Michael Creed (Cork North West, Fine Gael)

I spoke last night in the debate on the Electoral (Amendment)(Political Funding) Bill 2011 when I made the point that I was always somewhat nervous when there was virtual unanimity on legislation. I have looked at this Bill in its amended form, with the Minister's proposed amendments on Committee Stage. On this occasion, and with few, if any, reservations, I rush to join the ranks of the masses in the context of supporting the legislation before the House. In so doing, I acknowledge the role played by Senator Quinn, Mr. Seán Gallagher and the Upper House in the production of this Bill. Very often, and I am sure it will be no different later today, the Seanad comes in for some criticism regarding the manner in which it goes about its business. In the context of real reform, the way what began as a Private Members' Bill in the Seanad has wound its way through both Houses and attracted virtually unanimous support is a reflection of a mature parliament going about is business in a mature fashion. We need more of that and fewer of the restrictions imposed by the Whip system.

The Bill relates to the construction industry. It is interesting to reflect on that industry in a broad sense. In 2007 some 270,000 people were employed in the construction industry, whereas today the figure stands at approximately 100,000. This represents a substantial collapse. Given that in excess of 160,000 people lost their jobs, we must ask what is a sustainable construction industry in a mature economy. I contend that the pendulum swung too far in the context of the correction which occurred and that there is scope to create sustainable jobs within the construction industry. It is critical, however, that we should put in place the proper legislative framework to allow the industry to re-establish itself.

It has been regrettable to watch the dismantling of the construction industry on television. I refer here to reports relating to the sale and export of heavy plant and machinery to eastern Europe and elsewhere. We must remember though that a critical aspect of re-establishing the industry relates to the human component, namely, those who comprise the skilled workforce. All Members will have sat in the kitchens and living rooms of constituents who worked as block layers, plasterers, carpenters, electricians, general labourers, painters, window installers, etc. and witnessed the carnage that has been wrought. Many of these people subcontracted in the absence of the safety net of a written contract and were left high and dry. What the Bill involves is people learning lessons - perhaps after the horse has bolted in many instances - and putting in place some certainty about the manner in which those to whom I refer can go about their business in the future and be assured of receiving payment for the work they do. Regrettably, many of the individuals in question have fallen foul of a system which has allowed main contractors prosper at their expense. The law appears to be entirely skewed against their interests and in many respects the Bill tries to create a level playing pitch.

One of the issues which is bedevilling the construction industry as it attempts to get back on a sustainable footing is the prevalence of the black economy. That is a matter which the Government must address with some urgency. I recently spoke to a small building contractor in my constituency who tendered for a job relating to a house extension. Many people are deciding not to move to bigger homes but are rather upgrading their existing residences. The man in question tendered for the job but he was beaten hands down by some individuals who are operating in the black economy and who are concurrently working and signing on. There is an onus on the Government, through agencies such as the planning authorities and Revenue, to address the black economy in a sustained fashion in order that people who are paying their taxes and trying to survive in a very difficult environment will not be hounded out of business as a result of the State's inactivity in this area.

We now have substantial control over the banks and we should oblige them to notify Revenue when someone who is funding extension or improvement works or a construction project by means of a bank loan draws down money. In addition, a person who is extending his or her house should also be obliged to notify Revenue when work commences. A simple obligation of the type to which I refer would put the fear of God into the sponsor of the project and anyone working on the site that if they were not tax compliant, if they were concurrently working and signing on or if their affairs were not in order, inspectors from the Department of Social Protection, Revenue or some other agency might come calling. That is one way to proceed. If the sponsors of projects were obliged to notify Revenue on commencement of work and if the banks were similarly obliged to issue notification when moneys were drawn down, that would go a long way towards addressing the issues to which I refer.

Essentially, the real issue relating to subcontractors is that in many cases legal contracts were not in place. The relationship between main contractors and subcontractors was not one of equals. Subcontractors were very much at the receiving end when it came to terms and conditions. This was despite the fact they did not have written contracts. What is critical in respect of this legislation is that in the future the adjudication process, which is quick and affordable, must be binding. I welcome the commitment the Minister made to the effect that it will be binding. The fact the latter will be the case will not mean someone who is aggrieved by the outcome of the process will not have recourse to conciliation, arbitration or, ultimately, litigation. The essential point is that the adjudication process will be binding. In other words, people will pay now and argue the matter in court or elsewhere at a later date. This will mean subcontractors will not be left high and dry.

We must ask whether the notion of binding adjudication is sufficient. As Deputy Healy-Rae observed, contracts are awarded to main contractors and the simple requirement on them is that they must have a tax clearance certificate to tender for work. In itself, this can hardly be considered adequate any longer. Main contractors should be obliged to display some financial muscle which demonstrates they are not merely winning contracts on the basis of tax clearance requirements. When they do win contracts, these individuals or companies approach subcontractors and state they will take 20% off the top for themselves and the former can have the work on a subcontract basis for 80% of the original amount on offer. We must examine the tender process and ensure the prices being charged are realistic and are not below cost. We must also ensure main contractors are not in a position to drive a coach and four through the legislation and the intent behind it.

I welcome the Minister's indication to the effect that thresholds will be removed, which is critical. It was originally envisaged that thresholds of €200,000 and €50,000 would apply in respect of public and private contracts. There are people who went out of business because they could not recoup amounts as low as €2,000 or €3,000. This was particularly the case when credit from the banks was drying up and people could not obtain payment. Effectively, the house of cards came down as a result. The Government must consider the impact of the domino effect in this regard. A subcontractor might have had two or three block layers, electricians or carpenters working for him. By virtue of the PRSI contributions the former paid on their behalf, these individuals had the comfort of a safety net. In other words, they qualified for jobseeker's benefit. However, because they paid a different class of PRSI contributions, subcontractors were effectively left swinging in the wind. Their contributions were only of use to them in terms of pension entitlement on retirement.

I return to my initial point. We must ensure we have available to us the people required to kick-start the construction sector when the opportunity arises and when the time is right. Many people were so badly burnt that they either emigrated or dismantled the capacity of their businesses. One of the reasons they did so was they felt they had been badly burned by the social welfare system when they needed a leg up. The entitlement of self-employed subcontractors to pay a higher rate of PRSI contribution on a voluntary basis needs to be looked at.

I welcome the Bill. I particularly welcome the collaborative approach that is at its heart, the involvement of the Minister of State, Deputy Brian Hayes, and the improvements that have been engineered so far.

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