Peadar Tóibín
Ceist:5. Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation the steps he has taken to support business at risk from closure. [3567/13]
Amharc ar fhreagraThursday, 24 January 2013
Ceisteanna (5)
Freagraí ó Béal (36 píosaí cainte)
The entire focus of Action Plan for Jobs 2012 has been on measures to protect existing jobs and support the creation of new jobs. It addresses issues of competitiveness, access to finance, support of enterprise and sectoral strategies.
The enterprise support agencies of the Department, Enterprise Ireland, IDA Ireland and the county enterprise boards, are all alert to the need for business to anticipate difficulties and have developed various programmes for process improvement, innovation, mentoring and capability development to assist companies in making necessary transformations. For this reason, the enterprise development agencies, Enterprise Ireland, IDA Ireland and Shannon Development operate an early warning system which has been in place for over ten years. When triggered, this mechanism brings the full capacity of the agency concerned to bear on whatever situation has arisen within the client company.
A number of new measures of particular assistance to businesses under pressure have included the introduction of the microfinance loan fund and the credit guarantee scheme, reform of wage setting mechanisms, allowing easier access to examinership to which the Minister, Deputy Bruton, alluded, reducing employers' PRSI and the introduction of a low rate of VAT for certain sectors. We have also introduced a first-time exporters division within Enterprise Ireland, which is designed to assist companies consider developing an export market.
Additionally, under Action Plan for Jobs, my Department and small business representative organisations developed a guide, entitled Managing Out of the Crisis, which sets out warning signs to encourage small businesses to ask for help and outlines services available to help them through difficulties. This guide is available on my Department's website and those of the small business organisations. Other services of the Department, such as the Labour Relations Commission, regularly assist companies in difficulty which seek to negotiate cost reductions or changes in work practices as part of restructuring.
The 2013 action plan for jobs is currently being prepared. The 2013 plan will build on the progress made last year and will set out a number of new initiatives to support job creation. It will be published by the Minister, Deputy Bruton, in the coming weeks.
Last week, HMV and the Old Darnley Lodge in Athboy closed. I went out to the Old Darnley Lodge in Athboy and sat in with the workers while they were involved in their sit-in on Thursday and Friday last. I spoke at length to the workers in that situation. They are devastated at what has happened. Holiday pay is owed. Some staff have wages still outstanding and they are not confident about what will happen on redundancy. The management have gone to ground and, disgracefully, have not been in contact with the workers. As we speak, the staff in Athboy are still sitting in.
The Minister mentioned insolvency a while ago. I understand that the company has not paid rent in two years. It has not paid rates. It has not paid water rates. That would indicate that solvency is definitely not involved.
Athboy is a town like many others in middle Ireland that has lost a serious number of jobs over recent years with little or no Government response. It seems that if the Old Darnley Lodge was the Old Darnley bank, the Government would be in like Flynn trying to resolve the situation.
Last year, I introduced legislation that would have expedited the process of where workers find themselves now and have their full rights vindicated. It would also have ensured that one would not need to wait for liquidation to ensure that redundancy was paid and that redundancy would be paid once the company was seen to be insolvent. The Minister and the Government refused that legislation and, as a result, the workers are in that position of sitting in today. If they are sitting in today in search of their rights, how can the Minister of State say that he is protecting their rights?
That is quite a different question from the question Deputy Tóibín asked. On enterprise and business, as the Minister, Deputy Bruton, correctly stated, it is difficult to get into private enterprise. There are the protections of PRSI and the workers will get the benefits. I took a Topical Issue debate on this last week. They will get the statutory redundancy from the State. It is regrettable that they must sit in. Obviously, this company has closed and the owners are not contactable. It is difficult to legislate for that situation. We all know the difficulty in both examples to which the Deputy alluded, HMV and the hotel trader. Both are difficult areas. They are changing trades.
The Government has created substantial jobs in the area of innovation and enterprise, with the enterprise offices, the innovation hub and the pharmaceutical end. Clearly, there is the legacy of the previous Government with the amount of retailing space. Equally, the number of hotels that were developed caused serious difficulties.
It is regrettable that workers are sitting in currently but no doubt they will get their statutory entitlement from their PRSI contributions. It is regrettable that they must go that avenue.
It is obvious that HMV's product offering is meeting technological changes which is making the company less competitive, but it must be remembered that HMV is still operating in England. It is believed that upward-only rent has had an effect on its ability to trade. It is interesting that another trader, Mr. John Corcoran, was forced to close a couple of weeks ago because of upward-only rents and after a long campaign and fight. Indeed, the Labour Party held a press conference in his store which launched its campaign for resolving upward-only rents. When the party went into government, it stated the matter would need a constitutional amendment. Retail business and my party have seen legal advice stating the opposite. If the Minister states it needs a constitutional amendment, why does the Government not put a constitutional amendment to the people?
If the Minister of State believes we should eliminate upward-only rents, why does the Government not change the Constitution? We hear today there may be a need for a constitutional amendment with regard to EU patents, etc. That would represent a prime opportunity for the Government to include a constitutional amendment on upward-only rents to ensure that this extremely anti-competitive cost is reduced. It must be remembered that rents on Grafton Street are among the most expensive in the world and every other street in Ireland is a function of that. It would be a massive boost for the competitiveness of retail businesses if the Government lived up to its pre-general election promises on this.
HMV is in examinership in the UK and I understand there is a takeover bid in the UK for it. It is in receivership here, which is the difference. I hope a buyer will be found to salvage some of the business. The advice of the Attorney General on upward-only rents is quite clear.
Why not have a referendum?
The advice was given by the Attorney General.
That advice changed.
As the Deputy will know from his own constituency, rents have reduced regardless of the existence of upward-only rent reviews. As I have often said, there is 13,000 sq. ft. of retail area per head of population, compared with 1,000 sq. ft. in the UK, which is part of the legacy of the previous Government. The point is that rents-----
It is a serious question.
Allow the Minister of State to finish.
If the Government believes a constitutional referendum is necessary and that upward-only rents are wrong, why does it not hold a referendum?
That is only one aspect of the problem. The Deputy must remember that-----
Then it should just focus on the one aspect at the moment.
The Minister of State without interruption.
It is about confidence and credit in the economy.
The Minister of State should focus on the one aspect about which I am asking.
In the doom and gloom Sinn Féin is professing, it never recognises the opportunities. I visit companies throughout the country where jobs are being created.
Honestly-----
Deputy Tóibín is coming in here with the same pessimistic outlook all the time.
It is only a question.
There is opportunity in the retail trade and some businesses are very successful at the moment - they are not all closing.
Nobody is saying that.
The Deputy needs to look at the positivity in the market as well as the opportunities and challenges in the economy. I was in the RDS-----
The question is not on the RDS.
I was at the National Crafts and Design Fair in the RDS. Did Deputy Tóibín attend the National Crafts and Design Fair this week?
The question I am asking-----
Minister-----
Jobs are being created at the National Crafts and Design Fair in the RDS and there are great opportunities in the retail sector.
If the Government is in favour of the abolition of upward-only rents and there needs to be a constitutional referendum-----
We need to move on to other questions.
We have debated-----
-----why would it not have a constitutional referendum?
It is not necessary.
Minister-----
It is not the issue that is closing down businesses at the moment.