I welcome the opportunity provided by this debate to identify the causes of unemployment.
Employment Crisis: Statements.
Could we have copies of the speech?
I merely have notes I typed myself.
You typed yourself?
Fair dues to you. That is economising.
The Taoiseach will accept it looks like a script?
The Opposition may be unaccustomed to making speeches they wrote themselves but it is my practice to do so.
I must ask for a withdrawal of that remark. The Taoiseach stood up as if he was reading from a script. In accordance with precedent, I asked for a copy. I do not think that merits an insult from the Taoiseach.
I interpreted the hilarity from the other side when I said——
We have now wasted 20 minutes.
——it was my own speech as suggesting that they were not accustomed to doing so.
It was at the idea of typing it yourself.
I welcome the opportunity provided by this debate to identify the causes of unemployment, to indicate the Government's approach to the problem and give the Opposition an opportunity to demonstrate whether they see this matter as something more than a political football. We shall in the hours ahead see whether they have the courage to admit their share of responsibility for the present crisis and rise to the needs of the enormous human tragedy by joining the Government in a clear-sighted and courageous attack on the roots of the problem in so far as they are to be found in society and within our own competence and control.
As to the causes of the crisis, I shall enumerate four. The first and perhaps the most important single factor has been the stagnation of the world economy during the past three or four years after the brief recovery which followed the first oil crisis in 1973-1975. The second has been the weakness and vulnerability of our industrial base, the failure of so many of our established industries to take advantage of the huge new markets opened up by our entry into the EEC and our consequent excessive dependence on new foreign industries, the flow of which has been reduced sharply to Ireland by the world crisis.
This third factor to which I must advert is our failure to maintain and improve our competitiveness, partly because our labour costs have risen disproportionately as wages and salaries have been pushed up at a rate far beyond that experienced in competing countries, as other industrial costs, to which Government policy contributes directly or indirectly, have also risen disproportionately, for instance the various services for industry provided by the Department of Industry and Energy.
The fourth factor to which I will refer in the context of the unemployment situation has been the serious deterioration in our public finances which has left the Government of the day without the financial capacity to mitigate the effects of unemployment by remedial measures on an adequate scale. Some of these factors, those external to our State, are very largely outside our control save to the extent that by joining like-minded countries within the EEC we can exert some influence on the economic strategy of the Community and of the major member states and, perhaps, through this leverage affect, even though only marginally, the policies of other major industrialised countries.
It would obviously be absurd to exaggerate our potential influence in this matter, but to the extent that we can, with others, help to shape international policies that may promote and sustain a recovery in world economy, in world trade, we are doing so, specifically in the preparation for the Williamsburg Summit of the major industrialised countries this month. We have joined with other smaller members of the Community to work in conjunction with the Commission towards a positive outcome of the world economic summit, at which we will, of course, be represented only indirectly through the input of the Community and the Commission. It is too soon to judge whether or to what extent the efforts we and others are making will have any positive influence on the outcome of that meeting. The most one can say is that now there are signs that the participants may face some of the real issues of economic recovery rather than get bogged down in a sterile trans-Atlantic quarrel about the issue of east-west trade.
Whatever the outcome of Williamsburg, we shall have to live within and work within the context of the resultant world trading situation. If the recovery now starting in the US is sufficiently strong and sufficiently sustained and if it is reinforced by appropriate responses from other industrialised countries, the major industrialised countries in particular, by this time next year and for a period after that we will find ourselves once again in a favourable world trading context with demand for goods and services rising strongly, bringing with it the possibility of expanding order books for Irish industry, with more tourists with the necessary money to come to our shores and spend it here.
If the recovery now starting is weak and is not sustained, we shall have to adapt ourselves to a continuation of the unfavourable context in which we have been living for some years past. The important thing is that either way we take the action that is within our power in order to maximise our share of world markets, whether those markets be expanding or as they have been for some years past, stagnant.
There is much that is within our power and we have to avoid the kind of fatalism that can too easily be induced by concentrating our relative power to influence the course of economic recovery world-wide. Instead of reacting to this by throwing up our hands and saying there is very little we can do to influence these great events, we should be saying to ourselves that our share of the market in which we trade is so tiny that whether they are expanding or not we, by increasing our share of those vast markets, can achieve the growth needed to reduce unemployment.
In this context we cannot and should not ignore the fact that other European countries such as Austria, Norway and Sweden — some of the smaller countries in Europe — have unemployment rates that are only a fraction of ours, a third or a quarter of the figure applying to this country. Other countries such as Austria, Switzerland, Germany, the Netherlands and Great Britain have inflation rates that are only half to one-third of ours, reflecting in large measure a much smaller annual increase in labour costs in those countries, which are, of course, crucially important, though far from the only element. There is no inherent reason why we should not be able to match the performances of those countries. Concrete or physical our situation is not so different from theirs that it would make it impossible for us to achieve what they have achieved. There are, of course, differences in some cases of size, and in other cases the question of markets and organisation of industry. However, there is no fundamental difference between us that explains or justifies the fact that our employment rate and our inflation rate are three to four times higher than in those other countries which have had to face the same external problems, such as the oil crises, that we faced. Perhaps even in some cases they were worse placed than we were in regard to these problems.
I will return to this when I come to the third factor I mentioned at the outset, our failure to maintain and improve our competitiveness. First, I will refer briefly to the second factor that influences our level of unemployment, weaknesses in our industrial base, influencing not only problems of declining competitiveness together with labour costs, but also management efficiency in our established industries. At a time when the flow of foreign investment to this country, as to others, has been reduced by the stagnation in the world economy, we are dependent more than at any other time on our own industries, those established here by Irish people, initially behind protected barriers. These industries had a long period of preparation for the beginning of trade and the opening of new markets up to 1973. They received every possible help from the Government of the day, which was a Fianna Fáil Government, to adapt to new conditions. Some have done so and have been notably successful, but many others ignored both warnings and opportunities. They failed to establish a good relationship with their workforce. They failed to achieve the design and quality standards necessary to compete in international markets. They failed to market their goods with the professional skills required to succeed.
Those failures were not fatal for many of those firms in good times; in hard times they proved disastrous. It has to be said however, that the weaker firms or the stronger ones which survived, or the new industries that established themselves here in the sixties and seventies have not been helped by the third factor, failure to maintain and improve their competitiveness. In recent times efforts were made to decry the importance of labour costs in competitiveness. It has been said rightly that they are not the only factor. Nevertheless their importance has been obscured by the fact that the scale of labour costs in relation to total costs varies tremendously from industry to industry, some being so highly capital-intensive that increases in labour costs may be relatively unimportant to their survival.
Crude calculations based on the whole range of industries, lumping together those that are capital-intensive and those that are labour-intensive, tend to produce apparently indeterminate results in so far as relationship between labour costs and competitiveness are concerned. We should not allow ourselves to be misled by simplistic arguments based on that sort of approach. The plain fact is that in many of our industries labour costs remain an important, even a decisive, element. As a part of total costs they are large enough to be crucial from the point of view of the survival of these industries. As we have allowed labour costs to rise inexorably faster than in so many of our competing countries we have priced many of our products, especially those of our established industries, goods and services, out of our own and other markets.
An important part of the unemployment problem we face today has been the rise in labour costs. Many of the people who have lost their jobs and many young people who have been unable to find employment owe their plight to the shortsightedness of a policy of increasing wages and salaries much faster than output, thus raising production costs against the trend in other competing countries. Those who seek to deny that this is a factor, not the only factor, in the growth of unemployment do no service to those who are without jobs. If our labour costs had risen less fast than in competing countries, instead of faster, many thousands more would be at work today here, reducing but by no means resolving the unemployment problem.
This is a crucial issue at the present time. Thousands are losing their jobs in what has been universally recognised as the most serious crisis in employment we have ever faced. Pay increases on a scale that helped to fail to recover some of our competitiveness reduced the prospects of many of those at work to retain their employment and could destroy the hopes of new jobs for the 188,000 out of work.
Even on the most optimistic assumptions about relative exchange rates in the year ahead and about the growth of productivity, increases recently agreed or proposed do not offer any prospect of unalleviation of our own in competitiveness.
If followed generally the pattern set by some of these increases would lose us an opportunity to regain lost ground, and if later increases exceeded those which have recently emerged we would lose even more ground and thus even more jobs.
The costs of industry are not confined to the wages and salaries paid in the firms in question. Industries depend on services—transport, telecommunications, postal services and energy costs. Where the costs of these services rise inordinately to a level that is higher than competing countries, industry is disadvantaged. Some existing industries may find their capacity to complete undermined and new industries may be deterred from coming here. Our record in respect of these services is not good, especially in so far as they are provided by the State. The combination of inordinate increases in labour costs in the public sector, arising from pay increases which between 1979 and 1981, far outran pay increases in industry itself, and in some cases also unwise management decisions in the State sector about investment, as well as low productivity and poor morale among workers, have increased alarmingly the burden these services place on industry.
This is an area of direct Government responsibility. Most of these services are provided by the State or by State-owned concerns. The Government must take their responsibilities in this area and will do so. They must and will ensure that costs are controlled and are not allowed to rise at a rate that will become a burden on industry and the community. That means improving the quality of management where it has proved inadequate and ensuring that wage and salary increases do not outrun productivity increases, so that the prices of these services are not increased at a rate that helps to make industry uncompetitive. These areas are under our control, not areas where our fate is determined externally. Any Government who fail to tackle these problems, as happened in the past, do not deserve to, and would not, remain in power.
The fourth factor affecting our employment situation has been the deterioration in our public finances. Given the scale of unemployment and the fact that much, but not all, of it is determined by external events, government should, in the face of the resulting crisis, seek to alleviate the problem by reducing taxes, stimulating domestic growth and creating employment opportunities where there is necessary infrastructural work to be done, whether it be road building, housing, the construction of schools, the development of telecommunications and so on. No Irish Government, whoever they might be, can at this time take such action on an adequate scale because the public finances are in such disorder that the maintenance of public solvency requires action diametrically opposed to that which the employment situation demands. Here lies the real tragedy of our situation today and the source of so many of the frustrations felt by our people.
The scale of our financial problem is still only partially grasped by many people. It is hard for our electorate to grasp that any Government could have behaved with such total irresponsibility as to have brought us to the brink of national insolvency. They still cannot fully believe that the people they elected to office could have done damage on such a scale, and so they underestimate the magnitude of the disaster and the scale of the constraints this imposes on the Government's power to act to mitigate the effects of unemployment. The facts admit of no dispute, however. Between 1977 and 1980 the rate of Exchequer borrowing was allowed to rise at such a rate, and the willingness and capacity of our economy to provide the State with its needs in terms of domestic loans was so undermined, that from a position in 1977, when we borrowed nothing abroad, three years later well over half our Exchequer borrowings, amounting to no less than the equivalent of one-twelfth of our national output, was coming from foreign banks. Within five years foreign borrowing had quintupled from £1 billion, inherited from all the years before 1977, to £5 billion.
Even if we, as a Government, were able to eliminate overnight the need for further foreign borrowing—and we cannot because it has to be tackled gradually over a five-year period if we are not to disrupt our economy totally—the payment of interest on what has already been borrowed in those years when Fianna Fáil were in power and the repayment of the debt itself, will cost us almost £1 billion a year up to and including 1989. The figures are there for anyone to see in the tables at the back of the Central Bank report. They fluctuate a little, around the £800 million or £900 million mark up to £1,000 million, but they average £900 million and will probably be somewhat higher in the light of the exchange rate situation which has developed since the last figures were published. Almost £1 billion a year up to 1989 will be paid to foreign banks to meet loan repayments and interest. That £1 billion will be lost to our economy, unavailable to provide a single extra job in this country, although no doubt the flow of resources contrived by Fianna Fáil from Ireland to Germany, the United States and other countries, at this rate will help to provide jobs in those countries in the decade ahead.
The recession in our economy has now reached the point at which were it not for the cost of servicing this enormous foreign debt incurred as a result of disastrous policy pursued by our predecessors, our external payments would be in surplus to the tune of some hundreds of millions of pounds. This is the kind of situation in which the appropriate policy for an Irish Government to follow, if they were free to act, would be to pump some money into the economy, to secure a modest reflation of demand in a manner carefully judged to have the maximum effect on employment. We should be doing this now, and were we free to, we could probably hold unemployment at its present level or even start to reduce it somewhat even in advance of the impending world economic recovery, but we are not free to do so. The burden of public spending and of debt, foreign and domestic, is such as a result of what happened after 1977, that instead of being able to stimulate growth by tax cuts or increased infrastructural spending, in order to remain solvent, to maintain our creditworthiness and to prevent a further escalation of debt repayments, we are forced to do the exact opposite to what the unemployment situation demands. We are forced to raise taxes to a virtually intolerable level and inhibited from taking action on the necessary scale to create employment in infrastructural works which would bring down the level of unemployment. To find oneself in such a situation is the ultimate condemnation in the Government policies which created this dilemma.
That will not wash.
The party which in Government created this situation and which in their last couple of years in power under a different leadership, failed to face up to the consequences of their folly, should not and will not be allowed to get their hands on the levers of power until they have recognised and faced up to the damage done, and perhaps until they have thrown up new men and women who do not share the responsibility for this debacle.
In the meantime we in this Government have to pick up the pieces. We have to restore national morale and self-confidence as we tread our way carefully between the Scylla of national insolvency and the Charybdis of national depression. Our first duty, which we have started to fulfil, is to get our national finances into order so that we will regain the freedom of action which our dependence on foreign borrowing has temporarily lost us and regain the economic independence thrown away by Fianna Fáil after 1977. This has to be done gradually, not suddenly. Contrary to Fianna Fáil, we believe the task should be spread not over four years, as they set in their policy document and claimed at the general election, but over five years. We believe the first step in the current year should involve cutting the current deficit to £900 million instead of £750 million as contained in The Way Forward and repeated since by Fianna Fáil during the general election.
The Opposition have criticised everything we have done to get the country back on this road, but they have not told us, even by so much as a hint how they, if they remained in office, would have found the hundreds of millions of pounds which we had to find over and above the cuts they had made in the Book of Estimates, to reach our deficit figure of £900 million, never mind the extra £150 million which they intended to take out of the people's pockets in the Draconian budget they had foreshadowed in The Way Forward. Until they come clean about their policies and tell the country how they would have acted to get that deficit down to £750 million, no one will take them seriously again.
Having taken the initial financial measures, we have started to probe all available possibilities for employment creation or maintenance within the constraints imposed on us by the financial chaos we have inherited. The Government task force are at work on projects to channel private finance into the road system, to expand the activities of the Housing Finance Agency, which we established when in power for a brief period before, and whose work was deliberately held up for political reasons by Fianna Fáil in their brief period in Government; to fine tune the work of the Youth Employment Agency, which we also established and which is now operating one of the largest youth employment schemes in Europe, and we are examining the possibilities for increasing employment by other means, such as reducing overtime, or work-sharing. Meanwhile, the newly established National Planning Board are preparing their initial recommendations, to be taken into account in the preparation of the 1984 budget, as a prelude to preparing a medium-term plan based on realities, not the aspirational approach in the discredited The Way Forward document.
The plans will emerge as a result of the work of that board and the action taken by the Government on the basis of recommendations to be made by that board will be a plan based on reality. It will set out what is likely to happen on the basis of current policies, allowing for a range of hypotheses about external conditions. It will not do what The Way Forward did — say what you would like to see happen in five years' time and then assume that it is going to happen by having page after page of “it is envisaged that”, without a single policy decision.
Any plans which the Government produce will be realistic. They will assess to the best of their ability, on the basis of independent advice, just what is likely to happen on the basis of current policies; and in so far as those policies look like yielding a situation that will not be tolerated by our people, they will propose the changes in policy necessary to bring about the improvement in the situation which our people demand. For the first time the Government, dealing with this kind of problem, will face reality and the people will also be asked to face reality. In the meantime the whole apparatus of Government is itself being overhauled to ensure that it operates effectively in directing the process of economic recovery and, if world trade revives, that we are able to take the fullest possible advantage of this development.
Meanwhile, national morale is gradually being restored, an essential prerequisite of any progress. It is being restored by the knowledge that there is in power a Government with courage and will to govern, a Government who will solve the problems which they have inherited, not flinching from any unpopularity which they may draw on themselves by facing issues which have so long been dodged, swept under the carpet, or ignored, regardless of the effect of this on our capacity as a State to provide an environment in which people can find work. Everything must now be subordinate to this objective. No vested interests — and there are many and they are powerful — no selfish attempt to grasp and hold on to an unfair share of the national resources will be permitted by this Government to stand in the way of the steps which have been taken to get the unemployed back to work and to find jobs for those who are now leaving school.
Let us recall that these two groups are unorganised. They do not have the kind of weight that those people who are in jobs have, through their trade unions, that those people who are running industries have, through their industrial organisations, that those who engage in farming have through the farming organisations — those who, one way or another, find themselves in a position of having jobs, or property, or something to defend and are organised to defend what they have. The unemployed and school leavers are not so organised. They depend for the protection of their interests on the Government acting to protect them from the predatory efforts of the vested interests in the State seeking to hold on to what they have and unwilling to yield anything to help those who need to have the opportunity for employment.
The task of Government is to undertake the work of protecting those who cannot protect themselves and helping these unorganised groups who have no political clout. For too long they have been neglected by Governments kowtowing to the "haves" in our society — those who have property, those who have adequate incomes which they are unwilling to share, those who have jobs. This Government will not follow that path. We shall take our responsibilities.
Brave words.
We have just listened to an academic dissertation spiced with some old-fashioned Fíanna Fáil bashing. That is the net extent of the speech to which we have just been treated. This follows an appeal by the Taoiseach that the debate should be taken as a serious contribution from the Dáil as a Parliament to what is currently the most serious problem facing the country—the massive unemployment, now rising towards the 200,000 mark, which is highlighted by the fact that gilt-edged industries and industries essential for our economic development are now in serious trouble or have already foundered. I do not have to go through the litany of them—Telectron, Black and Decker, Dunlop's of Cork in serious jeopardy, a similar situation arising with Roadstone, which is just maintaining itself in a creditworthy position.
We are not speaking about occasional unemployment, about fringed or peripheral industries going to the wall. We are talking about basic, fundamental industries which can be described as gilt-edged industries with regard to both employment and stature within our economy which are now either gone to the wall or in serious trouble. That is the situation which we are up against and it is not a situation which warrants just an academic dissertation and some old-fashioned Fíanna Fáil bashing. This country deserves more from this Taoiseach at this time than what we have just heard. It does not deserve an attitude of mind that believes that we are at a debating society here in Dáil Éireann. The Parliament of the people is not a debating society; it is a place where the majority in that Parliament elect a Government to govern. What we want from the Taoiseach when he addresses this House on a serious matter of this kind is a serious exposition of what the Government propose to do about the problem.
Hear, hear.
That is what we expect from the Taoiseach at this time. We have enough economic commentators to analyse the problem for us. We all know the facts, that factories are closing and about to close and that firms are in serious jeopardy. What we want from the Government at this time is not just an analysis, not just a debating society approach. We want from them positive suggestions and a positive outline of where their planning for the future is going and what sort of considerations they will take into account in organising planning for the future.
There is no point in talking in vague terms about a National Planning Board or anything of that kind. I noticed, by the way, that the National Development Corporation was not referred to at all by the Taoiseach. I happen to agree with him on that, because that is a lot of nonsense which was engineered to seduce the Labour Party into joining the Coalition. It has absolutely no place in our present political climate, except precisely that. It is rather significant that the Taoiseach, in his various panaceas for the future, did not include the National Development Corporation. Obviously, the Fine Gael Party prefer the National Planning Board. Now they can have either— Tweedledum or Tweedledee. Neither the National Planning Board of Fine Gael, nor the National Development Corporation of the Labour Party are any substitute for political leadership and economic management. What is required in this country today is a combination of those two factors from the Government, a Government giving political leadership at every level from the Taoiseach right throughout the other Ministers in charge of affairs and, at the same time, sound economic management as a back-up to that political leadership. We are not getting either of those two factors right in the administration of the present Government.
I will illustrate, if it requires to be illustrated, where we are going wrong in regard to both political leadership and economic management. We have had a situation in which, in regard to jobs, the Minister primarily responsible, the Minister for Industry and Energy, the Minister primarily charged by this house with responsibility for the whole industrial area has not shown a single example of where he has intervened in any way to prevent the breakdown or closure of a firm. When we were in Government it was our constant endeavour to seek to pre-empt a closure of a firm or factory. Deputy Reynolds, as Minister for Industry and Commerce at that time——
We remember Talbot.
—— week in, week out was in regular consultation with the State agencies concerned, with Foir Teoranta, with the Industrial Credit Company and the Industrial Development Authority with a view to preventing closure, taking action in advance, setting up a warning signal system. We had established a clear warning signal system whereby the Department of Labour under Deputy Gene Fitzgerald and the Department of Industry under Deputy Reynolds were in constant consultation with the State agencies concerned to prevent closures.
I would like to ask the Taoiseach if he has inquired from his Minister for Industry and Energy, Deputy Bruton, to what extent he made any contacts prior to the actual closure of Telectron. There was a big movement made after the event had happened. When the horse had left the stable we found the Minister for Industry and Energy inside the stable cleaning out the remains when the horse had gone and Telectron was out. There was no movement whatever prior to the Telectron closure. We have had a similar attitude adopted in regard to other firms that have closed in the recent past — the Black & Decker firm in Kildare was another firm that closed suddenly without any apparent knowledge on the part of the Government, without any apparent action being taken through the agency of the Government Minister responsible. A similar situation obtains across the board, an absence of consultation between the Minister for Industry and Energy, firms and State agencies, prior to an actual collapse. There are various ways, means and devices, credit devices, grant devices, mergers, take-over devices, any number of them that can be adopted in the business and commercial world prior to a collapse. But, once the collapse happens, it is an inevitable process thereafter. The pathetic sight of the Minister for Industry and Energy seeking to rescue Telectron after Telectron had virtually closed was not edifying and did not show either political leadership or economic management of any kind.
I shall go through this Government's record factually. There is no point in treating this House as a debating society and talking in generalities as we have just heard from the Taoiseach. We want to get down to practical examples. I will tell the House one of the reasons the Minister for Industry is unable to do anything, or very little, about employment, because he simply ran away from the problem. Indeed he ran away from it in a very interesting way. It was quite evident here on the first day this Dáil met — and I said so subsequently on a debate on Dáil reform — that we had the Minister responsible for jobs wasting his time sitting in here on these benches, day after day, week after week, discussing the esoteric subject of Dáil reform. I am on record in the House as saying in that debate that Dáil reform was a very peripheral matter compared with the importance of executive reform and action, that no amount of Dáil reform, or other committees of the House, or indeed other debates in the Dáil would affect executive action, political action, political leadership and economic management of our society, that these basic matters were far more important than Dáil reform. Dáil reform is a nice, esoteric, cosy subject to be given to some junior Minister on which to whet his appetite and so on, to get on with as a specific assignment. That is the sort of subject it is but it is not a subject for a senior Minister concerned with jobs, concerned with safeguarding and creating jobs.
In our present economic climate I would regard Deputy Bruton, or whoever may be Minister for industry as commanding the most important post in an Irish Government at present, the most important post as far as the preservation of Irish society is concerned. Yet he spends his time footling around on committees concerned with Dáil reform, spends his time sitting in here in the House listening to a debate for weeks on end on Dáil reform. Indeed last week I was amazed when attending a meeting of the Committee on Procedure and Privileges to see the Minister for Industry and Energy walk in, in the middle of the Telectron crisis; it was the black day last week when Telectron, Black & Decker and other firms closed. That very day I was sitting in a room in this House at a meeting of the Committee on Procedure and Privileges when in walked the Minister for Industry and Energy to make a contribution about the procedures and privileges of this House. I know that is a matter with which we are all concerned as Deputies. I am not dismissing Dáil reform either. That is a matter that should be discussed and we can always improve Dáil procedures. But these are not fundamental matters today for the Minister for Industry and Energy who is charged with responsibility for jobs and for safeguarding and creating jobs. He managed to spend the morning at that committee meeting last week. That Committee on Procedure and Privileges was part of his brief as a Dáil reformer and obviously he felt as a Dáil reformer he should be sitting in on that meeting.
We are talking about unemployment.
I am talking about the man directly responsible for unemployment at present. That man is the Minister for Industry and Energy and that Government responsible for unemployment is the Government that Deputy Allen supports, headed by the Taoiseach who sits in this House.
What are the Deputy's suggestions?
I am coming now to some very practical suggestions, the first of which is this, that if the Government do not establish, as we had established, a proper pre-emptive system in regard to potential trouble within firms in this country than we shall continue to slide down the slippery slope on which we have already started. There is no question about that. We had established, through our Ministers for Labour and Industry and Energy, in conjunction with the State agencies concerned, precisely that type of early warning system whereby each of the State agencies was obliged to set up a specific division within their organisation. There was also a reporting system established to the Minister so that the matter came straight onto the Government table. In this way we were warned weeks and months in advance about firm A, B or C being in a situation moving towards trouble.
They still closed.
This is basic commonsense and I am seeking to be helpful. Any accountant will tell one that the time to settle a firm's affairs, to get that firm trimmed down, into order, so that it can continue production and give employment, is well in advance of the actual trouble taking place. When the trouble happens it is virtually impossible to do anything about it. Apparently this Government did not know anything last week about Telectron until they announced they were in serious trouble. Then we had the Minister for Industry and Energy, responsible for jobs, hurrying and scurrying about to deal with the problem. The Minister responsible for jobs, responsible for unemployment in our society, has spent all of his time over the past five months establishing a new division within his Department, creating new jobs in his Department concerned with Dáil reform. Dáil reform is an excellent, esoteric subject. I do not mind somebody cutting their teeth on it, somebody like Deputy Allen up there, or somebody like Deputy Durkan — that is an excellent idea — but to have the Minister responsible for employment in our society spend his time, not just at meetings of the Committee on Procedure and Privileges, but setting up a special division in the Department of Industry and Energy to deal with Dáil reform is one example of what I would call a total lack of attention to essentials. That is an example of the lack of political leadership and economic management we so badly need today.
The Minister for Agriculture, Deputy Deasy, has given a very sorry and sad performance in Brussels. It was a performance that yielded nothing and will yield nothing. But, apart from the inadequacy of Ireland's Minister for Agriculture in Brussels, you have his further total inadequacy in regard to Irish agriculture as a whole. When I left the Department last December there was an agreed four-year plan drawn up by all the Irish farming organisations in conjunction with the State agencies concerned and the officials of the Department. That was a plan drawn up and agreed upon for the first time by all the interested parties. That plan has been shelved for the petty reason, obviously, that it was we who set it up — another example of Fianna Fáil bashing — because we established a constructive committee to bring all the farming organisations together to pool all their ideas. It was a plan designed to produce very good practical results. That plan was produced in December and was to have been published in January. That plan has been buried. Also buried with it was a very practical scheme involving £100 million credit over the next four years raised by way of Euro currency loans designed to increase our existing cattle herd. There again is failure in a definite executive sense.
All we have got so far from Deputy Dukes, Minister for Finance, in the way of Government policy is an accountancy Budget Statement in which he merely put the figures together and delivered a speech that could have been delivered here by the Secretary of the Department. I happen to know this because as the Government last December we had a preliminary look at the various documents and statements put before the Government at the time by the Department of Finance. What the Minister for Finance, Deputy Dukes, said here had not one iota of political content in it. The Budget Statement and the documentation presented with it was simply a repetition of submissions made to the Government by the Department of Finance and, as I said, the speech could have been read here just as easily by an official of the Department and not even the Secretary of the Department. There was not one single item of political content in it. There was no thought and planning for the future.
It is vitally essential that, along with the necessary corrective measures the Government may have to propose, there should be a development content, a planning content and a content which shows that, if we get the corrective measures working, then we can plan forward for the economy and for further improvement. That is the sort of essential thinking and attitude required. It is the sort of thinking and attitude right through the whole of The Way Forward which is the only document on record — I discard the Budget Statement as a serious document relating to the management of our society — dealing seriously with the management of our society. The basic thinking is there in the very first chapter, paragraph 5:
The Government consider that the measures necessary to overcome our economic difficulties and, at the same time, to realise our economic potential should be combined in a National Economic Plan covering the years 1983-1987.
In other words, we must take measures to overcome our economic difficulties but we should also take measures to realise our economic potential. I was asked some moments ago what we would have done. What we would have done is all set out in paragraph 5, page 45, dealing with the employment side in a very constructive statement in regard to the whole question of how to deal with the challenges facing Irish industry. The document emphasises the various possible developments that should be adopted, and in paragraph 8 on page 47 it is specified that company development plans will be the focus for all State aid in the future:
This approach will be selective and based on the potential for development of the firms concerned. Assessment would be carried out on a joint co-operative basis with firms using the co-ordinated services of the various State agencies. The new approach will result in a development plan where selected individual firms aimed at securing significant improvements in output, employment sales, product development etc.
That is a specific suggestion. The State agency should go to each firm, firm by firm, and pre-empt the situation, as I said earlier, and the State experts from the agencies concerned should sit down with the companies' experts and the State accountants and companies' accountants and assess the situation and make decisions which are designed to prevent the closure of businesses in six, nine or 12 months' time. I regard that approach as being very constructive and basic in regard to the problem of unemployment. If we allow the situation to drift, if we do not have political leadership and economic management, then that will be very serious from the point of view of the future of our country; and I solemnly warn the Government they are playing with fire because they are playing with young people's idealism and their future and these young people will not tolerate this Government very much longer if they continue in this way. They will take very serious steps to ensure the Government will not continue unless there is some evidence of planning, of development and of an approach by the Government that, side by side with the dry economic presentation of the budget sent to them by the Department of Finance, side by side with that and with whatever corrective measures they may take, there will be a developmental approach to and specific planning in agriculture and in industry which has not been attempted.
The National Development Corporation, rightly ignored by the Taoiseach in his remarks, is no answer. It is merely the creation of another layer of bureaucracy in the system instead of dealing with the system that is there and seeking to improve it through the agents that are there and do it immediately and not just set up national planning boards or anything else. This nice academic type of recommendation is not what government is about. Government is elected to take action, not to delegate to some committee or some commission what action should be taken. It is the Government's job to take action. Taking action is what political leadership is about and economic management demands that action be taken.
It may be helpful to the Deputy if I tell him that there is no fixed time for speeches but the Chair understands there is a gentleman's agreement between the Whips that speakers would speak for 20 or 25 minutes.
A gentleman's agreement will always be observed. I shall finish in five minutes. What I have to say is practical. It is designed to emphaise the necessity for political leadership and economic management and not allow matters to drift. In regard to labour relations, Deputy Gene Fitzgerald, Minister for Labour last year, took a positive attitude, in co-operation with the Irish Congress of Trade Unions, and brought about a rational arrangement in regard to public service pay for the rest of last year and this year. That was done by taking positive action, not sitting back and letting matters drift. The initiative was taken. The same sort of initative was taken by Deputy Reynolds as Minister for Industry. I sought to take similar initiatives as Minister for Agriculture. In my view there has been neglect in those three key areas since last December.
Another area I wish to mention is one that concerns the Tánaiste as Minister for the Environment. The last Government, as can be checked from the files in the Department, mandated the then Minister, Deputy Burke, to take charge of the whole area of import substitution. Deputy Burke had made considerable progress in that regard. Import substitution is a fundamental aspect of our present economic problems but the words have not been mentioned either by the Taoiseach today or by the Minister for Finance at any stage. The reference to import substitution is to be found in The Way Forward. Import substitution is a positive way of taking steps internally to deal with unnecessary imports, with goods that can be handled at home.
The then Minister was given the task of dealing with this area following reports and recommendations of consultants, architects and engineers throughout the country who reported that enormous amounts of machinery and other expensive equipment were being imported that could be handled at home. Apart from the expensive machinery, many different types of fittings, furnishings and so on were involved. There was a whole range of imports that could come within the ambit of the Department of the Environment if that Department were to impose the appropriate regulations on local authorities, on the professional people and on the forms involved. However, we have not heard anything about import substitution from the Government and in particular we have not heard anything about it from the man who succeeded the person we appointed to deal with this very important area. On a conservative estimate, import substitution could save this country £300 million per year if it was approached properly by all Government Departments but particularly by the Department of the Environment.
It would have to be approached discreetly, too.
I am well aware of the need for discretion but part of the problem is that the people opposite do not have the brains to deal discreetly with such matters. I know all about EEC regulations but if we must go abroad for lessons we need only look to the French to see what they are doing every day of the week and have been doing since they joined the EEC. The Taoiseach's expression of belief in the Williamsburg conference was rather pathetic. That conference will not solve our problems. It can help in creating a climate of development throughout the world, but that development will happen regardless of us altogether. We must get down to our own business at home and show political leadership and economic management in relation to our affairs. Naturally, the rising tide will help us when the big powers free out their economies but it is nonsense to make a big deal of Ireland's participation at Williamsburg. The Government were elected to look after Irish affairs at home.
Another area in which there has been no evidence of leadership from this Government is the whole area of the training and retraining of our young people, of job mobility, of job sharing and of ensuring that through the State agencies concerned — the Youth Employment Agency, AnCO and Manpower — there is a co-ordinated policy designed to ensure that if young people do not get jobs immediately they will at least be equipped to deal with a range of jobs. This will be in keeping with the American model in this respect. However, the failure of the Government in this regard is yet another indication of their lack of political leadership and economic management.
On behalf of this party I wish to record our total dismay with the performance of the Taoiseach who on an occasion when he might have indicated some positive steps on the part of the Government or proposals for Government action, engaged instead in what was a mixture of academic dissertation and Fianna Fáil bashing. That is not enough. We want performance from the Government. I have indicated in my remarks that that performance is sadly lacking. If we are to avoid total disillusionment which would lead only to social unrest, a pitfall towards which we seem to be heading, the Government must perform and if they cannot do that, they should get out.
I welcome the opportunity for the House to discuss what I regard as being perhaps the greatest threat to both young and old, that is, the problem of unemployment. There must be agreement on all sides of the House that this problem represents the greatest challenge both to politicians and to planners and that unless we have vigorous and constant monitoring of industrial policy and performance, we will not be able to pave the way for the proper development of the country. I agree with Deputy Lenihan that unless we face up to the problems and provide the solutions in the short term, in the medium term and in the long term, the whole fabric of our society will be under severe threat. Vast social deprivation results from unemployment.
Very little of the remainder of Deputy Lenihan's contribution would be of help to anyone in trying to provide jobs in the immediate term. If the Deputy had only come into Dáil Eireann as a young Member I could understand his enthusiasm but as a man who has been here for perhaps 25 years he must accept some of the blame for the present condition of the country.
Enthusiasm is a virtue that we should all try to retain.
The Deputy seems to manage that very well. Deputy Lenihan waxed eloquent about the signal warning system that his Government created for the purpose of seeking out problems in industry as they arose. I had a sad experience in my constituency of how this signal warning system was meant to work but never did. The previous Minister for Industry and Energy visited a factory in Tralee on at least one occasion while some of his Fianna Fáil colleagues visited the premises on three or four occasions but when the factory collapsed had the audacity to say that despite visiting the factory on numerous occasions they had not been informed that the company were in serious trouble. There was a lot of razzamatazz about that system but the solutions were not forthcoming.
In the context of this debate we should look at the broad context of the problem. We should look first at aspects of our industrial policy as we have known them in the past number of years and we should analyse our failures and our successes. We should look then at the present situation and then we must consider the future with a view to finding out how to overcome the difficulties.
In relation to aspects of industrial policy, by and large there has been a continuity of Irish industrial policy in the past 25 years, particularly in terms of the incentives offered, the gradual but inexorable movement towards full free trade from the early sixties to the late seventies and the push for regional development. Successive Governmants generally adopted a basic system of tax incentives and grants already in operation or added some new incentives — for example, in the areas of training or employment pressures or modified tax incentives such as tax free profits on export sales when necessary due to pressure from the EEC. There is little doubt that continuity was preferable to the constant changing of the basic incentives. The thrust towards free trade began in the early 1960s added to by the Anglo-Irish Free Trade Agreement of 1965 and accelerated by EEC entry from 1973 onwards. This has meant the transformation of the Irish industrial structure. The Labour Party warned against entry to the EEC on the terms negotiated in 1972 but the people chose by an overwhelming majority and in a democratic manner, the course of entry to the EEC. The challenge for policy makers was to make the best of that opportunity and to minimise the losses for this country consequent on that decision. The question still remains as to how well our industrial structure reacted to the situation.
There has also been a belief in regionalisation and this has been a feature of policy over the last 15 years or so with the location of new industry being pushed generally westwwards. This has changed the face of rural Ireland and, I am glad to say, for the better. On the other hand, the older industrial structures of the east of Ireland have faced tremendous problems on adaptation in the past number of years. We have to analyse whether we have had success or failure in the immediate past with our industrial policy.
The success or failure of industrial policy can be approached in a number of ways. Favourable and unfavourable comparisons can be made with other countries. However, as we all know, overall employment in agriculture, industry and services together has not been nearly adequate to meet the job needs of our growing labour force. I would give examples. The IDA employment surveys, classified by grant type, found a growth in employment of some 21,000 in foreign industry and about 5,000 persons in indigenous industry between 1973 and 1980. However, we must take into account that between fiscal 1973 and fiscal 1980 about £2,000 million in 1980 values was spent, according to Telesis, on Irish industrial policy as a whole excluding tax foregone under export sales relief. We must also realise that in the course of this period there was the impact of two oil induced recessions, that there was chosen adjustment to free trade, which meant enormous job losses in traditional industries which were unprepared in terms of management capacity, marketing skills and productivity levels for some level of competition experienced on both home and export markets.
We also had the job gains in new mainly foreign-owned industries such as chemicals and electronics. I would not wish to be critical of IDA performance. In fact, it should be recognised, as the Telesis people found, that the IDA had developed a marketing organisation which is unquestionably the most dynamic, most efficient and most effective of its kind in the world. The problem may rather have been that the overall framework of policy was inadequate, that the IDA was expected to do too much, that there was too much attention to expected job approvals which never materialised and that, due to inadequate or non-existent planning structures, too little attention was paid to a coherent strategy for protecting existing jobs or helping existing firms to rationalise or merge and then develop into new areas or new product lines.
The 1970s also saw the neglect of the State sector as an engine of development. It was neglected by politicians, who tended to notice only when issues such as major losses had emerged or when a financial crisis was imminent and who failed to provide consistent and clear objectives for the State sector. There was serious undercapitalisation and poor investment decisions in some areas which caused a major burden of debt. Although the Joint Oireachtas Committee on State-Sponsored Bodies was an important innovation, there was no effective policy supervision or effective co-ordination between State enterprises. Whatever the causes, the commercial and manufacturing semi-State companies have come into the 1980s weak in morale, in serious financial trouble and with their contribution to sound economic development seriously diminished by comparison with their earlier pioneering days.
We ask ourselves, and many other people outside this House are asking: where do we go now? What future have we and what plans and prospects have we of dealing with the serious problem of unemployment? Generally over the last 20 years the rate of growth of industrial output has exceeded European levels, if not reaching the level of Japan. It was on average, between 1959 and 1966, 6.2 per cent annually; between 1966 and 1973, it was 7.09 per cent annually; and, between 1973 and 1979, it was 5.11 per cent annually, with little or no change since 1979. By contrast with the de-industrialisation trend in Britain and elsewhere there is no doubt that Ireland has the potential for future growth in processing and manufacturing. We have long since realised, and it has been forcefully brought home to us in recent weeks, that new foreign industry is vulnerable to recession, to closure on market grounds and on grounds of overall global strategy.
Multinational firms, in the last analysis, tend to be mobile. Unemployment has risen dramatically throughout all western economies in the last two to three years and output stagnated. Although we in Ireland as an open economy are vulnerable to this, the growth of manufacturing exports continues to be impressive, consistently exceeding the growth of export markets; but competition from imports continues to be a major problem for many firms particularly in traditional industries. Of course we must protect native industries, we must allow them to develop, we must streamline the production and the commodities and we must at all times encourage the use of native materials in the market place at home.
The growth of the labour force at about 20,000 a year is high by comparison with neighbouring countries and emigration is rightly rejected as a bogus solution for our younger people. The necessity for corrective measures in the budget to protect our borrowing capacity and give us room for manoeuvre in the future curtails spending on both the current and capital side as a boost to recovery. I would say that the budget was a harsh necessity rather than a preferred choice, if we were to be realistic and face up to the serious problems facing this country. In setting out for a target of £897 million as a current budget deficit we were adopting a realistic approach to the serious problems facing this country. I do not think it would have been practicable or feasible to have gone for the target of £750 million, as outlined by the Fianna Fáil Party in the course of the election campaign. I do not think either that the country or the people, who in the end are what count, would have been able to sustain the serious economic deprivation which would have resulted immediately on aiming for a target of £750 million.
Many recent industrial studies indicate that we are now at a transition stage in terms of industrial policy. Our past policies have been totally inadequate in providing employment oportunities and obviously changes must take place. I will concentrate on a few of the issues which must be looked at if we are to overcome the difficulties. Adequate infrastructure is essential for industrial development. This year there has been a significant increase in the provision for sanitary services which are a necessary part of infrastructure in attracting development. My Department are reviewing the road development plan and we are considering the establishment of a separate funding agency to tap private sector sources of funds so as to accelerate road development. Road development is very important not only in the rural areas but in the cities in terms of attracting and locating industry. We are well aware of the time and money wasted because of lack of traffic mobility in the cities due to an inadequate road system. It is my intention to see that we have adequate infrastructure so as to avoid serious bottlenecks which will hinder industrial investment or recovery.
It is accepted by all politicians that we must have a continuing and adequate planning system for this country to develop. We must have a continuous planning system which will highlight obstacles to development and act as a special forum with wide contacts in the various sectors of the economy. That will be an important part of the development process. Ever since the Second Programme in the 1960s Governments have shown a marked reluctance to establish lasting planning structures. All parties should be actively involved in planning and in charting a course which we should follow if we are to have economic development. Our overall costs must be competitive, as there is no solution in a low wage economy, nor is there any guarantee that restraint in incomes will mean increased output and employment. From a given base, changes in wages and in related costs higher than those in competing countries will have a damaging effect and lower the prospects of recovery.
Private investment has failed, due possibly to the recession. What is needed is a more competitive structure, more innovation, more research and development and better marketing skills, which would allow us to market effectively in countries where English is not the spoken language. Up to recent times our marketing in these countries has been totally inadequate because we have not the basic language. We should also encourage the development of high technology forms in growth areas so that there will be an increase in productivity levels.
We have never neglected incentives to industry, but we are at a stage where we are analysing industry and the state of our economy. We must appreciate that it is essential to encourage entrepreneurial talent in the private co-operative and State sectors. Sole reliance on new foreign firms and associated tehnology and capital is a recipe for disaster. It is necessary to strengthen the climate which encourages genuine industrial risk and to severely penalise unjustified gains from speculation and windfall profits in nonproductive areas. Every encouragement will continue to be given to worker co-operatives, although ideally these schemes should emerge as projects in their own right, before established firms get into difficulty, rather than as a last resort type of industrial rescue.
The important role to be played by the State rescue agencies should not be underestimated. These agencies must continue to be active in job protection. In the present climate employed people are wondering whether they will be employed next week or next month and there is a growing uncertainty. We must fight to preserve existing jobs and to make the foundation on which these jobs are based a solid one so that they will survive the serious problems of recession facing us. Every effort must be made to save existing jobs, so long as there is a possibility of a viable outcome, by injecting new State funds.
Deputy Lenihan questioned the absence from the Taoiseach's remarks of the proposals for the National Development Corporation as have been outlined in the Programme for Government. It is essential that the State sector be financially restructured and encouraged to develop and diversify into new and profitable areas. The object of rationalisation must be to encourage development in other areas. The National Development Corporation will be a key instrument in the development of new public sector enterprises, in initiating joint ventures and as a vehicle for commercialising ideas from State research institutes and elsewhere. They can play a key role in developing our natural resources in areas of industry based on agriculture and forestry and in high technology areas. It is necessary to get the legislation right so that the National Development Corporation will be effective and so that State enterprises can again play a vital role in industrialisation. Adequate funding will not be a problem for the National Development Corporation when suitable projects are identified and analysed.
I accept that there are serious problems facing us and, more particularly, facing our young people. We have always spoken of our young people as being our greatest asset. Unemployed young people are wondering from where we got that terminology. We must recognise that the large numbers of unemployed young people are a sign of our failure to cope and develop policies to solve their problems. If we are to succeed in tackling this problem Irish companies must be developed in the private, co-operative and State sectors which will be able to compete in the free trade world. We cannot rely on foreign enterprise or on foreign market forces to satisfy the national requirement for growth and jobs. The forthcoming White Paper on Industrial Policy will spell out the details of Government action. In the meantime within the overall financial constraints that exist where because of the huge burden of debt there is little room for manoeuvre, the Government are making every effort to save jobs and encourage investment and growth.
It is my intention to deal with the region of the country which I represent and to refer mainly to the unemployment situation there. At the outset I should like to make a few remarks about what the Tánaiste said a short while ago. I am glad the Tánaiste welcomes the idea of regionalisation in regard to industrial development. It was a very bright idea and for the most part it was one which was put to work in the regions quite successfully. The Tánaiste referred to the semi-State areas, dealt with their weak position as of now and told the House that many of them are in a weak position and that there was a crisis of morale. That whole area will need to be studied carefully and norms set, advice given and action taken by the Government in order to improve the morale and confidence in those companies. It seems odd to be referring to a National Development Corporation at a time when the existing and experienced semi-State companies do not seem to be able to deliver the goods. It seems to be a kind of cosy answer which is given by commentators: "All you have to do is develop State companies and then all our problems, unemployment and industrial development, will be solved". It is not quite as easy as that and anyone who in Government has had close contact in the recent past with some semi-State companies crying out for equity, for further Government guarantees for borrowing, will be very dubious about the claims made for development by people who regard this as a solution to all our problems.
I would agree with a good deal of what the Tánaiste said about our weaknesses in certain areas and about the importance of infrastructure. It is not my first time to mention in the House that the region about which I intend to speak is one that has been treated very shabbily with regard to the basic infrastructure, namely, the provision of adequate roadways. I have said in the House before that in the twenties, thirties and for some time in the forties, we had in the Cavan-Monaghan area a fine railway service, the Great Northern Railway and the old Midland-Great Western, a CIE operated section from Cavan to Mullingar. People were very reluctant to agree to those services being withdrawn, but promises were made of an extra provision of money for roadmaking. Indeed, the promises were delivered on once or twice, but not for many years now has any cognisance been taken of the fact that road is the only access to that region.
I get angry in the House when I hear pleas being made for improved roadways and so on — very busy roadways, admittedly — to the south while at the same time a good railway service is available to the major regions in Munster from Dublin. Development is needed there, but it is difficult for taxpayers not to be angry when they find they are not getting the infrastructural development they are entitled to as citizens and that there are places of privilege in this regard in the State.
The Tánaiste also referred to the difficulty about training an adequate sales force to sell our goods in countries where English is not the language. I agree with the Tánaiste, but I should like to add that as Minister for Education I took steps to improve the quality of oral continental languages by introducing an oral test. I have not a great belief in the test as such but it will draw the attention of the pupil to the importance of being able to communicate in the language. It will concentrate the teachers' interest in that area also and, inevitably, it will benefit the pupils. What do we find now? We find that the Minister for Education, for the sake of saving a few pounds, a bagatelle, a trifle, has scrapped the scheme which had been in progress on an experimental basis for some time. That was a very short-sighted decision and the Tánaiste should impress upon the Minister for Education the importance of changing that decision.
I agree with the Tánaiste that the development of entrepreneurial talent in our people is important, particularly among our young people. It is true that all the programmes, syllabi for the schools, were reorganised with that in view, to develop imagination, self-confidence and ability to do their own research depending on what level they were at in the school. Above all we were anxious to produce flexibility of mind and approach geared to the idea that young people should think up projects for themselves and that people working in certain industries should be thinking of setting up a small industry in an allied area. Some time ago I mentioned in the House that Dr. Kieran Kennedy gave an account of the development of small industry in Denmark. He pointed out that he learned from his studies that in Denmark most of the small industries were started by young people who have been employed in a specific small industry, had an idea related to that industry and set up on their own. In that way the industrial base in Denmark was expanded and strengthened.
I note that the Tánaiste said that when the time came to establish the National Development Corporation adequate funding would be available. I will deal with that matter later. Another point I want to deal with is the budget and how it has damaged employment. The House may be aware that the North Eastern Regional Development Organisation covers the counties of Louth, Monaghan and Cavan. As the subject under discussion is unemployment, I should like to refer to the statistics issued on 25 March last for that area by that group. The total figure is horrifying — 10,818 people. I have evidence that since 25 March that figure has increased and the situation is now worse than ever. That was the number who were unemployed in the Louth, Cavan and Monaghan region. At a conservative estimate each unemployed person affects three others. So we are talking about the plight of 30,000-plus people in that small region.
In some cases there is a severe degree of hardship. Admittedly, there is some cushioning from social welfare, but in other cases it is not merely a degree of hardship but of distress and despair. In a sense the whole structure of society in recent times is bound to create despair for young people, particularly young married couples, when they lose their jobs. Our way of living involves a mortgage, which is a heavy load on any young couple even when both are working. Consumerism has affected them to such an extent that they purchase, often on hire purchase, cars, cookers, fridges, washing machines, deep freezes, stereos, videos and so on. Everything has to be wall to wall. It could be characterised as the wall to wall society. There is nothing as heart-breaking as the pride of young people when unemployment strikes. It can be very upsetting for anyone in public life and is a severe blow to young people who are living in hope.
I put down a question to the Minister for Labour some time ago. It was answered by the Minister of State. It related to the number of people who were registered for unemployment by the National Manpower Service in Cavan town. The largest group were construction workers and general factory operatives. Next to that were clerical and related occupations. The construction industry is in a perilous state, as everyone admits. Some responsibility for this lies with the capital budget. There is a motion on the Order Paper at present about the cut of £220 million in the Minister's budget from what we envisaged we would have spent. We had a programme for decentralisation involving Dundalk, Cavan, Sligo and Letterkenny — a girdle of towns around the Border. If that programme had been proceeded with the category under "construction" would have been wiped out. We had skilled people and projects were under way. They were simply cancelled. I do not think there was any justification for this. The Government would eventually have saved money if they had gone ahead with the programme. It was said in the House that there was no private money available. I said I was prepared to take up that challenge and that in my county town the money would be available, as were the skills to construct the building. This would have involved a large number of highly skilled operatives and would have breathed life into the town with the increase in population, the numbers employed, spending power and so on.
I am not alone in thinking there was a serious mistake made in cutting the capital budget. Dr. Kennedy, Director of the ESRI, said in a speech in Galway that it was also a mistake to trim the public capital programme by eliminating the provision for new projects satisfying clearly defined criteria rather than cutting out some of the more wasteful existing components. Nobody could accuse Dr. Kennedy of ex parte pleading or political motivation. He has been more kind to the budget than I would be, but he makes the point I am making. I am applying it to my own area. It was a serious mistake to curb the capital programme.
The second highest group looking for positions were clerical and related occupations. Many people, particularly girls, do their leaving certificate and then do a commercial course lasting one year. There are hundreds of them on the labour market and very few jobs. I have had meetings with young people in the recent past in a number of different counties and asked them to speak up and say what they thought. Very often that problem surfaced, with wide ramifications.
First of all, increasing automation of offices, increasing computerisation, will leave fewer jobs, at least in the larger enterprises. There may always be employment, and there is no reason why it should not be good employment, in smaller firms in which it would not be economical to invest heavily in technology, but it is a serious problem we will have to face up to. The North East Regional Development Organisation commissioned a study of the area and I am very pleased to see that the period they took in for the study was 1980 to 2000: they were thinking in terms of the next century. The numbers out of work or looking for work, with good liberal education plus a year in training for clerical work, are very large. It is very disheartening to find there are no jobs for them.
Among the complaints of young people to me was that married women were staying on in jobs. That was referred to in a wider sphere than clerical jobs: it was spoken of in relation to nursing, teaching, and so on. It is very hard to make categorical statements about it. It is a difficult problem. A citizen who is a married woman may have skills and experience that she can put at the service of the State. It is very difficult to tell such a person that she cannot take that job because she is married. On the other hand a young person is told she is inexperienced and that she cannot get a job. If you cannot get a job you cannot get experience. The Work Experience Programme came in for a lot of criticism from young people. They said that it was not really serving the purpose that it was designed for, that the work experience was not worth while in many cases. There were even complaints about exploitation. Young people tend to exaggerate and therefore I do not intend to dwell on that.
However, we will have to have a deep study of the problem that automation of offices will create, difficulties that will be increasing in the near future, and to the end of the century and into the next century, in this regard. Why should we continue to encourage people to train for jobs if the jobs will not be available? We will have to look at society to see how wealth can be distributed by giving part-time jobs or half-day work, etc., to people as this problem increases. We hope the recession will lift and that there will be more jobs, but even if it does, even if we begin to produce more wealth, it may be that the wealth will be produced by fewer workers. It is something we will have to face up to.
I want to reiterate that I condemn the cut in the capital budget which among other things wiped out the decentralisation programme, decentralisation being desired in its own right, but there would be a spin-off in the production of buildings, and great numbers of people would be employed. I speak specifically for my own area but it would apply to other parts of the country.
We have very serious problems of unemployment, redundancy etc. as a result of the budget. I will cite a study made by business people of estimated losses in a small town in my constituency. The losses to the State on excise as a result of the penal excise duties in the budget have been estimated at £434,928 per annum; loss of excise on spirits has been estimated at £800,000 per annum; the loss to public houses because of VAT at 23 per cent is estimated at £365,976. Excluding petrol and the publicans, the loss of VAT revenue per annum has been given at £299,000, a total in one small town of almost £2 million.
I submit there is a very special difficulty in the Border areas. Some Members of the House who are members of the Government parties will have visited Donegal for the by-election campaign and they will have noted that there is a very alarming effect in Border towns. They will have noticed that there are roadside markets very near the Border. I encountered one on Sunday and it took me about half-an-hour to get through it. It was between Enniskillen and Swanlinbar. The market was along the side of the road. The pessimism and lack of confidence being spread in that area cannot be exaggerated. In the distributive trade there are redundancies every week with shops and businesses closing down, some opening for portion of the day.
In particular the hotel and catering industries, which for many years along the Border were thriving, are severely affected by the duties, taxes and excise and the difference between them in the Six Counties and the Republic. I appreciate that a gesture was made by the Minister for Finance with regard to VAT, and it was appreciated, but it will not have a great impact on business, though the position is better than it was. It shows the Minister was conscious that something had to be done because otherwise the industry would have fallen down and disappeared.
I will give some indication of how widespread the increase in unemployment has been in a Border region. Between January and November 1982, Dundalk lost very heavily. I can add to that what is happening at the moment as a result of the budget impositions. Dundalk is in a very serious position. Drogheda, further south, also suffered severe job loss in 1982. Ballyjamesduff, a small Cavan town, suffered very severely. A meat processing business there was closed down altogether. Kingscourt lost jobs, Ardee lost jobs, Killeshandra lost jobs, Castleblayney lost jobs, Carrickmacross, Cootehill and Ardagh lost jobs. In Ardagh the copper processing plant was closed down leaving the workers in the lurch. I could not charge the Dutch people who founded the company with irresponsibility. They traded for as long as they could but their market dried up.
I mentioned that the North Eastern Regional Development Organisation had commissioned a study which could be a headline for other regions as well, and even for Government. The conclusion of the report by the North Eastern Regional Development Organisation for 1982 is worth reading into the record.
The much-promised and longawaited end to the recession has still not arrived——
The pundits said the recession is lifting. Dr. Kennedy in his speech in Galway said the US economy was lifting and that gradually the European and our own economies would lift too. I hope that is true because it is better to see the pint glass half full than half empty.
——and in fact the employment position has deteriorated further since the date of the survey in November 1982. The needs and priorities of the North East Region have been highlighted on many occasions and in many forms but now similar needs and priorities are evident in many of the other regions in the state. The competition for jobs in the future will be very keen and the North East Region will have to be promoted and projected intensively if it is to obtain its due share of the available jobs.
I am toying with the idea of a type of SFADCo for the Border region which would be useful as a developmental vehicle. Nobody ever took the economics of the Border area seriously. It was never studied specifically as it affected the counties on the Border.
The IDA is currently preparing its Industrial Development Plan for the next five years.
The Tánaiste mentioned that a White Paper on development will be issued soon.
It is anticipated that in the light of past performance and future expectations, the various programmes and procedures of the IDA will be closely examined to determine if they are suitable and appropriate for the critical task of job creation which faces the country in the years ahead.
NERDO, having anticipated the need for a co-ordinated programme of development of the NE Region, commissioned a study to formulate a regional Strategy for the period 1983-2001. Work on this study is well advanced and the final report is due for publication in mid 1983. This strategy will quantify the population and workforce projections for the counties and main towns in the region and identify where the need for jobs is most pressing and it is to be hoped that a series of imaginative and innovative recommendations will be produced which will assist the development agencies operating in the region to fulfil their obligations in the job creation field.
We cannot fail in that, particularly because of the very large numbers of young people in that region. I go along with all those who say that pessimism is a very serious enemy, that we must be very careful, despite the fact that all the indicators are wrong and that the recession is still biting, and that we instil confidence in our young people. We must not deprive our youth of hope.
I would like somebody to tell me about the Youth Employment Agency. There is supposed to be a sum of £70 million plus for this agency. The agency has two objectives, training and work experience, but they should create positive and continuing jobs for young people. What is the agency doing in that regard? I met young people recently and asked them to bring forward positive ideas for employment, to study the setting up of youth co-operatives and to look around and see if there is anything they could develop in their own areas.
I do not know how long I have been speaking nor do I know how long I have.
The Deputy has been speaking since 12.10 p.m. and we conclude at 2.30 p.m. There are a number of Members offering.
I will not be much longer. I want to make the point that pessimism is a dangerous enemy and we must inspire our young people with hope and confidence. I want the Youth Employment Agency to get that £70 million, but they should invest it in projects for young people. A youth co-operative movement would be a good idea. I come from an area where the bulwark of the economy is large co-operatives.
I have some positive suggestions to make. There was a gas find in the western part of County Cavan, extending into County Fermanagh and maybe parts of County Leitrim. Last borings made improved the flow of gas, but there has not been a commercial flow. Experts in this field say this gas is available. The Minister of State, Deputy Collins, told me provision has been made for two borings this year. I suggest that money from the European Regional Fund be made available to that more extensive borings can be carried out this year. This would be a great boost for the national economy, apart altogether from the local economy.
The Tánaiste said multinationals tended to be mobile. Telesis said we should be concentrating heavily on native raw material based industries. In my region there are very highly developed co-operatives. At one time the area was famous for oats. We are importing cereals. The dieticians and experts, particularly the health fiends in the United States, say the fibre and roughage available from natural porridge is best and over-manufactured cereals are not so good. Why then can we not have import substitutions in that field? Admittedly, my region has turned mainly to dairying but young people might pounce on this idea of growing oats and the scheme could be funded by the Youth Employment Agency. Some years ago some Members, including myself, supported a woman who maintained a corn mill in Kells which was in danger of drainage. She produces the traditional porridge oatlets for her own locality.
I seem to have potatoes on the brain. £26.4 million worth of potatoes was imported in 1982 into this country. That is bad management of our agricultural economy, there is no doubt about that. Potato production and potato processing, as chips or otherwise, have a potential for employment. I cannot understand, from a news broadcast which I heard this morning when on my way into the Dáil, why several tonnes of potatoes were being imported yesterday at Greenore. I do not want to condone illegal action in any way, but the local farmers took action themselves and either dumped those potatoes into the sea or turned them inedible. There is a glut of potatoes in Ireland at present, prices are at rock-bottom and I cannot understand why it was necessary to import potatoes this year. A glut may be followed by a famine and perhaps next year potatoes may be very dear and very scarce. There is some lack of direction and thought. Perhaps a floor price of some kind could be introduced. Deputy Lenihan spoke about import substitution. There is certainly no question of that amount of potatoes having to be brought into this country.
Diversification from butter-making is important. The Minister for Agriculture will have a fight on his hands to ensure that we get a fair deal in the British market as far as the selling of Kerrygold butter is concerned. We are not getting that now. The British are doing what they like in this regard. Sales have gone down and there is alleged to be unfair rigging and competition.
In my own constituency over 30 million gallons of milk are now used for the production of Bailey's cream, one of the great export successes of recent times. A few years ago nobody would have thought of that as having such potential. That potential has been exploited and I am glad to say that another cream — Emmet's Cream — is being produced in the county, using a certain amount of milk.
Why is it that if one goes on holiday to any continental country in the supermarkets one can get tinned and processed food from Denmark, the Netherlands, Germany and France, but none from Ireland? The only Irish product one sees on the shelves there is Kerrygold butter, salted or unsalted — one has a choice. We kill beef animals at a younger stage than they do on the Continent and our meat is better and more tender, so why can we not exploit it? We are talking all the time about food processing and every venture which we have had has fallen down. That includes the Sugar Company off-shoot which was not a great success — again I do not know why. We have the raw materials. We could go to the general market or go up-market by selling to delicatessens and charging high prices for special selected meats, whether lamb, beef or pork, the latter being extensively raised in my region.
It will take the combined efforts of everybody in this House and of all the existing development organisations to cope with the present situation as a result of the recession but also, when the recession is over, to cope with the huge numbers of young people — sophisticated, well-trained and well-educated — who will come on the market. If the Government do not very soon come up with a positive plan for development, particularly in manufacturing industry, the pessimism will become endemic and it will be impossible to build confidence in our young people for the future. People talk about the danger of a social explosion. To be quite frank, they would be foolish if they did not explode and blow the lot of us up if we let them down by not developing the country in such a way that they can find enriching employment and can with satisfaction develop their own country. There is nowhere else to go — I am tempted to add "Thank God". They must stay and develop their own country. We must have the plans, provide the vehicles, give them the tools and I am sure that they will do the job.
I listened with great interest to what Deputy Wilson had to say and am glad that his contribution was in short, sharp contrast to that of the deputy leader of his party. He made a number of constructive suggestions and accepted, as a politician in this House, that the blame lay on us as politicians in some part for the problems which face this country and not one Government or party. He realises that this is a continuing difficulty which all of us must share and ask what we can do about it. He endeavoured to make constructive suggestions, which appeared absent from the speech of his deputy leader, who took the opportunity to use it as an exercise to bash the Government rather than to put forward something constructive to give hope to the people who are without jobs.
This debate on the recent factory closures and the job losses which have resulted has had a beneficial potential on two counts. It affords the Government an opportunity to underline their policy for stemming the tide of job losses through a concerted planning approach from the industrial sector level upwards. It also affords the Opposition an opportunity to demonstrate whether their intent in seeking this time was motivated by a genuine and constructive concern for those who have lost their jobs, or whether it represented an opportunist political stroke at our expense. It certainly gave me no pleasure to have heard the feigned and empty anguish expressed by the Fianna Fáil deputy leader. There was no constructive input which offers any hope for those who have recently found themselves without jobs. Their plight is being used here for cheap political point scoring, if I understand the temper of his speech. The sooner Fianna Fáil Members who would take this opportunity to make speeches like that discover the bankruptcy of that sort of approach, the better for us all. Overcoming the jobs crisis is not a matter for the Government alone, but should elicit the most constructive and committed efforts of every Member of this House.
The Taoiseach and the Tánaiste have addressed themselves to the planning structures which have now been put in place by this Government. Their purpose is to evolve a more cohesive approach to industrial development than has previously existed. In this exercise we have the benefit of knowing the strengths and weaknesses of past policies. It is clear that only through achieving a broader and more diversified domestic industrial base can we have greater control over the employment destinies of our work force. The urgency and importance of this task is sharply focused by recent factory closures.
Commitment by this or previous Governments to facilitating industrial expansion has never been an issue. Huge sums of taxpayers' money are expended annually on factory premises, industrial grants for equipment, management and operative training, loan and rescue finance arrangements. The State has generously assisted our industrial sector at every turn — from the cradle and, unfortunately far too frequently, to the grave. The questions now being seriously examined by this Government are whether the return in terms of the creation of durable employment has not been far too meagre, as also policy changes called for to affect improvements to bring about a greater degree of industrial job security.
When last in the Department of Labour I established the Youth Employment Agency, with the full backing of all parties in the House, by means of a 1 per cent levy, the continuation of which I have ensured since coming back as Minister for Labour. It will now apply to all incomes. More than £75 million, in addition to moneys from the European Social Fund, will be applied this year to ameliorate and overcome the employment problems of young people.
The Youth Employment Agency has been only a short time in existence. But when one considers the increase in numbers given training and work experience opportunities in the last two years, one will see that its intervention has already had a significant impact. Apart from working towards greater coordination and control of youth schemes, the agency has brought about an emphasis on catering, more centrally, for the need of disadvantaged youth and the longer-term unemployed than obtained heretofore. The numbers undergoing programmes funded through the levy have increased also in two-year period from approximately 19,000 to an estimated 45,000 this year. The Government are committed fully to the work of the Youth Employment Agency and, as indicated in the Joint Programme for Government, will facilitate that agency in every way to ensure that it can expeditiously and effectively discharge the important national task for which it was established.
In outlining the potential of Government to address the problems of unemployment and establish more solid foundations for future economic growth, we must recognise also our continuing vulnerability to variations in the industrial economic climate. This recession like the last, is taking its toll in closures and increasing levels of unemployment. Much stronger economies than ours have been affected similarly. For example, in the Netherlands at present unemployment stands at 14.3 per cent of the labour force. In Belgium the rate is 13.4 per cent while the Federal Republic of Germany, with a traditionally strong economy, has an unemployment rate now of 10 per cent.
The factors which have led to increased unemployment are many. In the first place there is a world-wide economic recession which has led to the growth of Irish exports falling to around 3 per cent on average in the last three years as against 8 per cent in the late 1970s. Apart from that, the recession has created an environment which is unfavourable to new investment and resulting job creation. In particular competition internationally between countries to attract direct foreign investment has intensified. This offers little consolation to those without work at home.
However, in some recent closures, the tragedy of workers' plight has been callously heightened by the cavalier approach of employers to notifying them of their impending redundancy. The Government and the country at large abhor this behaviour. I want to make it abundantly clear to any employer who might countenance a similar approach that any disregard for the existing legislative provisions governing redundancies will be met with the full rigours of all the means at the disposal of the State. The Protection of Employment Act, which is administered by my Department, obliges employers contemplating redundancies to notify the Minister for Labour and worker representatives in writing at least one month in advance of the proposed effective date. The purpose of that Act is to allow for discussions to take place between all interested parties, to establish what possibilities, if any, exist to save the jobs at risk. This legislative obligation is not discharged by an employer who gives no notice of redundancy to his workers and who instead seeks to compensate them financially. Such an approach undermines the whole purpose of the Act, indicates scant regard for the future welfare of employees and often jeopardises the efforts of State agencies to assist.
I have reviewed the operation of the provisions of the Protection of Employment Act since it was first implemented in 1977. As a result of this review I intend to strengthen its provisions in two areas. The requirement of one month's notification of impending redundancies has been shown to be too short to allow for an exhaustive examination of possibilities for salvaging jobs at risk. I intend to extend the required notification period. I am concerned also that the penalties for non-compliance with the provisions of the Act should constitute a real deterrent. Therefore I intend to put proposals before the House which will increase their level and broaden their ambit in order to achieve that result.
Closures of firms and large-scale redundancies can lead to serious industrial relations problems and put considerable strains on our industrial relations system. Nevertheless the principle of free collective bargaining is accepted by all sides as the best basis for our system. The role of the State is to provide institutions which can help the parties to disputes to settle their differences: the Labour Court, the conciliation service, rights commissioners and the Employment Appeals Tribunal, all have been set up for this purpose. Disputes arising from closures and redundancies are best dealt with through agreed procedures and, where necessary, by invoking the services of public institutions.
Unfortunately some closures have led to forms of industrial action which are not authorised by the law. I know that trade unions generally do not condone or support such action. I am sure they will continue to encourage their members to act within the law. I would point out that illegal action frequently can frustrate the efforts of the State agencies endeavouring to get replacement industries set up where firms have had to close. Furthermore the inevitable publicity which illegal industrial action receives can do nothing but harm to our prospects of attracting new industry here. While the frustration and anguish associated with losing employment due to a closure are entirely understandable, workers should appreciate that unlawful action often can have serious adverse effects on theirs and fellow workers' future employment prospects.
I would advise employers to weigh very carefully the implications of having recourse to the law in an effort to defuse industrial relations difficulties. The use of injunctions in industrial disputes is a difficult and emotional issue. The granting of ex-parte injunctions where one party only to a dispute is heard, is subject to particular criticism. I am anxious to have discussions with employers and trade unions on the use of injunctions in trade disputes, to establish whether an agreed basis for changes can be found. In my view experience has shown that injunctions often can compound problems in industrial disputes, making their ultimate solution vastly more difficult.
I am disappointed with the tenor of contributions from the Fianna Fáil benches. They have sought to give the impression that they alone of the parties in this House champion the interests of working people, Yet, nowhere in their legislative record have they enshrined that commitment they so often profess in opposition. The stock of substantive legislation protecting the rights of workers has not been updated by one comma since its advent onto the Statute Book at the instigation of the Labour Party in the period between 1973 and 1977. For example, Fianna Fáil members of the European Parliament voted en masse only a short few months ago to scupper an EEC proposal to require multinational companies with subsidiaries in the Community, including Ireland, to give basic information to their workers on the wellbeing or otherwise of the enterprises in which they work. Those kinds of realities are what test their sincerity in pleading the cause of working people. Indeed talk is a very cheap commodity; actions speak louder than words. That type of stance on the part of Fianna Fáil expresses a complex certainly not relevant to the Ireland of the 1980s. Industrial location here, especially by the bigger multinationals, has never come cheap. The national duty-free shop has been exhaustively scrutinised in advance of start-up decisions being taken. Often the bottom line is certainly not an indulgence of our national need for more industry but the potential for return in the form of profit.
In assessing that potential for return locating firms take very fully into account the many positive advantages we offer. For our part we may in the past have been too willing to subordinate the longer-term interests of Irish workers in our anxiety to clinch agreement for firms to set up here, even where their longerterm durability was dubious. To some extent our present difficulties have their source in such an approach. A refashioning of our industrial policy must now take full account of past deficiencies and ensure that we proceed only on the basis that offers those now without work and the thousands who will join the labour markets in the years ahead the best possibilities for employment commensurate with their educational and technical skills. That is the objective of this Governments's policy.
Because of the short time left I shall try to be brief in order to allow other speakers to take part in the debate. The debate so far has not attempted to deal with the problem of unemployment in any realistic way. It has not attempted to examine what is wrong, what has brought about the levels of unemployment we are experiencing. Unemployment, is not, of course, a new problem. It is an element we have had since the State was founded. It is an element that existed even before that. Successive Governments since the establishment of the State have implemented plans which they thought would imporve or develop the industrial base and provide employment for all those available for work. It is clear from even a very basic and cursory look at the history of the State that the policies pursued down through the years by succesive Governments have failed and the most obvious indication of that failure is the present level of unemployment and the thousands upon thousands who have emigrated in search of work since there was no work at home because of the grossly undeveloped state of the industrial sector.
I would be anxious to hear the Government outline what precise proposals they have to change the thrust of this policy in relation to unemployment. It is regrettable that the budget and the Bill now before the House have done virtually nothing to change the policies implemented down through the years in an attempt to solve the unemployment problem. We have had a chorus of speakers, some Government speakers and some from the industrial sector, saying that pay rises could put jobs in jeopardy. We have the Minister for Finance in recent days indicating his willingness to interfere with the system of collective bargaining in order to impose sanctions on companies which enter freely into arrangements with workers for wage increases and, at the same time, refusing or saying he has no authority whatsoever to impose sanctions on companies which have failed down through the years to reinvest the profits made for their activities or to develop the various elements of marketing and research development which are so essential in developing competitive commodities for sale in the export market. The chorus we hear day in and day out is that the workers are the ones who are at the back of the crisis. They are the ones creating job losses. It is not the working class who control the finances of this State. It is not they who engage in land speculation rather than invest in jobs. It is not the working class who make decisions. It is not they who invested £106 million buying a bank in America rather than bring the money back here to invest in housing and industry. They are not the people creating job losses. It is the people with the financial power and those with the power to make investment decisions who are at the back of the present crisis.
We are told the recession is worldwide and we are victims of that recession. Recession in any part of the world will affect this country but it is ludicrous to suggest there is no way for us to tackle our problems until the recession in Europe or America is at an end. Basically this State and its economy is under developed. The chorus I mentioned about our pricing ourselves out of jobs and out of export markets is raised on the basis that workers who are looking for a reasonable standard of living have destroyed jobs. I should like here to quote from a pamphlet recently published entitled Jobs and Wages, the True Story of Competitiveness. This pamphlet was published by a group of socialist economists in May 1982. At page 11 it is stated:
In recent years the other non-wage factors in competitiveness have been receiving more and more attention from international experts and management executives. The business management approach to competitiveness recognises the cost of productivity and its effect on prices are not the main influence on competitive ability and profitability.
It gives some quotations on this.
The European Management Forum in a Report on the Competitiveness of European Industry 1980 strongly warns against such crude labour cost theories. It says competitiveness is not a one dimensional concept. In the market place buyers will weigh price advantage against poor quality or a lack of after sales service and so on. The notion that competitiveness might be reduced to consideration of costs and productivity is thus a dangerous one.
The report has a much more comprehensive definition of competitiveness than the crude single factor ones of the costobsessed Irish business leaders and the conservative economists:
Industrial competitiveness is a measure of the immediate and future ability of industrialists to design, produce and market goods whose various price and non price additives combine to form a more attractive package than those of similar products offered by competition. The final judge of competitiveness is thus the market place.
That is a clear indication, if not in Ireland at least in Europe, that business and management experience are not blinded by this simplistic approach that pay rises result in a loss of jobs. No one argues that wage costs have not a bearing upon competitiveness. But it is both ridiculous and simplistic for business interests and Government spokesmen to imply, as they have been implying in the past few weeks, that each time the worker seeks a miserable wage increase he is increasing the dole queue. That is nonsense. The form I mentioned earlier lists ten principal factors of competitiveness, but wage costs is not even one of those. The total cost of production and industrial efficiency are listed as one factor and wage costs are but one aspect of that. If the Government are serious about employment and about organising this economy, they must get off their hobby horse and stop implying that the working class, the people with jobs, are the ones who are causing job losses.
The Workers' Party stand alone in this House in offering a comprehensive and positive alternative to the hairshirt economic policies of both Fine Gael and Fianna Fáil. In October last our party produced a document entitled An End to the Crisis. This is based on the central principle that the massive economic challenge facing the country can be solved only by determined resolve on the part of the Government to increase by way of a production plan national production in industry, in agriculture and in new technology fields. The plans produced to date by the present Government and by their predecessors — indeed this goes also for every Government since the foundation of this State — have been spending plans born from the economics of despair and based on the indefensible proposal that we can deflate ourselves out of the recession. No one denies that tough action is needed to get us out of the economic mess, a mess produced by the free enterprise policies of the conservative parties; but that tough action must be directed towards the productive sector and in particular towards the private industrial sector, and towards the farmers as well as by way of a broadly-based mobilisation of the State agencies and State companies. The week-kneed and callous approach of taking measures only against the unemployed and those who have jobs, as well as against the elderly, the sick and the homeless, would not be necessary if the emphasis was on raising national income rather than cutting expenditure.
We argue that full employment is the demand of this society, but none of the people who has spoken so far this morning has put forward proposals or suggestions as to how that aim can be achieved. What we are talking about in this context is a massive challenge, but with the necessary will the Government could succeed in that regard. It is the responsibility of each of us here to address ourselves to that challenge. It is not enough to talk about what has been done or about stabilising employment. We must talk about the achievement of full employment, an objective that we believe to be both realistic and realisable. We have not even begun to use our potential for industrialisation so far as our indigenous resources — agriculture, forestry, fisheries and minerals — are concerned. We are an underdeveloped economy in many ways.
Ours is also a low-wage economy. I would refer again to the document from which I quoted earlier which indicates that our wage rates are the lowest in the EEC. To those who would say that low wage rates represent the only means of creating employment, I would point to those many countries in the world whose wage rates would shock even the most conservative of our industrialists; but these countries do not have full employment either. In this low-wage economy of ours we are trying to compete in assembly-type industries with lowerwage developing economies in the Third World. This is particularly true of the industrial revolution in the electronics industry. Our aim should be to reach the top of the market in specialised areas, but to be successful in that regard we must have highly-trained and highlyskilled workers backed up by the best research and development services and marketing organisation. The market in this area is so huge and growing so fast that a gain of only ½ per cent of the European market in the next decade would result in this State earning one billion dollars annually from the high technology industry. But in addition to earning this money we would be helping our balance of payments and providing increased employment. We would also be assisting in the increased efficiency of all our other industries by being first and best in the electronics field.
There are two areas I should like to deal with specifically in relation to job creation. One is the question of meat processing. This morning we saw a large number of workers from the meat industry protesting outside the gates of this House about job losses. One of the leaflets they were handing out explained that the reason for the workers taking this action this morning was to protest at the fact that more than 129,000 cattle were exported live so far this year to create jobs in Britain and elsewhere, but each week between 3,500 and 4,500 cattle are moved from the Republic to Northern Ireland, a quantity sufficient to keep two large factories in operation. The leaflet referred also the IMP in Leixlip having laid off 400 workers, to Premier Meats in Sallins laying off 250 workers and to the fact that Kildare Chilling Company have their 150 workers on a two-day week. This is a disgraceful situation in a country which prides itself on the fertility of its land and on the excellence of its agricultural produce. To argue that jobs cannot be created and that we are at a time when we must educate for leisure, while at the same time some of our natural resources are being exported raw, is not to put the situation fairly. In addition to the export of live cattle, I refer also to the export of timber and of minerals taken from the ground in County Meath. There is the disgrace, too, of the importation of food at a time when most of the land is unproductive. We read in the papers today of the ridiculous spectacle of farmers going to Greenore to destroy food, the importation of which they object to, while at the same time they have failed to produce the food that will keep the processing factories working full time, when they have failed to produce the food the housewives are prepared to buy. The Dutch potatoes that are being imported are up to £2 dearer in the shops than are the Irish-produced potatoes, but the Irish housewife is prepared to pay the extra amount. Instead of so gallantly destroying the consignment of Dutch potatoes, our farmers would serve the country better by finding out why their produce is not acceptable and why it is that housewives are willing to pay more for an imported product. The answer they will find is that what they are producing is not up to standard.
Deputy Wilson said he could not understand why it was that food was being imported when we could grow it here, why it was that processing factories have failed. The reason they have failed is because the farming community have refused to supply these factories when there was more money to be got from selling in the open market. The farmers have consistently over the years refused to fulfil contracts they made with processing factories. I do not lay all the blame at the door of farmers. They, like every other sector, are presumably anxious to maximise their income. The blame must fall on the shoulders of the Government, not just this Government but also previous Governments, for failing to tackle the question of how the land of this country is utilised, how it is controlled and how it is abused. Because of the power of the farming vote they were afraid to tackle the problem of utilisation of land.
The Taoiseach this morning indicated that they were going to take tough measures against the vested interests and he lumped the workers among those vested interests. He also mentioned people who control land and resources and abused them or failed to use them. I wait with bated breath to hear what proposals he has to deal with those vested interests other than the working class. The present Government have shown clearly what they intend to do in relation to the workers. They have cut their living standards. They are trying to force them to accept wage increases which are away below the cost of living increase. I am waiting to find out what the Government intend to do with the land speculators and the industrialists who continue to fail to reinvest, what they intend to do with the farmers who sit on land and refuse to develop it or to use it in any way. I would like to know what the Government intend to do with the financial institutions which invest abroad and refuse to invest in industrial development and who hand out money willy-nilly for investment in land speculation and office blocks. I hope the Government, when replying, will outline some of the steps they intend to take against the people who make the decisions which are losing jobs, the people who actually control the economy, to make sure that they use the power they have to develop this economy. Unless the Government take measures to plan the economy, and not just set down nice targets which they would like to see realised, and ensure that all sections of this economy comply with this plan, we will be debating here in a year or in two years' time and there will be 300,000 unemployed.
I was very disappointed with the contribution made by Deputy Lenihan. The most he seemed to be able to offer was an early warning system and he mentioned in passing import substitution. The most extraordinary thing I picked up from Deputy Wilson was that, while he advocated wealth distribution, he went on to explain that what he meant by this was work sharing. In other words, he wants those of us who are working for a week's wages to share with those who do not have a week's wages, which is fine provided also that those who earn their living from investments, from profits and from speculation are also made to share their wealth. The tax campaign which has been in progress indicates that the working class are not satisfied that this Government or previous Governments have made any effort to ensure that those who have wealth will share it.
The notion that job sharing, work experience, early retirement or a shorter working week will cure the unemployment problem is unrealistic and does not come to terms with the basic fact that this economy is under-developed. Governments to date have committed themselves to encouraging private enterprise, and private enterprise has failed. They must move away from that policy and they must insist that, if incentives are being given to private enterprise, productivity and re-investment must be part of the return. They must insist that no more grants are given to any sector, whether the farming sector or the industrial sector, unless those incentives are tied to proper planning and management of the enterprise into which the money is put. Work sharing and so on are temporary stop gaps which will not solve the unemployment problem. The development of our resources and the proper planned investment of the wealth of this country in job creation is the only solution.
Deputy Durkan, and the Minister also has to reply.
At what time does the Minister come in?
Acting Chairman
At 2.15.
I must express my amazement at the opening speech by the Opposition spokesman, Deputy Lenihan, who castigated the Government for inactivity and said there was not political leadership and that there was a lack of management in Government. While I do not think it is a good thing to become involved in that type of debate it behoves us to remind Deputy Lenihan that it is only a few short years ago since a Minister in his party was reported as saying that if full employment was not achieved in a given time it would be necessary to dig holes in the road to provide people with jobs. Three years later that man had resigned and the holes were in the roads and the Government did not have sufficient funds to fill them.
That is an obvious indictment of the policies now suggested to be pursued. The House should consider what might happen if the policies which were pursued over the last five years were continued over the next five years. We would have the same scale of borrowing, the same scale of job losses and the same mismanagement. If that continued the situation would be disastrous.
I, like all politicians, am seriously concerned about unemployment. The unemployed are looking to politicians for the leadership which will give them not only the jobs but also confidence in the future. If they do not have that confidence there is a grave danger that our political system will break down. Previous speakers referred to job losses in the meat processing area. In my constituency in Kildare we had a litany of job losses, Cill Dara Spinning, Navan Carpets, Irish Meat Packers, Donaldsons of Celbridge, Ardagh Trailers in Celbridge, Trailer Manufacturers in Naas, Kildare Wallpapers and so on. All this has happened over the last 18 months and in the last few days we had the announcement of the Black & Decker closure. It is imperative that we as politicians unite to put forward some constructive proposals which will arrest the decline in the numbers of people out of work and at the same time we should generate the confidence which is necessary to bring about that situation.
Various people have put forward solutions to these problems. Deputy De Rossa seems to want a greater involvement by the public sector in the wealth generating areas. This would be further economic madness. If we look at the public sector and its efficiency and production over the last couple of years we could ask ourselves serious questions about whether or not we should consider taking money from taxpayers to allow it to be spent in the same fashion. Any Government embarking on such a policy could only be castigated and annihilated by the electorate. We must have industry which is efficient, capable of paying its own way and contributing something to the Exchequer.
Despite what the last speaker said, we all represent workers, as we are elected by the masses of people most of whom are workers. A large proportion of the electorate in my constituency are workers and as their representative it is my duty to put forward constructive policies which will ensure that workers' interests are considered by the Government. If that means harnessing the private sector and encouraging it to take the necessary risks to provide jobs, we must do that. That is the only way out of the situation. There is no point in saying that the State should become involved to a greater extent and that the State should be involved in wealth-generating areas and in nationalisation. That policy was pursued by various Governments throughout Europe and it has failed. We should create a climate which will encourage the private sector to become involved in relieving unemployment.
Reference was made to the importation of potatoes. What the producers in this case have been trying to do is to organise a quality grading and marketing situation which will benefit the housewife, but their efforts are being frustrated by people who have other interests and who see fit to import potatoes legally and illegally to distort the market and create a situation which will ultimately undermine the producers' position and which will give the housewife a poorer choice.
We must now depend on agriculture to bring about an improvement in our economy and a dramatic improvement in the jobs situation. In relation to meat and food processing, I hope measures will be taken by the present Government to ensure that every opportunity is availed of to recover job losses and to create new jobs. We require a tough and aggressive policy on negotiations at EEC level. Our Minister for Agriculture should bring to the attention of the British Minister for Agriculture in particular, the necessity to remove some of the anomalies that exist in relation to meat processing here. I refer to the variable slaughtering premiums and to the fact that this seriously militates against both the Irish producer and the Irish meat processing worker. The Government should take steps to bring about the re-opening of the meat plants which have been mentioned already in County Kildare, in Leixlip and in Sallins. The Government should also try to ensure the return to full-time working of the Kildare Chilling Company. This area has been beset with unemployment and job losses during the last number of years and it is unfortunate that this area is once again affected. This area of work should have a reasonable degree of efficiency; it is long established, it should be highly developed and the raw materials are available.
Some other speakers say that the cause of the problem is that too many live cattle are being exported. I do not agree with that. Some years ago the producers had to beg to get their cattle admitted to some of those factories. A monopoly existed and no attempt was made to facilitate the producers. The producers have long memories. I should like to point out that fewer live cattle were exported last year than any year since 1979. All the blame does not rest with those who are exporting live. Obviously, there is a need for greater efficiency in some of the plants I have mentioned and I am sure the Minister is aware of the need for more efficient operation. I hope he will do what he can to restore the jobs that were lost in that industry recently and see to it that the families of the workers concerned are looked after.
The Government have a great responsibility in regard to unemployment but they have been in office for approximately five months and they should not be expected to produce the dramatic results Deputy Lenihan suggested. Having regard to the record of the Fianna Fáil Government I do not think that even he would expect the results he is seeking. In the infrastructural area, as the Minister for Labour mentioned earlier, there is the possibility of creating more jobs by getting private enterprise to build new roads, bridges and so on. We are all aware of the big number of people on the local authority housing lists and the fact that it has been impossible for such bodies to house them. For that reason the time has come when we should ask the private sector to become involved in building such houses which should be made available for sale to approved Housing Finance Agency loan applicants. That would have a dramatic effect on our unemployment situation.
There should be further encouragement for small industries. The time has long passed when there should be some type of emergency employment relief scheme introduced involving projects of an environmental nature, the restoration of public buildings, the development of open spaces, anemity area development, the development of canals, public parks and so on. In those areas local authorities have not the resources to deal with such matters but if a scheme was introduced along the lines of the youth employment scheme it would be possible to provide much needed employment in the areas I have mentioned. The most important matter that I as a consumer am concerned about is the need for more patriotism. Many speakers have mentioned that it is possible to buy products manufactured throughout the world here. It is unfortunate that domestic and commercial consumers pass by products manufactured here, preferring foreign manufactured goods. We have also the dumping here of clothing manufactured abroad. In some cases labels are changed abroad and labels stating that the products were manufactured here are substituted. That is dumping. We seem to ignore that the most important area of patriotism is to support our own industries but for the sake of a few pence we seem to support foreign industries to the detriment of our own.
Acting Chairman
I should like to indicate to the House that the Minister for Industry and Energy would like to contribute and, if possible, to get in at 2.10 p.m.
If it is possible for me to get in at 2.15 p.m. I would be grateful.
Naturally, I am disappointed that a time limit has been imposed on this debate because the need for an economic climate to create jobs is our greatest problem. We have never experienced in our history greater despondency on the part of the unemployed. The unemployed look to the House more in despair than in hope seeking a solution to their plight. It is unfortunate that this despondency has been created here. It is the duty of the Taoiseach, and the Government, to show the way forward, to provide encouragement and hope for our people. It is regrettable that has not been the case but even at this late stage I hope we can indicate to our people that it is possible for us to overcome the recession if we can all pull our weight. It is for that reason that I do not wish to be seen to be making a political contribution on this debate.
The extreme monetarist policies being pursued by the Government have contributed to our problems. I can understand the economic reason behind such policies but the objective of those policies is being seriously undermined by the increasing demand on State resources to support a rapidly growing number of unemployed. Whatever economic gain there may be in pursuing such a policy is being seriously eroded. In the course of the budget debate, and in the debate on the Finance Bill, the Minister for Finance has stated that his objective is to bring the public finances under control but that that objective is being undermined. That is also the opinion of economic commentators. It makes better economic sense to subsidise employment by keeping potentially viable factories going than to pay from public funds benefits to workers who are laid off in such factories. I am not advocating such a policy as an acceptable long-term objective for industrial development. As far as possible our industry should be self-supporting and competitive and in this regard we have a lot of ground to make up at all levels.
Part of the problem is that we have not faced up to this reality before now. We are now paying a high price in terms of economic and human losses. I am pleased that the last speaker dealt with an area which deserves greater support by our people, that is, the need to purchase the produce of and output from Irish factories. The slogan "Do not import unemployment" is very true and relevant. We pay a lot of lip service to patriotism, but real patriotism is our commitment to support and work for improved economic conditions so that all our people can enjoy a decent standard of living.
This is not the right time to abandon ailing and depressed industries. Many industries have cost the Exchequer millions of pounds and could survive in a more favourable economic climate. We should assist each of these to survive in the improved economic climate, of which there is already evidence throughout America and Europe at present. Our policy should be to support and sustain our original investment in those industries so as to maximise the benefits which will come with the rising economic tide as the economy recovers. It is vital that we are poised for that recovery and that we are not left with a skeleton of abandoned and dead industries from which to commence our recovery.
There is an obligation on foreign industrialists who have benefited from State assistance and from a manufacturing base, which we were pleased to provide, to share and carry part of the recession we are going through at present. We have too many examples of such firms taking the easy option of safeguarding their firm economic base at the expense of the nation which helped them to consolidate that base in the first instance.
I have said on many occasions that we have not maintained a fair balance between productive industry and public sector employment. I still hold that view. The answer does not lie in the negative attitude of cutting back in the public sector but rather in the implementation of a productive job creation plan where productive employment can be increased through industrial and agricultural development. Instead of encouraging productivity some recent Government measures, particularly in relation to VAT, have discouraged production. The emphasis should be on value added and not on taxing value added — in other words, we should place the emphasis on generating economic activity where productive employment can expand.
With regard to industrial development our priorities were originally wrongly based. We should have developed our industrial base using our natural resources — agriculture, horticulture and forestry. As previous speakers said, we have failed miserably in the area of food processing and as a nation have not benefited from our greatest national resource, the land. I was interested to hear the comments of the previous speaker in relation to the importation of potatoes and the fact that a large consignment of potatoes was destroyed at one of our ports last night. I cannot agree with his sentiments when he said farmers and horticulturists here have not produced the goods the Irish housewife requires. I know many farmers and horticulturists who produce high quality goods. They bring them to the Dublin market properly packed and prepared, but because of the large vested interest syndicates who operate there they find their produce is given second place as regards sales. It is in that kind of situation that they found it necessary last night to board the ship in Dundalk and take action.
We should all respect the law.
I accept the point the Minister is making and I do not condone their activity. I am saying in that kind of frustrating situation they found it necessary to take the extreme action they took.
As regards forestry, if one talks to a forester he will tell one that this area has a great potential for employment. Many men could be employed in the planting of trees and in the processing of timber. However we are told that there is not sufficient money to create that kind of productive employment. On the other side of the coin, the Department of Social Welfare seems to have a bottomless source of finance from which to meet the day to day payments of our unemployed work force. Surely it should be within the competence of those who work in the Department and the various Ministers to co-ordinate the activities of both Departments and transfer from the Department of Social Welfare to the Department of Forestry and, indeed, the Department of the Environment, the money which is paid out weekly from public funds. Unless we have the political courage and will to tackle this problem we will not make any kind of real progress.
I am a bit frustrated that my line of thought has been upset by lack of time. At present the Minister for Labour has a proposal from a small group in County Laois who have put up local community money to put unemployed people to work in the area. They have requested the Department to supplement the local contribution to the amount of the unemployment assistance which is now being paid. That is a positive proposal from a community which could be developed and expanded. It would go some way towards resolving the massive unemployment.
The importation of industrial raw material is the greatest source of unemployment. An industry in which I worked at one time make doors and windows, all high class joinery products. Now we import these products from Taiwan and other countries and this is posing great hardship on the manufacturers of similar products here.
In the constituency which I represent we had a factory, Snia Ireland Ltd., which up to last August employed 380 people. Then the 380 were asked to take six weeks holidays. They took their holidays but not one of them has gone back to work. Unfortunately this has not been brought to the attention of the House. I should like to know why those people were asked to take their holidays and then why work was not made available to them since.
What we should be doing in the House, instead of Shadow Ministers shouting across at Ministers and vice versa, is trying to get together to work out the best possible way to solve the unemployment problem. Shouting across the floor of the House will not solve anything. We should all get together to try to find ways to take the thousands of people out of the dole queues. The most frustrating thing for a man used to going to work is to be put on the dole for months or perhaps years.
I was glad to hear Deputy Durkan refer to patriotism here. If we had true patriotism we would be buying Irish and in that way we would be providing many more jobs for our people. If we go into shops or supermarkets we will find them full of imported goods which we are capable of producing here. I would ask the Minister to do what he can about doors and windows being imported from Taiwan and elsewhere, materials that we could produce here, and of much higher quality. That was my type of work and I know that the imported products are not half as good as the doors we can produce here.
To listen to the Opposition in this debate — with the exception of the last two, who were very constructive — one would be forgiven for forgetting that the Opposition party, and I am thinking particularly of Deputy Lenihan, had been in Government for 56 of the last 69 months.
One might also be forgiven for forgetting that the high costs that are so much a feature of current industrial problems derive directly from decisions taken in their period of office. There were decisions to set a record of weakness in setting appropriate standards in wage negotiation; decisions to intervene to get employers to pay more than they could really afford, or had intended to; decisions to increase State borrowing, the interest on which is the major cause of current high tax levels, which are a large part of industrial problems; decisions to impose the ill-conceived tax regime of VAT at point of entry which caused many tax-flow problems for industry.
This is the industrial record of Deputy Lenihan and his colleagues, against which his current effusion of bombastic rhetoric ought to be judged.
I turn now to what this Government are doing to tackle this problem. We have strengthened Government activity in the industrial rescue area, as a result of which 2,481 jobs have been saved by various State agencies in the first four months of this year as against 1,619 in the first four months of 1982 by IDA and Fóir Teoranta.
We are launching through the IDA a major national campaign to assist in starting new businesses. This is backed up by seminars all over the country, TV advertisements, and the opening up of a new late opening advice centre in Dublin for people with product ideas who might set up on their own. We have reversed the worst effects of the ill-advised VAT at point of import regime. We are undertaking a major overhaul of our industrial incentives. We want value for money. We want flexible aid that helps each firm in the way it needs it most, not rigid schemes tied to capital investments. This may mean beefing up management, marketing, quality control or any number of other key features rather than putting money into a new machine or such things.
We intend to close this gap between industry and new technology. We have brought the National Board for Science and Technology, together with the IDA, under one Minister, where they always should have been, so that there will be proper integration of the results of modern technology and its application in the industrial field.
We are setting out to fight at European level the protectionist threat to our markets by some major European countries. This matter will be raised by the Taoiseach at the highest level at the forthcoming European Summit at Stuttgart.
We are taking steps to unleash the potential of our food industry which is being eroded by unnecessary imports. Recent speakers have referred to this. The Minister for Agriculture has set up a top level group to examine the cause of food imports, and I intend to have discussions with him to see how the industrial development side of the food industry can be properly integrated with farm levels of production. Lack of supplies to our factories, which are causing demonstrations and redundancies at present, could be overcome if there were long term contracts between meat processors and farmers which would be legally binding on both sides as to price and supply. These would help to eliminate the cause of redundancies. We do not need to adopt radical measures, simply to encourage the making of contracts which would be honoured by all sides, thus setting a firm foundation for long term marketing strategies in the food industry.
We have restored the incentive to work, despite opposition from Fianna Fáil, through the changes in the Social Welfare Bill.
In the 1982 budget we provided a tax incentive scheme for worker shareholding in industry which will bridge the artificial gap which often exists between workers and management and help eliminate the cause of restrictive labour practices which sometimes strangle healthy industries to death.
Deputy Lenihan referred in this debate to Dáil reform and suggested it was taking up too much of my time. First of all I assert, without fear of contradiction, that many of the problems now faced by Irish industry, and many of the job losses now taking place, derive directly from a lack of reality in this House about public spending and taxation. Unless we get our house in order we have no business telling other people how they should organise their business, whether it be in the trade union movement or in industry itself.
Secondly, practically the only time I have spent on Dáil reform in recent weeks has been chasing Deputy Lenihan's colleagues to get them to respond in any way to detailed proposals the Government made to them, in the hope of getting a measure of consensus on the subject. Thirdly, the proposals we have made will directly help the environment for job creation. By setting up a committee on public expenditure we will be helping to create a cross-party consensus to remove the cause of high tax levels, and by setting up a special committee on small businesses we will help to get something done on a lasting basis. That sector of the economy, which has been most successful in protecting and creating jobs, is the best means of promoting indigenous Irish enterprise.
It is out of small businesses that major Irish export corporations will grow. The majority of the most successful corporations in the United States and on the continent were started by people who were self-employed. It was the self-employed who became small employers who gradually became larger employers, and who set up businesses which could sell goods competitively anywhere in the world. Industries grow and countries prosper. That is something we should constantly remember and I intend to focus maximum attention on it in order to promote a spirit of enterprise. I believe that through the committee on small businesses we will get a consensus on methods to help small businesses. I will be undertaking trips to certain parts of the country to get this message across, encouraging people who have ideas to put them into practice, and talking to the IDA so that they can help create jobs. I will be visiting Deputy Hyland's constituency in the relatively near future.
The Minister will be very welcome.
This is an area which needs a lot of encouragement.
The Minister will also be very welcome in Cork.
I will certainly go to Cork. I appeal to Fianna Fáil to get down off their political hobbyhorse and start setting an example by reforming this House and working out practical schemes to help Irish industry grow.
Reference was made by Opposition speakers to what they described as the monetarist policies of this Government. Nothing could be further from the truth. I would like to recollect the contents of The Way Forward. In that document Fianna Fáil said if they were in office they would have a current budget deficit of £750 million as against the £900 million we have in this budget. In other words, they would be taking not just the present amount of tax out of the economy or imposing the present restrictions on public spending, but a further £150 million would have to be found either by way of reductions in expenditure or by increases in taxation.
We had The Way Forward; Fine Gael had nothing.
It does not come sincerely from the Opposition to be criticising restrictive budgetary policies in this regard when their own policies would have taken a further £150 million out of people's pockets this year. In my view, there is no foundation for talk from the Fianna Fáil benches about a climate of despair. I believe there is every ground to be confident about our future in the industrial field. This is not a party point; it is something about which all parties can feel a measure of satisfaction. Last year our industrial products grew by about 13 per cent in a world market which was contracting by about ½ per cent. Irish industry was beating the world trend in terms of gaining a share of the export market, despite many of the handicaps they have to work under in terms of high costs and various restrictions. Our industry was able to give a much better industrial export performance than most of its competitors in Europe. That underlines the basic health of our economy and the inherent strength of the enterprise sector. The majority of these export gains were made by foreign-owned industries established here. We are inclined to criticise foreign-owned industry. Let us not lose our sense of proportion. There are 80,000 jobs in foreign owned industries, and there are 800 foreign firms in this economy exporting more than £4,500 million worth of goods. What would be our export position or our balance of payments position if we did not have the contributions those industries make? While we should criticise bad or hasty decisions made by foreign industries — or bad decisions made by anyone — we should not lose our sense of proportion or lose sight of the major contribution made by these enterprises to our economy.
Let us recollect the many successes there are in Irish industry. Look at the success of Baileys Irish Cream which has 80 per cent of the world market in cream liqueurs. This industry located in Virginia, County Cavan, is dominating the world market. Other countries are producing imitations pretending they are as good if not better that the Irish product. Let us not forget what we can do.
Let us recollect the successes of the Irish cheese industry. They have developed new forms of cheese to sell on the European market to meet new consumer tastes. Let us look at our successful industries and learn from what they are able to do in adverse circumstances. Let us look at the success of the Irish farm machinery exporting group set up under the aegis of Córas Tráchtála. They got together and produced a brochure showing a wide range of farm machinery suiting almost any need which can be produced here for the export market. This was a co-operative endeavour by a large number of firms which previously had been operating in competition with one another. They have come together and succeeded.
Look at the Irish knitwear group. That is a sector of the economy where one would say they are bound to meet difficulties because it could be argued that people in Taiwan and elsewhere would have a competitive advantage. The Irish knitwear group got together and presented a package of a wide range of goods which can be produced here. These firms are co-operating and gaining new markets.
Another success story in the textile group is the Irish fashion group set up under the aegis of the Irish Goods Council. They got together to market Irish fashion goods at home and abroad and they are regaining the share of the Irish market for these goods. This shows we can produce the best designed products to quality and to time.
I believe it is very important that we get together to reform this House. We should share what we have and in this way contribute to the economy. Let us start by looking at what is good, such as our successes in the marketing of food, textile goods, farm machinery and so on, and apply what we can learn from them to other parts of our ecomony which have not been so successful. That is the proper approach to adopt.
Having got all the criticism off their chests during this debate, I hope all Members will co-operate through the new committees to create an environment in which Irish industry can succeed and Irish jobs can be created. We should develop an aggressive market approach based on selling our goods as the best quality on the European market and get on with the job.