Check Against Delivery

Address by the Tánaiste on Private Members Motion on rise in Unemployment

Dail Eireann, Tuesday 10^th March 2009

Go raibh maith agat.

Ceann Comhairle, there is no doubting the seriousness of the economic environment at the moment. Addressing significant unemployment is again, regrettably, an issue at the top of our national agenda on this island. The number of people on the live register represents the human reality of the difficult economic times we are in. Families, who had never contemplated having to base their weekly budget around jobseekers’ benefit and other social supports, are now having to do so. It is a dramatic change for these families, and indeed for our wider expectations as a people, in such a short period of time. It is a challenge that this Government is working hard to overcome and we are conscious that people across the country want to know that we are taking the action necessary to ensure that Ireland is best positioned when this period of economic turmoil comes to an end. I want to assure them that as Minister for Enterprise, Trade and Employment, my priority is simple – jobs, jobs, jobs. Protecting those jobs currently in our economy; creating and attracting new jobs in and to our economy; putting in place a clear vision of where the jobs of the future are to come from; and equipping people with the skills necessary for those jobs.

The current global economic storm has been exacerbated by credit constraints and prolonged by a decline in consumer and investor confidence. The Government is responding to all of this in a context of worsening public finances. The decline of confidence and credit has, very significantly, reduced property and construction activity. As a result, the jobs and income – both to the individual and to the State – associated with all of that activity in the last decade, have diminished. The downturn is now dragging down all sectors of the wider economy, presenting each and everyone of us with difficult decisions and consequences. And this will continue for some time yet.

It is likely that we will not see a return to growth in the short term. This makes the series of measures we have introduced to increase training places, enhance job-search services and speed up job seeker payments all the more important. I will talk about each of these a little later, but it is important that the Opposition and everyone else be crystal clear as to the challenging environment in which all of this has to be done- and is being done.

Short-term action will help those losing their jobs. We must stabilise the public finances. We must meet our commitment to a 9.5% GDP deficit limit. This will ensure the stabilisation and sustainability of the public finances, which are an essential prerequisite for economic renewal. We must protect our international reputation regarding borrowing and attracting foreign direct investment. And we must do all of this while continuing to support those hurt by the downturn and investing in the research, training and infrastructure that will drive economic and employment growth as Ireland recovers. The supplementary budget, which, we will present to this House in April, will address these issues.

Enhanced Coordination

To respond to the present economic situation and in particular the increasing numbers of people on the Live Register, I am working closely with my colleagues, Minister Hanafin and Minister O’Keeffe, to ensure that appropriate responses are developed and put in place to meet the upskilling needs of those who are losing their jobs or facing uncertain employment prospects. In particular, we are identifying opportunities for increased collaboration between FÁS, the Institutes of Technology and the VECs with a view to ensuring that we secure the optimal return from the expenditure of scarce resources.

While my colleague Minister Hanafin will outline some of the measures she is taking in her Department to deal with the increasing numbers of unemployed, for my part, at the outset I wish to speak about the measures I am taking in my own Department in relation to supporting those than find themselves without work.

Job Search Supports

We are responding to the rising Live Register numbers through a variety of measures.

Firstly, FÁS’ Employment Services, together with Local Employment Services, have been working to provide a greater capacity to provide job search assistance to the increasing numbers of the unemployed. The implementation of these measures will nearly double the monthly capacity of job search services from 6,500 to 12,250 persons per month.

Furthermore, FÁS and the Department of Social and Family Affairs are currently operating a pilot initiative in two locations, Letterkenny and Clondalkin. This initiative involves the immediate referral of clients, aged 18 and 19, upon registering with the Department of Social and Family Affairs, to FÁS Employment Services. The pilot is due to finish in late April after, which its effectiveness will be reviewed by FÁS and the Department of Social and Family Affairs.

Training Initiatives

Of course, in a difficult employment climate such as we are currently facing, the importance of training and education in order to maximise reskilling and upskilling opportunities is vital for everyone within the workforce. The impact such training opportunities can have for those who are out of work and are seeking to rejoin the labour market, cannot be overstated.

The training and education programmes funded by this Government through my Department and the Department of Education and Science are designed to increase the skills and competencies of participants, thereby increasing their employability and hopefully enabling them secure alternative employment as soon as possible. In addition to the economic benefits associated with participating in upskilling and reskilling programmes it should also be remembered that these programmes provide an invaluable social service by ensuring that individuals, remain active and continue to learn so as to be ready to take up employment when job growth returns.

In light of the obvious importance of training, I have already announced that an additional 51,000 training places are to be delivered by FÁS this year. These places are specifically tailored for individuals who are recently unemployed and who wish to add to their existing skills level in order to improve their prospects of securing employment.

This new initative enhances FÁS’ existing portfolio of traditional course offerings and will be delivered through three core-training initatives – 10 week courses, night courses, and online courses. The night courses offer a flexible alternative to those whose circumstances may not allow them to attend during the day and the online courses provide a good option for those who need a fast and flexible intervention and who prefer a self-directed e-learning and blended learning environment.

My announcement last month means that FÁS is providing a total of 78,000 training places under this initiative. This is almost a three fold increase in the provision of these types of training places. This is an important development in responding to the number of people now on the Live Register. However, the Government are fully aware that this is only one measure. We are continuing to actively explore other initiatives to further increase the number of training and education places that will be available to people seeking employment.

Redundant Workers

For redundant workers FÁS, has, with other state agencies, formed an early response team to deal with significant redundancies.

The nature of the FÁS response is to conduct interviews on a voluntary basis with those who wish to explore employment and/or retraining options. Such interviews would normally be conducted on site, with the co-operation of the employer, and would take place before any planned lay-offs. Training interventions and other supports would then be provided as required. FÁS services in this area comprise:

One-to-one occupational guidance and priority access to appropriate vocational training;

• Job Club referral options;
• Individual assessment and guidance;
• Group and individual training options;
• Upskilling for specific targeted alternative employment;
• In-House dedicated Employment Services facilities;
• Organisation of Jobs Fairs in conjunction with other employers and agencies in the area.

Construction Sector

Particular support is also being provided to redundant construction workers. Since the beginning of last year we have witnessed a dramatic reduction in construction related activity. This has resulted in a significant fall in the numbers employed in the sector since 2007.

The Government is committed to providing assistance to these individuals to increase their skills levels and in some cases develop new skills sets, which will take advantage of the opportunities in new emerging growth areas within the construction sector. These include the installation of energy efficient and renewable technologies and compliance and regulatory work. Since November 2008 FÁS training centres have provided training to approximately 880 trainees in these emerging areas.

In addition, to the usual supports that it provides to redundant workers FÁS has established a training fund to provide a timely response to identified training and re-training needs for low skilled and redundant craft workers from the construction sector.

FÁS are also assisting Irish construction workers who wish to continue working in the industry to obtain employment abroad in other EU Member States. Discussions are also taking place with agencies in Canada and Australia to support the recruitment of craftspersons from Ireland. In the delivery of these services FÁS liaises with the other relevant agencies including Enteprise Ireland, IDA, Ireland, the City/County Enteprise Boards and the Department of Social and Family Affairs.

Redundant Apprentices

Given the significant reduction in the number of people employed in the construction sector, this has led to a rising number of apprentices who have been made redundant.

The Government is determined to provide support and assistance to these redundant apprentices so that they are given every opportunity to complete their apprenticeships. To date a number of innovative measures have been initiated to assist redundant apprentices. These include redundant apprentices being allowed to progress to their next off-the-job phase of training without having to do the next on-the-job phase. It is expected that during 2009 in excess of 1,200 redundant apprentices will receive off-the-job training. At present 539 redundant apprentices are attending an off-the-job phase.

The Employer Based Redundant Apprentice Rotation Scheme aims to provide redundant apprentices with the necessary on-the-job experience, which they require in order to complete their apprenticeship. This scheme will provide assistance to up to 500 redundant apprentices.

ESB Networks has agreed a programme with FÁS to provide 400 redundant electrical apprentices with on-the-job training opportunities at Phases 5 and 7 over an 18-month period. Léargas has provided part funding under the EU’s Leonardo da Vinci programme to support the placement of 26 redundant apprentices with overseas employers to complete their Phase 7 on-the-job training, and FÁS has submitted a further proposal to Léargas for up to 60 additional redundant apprentices to complete their on-the-job training in Finland and Germany.

As a result of these measures almost 2,200 apprentices who have been made redundant should be able to progress their apprenticeships. My Department will, of course, continue to consider further initiatives to assist redundant apprentices in completing their apprenticeships.

Employment Programmes

The Government is also committed to assisting the most vulnerable in our society, including those who for various reasons have over time become distanced from the Labour Market and are seeking to re-enter. The Community Employment Scheme (CE) is an active labour market programme, which is currently helping 22,469 long-term unemployed people to re-enter the active workforce by breaking their experience of unemployment through a normal work routine. The programme assists them to enhance and develop both their technical and personal skills which can then be used in the workplace. The programme is sponsored by groups wishing to benefit the local community, namely voluntary organisations and public bodies involved in not-for-profit activities.

FÁS is continuing to develop the content of the CE programme. The new approach involves the introduction of an “Individual Learner Planning Process” which focuses on meeting the learning needs of participants. The Individual Learner Plan provides for the planning, organising and recording of the work experience, training and development that each participant receives while working on CE.

Job Initiative is a programme providing full-time employment for 1,431 people who are 35 years of age or over who have been unemployed for 5 years or more and in receipt of social welfare payments over that period. The main purpose of the programme is to assist long-term unemployed people to prepare for work opportunities. The programme achieves this by providing participants with work experience, training and development opportunities. The programme is sponsored by groups wishing to benefit the local community, namely voluntary organisations, public bodies and those involved in not-for-profit activities.

This Government will continue to support the positive role of FÁS Employment Schemes in meeting the needs of long-term unemployed persons while at the same time providing essential services to communities. I am keeping the operation of the Schemes under constant review in the context of the current difficult unemployment situation.

Investment in Education

This Government has always believed in the benefits of investing significantly in our education system. We increased investment in higher education to €2,000 million in 2008, which represents an increase of 135% since 1997, and is supporting participation by over 170,000 learners.

We have also continually increased our investment in the further Education sector to €414 million last year, which represented an increase of over 400% since 1997. As a result of this Government’s substantial investment some 145,000 learners had access to learning opportunities last year, an increase of 95,000 over the equivalent 1997 figures.

Education -Responding to needs of Unemployed

A key priority for the education system is to continue to respond to the needs of learners and of course the wider needs of society and the economy. Since 1997, we have introduced a variety of measures across all sectors of the education sector to increase the learning opportunities and enhance the access all individuals have to education in Ireland.

In the Further Education Sector, we introduced the Back to Education Initiative, which provides flexible part-time options across Further Education and is aimed at adults with less than upper second level education, including unemployed adults. It aims to give adults who wish to return to education an opportunity to combine their return to learning with family, work and other responsibilities. To facilitate access and participation programmes are offered on a part-time basis or at weekends.

Under this initiative any adult with less than an upper second level education is entitled to free tuition. This year 9,000 individuals will benefit from participating in this initiative.

In addition, the Vocational Training Opportunities Scheme (VTOS), is a second chance education initiative designed specifically for the unemployed. Unemployed persons who are at least 21 years of age and in receipt of specified social welfare payments for at least six months are eligible to participate. It aims to give participants’ education and training opportunities, which will develop and prepare them to go into paid employment or on to further education opportunities leading to paid employment.

As a result of the downturn in the economy it is anticipated that the intake to higher education institutions will be much higher in 2009 as other options for school leavers diminish. As jobs continue to be lost across the economy, it is also critical that the capacity of the higher education sector to provide for fundamental upskilling of the workforce is enhanced and developed.

I would like to point out that there is no cap on places in higher education generally and this is in line with the Government’s policy objectives of increasing participation in higher education from both a social policy and economic development perspective.

The Institutes of Technology are taking steps to utilize all available capacity to provide upskilling for those who have become unemployed or are facing uncertain employment prospects, including the provision of preparatory courses for those who may be a long time out of the formal education system. Colleges will expand provision from September 2009 in course areas where employment opportunities are likely to develop and will provide enhanced opportunities for progression to other higher education programmes.

The introduction of the multi-annual Strategic Innovation Fund for
higher education which has been a major catalyst in introducing more flexible and innovative approaches to the delivery of programmes responsive to the needs of industry and to an increasingly diverse group of learners. Under the Strategic Innovation Fund the Institutes are also examining the scope for more flexible delivery of provision, including the possibility of alternate start dates and accelerated programmes so as to utilise capacity that may develop due to attrition.

Enterprise and Job Creation

I now want to turn to the issue of job creation. Despite the current global turbulence the Government remains determined to further develop the country’s economy and create the right conditions for fostering growth in the business sector.

Over the last number of years, economic growth in Ireland has been driven by domestic demand and not by international competitiveness. As domestic demand has weakened we must look to exports for a sustained economic recovery. Indigenous exporters are and will continue to be critical in the achievement of future economic stability and job maintenance and growth in the Irish market.

Our principal focus, therefore, is on supporting the growth of a cohort of Irish companies with the ambition, leadership and innovation necessary to achieve global scale. To support industry and the economy as a whole, a targeted focus must be placed on sustaining and creating exports. In directing this focus, the development agency, Enterprise Ireland, has a dedicated task force, which is actively working to respond to the changed economic environment. This will ensure that the supports offered to companies are the most relevant and effective in addressing the current realities facing businesses across the manufacturing and internationally traded sectors throughout Ireland. It is critical that we continue to invest in the companies upon which our economic recovery depends.

To that end, I have already put in place an Enterprise Stabilisation Fund, which was announced by the Taoiseach just over a week ago, to allow for meaningful additional assistance to be provided to basically sound internationally traded companies that would otherwise struggle to survive the global downturn. The fund will operate in conjunction with the banks and will supply direct financial support to eligible, internationally traduing enterprises which are undertaking development expenditure to reduce costs and gain sales in recession hit overseas markets. The fund will complement the banks’ commitment to SMEs under the recapitalisation scheme and should facilitate much of the restructuring that is needed for viable companies selling on the home market.

It is worth pointing out that Enterprise Ireland client companies are estimated to have achieved exports gains of up to €1bn in 2008 despite the unprecedented global economic environment. That this is being achieved in the face of contracting international markets, and a negative currency environment, is a credit to the tenacity and resilience of those Irish companies that compete for and win new business overseas.

County Enterprise Boards

For their part the County Enterprise Boards have an excellent track record of tapping into local entrepreneurial potential and their focus has increasingly been on the development of sustainable growth-orientated local enterprise, which can deliver high quality job creation without displacement or deadweight. The current parameters within which the Enterprise Boards operate enable them to deliver valuable assistance to business start-ups with good growth and employment potential. Through the provision of both financial and non-financial support the Boards have assisted many micro-enterprises in developing their growth and export potential as well as bringing them to a stage where they have sufficient mass to access the services of Enterprise Ireland.

I am confident that the County Enterprise Boards will continue to be at the forefront of supporting Ireland’s economy through the challenging times ahead. The indigenous small business sector is, more than ever, the key to a solid economic future and we must all do our best to continue to encourage entrepreneurship and maintain the momentum built up in recent times.

IDA

In addition to assisting Irish companies expand their international footing and their domestic performances; attracting new investment to these shores is a core element of the continuing development of this economy. In this context the work of the IDA in fostering the growth and development of business in Ireland is vital. It is important to stress that relative to the size of the economy, the level of Foreign Direct Investment in Ireland is one of the highest in the world. Almost 1,000 overseas companies have substantial international operations in Ireland. These include many of the leading companies in Information & Communications Technologies, Life Sciences, Globally Traded Business and Financial Services.

In the current global economic climate, multinational companies are restructuring their global operations leading to global job cuts. Ireland therefore will inevitably be affected. On a daily basis, IDA is working with its clients making every effort to keep them operating in Ireland while minimising the job losses encountered.

Despite the stark deterioration in the global economic situation, 2008 saw a strong Foreign Direct Investment performance with the number of investments from IDA supported companies up 14% on 2007 and saw the creation of in excess of 8,800 new jobs. There was a 22% increase in Research, Development and Innovation Projects, while the number of new companies investing in Ireland for the first time was 16% up on the previous year. In all, investments in the region of €2 billion were secured.

We also saw evidence of our strategy’s success today, with the announcement by HP of a significant investment in Ireland that has the potential to create up to 1,000 jobs over the next number of years. It is a welcome indication that, despite the recession, Ireland is globally well positioned to continue to attract high end investment and quality jobs from overseas.

IDA’s supported Foreign Direct Investment has played, and continues to play, a critical role in the development of the Irish economy. Currently the IDA supported sector accounts for 136,000 jobs, €2.9bn in Corporate Tax receipts and a direct expenditure of €15.8 billion in the economy.

IDA has recently undertaken a significant shift in resources from non-business generation to business generation. The Agency is expanding the number of people based in the United States and opening new offices in Boston and southern California. The agency is also keen to diversify the source of foreign direct investment and recently set up offices in Mumbai and Shanghai. The agency has also expanded operations in London and Frankfurt and continues to explore opportunities to market Ireland for FDI in emerging economies in areas such as the Russian Federation and Brazil.

Despite the economic uncertainty which will have a negative impact on the Irish and global economies IDA remains guardedly optimistic of Ireland’s ability to continue attracting high level FDI in 2009 and beyond.

The Agency will continue to target high value investments in-keeping with the strategy outlined in the recent framework document for sustainable economic renewal—“Building Ireland’s Smart Economy.” Also, in collaboration with its sister agencies Enterprise Ireland and Science Foundation Ireland, IDA will be marketing Ireland as the Innovation Island and the location for businesses of the future.

Whilst almost all economic commentators are predicting an extremely difficult year in 2009, it is important to recognise that even in turbulent economic times there is still Foreign Direct Investment to be won and our competitors will not be slow in targeting opportunities. A firm focus and a positive attitude in our ability to win this investment, by all stakeholders in Team Ireland, are key ingredients to a successful outcome.

Conclusion

We must all realise that these are the most challenging of times for our economy. It is therefore vital that the right mix of good macro-economic and sound enterprise policies are in place to restore our public finances and confidence in our economy generally. This Government is committed to taking the necessary difficult decisions over the next few weeks to ensure the Irish economy overcomes the present challenges and is placed on a secure and more sustainable footing.

The Government is committed to continuing to provide every assistance to individuals who have been severely affected by the present downturn. We will continue to provide education and training opportunities to improve people’s skills and increase the possibility of them securing employment.

We will continue to examine new initiatives to better utilise our existing resources and provide enhanced supports to our citizens.

Our enterprise support agencies will continue to invest in developing and attracting new companies that will be the key drivers in employment and economic growth over this difficult period.

The policies and various measures I have outlined here tonight are evidence of this Government’s determination to overcome the present difficult economic situation. I am confident that as a result of these policies we will in time see the Irish economy emerge from our present challenges and once again be one of the world’s most dynamic and successful economies.

Thank you.

ENDS\ETE2016