Dáil debates
Wednesday, 1 April 2009
Leaders' Questions
10:30 am
Enda Kenny (Mayo, Fine Gael)
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Last month's unemployment figures on the live register were 354,000, which was up 26,000 on the previous month and 165,000 on the previous year. The Minister for Social and Family Affairs last night indicated that the figure for this month, due to be published in half an hour and now available to the Government, would show a further increase. What are the figures for the live register for the end of last month?
Brian Cowen (Laois-Offaly, Fianna Fail)
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They are to come out this morning. The live register to the end of March was 371,300, which represents an increase of 16,863 on last month. The standardised unemployment rate for March is expected to be 10.9%. The rate has continued to rise strongly but it has shown some signs of abating. A fall is, however, unlikely in coming months and seasonal factors mainly associated with holidays in the educational sector will further disimprove the position in June.
Enda Kenny (Mayo, Fine Gael)
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If I have the figures correct, the rise to over 371,000 represents a massive increase of more than 16,000. It is appalling that this number of educated, healthy and fit people are expected to walk around with nothing to do. We have been in this House month after month and have heard from the Government benches the necessity for solidarity, constructive proposals and the backing of the country and its people. In fairness, Fine Gael has consistently produced a range of such proposals, and I would like to put two to the Taoiseach again today.
Given the scale of unemployment, the shock caused to people and the loss of dignity and social structure, Fine Gael last week published a detailed document presenting the opportunity to create 100,000 jobs through an economic recovery authority. It would be financed by the National Pensions Reserve Fund, an economic recovery bond and private equity and the document set out a holding company with six commercially driven State companies reporting to the Department of the Taoiseach. It would afford the opportunity to create 100,000 jobs around the country dealing with broadband, renewables, biomass, smart grids, telecommunications and so on. These are real opportunities and not fantasy.
Enda Kenny (Mayo, Fine Gael)
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We made this suggestion in the House already and Deputy Coveney produced a detailed document thereon. In the spirit of what Ministers have been saying about the need to support the country, will the Taoiseach consider this real proposition to give people hope, confidence and a sense of realism? There is the potential for 100,000 jobs in the Fine Gael plan.
In the context of preparation for a budget next Tuesday, will the Taoiseach give this serious consideration and provide an opportunity to have it debated in the House? The Minister of State at the Department of the Taoiseach, Deputy Pat Carey, broadly welcomed it and the Taoiseach yesterday stated he would not pour cold water on it. There is an opportunity for discussion about real jobs for men and women, farmers, chemists, scientists, engineers or whatever.
Enda Kenny (Mayo, Fine Gael)
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My second suggestion is in respect of this appalling increase in unemployment figures on the live register. I will not pull any punches. Most, although not all, of our domestic mess is the result of incompetence in the Government. I suggest that the Government deal now with a reduction in the lower end of VAT from 13.5% to 10%, as this directly affects the tourism, hospitality, construction and infrastructure industries, where jobs can be protected and created. It would offer some opportunity to people who are strangled by red tape and bureaucratic difficulties and where business is going down the tubes before our eyes.
The Taoiseach as Head of Government has the opportunity to do something about this. I make these two suggestions in the spirit of a constructive proposal. I know a VAT reduction from 13.5% to 10% would require, in part, approval from Europe. This party's connections in Europe are much stronger than those of Fianna Fáil and I am prepared to go out there at my own expense along with the Taoiseach to seek support from the European leaders for whatever approval is necessary.
Alan Shatter
Seán Power (Kildare South, Fianna Fail)
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The Deputy might need to bring his name tag with him.
Paul Connaughton Snr (Galway East, Fine Gael)
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It is the same voices the whole time.
Enda Kenny (Mayo, Fine Gael)
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Nobody in Europe will deny the Government emergency approval for a VAT reduction like this because we have a decision to make later in the year about completing the architecture for a new Europe of 500 million people.
Timmy Dooley (Clare, Fianna Fail)
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The Deputy should get his own party in order first.
Enda Kenny (Mayo, Fine Gael)
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I will accompany the Taoiseach in order to assist him and co-operate with him in the country's interests.
Bernard Durkan (Kildare North, Fine Gael)
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Deputy Johnny Brady is going to have to take it easy over there on the Government side.
Enda Kenny (Mayo, Fine Gael)
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My proposals are in line with what the Government has been saying and I ask the Taoiseach to take them on board in that spirit.
Paul Kehoe (Wexford, Fine Gael)
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Deputy Breen wiped Deputy Dooley's eye for him last week.
Brian Cowen (Laois-Offaly, Fianna Fail)
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As stated on previous occasions, it is not for me to become involved in a contretemps with the Leader of the Opposition regarding any policy documents he may put forward. When they have been properly examined and assessed, such documents should be debated in the House. There are aspects to the Deputy's proposals about which we have serious concerns.
Paul Connaughton Snr (Galway East, Fine Gael)
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I am sure that would be the case.
Brian Cowen (Laois-Offaly, Fianna Fail)
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I would prefer if such matters were dealt with as part of a formal debate. I look forward to the opportunity to debate these proposals in detail. The introduction of the budget next week will allow people to provide their initial views on the Deputy's proposals. I do not wish to seem churlish or to give the impression that I am not prepared to consider everything. However, we would be obliged to discuss and examine in greater detail the question of establishing a holding company to bring all semi-State bodies under the control of one entity——
Enda Kenny (Mayo, Fine Gael)
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It would be under the control of the Department of the Taoiseach.
Brian Cowen (Laois-Offaly, Fianna Fail)
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——the implications of so doing and the extent to which such a development would contribute to competition and innovation. I do not wish to say any more than that. Deputy Kenny has put forward a policy document and we can debate it when the opportunity arises.
In the context of rising unemployment and during a period in which the economy is contracting to a considerable degree, we are cognisant of the fact that people's very real concerns lie behind the statistics. Some 224,000 are in receipt of payments in respect of being unemployed for a full week and over 50,000 are receiving payments in respect of being unemployed for part of the week. In the context of the budget, we will do all in our power to reallocate existing resources into areas where activation, reskilling and other opportunities can be created in order to assist people who were unfortunate enough to lose their jobs in recent months.
I cannot discuss taxation at this particular juncture. The Minister for Finance will outline his position in that regard in full on Tuesday next. The major problem with the Government finances in recent months relates to the fall-off in tax revenues. We must seek to replace those revenues. A structural deficit has emerged because, as a result of the change in activity in the economy, the tax revenues that have been lost are not likely to be replaced from the same sources of income from which they were originally collected. That deficit could be of the order of 8% or €16 billion. There will be a need to examine tax expenditures and consider other means of raising taxes. We will also be obliged to cut expenditure programmes that are no longer regarded as necessary or to redesign them in light of the new circumstances in which we find ourselves. The challenge the Government faces not only in the context of next week's supplementary budget, but also in the coming years, is to redesign the tax base and the systems relating there to in order to ensure that they will be sustainable. The gap that has emerged cannot be bridged by relying on the sources of income on which we relied in the past. That is what we mean when we refer to closing the structural deficit.
We are in a recession and world trade is down. As a result, there is less demand for our goods and services abroad. However, that demand will return as growth returns. That is the distinction we are seeking to make in trying to analyse what happened and communicating to the public the nature of the problem and the changes that must be made in the context of putting in place a new taxation system. Some of those changes will relate to increased income tax, while others will come about in due course on foot of a broadening of the tax base. There is a fine judgment to be made with regard to Deputy's proposal in respect of reducing VAT or other taxes. As already stated, I do not wish to pre-empt what the Minister for Finance may wish to say in respect of these matters on Tuesday next. However, I hope I have provided some indication of the Government's thinking.
Eamon Gilmore (Dún Laoghaire, Labour)
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These unemployment figures are extremely bad. This is the third successive month in which the figure for unemployment has been the highest ever recorded in the history of the State. There are now some 371,000 on the live register. This represents an increase of over 200,000 on the figure that obtained at Christmas 2007. The figure of 371,000 does not include the 240 jobs that will, as announced yesterday, be lost at Schering-Plough, nor does it include the 1,200 jobs that will be lost at Dell's Cherrywood facility in my constituency or the 1,200 that will be lost at SR Technics.
The Taoiseach referred to the gap in the public finances. We acknowledge that such a gap exists and we are focused on what to do about it. However, the decline in the number of people at work, the associated loss of tax revenue and the increase in social welfare payments are causing the problem. The job losses to which I refer are engendering fear across the economy to such an extent that even those who are in employment are afraid to spend and tax revenues are decreasing further as a result.
Two weeks ago, the Labour Party put forward eight specific proposals to address the immediate problems relating to those who are losing their jobs and who are likely to be out of work for some time. Those proposals related to the provision of education, training, etc., so that some of the difficulties to which I refer might be addressed. Unfortunately, the Government voted them down.
I wish to focus now on what can be done to save jobs. I do not accept that we must throw in the towel, as the Government appears to be doing, in the context of trying to save jobs. Neither must we accept that jobs which can be saved are going to be lost. SR Technics is involved in the aircraft maintenance sector. Ireland is an island and if SR Technics goes, we will end up without an aircraft maintenance facility. SR Technics' business is being moved to Switzerland, which is hardly a low-cost economy. The equipment and hangars relating to aircraft maintenance are already in place at the SR Technics facility at Dublin Airport and a great skills base has been built up among the company's employees over the years.
We are informed that the proposed management buy-out at SR Technics will cost in the order of €25 million. That may seem like a great deal of money. However, if these people lose their jobs, the Government will be obliged to spend that amount next year in social welfare payments, refunding redundancy payments that will have to be made and paying secondary benefits to people. In addition, account must be taken of the tax revenue that will be lost. Why will the Government not respond positively to the proposal for a management buy-out at SR Technics? This buy-out would save 900 of the 1,200 jobs at the company, would lead to the retention of what is a viable business and a valuable skills base and would ensure that the country will continue to have an aircraft maintenance facility. Why does the Government not respond positively to the proposal for a management buy-out at SR Technics and save 900 of those jobs?
Brian Cowen (Laois-Offaly, Fianna Fail)
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I do not accept that the Government, in tandem with the State agencies, is not seeking to find a solution to this problem or a viable way forward for the company in question. There have been some serious expressions of interest and, as the Deputy is aware, our efforts in respect of the company are ongoing. Government Deputies and Ministers and other Members have been seeking a solution that will ensure jobs are retained. That is ongoing and they are continuing to assess the various proposals received. I am aware of the views of trade union representatives and others who are trying to find a way forward. The provision of financial and other supports by the agencies will be dependent on a company or companies submitting proposals for consideration and seeking approval for State support in the normal way. We have to see in what way we can move forward this situation, given that there have been a number of inquiries, the current position and the confirmation that everyone is working to find a solution to the problem.
Eamon Gilmore (Dún Laoghaire, Labour)
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I do not accept that the Government is working sufficiently hard or urgently to find a solution to this problem. The current position is that 600 of those employees will walk out the door next Friday and, therefore, there is not much time left. My colleagues, Deputies Broughan, Shortall and Costello met with the Industrial Development Authority last night to discuss ways in which this facility can be saved and among the things they learned was that the Department of Transport had known about the difficulties in SR Technics for some time but apparently had not communicated them to the Department of Enterprise, Trade and Employment and to the IDA. There is incompetence——
Noel Dempsey (Meath West, Fianna Fail)
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That is untrue. That is a lie.
Eamon Gilmore (Dún Laoghaire, Labour)
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It is a lie like the lie that the Minister did not know about Aer Lingus pulling out of Shannon. That was a lie too, was it not? If the Minister for Transport was doing his job——
John O'Donoghue (Kerry South, Ceann Comhairle)
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The Minister, Deputy Dempsey, must withdraw the word "lie".
Noel Dempsey (Meath West, Fianna Fail)
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I did not say the Deputy was lying; I said "that is a lie".
Eamon Gilmore (Dún Laoghaire, Labour)
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Is the Minister withdrawing it?
John O'Donoghue (Kerry South, Ceann Comhairle)
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He is not saying Deputy Gilmore is telling a lie.
Eamon Gilmore (Dún Laoghaire, Labour)
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Butter would not melt in his mouth.
Noel Dempsey (Meath West, Fianna Fail)
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The Deputy's spokesman is telling the lies.
Eamon Gilmore (Dún Laoghaire, Labour)
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If the Minister for Transport or any of the other Ministers on that side of the House were as good at doing their jobs and saving the jobs of people who are losing them as they are at casting political attacks in this direction, we would all be much better off.
Noel Dempsey (Meath West, Fianna Fail)
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The Deputy is too sensitive.
John O'Donoghue (Kerry South, Ceann Comhairle)
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Deputy Gilmore, without interruption.
Eamon Gilmore (Dún Laoghaire, Labour)
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The fact of the matter——
John O'Donoghue (Kerry South, Ceann Comhairle)
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Let him finish.
Eamon Gilmore (Dún Laoghaire, Labour)
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There are 600 employees in SR Technics who will lose their jobs this Friday. Another 600 will lose their jobs further down the line. Nine hundred of those jobs can be saved if the Government gets off its butt and does what is required to save them. A management buy-out plan has been put forward, but the Government is not responding promptly or adequately to it. All we are hearing from the Taoiseach is that they are doing their best, they will wait and see, they will do this, that and the other and it is business as usual. It is business as usual that is costing the loss of these jobs. These jobs can be saved. This facility can be kept in business. There is no reason for this country to lose its aircraft maintenance operation and facility.
I have met the employees in that company. They tell me they have the business, the customers, the equipment, the skills and the will. They are prepared to make whatever changes are necessary in work practices and in the way business is done at the facility in order to save the jobs. They need help from the Government now. The Government will end up spending taxpayers' money keeping those people on the dole when that money would be better used if it were invested now to keep those people in employment.
Brian Cowen (Laois-Offaly, Fianna Fail)
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First, what will keep people in employment, which is the objective of the Government as well as everyone else, is to obtain and provide a viable way forward for the company. Deputy Gilmore is not alone in his concern or in relation to the work that has been ongoing on this matter for some months.
Dermot AhernBrian Cowen (Laois-Offaly, Fianna Fail)
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Second, the Government will make every effort consistent with obtaining a viable proposal with the purpose of having an aircraft maintenance facility in Ireland. That is the purpose for which the work is ongoing, with the agencies as well. I presume the Deputy does not regard the people in IDA Ireland or Enterprise Ireland as being not interested in trying to maintain employment, although he can throw his political attacks at the Government.
Brian Cowen (Laois-Offaly, Fianna Fail)
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That is predictable but I heard political attacks coming from his spokesperson this morning. There is no harm in balancing that out for a moment. We are focused on trying to see if there is a way forward that will maintain employment in a viable way.
Emmet Stagg (Kildare North, Labour)
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There is a way forward if the Government would do it.
Brian Cowen (Laois-Offaly, Fianna Fail)
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There is a continuing evaluation taking place and discussions are ongoing in regard to that matter. That is not the done deal Deputy Stagg would suggest it is, much as I wish it were, but we are working to see if there is a viable way forward.