National Training Fund Bill, 2000: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney)

The purpose of this Bill is to establish the national training fund. The fund will support a range of training initiatives aimed at the employed and those seeking to enter or return to employment. The establishment of the fund is part of a wider strategy for the promotion of human resource development in response to the social and competitiveness challenges now facing us. We are living in the midst of a period of unprecedented economic growth. We are experiencing the positive effects of reformed public finances, increased competition and a pro-enterprise environment, a successful and focused industrial policy, low taxation and long-run investment in initial education and vocational training. Globally, we have experienced growing and increasingly diverse trade and a dispersal of the factors of production. We have seen the growth of the knowledge economy and the shift from "bricks to clicks", as it has been called. We have witnessed the growth and consolidation of the European Union as a trading block.

In Ireland we have been fortunate to experience the confluence of these two rivers of change – national and global. The steps we have taken to put our own house in order have allowed us to gain enormously from globalisation and the knowledge economy. This is why we attract 27% of all US greenfield investment in Europe. It is why we are the largest exporter of software globally and it is why young, dynamic Irish companies are now beginning to penetrate the technology powerhouse of the US.

Change has fostered prosperity, but that very prosperity and the change which fuelled it bring new challenges and new uncertainties. We are now at the point of full employment when viewed in classical economic terms. We are also on the cusp of a significant change in demographics, where the numbers of new entrants to the labour force will fall from 27,000 this year to under 12,000 by 2008. Concurrently, we will be faced with significant labour and skills requirements to service the expanding economy and address infrastructural deficits. Notwithstanding current labour market tightness, we need to treat the concept of full employment very cautiously indeed. We must not be complacent and feel that we have solved the unemployment problem. We must strive not just to cut unemployment, but to grow our employment rate also.

As far as unemployment, and indeed underemployment, is concerned, we still have 52,000 people who are short-term unemployed. We also have 28,000 people who are long-term unemployed. In addition to these people, who indicated that they are unemployed in response to the labour force survey, we also have a significant group of some 80,000 people who are marginally attached to the workforce. These people could benefit from work, given the right combination of circumstances and opportunity. In all, this represents a large number of people who could benefit from work.

There are also significant numbers of people with disabilities who want to work. My Department has fully embraced its responsibilities for the training and employment of such people. Both the national training fund and the Exchequer will provide the resources to ensure that people with disabilities are given the opportunity, means and skills to secure work. As well as people who are unemployed, we also have a large number of women who remain outside the labour force. By comparison to the best performers among our EU counterparts, our female employment rate of 51.4% is lagging behind. The rate in Denmark is in excess of 70%. In many cases, women need to equip themselves with specific skills in order to find jobs. Again, training is the key.

Many people find themselves in unemployment because of structural changes in the economy which devalue their existing skills set. People who left the education system early with marginal skills in the first place are demonstrably the most vulnerable in times of economic downturn. The quality of the training programmes we offer can be a critical determining factor in helping people back into employment.

The national development plan involves investment of £23 billion in infrastructural projects. Having the necessary levels of craft skills and craftspersons is a key success factor underpinning the national development plan. The apprenticeship system plays an essential role here and will be an important component of the national training fund.

Enterprises will be increasingly dependent on the existing workforce and its ability to adapt to technological and competitive changes. This is an inevitable consequence of our high employment rate and demographic change factors. It is a positive sign that enterprises themselves are already recognising this. The 1997 White Paper on Human Resource Development indicated that

spending on training by Irish firms was 1.5% of payroll costs. A recent survey of firms conducted by IBEC suggests that this has increased to 3%.

The survey revealed some significant improvements, but some continuing weaknesses also. For example, 45% of the companies surveyed had a specific budget for training and the average number of training days was five per annum. As against this, 40% of companies did not have a specific training budget, suggesting that training was pursued on an ad hoc basis. The remaining 5% of companies identified no spend on training at all. These data suggest that the picture on enterprise training is changing. There is increased commitment among firms, but there are still significant numbers of firms whose approach to training is ad hoc, and a smaller number of firms who simply do not train at all. It is also clear that firms find the costs of training too high and that the market in supply of training may not be sufficiently developed. Policy, and the structures through which it is delivered, needs to respond to these issues.

Today, almost 900,000 people work in the commercial services sector. This number has grown by almost 250,000 since 1990. Growth in international services has been particularly impressive, rising from 11,000 in 1990 to 49,000 by 1999. Manufacturing remains critically important and is continuing to prosper. However, our manufacturing base is changing significantly. This can be seen by the fact that the high-tech sector, including chemicals, engineering and IT, grew by 42,123 jobs from 1990 to 1999. Lower technology sectors, such as textiles, clothing and furniture, by contrast lost almost 11,000 jobs. Our approach to training needs to reflect these changing trends.

The Government is committed to partnership. We have worked hard with the social partners since we came into Government to develop the Programme for Prosperity and Fairness and to ensure that the partnership process remains capable of coping with the changing economic and social environment. The creation of the national training fund is the foundation stone for a new approach to training policy and enterprise training in particular. Our overall commitment to part nership has applied to the development of the fund. In January this year, my Department issued a discussion document on enterprise training, which addressed a wide range of topics, including apprenticeship, the respective roles of FÁS and Enterprise Ireland, and the question of the relevance and appropriateness of continuing with the statutorily defined industrial training committees.

Since issuing the document, officials of my Department have engaged in wide-ranging consultation with the stakeholders in training. These consultations have involved regular contacts with FÁS, Enterprise Ireland, IBEC, the Chambers of Commerce of Ireland, Skillnets and the Irish Congress of Trade Unions. My Department has also met with delegations from each of the industrial training committees. The overwhelming view that emerged from these discussions was that both employer and employee representatives want to explore new approaches to human resource development. They want flexible structures. They want a greater focus on certification and the development of certification models appropriate to enterprise. They want to work with the State to develop lifelong learning and, in particular, more flexible and easier access to the education and training system.

All the stakeholders have welcomed the dialogue which has been initiated. They want to be sure, however, that a structure is put in place for the continuation of the approach. In that regard the Bill provides for consultation with employer and employee representatives in respect of the fund. I envisage this consultation taking place via the national training advisory committee which I intend to establish early in the new year.

With policy consultation, my Department has worked with the social partners to develop practical new initiatives in training. The Skillnets initiative is an excellent example of this. It gives enterprises an opportunity to collaborate in identifying and addressing their shared training needs. Moreover, by pooling resources and group purchasing solutions to common training problems, the costs of accessing training can be reduced for individual network members. Skillnets has been enthusiastically welcomed and 60 projects are now in operation or getting under way.

The overall environment is changing dramatically and so is our approach to human resource development. Set against those changes, our statutory framework as embodied in the Industrial Training Act, 1967, is outmoded. It is based on the concept of designating sectors, establishing statutory industrial training committees to oversee training in these sectors and imposing sectoral levies to fund that training. This framework is increasingly at odds with the developments I have described. It is too rigid. It ignores intersectoral and value chain linkages, which are increasingly important to competitiveness, and it creates an artificial distinction between firm specific and sector specific assist ance. It is too focused on manufacturing to the detriment of the services sector. In terms of finance, the system of sectoral and apprenticeship levies reflects many of these flaws and does not provide an appropriate funding base for training. We, therefore, need new funding mechanisms and new structures, which must be flexible, responsive and client friendly. The Bill provides an essential statutory underpinning for this new approach.

I will now outline the principal features of the Bill. Its main purpose is to establish the national training fund and consequent national training levy. The fund will finance a range of schemes aimed at raising the skills of those in employment; providing training for those who wish to acquire skills for the purposes of taking up employment and providing information on existing and likely future skills needs in the economy.

The Bill provides for the payment by employers of a levy equivalent to 0.7% of the reckonable earnings of employees insured for the purposes of social welfare legislation under Class A, with the exception of community employment participants, and Class H employments. There will be no additional financial imposition on employers as the cost of the levy will be offset by a comparable cut in employers PRSI contributions. This cut will be effected by a ministerial order which will be brought forward by the Minister for Social, Community and Family Affairs to coincide with the introduction of the national training fund levy.

Section 2 provides for the establishment of the national training fund. The fund will operate a current account and an investment account. Any moneys which are not required to meet current expenditure will be transferred to the investment account and may be transferred back to the current account as required. The Bill will thus provide a ring-fenced source of funds for training. This section also provides for the Exchequer to make contributions to the fund, if required.

Section 3 provides for the imposition of the national training fund levy on employers in respect of relevant employees. Section 4 provides that the rate of the levy payable by the employer will be 0.7% of the reckonable earnings of relevant employees, subject to the ceilings which apply for payment of employers PRSI contributions and certain exemptions. This section also provides for the payment by the Minister for Social, Community and Family Affairs of a sum of £120 million from the social insurance fund to the Minister for Enterprise, Trade and Employment for 2000 to take account of the fact that those training schemes falling within the ambit of the fund's purposes have already been subvented by the Exchequer this year. The section also provides for funds from the former levy grant schemes which are now held by FÁS to be transferred to the national training fund.

Section 5 provides for the collection of the levy. The sums collected will be transferred to the social insurance fund in the first instance and from there to the national training fund. Section 6 provides that the Revenue Commissioners may supply information regarding reckonable earnings of persons in respect of whom the levy is payable.

Section 7 sets out the basis for making payments from the fund. It provides for payments to be made from the fund for schemes meeting the purposes I have described. The section also provides that a wide range of schemes may be subvented by the fund. As regards the selection of schemes to be funded, this will be determined by the Minister for Enterprise, Trade and Employment. I described a number of key areas such as apprenticeship, skills training for unemployed persons and those outside the labour force, in-company training and lifelong learning which need concerted and sustained attention. All these areas will fall within the ambit of the national training fund. The moneys to be allocated to particular schemes will be determined with the consent of the Minister for Finance in tandem with the annual Estimates process. This is essential given that many of the organisations subvented by the fund will also be in receipt of Exchequer funding. I have also provided in the section for consultation with representatives of employers and employees in relation to the fund.

Section 8 provides for penalties for specified offences under the Bill. Section 9 provides for the repeal of certain sections of the Industrial Training Act, 1967, and the entire Industrial Training (Apprenticeship Levy) Act, 1994. The principal items covered are the repeal of the statutory provisions covering the former apprenticeship and sectoral levies which were suspended in 2000 in anticipation of the introduction of the national training fund levy and those providing for the establishment and operation of the statutory industrial training committees which were integrally linked to the sectoral levy grant schemes. The remaining sections are standard provisions.

The boundaries of the competitiveness game are now well established. Increasingly, the issue is not about whether we are in the right ball park, but rather how skilfully we play the game. Our match fitness depends on the quality of our human resources and the developmental opportunities we can offer our people, whether they are entering the labour market for the first time, seeking to return to work or change career, or simply to advance within their chosen occupation.

We have made enormous strides at the level of competitiveness and social inclusion. We have achieved this in large part through investing in skills, especially in the initial education and training area. We need to take a broader approach, one which looks to the future and ensures the skills base we have built is maintained and upgraded to meet the challenges to come. The National Training Fund Bill and the policy approach I have outlined provide for precisely such an approach. I commend it to the House.

Mr. Coghlan

I welcome the Minister and, with a few possible exceptions, the Bill, which provides for the establishment of a national training fund and an associated levy as announced by the Minister for Finance in budget 2000. At this juncture in our development as a nation, the issue of training and retraining is of crucial importance to our future and the lives of so many of our citizens who, for one reason or other, are finding that it is not always possible to remain in the same employment for an entire working life.

The fund is intended to finance a range of schemes aimed at raising the skills of those in employment and providing training for those who wish to acquire skills for the purposes of taking up employment. I take it that the latter is intended to cover those transferring from one employment to another and those who, through force of necessity, need other employment because of displacement arising from companies going into liquidation or other reasons.

Increasingly, training and upskilling of the workforce is of fundamental importance. It is incumbent on us to have all the proper structures in place to meet the needs of all such persons as well as those of the unemployed who need to be brought back into the workforce at the earliest opportunity. We must also ensure those in jobs with short-term viability are not overlooked and have access to proper facilities for retraining to enable them to return to the workforce quickly. We all appreciate the need for a concerted and focused approach across the economy to industrial training.

The Minister said in the Dáil that manufacturing remains critically important. This area will present a serious challenge in the future. In focusing on manufacturing there is a necessity to ensure a balance in terms of providing people with the necessary manufacturing and service skills. When dealing with human resources we must not lose sight of the need to ensure a good quality of life. We must focus not only on the companies and their requirements but also on individuals to find out how they can best benefit from additional training and investment in this area. We must not consider things solely from the point of view of enterprise but ensure that people have the necessary skills to take up employment and that the employment is secure.

Much of our economic success has been due to our well educated workforce and the talented people who are available to take up employment opportunities. However, labour shortages are a great threat to our continued success in many areas. Firms are reporting vacancy rates of approximately 10% across all grades, the highest being in the IT sector where the vacancy rate is approximately 15%. This clearly points to the need to improve our capacity to upgrade the skills of people in the workforce and to enable people who are temporarily displaced quickly to relocate within the workforce. We should also do more to bring home our educated emigrants who could take up employment in areas where shortages have arisen.

The greatest barrier to our emigrants is the inability to purchase a new home when relocating. If we are serious about attracting people back to this country, more will have to be done to assist them in relocating. I recently encountered the case of an eminent individual from the Munster area who has worked successfully in Canada for a few years and wanted to relocate to Ireland. Suitable well paid positions are available and have been recently advertised by some health boards. This man lives in comfortable accommodation in Canada but when he contacted me he discovered to his shock and horror how much house prices in Ireland had increased. It is a sad situation. Much as he and his family would like to relocate here, they are financially precluded from doing so. More attention will have to be paid to this problem. The Government hopes that the Bacon reports and its recent decisions will improve the situation, but that improvement has not yet occurred.

The Chamber of Commerce of Ireland's recent survey highlighting the fact that 56% of companies have no staff training budget must give rise to serious concern. Employers must become more conscious of the importance of investing in the development of their workforces' skills, an important area to have been overlooked. No doubt many employers are looking to this fund to provide that investment. Employers must be prepared to invest in their employees and to develop human resources skills. A determined effort is required to ensure that they buy into this programme.

Sadly, 25% of our population have poor literacy skills. The Tánaiste spoke about shifting from bricks to clicks, but unfortunately a large proportion of the population will find it difficult to make such a transition in terms of basic reading or computer skills. Low levels of literacy undoubtedly affect performance and unless tackled will continue to hamper our economic productivity.

Section 9 of the Bill is a source of concern. It proposes the abolition of many of the existing training arrangements, particularly the statutory industrial training committees. It is believed that this has fundamental implications for the construction industry at a time when Government Ministers are expressing concern about the capacity of the industry to deliver the national development plan. Major training programmes developed by CITC may be jeopardised. Will the Minister clarify if I am interpreting the section correctly or if I have been misinformed? I have been advised that, following wide consultation, the Construction Industry Federation and construction trade unions are deeply concerned with these developments.

Given that concern, I intend to put down two amendments to the Bill. One will provide that funds which are committed to existing training programmes should be held within FÁS and funds required for sectoral training plans where they exist should be ring fenced in the new training fund arrangements. The second will provide that a construction industry training committee will continue to advise the board of FÁS and will retain its structure and partnership nature.

I am glad to note there will be no additional cost to employers in regard to the levy and that there will be a cut in employers' PRSI contributions. On the Order of Business yesterday I raised the abolition of the ceiling on PRSI contributions provided for in the budget. I understand this is a trade off for corporation tax provisions. Since professionals and professional partnerships do not pay corporation tax, this measure will have a serious effect on recruitment and investment in those areas. I hope the Government will redress that problem in the Finance Bill.

I was delighted to hear the Tánaiste use the phrase "client friendly" in regard to the delivery of the schemes and services envisaged in the Bill. Despite the reduction in the number of unemployed, our hearts must go out to people who lose their jobs as a result of companies going into liquidation, particularly people who have worked for the same company for up to 25 years. Suddenly they find that the job they believed to be secure is not secure and that they are obliged to sign on for their weekly benefit.

Many of them have reported to me that the service is anything but client friendly, particularly in the capital city. These people have been dedicated workers and are imbued with the work ethic. They want to get back into employment but they encounter difficulty in securing retraining. The jobs they lost are no longer available and they cannot get something similar. They might have been in the business for up to 30 years but still feel they have a contribution to make. They want to work and I hope this measure will do something for them. However, I am not sure that it will. How can we improve the flow of information through the employment exchanges to assist these people? At present all they are given are gruff, curt messages when they visit these offices. That is not good enough for the State sector.

I look forward to the Minister's response to this debate. We will see what amendments will have to be tabled for tomorrow.

Ms Cox

I welcome this Bill. Everybody agrees that training and development are most important for the continued success of our economy. Our greatest asset which attracted many businesses to Ireland and contributed to that success is our workforce. We will continue to invest in and develop that workforce. If not, we will be unable to make the grade in the global economy and meet the competitive challenges that face us each day.

The Minister addressed a number of important issues. She is well aware of the challenges facing organisations with regard to training. The main factor is the cost of training. Many people think this involves just the £200 to £400 for the cost of the day's training. In fact it is the cost to the company of allowing the employee to be available for training on that day, the cost of additional cover to ensure the person's job is done and the cost of lost opportunities as a result of people being absent from the workforce during the training period. This has not been recognised in the past by agencies which have provided funding and support to companies which continue to train employees. The real cost of training must be borne in mind when we consider ways of encouraging companies to avail of schemes which may be funded through this measure.

Training must be practical. Many training courses are up in the air and are not properly evaluated and no practical steps are taken to ensure that the lessons learned during training are put into practice when people return to the workforce. When schemes are being devised, an evaluation and certification process should be built into them.

The Minister referred to the Skillnets initiative which operates throughout the country. The north Mayo Skillnets has identified training needs for all companies in the area, pooled resources and purchased suitable training in bulk for employees in these companies. The Organisation for Women in Business is also benefiting from the Skillnets programme, as are many chambers of commerce throughout the country.

There has been a long-standing focus on the manufacturing industry in this country and, for many years, there was an unwillingness to deal with the provision of services with the result that we ignored the sector at our peril. I hope the move towards a more client-friendly and flexible training approach will allow those in the service industry to apply to the fund and benefit from it. Technology is changing on a daily basis and it is very important that we retain our competitive advantage to ensure that people keep pace with technological developments.

The Minister spoke about unemployment. There are 52,000 short-term unemployed people and 28,000 long-term unemployed people on the live register. One of the greatest challenges facing us is what to do with people who have been out of work for a long time. Such people may feel they are unable to return to the workforce because it might not meet their requirements in terms of salaries, benefits for their families and self-esteem.

Long-term unemployed people require a particular type of training. Before training commences, issues such as confidence building and personal development must be addressed. Companies should be encouraged to take on people who might not initially meet their criteria or who might not be deemed the most "desirable" type of employee, people who have had difficulties finding work, people from disadvantaged areas or people who may have criminal records and have gone through the probation system. It is very important that companies are supported if they take a chance in recruiting these people. The fast-track information technology programme, which targeted a range of people in disadvantaged areas, has been very successful in Dublin. Long-term unemployed people have acquired skills which make them very valuable employees capable of commanding large salaries which they previously never imagined they could.

There must be a one-to-one focus in regard to the training of long-term unemployed people, and the current numbers would allow us to do that. Any agency which is given responsibility for this training, be it FÁS or otherwise, must adopt a supporting and mentoring role. Sending 26 people on a course with a "let them make it or break it" attitude will not suffice. Training should be followed up on a weekly or daily basis to help people to get through the difficulties they may encounter in the job seeking process. When they encounter problems or disappointments, they should be encouraged to try again.

The issue of retraining is very important. People do not like change. They are accustomed to doing their jobs in a particular way and find it difficult to adopt new approaches. Initiatives which address the barriers to retraining prior to the commencement of training are very important. Women have had difficulty accessing training for many years. If they want to get on to a FÁS course, they must be on the live register. That barrier must be removed. Women who choose to return to work, having stayed at home to care for their families, must have their confidence and self-esteem restored.

The Minister spoke about the need for flexibility in training and development. Community employment schemes have fulfilled a very important practical and social role in the area of employment. Many people who participate in community employment schemes may not be able to access full-time employment for a myriad of reasons, some of which may relate to their home circumstances. Community employment schemes offer people the opportunity to go out to work for 20 hours per week. Their working hours are generally flexible and the work they do is valuable. We must recognise that community employment schemes are not just about taking people off the live register. They are about giving something back to society and providing people with a mechanism to do that. Although community employment schemes do not represent the way forward, it is important that any future schemes would be based on the community employment scheme model.

FÁS runs an excellent return to work course throughout the country which offers people an opportunity to return to work on a part-time basis and gain work experience. Many people subsequently move straight into permanent mainstream employment, sometimes on a part-time basis. These courses are particularly suited to women.

The Minister referred to disability and the need to convince employers that they have a responsibility to work with people with disabilities and to create environments in which such people can work. That would allow people a certain independence in that they would not be dependent on the State for financial support but could earn their own income.

We also talked about the importance of craft skills, particularly in the context of the national development plan, and the money being invested in our infrastructural development. It is necessary to work on the perception of apprenticeship schemes, crafts and similar skilling to ensure people understand it is as important to qualify as a carpenter, plumber, painter, plasterer or bricklayer as to qualify in IT or engineering. Both parts of the employment spectrum must work together.

It is important that the process we put in place to allow people access funding should be as unbureaucratic as possible. I have gone through the process of trying to apply for grant aid for training and development courses. The first thing requested on the application form is a training plan. People say they must draw up the training plan before getting access to funding, but this may take up to six months resulting in the application form not being completed and the people not receiving training. One of the greatest difficulties I have found in the past is the bureaucracy and form filling, particularly for small organisations. SMEs will sustain our growth and they have no time to waste on filling forms. They must be able to access money and draw it down as quickly as possible with the least amount of bureaucracy. Our challenge is to put something together, be it a questionnaire type form or whatever, so people are encouraged to access the information.

The Tánaiste said she will set up an advisory committee and the list of people she mentioned in terms of consultations is very impressive, including ICTU, IBEC, FÁS, Enterprise Ireland and the chamber of commerce. The one area left out seem to be professionals. It is important that a member of the Irish Institute of Training and Development, the professional body for those involved in the training profession, be nominated to the advisory committee. One of the great things about training and development is the commitment of those involved in the provision of such services. We can only benefit from having their advice in relation to putting together a training and development fund.

Certification is very important. We should continue to identify ways in which we can develop certification models which are recognised throughout Europe and the world. One fine example of this is the European computer driving licence. When it was launched four and a half years ago nobody knew what it was, but now people have certificates in their offices and course notes on their desks. Many people have undertaken the training programme. It is very important to identify certification models which are relevant and recognisable within the EU and globally.

I am delighted the Bill is before us and am hopeful it will pass all Stages by tomorrow. It is very worthwhile and I commend the Minister on her fine work.

Mr. Quinn

I wish to share time with Senator Ryan. I welcome the Bill and the Minister. I welcome her words, particularly her reference to the "challenge of growth" as the world has changed dramatically in the past few years.

The Tánaiste said the 1967 Act is outdated and outmoded, a comment I welcome. All of us, particularly those of us who are employers, recognise the need to invest in training as it pays to do so. Just ten years ago my company opened a shop in Lucan and we had 4,000 applicants for 100 jobs. We had a huge task in selecting 100 people and turning down 3,900 others. Just a couple of months ago we opened a shop in Waterford and had to realise that if we were going to get people to work for us we had to make the job attractive not only in terms of pay, but in terms of a future and a career. This is where training becomes so important.

I wish to say a few words of caution and a few words pertaining to opportunity. I had the task of chairing the committee on the leaving certificate applied programme for a number of years and I realised the number of people being left behind in terms of education. We have set a target of 90% of those at school completing their education, which recognises that one in ten will be left behind. We are only achieving a figure of 80%, so two in ten are being left behind. That is why this is an opportunity for those left behind, and the words of the Tánaiste are correct in this regard.

I am concerned about what are perceived as the sexy, attractive, modern jobs, the clicks as against the bricks referred to by the Tánaiste. Senator Cox gave a very good example, through the jobs she has created through ICE, of what can be done by small rather than large businesses. I wish to touch on the other skills which have been undeveloped in the past as they were neither modern nor attractive.

As chairman of the committee on the leaving certificate applied I took the example of a supermarket manager. Very often they would not have a good leaving certificate and did not pass the academic subjects. If we focus on one particular intelligence, namely that used in communication, the traditional way of judging people and their ability was measuring their ability to communicate in written form only. However, the communication necessary for a supermarket manager, perhaps employing 200 or 300 people with 20,000 customers and 10,000 products, is largely oral. The amount of written communication is comparatively small. Yet our traditional training and education did not develop oral communication and did not recognise it as a skill. Therefore, very often people failed early in their education and were made feel they were failures. Howard Gardiner talks about seven kinds of intelligence, which are often not recognised in traditional training and education. When a person recognises they have an ability and intelligence which was not previously recognised they grow in confidence.

Of course, as the Tánaiste said, we need new developments in terms of "bricks to clicks", but we will always need the older skills. In my business we will need butchers and bakers and we should not leave them behind. That is why Skillsnet is doing such a good job. We must ensure we do not forget some of the traditional, dull, boring skills and talents which might be regarded as unadventerous.

I wish to refer to one other change which relates to more opportunity, namely, the changes occurring in lifestyles and how we live and develop. Dr. David Robinson, who was in charge of the school of horticulture in Kinsealy, told me that five or six years ago they were approached by a person who wanted to learn and be taught how to develop grass for golf courses. The college asked if this was part of their job and if they should be trying to develop grasses for golf courses. At the highest level they considered whether this was something they should do. Dr. Robinson told me that now 80% of those who attend courses concentrate on horticulture for gardening, including flower gardening, lawns and golf courses. This was not previously regarded as something they should be doing but as something they should turn away from.

The whole area of food safety involves skill because jobs in kitchens and catering are blossoming and developing so much. Skills in that area are needed and this is an area of training that did not exist some years ago or, if it did, was not regarded as such. I spoke recently to Dr. Patrick Wall who reminded us of the Food Safety Authority and of the need for the skills that exist.

I read what the Minister said here about enterprise, and my understanding of enterprise is slightly different. My point here is that I do not believe there is a general understanding in the area of training of the need to please the market and get customers to return, of the importance of customers and that, whatever individuals do, they are dependent on customers. This applies not just to business but to every other area. As chairman of a hospital board, I tried to get the hospital to stop referring to patients and to refer to customers instead. There was a reluctance to do that, but hospitals do not succeed unless they recognise that they have customers. I dare say that if teachers cease to recognise that their students are their customers, they will cease to be needed and they will lose business to somewhere else. Jobs that used to be secure are no longer secure. I remember quoting that there was no concern that did not rely on trying to get the customer to come back again. The only challenge to that was that it was unlikely that the undertaker's customers would come back, but even that did not stand up because the customer is not the deceased but the family of the deceased.

So I urge that much more attention be given to the marketplace and to the need to recognise that businesses do not stay in existence unless they manage to please their customers. I have been in the grocery business for 40 years and I know of 20 supermarket grocery businesses that have gone out of business, six because they ran short of money and 14 because they ran short of customers. In the training for every single task we must get the message across that staying in business depends on pleasing customers, whether worldwide or across the road in Ireland, because no matter where in the world a business is located it is in competition with businesses in other parts of the world.

On the question of disability, we must not lose confidence and say that somebody who is disabled is unlikely to be suitable for a job. It is possible to find them jobs. In the context of people who did the leaving certificate applied, I found that there were jobs which required the skills they acquired. I remember reading that in Israel it was discovered that there was no part of its land that could not grow some tree so that when it was decided to develop a forestry it was possible to find trees that would grow in almost every part of the country, even the most barren desert. We must search for opportunities for those who have been left behind by society, particularly the disabled.

A recent advertisement depicted someone who was not disabled looking for a job. He was given the detail in Braille and said he could not read it. Then the same man was shown when he was about to get on a bus only to be told that it was for wheelchairs only. The whole concept was to get it across to us what it is like to be disabled. However, the point I am making is that it is possible to find jobs. Just as the Israelis found trees that would grow on any land, we can find jobs that will fit almost every disability. Our task – it is mentioned in the Bill but I want to give it prominence – is to create confidence that jobs can be created for almost every disability. That needs commitment and dedication, and it needs a belief that we can actually achieve it.

I welcome the Bill and the opportunity it affords. I particularly recognise that it is a change from the 1967 Act, a change about which Senator Coghlan spoke. Every business, when it starts, believes its people are its best asset and investing in people will show a return. This Bill recognises that and encourages every organisation, not just commercial ones, to invest in training because it will pay.

Mr. Ryan

The Bill is welcome. It is always welcome to find imagination in play and that we are beginning to respond to the way we are because there is great inertia in much of the State sector, which seems still transfixed by the problems of the 1980s and has not yet adjusted to the realities. The Minister referred to what classical economists would call full employment. I have a very simple view. I regard full employment as a situation where there is nobody in the jobs market who cannot get a job that pays them a reasonable wage. We are not quite there yet and there is fairly good evidence that there is still a large sector of society where the minimum wage is the going rate. That suggests that there is a significant residue of underemployment, if not actual unemployment.

I want to sound a note of caution and probably provoke Senator Cox in the process, but it would not be the first time. We need to be wary of a culture of corporate welfare in our society. One of the great undiscussed topics in the United States is the scale of breaks, supports etc. for the corporate sector, none of which is evaluated in terms of the contribution they make to what they are allegedly helping. I have no problem with fostering an enterprise culture, provided what we get is real enterprise, not simply a tolerance of a fairly vulgar kind of accumulation of wealth. I understand an enterprise culture to mean a culture which fosters and encourages imagination, creativity and genuine risk taking. To classify as entrepreneurs people who have made money and have used it to invest in property is to turn the concept on its head. People who have an idea in the area the Minister classified as high tech – chemicals, computers, IT and areas like that – and turn a good idea into a commercial reality are of course genuine entrepreneurs. However, we should be very careful not to confuse the two because if we do we are likely to devalue the concept of enterprise.

There is a delicious irony in this Bill. The idea of raising a levy from employers to fund training to ensure that those whom the market would leave out of the jobs market can reinsert themselves into the market is a wonderfully interventionist concept, and to the degree that it is that, it is a classical act of labour market intervention of the well-honed Scandinavian variety which has been so successful in the countries of northern Europe. It is a classic example of the need to get away from the idea that growth and development are synonymous. What we can do with growth is what gives us development, and what we do not do with growth can seriously hinder development. Per capita GDP has been mis takenly used by commentators and sometimes even by political figures to mean the same thing as standard of living or standard of life, but it is not so. Per capita GDP is a necessary condition for a good quality of life but it is not the same thing.

It is interesting that the country which perhaps would be regarded as putting the heaviest emphasis on intervention through taxation, policy and a chapter of rights is Sweden. In terms of its taxation system, the fact that almost 90% of its workforce is unionised and that the workforce has considerable co-determination rights in terms of industrial development would be regarded by many in this country as anathema and undermining our global competitiveness, although I have some difficulties with the concept of national competitiveness. There are perfectly respectable economists in the world, among them Paul Krugman from MIT, who said that the idea of national competitiveness is a nonsense, and to a degree I agree with him.

What is interesting in terms of the whole idea of the global marketplace and mobile direct investment is that we have been very successful at attracting foreign direct investment. It represented 20% of our gross domestic product in 1999 but we are not the most successful at attracting foreign direct investment. The most successful country at attracting foreign direct investment in 1999 was Sweden, which attracted foreign direct investment equivalent to 25%, or $65 billion, of its gross domestic product. The reason the figures do not look so big if they are done quickly is that Sweden also engages in a lot of overseas investment.

The point I am making is that policies like this, as is stated here, are interventionist on behalf of people whose skills are deficient, and therefore they are welcome, but we have to remember that this is an intervention on behalf of those people. The fact that this intervention provides a service to industry is subsidiary to that. It may well be that the greater proportion of the investment should go not to the people whom industry would most enthusiastically wish for because of their high quality skills, but to the people who are most marginalised because of life tragedies, handicap or whatever. We have to continue to focus on that. This legislation is about training people to enable them to have a fuller life. It is not about filling gaps in the labour market. That is not an unimportant issue but at this stage of the country's development, the most fundamental requirement is to make the current prosperity a part of everybody's life, particularly the 15% to 20% of our population who have seen very little of it. Many of those are among the unemployed, poorly skilled and insecure and, therefore, the working out of this proposal will be important.

There are issues to do with training that we seem to be reluctant to deal with. I am thinking in particular of the extraordinarily inadequate level of in-service training available to the teaching profession. It is poorly funded and the Department of Education and Science's simple way of dealing with the issue is to give people days off to compensate them for the time they spend training during their holidays whereas it would be much simpler to pay people to do this training and not leave gaps in the timetable as a consequence of retraining. Training is very limited. In my own sector, the technological sector of third level education, there is virtually no training for the people who teach in that sector of education. The people arrive on a Friday or a Monday, they are presented with a timetable and they start teaching.

There are limited opportunities for skills renewal within the third level sector of education. Universities have a tradition of sabbaticals but that tradition does not exist in the sector of education in which I am involved. Anything one learns is largely self-taught. My acquaintance with information technology is entirely self-taught and the gaps in that probably show up from time to time.

The American Board of Engineering and Training – ABET – has produced a new set of criteria for evaluating engineering courses in American universities. ABET identified three requirements for an engineer. The first is knowledge, the second is skill and the third is a correct set of values and attitudes. Our training programmes, whether they are for craft or high level technological skills, should not neglect any of those three requirements. People must have knowledge and skill but they must also have the values and attitudes that will enable them to relearn and to do the sort of things about which Senator Quinn spoke. They need to have an attitude to customers whether they be in education or in the provision of plumbing services, which is based on the idea that what one is actually doing is providing a service. If any of those three is to be left out, there will be people in the world who are inadequately trained.

Mr. Mooney

Like my colleagues, I welcome this legislation which again is indicative of the economic progress this country has been making. The main thrust of the Bill, as outlined by the Minister and a number of speakers, is to ensure that a sum of money will be set aside for education and training leading to job opportunities and that this money, which is an important element of the Bill, will be ring-fenced to ensure that there is a continuing source of resources for an area which has been severely under-resourced. Indeed, all of the reports that emanated from various Departments and working groups in the area of skills and labour shortages pointed to the lack of resources. The Bill goes a long way towards addressing that lack.

It is important to put in context exactly where we are now. The ESRI medium-term review forecasts the economy growing at 5.1% on average from now until the year 2005 and that employment in real terms will grow at the rate of 2.1%. These figures indicate that it will increase by 176,000 and that the overall participation rate, keeping in mind the projected growth figures, will have to increase from the current 58.9% to 61% by the year 2005 to match the forecast employment expansion figures.

It is interesting in the context of the ESRI medium-term forecasts and in light of all the discussions about immigration policy and Ireland becoming a multi-cultural society and various Government Ministers, not least the Tánaiste, encouraging people from other countries to apply for both short-term and long-term work permits here, that all that would be required to meet these forecasts would be a very modest increase in worker participation from that figure of 58.9%. In other words, a 2% increase in participation rates in the employment sector in Ireland could address the employment needs to the year 2005. If these figures are exceeded, and on the basis of the growth rates Ireland has been experiencing over the past number of years that is possible, one then has to look at a higher participation rate but even if the growth rate increased by an extra 1% or 2% to 6% or possibly 7%, the participation rates would increase proportionately by another 1% or 2%, which is not unachievable.

I am highlighting these figures because we sometimes get lost in a fog of statistics and concerns expressed by employers and other groups that somehow Ireland's economic miracle cannot or will not be sustained without large scale immigration, but the figures point to a different interpretation. They show that if there are specific measures targeted at specific groups in this country, in the short term at least we would be able to live with the expected growth figures as forecast by the ESRI.

This brings me to an issue which arises in the context of my membership of the National Economic and Social Forum, of which Senator Cox is also a member. I have with me the forum's latest report, Report No. 19, Alleviating Labour Shortages, which I am sure the Minister and her colleagues have burned the midnight oil poring over. The labour shortages group toiled long and hard with our social partners for nine months to produce this report. In fairness to them, Departments take the forum's recommendations seriously and I hope they will look at the detail of this report. I wish to allude to some of its recommendations on the issue we are debating.

The least skilled, which is what the legislation is primarily about, obviously need the benefits of this fund. This category includes the approximately 76,000 people who are long-term unemployed. I support the statement in the report that the challenge is to ensure that priority is given to addressing the education and training needs of the least skilled, regardless of their current employment or social status. It goes on to say that the second complementary approach is to make work pay at the lower end of the labour market through the development of a number of recommendations, such as a minimum wage, targeted tax relief, in-work benefits and other welfare to work policies.

I pay tribute to the Minister for Finance who indicated that, notwithstanding the initiatives included in the budget, he will increase the amount of take-home pay at the lower end of the scale in the next budget, which will result in yet another significant cohort of the lower paid being taken out of the tax net. However, this noble aspiration must be balanced with the possibility that for some people this might become a disincentive to work. The devil is in the detail, so to speak, in trying to reconcile those two areas.

Anecdotal and statistical evidence will back up the assertion that the overwhelming majority of people who are unemployed wish to return to the workforce and are looking for a job. If one needed proof of this one has only to read the excellent series of reports in The Irish Times which highlighted the plight of individuals who are trying to find work. This is a salutary reminder to those who think that the long-term unemployed are lazy or not interested in finding work in our booming economy. The simple fact is that there is a variety of reasons people who are long-term unemployed or out of work for a period of time are unable to find work.

The story about the gentleman from County Cavan who has had 40-50 interviews is a typical example of what is happening throughout the Border counties and the Minister of State, Deputy Moffatt's county. It is not that the work is not there; it is there but if one is far removed from it and does not have public transport, then one cannot find a job. Is it seriously suggested that a person who lives 20 miles from the nearest growth centre where there are jobs but no public transport should take a taxi to and from work? What is a person who lives in one of the least populated areas in the west, north-west and Border counties, where there is a high proportion of the unemployed and no complementary jobs, to do? Is it being inferred that a secret protocol written by the Government suggests we all should move to Dublin and the east coast? This is not the case as the Government is committed to decentralisation not only in terms of State jobs but also in its industrial strategy. The reality of Objective One bears this out.

There are very real problems in my constituency and in the least populated areas. These problems have not been adequately addressed by the Department of Enterprise, Trade and Employment which has taken a global view of the issue and looked at the figures nationally. I know from discussions with officials on the forum that there is a belated acknowledgment that there is a need to be more targeted and focused when addressing issues relating to long-term unemployment. These issues include rural transport initiatives, the provision of jobs within a certain catchment area which allow them to work and up-skilling of the people in those areas where there have not been job opportunities traditionally so that they can adapt. The Department must keep in mind those issues as they relate to rural Ireland. There is a need to refocus policies to address those who live and work in areas of severe disadvantage.

I hope the Minister looks at those areas outlined in the forum's Report No. 19, Alleviating Labour Shortages, as they relate to her Department and act on its recommendations. These recommendations were arrived at following a consensus approach by the social partners and parliamentary representatives over a period of nine months. We worked as a team and believe that this report will go some way to addressing the skills shortages.

I ask the Department to back off from terminating community employment schemes in rural areas where people in the 40-60 age group do not have the job opportunities being talked about at national level. The Department must recognise that there are two Irelands.