership board and be a constituent part on an overall national tourism strategy. The county tourism plan will have the full support of the new boards and access to the relevant funding at county level.

To maintain consistent national employment and job creation policies — at least five public servants, that is a county manager, the chief executive officers of Teagasc and the vocational education committees and the regional and/or deputy regional managers of the IDA, FÁS, SFADCo and Udarás na Gaeltachta, may sit on the new boards. These members will produce monthly reports to the boards on their job creating activities and proposals for development activities in their relevant functional areas. The whole thrust of these new boards is co-operation and partnership. Consequently, there will be a strong community representation on them. These will include the chairperson of a county local authority, three representatives nominated one each by the employer, trade union and farming organisations. There will be a further three representatives selected by the relevant commercial and developmental organisations. Finally, the business innovation centres will have a professional representative on each board. In a short time, they have had a major impact on new business development.

These new partnership boards will have three key objectives for the development of small and start-up enterprises employing up to and including 12 people; for training and education, especially as linked to enterprise development, and for local community development. The membership of the board will fit these objectives and they will establish three sub-committees to facilitate those objectives. One director will chair each sub-committee, which may include co-opted members from both the private and public sector. The chief executive officers of the new boards will automatically be a member of the enterprise sub-committee.

The membership of the boards are structured so as to enable them to call before them, any representative from a public service organisation at State, semi-State or county level, to provide immediate specialist advice, written or oral, on any matter, to the board or any of its sub-committees, at short notice. The purpose of this facility is to enable decisions to be reached quickly on important matters, with the minimum of bureaucracy.

On appointment, the new boards and their staffs, shall immediately prepare a county action plan, which will include a clear statement of the basic strategy underlying the plan, where it seeks to achieve its objectives of our economic and social revitalisation. The relevant public sector organisations whether represented on the board directly or indirectly, or at sub-committee level or otherwise, shall co-operate in the formulation of this initial and immediate county action plan and thereafter with its implementation.

This plan will evolve through a consultation process with the relevant local and community organisations. It will include a statement on executive capacity for its implementation. The plan shall be discussed, along with any other relevant issues, at a quarterly forum of all relevant community and developmental organisations, who shall each be represented by one nominated delegate to the forum. These include area partnership companies, IRD companies, Leader groups, FIE, CII, CIF, chambers of commerce, local trade unions, ICTU centres for the unemployed, IFA, ICMSA, Macra na Feirme, ICA, ICOS, urban district councils, town commissioners, vocational education committees, regional technical colleges, universities and other relevant local community and voluntary groups. The assistant chief executive officer shall be secretary to and co-ordinator for the forum group.

I am sure the House will agree that all of these decisions, which have been taken by Government, are radical departures in both the management of our local economies and of job creation. For the first time, in the history of the State there is a clear demarcation in small job creating projects and start-up schemes. They have been clearly identified from medium and bigger industry. This should give a major incentive to people with ideas and incentives to come forward with their proposals to a local county enterprise board.

Secondly, the new structures are very democratic. They represent a major step forward in the devolution of power to local communities. This is positive reform.

Funding for the boards will include £50 million of Exchequer funds for enterprise, £100 million by way of loans and equity from Irish financial institutions, and further funding from existing budgets through vote transfer, etc., in various Government Departments and State agencies, from a number of European Commission programmes, funds and initiatives, from some enterprise funds and from local community contributions.

The boards will consider applications for funds to assist with various job-creating projects. National and local policies and criteria will be used in assessing these applications and on the basis of commercial relevance, viability, etc., decisions on individual projects shall be made locally.

The boards will operate a flexible financial support system, giving them discreation to support any project by way of grants, equity and loans or any combination thereof.

A national management company consisting of 15 directors shall manage the funding of the county enterprise partnership boards. These directors shall reflect a balanced mix of the board members and others at county level.

The role of the national management company will be to allocate funds in line with three demand criteria of unemployment, long term unemployment and migration in rural areas; to monitor overall spending on the basis of returns from boards; to evaluate outcome on an annual basis, monitor the performance of the various boards, decide the relevant national policies and maintain appropriate linkages across the country between boards on policies development, tourism, etc., and the necessary relevant State flexibility and between semi-State bodies.

It is our intention to create a new enterprise culture in this country. We intend to acknowledge effort, reward reasonable risk and support positive job creating projects and proposals. We will not be deflected in our efforts to provide opportunity for all of our people. We are all in this together. Through co-opertive participation in these new partnership initiatives, we can together conquer the scourge of unemployment.

I, for my part, will do my utmost with the task, which has been given to me by Government and I know that I have the full support of my Government colleagues. I seek your support and help also in this great national initiative.

These are exciting times. This new enterprise initiative brings hope to many. Together in a new national spirit of self-help and enterprise, we can achieve the success that this great country richly deserves. Ní neart go cur le chéile.

I would like to congratulate the chairman of the committee, Deputy Hillery, for bringing this interim report to the House. I know he is a very sincere Member of the House and anxious to do the right thing and anything I am about to say should not be taken as in any way a personal comment. It is equally so in relation to the Minister of State, Deputy Noel Treacy. I believe he also is a serious Member of this House who believes what he says and does his best. However, I have to be a little cynical about some of the things I have heard over the last couple of days. I have to take up the phrase the Minister used about this being an exciting time. It is not an exciting time.

He meant it as in the Chinese proverb —"may you live in exciting times".

It is anything but exciting for people seeking employment. In fact it is a terrifying time, a dangerous and a worrying time when people are looking desperately to people they feel are in a position to help them out.

I do not want to go over the ground again and again but whenever it comes up I must repeat it. Yesterday the Taoiseach mentioned that Fine Gael had not joined the committee. I must remind the Government yet again that this is a committee not a forum. Fine Gael first mooted a forum, and we would all be in favour of a forum. As our leader, Deputy Bruton, mentioned yesterday, when he is sitting over there he will extend the invitation to the Minister to join in a forum. That would be seen as a positive attempt by all the people in this House to co-operate with those outside it to do something about unemployment. I mean no disrespect to those who have joined the committee but there is a distinction between a committee and a forum and that was pointed out by our leader yesterday.

We must ask ourselves how many of us in this House have provided jobs. That is what people outside who provide jobs are asking. They ask how many of us in here have gone through the experience of setting up a business and providing jobs for other people. They say that when we do that we will realise how many obstacles are in the way. What is worrying is that with all the schemes and committees now being set up we have a top-heavy, administration-laden bureaucracy which will do nothing but murder the unfortunate people who are trying to provide jobs in industry in the public and private sectors. I cannot understand how committees of 16 or 17 people can work. We will have a plethora of agencies, all well-meaning, but I do not know how they can loosen up the system to make it more possible for people to work.

Take the example of the man who came into my clinic the other day. He is on the dole and seriously wants to work. He wants to set up a small industry supplying coal, firewood, etc. He is scarcely able to get together the necessary capital. He goes to FÁS so that he can get £40 a week. That is not great. A person in that situation will tend to remain on the unemployment register because it involves less effort and more reward. The alternative is to get up at six o'clock in the morning and to work long, hard hours for £40 a week. However, he will lose his medical card and all the other concessions for making that effort for which he will receive £40 per week but this is not adequate compensation. We need to look at this matter to try to eliminate the obstacles which are impeding the development of industry.

We have now reached the stage within counties — I am not sure if this is the position in Dublin city and county — where small industries are greeted by the local authority as if they had the plague. Small industries which provide jobs for up to three people are no longer wanted or greeted with enthusiasm by the planning authority and every possible obstacle is put in their path. On the other hand — and I agree with this — a big business operation with a bevy of accountants and technicians to back them up, will be facilitated in every way possible.

For some unknown reason the unfortunate small entrepreneur, be it in the clothing or textile sector or in the local services sector providing furniture, hardware or any other local service, is viewed with cynicism and encounters problems in relation to planning permission. For instance, small car repair workshops are not wanted in both urban and rural areas so where do they go? Given that there are nearly 300,000 people unemployed and looking for work it is ridiculous that bureaucracy is put in the way of those who attempt to provide themselves and probably their wives and children with jobs.

I know of one person in my own area who has been through the courts on at least ten occasions because it was deemed that his small business which provided employment for himself, his wife and four children was inconsistent with the aesthetics of the area. He had to go to court again and again and eventually he won his case. This man who was providing both himself and his family with jobs succeeded against all the odds and yet we ask ourselves why we have 300,000 people unemployed. That is one of the reasons and the sooner the county enterprise boards which are to be set up recognise this the better.

As the question of PRSI has already been referred to by other speakers I do not intend to go over the ground again except to say, given the level of the penalty or charge on the unfortunate worker and his employer at present, it is scarcely worth their while working as it is not very attractive.

Reference has also been made to the tourism sector which is seen to have the potential to resolve all our problems. While I do not come from a tourism county even though we are doing our best from what I have seen I do not think it can resolve our economic difficulties but it will be of help. We are deluding ourselves if we think that by concentrating solely and indefinitely on the tourism sector we will resolve our difficulties. While it will be of help it would be wrong to think it can resolve our problem given its magnitude.

The current monetary crisis is obviously going to cause further economic problems for us. Let me say in passing that the people who wanted to merge the European currencies, in the context of the Maastricht Treaty, were only too right; the problem is that this will not happen fast enough. Until such time as we have a single currency, each time the speculators on the financial market want to take a bender at some currency we will be up for grabs again and this will continue to happen until such time as all the European peoples — I think politicians realise this already — recognise that their salvation lies in coming together under the one financial exchange rate mechanism; this means a single currency.

I wish the committee well even though they are restricted given that it is not a forum. If it was a forum it could be more effective. As I have pointed out previously, at least the New Ireland Forum which did not achieve everything we would have liked it to achieve was able to proceed unimpeded. I appeal, once again, to the Government benches not to wait until we replace them on that side of the House — the matter is too serious for that — but rather to do it now and expand it to a forum so that everybody can be involved and do their best to solve this major economic issue.

I welcome the Minister of State at the Department of Finance and the Department of the Taoiseach to the House. I would like to confine my remarks to his contribution, and perhaps during the course of the question and answer session he will be able to clarify some of the points raised.

The committee recommended that there should be an equity for jobs fund. The sum of money that we had in mind at the time was of the order of £10 million which would be made available to relatively small enterprises as seed capital in sums of the order of £20,000 to £75,000. At present this is the kind of money which is underwritten by a second mortgage on a household property. It is not clear whether the person who needs ready access to such money will be able to get to the decision maker quickly without having to go through — it is clear that the Minister does not want this to happen — what could be a bureaucratic-type operation. Perhaps in the operation of the new county enterprise board system a door will be clearly marked for those people seeking a soft loan or equity injection or participation. They should be able to go to a designated individual to get the money they require. As Deputy Lawlor said, this point was made frequently in presentation after presentation from the small industry sector, from the promoters, the banks, individuals and various commentators.

While there are many other things that the county enterprise boards should do — and I will turn my attention to that matter in a few moments — it would be wrong to suggest — and I do not think the Minister intended it — that the comment as set out in his comprehensive speech is a total response to the recommendation that we should have an equity for jobs fund. That point could be missed. I have no doubt that we will be given a further opportunity to refer to it again.

The second point I want to make relates to the county enterprise board structure which is delineated more succinctly in the Minister's speech than elsewhere. I am aware there is a copy of a statement in the Oireachtas Library but I have not yet had an opportunity to read it. I would like to confine my remarks to the Dublin area.

I am a member of a sub-committee of Dublin Corporation called the Committee on the Economy of Dublin which was set up by the previous members of Dublin Corporation between 1985 and 1991 which was led by Fianna Fáil at that time. The Civic Charter which was adopted unanimously by Dublin City Council on 9 September last year proposed the establishment of an enterprise board for Dublin. Having completed some preliminary work we have come to the conclusion that we cannot promote Dublin if we are talking only about the Dublin Corporation area. Our colleagues in Dublin County Council have come to a similar conclusion in relation to their economy committee.

As the Minister is aware, by the end of next year there will be four separate county authorities in Dublin when the new four county structure is established. The question that must be addressed very quickly — I invite the Minister to do this — is whether we are talking about one enterprise board for Dublin or about four. If it is four, this is going to be a disaster.

Having given the matter some considerable thought — and I invite the Minister to respond at an appropriate time — I recommend that a Dublin enterprise board be established which would be a kind of Dublin SFADCo, to give people an image of the agency I am talking about. They would promote tourism and the services area in relation to job creation. There will be more services jobs in the Dublin area than anywhere else; yet, Dublin is the Cinderella when it comes to tourism promotion on a national scale. We do not have the capability or the political cohesion at local level that is manifest in counties such as Donegal, Galway or Kerry where there is a collective commitment because they realise the critical economic importance of tourism. Therefore there are no internal divisions. One good example was the attitude of Dublin City Council to the Shannon stop-over and the divergent views held by members of that council, not fully realising the importance of Dublin Airport in that whole argument.

I suggest that there could be savings in this area. A Dublin enterprise board should be set up, although I have some reservations about the representation that would be appropriate for such a board. I do not necessarily believe that it should be a similar structure to that in County Offaly, for example. It should besui generis and should be treated differently. I invite the Minister to consider that matter. Such a board would also need a substantial budget on a pro rata basis. It is proposed that about £100 million of capital loan money would be made available to the various financial institutions that have been named in this statement and in the Taoiseach's statement yesterday and the balance of £50 million would come from a range of sources including existing staff overhead budgets and so on.

Dublin City Council had a very detailed and long debate last Monday night on the whole question of employment. The comment made by a number of speakers and reiterated by the City Manager, Mr. Frank Feely, was that Dublin city and county, with one-third of the population, could legitimately claim £50 million of the £150 million. We know that is not possible but Dublin would have to receive a substantial amount of money. There is political consensus on this matter — there is all-party consensus on it in the city council as represented in the civic charter of commitment to an enterprise board. There is consensus between Dublin County Council and Dublin Corporation, two bodies not noted for consensus on many issues. An enterprise board should be set up in Dublin in the near future with a programme of enterprise promotion and some method of removing the impediments to small industry that local authorities sometimes put in their way.

Deputy Durkan referred to some of these impediments, and it is not a question of choosing between the environment and employment. It is sometimes extremely difficult for small scale operators to engage with bureaucracy. They do not have lunch breaks or tea breaks; they eat on the job. The threshold of staff in a small enterprise is such that it simply does not have the time or the resources to become intimately aware of all the requirements. To require certain small enterprises to interact with large complicated bureaucracies is like sending a group of schoolboy football players to play against a professional first division league team. There should be a small industry section in each of the Dublin local authorities whereby people with planning problems who cannot afford the comprehensive fees charged by professionals can get good professional advice.

An excellent example of this was pioneered in County Cork, with particular reference to west Cork and the tourism towns of Kinsale, Ballydehob and Schull, where a former fellow pupil of mine in UCD, Mr. Billy Houlihan, an architect, ran a workshop for people who wished to improve their business. These people could receive hands-on advice from those making the decision in relation to the planning application. County enterprise boards will not succeed unless they facilitate the interaction of small business with the entire bureaucracy — the Revenue Commissioners, local authorities and the banks. Perhaps the Minister would at some stage attend our committee and elaborate on how he thinks the system might work. We could then tease out these matters.

I commend my constituency colleague, Deputy Brian Hillery, chairman of the committee, on bringing this report before the House. I also commend the committee. I would like to continue the line of argument started by Deputy Quinn regarding the Dublin situation. When listening to the speech by the Minister on the establishment of county enterprise boards it seemed as if there was an orientation in the way in which the boards are to be established which would adapt very well to the position in rural counties but would not fit in easily with the Dublin situation. There was no mention of the changes taking place in local government in Dublin. The greatest disaster in the establishment of county enterprise boards would be to establish them on the basis of the existing local authority structures in Dublin, that is Dublin city, Dublin county and Dún Laoghaire borough, given we are half way through the process of reorganising local government in Dublin and new local authorities are being established.

For example, reference is made to the tasks being given in the making of county plans. It would not make great sense to draw up county plans based on old local government structures if in 12 or 18 months' time they would have to be superseded by other county plans based on the new structures. The Minister should consider the proposed new structures for local government in Dublin and adapt the establishment of the county enterprise boards to them.

I fully agree with the point made by Deputy Quinn in relation to the overall Dublin situation. To give effect to Deputy Quinn's suggestion one would have to initially establish the boards on the basis of the proposed new authorities and use the new regional structure, proposed by the local authorities in Dublin for the overall greater Dublin area, as the vehicle for the establishment of an overall Dublin structure. That would have the advantage of giving an overall Dublin theme to the exercise while at the same time giving recognition to the varying factors which apply in the four different local authorities: Dublin Corporation would deal with questions relating to the city; the new Fingal county would place heavy emphasis on horticulture and agriculture-based initiatives; the western county would place greater emphasis on industry; and the Dún Laoghaire county would concentrate on its port, tourism and so on. Recognition should be given to that matter and I strongly urge the Minister to consider it. It would be regrettable if the exercise in Dublin was improperly dealt with because of an over-rigid application to the existing structures.

I am a little disappointed that the Minister of State at the Department of Finance did not make specific reference to the currency crisis and the matters that have been the subject of considerable debate in recent times. I find it extraordinary that in the middle of the currency crisis whose implications for employment the entire country is discussing, the Government yesterday announced their intention to privatise the ACC and the ICC. That is an incredibly shortsighted decision and one that should be reversed. It seems to be based on a desperate attempt by the Government in the latter part of the year to balance the books rather than on any thought-out implications for the impact on our banking system and employment.

The Deputy's time has come to an end.

I would like to have referred to a number of other points but obviously we have run out of time.

Acting Chairman

Members now have 15 minutes to put questions to the Minister.

I do not have time nor indeed permission to comment on what has been put before us. However, I should like to ask the Minister whether these new boards will have any real say, in so far as providing the infrastructure and climate required to attain the ends for which they have been set up, are concerned? Will any effort be made by the Government to transfer certain primary road moneys coming from Europe — or a percentage of them — to try to preserve what is left of our county road system, without which our enterprise schemes may come to nought? Will the Government, to help this whole initiative, seek from Europe, through Structural Funds or otherwise, a freight equalisation or subsidy scheme, for the peripheral areas particularly? It can be done but the question is whether we will try to do it because it is essential to level the playing pitch to enable the enterprise boards to succeed.

Will an effort be made — I think it has already started judging by the remarks of the Minister for the Marine, Deputy Woods — to seek a doubling of our total allowable catches under the Common Fisheries Policy which would create many jobs? Will the Minister impress on his Cabinet colleagues the need for the tax system to be amended to favour a job creation climate because the reverse applies at present? To fund it, perhaps there should be a five year moratorium on our national debt, thereby providing the kind of revenue which could be devoted to job creation.

Acting Chairman

Will the Deputy leave it at that?

I assure the House that these boards are not being set up to replace local authorities, nor do we intend that they should take over the role of local authorities who are responsible for the administration of funds and decisions and infrastructure at local level. In the document which the Government have cleared — and which, as Deputy Quinn said, is now public knowledge — it is said that where EC programmes are made available to this country and where the existing structures do not enable us to draw from those structures for whatever reason or impediment, flexibility will be given to the enterprise partnership boards to come up with a solution to the problem where they can draw the funds on behalf of local people for local initiatives and projects.

As far as freight equalisation and a favourable tax system for job creation are concerned, all these matters are being considered by the various Ministers involved. I do not have responsibility but the new boards will have a facility where they can influence the heads of the public bodies sitting on the boards; those people have to report to them each month, there will be dialogue and discussion, they will be able to make recommendations and at least exert pressure on them to ensure that sufficient changes are brought about to improve opportunities for everybody. The Government are considering the tax systemvis-à-vis an incentive for job creation.

When does the Minister expect the county enterprise boards to make an impact on the people who are now looking with despair at the jobs market? The proposal is satisfactory but it could be two years before we see an impact.

We are moving full steam ahead. We intend to put these boards in position very quickly and they will all be operational by 1 January, taking account of the budget, so that they may avail of the funds. They will have an immediate effect although the question of their impact is a different one. I answered this question at a press conference the other day, I believe that by next June we should see the impact of their performance. We will not be waiting for a year or two to get them in position. As I said, they will be in position shortly and will have an immediate effect. I expect them to make an impact after the first six months.

I have two questions. Will the Minister indicate whether he is prepared to meet representatives in the Dublin region to discuss the kind of structures which Deputy Gilmore and I referred to very briefly because it requires a different kind of treatment? Deputy Gilmore made some suggestions in that regard with which I am in agreement. If somebody listening to this debate wants £50,000 equity capital quickly where does he or she go? To whom do they talk and how long will it take before they get the cheque provided their idea is sound?

I will make a general response to the comments made earlier. I said in my speech that the new boards are structured in a way where the county manager will be able to tell his chief planning engineer to report on a certain day to discuss project X, a decision will be made there and then based on the information available. There will not be a six months' delay in relation to a decision.

We have taken full cognisance of the situation pertaining to Dublin and we have no intention of foisting on the people of the city or county of Dublin a structure which is unworkable and which will be shortly out of date. We have noted the changes proposed and the plans laid out for local democracy in area councils. The document, in relation to urban boards, says that the chairperson of the board will be an employer representative and that on the public sector it will be the county or area manager. Under the community sector it will be the chairperson of a local authority or area council. That has all been taken into account and if I could get away with four boards in Dublin I would be delighted. However, we have an open mind in this regard, we know that Dublin needs special attention and that different parts of the city need more attention than others. You cannot have the same plans for extreme unemployment areas and affluent areas, it would not be feasible or practical. I would be delighted to have submissions from the Members in that regard. It will be very easy to proceed in relation to the rest of the country, the boards will be almost able to pick themselves.

In reply to Deputy Quinn, if somebody wanted £50,000 equity capital I could not send him anywhere. However, we are totally committed to the equity concept and our first priority was to ensure that there would be adequate funding. We are satisfied that we have such funding in place.

When will the funding be in place?

The funding is in place. We have taken every possible option available so that funds will be channelled to the boards. We are working very hard on an equity concept and we believe that there is a major national need for high risk, low cost, seed capital to assist job creating projects. We are working on that, first to get the funds and, second, to rechannel them. We have received many submissions from financial people but we are not sure who has the capacity to do it and we are working hard in that regard. Much co-operation would be needed to achieve that and the Government certainly have the wish to do so. We believe that the recommendation is right.

I get a little nervous when I hear the Minister say that Dublin is expected to take additional time. I do not want Dublin to be put on the long finger.

The Deputy cannot have it every way. He has sought a particular system, the Government want to provide that system, and now the Deputy is not happy with that.

I only want to help the Minister.

I thank the Deputy. I know he always wants to help the Minister.

Perhaps the suggestion put forward by Deputy Quinn of a meeting to be held reasonably soon between the chairpersons of the various councils, respective managers and the Minister would result in progress being made quickly.

I wish to ask an additional question in relation to the enterprise boards generally. Will the passage of legislation be required for the establishment of those boards or for any aspect of them?

I do not wish to commit myself to any meeting with people outside the House. I am prepared to accept submissions from Members and I am prepared to meet the Oireachtas Joint Committee on Employment if discussion is required. Thereafter, if external meetings with other people are necessary I shall consider being present. At this stage I cannot give a commitment on that.

Legislation is not necessary. In order to be able to channel the funds through, both nationally and internationally from the European Community, a certain structure must be put in position. One element is a national management company, about which I spoke. The other element would consist of the enterprise partnership boards. The Government are setting up those structures on a one year interim basis. They will be reviewed on effectiveness, performance and contribution at the end of that year. The Government will then give consideration to legislation that will give them a statutory position.

Is any real consideration being given to the sanctioning of the backlog of public housing under the administration of the Department of the Environment? Has consideration been given to the re-introduction of grants, which would create jobs much faster and on a larger scale than the boards could create jobs? In saying that, I do not wish to take away from the efforts of the boards.

Being the great politician that he is, and with his great wealth of experience, Deputy Blaney is always able to take a very wide view of issues. I should love to have responsibility for all of the questions asked by the Deputy but my responsibilities are very narrow. I cannot speak about the position regarding public housing. I do know that the Minister for the Environment, Deputy Smith, is dealing with that matter at Government level and with his officials. The enterprise boards are designed to create opportunities for employment. They have a clear role in job creation, enterprise, education and training and community development. This is an economic debate, and that is the best I can do for the Deputy at the moment.

The Minister is ready to go with those proposals.

My query arises from the question asked by Deputy Quinn on the present availability of equity capital. I realise that at this stage the Minister cannot give details about the projects that will qualify or the speed with which progress can be made. For a person who may be at present thinking about and planning the establishment of a small industrial enterprise, could the Minister give an indication as to when a possible response could be expected from the area to which the Minister refers? The Minister has mentioned next June. Would it be possible for someone to seek equity capital in the area referred to by the Minister by that month?

I shall try to be as helpful as I can for the Deputy. There is assistance available now by way of grant-aid. The small community enterprise scheme, jointly administered by my Department and the Department of Agriculture and Food, under the direction of the Minister of State, Deputy Hyland, and myself, is available to make grants of up to £50,000 with a maximum of 50 per cent. Under that system there is also a technical assistance grant of £5,000 available for exploration of the feasibility of setting up a project. The Western Development Fund has similar discretion. Those funds will continue until the new boards are properly structured and finance are properly in position. At present loans are available from the financial institutions through a new enterprise initiative, agreed by the Government, that has been announced.

The Government are very much committed to equity. I spent all of last Friday working on the issue of equity. I have had discussions with people from all over the country. The Government are trying to identify the source of funds and a secure and professional vehicle through which those funds may be transferred with the minimum of bureaucracy to the new boards for use in various projects. It is my hope that that equity will be available as and from 1 January, the Government's target date. The Government are certainly not disposed towards postponement in that regard. Equity is a wonderful concept but is a very difficult structure to establish. Anyone who has a few pounds wants to get a good return on his or her money and the making available of money as equity might not always give that return. There is much good will in the community, however, and the Government recognise that. It is hoped that the Government will be able to capitalise on the good will and create the equity base that is vital for the success of major job creation projects.

I realise that the Minister is worn out from dealing with equity. I wish to ask him about the timescale he proposes in this regard. In reply to an earlier question, the Minister said that the boards were being established on a trial basis for a period of one year.

I said they would be established on an interim basis.

Surely that amounts to the same thing?

Not necessarily, if one puts something on trial one may then kill it altogether.

Acting Chairman

I hope the Deputy will be brief. The House is now having a short period of questions and answers. Deputy Gilmore should ask his question and then there will be time for a brief answer from the Minister. We have now gone over time.

Given that the regional tourism organisations, county development teams and so on are to be amalgamated into the new structure, could the Minister offer the members, staffs and those who are associated with those bodies some solace that they will not find themselves amalgamated out of existence at the end of the Minister's interim period? Would the Minister give some assurance that the new boards being established will have a continued existence after the interim 12 months and after the review period referred to earlier?

I give an absolute guarantee to the staffs of the county development teams and of the regional tourism organisations that their jobs are permanently secure and that they will be treated equitably and fairly under the new system. My Government colleagues and I have already conveyed that assurance to those people. I also guarantee that the new structure will stay in place for a long time and that the staffs involved will have jobs for a long time. The Deputy has misinterpreted what I am saying. The Government are putting the new structure in position at the moment. We cannot say to those involved that a new structure has been established and will be maintained for perhaps 100 years. Such a practice has happened for too long. The performance, the structure and the operation of the system will be under review for the first year. At the end of the year the Government may change the system, may reduce the membership of the boards, may put in additional components and so on. The back-up structure will not change; there is no danger of that.

Are we going to have a new Government then?

I do not consider that this country will need a new Government until about 1994. Members will be able to work on in the interests of the country.

There may be a second election in 1994.

Acting Chairman

I wish to remind Deputies that there are three further sections to be taken today, together with time for questions and answers on each section. I now call on the Minister for Industry and Commerce.

The currency crisis of recent weeks has been, perhaps, in terms of impact, intensity and long term consequences, one of the most substantive economic developments in the history of post-war Europe. It will take analysts many months and more to identify the causes, the likely overall impact and the lessons for the future.

One thing, however, is clear even at this stage: membership of a system of fixed-rate exchange rates within the European Monetary System is not sufficient in itself to sustain the value of any particular currency against its trading partners. Membership of a monetary system holds responsibilities as well as privileges. It demands from each member state economic policies and performance which are consistent with maintaining parties within the system.

The destabilisation of the ERM in recent weeks had one fundamental underlying characteristic: investors and analysts simply did not believe that the exchange rates attaching to sterling and the lira properly reflected the economic performance of the UK and Italy, either in the recent past or would in the immediate future. They did not consider that the economic policies operating in these countries were consistent with the exchange rate levels of their currencies within the ERM.

The result was a stampede by investors from sterling and the lira into currencies, such as the Deutsche Mark, which are underpinned by strong long term economic performance together with credible and stable economic policies. The process was not helped by the recent uncertainty concerning the future of the Maastricht Treaty following the Danish referendum and the doubts that have arisen in Britain.

The lesson, however, for this country is clear: maintaining a firm and stable exchange rate for our currency within the narrow-band of the EMS requires equally firm and stable economic policies which will first, improve the competitiveness of the sectors exposed to the market and all other sectors of the economy through a level of wage increases and investment which enable Irish exporters and domestic producers to gain market share at the expense of competitor countries; secondly, ensure a level of public expenditure in balance with maintaining the revenue raising capacity from the exposed market sectors of the economy at a level which does not stultify initiative and enterprise through penal levels of taxation and thirdly, sustain a positive balance of trade and balance of payments.

The cost to date of the currency crisis in Ireland has not been negligible: the overseas EC markets into which we mainly sell, including the UK, are in a state of disarray and declining demand at present; this is putting great pressure on Irish exporters in maintaining markets and margins; for many small firms selling into the UK market without forward cover, the devaluation of sterling has led to significant losses on UK trading in the short term; cheaper UK imports of finished goods have put further pressure on many firms supplying the domestic market; interest rates have soared — hopefully on a temporary basis — adding further to the costs of firms; there has been a large-scale outflow of capital by both investors in short term Government instruments and by the business sector buying sterling forward for business uses; perhaps, the greatest casualty of the recent turmoil in currency markets is the shattering of investor confidence that has occurred; new investments have been postponed or put on indefinite hold in many cases; and uncertainty and lost margins have forced some firms to look hard at the numbers they have employed with the objective of reducing costs. Already there is evidence of lay-offs and short-time working.

The immediate consequences of sterling's devaluation are, however, not entirely negative from Ireland's point of view. While we have a significant overall surplus on our balance of payments there has been a substantial deficit with the UK for many years — amounting to more than £520 million in 1991. Accordingly, the net immediate financial effect of sterling's devaluation for the Irish economy is positive. Consumers gain considerably from lower prices on a range of products in contrast perhaps, with workers in firms supplying the domestic market whose jobs are under threat because of the immediate and short term advantage which sterling's devaluation confers on imports from the United Kingdom.

More than 60 per cent of our imports from the United Kingdom are accounted for by producers' capital goods and by materials for further production. The devaluation of sterling, accordingly, confers considerable benefits on firms which import components from the UK. These benefits are particularly advantageous for firms with significant UK imports but which sell into overseas markets other than the UK. Even for those firms selling into the UK without forward cover the lower prices, in Irish punt terms, they now receive are offset to the extent that input costs denominated in sterling are also cheaper in Irish punt terms.

The most recent figures indicate that this country's inflation rate is now down to an annual rate of 2.8 per cent — well below the average of the relatively low rates of recent years. The devaluation of sterling will help to maintain further downward pressure on prices from the point of view of consumers. It will also do a great deal in helping to achieve the type of realistic and modest wage settlements which low inflation, and the changed competitive position of Irish goods and services in the marketplace, following the recent currency and associated changes, demand.

In summary, despite the fact that there are those who will benefit in the short term from the effective revaluation of the Irish punt against a number of our trading partners, the short term impact of the currency crisis holds very serious consequences for a large number of Irish trading firms because of its intensity, size and the suddenness with which it has occurred. The responsibility for responding to the consequential and fundamental changes in the market-place rest in the first place with each individual firm affected. I am aware from speaking with many of them that this process of adjustment is already taking place. Firms are already seeking ways to reduce production and distribution costs and taking action to improve the products and services they offer customers to justify an increase in prices to help maintain margins. Many are also diversifying to markets such as Germany and the Netherlands where the recent currency upheaval has conferred a competitive advantage on Irish exports.

This is the correct approach for firms. The role of the Government and its agencies is to help firms to help themselves in the current difficult situation which many of them face. In present circumstances this support must be quick, flexible and concentrated on those firms that require support to put into place the adjustment measures needed to survive and expand in the changed marketplaces which they serve.

The Government do not favour a blanket provision of employment or other subsidies applied to firms irrespective of the need or of the actions they are putting into place to maintain competitiveness and market share.

That is the purpose of the new market development fund of up to £50 million, which I announced this week. We dealt with some of the issues involved at Question Time on Wednesday, but there are a number of aspects to the situation which I believe merit mention here.

As Deputies will be aware, on 29 September 1992 the Government established an inter-departmental working group, under the chairmanship of my Department, to look at the scope and nature of the problems arising for firms as a result of the decline in the value of sterling and to make recommendations as soon as possible.

The working group's report was considered by the Government on Tuesday and they decided to immediately establish a market development fund of up to £50 million for the period to the end of March 1993 to assist firms to put into place those measures which will allow them to survive and expand on domestic and overseas markets in a situation where the underlying competitive factors are changing rapidly.

The establishment of the fund for this purpose is a substantial and rapid response by the Government to the serious difficulties which many firms are facing in serving the needs of customers on both the domestic and certain overseas markets.

The firms under greatest pressure have some or all of the following main characteristics: a high level of dependence on markets where the forces of competition have changed radically because of recent currency instability; existing low margins; high gearing; high level of debtor exposure and little or no forward cover. The market development fund will help firms affected by the difficult situation which recent currency and associated changes have brought about in the marketplace. The recent currency upheaval was not only unwelcome for exporters, it was also unexpected. It is, however, a reality and while we hope it will be short term it is, nonetheless, something to which firms will have to adapt. A key requirement in providing support from the fund will be for firms to demonstrate that they are implementing an action-plan to maintain and improve their competitiveness and to adjust to the recent significant changes in the market-place arising from currency and associated changes.

The working group, in their report to the Government, emphasised that firms will need to demonstrate the ability and commitment to manage their way out of the current difficulties. From my knowledge of many of our companies and, especially, from contacts with companies in the last few days, I am certain that they are every bit as determined as the Government to ride out this storm. Many of our exporters have been gaining market share in recent years despite the downturn in the international economy and very tough competition.

The market development fund will help firms affected by the recent fundamental changes that have taken place in the market-place to adapt their cost structures to the new situation, to develop new business arrangements with their overseas customers, and to seek a diversification of market opportunities. I have given very explicit instructions that it is to be operated in as flexible and non-bureaucratic a manner as possible and that it is to be responsive to the genuine needs of firms.

The provision of up to £50 million in Government support over a six-month period is a generous response by the Government to the difficulties of business and this has been recognised by the representative bodies and individual firms. The market development fund will help to maintain the productive, wealth-creating sector which underpins so much of our national prosperity.

For the reasons I have already outlined, such a blanket approach is neither intended nor appropriate. The management board set up to supervise the fund have today finalised the guidelines for firms who wish to apply for support under the fund. These are being printed even as I speak and copies should be available from the Fund Management Team, based at An Bord Trachtála headquarters, later today. The team, which comprises senior and experienced executives drawn from ABT, FÁS, IDA and SFADCo, are to be congratulated on having the guidelines and application forms available so quickly after the Government decision.

I will arrange to have the details brought to the attention of the Opposition spokespersons on Industry and Commerce and, if they so wish, I will arrange for the chairman and members of the management board and officials administering the fund to brief them on the arrangements for the administration of the fund.

I intend to bring forward a Supplementary Estimate next week to enable payments from the fund to be made to seriously affected companies as quickly as possible. I hope that Deputies on all sides of the House will assist the passage of the Supplementary Estimate.

The measures which the Government are putting into place are the correct and appropriate policy response to the current situation. They are specifically geared to respond to the needs of firms in the current difficult market situation. They will do a great deal to strengthen the position of the Irish punt within the ERM.

Devaluation is neither warranted nor appropriate to the long term development and employment needs of the Irish economy. It is a "quick fix" policy response to which the Government are fully opposed. From an industry point of view the reasons for this are clearcut: first, a devaluation of the IR£ in itself, and also because it would place question-marks over the stability and consistency of Irish economic policy, would mean that investors would seek an additional exchange risk premium on Irish investments with consequential higher nominal and real interest rates for Irish industry. Second, a devaluation of the Irish pound now would lead to similar expectations at times of future currency instability and drive away future investment. It would add a higher risk premium to interest rates in future and discourage industry from taking the actions required to expand in future years, for example, to increase efficiency and competitiveness and further diversify markets. Third, a devaluation of the Irish pound as a temporary means of boosting-restoring competitiveness to Irish firms would also give the wrong signal to both employers and employees in the wage-negotiation process.

Fourth, one of the benefits of the Exchange Rate Mechanism of the EMS has been — until this recent turbulence — that we were able to maintain lower interest rates. This was particularly the case when compared to sterling rates in the past. Until recently the differential between rates here and Germany was at an all-time low of 1 per cent. We want to return to that situation as quickly as possible. Fifth, some £8.9 billion of our national debt is denominated in currencies other than sterling; a devaluation of our currency would, therefore, increase our national debt by almost £100 million for each percentage point by which the punt would devalue. This would be a major blow to our public finances necessitating widespread cutbacks in expenditure and increases in taxation. Sixth, our membership of the ERM and adherence to its disciplines has facilitated a significant improvement in the state of our national finances. It has contributed greatly to the improved rate of employment creation achieved in recent years. While recognising that much more must be done to sustain and increase employment we cannot jettison recent progress by now going for a devaluation option.

I and my colleagues in Government are greatly encouraged by the widespread support of the business sector and the trade union movement for the Government's approach to the currency crisis. It represents a great national effort to maintain this country's commitment to the policies which are the only basis for a long term increase in employment and living standards. I was particularly heartened, for example, by the announcement yesterday that the Bank of Ireland will reduce interest and waive certain charges for small firms supported under the Market Development Fund. This is the kind of national response required from all sectors of business and workers at present.

I would also like to congratulate the Opposition parties for the responsible approach they have taken to the situation. This is not a time for political point-scoring and, in general, the contribution of Deputies has been positive and helpful. For my part, I will be very willing to be as helpful and forthcoming as possible to Deputies in relation to any issues they may wish to raise with me.

(Carlow-Kilkenny): The Minister holds a very important portfolio; it is the powerhouse for the creation of employment. However, when one looks at the present unemployment figures one can only surmise that there is very little power in that house, because things are very bad. We have to look at all aspects of industry in the creation of jobs for people who want to contribute to the welfare of the nation. I have spoken to business people who continually refer to the cost of employment. It is amazing that there was no reference to his aspect of job creation in the Minister's speech. An article in the “Working & Living” supplement to The Irish Times backs up everything which has been said in the past about the cost of employment. Professor Dermot McAleese of Trinity College, Dublin estimates that the cost to employers of providing the average single employee with a £1 increase in net income rose from £1.82 in 1980-81 to £2.25 in 1987-88. We always hear about the high cost of employing people, and when figures like that can be produced it is time somebody in authority listened. The Minister should ask his colleague, the Minister for Finance, if we are killing the goose that lays the golden egg, if we are going out of our way to ensure that those who can give employment will be unable to give it due to the high costs involved. The article states, and I quote:

The Federation of Irish Employers argues: "Payroll levies simply represent attacks on employment, in one form or another. Employers' PRSI has long been considered to have the same effect. In each instance the result would be to reduce the prospect for employment rather than enhance it ... When account is taken of employers' and employees' PRSI on top of PAYE, the tax wedge between gross income and net pay is seen as a major disincentive to employment. Gross wage costs for prospective employers are much higher than they should be."

If this is correct, then the system should be changed. This article confirms what is said by business people every time you meet them. If changing the current system of PRSI will bring in the income required, then this should be done. We cannot continue to discourage people from taking on new employees.

I welcome the help being given by the Minister's Department to firms who export to Britain. Last night one of my constituents told me his company could lose up to £40,000 in a few weeks if the sterling crisis continues. I wish to quote from a speech made on 28 June 1984 by the Taoiseach when he was a member of the irresponsible Opposition. He said:

Our taxation policy is a complete disincentive to investment. It is a total disincentive also in terms of employing people. The level of taxation which has become such an intolerable burden on the workforce is making them angry and antagonistic towards the institutions of the State. Workers see no fruits by way of reward for their work. Too much is being taken from their wage packets ...

We must first create a climate in which those prepared to take risks can flourish, where hard work is rewarded and where profit is not regarded as a dirty word.

It rings very hollow at this stage to think that the reverse has happened. As pointed out by our leader, Deputy Bruton, yesterday, people are now encouraged to invest their money in the Post Office and in banks to avail of the 10 per cent tax rate while those who could help industry are discouraged.

The banks should be encouraged to play a more active role in business by taking equity in the business rather than simply giving loans and waiting to pounce if things go wrong. They should be encouraged to take equity in business by way of being given a break in tax levies for instance, because in the long run it is better that banks, instead of closing down companies, tried to keep them in operation. If that concept were accepted it might lead to employment for graduates because the banks need people with experience in commerce to advise them. Such concept should be seriously considered because at present the banks are seen as institutions who, if they are unable to recover moneys lent, will take whatever they can — the company manager's property perhaps — by way of reimbursement. That should be discouraged.

It has been suggested that VAT ceilings should be increased to a limit of £100,000. A whole fleet of people are going around hounding small businesses, many of which are struggling to survive. A figure of £100,000 might appear high but it has been suggested to me that if the VAT rate was increased from 21 per cent to 22 per cent the bigger businesses could carry the burden.

In regard to the other extreme, I know two people in very small businesses who simply closed down shop because they spent most of their nights worrying about preparing their VAT returns. There is the misconception that people in small businesses employ others to keep their accounts and make their VAT and PRSI returns. If there could be devised a system whereby that work would not take up so much of the employers' time, it could have the result of putting others into productive work and we might gain in the overall.

The jobs committee have submitted their report and it has been referred to by several speakers. There have been appeals to Fine Gael to participate in that committee. Deputy Bruton pointed out yesterday that when the Government take part in the jobs forum, Fine Gael will, too. I listened to one of the chairmen of the sub-committees say, "if we can get the Government to listen". "This is proof that Fine Gael should not be involved in a committee where the backbenchers have to ask their own Government to listen. I do not wish to belittle the fact that the committee is made up of backbenchers because the chairman of the committee, Deputy Hillery, on the basis of his ability should be a Minister. He should never have been on the back-benches. The committee are merely making suggestions, the Government ride on into the sunset and ignore everything that can be done.

I am not sure if the proposal regarding county enterprise partnership boards is a gimmick or is something real. It is proposed to have boards at county and sub-county levels. The proposals in the document sound great but in page three it states that, through the creation of additional opportunities people who become unemployed will be helped to contribute to the development of their own local community and to engage in productive activities. It seems that this report was prepared with the idea of confusing people with verbiage, and that no one will be able to make head or tail of it.

I am concerned that the regional tourism offices, which have done much at regional level, drawing up plans etc., and which were so independent financially having obtained more than half their money from local enterprises, are to be abolished, as if tourism is unimportant. If anything has potential for job creation it is our tourist industry.

Finally, I was told by a person last night that he could get two days' work if he was willing to travel 20 miles but, because of the new trend in social welfare, he will be worse off because he will not be given a travel allowance. Another person who is working and who has two brothers unemployed came to me to find out if he was entitled to a medical card. He told me that financially he is worse off than are his two brothers who are unemployed, but he would prefer to work. The Ministers will have to get together and come up with a plan which will encourage people to work.

I welcome the Minister's speech outlining his reaction to the financial crisis which faced the country in recent weeks. I compliment him on the procedures he has put in place in order to come to grips with the problem and to try to safeguard businesses and jobs which are under threat. However, his speech is confined in total to the sterling crisis of recent weeks. It does not hit at the underlying problem which has been with us for a considerable time, much longer than the recent financial crisis which has hit this country like a windstorm. I compliment the Minister but he has not dealt with the kernel of the problem.

Politicians, economic commentators and financial experts have all stated that our economy is sound, that inflation is low and the punt is strong. This seems to be the thinking that says everything is on course, that the jobs situation is a byproduct of the international scene and that when things improve, jobs will once again materialise.

I do not agree with this analysis. Ten years ago in the ward I represented in Cork, there was a 20 per cent unemployment figure. Today the figure has risen to 40 per cent and continues to rise, a sure recipe for disaster.

The seminar on unemployment in UCC last week organised by the Bishop of Cork, brought together a cross section of people from all parts of society with the aim of trying to address the serious problems affecting the city. At that seminar the serious problems which can arise from wholesale unemployment were highlighted and a frightening picture was painted of social deprivation. The message was loud and clear, that the economy must serve all the people and not a favoured few. The reality in the business world is that to survive you must make a profit, there is nothing wrong with that. In fact, I would go further and say it would be extremely foolish to indicate otherwise. There are very few philantrophists left in the business and commercial world, but when profit becomes the sole motive and everything else is deemed expendable, society as we know it is in a very serious and precarious position.

The lack of jobs and loss of disposable income on the part of hundreds of our people will have a disastrous effect economically, not to mention their effects socially. Even the latest mortgage interest rate rise — which will have a domino effect on small businesses — will mean that already hard-pressed mortgage holders will have to cut back on expenditure leading to redundancies in public houses, hotels, garages and shops, all adding to the spiral of unemployment; small in numbers, perhaps, but in the aggregate amounting to a frightening figure. The national and international controllers of our economic wellbeing may have to pay a price which would have a disastrous effect on society as we know it today, a price none of us wishes to pay. The message must go out loud and clear that jobs are necessary if this nation, as a democracy, is to survive.

How those jobs are to be provided must be examined urgently. I note from the first report of the Oireachtas Joint Committee on Employment that certain areas are being examined and remain the subject of examination. There are various options, for example, indigenous industries, multi-national, State and semi-State, local authorities, which must be examined. The manufacturing sector constitutes the engine room of our economy and existing jobs there must be protected and encouragement given to companies wishing to establish here. Whether such companies be of multi-national origin or Irish, whether semi-State, local authorities or small business ventures does not really matter, job creation should be our aim. Jobs, and their creation, must be our first objective and that on which the committee must focus.

Jobs are vital if we are to restore our people's dignity to which they are entitled. People must be given the opportunity to participate in the mainsteam of everyday life and not be marginalised by economic patterns dictated by sources outside the country. Fiscal rectitude has been the buzz phrase of those in control. We are all aware who has had to foot the bill for that fiscal rectitude, those people who had to forego pay rises, many of whom are now on the dole queues. As a factory floor worker with a multi-national company for over 30 years — I hasten to add one which paid well and ensured good conditions for their workers — I can understand only too well the deep frustration of many workers who, having co-operated with management to streamline their operations, rendering them more competitive on the international scene, saw their best efforts dashed by a telephone call from the United Kingdom, the United States or Germany.

The proposal outlined in the Culliton Report that the Government should become involved actively by way of equity in indigenous industry is an objective that must be actively pursued as a safeguard to secure employment here. The Minister should pursue that line relentlessly as a means of creating sustainable jobs so urgently needed here at present.

While many workers like myself, in Cork and other locations, actively cooperated when they saw their companies in trouble, with the co-operation of their unions, producing more and enduring conditions they might not normally entertain, the fact remains that somewhere, someone had power to say to them that no matter what they did it would make no difference because somebody in, say, Zurich or elsewhere would take a decision rendering them redundant. That is why Government equity should be involved in the case of many industries establishing here. That is the only answer in providing for workers secure, sustainable jobs in the present climate.

None of my colleagues referred to the Minister's offer that the Chairman of the Market Development Fund would brief the Opposition spokespersons on Industry and Commerce. It would be a good idea if that briefing could be arranged, preferably together.

The Minister referred to the question of the windfall benefit to consumers as compared with the cost to the vulnerable sectors trading into the United Kingdom in particular. I should like to ask the Minister to address this question of the balance that needs to be struck as between the undoubted benefits to consumers, certainly in the short term, and the difficulties posed for workers employed in these vulnerable sectors.

I note the Minister ruled out devaluation of the punt in his contribution. I note also that, in so doing, he referred to ruling out a devaluation of the punt "in itself". Is he there contemplating a renegotiated realignment within the ERM because I agree that tying our economic future to sterling is not the way to proceed? We cannot talk ourselves into the fast lane, and if we ultimately find ourselves, as we do, between a rock and a hard place, it is possible we will end up seeking a renegotiated alignment. I should like the Minister to address that point.

Regrettably I have very little time within which to contribute but I should like to make some reference to the ongoing conflict between the Taoiseach and the Minister for Industry and Commerce. I would ask the Minister to tell the House honestly whether he considers that the sabotage of industrial policy going on is a reasonable price to pay for persistence in office. The dispute between him and the Taoiseach has got us into another fine mess. In their fourth year in office the Government have finally got around to implementing some of the strategies the various committees and task forces recommended, which committees and task forces constituted an excuse, to date, for not acting on the unemployment crisis. If we look at what is happening we will see that instead of the overall, comprehensive series of conflicting,ad hoc measures, the product of the Taoiseach's determination to diminish the role of the Minister for Industry and Commerce and his Department.

This morning I instanced the responsibility for small enterprise being taken over by the Taoiseach's Department. Having listened to the Minister of State at the Department of the Taoiseach, Deputy Noel Treacy, one would think he was a small boy in charge of a jar of lollipops he would be distributing at crossroads nationwide. Surely the Minister does not support this ill-conceived enterprise partnership boards' concept as a suitable structure to efficiently assist and finance small enterprise? Surely the Minister agrees that this parish pump, milch-cow approach is not the way to develop the indigenous sector?

I did not refer this morning to the future proposal by the Taoiseach to establish An Bord Bí, a measure also designed to diminish the role of the Department of Industry and Commerce and of the Minister. A task force has been established within the Department of Agriculture and Food designed to assume responsibility for industrial policyvis-à-vis the food sector. The development of the food sector is critical to the development of indigenous industry as identified by Culliton and others. Far from meeting the Culliton recommendation — that the focus of the Department of Industry and Commerce should be redefined as being “predominantly one of policy determination for industrial development and the supervision of its implementation”— these latest developments further marginalise the Department of Industry and Commerce. It is almost unbelievable that, after what has been revealed at Dublin Castle, any Government would even contemplate handling over the industrial expansion of the food sector to the Department of Agriculture and Food which presided over the Goodman débacle.

Then we have the mish-mash proposal for a super agency for industrial development which includes a division called Forbairt, supposed to concentrate on the indigenous sector. Surely it is the Minister's sensible purpose to ensure that, in the light of the developments about which I have spoken, Forbairt will be stillborn? At a minimum can be assure the House he will delay the relevant legislation until a general election is in prospect? The proposed new structures now make no sense, are merely a distraction that no new Government, irrespective of its configuration, will ever implement. The Taoiseach is clearly determined to drive the Progressive Democrats out of Government and, in the process, is succeeding only in driving more people into the dole queues. The country cannot live indefinitely with this fundamental conflict at the heart of industrial policy. It is particularly regrettable, at a time when we are faced with an unprecedented scale of unemployment, we should have this continuous conflict at the heart of Government.

The IDA are rubbing their hands with glee because they have been divested of this difficult responsibility for small enterprise. The IDA will end up having responsibility for marketing the foreign sector. The so-called focus supposed to be placed on the indigenous sector is now so diffuse, so scattered around the nation's crossroads, the prospects of any serious expansion of employment are worse than they were before this unfortunate measure was announced.

Fifteen minutes are now allocated to spokespersons to seek clarification on specific issues from the Minister and this will take the form of direct questions to the Minister.

Can I ask the Minister to address the critical question of the impact of the currency crisis? Does he agree that by definition the package of subsidies worked out in the market development fund is, of necessity, a short term measure; that we may have to look to what I suggested, a negotiated realignment, and that the real challenge for this Government along with other European governments is to assert some political control over the financial markets, and that that probably will mean a negotiated realignment? Can the Minister give any information to the House on the disposition of other governments, especially Germany, towards such a proposal?

I am glad to have the opportunity to comment on the matter that the Deputy raises because I think he is trying to read into my script, something that was neither said nor intended. The Deputy, as I understood him, began by saying that he agreed that we should not devalue but he then raised this question of a negotiated realignment. I used the words that a devaluation "in itself" would have certain detrimental effects and also because it would place question marks over the stability and consistency. In other words, I am giving two reasons in the same paragraph rather than one and that is the only significance of it. I want to make it clear to the House that there is no question of a negotiated realignment being considered by the Government at the moment nor, to the best of my knowledge, although I cannot speak for them, by other governments. Presumably different aspects of the ERM and its workings will be discussed at the end of next week at the Special Summit in Birmingham. I want to re-emphasise that the use of the words "in itself" are to emphasise that devaluation in itself would be bad for the reasons stated and that in addition to those reasons it would place question marks over our economic policies. I believe it can be correctly said that the underlying economic policies of this country are very clearly understood and appreciated at the moment and there are others where they are not as clear at all and those countries are suffering considerable difficulties as a result.

(Carlow-Kilkenny): May I ask the Minister how long it will take for companies to receive financial aid under the scheme? In other words, is it going to take weeks to determine whether 49 per cent or 50 per cent of a company's exports were to England? Has the Minister any particular plans to deal with the PRSI problem as it relates to employment and has he any interest in helping firms who may be in difficulties because of the interest rates and who are suffering this extra burden?

The payments should begin quite quickly and by that I mean perhaps in a week or a little longer but in the meantime if a company has to wait a couple of weeks for payments, if it is clearly a company who qualify for assistance from this fund and are prepared to accept money on the basis that they will take the necessary steps to improve their competitiveness, they can then borrow from their bank on the strength of what will be due to them. That, of course, would be very short term borrowing. An indication of my anxiety and the Government's anxiety to pay out the money as quickly as possible to these companies who are under a lot of pressure is that I have asked the Government Whip to put in next Thursday a Supplementary Estimate which would enable payments to start — if the House approves it, which I hope and presume it will — next Thursday evening or Friday morning. That is an indication of how anxious we are to have the payments made as quickly as possible. In other circumstances a Supplementary Estimate of that kind could be passed at any time between now and Christmas.

The Minister indicated in his speech that there would be benefits accruing to manufacturers who import from the sterling area and export outside that area. Can the Minister give an assurance to the House that consumers can and will benefit from any advantage that will arise from the differential between sterling and the punt? Will there be sufficient personnel to monitor this?

That will be done by the Director of Consumer Affairs who has staff for that purpose and I have already asked him to carry out the necessary inspections, monitoring and policing. Obviously he does not have unlimited staff, no more than any section of my Department has unlimited staff, but they are experienced personnel. They know what to look for and they know where to look for it and that work has already commenced. I would say that the most important single sector where the benefits of the devaluation of sterling can principally be passed on to consumers is in the grocery trade. Happily in the grocery trade, unlike certain other trades, there is genuine and intense competition and the result of that is that we are already seeing the benefits of these reductions being passed on in that trade, not just in Dublin or the larger cities but throughout the country, as a result of the advent of these Irish-owned chain supermarkets and I greatly welcome that fact. I would say to those who are engaged in trades that are less intensely competitive that it would be very much in their interest to become competitive and to ensure that they pass on the benefits of these windfall decreases that are now coming on stream. If they do not I will have to resort to a practice that I adopted before when we experienced a similar situation but on a much smaller scale which is to make new price control orders. I do not want to do that because it is expensive from the State point of view and it requires quite a number of people to monitor it. It is also very difficult from the point of view of the traders in whatever sector such an order has to be made. However, if it has to be made it will be made. Could I echo what the Taoiseach is reported as having said yesterday regarding the question of competition in the drinks trade. I would like to remind consumers of drink that in their pubs and off licence premises there should now be a substantial reduction in the price of Scotch.

That is good news.

I instance Scotch specifically to see whether that will happen and I would like to believe that in the public house trade there is the same degree of competition as we see in supermarkets in this country, and I will look again in a week or two to see whether there has been a significant decrease in the price of Scotch, thereby giving evidence of any competition within the licensed trade.

In response to Deputy Browne's intervention, the PRSI question is certainly under review by the Government. It is a budgetary matter which would be dealt with in the budget in January. It is under discussion. The possibility of trying to deal with the currency problemvia the PRSI system was examined by the inter-departmental committee which the Government set up, but the committee recommended against it for a number of reasons which I think are valid. One of them was that the highest level of aid which could have been given per worker by a change in that system was £30 per week, which I considered was not sufficient in present circumstances. For that and certain other reasons we abandoned it for this purpose. It is a significant inhibitor on the creation and maintenance of employment.

I have always taken the view that PRSI is essentially the same thing as income tax and the combined imposition on an employee and an employer should be looked on as total State taxation. Any distinction there might have been between them in the past, because the PRSI notionally went into a separate social welfare fund, is at an end. While nominally there may still be a social welfare fund, effectively it all comes from the Exchequer. It is a matter I hope the Minister for Finance will consider again fully and I will encourage him to do so between now and the budget. I have to warn Deputies that as far as any adjustments in the budget are concerned, the Minister for Finance faces a particular difficulty next January, caused not least by the difficulty we are discussing today.

The Minister said he echoes the Taoiseach's views on the falling price of Scotch. Does he re-echo the Taoiseach's view that those county enterprise partnership boards are the most productive and efficient way of spending £150 million?

It is not £150 million of public money.

Two-thirds of it.

A lot of money in that fund is money which the banks will make available on commercial terms to very small firms. If the banks are prepared to make moneys available to very small firms by way of loans, I welcome that. All firms to some extent, and small firms in particular, have frequently expressed to me and others their difficulty in raising finance from banks and elsewhere. They have a particular difficulty if they do not have assets with which to secure their borrowings. I have constantly urged Irish banks not to look to asset-backed borrowers but to look to people who have ideas and enterprise and to try to use that as their security. They are the very people we want. People with substantial property assets who seem to be able to borrow money without difficulty are often of very little use to the country.

An excellent answer to a difficult question.

I am glad to have this opportunity to respond to this first report of the Joint Committee on Employment. I sincerely congratulate everyone on that Committee, both Oireachtas Members and those members from outside the Oireachtas who are on the sub-committees, on their excellent work, the commitment they display and their sincere attempts to look at everything in a constructive and positive way. We all realise that there are no simple, facile solutions to this problem. We face a long term structural proble. We are aware that the international recession impinges heavily on a small, open trading economy like ours and exacerbates difficulties which we have been having, given our population profile and so on, at our stage of development. The members of the committee have succeeded in making sure that the partisanship which has bedevilled and restricted the effectiveness of other Oireachtas Committees in relation to less important matters than this is not a feature of this Committee. That is a tribute to its membership.

I congratulate the chairman, Deputy Hillery, whose style andmodus operandi have ensured that this Committee have got off to a good start and will go about their work in an efficient and professional way. The chairmen of the three sub-committees are also to be congratulated on the approach they have adopted under his leadership.

There seems to be some indication that Fine Gael, despite their non-membership of the Committee, are seeking to give the impression that the Government will not act on the recommendations of the Committee. I want to nail that suggestion. The Government welcome every possible initiative and workable recommendation from the Committee. My Department are very interested to hear the ideas of other members of the Committee on strategies for the unemployed.

We have heard from the Minister for Industry and Commerce who is responsible for the area of job creation. My primary responsibilities are in the area of manpower and training. While we have very high levels of unemployment we need to look at fresh strategies which will best help those on the live register to get a foothold in the labour market.

The report quite rightly points out some very obvious linkages which have to be established and policy responses which must be brought forward if we are to devise effective strategies. It refers to the fact that unemployment is linked to educational attainment and that many long term unemployed unfortunately do not have the type of educational qualification required in a modern technological society. They do not have the marketable skills needed to get a job in the very competitive labour market. Many of those coming on to the jobs market every year have second and third level qualifications, which puts the long term unemployed at a serious disadvantage. We must consider how to deal with that problem.

The report contains a number of recommendations. One of them is to improve the co-ordination of job creation, training and employment schemes. In the context of the White Paper,Reviewing Manpower Policy, that is being considered. The interfacing between the Departments of Labour and Education has to be addressed. In that context there is a recommendation regarding an independent certification body so that people who get qualifications have certification which is internationally recognised. We are very interested in doing this. It is one of the recommendations of the Culliton report, and discussions are ongoing with the Department of Education to bring it about as quickly as possible.

The most publicised recommendation of the Committee was in regard to the equity for jobs fund. They mentioned £10 million as a start-up figure. The Government immediately took that excellent proposal on board. We have now established the county enterprise partnership boards involving a total of more than £100 million.

I listened with interest to Deputy Rabbitte's interpretation of what this means for industrial promotion policy. I always admire Deputy Rabbitte's ability to anticipate stories of political fiction. In the past Deputy Rabbitte has been highly committed to centralised planned economies which unfortunately are no longer part of the world stage. The Deputy implied that this was some sort of localism but in fact it is in line with the Culliton Report.

The Minister might notice that his colleague, the Minister for Industry and Commerce, does not corroborate what the Minister is saying. He does not believe it.

Deputy Rabbitte, this is not a cross-examination. The Deputy will get his opportunity.

The chairman of that committee, Mr. Culliton, acknowledges that there is a need to tap into local initiative and for localised structures——

I agree with that.

——where we marry the public and the private sectors so that people come together affiliated to and loyal to their own area. They can come forward to choose winners and give street credibility to those with enterprising ideas, so that they can go to the banks which heretofore have not been giving them the funds to set up business. This will provide an imprimatur to local entrepreneurs. That is the whole idea behind the county enterprise partnership boards. It is a good idea. I come from a part of the country where we set up an Offaly enterprise board which did excellent work in the promotion of enterprise and in the provision of jobs at local level. Deputy Rabbitte has a trait which leans towards killing a project before it starts despite his calls for radical approaches. Rather than that, we should be entertaining the prospect that this idea gives us ten times the funding that was recommended by the Oireachtas Committee.

They are two different things. I am entitled to make serious criticisms.

The Deputy will have an opportunity to ask a question when I am finished.

I will not, as I am not the spokesperson.

We should not try to kill this initiative before it starts. Let us criticise the scheme when the interim period is over, when we know if the structure works or if there is a need for change but let us not come into the House before it starts and seek to throw it out as part of a battle which Deputy Rabbitte perceives between the Minister for Industry and Commerce and the Taoiseach.

It is not the correct structure.

That is the Deputy's opinion.

The Minister, perhaps unwittingly, in directing his remarks to Deputy Rabbitte is giving that Deputy the false impression that he is expected to reply.

In relation to linkages, Deputy Richard Bruton criticised the Taoiseach's trip to the US saying that it was not the sort of investment that provides us with the necessary jobs. Mobile international investment although not the whole solution is part of the solution. It is something on which we in this economy must continue to concentrate. The Culliton Report points out that we need to develop indigenous industry more actively. I accept the need to develop linkages. If at the moment in terms of the statistics the Deputy quotes there is only 19 pence in every pound being provided in the sub supply side by Irish industry, surely here are opportunities for Irish industrialists to tap into this and make sure we can provide an increased linkage there.

You have been saying that for 20 years.

I agree, but it has been proved that perhaps the performance of the IDA in that regard has not been what it should have been. This is one of the areas that the Culliton Report criticises. That has been a deficiency in industrial policy heretofore but it is being addressed by the Government in the new structures, in line with the Culliton recommendations.

There is also a mention of a planned expansion of the social employment schemes. These are temporary work experience schemes which are not being put forward as the panacea for our ills. Obviously it is part of the strategy for the unemployed to help them get back to work. Recently we heard the announcement of increased numbers in the social employment schemes. There is a need here that must be addressed and I have asked the people concerned to address it. We need uniform participation in social employment schemes throughout the country. Unfortunately, some local authorities are not operating the scheme. The arguments put up against the scheme are no longer relevant and they should be dealt with within the trade union movement so that we can have uniform application of the SES schemes throughout the country. The arguments against them are now redundant.

Hear, hear.

I hope this anachronism can be eliminated. I welcome the recommendation for increased participation in vocational training and opportunities schemes and I accept the need to develop that and increase the numbers over a period of years. The lack of educational attainment is a major impediment in getting many long term unemployed people into jobs.

I agree with the EC sub-committee on the need for the European Community to develop strategies to deal with long term unemployment which is a problem throughout the Community. In agreeing with this recommendation of the committee, I would tell the House that next Monday and Tuesday there is an informal social affairs Council meeting and I have insisted that the British UK Presidency use that meeting to bring unemployment to the top of the agenda of the social affairs Council of Ministers, because there is a need for the community to look at ways and means to co-ordinate measures to come up with strategies to help the unemployed. That commitment has not been there to the extent that it should have been in the past. The UK Presidency has agreed to try to bring the problem to the top of that Council of Ministers agenda.

The criteria governing the European Social Fund are too strictly economic and are preventing us from getting funding from the ESF, for example for the SES schemes. These schemes are totally Exchequer funded but were we to get increased EC resources for the SES schemes we could boost numbers fairly quickly and do work that needs to be done. The social employment schemes are doing necessary work. As a former member of a local authority I am aware of local authority difficulties in relation to finance and of their inability to create more employment because of lack of resources. Under the SES schemes good public works can be done in the community and those works may be of permanent value to those communities. We must try to accelerate progress in this area. We should forget redundant arguments and get more people into the type of work which local communities are demanding should be done. It is not being done nor is there any prospect of it being done given the financial constraints in local authorities.

Let me conclude by saying that we are going ahead with the setting up of an independent certification body. We are seeking to improve the EC debate in relation to this whole area of unemployment. We have already put in place an expansion of the social employment scheme. We are seeking increased ESF funding for the sort of schemes that help the unemployed. I would heartily commend this committee and look forward to the many more reports that will be emanating from this good body.

Deputy Jim Higgins. I would ask for your co-operation in the matter of time. We are about 10 minutes behind time generally.

It is fair to say that no other Government in the history of this nation have received such a political social or economic amnesty as this failed Government and their equally failed predecessor. They arrived in office five and a half years ago to a £900 million tax amnesty bonanza. They succeeded in getting the unions, the farmers and the employers to agree to the so-calledProgramme for Economic Recovery. They received an unprecedented political gesture from Fine Gael in the form of the Tallaght strategy. The nation, as a whole, agreed to tighten its financial belt. They sold one of the nation's jewels and got £200 million for Irish Life, and the ACC and the ICC are now under the gavel. They now have the doomed and discredited Programme for Economic and Social Progress with the compliant social partners still on board, and in spite of all of that consensus and amnesty we now find ourselves top of the European jobless league and about to enter a new one-nation super league of our own.

The single greatest growth area in this country today is unemployment. Many of the 300,000 people out of work in this country and particularly the 100,000 long term unemployed must have wondered this morning whether it was worth while getting up, whether there was any point in drawing the curtains today to look out on an Ireland that has let them down in terms of jobs and of a livelihood, an Ireland that has failed to provide a job or protect the jobs that existed and that offers no realistic prospect of a job in the foreseeable future. That is the very real dilemma facing one in every five people that got up this morning in this country, apart altogether from the misery of trying to eke out an existence on dole of £55 a week.

Is it any wonder that people are cynical about politics and politicians when in the midst of the worse economic crisis in this country they see this, when they had to listen to the Taoiseach last week talking in Seville about Ireland joining the fast lane — the fast lane to where? Is it any wonder that people will lose hope after the plethora of political kites, of job creation announcements, of economic kick starts which were to deliver thousands of jobs in many sectors throughout the summer and which have not produced a single job to date? Many of the 300,000 unemployed, reading this 55-page document would be sorely tempted not to get out of bed.

I admire Professor Brian Hillery, a man uniquely qualified both in terms of ability, intelligence and professional training, a man who should be a Government Minister but who should not have been landed with this toothless tiger that this committee is. If ever one sought an example of a damp squib with absolutely no ignition power whatever, one need look no further than this document. I do not want to be dismissive or negative but it is arid, empty and bureaucratic.

The first seven pages of this document is simply an introduction consisting of a preface and a foreword. Then there are 24 pages of padding, for example, the terms of reference as laid down by the Dáil and the Seanad. We know what these are; they are of no interest to people out there. In addition to that we have the membership of the committee. We know what that is as well. We know who it contains and who it does not contain. Then there is the membership of the various sub-committees, then the amendments put down by the various people and then apologies from the people who could not attend the various meetings. Of this report 31 pages can be totally discounted as irrelevant to employment. In essence, therefore, we have a 21-page report.

I am extremely surprised that the Labour Party and the Democratic Left have allowed themselves to be sucked into what is a classic Fianna Fáil talking shop. Equally, I am surprised that they are still hanging in there when it is quite obvious that this committee is going nowhere.

It is a static talking shop rather than a travelling talking shop.

They are being brought along on a wave of autumnal expectations because, reading this document, one is forcibly struck by the number of times reference is made to the various items that will be examined in some considerable detail in the autumn.

The status of this jobs committee, the sincerity of the Government in relation to unemployment, is absolutely nil in that they still stubbornly refuse to allow a single Government Minister, let alone a key economic Minister to be a member of the committee. We have an assurance from the Minister for Labour today that the points are being taken seriously. Of course the points are being taken seriously, but if we want real action the Minister for Labour, together with the Minister for Industry and Commerce, the Minister for Finance and the Minister for Education should be at the table as joint participants in this committee, not just receiving reports and coming in here to pat Deputy Hillery on the back.

Any contribution to solving the jobs crisis is welcome. However, this document contains absolutely no new idea. It lacks the inspirational spark to do anything about the massive and lengthening dole queues. On page four there is the heading "Role of the EC". This paragraph begins by trying to soften the impact and saying that after all we are not so badly off here because there are 12,800,000 people unemployed in the Community. It then launches into a simple restatement of what is meant by the internal market, by economic and social cohesion, the Structural Funds and economic and monetary union — in other words, a four-page distillation of exactly what we had during the protracted debate on the Maastricht Treaty. It finishes by telling us that, as a major trading block within the greater world economy, the EC has a great future. The Government have one thing to their credit. As a PR exercise they have managed to specialise in the development of a very high-sounding type of jargon, a kind of official bureaucratic vocabulary that sounds mellifluous, that is supposed to convey a lot but in essence conveys very little indeed. This section of the report of the EC contains one gem of a phrase typical of the bland aspirational nonsense that is supposed to keep the lid on the potentially explosive situation with the assurance that there are greater things ahead. This particular neatly-crafted nugget of a phrase tells us that "the considerable rationalisation of Irish industry in the last decade should see Ireland well placed to maximise the benefits of the external market". What a lovely phrase to justify the closure of most of our regional bacon factories, our entire footwear industry, most of our clothing factories and the litany of industrial closures that we have seen in the past five and a half years and that has accelerated particularly in the past year.

I thought that when we got to the section on job creation strategies we would really get into the meat of it, that we would have something substantial that we could parse and analyse and tease out. We find, however, that pages 13, 14 and 15 are an examination of past and present industrial strategies.

We have had enough examination. This has been exhaustively done by the NESC, by the ESRI and, latterly, at the Government's own behest by the Culliton Committee. Then again, if one has nothing new to offer, one has to rake over the old coals. Apart from noting with interest and patting on the back the few small private sector initiatives which we have currently undertaken, there is nothing except the £10 million venture capital fund.

We support the concept of venture capital. Indeed, Fine Gael have proposed that we should use half the money allocated to the IDA and FÁS to set up a proper capital venture fund of £500 million. We could barely realign seven miles of a national primary road in any part of the country, let alone simulate job creation with £10 million. Apart from this recommendation, half a page is given over to a cursory look at commercial semi-State companies. The section offers no new ideas and fails to identify growth areas. Indeed, it does not even make a stab at predicting possible job creation figures and prospects for growth.

Let me now turn to the section entitled, "Strategies for the Unemployed". God help the unemployed if they are waiting for Deputy Hillery's committee to raise their hopes and expectations because pages 19 and 20 are wasted. On those pages we are told that there were some 108,000 who had been continuously on the live register for a year or more while the characteristics of unemployed persons are outlined in detail. They offer a threadbare, stale diagnosis which is finished with a typical high sounding palliative: "co-ordinated strategies need to be developed at both national and EC level to tackle long term unemployment". Please, tell us something new because this has been trotted out time and again during the past ten years.

The report contains a two page analysis of FÁS and the social employment scheme. However, it recommends no fundamental reforms except a minor tinkering with the guidelines and rules and regulations.

One of the core sections of the document is entitled, "Work for the Unemployed" but what is in it for the unemployed? It extends to more than 11 lines in an attempt to deal with the unemployment problem. Towards the end of that section the unemployed are told that the committee will make recommendations in the autumn. The autumn is going to be a great season; it is going to be a season of mists and mellow fruitfulness for the unemployed but the problem is that the autumn comes to an end in 21 days when we will be into the winter. The 120,000 unemployed persons will then be left holding their breath for another year or two when the number will have almost doubled.

In relation to the section entitled "Training" to which the Minister referred, apart from a few relatively minor recommendations the committee sympathise with the unemployed on their plight and regret the fact that there has been a poor take-up of the job training schemes. What the Government do not seem to realise is that they cannot fool all the people all of the time and, so far as the vast majority of the people are concerned, it is no longer good enough to come up with half-cocked, poorly thought out and hare-brained budget day announcements which are good for a one day headline but which in reality deliver very little.

What this document should have provided is a root and branch analysis of the apprenticeship scheme and recommended that it be reformed. Thousands of manually gifted people have been denied access to jobs due to the fact that they cannot get sponsorship. Instead all we have are a few bland recommendations. The section also reassures us that "the committee will be looking at the training area in greater detail in the autumn". I wonder which autumn.

In relation to the section entitled "Education" one is amazed by the lack of new ideas. After the inevitable analysis we come to the only real recommendation made by the committee, that the vocational training opportunities scheme should be expanded. It is recommended that 2,000 people between the ages of 18 and 21 should be taken off the live register and taken by the scruff of the neck to training centres and given the ultimatum that if they do not participate in the scheme they will lose their dole although I understand this approach has been mellowed of late. When will the Minister for Education and the Government realise that one cannot force-feed education to an unwilling population? For children up to the age of 15 education is compulsory. While Fine Gael would welcome an extension to the age of 17 we do not agree that people should be taken by the scruff of the neck to a class hall and told that if they do not sit there they will not get the dole. If this kind of money is available it should be allocated be way of ESF grants or allocated to the primary or vocational sectors or, last but by no means least, the regional technical colleges. I would like to be positive but I am afraid I cannot because, unfortunately, this document is disappointing.

First, I should say that I was disappointed the Minister for Labour adopted a confrontational attitude and I would contrast it rather severely with the attitude adopted by the chairman of the committee. I would also remind Deputy Higgins that this is but the first report of the committee and not their final report although he treated it as such. I would ask him, and his colleagues in Fine Gael, to stop the whingeing and the crying from the sidelines, the contorted old Sinn Féinism, which seemingly is the opposite of the Tallaght strategy and using the unemployed as a football. They should take part in the committee and do all of the things that they tell us we are not doing on the committee. I would strongly urge them to do so.

The Deputy's party are being used.

I welcome this opportunity to discuss the first preliminary report of the committee and take it as an indication of the Government's seriousness that Ministers are present in the House to address it. I would like to congratulate the chairperson of the committee, Deputy Hillery, and the chairperson of the sub-committee on which I served, Deputy Frank Fahey. Like other Members I would also like to congratulate the excellent staff assigned to the committee, including the Clerk. They provide an excellent service and have worked extremely hard on behalf of and with the committee.

The sub-committee of which I am a member is the sub-committee on strategies for the unemployed. Their brief arises from the recognition on the part of the committee that a large group of people will continue to be unemployed for the foreseeable future and of the need to evolve a policy to lessen their load. The other sub-committees are dealing with the prospects of creating employment.

The committee recognises the negative economic and personal effects of long term unemployment and believe we can place the unemployed in a better position to take advantage of any opportunities that may arise through training and reeducation. I warn the Minister and his colleague about the VTOS scheme. We have identified and recognise the value of that scheme and its success. We also welcome the fact that our proposal that it be expanded has been accepted.

The voluntary nature of the VTOS scheme is its bedrock. If participation was to be made compulsory the scheme would be wrecked and rendered useless. I warn the Minister, who I am sure will take this message to the Government, that the Labour Party will not stay on the committee if the recommendations of the committee are ignored or cut across by Government decisions.

At present there are 120,000 people who are long term unemployed 50,000 of whom have been unemployed for over three years. About £1 billion is paid out in unemployment assistance per year. The primary condition is that people remain idle. A person in receipt of any part of that payment is not entitled to go and cut firewood for themselves as they would then be unavailable for work. I know of one man who because he cut hedges to collect firewood lost his payments. The other main condition is that they seek jobs which do not exist and to present a list of refusals from employers. In fact, some employers now have a standard letter which they give to people who apply for jobs to present to the dole office to prove that they applied for a job.

There is a deep recognition by the committee of the severe level of poverty and the degrading social welfare system. The unemployed complain in particular about the system of queuing and means-testing. In recent times this has been met by a series of cuts and changes on the part of the Minister for Social Welfare, Deputy McCreevy, but these have made the lot of the unemployed worse and deepened their poverty. Such cuts cut across the opinion of the committee. The Minister should be warned that there is a statutory committee of this House who have an opinion which runs counter to his actions.

The social employment scheme, warts and all, is a useful scheme from the point of view of the unemployed. The warts include the stop-start nature of the scheme and various other details. The committee are in the process of talking to the Minister and his Department about the shortcomings of the scheme. We have recommended that it be expanded to allow easier access to the scheme. I am pleased with the Minister's announcement that there will be an expansion of that scheme.

The committee received a very large volume of submissions, one of which came from Mr. David Buttimer from Tralee. I read that submission and was so excited by it that I asked that it be placed on the agenda. I was struck by its simplicity and workability. I thank David Buttimer for presenting that submission and for coming to talk to us about it.

I also thank Mr. Gerry Ward, Kildare County Manager, who explained to the committee how the proposal would work in that county. The proposal, which has been adopted in principle by the committee, suggests that work on a voluntary basis suited to the skills of participants in the area of county councils, voluntary bodies, health boards, vocational education committees and so on would be made available. It is not a Workfare programme and has no element of such. It contains no element of compulsion, and the committee recently discussed how best to ensure that that would continue to be the case. It was suggested that the social welfare code may need to be amended to ensure that there will be no compulsory element in the scheme at a later date.

The proposal is that payment would be made at full trade union rates to voluntary participants for the number of hours required to yield the same take-home pay they receive at present on unemployment assistance. For example, if a general operative — a single man — got work for two days with the local county council he would receive a cheque from the council for £57, the same amount he receives from the Department of Social Welfare. The voluntary participant would no longer be required to sign on the dole or be subject to a means test. He would be free for the remainder of the week — five days — to further his education or recreation or involve himself in other economic activities; he could do so legally without looking over his shoulder. I believe that 50,000 people could be employed by local and voluntary bodies by the end of one month under that scheme.

One aspect that needs to be considered is the overheads arising from the operation of the scheme. There are many bodies that could carry such overheads but local authorities are probably the least able to do so. At present we pay £54 per week per employee to the private sector for taking a person off the dole; perhaps some of that money could be used to cover overhead costs.

Participants in the scheme under examination would have the full protection of the legislation that applies at present to part-time workers concerning holidays, part-time workers, sick pay, etc. There would be no threat to existing jobs and there would be agreement with the unions. The merits are many. Fifty thousand people who are at present condemned to enforced idleness would be allowed to participate in this scheme on a voluntary basis. They would be in contact with employers, which would enhance their chance of finding full-time employment, and their dignity would be restored because they would see the immediate benefits of their work in the community.

I again thank the staff and the chairperson of the committee. I particularly thank Mr. David Buttimer whose proposal would ensure the more productive and positive use of £700 million.

I join with other Members in congratulating the committee on the publication of their first report. Anyone who attempts to address the serious problems in the community should be congratulated, there is no problem as serious as the unemployment problem. Deputy Higgins said that any contribution to this issue is to be welcomed, but I wonder why his party are not prepared to make a contribution to the work of the committee. As a Whip I recall many times the demand made at meetings by Deputy Higgins on behalf of his party that such a committee be established. It is a great pity that when it was established they found what I believe to be an unacceptable reason for nonparticipation. However, that is their business.

I wish to defend the position of the Democratic Left Party in contributing as best they can to the work of this committee, however limited it might ultimately be. I am not a member of the committee — Deputy Rabbitte is the representative of my party — but I was disturbed when I heard this morning the chairperson of the committee on strategies for the unemployed, Deputy Fahey, saying that one useful idea was to put people to work at an hourly rate equivalent to the amount they would receive on the dole. That suggestion is very worrying. I agree that we should be looking for more productive and useful ways to spend the £1 billion annual social welfare bill, but the suggestion of putting people to work for the dole, whether on a non-compulsory basis or otherwise, is one my party would not defend.

I do not know whether Mr. Buttimer is a member of the Democratic Left Party or if Deputy Rabbitte has paid good attention to the submission he made but by way of contribution to the work of this committee our party earlier this week published a document entitled "A Community Employment Programme" in which we set out basic ideas which we believe would lead to the productive and useful employment of up to 50,000 — the coincidental figure set out in Mr. Buttimer's submission and in our party's document — long term unemployed, bringing them back into the work stream, as is the objective of us all.

In our basic proposal to establish a community employment programme we envisage the provision of jobs for long term unemployed in the voluntary and public sector on a full-time and part-time basis. We would argue that such programmes should be operated by the partnership schemes already in existence under theProgramme for Economic and Social Progress. It is in part for that reason the Minister and Deputy Rabbitte exchanged views earlier on the need to establish another administrative organisation. The Government must be asked to reconsider that development in view of the fact that there already exists community enterprise partnership programmes under the Programme for Economic and Social Progress.

We propose that each scheme draw up a list of development projects and ongoing services requiring staff, together with training requirements. Once a work and training programme is approved by the local committee a budget would be agreed, allowing people to be employed on a three to five year contract and not just on a year-in year-out programme as is currently operated under the social employment schemes. Good as those schemes are they are limited and frustrate the serious effort made by communities to establish people in long term employment — 12 months is too short for a person moving back into the labour stream. Participation in such a programme would be confined to the public and voluntary sectors and the people taken on would be in addition to the established full-time positions. We recognise the right of trade unions to have their say as they are already involved in these partnership programmes.

We set out basic principles in our document — I do not have time to go through them here — upon which the scheme would operate. We estimate that the cost to the Exchequer would be approximately £50 million, which could be found by reintroducing the wealth tax. This is a small amount compared with the overall expenditure on social welfare or tax breaks and incentives to industry. I urge the Minister and the committee to consider our proposals which would make a concrete contribution towards tackling these basic problems.

We are almost half an hour behind time. I should like Deputies to be specific regarding the points of clarification. I appreciate that Deputy Blaney has not had a chance to speak but perhaps the other Deputies might agree to a reduction in their time so that we can move to the next business ordered. Perhaps Deputies will limit themselves to one question.

Will the Minister state whether there will be an element of compulsion in the intended expanded scheme of the VTOS and a concomitant penalty of loss of dole for those who fail to participate?

I am in agreement with the views expressed by Deputy Stagg on how the scheme will work and the chairman has also made that point.

It has been suggested that the VTOS scheme will be compulsory. Indeed, the committee felt so strongly about it that they wrote to the Minister saying they felt it should not. I should like to hear the views of the Minister for Labour.

My understanding is that the scheme is intended to extend the numbers. There are 2,000 places on the scheme and I am sure there will be a big demand for places. We will try to expand the operation of the scheme in time, taking financial considerations into account.

I should like to hear the Minister's reaction to the comment in the report that employment subsidy schemes tend to have a lot of dead weight resulting in displacement; they make a number of criticisms of the employment subsidy scheme. In view of the Minister's proposal to take 15,000 people on the scheme, will he comment on criticisms that this might be wasteful? In reviewing apprenticeship schemes will the almost exclusive sponsorship continue? This militates against young people who may not have contacts in the trade to secure an apprenticeship.

The employment subsidy scheme is EC funded and is being reviewed at present. It is of a temporary nature and we do not have a commitment from the EC that it will continue. If 15,000 people want to participate in the scheme we have sufficient funding but it is a basic requirement for participation that a person must have been at least eight weeks on the live register. I relaxed the requirements in relation to the JTS in an effort to try to improve the take-up whereby earlier school leavers who are not on the live register would be able to avail of it. However, a person must be on the live register before he or she can participate in the employment subsidy scheme. There has been a long debate and discussion about apprenticeships and the need to change the system from a time served basis to a standard attained basis. It was as a result of long tripartite discussions within the industrial training committees that the new apprenticeship system has been brought forward. There is a need to ensure that it works and has the agreement of all the people concerned in the apprenticeship system. I understand that a small number of places is available to people who cannot get a sponsor but it will in the main, particularly in relation to the traditional craft areas, be available to those who are covered by sponsorship.

It is the first time I have heard about Mr. Buttimer's proposal, through Deputy Stagg. It may sound extraordinary at this stage but I should like the Minister to find out if there is still extant a proposal in the now Department of the Environment which went to the Government on three occasions and was rejected, very similar to what Deputy Stagg outlined. It is a long time ago — somewhere between 1959 and 1961 — but they say that history repeats itself.

Will the Minister agree that under the Department of Education, through the vocational education committees, there is a grave overlapping of capacity on the one hand and lack of expertise and premises on the other? The vocational education committee have the expertise and the premises for training and retraining and the Department of Labour have the wherewithal to do that training. I ask the Minister to arrange a meeting between the officials of the Department of Labour and those of the Department of Education to see whether the financial resources available to the Department of Labour and the premises and personnel in the Department of Education could be better used and give a better service than they can give separately. Over the years that has not been the case, they want to keep apart whereas they should be fused.

In regard to the SES, the local promoter plays far too great a role in choosing those who will participate in the scheme. The same people are taken on year in, year out, while other people do not have a chance. The EC is involved through the ESF and greater efforts should be made to provide more funding. I appreciate the time that has been given and I ask the Minister to respond.

I will speak to the Minister for the Environment regarding the matters to which the Deputy referred. It is true that people are retained on the social employment schemes in exceptional circumstances. Sometimes a case is made to me when a core worker is involved and where the whole scheme would fall apart if he or she was not kept. That is dealt with in the report. I am also very sympathetic to disabled and disadvantaged people who would find it very hard to get any other work experience. I also agree with what the Deputy said regarding the Departments of Education and Labour. There has not been sufficient co-ordination and the Minister for Education and I are addressing the problem to see if more local training can be put in place which would be relevant to local interests and not dictated by the semi-State agencies who perhaps might want to run courses to suit themselves.

We have a half an hour for further debate. I am grateful to the Minister for Education who has indicated that, in the circumstances, he is prepared to reduce his time by almost half. Perhaps other spokespersons will co-operate by doing the same which would leave some time for putting questions for clarification. I rely on Deputies to co-operate.

Thank you, a Leas-Cheann Comhairle. Although I am entitled to 15 minutes, I shall take only five or six minutes for my contribution, which should be helpful.

I very much admire the work of the committee and thank the committee for bringing forward this report. I extend a particular word of thanks to my colleague Deputy Hillery, who has chaired the committee with great distinction and made a real impact on a very difficult problem.

Among the key objectives I set down in the recently published Green Paper on Education was my intention to broaden Irish education to equip students more effectively for life and for work in what I would call an enterprise culture. That has to be done in the context of the emerging new Europe. We must prepare the citizens of that new Europe. The achievement of that objective will require many attitudinal and structural changes in our educational system. It will require an acceptance that we need to have a society in which there are real educational and vocational training opportunities for all young people — opportunities that result in a recognised and worthwhile qualification and that avoid the errors of earlier decades which failed to recognise the importance of a properly constructed certification system.

In that context, I, too, share the view of the Oireachtas Joint Committee on Employment that recommends the establishment of a more coherent, internationally recognised system of certification for Irish vocational qualifications. I have identified that as a priority in the Green Paper, in which it is stated:

It is intended to constitute a new Council which will bring together all concerned, education training and business interests, including the social partners. The remit of the new Council will cover all aspects of vocational training provided by the education and training agencies, including apprenticeship training, as well as taking over the role of the NCEA in relation to third level courses outside the University sector. This new Council will establish a common certification system with international standing which will facilitate participants in the programmes being certified to obtain suitable employment or to progress to higher levels of education or training.

What is involved is not so much a new council as a restructuring of an existing body, and I consider that will be more effective.

The joint committee have also highlighted the need for improved co-ordination of job creation, training and employment schemes. That is indisputable. For too long we have had the development of schemes that have been worthwhile in themselves but that have not been linked into existing schemes and have often led to the creation of another layer of bureaucracy. As my colleague the Minister for Labour has just said, he and I are determined to deal once and for all with the apparent overlapping between the Departments of Education and Labour. We are determined to get to the bottom of that issue urgently. Very good progress has already been made in that regard. A top level committee have already met twice to chart the future in that regard. I hope there will be less overlapping from now on.

My proposals for change in the education system recognise the importance of incorporating into the education system, particularly at post-compulsory level, a strong vocational orientation. I trust that will provide an initial training which will better equip young people for working life or for progression into further training.

We are now faced with considering the education and training systems as a continuum with working life. Therefore, we have to put in place a flexible system that will allow for the maximum level of progression.

I am satisfied that my own proposals for our second level system, including a leaving certificate vocational programme pursued by up to 30 per cent of the students and an increased emphasis on languages, technology and enterprise awareness, are an important step in the right direction. It will go a long way to ensure that our system will be responsive to and be predicated upon the specific needs of the labour market itself.

Our third level vocational sector has made a major contribution to our economic development. The availability of highly skilled technicians trained in this system has for a long time been acknowledged. We simply must do more in that area. I am anxious that the colleges and, in particular, the universities play a greater role in the development of proposals in the area of job creation. No body of people is better placed to promote entrepreneurship than is our third level sector. Nowhere can research and development be better pursued in the interests of global economic development than in our third level institutes. Recently I met the university heads in this regard and will soon be meeting the principals of the regional technical colleges. I have urged the presidents, and will be urging the principals, to prioritise job creation ideas being developed in their research and development activities. I recognise these major centres of excellence as having a central role to play in bringing about a number of job creation ideas. I thank the university heads for their reaction and I encourage them to do more in that area.

Further provision has to be made to meet the increasingly important demand for the enhancement of the skills of our people at work, those threatened by redundancy and the unemployed. As is proposed in the Green Paper, the higher education institutions will be encouraged to put in place the structures necessary for the identification and provision of recurrent education needs on a cost recovery basis.

Such an identification process has already focused our minds on the particular needs of the long term unemployed. Those needs have been specifically identified by the Oireachtas Joint Committee on Employment, who have called on the Government to increase the number of places available in the special intervention programme, the vocational training opportunities scheme. The Government have already agreed to my proposal to increase participation in that scheme, in line with the recommendation of the joint committee. The number of places available, therefore, will be 2,060 by the end of this year.

The vocational training opportunities scheme has been the subject of favourable comment by several evaluators. It is perceived by participants as offering them a real opportunity to re-enter the labour market with skills recognised as relevant to that market.

An educational profile of the long term unemployed has shown that some 86 per cent have not completed second level education, with approximately 60 per cent having no second level qualification. All available evidence points to the level of numeracy and literacy problems faced by the long term unemployed.

The objectives of the vocational training opportunities scheme are: to provide long term unemployed trainees over 21 years of age with the skills needed to enhance their chances of gaining employment or progressing to further education; to address the structural problems in the labour market, as I have already mentioned; to cater for one of the most disadvantaged groups in the labour market, those who do not have the educational levels necessary to avail of the more mainstream programmes. I have ambitious plans to expand the vocational training opportunities programme and I shall talk about those in the not too distant future.

There are many more areas dealing with employment contained in the Green Paper and both the Department of Education and myself have many more proposals in this area. I shall not detain the House on this occasion by talking about them. I wanted to specifically mention the link between education and employment and to focus on the vocational training opportunities scheme.

With your permission, a Leas-Cheann Comhairle, I wish to share my time with Deputy Jim Higgins. If the House is agreeable, we shall both take three and a half minutes.

Does the House agree to that proposal? Agreed.

I was glad to hear the Minister say that through his Department he is trying to create an enterprise culture. I advise the Minister to have a talk with the Taoiseach and the Minister for Finance, who seem to be trying to destroy the atmosphere for enterprise in this country.

What is happening in Dublin in particular as regards education is an absolute scandal. I refer to the level of third level grants available to those coming from deprived areas, people who do not get a chance in life. Those people usually do not have many options — they may choose to opt out of education before completing second level education and go down to the dole office to draw out £50 a week unemployment assistance or they can take on the challenge of trying to take up third level education. If they do not have the requisite number of points they cannot gain entry to a third level college and if they do happen to be accepted on a pre-third level course they then have to face up to the reality of finding bus fares to travel to and from college. Often people from a deprived area come from a home in which the rest of the family is unemployed. Difficulty is also encountered when trying to find a place to study, because housing conditions in deprived areas are appalling. A person in that position faces terrific obstacles from day one. To my knowledge, the programmes that have come from the Department contain nothing to deal with those day-to-day problems.

Deputy Hillery, who is sitting behind the Minister, is well aware of the problems I am talking about. The real trouble is that there are large numbers of young people not completing education because there is no incentive to do so; the attraction of the £50 a week unemployment assistance is too great. Many of the long term unemployed come from that kind of background. It is true that in some families nobody in the home has ever worked. We are creating a culture in which there are huge divisions, even down to the housing policy. What are we doing to give people a chance to study? How could a person possibly study in a three-bedroom house that is shared by 11 people? Has anybody thought of making available the facilities of primary schools in the evenings to third level students in these areas? The answer is no. The reality is that these people do not have facilities for studying. It is about time we started to deal with the problems on the ground rather than producing more reports.

I should like to refer briefly to the tourism industry. A great deal of play has been made of the development of tourism, and rightly so. I happen to believe it is an area of possible growth. Yet, there are very few places available in our third level colleges for those wishing to do degree courses in hotel or catering management. Yet other colleges are bulging with students doing BAs etc. with no prospect of jobs at the end. In the Dublin College of Catering in Cathal Brugha Street there is not even a decent library. We are talking about the development of tourism but we do not have the places, the programmes or the opportunities to encourage students to take up those types of degree courses which would give them some chance of employment and where they might generate wealth. Such qualifications are recognised worldwide. As soon as people are qualified in that area the large international hotel groups recruit them and perhaps take them to the States. We talk plenty but when we get down to the basics we do not have the answers and we are not doing anything about it. If we are serious about providing jobs let us not get back on the trail of offering people fake jobs by way of more schemes. After 12 months on a scheme people are disappointed to be left doing nothing once again. That is not the way to build an economy. If we continue on that road it will be a disaster.

I have to remind Deputy Barrett that he has failed in his promise. Perhaps Deputy Higgins would compensate for it.

I will. I welcome the commitment given by the Minister to link education with training. I appreciate his recognition of the need for partnership and co-operation and having the two elements working together. I was present last Thursday when the Minister was presented with the NCCA report in relation to the 1991 leaving certificate. It is a good analytical document but when you examine the figures you see the reality, that is that technical subjects are very far down the pecking order. As has been said they do not count. For example, on the leaving certificate 1991 results, one has to get to number 18, 19 and 20 before getting a technical subject, they are technical drawing, engineering and building construction.

Maastricht, Culliton and our own instincts tell us that we should be going down the road towards vocational and technical education. We pay lip-service to it but we means test the EFS grants which are supposed to discriminate positively in favour of Letterkenny, Sligo and Athlone.

Last night I was in Athlone where I addressed a meeting of students. They do not know what grant they will get and if they are eligible for a grant — I know this because I rang three vocational education committees yesterday — it will be at least Christmas before they receive it. Means testing of ESF grants should be discontinued, the entire third level grants scheme should be committed to a radical and thorough appraisal by some competent agency and in the meantime we should hold what we have and seek additional money from Brussels. We were told that if we signed Maastricht the money would be available.

In regard to languages we have got to get away from our preponderance of dependence on French. This compares unfavourably with the study of German and many of the minority languages such as Italian and Portuguese are not studied. We must have a complete re-orientation of our second and third level curriculum.

I am calling Deputy Seán Ryan who has five minutes.

As a member of the Joint Committee on Employment I should like to put on record my appreciation for the work of Deputy Hillery as chairman and the staff who have helped us produce this first report. I smile to myself when I hear members of the Fine Gael Party pulling this report to shreds. It is very easy for people on the sidelines to make those attacks. We in the Labour Party are on this committee because of the gravity of the situation and 300,000 people are looking to the Dáil for some answers. Time will tell but I do not think the people, particularly the long term unemployed, will look too kindly on the Fine Gael Party. They have the opportunity through this committee, to make their contribution.

Are we not making it here today?

Last evening we heard from the Minister for Labour and Deputy Bruton about statistics but the main statistic is the 300,000 people who are unemployed. It is up to us to produce a report and demand that the Government act on the proposals in that report. I should like to put on the record once again that if the Labour Party see that the Government or Ministers are dragging their feet we will withdraw from the committee but, hopefully, that will not happen.

Unemployment is at the heart of the poverty and despair that afflicts thousands of families; it is at the core of many of our mounting problems. Most of all, unemployment is about institutionalised inequality. There is a cause and effect relationship between unemployment and the planning that has gone into many of our large estates, particularly in County Dublin. There is a link that cannot be broken between unemployment, poverty and disadvantage together they form part of the never ending vicious circle of inequality.

Most importantly, there is a cause and effect relationship between unemployment and poor access to education. That is what we must look at. The statistics show that 45 per cent of the unempmloyed left school at primary level; this evening the Minister gave us another statistic — 86 per cent did not finish second level. We should redirect the available resources to the first level where there is a lack of funding; in certain areas unemployment can be as high as 75 per cent. We ask why people left school but in area of bad housing and high unemployment that is a major problem.

A recently published OECD report highlighted the under-funding of primary education in Ireland. This under-funding is particularly damaging in our disadvantaged or developing areas. I would ask the Government to look at those areas and try to redirect the resources. While I am aware of the time constraint I should like to refer to the need to equip our young people with job skills. It is a scandal that some three years after the initial report on a new apprenticeship scheme was produced that scheme is not yet available. The importance of apprenticeships cannot be over emphasised. I believe a national apprenticeship scheme should be established to provide training opportunities for school leavers in a wide range of occupations; in manufacturing, services and commercial activities, and that it should be modelled on similar successful schemes in Germany and Holland. The scheme should be designed to provide standard base apprenticeship training within the new apprentice model by allowing periods of both on and off the job training leading to the granting of a national trade certificate. This scheme could be funded not only by the Government but also by the ESF.

I should like to say to the Minister that I recently read in a document that it was easier to get into a third level college than to get an apprenticeship. It is a scandal that this year 1,900 apprenticeship places only are available for the entire country. Three or four years ago there were 3,500 places available. What will happen when there is a demand in industry for people who have served their apprenticeships? I hope the committee will deal further with this issue. I ask the Minister to take these points on board and to give a commitment to young people who are looking for a start in life that more apprenticeship places will be made available. I wish I had more time to develop this point. I hope the recommendations in this report are implemented in full.

The Joint Committee on Employment is an important committee of the House. It is important for the very reason that the misery which lies behind the appalling unemployment statistics cannot be allowed to proceed without this House taking some steps to deal with it and at least be seen to take this problem seriously. Whether the committee produce definitive solutions is a matter for the people who participate in the committee and the degree to which the proposals which arise from it are taken on board by the Government. It is a matter for the political parties in this House to push and shove and try to ensure that real steps are taken arising from the discussions. It is important that this House is seen to be actively looking at the problem, trying to come up with solutions and making itself relevant to the problems outside. I make no excuses for my party being part of that committee; neither do I attempt to justify it. We are part of that committee because there is a serious problem which has to be dealt with.

In the few minutes available to me I wish to deal specifically with the VTOS scheme. The single proposal in regard to this scheme in the report is that it should be expanded. I agree that the scheme should be greatly expanded. The Minister said he had ambitious proposals in relation to it. I suggest that one way of expanding participation in that scheme — apart, obviously, from the question of funding, and in terms of the people participating — is to apply more flexible criteria to those who want to participate in it. I do not think there is any question of this scheme being successful if it is made compulsory but I believe the Department would be over-run by the number of people wishing to participate in it if the criteria were more flexible.

Before I conclude I wish to refer to the case history of a 22 year old woman from Sallynoggin who was unemployed for two years, got work for two months last year and who has been refused financial support on a VTOS place she has got because she has not been unemployed for 311 days within the relevant tax year. She is seven days short of the 311 days requirement because she worked for two months. Effectively, the Department of Social Welfare will support her for the next year so that she can qualify for a grant next year. The number of participants in the VTOS, an excellent scheme, would increase ten times if the criteria used were more favourable. I appeal to the Minister in his ambitious plan for the VTOS to take that point on board.

Does the Minister have any plans to reduce the length of service for teachers from 40 years to 35 years? This would enable more jobs to be created for young people who have qualified as teachers but who cannot get jobs. I believe this would be a constructive and reasonable move.

I thank the Deputy for his question. I have no plans to reduce the number of years. This is one of the issues we discuss with the unions from time to time. I have no immediate plans to make that reduction.

I have three brief questions. First, what progress, if any, has been made in the introduction of job sharing in the teaching profession? Such a scheme would create more jobs for teachers. Every effort should be made to try to implement such a scheme. Second, will the Minister give a commitment that the VTOS will be operated on a voluntary basis? Third, does the Minister have any proposals to increase the number of apprenticeship places for young people?

With regard to the question of job sharing, we have a long agenda to discuss with the unions representing teachers and this is the sort of item we discuss from time to time. It is a very difficult area both for them and the Government. I have no proposals now to introduce a job sharing scheme among teachers.

A pilot scheme?

We will continue to discuss this issue with the unions

With regard to the VTOS, there are approximately 2,000 participants in that scheme and I hope to expand the number quite substantially. Obviously I would prefer to expand it on a voluntary basis so that we would not have to consider other options. Our aim is to get people from the live register into education and hopefully we can achieve that on a voluntary basis. He will have to consider the other options open to us if we are unable to achieve that.

I take special note of the point made by Deputy De Rossa about the criteria used. It may be that some of the conditions are too rigid; we have not been getting a great response to the existing scheme. Perhaps we need to look again at the criteria. It is a good scheme, the concept is right and we need to get more people onto it.

With regard to apprenticeships, one of the problems in this area has to do with definition. Progress needs to be made in this regard. Many people in regional technical colleges and vocational education committees are pursuing apprenticeship courses which are not strictly apprenticeships in the legal sense, they are apprenticeship-type courses. I take the Deputy's point about the reduction from 3,500 to 1,900 in the number of apprenticeship places available. That is a serious problem but it is not the entire picture. If one takes the bigger picture of the number of people pursuing technical and vocational apprenticeship-type courses, one can see that the figure has increased dramatically. The Minister for Labour and I are trying to resolve the problems in this area.

Deputies Higgins and De Rossa have indicated that they wish to offer. Perhaps they will put their questions and the Minister can answer both together. I must put the final question at 4 p.m.

May I ask the Minister, apart from the VTOS, what other direct input by way of education, his Department can make to resolving the job crisis? The VTOS is the only scheme referred to in this report.

My question relates to the VTOS. The report recommends that this scheme should be expanded to cater for approximately 10,000 participants. Obviously, the need to maintain the quality of the training provided has been borne in mind. Can the Minister indicate the ability of the system to deal with 10,000 participants? What is the capacity of the system at present? Is it 15,000, 10,000 or 8,000? What are the Minister's plans for the expansion of the scheme?

I do not think Deputy Higgins expects me to spell out all my job creation proposals in 20 seconds.

Will the Minister list them briefly?

Post-leaving certificate courses will make a major contribution to resolving the unemployment problem. If the Deputy had time, I could list the dozens of proposals I have. No doubt we will get around to them.

The Minister can tell us about them during the debate on the Green Paper next week.

Deputy De Rossa asked about the capacity of the scheme. The capacity from 1994 onwards will be substantially increased, mainly because of EC possibilities from that day onwards. The capacity of the scheme in 1993 is causing problems for me because of the flow of funds. I estimate that the capacity of the scheme will be approximately 10,000. We will be well into 1994 before that happens. That is a guestimate and I can get the Deputy more accurate information if he wishes.

Question put and agreed to.
The Dáil adjourned at 4 p.m. until 2.30 p.m. on Tuesday, 13 October 1992.