I take it the Parliamentary Secretary is not available either, which is a pity. It is obviously totally unsatisfactory in these circumstances to try even to begin a debate of any description on industry and commerce which is a very wide ranging topic. If I get the opportunity, and I do not know whether I will, I will try to speak in some detail about it on the Adjournment Debate, but in the very few minutes at my disposal I should like to make some brief general observations about the situation in which our economy finds itself today, particularly from the standpoint of commerce and of industry.
The basic problem which faces us so far as job creation is concerned today is that we are informed by the various semi-official economic commentators attached to the ESRI and other similar organisations, and it is not denied that in the 12 years from 1974 to 1986 if we are to achieve what they describe for the purposes of their academic papers as full employment—and a 4 per cent unemployment rate in this country is full employment for the purposes of economic commentators—we must in each of the years from 1974 to 1986 create net 30,000 new jobs, that is after the loss of any jobs that unavoidably are going to be lost in each of those years. We must create a plus figure in each of those years of 30,000.
We have not the faintest hope, with the way things have been going over the past two years, of even approaching that sort of target. The figures for 1974 and 1975, as supplied by the IDA, show that there was no plus whatever, that in fact there was a net loss of jobs in each of the two years concerned. This is dealing only with jobs which the IDA are concerned with, industrial employment. This does not take into account the almost inevitable loss of jobs taking place in any event in agriculture and the apparent loss of jobs, although one cannot get exact figures for it, in the service sector of commerce. In industry alone, which is the job creation sector, there has been a net loss in each of the years 1974 and 1975. This increases therefore our target from 30,000 jobs per annum to something considerably above that. It makes it a figure of something in the region of 36,000 net new jobs per annum between now and 1986.
This House should seriously ask itself have we the faintest hope of reaching even 50 per cent of that target, or are we therefore going to commit our people almost ad infinitum to an extraordinarily high rate of unemployment? Are we going to deepen further in the minds of many of our people, and, tragically above all others, in the minds of young people the mentality that as long as they have enough dole in their pockets they should be reasonably happy and should not be complaining? Is this the kind of dynamism that will allow this country to take off economically? Much of such a bad nature has been happening over the last few days in relation to wage agreements and bank closures and so on. A very significant set of figures which was published only on Monday last, 25th June, has to some extent tended to have been overshadowed. That is the publication of the consumer price index to mid May. It is a frightening document. Perhaps the figures in it have a greater effect on industry and on the long-term creation of employment than any other single factor. We have the frightening situation that in the quarter to mid May, which immediately follows a quarter in which we had a rise in the consumer price index of 7.3 per cent, we have a further rise of 6.2 per cent. That is an overall rise in the six months to mid May, 1976, of 14 per cent.
Our inflation rate in the first six months of 1976 is more than double what it is for 12 months in every EEC country other than Britain. The indications are now that our inflation rate of 14 per cent in the six months to mid May, 1976, will in fact be more than the annual inflation rate of Britain in 1976. What chance has our industry in these circumstances? How are we going to create 36,000 net new jobs per annum between now and 1986 when we are faced with these kind of figures, when the competitiveness of our industry is virtually put in an impossible position? What hope is there for any long-term job creation when we are faced with the crippling blow of this inflation? It cannot be denied that the greater part of this inflation is Government fuelled and Government created because a very high proportion of that 14 per cent inflation we have suffered in the last six months is a direct result of higher indirect taxes imposed by the Government in the budget of January, 1976.
We are facing a position in which our hopes for job creation, if present fiscal and industrial policies are continued, are very slight indeed. I see it as the principal function of the Minister for Industry and Commerce in this or in any other free country to create an atomosphere in which new investment or reinvestment in industry is encouraged. One has only, unfortunately, to look around one in the country today to see the lack of new investment, other than what is being handed out by the State, to see the almost total absence of reinvestment. This arises from two factors. The first is that there are not profits to reinvest in most cases and, secondly, even where there are the whole atmosphere is so discouraging that very few people are now willing to take the risk of reinvesting whatever profits there are.
I say to the Government—I cannot say it to the Minister for Industry and Commerce—that in the long term and indeed even in the comparatively short term the only real place that jobs will be created, the only real way they will be created, is as a result of investment in industry in the country. We are not having it because the atmosphere is wrong. The atmosphere is not one of encouragement to those who want to take a risk. It is not one of encouragement to those who want to work hard. It is one of discouragement and disincentive, tragically. The results of that situation are around us for all to see with the highest rate of unemployment in the EEC and the highest rate of inflation not alone in the EEC but in the whole of Europe if one excludes Iceland, which is such a small country and suffering from such particular difficulties that it is hardly worth taking into account for comparative purposes.
We have all these terrible disadvantages. It is important to remember that they are disadvantages which we have created ourselves. I mean by that, that I can prove that they have in fact in large measure been created by the Government over the past two-anda-half years. We have an atmosphere of economic uncertainty in the country at the moment arising from an enoromous number of sources, all adding together to one of pervading uncertainty and an unwillingness to take risks and make investment which would create employment. We are dooming our people, if we continue as we are, to an unemployment rate of 9, 10, 11 and even 12 per cent over the next decade.
We have opportunities to avail of now but we are not availing of them because people are not prepared to take the risks which are necessary. The greatest opportunity we have is, paradoxically, the fact that our £ is tied to the £ sterling which has depreciated over 40 per cent since December, 1971, against the major currencies in the world. We have a glorious opportunity for exports. Although they are increasing they are only doing so at a figure slightly in excess of the rate of inflation that has been current over the past two years. There has been very little increase in real terms in exports, particularly in the last 12 months, when our export figures have shot up. A very high proportion of that increase has been due to the export of animals and animal products, whether meat, milk or milk products.
Our manufacturing industries, which have had a glorious opportunity which possibly will never be repeated again, have failed to avail of that opportunity because the capital investment in those industries is not high enough and there is no incentive to create that investment. There are factories in the country at the moment working at a capacity of perhaps 75 per cent or 50 per cent because they do not feel it is worth taking up the slack that is there and which could be taken up without any great capital investment at all but which could create worth-while employment which could give worth-while opportunity for profit and for export. Unfortunately profit in the country over the last couple of years has become a word which is regarded as almost immoral. It is no longer regarded as legitimate or proper that a firm or a business of any kind should seek to make a reasonable return or profit.
Our average return on capital invested in manufacturing industry in the country at the moment is about 4 per cent. It may be marginally under that. Do the Government or the House realise what would happen if the people who have capital in manufacturing industry in the country at the moment endeavoured to liquidate that capital, if they were able to do it, and put it simply into Government loans and sit back knowing that they can get a return on long-term Government loans at the moment of about 13.5 per cent without lifting a little finger either for themselves or their country? Is there any incentive in a situation where one is subject to tremendous risks for a very small return and where, without any risk whatever, you can get a return of three or four times as high as that for which you take a huge risk? There is no incentive, and that is why we are in the situation we are in and why, unlike other countries in Europe and elsewhere, we are not pulling out of the general recession which was current throughout Europe and the USA two years ago. It is not so any longer in any country other than Britain and Ireland and Britain, happily for her, shows every indication that she will get out of it very soon.
I have referred to one aspect of the Government's industrial policy very often. It is one I cannot understand. I do not know what their purpose is in almost going out of their way, and being seen to go out of their way, not to encourage the manufacture of articles here which could be manufactured here, either small or large capital items. Indeed they have been seen almost to encourage the purchase of such commodities abroad. Already this morning in the very unlikely area of defence Deputy Leonard drew attention to the purchase of a whole range of commodities necessary for a barracks under construction in Monaghan. All of these commodities are manufactured in this country but they are being imported. Not alone are Irish firms not getting this sort of work but they are not even getting the opportunity to tender in many cases.
There is a classic example of it in something I can recall from my time in Government as the magnificent scientific achievement of an Irishman, Professor Timoney, who designed an armoured personnel carrier which he was most anxious to have manufactured in this country. This vehicle is now being manufactured in a Belgian factory at Bornem. That is certainly not in accordance with Professor Timoney's wishes.