Vol. 462 No. 2
18 Mr. Killeen asked the Minister for Tourism and Trade the number of meetings he has had with An Bord Tráchtála to discuss problems experienced by exporters, particularly arising from the strength of the punt against sterling; and the initiatives, if any, there are to address these problems. [4406/96]
I and my officials have on-going contact with the chairman and executive of An Bord Tráchtála concerning developments affecting Irish exporters. Exchange rates are just one of a number of complex and inter-connected factors affecting exporters. It is Government policy to ensure, in so far as it can, that the economic environment here is as conducive as possible to the conduct of business, with a strong emphasis on helping industry to keep its cost base competitive vis-à-vis our main competitors and key markets. That policy has resulted in an economic environment characterised by sound public finances, high growth, low inflation, interest rates at historically low levels and moderate wage increases. The Government in this year's budget introduced a number of further measures aimed at improving the economic climate for business including improvements in income tax, PRSI and corporation tax.
While it is the responsibility of business itself to cope with the fluctuations in the marketplace, An Bord Tráchtála offers a range of services, some specific to certain markets, aimed at assisting exporters to maintain market position and increase export levels. For example, ABT is establishing a special task force, consisting of five marketing specialists, based in Britain, to work with indigenous exporters who are highly dependent on the British market.
Meanwhile the board has also been pursuing a very pro-active campaign to encourage and assist indigenous companies to expand and increase exports into key markets in continental Europe such as France, Germany, Benelux, Scandinavia, Austria, northern Italy and northern Spain. While all markets, including the UK, showed export growth last year ranging from 6 per cent to 14 per cent, continental Europe's share of indigenous exports grew by 2 per cent to over 46 per cent while dependence on the UK market dropped by 2 per cent to 44.8 per cent.
Has any study been undertaken of the impact of currency fluctuations on employment? He will be aware of suggestions that as many as 5,000 jobs have been lost because of the ongoing currency difficulty.
The punt is today trading at £1.032 sterling. The Minister for Finance, who has a great interest in this, indicated that he would examine the ESRI report on the European Monetary Union. It is important also to note the effect and the consequences of the state of the British economy which, after strong growth in the 18 months leading to the first quarter of 1995, has weakened considerably in the last six to nine months. The export boom which had driven the economy to a GDP growth rate of 4.5 per cent in 1994 tapered off considerably, resulting in a weakened demand for British consumer goods in Europe. Consumer expenditure remained depressed during the year, with last autumn showing the biggest rise in unsold goods in British warehouses for 20 years.
The depressed consumer market had a significant effect on exporters in the consumer sectors during 1995. There are expectations that retail sales will improve in the second and third quarters of 1996 and the projections are for a significant growth in 1997, which would have an impact on our ability to export to Britain.
The ESRI report for the end of last year indicated that indigenous exports to Britain increased by 6 per cent in 1995. This compared to an exceptional 17 per cent in 1994. Consumer exports performed somewhat poorly and showed an increase of only 1 per cent. This reflected the state of the British economy, especially with regard to consumer goods. I do not have any figures for the Deputy regarding assessments or estimates as to jobs gained or lost as a result of the exchange rate position.
Has the Government pursued the question of Article 109 of the Maastricht Treaty with regard to the British management, to detrimental effect, of its currency and exchange rate?
The British Government is interested in managing a strong British economy. I have outlined what occurred last year and its consequences in respect of indigenous goods from Ireland. A small number of companies in the non-food area has experienced difficulties. ABT has established a specialist task force of highly competent marketing people to assist these companies. It is taking up duty on 4 March and I expect it will deal from a position of intimate knowledge with the British market.
