Dáil Éireann díospóireacht -
Wednesday, 23 Feb 1983

Vol. 340 No. 5

Insurance (Amendment) Bill, 1982: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Skelly

Before the Adjournment I was talking about Córas Tráchtála and how they could be more effective in their operations if they allowed and encouraged the principals of businesses to travel abroad when they need to look for business. I asked if Córas Tráchtála might be able to assist them in the compilation of itineraries and the organising of travel arrangements. Those involved in business should be enabled to pursue the best methods of exploiting situations that might arise. So many personnel are involved in Córas Tráchtála and the IDA, and their organisations are so big, that they do not appreciate fully what is needed on the ground. I suggest Córas Tráchtála could help to meet the costs involved. Often businessmen are unable to travel abroad because of the high cost of travel. Therefore they cannot go to America, the Far East, and the Middle East to talk about projects.

These Bills are timely. Heretofore restraint has been placed on the expansion of Irish exports because consideration has been confined to goods and merchandise. I referred to this yesterday in my budget speech. I spoke about the ingenuity, the hard work and the ability that are around, but I said we had not opened our doors to receive the benefits. Consequently, other countries have had a head start on us, but we could quickly overtake them. I am glad the Minister appreciates that we should not be left behind. Other countries are well geared for the promotion of exports of goods and services. For example, in the UK there are very favourable conditions. If businesses want to supply goods to other countries the Government make arrangements to pay the suppliers of the goods immediately on delivery and the Government will wait for payment by the companies supplied. It might not be a bad thing for the Revenue to look at this because businesses even supplying within the country are constantly collecting taxes for the Government as well as carrying the burden, particularly during recession, of having to wait for their money. It imposes great hardships on them and it is grossly unfair.

I have said that we are well supplied with ability; we are well geared to take advantage of and to exploit foreign markets. There is no better situated country than Ireland to do that. Shannon being on the international flight routes, we can easily go from here to the US, South America, the Middle East, the Far East. We could reduce our very high unemployment in the coming years through the introduction of these Bills. Irish business people are at home in boardrooms throughout the world. They are at home in executive selling and they have the charm which enables most Irish people to laugh and to enjoy themselves. Because of their natural hospitality they are able to win over customers. Our long periods of emigration have helped to establish Ireland throughout the world. Although emigration has been very painful to us, it is well that the red carpet has been rolled out in countries throughout the world for us and it is up to us to take advantage of it. We are now in a position to benefit, though we were not able to benefit in the last century when the Industrial Revolution passed us by. Because of our small population, because of the trauma, the pain and agony the country has gone through, it is geared technically, it is very well placed among high technology businesses, it has well-educated engineers and technicians and we are in a position to offer to other countries an exchange of technology which we were not able to do in the past. We are now able to turn the tables on the large multinationals who set up here in the last two decades almost as acts of charity and exploited our work force. We knew, of course, that our only return would be employment. However, we knew we would learn and be enabled to train a highly-skilled work force. We now have that work force.

The Government and the semi-State bodies have been working very effectively and successfully in exploiting world markets. However, it is time for a reappraisal of the role of CTT, the IDA and the NBST. We must examine the structure and staffing of these organisations. They seem to be closed bodies. We do not know what they are doing but we read the reports and we accept their advertising and their public relations work. An outside body should be asked to carry out this examination because I know that savings could be effected and they could become more effective in the future.

Some Deputies are not up-to-date with modern conditions and spoke in their contribution as if we were still in the age of camel trains and merchants in the Middle East and shiploads of merchandise as in the Elizabethan days. We are talking about the advance of technology and how quickly we are prepared to exploit it. The world has been reduced by telecommunications and the development of high technology and the market has come to our doorstep. It is not a disadvantage to be small; it is an advantage. It is also an advantage to be placed on the western edge of Europe. People have come here from America so that they can be within reach of the EEC while they are also able to exploit the markets of North and South America and of the Middle East. The Loctite Company have moved their entire research and development operation from America to this country and many others have done the same. There is a quiet revolution in the high technology telecommunications and micro-electronics industries which has been exploited very well by the IDA and the educational institutions, away from the old academic mould. The climate is perfect, especially in the Middle East and Africa, for Irish firms. There is a huge market in the Middle East for semi-conductors, even in the oil countries where solar energy is developing. They are looking for micro-wave stations for their villages so that they will not have to haul oil to remote areas. I have already mentioned the development in this field at Fota Island.

I welcome the introduction of these fairly revolutionary Bills. I congratulate the Minister and encourage him. With little or no expenditure the Bills will give an enormous boost to employment and they are not coming into operation a moment too soon.

Mr. R. Burke

I welcome the introduction of these Bills. It is very important that the relevant administrative machinery is geared for the promotion of goods and services and we simply cannot afford to be left behind in this regard. I fully accept the Minister's statement that it is vitally important for job creation and job maintenance that all administrative facilities be made available to exporters, whether in goods or in services.

I should like to praise the work of CTT. Their staff at home and abroad have done magnificent work on behalf of the Irish people and Government. I had the honour and privilege of serving as Minister of State at the Department of Industry, Commerce and Energy, as it was then known, and I was very much involved with CTT. I say without fear of contradiction that our finest State agency, barring none, is CTT, although there are others who are not bad at self-promotion. CTT have been operating on a relative shoestring with regard to resources and they have been superbly successful in their work. They have worked not only with the major international companies which have based themselves here but also with our own indigenous industries whom they have encouraged to look beyond our shores. They took our industrialists by the hand, first of all to the UK, then into the European market and the Far East. We owe a deep debt of gratitude to the management and staff of CTT.

I am glad the Minister has recognised the importance of the service industries. In the future we in the European Community must recognise that the Southern Hemisphere will concentrate on the basic processing and manufacturing industries, such as leather, which we took for granted as being our own. In future our country will have a greater involvement in services such as computer services, insurance, re-insurance, banking and the supply of technical expertise to the developing countries, such as the ESB and An Foras Forbartha are already providing. We must look more and more towards service industries as the vehicle for job creation and I congratulate the Minister on the timely introduction of these two Bills. At a time when unemployment figures are heading towards 200,000 it is important that we should concentrate our minds on all avenues of job creation and the service industries represent a very important area.

The previous speaker mentioned research and development. We have had magnificent successes in attracting foreign investment to Ireland during the past ten or 15 years, particularly American and Japanese investment. Too often the industries we attracted were assembly line operations and we were not successful in our efforts to attract the research, development and marketing aspects of foreign companies. There is tremendous potential in the marketing aspects of industry. If foreign companies base their marketing headquarters here in conjunction with assembly lines many new jobs would be created.

In dealing with services it is important that the House should recognise that tourism needs all the encouragement it can get. While we must plan to market abroad we must bear in mind that it is important to market at home also through the Irish Goods Council and in regard to tourism. There is great potential in the tourist industry for job creation. For too long jobs in that sector were looked upon by certain sectors as being less than attractive or meaningful occupations. The Minister, who has a responsibility for tourism, should devote his energies to that industry.

As Europeans we must recognise that our jobs in the future will be in marketing, research and development. The low technology industries will in future be based in the Southern Hemisphere and, if we recognise that, we will see that there is a great potential for job creation. Our young people are educated to a high standard and we have a tradition of highly-skilled operatives, but now we must look further afield. We must try to make Ireland a centre for the insurance business, international banking, marketing, research and development. In welcoming the Bills I should like to congratulate the Minister on bringing them before the House. They were prepared by my colleague, Deputy Flynn, before he left office and I am glad the Minister has followed up his work.

Minister for Trade, Commerce and Tourism (Mr. Cluskey)

I should like to thank Deputy Flynn, and other Members, for the good wishes they expressed to me in the course of their contributions. I should like to extend my congratulations to Deputy Flynn on his appointment to the Front Bench and I hope we can work together for the good of the country, although we are on opposite sides of the House. I am sure it is his intention also. I should like to thank those who contributed constructively to the debate. Deputy Flynn's contribution was very constructive. He recognised the advantage and necessity for the two Bills to enable us to participate more comprehensively in the exporting market. CTT have run a successful operation up to now and the two measures before the House will give them greater scope by permitting them to export assistance and expertise. Firms engaged in the export market will also be given the necessary insurance cover.

One matter that has been raised on many occasions during the course of the debate was the question of marketing. The importance of that cannot be over-emphasised. Unless Irish firms who wish to engage in export markets realise the importance of proper marketing expertise it will not be possible to make much progress. CTT provide the expertise, but it is essential also for Irish firms to develop their own expertise in marketing. While firms engaged in the export business may get by without proper marketing expertise in their own firms in good times, when a recession hits, such as at present, they will not succeed. The necessity for marketing expertise must be recognised.

The legislation before the House will bring us into line with many other countries which have these facilities available for exporters. We are confident that our export performance in the next year or so will benefit greatly.

I should like to give some indication of how successful CTT have been. Deputy Burke paid a glowing tribute to CTT and statistics justify that. The value of our exports from January to December 1982 was £5,690.6 million, an increase of £915.5 million or 19.2 per cent on exports over the same period in 1981; and from that one can see how successful CTT and Irish firms, semi-State and private, have been in this highly competitive market. I should like to refer briefly to the figures announced yesterday by the Central Statistics Office last there is an impression that all is gloom and doom.

Naturally, one must be concerned at any drop in our exports and an increase in our imports, but it is important for the morale of exporters and people in general, particularly when talking about the manufacturing field which provides four out of five jobs, that things should be kept in perspective. In January there was a 20 per cent increase over the corresponding month in 1982 and the target set by Córas Tráchtála for the current year is a 17 per cent increase. When projecting that increase a number of factors were taken into consideration — the recession, the fiercely competitive nature of the export business and the change in sterling. That latter was a development that had to be taken into consideration. Although we have shifted the emphasis the fact remains that our nearest neighbour, the United Kingdom, is still our biggest customer where exports are concerned. It is important I should mention these factors.

Deputy Flynn queries our obligations and the effect these Bills will have on those obligations vis-à-vis our membership of the EEC. We have had informal discussions with the Commission. We will have formal discussions with them after the Bills are passed. We do not anticipate any difficulty but it is right that I should raise this particular issue. Mention was made of the insurance scheme and whether or not this scheme will be self-financing. It will be self-financing. That includes the administration of the scheme but it does not include the cost of departmental work.

Deputy Skelly questioned the operations of Córas Tráchtála. He raised one or two specific issues. He questioned whether or not firms had free access to CTT and how all-embracing the activities of Córas Tráchtála were. He also mentioned the cost incurred by Irish business people travelling abroad in the hope of securing contracts for exports and now, of course, services. My information is in over 2,000 exporting companies more than 1,800 received some assistance from CTT. Córas Tráchtála do in fact provide grants to assist foreign business travel and they also provide monetary assistance for advertising abroad and the promotion abroad of Irish businesses interests. That is, I think, a reasonable repudiation of any suggestion that CTT are not operating in a comprehensive way.

While it is fair to say there is a clear recognition of the beneficial operation of Córas Tráchtála it would be wrong — indeed it would be stupid — for us to become complacent because this is such a vital area nationally. Our economic recovery will depend very, very largely on our success in the export field and so we cannot become complacent about the operations of CTT. One of the first things I did on taking office was to arrange with Córas Tráchtála that a small — I emphasise small — top level group would be set up comprised of top officials from CTT and top officials from my Department. The purpose of that group would be to review the whole strategy of our export business and pinpoint geographically produce areas in which there was potential, as well as setting realistic targets in such areas. Secondly, as far as produce was concerned, the group should monitor year by year the produce area instead of just looking at the CTT operation in global terms. That would enable the group to identify the best potential and set realistic targets for the particular areas, subsequently monitoring the success or failure of the exercise. There is no danger of our becoming complacent in regard to the work of CTT. In fairness to CTT I should say that this suggestion was accepted by them without hesitation and it had their full cooperation and participation. That speaks well for them. Indeed, it gave me an insight into why the body had been so successful in the past. They were prepared to allow their targets to be monitored.

Deputy Flynn spoke about the extent of their operations in service areas and the possibility of risk. He also said he would like to see flexibility in the areas designated since I will have the right to designate under the Bill. I understand that approach and I have considerable sympathy with it. However, it is only fair to say that after discussion between my Department and CTT the areas which will be designated initially are fairly comprehensive but they are areas where it is expected there will be a high return in a fairly short period of time. CTT like everyone else is suffering from recession. The money given to CTT is taxpayers' money and there has to be due regard to value and return. While I will be as flexible as possible and while I do have sympathy with the approach advocated by Deputy Flynn, I must also take that aspect into consideration.

Deputy Kelly queried the necessity for having this restriction in the Bill at all. It is a normal provision in a Bill. I am sure Deputy Kelly, as a Minister, promoted Bills that had the same provision. It is not an innovation or restriction in the normal sense of the word. It is a safeguard to ensure that both taxpayers' money and the very valuable expertise of CTT are utilised to the best possible advantage for the Irish people and the Irish economy. If one were to put in a long list of services which had very little export potential one would be retarding the progress that could be made by this breakthrough. I can assure the House that I will, in consultation with CTT and other interested bodies, be reviewing and updating the list frequently. Not only will I be adding to it but I will also possibly be taking areas which are now being included out of it because they have shown themselves not to be successful or because their potential has diminished over a period of time. There will be a constant review of the services that are covered under the Bill.

The activities of the IDA and CTT have been raised. We have looked at this carefully to ensure that there will be no overlapping or duplication of work by the two bodies. We are satisfied that that will not happen and that where they come into the same field they will be complementary to each other and not in competition.

Deputy Kelly raised the question of training. He spoke about universities and the training of police forces in other countries. Training is included in very general terms to give us greater flexibility should any particular project be presented that has good potential. The words I used when introducing the Bill were: "training services covering all activities." That is an all-embracing approach to training, so I do not think Deputy Kelly need worry on that score.

I have always admired Deputy Kelly as a very colourful speaker with a wonderful turn of phrase. He has amused and entertained me in the House many times. But he seemed to get somewhat confused this morning in relating this Bill to a speech he made outside the House last week with regard to emigration. While I say a colourful speaker with a wonderful turn of phrase that does not necessarily always reflect accuracy and there is no relationship between this Bill and the subject matter of Deputy Kelly's speech last week——

Mr. Flynn

That was the cultural subversion bit.

Mr. Cluskey

—— for which he got considerable media coverage. I do not mind coverage but I would be very reluctant to have it confused with the purpose, the objective and the undoubted effect of these Bills. People who will be serving abroad under contract as a result of this approach will be doing so on behalf of Irish-based firms. They will be doing so for a limited period of time under contract, but their roots, their opportunities, their promotion and their progress in their particular profession or occupation will not be outside this country except for a very limited period. It would be just as unrealistic to say that the people working abroad on behalf of the State for Córas Tráchtála, or indeed people who work in our embassies for three and four years, would fall into that category.

Mr. Flynn

The Minister is being very hard on him.

Mr. Cluskey

I do not want to be, but it is important that the advance that has been acknowledged by all sides of the House in this Bill, the beneficial effects of it on exporting and on the national economy, should not be confused by a contribution that could unintentionally do that.

The other matters raised were of a general nature and referred to the work of Córas Tráchtála and the IDA. The IDA do not come under my Department, so I will not make any comment in that regard. If we are to make economic recovery it is essential that we be successful in the export climate. Every reasonable assistance that can be given to our exporters should be provided. I believe those two measures will have an extremely beneficial effect on the export trade. It is embracing an area where there is very considerable potential which has been identified. The initial services that should be covered have been identified and, hopefully, it will now get the support and the aggressiveness by Irish firms engaged in this market that is necessary to make it successful. It is a highly competitive market and is even more so now because of the recession the world is going through.

The figures I read out comparing 1981 with 1982 prove that Irish firms need not feel any sense of inferiority in this market. They have shown they can do it and these provisions will, undoubtedly, make it easier for them to do it. Apart from designating a number of service areas the other Bill, the insurance credit, is also essential because our greatest potential would appear to be in the Middle East, the Continent of Africa and Latin America. There are some of those areas where dealing is a relatively risky business. Unless companies have these facilities, particularly as far as credit insurance is concerned, it makes it difficult, if not impossible, for them to engage in these markets.

These facilities are now being provided. There has been a clear recognition here today that there is, not only a willingness, but an anxiety, to facilitate the export trade by the Opposition as well as by the Government. This is not political, it is recognised for what it is, essential for the national good. I believe, with the passage of those two Bills, that we can all reasonably expect a significant increase in our exports over the next few years. That is my hope and my expectation. However, everything cannot be laid on the Government or on a Government agency.

I would like to come back to the question of marketing. I refer again to the highly competitive nature of the operation but other countries and other firms are geared for that market. They have recognised the supreme importance of proper marketing expertise and techniques. As I said, Córas Tráchtála have that expertise. They are able to give very considerable assistance to Irish firms, either seeking orders for export or those who are actually engaged in the export of goods and now services, but at the end of the day, the main responsibility will have to lie on the individual Irish firms and companies who are engaged in this particular business. The figures prove that they have the capability to do that. They can reply on the continuing support of Córas Tráchtála. That is extended now by the measures proposed in these Bills. At the end of the day it is the recognition that their performance and their expertise, particularly in marketing, will be essential to the success or failure of the particular venture they are engaged in.

Deputy Flynn mentioned one other thing this morning, which is extremely important, that there should be a coordination of the activities of Government Departments, State and semi-State bodies, to ensure that they are aware of their responsibilities as far as export markets are concerned, that anything they can do on their own or in conjunction with another Department or Departments, State or semi-State bodies should be done. I would like to assure the House and Deputy Flynn that I have been conscious of the necessity for such an approach and that steps will be taken to ensure that that approach is made. While the work we have been engaged in in export has been successful it has by no means reached its full potential.

I feel Córas Tráchtála will get undoubted courage to continue and reinforce the task they are engaged in by the contributions that were made today on both sides of the House. An unstinting tribute was paid to the work they are engaged in. While that is justified, I said earlier in regard to the establishment of this top level group to monitor, that I was sure there was no feeling of complacency, but it is also proper that I should say that if there were any indications of complacency, the attitude of the House, particularly the other side of the House, would change quite dramatically. I do not believe there is any danger of that development. I believe there is a clear recognition by them of their responsibilities. I believe they are heartened by the success they have had in the past and that they will be further encouraged in their efforts by the passage of these Bills. I would again like to thank the Opposition and Deputy Flynn for his very constructive approach to this Bill. I would like to thank the other Members of the House for the way in which they have approached this matter.

Question put and agreed to.

Committee Stage ordered for Tuesday, 1 March 1983.