Youth Employment Agency Bill, 1981: Second Stage (Resumed).

Tuesday, 8 December 1981

Dáil Eireann Debate
Vol. 331 No. 7

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Question again proposed: “That the Bill be now read a Second Time”.

Mr. Ahern: Information on Bertie Ahern  Zoom on Bertie Ahern  I will not take up too much of the limited amount of time that is left to debate this Stage but I am anxious to summarise the points I made last week. I support the Bill because anything that helps the many thousands who are unemployed is welcome and, secondly, because there are so many organisations involved in dealing with youth unemployment it is important that a central agency be established. It is unnecessary to have so many bodies working towards the one goal. The agency represents an ideal opportunity to get away from that system and have one body dealing with employment for young people, whether it is training or placement that is involved. The objectives of the agency, their working methods or their relationship with the various organisations, are not contained in the Bill but, hopefully, that will be made clear later in the week. I am anxious to know what happens to AnCO and the other organisations that are presently [1267] engaged in promoting youth employment.

Figures for youth unemployment vary greatly because there is no proper data available. The Manpower consultative group established a committee to look into youth unemployment but all they said in their report was that youth unemployment was at an unsatisfactory and unacceptably high level. It is generally believed that there are from 70,000 to 80,000 people between 17 and 24 years of age unemployed and from the figures issued in the last few days it is obvious that the number is rising at a rapid rate. I am sure the priority of the agency will be to undertake a study to ascertain the extent of the problem. None of the agencies that are dealing with the problem at present have issued figures relating to the number unemployed. They have not identified the problem on a regional basis or the type of skills that are needed in different areas. It appears that the problem of youth unemployment will be with us for some time to come and it has been estimated that between the eighties and nineties the number coming on to the labour market, as against those exiting due to retirement or death, will probably double. That is an indication of the important role the agency will have to play in tackling the problem. That is why it is important that we should deal with this legislation in a proper manner and not because it was an election promise given to a youth organisation.

If the questions I have raised about the Bill are not clarified today we will have passed legislation that does not specify or clarify certain points. In that event the time spent discussing the legislation will be wasted.

The problem of youth unemployment is characterised not only by the numbers unemployed but by the serious inadequacy of vocational preparation and career guidance. This is something the agency will have to tackle. At present we have many groups and people in different areas doing bits and pieces to educate our youth and introduce certain courses but that is not satisfactory. In my view AnCO have done their very best but they can [1268] cater for only a small number of people. They run courses for 12 to 14 people over 48 weeks and that cannot be expected to do much for the 70,000 to 80,000 unemployed young people. A further serious problem which has tended to undermine any successful attack on youth unemployment is the lack of effective co-ordination between the schools, the agencies, the placement services, Government Departments and the employers. The problem is that there is almost exclusive control by the different sectors over their own area of responsibility. This has hindered any overall drive towards solving the problem and has prevented the development of a comprehensive integrated scheme. If that is to continue, if we will still have the full structure of AnCO, National Manpower Service and the other organisations, if they are going to stand as they are, then the agency will be waste of time and money. It will be another costly exercise that will not achieve anything. I hope that by the end of the week I will leave the House convinced in some way that the agency does not amount to an election promise that will not do anything for our young people.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  A deep concern exists on all sides of this House about the present level of unemployment among young people and the prospects facing us as a community in this key area. The introduction of this legislation provides us with an opportunity to discuss the situation in a constructive manner, to consider the implications and to examine possible alternative policies.

The Minister in his introductory speech has given a broad outline of the extent of the problem. He has indicated the problems facing the school leaver seeking employment for the first time. The Minister does not, however, attribute the same urgency to the problem as, for instance, the president of the ITGWU, who has recently described it as “a frightening prospect”.

The National Youth Council of Ireland in a memorandum on this legislation stated:

The problem of youth unemployment is large and growing — over [1269] 35,000 registered unemployed under 25 years with a further 10,000 — 15,000 probably unaccounted for in this figure.

That, of course, was before the dramatic announcement yesterday that the registered unemployment figure is now 133,000 plus. The real figure today for youth unemployment must now be at a terrifying level. I would not disagree with the figures which Deputy Ahern has mentioned. We must at this stage be contemplating a figure for young unemployed persons under 25 years of age of somewhere in the region of 70,000 to 80,000.

It is our view that the issue of youth employment is something more than just the absence of employment. It is a major social phenomenon whose effects spread deep down into community life and disturb the very fabric of our society. Our approach to and our assessment of this legislation is based on that belief.

This legislation falls to be considered from two separate aspects. Firstly, there is the proposal to establish a new body to be known as the Youth Employment Agency and, secondly, there is the proposal to finance this new agency by means of a new type of levy.

There is always a possibility when a new body of this sort is established to deal with a particular situation that it will in effect amount to nothing more than a substitute for positive action. To a large extent in the case of any body of this sort we have to wait and see. It is very much a question of intent and the quality of the persons appointed and whether there is a real commitment to the objectives stated. Experience teaches us with new bodies or agencies of this sort which are established in response to a particular problem situation that, having been established, they can be greatly curtailed in scope and limited in their operations unless full support is forthcoming for them, especially from the Minister and Department of Finance. In the case of this particular new body, we shall have to postpone judgment and await developments, but the signs are not propitious.

Unemployment is usually categorised as either cyclical or structural. Cyclical unemployment arises from a falling off in [1270] the level of economic activity and corresponds more or less to the rise and fall of economic activity. Structural unemployment on the other hand is that degree of unemployment which can be attributed to organisational causes and to our failure to match the available labour force with reasonable precision to the requirements of the economy. Structural unemployment derives from structural changes in the economy or because people are not trained or educated for or do not have the skills which would enable them to fit into, the employment opportunities which the economy offers at any time.

It is to the problem of structural unemployment primarily that this legislation is directed, It will not have any impact on that level of unemployment which is attributed to a falling off in the general level of economic activity, nor will it contribute to promoting economic development as the real cure for unemployment. The legislation is basically organisational in its approach, providing training and work experience for young people and in some cases creating community-type employment outside the realms of normal commercial and industrial activity. There is one key sentence in the Minister's introduction statement which I quote with full approval. It is:

Unemployment among young people is high because unemployment is high in the community overall.

That is a statement of significant importance and is the key to the assessment of this legislation. The Minister is saying in effect that youth unemployment is part of the overall economic problem and he is recognising the fact that youth unemployment as a problem can be solved only in conjunction with the solution of the problem of unemployment generally. In other words, youth unemployment will only recede when we succeed in achieving a level of overall economic development which will cope with the employment needs of the community as a whole. In the meantime we may, through this new agency and otherwise, occupy young people in training, work experience and community improvement schemes, but we will not be providing employment for [1271] them. In fact, in so far as he comments at all on this aspect, the Minister's comments are depressing and I quote:

...the main plank of any policy to reduce youth unemployment must be a sustained attack on the scourge of unemployment at all levels in our society. For Ireland, this requires continued growth in our exports of goods and services. Increased exports are vital in view of the sharp deterioration in our balance of payments position in the last few years. Export growth must also be the engine for the creation of the new jobs which are going to be needed in the years to come.

I find that repetition of the standard, stereotype economic formula discouraging and depressing. Those sentences could have been lifted out of any Central Bank report during the past decade or even during the past several decades. They represent the ritual exhortation to economic virtue so dear to the heart of the professional economist without suggesting any clear lines of action — a long way indeed from what we might expect from a radical socialist Labour Minister. That empty phraseology by the Minister compels me to conclude that the Minister does not really accept that the root cause of youth unemployment in this country is the lack of investment in economic development and that this legislation will not contribute to solving that problem. On the contrary, this legislation is devised merely to improve structures. The new agency apparently will rely on the main on education, training and work experience schemes for a body of unemployed young people who may be occupied, but will still not be employed.

This is unfortunately underlined by the Tánaiste in his interview with The Irish Times on 21 November when he said that he saw unemployment rising to 145,000 next year and that it was difficult to see unemployment in this country falling below 125,000. He said, and I quote:

“I'm not saying that we won't do all we can to create jobs or that we should lie down and accept the situation. But [1272] I don't think that we can create all that many more.

This defeatist approach confirms me in my view that this legislation will not be utilised to undertake and attempt to effect a major reduction in the actual number of unemployed young people. The existing range of programmes which we had already established cater for up to 20,000 young people — 5,000 young people in the National Manpower Service's work experience programme, 10,000 in Anco's general training programmes, 2,000 apprentices and 11,700 in the community youth training programme. These are all excellent schemes, fulfilling worthwhile social and community objectives. But they cannot be a substitute for the generation of permanent viable employment which arises from overall economic development.

It is in this context that we must look very closely at this proposed new Youth Employment Agency. It is coming into being at a time when the thrust of general Government economic policy is in exactly the opposite direction from economic expansion or employment creation. Deflation is the principal element in all ministerial speeches; cutbacks in both investment and current expenditures are the order of the day. There is no possibility therefore that any significant amount of new resources will be devoted to a reduction in the general level of unemployment, of which youth employment is part.

The figures published yesterday prove conclusively that if this Government have any employment policy—and it is my belief that they have not—it is in a shambles. In January of this year the number of registered unemployed was 125,000, but in June when we left office there had been a reduction to about 123,000. The Coalition came into office then and after five months we find that there are an additional 10,000 people registered as unemployed. That is the achievement of the Government in so far as employment generally is concerned. This increase of 10,000 is attributable directly to the Government's economic and fiscal policies. About 5,000 of the 10,000 can be attributed [1273] to the ban on recruitment to the public service while the remainder is attributable to the general cutback in economic activity. So far as we can see there is no indication of any let-up in employment. The graph will keep on rising if the Government continue to pursue the economic and fiscal policies that they have been pursuing in the past five months. The Minister recognises that youth unemployment is only part of the general problem of unemployment, but in so far as youth employment is concerned we cannot expect anything from these economic and fiscal policies of the Coalition. The whole impetus of their policy is in the opposite direction. It is calculated to create more rather than less unemployment.

This new Youth Employment Agency therefore will be confined to a very limited area of operation, in the main dealing with the structural aspects of youth unemployment but not really influencing the overall level of youth unemployment which is part of the general employment situation.

This concentration of the new agency on structural problems is very clearly enunciated by the Minister when he says in his introductory speech, that what is expected of the Agency is “that it should very quickly achieve an identification as a primary agency, assisting and facilitating the employment of young persons”. There is nothing there about job creation but a very clear description of the structural role of the new agency.

A major obstacle in planning an attack on youth unemployment is the absence of full and accurate statistics, deriving largely from the fact that when young people apply unsuccessfully to an employment exchange they are not recorded and are not included in the number on the register. I hope that the staff needed by the Department of Labour to prepare an adequate statistical profile of the problem of youth unemployment will be supplied and that that staff at least will be exempted from the general ban on recruitment to the public service.

When we come to examine the financial provisions of this legislation, this limitation [1274] of the scope of the Employment Agency becomes even clearer still. There is obviously no question of vast new resources being poured into the existing schemes or the provision of new ones. In 1981 the cost of the existing measures, grants to AnCO, CERT, the Work Experience Programme and so on came to roughly £35 million. The Minister indicated in his introductory speech that the new levy about to be imposed will raise £40 million in 1982. This makes it quite clear that a considerable expansion of the resources available is not contemplated and that there will be a negligible increase if any in the programmes if there is to be an increase at all.

It seems, therefore, that all we really have to consider in regard to this legislation is whether or not this new agency will be more effective in administering the existing schemes with possibly marginally increased resources. It may well be, but we cannot be sure. It seems to me that the Minister lays far too much stress on the importance of co-ordinating and integrating existing schemes. He seems to be of the opinion that co-ordination in itself will improve the situation. I doubt it. Superficially, there is a great deal to be said for having all the schemes supervised by one body, but it is extremely doubtful if this supervision and co-ordination will on the ground add to the number of young people being included in the scheme. In fact, it may do the very opposite. We all know when the administrators get down to co-ordinating and integrating the language used on this occasion—it is more often likely to mean a reduction in the numbers than the reverse.

There is another aspect of co-ordination. The existing corps of unemployed young people, must, of necessity be of very diverse character. The nature and extent of unemployment and the categories unemployed will vary from area to area. The type of employment required will also vary considerably. Young people seeking employment will have different ambitions, requirements, standards of education and training. The response, therefore, to their employment needs must be equally varied and flexible. [1275] I ask the Minister to be on his guard against the possibility that because there is one new overall body integrating the schemes and co-ordinating activities this will hinder or limit the variety and the nature of the schemes or their ability to respond in a flexible manner to the differing situations that prevail.

The whole approach to youth unemployment, for instance, in the inner city area of Dublin, must be radically different from that in a mixed urban rural area. I want to sound a very specific note of warning that in the process of co-ordinating and intergrating there will not be a reduction not so much in the overall level of numbers covered but in the flexibility of the response because a very different type of response to youth unemployment is needed in different areas and for different categories of the population.

I was surprised to note that the board of directors of the agency will only include a representative from the Department of Education and one from the Department of the Environment. I believe that it is a fatal weakness that neither Finance nor Industry and Energy will be represented. The absence of a representative from the Department of Finance particularly clearly signals that there is no commitment from that Department and they prefer to stay aloof from this new agency and exercise their restrictive role from a distance. I would like to have seen a representative from the Department of Finance, in particular, on the board of this new agency because no matter how admirable the representatives from the Department of Education or the Department of the Environment may be they do not command the same strength and muscle as the Department of Finance do. I would be afraid that because the Department of Finance are not committed in this way by membership of the board they will exercise their traditional restrictive, limiting role from a distance and considerably curtail the functions and the activities of the agency.

Equally, I believe it is extraordinary that we have not got a commitment from the Department of Industry and Energy [1276] by having a representative on the board. I believe that the board will suffer from a serious defect by the absence of some representative from the Department of Industry and Energy. I believe these are two important aspects of the structure of the new agency which should have been considered but perhaps could be considered now before it is too late. Unfortunately, we will not have a great deal of time to effect changes in the legislation on Committee Stage because we have undertaken to let the Government have the Committee Stage fairly quickly.

It is not difficult, as Deputy Bertie Ahern has pointed out, to see serious problems arising over the respective roles of this new agency and the bodies which are already involved in the youth employment area, particularly AnCO. AnCO train young people, place them with employers and secure funds from the European Social Fund. Where exactly will AnCO stand in regard to these and other functions in relation to the new agency? There is grave danger of confusion arising there. When two State agencies have a role in the same general area it is very important that their respective roles be clearly delineated, that lines of demarcation be drawn. I believe this legislation should have clarified that aspect and should have clearly laid down the functions of the different bodies and agencies concerned. It should have defined exactly where the existing agencies will end their responsibility and that responsibility will be taken over by the new agency.

The Minister's introductory speech was disappointing in a number of its aspects, especially where he speaks about the employment guarantee concept. This guarantee has been watered down to something which is of very little significance, and one must naturally expect that this watering down has been for financial reasons. In his introductory speech, the Minister said:

It is fair to say that what we are proposing for Ireland in the Bill before us at least matches what is being done in other countries. The emphasis is on a comprehensive package to assist [1277] young people, and it is very similar to, if not identical to, the youth guarantee idea which I have mentioned.

The important words there are, of course. “if not identical to” because the unpalatable fact which the Minister is seeking to glide over in those sentences is that the idea of an employment guarantee has, in fact, been discharged. There is no further mention of a guarantee or of a fixed period, such as six months, after which a job or a training place will definitely be offered. The highest hope is, of course, expressed that existing schemes will be extended to take on additional numbers but I am afraid we cannot be in any way optimistic about that having regard to the funding provisions proposed.

It is to the financial aspects of this legislation that we are most strenuously opposed. It is improper to add this new levy to the health contribution. If taxes cease to be what they say they are and instead of being a health contribution are in reality a youth employment levy, this undermines the acceptability and credibility of our taxation system. This new levy of 1 per cent which is being raised as a health contribution is in reality an additional income tax, but a very crude form of income tax without any of the necessary refinements of the income tax code which cater for differing individual and family circumstances.

The Minister puts up a very weak and feeble case when he talks about his decision not to establish a youth employment fund. I think everyone confidently expected that would happen, that the existing schemes would continue to be financed from the Exchequer in the normal way, that the proceeds of the levy would be extra and would provide a major new source of funds which would be available to finance job creation on a considerable scale. That is what the general public, and particularly the young people and the youth organisations, expected.

The Minister's explanation as to why this is not happening is spurious. He decided, he says, that it would be, and I quote, “wasteful of resources and inefficient”. [1278] There is no question of wasting resources or being inefficient in leaving the existing schemes to be financed by the Exchequer as they are now and making the new funds from the levy available for additional operations. What has happened and what the Minister is endeavouring to cloak is that the Government have decided to use the proceeds from this new levy to transfer from the Exchequer the cost of the existing schemes. Unfortunately and regrettably, that is as clear as day. There will be practically no additional funding for youth employment. In fact, it is not unreasonable to claim that this whole system of financing the new Youth Employment Agency, whatever the merits of the agency as a body may be, is simply a very clever device to shift the cost of financing youth employment schemes and to transfer that cost onto the shoulders of employees.

At this point it would be possible for me in a cynical way to congratulate the Department of Finance on what they have achieved here. They have taken particular advantage of a political situation. There was a commitment by the Fine Gael Party and the Fine Gael leadership to this new agency and to this new youth employment levy. That seemed to be a fairly straightforward undertaking by Fine Gael to the young people to raise new money by way of an additional levy to finance additional youth employment activity. However, somewhere along the line someone has succeeded in subverting that concept. Now the levy is being imposed arbitrarily on all employees, but instead of the money going in total for new job creation it is being used to relieve the Exchequer of the cost of existing schemes. In the interests of the Exchequer, someone has done a very clever job there.

The great bulk of this new levy will be contributed by PAYE employees and will in effect mean a 1 per cent drop in the take-home pay of those employees. That must surely generate demands for compensation. In this connection, it is well to note also that the levy can be increased by order of the Minister and that he can also by order define the “reckonable earnings” on which the levy will be paid.

[1279] So far as this levy is concerned, it is a wide open situation. Members of this House should not think that this legislation is putting a limit in this area. It is not. First, the Minister may by order define “reckonable earnings” in any way he wishes. The definitions section of the Bill is unusual. As would normally be the case, it does not define “reckonable earnings” but states that “reckonable earnings will be defined by ministerial order”. In theory, the Minister could define “reckonable earnings” as twice the salary or take-home pay of an individual. Not alone can he define “reckonable earnings” in any way he wishes but he can also by ministerial order increase the 1 per cent levy. I regard that situation as undesirable. If we had more time and if this were a different type of legislation not directed to such worthwhile social purposes, we would take strenuous objection to such an open-ended type of legislation.

We oppose this proposal of a levy on the two main grounds; first, because the new levy is arbitrary and unfair in that it does not take account of family circumstances and, secondly, because the new moneys raised will simply be used to relieve the Exchequer of the cost of existing youth employment schemes and will not go towards new job creation. On that basis we are opposed to the levy in particular and to the financial provisions of this legislation.

When we sift through these legislative proposals and the Minister's speech what are we left with? All the Government are really doing is setting up a new agency which will co-ordinate and integrate existing schemes, oversee them and examine proposals for new schemes. The whole exercise regrettably will have only a negligible additional impact on youth employment.

We are prepared to accept that there may be a case for such a co-ordinating agency and we are prepared to give it every chance. We will not, therefore, oppose the Bill as a whole, though we will oppose the sections which impose this new arbitrary levy because this is an additional direct tax on employees and [1280] simply a device to make employees shoulder an additional burden so as to relieve the Exchequer of what should be its responsibility for youth employment.

We would like to see a number of changes both in this legislation and in the Government's approach to youth employment generally.

With regard to this legislation itself we would like principally to see a major change in the financial provisions. The arbitrary levy of 1 per cent on employees should be abandoned and the amount of money to be provided for youth employment should come directly from the Exchequer through the normal taxation process. The proceeds of that levy should be additional to the existing schemes already financed directly from the Exchequer.

Secondly, the board of directors should include representatives from both the Department of Finance and the Department of Industry and Energy in order to ensure the full commitment of those Departments to the operations and activities of the agency. There are other changes which could be made in the board which would be beneficial.

On this aspect I would quote with approval the statement issued by the National Youth Council of Ireland as follows:

But we stress again as we have done consistently in the past the absolute necessity to give real power to the Agency, yet another costly Committee would be a waste.

That is very true.

Thirdly, the legislation should clearly and specifically designate the respective roles and areas of responsibilities of AnCO and the other bodies already involved in the youth employment area.

On the general objective of tackling overall unemployment we would like to suggest action along the following lines. Firstly, there must be positive decision by the Government to award the provision of youth employment an absolute priority in economic and fiscal policy and to reverse present policies in this respect.

Secondly, our 1981 National Investment Plan should be fully implemented and carried forward at an expanded level [1281] into 1982 with emphasis on capital investment in building up and improving our economic and social infrastructure.

Thirdly, we would like to see the industrial development programme of the IDA intensified and expanded to the maximum level and in addition to see a major drive by the IDA to create a new services export-oriented industry based on our existing educational and professional advantages. The legislation to build up such a services industry already exists and the IDA are statutorily equipped to promote it.

Fourthly, we would like to see a directive given to every semi-State body to maintain apprentice and trainee recruitment at adequate levels and in addition to carry out a detailed study of all their areas of operation to see where new viable and permanent jobs can be created through the development of their existing operations and possible new related ones.

Fifthly, there should be a continuing shift in the emphasis of second and third level education away from the present academically oriented system to a scientific and technological one.

Sixthly, the Government should take up the European Commission on their statement in the paper “Job Creation — Priorities for Action” that “there is a wide range of measures available to the Commission to assist the entry into working life in the 19 - 25 age group”.

Finally, the ban on recruitment to the public service should be scrapped.

It is regrettable the the Government feel it is politically necessary to rush this legislation through because I believe it is legislation that could be greatly improved and that a good Committee Stage with a constructive non-partisan approach by the many Deputies who know a great deal about the subject would have been very beneficial.

However, we have reluctantly agreed to give the Government all Stages now before the Christmas recess because we would not wish young people to think that any effort of any kind to improve their employment prospects and opportunities would be unnecessarily delayed in this House.

[1282]An Leas-Cheann Comhairle: Information on James C. Tunney  Zoom on James C. Tunney  The Minister for Defence to conclude.

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  I should like to make one or two observations.

An Leas-Cheann Comhairle: Information on James C. Tunney  Zoom on James C. Tunney  The Chair would remind Deputy Sherlock that he had already made his contribution and Deputies are allowed one contribution only on Second Stage.

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  I wish to make an observation.

An Leas-Cheann Comhairle: Information on James C. Tunney  Zoom on James C. Tunney  It is not possible for the Deputy to make any observations because he has already contributed on Second Stage. He may make his observations on Committee Stage but not now. The Minister has until 5 o'clock to conclude.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  Where is the Minister for Labour?

Minister for Defence (Mr. Tully): Information on James Tully  Zoom on James Tully  The Minister for Labour is on Government business abroad. In any Government Ministers have to undertake such duties.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  We would like to have seen better evidence of his commitment to this legislation.

Mr. Tully: Information on James Tully  Zoom on James Tully  I was spokesman on Finance for my party when Deputy Haughey was Minister for Finance and while I did not know very much about finance I usually honed it up before coming into the House and Deputy Haughey was very good at answering questions. He had his facts straight and would not handle a brief unless this was the case. I am very sorry that he had deteriorated so much or that he has been given a brief containing so many inaccuracies. If he seeks commitment, he has the commitment of the Government. He has been using a brief which he did not check. The fact that some Departments will not have representatives on the board does not mean that they will not be involved because we work as a Government. I am [1283] sorry that Deputy Haughey spent so much time nit-picking because excellent speeches were made by other Deputies on all sides. I was looking forward to listening to Deputy Haughey but I was disappointed.

I thank Deputies for their comments and helpful suggestions. They will be borne in mind, particularly when drawing up the memorandum and articles of association of the agency when it is established. I am particularly appreciative of the remarks on the speed with which we have brought forward these proposals. They anticipate more general proposals which will deal with economic development and other relevant matters. I should like to assure Deputy Haughey that his comment regarding the way the scheme will be funded is inaccurate and I will deal with this in the course of my remarks.

In the Minister's opening speech the reasons for the decision to adopt such a course were made quite clear. First, we wanted to see a co-ordinated approach between what had been done in the past and what is to be done in the future, and I am convinced that the best way to do this is by having a single source of Exchequer finance. The alternative would be to finance expansions in the activity of certain bodies from the levy while continuing to finance their existing level of activity from general taxation. Such an approach would lead inevitably to administrative confusion and a larger bureaucratic structure. I share the concern expressed by certain Deputies that this should not be allowed to happen.

The extent of the Government's commitment in the area of youth employment can be seen from our intention to increase the number of young people catered for under the various schemes from 20,000 in 1981 to 40,000 in 1982 — in other words, an increase of 20,000. Net Exchequer contributions to the existing programmes, which in future will be financed through the agency, will total just under £20 million in 1981 as compared with an estimated £40 million anticipated in 1982.

On the question of the levy being an [1284] additional tax, I emphasise that the overall level of direct and indirect taxation will be set by Government in formulating their budget. The existence of the 1 per cent levy will be taken into account when this is being done. In this sense the levy is not an additional tax. It is a positive step taken to identify a given amount of revenue as being devoted entirely to the important task of combating youth unemployment. The use of the moneys raised must be taken into account in looking at the impact of the levy. I intend to improve the concentration of available resources on those most in need: young unemployed people in our poorer areas. By this means, along with the exemption of social welfare pensions and other payments from the levy, we are ensuring that the effect of this new measure will be progressive.

The Bill provides for the variation of the levy. This provision is designed to allow for the reduction of the levy at any time should the proceeds be greater than felt necessary for the operation of the agencies. Such a situation would come about with a reduction in the extent of the youth employment problem.

It is not possible to increase the levy to more than 1 per cent. Section 19 (1) of the Bill provides that:

(c) Regulations under this paragraph shall not so vary the rate of levy specified in this Act that it exceeds the rate standing so specified upon the passing of this Act.

Sections 16, 17 and 18, which provide for the payment of the levy, specify that the rate of levy will be 1 per cent. The proceeds of the levy will be paid via the social insurance fund and the Minister for Labour to the Exchequer. An amount equivalent to the yield from the levy will be entered in a subhead of the Vote of the Office of the Minister for Labour. The agency will have a responsibility for channelling these moneys to approved programme sponsors. For the first year provision for channelling funds direct to the programme sponsors is being made. This, of course, is an interim arrangement.

As regards the detailed activities of the [1285] agency, this will be a matter for decision by the board. The composition of the board, representative as they are of a broad spectrum of society, will put them in a position to devise and implement new programmes where existing schemes are deficient. The proposed terms of reference leave scope for such an approach.

Equally important is the need to maintain and, indeed, improve the quality of existing schemes as they are expanding. I regard this as one of the central roles to be entrusted to the agency. The scope which the agency will have for bilateral contact with local bodies will make a major contribution both in the area of improving existing schemes and in developing new ones.

I can see scope for the agency to take new initiatives in a number of areas. For example, many new areas of social and community work are emerging. The agency could take the initiative in looking at young people's involvement in the growing field of child care services, home care for the aged and similar activities. Assistance will be given with the development of enterprises and this will meet the wishes expressed by a number of Deputies.

While dealing with the question of new initiatives by the agency, I would like to refer to the assistance which the agency would give to local areas and rural areas. The register of young job seekers prepared by the NMS will indicate the areas where excess labour exists and where there is a need for assistance for young people. The agency will then arrange for programme sponsors to come forward with the necessary programmes. I could envisage here the local organisation of an integrated series of activities which take account of local circumstances, in particular building education and training elements into all programmes including all those now providing only short-term employment. This would involve co-operation between, for instance, local authorities, programme sponsors and VECs. It is fair to say that existing schemes and arrangements do not cater for local areas and there is a clear need for the type of overall approach that will [1286] result from the activities of the Youth Employment Agency.

The agency will also help rural areas. One of the terms of reference is to identify areas outside the scope of existing programmes into which Government aid to young people could be extended. Under this heading I anticipate a concentration on employment in agriculture and other primary activities. In carrying out their activities the agency, of course, will be in continuous consultation with development bodies, including regional and local development bodies. The overall objective is to equip young people to enter working life and to take emphasis off “make-work” schemes. The agency's composition and their ability to take an overview of the whole area of transition from education to working life puts them in a unique position to make improvements to existing schemes and to devise new programmes.

Some Deputies have suggested that the setting up of the Youth Employment Agency is unnecessary and represents a needless addition to our administrative system. In this connection I will point out that the programme for Government contained a commitment to establish a youth employment agency. In making that commitment full regard was had to the existing arrangements. That consideration indicated the failure of previous efforts at co-ordination. To suggest now that the essential role being given to the Youth Employment Agency could equally well be discharged by one of the present sponsors is not convincing. Their establishment as a limited company with the task of funding and assessing existing schemes, devising new programmes and encouraging youth enterprises afford flexibility which no existing sponsor has or could easily be assigned. In addition, the agency's role in funding the activities of sponsors will mean that real co-ordination and assessment will for the first time become a feature of our approach to tackling the problem of youth employment.

I share the concern expressed at the tendency for State agencies to expand and become bureaucratic in their approach. One safeguard against this [1287] happening in the Youth Employment Agency will be the representative nature of their board. Another will be the clear identification of the agency's source of funding with the objective they are intended to achieve. Finally, the Minister for Labour himself will have to be consulted on staffing levels. I intend the calibre of those appointed to the agency to be of the highest standards. I know I can rely on the nominating bodies to assist me in this respect.

I accept that the setting up of the Youth Employment Agency will not solve all the problems of youth unemployment. In my opening statement I placed youth unemployment firmly in the context of the global problem of unemployment. The Government are committed to planning for soundly-based economic growth and work is proceeding on the preparation of an initial three-year plan. We are also proposing to reform the Government's own financial procedures in such a way that the social and economic impact of Government spending will be made clear. This is essential to democratic and participative planning. Within this overall planning context, the Government will continue with existing forms of job creation in the productive sectors. The National Development Corporation will be a major new initiative in this field.

The setting up of the Youth Employment Agency will make an immediate contribution to tackling the present high level of youth unemployment. The agency's role in improving the transition from education to working life must also be seen as one of the building blocks of long-term social and economic planning. The young people now entering the workforce will form the backbone of our adult population for many years to come. Providing these young people with skills and the ability to cope with the many changes which will take place is vital.

The Minister mentioned in his opening address on Second Stage that he intended to set up the agency on an ad hoc basis. As I have heard no objections to this approach, it is proposed now to proceed on that basis.

Much play has been made about the [1288] employment figure and using the unemployment numbers to show, according to the people opposite, that there was a tremendous increase in unemployment in this country. Listening to the people who were speaking, one would imagine that unemployment had been invented some time in July and had not had any effect before that. Of course, those of us who want to look at it and who care to give an unbiased view of the position know that unemployment has been with us for quite some time. For a Government who had four years during which the employment position was deteriorating it is a bit much to hear them complaining that it has not been solved in five months. The rising trend in unemployment which commenced at the beginning of 1980 at the onset of the recession has continued throughout 1981, but at a considerably lower rate. Allowing for seasonal effects, the live register increased by 1,400 per month on average during the first 11 months of 1981 compared with an average monthly increase of 2,800 during 1980, twice as many. This significant slowing down is an encouraging sign and, taken with other economic indicators suggests that unemployment should reach its peak level fairly soon.

Recovery began in industrial output during the first half of this year and, while the decline in manufacturing employment continued, this was considerably less during the second quarter than in the previous four quarters. The increase in registered unemployment here during the past year or so has been well below EEC average and very much less than that in other member countries. This should be remembered. Up to October 1981, registered unemployed increased by 54 per cent in Germany and the Netherlands, 47 per cent in Luxembourg, 45 per cent in the United Kingdom and 31 per cent in the Community as a whole while the increase here in the same period was 17 per cent.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  We kept making that point to the Minister.

Mr. Tully: Information on James Tully  Zoom on James Tully  The Leader of the Opposition tried to give the impression that [1289] Fianna Fáil had solved the unemployment problem and, since they left office, that things had deteriorated. Fianna Fáil made a mess of the unemployment problem. They were not able to produce the necessary money, even by borrowing as much as they possibly could, to try to keep industry going, and created the situation with which we are now faced. We are trying to get unemployment back on an even keel and the Opposition are criticising us for that. I do not mind being criticised by people who do not know any better but I find it hard to take it from Deputy Haughey who, I am sure, knows the true position. His comments on the Bill did him no credit. I believe he is capable of a far better contribution than that which he made to-day.

Deputy Haughey quoted a figure for January 1981 of 125,000 people unemployed and the seasonally adjusted figure as 119,600. In June 1981 the figure was 123,600 and the seasonal adjustment was 126,400. In November 1981 the figure was 133,100 as against 133,900. It is not true to say that the unemployment trend was down in the January-June period and that statement should not have been made by Deputy Haughey.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  Unfortunately for the Minister the figures are there.

Mr. Tully: Information on James Tully  Zoom on James Tully  I have just quoted the figures. The effect of youth unemployment has created a situation which is pushing up the unemployment figure generally. Because of the fact that there are so many young people looking for jobs, prepared to do anything, older people who lose their jobs are finding it impossible to get new employment. That is something we will have to face and we are hoping that this agency will at least give us the chance to take the pressure off older people by giving younger people an opportunity to get employment. Deputy Haughey said it is wrong for any country to have such a high number of unemployed young people. We all echo that sentiment but youth unemployment has not been created during the last five months and Deputy Haughey knows that. He knows it was partly if not mainly as a result of [1290] maladministration which created a situation where it was nearly impossible for young people leaving school, no matter what qualifications they had, to find employment.

Most of the Deputies opposite made constructive comments on the Bill and I hope, when we reach Committee Stage, they will continue to do so. Deputy Haughey knows that my attitude to legislation has always been that it is not a one-sided affair, it must be dealt with by both sides. Constructive criticism from the Opposition very often improves a Bill going through the House but it must not consist of carping criticism only. We are pinning our faith on the fact that everybody knows that 1 per cent of his or her income is going to fund this scheme. That 1 per cent cannot be increased and, if things improve, we expect to be able to reduce it. It is not correct to suggest that we will increase it.

Reckonable earnings — and I am sure Deputy Haughey is aware of this — follow the same definition as in the Health Act.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  They can be defined by regulation.

Mr. Tully: Information on James Tully  Zoom on James Tully  Yes, but it is the same definition as in the Health Act.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  The Minister can do so, I am not saying he would.

Mr. Tully: Information on James Tully  Zoom on James Tully  There is no question of increasing it above 1 per cent. It is not the intention of the Government to do so and we shall be here for a long time.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  Have we a firm guarantee on that?

Mr. Tully: Information on James Tully  Zoom on James Tully  If Fianna Fáil ever come back into power are we to take it they would increase it?

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  It is the Government's Bill.

Mr. Tully: Information on James Tully  Zoom on James Tully  Yes, and there is no suggestion that this was intended and I am [1291] surprised that Deputy Haughey made that suggestion.

Mr. Haughey: Information on Charles J. Haughey  Zoom on Charles J. Haughey  The Minister must acknowledge that reckonable earnings can be defined by regulation, that is all I am objecting to. Normally a phrase like “reckonable earnings” is defined in the definition section.

Question put and agreed to.

Committee Stage ordered for Wednesday, 9 December 1981.

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