NESF Report on Long-Term Unemployment Initiatives: Statements.

Minister of State at the Department of Enterprise and Employment (Ms E. Fitzgerald)

As the Government's representative on the National Economic and Social Forum, I very much welcome its pioneering No. 4 report aimed at ending long-term unemployment. It was unanimously agreed by the forum which comprises Members of this and the other House, the traditional social partners, unemployed people and others outside the traditional social consensus and under-represented in the paid labour force. The forum, which is broadly representative and which has given a voice to the unemployed, the disadvantaged, women's groups and others, has come up with a good programme aimed at ending long-term unemployment which has shaped Government policy and thinking in this area. As a result of that report a commitment was made to immediately set up a local employment service and a task force on long-term unemployment. That task force submitted two reports to Government, the first of which deals with the setting up of the local employment service. Work is proceeding on putting that service in place in 14 areas, the 12 original partnership areas as well as Kildare and Clare. Based on experience in those areas, the Government intends to set up the programme on a nationwide basis as soon as the local employment service is fully established.

The second report of the task force on long-term unemployment recommended changes to the community employment scheme to focus it better on the needs of the long-term unemployed. The task force analysed the differences on the live register between those considered to be reasonably likely to get a job with a small degree of help and those who need more intensive support to get work. Changes were proposed in the community employment scheme such as the introduction of the integration option which would cater for those who have been unemployed for a year or more and who would be considered, with a year's work experience on community employment, to have a reasonable chance of getting work.

The community employment scheme was revamped to put greater emphasis on training of participants and quality work experience. The proposal that one quarter of the places on community employment be reserved for people who have been long-term unemployed, for three years or more, is being put into effect. Under a new pilot scheme there are 1,000 places on offer to the very long-term unemployed, people aged over 35 years who have been unemployed for three years or more and whose possibilities of getting work are extremely limited, people at the end of the queue for employment.

The National Economic and Social Forum welcomes the initiative in setting up the local employment service, the revamping of community employment and the particular focus on the long-term unemployed. I am glad that not only are we creating jobs at a record level — 93,000 new jobs were created in the past two years, the highest level in the history of the State — but the emphasis on tackling long-term unemployment is beginning to pay off. In the year 1994-95, the latest year for which detailed figures are available, with an increase in total jobs of 53,000, there was a reduction of 34,000 in the number out of work. Of those 34,000 jobs, 25,000 went to the long-term unemployed and 9,000 to the short-term unemployed, those unemployed for less than a year. It is interesting to give a disaggregation of those figures. In the year 1994-95 a greater number of jobs went to people who had been out of work for more than two years than to those who had been out of work for between one and two years.

The forum indicated that to address the problem of long-term unemployment it is not sufficient to focus on the issues of economic growth, interest rates and so on. While those factors help to create extra jobs in the economy, the jobs will not necessarily go to the long-term unemployed unless we address the specific problems, handicaps and obstacles facing those people. For example, individuals who have been out of work for some time lose heart and hope. After a period of looking for jobs and finding themselves at the back of the queue, many people no longer believe in themselves and, therefore, it is very difficult for an employer to believe in them. In some cases whole communities lose hope and young people in those communities whose parents do not have a job wonder whether it is worth while staying on at school. Those issues need to be addressed in tackling long-term unemployment.

We must also address issues such as lack of education and training. The long-term unemployed disproportionately include those who had an incomplete education or whose skills are obsolete. Some 74 per cent of long-term unemployed people left school with no qualifications or with minimal qualifications.

In order to address the handicaps facing the long-term unemployed the Government is engaged, through the local employment service, in a policy of turning the traditional pattern on its head of trying to fit the unemployed person into the service on offer. The local employment service is a counselling, training, education and placement service, tailored to the needs of the unemployed person. There is need to offer people an upgrading of skills by way of compensatory education.

There is also need to ensure a job placement service modelled on successful initiatives such as the Job Centre in Ballymun and Contact Point in Coolock. The adoption of a partnership approach at local level, involving employers, unemployment centres and the trade union movement, which concentrates on the skills and potential of the long-term unemployed, offers a bridge back into the world of work in that employers offer vacancies to people coming out of the local job centre or employment service. That model, which was pioneered in Ballymun and Coolock, is proposed by the local employment service in the 14 partnership areas throughout the country. The service is working to put in place a tailored response to the problems faced by individuals.

When I drew up the national plan I laid particular emphasis on rebuilding the economic potential of unemployment black spots. The local development programme, which has been extended to 33 areas selected on the basis of criteria supplied by the Combat Poverty Agency as being the most disadvantaged communities in the country, places major emphasis on rebuilding the economic potential, tackling community problems and restoring hope in those communities.

In the education area the Minister, Deputy Bhreathnach, has directed an unprecedented amount of resources to schools in disadvantaged areas and to remedial education. She set up the Head Start Programme for pre-school education in disadvantaged areas. This year the demographic dividend has been devoted almost exclusively to the Breaking the Cycle initiative to ensure that young people in disadvantaged communities can get help to overcome the education and other disadvantages which would otherwise make them more likely to become today's early school leavers and tomorrow's long-term unemployed.

Other initiatives are in place to address the problem of early school leaving and lessons being learned through the Youthstart, HORIZON and other programmes are being mainstreamed into the school system. The retention rate for young people in second level education is increasing and we are all aware of the strong links between lack of education and long-term unemployment. Identifying people at an early age is an important part of the programme to address long-term unemployment.

We also have in place a series of programmes designed to deal with the disincentives which may face those moving out of unemployment into the world of work and to ensure that long-term unemployed people are financially in a position to take up job opportunities becoming available to them through various policies and in a rising economy. In the past three years there has been a concentration on tax relief for low paid workers in marked contrast to the emphasis on tax relief for high earners during the Fianna Fáil-Progressive Democrats Administration. It is by reducing the tax, PRSI and levy burdens on the low paid we will address the margin between being unemployed and moving into employment. That is particularly important and is paying off.

The back to work allowance scheme is in operation and 17,000 places are now available. The scheme allows people to take three-quarters of their previous dole money in year one, half in year two and a quarter in year three tax free if they move either in an entrepreneurial capacity by creating a job, as Deputy Harney would like, or into the private sector. That scheme is successful and there is a steady demand for it. I am aware of its success in helping people who have been out of work for a long time get back into the workforce.

Changes have been made in the health system so that a person who has been unemployed for three years can keep his medical card for three years after taking up a job.

Mrs. O'Rourke

They cannot get medical cards. It is in complete chaos.

Ms E. Fitzgerald

We are ensuring also that people can retain child benefit payments for three months after taking up work before the family income supplement comes into place. In successive budgets we have placed emphasis on improving family income supplement because it is by paying benefits to people in work, particularly those with limited earning capacity, that we ensure it pays to take up employment. In all of these measures there is a concentration on the obstacles and difficulties facing the long-term unemployed.

When I was first elected to this House and worked in the Department of Finance the official attitude, generally speaking, was that if the economy is going well it will benefit the long-term unemployed. We all know from experience, research and from working with people who are long-term unemployed that economic policies alone will not solve the problem of long-term unemployment. Something extra is required and those additional measures are being implemented. The Government is guided in that regard by the opinions of the National Economic and Social Forum and that is recognised in the forum's opinion number three.

I would be the first to say we have not finished the job and much more needs to be done in this area. We have been at pains to ensure the local employment service operates efficiently as it has been disappointingly slow as Deputy O'Rourke said, in getting off the ground. I would prefer to have a local employment service that works effectively rather than one put in place in such haste it does not work. As we learn the lessons from establishing the local employment service in the first 14 areas, it will become easier to ensure it is established effectively on a nationwide basis as recommended by the National Economic and Social Forum. In its opinion number three the forum drew attention to the need for more quality work experience and training. The Government accepts that recommendation.

The forum raised the issue of the rate for the job. Deputies will be aware that community employment is paid on a benefits plus basis. The new pilot whole time jobs option, which is directed at people over 35 who have been unemployed for more than five years, the most disadvantaged in the labour market, will be paid on a rate for the job basis. The CORI scheme which has operated since June 1994 is due for evaluation in June 1997. That scheme has operated on a rate for the job basis within the same type of budget as that provided for community employment. There are different views on which scheme is the more appropriate, a benefits plus based scheme or a scheme where people get their social welfare payments plus an additional amount which forms the community employment rate.

If we were to move to "rate for the job" on the basis of half time jobs, some people currently on community employment, including parents of families, could lose out financially; it would not be worth their while taking up a community employment place. That is an issue of concern to the Government because the children of today's unemployed are more likely to be the unemployed of tomorrow. We must ensure that parents are encouraged to take up job options which will help to build a bridge back to the world of work. The basis on which we move forward, or whether we continue to move forward on a dual basis as is currently the case, will be examined in the evaluation of the CORI scheme.

There is ongoing evaluation of the community employment scheme and this issue, on which the forum holds a particular view, will remain on the table for discussion in the light of the evidence of which is more successful in terms of both attracting long-term unemployed people, particularly those with families, on to community employment programmes, and the type of job experience. In the CORI schemes, for example, some people earn their money by working ten hours per week while others may earn theirs by working 20 hours a week. That can create internal tensions. This issue will have to be examined so that we can determine which is the best method. The Government does not have any a priori views on this matter but there has not been a shortage of people presenting themselves for community employment places on the basis of the current rate for the job.

The forum referred also to the potential of the social economy and work is under way in the Department of Enterprise and Employment on this. The community employment scheme would be regarded as the biggest single intervention in the social economy but work is also under way through the county enterprise boards in relation to this.

The forum drew attention to the need to co-ordinate the pilot whole time jobs option and that is being taken on board. The division of the CE options, 25 per cent and 75 per cent between the short-term and long-term unemployed, is supported by the forum also.

Regarding the status of working conditions for participants, the Government proceeded, on the recommendation of the forum, with the class A contribution for community employment workers. Members of the forum had strong views on this issue. I have mixed views on it and I am aware it is causing some difficulties on the ground. The recruitment subsidy for employers has now been implemented through the new Jobstart scheme. It has been slow to take off but a publicity campaign is under way. Deputy O'Rourke will know I launched this scheme in Athlone recently and spoke to employers about it. Employers also spoke to me about having recruited FÁS trainees under the Jobstart scheme and being pleased with the outcome.

The forum's report also addresses the area of youth unemployment. It is now working on a report on early school leavers and youth unemployment because there is a link between the two. Better education funding is often the best policy for tackling unemployment. That is being done through heavy investment in schools in disadvantaged areas, by targeting of resources at those children who may have little help or few books at home and who are least likely to benefit from their education unless they are given targeted and special help. Emphasis will be placed by the home-school liaison scheme on involving the family because it is constitutionally the primary and natural educator of children. Involving the family in the education process is extremely important. That service has been developed and expanded. Using the demographic dividend arising from falling numbers in education to target resources at disadvantaged areas is extremely important.

The forum makes a number of specific recommendations for the local employment service and these are being adopted by the policy unit in my Department. For example, the recommendation on representation of the voluntary sector on the monitoring group has been adopted.

On unemployment statistics, a subject the forum will return to when it holds a plenary session on the subject, we in this House know how unsatisfactory the live register has been. That has been shown in the survey carried out at the same time as the labour force survey which showed a discrepancy between the latter's figures and the live register's. There is a concern that certain categories are not measured by the live register, for example, women who are actively seeking work and who may not qualify for credits or benefits. They may be under-recorded. We have a degree of over-recording and under-recording on the live register. The labour force survey has much detailed information which allows useful figures on unemployment to be constructed. This allows us to get a more accurate picture of who is actively seeking work and to form pools of workers for recruitment by employers. We must do more on that and on regular tracking because the labour force survey, our most accurate measure, is only available on an annual basis. However, the quarterly labour force surveys have now been implemented and we will begin to get that information on a more regular basis from the new year. This will help to accurately track something extremely important.

Unemployment is an Irish and European problem. Some 18 million people are unemployed in Europe. Earlier this week in County Clare. I attended the Conference of the European Federation of Unemployed Organisations. Half of Europe's unemployed are long-term unemployed. This is a matter we are highlighting during our Presidency. I held my informal Social Affairs Council in July on the theme of long-term unemployment. I listened with great interest to what was said and the measures taken in different countries in moving towards a more active labour market policy. For example, there are successful job sharing and job rotation schemes in Belgium and Denmark and they are also being implemented in Sweden and Finland. I will have some proposals in this area in the future. The other European countries were also interested in turn in what we are doing in our area partnerships, or "territorial pacts" in Euro jargon. This is an area which will be discussed again at the Dublin summit. We have put long-term unemployment at the forefront of the domestic agenda and European agendas.

The rising tide does not lift all boats. A range of additional policy measures is needed to address the specific problems and issues of long-term unemployment. Those are being implemented but what is in place is not and cannot be the last word. We must always be open to new ideas, to experiences elsewhere and to see what more we can do to tackle the problem of long-term unemployment and our unemployment blackspots.

I have made this a personal priority in both my jobs in the Departments of Finance and Enterprise and Employment and as the Government representative on the National Economic and Social Forum. I welcome the fact that Government policies are being shaped by the input of the unemployed organisations, the Congress of Unemployed Centres and the Irish National Organisation of the Unemployed. There is continuous feedback between the unemployed, Members of both Houses, who deal with the long-term unemployment problem in their clinics and communities, and the social partners, who can do much to remedy the problem. That partnership, through the National Economic and Social Forum, is fruitful. It has a voice to which the Government listens and on whose recommendations this and the previous Governments have been quick to act.

Mrs. O'Rourke

I am glad to discuss the issue of long-term unemployment and I thank the Minister for giving me the opportunity. When I was invited to the forum some months ago I said discussion of its reports should become a feature of Dáil debating and I am appreciative that this has been done. What I say is not against the Minister or her Department but about the disgraceful neglect of the NESF. The rosy picture the Minister has painted is not an accurate representation. However, I know from my experience as a Minister that the best foot must be put forward, so I do not fault the Minister for doing so.

Ms E. Fitzgerald

I have the figures.

Mrs. O'Rourke

I have the figures too. I did not interrupt the Minister once except on the issue of medical cards about which I have a tale to tell. The Minister must have never sat in a clinic with a long-term unemployed person who has returned to work and has failed to get a medical card.

I am glad we are having the debate. The latest live register figures show that the number of long-term unemployed is 3,500 higher. It gives me no joy to say that Ireland continues to have the greatest number of long-term unemployed in the OECD. The Minister says the job is not yet finished. I say the job has not yet been started. I do not know how we can utter a paean of praise to a country with the highest rate of long-term unemployment in the OECD. We may have the highest rate of economic growth but we have the highest rate of long-term unemployment. That is a paradox which has not been explained in two years of this Government.

The Minister for Finance, Deputy Quinn, and other Ministers speak ecstatically about economic growth and say we are the envy of Europe but many people are in despair. We have the largest number of long-term unemployed and the number has grown by 3,500 in the past year. It is all very fine for the well-heeled, but for people who are part of the growing number of neglected people, it is sad that we are debating an issue when we have nothing concrete to show for it.

In his budget speech the Minister for Finance said that Jobstart and Workplace would be central planks of the Government's commitment to reducing long-term unemployment. We waited with bated breath. It is now nearly the end of November and just 500 people are employed under the schemes, not the 5,000 projected. I knew that projection was a scam because the Minister for Enterprise and Employment, Mr. Richard Bruton, did not have the money to meet the target. Nineteen ninety-six was to have been the year of initiatives by the Government but only 500 are employed under the project and £1 million has been spent on advertising it. I am glad it is being advertised, but we are assailed on radio, television and in newspapers by massive advertisements, and there must be something wrong when the schemes are not being taken up. I was unable to go to Athlone but I sent my apologies. I hope the fact that only 500 are employed under these schemes will prompt action.

A year and a half ago, on 20 June 1995, during a Private Members' debate on long-term unemployment the Minister for Enterprise and Employment, Deputy Bruton, said that the Government was determined "to implement the local employment service as recommended by the NESF and as endorsed by the task force on long-term unemployment". This has not yet been fully implemented, as is noted with serious concern by the NESF in its report of April, 1996 entitled "Long-term Unemployment Initiatives". I commend NESF and its very sturdy chairperson who has not allowed herself to become part of the system. I thought NESF would be sucked into the system and to a certain extent it has; the marginalised are now muted because they feel they are part of making policy. They are very far from making policy. However, the chairperson pulls no punches. She notes in the report that the NESF is seriously concerned about the delays in establishing the local employment services even in the initial 14 designated areas, apart altogether from the Government's stated commitment to extend it to all other areas throughout the country. This body, set up by the Government to be the forum through which the views and policy making points of the long-term unemployed would emerge, has been ignored, and that fact cannot be obviated by the sweetness and light of the debate.

The NESF also lambasted a £6 million allocation in 1996 for the local employment service, stating that it would not provide any additional moneys to extend the services to other areas in the immediate future. They concluded that much more needs to be done at an accelerated pace to achieve practical and concrete results. The Government says the job has not been finished, but I say it has not started. The Minister of State, Deputy Fitzgerald, also said that the local employment service would be established throughout the country as soon as practicable, but it is a long time coming, I note the Minister of State told the INO in Ennis during the week that the numbers had come down but the number of long-term unemployed on the live register is 3,500 greater after two years under this Government.

Although some long-term unemployed may have got jobs last year, they were replaced on the long-term register by others, witness the 3,500. We tried again this morning to get the live register figures for the end of October but our researcher was told by the Central Statistics Office that it would be many months before the figures were available by about the first week in December will not be available for many months, possibly after the next election. I can only describe the manipulation of the figures as sinister. A person who is long-term unemployed does not care what survey he turns up in; he knows he has not had a job for a long time and that there is not much hope of getting one.

The Labour Party claims to be the guardian angel of the NESF, but Deputy Kemmy, in a debate on long-term unemployment in the Dáil, said reports were piling up on shelves and gathering dust. Last night in the Dáil, we were treated to what I can only describe as sanctimonious humbug, but the Labour leadership, in which I do not include the Minister of State, Deputy Fitzgerald, have long forgotten Ireland's poor. The Labour leadership may well see the poor in New York, Boston and elsewhere, but Ireland's poor are very far from their minds. Perhaps the Minister of State and the members of the Labour leadership would sign the European initiative on the long-term unemployed, the European Full Employment Appeal, which has been developed by a number of groups within the European Parliament. I was informed this morning that not one member of the Labour leadership has signed it, even though some of the Labour backbenchers have brought it to their attention. It is not good enough that it has not been signed by the leadership of the party to give expression to their supposed commitment.

Some groups have been sucked into the system even though they are doing their best to keep their criticisms sharp and focused. It would not surprise me if they felt like giving up when their points are ignored. Deputy Lynch told the Dáil that we were precipitate in putting down the June 1995 debate and that the recommendations of the NESF would be implemented. Her main job in life seems to be to cheer all the Ministers in the Dáil who are making mistakes, and when she has done that job she leaves it.

I consider myself cheerful and optimistic but I am overawed by the cheerfulness of this cheerleader extraordinaire who seems to see it as her job. I wonder if there is a perk with the job, although it does not fall into the same category as being chairman of a committee. Nevertheless, Deputy Lynch has made it her mission. She praised the Minister for Health, Deputy Noonan, as being wonderful for the women of Ireland——

Miss Harney

He attacked the women of Ireland.

Mrs. O'Rourke

——and she praised the Minister for Agriculture, Food and Forestry, Deputy Yates. Deputy Noonan attacked the women of Ireland during the hepatitis C debate. Deputy Lynch also praised the Minister for Defence, Deputy Barrett, and what he did for the Army widows. It was the most extraordinary debate I ever heard. I will be a long time in Government or in Opposition before I let myself down to that extent.

Unfortunately, I cannot stay until the Minister of State replies to the debate as I must attend a public function. However, perhaps she will tell the House when it is planned to extend the local unemployment service. The report recommends its extension countrywide. The Minister of State said it is better to hasten slowly and do it in proper order, festina lente, but if a person is long-term unemployed, will he or she care for proper order? They want a job and every help in getting a job.

There is a poignant aspect to statements by the Minister for Finance, Deputy Quinn, and other Minister about our massive growth and economic boom. I hold my constituency clinics on Saturdays and over a period of about six hours I deal with about 80 people on the telephone and in person. Many of them tell me they do not understand the economic boom and do not know what the Government means in its statements. The Government's message does not reach the homes in Battery Heights, Sarsfield Square, St. Mel's Terrace and similar places whose inhabitants cannot get jobs because of the tardy pace at which the Government is supposedly tackling long-term unemployment. It is a disgrace, as is the distancing of the leadership of the Labour Party, Democratic Left and Fine Gael from the problem. They wrap themselves in surreal phrases such as "we trust one another". The electorate trusts none of them. The electorate is waiting, not in the long grass but in the short grass, to give the proper verdict on what has not been done.

Although the INOU is estimable, it does not have a countrywide structure so there is no direct representative of the long-term unemployed. We hold debates such as this and everybody says their piece. We keen and moan when the monthly figures are released but what can we do? We can spend money on extending the local employment services immediately. We can get the money in the budget and extend the scheme, and not just to six more areas, and bring proposals to the Cabinet. Its members have read the NESF report — or perhaps not, it would appear — but they are not implementing its recommendations. One in 16 new jobs goes to a long-term unemployed person. This document was welcomed when it was produced last April. After the welcome, however, there was a halt to any further work on it. It has been ignored.

The retention of medical cards was put forward as the central plank of policy. The long-term unemployed could return to work and keep their medical cards for some time. That was the carrot, but it is a shrivelled carrot. I have put down parliamentary questions on this matter to the Minister for Enterprise and Employment but he has denied responsibility. I have put the same questions to the Minister for Health who replied that the health boards are meeting to work out a formula. This is November and the scheme was announced in January. The carrot for the long-term unemployed was that they could retain their medical cards for a certain period if they returned to work. It is not working. The Minister of State, Deputy Fitzgerald, does a great deal of constituency work so she must meet such people as regularly as I do and be aware of the problem. The people who come to my clinics say they are not getting their medical cards and I do not know why.

There is something wrong with a Government whose members pass the buck. The Minister for Justice, Deputy Owen, passes it constantly and, as a result, some poor civil servant will be truncated when it is the Minister's fault. We are waiting to hear the result of an inquiry which is due to report within the next two weeks but the Minister is culpable, not the head that will be chosen following the inquiry. Or will we have an "Alice in Wonderland" situation in which it is nobody's fault but the "system"? How interesting. The system is inanimate but it appears it can be faulty.

The Minister for Enterprise and Employment says medical cards are the responsibility of the Minister for Health. The Minister for Health says the health boards are endeavouring to meet to work out a formula. However, this is November and the scheme was a central feature of the strategy to help the long-term unemployed when it was introduced in January. Do Ministers and Departments talk and communicate? Do civil servants talk? Why can it not be done? The medical card provision is not being implemented. It is a classic example of what goes on in this Government with every Minister second guessing the other.

I will recount the relevant points. The NESF forum is excellent and is excellently led but the marginalised are being muted. Perhaps that was the intention. The reports are sturdy and vigorous but they have not been implemented. I am glad the House is having this debate. It might instigate some action, although I doubt it. Since we have the largest number of long-term unemployed people in the OECD, any attempt on the part of the Government to be pleased with itself is faulty. The number of unemployed has increased by 3,500. The Jobstart and Workplace programmes which were to have 5,000 participants in 1996 have only 500 participants despite massive advertising by FÁS. The report recommended that local employment services be extended countrywide. That has not happened. The medical card "initiative" has not happened and I do not know why. I also do not know why the anticipated numbers have not participated in the Jobstart and Workplace programmes.

The net result is that Ireland is becoming an insider versus outsider society. Insiders are buoyed up by the high economic growth and by the figures spewed out at posh conferences in Kenmare and other places. I mean no disrespect to those who spoke at the conferences. People who attend such conferences go home in posh cars, comforted by figures which claim Ireland is doing brilliantly. Ireland is not doing brilliantly for the long-term unemployed. We are a show. We allow the scandal of those numbers to grow while saying, with a brazen face, that the country is doing well in economic terms. It is not doing well in economic terms if it ignores the growth of such social injustice. That injustice is the number of long-term unemployed who have no hope or objective in life. How can they have an aim? They look to the Government and public representatives to help them and we, and particularly this Government which set out with such high sounding notions, have failed them miserably and utterly.

With the permission of the House, I will give the remainder of my time to my colleague, Deputy Walsh, who has a real interest in this matter.

Mr. J. Walsh

I compliment the authors of the NESF report. They did a great service in outlining clearly the extent of the unemployment problem and the plight of the long-term unemployed. What I find extremely difficult to understand is that the Government and Ministers directly responsible seek to ignore the problem rather than to acknowledge and address it. On questions and during the debate on social welfare I have brought this matter to the attention of the Minister for Social Welfare on several occasions but, as in many other cases, he seeks to air brush it out of existence and say it does not really exist. The other survey is far more beneficial from the Government's point of view. If we have a difficulty with the live register, we produce a survey carried out once a year or once every six months, such as the labour force survey, which shows the Government in a much better light. That is absolute nonsense and escapism.

It is clear from questions answered here that more people are now being paid long-term unemployment benefit than a year ago or two years ago. To cater for these people we must look at the whole economic model because obviously it has not worked. The figure for people unemployed long-term is 136,500. That is more than when the Minister came into Government and no amount of escapism will get away from that. Some research should be done on those figures. When I asked the Minister for Social Welfare the extent of research on those figures he said he had no idea, that it was not his job to know. The Government should think about its constitutional responsibilities to the people.

The Government got into office by chance in a situation engineered by the leader of the Labour Party. There is more about being in Government than having the trappings of power. The responsibilities of office mean one has to avail of the opportunities, the good economic growth performance, the remodelling of the national finances and the restructuring of the whole economy post 1987. One cannot rely on press conferences and spin doctors who say we have the greatest growth rate in Europe, the lowest inflation and interest rates are at an all time low. That is no good to the greater number of unemployed people.

If the Government could say it converted growth and good economic performance into real jobs and opportunities there would be a degree of hope for the long-term unemployed. That is the responsibility of the Government. Research on the long-term unemployed should be carried out to assess their level of education, backgrounds, skills and their ability to be in a position to avail of opportunities. How can we superimpose an education model based on the academic model to a great extent on people in deprived and depressed areas? Those people in deprived and depressed areas have tremendous skills, many of which are unknown in the rest of the country. We are not allowing them to use skills by providing an education system which would allow them put those skills into operation. Instead of making facilities available through the education system we abandon and neglect them. Then we wonder why they end up crowding our prisons, why they are on drugs, why they end up in neglected and abandoned housing estates and in housing schemes which are no-go areas.

On the Control of Horses Bill we debated wandering horses. The unfortunate people who ride them were berated and insulted. However, riding is a skill and we have some of the best jockeys in Europe. We have a racing apprentice school in Kildare. Why not provide more opportunities for those unfortunate people? If there was a will to do it, it would be done; we have many FÁS schemes. Some of these young people would be good at many other skills because they have good hands and could work with timber and so on. There is not the will to look at alternative opportunities for those people but if we did so we would begin to seriously tackle the problem of long-term unemployment.

Apart from the niche opportunities, indigenous industry is sorely neglected. We are fooling ourselves to a great extent if we think the growth levels are a reflection of how good the economy is doing. Our growth level tells only half the story. Much of industry here is dependent on the economic model which is based to a great extent on attracting foreign industry. We have been extremely good at doing that. Much of our exports have only a minimal indigenous content. Many of the foreign companies here boost our exports because they avail of the 10 per cent tax rate. The spin-off and the benefit to the economy and to jobs is minimal.

We have the resources to build up a truly great indigenous industry in, for example, potatoes but it is totally neglected. If anything is synonymous with Ireland it is the humble potato. Ireland is 60 per cent self-sufficient in potatoes. This means almost half of the potatoes consumed here are imported. That is a shame. There should be Government and Departmental encouragement, and resources should be put into that area. We would have another famine in many parts of the country if people had to depend on what they produce in potatoes and other vegetables. We have to depend on the economies of Cyprus and the Netherlands to feed the Irish people. We do not do ourselves justice in that regard.

In the food area, we have the BSE problem. In 1987 when the restructuring of the economy began in earnest, an office of food was established and a Ministry of Food was put in place but it was abandoned by the Rainbow Coalition. The policy is to depend on live exports, sent on the hoof to North Africa, Russia or to anyone who will take them from us. When there is instability in any of those areas one is left high and dry. The urgency of this problem has not dawned on the Government. There is one area in which there has been a tremendous growth in jobs: that of special advisers, programme managers, spin doctors and so on. These are all employed in the interests of ensuring Government decisions are implemented efficiently and effectively.

What happened in the past two months and in the past two years when Ministers went to Government and to Cabinet with a proposal? In the case of the Minister for Justice, Deputy Owen, the proposal was put, decided on favourably, and went back to the Department where it was thrown somewhere. Where are the programme managers, special advisers and spin doctors who are supposed to free up the wheels of Government and ensure that everything is done efficiently and effectively? If the labour force survey and the live register do not suit, the rules are changed. In the last few weeks, the Government decided that the Ministers and Secretaries Act, 1924, was not to be obeyed. It says it is not effective and it does not have to abide by it. I commend this report to the House and ask the Government to take its recommendations seriously.

Miss Harney

These debates are useful but to a large extent statements and reports of this kind become legislative polyfillas. We usually have a debate on some Government report or other on a Thursday afternoon where everyone makes meaningful and aspirational statements, after which nothing happens. This will be the case with this issue, which has been debated before. If debates, task forces, reports, committees, consultants, programme managers and advisers could solve our unemployment problem, we would have none. The country is overwhelmed with advice, reports and recommendations in relation to job creation and unemployment.

Before we debate unemployment and long-term unemployment in particular, which is the focus of this report, we need to make a few things clear. No party has a monopoly on concern for the poor, unemployed or the marginalised. Every political party worthy of the name is concerned about all these issues. The difference is not in the extent of the concern but in how we believe the problems can be tackled. We belong to different political parties because we have a different approach, outlook and philosophy on how this country and its economy should be ordered so that more people can have an opportunity to participate in society. The reason the Minister of State and I are in two very different parties is precisely that we have a different approach. Politics is about ideas and options and general elections give the public an opportunity to choose between conflicting sets of ideas.

The Minister of State believes in State intervention and regulation. She believes in State control to a large extent and that it knows best how to spend people's money. Ireland is one of the few countries which adopts this approach. Labour parties in New Zealand and Europe have adopted a different approach. The State should have a minimalist role in our economic affairs and our life generally. As regards private morality where individuals should be allowed to make choices about their lives, equally in relation to economic matters, workers should be allowed keep more of what they earn and choose how to spend it. If others can perform a task or provide a utility, they should be allowed to do so.

The primary duty of any State is to protect its citizens, to ensure it has a fair and even-handed system of justice and that the laws are enforced across the board, without fear or favour. Our citizens, elderly and young, should not be vulnerable to criminals and in so far as any State can, it should protect them from crime and deal severely with those who commit crimes.

The State has a duty to provide a comprehensive system of education, from preschool to third level, for all its citizens. It must also provide a decent health and welfare system, to ensure money does not become the reason one gets particular medical procedures. Every citizen in the State should have access to a decent, caring and compassionate health service. Those citizens who cannot, for whatever reason, provide for themselves should be provided for by the State, not as a matter of charity but as a matter of right.

Ireland has followed the European pattern of high unemployment. We have failed miserably to provide opportunities for our citizens. There are 20 million unemployed in Europe, which is the unemployment blackspot of the world. The unemployment level is the equivalent of the population of three member states — four including Luxembourg. We do not yet know now many are unemployed in Ireland and the Minister may shed some light on this. According to the live register, there are 270,000 unemployed but the Minister said that is not a reliable figure. If it is not reliable, why are we paying unemployment benefit to 270,000 people? The labour force survey, which the Minister and the Government says is the more accurate figure, is 190,000. If that is the accurate figure, why are the taxpayers paying an extra 80,000 people unemployment benefit if they are not unemployed? The gap between those figures is so enormous that the policy imperatives are equally very different. If we do not know the exact figure we cannot really begin to address the problem in a meaningful way.

There has been recent evidence to suggest massive fraud in the social welfare system. During the past two months, 20,000 people stopped signing on. I do not think even the Minister is suggesting that 20,000 jobs were created in the last two months. They stopped signing on because they were afraid they would be caught. If we are to have a welfare system which looks after those in need on a fair and equal basis, we have to ensure that the taxpayers' resources which fund that system are concentrated on those who need it. If people are defrauding the system, they are defrauding their fellow citizens, the elderly, disabled and those who have to rely on welfare to provide for themselves and their families. These people should be rooted out.

Whether one is unemployed, a taxpayer or an employer, we all respond to the system which has been put in place. That is human nature. Our tax system encourages people to opt for it both ways — to be part of the black economy and part of the welfare system. They know before they go to work on Monday morning that they have more than £100 in their pocket. They know the chances of getting caught are probably slim and the penal levels of tax so high if they become legitimate that they are prepared to take the risk. A recent CSO analysis of the live register showed that 48 per cent of the register have been unemployed for more than a year and that 25 per cent have been unemployed for more than three years. The 48 per cent figure represents about 130,000 people and the 25 per cent represents 70,000 people.

We are told that the growth rate in the economy over the past two years has been in the region of 20 per cent. Despite that growth rate, the "Celtic Tiger", as we like to call ourselves, has not produced employment opportunities for the long-term unemployed whose number is as high now as it was two years ago. We need to focus on the effects of long-term unemployment, not just on the families in question but on the whole fabric of our society.

Earlier, when I expressed reservations about the regulations we were putting into effect to limit the pocket money of young people, the Minister chastised me and spoke about slave labour. We do not live in Dickensian times, we live in a country which has almost reached the 21st century. We do not have slave labour, but many people are enslaved in a system of long-term unemployment because of the way we order our affairs. Whole communities, our entire country, is being destroyed because of unemployment. Too many of our people, young people in particular, are growing up in households where they have never known what it is like to see somebody go out to work; the dignity of their parents, their self-esteem, their worth as human beings is destroyed. In our society, social conversation often begins with: "where do you work" or "what do you do?" Too many of our people sometimes have to lie being too ashamed to admit the truth. If ours is to be a caring, civilised society it cannot continue to assign so many of its citizens to the prospect of long-term unemployment and its consequences, including marginalisation, isolation. Many young people who leave school and have no opportunity to work may become drug addicts and criminals. There is no doubt that many will end up in trouble with the law because idle hands always find things to do.

Our society has a lot at stake when it seeks to address the question of unemployment. As politicians we must address how we can begin to make an impact, in terms of legislation and budgets, to ensure that fewer people in the future are assigned to a life of unemployment, particularly long-term unemployment.

When dealing with the regulations the Minister of State said she does not believe in Mickey Mouse jobs or Mickey Mouse wages. I know she did not have a script but I do not quite know what that means. Unlike the Minister of State I believe one is better with a lousy job than no job, that one is better on low pay than none; that is not just a soundbite, I believe that.

Ms E. Fitzgerald

Does the Deputy want people to leave school at 15 and take up Mickey Mouse jobs?

Miss Harney

When I was 15 I worked during the summer and it did me no harm. I want society to provide——

Ms E. Fitzgerald

We have found young people of 15 in full-time work.

Miss Harney

——circumstances in which if young people and their parents want them to work as lounge bar assistants at 17 years of age, say a university student, until midnight on Friday, they should be free to do so.

When I asked the Minister of State who would police the regulations I did not receive a satisfactory answer. I predict they will not be policed because the law is not policed at present. One can go into any bar in this city and find young people serving into the very late hours. The Minister knows that to be the case. All of this might be ideal in an ideal world but we do not live in an ideal world, we live in a very competitive world of globalised markets. Irish companies have to compete in those markets in terms of——

Ms E. Fitzgerald

The Deputy is saying she wants people to leave school at 15 and take up Mickey Mouse jobs.

Miss Harney

I did not interrupt the Minister of State. Irish companies must be able to compete in those markets in terms of quality and price if we are to sell our products. As we move into the 21st century, if we really want to encourage employment, the patriots will be those who create enterprises and take risks because it is through their risk-taking they provide opportunities for themselves and others. Rather than hounding those people through more and more regulation, bureaucracy and higher taxes we should seek to encourage them because the society we want to create needs more people like them.

We Irish have understood the link between tax incentives and activity. When it comes to manufacturing industry, we have a 10 per cent tax on the profits of manufacturing companies. As a result we have done extremely well in attracting very labour-intensive industries of a manufacturing kind. Although ours is one of Europe's smallest countries, when it comes to some key sectors of our economy, we have attracted 23 per cent of all mobile investment from the United States in some key manufacturing areas consequent on that 10 per cent tax rate.

Last year Irish subsidiaries of foreign companies made pre-tax profits of £4.5 billion. That means they paid approximately £450 million in tax to the Revenue Commissioners whereas, had they been paying tax at the European norm, of approximately 30 per cent, they would have paid three times more tax, or £1.5 billion rather than £450 million. That 10 per cent tax is worth £1 billion Irish pounds to those Irish subsidiaries of foreign companies. That is the main reason they remain and will continue to remain here if we are able to bring our standard rate of CPT down so that we do not have two different rates which will not be allowed within the European Union in a number of years to come.

Equally the financial services sector, where some 2,000 people now work, has been extremely successful. Profits in that sector are taxed at 10 per cent also which is the reason we have so much activity in that area.

We have used tax breaks to encourage the development of the film industry and that industry has responded very well. We have used tax breaks to designate certain urban areas for urban renewal, to designate seaside resorts for development but, when it comes to work, we have never understood the link between tax and activity, between tax and effort and tax and reward.

I want to pose some questions to the Minister. If we are talking about providing opportunities for the long-term unemployed, I must point out that initially they will obtain jobs for modest wages. Let us consider the case of a single person on a weekly wage of £150 out of which he or she will pay £26.50 in tax and PRSI in addition to which their employer must pay employers' PRSI. Out of that salary the Government will take £39. The combined tax take, including what the Government takes in terms of employers' PRSI, amounts to 26 per cent. If such a person is at present on the dole, taking into account the fact that they may be in receipt of a rent allowance if living away from home and will incur travelling costs going to work, consequent on working perhaps up to 40 hours per week, they will be £14 weekly or 35 pence an hour better off: that is the reality.

If we move up the scale to a person I would not regard as a high income earner by any standard but who earns the average industrial wage, say a single person in receipt of £300 weekly, that person in the Republic of Ireland is £16 weekly worse off than his or her counterpart in Northern Ireland. To allow their employer give them an extra £1 in take-home pay is 50 per cent more expensive in the Republic than in Northern Ireland. If at a time when our economy is growing at an annual rate of seven, eight or nine per cent we cannot apply the proceeds of that growth to reduce the burden of tax on work, we shall miss an opportunity to put a real dent in unemployment once and for all.

Of late we have heard much about the number of jobs created within our economy, two out of every three of which are part-time. Job creation is measured by, for example, in the case of a supermarket owner replacing one full-time worker with three part-time, describing that more as two new jobs. We need to re-examine how we calculate and interpret what exactly constitutes new jobs in terms of their full-time job equivalent.

The Minister of State may be surprised to hear that I agree with one comment she made — that a rising tide does not lift all boats. There is no doubt about that. We have had a rising tide for a number of years past, a very successful economy in terms of fundamentals and growth rates. As far as some people are concerned it is all boom but, when one translates that into activity on the ground, for those who are unemployed, particularly in the case of the long-term unemployed, they have not seen the benefit.

Despite the high level of unemployment in this economy, estimated by the live register to be 270,000 or by the Labour Force Survey to be 190,000 — it does not matter which figure one uses for this purpose — in the catering industry they cannot find people to take up jobs. We now have the lubricious circumstance in which I understand Spanish workers are being brought here to work in our tourism and catering industry. What does that say about our commitment to solving unemployment? Our current system of managing employment services and unemployment compensation, divided between two Government Departments, needs to be examined. The Department to which the Minister of State is attached, is at present responsible through FÁS for employment services but has no control whatever over what I would regard as payments to unemployed people.

I commend the local employment service but it is not available to all unemployed people. We need to integrate employment services with the unemployment compensation payments scheme. If unemployed people, particularly those who have been unemployed for three years or more, are not given the assistance and skills they need to help them return to the jobs market then opportunities will pass them by. The functions carried out by the Department of Social Welfare in terms of the payout of benefits to unemployed people should be integrated with the functions carried out by the Department of Social Welfare Employment through FÁS. Many workers in the two Departments work side by side with each other but the systems are not integrated. As a result there is a lack of efficiency and, more importantly, unemployed people do not get the advice they require.

The Minister referred to the famous Jobstart programme, which has become something of a joke. The Minister for Finance trumpeted the programme as a major initiative to help long-term unemployed people return to the workforce. We were told that £1 million was being provided and that 5,000 people would qualify for inclusion in the programme. One does not have to be a mathematical genius to work out that a sum in the region of £20 million per year would be required if 5,000 people qualified for inclusion in the programme at a rate of £80 per week.

The programme has not been a success and the Department recently undertook a massive advertising campaign, which included availing of prime time spots on RTÉ radio and, presumably, on local radio stations, to promote it. One does not have to tell employers about the benefits available to them and the reason so much effort has been put into advertising the programme is that it was doomed to fail before it ever started. This is why no more than 400 people have been employed under the programme.

If task forces, committees, consultants, programme managers, advisers and Government schemes could solve unemployment then we would not have a problem. However, the reality is that there are more people on Government job schemes than working in the food industry and there are more people working in job creation agencies than working in some of the traditional industries such as brewing or distilling. We have adopted a bureaucratic response to the problem of unemployment. The Culliton report recommended the adoption of a different approach and referred to the need to lower the burden of tax on work and to streamline the number of agencies delivering advice and assistance in the job creation area. Instead of this, we got the opposite. We missed a great opportunity when we adopted a bureaucratic approach to the problem.

For every ten people at work there are approximately 22 dependants. Of the ten who work, two work for the State and eight work in the private sector. For every person working in the private wealth creating sector there are three dependants. The smaller the wealth creating private sector becomes the more dependants there will be. We must ensure we do not put obstacles in place which would prevent that sector expanding. It is only by expanding that sector that we will have more money for health, welfare, education and the host of measures we would like to see implemented if the resources were there.

We must begin at the beginning and tackle unemployment, particularly long-term unemployment, by ensuring that the incentives which operate in the economy encourage employers to expand their businesses in a way which requires them to take on more workers. The more regulations, bureaucracy and tax burdens we put in their way the less we will encourage them to employ more people. Eleven per cent of those employed in the manufacturing industry are casual workers. The reason this figure has doubled over the past five years is that in a world of globalised markets people will not make long-term commitments if obstacles are put in their way.

In recent weeks three major companies — Chung Wa, Lucky Goldstar and Hyundai — decided to locate in Scotland, Wales and the United Kingdom. Each of these labour intensive companies will employ 2,000 people. They did not locate in Ireland because of the tax system and the regulations with which employers must comply. It is interesting to note that even though the cost of employment in Wales is much lower than in Ireland the take home pay and per capita income of Welsh workers is higher than that of the average Irish worker. We must learn lessons from this and ensure as we move into the next century that workers take home more of what they earn, that workers earning £300 per week do not pay the top rate of tax and that workers in Dundalk earning £300 per week are not £16 per week worse off than their counterparts across the Border in Newry. If we are to grasp in the future the opportunities we grasped in the past then we will have to adopt a different approach and a different style of politics. We need to focus on encouraging people to do things for themselves and putting in place a system of government and economic policies which bring out the best in people whether they are unemployed, workers or business people. We need to adopt a different approach from the one which proposes more schemes, task forces, tax, bureaucracy and regulations. This approach has failed and we must try the alternative.

Mr. Costello

It is mind boggling to be lectured by the Progressive Democrats and Fianna Fáil on job creation and unemployment. When Fianna Fáil was returned to power in 1977 Deputy Harney was a member of that party. The then Taoiseach, Jack Lynch, said he would resign if unemployment went over the 100,000 mark. Even though unemployment went over the 100,000 mark in 1980 Jack Lynch did not resign and Fianna Fáil did nothing about it. Between 1977 and 1979 Fianna Fáil stuffed the Civil Service and the public service with workers. During the late 1980s Ray MacSharry had to cut back on the number of people employed in these areas. It is ludicrous for people who behaved in that fashion to shed crocodile tears.

Mr. M. Brennan

The Government is stuffing the Civil Service with workers now.

Mr. Costello

More jobs have been created by this Government than have been created by any other Government in the history of the State.

Mr. M. Brennan

We left a good economy for the Government.

Mr. Costello

That is open to question.

Dáil Éireann díospóireacht - Thursday, 14 Nov 1996

NESF Report on Long-Term Unemployment Initiatives: Statements.

Acting Chairman

Acting Chairman

Dáil Éireann díospóireacht -
Thursday, 14 Nov 1996