Vol. 291 No. 14
I am taking this. I move:
That a sum not exceeding £86,703,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1976, for the salaries and expenses of the Office of the Minister for Industry and Commerce including certain services administered by that Office, and for payment of certain subsidies and sundry grants-in-aid.
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.
Or the intentions of Fianna Fáil to encourage him.
If he wants it built at all that is the only place he can get it built. I have a photostat copy of a company factory, Beherman Demoen, based in Bornem in Belgium. Their advertisement appeared in a paper in May, 1976 for BDX, a vehicle designed by Timoney. It consists of a large photograph of the vehicle and it shows army personnel surrounding it, whether Belgian or Irish I do not know. The advertisement states: "Made in our factory at Bornem."
This sort of thing is tragic, yet we had the grotesque spectacle of the Minister for Defence this morning trying to defend that situation. There is one of the greatest technological achievements of Irish engineering in a decade, a brilliant piece of work, a vehicle infinitely better and more efficient than any armoured carrier in any army in Europe, which can be built for half the cost of the vehicle the French have designed, and which Irish workmen could build, now being built in a factory in Belgium.
Is it any wonder this country today has 109,000 people unemployed? We had the Minister for Labour boasting yesterday that it was 116,000 a few months ago, a great achievement. We have an unemployment rate far in excess of any country in Europe and we have the certainty that while this lunacy is being continued our unemployment rate will remain the highest in Europe.
I can give a simple example in relation to how employment is being discouraged. I will take the offshore gas and oil discoveries. According to the June issue of the CII Newsletter, it is estimated that the cost of the offshore and onshore development of the Kinsale Head gas-field will be about £200 million.
Recently the Minister for Industry and Commerce announced the issue of contracts totalling about £10 million for this development to Irish firms, and he said this represents 95 per cent of the contracts for which Irish firms tendered. What he did not tell us is that the £10 million represents 5 per cent precisely of the value of the work which is being done and has to be done as a result of the Kinsale Head gas find. Could this sort of thing happen in Britain? Would the British allow British firms only to get 5 per cent of the work? Would the Norwegian Government allow it in respect of their finds in the North Sea? It is permitted here at a time when unemployment is far higher than in any country in the world. Is it any wonder that the unemployment rate is so high? It is a certainty that while these fiscal and industrial policies of the Government are allowed to continue our rate of unemployment must remain the highest in the EEC and throughout Europe.
I should like to speak briefly on a question I raised here yesterday. I asked the Taoiseach the total number of refrigerators imported in the first three months of 1975 and 1976 and I was informed that imports of domestic refrigerators amounted to just over 1,000 in January-March 1975 and 23,044 in the same period in 1976. Many of these were imported from Russia but the bulk of them came from Britain. I pointed out that it was my information that the refrigerators imported from Britain came through an agent and that there is reason to suspect that these were imported into Britain before export here.
The point I want to make is that the total number of refrigerators sold in this country in a full year would be between 30,000 and 40,000. Therefore, we have a situation where more than half of the total number sold here had already been imported in the first three months of this year. Replying to a supplementary the Parliamentary Secretary said that it might interest me to know that a possible reason for this is that the import rates were reduced as from 1st January, 1976.
The Minister for Industry and Commerce is well aware that had it not been for the pressure from this side of the House by way of Private Members' motions and many questions, the same import duty would have been removed in relation to the footwear industry. We had to force him to go to Brussels to ask the EEC to give us the protection to which we are entitled for an industry which is in difficulties. We pointed out that under Article 135 of the Rome Treaty any country newly affiliated to the EEC could demand from the EEC protection for an industry which was in difficulties up to 1977. Therefore, because of the pressure put on the Minister from this side and because we drew his attention to the dangerous situation in which the footwear industry was and still is the Minister moved on this matter.
It is obvious that unless pressure from this side of the House is brought to bear on the Minister for Industry and Commerce nothing will happen. He seemed to be unaware of the fact that a very large number of industrial workers are dependent on control being exercised and their rights being assured. In my home town there is an AET factory which makes refrigerators and up to now had a reasonable proportion of the market. What will happen to those workers now that more than half the total number of refrigerators sold in a year has been imported during the first three months of this year? I was astounded when, in reply to another supplementary question, the Parliamentary Secretary to the Taoiseach said that the Central Statistics Office had indicated that the very high figure for the first three months of this year was due to restocking. That, he said, was a very healthy sign for the economy and he was sure I would agree with that. Coming from a Parliamentary Secretary that is a shocking statement. Does he expect the 400 workers in the AET factory to rejoice now that 23,000 refrigerators have been imported?
Will the Minister for Transport and Power—I regret neither the Minister for Industry and Commerce nor his Parliamentary Secretary is here—ask the Minister for Industry and Commerce to demand immediately from the EEC that we have the right to reimpose the import duty. I would also ask him to examine immediately the enormous increase in refrigerators which has taken place this year, particularly the imports from Britain, and ensure that dumping is not taking place. I would like to know how our importers were allowed import 1,100 refrigerators from Russia. What did we get from Russia in return?
There is one difficulty in a matter like this because we can never prove whether there was dumping of refrigerators or not in respect of Russian imports. I do not know how anybody could find out the cost of raw materials and labour in Russia. Nevertheless the Government must ensure that we are permitted to reimpose the duty, which was removed on the 1st January in the same way as the duty was continued for the footwear industry. The Minister must also ensure that a thorough examination is made of imports, source, and so on.
We are not concerned solely with the importation of refrigerators. In 1975 5,500 cookers were imported and this year 12,000 cookers were imported. Will the workers in the Dunleer factory be pleased to note the Parliamentary Secretary's remarks when he said that this was a healthy sign for the economy? There were 4,600 electric kettles imported last year and 11,000 this year. I could go on but I will not delay the House. Again I am requesting the Minister to get in touch with his colleague to ensure that the jobs of the workers in AET and in other electrical factories are safeguarded.
This is a scandalous situation. It was obvious that until this question was put down the Minister for Industry and Commerce was not concerned about it.
I want to ask the Minister if the activities of Fóir Teoranta have been frozen, now that freezing is in fashion? Iris Oifigiúil, 22nd June, shows that in 1975 there were issues over the period 1st January to 20th June, of £2,158,000, and £103,000 for the same period this year. I am raising this point in relation to the Drogheda factory and in particular with the Greenmount and Boyne factory in Kingscourt, County Cavan. I raised this matter earlier in the year with the Minister for Industry and Commerce and asked him if he would ensure that Fóir Teoranta would come to the aid of this factory which employed approximately 50 people. This industry is very important for this small town. I was told at that time that a receiver had been put in, but there was still a possibility that Fóir Teoranta would come to the aid of the factory, having had an interest in it already. I understand that at the end of this month this factory will close. This is a very serious matter and I would ask the Minister to get in touch with the Minister for Industry and Commerce to try to save this factory, even at this late stage.
The creation of 30,000 jobs between now and 1986 is an enormous undertaking and will require co-operation, investment, a sense of responsibility and maybe sacrifice by everybody in this country. It will be a heavy strain on all of us to see that the young people particularly, and those who are, thankfully in lesser numbers, coming off the land, will find work here.
The recession we have been experiencing for the past two years is different from that which had been weathered by other Governments at other times, which were largely brought about by a poor return on policies and were confined within this country. At that time the safety valve of emigration was still available to those who were unable to get work here. Fianna Fáil are very fond of quoting the late Taoiseach, Deputy Séan Lemass, when he said that a rising tide lifts all boats. They interpret this—and I do not think he meant it this way because I think he was shrewder and more far-seeing than a lot of Deputies opposite——
Or on the Minister's own side.
Yes. Fianna Fáil chose to interpret this remark, that a rising tide lifts all boats, as being the example of how all industries and firms inside this country rise when the tide of the economy rises. I think what Deputy Lemass meant, and what he was shrewd enough to see from his little boat, was that a rising tide of world trade lifted the Irish economy if we were open enough to take advantage of it. This was in the early 1960s when the free trade agreement with Britain was signed and when the "Into Europe" movement, which was probably led by and certainly backed by my party, started to gain momentum in this country. We benefited from rising world trade then, but if a rising tide lifts all boats, a falling tide means that they all fall to the same level.
Some go on the rocks and some do not.
That is true, and that has been the concern of this Government for the last two years: to see that the boat of the Irish economy does not go on the rocks. The safety valve of emigration which was the advantage of the Fianna Fáil Party for years is not there now.
Are you talking about 1957?
I am talking about all Governments, but particularly Fianna Fáil who for years used the advantage of emigration to keep the people off the register of unemployed. Whether we are here, or whether there is a change of Government, no Government in the future should depend on emigration. We must bend our efforts to see that we provide this large number of jobs here between now and the mid-1980s.
When Deputy O'Malley spoke he said that there was no climate for investment in the private sector here, that people were uninclined to invest. He said that they were unable to make profits and that profits was a dirty word. At another stage he said that many of our manufacturing industries were working at 50 to 70 per cent of capacity, and he said that firms that were working to that capacity did not need capital investment, that they did not want to take up the slack. If there is no tax being paid on exports and if they are worried about their profits why is their slack not taken up in exports if it is that easy? Why do they not make use of Coras Tráchtála Teo., to sell their goods abroad and to point out markets to them, and what is this malaise that affects the private sector at a time of recession? If there is no investment needed, if the capacity is there, if the export markets can be got because of the devaluation of the Irish pound and if there is no tax to be paid on profits made on that market, what is missing? Why are not all those things put together for the benefit of this country and the lower income employment figure here? There is something else missing. What is the missing component which would unlock that and take up unused capacity, provide money that they would not pay tax on and lower the unemployment here? This would help their tax position because the fewer that are unemployed the less social welfare benefits have to be paid.
By not paying tax the Minister of course is referring to income tax, not to capital tax?
That is right, yes. Industry in this country can be broken into a number of sectors. There are what can be called the old industries that were here before the State was formed. There are those which were founded or set up during the protection days of the 1930s and 1940s. Then there are the newer industries, the international componen panies who came here as a result of the financial benefits of establishing here. They are still coming here, still investing, still availing of the grants being proposed by the IDA, still accepting the services of CTT to sell their products abroad and still accepting the tax exemption on profits. If they are coming here why are Irish people who have money not investing it in this country?
Have they confidence?
If international companies have confidence, what is wrong with the Irish companies? We passed a sizeable amount of money for the IDA for investment in industry. The sum is up by 40 per cent on last year. Some of that money will go to internal firms but the bulk of it will go to industrialists from abroad who have confidence in this country and are willing to avail of the most encouraging set of incentives to industry possible in the world, but certainly in Europe.
Did the Alcan project for Achill Sound go because of lack of confidence or for any other reason?
I think it probably went for lack of confidence in the international market for aluminium. It would not have been a large enough industry to satisfy 1 per cent of the Irish need. It had nothing to do with Ireland at all. It is for the same reason Dupont in Cork Harbour went and why a number of other industries went. In times of recession people contract and try to pare down their operations so that the diminished profits they expect to earn will be sufficient to keep their show on the road. In times of boom, or on the rising tide, they invest and take risks that they will not take at a time of recession. Of course Alcan is not finished, but it has been put aside the same as Dupont. About six months ago the Minister for Finance said that to get through 1976 this country needed wage restraint or a wage pause. When that did not seem possible in the early months of 1976 every chamber of commerce, every trade association and the big industrialists berated the Government for not being firm enough. "The Government should stand firm" was a phrase often repeated in January and February of this year. The phrase "The Government should introduce legislation to control wages" was also used.
The directors of the banks offered a wage settlement to their employees that would have done untold damage to our economy. We have this schizophrenic approach from the people who are most concerned, whose money is at stake, who, when they wear their bankers hat, say that bank officials are different and should be paid more than the ordinary worker, even though their qualifications are the same; but when they wear their industrialist hat they say that the workers are being paid too much.
I heard that speech before.
The Minister should be allowed to reply, the Minister listened.
If you look down the list of the directors of the two major banks in this country, and the other two as well, you will see that everyone of these people who made speeches, who lectured the Government for the three months early this year are directors of a bank. If the Government introduce statutory control of wages who would be the first to start bellyaching, if their performance in the past fortnight is any indication?
The Labour Party.
And you know it full well.
The Government act as a Government and there is no concern inside the council chamber whether the Minister who speaks is a Fine Gael Minister or a Labour Minister.
You do not have to tell lies.
The Minister should be allowed to make his reply.
Deputy O'Malley says profit is being made a dirty word in the past two years by the antics—I think that is the word the used—of Ministers of the Government. That is not true. I presume he is referring to some Labour Ministers to whom Deputy Tunney refers. He is probably thinking of the Minister for Industry and Commerce but he has said on numerous occasions that he wants industry to make sufficient profit. He has been defending price increases at Question Time here and he has thrown it back at the Opposition and said to them: "What should I do about prices? Should I so squeeze profits that there is no reinvestment and no jobs for workers?" I heard him say that myself.
That is the way he began: he changed a bit.
That is a smear that is untrue and unworthy of Deputy O'Malley who is well able to make his points without resorting to half-truths of that kind.
The point related to the fiscal structure created by this Government.
It has not been created by this Government nor can anybody point to any Minister of this Government with an anti-profit attitude. It is not true. We can see how much time the Minister for Industry and Commerce has spent in other countries trying to bring industries here, industries that are very profit conscious. That is an indication of the welcome, and the acceptance by them of that welcome, that awaits industries here. He has visited all the major industrial countries of the world and asked them to establish industries here and he has been extremely successful in bringing here leaders in the field of very high technology industry which we must get. Examples are Asahi in Ballina. Alcan and Dupont. They will all be here and will provide the basis for a high-technology industrial arm for this economy.
It is not only in the manufacturing sector that we want job creation. There must be expansion in the services section also. If the expansion comes in manufacturing it will automatically follow in the service sector. We can get all the external investment which we can provide money to help and the money is there also for internal investment. How do we get manufacturers in Ireland to accept the need to take a risk, invest and earn profits which will be tax-free? That is the key which we must find to open the door to provide the 30,000 jobs which I and every member of the Government are determined to see will be provided so that emigration will no longer be used to drive people from the country to earn their living abroad.
I have not yet got the full details of the matter raised by Deputy Faulkner. I shall bring it to the attention of the Minister for Industry and Commerce and ask him to write to the Deputy direct giving the full position about the importation of fridges.
I am not concerned with information in regard to the situation; I know that. I am asking the Minister to demand from the EEC the reimposition of the tariff which was removed on 1st January, just as the tariff in regard to footwear was retained and also to examine carefully the situation in relation to these imports so as to ensure that there is no dumping and to use any other methods available to him to ensure that the livelihood of the people who are working in the electrical industry here is assured.
I will give the Minister an extract from the Dáil Debates and I shall also speak to him about it.
The Minister would agree that 23,000 as compared with 1,000 is an extraordinary situation in relation to the importation of refrigerators over three months.
Deputy Wilson spoke about Fóir Teoranta but that comes under the Minister for Finance.
But it is related to the saving of an industry.
The Deputy said that some £2 million was spent by Fóir Teoranta and it is down to £103,000 now. Surely that is a good sign.
It is not a good sign if there are factories waiting for the money to save them.
I believe that Fóir Teoranta have got extra money this year and it would seem to me that they are not using it, that there are fewer people looking for it, which is a very good thing.
The fact is that £2 million was available for Fóir Teoranta for six months in 1975. They have got an increased allocation for 1976. Therefore, they have the money but they have spent only £103,000.
The Minister will agree that it is a bit of a fraud to make it possible to spend the money when in some way they are stopped from spending it especially when there are factories with full order books and where the employment is good. Yet the company is closing down because Fóir Teoranta will not let them have the money.
If the Deputy will give me the name of the company——
Greenmount and Boyne.
