Dáil Éireann díospóireacht -
Wednesday, 7 Mar 1984

Vol. 348 No. 9

Adjournment Debate. - Tallaght (Dublin) Biscuit Factory.

Mr. S. Walsh

I thank you, Sir, for affording me the opportunity to raise this matter which is of great importance to Tallaght and to the city and county of Dublin. I thank the Minister of State, Deputy Moynihan, for his presence, but I am disappointed that the Minister for Industry, Trade, Commerce and Tourism, Deputy Bruton, is not here to deal with it. There are other representatives of the constituency here and I will not take up my entire time quota so that they may give the House their views on this important matter.

The problem is that Irish Biscuits Limited, once known as Jacobs, who moved to Tallaght some years ago and have been giving employment to between 1,000 and 1,300 people in permanent jobs and to 200 to 300 people doing summer work, last Monday put 850 to 900 workers on short time, working weeks about, and another 350 on a three-day week. Frequently when problems such as this arise in firms we hear a lot about irresponsible employees, but in the case of Irish Biscuits Limited the workers put their case early last winter. A number of them met the Minister, Deputy J. Mitchell and they saw Deputy Cluskey before he resigned from the Cabinet. Some senior members of the staff saw the Minister for Finance.

I do not condemn any of those Ministers but the word coming back to me is that very little encouragement was received and that the representatives of the workers did not get an acknowledgment of the case they put. The workers behaved responsibly and came here for help when they realised what would happen in the firm, but they received little help or acknowledgment from the people who matter.

I am sure the other representatives of the constituency will agree with me that this situation has not arisen because of irresponsibility on the part of the workers. It is on a par with the Clondalkin Paper Mills. After their visit to members of the Government, the workers were very annoyed that they did not receive an acknowledgment. It was the duty and responsibility of the Ministers to listen to the people concerned and to try to have something done to protect their jobs.

The company have said that stocks are too high and sales too low. We must look at the reasons for this situation. One of the many is the high rate of VAT on their products and I appeal to the Minister of State to ask the Government to consider reducing the rate of VAT. In their memorandum to the Minister the workers have asked for a reduction of the VAT rate on some types of biscuits. Recently a problem regarding disemployment arose in Cork and there was tremendous publicity. The Taoiseach went there and said special attention would be given to Cork. Tallaght needs the same attention now. Some years ago Dublin County Council decided that Tallaght should be a new town accommodating anything from 150,000 to 175,000 people. At the moment between 80,000 and 90,000 live there. There are more than 5,000 people unemployed in Tallaght and another 3,000 in neighbouring Clondalkin. Industries like Telectron, Glen Abbey and others have laid off workers and the situation has become extremely sad in Tallaght.

Will the Government give some special consideration to the serious situation in Irish Biscuits Limited? We hear about areas in the country being designated disadvantaged or special category areas. Tallaght demands some such designation because of its massive unemployment rate. Something must be done about those on short time in Irish Biscuits Limited. There has been talk about special consideration being given to some firms in the matter of gas supplies so that their energy costs would be lower. VAT and many other proposals can also be considered, but there is no point in my raising this matter here tonight unless the Government give some consideration to it. I am disappointed that the Minister concerned, Deputy Bruton, is not present tonight. I appreciate that a Minister in Government is very busy, but there are a number of other Ministers in the Government, and if the Taoiseach thought fit to go to Cork he could equally come to Tallaght and meet the workers there. During the last election campaign we heard a great deal about the proposals of the two parties now in Government and what they would do for employment and what our party were not doing. Now is the time, this is the place and I hope that from tonight onwards some consideration will be given to this very serious situation.

Irish Biscuits Limited have 1,050 workers on short time, week and week about, and about 350 working a three-day week. The Glen Abbey workers are on a three-day week and a number of other firms have closed, bringing the total unemployed in the area to approximately 5,000. I hope that the Government will give special consideration to this matter.

I thank you, Sir, for giving us an opportunity to raise this matter. I appreciate your consideration. We have raised many matters here in relation to Tallaght and you have been most helpful, considerate and courteous in this regard. Again I thank the Minister of State for coming here tonight, but I am very sorry that it is not the Minister for Industry, Trade, Commerce and Tourism or at least some senior Minister. Now I will give way to the other Deputies who have something to contribute on this.

Mr. Taylor

I am most grateful to my constituency colleague, Deputy Seán Walsh, who in accordance with his universally courteous manner has given way to allow me to make a few brief comments on this subject. I will take only a few minutes because our colleague, Deputy Harney, is anxious to make a contribution.

Irish Biscuits Limited is the only remaining biscuit factory in this country. The country is flooded with foreign biscuits and the workers there now are on short time. If something is not done about it the writing is on the wall and if matters are allowed to continue in this way the factory could close down and fold up altogether. What is the reason for this? The imports are coming in here freely on a basis of unfair competition. They are based on subsidised products and subsidised energies from other countries, and we do nothing about it. We allow that to continue. Protective walls are thrown up against our goods when we seek to export them both within and outside the EEC and our Government are slow and, it would appear, reluctant to counterbalance that by affording protection and providing some reasonable basis of ordinary competition for the biscuits that can be manufactured at Tallaght to supply the entire country. Neither the firm nor the workers in Tallaght are afraid to take on fair competition, but dumping of foreign biscuits here is putting at risk the jobs of those workers in Irish Biscuits Limited.

The Government should use the measures available to them under the EEC Treaty which provides opportunities to avail of anti-dumping measures and protocols that can be used if the will is there to use them. Other countries — France when it comes to meat and other products, Germany, Italy; the list is as long as your arm — are not slow to avail of these protective measures provided by the EEC protocol to protect vital industries and jobs in their countries. Why can we not do the same when our last remaining biscuit factory, which can cater for all the needs of the country, is put at risk in this way?

I want to say a word here to the shopkeepers and supermarket owners, native or multinational. Have they no sense of responsibility to this country? They are prepared to stock their shelves to the ceiling with biscuits from all round the world, from Korea, Britain, Australia, the lot, when they have available for them all the supplies they need which are every bit as good as, if not better than, the foreign product. Where is their patriotism, where is responsibility shown by those supermarket chains who are prepared to go out of their way in stocking these foreign biscuits?

I ask the Minister — Deputy Moynihan, Deputy Bruton or any Minister responsible for this — why he does not call in those supermarket owners and directors and lay it on the line that they are required and expected by the Government to show some degree of patriotism and use Irish goods that we can make and are in a position to make. I could say more on this subject but I want to leave a few minutes to our constituency colleague, Deputy Harney.

Miss Harney

I thank Deputy Walsh for affording me the opportunity of contributing to this discussion on the serious situation in relation to Irish Biscuits Limited in Tallaght. I do not wish to repeat what was said by Deputy Taylor and Deputy Walsh, but none of us can say loudly or often enough how serious the unemployment situation now is in Tallaght. Deputy Walsh has outlined that almost 5,000 people are unemployed currently in the Tallaght area. That may not appear to be very many, but when it is realised that the vast majority of the people living in Tallaght are still young and will come on to the work force in huge numbers in the next few years, it will be seen that the area has a crucial and serious unemployment situation and unless something is done about it very soon the whole future of the town of Tallaght will be seriously affected. It appears that no job opportunities or new industries are coming into the area and all we can hope for is that at least the industries there are maintained and allowed to stay in existence.

Some industries, such as the biscuit industry, are very labour-intensive. These industries are the kind that our Government, be they Coalition or Fianna Fáil, must give every possible support to. What do we do? We tax labour. We give great concessions to people who have machines and buildings but if they have labour they are taxed more and more. Our PRSI scheme has made it impossible for many people — Irish Biscuits Limited are a case in point — to employ staff. Their wage bill is enormous. The amount of money contributed to the State in the form of PRSI contributions is enormous and is crippling Irish industry. All our industries — again Irish Biscuits Ltd. are a case in point — suffer greatly from energy costs compared to their competitors in the UK. Last year the energy costs of Irish Biscuits Ltd. came to £844,000. A similar operation in the UK cost £681,000. That is a margin 24 per cent higher in Ireland for energy than in Britain.

How can our industries survive under such conditions? We have had this in the case of Clondalkin Paper Mills and Telectron.

We have made our case here and either a Government Minister is not here to listen to us and take action or we are ignored totally and the matter is never raised. That is no reflection on the Minister of State whom I am delighted to see here, but is a sad, poor reflection on Fine Gael that no member of that party from the area is present this evening and that no senior Cabinet member or any Cabinet member is present either. It is only the Government who can take the necessary decisions in this case. As Deputy Walsh said, the imposition of VAT on biscuits at 23 per cent is totally unacceptable. It means that Irish people cannot buy Irish made biscuits at a competitive price. Deputy Taylor referred to our supermarkets. These are flooded with biscuits from the UK which are dumped here at unrealistic prices with which no Irish manufacturer could compete. It is about time we came to grips with the problem and dealt with it realistically.

Firms like Irish Biscuits Limited, labour intensive, employing over 1,000 workers have made a very significant contribution to employment in my area. They must be encouraged and supported in every way. Three things must be done. Firstly, some relief must be given to such industries in relation to PRSI and to all Irish industries in relation to energy costs and, lastly in relation to VAT on biscuits. The rate of VAT must be either decreased or perhaps abolished altogether. We are taxing our own products completely out of the market, which is absolutely ridiculous. Unless we face these problems as they arise and take courageous decisions, by giving incentives to industrialists who give employment, we will find ourselves in an extremely serious situation before long. Our unemployment is now at an all time high level. Unless these industries which are labour-intensive and major employers are given that kind of support — the cost of which would not be enormous — it will be a sad reflection on all of us politicians.

Minister of State at the Department of Industry, Trade, Commerce and Tourism (Mr. M. Moynihan)

I thank the three Deputies concerned for their realistic appraisal of the problems confronting our biscuit industry. As Minister for State responsible for industrial development, it always saddens me to see how a world recession can have adverse effects on firms on our own doorstep. The heartening thing is that, in most cases, firms pull out of their particular difficulties and develop once again their original momentum.

I am naturally very concerned that Irish Biscuits Limited, which are one of the corner stones of our industrial fabric and have for so long been a feature of Irish industrial life, should be so affected by the general recession that they are obliged to introduce short-time working.

I do not want to enter into the realm of debate and try to ascribe the decision of the company to any one particular problem. The fact is that we operate in a very open economy and, as one of the prices for competing in international markets, we must face up to the competition from products coming into our market. I hope that the House will accept that the era of protectionism is no longer a realistic option. Apart from EEC and other considerations, it would be a short-sighted policy to try to take unilateral action against imports, as other countries could operate a tit-for-tat and prevent Irish exports from reaching their shelves. The impact of any such extreme measures is too horrendous to contemplate.

In every world recession, people's purchasing power is limited. Foreign manufacturers of biscuits and, indeed, all consumer products, find that their traditional outlets abroad are adversely affected, and they look around for new markets for their goods. Unfortunately, they, too, cast their eyes on Ireland, as will be clear from a visit to any Irish supermarket. Clearly, cost competitiveness is the answer to the problem, and not short-term protectionist measures. It is a matter for management in industry to achieve this cost competitiveness. However, I am not by any means saying that loss of competitiveness is entirely the fault of industrial management. That would be a naive statement. Cost competitiveness can be achieved, or adversely affected, by a number of factors and attitudes. I know that the popular thing to say is that the Government policy on taxation is to blame for all these ills and far be it from me to say that it has not had some impact. What must not be lost sight of is that there are a number of social partners, and it behoves each of the partners to look critically at their own involvement in this industry.

On the taxation front, a delicate balance must be struck between the need to collect enough revenue to run the economy and the need for industry to survive and develop. Management must manage effectively while workers must, through attitudes and wage and other demands, have full regard for the interests of their firms.

The Government are extremely concerned about all components of industrial costs. The Minister for Industry, Trade, Commerce and Tourism, has established a committee to investigate electricity charges as they apply to industry, and this committee are still examining this urgent matter. Within the present Department, a committee on industrial costs are investigating the whole matter in depth.

I am also glad to advise the Deputies and the House that the Minister is arranging, at the earliest date, to meet the owners of all our major supermarkets with a view to impressing upon them the need to give every possible facility to home produced goods on their shelves. In this connection, I must put on record the fact that VAT on imported biscuits is the same as that applicable to home produced biscuits, and it is not right to imply that there is an advantage here for the imported article.

While it may be small comfort to Irish Biscuits Limited, the general international consensus seems to be that the world recession is easing and that there is a modest but growing confidence in an upturn shortly. While again expressing my concern at the proposed short-time working, I would like to think that it is a prudent decision by the company's management aimed at not only stabilising existing production but expanding at a later stage to take advantage of the more favourable world climate for industrial production. I assure Deputy Walsh that I shall immediately bring his anxiety and that of the other speakers to the attention of the IDA, to see what further investigation might be engaged in so that no stone is left unturned to ensure the safety and prolonged security of Irish Biscuits Limited.

With regard to the point made by Deputy Taylor, dumping would have to be proved. This dumping may be occurring but in order to be effective in opposing dumping, it must be definitely proved, and this is extremely difficult. Certainly, if Deputy Taylor or any other Deputy can bring evidence to our Department of dumping on a scale which can be proved, I shall be happy indeed to investigate the matter. With regard to the point made by Deputy Walsh that a number of meetings between the workers and different Ministers had taken place, unfortunately I was not present at those meetings. However, I understand that they are mainly related to VAT and PRSI deductions, and these would be primarily a matter for the Minister for Finance.

I assure the Deputies and the House that we will have these matters reactivated with the Minister for Finance to ensure that, having regard to the gravity of the situation, every co-operation is forthcoming from the Department side to meet the worries and anxieties of the Deputies on the opposite side of the House.

The Dáil adjourned at 9 p.m. until 10.30 a.m. on Thursday, 8 March 1984.