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Northern Ireland Assembly

Monday 25 September 2000 (continued)

Mr P Robinson:

To conform with the procedures of the House, I have to draw attention to an interest that I have declared in the Register of Members' Interests.

I thank the Minister for having kept me informed and briefed on matters relating to the shipyard in which his Department has been involved over recent months. That is both appreciated and helpful. I assure the Minister that I will continue to work with him in attempting to secure more work for the yard.

I have two questions. One relates to training issues and the other to land issues. With regard to training, I am sure that the Minister is aware that when a workforce is reduced to the level of Harland & Wolff's, many key skills could be lost to the firm, should there be a new order. Can the Minister ensure that there will be proper training to ensure that, if a new order is received, there will be people with the proper skills available?

I remind the Minister that the Training and Employment Agency premises at Dundonald were closed down and that there is a need for more training facilities and funding in east Belfast. I trust that within the task force he can make that a telling point.

With reference to the land issue, I am sure the Minister is aware that there is a suspicion in Harland & Wolff and outside that in the minds of some in the management and ownership of the company there is a more beneficial use for the land.

I have spoken to my Friend, the Minister for Regional Development. Will the Minister of Enterprise, Trade and Investment consult and work with Mr Gregory Campbell to ensure that the two Departments prevent the removal of any land from any present leasing arrangements without its being in the interests of the people of Northern Ireland? There is a fear and suspicion that it could be more financially useful to the owner than the core business of shipbuilding at the yard.

Sir Reg Empey:

Of course, the Member has been working on the matter for many years as the Member of Parliament for East Belfast, and he knows that, in other capacities, I and other colleagues have been being doing the same. He raises the issue of training and he quite correctly identifies one of the dangers in the current exercise. He may be aware that, through the company development programme, the Department currently has an agreement with Harland & Wolff in which we provide them with financial assistance towards the costs of re-training staff. A budget was available towards the end of last year, an agreement has now been reached and training is taking place. To some extent, that has been overtaken by events.

The chief executive of the Training and Employment Agency is one of the key people in the taskforce. Obviously, some of the ships Harland & Wolff have just completed, and some which are currently being built, are very complicated and highly technical. Significant skills are needed to complete contracts and, therefore, the Member correctly identifies one of the key areas the taskforce must address. The difficulty is that if you are losing more than 50% of your existing workforce, then, by definition, you are bound to have a skills fallout. We saw, in the situation with the Global Marine contract, that large numbers of people from outside had to be brought in, and the management of those people led to some of the difficulties.

I agree with what the Member said and I assure him that one of the key roles of the taskforce will be to ensure that what staff remain are as well trained as possible. The Department will stand ready, through the company development programme, to assist in that regard.

With regard to suspicions over the land, I am as aware as the Member is of the long-held belief that there was another issue around, and it was not simply a matter of shipbuilding. I assure him that I would have no difficulty in working with my Colleague, Gregory Campbell, to ensure that the undertakings we have been given by the company, publicly and privately, are adhered to. The company has undertaken to maintain Harland & Wolff as a shipbuilding and engineering facility. We know it no longer requires part of its land and that that land is being used for property development. I have no difficulty with that; it is the Titanic quarter; it is out in the open; we all know about it, and it is clearly land that is not currently needed. I am not sure what powers I have in the event that attempts are made to move beyond that and to convert the whole area into some kind of property development. Therefore, I am not able to answer the Member specifically on that point. However, if I have the power to prevent a "smash and grab" land deal being done, I will have no hesitation in using it. I would work very closely with the Minister for Regional Development to ensure that does not happen. I will come back to the Member when I have had the opportunity to check my ability to do that.

Dr McDonnell:

I thank the Minister for his statement. There are a number of points on which I would like more information. He has given us three points on the terms of reference for the task force. Are these the only three points or does the taskforce have any other terms of reference? He has mentioned that the chief executive of the Training and Employment Agency is on the task force. Would it be possible to know who else is on it? Is the taskforce to produce a report within a reasonable period of time, and if so, when is the report due?

Sir Reg Empey:

I have identified the key members of the task force. I have to consult with my colleague, Dr Farren, before finalising the members, but a list can be left in the Library for Members. The points are not intended to be restrictive. I have highlighted the main elements, but any other matter will be addressed if necessary.

A change of membership may become necessary, but that does not matter. We are simply trying to help. There are over 600 families in difficulty, and possibly more. The Government will do anything they feel is required.

There has already been communication between Dr Farren's Department and mine, and this is not the first attempt at setting up a task force. We are setting it up now, because we want to ensure that there is no doubt that we are co-ordinating all our efforts. It may well be that the Department for Regional Development will have an interest, and I will have no difficulty if that is the case.

Work will begin immediately as there is not enough time to sit for weeks and look over these matters. I fully subscribe to Mr Neeson's view that these are urgent matters, and I assure him that there will be no delay either in the establishment of the task force or in its work.

Ms Gildernew:

Go raibh maith agat. I welcome the Minister's statement and the fact that he is trying to save jobs. Is he aware of the financial crisis affecting a much bigger employer than Harland & Wolff? The community and voluntary sector employs thousands of people from both communities and is currently being suffocated by a lack of resources. If he is going to spend money from the public purse on -

Mr Speaker:

Order. Such a question is out of order. Questions to a Minister on a statement must be on the subject of the statement. If the member has a question on the subject of the statement, she should put it.

Mr P Robinson:

It is not even something that he is responsible for.

Mr Speaker:

The Member from a sedentary position adds that it is a matter of putting a question to the Minister who has responsibility for the subject of that question. Sometimes I am generous and allow a Minister to say whether he is responsible. Ministers usually give a response anyway. If the Member wishes to put a question on the statement, she is welcome to do so.

Mr S Wilson:

I echo the thanks that Mr Peter Robinson has extended to the Minister for keeping local representatives in east Belfast informed about developments at the shipyard and for his involvement since becoming Minister.

At times, the management has not been very forthcoming with the workers and public representatives. The Minister barely mentions the management in his statement, other than to say that he has been meeting with it. Is he happy with how the management has dealt with the situation in the shipyard? I think particularly of chasing new orders and handling existing orders, which seem to have been crisis prone? Is he aware that the workers first found out about the scale of the redundancies from the radio? Will he be taking this issue up with the management at Harland & Wolff? Many people are grossly upset that the trade unions and the workers themselves were not given prior notice of the management's statement.

Is the Minister aware of the graffiti on the walls in the Short Strand, no doubt put up by Republicans, gloating about the job losses at the shipyard? Does he agree that such sentiments are a result of the sectarian poison that has been injected into parts of our community by members of IRA/Sinn Fein?


Sir Reg Empey:

I deeply regret that such material has appeared, and I would advise such people that what goes around comes around. If any person is losing his job, if any company is in difficulties, that is a negative thing for the entire economy. It is not simply the local people who work in the company who are affected; the surrounding businesses, as the hon Member knows, are affected, whether they be petrol stations, sweet shops, grocery stores or whatever. It is very short-sighted and deplorable if that is the attitude of some people.

As the Member will know, I appreciate his efforts for the company over a long time. I am regularly in touch with the local management but the senior company is also involved here. This means that there is management engagement at two levels, at the level of the local company and at the level of the principal shareholding company. I have had regular contacts with both and in recent weeks a majority of my contact has been with the senior company and with the owner, Mr Olsen, personally. With regard to how things were managed, the Member may know that in August, when I was out of Northern Ireland on a trade mission, I was led to believe that an announcement was imminent and came back from America for that reason. At that moment, however, the shop stewards who were standing by were stood down, and then something suddenly appeared in the press. Notices were given to the Stock Exchange in Oslo, but the workers were not notified and neither was I. I got sight of some of those announcements after they were made in public, so I was not at all times in possession of the information.

However, Harland & Wolff is a private company, and it does its own thing. I agree that the cruellest aspect of all of this is not so much the knowledge that the company has been in difficulty, but that people have had a sword of Damocles hanging over their heads, knowing that they might be made redundant. To have that drag on for some considerable time added to the tensions, and then there was the legal dispute over payment. The fact that it had to go to arbitration made it all take much longer than was expected and made the whole thing worse. I am aware of those concerns.

We will have to have an inquest into all of these matters, but the task now is to try to insure the core that remains. The one good thing that has come out of this is that the core still exists; the potential for growth is still there and with the oil price having risen substantially, the offshore market with which Harlands is currently geared up ought to be improving.

An aggressive marketing strategy aimed at that market is the only way forward, and if there is anything this Department can do in that regard we will certainly do it.

I hinted earlier that with regard to Ministry of Defence matters, we may need to make a fresh push. I would certainly appreciate the support of local representatives in that. I understand that the hon Member for East Belfast, Mr P Robinson, has publicly indicated his willingness to engage in that, and that is something that we all could do. That would be positive. Harlands is part of a number of consortia that are bidding for Ministry of Defence work. These are big contracts and they are no longer going to a single yard - they are going to consortia. That is an area where we should have some influence. I hope that we can count on all local representatives to assist in that, and if an opportunity can be created for such a situation then I would be happy to do so.

Dr O'Hagan:

Go raibh maith agat. I thank the Minister for his statement and for keeping the departmental Committee informed. First, I wish to put my party's position on record and to express concern about job losses in any sector, particularly when those job losses are major. It is clear that strenuous efforts have been made to keep the shipyard afloat, and that the nub of the problem lies in the lack of current orders for Harland & Wolff. This is due to a number of factors, including global market conditions. It is also clear that hard-nosed business decisions have to be made in respect of the whole issue.

I turn to the creation of this high calibre task force. Given the crisis that faces the textile and bakery industries, the community sector and firms like United Technology Automotive Ltd in Derry, which has paid off over 1,000 workers, will the same level of urgency be given to such matters, and will similar task forces be set up?

Sir Reg Empey:

The Member correctly points out that the key issue is the lack of firm orders. If the company does not have business on its books, what the Government do will not affect the outcome.

The task force is not a new concept. At the end of last year, the textile industry went through a particularly difficult patch, particularly in the North Down and Ards areas. I established a task force with the help of Ards Borough Council. The hon Member for Strangford, who is in the Room, will confirm that. It included members of the local authority and IDB and LEDU officials, and was formed because of the number and concentration of redundancies in the textile industry and to see what steps could be taken to help. That task force has been working since, and I am sure that a number of members of Ards Borough Council who are in the Chamber will be prepared to confirm that. The concept is not new.

With regard to the wider issue of textiles, the Department has, after consultation with the industry, appointed Kurt Salmon Associates, not simply to carry out a management consultancy exercise but to work with the industry through workshops and various strategy groups to see if there is a way forward, taking into account what has happened in other European countries. That is another example of action having been taken on the textile sector.

Similarly, I have spoken to the Northern Ireland Bakeries Council and have been keeping that industry under close watch. I have also been engaged in consultations with the General Consumer Council for Northern Ireland with particular regard to that industry because, as the Member will appreciate, the difficulty for the bakery industry has been the pressure from the supermarkets to cut prices.

The principle of setting up task forces is well established and is not unique to this particular case. I hope that it is not necessary to appoint any more, but, should the situation arise where benefit can be gained or assistance given, we would have no hesitation in doing so.

Ms Morrice:

I thank the Minister for his statement and join with him in his concern for the well-being of those to be made redundant and their families.

I have three questions for the Minister. First, to follow up Mr P Robinson's question about his power to control any proposed smash-and-grab land deal. Does the Minister have the power to recall any of the grant assistance given to the yard in the past?

Secondly, I should like the Minister to explain why the United Kingdom - and Harland & Wolff - has such a small share of the world shipbuilding industry, particularly in the light of the fact that the Dutch and the French are beating us hands down. Perhaps, after what was said about the textiles sector, we should also employ consultants like Kurt Salmon to look at the future of our shipbuilding industry.

Finally, I should like to ask the Minister if he agrees that we cannot and must not close the door on our shipbuilding industry and the livelihoods of the people who work there. Does he agree that the Blair Government would have been better advised to concentrate their efforts on securing contracts for Harland & Wolff rather than wasting public money on something like the Millennium Dome?

Sir Reg Empey:

It seems impossible to have any subject on the table at the moment without its relating in some way to the dome, which, if nothing else, is certainly, as someone has said, one of the few things visible when looking at the earth from outer space. However, a range of issues has been raised about the land. I must, however, put on the record that Mr Olsen and his company have made very substantial sums of money available over the last few months to keep the yard open, not the action of people lacking commitment. Without closing my eyes to the risks, I believe the firm intention is still to keep a core business operating on that site. That is certainly the Department's objective and my own.

With regard to grants recall, I must point out that the IDB assists Harland & Wolff - and, indeed any other shipbuilding industry, were there more than one company - in a unique way. It is not through selective financial assistance, the normal mechanism used by the IDB, but through another called intervention aid grant , designed specifically for shipbuilding. Money is granted to a specific project. The grant goes on the construction of a particular vessel, not on a general sum of money for a company to employ a certain number of people. The grant is totally focused on a particular project. That is governed by the EU Shipbuilding Regulation (EC No 9506/98), in which the sums of money which may be given are specifically set out. There is no question of grant recall. However, bearing in mind that we have been paying grant in arrears by stages, if there is any flaw in the contract, or the company does not deliver what it is supposed to, grant could be withheld. Intervention aid is contract-related, so the IDB has no right to recover grants where the contract is completed. It would only have the right to withhold money if the contract were not implemented.

There is a shipbuilding market of approximately 2,500 vessels per annum. The Koreans are able to snap up perhaps 400 to 500 of those, leaving the rest of the world about 2,000 vessels. There are currently 15 vessels under construction in the entire United Kingdom. I have mentioned the Dutch experience before the Committee. They currently have 246 vessels under construction, but they cover many different types of vessels, such as those used on the Rhine. They would not necessarily be vessels you or I would recognise as such, for the name covers a vast variety.

12.15 pm

As regards our competitiveness with the rest of Europe, our costs are approximately 7% higher than the European average. There are also problems with the labour force. If you look at the graph you will see that a large number of people working in shipbuilding are in their late '40s and '50s. There are not nearly as many in the lower age bracket.

The Government have established a shipbuilding forum, on which Harland & Wolff is entitled to have representation. This forum is looking at a range of problems. The purpose of the meeting we had with the Deputy Prime Minister in July was to look at the way ahead, consider the progress of that forum and bring forward proposals and ideas to modernise and sustain.

The House needs to be aware that, as things stand, we will not be able to offer any intervention aid grant after 31 December 2000, unless a decision is taken by the European Union, in negotiations to take place in November, to extend that deadline. The unanimous view of the July meeting was that that should happen. After 31 December 2000, if I am correct, we will not be able to pay out any intervention aid grant for shipbuilding. Members need to get their heads around that, because it is a significant development.

We will be lobbying strongly - and I am in regular contact with Stephen Byers - that we are of the view that we should be permitted to continue to offer intervention aid grant. There is a general feeling that there is not a level playing field in the world market. The Koreans are buying to capacity, going for growth and subsidising their production through various means. That is the opinion held throughout the UK shipbuilding industry.

As far as closing the door is concerned, I assure the hon Member that whatever else I maybe guilty of, I am not trying to see the demise of this industry. I am doing everything possible, but we have to understand our limitations. The key issue is for the company to find a client capable of providing the finance to construct vessels and get them to sign a contract. In the absence of a viable contract, there is nothing that anybody in this House can do that will matter, and that has to be borne in mind.

Mr Shannon:

I thank the Minister for the work he is doing in to try to safeguard these jobs. Despite his good work, we are now facing over 600 lay-offs, with no guarantee for those who are left.

Can the Minister gave us the state of play on the four roll-on/roll-off ferries? What are the chances of getting those contracts, and what help can his Department give? Does the Minister agree that there is a real concern that Harland & Wolff has been unable to gain orders world-wide for either oil drilling rigs or cruise liners? This flies in the face of the real upturn in demand for those, and it begs the question: why is Harland & Wolff management seeking orders for windmills? They are like Don Quixote - chasing windmills instead of building ships. This makes a great many of us concerned.

In the light of the very real concerns that the workers and elected representatives have, does the Minister agree that we need a public inquiry into the management of Harland & Wolff? Many of us are trying to understand what is happening. In his reply to a question from Peter Robinson, the Minister mentioned re-training. Many Harland & Wolff workers live in the Strangford and Ards Borough Council area -

Mr Speaker:

Order. This is an opportunity for Members to put questions, not to make expansive speeches.

Mr Shannon:

Does the Minister intend to focus the retraining on the people who are losing their jobs rather than on the area of east Belfast, thereby missing many who are losing their jobs?

Sir Reg Empey:

I assure the Member that the focus will be on the individual and not on east Belfast. We intend to set up a temporary job centre in the yard, where individuals threatened with redundancy can be advised or counselled on redundancy. The job centre will bring with it the demands from the labour market for skilled workers and a number of companies are currently looking for skilled workers. Therefore, I hope that a significant percentage of those who are made redundant will have an opportunity to get new jobs.

Clearly, this is a different proposition from the one that the hon Member for East Belfast (Mr Peter Robinson) made earlier, when he referred to the remaining workforce. The part of the workforce that leaves will be offered training and retraining - that is a key issue. Every person will be dealt with on a personal basis, and a package will be developed for the individual. It will not only be an area issue. It will focus on the person.

With regard to the oil industry, I agree with the Member. There is great potential at the moment. I am encouraged by Mr Olsen's announcement that a second rig will soon arrive in the yard for assessment. That could produce some work. One rig is already being surveyed and examined. We await the outcome of the survey to find out what further work will need to be done. At the moment, the contract is to survey the rig and to assess its condition. Mr Olsen recently purchased a second rig, which will undergo a similar exercise. Work may be generated when those two vessels and rigs arrive.

The question of windmills does sound a bit off beam, but it is not necessarily a bad idea. Mr Olsen's business is energy - his company is called Fred Olsen Energy - and it can take different forms, such as oil, gas or wind. He foresees the development of large offshore wind farms, which will fulfil future energy needs.

Several sites have been identified in the British Isles. These windmills are substantial structures made mostly of steel and the process for constructing offshore windmills is complicated and technical. A licence has been granted for a test area to be developed about two miles off the west coast of the Republic. If the initial project is successful, another licence will emerge.

There have been similar proposals for other offshore sites in the Irish Sea. These are very substantial structures and there could be a long-term future in them. The recent oil crisis has resulted in President Clinton releasing emergency oil stocks in the past few days. That situation has not occurred for many years.

The training will be focused on individuals, and I agree with the hon Member that there ought to be potential for developing the offshore industry.

This a private company, so inquiries into its operations are limited. What can be enquired into - through the Enterprise Trade and Investment Committee - are matters which relate to the use of public funds in the area of development. However, ultimately it is a private company. As I indicated, intervention aid grant is paid to a specific project and not to the company in general.

Mr Speaker:

I will take two more questions on the statement.

Mr J Kelly:

Go raibh maith agat, a Cheann Comhairle. I congratulate the Minister for attempting to save jobs in the yard and elsewhere. I commend his visit to America, with my colleague Pat Doherty, to investigate further opportunities for employment. I too declare an interest. It is, perhaps not as beneficially weighty as Peter Robinson's, but my great-great-grandfather was building ships on the east side of Belfast Lough before Harland & Wolff bought them out. That is my interest in the shipyard.

May I mention Mr Sammy Wilson's reference to the graffiti in the Short Strand area of East Belfast? That community has suffered from unemployment over the years and also from what they perceive as discrimination in unemployment. When the shipyard was the goose that laid the golden egg, they never really shared in that golden egg. However, I would be disappointed to learn - and I shall check it out - that that community, which has suffered so much, is gloating over anyone else's losing their jobs.

If the Minister is working with Mr Sean Farren on training and on other issues relating to, we hope, the future development of the shipyard, will he ensure that there are equal employment opportunities in the shipyard? As a trade unionist, I share Mr Peter Robinson's and Mr Sammy Wilson's concerns over the intentions of Harland & Wolff's owners and their equivocation about the future of the yard. There is a perception abroad in the general community that they are not serious about ensuring that there is a viable industry within the confines of Harland & Wolff. Perhaps they see greater financial reward from going in other directions.

Sir Reg Empey:

I presume that the Member is referring to the Workman, Clark and Co shipyard which existed in the city some years ago.

With regard to the Short Strand, I said in response to Mr Sammy Wilson's question that I deplore the graffiti in that area. It is an immature and short-sighted attitude to adopt, because, to use an awful pun, rising tide will lift all boats. It is in everybody's interest to ensure that as many jobs as possible are protected.

On the issue of equal opportunities, the Member will be aware that, along with every other company in Northern Ireland, Harland & Wolff has to comply with the legislation. In the past few years, it has been making significant efforts. Some of the Members' party Colleagues have, at the invitation of the shipyard, visited it in their capacity as Belfast City Councillors on more than one occasion to see the facilities for themselves. The company has taken an interest in them and explained what was going on. Whenever opportunities were created, I understand, Harland & Wolff was represented on road shows that went to schools in west Belfast. It held fairs and took part in public events in the likes of the Waterfront Hall in order to be available to any labour force.

However, the reality is that there is a contracting workforce, and, therefore, the opportunity for such people to gain employment in the company will come only if it is successful. That is the direction in which we should be going.

As for the intentions of the owners, I said earlier that if I were interested purely in a land deal, I would not do what Mr Olsen is doing. I would not do what Mr Olsten did throughout the summer when he put large amounts of his own company's money into the shipyard. I am talking about large amounts - not nickels and dimes. While there will inevitably be a property dimension to all of this, and he and the company made that clear in their statement, they also made it clear that they were committed to maintaining a core shipbuilding and engineering facility on that site.

I take their word at face value, and if I and other Members are being misled, I will take a dim view of that.

With regard to the matter that the hon Member for East Belfast (Mr Peter Robinson) raised when he referred to the Minister for Regional Development, we have in this Assembly, in our own hands, the ability to more or less resolve this issue, because when the issue of the privatisation of the port is dealt with, the issue of the land and who holds the leases will be also. The Assembly has the power to decide what happens. There is normally a user clause that specifies what you are allowed to do with the land that you lease. This land clearly is for shipbuilding and engineering. If you wish to change to some other activity, that requires you to get the permission of the landlord, and large sums of money normally are extracted if user clauses are changed.

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When a recent lease was altered to allow the Titanic Quarter to develop, the Harbour Commissioners came to an arrangement with the company to share the profits from that. If we deal with the land issues surrounding the port, the House has the power to deal with that and settle it.

I am working on the assumption that I am being told the truth and that the company means what it is saying in its statements. I am proceeding on that basis. I would be greatly distressed to learn that something else was the case.

Mr Benson:

The question that I wished to ask has already been dealt with.

Mr Speaker:

The Member is to be commended. Not every Member admits that his question has been answered; most ask the question again.

New Deal Programme


The Chairperson of the Higher and Further Education, Training and Employment Committee (Dr Birnie):

I beg to move

That this Assembly calls on the Minister of Higher and Further Education, Training and Employment to review the New Deal programme to tailor it to the needs of the long-term unemployed in Northern Ireland.

The Higher and Further Education, Training and Employment Committee is grateful for the opportunity to debate this matter. The Committee was agreed that the subject of the New Deal was of sufficient concern to be brought to the House at the earliest opportunity.

I will begin by laying out some broad principles. There are some good developments in the Northern Ireland labour market, notwithstanding the subject of the previous ministerial statement. Members will know from the recent announcement that the unemployed claimant count is down and has been declining for some time. Unemployment rates are at historically low levels - average rates are lower than the European Union average. Six thousand persons came off the claimant count, off benefits and into work in 1998-99.

As Chairman of the Committee, I recognise that commendable efforts have been made by those in the administration of the New Deal scheme and by those who implement it on the ground. Some of them deserve special commendation for efforts above and beyond the call of duty in the attempt to bring people out of a benefits culture and into the world of work.

Nevertheless, in spite of all those bouquets, there are still deficiencies, and these matter because there is a tragically large pocket of long-term unemployment in Northern Ireland. According to some indicators we may be moving back towards full employment, at least as defined in the technical sense, where the supply of those readily available for work roughly equates to the types of labour that are in demand.

The purpose of the Committee motion is to be constructively critical. There are feasible changes to the New Deal scheme that would yield positive results. Many of those changes would not incur large costs. A recurrent theme throughout the debate will be the point that the New Deal scheme was designed in London and may not transfer well to the different conditions that exist in the local labour market. For example, in Northern Ireland, as a percentage of the total labour force, we have more older long-term unemployed, and some of our long-term unemployed have been out of work for a considerable numbers of years.

The Committee supports the Minister in efforts to change the New Deal at UK level. It recognises that there are limits on the autonomy and freedom of action of the Stormont Executive because it is a UK-wide scheme. We also recognise that the funding for New Deal is ring-fenced money provided by the Chancellor of the Exchequer so we do not have the option, even if we wished to take it, to move money to other parts of the Northern Ireland block.

The Committee has reflected on the evidence presented by five New Deal providers and consortia on 7 September 2000. It has also considered the many evaluative studies of New Deal. Most of those relate to Great Britain but some relate to Northern Ireland. There are many interesting lessons.

New Deal has some strengths. Its aim is commendable - to take people off welfare and put them into work. In the long run, its success will have to be judged alongside other Labour flagship policies, such as the minimum wage and the working family tax credit. Commentators who praise the New Deal often stress the role of the personal advisers who are supposed to work alongside the long-term unemployed to direct them appropriately through the various options contained in the scheme. That is good practice if it works well. However, there are situations where some of the personal advisers have very heavy caseloads, in some cases between 120 and 130 individuals. That issue needs to be looked at.

Unfortunately, many weaknesses have become apparent at both the UK and Northern Ireland levels. There is evidence that New Deal participants are often moving out of the scheme, and that if they do receive a job it is only of short-term duration. In England the phenomenon of the revolving door has been noted - individuals leave the scheme, return to unemployment and after the due period come back on to New Deal. They move round and round without progressing permanently into the labour market.

We need a better system of tracking what becomes of those who graduate from New Deal. Such tracking is required both in Northern Ireland and the United Kingdom as a whole. Frank Field MP noted the latter point in a letter to 'The Times' on 14 July 2000.

We would like to know more about the extent of so-called dead weight in the Northern Ireland scheme. These are cases where New Deal participants would have found employment, even if the scheme did not exist. We note with concern estimates that have been made for various New Deal options in Great Britain which suggest dead weight figures of between 60% and 80%. That means that most people coming through the scheme would have found work anyway, indicating a waste of public money.

It is clear that there are huge benefits to the individual and to society from improvements in training. In that regard, the Committee is concerned about perceived inflexibility in the regulations of the New Deal scheme. It may be more perception than reality. If that is the case, there is a need for the Training and Employment Agency to improve the information provided to participants and the consortia. On the one hand, the New Deal may not be facilitating the progression of a high-flyer who wants to take qualifications beyond NVQ2 or NVQ3 level. However, on the other hand, in many cases there has been a failure to recognise and tackle the absences of the most basic and vital skills - literacy and numeracy. That point was well made by the Education and Training Inspectorate's report on New Deal options in south and east Belfast.

As ever in government, it is important to lead by example. How many New Dealers, we wonder, are currently employed by the Northern Ireland Civil Service. In Great Britain the figure is about 1.2%, with a target of 2%. What is the record in Northern Ireland?

The Committee is pleased that the Minister has provided suggestions to the relevant Minister at Westminster, Tessa Jowell, on how the overall New Deal scheme might be altered. We particularly commend a longer so-called intensive activity period - 26 weeks instead of 13 - in the New Deal 25-plus. This matters because Northern Ireland's long-term unemployed are often from the older labour force.

We also commend the application of the £750 training grant to the 25-plus group. There should be a reduction in the eligibility criteria for 25-plus from 18 months of unemployment to 12. Alongside that, there should be stronger sanctions with respect to withdrawal of benefits at 25 weeks.

Reform of the New Deal as a UK-wide policy could be the subject of meetings of a joint ministerial committee bringing our local Minister together with his counterparts in Edinburgh, Cardiff and London.

I repeat that the Committee welcomes this opportunity to debate what is an important subject for many people. Long-term unemployment is a human tragedy because of the waste it involves. A former Prime Minister, Harold Wilson, once said that for the person or individual who is unemployed, the unemployment rate is always 100%. Our priority today is neither to praise New Deal nor necessarily to bury it; it is to suggest sensible reforms to make it work more effectively in Northern Ireland's labour market circumstances.

Mr Speaker:

I have a list of Members who want to speak. Taking that into account, and to give an opportunity for the Minister to respond and for Dr Birnie to wind up, and to allow a short break between the end of the debate and Question Time at 2.30, I will restrict all Members, except the Minister and Dr Birnie, to five minutes.

The Deputy Chairperson of the Higher and Further Education, Training and Employment Committee (Mr Carrick):

The performance of the New Deal thus far can be measured in a number of ways. We could look at the statistics; there are ample statistics in the KPMG report. There has been plenty of press coverage, and we could make our judgements according to that. I want to base my comments on the experiences of the participants. Those are the people at the coalface. There are probably few of us in the Chamber who know anything about the indignity of long-term unemployment and the despair of the continual unsuccessful search for a job.

From the evidence presented to the Committee, it is all too clear, according to the providers, that in order to be relevant to the long-term unemployment situation, New Deal requires to be revamped or, in the words of the motion,

"tailor[ed] to the needs of the long term unemployed in Northern Ireland."

That conclusion is derived from a series of experiences across Northern Ireland of those who operate at the coalface. The complexity of the administration is highlighted in the KPMG report. That is the view of personal advisers, but the providers confirmed it in their evidence:

"There was too much paperwork and administration in some cases with a perceived lack of administrative support, and . much of the paperwork was unnecessarily duplicated."

12.45 pm

Responding to a question on the bureaucratic structure of New Deal, which involves the Training and Employment Agency, the Social Security Agency, consortia, lead partners, members, associate members, providers, personal advisors and participants, one witness felt that the programme could be streamlined to provide a better service. The referral system, or entry requirement, for the New Deal programme requires modification to enable it to be more effective in Northern Ireland. In the 25-plus category, the eligibility threshold should be reduced from 18 months to no more than 12 months, and the intensive activity period increased from 13 weeks to at least 26 weeks. There are also difficulties with the voluntary sector and environmental options. There is no real split between them. Participants are doing the same work in both cases.

Although New Deal was not introduced as a replacement for the Action for Community Employment (ACE) programme, it was nevertheless made clear by the Government that the training elements of ACE could be incorporated into New Deal. Indeed, this was one of the selling points when the ACE schemes were vigorously lobbying for retention. However, despite the demand in Northern Ireland for environmental work and other social support work involving tradesmen's skills and care programme disciplines, there is insufficient flexibility in the New Deal programme to facilitate such training. In addition, the lack of referrals to the voluntary and environmental options is leaving providers in the unenviable position of having to shut up shop because the enterprise is no longer viable.

Not only is this detrimental to the voluntary organisation, but it causes yet another gap in the social development of the community. It is therefore imperative that New Deal be tailored in such a way that is flexible enough to provide training opportunities in all those environmental skills, household skills and a whole range of social activities with a measurable economic output.

Mr Dallat:

One important fact to emerge from this report is the degree of illiteracy among young people. If the report is to serve a useful function, we have to establish why so many young people are slipping through the education system and leaving school with serious learning difficulties which may haunt them for the rest of their lives. Surely, in the developed world, it is totally unacceptable that it is left to training organisations to pick up the pieces of so many who go through school only to leave with undetected problems such as dyslexia and other learning disorders.

All of those problems can be remedied if the skills and resources are available at school level, but quite clearly they are not available. Members will agree that the most critical evidence from the inquiry was the startling revelation that so many young people cannot read or write. They spend 12 years of their lives going through the education system while coping with serious literacy and numeracy problems. Even when they leave school there are no records of these problems available to the Training and Employment Agency, so that they can be helped. That was backed up by evidence given by the Northern Ireland Chamber of Commerce to an Assembly Committee last week.

Is it right that a society that prides itself in standards of excellence, which many of our centres of learning are renowned for, should have this problem? Where do these unfortunate young people figure in those wonderful league tables that occupy so much of our newsprint? They are nowhere. That must change. Such people cannot enjoy the fundamental right of being able to read and write. We need to know why this state of affairs exists, and we need to know what can be done about it.

We know from research that overcrowding in classrooms is a fundamental cause of low levels of attainment and that, when classes are smaller, children progress more rapidly. Why do we train teachers to the highest levels in our universities and training colleges, only to discover that they cannot obtain jobs in the profession that they were trained for? Surely, it is reasonable to ask why we are getting such disturbing evidence about the lack of basic skills in reading and writing when - and I know this from personal experience - many of our young and talented teachers are unable to find jobs in schools and are on the dole.

For many years, our education system, at all levels, has been treated appallingly by successive Government. Our teachers have been crucified by a system that seldom appreciated their work and always failed miserably to provide the necessary resources.

It is to be hoped that, with the publication of this report, the past will really be the past and we can wipe the slate clean and make a new beginning where every child will be treated as an individual. Let us make it a fundamental right of every child that his or her special needs can be met. Let us ensure that factories do not have to take on the job of teaching the basic skills of reading and writing after young people have left school.

The present training programme, as Dr Birnie said, has many defects, but many of the recommendations in this report are worthy of consideration. Those employed on the programme are grossly overworked and do not have the resources to do the job properly. We were told that in the Committee time and time again. They are most certainly not equipped to do the job of specialists trying to find out why individuals are finding it so difficult to get permanent jobs, when such people are holding a personal secret - the secret of being illiterate. In a world of technological change, which increasingly demands that people be able to demonstrate the basic skills of literacy and numeracy, there is no place for serious flaws in the education system.

For whatever reason, thousands of our young people are released into the world with one of the heaviest burdens anyone can be asked to bear. Something must be done about it. If we do nothing, it matters little how good the training is. The trainees will simply go back to the unemployment register to begin the whole fruitless process of training again and again, without resolving the critical issue of the fundamental right to be literate and avail oneself of lifelong learning - one of the high ideals set by the Assembly.

Mrs Nelis:

Go raibh maith agat, a Cheann Comhairle. The motion calls for a review of the New Deal programme to tailor it to the needs of the long-term unemployed. However, one wonders if New Deal can be tailored to anything, as the little evidence available from its inception suggests that the garment was fatally flawed at the design and cut stage. We could argue that New Deal is yet another import from across the water that has not worked here.

When the British Government first introduced New Deal, it was seen by the community as another scheme to take people off the dole register. The criticism then was that New Deal was not really new but the Welfare to Work scheme talked up, and that the finer details had not been worked out. That criticism still stands.

The second criticism was that the British Labour Party, no doubt expounding social democratic values, had fallen into the old Tory trap of believing that there were two types of people, namely those who wanted to work and those who did not. It is this rationale which still underpins New Deal. It is clear that the New Deal programme has not addressed the needs of the long-term unemployed in the north of Ireland.

Indeed, as the Committee for Higher and Further Education, Training and Employment has heard from the limited evidence given so far, the New Deal programme makes dismal reading. The picture presented shows the long-term employed doing menial work, receiving little support and being involved in a situation of forced labour. As one witness to the Committee said, if someone is forced into a programme, they will not go. Members of the consortia are seen as enforcers and, because of that, New Deal is becoming a revolving-door scheme with participants completing their options, going straight back to unemployment benefit and re-entering some months later.

The problem for us, and the unemployed, is that we have no way of measuring the extent of this dismal picture of New Deal. We have no up-to-date data on how well New Deal is performing. What little evidence we have suggests there is an east/west split in opportunity for the long-term unemployed in training and in jobs.

Apart from the east/west difficulty, New Deal is not a good deal for women, but that is not new either.

The official figures available, issued in January this year, referred to the period up to the end of October. That data gave only Job Centre figures for New Deal without telling us how many unemployed, either short or long-term, were in each area, how many access work through New Deal, what type of work it is, and so on. That situation is compounded by the failure of the Department to produce statistics due in July and August of this year which may have helped to determine whether New Deal was a viable scheme for the long- term unemployed, even if it were reviewed. Indeed what is available from a plethora of groups from economic experts, to lead partners and consortia, suggests that the whole New Deal scheme is not working. The Minister and the Training and Employment Agency will argue that while there are problems - indeed, Mr Farren has sent suggestions to the British Government on proposed changes - New Deal is working and should not be written off. They will say that the group known as the long-term unemployed has reduced substantially over the last two years so things are happening, people are getting jobs and moving off the register.They do not deny that the element of compulsion for the 18-to 24-year-olds has caused problems from the start. But, they state, it is British Government policy and it does not allow for much flexibility, even though the unemployment situation here is different and more acute than it is in England.

What is worrying, however, is that the Training and Employment Agency states

"There are people who are more job-ready and there are others who are more difficult to place because of related problems".

They include in that low achievers and people who have problems associated with drug and alcohol abuse. New Deal has almost abandoned these people. However, they do not tell us that, in most instances, the real difficulty for the long-term unemployed, whether we review New Deal or not, is that there is no work for that group to go back to. According to KPMG Management Consultants, the general impression of the over-25 group living west of the Bann was that job placements were not available.

There is also a gender split. The eligibility criteria excludes women who are not on the register but who may want to return to work. This is further exacerbated by the New Deal programme for lone parents which, rather than provide opportunities for education and training places the emphasis -

Mr Speaker:

I must ask the Member to bring her remarks to a close.

Mrs Nelis:

It places the emphasis on directing lone parents into jobs which are often low paid and insecure. I do not believe that imposing benefit sanctions on the over 25s will produce a better deal for the long-term unemployed. I do not believe -

Mr Speaker:

Order. I must ask the Member to finish. She is well over time.

1.00 pm

Mr Neeson:

Those with fond memories of the Northern Ireland Forum for Political Dialogue will remember that one of the major issues tackled was the transition from ACE to New Deal. In fact, the Chairman of the Committee on Higher and Further Education, Training and Employment was an adviser to the economic committee of the forum on that and other issues. I hate to be one of those people who says "I told you so", but when we were dealing with the introduction of New Deal we said that one of the major problems was that New Deal did not relate specifically to Northern Ireland.

That is why New Deal is such a failure. I firmly believe that the destruction of the ACE schemes took away a great deal of very worthwhile community service and community care. One of the strengths of the ACE scheme was that it went straight into the community and helped the most vulnerable people.

The introduction of New Deal has seriously weakened a number of local enterprise agencies in Northern Ireland, because a major element in many of them was developing training within ACE itself. New Deal, as it has been implemented in Northern Ireland, does not really recognise community needs. However, there is one big difference between the Assembly and the Northern Ireland Forum on issues such as New Deal: the Assembly has the powers to deal effectively with such issues.

Interestingly, one of the main issues emerging in the work being carried out by the Enterprise, Trade and Investment Committee on 'Strategy 2010' is the need to develop skills relating to the needs of the new industries coming into Northern Ireland. With that in mind, I see another weakness in New Deal, because it will be necessary to get people into situations where they can take advantage of the training required for those new industries.

I welcome the fact that the Minister of Higher and Further Education, Training and Employment is working very closely with Sir Reg Empey in Enterprise, Trade and Investment. There is a strong link between skills development and the creation of employment opportunities in Northern Ireland. Last Monday's announcement concerning New Deal 50-plus was very welcome. While New Deal has concentrated largely on the 18-25 age group, there are major opportunities for people who feel that once they have reached the age of 50 their chances of getting new employment are remote. I believe opportunities are being provided. I welcome the fact that there will be a review of the operation of New Deal. It is necessary to look at the effectiveness of the project as it is presently operating. It is crucial that there is a monitoring process to find out what happens to people after experiencing six months of New Deal. It is important to gauge just how much New Deal is targeted towards social inclusion and for that reason I ask the Assembly to review the use of the Robson Index for establishing deprivation in Northern Ireland. Many areas of Northern Ireland are suffering because of that.

Ms McWilliams:

This debate is timely, as we need to reflect on the fact that a huge sum of money is being allocated to this programme. It is probably more than some of the Departments have to allocate - £140 million. We will not have the opportunity too often to have such a large amount of money allocated to the long-term unemployed.

There are some things to be commended in the programme. I have heard the providers who are dealing with the disabled and lone parents commending the changes that it has made in terms of the employability of these categories of people. However, I agree with the Chairman of the Committee, who said that it catered for the circumstances of the long-term unemployed in England. We know from all of the research on unemployment in Northern Ireland that the case is different here.

I am concerned that 30,000 of the 90,000 places allocated to the programme have been given to Northern Ireland. We will have a great many problems changing the current rules in order to make it a more flexible programme to enable us to meet the needs of those 30,000 people.

I am very concerned about the lack of data currently available. To know if this programme is working, we need the statistics which will tell us about the performance outcomes. What I have got to date is extremely limited. The programme has been running long enough, and if Great Britain is able to produce this data, then Northern Ireland must not lag behind.

Secondly, I am concerned about the providers and trainers. Many of these people gave evidence to our Committee, and over and over again they advised us that they were being tied up in doing manual administrative tasks. The computer system which would have enabled them to do their job much better and provide the Committee with much better information was not available. Those are huge criticisms which I have to direct at the programme.

We need to clarify the role of the personal advisers; they are overworked and suffering from stress. We are asking them to do far too many things. Anyone who has been a personal adviser to an unemployed person knows that you have to develop a relationship with that person. We are dealing with a human being, not a number on a page. To give a personal adviser 120 people to deal with is outrageous. It is little wonder that people do not get the advice and support they came for. That is not a criticism of the personal adviser; it is directed against the resources. We know that a great deal of money has been allocated to this programme which gave 120 people to one adviser. We need also to get clarification of the role of the personal adviser and the providers. Whose job is it to try to place this person?

I am concerned about the information I have received on targeting social need. From the data provided it seems to be creating even greater differentials between areas with the highest social need and those with the least. The most recent data suggests that that changes somewhat, but we need to know why that is the case. Here is a programme targeted at social disadvantage, which is about job placement, not job creation. ACE was abolished due to the fact that it did not have a sufficient element of job creation, and yet we are all aware of the enormous benefits of the skills and personal development unemployed people gained from that programme. Yet ACE was abolished to make way for this scheme. This is continuing to create a disadvantage between areas that have job placements and those that do not.

I am therefore going to be critical of the suggestion that we should have benefit sanctions for the over-25s - simply extending the 18- to 24-year-old group. The programme is also meant to benefit those in the west, but what happens there? People have to move out of the area to get job placements, and if they stay, we are going to sanction their benefits. These people have families and children.

I am also going to be critical of the fact that 88% of those on the New Deal for the over-25s are men. Are married women not considered to be eligible? There is more concern about getting people off the register than helping those who are unemployed. We know that women are discouraged from registering and are therefore not eligible. Finally, the public sector ought to be looking at job placements. The programme needs to be more flexible and we need to get back to our strategic vision of what we would like to do in relation to the long-term unemployed.


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