While it was described on the sheet of paper we received as an amendment it is difficult to understand this because the gist of it simply is to take the wording used in the first part of our motion without the words "with concern". In other words, it states: "That Dáil Éireann notes the placing ... of an order ...". Secondly, it "asks the Government to ensure the continued employment of workers in Verolme Dockyard". This is a slightly shorter version of what we asked in our motion which "calls on the Government to intervene in this matter to ensure continued employment ... at a time of exceptional economic distress and heavy unemployment". That is also left out of the Government amendment. I suppose the movers of the amendment do not consider there is exceptional economic distress and heavy unemployment.
I am glad the Minister for Transport and Power has now arrived in the House. We have an amendment that does not differ in virtually any respect from the original motion except to leave out certain bits that call on the Government to ensure continued employment rather than asking the Government to intervene. This has been signed by three members of the Government. I have never seen a motion or an amendment signed by members of a Government asking the Government to do something. In my simplicity I understood members of the Government to have collective responsibility, that when they made decisions they were bound by those decisions. Therefore it seems incredible that the Ministers for Transport and Power, Industry and Commerce and Labour are calling on the Government as a body to do a certain thing.
Are we to deduce from this—it is not an unfair deduction—that certain other members of the Government do not want to ensure the continued employment of workers in the Verolme Dockyard? If not, what else are we to deduce from it? I cannot remember any precedent in this House for three members of the Government putting down an amendment calling on themselves and their colleagues to take a certain action.
When this amendment was handed to me at 12 noon today it caused a certain amount of incredulity and amusement not alone on my part but on the part of my colleagues who read it. We could not believe such amendment would be put down. It is totally meaningless in its terms because it is virtually the same as the original motion except that it leaves out certain bits and it asks the Government to do a certain thing. It is fair to conclude from that that different parts of the Government have different views about this matter.
If there is collective responsibility, why are three members of the Government asking the Government as a whole to do something? It may be simply due to bad draftsmanship. Obviously the amendment was got out in a great hurry today, in the middle of a Government meeting. It is probably designed to get Deputies in the Cork area off the hook so far as the original motion is concerned, but it is a ham-fisted and almost laughable way of doing it. It has repercussions for the whole doctrine of collective responsibility which go way beyond the terms of this motion and the series of problems we are discussing under it. They are of grave, long-term importance from the point of view of collective responsibility and parliamentary government.
We presume the wording of the amendment is so designed that it will cause somewhat less difficulty for the Labour and Fine Gael Deputies in the Cork region in voting for it. This meaningless amendment will be put by the Chair in accordance with the usual practice, presumably it will be carried if everyone on the other side votes for it and the original motion will fall and will not be put by the Chair. If this is the purpose it may well succeed but it is the most ham-fisted way of achieving it that I have ever seen.
Our motion asks the Dáil to note with concern the placing of the order by Irish Shipping Limited. If the Dáil refuses to note this with concern, it will be about the only institution in the country that so refuses because there is uproar not only in Cork but everywhere else with regard to what Irish Shipping have been allowed to do in a time of exceptional economic distress.
We used the words "and calls on the Government to intervene in this matter" and I want to make clear what we mean here. We mean we are calling on the Government to intervene because of the abnormal unemployment and the exceptional economic distress that exists. We are calling on the Government to use their powers through the Minister for Industry and Commerce, the Minister for Transport and Power, or whatever Minister is appropriate in the matter, to inform Irish Shipping that in the circumstances they will have to cancel the order and that it should be replaced with Verolme Dockyard after suitable negotiations with that company have been carried out. I say that at the outset in order to make it clear that is what we had in mind. If the amendment, which is meaningless, is carried and the terms of our motion are not put, those who vote for the amendment are voting to encourage the Government not to intervene in the matter and to allow this substantial order to go to Japan.
I am in the difficulty in opening this debate that the Minister for Transport and Power has said nothing about the placing of these orders with the exception of what he said in reply to four questions from Deputies Brosnan and Cronin last week, as reported in the Official Report, Volume 285 of 19th November, columns 1558-1560. What he said in those three columns is very limited. We are given no figures for the actual contract. All we are told is that the Minister believes that the cost of these ships would be considerably more—he estimated 40 per cent—if the contract were placed with a European dockyard which, I presume, includes Verolme in Cork. He gives no indication of any alternative work for Verolme Dockyard in future other than the hope of a fishery protection vessel and the possibility of B & I building a vessel, which he cannot guarantee would be built in Cork, and also the fact that Verolme Dockyard were hopeful of getting a fair share of the work arising from the Marathon platforms in the Kinsale gas field.
Therefore, I have no assistance in terms of official information and I must rely for information in regard to this matter on what has been printed in newspapers which has not been denied and which I accept is reasonably accurate. There it is stated that the price of these two ships as agreed with the Japanese shipyard is £11.2 million. So far as one can estimate the Verolme price would be about 30 per cent more than that, about £3.2 million more.
I want to make some general comments in regard to the failure of the Government, for the sake of £3 million or a little more, to insist on this contract being placed in Cork, which is the only dockyard in the Republic of Ireland suitable for orders of this size. At present there are between 1,200 and 1,250 men employed at Verolme Dockyard. They are among the highest-paid industrial workers in Ireland. I cannot give precise figures for wages but in the case of a great many of these workers their pay is in the region of £80 or £90 a week and in quite a number of cases more. Because of the size of their wages the income tax these men pay is considerably higher than the average amount paid by Irish industrial workers. The country stands to lose, because of the difficulties that now face Verolme as a result of the loss of this contract, a substantial sum every week in income tax and a fairly sizeable sum in social welfare contributions which would be made by workers who are now apparently becoming redundant in 1976. The Exchequer will also stand to lose a considerable amount in VAT which would have accrued to the Exchequer from the expenditure, which is high, of these workers. More exact figures will be given by my colleague, Deputy Fitzgerald, when he speaks in this debate. Even without precise figures nobody can deny that the loss to the Exchequer under these three headings is very substantial.
As well as losing these amounts in a positive way, the Exchequer will be faced with, directly or indirectly, paying out unemployment benefit, unemployment assistance, redundancy payments and pay-related benefits. I know that a high proportion of these come out of special funds, but in the last resort they have to be supplemented and helped by the Exchequer. Also, the general area will lose the circulation of money and a large number of subcontractors and providers of various services to the dockyard will lose very substantially. The loss to the Exchequer and to the general economy as a result of the loss of this contract for the sake of about £3 million will far exceed that figure.
It is difficult to get precise figures but there is no doubt that at the very least these figures would cancel each other out. It seems to me to be a strange form of economics when the Government approach the matter in this way—"We shall let this go in order to save £3 million or so but we are quite happy to pay out roughly the same amount or lose it and that will not really matter so long as Irish Shipping Limited can produce healthy accounts and a good looking balance sheet." I and my party think that approach, particularly at this time of exceptional difficulty in our economy, is totally erroneous and one that causes loss of confidence not only in this business but in all forms of business activity right across the commercial and industrial spectrum. If this is the approach of the Government in this case where substantial work would have been given—even though at a cost—and is not given while the Government will cheerfully pay out large sums in unemployment, redundancy and so on in lieu of that work being given, one cannot see much hope for the economy generally.
The company in Japan, if one might so describe it, is a subsidiary of the Mitsui Corporation, one of these huge conglomerates of a size unique to Japan and at which our imagination in this part of the world boggles. Their annual budget is probably a good deal bigger than the public national budget of this country. Matters such as this £11.2 million are peanuts to them and whether they make a profit or a loss on them is of no consequence. The shipbuilding yard in Japan which has got the contract is a small part of this enormous conglomerate and it pays Mitsui, as it would pay the other huge conglomerate there, Mitsubishi, to have certain work carried out in certain of its subsidiaries even at a substantial loss—and I think it is accepted that they will make a substantial loss on this contract—because it suits their overall operation. The evidence appears to be in this case that the Mitsui Corporation possess, through various other subsidiary companies of theirs, vast quantities of heavy steel suitable only for shipbuilding. They own this steel because they bought it over the past couple of years in the belief that the market for large oil tankers which was very buoyant in 1971, 1972 and 1973 would continue into 1974 and 1975. In fact it did not and they were stuck with a lot of this steel. They are losing very heavily on the stocks they had and are anxious to get rid of it at all costs. That steel is readily adaptable to bulk carriers of this kind and it can be used by them easily in the course of building these two 27,000 ton drawing bulk carriers for Irish Shipping. While the shipyard concerned, as an individual entity, may well, and will lose heavily on this transaction, the Mitsui Corporation as a whole will profit by it because they get rid of a lot of steel they would otherwise be stuck with. Therefore we are faced with the situation that the tender of the Japanese shipyard is an artificially low one that cannot be matched by any bona fide shipyard such as Verolme in Cork without State help or intervention of some kind. The sort of things Mitsui are doing in relation to this contract have, no doubt, the blessing of the Japanese Government, who see it as being in the overall interest of the Japanese economy that a corporation such as Mitsui should trade profitably. If a loss on a particular shipbuilding contract ensues it does not matter if the corporation as a whole are suited by the operation, as appears to be so in the case of this conglomerate.
One result of this is that the Japanese Government are encouraging this sort of activity on the part of their huge companies such as Mitsui and Mitsubishi, particularly in so far as export orders are concerned. The Japanese Government would be less keen to encourage this sort of loss-making contract if it were a domestic Japanese contract. But it is part of their policy—they are entitled to pursue such a policy because it is in their national interest—to encourage this sort of activity where export orders are concerned. The result is that the price which Irish Shipping Limited have been quoted for the building of their two ships has to be less than would be quoted for a similar order to domestic shipping companies in Japan. Unfortunately, one cannot prove this with precise figures on this side of the world, particularly as the Japanese are very inscrutable and do not divulge to anybody the details of the inner financial arrangements in deals of this kind. But I do not think anybody can seriously deny that this is a special export order at a special export price and that the domestic price would be higher.
This being so, that activity comes within the GAAT definition of dumping: to sell on an export market at a price which is significantly below the domestic price for the same product is dumping on that export market. In recent years we heard a lot about the dumping of commodities, mainly cheap textiles and footwear, and a lot of allegations and counter allegations were made about this dumping. There was a lot of pressure on the Government to take steps in relation to it and, finally, they took some steps in relation to certain dumping activities when it was proved beyond doubt to them that dumping was going on. We have an incredible situation here in that we have dumping again, not in respect of cheap textiles costing 50p or £1 but in respect of huge ships costing £5,500,000 or £6 million. It is dumping if these ships are being provided for companies abroad at a price significantly less than they would be for the domestic Japanese consumer. It is a practice which an independent bona fide shipyard such as Verolme has no chance against unless the Government intervene in their interests and the interests of their workers to give some subsidy to enable them to keep going.
In asking the Government to intervene to cancel this order, even at this late stage, and to provide a subsidy to enable Verolme to build these ships which they vitally need in order to preserve employment, I am conscious of the fact that subsidies were frequently voted by this House for Verolme shipbuilding down the years. I have not gone through all the occasions on which they were voted subsidies but I should like to refer to one occasion, in 1963, not long after Verolme got going. At that time Verolme hit a recession in the world shipping market and ran into difficulties, much the same as they are in now.
The Minister for Industry and Commerce, Deputy Jack Lynch, moved on 18th July, 1963, a Supplementary Estimate for £990,000 as a grant-in-aid for Verolme by way of subsidy. The reference to the Supplementary Estimate is Volume 204, column 1386, of the Official Report. Deputy Lynch explained that Verolme were meeting with difficulties and finding it difficult to compete. Indeed, this speech might have been delivered by a responsible Minister for Industry and Commerce in this House today coming in with another subsidy in order to enable Verolme to obtain this contract from Irish Shipping to keep their operations viable and men in employment. Unfortunately, we do not have anybody looking for a subsidy today, a subsidy which, as far as this side of the House is concerned, would be willingly given.
At that time there was grave risk to the employment of the men concerned and Verolme were unable to get contracts without some form of subsidy. The Government agreed and gave the subsidy. One would have thought there would have been enthusiasm for such a move in order to preserve this important heavy industry in which there was, and still is, a large skilled work force, but instead Deputy Cosgrave moved that the Supplementary Estimate be referred back for reconsideration. A fairly long, and pretty acrimonious debate followed on the question of this subsidy. The present Taoiseach, a Member of the Fine Gael Front Bench then, was opposed to it and he was followed by a number of Cork Deputies who, while they felt Deputy Cosgrave was right, wanted the money given to Verolme. Later in the debate he was followed by the late Deputy Sweetman and the former Deputy McGilligan. They did not pull any punches and were strongly opposed to the giving of a subsidy. At column 1484 we see that the debate came to an end and as a result of the arguments put forward Deputy Cosgrave said that although he was still opposed to the matter he would withdraw the motion to refer back and, instead, would move a motion to establish a Select Committee of the House to investigate the affairs of Verolme, including the advisability of the expenditure proposed in the Supplementary Estimate. This did not appeal to the late Deputy Casey who moved an amendment to delete the words related to the Supplementary Estimate and that, apparently, was accepted. Deputy Cosgrave's motion was then put and defeated by 67 votes to 53.
I mention this as an indication of the feeling of, at the very least, the Fine Gael Party and certain parts of the Labour Party in relation to this dockyard as long ago as 1963. Now, 12 years later, we should not be too surprised, much as we might regret it, at their present attitude.
In the 1965 by-election Deputy Fitzpatrick, now Minister for Lands in a speech in Cavan referred specifically to the Verolme Dockyard as an example of good money being thrown after bad, taxpayers' money being wasted on a useless product. He said also that the Fine Gael Party were opposed to projects of this kind and did not believe in them. That speech got quite a lot of notice at that time and caused a stir in the Cork region. It was taken as an indication of the Fine Gael Party policy in relation to the dockyard and the subsidies which had been given at that time and which were subsequently given to keep the dockyard in operation.
When talking about subsidies for Verolme I am not talking about something that is unique to Verolme. There is scarcely a shipyard in the world today, outside of Korea and Japan where labour costs are extremely low, that does not constantly get subsidies from its Government to enable it to tender for work which it would not otherwise get. We have a classic example here of a pretty large contract which would be of great importance to Verolme, whose tender was £3 million too high. They got no special assistance to obtain the contract.
As a further example of the assistance given to the dockyard, in 1967 Deputy Colley, when he was Minister for Industry and Commerce, formed a company called Irish Shipping Finance Corporation Limited, a subsidiary of the Industrial Credit Company. The purpose of that company was to provide Verolme Dockyard and ship-builders and owners at that time with finance on reasonable terms and so enable the contracts to be carried out by Verolme. Otherwise Verolme would not have been able to tender competitively for these contracts.
We have a long history of assistance to this dockyard, assistance that was badly needed at that time but is far more seriously needed today when there are 107,500 people out of work— a figure that has never been equalled since our Independence. If these subsidies were necessary in the days of 50,000 unemployed, how much more necessary are they today when there are more than 107,000 out of work.
I am flabbergasted that this contract was allowed to go out of the country. It has been known since August that Irish Shipping were having consultations and discussions with Mitsui in Japan. Very strong representations were made by Deputies in Cork, trade unions and other interested parties asking the Government to avoid giving sanction to Irish Shipping's proposal to place the order in Japan. All these suggestions and proposals fell on deaf ears.
I recall being at a dinner in Cobh on the night of Friday, 18th September last at which Deputy Brosnan spoke at length and very forcefully about the very strong rumour then current in Cobh that the order for these two ships was to be given to Japan. He had the unanimous backing not just of everybody connected with the shipyard, but of everybody in Cork, Cobh and the surrounding areas and everybody throughout the country who is interested in the economic progress of our nation. Unfortunately, his protest fell on deaf ears.
It was confirmed last week that the contract had been given to Japan and the consequences have been spelled out by Verolme. With the orders they have on hands they cannot guarantee employment for their work force after October, 1976. They have already cut down on their intake of apprentices this year because of their poor order book. Because orders take a long time to come to the actual fabrication stage it would appear, as there are now only 11 months to go to October, 1976, that even if big orders were to come straightaway there would still be a valley period in which some of this highly-skilled work force will have to be let go.
When the Minister for Transport and Power was asked last week by Deputy Cronin and Deputy Brosnan about the possibility of orders or work being obtained by Verolme, the best he could do was to say that "Negotiations are, I believe, in progress about the ordering of a fishery protection vessel for the Naval Service". I would like to say a word or two about this. This has been referred to more than once as if it would solve Verolme's and everybody else's problems. The order for this small ship has been actively negotiated since we were in Government in early 1973. I am not sure of its exact tonnage but I think it is something over 1,000 tons. By comparison with the two ships we are talking about now, this is very small. An exact sister ship was ordered by us in 1970. It took only 12 months to design and build and it was launched in 1971. I am advised that the amount of actual working time on the ship was only three months. I am afraid that that ship is not going to solve anybody's problems.
I need hardly say that exactly 12 months ago at a by-election in north-east Cork the Minister for Defence announced that the order was being placed with Verolme. He announced this a month after he became Minister for Defence. Unfortunately, the order still has not been placed. Even if the Minister were to place the order today it is still only a minor order. Although it might be considered important to the Naval Service and to general fishery protection, it is of very little consequence to Verolme.
The other suggestion is in relation to the possibility of a B & I ship which might or might not be built, depending on the financial circumstances of the B & I company. Even if they were to decide to build it, neither they nor the Minister could give a guarantee that it will be built in Cork. The Minister said also that Verolme were hopeful of getting a fair share of the work from the Marathon platforms in the Kinsale gas field. That, I am afraid, is a very speculative hope indeed. We read in today's papers how disappointed Marathon are that after five years of intensive searching they have only one gas field and no oil well off our south coast, and they are becoming dubious about discovering oil there.
A couple of weeks after what is described as a Buy Irish Campaign began on the instructions of the Government, with money voted in this House, we have an incredible example of the Government allowing a State-sponsored body, all the shares in which are owned publicly, to place an order for two very substantial ships on the other side of the world at a time when it is well known that one of the few heavy industries here is running into serious difficulties from lack of orders. If this is the kind of example we are getting from the Government in relation to commodities, such as bulk carriers of this kind costing £11 million or more, how can any housewife or shopkeeper be expected to further the economic interest of our nation by buying Irish in relation to small matters which come within their own buying power?
