Dáil debates

Thursday, 7 February 2008

3:00 pm

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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Question 2: To ask the Minister for Enterprise, Trade and Employment his views on the steady increase in the number of people out of work, as recorded in the monthly live register figures and the continued loss of jobs in the manufacturing sector; the action he is taking to address this situation; and if he will make a statement on the matter. [4075/08]

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Question 3: To ask the Minister for Enterprise, Trade and Employment if he will revise upwards the Government's projected unemployment rate for 2008; the measures he is taking to reverse this rise in unemployment and under-employment; and if he will make a statement on the matter. [4415/08]

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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I propose to take Questions Nos. 2 and 3 together.

The total number of people recorded on the live register for January 2008 is 181,449. The live register is not designed to measure unemployment. It includes part-time, seasonal and casual workers entitled to unemployment benefit.

Unemployment is measured by the quarterly national household survey, collated and published by the Central Statistics Office. The most recent quarterly national household survey, quarter 3, 2007, indicates that employment has increased by 67,600 in the year. The unemployment rate is currently at 4.7%, down from 4.8% in the same period last year.

The predictions for the medium term are for continued employment growth, albeit at a slower pace than that experienced to date. Unemployment is forecast to average at around 5.5% over the period 2008-10.

The manufacturing sector in Ireland has evolved noticeably since 2000, in terms of the composition of industry and the nature of activities, and is likely to continue to do so. Manufacturing continues to be a significant employer accounting directly for 11% of total employment and a significant amount of associated services employment. In order to sustain and grow the sector, the Irish-based manufacturing enterprises will have to continue the progression to high value-added sectors and activities, and continue to increase productivity through investments in human capital, technology and innovation.

Many of the job losses incurred in the past number of years were in low value-added manufacturing and these losses have been more than offset by jobs created in higher value-added manufacturing and the financial and international services sectors.

The Department, in conjunction with the enterprise development agencies, has taken a number of steps in recent years to identify and address issues affecting the manufacturing sectors, particularly through implementation of the enterprise action plan arising from the enterprise strategy group report and implementation of recommendations from the small business forum.

As part of the commitments included under the partnership agreement Towards 2016, the Minister, Deputy Martin, established a high-level manufacturing group to review the challenges facing the manufacturing sector and to identify further measures to meet those challenges. This group, comprised of industry, employee, Government and enterprise agency representatives, is currently in the process of finalising a report outlining its views and recommendations to ensure that manufacturing continues to play a major role in our economy and will report back to partnership early in 2008.

For those who become unemployed, in any sector, the range of services provided by FÁS will be available. This will include active engagement with persons on the live register with the objective of helping them to obtain jobs either directly or through further training, education or work experience. It also includes access to the various training and employment programmes provided by FÁS.

FÁS is also placing particular emphasis on the training of low skilled workers in vulnerable industries. This is to ensure that in the event of becoming unemployed they will have the skills necessary to make the transition to other employment.

The development agencies, including IDA Ireland, Enterprise Ireland and the county enterprise boards will continue to promote job creation through the delivery of programmes to assist the enterprise sector to develop, thereby creating new jobs.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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The position is quite clear. For almost a decade the Government has been sailing along, buoyed by the economic boom and thereby lulled into a false sense of security, smugness and complacency. The Government has been given a free ride for almost a decade but it is now faced with significant economic turbulence. The Government always claimed credit for everything that happened, with Ministers appearing on the news every evening. Every news programme in the country was bombarded by them. However, we have had 130 job losses at Grove Turkeys in Monaghan, 60 at Merriot Radiators in Clonmel, 360 at Allergan in Arklow, 220 at Jacobs-Fruitfield in Tallaght, 60 at Britvic in Cork, and 400 at the Burlington Hotel in Dublin, while 1,500 jobs are under threat at SR Technics in Dublin. The litany of job losses goes on. Is the Minister of State concerned that in January numbers on the live register increased for the fourth consecutive month? One would have to go back to 1999 in order to find worse figures for January. Was the Minister of State prepared for this? Did he put all his eggs in the one basket, hoping the construction industry would carry employment forward? Did he not anticipate that difficulties might well arise and were there no warning signs? Many small business people, who are the risk-takers in this economy, are smothered and choked by the level of bureaucracy the Government has imposed upon them. The Government is strangling the life out of small businesses but what will the Minister of State do about it?

Yesterday, the owner of a business with ten employees appeared before the Committee on Enterprise, Trade and Employment. He complained that he had to fill in 54 different forms. That sort of red tape is strangling small businesses that are the lifeblood of this economy generating jobs across the economic spectrum. What will the Government do to help those industries? The provision of foreign direct investment in parallel with support for small industries, which are important in every community, is needed. What will the Minister of State do to ensure the obstacles and impediments to growth in those industries are removed so that they can expand and be competitive in this environment? Is the imposition of a significant number of indirect stealth taxes on industry by the Government not one of its greatest problems? Is it not responsible for the significant cost base of businesses, which is leading to a lack of competitiveness? We are suffering the consequences of the Government's actions in imposing stealth taxes on companies and small business.

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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I do not agree with the Deputy's contention that we have been smug and unaware of what was coming down the tracks. The Tánaiste and Minister for Finance stated in his budget speech that estimated economic growth in 2007 would be approximately 4.7% and it would average 3.25% between 2008 and 2010. He also stated the economy had reached a turning point and was entering a phase of much lower growth. This is due to a combination of factors, including a weak dollar, weak sterling, interest rates and a slowdown in the housing market, which everybody acknowledges and which is having a significant impact on the economy. The budget estimated employment growth at 3.5% in 2007, which equates to 72,000 jobs, but a reduction to more than 1% in 2008 or 28,000 jobs. Employment increased between 2004 and 2007 by 247,300 and for the first time ever more than 2 million people are employed in the State.

However, we acknowledge there are problems and we must ensure competitiveness is protected and red tape is reduced. We have plans to do so and I will go into this in more detail when I reply to a later question. The Government accepts we are in a different scenario from a number of years ago but we are taking steps to ensure jobs are protected and continue to entice foreign direct investment, which has been good to this country over many years.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I agree with everything Deputy Penrose said. This is the week after the highest increase in the numbers signing on since I was one year old and it is very disappointing the Minister is not present to answer questions. Why not?

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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He is attending the North-South Ministerial Council in Dundalk.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I accept fully that the quarterly household survey is the most accurate measure of unemployment, but the live register is still significant. It measures both unemployment and underemployment. It is interesting that since the Minister for Enterprise, Trade and Employment took office, the number on the live register has increased by 21,000 compared to a reduction of 100,000 when his predecessor, Deputy Mary Harney, held the portfolio. By any reasonable benchmark, the Minister, Deputy Martin, has nothing of which to be proud. I also accept the Minister of State's comments on the increase in employment but there has been a greater increase in unemployment, which is best measured by the standardised unemployment rate, SUR. This has hit 4.9% and has increased by 0.5% since the Minister, Deputy Martin, took office.

Is the Minister of State proud of his line manager's record, given the increases in the live register and the SUR and the poor comparison with his predecessor's performance? Does he stand over the Government's budget projection that the SUR will increase to 5.4% this year? Does he think that figure was underestimated and the number unemployed will be even higher than anticipated by the Tánaiste and Minister for Finance last December?

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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For the past ten years I have listened to predictions of doom and gloom by Opposition colleagues, even though more than 2 million people are at work, the highest number in the history of the State. I acknowledge there will be a downturn, mainly due to the correction in the house building industry. However, 80,000 were employed in this industry and approximately 6,000 have been laid off. Commercial property construction is holding up. For example, a new power station is being built by the ESB in Whitegate in my constituency, which will employ more than 700 people. Bord Gais is building a power station in Aghada, which is nearby, and it will employ another 450. Workers leaving the house building industry will take up these jobs. It will be interesting to see how people who have travelled to Ireland from other parts of Europe to work in the construction industry will react. There is evidence of a reduction in the net number of immigrants in the past year and manufacturing industry is holding up.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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The Minister of State has not answered either of my questions.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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When the Minister of State embarks on trade missions, why do the delegations not include county managers and representatives of trade organisations and councils based in areas bedevilled by unemployment and where an IDA Ireland factory has not been built? Will he take this issue on board to ensure industry can be attracted to those blackspots? Given that competitiveness is important, does the Minister of State accept Ireland is at a competitive disadvantage because the Government has been so slow in rolling out broadband and in developing e-commerce?

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Does the Minister of State stand over the Government's projection that the SUR will increase to 5.4% this year or will it be higher? Is he proud of his senior Minister's record on unemployment, which has increased by 0.5% since he took office, with 21,000 more people on the live register?

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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I agree with Deputy Penrose's suggestion regarding the inclusion of county managers and other development officers on trade missions, having been on many such trips in the past five years, and I will convey it to the Minister. The roll-out of broadband has not been quick enough and it has been held up for reasons we all know. However, moves have been afoot since before the Minister for Communications, Energy and Natural Resources took office to roll out the network so that we achieve parity in this regard with other member states.

The Minister for Enterprise, Trade and Employment is doing an excellent job promoting industry throughout the world. He is not at fault for the change in the building industry. Anybody who made predictions on housing output referred to a maximum of between 55,000 and 60,000 units to meet demand. Housing output reached 90,000 units and it was logical that at some stage developers would hit the wall and they would have to pull back when supply exceeded demand.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Unemployment has been on the increase since 2004 and most jobs lost are non-construction.

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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Unemployment is increasing mainly in the construction industry.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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What about the services industry? What about Jacobs?

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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The numbers employed in the manufacturing and services industries are increasing exponentially.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Not in services.