Dominic Hannigan (Meath East, Labour)
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We will continue now with our consideration of the review of Europe's 2020 strategy. On behalf of the committee I thank all of the organisations that made submissions to the committee. We solicited public comment on the strategy and received a number of submissions. Today, we are delighted to hear from some stakeholders. I welcome Dr. Pat Ivory, who will address the committee, and Mr. Erik O'Donovan, both from IBEC. We are also joined by Mr. Paul Ginnell from the European Anti-Poverty Network, Ms Brid O'Brien from the Irish National Organisation of the Unemployed and Ms Lorraine Mulligan from SIPTU. Together, they represent the Better Europe Alliance and Mr. Ginnell will address us on their behalf.
Before we go ahead with their contributions, I remind witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give the committee. If they are directed by the committee to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable.

Dr. Pat Ivory:

On behalf of IBEC I thank the Chairman and committee members for the invitation to address them and exchange views on the European Commission's interim review of the Europe 2020 strategy.

As stated in our address to the committee on 20 February 2014, the EU and the actions of its institutions are important to Irish business and our citizens. In the current economic context and in the context of the ongoing transition in the European institutions, this interim review process is a case in point. IBEC will respond formally to the Commission's consultation at the end of October and is working with its European business partners at EU level to submit input from European businesses. Later this year, IBEC will also publish a set of business priorities for the next Commission as part of its ongoing campaign, a European Union that works and an Ireland that works.

After the deepest crisis in decades and at the beginning of a new EU political cycle, there is an opportunity for the Union and national policy makers to step up their efforts to create the right environment to facilitate the delivery of growth, jobs and prosperity across the Union. The mid-term review of the Europe 2020 strategy is timely and important in reflecting on how this can be achieved. We believe the review must look at the strategy's relevance, targets and process.

I will turn first to the relevance of Europe 2020. Following on from the Lisbon strategy, the Europe 2020 strategy aims to provide a framework that facilitates smart, inclusive and sustainable growth. However, the economic context underpinning that framework has changed dramatically since its inception in 2010 and a review is timely. Europe continues to have much strength, but faces known demographic, socioeconomic and competitive pressures. The key challenges are unacceptable unemployment levels and sluggish economic growth, partly as a result of poor domestic demand, particularly in Europe. Therefore, the forecast set out in Europe 2020 requires recalibration to reflect the new economic context and the delivery of growth and jobs.

IBEC believes this can happen if policymakers create an environment in which business can continue to create jobs and increases its capacity to do so.

I will now turn to targets. The European Union and Ireland have made mixed progress in meeting five headline targets. Overall, the European Union is making broad progress in the areas of education, climate change and energy, but it is not on track in the areas of employment, research and development, and poverty reduction. The biggest challenge that both it and Ireland face is getting citizens back to work and tackling unacceptable unemployment levels.

The Europe 2020 strategy sets a target employment rate for 20 to 64 year olds of 75%. This equates to 16 million additional people in employment in the European Union. Some progress has been made, but it has not been even across Europe, with some regions continuing to record particularly high levels of youth unemployment. In Ireland's case, the number in employment was up 31,600 or 1.7% to the end of the second quarter of 2014. This employment growth remains among the strongest in the European Union and IBEC expects an annual year-on-year rate of 1.5% for the whole of 2014.

Another positive development this year is that firms in Ireland are becoming more confident in hiring full-time workers, in contrast to last year when spectacular employment growth rates were driven by part-time employment. IBEC forecasts the level of unemployment to fall to 10.9% in Ireland in 2014, down from 13% in 2013. Clearly, Ireland is making progress, but there is still a distance to travel to full recovery and achieving the employment targets set in the Europe 2020 strategy. Sensible European policies that support job creation will be critical in this regard. The relationship between targets and the flagship initiatives underpinning them has proved to be problematic in a number of areas and I would like to give a couple of examples. When progress is being made in meeting the climate change and energy targets, the overlapping targets create conflicting, implicit and explicit, price signals, resulting in cost inefficiencies in the achievement of the stated overall sustainability objective. Ongoing negotiations on an equitable and cost-effective 2030 climate change and energy framework are of crucial importance to Ireland. The CO2 emissions targets for 2020 are particularly problematic, with 13 of national targets forecast to be missed. There continue to be significant structural and affordability challenges, signalling the need for a careful review of the Europe 2020 strategy in this area.

The effectiveness of some of the strategy can also be called into question in other areas. On the issue of smart growth, Horizon 2020 is a positive research and development support framework, yet the funding ambition was reduced in negotiating the European Union's last multi-annual framework or budget. Many businesses still find engagement with these programmes to be complex. IBEC sees the budget of €80 billion secured for Horizon 2020 as a positive outcome of Ireland's recent EU Presidency and the efforts of Commissioner Geoghegan-Quinn. It is also the minimum amount required for the period 2014 to 2020, if the 2013 level of funding for projects included in framework programme 7, the European Institute of Innovation and Technology and the competitiveness and innovation ramework programme is to be continued.

One of the aims of the digital agenda flagship initiative was to underpin a single digital market. However, proposed legislation on data protection still needs to strike the right balance between privacy and enterprise. It is vital that data continue to be allowed to flow across borders if business is to achieve its full potential and citizens are to reap the full benefits of technology. Requirements for data to be stored locally would hamper business development and reduce choice for consumers. Getting the right balance will be vital if the European Union is to achieve its target for research and development to reach 3% of GDP. Progress in reaching this target is disappointing, with forecasts suggesting the 2020 target may be missed by as much as, or more than, 0.5%.

In education there are two parallel strategies that should complement each other. There is a stocktaking on the European framework for education and training - the ET2020 strategy in parallel with the Europe 2020 strategy mid-term review. Ireland has consistently been making progress in lowering the percentage of those who leave school early, recording a rate of 8.4% in 2013. That is close to our EU 2020 strategy target of 8% and well below the EU-28 average of 11.8%. In addition, Ireland's tertiary education attainment rate, at 52.6%, is the highest in Europe and well above the EU average of 36.9%. However, we need to carefully consider how well the education system prepares for work. Whereas there is a public consultation process for the review of the Europe 2020 strategy, the ET2020 strategy has a more targeted evaluation procedure. The ET2020 strategy stocktaking primarily involves relevant national authorities which are preparing national reports as inputs to the process. The opportunity for business and social partner involvement is considered limited. Moreover, the ET2020 strategy stocktaking should feed into the Europe 2020 strategy consultation process.

Better alignment of the needs of labour markets and the education and training systems should be the guiding principle in the next five years. Quantitative indicators of educational attainment are useful, but a qualitative approach to learning outcomes and employability should also be encouraged. Both the Commission and the Department of Social Protection link with poverty indicators the persistent levels of unemployment and the numbers of jobless households. The focus should, therefore, remain on creating an environment in which business can increase employment in Europe and Ireland. Inconsistencies must be avoided. In short, policy coherence in thinking and implementation is required.

I will now turn to the issue of governance. Ireland exited its EU-ECB-IMF programme in 2013 and took a full part in the European semester process, including receiving its first country specific recommendations from the European Commission in 2014. This was a new experience for us as a country. At national level, the European semester process is driven by the Government through its development of the Irish national reform programme, NRP. IBEC recommended specific actions in its submissions on the NRP, including reducing taxation on work, cutting red tape, encouraging labour market flexibility, encouraging entrepreneurship, improving access to finance and investing more in strategic infrastructure. IBEC believes the European semester process and the Europe 2020 strategy should continue to be linked with following the review. This change went some way towards addressing one of the weaknesses of the Lisbon strategy and is an improvement that should not be lost. IBEC has supported the increased governance of the Europe 2020 strategy as delivered through the European semester process and has also been involved at European level through Business Europe in monitoring the semester milestones.

The European semester process provides a helpful structure and discipline for reviewing national progress and maintaining a focus on assessment and the potential need for reform. Sufficient time to respond properly to consultations is also important if maximum potential is to be achieved. Ultimately, governments at national and EU level and business all want to create an environment that supports sustainable businesses that will continue to create jobs. IBEC's vision of an effective, outward looking, globally competitive European Union that works and a refocused and coherent EU 2020 strategy framework has the potential to deliver an environment in which business can create jobs and growth in the European Union and for its citizens. The framework should continue to be underpinned by monitoring the EU semester process. The European Union and its institutions matter to business and business matters to the Union. Effective EU decision-making to support growth and job creation will only be achieved by listening to and taking on board the views of businesses. IBEC strongly welcomes the European Commission President-designate's proposal to designate a vice president within the Commission with specific responsibility for the euro and social dialogue. We hope Mr. Dombrovskis, should he be confirmed in the role, will successfully complete his mission to strengthen the multilateral nature of the economic governing process and promotes social dialogue.

At national level, the process and depth of engagement with business and other stakeholders should also be improved. We welcome the opportunity to talk to the committee about these matters.

In consultation with its members, IBEC is developing clearly defined business priorities for the new Commission on the themes of promoting entrepreneurship, innovation and labour mobility, flexibility and skills, cutting red tape, completing the Single Market, investing in strategic infrastructure and expanding EU and global trade and investment.

I, again, thank the Chairman for giving me the opportunity to address the committee and the members in attendance. I am happy to participate in a discussion on the matters raised.

Mr. Paul Ginnell:

On behalf of the Better Europe Alliance, I welcome the opportunity to make a submission to the joint committee on the Europe 2020 strategy. The members will have received the full submission, in which we address three key issues, the first being the need for a balanced economic, environmental and social approach within the Europe 2020 strategy. We believe the strategy provides a potential framework for a balanced economic, social and sustainable strategy for the European Union and its member states. However, in reality, this balance has not been maintained and the Stability and Growth Pact has dominated the European semester process and the Europe 2020 strategy. Macroeconomic policies have prioritised the reduction of national budget deficits through austerity which has damaged all three elements of the Europe 2020 strategy. Therefore, the mid-term review must result in equal priority being given to all three elements - the economic, environmental and social objectives of the Europe 2020 strategy - which must also be balanced within the wider European semester process. This requires a shift towards a more sustainable development model which would put the economy at the service of an inclusive and sustainable society, not the other way round. A practical way in which this could be done is by mainstreaming the Lisbon treaty social clause in terms of overall policy development, thereby operationalising Article 9, the social clause of the treaty. In practical terms, at EU and national level, this could be done through greater use of a poverty, equality and environmental impact assessment of economic and budgetary policy.

The second area on which we focus within our submission is the strengthening of the targets and their implementation. The targets and policy areas they represent are interdependent and part of what must be seen as an integrated strategy. For example, employment has increasingy become an insecure route out of poverty, with 9.1% of households in the European Union classified as the working poor in 2012, an increase from 8.4% in 2010. In Ireland over 16.5% of people at work experienced material deprivation in 2012, compared to 6.6% in 2008. Efforts to reach the numerical employment target, without complementary safeguards regarding the quality of jobs and employment, only further undermine the achievement of the poverty reduction target, while also threatening the sustainability of economic recovery in Ireland and the European Union.

The following are some specific priorities for the Better Europe Alliance under four of the five targets set in the Europe 2020 strategy. To ensure the employment target reflects gender equality in the labour market, the employment target should be broken down separately for men and women. This would support a greater gender focus in labour market policies, including addressing caring responsibilities and the gender pay gap. Supporting people to move from welfare to work and reducing unemployment will only be sustainable, effective and equitable if done in the balanced manner outlined in the European Union's active inclusion approach which highlights that, in order to support those excluded from the labour market, a balanced approach must be adopted involving the three aspects of access to adequate income, access to quality services and an inclusive labour market, including tacking issues of discrimination and decent work. This approach is wider and more positive than the narrow approach to activation being prioritised in Ireland and many EU countries which emphasises conditionality and penalties over empowering people and providing them with choices.

With regard to climate change and energy, the European Union is on track to exceed its 2020 target. This is the result of a successful energy transition in a number of important member states, combined with the recession and the ongoing placing offshore some of the high-emitting industries. However, the European Union is not willing to commit to a higher Europe 2020 strategy target, even to the level which it expects to meet. Bearing in mind that the EU 2020 strategy target for greenhouse gas emissions will be easily exceeded, the alliance calls on the European Union to live up to its claims to be a leader in combating climate change by raising the target for the Europe 2020 stragegy to 30% and adopting a target of 55% for 2030.

In regard to the education targets, they need to include sub-targets which could highlight the different participation and outcome levels for specific groups of young people. This could help to ensure more equitable educational outcomes for all children and social groups across the whole system. This can vary across the European Union but for Ireland it should include Traveller children, children with disabilities or special learning needs and children living in disadvantaged areas. Including sub-targets would result in a greater focus on policy development and implementation for these groups of children. The Better Europe Alliance believes the European Union should commit to an adult literacy target under the heading of education. This would strengthen and prioritise adult literacy responses on a European level and within EU member states, including Ireland.

With regard to the poverty and social exclusion target, there has been a complete failure to deliver on the poverty target or even to take it seriously. Instead of making progress towards the target of reducing the number of people experiencing poverty and social exclusion by 20 million by 2020, there has been an increase of over 9 million people. There have also been rapid increases in poverty levels in Ireland.

A clear reason for the failure to make progress towards reaching the poverty target has been the lack of an effective, fully integrated strategy to address the multidimensional nature of poverty. In Ireland and the European Union the main response to tackling poverty and social exclusion under the Europe 2020 strategy has largely been limited to measures to reduce unemployment and support access to the labour market. While access to decent work can help many people to exit poverty, it is clear that this must be balanced by a range of other measures. Furthermore, 58% of people at risk of poverty in Ireland are not connected to the labour market, for example, the retired, students, those with an illness or a disability and those with a caring role. Poverty and social exclusion are multidimensional, with complex causes which require a strategy to be put in place to address them in an holistic manner. It is essential, therefore, that a more integrated strategy to address poverty and social exclusion be co-ordinated at EU level and implemented at national level. Our submission contains a range of the areas that need to be addressed in such an integrated strategy.

On the specific question of how the poverty target can be strengthened, a number of issues need to be addressed. At EU level the main difficulty is the agreement that member states can adopt national targets which may have no relationship to the three EU indicators, namely, "at risk of poverty", material deprivation and low work intensity households. This allows countries to have selective targets, with, for example, the focus only on reducing unemployment in Germany, or a risk of "creaming" which involves the setting of targets which are easier to achieve. The European Commission has also calculated that if all EU member states were to achieve their national poverty reduction targets, there would still be an 8 million shortfall in meeting the target of 20 million people. Therefore, greater ambition on poverty reduction in member states should be demanded.

At member state level targets should reflect the multidimensional nature of poverty and social exclusion and its causes and also the fact that different groups experience poverty and exclusion in different ways. The national poverty targets should, therefore, as far as possible use the three EU indicators, allowing them to be monitored more consistently by all member states and to give the EU target more credibility. These indicators tell us something different about poverty and social exclusion; therefore, there should be a requirement for progress under each of the indicators, not just in an aggregate or combined manner. For example, in Ireland the poverty target is set with reference to consistent poverty only - a combination of material poverty and being "at risk of poverty". Sub-targets need to be set for vulnerable groups which experience higher levels of poverty and exclusion.

This will depend on national circumstances. In Ireland, the survey of income and living conditions highlighted that those who are not at work due to illness or disability, lone parents, children, people who are long-term unemployed and those in social rented housing currently have higher poverty rates than the general population.
The third area is improving governance and meaningful stakeholder engagement. There must be major improvement in the level and quality of stakeholder engagement in the Europe 2020 strategy and the wider European semester process, involving a greater level of debate and more meaningful consultation. This is central to the issue of EU-level governance. The development of EU-level guidelines on stakeholder engagement at national and EU level, as committed to in the European platform against poverty, would be an important step forward in this process. This engagement must be meaningful, with a clear link to outcomes and impact.

Dominic Hannigan (Meath East, Labour)
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Before asking colleagues to ask questions, I have some queries. Dr. Ivory mentioned how hard it will be to hit particular targets and he mentioned some specific goals, including that of employment. In the submission you seemed to suggest that if targets are not met, they should perhaps be reviewed for appropriateness. What are you suggesting and how would we review them? What procedures should be followed?

I also have a question for Mr. Ginnell. He makes a point about the need for different targets and subgroup goals. I completely agree. In discussing the draft social indicators as part of the alert mechanism, this committee carried out a piece of work to which some of the witnesses may have contributed. The outcome was that the committee suggested that some of the indicators referred to by the witnesses should go in, particularly with regard to differential targets for gender. We also considered the issue of part-time and temporary workers and whether there should be targets for those sectors of the employment market. The witness mentioned "decent work" and how we can ensure the quality of work is of an appropriate standard. What is his view on targets or the development of such targets on how to monitor part-time or temporary workers? Would that be useful?

Eric Byrne (Dublin South Central, Labour)
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I thank the witnesses for the presentation. I tend to applaud myself as a politician in government, as we constantly hear of increased employment levels, with 1.9 million people travelling to work every day. The forecast economic growth is almost on a par with China at this stage. Nevertheless, there appear to be terrible contradictions within our society which the witnesses may be able to address.

I understand approximately 47% of the people who emigrated during the crisis had third level educational attainment and were in employment when they decided to emigrate. I do not know who provided such analysis but I know the 2020 project on employment highlights that approximately 20% of workers, based on 2010 figures, are in poor-quality jobs. As a prerequisite for reaching the EU 2020 employment target, we must adapt and improve job quality. Is it correct that these well-educated graduates are emigrating partly because industry in Ireland is not providing job satisfaction? We are talking about those with third level qualifications. Are there enough promotional outlets? Will the representatives of IBEC explain what they think is happening with this coterie of people? There is also the issue of those people trapped in low-paid employment who are dissatisfied in their work. Have we reached the stage where, presumably, one of the arguments must concern the issue of a living wage as against the basic and standard payment per hour? The living wage must be a key issue to be addressed.

There is a European figure that approximately 40% of employers are not convinced that they can find appropriately skilled persons and they question the level of educational attainment. A person may go through the university system and get a diploma or degree, but when he or she emerges, the person is not really the type wanted by those in industry. There is an argument that third level institutions should work more closely with industry, but at what stage do national educational institutions reconstruct their educational forms to appease industry? Is there an international trend towards industry determining the form of educational programming? Will independent universities adapt their progress in any case as they see how things evolve or develop in the international field?

The 47% statistic is shocking, as the people in question have been in employment. Are salary scales insufficient and is quality of life unacceptable? Are those who are dissatisfied with a job low-paid? It is a prerequisite of the 2020 programme that we resolve this problem by adapting and improving job quality for that coterie, so this may be a question for industry.

Joe O'Reilly (Cavan-Monaghan, Fine Gael)
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I welcome all our visitors and thank them for the presentations. I share Deputy Byrne's pride as a Government Deputy, and we are from each of the coalition parties. We have seen much achievement in the area of job creation, with unemployment now down to 11.1% or 11.2%. We are making massive strides in that area, with 31,000 new people at work in the past year. We are extremely happy about that, as it is our raison d'être.

Dominic Hannigan (Meath East, Labour)
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We know more has to be done.

Joe O'Reilly (Cavan-Monaghan, Fine Gael)
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Yes; I am coming to that. The people wishing for sensationalist, populist and other reasons to misrepresent our policies - the idea that we have adopted austerity as a happy ideological position - must know we are far from that. We adopted our policies with a view to putting our people to work and we are delighted that it is happening. I accept the Chairman's interjection, and he is right to insist that we should not be complacent. We are far from that.

In that context, I will ask Dr. Ivory some questions before moving to Mr. Ginnell. He mentioned investing in strategic infrastructure, and I take it he agrees with the Italian Presidency's view that such strategic infrastructure should be put outside the Lisbon rules, once it is productive. It should be considered as job creation and necessary expenditure. We could all guess what is strategic infrastructure, but Dr. Ivory has the professional expertise. What would he identify as very important strategic infrastructure for this country and Europe? I promoted the view in every forum that we should have an economic stimulus package across Europe, as we must match prudence to such a package. Does the witness agree that such a process should be outside fiscal rules?

We are talking in a European context and this question applies to Ireland and, I suspect, across Europe. There is a problem in job creation in that it lacks a regional dimension. Foreign direct investment tends to gravitate towards centres of population. In Ireland's case, it is the east coast which is very ably represented by the Chairman and others. Border constituencies such as mine do not attract foreign direct investment as readily. We suffer in that way. Will the delegates comment on this? I presume it is a Europe-wide phenomenon, but that does not make it any more acceptable; in fact, it makes it less so. I would be negligent if I did not raise this issue on behalf of the people I represent for whom it is a major issue.
Without labouring the point, I would like to ask about the youth guarantee scheme. What is its potential and are we using it correctly? My suspicion is that it is not up and running properly or as adequately as it should be. I had the privilege of leading the Irish delegation last week at the Council of Europe debate on education. Now that we need all of these houses, we will not have enough plasterers or blocklayers and the education system is not geared towards providing them. Should we have simulated conditions for training when we do not have master craftspeople? Should we train apprentices in simulated conditions and look towards the German model of education? Many young boys drop out of second level education because they are frustrated on the academic road. Our society and value system are oriented towards valuing only the academic route. Could we combine the two? The academic side, the humanities and the arts, are a critical part of the formation of any human being. In the case of boys and girls who are less academic - it tends to apply more to boys - can we marry the two approaches, with a focus on the practical, and address the skills shortage and, thus, increase economic activity?
I endorse what my colleague, Deputy Eric Byrne, said about the lower paid and people being in a poverty trap. Is it not the case that people on lower incomes invest all of their income in consumption? Their money re-enters the economy at once, compared to those on high incomes who might put money into equities, long-term investments and blocks of land. The ordinary person in a lowly paid job immediately spends all of his or her money on basics. Thus, the money re-enters the economy. On this basis and from the perspective of IBEC and the economic good, is there a reason to consider higher wages at the lower end? This runs contrary to the simplistic view among some employers that offering lower wages is better. Is it not the case that there is a multiplier effect if people are on decent wages? If someone is earning more than €100,000, it will be invested offshore and in equities. A person on €25,000 spends money on essential products, mostly home-grown and indigenous products that are eaten immediately. They may also be clothes, but they tend not to be foreign goods.
I have a number of questions for Mr. Ginnell. I accept all of what he says about creating a social Europe, a Europe in which there will be equality and the social charter applies. In education, the way to create equality is to get to children when they are very young. My background is in education, but practical observation also suggests the younger one intervenes, the better, particularly in the case of children from problematic homes. Hence, the early childhood care and education scheme is available to all citizens and was funded by the State during the worst of the recession. It is one of our great achievements that we kept it going. Does Mr. Ginnell agree that it is a wonderful mechanism across Europe to create equality of opportunity and that the period should be doubled to two years? Rather than investing at third level or the in upper tiers of primary level and second level, investing in preschool education first and then pro rataat later levels means that children living in difficult homes can be away from home for a few hours, have a proper diet and have difficulties identified. The child gets to live in a good way, away from family conflict.
Carers in our society are undervalued. They provide a quality of life for the people for whom they care, which is critical, and also save the State enormous sums on institutional care. The potential of carers in this country and across Europe is underestimated. If we paid them better, valued and celebrated them more, gave them the social benefits that go with medical cards and made it more attractive to be a carer, we would make it a decent job that is valued and has a great effect on society, but we would also attract people in low paid jobs into it. This would create jobs in these sectors. The people in relatively low paid jobs who are not in love with their job could become carers if they were to receive a decent income from caring. This would save on expenditure on institutional care and create a good society. Investment in young children and carers is the way to create a social Europe.

Dominic Hannigan (Meath East, Labour)
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I am conscious of the time limit and would not be surprised if there was a vote shortly. I ask each organisation to limit its answers and concluding remarks to five minutes.

Dr. Pat Ivory:

The Chairman asked about employment targets and their appropriateness. It is a matter of coherence across targets within the EU 2020 strategy. We will not achieve the employment targets set if we do not achieve the targets for research and development in the Irish context. Introducing policies that restrict the capacity to innovate, develop and conduct research in the economy will reduce employment here. Something that will have an impact on our targets and ability to achieve them is restricting the flow of data across borders. We have a high number of technology companies in the country, as well as sophisticated manufacturing industries in Ireland and across Europe. If they cannot exchange data in the course of day-to-day business and if data cannot flow across borders, it will reduce levels of growth in employment in the European Union.

I ask Mr. O'Donovan to say a few words about CO2 emissions and climate change.

Mr. Erik O'Donovan:

For IBEC, on climate change, it is a matter of coherence. There are three targets, one for greenhouse gas emissions, one for renewables and one for efficiency. Arguably, tinkering with the emissions trading scheme, ETS, in recent times gives a different price signal within as opposed to outside it. Ireland faces some structural challenges in meeting the non-ETS targets. It is not that we need additional targets, but we must give the right price signal to get the ETS working and need to look at the structural challenges in respect of the non-ETS targets.

For us, we think it is probably too soon to have new targets for climate for 2020 because at the moment new targets are being negotiated for the year 2030. Europe has already given a very clear signal as to what it wants by the year 2050 and it is essentially an upward trajectory. Ireland will face challenges and we in the business community are keeping a very close eye on those negotiations. If the matter is handled badly we believe it could cost the country an estimated €1.3 billion per annum. We need to have balance. We are talking about an EU deal for the year 2030.

Joe O'Reilly (Cavan-Monaghan, Fine Gael)
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I believe India and China are a problem.

Mr. Erik O'Donovan:

There are a number of questions that the committee wanted to get through. That was just in terms of the climate one.

Dr. Pat Ivory:

Deputy Eric Byrne asked whether the 47% of people with a third level education who are going abroad are doing so because of salary levels here. The quick answer to that is "no". It may be because of taxation levels here, and hopefully we can reduce taxation and make sure that people can keep more of what they earn. The second reason----

Eric Byrne (Dublin South Central, Labour)
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It could not just be----

Dr. Pat Ivory:

I am not saying that it is purely due to that. The second reason people go abroad with high levels of education is because they want experience. They want to gain that experience abroad. If they go abroad with high levels of education and secure good jobs abroad, that provides great value to them as individuals. It can also provide value to Ireland when those people return here and set up companies of their own or work in industry here. I would not view that as being a negative at all, I believe it is very positive that people who go abroad have good levels of education and can secure good jobs. Deputy Byrne said that 20% of the workers are in poor quality jobs. I am not sure how the Deputy defines a poor quality job, but we do need to think about how we look at work and how we define jobs. This comes into the Deputy's question as to whether the industry is providing the right jobs, and also flows into his question about education.

Education and the jobs that are available are not necessarily matched, and that is something which we need to think about. Over the next five years in particular, there needs to be a closer alignment of education with labour market needs. We need to look at what type of education people have, and sometimes it is a matter of providing short conversion courses, so that people who may have done, for example, an arts degree can then do a short-term diploma to convert into something that is more employable. It is a question of looking at this in innovative ways to help people get work and jobs. The importance of vocational type jobs is significant. For example, I have been working with Forfás and with industry in the freight, logistics and distribution sector to look at what type of future skill needs are there. How do we provide career paths in an area like transport and logistics? How do we enable young people to see that there are proper careers in these areas? Not all the careers will require a university degree. It might be more advantageous to have a good apprenticeship or vocational education which could support a very good quality of life and a very good, enjoyable career in that area.

Deputy Byrne mentioned the living wage rather than the minimum wage. I also refer to Deputy O'Reilly's questions in this regard. I believe that debate is about competitiveness. It is not possible to operate in isolation in Ireland. We live in a very global world and we are an extremely open economy. We have to take on board our levels of productivity, the competitiveness of our salary levels, taxation system and support for research and development. Other countries are moving up the chain in terms of trying to attract foreign direct investment, so we need to be acutely aware that our labour and research and development policies must ensure that Ireland remains competitive and continues to attract investment. Even when one looks at the UK one can see much stronger competition there than in the past.

On investment and strategic infrastructure, I would name three areas. Our ports are critical to our trade. Manufactured exports leave through our ports, so they are strategic infrastructure. We have well-defined core and second tier ports in Dublin, Cork, Shannon Foynes, Waterford and Rosslare Europort. Other ports can also make a contribution in terms of leisure and the regional dimension which the Deputy spoke about. Connectivity is important, given that our economy is now built as much around services as it is around manufacturing. Airports provide connectivity to people within the country and people from outside the country who are visiting for business globally, and this is extremely important. The other two areas of strategic infrastructure are communications, particularly broadband penetration, and our energy infrastructure. Those three provide huge opportunities for us to invest over the next five years, to upscale our economy in terms of infrastructure, and to move us up in terms of the league tables and the infrastructure that is available here.

On job creation lacking a regional dimension, we are very supportive of spatial planning and intend to look at that again to see how we can ensure that the maximum is being achieved at regional level . Particularly in relation to the Border counties, there is an increasing need for businesses in the South and North of Ireland to continue to talk about what opportunities we can work on together to support growth and employment in both our areas, as we are doing currently.

As for looking towards higher wages, particularly for low-wage workers as they spend a lot of their money, again it comes down to competitiveness. By having a competitive income tax regime we can help people to have more money while not increasing our wages in the economy and making us uncompetitive.

Ms Lorraine Mulligan:

I will start on the question of decent work that was addressed at the start, the question of whether targets at EU level would be appropriate for part-time and temporary workers. It is actually quite a complex area, because for many people if the choice to enter into part-time work is voluntary it may suit their child care arrangements or other commitments. The key thing is not so much to have a target on numbers, rather to track and be able to monitor the quality of temporary and part-time employment. Indeed the EU has potential to have a role in this regard. The Commission is currently undertaking analysis of the problem of zero hour contracts to see if there can be EU standards in that area. Domestically, a key requirement is to enable free access to trade union representation, so that people can have a quality employment experience.

Equally, the joint labour committees, JLC, mechanism which has been re-established under the Labour Party-Fine Gael Government is a key way of monitoring the quality of employment in the workplace. The problem is not so much meeting targets but rather ensuring there are proper rules and standards for employment and implementing them and that issues like zero-hour contracts are dealt with. There are examples of successful initiatives, particularly in the retail sector, where there are contracts with terms for a minimum number of hours or provision for some kind of reimbursement. It is an issue that has a varied response depending on whether it is a voluntary, involuntary, part-time or temporary working arrangement.

Deputy Eric Byrne mentioned the living wage. The evidence from the London and Scottish living wage campaigns is that there are very substantial benefits for employers in terms of retention of staff, reduced absenteeism, a higher level of morale, an economic dividend at the workplace level and for workers who are depending on very low wages and are struggling. More to the point, there is a big benefit to the State. Currently, the State subsidises low pay through family income support and other in-work benefits. The taxpayer is subsidising that situation. There are very real benefits to implementing a living wage and providing people with a decent standard of living so that they can have access to the benefits of education and other opportunities in their lives. On that note, the concept of decent work also has to take into account training and the role of the employer in that regard. The area of apprenticeships could be developed. SIPTU has made submissions to the apprenticeship council on developing apprenticeships in the childcare sector which is an undervalued area. If people are afforded professional standards and a real career path, that area could be developed. The transference of skills from the construction sector to the green economy can be pursued through the apprenticeship model. The same applies to the hotel and restaurant sectors, which have been casualised and where the issue of precarious work has been a problem because there is no proper career path for people. Apprenticeships are key. The role of employers in funding and supporting apprenticeships has to be underlined.

Dominic Hannigan (Meath East, Labour)
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On the living wage, I remind the committee that the jobs committee has appointed a rapporteur to prepare a report on the issue of the living wage. We expect to see further development on that in the next few months.

Mr. Paul Ginnell:

There are a couple of areas I wish to address. I think Ms Brid O'Brien will talk about the youth guarantee. It is also relevant to European Anti-Poverty Network (EAPN) Ireland. In relation to Deputy O'Reilly's questions on a social Europe, I agree with both points made in relation to a second year of free early care and education. It is extremely important. As noted, investment in the early years of a child's life has a greater benefit throughout that life and creates greater equality for children as they progress through the education system. Much of the focus in Ireland has been on third-level education and investing there although greater benefit - especially for children in disadvantaged areas - comes from investment in the early years. That investment and input in children's lives carries on throughout their lives. The impact on children is within a family context and a community context and this impacts the whole family later on.

The role of carers is an area that requires more investment and more focus, in particular carer's allowance and the role that plays within households. In the last number of years, many families have been struggling in that area. If there are greater supports within the family and a recognition of the role of the carer within the family, this supports the overall household to be socially engaged to a greater extent and its continued involvement and participation in wider society.

They are some of the elements of a social Europe. There has been a lot of talk about social investment at EU level. The focus of this needs perhaps a little clarification. In terms of social spending, it needs to be seen as an investment and not a cost. The two areas mentioned are part of that.

Ms Brid O'Brien:

I thank the committee for the opportunity to meet with it. In terms of the youth guarantee, the pilot in Ballymun has been rolled out and one of the striking features of it and one of the strong lessons coming from it is the importance of inter-agency work and collaboration and the need to work with the young people concerned, in particularly the very disadvantaged young people involved, to help them find a path back to education and training or work. One of the challenges in rolling the programme out further will be ensuring the resources are put in place to ensure that the inter-agency collaboration is rolled out with the youth guarantee. It will be a big challenge to ensure that happens. Otherwise, the guarantee will not deliver what it is hoped it will. At its heart, the guarantee needs to try to create decently paid employment for young people. As some of the young people involved are very distanced from the labour market and could be coming from family or community situations where there is inter-generational unemployment, it will be key to engage meaningfully with employers and to have strong equality and social inclusion principles at the heart of guarantee and to put those into practice.

There are a few initiatives in today's Pathways to Work document dealing with developmental internships that could play an important role. It is really important that these are rolled out constructively. It is about engaging with young people, working with them, helping them to see that what is on offer will assist them and for all of the players involved to engage meaningfully and to ensure that from the outset solid supports, good information, good advice and good quality training are available. Access to employment and trying to use some of the alternative accesses to employment is another issue.

In terms of education, I fully agree with the Deputy on the importance of early intervention and that it is a good investment, particularly because every young person will attend primary school. For those who were failed by the formal education system first time round, the roll out of the further education strategy will be critical as will putting the resources in place to help those who are already distant - who perhaps left school early - to address their skills gaps. They will then have some chance of being able to get access to jobs - perhaps better jobs that are coming down the line - and of securing a better future for themselves and their families. It is very important that we do that.

On the emigration front, there is a very striking recent statistic from the CSO. Of those who emigrated, more than twice as many people who emigrated did so from a job than emigrated because they were unemployed. We do have a quality of work issue in this country. There was a report over the weekend that, after the United States, Ireland had the highest percentage of low paid jobs. We have a quality of job problem and for a lot of young people ---

Dominic Hannigan (Meath East, Labour)
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To be clear, is it pay level or quality of job? They can be two distinct things.

Ms Brid O'Brien:

We would consider a decent level of income part of a quality job.

Dominic Hannigan (Meath East, Labour)
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A really well paid job could be very boring.

Ms Brid O'Brien:

Absolutely. Our concern is that much of what is rolling out at present is at the lower end of the scale. Many of our young people have left because what is on offer is not commensurate with what they had hoped to achieve with their levels of education. University College Cork did a piece of work about a year ago around that whole issue and it was very striking.

Dominic Hannigan (Meath East, Labour)
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So, it is more pay.

Ms Brid O'Brien:

Many people left from work. That is a challenge for us.

Eric Byrne (Dublin South Central, Labour)
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A proper wage would go some way to assist.

Ms Brid O'Brien:

Absolutely, very much so.

Dominic Hannigan (Meath East, Labour)
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Does Dr. Ivory want to come in?

Dr. Pat Ivory:

I accept that we need to create really good jobs in the Irish economy and that is what business is about and giving people opportunities. There are many good jobs in the Irish economy and people immigrate here, they come to Ireland to take up jobs in the Irish economy. It is not true that the Irish economy is not creating good jobs. It would be risky to assume that everybody who emigrates from a job to a job abroad is doing so for reasons of unhappiness with the job in Ireland. Equally they may be attracted by the opportunity to work abroad to gain experience to develop their careers. In some instances they may be moving abroad within the companies in which they are working. It is not straightforward to assume that somebody who moves from a job in Ireland and emigrates is doing so for reasons of quality of job or low pay. It can be for a whole range of reasons, including the opportunity to work abroad, gain experience abroad and get a really interesting career opportunity. I would say also that-----

Eric Byrne (Dublin South Central, Labour)
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Will Dr. Ivory hold on for two seconds? We are speculating but is anybody analysing the situation?

Dr. Pat Ivory:

The ESRI, the body-----

Dominic Hannigan (Meath East, Labour)
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Just one at a time, Dr. Pat Ivory to be followed by Ms Brid O'Brien.

Eric Byrne (Dublin South Central, Labour)
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It strikes me as weird in the middle of an economic downturn that of those who have attained employment within that economy, that as many as 47% would choose emigration. Somebody has to analyse the situation and give us the answer. Is anybody doing that?

Dominic Hannigan (Meath East, Labour)
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In the first instance is there research and, if so, where is it published?

Dr. Pat Ivory:

There is some research around this area. Professor John FitzGerald in the ESRI has produced research which shows that throughout the past decade, the boom years in the Irish economy, a high proportion of young Irish people were working in Australia.

Eric Byrne (Dublin South Central, Labour)
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Young people working in Australia and people leaving with third level education.

Dr. Pat Ivory:

The young people who are leaving to work in Australia are educated, some have third level education and some have very good skills which they can use abroad. It is not always people with third level education who go to work in Australia; hairdressers, plumbers and those with carpentry skills all have good opportunities in Australia. Professor FitzGerald's research pointed out that it is not a recent phenomenon to say that young people move abroad in periods of economic recession. The numbers may increase somewhat during periods of economic recession for reasons which are not there during boom periods but even in boom periods people emigrate for good reasons.

Dominic Hannigan (Meath East, Labour)
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I thank Dr. Ivory. I call Ms Brid O'Brien to conclude.

Ms Brid O'Brien:

Both University College Cork and the National Youth Council did some work in this area. What is striking is the number of people who have emigrated. Without a doubt, our unemployment figures would look worse without the levels of emigration. That so many people have left work and emigrated up to the end of the last quarter is striking. It is twice the number who left because they were unemployed. I think there are quality of work issues which we need to have a serious look at in this country. On the emigration-immigration front we need better data on all of these issues. My final point is around strategic infrastructural investment. It is important not to think always of those issues in terms of economic investment but also social investment that has a return. Both economic and social housing and education are two clear ones.

Dominic Hannigan (Meath East, Labour)
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I thank Ms O'Brien. On behalf of the committee I thank the witnesses for giving us their views and answering our questions.