Tom Shehan (Fine Gael)

I have been monitoring the debate up to now and there is one point I wish to raise with the Minister. I refer to the reduction — from 60% to 15% — in the rebate for employers in respect of redundancy payments. There should be an exemption in this regard for sole traders and self-employed persons whose staff complements do not exceed 20. I appreciate what the goal was when this provision was framed, particularly in the light of what occurred in the case of Talk Talk and other large companies which, on foot of decisions taken by their shareholders, decided to move their operations to countries in which it costs less to employ people. Such companies left the country after making massive profits and the State was obliged to pay a rebate of 60% to them in respect of each redundancy payment made. I completely agree with the ultimate goal of the provision, but I must plead with the Minister on behalf of sole traders and small business interests.

What will be the ramifications of this development for those to whom I refer? Let us consider the case of a sole trader who employs 15 or 20 staff and goes out of business. During the years that person would have, on behalf of the Government, deducted PAYE and PRSI contributions from his or her employees' wages and also paid his or her employer's contributions. When a business ceases trading, its owner is not entitled to claim social welfare payments for approximately 18 months. However, his or her former staff — as is their entitlement — can make social welfare claims immediately and be paid from the week following the closure of the business. When a self-employed person's business goes to the wall, he or she must endure the rigamarole of going to the community welfare officer, even though he or she has no entitlement to social welfare payments. Despite the fact that self-employed persons do not have incomes when their businesses cease trading, they are not entitled to social welfare payments because they do not make A class contributions. I previously requested that they be allowed to make such contributions, but the system has not been changed and they continue to make S class contributions. If a sole trader's business ceases trading and he or she is obliged to let his or her staff of 15 or 20 go, will the Government go after his or her family home in order to ensure redundancy payments are made?

As stated, I understand the impetus behind the relevant provision which is, after all, designed to combat the activity of large, profitable companies which decide to relocate their operations elsewhere. However, we will be doing a great disservice to sole traders and small businesses which are the backbone of our society if the provision, as it stands, is implemented. I have spoken to young entrepreneurs who are considering establishing businesses. What is envisaged will put another barrier or layer of bureaucracy in place and those with whom I have discussed the matter have indicated that it would discourage them from setting up in business. When people are establishing businesses, they tend to be excited. They are more interested in making their operations successful rather than considering the consequences of failure.

I plead with the Minister to examine the possibility of introducing an exemption for sole traders or self-employed persons who employ up to 15 or 20 staff. These individuals should not be obliged to contribute 85% towards the cost of redundancy payments. I am genuinely of the view that there will be difficulties in passing the Social Welfare Bill unless action is taken in respect of this provision. The Minister should consider the matter and make contact with the owners of small business interests in order that they might communicate their concerns to her. As stated, the proposed measure is extremely off-putting for those who are examining the possibility of setting up businesses.