Priority Questions.
64 Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has full confidence in the chairman and board of FÁS; and if she will make a statement on the matter. [45383/08]
Amharc ar fhreagraThe current chairman and board of FÁS were appointed by the Minister for Enterprise, Trade and Employment in 2006, in accordance with the provisions of the Labour Services Act 1987.
I met with the chairman and some members of the board of FÁS on 28 November and expressed my strong dissatisfaction at the events that had taken place in the public affairs division in FÁS. At the meeting the board assured me that action had been taken to deal with these matters. It also assured me that more robust structures with enhanced controls are now in place. This will help accelerate the audit work already under way in the corporate affairs area. It also will help FÁS to interface with the Comptroller and Auditor General in his examination of the effectiveness of the management and control systems in FÁS, which I understand he is to begin shortly. The FÁS internal audit function is also being strengthened.
In addition, the board agreed that a full examination of past practices is required to ensure the organisation can move forward with best practice, corporate governance procedures in place. I understand the normal annual internal audit examination by the Comptroller and Auditor General is already under way in FÁS. This audit will include an examination of internal procedures and governance arrangements within the organisation.
In my view, FÁS should continue to remain focused on its core mission, given the employment and training challenges currently facing the country. I express my strong support for the work of the new interim director general, the chairman and the other members of the board in that regard. In particular, I wish to acknowledge the ongoing commitment and importance of the staff of FÁS in helping us to meet the labour market challenges we face now and into the future.
I note the Tánaiste did not answer my question which asked if she had full confidence in the chairman and the board of FÁS. Without impugning the character of any individuals, it is important the question is answered. I appreciate from the Tánaiste's remarks that there is at least some expression of regret from her for having given full backing to the director general of FÁS in June, when we first raised these issues.
In terms of follow up I have two key questions to ask the Tánaiste in respect of the board and the chairman. Does she not have any concern about the fact the board and chairman signed off on the annual accounts, this year and last year? They said: "No weaknesses were found in the system of internal financial controls". Does the Tánaiste have no issue of confidence concerning the board in that regard?
There is the issue of the use of first class travel. As Members know, the first class travel used by board members and by FÁS officials was in contravention of the Department of Finance's guidelines on travel and subsistence. When he spoke to the Committee of Public Accounts, the chairman of FÁS admitted that such travel had been inappropriate. However, in my hand I have the invoice for €7,000 that covered his first-class flight to Florida. Does the Tánaiste not think that inappropriate? Arising from these two matters, perhaps she might answer my question, even with a yes or a no, as to whether she has full confidence in the chairman and the board.
As the Deputy knows, I expressed my dissatisfaction with matters and on investigation was taking place. An audit commenced in November 2004 arising from issues raised with my predecessor. In June 2004, information was passed to the Garda and a final audit report was supplied in May 2006. In February 2007, the FÁS internal audit report raised further concerns. These were referred to the Comptroller and Auditor General.
As the Deputy knows, on my appointment in May this year, the report was noted by the Comptroller and Auditor General. In June I met with the chairman and director general of FÁS to discuss the report and to seek assurances that matters were being addressed. Those assurances were given in writing to my Secretary General in July this year. In September, following further concerns, I asked the Comptroller and Auditor General to report on the effectiveness of the management and control systems across the organisation. As the Deputy knows, in October, November and December of this year there were ongoing discussions with the Committee of Public Accounts.
It is important to say, therefore, that there had been disquiet and that concerns were raised a considerable period ago, in 2004, arising from notification to my predecessor at that time. The process was ongoing. Matters have been investigated and I have consulted the Comptroller and Auditor General, who agreed he will move forward on the basis of his completed work with the Committee of Public Accounts. That will probably be brought to finality at the end of next week.
It is on that basis I must say that the issues that have been raised are of grave concern. As a consequence, they are being dealt with, and have been dealt with, pro forma, since 2004 when the information was provided. I have been given assurances by the chairman of the board, by the board and by the director general that the regulations as set down by the Department of Finance are being adhered to. As I indicated in my initial response, the issues that were raised are now being addressed and the internal audit aspect of the organisation is also being expanded in order to be more robust.
I will take a brief supplementary from Deputy Varadkar.
With regard to the overall issue, I welcome that the Comptroller and Auditor General will now carry out his investigation. Arising from the outcome of that, the matters will be dealt with again.
The reality is that this has been going on for a long time. There have been reports from the European Commission, internal audit reports, reports from the Comptroller and Auditor General, whistleblowing letters and concerns raised in this House. The only reason any action was taken in recent months is that information was given to us and to others under the Freedom of Information Act. This is an issue the Tánaiste might raise on our behalf, because FÁS continues to evade its responsibilities in terms of openness.
Some weeks ago we sought the details of HR2, the second human resources investigation into Mr. Gregory Craig. The freedom of information officer in FÁS approved that request but under the new closing-down, darkening and tightening procedures introduced by the organisation all freedom of information requests must go to Mr. Cooney, the assistant director general, before being released. That particular report has been on his desk for more than two weeks and, as a result, the deadline has expired. Under the freedom of information legislation this is now classed as a technical refusal. It was suggested to us that we should appeal the matter so it can be reviewed by somebody else in FÁS.
Essentially, what we see in FÁS is secrecy getting worse. Items that would have been released by the freedom of information officer in the past are now being sent to Mr. Cooney who is blocking them. I hope the Tánaiste will raise that matter with the interim director general on behalf of the public.
Prior to Deputy Varadkar's election last year, this matter was being dealt with. It did not take his evangelical appearance for this matter to be addressed by the appropriate authorities, namely, my two predecessors, the internal audit committee and the Comptroller and Auditor General. Just in case the Deputy feels he is the archangel——
It has not achieved very much.
When the Deputy arrived in this House last year these matters were under way. I appreciate very well that he does not believe in due process. That said, I must say it is totally inappropriate, with matters before the Committee of Public Accounts which will form part of an investigation by the Comptroller and Auditor General, that an accusation is made in this House that FÁS is hiding freedom of information——
It is a fact.
As the Deputy knows very well, the Freedom of Information Act offers a process whereby information is obtained by members of the public. There is a procedure which must be followed so that we do not——
Which has been breached by the agency in the past.
It has not been breached. I have to ensure these matters are investigated, that the outcome is obtained as soon as possible and that it is dealt with particularly on the basis of governance and procurement. However, given the current economic difficulties, it is more important that we give direction and support to the people who work in FÁS — we all interact with them on a daily basis and they do a fine job — while ensuring the core business of FÁS is dealt with as quickly as possible.
65 Deputy Willie Penrose asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on measures to strengthen the role of the county enterprise boards and, in particular, the removal of the limitation on the types of enterprise the boards can support by raising the limit on the number of jobs they can create to more than ten, as well as a significant increase in measure 1 funding to allow the boards to achieve their full potential in view of the continuing level of job losses in small and medium enterprises; and if she will make a statement on the matter. [44875/08]
Amharc ar fhreagraThe 35 county and city enterprise boards, CEBs, are the principal deliverers of State support to the micro-enterprise sector in Ireland. They provide support to businesses with ten or fewer employees in the start-up and expansion phases and they promote and develop indigenous micro-enterprise potential and stimulate economic activity and entrepreneurship at local level. As locally based enterprise development agencies, the boards are well positioned to meet the needs of the local economy.
The main focus of the CEBs is on the micro-enterprise sector and will remain so for the foreseeable future. The eligibility criteria under which they operate and the range of financial and non-financial instruments available to their clients have been very effective tools in the development of the micro-enterprise sector in Ireland since the inception of the CEBs and have enabled the CEBs to provide targeted assistance to the micro-enterprise sector, with excellent results. While it is acknowledged that there will be differences in requirements in the areas served by the various CEBs, my Department is satisfied that the current arrangements for eligibility criteria have generally allowed sufficient latitude to individual CEBs to respond to the needs in their own areas. While CEBs are not in a position to allocate direct grant assistance to companies with more than ten employees, they are permitted to provide indirect assistance such as advice, mentoring and a broad range of training programmes, the value of which should not be underestimated.
The budget allocation to the CEBs has increased steadily over the last few years, and the 2009 allocation announced in the recent budget represents a 16% increase in the capital allocation over 2008. This is against a background of savings in other areas of Government activity and is a clear acknowledgement and endorsement of the importance of the boards and of the need that exists for their services, particularly in the current economic climate.
I thank the Minister of State for his reply. I think I will be pushing an open door as far as he is concerned because he comes from a business background. Notwithstanding the 16% increase in capital funding, which I acknowledge is significant, is it not a fact that the CEBs' budgets for last year had been expended by last April, leaving them without a penny to give out in capital at a vital time? They have had nothing between then and the recent budget announcement. Their funding has been inadequate and the demand for funding from new and expanding businesses far exceeds the available funds. That is a fact. If fuller funding was made available — the extra 16% is a help — there is no doubt it would result in a greater number of business development opportunities.
The Minister mentioned the mentoring role. Would he agree the demand for mentoring and information technology support programmes is very high and that these have a major and immediate impact on business growth, but that budget constraints mean the CEBs are not able to meet the demand? These supports are not available on a year-round basis, notwithstanding what the Minister of State said, and this hinders the growth of small businesses.
The Department of Enterprise, Trade and Employment has imposed quotas in the allocations of county enterprise boards, and the allocation of the measure 1 budget is restricted by this. Maximum amounts of 25% and 10% of the budget must go towards employment grants and feasibility study grants, respectively, while 30% of grants awarded must be repaid. Would the Minister of State agree that these quotas are not conducive to small business development and that county enterprise boards should be allowed to facilitate customer needs and not be restricted by meeting quotas? It is time to tackle the issue of refundable aid. All recipients of refundable aid must repay 30% of the grants they received to the enterprise board, and this significantly reduces the attractiveness of the grant and increases the level of administration required. Alternative grant aid agencies are not obliged to operate in this manner.
I hear what the Minister is saying with regard to businesses with ten or more employees, but he is a business person and he knows himself how critical ten employees are in any area. Would he accept there is a critical gap in the level of service provision to businesses with ten or more employees serving the domestic market? No agency has responsibility for development and there are no opportunities for business within this category to receive any financial support towards their expansion or development. These are the businesses that fall between two stools and I have advocated their cause.
I have one final question before the Leas-Cheann Comhairle stops me. The small business forum has recommended that enterprise boards be a "first-stop shop" for all small business needs and take primary responsibility for information dissemination. This has yet to be implemented. The existence of a single source for obtaining business legislation, start-up information, training, advice, mentoring and finance would be helpful to all new business owners and would use the expertise contained in enterprise boards to maximum effect. Would the Minister of State agree this is fairly important?
Finally——
I will call the Deputy again.
All right. I know this Minister of State and I think he is on my side.
There is a lot in what the Deputy is saying. I suggest it is time we had a full and broad discussion at the committee of which he is Chairman, the Joint Committee on Enterprise, Trade and Employment, about enterprise boards, the SME sector and so on, and how we are engaging with them. It should be remembered that from 1993 to 2007 almost €190 million was given out to the boards in grants. There has been significant demand and they are meeting the demand for mentoring, further education, capital grants, refundable loans and all the rest of it. The increase of 16% will undoubtedly help them. There are now new demands on those boards. I have asked officials within my Department to consider the activities of the boards and to engage with them to try to understand what is now needed in our new economic circumstances.
Deputy Penrose asked about businesses with more than ten employees. It should also be remembered that Enterprise Ireland is now responsible for the boards, and the combination of the boards and Enterprise Ireland offers seamless support for the SME sector, from micro-enterprises to businesses with more than ten employees and export companies. An effort will be made to help these export companies grow and to engage with the companies that are employing more than ten people to see how we can be of assistance to them. As I said in my initial reply, mentoring, advice, further education and such support is as vital to these companies as finance, particularly now. In the context of the overall operation of the boards, I am happy with their performance, but there is perhaps a need for political debate at a committee meeting.
There is a misunderstanding out there, and I would like to correct the Deputy's assertion that there was no funding from the boards from June onwards. That is not true. At the end of last year we reallocated some of the money that was not being spent under the various measures because there were different demands within the local economies for certain enterprise boards, and they must respond accordingly. They have never been unable to respond because of a lack of support from the Department or from Enterprise Ireland. It is a new scene out there. It is being reflected upon and new measures will be introduced if necessary. The boards are working well. I meet them on a regular basis and engage with them and I am open to a full discussion, as I said, at the committee.
I will certainly take up that suggestion and invite the Minister of State to the committee.
I was given a reply to a parliamentary question which stated that seven boards did not have a penny after last April or May. Either that reply was right or I am wrong. However, we will leave that. Would the Minister agree that in these changed economic times, enterprise boards should be in a position to offer higher rates of grant aid to businesses in higher potential growth areas, for example, the alternative energy sector, the IT sector, health management and areas of scientific development? At present there is no added incentive they can offer to anybody who displays exceptional entrepreneurship in these areas, although they offer the possibility of creating significant employment. Could we ask Forfás or another agency or economic forecaster to indicate what types of enterprise should receive additional support? There is an opportunity there, particularly in these straitened economic times.
I remind the Deputy that 20,000 companies have received assistance over the years from enterprise boards, and 35,000 jobs have been created.
I know. That is why I want more.
That is also why I want more.
I am greedy for more — I want to get to 70,000.
I have a firm belief in that sector. We should engage with such businesses to find out what supports we can give them in the context of their demands and the new economic circumstances, and that is exactly what I am doing. I am willing to consider new ways of supporting them and to discuss with the Deputy's committee what we can do within that budget and in view of the 16% increase we have received.
Within the boards, we got a large response to Tech Check, which provides technology audits for companies to allow them to see where they are falling behind within their own organisations. We have supported them in this regard. There is a focus on support of that kind for companies. In addition, we need to consider new green technologies and companies associated with these because that is where new jobs will be created in future.
66 Deputy Damien English asked the Tánaiste and Minister for Enterprise, Trade and Employment the communications and discussions she has had to date with the Office of the Revenue Commissioners and with the Department of Finance on behalf of small and medium enterprise specifically in relation to attachment orders issued by the Revenue Commissioners; her views on whether SMEs would benefit from restructuring in the way that these attachment orders are administered; the proposals she will bring to the Department of Finance on behalf of SMEs that will see changes to the manner in which such attachment orders are executed; and if she will make a statement on the matter. [45384/08]
Amharc ar fhreagraThe collection of taxes and the issue of attachment orders are the responsibility of the Revenue Commissioners. It is therefore not appropriate for me to comment on the execution of, or the administrative arrangements applying to attachment orders.
Neither the Tánaiste nor I have had discussions with the Revenue Commissioners or with the Department of Finance in respect of attachment orders nor are we working on any proposals relating to attachment orders.
On a broader front, the Tánaiste has had discussions with ISME and SFA, and I also met the SFA last week on a range of issues, including access to finance, which are impacting on SMEs arising from the current economic difficulties.
Discussions between the Tánaiste and the Minister for Finance, Deputy Brian Lenihan and discussions between my Department and the Department of Finance at official level, have focused on addressing difficulties arising in accessing bank credit and ensuring that the banking system continues to play an appropriate role in supporting the SME sector. Over the past week, there have been several announcements by Irish banks of making special funding available to SMEs. In addition, as recently confirmed by the European Investment Bank, several Irish banks are in contact with the EIB seeking to draw down funding available under the EIB's €30 billion fund for assisting small and medium size enterprises. The EIB has anticipated that funding will probably be drawn down during the first quarter of 2009. I welcome these positive developments which should facilitate greater availability of finance to the SME sector.
All taxpayers and businesses have an obligation to meet their tax liabilities in a timely manner. A delay in the collection of revenues due impacts on the level and timeliness of financial resources available to the Government and facilitates those who, by withholding tax payments and using those moneys to improve cash flow, attempt to gain unfair competitive advantage. The Revenue Commissioners only resort to attachment orders in respect of taxpayers who purposely default in their payment obligations. The average number of attachment orders for the three-year period 2005 to 2007, was 2,269, in the context of 250,000 small enterprises.
The Revenue Commissioners' consistent message to taxpayers who experience a problem in meeting their tax obligations is to contact Revenue at the earliest possible time to work towards resolving the issue, therefore avoiding the necessity of deploying collection enforcement measures. The specific question of attachment orders did not arise in recent discussions between the Tánaiste and ISME and the Small Firms Association.
This is a typical reply. I am not surprised that the Minister of State has missed the whole point of the question. He has done his best not to answer it.
That is the Deputy's idea.
I am glad the Minister of State has attempted to answer it. I am shocked that he can tell me this issue was not raised at the meetings. We have business people and also ISME ringing us about this issue. The threat of attachment orders is preventing banks from giving overdrafts to certain businesses. I will explain the reason to the Ministers, if they regard this as complicated.
That is a different question.
It is not a different question. I am glad to see it only concerns 2,200. The Minister of State, Deputy McGuinness, has been in business and so he will understand the threat of attachment orders. If an attachment order is put on a business, the Revenue can step in and clear out that business account, including any overdraft facility. Therein lies the problem and it is another reason, along with many others, some of the banks will not give overdrafts. I ask the Minister of State to talk to the Minister about it and check it out to see if the arrangements can be changed.
The Minister of State referred to the payment of taxes to Revenue. It is a major issue when Revenue acts in a heavy handed manner and this is happening in the case of some businesses. Revenue is looking for the money too quickly. We are now in very different economic circumstances. The UK tax authorities seem to have recognised this and have put in place a special business and support service to deal with this situation. If businesses are under pressure making their repayments the UK authorities talk to them and arrange longer term payments with interest charged; it is not for free. They are doing something about it whereas I am being contacted by business people on a daily basis who are being put under pressure to make payments to the Revenue.
Deputy McGuinness is a Minister who can talk to the Department of Finance. Will he ask the Revenue Commissioners to show a little common sense? If somebody owes €60,000 or €80,000 to the Revenue, I agree he or she should pay it if possible but if the person goes bankrupt in the attempt this will cost the State much more this year and in future years, in terms of lost jobs and lost taxes. This would amount to a hell of a lot more than €60,000.
Will the Minister of State give this question some consideration? It is a reasonable question and it is down for a reason. I remind the Tánaiste and other Ministers that I do not make these things up. Our counterparts in other countries show a bit of leniency in these times and help business during economic hard times rather than putting pressure on them. The threat of these attachment orders is a very serious threat.
I understand that but I must explain to the Deputy that when Revenue comes before the Committee of Public Accounts, one will not meet a better organisation for explaining itself. It has been explained many times to me as a businessman, to the Committee of Public Accounts and to everybody else in business, that if a person has difficulty with paying taxes, the Revenue does not just drop on one's house overnight; it is normally a build-up over a period of time——
I do not need a lecture from the Minister of State.
The Deputy should allow the Minister of State to respond.
I am not lecturing the Deputy. He has given his side of the story which is not completely accurate. If people engage with Revenue they can actually work their way out of the problem. I have found Revenue to be flexible within the framework when dealing with these situations.
On the question of attachment orders, a whole process leads up to the application of an attachment order. The company in question is written to and is engaged with by the Revenue which discusses the issue with the company. Revenue encourages the company or individual to settle before it ever becomes heavy handed. Even prior to the situation becoming, as the Deputy describes it, "a bit heavy handed", an authorised senior manager must be engaged to apply the attachment order. The figures dating back to 2005 are roughly the same, ranging around 2,200. I know this is a difficult time for businesses in terms of meeting all their obligations but any company facing a difficulty with payment of taxes should, before it becomes serious, ask their accountants to contact the Revenue Commissioners and work their way out of it.
A brief supplementary question from Deputy English.
I accept the explanation and I ask the Minister of State to accept mine as being bona fide. I did not invent it and it is a concern of ISME and of small businesses. Will the Ministers talk to the Minister for Finance and others to see if this is an issue. I agree with the Minister of State that the Revenue Commissioners are normally very reasonable and very easy to deal with when it comes to organising repayments. However, in recent months the situation is not the same as it was previously. Businesses are under enough pressure from everybody else and they do not need the authorities making life difficult for them.
I ask the Minister not to look at me as if I am making this up. I am only asking——
I am only writing down what the Deputy is saying.
That is good. Will she please bear it in mind? I want our authorities to cut some slack to businesses that are genuinely trying. I have dealt with two or three already who are under immense pressure. ISME members are obviously feeling the heavy hand and I want the Minister to talk to that organisation. We are talking about the threat of attachment orders that can prevent a bank from making money available; we are not talking about the 2,000 in the past but rather the potential threat of it happening. This is a serious issue. I ask the Minister to give it some thought and to talk to the people involved.
We explained our understandings. I understand the Deputy's point. I met the Small Firms Association last week and this issue was not raised. I am not saying it is not an issue because I have had similar queries to my constituency office. I met the convenience store and newsagents association and this issue was not raised. However, I understand that it is an issue out there. I do not know the extent of the concern or the extent of the problem. I will undertake to ask the Revenue Commissioners and the Department of Finance about the specific issue the Deputy has raised.
The Minister of State should talk to the banks as well.
We will be meeting the banks shortly and I will undertake to raise the issue with them.
67 Deputy Willie Penrose asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the difficulties facing many small and medium sized companies as a result of their inability to secure credit from financial institutions and the consequent loss of jobs in this sector; the steps she has taken to address this problem; and if she will make a statement on the matter. [44885/08]
Amharc ar fhreagraI am very much aware of the difficulties facing small firms as a result of the current economic difficulties and in particular the importance of continuing access to bank credit facilities for sound projects.
The Tánaiste met the SFA and ISME on 19 November 2008, to discuss their concerns on a range of issues which have impacted on small business as a result of the credit crunch. These include access to credit from financial institutions.
While the banking sector is the responsibility of my colleague the Minister for Finance, Deputy Brian Lenihan, my Department has worked closely with the Minister and officials of his Department on encouraging the banks to assume their responsibility to provide support to economic development and to provide credit to SMEs in particular.
The Deputy will no doubt be aware that over the past week several Irish banks announced significant financial lending packages to assist SMEs. In addition, the European Investment Bank indicated it is in discussions with four Irish banks about its recently announced €30 billion loan facility to provide loans to SMEs through commercial banks. These important developments are to be welcomed.
My Department's continuous support for indigenous companies is shown through maintaining a positive business environment and through particular interventions from the State development agencies such as Enterprise Ireland, FÁS and the county and city enterprise boards.
On a point of order, am I correct in assuming the Minister of State should be replying to Question No. 67?
Yes, I am dealing with Deputy Penrose's Question No. 67.
I apologise to the Minister of State.
The significant allocations in the Department's Estimates for 2009 will ensure that it continues to build on this strategy for the future.
Enterprise Ireland is responsible for supporting the development of Irish companies with ambitions to grow in world markets. Many of its client companies are small to medium in size. Enterprise Ireland recognises the varied challenges facing such companies in the context of the changing economic environment and partners with companies to address their needs in a holistic manner.
Attractive BES and seed capital schemes contribute to the provision of capital investment across a range of small and medium-sized enterprises. In addition to this, Enterprise Ireland is directly involved in venture capital initiatives also attracting investment for businesses. As a result of the Government's investment of €175 million channelled through Enterprise Ireland, seven new venture capital funds have raised over €500 million which is available to invest in the small and medium-sized enterprise sector.
Also funded through the Department, the 35 county and city enterprise boards provide support to small businesses or microenterprises with ten employees or fewer. County and city enterprise board funding will increase next year by almost €3 million, 9%, to €34.8 million, representing a further indication of the Government's commitment to supporting this sector of business.
Additional information not given on the floor of the House.
FÁS through its one step up programme is encouraging employees to increase their competency levels and promoting an ethos of lifelong learning in the workplace. Its key intervention in this regard is the competency development programme. It offers workers different types of training programmes directed at various skill levels across major economic sectors. These training programmes are available to employees of small and medium-sized enterprises. FÁS also has a number of other training programmes aimed at upskilling small and medium-sized enterprises, namely, Skillnets and the strategic alliance programme.
The Government has also made considerable progress on the implementation of the small business forum report's recommendations. This progress is reflected through a substantial package of financial measures and schemes introduced to assist the sector over the past two years, including fiscal measures in the 2007 and 2008 Finance Acts.
Small and medium-sized enterprises are central to our economic development and the range of measures and supports outlined above will continue to help the sector adapt to the current economic climate. These measures will be kept under review to ensure that they remain appropriate to the current circumstances.
In our Department, we will continue to remain in regular contact with the Department of Finance and will ensure that the issue of availability of credit to small and medium-sized enterprises is kept under constant review. We will also continue to consult with ISME and SFA on all issues impacting on small businesses and we welcome their continued valuable input.
The Minister of State is aware that up to 250,000 small and medium-sized enterprises provide 800,000 jobs. While foreign direct investment is important for Ireland, small and medium-sized enterprises are the lifeblood of most areas, particularly rural areas. Is the Minister of State aware of people's concerns of a significant drain on the retail sector that will take place after Christmas? I am talking about the real businesspeople who I meet in towns and villages.
In the past, banks lent irresponsibly to builders who now cannot pay. The banks are squeezing other borrowers relentlessly to increase their reserves. Viable small and medium-sized enterprises are threatened by the unwillingness of the banks to lend. It is not because these businesses are at a risk of failure, but because the banks are desperately trying to attract deposits rather than give loans. These are profitable small and medium-sized enterprises which do not have the money to pay creditors.
Is the Minister of State aware that some businesses are afraid to take on too many creditors in case they are charged with reckless trading. The Minister of State, Deputy McGuinness, would know of this. If a trader takes on credit and cannot pay for it down the line, he or she will have to answer questions somewhere else under company law. There is a great fear among small and medium-sized enterprises that they could be charged with reckless trading in such cases. That is why credit is important to them. They are profitable businesses but they will be squeezed out of existence.
Access to the €15 billion in funds from the European Investment Bank came into operation in September. It is now nearly Christmas, three months later, and the banks still have not tapped into this fund. Why? Has any Minister asked the banks why? Is it because the banks will not get enough in management and banking charges? Will the banks deprive small businesses of the opportunity of survival? The financial institutions guarantee was given by the Dáil. What was asked in return? That the banks would save our 250,000 small and medium-sized enterprise by ensuring enough liquidity and cash to go around for them to meet their day-to-day commitments. It is time for the Minister for Finance and the Tánaiste and Minister for Enterprise, Trade and Employment to call in the banks to tell them they have a role to play as active participants in getting us all over this economic hump.
We are aware of the importance of the small and medium-sized enterprise sector to job creation, etc. The Tánaiste and the Department of Enterprise, Trade and Employment have met with the banks in the past two weeks and will be meeting with them over the next week or so. Over the past week, three banks have announced funding programmes for small and medium-sized enterprises.
The Deputy is correct that the fund from the European Investment Bank is €15 billion. We are expecting four of the banks, which are in discussion with the European Investment Bank, to announce packages in that line in the first quarter of 2009.
I note there are four Ministers on that side of the House and four Fine Gael Members on this side, while I am on my own. I will take them on single-handedly anyway.
The Deputy would be well able for us.
The Industrial Credit Corporation, established by the State in the 1930s, was of great assistance to small and medium-sized enterprises. The Government should establish a similar organisation if the banks do not tap into the European Investment Bank funds. Let the Government get into this money and tell the banks to stuff it if they do not play ball. It is about time they were told they cannot hold us to ransom.
We will take on board the Deputy's suggestion but we are also examining other ways of drawing down money.
Fair play to them. If the Ministers do that, I will be behind them every step of the way like Dickie Rock.
68 Deputy Denis Naughten asked the Tánaiste and Minister for Enterprise, Trade and Employment the action she is taking to protect the exploitation of migrant workers against employers breaching employment law; and if she will make a statement on the matter. [45385/08]
Amharc ar fhreagraI am conscious of the need for vigilance against the exploitation of vulnerable workers, including migrant workers. It is important to bear in mind that migrant workers can, and do, obtain the full benefits and protection of Irish labour law. Naturally, unscrupulous employers may try to take advantage of those in a vulnerable position. However, the Government will not stand aside while employers try to gain unfair competitive advantage by short-changing workers on their entitlements.
The foundation for the protection of vulnerable workers, including migrants, is the existing strong legislative base underpinning employment rights in Ireland which has been built upon by successive Governments. This includes the Protection of Young Persons (Employment) Act 1996, the Organisation of Working Time Act 1997, the National Minimum Wage Act 2000 and the Payment of Wages Act 1991.
There is also a code of practice on engagement of domestic staff in private houses, introduced in May 2007. It emphasises that employees in other people's homes have an equal entitlement to the employment rights and protections available to any other employee. It highlights several of these rights and includes provisions relating to protections that have particular relevance to these employers and employees.
The Employment Law Compliance Bill 2008 will further strengthen the protective framework. The Bill, which is on the Order Paper, is being finalised in consultation with stakeholders. I have requested the Department to ensure Second Stage will be taken early in the next parliamentary session.
In addition to a strong legislative foundation, there is highly effective industrial relations machinery through which to process claims by employees with grievances, including rights commissioners, the Labour Court and the Employment Appeals Tribunal. We have strengthened inspection and enforcement mechanisms.
Recent media coverage of abuses were a timely reminder of why the Government set up the National Employment Rights Authority as a key outcome of the social partnership process. The issues highlighted in the media are disturbing. However, these issues are not unknown to us. In over 20,000 workplace inspections so far this year, the authority has determined an average breach rate of 21%. It has had considerable success since it started operations in 2007 in ensuring abuses of workers rights and entitlements will not go unchecked.
Additional information not given on the floor of the House.
However, no matter how efficient an inspectorate we have, not every case of exploitation will be caught. That is why one of the best defences we have against abuse of workers is good quality information and ease of access to redress — both of which will empower the individual vulnerable worker to take the matter further. Information and good communication of workers' rights is a key element of employment rights compliance. Great emphasis is put on this by NERA, which reproduces its employment rights information in 12 languages and has 80 labour inspectors currently active who are skilled in foreign languages. These efforts are complemented greatly by the contribution that is made by the social partners — both trade unions and employers — as well as the established employment rights bodies to greater awareness of responsibilities and rights in the workplace.
The ability to prosecute employers who do not comply with the law is also a necessary tool in ensuring that employees statutory employment rights are respected and NERA has such a remit. In 2007, NERA referred 98 cases to the Chief State Solicitor's office for prosecution with 80 prosecution cases commenced to date in 2008.
Anyone who watched the "Prime Time Investigates" report last week was appalled at what it showed happening in some workplaces. Does the Minister of State agree that because our economy is contracting, employers, desperate to make savings, will be under pressure to exploit migrant workers? Does he agree the exploitation of these workers is not just undercutting Irish jobs, but also responsible employers trying to employ people in line with existing employment legislation?
How many labour inspectors have been appointed? The Employment Law Compliance Bill was published on 13 March 2008 but the Minister of State claims it will at least be February of next year before Second Stage is even debated. Why has there been a delay of 12 months in debating and putting this legislation in place?
Does the Minister of State agree the National Employment Rights Authority needs to increase fines and provide for more serious penalties for employers who blatantly break employment legislation? That cannot happen without primary legislation being put in place. What has the Minister of State been at that he has not brought in this legislation yet?
The Deputy is correct that when there is a change in the economic environment, pressures are on. We do not anticipate the labour inspectors taking it any easier. They have been enforcing employment legislation and have taken several prosecutions. The Chief State Solicitor's office has been brought in to ensure prosecutions are taken.
In the context of the recent media coverage of the haulage industry, it is important that the National Employment Rights Authority enforces the payment of the fines side of the legislation. The Road Safety Authority must enforce other aspects of the legislation referred to in the "Prime Time Investigates" programme. No collective agreements apply to the haulage industry as the minimum wage is the baseline in that sector. NERA is enforcing payment to ensure unscrupulous employers are found out. Considerable amounts of arrears have also been collected. I get representations from all sides of the House in the context of NERA being over-vigilant. We have 81 labour inspectors on the ground ensuring that employment law is complied with. I will not stand for employers using the downturn in the economy to potentially exploit Irish workers or people here on work permits. NERA is vigilant in that area.
I accept the point made by the Minister of State. On some occasions NERA can deal with minor, technical breaches but I refer to blatant flouting of the law. Why are we still nine inspectors short, some 12 months after they were supposed to be put in place? In light of the comments of the Minister of State on the "Prime Time Investigates" programme to the effect that road traffic legislation is not the responsibility of his Department, are the joint labour teams that were to be up and running set up? Are there plans to include the Department of Transport or the Road Safety Authority, RSA, in those joint investigation teams?
In my first reply I failed to refer to the employment law compliance Bill. It will be published in the early stages of the next parliamentary session. Labour inspectors can go about their business because they are set up on an interim basis and have all the statutory supports in terms of enforcing employment rights legislation. They are out and about in an effective manner.
Last June, prior to the "Prime Time Investigates" report, NERA met with the RSA to discuss areas where the bodies could mutually accommodate each other. That will continue and NERA will be involved in joint inspections in the context of the RSA, the Revenue Commissioners and the Department of Social and Family Affairs. These issues are occurring on a continual basis. NERA has taken prosecutions and has uncovered breaches of terms and conditions and arrears have been collected on behalf of workers who did not receive the full entitlement of pay and conditions.
