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Creating More and Better Jobs

Building the Knowledge Economy

The Challenge

Ireland's past successes in attracting foreign investment are world-famous and a vital part of our present economic success. In the future, however, we cannot expect to repeat the industrial successes and policies of the past. Ireland and the rest of the world have changed too much. We must build a new model of growth based on the knowledge economy to create more and better jobs.

Parts of China, India, South East Asia and Central Europe now compete for the types of high-tech manufacturing and services activities - electronics, software, financial services and pharmaceuticals - that drove the Celtic Tiger in the 1990s. Many have replicated Ireland's favourable corporation tax regime, grant incentives and access to skills.

There is now a track record of high end manufacturing and services in these countries that were once regarded as being too underdeveloped for these activities. This trend is blurring the traditional differences between industrialised and developing countries, and intensifying competition for high-paid, knowledge-intensive jobs.

At the same time, our own competitiveness and export performance has suffered from a government-driven inflationary boom that has dramatically raised costs, led to the re-emergence of a large and growing external payments deficit and made our economy far too dependent on construction and the public sector for jobs growth. The government has simply not acted with expedition in addressing these issues. Rather, the sluggishness of government has been part of the problem.

As the momentum to growth from construction and consumption eases off in the coming years, the main economic challenge facing the next government will be to recover our lost competitiveness and enter a more export-driven phase of growth, built not just on low corporation tax but on other advantages harder to imitate by lower wage economies.

Ireland continues to have significant competitive advantages, and the potential to create a new generation of indigenous enterprises which are both high-tech and strongly export-orientated. We must provide an environment that supports the creation and development of more Irish exporters and encourages foreign investors to increase the strategic importance of their Irish operations through R&D and marketing.

The total number of jobs created is important, but so too is the quality of those jobs. Ireland can only compete with lower wage locations on the basis of higher quality and productivity. While short-term cost competitiveness remains important, it is vital that we build a platform of competitive advantage that will create and sustain higher quality jobs - jobs that produce more and pay more.

Ireland can do better

Labour will work to develop a new platform of competitive advantage for Ireland, based on a knowledge economy, to create more and better jobs.
Ireland continues to have significant competitive advantages, and the potential to create a new generation of indigenous enterprises which are both high-tech and strongly export orientated.

What Labour will do

Tax Competitiveness for Exporters

Labour in government was central to the agreement of the 12.5 per cent single rate of corporation tax. As globalisation intensifies, a competitive tax regime for high-tech foreign direct investment and indigenous exporting companies alike is more vital now than ever before, even as we also develop other, less replicable, sources of competitive advantage. We also need to make sure our tax system is supportive of indigenous entrepreneurs and exporters, which continue to report difficulties in raising risk capital.

What Labour will do:

• Maintain the current rates of corporation tax and capital gains tax
• Expand our tax treaty network with Asia and Latin America to maximise the benefit of our low rate of corporation tax and to ensure that double taxation does not present a barrier to trade and investment with these fast developing economies.
• Examine further tax measures to make investment in high-tech, export oriented Irish firms more attractive to investors.
• By winding down property-based tax incentives, we will shift the balance away from the excessive, tax-driven allocation of savings in Ireland into property and towards more productive, export-oriented activities. There is a need to create a more even playing field for those competing for investment funds.
• Review the operation of the tax credit for research and development in Ireland to see how it can be made more attractive to smaller Irish-owned companies that are seeking to develop new products and services.
• Provide increased direct state support for the development of the Irish venture capital industry through Enterprise Ireland. This support will also be used to stimulate increased support for the venture capital industry from the private sector.
• Examine the barriers to Irish growth companies seeking public stock exchange listings and share issues, the small scale of which is a barrier to the development of the venture capital industry in Ireland and to the expansion of growth-oriented Irish companies.

Upskilling the Workforce

Economic and technological changes are creating demand for a rising threshold of basic skills, as well as for more frequent changes in the nature of skills required. The challenge facing Ireland and its workforce cannot be understated. According to the Expert Group on Future Skills Needs, of the 2.4 million people expected to be in the workforce by 2020, 1.43 million are already at work. Of the current workforce, 440,000 have at most lower secondary education, including 165,000 aged 35 or less. Participation by Irish adults in ongoing education and training remains, however, low compared with other countries

To meet this challenge, Ireland must develop a new attitude and approach to education and life-long learning. We must generate a Learning Community, as set out elsewhere in this manifesto. In terms of upskilling, we must set ourselves the target of increasing the number of people in employment that formally progress by at least one level under the National Framework of Qualifications by 100,000 over a five-year time frame. In policy terms, this requires a shift in the focus on national policy from just training people for employment to also training people in employment, reflecting our changed economic circumstances.

What Labour will do:

• Abolish fees for part time undergraduate courses for individuals who have not already benefited from higher education.
• Increase modularisation, portability and cross-recognition of courses taken in higher education institutions to facilitate part-time, flexible education and training.
• Accelerate the development of a national framework of qualifications that is well understood and recognised by individuals, employers and education and training providers and that makes access, transfer and progression a reality.This requires the rapid development of a certification and accreditation system to ensure that work-place learning can be properly certified and recognised.
• Provide more educational and training progression routes for those working in construction, through completion of apprenticeships and through easier progression into other higher educational technical and business disciplines.
• Introduce an option to take two-weeks statutory annual paid training leave, financed out of the NTF and paid at the minimum wage rate in order to focus on the low-skilled. This could be topped up by employers on a voluntary basis.
• Increase support for employer-led training networks, delivered through Skillnets and the enterprise development agencies. Greater support will be provided for training networks that focus on transferable skills (ICT literacy etc.) for the low-skilled.
• Re-invent the role of FÁS to achieve greater focus and efficiencies. FÁS will be given a strong mandate to expand work-training schemes and apprenticeships and to empower individuals and small businesses to access relevant training.
• Provide additional financial contributions from the Social Insurance Fund to support education and training for those that have been made redundant. The Fair Society - Labour Manifesto 2007

Enabling Ireland's Future:A "Next Generation" Telecoms Network

Ireland has the capacity to be a world leader in internet and information technology innovation. Yet due to ongoing government, regulatory and market failures we have fallen far behind in the deployment of broadband and other advanced IT services. Irish broadband connections have recently been increasing, but we are still considerably behind the majority of our EU and OECD partners and failing to keep pace with the best international broadband performers. Many Irish people have either no access to broadband services or are faced with a very limited and expensive range of services.

The Labour Party believes that a widespread, accessible and affordable broadband network is crucial for ensuring a cohesive society, competitive economy and to enable all Irish people to access the most technologically up-to-date services and products. At the heart of Labour's IT vision is also a commitment to the abolition of the digital divide and the guarantee that a new type of social exclusion will not be fuelled by the fast-paced technological changes that are now being experienced.

Our vision will be to create, by 2012, a new, high speed, open access, next generation telecoms network, designed and managed to support competing service operators that will use a variety of wireless and fixed wire "local loop" technologies, depending on local settlement patterns and geographic conditions, to deliver triple-play (TV, Internet and voice) services to every home in Ireland that wants them.

What Labour will do:

• Establish an ambitious new government vision of how Irish broadband connectivity should develop and the wider economic and social benefits intensified broadband development will facilitate. Renewed objectives, vigorously approached targets and a commitment to delivering on these targets will be a policy priority.
• Set-up a specific broadband task force headed by an e-envoy to concentrate resources and responsibility in a central location to drive an intensified rollout. The ICT industry will be encouraged to lead this development.
• Within six months of coming to power, we will tender for the upgrade and "broadband enabling" of telephone exchanges in those, mainly rural, areas where it has been uneconomic for the private sector to do so.
• Introduce serious regulatory reform to ensure that the broadband sector is regulated much more effectively. The communications regulator ComReg will have the ability to impose much greater financial penalties on telecom operators. Operational changes will also be examined to allow ComReg to operate without the current intensely prohibitive legal restrictions and to strengthen its anticompetitive mandate.
• To expedite competition blockages and remove obstruction, a separate High Court division of regulation will be established.
• Introduce co-competition powers for ComReg with the Competition Authority
• We will strengthen the hand of the regulator, and seek a settlement with Eircom to create an operationally separate network division to address the absolutely crucial problem of access to the local loop. This should ensure greater access for other broadband operators to provide services, and a greater variety and less expensive range of broadband products will be on offer for Irish consumers and businesses.
• Promote innovative measures for the delivery of a range of platforms for delivering different broadband technologies. These would include a widespread designation of 'hot spots' for wireless transmission, and making entire urban areas 'hot zones' that are entirely wireless broadband enabled. 10 The Fair Society - Labour Manifesto 2007
• Incorporate local government institutions including partnerships, county leaders and county development boards in broadband rollout
• Create a Universal Service Obligation (USO) for broadband. Accessibility to broadband networks will assume the same character as the present expectation of universal access to the postal service or telephone network. The development of mechanisms for ensuring that a broadband USO is in place creates considerable potential for ensuring a widespread and universally accessible broadband network.
• Instigate a national information technology education programme in order to provide the essential knowledge and training for using the critical ICT infrastructure of a modern economy. Although some schools provide such education, it is essential that all children regardless of the school they attend have access to a proper IT education so as to equip them with the knowledge and practical experience to participate fully in society.
• Ensure access to laptops for secondary school children. Broadband connectivity needs to have a practical application. An objective of a national ICT policy should be the provision of all secondary school students with laptops so the relevant knowledge of and necessary skills for advanced technology can be experienced within the classroom.All methods of practically facilitating such a scheme, such as a partnership agreement with the IT industry, should be examined to ensure the widespread provision of laptops at second level.

Positioning Ireland as a Life Sciences Leader

If 20th century technological development was defined by advances in the physical sciences (the transistor, the semiconductor, ICT) the 21st century will be defined by the life sciences. Life spans will rise sharply as cures are found for chronic diseases. Healthcare may come to be a larger share of the world economy than manufacturing. Life science developments will likely lead to everything from further agricultural revolutions to profound changes in energy technology and the development of new materials.

We will:

• Develop a National Life Sciences and Health Research Strategy to support entrepreneurs in Ireland to take advantage of the strong growth in products and services related to healthcare and the life sciences. We will establish a Life Sciences Research Taskforce comprising the Health Services Executive (HSE), the Health Research Board (HRB) and the industrial development agencies to develop this strategy.
• Excellence in research is dependent on excellence in people, and the HSE will be mandated to recruit clinician scientists together with required research nurses, allied health professionals and epidemiologists, with protected time for research.
• We will also need to modernise Ireland's regulatory system for clinical trials, as Ireland's slow and fragmented clinical trials approval processes are currently a barrier to promoting collaborative public-private clinical research. The Fair Society - Labour Manifesto 2007

Competitiveness through Research and Innovation

To sustain Ireland's growth in employment and living standards in the face of low cost competition, Ireland needs to move beyond the era of making things invented elsewhere. We need an era of indigenous industrial innovation, driven by Irish entrepreneurs.

Technological change is revolutionising business processes in agriculture, manufacturing and services. The ability of Irish companies to develop and absorb new technologies into their products, services and processes will be a decisive driver of competitive advantage.

Of course, innovation does not just derive from scientific and engineering breakthroughs. Three-fifths of US productivity growth during the 1990s was accounted for by innovation in services and business processes.

What Labour will do:

• Increase public funding for industry-led research and in-firm R&D in line with support for university research.
• Expand industry-led networks that help to define the research agendas of universities and the Institutes of Technology
• Reform the system for funding new higher education research infrastructure in a way that provides universities and Institutes of Technology with the opportunity to borrow to finance research infrastructure, and with the incentives to attract more ongoing research funding from industry by developing critical mass in distinctive research areas.
• Ensure that the Marine Institute has the necessary resources to be at the cutting edge of international marine research, in a way that provides practical benefits for the Irish marine fisheries industry.
• Establish a Centre of Excellence for Alternative Energy charged with ensuring Ireland develops a world class alternative energy sector. Wind, tidal and wave energy and renewable-friendly electricity grid development are areas where Ireland can develop unique capabilities through a long-term commitment to research and development.
• Hold a competition among universities for the part-funding of a new Institute of Advanced Studies in Applied Finance to support the further development of our international financial services industry into increasingly sophisticated activities.
• Establish a national Intellectual Property Services Centre (IPSC) to support our higher education institutes and their research teams in the creation, protection and exploitation of ideas generated from publicly funded research.
• Review the regulation and financing of the higher education sector to remove barriers holding back export development from these sectors. With the right structures, the higher education system could become one of Ireland's leading brands internationally, while continuing to meet the needs of Irish residents.
• Ensure that the enterprise development agencies, including the County Enterprise Boards, have the necessary tools and flexibility to support individual research and innovation projects by services companies. 12 The Fair Society - Labour Manifesto 2007

Cutting Red Tape and the Regulatory Burden

Labour believes that business regulation, when well-designed and enforced, improves the functioning of markets and helps to achieve environmental and social goals. In government, we will be committed to the highest standards of business regulation, and will have a particular focus on raising standards of corporate governance and improved enforcement of high employment standards and environmental obligations.

What Labour will do:

• We support better enforcement of labour legislation in Ireland to prevent exploitation of vulnerable workers, and a significant expansion in the powers and resources of the Labour Inspectorate. We will consolidate the Employment Acts and Companies Acts in order to make it easier for firms and employees to understand their rights and comply with their legal obligations, and rationalise the enforcement institutions.
• Small businesses currently face 80 tax return deadlines each year for various tax headings, such as PRSI, PAYE, VAT and corporation tax. We will significantly reduce the number of return dates for small businesses under all tax headings.
• Good economic statistics on industry are vital for policy making. By amending the Statistics Act, by introducing unique company identifiers (like PPS numbers for companies) and by improving technology, we will ensure where possible (subject to reasonable data protection constraints) that government does not ask for the same data twice.
• Companies involved in international trade have to submit large volumes of information to many governmental authorities to comply with tax, statistical, security and health and safety requirements, each with their own systems and forms. The same information is also required by private service providers, such as packers, freight forwarders, customs brokers and banks. In government, we will establish a "Single Window" for traders, whereby trade-related information is only submitted once through a single, electronic entry point.
• Introduce a "risk-based" system of regulatory enforcement, as has been done in the UK.
• We will publish future RIAs. Published RIAs will be available on a central website for businesses and citizens to read and comment upon.
• We will establish a Forum on Better Business Regulation to be chaired by the Department of Enterprise, Trade and Employment, to provide a mechanism for a structured dialogue on regulation between policy makers and business, and for consultation on specific RIAs.
• Since so much of the new regulation is of European origin, we will pay closer attention to the EU system of regulatory impact assessment and its use in practice. We will push for the European Commission to carry out country level disaggregation of all EU RIAs and this should be mandatory for EU Regulations, which are immediately binding on all member states. The Fair Society - Labour Manifesto 2007

Creating Jobs in the Green Economy

As pointed out by the UK Stern Review, the shift towards a lower carbon economy will generate a large number of commercial opportunities. Markets for low carbon energy products are likely to be worth at least $500bn per year by 2050, and perhaps much more. The shift towards low-carbon technologies will be accompanied by a shift in employment patterns. Over 25 million people may be working in these sectors worldwide by 2050.

Ireland has some strong geo-natural advantages in this area, and with the right policies the shift to a low carbon economy can produce high quality jobs. Tackling climate change early is the long-term pro-growth strategy.

What Labour will do:

• Establish a Centre of Excellence for Alternative Energy charged with ensuring Ireland develops a world class alternative energy sector.
• Direct ESB and Bord na Mona to become leaders in renewable energy technologies.
• Take measures to support the development of a domestic bio-energy sector. We will abolish excise duty on bio-fuels for transport We will also reform the Existing Energy Crops Scheme to make it more attractive to farmers. Finally, we will disburse Start-Up Grants for Bio Fuel Processing Plants on a competitive basis.
• With the right regulatory environment, global moves towards a lower carbon economy will also generate opportunities for banks and other financial intermediaries. We will work with industry bodies and the financial regulator to make the necessary adjustments to our tax, skills and regulatory framework to ensure that the Irish financial services industry is in a position to exploit these new opportunities.
• We will also mandate Enterprise Ireland to support the development of specialist venture capital (VC) funds focusing on renewable energy start-ups in Ireland.

Controlling Utilities Costs

The availability at competitive prices of high quality energy and communications services is vital for competitiveness, as well as for supporting balanced regional development and protecting the living standards of people on low incomes.

What Labour will do:

• We will strengthen the powers of regulators, while ensuring that they remain accountable to Houses of the Oireachtas, to drive pro-consumers regulation in utilities. We will also examine the scope for reducing the number of regulators, so as to concentrate the skills and expertise available to the state to the benefit of consumers.
• We will abolish the existing regulatory appeals bodies and will create a Competition Appeals Court presided over by a High Court judge to hear and decide appeals involving competition or other regulatory issues.

Public Enterprise

Labour is committed to the concept and practice of public enterprise. We will keep existing semi-state companies in public ownership. In government we will develop a positive vision of the role of semi-state bodies and put in place appropriate governance structures.

We will:

• Ensure that semi-state companies have the commercial freedom to grow and to fulfil their mandates free from ministerial interference.
• We will ensure that semi-state companies have access to capital.

Consumer Protection

Hard working families have been the victims of the 'ripoff phenomena' Labour in government will act to protect their interests

What Labour will do:

• Cap growth in charges by state bodies at the rate of inflation. Any requested increases beyond the rate of inflation will require a specific Public Interest Report to be presented to the Dáil.
• Compensate consumers who lose their utility service for more than three hours in a 24 hour period by forcing providers to deduct the cost of one day's service from the bill. This will apply to electricity, gas, telephone, internet and cable TV providers.
• Provide a legislative basis for co-operation agreements between the National Consumer Agency (NCA) and the utility regulators to ensure greater consumer awareness of their consumer rights when dealing with utility providers, and to promote speedier redress when their rights have been violated. The agreements will also allow for a stronger NCA input into economic regulation through formal information sharing, reciprocal consultation and co-operation in relation to consumer awareness campaigns.
• Examine the introduction of measures to tackle unfair termination charges that are imposed on mobile users.
• Support the EU-led campaign to abolish unjustified roaming charges on European mobile users when they are using their mobiles abroad.
• Ensure that regulation of mobile phone content and services, which is presently a self-regulated industry, is brought under the remit of ComReg. This should ensure the more effective monitoring of mobile phone services (which are particularly popular among teenagers and young people) which at present are open to exploitation by unscrupulous operators.
• Make the CEO of the Radiological Protection Society of Ireland responsible for monitoring the health effects of non-ionising and microwave radiation with the Director submitting a regular report to the Oireachtas.
• Reform the Planning and Development Regulations 2001 (Statutory Instrument No. 600 of 2001) to ensure that microwave masts are co-located away from homes, schools and youth facilities.
• Ensure 3G licensing and rollout is being carried out in the most effective and beneficial manner for Irish mobile users given ongoing complaints about charges, coverage and quality of handsets in the 3G sector.
• Adequately resource the competition authority to pursue rigorous competition enforcement, focused on the needs of households.
• Put in place a Consumer Court dealing specifically with consumer issues.
• Insist that airlines publish full information about the total cost of seats in their advertising, including hidden charges.
• Local councils will also have a consumer protection role in relation to public services provided by the private sector.