Gerald Nash (Louth, Labour) | Oireachtas source

The issue of the day is housing. On 31 March, the Government will bring an end to its five-month stay on evictions. We vehemently oppose this move which will be catastrophic for countless numbers of renters who, if they are made homeless, will have nowhere to go. In my home town of Drogheda, which is Ireland's largest and most populous town that has yet to be designated a city, there are four properties to rent on www.daft.ietoday. This Government has done next to nothing to put any contingencies, mitigations or ameliorating measures in place for those who may lose their homes even though it has had five months to do so.

The Government is saying, and the Taoiseach said it again today during Leaders' Questions, that it is considering taxation measures aimed at small landlords and that they may be announced in budget 2024 in October. I am no cheerleader for landlords of any description. I am only repeating the commitments the Government has made and has yet to deliver on. I say this because we have a Finance Bill before us but even with the controversial ending of the eviction ban coming in next week, the Bill contains no such measures. Why not? The Government is still considering what it might do, five months after the introduction of the original eviction ban and several months before budget 2024 happens. What is the Government going to do in the meantime? This is a missed opportunity for it to do the things it has commented upon in the media in recent weeks. It is difficult to take the Government seriously when it refuses to do something it could have planned for over the last five months and chooses to kick the can down the line for another few months while people are put to the pin of their collar and when we know there is going to be a serious wave of evictions experienced in this society, in every community across the country, over the next few months.

The measures underpinned by this Bill and the total package of cost-of-living measures the Government announced last month are too little, too late for struggling households across the country. The fact that the Minister has had to produce another Finance Bill so soon after the last one is a frank admission that budget 2023 has let too many people down. The economy is doing well and that is, of course, a good thing and something of which we should all be proud. Ireland is not in recession but too many households are. There are record numbers of people at work but over 20% of them are on low pay. For far too many people, this economy is not working in the way it ought to work. We have a record Exchequer surplus and very high tax revenues built on the backs of hard-working people but too many of those same hard-working people cannot afford to buy a home or find a place to rent and if they do, from late next week, they might find themselves on the streets because of the ending of the eviction ban. The self-congratulatory mode of the Government needs to stop. As I have said it before, one cannot eat good GDP figures and good Exchequer figures will not heat one's home. It is what we do with taxpayers' hard-earned money that matters. Short-term measures, such as those contained in this Bill, simply do not go far enough in the context of the extent and nature of the problems householders are experiencing.

It can be difficult to be proud of a society that tolerates 1 million of its citizens living below the poverty line. Politics is about choices. What is interesting about this Bill and the other so-called cost-of-living measures announced recently is not what is in them but what is not in them. There is nothing in the recently announced measures for the low paid. We recommended an increase in the national minimum wage from €11.30 to €12 because with inflation, the incomes of those on the minimum wage are falling in real terms. None of the measures announced in recent weeks or the provisions in this Finance Bill addresses that issue. Of the over €1.25 billion in the Government's recent package, our estimate is that less than half went to people on social welfare. We need real and long-lasting measures that increase the income of low-paid workers and those on social welfare on an ongoing basis. That is why social welfare payment rates must be indexed. The Labour Party would have approved a full double payment of social welfare as well as a full extra month of child benefit. We would have added €8 per week to all social welfare payments which would, in effect, result in a €20 increase based on the figures last September, before the budget. That is a proven way to address poverty. We wanted additional support for lone parents and we called for the extension of the fuel allowance to recipients of the working family payment. The Government has not acted on that issue and has again failed to address the cost-of-living crisis for the least well paid and least well off in our society.

This Bill will make very little difference for many people. The Government will tell us that it is about giving effect to measures to reduce the cost of living but in fact, it is fundamentally about correcting mistakes the Government made in the budget. In February, when the Government introduced its mini-budget that was not a mini-budget, I said the measures were proof that it had got its September budget wrong. Should we congratulate the Government for seeing the error of its ways and trying to fix the damage with this Finance Bill or criticise it for getting it so badly wrong in the first place?

Let us start with TBESS. The measures in this Bill will see the scheme extended until the end of May and the threshold for qualification cut from a 50% rise in energy costs, as it stood a year ago, to a 30% rise from now on. The level of relief will increase from 40% to 50% of eligible costs, with payments now capped at €45,000 instead of €30,000 where the business is carried on from more than one location. All of these are welcome measures, particularly for small businesses, but as with everything in the Government's mini-budget that is not a mini-budget, it is case of too little, too late. The Government is introducing these changes to TBESS because the original scheme was an unmitigated disaster. The Minister put on record earlier the drawdown from the scheme which comes in at about €60 million at this point. The House should not take my word for it, in terms of my critique of the scheme. The Department of Finance itself said in its review of TBESS that the scheme has, to date, "seen a relatively lower level of uptake than would have been initially expected and budgeted for". That is Civil Service speak for it being a disaster. Why was there such a low take-up of the original scheme? A survey conducted by the Kildare Chamber of Commerce gives us some clues, although the experience of the scheme has been common right across the country, including in my constituency of Louth and east Meath.

The survey of 300 businesses found that 76% of Kildare Chamber of Commerce members were not able to avail of the scheme, despite 50% of its members reporting energy bill increases of 40% or more over the past year. Some 30% of respondents blamed the complexity of the application process for them not using the scheme and a similar percentage indicated their energy costs had not increased by the required amount, while 20% stated their businesses fell outside the scope of TBESS. However, 43% stated they were very concerned about rising costs and nearly two thirds expressed the view that the supports would not be enough to cushion against rising costs. The truth is the original scheme simply did not work. It was poorly designed, thought-through and executed and now the Government is scrambling to try to put it right after suffering a massive backlash from SMEs the length and breadth of the country.

While the Government, to be fair, has identified and acknowledged the error of its ways in relation to TBESS, it has decided to double down on the 9% special VAT rate for the hospitality sector. It decided to extend the rate until the end of August at a time when the industry is benefiting from a post-Covid lockdown boom. The Labour Party called on the Government to at least use the special rate for the tourism and hospitality sector as leverage to improve working conditions in the industry for long-suffering employees. This is the worst paid sector in our economy and the sector that reports some of the most egregious working conditions in society. We made that call with good reason and a wealth of research behind it, which shows this is an industry that needs to pull up its socks in terms of how it treats its workers. I hope it will use the extension of the special VAT rate to make progress on that issue, rather than simply pocketing the extra profit it will bring.

In November 2022, the Joint Committee on Tourism, Culture, Arts, Sport and Media published a report on working conditions and skills shortages in Ireland's hospitality sector. The report found that employees in the sector may be subject to poor working conditions. Employers, in some cases, do not adhere to the minimum protections for employees that are set out in a whole range of different areas of employment legislation. Employees in the industry report a lack of appropriate pay and adequate break times. They also report instances of bullying, harassment and other harmful workplace behaviours, including, in particular, ill treatment of migrant and female employees within the sector.

Research conducted by Fáilte Ireland, the State’s own agency, in September 2021, found that 52% of the tourism and hospitality employees surveyed who were paid by the hour earned between €10.01 and €12 and that pay was generally a source of concern among surveyed workers. This is hardly an industry we associate with the concept of a living wage.

The Unite the Union’s research, Hidden Truths: The Reality of Work in Ireland's Hospitality and Tourism Sector, which was published around the same time, found that 55.6% of respondents were paid less than €12.30 per hour. In addition, 50% of respondents reported they did not receive tips and-or were unaware of tipping practices in their workplaces. I acknowledge, however, that improvements have since been made in relation to the legal status of tips and tip practices. Moreover, 75% of respondents reported that they did not receive premium payments for Sunday work and 77% of respondents reported that low pay was the most significant problem facing the sector. Unite states there is resistance to increasing wages for the sector. It believes the so-called crisis in sectoral recruitment has potentially been exaggerated to justify maintaining current low-wage rates in the face of rising inflation. The Irish Congress of Trade Unions, ICTU, states that 41% of those in the sector work part time and this proportion has grown to 51% over the course of the pandemic. For ICTU, this is a demonstration of growing precarity in a sector that we know is synonymous with precarity and insecurity generally.

I return for a moment to the Fáilte Ireland survey from 2021, which reported that 33% of respondents desired job security and longer term contracts. There is therefore a desire in the sector for better pay and improved conditions. There is the employment law legislative framework to enable employers in the sector and trade unions representing workers to come together under the 2012 Industrial Relations (Amendment) Act. However, certain actors in the tourism and hospitality sector maintain their policy of vetoing the operation of a joint labour committee. The Government fails to use the position it enjoys as a result of the extension of this very generous and costly subsidy to this sector. The Government should focus on working with the sector to make this extended subsidy a condition of it participating in the joint labour committee to improve, on an agreed basis, the pay and terms and conditions in an industry that is associated, as we know only too well, with insecurity and precarity, often with exploitation and certainly with low pay. As I have reminded the Minister time and again with regard to the temporary wage subsidy scheme, TWSS, and the employment wage subsidy scheme, EWSS, hundreds of millions of euro of taxpayers’ money is being used to subsidise businesses that often do not need a subsidy. This is cash with no conditions. If a party on the left was making a proposal for such a scheme, it would be described as bananas and we would be called irresponsible and imprudent. How does the Minister explain that?

This Bill will also extend the temporary reduction in the VAT level on domestic electricity and gas bills until the end of October. That measure was welcome but it was temporary, and it amounts to little more than a sticking plaster on a gaping wound. What we really need is for the long promised but yet to be delivered windfall tax on the super-normal profits of energy companies, which have been raking in the cash while families and individuals struggle to pay their escalating bills. According to reports in the media, the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, brought a memorandum to Cabinet today on the design of the windfall tax. It would be useful if the Minister for Finance put on record a timeline for the introduction of the relevant legislation because we are far behind the curve in introducing the windfall tax and the solidarity tax on fossil fuel operators. The experience in Europe has been that many of the countries we like to compare ourselves with introduced large windfall taxes on the excess profits of energy companies last November and December. They have been enabled to do so since the fourth quarter of last year following a decision of the European Commission, yet, as usual, Ireland is the laggard.

The Minister referred to the benefit-in-kind, BIK, regime, which was another mistake in budget 2023. Time and again, Opposition representatives and indeed some of the Minister's Government colleagues in Fianna Fáil and Fine Gael have pointed out the difficulties many workers would experience as a result of the changes introduced on 1 January to the benefit-in-kind scheme for company vehicles. We welcome the Minister's U-turn on that scheme. I am glad he thought this through and has made the necessary changes, at least for now. A couple of weeks ago when the Minister made the initial intervention, Charlie Weston, a business and consumer journalist, writing in the Irish Independent, called the measures on benefit-in-kind in the Finance Bill a temporary climb-down and "an embarrassing U-turn". I tend to agree with him. The Minister doubled down on this and his predecessor, the Minister, Deputy Donohoe, doubled down on it previously. The original changes to the scheme which were implemented in January meant that BIK more than doubled for some of those who were given a vehicle by their employer because they have to travel for their jobs. There was - as the Minister knows and has heard at his parliamentary party meetings - a massive backlash from the estimated 150,000 drivers of company cars. I recall that vehicle leasing firms reported some workers were actually handing back their company cars or were buying them out so they could use them as private vehicles. They were then claiming the mileage instead because it was a more cost-effective way to do their jobs.

We look forward to seeing the Committee Stage amendments the Minister is proposing. We are aware of their nature, which the Minister outlined earlier. In his press statement a couple of weeks ago, the Minister provided some details on how he intends approaching the issue. The correction to these poorly thought-out measures comes better late than never. The Minister has belatedly recognised that the changes Fine Gael made in 2019, which went live on 1 January, had the potential to harm workers. These are workers, let us remember, who had no choice but to drive a company vehicle. The imposition of the extra cost from the start of this year was a bridge too far for thousands of workers who saw any benefit from budget 2023 disappear in a puff of smoke as a result of these changes. I and my party colleagues across the country, including Councillor John Maher in Cork, with whom the Minister will be familiar, have been at the vanguard in raising this. We received numerous calls from constituents who have been unfairly levied thousands of euro because of the introduction of this change to the BIK regime.

It had particular consequences for people who predominantly live in rural areas and had to rely on private cars provided to them by their companies to do their jobs.

While we welcome many of the changes the Minister has proposed in this Finance Bill, we are incredulous that he has decided not to introduce some of the changes he has been commenting on and proposing through the media on the housing situation. That is incredible given that the issue du jour, the topic on everybody's lips, is the eviction ban and the availability of rental accommodation over the next period. It would be helpful if the Minister explained to the House the reason he has failed to use this opportunity to introduce the changes he said he would introduce. The public and this House are entitled to an explanation.

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