Willie Penrose (Longford-Westmeath, Labour)

I move:

"That Dáil Éireann:

— recognises that getting the economy back on track must be the number one priority and that this requires urgent action to retain and create jobs, to assist struggling businesses and those attempting to establish new enterprises and to ensure that those currently unemployed have the skills required to get back into employment;

noting that:

— 402,100 people are now unemployed;

— 195,100 people have lost their jobs in the year to the end of April;

— viable small and medium enterprises are continuing to close because they cannot access credit;

— provisions for retraining and up-skilling of unemployed workers and those in vulnerable sectors of the economy have been totally inadequate;

— the lack of urgency with which proposed jobs cuts at key employers such as Dell, Waterford Crystal and SR Technics have been met has resulted in jobs that may have otherwise been saved being lost; and

— escalating unemployment has resulted in a sharp fall in revenue from income tax while the social insurance fund is at a risk of running out by the end of the year, in part due to the pressure on it from welfare payments to those out of work;

calls on the Government to take urgent action to stem the jobs haemorrhage and put people back to work through, in particular:

— the establishment of a national investment bank to invest in our own future and help create jobs including by ensuring access to credit for small business;

— the fast tracking of business start-ups by creating one-stop enterprise business points to bring together funding, expertise and advice for entrepreneurs who want to start new businesses or grow existing ones;

— taking Eircom into public ownership to provide a suitable platform for investment in broadband;

— measures, including tax breaks, to assist employers to retain workers in employment and to take people off the dole;

— providing support for Irish manufacturers and producers to export to markets outside the US and Britain including language and regulation support;

— setting up a 'Bridge the Gap' work experience scheme for graduates and apprentices;

— helping people working part-time to train in their time off through an 'Earn and Learn' scheme; and

— launching a skills drive for people who have lost jobs and those in vulnerable sectors of the economy, including tax back for full-time study and measures to get early school leavers back into education.

This motion, in the name of the Labour Party and Sinn Féin Members, recognises that getting the economy back on track must be the number one priority, and that this requires urgent action to retain and create jobs, to assist struggling businesses and those attempting to establish new enterprises, and to ensure those currently unemployed have the skills required to get back into employment.

Some commentators have suggested that the current crisis is not as bad as that in the 1980s. They are wrong, because in the 1980s we had a halt to the modest economic growth of the late 1970s and most people had not experienced prosperity. It was also possible for the unemployed to emigrate, as the UK and the USA were growing rapidly. We had release valves. In its current state of panic, the Government is trying to blame the global economic recession for all our problems, but most people, like those we met while canvassing, understand that the polices pursued by the Fianna Fáil-led Government over the past decade have left us ill-prepared for the current crisis. I do not wish to lecture the House about economic theory, but every first-year student of economics learns that in managing the economy, Government policy should be counter cyclical. This means that in a boom period, the Government dampens the boom by controlling spending and, if necessary, by increasing taxation.

People on the ground could not believe that in two budgets introduced within six months of each other, not one pro-enterprise incentive or initiative was brought forward. Since the time of Charlie McCreevy, the policy of "If I have it, I spend it" meant that the Government fuelled the boom, and now that the boom is over, the cupboard is almost bare. The few bones left must be used to prop up the banks, whose irresponsible lending has contributed so much to the current crisis. At a time when banks should be lending to support existing and new businesses, they are unwilling to do so. Notwithstanding their assurances to the contrary, all the signs are that they are unwilling to do so, as they hoard capital in order to deal with the crisis caused by irresponsible lending.

We should not forget that about 250,000 small businesses across this State provide up to 750,000 jobs. These are often the backbone of the infrastructural fabric of many of our rural villages and towns. Many small businesses that are members of the Small Firms Association or ISME have had varied experiences dealing with the banks, and many are now on the brink of failure due to the lack of credit which is the lifeblood of business. We are all aware that small and medium sized enterprises are the engine room of the economy. Some of the banks are even refusing to pass on the reductions in interest rates. People on the streets outside and Members in here are asking what happened to the billions invested by the Government as part of the recapitalisation plan. Who benefits from this massive injection? It is not filtering down to small businesses that are crucial to the economic well being of the country, and to many places throughout rural Ireland.

In putting down this motion, we are reminding Fianna Fáil of a fact its leaders seem determined to ignore, namely, that there are now 400,000 people on the live register, and the number is rapidly climbing towards 500,000. The pace of deterioration in the number of people signing on is truly frightening. In May 2009, the seasonally adjusted live register reached 402,100, which is up by 195,100 or 97% in only 12 months. The increase in the previous month was 13,500. It is widely expected that the live register will reach 500,000 or more by the end of the year. Behind those figures lie other disturbing statistics. For example, there are some 85,000 people aged under 25 on the live register.

We know that not everyone on the live register is without work, but the fact remains that unemployment is spiralling. The ESRI estimate that the unemployment rate will reach 17% next year. Based on that estimate, it is clear that more than 500,000 people will be on the live register by the end of this year. Quite frankly, that is an appalling vista. To have that many people without work, with all the human cost that goes with it, is an economic and social calamity. There is the loss of income, the threat to the family home, the loss of skills and capacity within the economy, and the sheer frustration for people who simply want to work. Any of us who knocked on a door during the recent election campaign will realise that this is what is annoying people. Be they mothers, brothers, sons or daughters, grandparents or parents, everybody is concerned. Yet in the face of this crisis, we have seen little or no response from the Government. We have seen urgency in dealing with the banking crisis, and we have seen action on the public finances, but we have seen no urgency and no coherence in dealing with the jobs crisis.

What has happened to the so-called jobs summit that was promised for the spring of this year? What has the Government done to either stimulate economic activity, where that can be done, or to provide more work and training options for the unemployed? Where is the beef? The answer is to be found in an annex to the budget. There are a mere 16,000 extra training places. There is a proposal for a pilot "earn and learn" scheme, with a total of 277 places. There is a proposal for a graduate placement scheme, that will have 2,000 places. Yet there are 85,000 people under 25 on the live register. The scale of this response simply does not match the scale of the problem.

What we need is a concerted drive to offer opportunities to people who have no work. This is not just a matter of providing people with something to do, even though that is important. It is a vital part of any viable strategy for recovery. Behind every unemployment statistic is a human being, often with a family, a mortgage and everything else that goes with that.

The motion before the House calls on the Government to treat this issue urgently and seriously. It is not an optional extra. It is vital. The motion calls for a number of measures to be taken to offer opportunities to people on the live register. It also calls for the establishment of a national investment bank that would raise finance to fund investment in infrastructure and to act as a banker to small business. That is absolutely essential to get credit flowing and to sustain viable businesses. We are actually closing down the opportunity for small businesses to expand, due to the lack of credit. This cannot continue. Bank executives are going around pretending they are doing this, that and the other for small businesses. Who do they think they are fooling? Money invested in infrastructure projects will act as a stimulus to the economy and create much needed employment.

Despite all the billions that have been committed to the banks, by far the biggest issue being raised with Deputies by small business is the problem of credit. This is reflected in the Central Bank figures, which show that in the past two months, lending to business has fallen by approximately €1 billion per month. A national investment bank would also have the capacity to lend to businesses and could draw on funds available from the European Investment Bank to do so. We have only drawn a pittance from the huge funds available there. Let us show the people the importance of Europe and the European Investment Bank, and how they can contribute to revitalising industry, to sustaining jobs and businesses, and to giving them an opportunity to expand. After all, the small businesses employing four, five or six people fall off the radar and it is only those losing 50 or 100 jobs that have become the focus of attention. Across the country, small businesses are closing and these are essential. Many of them are family businesses and families will go to the very end to preserve, sustain and retain those businesses. They will literally put their houses on the line, yet the banks will not even remortgage their houses. They are in a triple loop and they cannot get out of it. The Minister has an obligation to unravel this and make sure that credit gets through to those businesses.

We believe that appropriate and worthwhile start-up grants should be made available to people who are unemployed and wish to start up new businesses. A small business rates relief scheme, which would be based either on floor size or turnover, or a combination of both, should now be introduced and thereby enable many of our small businesses to survive this very challenging economic environment. That is Labour Party policy and was passed at the Labour Party conference.

Thousands of jobs have been lost in the construction industry, yet the schools building programme - for which money has been already allocated - is incredibly slow, with more than 40,000 pupils languishing in prefabs. The Department of Education and Science seems to take years even to approve a new school, not to mind build one. I welcome the commencement of the insulation scheme, which was first proposed by the Labour Party, but which is too limited in its scope, in so far as a key component of any such scheme for our elderly would be the inclusion of the replacement of windows and doors as they contribute to the preservation of heat in much of the housing stock. More than 40% of our houses were built prior to 1963 and there is not a hint of insulation in any of them. The Labour Party would encourage renovation and improving energy efficiency for older houses and this could be done by reducing the level of VAT for improvement works and reducing or removing VAT on insulating materials if the Government was really committed to this. We have offered a significant number of new ideas to tackle the current crisis, and I repeat them here.

I am sick of reading right-wing commentators every week. The latest to join the chorus is Mr. David Quinn. He is obviously nettled by the fact that the Labour Party and other left-wing candidates made substantial gains in the local elections. He came out with the usual claptrap, attacking the Labour Party, but saying nothing about the right-wing philosophy he espouses and articulated for the past number of years. Where has that left us? He does not pay much attention to the human cost of such economic policies. We have articulated policy at party conferences and in the House, as have other parties. We are not afraid to demonstrate that they are workable policies.

We have a sorry tradition of allowing the unemployed to languish on the dole queue, with little hope of further training or work experience. We still have a Victorian poor law attitude to the unemployed, and more effort is made to prove that the unemployed person is idle rather than try to get the person back into the labour force. We must learn from schemes in other EU countries where efforts are made to ensure unemployed workers, particularly young workers, do not become detached from the labour force. We must immediately set about fundamentally reforming the back to work supports, such as the back to work enterprise allowance, and all lead-in times for the determination of eligibility should be eliminated.

The welfare system should be about preventing, rather than promoting, long-term unemployment. We have had some tokenism in the budget. There are now 242,871 more people on the live register than in May 2007, when this Government came to power, representing a cost of €4.8 billion to the Exchequer. Would we not be better off redirecting the money to ensure the misery visited upon homes throughout the State is alleviated? There is a precedent in place whereby people who have received statutory redundancy are already permitted to avail of these schemes immediately, so the principle is already accepted.

We must formulate the use of career breaks and flexible working arrangements. Career breaks are rarely offered to employees outside the public service. We need to devise a scheme that provides incentives to employers to offer career breaks or flexible working arrangements, while providing employees with legal entitlements to their jobs back and security on other issues when that leave ends.

We must significantly increase training places via FÁS, VECs and the institutes of technology. Colleges of further education are losing teachers and have to turn away young people who are going straight from school into unemployment. VECs and ITs are ready and willing to provide many more training places if they are given funding. The last area in which cutbacks should be considered is education and training.

Regarding social welfare, why not allow employers who are in a position to provide a worthwhile job, but whose financial position prevents them from doing so, to top up the rate of the jobseeker's benefit or jobseeker's allowance of those who wish to be in employment and ensure the top up would bring the individual's income up to a good wage? We must be innovative and show flexibility in the new circumstances.

It is time to increase the VAT exemption level for those who supply services from its current threshold of €37,500 up to €65,000. Similarly, the exemption figure for the supply of goods must be increased from its current low threshold of €70,000 to €125,000. The complexities of VAT would require a small business to employ a bookkeeper for a half day each week, which is another burden on small businesses. The Government has strangled companies and small businesses with unbelievable levels of regulation. It is time to simplify the process by ensuring a unitary style form is made available which satisfies all the criteria for submission to the various governmental bodies and agencies.

The role of the county enterprise boards, and their contribution to employment creation at the micro level, is very important and needs to be recognised. We are committed to expanding the functions and job creation capacity of county enterprise boards and to giving them greater flexibility and more discretion to enable them to contribute to employment creation. The stricture whereby they can only grant aid a business with up to ten jobs will be removed under a Government with Labour Party participation. We would also allow a wide range of start-up grants and a loosening of eligibility criteria.

In the Forfás report of 2007, Towards Developing an Entrepreneurship Policy for Ireland, a major problem in the area of entrepreneurship policy was identified. While one cannot deny that the Government is investing in programmes that aim to develop and encourage small businesses and entrepreneurship, too many agencies, bodies and Departments are involved in this area. The Department of Enterprise, Trade and Employment supports entrepreneurs and start-up businesses. The Department of Education and Science is responsible for the delivery of entrepreneurship education and training. The Department of Community, Rural and Gaeltacht Affairs is responsible for Údarás na Gaeltachta, the Leader programme and area partnerships. The Department of Arts, Sport and Tourism is responsible for the development of tourism enterprises through Fáilte Ireland. The Department of Justice, Equality and Law Reform is responsible for regulating residence and work visas for third country citizens and issuing business permissions. The Department of Finance is responsible for overseeing the fiscal incentives for enterprise establishment and equity investment such as the seed capital and business expansion schemes. The Labour Party commits to bringing all the above responsibilities under the remit of one Minister, who will have control of a single Department and will perform the activities carried out by a variety of Departments. The Department with responsibility for entrepreneurship policy would be responsible for delivering various initiatives that have an impact on entrepreneurs and the environment in which they operate in a cogent and cohesive manner.

See this speech in context