I move:
That Dáil Éireann notes with deep concern the serious decline in the footwear industry with consequent heavy unemployment, and calls on the Government to take immediate steps to halt the decline and to get the industry going again.
I have here a report in The Irish Independent of today headed “Ban on Cheap Clothing Imports”, a matter which was raised by Deputy O'Malley at Question Time. I understand now that the report is not correct so I will not deal with it any further. The present situation in the footwear industry is frightening, with large scale redundancies, rising unemployment, factories going into liquidation and factories closing down. I must say that it is a matter of deep regret to me that there should be any necessity to raise this matter once again in Private Members' Time because I hoped the Minister would have taken effective action in the intervening months since the matter was previously discussed. About six months ago, I raised the matter here and pointed out the very serious problems facing the industry at that time. I underlined for the Minister the need for urgent action and pointed to the consequences of the failure by the Minister and the Government to take the necessary steps to save an industry which employed very large numbers of our people.
Apart from agreeing at the time that the situation was a serious one and taking a small number of minor decisions which had no perceptible effect on the industry, no further action was taken and the whole industry is now sliding into the chaos which we predicted if the necessary steps were not taken. The lack of initiative on the part of the Minister is deplorable and I fail to understand it. Warning after warning was given by us as to the trends clearly visible at that time in the industry. Warning after warning was given by the Irish Shoe and Leather Workers' Union and the Federation of Footwear Manufacturers. Indeed, warnings were hardly necessary at that time because redundancies were becoming very apparent and were growing rapidly. None of the warnings and signs had any influence on the Government or the Minister and no decisions of any consequence were taken.
Immediately previous to the last discussion we had six months ago, the footwear workers marched through Dublin in protest against the inactivity of the Minister and recently they picketed stores which carried enormous consignments of foreign footwear. The footwear operatives are a highly responsible body of people, with little liking for parades and pickets, but the fact that they did parade and picket illustrates the grave anxiety which permeates the industry as a whole and also indicates the fact that they have lost all confidence in the Minister and the Government with regard to taking any effective action. In a report of the annual general meeting of Woodington's boot factory in Drogheda in The Irish Independent of 29th May, I note that the managing director stated that the company had had discussions with the Minister for Industry and Commerce on their problems but that no remedial action had so far been taken. This is typical—nice, cosy and friendly discussions, with promises of action and nothing done, and I do not think it is any wonder that the workers in this industry are bordering on despair.
The footwear industry to all intents and purposes was set up by the Fianna Fáil Government in the early thirties as part of their industrial development policy. From a weak beginning, it thrived over the years, employing large numbers of people and my constituency of Louth benefited immensely from this policy and became what might be termed the headquarters of the footwear industry in Ireland. The industry in fact was the greatest single employer in the county. When I spoke here six months ago the cracks were showing but nevertheless we still had reasonably good employment in the industry. Today one large factory has closed, one has gone into liquidation and two other large factories are on short-time working. If I might briefly refer to the factory which has gone into liquidation, Donaghy's of Drogheda, it was established in 1932 and gave very considerable and worthwhile employment to a number of generations of workers in Drogheda. A valuable pool of skills was built up over the years, and now the factory is about to close, with resultant loss not only to the workers but to Drogheda and the economy of the country as a whole, without the slightest effort being made by the Government to help.
When one recognises the tremendous effort both workers and management put into the development of the footwear industry over the years, the present position is nothing short of calamitous. The skills acquired by our workers, allied to the exceptional technological developments which took place in the industry over the years, had placed the standards in the industry here on a par with standards abroad. This was proved by the fact that there was built up here over the years a very considerable export trade which now regrettably has been reduced to a trickle because of unfair competition about which the Government have done nothing. It is a fact that at present the industry has reached crisis point and I sincerely hope it has not passed the point of no return.
Protests by the footwear union, by the employers, by the newspapers, by other unions and by the Fianna Fáil Party have failed to get any response from the Minister, who is apparently satisfied that his only contribution to the health of this industry is to say that the EEC rules are there and he can do nothing. In an earlier debate on this subject, he stated that the economic consequences of breaking the EEC rules would be disastrous for Ireland, but we pointed out at that time that the consequences of doing nothing to curb the flood of cheap imports of footwear from low-cost countries would be much more serious. Everybody, except the Government evidently, could see that the footwear and textile industries were set on a course which could only result in collapse and the consequences of their inactivity are now with us. The simple facts are that not one of the EEC countries adhered strictly to the rules when their own vital interests were at stake and in circumstances in which the footwear industry here is facing extinction, extraordinary measures have to be taken.
As a result of the pressures from us, the Minister flew to Brussels and requested an EEC task force to come here to investigate the footwear and textile industries. The task force arrived, spent some time examining the situation, and in effect told the Minister that the remedy lay in his own hands, something which we had been telling him for quite a while, but the Minister still sticks to his guns and says he cannot do anything, that the rules of the EEC are the problem and he cannot do anything about them. In fact, I have no doubt that in the EEC they are beginning to wonder if we are not too good to be true. The really disturbing part of this whole saga is that many of the jobs in the footwear industry are not simply temporarily lost, they are gone forever, and the sad aspect of it is that so far as I can see this need not have happened if decisions had been taken at the proper time.
Apart altogether from the question of whether rules and regulations should be broken or not, the simple fact is that the rules and regulations were made by the member countries, either by the Six or by the Nine, and therefore these rules and regulations can be changed if they are unjust or if the EEC countries desire for whatever reason. We pressed the Minister on many occasions to propose such changes as were necessary, to pursue such propositions vigorously and to enlist all the support he could possibly get in relation to them.
Quite recently I watched a television programme on the EEC Referendum in Britain in which Mr. Roy Hattersley, who is a pro-Market Labour Government Minister, discussed entry with three anti-Market intellectuals. One of them asked him, in the event of staying in what would Britain do if the continued existence of one of her major industries was in jeopardy because of Common Market regulations which the other members were not willing to alter. He replied that when Italy was in serious economic difficulties the EEC recognised this and did not press for the full implementation of the regulations in the circumstances.
Why can we not adopt a similar attitude to that adopted by Italy, when one of our most labour-intensive industries is in great danger, where large numbers of footwear workers are now redundant and where many jobs are now lost? I would remind the Minister that when we were speaking here on a Private Members' motion on the footwear industry six months ago, he cited Italy as being an example of what can happen a country, to its detriment, which breaks EEC rules. Might I now point out to the Minister that this same Italy has succeeded in cutting its inflation rate since then from 24 per cent to 12 per cent, while we are at the top of the inflation league.
It should not be necessary to refer again to the underlying problems facing the industry, but in view of the Minister's lack of initiative I think I should once again recount the situation. There is a flood of cheap imports coming on the home market from low-cost countries such as Taiwan, Korea and Hong Kong, and there are large supplies coming in from Comecon countries, all of which are coming either directly or through the United Kingdom. Evidently all that is required to tranship these products and dump them on our market is to make slight alteration in them and repack them. The low standard of living, the low raw materials costs and the low wages paid in the low-cost countries constitute unfair competition. This must be overcome by changing the appropriate EEC regulations and by changing, where necessary, our own anti-dumping laws.
I suggested previously that we should change, at least for a time, from the tariff system to the quota system. Tariffs of even 100 per cent, which of course are not permissible at that level because of other trade agreements, have no effect when the cost of the imported shoes is very low. Therefore we should deal with the problem by restricting imports to an acceptable level through the quota system. I have no doubt the Minister will reply that this also is impossible, but I would remind him that when the Irish footwear industry needed time to adjust to the situation arising from the change-over to the tariff system under the Anglo-Irish Free Trade Area Agreement, the then Minister for Industry and Commerce, Deputy George Colley, reverted to the quota system for a couple of years, a change which had very beneficial consequences for the industry at the time. The British did not like the reimposition of the quotas and they told us so, but the industry got from the decision the boost it needed. I might add that the British, who protested then, had little hesitation in applying levies to our goods going into the United Kingdom when it suited their purpose, in spite of the agreement.
The objective of the Comecon countries in exporting to the West is to obtain currency for the purpose of buying capital goods, machinery and so on from the countries of the West. Few people have any doubt that the footwear from these countries is subsidised. Subsidisation is difficult to prove, and our dumping laws need further scrutiny in this respect. I could give an example; an all-leather shoe, with a leather upper, leather sole, leather lining, can be imported for about £1.70 from the Comecon countries. A similar shoe manufactured here would cost about £10. You would not buy the sole of the shoe for the price of the finished article being imported. How is this done? I strongly advocate that the countries such as those I have mentioned should have to substantiate their costs. We must insist that they, as the importer, must inform us as to the cost of the raw materials, the production costs, the transport costs and so on. If we had this information it would be a relatively simple matter to identify dumping, which it quite clearly is.
We must also bear in mind that goods of this nature dumped into Britain are also a very serious source of danger to us because of her capacity for unloading unwanted footwear on us. Because of her wider trade commitments with the Comecon countries, she may not wish to disturb their equanimity by requiring them to substantiate their costings, but if she does not, then we must keep a wary eye on imports from Britain, especially through the north of Ireland.
As things stand in regard to dumping, the onus is on the complainant to prove that dumping has taken place. This is imposing an almost impossible task on the complainant. As I say, the onus should be placed on the importer or on the country of origin, where a clearly justifiable complaint is made, to prove that the footwear is not being dumped.
The Merchandise Marks (Restriction on Importation of Footwear) Order, 1971, was made by my colleague, Deputy Lalor, when Minister for Industry and Commerce. By this order the importation, by way of trade, of footwear was prohibited unless the goods bore at importation an indication of origin marked on the goods and consisting of the words "Made in" followed by the name of the country in which the goods were manufactured. In all cases the goods had to be marked indelibly, legibly and conspicuously on the outer surface.
I would like to know if this order is being adhered to. Is it being adhered to in relation to container loads of footwear crossing the Border? Does the Minister propose to extend the order so as to ensure that the footwear concerned will continue to carry the indication of the country of origin at retail level? We have been advocating for some time that imports of footwear should be monitored. We recognise that the effect on the imports will be relatively slight, but at least our manufacturers will have a clearer view of the problem and it will give them some easement in the present frightening situation. The French have operated such a scheme for some time, even though the EEC rules did not allow it. This year the EEC have consented to a surveillance scheme such as the French operate, and I understand it is applicable to imports from the EEC countries as well as to imports from outside the EEC. It has been open to us for quite a while to adopt this arrangement; yet we are in a situation in which the Minister, in reply to Deputy Leonard today, said he hoped to put such a scheme into operation soon. I would have hoped and expected that the scheme would have been in operation long ago.
The visa technique system is operated in France. The importer must apply to the French Government for a visa before he can place an order. The visa takes from two to eight weeks to obtain, and I think we can take it that a visa for sensitive goods would hardly be forthcoming in less than the eight weeks. There is another system whereby the importer places his order abroad and simply applies for a licence to import the goods. Whatever merit there is in the French system, the other is useless, and I hope he is not proposing to bring in the second system I have mentioned. The French Government have never had any compunction in protecting any sensitive sector of its industry. For example, on the 25th April, this year the French Premier stated that his Government recognised the important role of the textile industry, particularly in current difficult trading conditions, and that he intended to support that industry. He also stated that the French Government would press the EEC to conclude a bi-lateral agreement for the limitation of textile imports from third countries as quickly as possible and that this would prevent what he termed "the uncontrolled and brutal influx of textile products on the French market from countries whose trading practices were so different from those of France". What is to prevent us from adopting a similar attitude in relation to our footwear and textile products?
Further, in 1968 the French, with the consent of the EEC, introduced quota restrictions. Some of the reasons given then for permitting the French to do so were that their production costs had risen rapidly due to a number of factors and that France had a balance of payments problem. The French invoked articles 104 and 108 of the Rome Treaty. We are now in a comparable situation. Our footwear production costs are rising much more rapidly than in any other EEC country and we have a balance of payments problem. Surely it is not necessary for me, when our footwear industry is facing disaster, to urge the Minister to consider what he can do in a similar way.
He might also concern himself about article 137 of the Treaty of Accession which gives permission to us to take measures in cases of extreme urgency to protect our industry up to December, 1975. I need not stress that we are in a situation of extreme urgency in regard to the footwear industry. The call for urgent and effective action has come from many sources but has met with no response apart from lectures on the Common Market rules and regulations and, as in the last speech, taunts about Fianna Fáil activity at the time of the EEC referendum here, as if Ireland could live in splendid isolation had we not entered the EEC, and leave ourselves with tariff barriers being erected against us by practically all western European countries. I think the result of the British referendum should put paid to that argument.
There is another aspect of this problem which has done untold damage to our footwear industry. We have a frightening inflationary situation, being now well at the top of the EEC inflationary league. This Government have neither the courage nor political will to do their duty and take effective measures to curb inflation. They hold highly-publicised Government meetings but if meetings could solve the problems these would have been solved long ago. Inflation is playing havoc with Irish-made footwear at home and it has destroyed a once-creditable export trade. Footwear manufacturers who had a good export trade six months ago when we last debated this subject now inform me that in some cases this trade has dried up completely while in others it is reduced to a trickle. Foreign agents who used come here to view our products and buy them no longer come. They ring from London to say however high the quality of our footwear may be our prices are no longer competitive and there is no point in coming to see it. This is a frightening situation.
A pointer to the seriousness of the situation is found in comparing the change in recent years in the relation between imports and exports of footwear. In 1970 our exports were 1.8 million pairs and imports 1.6 million pairs, a balance in favour of exports. In 1974 our exports were 3 million pairs and our imports 5.3 million pairs, a balance very much in favour of imports. Our exports this year will be very much lower and the trading imbalance much greater. The number of manufacturing units is growing less each year and the number unemployed increasing very rapidly, not in small groups but in hundreds. I had intended to give the number of factories left but as such factories are closing now fairly frequently that is not possible. Some time ago manufacturers had pinned their faith on increased exports—and with some considerable success until recently. Of the main exporting factories one is closed, one is threatened with imminent closure and the remainder are on short time.
I advocated a "Buy Irish" campaign when I last spoke on a similar motion. During that debate the Minister said he was about to launch a "Buy Irish" campaign that very week which he believed would be effective. Apart from going through the motions of declaring a "Buy Irish" campaign open, there was no follow-up and the whole thing fizzled out in a couple of weeks. For most people it never got off the ground. I understand that the princely sum of £3,000 was spent on the programme. At that time a new approach to a "Buy Irish" campaign had been promised but it came to nothing. There is no better indication of the paucity of ideas and lack of will to pursue any worthwhile plan or strategy by the Government than their lack of initiative and staying power in this venture when the employment of so many people depended on a vigorous and sustained "Buy Irish" and "Sell Irish" campaign.
We have now reached a really frightening situation regarding stocking of Irish goods particularly by many large supermarkets in this city and by many supermarkets in large stores in larger towns throughout the country. From personal observation and research conducted by me and some of my colleagues I have found it is virtually impossible to find either Irish footwear or textiles in the large stores, not to speak of buying Irish goods. These stores are packed from floor to ceiling with foreign products, many from low-cost countries and some from our nearer neighbours. The problem is not so much buying as finding Irish goods. Very often a specific request must be made before Irish goods are shown to a customer. Every effort is made to encourage the purchase of foreign goods and often it is only after a struggle that one can purchase an Irish article. This is a disgraceful situation and how the owner of any store who has the slightest interest in the country's economy and welfare can persist in this kind of national sabotage is beyond me. It is past the time when a long hard look should be taken at the whole position including, specifically, profit margins on imported footwear. I do not wish to tar all large stores or supermarkets with the same brush—some do their best—but in general the situation is extremely bad and a thorough investigation of the reasons for it must be made, followed by a constructive approach, if the vital industry now being discussed here is not to go to the wall.
I understand that for some time after the last lengthy discussion here on this matter many large stores placed extra orders for Irish footwear but that after a relatively short time they reverted to their original practice of buying vast quantities of foreign goods. I hope this discussion will again have the effect of ensuring increased purchases from our own factories but that this time it will be a continuing process.
I should like to deal with a case that is made, perhaps with some validity regarding this matter and to suggest how it could be met. First, let me say that prices are escalating; the cost of living is intolerable; not a day passes without increases in the prices of a number of products. Before the last election we were promised that this Government would stabilise and reduce prices. I have no doubt that this promise helped more than any other single factor to ensure that the Coalition were returned to office. The results of their efforts are now only too apparent: prices have escalated to a point where many families are pushed to the limit even to exist. In such circumstances it is very difficult to be critical of the harassed mother of a large family if she decides to buy foreign made shoes when she can get them at a price which is considerably lower than the price of Irish footwear.
I would stress strongly that the Irish footwear industry—management and workers—are not asking for a monopoly here for their goods. They recognise that they can only develop as a result of trading. They are asking simply for fair competition and are willing to accept that there should be a considerable importation of footwear into this country. They are asking that we apply a quota system so as to enable us to control the level of imports. If this proposal were accepted by the Minister and fought for at EEC level and if it were acceded to there, there would continue to be a big range of cheap imported footwear products from which a mother in the circumstances I have outlined could buy.
In addition to that, a properly directed buy Irish campaign would encourage those who are better off to leave these cheaper products to those who cannot afford anything else and to buy Irish themselves. Whenever there is any suggestion of placing a restriction on the importation of footwear, those who favour unrestricted importation use the argument that we are trying to penalise the less well-off. The fact is that those who buy pairs of cheap foreign shoes in any year are not the poor who cannot afford to buy Irish goods but, very often, are those who are reasonably well off and who, through lack of thought regarding the effect of their action on employment or because of a could-not-care-less attitude do not bother to buy Irish. By leaving the cheaper products for the less well-off larger families and by buying Irish, even at some little financial sacrifice, they could help transform the industry, prevent further redundancies and help consolidate employment.
Let me further remind them that they would be doing themselves a favour, perhaps, today, this is more obvious than ever before when even jobs which were regarded previously as being in the safe categories are now under severe pressure. It should be understood clearly that each footwear worker who loses his employment, renders a little less secure at all levels the employment of every other worker in the country. The man who becomes unemployed suffers a drop in income which means that his ability to purchase goods decreases. It means that the volume of necessities he buys is reduced and that the purchase of other articles or of articles he proposed to replace is put off to a later date. All of this affects adversely, directly or indirectly, the security of those still in employment. Workers at all levels have a clearer perception now of this situation and I believe that some well planned and properly thought out publicity would hammer home the vital need for all our people to buy Irish today.
Basically, there is a need for the display of more Irish goods in the larger stores and supermarkets and also in the smaller shops. We need, too, to instil in the public a clearer understanding as to the economic consequences of ignoring the call to buy Irish. If these labour-intensive industries are permitted to collapse, either because of lack of positive thinking and decision on the part of the Minister, or because of a lack of understanding on the part of the public, the consequences for all of us, and not merely for the workers in these industries, will be very serious.
A good start might be made in this respect in relation to a buy Irish campaign if we were to begin by concentrating on buying locally. Every town and village is experiencing unemployment. If we could concentrate the minds of our people not only on the general problem but on the fact that each individual has some responsibility for the welfare of his neighbour, we would be on the way towards overcoming the main difficulties we are experiencing.
Perhaps I might summarise briefly the general position in which the footwear industry finds itself and some of my proposals to overcome the problems. The first and basic matter to realise is that this industry is set on a disaster course. It is no longer a question of a few workers becoming temporarily disemployed in the factories. The stage has been reached where the industry is disintegrating. Whole factories are going into liquidation. They are closing down with an alarmingly detrimental effect not only on the workers immediately concerned but on workers in ancillary industries. Very often where the industry is the only one in the area, its closure has a disastrous effect on the whole community. What is at stake then, is the employment of thousands of people. I am sure the Minister will accept that swift and effective action must be taken by him at this stage, action which would curb imports from low cost countries by insisting at EEC level on a quota system. This must apply, also, in the case of the Comecon countries where the importer or the country of origin must be obliged to substantiate costings. The most effective monitoring system must be brought into operation at once and the best possible use made of it.
Serious consideration must be given immediately to invoking Articles 104 and 108 of the Treaty of Rome. The conditions laid down for invoking these Articles is clearly evident in the Irish economy of today although the Minister may hold a different view.
Article 137 of the Treaty of Accession underlines clearly that we can take measures to correct our economy in cases of extreme urgency up to 31st December, 1975. With so many of our people swelling the dole queue, there is no doubt that this is a time of extreme urgency for all industry but, particularly, for the footwear industry. Consideration should be given to the application of VAT to footwear imports at the point of entry.
In arranging quotas for imports from Comecon countries, realistic values should be applied by the Revenue Commissioners to documentation for the purpose of establishing a correct duty. The necessity for this is obvious to everybody.
Special help should be given to the footwear industry for export purposes. Again, I would emphasise the necessity for a worthwhile buy and sell Irish campaign. Such a campaign must be got under way immediately and sustained.
Efforts are continuing on the part of the IDA to secure new industry. This is highly commendable and is worthy of our full support. However, in the short term, we need to concentrate on saving the industries we have. We are spending a considerable amount each year in setting up new industries. It is right to do this because very often these industries have worthwhile potential. However, their employment content is small in their early years, whereas the collapse of one footwear industry in a town may mean the loss at one fell swoop of as many jobs as may be provided at the initial stage in many new industries. While recognising the urgent need for industrial expansion, I am well aware of the excellent work being done by Fóir Teoranta in their efforts to assist industries in difficulty. In the short-term, while proceeding with our industrial development we should make available more money from whatever source to help the footwear industry which is now in a very serious predicament.
Finally, I would say that all our efforts to keep the footwear industry going will be futile unless immediate action is taken to curb inflation. This is fundamental. It is ridiculous to hear Ministers making speeches to that effect. They know the facts, we know the facts; what we want from them is action but to date they have done nothing to curb inflation.
So long as inflation remains at its present level, not alone will the footwear industry disappear but all industries are in serious danger. I can say this from experience in one of the most highly industrialised constituencies in the country. The footwear industry is faced with disaster. The Minister knows this and only a superlative effort can save the jobs of thousands of workers. I hope that in his reply the Minister will give the industry some hope. I hope he will not persist in his previous attitude of saying there is nothing he can do, that it is in the hands of the EEC.
