Gerald Nash (Louth, Labour) | Oireachtas source

I congratulate the Minister of State on his recent appointment and wish him well in his work and in his term of office at a very important time for our country. I confirm that the Labour Party will not oppose this legislation. We support its merits and what it is designed to do.

I noted with interest the book review by the Minister, Deputy Donohoe, in TheIrish Timesthis weekend of The Economics of Belonging by Martin Sandbu. He cited a particular relevant passage, which I will read out. It states “Those turning against the western order are those who feel left behind in it, but not just that: they feel left behind by their own – betrayed by the elites who constructed the system and were entrusted with making it deliver.” The Minister noted that, according to this analysis, the causes of this challenge are primarily economic. The Minister wrote "The promise of economic advancement, through a secure job, rising income or an affordable home, has diminished for too many." These phenomena referenced by the Minister in his book review last weekend should come as no surprise to anyone who served in the last Government, a government supported by the Minister of State's own party, albeit from the outside.

The challenges outlined by Mr. Sandbu in that publication are very real. Covid-19 risks further exacerbating the feelings of those left behind economically, particularly our young people, who have been disproportionately impacted by the economic fallout from this public health crisis. As the Tánaiste outlined and admitted in recent weeks, the pandemic has the potential to cause further divisive inequality, which may ultimately fuel the rise of the kinds of far-right populism and far-left populism we are seeing develop across western societies at present.

The forthcoming July stimulus therefore has to be the start of a new social contract that restores the promise of economic advancement through a secure job, rising incomes and affordable home ownership in a new, sustainable economic model. Short-term working and training schemes will be pivotal in providing such secure employment opportunities in the months and years ahead. The EU Support to mitigate Unemployment Risks in an Emergency, SURE, scheme, which was first proposed by our collective of sister parties across Europe, the Party of European Socialists, will be a key funding mechanism to make such systems a reality.

I therefore welcome the legislation before us this evening, although it is coming two months after the scheme was initially announced at EU level. For months now, others in the Labour Party and I have been calling, on the record of this House and in the local and national media, for a reformed short-term work and training scheme similar to the German model which proved so successful in supporting businesses and workers throughout the last economic crisis. International evidence from the OECD suggest that the key element of its success was concurrent access to vocational training, which the current temporary wage subsidy scheme lacks. Last month's confirmation of the incorporation of apprentices into the wage subsidy scheme is a welcome step in the right direction but it does not go nearly far enough. Under the equivalent Dutch scheme, for example, employers are obliged to support retraining or reskilling opportunities for all employees. Similarly, France has introduced a special training subsidy as part of its scheme to help companies undergoing structural changes that need to reskill or upskill their workforces.

The Government must prioritise this area in the upcoming July stimulus package. Specifically, we need to both oblige and support companies to invest in the skills of new and existing employees, for example via the uptake of accessible online training programmes. All of the evidence shows that this will lead to greater productivity, higher wages, and greater job security as employers seek to retain the skilled workers in whom they have invested over many years.

Ireland has one of the lowest rates of in-work training and upskilling in the EU. It is estimated at only 5.5% compared with 17% in the UK, 20% in France, and as high as 33% in Denmark. To take digital skills for example, despite our current status as a hub for multinational technology firms and the fact that nine out of ten jobs in the future will require a degree of digital expertise, more than half of our population lack basic digital skills and only 79% are able to use the Internet, which is one of the lowest levels in the EU.

Digital literacy issues do not just have an economic consequence but a social and cultural impact as well. Likewise, more than a third of workers in sectors such as financial services have not been provided with any training and development on technology according to the Financial Services Union working conditions survey of 2019. In addition, Ireland currently spends well below its EU peers when it comes to investing in human capital and the innovative capacity of young people. This is the real threat to our future competitiveness when it comes to attracting, sustaining and maintaining the high levels of foreign direct investment we all want to promote and maintain. As part of the July stimulus, the Government should target schemes to immediately address the current digital skills shortage caused by years of chronic underinvestment and a lack of in-work training.

We must also seek to develop new technological universities such as Dundalk Institute of Technology, DkIT, in my constituency, in collaboration with the multinational corporations that locate here so that the new technological universities evolving throughout the country are delivering and instilling in young people the kind of skill sets our economic model and national industrial strategy will require.

Another essential element of a reformed short-term working scheme that I hope can be funded through this enabling legislation must be the introduction of limitations on economic dismissals, in essence, redundancies, during the crisis. A ban on lay-offs was introduced as early as March in Italy and Spain and later in France, the Netherlands and other EU states. Such measures are needed to reassure workers in a period of strong anxiety while also limiting the opportunistic behaviour of some employers who have used or may use the crisis as an excuse to dismiss difficult workers. We have already witnessed large-scale dismissals in the context of Debenhams and National Pen in my constituency, organisations which in my view have ruthlessly used the Covid-19 crisis as cover to cull workers without any meaningful consultation whatsoever. Any reformed short-term working scheme must ensure that both workers and the public purse are protected. For example, under the Dutch scheme to which I referred earlier, if an employer dismisses a worker on economic grounds, the employer must pay back 100% of the compensation that it received. In addition, agreement with trade unions and worker representatives must be reached before any large-scale lay-offs of 20 or more employees.

On several occasions in recent weeks I asked the Minister for Finance if he would consider such a clawback mechanism as part of the wage subsidy scheme, to which he replied that he had no plans to do so. I am interested in the Minister's view on this issue and if the Department of Finance has revised its thinking on this since the Minister for Finance replied to me and if this forms part of the Government's thinking on the July stimulus package. Likewise, I have repeatedly made the case that social and environmental conditionality should be attached to the wage subsidy scheme and other initiatives that may be undertaken by the Government and that there also needs to be a comprehensive audit of companies receiving the scheme to ensure they have met the stated criteria. On the latter point, I am pleased that the Minister has been reasonably vocal in recent weeks on a compliance programme as part of the operation of the wage subsidy scheme. I am interested in an update on this if it is to hand.

Regarding the question of conditionality, governments in other EU countries such as Denmark and France, and Scotland refused to grant public aid such as wage subsidy schemes to businesses registered in tax havens. Programmes under the SURE scheme will attract considerable funding from the State via the Union. The states I referred to are wisely making use of aid conditionality as an incentive for the enforcement of their own fiscal rules and EU fiscal rules, and so should we, in particular in light of tomorrow's Apple tax ruling and the international crackdown on tax avoidance and aggressive tax planning by some multinational corporations. Does the Department have plans to attach any kind of conditionality at all, for example, to a reformed short-time working scheme or any of the other programmes that will be brought forward as a result of the passage of this legislation and the funding of other such programmes that I expect to be announced in the coming days?

That is an important point. Many other countries across Europe have attached that kind of conditionality and it seems that we are entirely uninterested in doing that. It is reasonable that we use the opportunities presented to us now to paint a picture of a better future and to attach conditions to massive State investment in the interests of achieving some positive public policy gains. Many significant opportunities will arise for this country from the passage of the legislation and we need to use them to paint a picture of a better future and reshape our future to make sure that people are paid reasonable wages, that their rights in the workplace are respected and that the social and environmental objectives we have, which I hope we share across this Chamber, are achieved and that the post-pandemic Ireland of the future looks better than the Ireland of the recent past.

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