Vol. 1038 No. 2
55. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment if he is aware of the view expressed by European and international agencies and organisations that corporate profiteering is a real and significant contributor to inflation; and if he has plans to tackle price gouging in food products. [22055/23]
My question is fairly straightforward. It is to ask the Minister for Enterprise, Trade and Employment if he is aware of the view expressed by European and international agencies and organisations that corporate profiteering is a real and significant contributor to inflation and if there are any plans to tackle price gouging in food products.
We had some discussion of this issue yesterday in a committee. I am aware, of course, of views expressed by European agencies and organisations that corporate profits are a contributing factor to inflation. The European Central Bank, ECB, examined the degree to which inflation is being driven by increases in wages compared with profits. It established there has been a significant increase in corporate profits throughout 2022 across multiple sectors and that this contributed to more than half of European domestic price pressures in the last quarter of 2022. The ECB has predicted that, over the coming years, growth in profit margins and wages will moderate as a result of its efforts to lower inflation and that this will have a knock-on effect on product prices. It has stated it is closely monitoring any exploitation of the uncertainty created by high and volatile inflation and supply-demand mismatches.
Ultimately the setting of market prices is a commercial matter to be decided on by individual commercial entities. Due to varied pricing strategies, it may take some time for wholesale price changes to be reflected in retail prices. The increase in commodity prices, such as in oil, energy and grain, has resulted in increases in the domestic sale price of several core products such as milk, butter and bread because these feed into fuel and fertiliser costs. Domestic food prices are influenced by international pricing. We import and export food at international prices. Prices in Ireland for domestically produced food will be influenced by the price achieved for these in export markets. A recent study by Kantar is showing that the rate of food inflation in Ireland has dropped slightly for the first time in two years for the period from February to April. This compares with EUROSTAT figures for the eurozone area which show inflation rose slightly to 7% in April. The fact that Irish food inflation is less than the EU average suggests Irish supports for business as well as the level of competition in the market are starting to have an effect.
The ECB expects profits to grow more moderately as the mismatches between demand and supply are resolved and inflation eases, and particularly as demand is dampened through rising interest rates. I will come back with a more specific answer next time.
The Minister mentioned wages. It is worth bearing in mind that while corporate profits might be ripping away, wages are not. In real terms, according to Unite Investigates, a division of the Unite trade union, wages are falling by an average of €76 weekly. We can see this from the perspective of consumers who are seeing their wages falling by an average of €76 while also seeing that profits are high. At the beginning of March, the ECB highlighted that corporate profiteering contributes twice as much to price rises as wage increases. Wages, therefore, are nowhere near what the corporate profits are. Indeed, the ECB is flagging this as an issue.
What are the Minister and his Department doing to ensure corporate profiteering is not contributing to food and grocery price increases in respect of large supermarkets and the big food conglomerates and processors? I do not mean asking them nicely by saying, "Sure, lads, you aren't doing this." I mean asking what specifically is being done in this regard.
I acknowledge the ECB reports that have come out. The Government, of course, acknowledges the pressures families are under. This is why we have been proactive in limiting the fallout from higher rates of inflation. A total of €12 billion, some 4.5% of national income, has now been provided in direct relief to absorb some of the impacts and ease the burden of inflation on households and families. The Government believes, especially for vital products such as staple foods, where reduced input costs come through to product prices, that consumers should benefit from this. This is why the Minister of State, Deputy Richmond, chaired a special meeting of the retail forum yesterday and will have another such meeting in six weeks' time. The Government has given a clear signal to business leaders in the retail sector that we are not happy and that we expect to see the reduction in the cost of production passed on to consumers in terms of pricing. We also expect to see primary producers protected in that context.
Is the strong message being sent by the Government that it is not happy? I am not being funny, but is that the strong message the Government is sending? That is what the Minister said. He said the Government had sent a strong message and that it is not happy. Could the message not be something like the Government is going to demand transparency? Could it not be that, if the Government does not see delivery in reductions for consumers, it will act? The Minister just said the Government's message was that it was not happy. Can I give the Minister a message from consumers? They are getting creased. They also are not happy, but their unhappiness is taking the form of having to make hard choices concerning what they buy in the supermarket, including such things as food to feed their kids, nappies and all those essential things. I appreciate the Minister has sympathy with people and I do not for a moment suggest there is a monopoly on compassion anywhere, but does the Minister understand that people want to see a little more in terms of action, deliverables, timeframes and targets?
That is exactly why we held the meeting of the retail forum yesterday and it is also why I took advice from the Competition and Consumer Protection Commission, CCPC, regarding options. I would like to get more advice from it concerning the options available to us in the context of delivering more transparency in the food supply chain to ensure consumers are paying reasonable prices. I hope to get this advice in the coming weeks.
Additionally, we completed the passage of legislation in this House last night to progress a new agrifood regulator, whose job it will be to try to provide more transparency on this supply chain in terms of protecting primary producers and ensuring processors and retailers are delivering fair prices for consumers. There is a lot happening in this space. We must, however, ensure we think through any new initiatives because several countries have suggested bringing forward price caps and have then decided not to do that. Others have tried to limit margins and then have had to change those decisions. We must ensure, therefore, we have a functioning enterprise and competitive market here while also ensuring we protect consumers. The Government will act to do this.
56. Deputy Peter Fitzpatrick asked the Minister for Enterprise, Trade and Employment if he will seek briefings from IDA Ireland and Enterprise Ireland on the work they are currently undertaking to actively secure foreign and indigenous direct investment in areas in County Louth, such as at a complex in Dundalk (details supplied); and if he will make a statement on the matter. [21905/23]
This question is to ask the Minister for Enterprise, Trade and Employment if he will seek briefings from IDA Ireland and Enterprise Ireland on the work that they are currently undertaking to actively secure foreign and indigenous direct investment in areas in County Louth, such as at a complex in Dundalk regarding which details have been supplied, and if he will make a statement on the matter.
Regional development is at the centre of the Government's enterprise policy, as set out in the White Paper on enterprise, and it is the key focus of our Department's leadership of the regional enterprise plans. Similarly, the IDA’s strategy, Driving Recovery and Sustainability 2021-2024, has an ambitious target of 800 investments over the lifetime of its current strategy, and it will target half of all investments to regional locations.
The foreign direct investment, FDI, performance in the mid-east, which comprises counties Louth, Meath, Kildare and Wicklow, has been strong over the past five years.
County Louth is home to 36 IDA Ireland client companies directly employing 4,485 people. Enterprise Ireland clients support 6,369 jobs in Louth, 613 of which were created last year alone.
The timely provision of appropriate, cost-effective property and infrastructure solutions to meet the needs of multinational companies remains essential to winning FDI. In June 2021, IDA Ireland acquired two land banks in County Louth. These land acquisitions, with a combined total of 157 acres, are situated in Drogheda and Dundalk and form part of the IDA’s long-term strategic plan to position Louth and the wider region to compete for FDI investment. The IDA has also delivered an advanced office solution on IDA’s Finnabair Business Park and an advanced business solution building at IDA’s Mullaharlin science and technology park in Dundalk. The agency also plans to commence the delivery of an advanced building solution in Drogheda as part of the current strategy.
The IDA continues to work with private sector commercial property owners, developers and local authorities to market other property solutions across all regions where they exist. The IDA is familiar with the property and infrastructure solution that the Xerox business campus offers to potential new enterprises and actively markets such potential property solutions for FDI and to meet the needs of Enterprise Ireland clients.
I was in Dundalk a couple of weeks ago with one of the Deputy's colleagues. There are some amazing business opportunities happening in the town in terms of new indigenous business and making the most of the creative spark hub, but there is also huge investment coming in from abroad. It is fair to say the town is thriving, but we remain ambitious for Dundalk and the entire region.
The Department saw an increase last year in the number of early warning reports for FDI companies which may be experiencing trading difficulties or are ceasing operations in Ireland. The number of early warning reports for the first 11 months of 2022 is higher than the same period in 2021. We saw this in County Louth, with the exit of National Pen and the closure of PayPal and Actavis in recent years. There are currently a number of significant players being impacted by global trading conditions and the war in Ukraine. At a national level, the IDA strategy, Driving Recovery and Sustainable Growth 2021-2024, reflects the approach and ambition of the programme for Government whereby, in conjunction with the Department of Enterprise, Trade and Employment, the success of the IDA is measured by the impact of FDI on the Irish economy.
In terms of job creation and strategic achievements, the closure of the PayPal office in the Xerox complex and the empty state-of-the-art buildings on the Actavis and National Pen sites offer an opportunity for the IDA, the Department of Enterprise, Trade and Employment and Enterprise Ireland to attract new businesses and jobs to County Louth.
The Deputy is right. There has been an increase in the level of early warning reports and we all accept that a lot of that is due in part to a global restructuring, in particular in the tech sector, to which the Deputy referred in particular regarding PayPal. The one silver lining is that the global average has not impacted Ireland as much as the rest of the world. We have seen it being at a much lower scale in Ireland. Crucially, within the tech sector we are seeing net job increases across Ireland and the regions.
In Dundalk and the wider county of Louth, more jobs are being created and more companies are investing to offset what are very real concerns. No one ever wants to see anyone being made redundant, but the campus at Xerox offers a huge opportunity for FDI as well as indigenous business. All State agencies, as well as our Department, will make every effort to ensure that is supported. We are in a lucky position whereby we are at effective full employment nationally. We are seeing that repeated across regions, in particular in towns like Dundalk and the wider county of Louth.
I thank the Minister of State for visiting Dundalk. It is nice to know he came to Dundalk to sit down and have a chat. I appreciate that the IDA and Enterprise Ireland have, as the Minister of State said, been involved in 800 investments. There have been 36 in Louth alone, comprising 4,485 jobs. Enterprise Ireland has been involved in the creation of 630 jobs. This is all very welcome.
However, we have also seen the closure of the PayPal offices and the exit of National Pen. Many FDI companies do a fantastic job in the country, but some are leaving. I would appreciate if the Minister of State could come to Dundalk and have a chat. It is not only County Louth but the whole country which is affected by this.
We welcome the work that is being done. Corporation tax has been significant for the past number of years. The Minister of State said it will be €10 billion this year and €16 billion next year. The country went through a very bad time over recent years, and only for the likes of FDI in this country which paid corporation tax and did a great job, things could have been worse. Let us fix things before they are broken. I appreciate the good work the Minister of State and the Department are doing. I ask him to look at County Louth and make sure the sites are looked after.
When the Deputy was elected to the Dáil in 2011, unemployment was 15.6% nationally. It is now at 3.9%. Much of that is down to the fact that people like the Minister, Deputy Coveney, visited ten large multinationals in California at the start of the year to talk about Ireland not only as a place to maintain investment but also to look for new FDI, in particular in places like County Louth and the Xerox campus in Dundalk. There are huge opportunities there. There will be consistent efforts from the Government to protect existing jobs, build new ones and create a strong economic environment for FDI across the regions. The IDA is always looking for new opportunities or to revive opportunities in terms of land banks and places where there are opportunities. The site the Deputy mentioned in Dundalk is a great opportunity. There is net job growth in Dundalk, but we want to maintain that.
57. Deputy Louise O'Reilly asked the Minister for Enterprise, Trade and Employment his views on expanding the powers of the Workplace Relations Commission to police compliance with sectoral employment orders, employment regulation orders and registered employment agreements; and if he will make a statement on the matter. [22056/23]
The question is to ask the Minister for his views on expanding the powers of the Workplace Relations Commission, WRC, to police compliance with sectoral employment orders, SEOs, employment regulation orders, EROs, and registered employment agreements, REAs.
I thank Deputy O'Reilly for raising this issue as well as for her engagement in committee on this issue. As we saw with the recent introduction of an SEO for the construction sector, these are important tools for our workers and must be enforced. It is the role of the WRC to inspect and I am open to further considering its role and powers to ensure that SEO minimum rates of pay and terms and conditions are fully upheld and enforced.
The WRC is an independent statutory office under the aegis of my Department. Its primary functions include the inspection of employment law compliance, the provision of information on employment law, mediation, adjudication, conciliation, facilitation and advisory services. WRC inspectors have specific powers relating to accessing workplaces, inspecting, copying or taking records, and the questioning of persons in a workplace. It is an offence to obstruct or interfere with an inspector, provide false information or documents to an inspector, or impede an inspector in carrying out his or her duties.
While WRC inspectors operate on a compliance model basis and focus on bringing instances of breaches of employment law into compliance, inspectors also have robust enforcement instruments available to deal with continuing or persistent events of non-compliance. These instruments include criminal prosecution, compliance notices and fixed penalty notices. Inspectors may be accompanied by members of An Garda Síochána or other inspectors where necessary. In 2022, 103 inspections were carried out with An Garda Síochána, 113 joint inspections with officers of the Department of Social Protection and 57 joint inspections with officers of the Revenue Commissioners.
In 2022, WRC inspectors closed 3,943 inspection cases and carried out 5,820 inspection site visits. More than €1.4 million in unpaid wages was recovered and returned to employees. Eighty-nine employers were prosecuted in 2022, with successful outcomes in 69 cases. Where matters cannot be resolved at an employer or trade union level, redress for complaints claiming non-compliance by employers in sectors subject to statutory orders should be directed to WRC adjudication and conciliation services.
A total of €20 million in withheld wages has been recouped through the WRC since 2011. I will take this opportunity to say that if it could do that with the limited resources it has had, imagine what it could do if the Minister of State improved resources and increased the number of inspectors to the number agreed in 2006.
We all support SEOs, EROs and REAs, but time and again there are situations where they are being undermined because some employers are refusing to comply with them. That, in effect, gives a competitive advantage to an employer who is dodging it. The employer who is paying the correct rate finds himself or herself becoming less competitive because he or she is trying to do the right thing.
I welcome that the Minister of State is open to looking at the powers of the WRC. When he considers that, I ask that he consider specifically policing SEOs and EROs, because when they are not complied with, they distort the labour market. It is unfair on workers and on employers.
I thank the Deputy for her comments. I do not wish to revive the complete debate we had at committee a couple of weeks ago, which was weird for both of us, when we kept agreeing with each other across the committee room. I do not wish to be doing too much of that, but I fundamentally believe that SEOs are a strong part of what we have in our industrial relations sector and are crucial for our economy and the workers at hand. When they work, they work extremely well. I am very hopeful for the new SEO in the construction sector. This is something that is agreed upon between employees and employers alike. However, the Deputy is right. We are open to discussing and looking into both the role and the powers of the WRC, but appreciate fully that that requires resources in funding from the Department, as well as the employment of additional inspectors where required. If those efforts are made and put in place - the request has come regularly from other members of the trade union movement, as well as in this House - looking at the specific orders and their enforcement will make sense.
In advance of doing any of this, the Minister of State could choose to spend taxpayers' money only where workers' rights are respected and do business only with those companies that respect the SEOs, EROs and REAs. These agreements not only show the power of trade unions but also ensure better pay and conditions for workers, which is very important. If the agreements are undermined and the rates of pay are not upheld and if those companies get rewarded with contracts from the Government, it sends a very poor message to workers, as does the under-resourcing of the WRC. However, a specific unit to look at the employment agreements and ensure they are upheld will have a benefit across the board, not just for employees and workers but also for employers.
What we have seen over the past year or two is additional resources provided to the WRC and additional inspectors and cases go through the WRC. The Deputy would have read the annual report earlier in the week of the activities of the WRC in 2002, which saw an increase in the number of cases, resolutions and inspections, which are all good things. We remain optimistic and ambitious for the role of the WRC, aware of the vital part it plays in ensuring industrial harmony, but also ensuring that the rights of workers are protected and that the rights of employers are also protected, because the strength of an SEO is in common agreement between employer and employee alike; they come together for a mutual gain. That strength is well recognised. The SEO works when employers engage fruitfully to ensure that the SEO is recognised and developed. We wish to make sure employers are awarded for doing so and play their part more widely.
