Dáil Éireann díospóireacht -
Wednesday, 10 Jul 1985

Vol. 360 No. 6

Supplementary Estimates, 1985. - Vote 40: Industry, Trade, Commerce and Tourism.

Minister for Industry, Trade, Commerce and Tourism (Mr. J. Bruton)

I move:

That a supplementary sum not exceeding £5,000,000 be granted to defray the charge which will come in course of payment in the year ending 31 December 1985 for the salaries and expenses of the Office of the Minister for Industry, Trade, Commerce and Tourism, including certain services administered by that Office, and for payment of certain loans, subsidies, grants and grants-in-aid.

The purpose of this Supplementary Estimate is to provide up to £5 million to Irish Steel Limited in the period to December 1985 to meet the company's working capital requirements.

I explained to the House last week, in the course of a debate on a Private Members's motion, that Irish Steel's financial position has deteriorated considerably as compared with what was projected when the Oireachtas approved legislation in June 1984 to enable the investment of £89 million in the company. It is now clear to me and the Government that the £89 million investment package has not achieved its main objective — that of making the company financially viable and not dependent on further aid from the State. The company now requires further funding if they are to be able to continue in operation.

The House will recall that the Government submitted an application to the European Commission on 3 May 1985 for approval to invest up to a maximum of £24 million by way of additional equity in Irish Steel Limited. I understand that the Commission will be taking a decision soon on this application.

I am sure Deputies will agree that there is no point in making a further substantial investment in the company if this is only going to last another year or two. It would be a waste of taxpayers' money if the Government committed a further £24 million to the company with their present uncompetitive cost structure, as this money be quickly swallowed up in further losses. It is essential to bring about, where possible, a major reduction in costs if the company are to have any hope of becoming viable. Otherwise, we might as well close the company now and instead invest the money in other commercially viable projects which would be capable of providing lasting employment and a positive return on the taxpayer's investment.

As Deputies will be aware, the board of Irish Steel have recently put proposals to the workforce for a pay freeze and 100 redundancies in an effort to cut costs. I understand, that the plant could be operated just as efficiently with 100 fewer employees. The proposed measures may appear to be draconian. It may even be argued that it is unfair to penalise the employees fo Irish Steel when the company's major difficulties are outside of their control. However, the company must get their costs down as far as possible if they are to have any hope of surviving. Even if this means that some jobs have to go, I am sure the House will agree that it is better that 100 jobs are lost rather than all 650 and possibly more in other industries.

I met the workers in Irish Steel through their unions. I realise that we are talking about people with families dependent on them and that the prospect of redundancies, however limited, is something that can never be contemplated without grief. It is accepted by the company that 100 redundancies are necessary. I know that the 100 redundancies are not just figures on a ledger but these redundancies are necessary to protect the remainder of the employees in Irish Steel. I accept that the people concerned have families to be educated, mortgages to pay and so on, but to look at it in this way does not assist one in selling steel and Irish Steel must operate in a market where they can sell their product. If other companies in other countries reduce their labour costs by making similar sacrifices and we do not make these sacrifices, the end result will be worse for us because we will lose all our jobs and they will at least preserve some of theirs. There is no point in preserving an uncompetitive cost structure which results in building up stockpiles of unsold products or in a product being sold at a price well below what it cost to produce. It is important that everybody in Irish Steel realise that action along the lines indicated in my statement must be taken in order to protect the vast majority of jobs in Irish Steel. The measures outlined in my statement are taken in a spirit of achieving the greater good and I hope the people will realise that there must be a tempering of concern with realism in this area.

The Government are, therefore, not prepared to invest any further funds in Irish Steel unless there is agreement between the company and their employees on (i) a pay freeze to the end of 1986, (ii) a redundancy scheme which would have the effect of reducing the company's present labour costs by at least 10 per cent and (iii) the elimination of all restrictive working practices. I wish to make a strong appeal to management and employees at Irish Steel to reach an early agreement on cost-cutting proposals. If such agreement is not forthcoming by the middle of August the company will not be able to continue in operation for any length of time thereafter.

I also want to make it clear that the Government are not prepared to support Irish Steel at any price. The taxpayer has already paid dearly towards the maintenance of employment at Irish Steel and is now being asked to make another contribution. With the equivalent of a grant per job of over £135,000 provided last year and a possible commitment of over £40,000 per job sought now, it is only reasonable for the Government to demand, on behalf of the taxpayer, that Irish Steel's employees should themselves make a significant contribution towards the continuation of the company.

In informing the chairman of Irish Steel of the Government's decision regarding the future of the company, I expressed my grave concern about the company's poor financial performance. The level of losses in 1984-85 at around £17 million is unacceptable, especially in the light of the £89 million equity investment made last year, and having regard to the fact that I informed the Oireachtas that the company must survive on their own without further resources to Exchequer financing at that time.

There are several factors, in addition to a reduction in labour costs, which will influence the Government when they take their final decision about the future of Irish Steel towards the end of the year. These include developments regarding the price of scrap. As Deputies are aware, this essential raw material is the most costly element in Irish Steel's production process. The recent fall in the composite price of scrap, if sustained, could result in an appreciable improvement in the company's finances. However, some reduction in scrap prices usually occurs at this time of year. The durability of this reduction will thus have to be assessed over the coming months.

The Government consider that the availability of third party investment to Irish Steel would improve significantly the long term prospects of the company remaining in operation. This possibility will be investigated vigorously by Irish Steel. It would result in a reduction in debt charges, through an equity injection, below the level beyond which under ECSC rules Government subsidy may not bring these debt charges even assuming the maximum contribution we could make.

Irish Steel must demonstrate that they can operate as competitively as possible. To this end I have asked the company's board to immediately reassess all aspects of their operations with a view to making the company more efficient, productive and, I hope, profitable. Only if everything possible is done to create conditions on which the Government can be satisfied as to the long term financial viability of the company will the balance of the £24 million be paid to Irish Steel at the end of the year.

To comply with the Government's aid application to the EC Commission, it is envisaged that enabling legislation would be introduced later this year to convert this grant of £5 million into share capital and, if necessary, to provide for additional share capital if the Government decide later in the year to further assist the company. I would remind the House that the Irish Steel (Amendment) Act, 1984, enables the Minister for Finance to invest a further £1 million in the share capital of the company and this money will also be advanced to Irish Steel, if necessary, in the light of the company's working capital requirements.

I would like to remind the House that I have instructed my Department to approach the EC Commission with the object of finding out whether ECSC funding would be available to assist redundant steel workers. Every effort will have to be made to put our case as vigorously as possible but there is no guarantee that the Commission will make the moneys available.

In taking their decision to invest up to £6 million in Irish Steel the Government considered all possible options, including the closure of the plant. The Government have made the choice to provide further aid to the company having regard, in particular, to the considerable adverse impact the closure of Irish Steel would have on the economic life of the Cork region which has still not recovered from the closure of Fords, Dunlops and Verolme.

By way of conclusion, I would like to reiterate, in the strongest possible terms, that Irish Steel cannot afford to pay unrealistic redundancy payments nor indeed have they the ability to fund any further pay increases in the foreseeable future. This stark fact must be understood by the company's employees. I would, therefore, urge them, for the good of the company and the Cork region, to conclude their negotiations with Irish Steel's management as soon as possible.

I now commend this Estimate to the House.

Before concluding my remarks I would like to say that what the Government are doing is designed to put all the ingredients in place that would maximise the prospects of sustained survival for Irish Steel. The first steps have to be taken by the workforce, although other steps, some of which I have alluded to in my speech, would need to be taken subsequently. A very complex set of factors must be put in place, but there is no point in putting money into the company unless everything is done to ensure that once that is done they will be able to survive on their own. I appeal to everyone here who has any influence on those involved to use that influence to ensure that realism and co-operation are the watchwords in the approach to the very critical decisions that have to be taken in the coming weeks and months directed towards putting this company on such a footing that they can survive on their own. I hope that I can count on the support of all in this House in making this approach work.

Mr. Lyons

It is with some satisfaction, tempered by the inadequacy of what the Minister is proposing, that I realise that the motion that we had before the House last week on the question of the Government ensuring the continuation of Irish Steel has eventually prompted them into some action. While I support the Supplementary Estimate of £5 million, I know that £1 million floating around in some contingency fund has to be added. Nevertheless, I have no intention of giving unqualified support to what is being proposed just now by the Minister or to what was suggested in points given at a meeting held yesterday between the chairman of the board and the workers.

Sufficient commitment has not been given by this Government to Irish Steel. Anybody who had occasion to see the news tonight at 9 p.m. will know that we had an extraordinary public relations exercise again from the national handlers. I welcome the setting up of jobs anywhere in this country at this time because they are dearly and severely wanted, but the Minister made this fantastic announcement about the 600 jobs that will be achieved in two years time, mark you — not tonight, as it would appear from the television programme. Anyone listening carefully would realise that they will appear in two years time. This Minister and this Government are toying with an industry that already has 600 workers in it. I could comment in that vein a little further, but it would be unfair of me to take too much time from my colleagues from the Cork area, and I am glad to see three of them on the Government benches and I am sure they will want to say something on this matter.

Let me revert to a little over 12 months ago, May 1984, when we had a Supplementary Estimate before this House seeking approval for £89 million to be put into equity in Irish Steel to pay off some of the capital accounts that were there and some of the interest that was due. We gave it our support and approval, despite the fact that we asked the Minister to let the House have the consultants' report on Irish Steel. The Minister neglected, for whatever reason, to give us that report. It was indicated that by giving this money to Irish Steel the continued viability of the company would be assured. What has now happened to the viability we were told about?

I suggest that the handling of this project by the Minister and the Government has been nothing short of criminal. The responsibility for what is happening must be laid fairly and squarely on them. I am not qualified to indicate to the board and management of Irish Steel how to organise their affairs but I and many others realise that the performance in the operation of the mill leaves a lot to be desired. However, I will not allow this Minister to lay the entire blame on the workforce. He has appealed to us to get the workforce to keep the mill going as if nobody else were involved and no Minister had any responsibility, as if there were no Government. Of course many people throughout the country would say that we have not got a Government. The condition in which they have left Irish Steel is adding to that impression. We do not have a Minister capable of looking after industry or a Government capable of making decisions on behalf of this industry that will ensure its continuance. They should not blame the workforce for all that is happening in Irish Steel. What is management for?

The Minister refers to work practices. It is only now that he and the Government realise that there is something wrong in the work practices of Irish Steel? It is only now that the management and the board realise there is something wrong and have decided the workers are to blame? Where is the leadership or commitment, the effort to get people around the table to sort out the problems? Would it not be more positive for the Minister to adopt some such suggestion?

I do not condone malpractices in the workplace but it has not been established that they exist here and nobody has said what they are. If they exist, why not get the people concerned to sit down and talk about it? If such a problem exists it would not be conducive to proper operations but why not discuss the problem with workers' representatives and the people concerned?

The Minister and the Government will not be allowed by me or my party to abrogate their responsibility to Irish Steel. They have been totally and absolutely negligent in this matter. The uncertainty about the future of the industry is aggravated by the indecisiveness of the Government. That indecisiveness has been very evident over a period of time, not just today or last week when we brought a Private Members' motion before the House. They are generating further doubt by these proposals. I said last week that the talk of redundancies and closure had the very obvious effect of undermining the workforce in Irish Steel. That situation should not have been allowed to develop and the Minister must take full responsibility for the current frame of mind of the workforce.

It was indicated one year ago that the company would be made viable through an injection of £89 million. There were warnings given during that debate that one element was causing concern, namely, energy costs. We were told those costs were having a detrimental effect on the cost of production, as well as a number of other cost factors. The Minister and the Government did sweet damn all about the problem of energy costs and we were told recently that these costs are having a tremendous effect on the viability of the company. Nevertheless the Minister now sees that the fault lies with the workforce. Why was something not done about the cost element? The Minister was asked to find a solution to that problem and several others. There is no evidence of any effort on the part of the Minister or his colleagues in Government to correct this glaring problem which Irish Steel were facing 12 months ago. It has been restated in recent days that energy costs are having an effect on production costs at the mill but the Minister's solution is to tell us to go away, talk to the workers and use our influence to get 100 redundancies. Six months ago the board advised the Minister that because of a number of factors the company would face financial problems before the end of 1985. Why did the Minister and the Government sleep on this issue until they were prompted into some action six days ago?

It is hardly necessary for me or anybody else to indicate to the Government the immense contribution Irish Steel are making to our economy. Their total contribution amounts to £24.85 million. Surely the Government are aware that their contribution to the balance of payments is £45 million. We will not accept the Minister's proposals. It seems now that he has decided to confront the workers with measures so unpalatable that he will bring about a confrontation between managers and workers. He will then close the factory and blame it on the workers. The thinking of the Minister and the Government is very clear in regard to Irish Steel. They think they will divert responsibility to the workforce and so avoid political damage. They should have a rethink in that regard because it will not wash with the people in Irish Steel nor with the taxpayers to whom the Minister referred.

My information is that at a meeting held yesterday, the chairman indicated that he had come from a conference with the Minister, Deputy Bruton and the chairman indicated that the sum of £6 million would be forthcoming in stages provided that the programme of 13 June 1985 would be agreed by the date set by the Minister, 15 August 1985. I should like to again put on record the board's recommendations of 13 June 1985. They were: (1) that there would be an instant pay freeze at all levels until the end of 1986; (2) that the numbers employed by the company would be reduced by approximately 100 persons. I do not know who is doing the Minister's sums. He indicated some time ago — and he is correct — that there would be a reduction of 10 per cent in the wages bill if 100 workers were made redundant. Irish Steel has a wages bill of £10 million. A sum of £2 million was paid in overtime in Irish Steel last year. By reducing the workforce by 100 persons, is it the Minister's intention to pay out more overtime? Would it not be better if the Minister reduced overtime and got the management and workers of the firm to streamline the operation? If payments for overtime were reduced by a sum of £1 million, those 100 workers could remain in employment. Has the Minister considered that aspect of the cost in Irish Steel? The third recommendation was that redundancy should be restricted to the statutory requirement plus one week's pay for every year of service.

We have had enough redundancies in the Cork area and we are not trying to get any in Irish Steel. We are only too well aware — and the Government must also be well aware — of what becomes of workers made redundant. We have had too many sorrowful experiences in Cork in this regard and we will not be a party to creating more redundancies. The workers of Irish Steel fully realise that if there is a possibility of saving their jobs it is much better to do so than to make them redundant. I wonder if it is necessary to develop that point, as everybody knows — certainly public representatives in Cork know from public meetings which have been held — how workers feel about redundancy. The Minister can forget about redundancies in Irish Steel.

The fourth recommendation was that the 1.7 per cent increase by way of the analogue review for 1984 which was recommended by the Labour Court should be paid. However, that got very short shrift from the Minister this week because the chairman indicated to the shop stewards that the Minister has removed the fourth recommendation and will not sanction it. Another recommendation was that undesirable work practices would have to be eliminated and there was no elaboration by the chairman in regard to this point. If such practices exist and are shown to be detrimental to the successful ongoing operations in Irish Steel, everybody concerned will have to work in their own interests because I could not condone undesirable work practices, whatever they may be.

I notice that management have been instruced to negotiate redundancies. When the board's recommendations were issued in June, it was clearly stated that the proposals were not negotiable. I am satisfied that new thinking was brought to bear on that decision and that negotiations may now continue — if that is the right word after yesterday's meeting — but there are other matters to be discussed other than redundancies.

There was no reference in the Minister's speech to the fact that there would be a sum of £1,500 for each redundant worker although this was indicated to the representatives yesterday. There was no elaboration on this amount, to whom it would apply or how it would be calculated except that it could be negotiated by the Minister's Department over the next six months. I sincerely hope it will not arise that we will be discussing the £1,500 because that figure is for redundancies. I hope that is not a carrot being dangled in front of the workers. If it is I can tell the Minister, with a degree of certainty, that it will not be accepted. The people involved want their jobs and not dangling carrots of £1,500.

It was also indicated on 30 June that the company's balance amounted to £7.6 million and that the Minister was informed — I presume at yesterday's meeting — that at the close of business on Friday last, 5 July, there was a balance of £3.4 million in the company's account. It was indicated to the Minister that that sum would be reduced to £1.4 million by mid-August and that by the end of September a further reduction would leave the figure at £0.7 million. The Minister's response to this — he may correct me if I am wrong——

Mr. J. Bruton

The Deputy is.

Mr. Lyons

——was that it was absolutely necessary that the unions would reach agreement before 15 August. The Government, it was indicated, would be prepared to release £6 million if the proposals — the pay freeze, the redundancies, or work practices — were agreed on. All of a sudden the Minister has realised the exact position within Irish Steel. What the Minister, the Government, the Department, management and the board have been doing for the past 12 months has not been explained to me. Is the Minister aware that the workers' rep-representatives have expressed the view — I tend to support that view — that the Government's proposals are nothing short of industrial blackmail?

Is the Minister aware of the difficult position he has placed trade unions in, to negotiate and have the proposals accepted by 15 August? I have heard the phrase of cracking the whip but there is a fair lash out of that whip and that demand by the Minister which I am sure is being made on behalf of the Government. The Minister in his speech tonight again referred to a possible closure. The Minister, and the Government, are prolonging the agony of Irish Steel according to phraseology used in the Minister's script. I can tell the Minister that we will not have that from the Government or the Minister. We will not have a prolonging of the agony in Irish Steel with a decision by the Minister to see what will be done with Irish Steel by the end of the year. The problem is a lot more serious than is indicated by that type of whip-cracking over the workers of Irish Steel. I have no doubt they will play their part given the encouragement, the understanding, the leadership and the commitment but there was nothing for them in the Minister's speech or what he said through the chairman of the board yesterday.

The funding that the Minister is conditionally offering is insufficient given the financial circumstances of the company and it is my honest view that it will do more harm than good. Why must there be a demand for redundancies in Irish Steel? It is a demand, not a request. Is the reason to let 100 workers to to save £1 million? It appears, if one calculates the total figures and the amount of overtime, that 100 workers would be let go to save £1 million. If the operation was examined that sum could be saved by reducing half of the amount paid out in overtime. I am not satisfied, and it has not been established for me, that the redundancies are necessary.

As a trade unionist for many years, a shop steward for a good number of years, a chairman of the local branch of my trade union and a member of the Cork Council of Trade Unions I can tell the House that in our time we would not stand for 100 workers being out out on the road while the amount paid in overtime was doubled. It would be unacceptable. Surely the sums can be done by somebody if the Minister and the Government cannot do them. Is it the intention to reduce output? That has not been mentioned so far. Is it not logical to contend that if the workforce is reduced by 100 the overtime bill will grow beyond £2 million. I do not think it is in the minds of any workers that they should work overtime while their colleagues are idle. Basically that is what they are being asked to do. I am sure any trade unionist would agree not to work overtime while their colleagues are idle. We never did it and I doubt if the workers today are any different from us when we were working at the bench.

Mr. Allen

I will have no overtime tonight, especially when we are finishing this debate at midnight.

An Ceann Comhairle

I am aware of that but the Chair is bound by the Order of the House today and any other arrangement made between Deputies does not arise.

Mr. Lyons

I will get into top gear now. When the leader of our party and a group of local representatives visited the plant recently we found everybody gainfully employed. Will the Minister some clean on Irish Steel? Has a decision been made in Irish Steel — there are references to a closure in the Minister's speech — in regard to a closure? The Minister should stop fudging the matter and restore the morale of the workers. He is doing a disservice to them by his behaviour, his warnings and threats. I do not understand how the Government could consider, as they appear to have done, the closure of Irish Steel. Is this a threat? Would the Minister clarify this for me? I would be happy to know that the reference to closure in the Minister's speech this evening is not being used as a threat to anybody working in Irish Steel.

Mr. Allen

Since there are only 40 minutes left and there are still five Members waiting to contribute, I will cut my contribution to the bone. The speech we have just heard for the past 35 minutes was one of the most disgraceful I have heard in my three or four years in this House. It was totally irresponsible. My impression is that some of the people on the opposite side would like to see Irish Steel close for political gain.

Mr. Lyons

Bunkum.

Mr. Allen

The Minister called for realism and co-operation in the weeks ahead and there was nothing in the speech I just heard which lends itself to realism and co-operation. This is a time when we should not be indulging in political flag waving, but the last speech was a blatant attempt to politicise the issue and was structured to influence voters and to win votes in a forthcoming election. It will inflame passions in the steel plant when the speech is read. Nobody blamed the workforce and if anybody reads the speeches made last week he will see that questions were posed concerning management and the workforce and the suggestion was made that both sides should come together to examine these problems in depth to safeguard the future of Irish Steel.

I have listened for 35 minutes to Deputy Lyons's speech and he mentioned a number of problems in Irish Steel but put forward very few solutions. Are we to put in £24 million of taxpayers' money without questioning why there is a haemorrhage in Irish Steel? Should we just plough ahead with what has been happening there over the last number of years, putting in another £24 million to follow the £89 million we gave last year, and spend more next year? We cannot do that. We cannot call for a drop in taxation levels and still push money indefinitely into an operation which is clearly losing money.

Last week I mentioned the £2 million paid in overtime and down time — 51 per cent in 1983-84 and down this year to 39 per cent. These issues need to be investigated and have to be taken on by management and unions. However, there are external factors which have to be considered also — the price of scrap, electricity prices and the level of the company's debt. I welcome the Minister's proposals to put £6 million into Irish Steel provided there is agreement between management and unions. I am glad he consented to the proposals put forward last week. This £6 million is a fragile life line to the company and the company, management and unions must come together in the next few weeks and work out a compromise agreement about the internal problems of the plant.

As I said, there are major external factors affecting the operation of Irish Steel which I identified last week but which, because of time, I will not go into in detail tonight. These factors are the responsibility of the Minister's office and they must be looked at in the next few months. The Minister must also consider restructuring the tariffs for electricity charges to commercial users. That is a millstone around the neck of Irish Steel at present and it must be examined and considered.

The Minister mentioned a joint venture. This is an interesting concept and must be brought to a successful conclusion at some stage because the company's debt is one which, despite all our efforts, could close the mill if not tackled urgently. I am encouraged by the reduction in the prices of scrap. If they continue to drop, there could be a saving of a few million pounds. What is required at the present time are cool heads and co-operation between union and management and decisive action by the Minister and his officials between now and the new year to deal with the external factors I mentioned.

The redundancy offer made to the workers must be reconsidered and there must be some flexibility. As I mentioned last week, redundancy is not the pot of gold at the end of the rainbow as Cork workers know. Tonight I appeal to everyone in Irish Steel to sit down and discuss the problems in the plant in a calm and constructive manner and I ask the Minister to attend to some of the major external factors affecting the plant in the months ahead.

Mr. Wyse

I too will be brief in order to give other speakers an opportunity to contribute. I welcome the injection of money into Irish Steel and to any industry which is suffering from the recession. The Minister's speech tonight was similar to last week's — nothing positive and no encouragement to that industry. Last Wednesday I said that steel companies throughout Europe will be seeking financial aid in the region of £10 billion. One would think Irish Steel was the only industry in difficulties. The Germans are asking for £350 million; the Italians are talking about £5,000 million and the French £250 million, but we are not talking about that kind of money to keep Irish Steel in business. What are other steel industries in Europe doing at the moment confronted with the same problems? I am sure of one thing: their Governments are not talking about redundancies and closures.

Mr. J. Bruton

Wrong.

Mr. Wyse

The Minister should have mentioned that in his speech. Last week he laid great emphasis on problems being created by countries outside the European Communities. The Minister should also have informed us of what was happening in other steel industries in Europe and what action was being taken by them to overcome their problems. We thought perhaps at a later stage, in this House or elsewhere there would be a discussion about the whole position regarding Irish Steel and what has been happening in recent times.

I am sorry that the Minister introduced a dictatorial atmosphere into the debate tonight. If has been a long tradition in this country that trade unions, workers and management always have been advised to get around the round table to discuss their problems and come to some agreement. Are we now departing from that tradition? Are the Government now telling the workers, trade unions and management that, if they do not agree to this, then they must close? I am sorry that this approach has been brought into the debate. I believe that we have closed the doors against any negotiations which could bring about commonsense in this matter. The Minister is saying no to that, but if I were a worker in Irish Steel that is what I would think. I hope that they do not think that. We should never force anything on workers, trade unions or management. They have the intelligence, understanding and will to save an industry by co-operating with one another, rather than having, as Deputy Lyons mentioned, a whiplash over them.

I appeal to the workers of Irish Steel, the management and the trade unions to be more realistic now in their approach, in the interests of the majority of jobs in that industry. I am almost convinced that agreement has been reached at Cabinet level about the future of this industry. Everything which has happened in recent times is convincing me more. In the presence of the Minister, the Deputies from Cork and the management, I should like to question the chairman's address made publicly not long after the Minister's visit to that plant. I question especially the time the statement was made. Everybody was aware of the problems of Irish Steel except the workers. I do not think that management were aware that the chairman of Irish Steel was about to make the statement which he made. Nobody got the warning. With all due respect to the Minister, there was something very suspicious about that statement and its timing. I cannot go into further details, but wish I had a little more time. I want to oblige other Deputies who wish to make contributions.

I hope that everybody will sit down and discuss the future of Irish Steel and what is to be done to save that industry. After the chairman's statement was made, there was only one other member of the Government who made a statement. That was a senior member of the Cabinet, in Cork the Minister for Foreign Affairs, who repeated——

Mr. Lyons

Did he wake up?

Mr. Wyse

I am not casting any reflection on any Deputy. He repeated the exact words that were in the chairman's statement. I would have assumed that the Minister present now, as the responsible Minister, would have made the statement first. There are other days when we will be questioning certain activities and certain statements made and their timing. These events became known through the city and county of Cork and the belief was that the Government must now have made their final decision to close that industry. Ask any of the workers in Irish Steel and they will tell the Minister exactly what I am saying here tonight. I have to be very cautious in view of the Minister's statement, lest I cause any further interruptions, in the hope that everybody concerned will sit down and discuss the future of Irish Steel. I am disappointed that the Minister was not prepared to let us know exactly what is happening in Europe and what other Governments are doing.

Mr. J. Bruton

I just did not have time.

Mr. O'Sullivan

Would I be asking too much if I were to ask the Members of the Opposition to give credit where it is due? Having listened to them last week and again tonight, it seems that they are a little disappointed that this aid has now been given to Irish Steel. Granted, there are certain aspects of the Bill about which I would be concerned and to which I will refer later.

Deputy Lyons said that he had no intention of giving unqualified support. That is quite legitimate. He accused the Government of being indecisive. Nothing could be further from the truth. He also accused them of lack of commitment. Would he not consider £95 million a significant commitment to this industry? I think it is. Mention was made of the energy costs. I referred to that in my speech last week. I would like again to remind Deputy Lyons about Deputy Reynolds' speech of 28 June 1984 regarding energy costs to Irish Steel and the reservations which he expressed on that occasion. There was no commitment from Fianna Fáil on that date that they would do anything positive regarding energy costs and that is on the record of this House, if anybody doubts my word.

It has been suggested that it was the motion before this House which prompted the Government into action. I do not think those who suggest that really believe it in their hearts. Certainly, the workers in Irish Steel will not be fooled by that ploy.

It has been said that a week is a long time in politics. Having listened to what Deputy Wyse had to say last week and again tonight, that is illustrated in no uncertain terms. In last week's debate that Deputy accused the Minister, more or less, that it was his visit to the Irish Steel plant which prompted the announcement from the chairman. He has now expressed doubts as to whether this was the case. I wish he would make up his mind.

Mr. Wyse

I am positive. I did not cast any doubts on what I said last week.

Mr. O'Sullivan

It is on the record of the House.

Mr. Wyse

The Deputy will have to look carefully at the record.

Mr. O'Sullivan

I have.

Mr. J. Bruton

There is no connection between the two events.

Mr. O'Sullivan

The role of the Labour Party in Government was criticised by Deputy Gene Fitzgerald during last week's debate. On that occasion I expressed my confidence in the participation of the Labour Party in this issue. Indeed, I am proud to be part, as a back bencher, of the Government, that have taken this decision. This is the first positive step that we have seen towards the winning back of jobs in Cork. We have to preserve jobs before we create them. Up to now we have been on a slippery slope, with closures all over the place, but this is a very definite step towards resurgence of industry in the Cork area. I am proud to be here tonight to support the Minister's Estimate.

Mr. Lyons

One hundred redundancies.

Mr. O'Sullivan

The saving of 560 jobs plus the ancillary industries. The Deputy should look at the positive aspect of it. These will have to be taken into account. Last week the Deputy was complaining about the impending closure but now he must realise something is being done. I accept that certain conditions have been laid down and I shall refer to them. As a trade unionist I must express my reservations about the package presented by the Minister in his speech tonight. The union are being put in a position of disadvantage. It is against the principle of good negotiations to set out pre-conditions. That is not the correct approach. We must remember that two weeks ago we were told there would be negotiations and the fact that these negotiations will now take place is progress in itself. I have the utmost confidence in the trade union negotiators that they will fight every inch of the way in the interests of their members. They have my full support in that regard.

There is a departure from what has been the traditional way of dealing with redundancies in that the Government have made an application to the European Coal and Steel Commission for aid for redundant steel workers. I hope we will be successful in that connection. It is only right that I should caution the Minister that it will be extremely difficult to sell a package to the people in Irish Steel who will be made redundant when one takes into account the payments already made to people in Cork.

The Minister acknowledges that the proposed measures appear draconian. I hope the discussions will be tempered with commonsense and that they will be fruitful. It has been suggested that there could be a third party involvement but I do not think it is realistic to assume that somebody will be interested in taking a share in a company that is in such difficulty. It is not an attractive proposition at the moment.

A matter that was mentioned yesterday in the discussions with the chairman and union representatives was areas of demarcation. There has been mention of the elimination of all restrictive working practices. I would prefer to speak of the elimination of all wasteful work practices. To expect that in the course of these negotiations which must be concluded by 15 August one can eliminate a tradition of many years is quite unrealistic. I accept that an effort should be made to eliminate all wasteful work practices and I am sure that will get a positive response from the union.

I welcome this measure. Last week I expressed a fear that this could be the beginning of the end. I am now confident it is a new beginning.

Mr. M. Ahern

I believe that the supplementary Estimate and the Minister's speech is a warning to the workforce either to accept what is proposed or to be thrown on the scrapheap. What we need is scrap at a cheap price rather than throwing 650 people on the scrapheap. The whole tenor of the Minister's speech was negative. There was nothing constructive in it. He warned the workforce to accept a pay freeze and a redundancy scheme and to eliminate all restrictive working practices. However, he did not give us any details on what he considers to be restrictive working practices or redundancy schemes. We had vague references about approaching the EC to get funding in respect of redundancies but the whole tenor of the speech was destructive to the workforce.

From what I hear from people in the steel industry, there is a need for the restructuring and streamlining of the system and of work practices in Irish Steel. However, not all the blame can be placed on the manual workers. Management must take a certain amount of blame for what has happened during the years.

In his speech the Minister referred to cutting costs by a cut of 10 per cent in respect of pay. This would amount to £1 million. As far as I am concerned this is pie in the sky. The Minister's reference gave the impression that Irish Steel will not be saved by the Government. I ask him to come clean regarding the Government's intentions. The Minister adopted a negative approach. The management and the workers have been set on a collision course. If and when they close Irish Steel, the Government want to place the blame on the workforce alone. The Government must change their approach. As Deputy O'Sullivan said, there must be co-operation between the workforce, management and the unions if a solution is to be found to the problem. The approach taken by the Government and this Minister is not helpful to the future of Irish Steel.

In conclusion, I ask the Minister to reconsider his approach so that there will not be another closure of a major industry in the Cork area.

Mr. Coveney

Regarding the steel industry in Europe generally, the reality is that in a period of ten years the steel and coal producing countries were forced to shed 350,000 jobs. That is the scale of the climate of the European steel industry in which we are talking about Irish Steel.

I welcome the commitment of £6 million of taxpayers' money to Irish Steel. Last week the Minister stated the barometers by which he was making this amount available. He had a duty and a responsibility to the taxpayer as well as to Irish Steel to do so. The Minister said then that he had to consider such factors as the commercial viability of the company, the effectiveness of cost cutting measures and the impact that closure would have on Cork. He said that he had to balance all those factors against very scarce Exchequer resources. Within one week he has come back to the House and announced that the Government have decided to support Irish Steel. Therefore, this should be an evening for some degree of rejoicing in this House and of course in Irish Steel also. But there is a price to be paid for this. It would be irresponsible of the Minister to say that Irish Steel will be protected by an endless flow of money from the taxpayer who is already paying too much tax. Therefore, the Minister has a duty to place severe restrictions on the release of this money to Irish Steel. The making available of the money is a significant act of faith and confidence in the future of the company but I trust that the kind of emotive language used by the first person from the other side of the House to speak on this Estimate will not inflame passions because that would not be the way to do service to Irish Steel. I do not believe the Deputy intended his remarks in that sense.

The reality is that in 1984-85, the losses in Irish Steel are £17 million. There is a recognition on the part of the Government that external factors were to blame largely for this loss and that is why the Minister is giving further assistance to the company. The losses that accrued cannot be attributed to the workers or to anyone involved in Irish Steel. If one can be optimistic about such a difficult industry, one might say also that scrap prices are falling faster than was the case this time last year, that interest rates are easing and that there is the possibility of a third party investor. Leaving philosophy aside, that prospect is worth considering purely on its merits with a view to introducing additional equity that would not otherwise be available. This might enable us to have access to markets that might not be easy to penetrate otherwise. Therefore, a strong partner in Irish Steel would make a lot of sense.

The Minister has referred to the agony that would result from redundancies. He has already made an application to the European Coal and Steel Community for a subvention to help fund redundancies and reduce the impact on the workforce. I am mystified by the tone of the Fianna Fáil response this evening because I have here a copy of The Way Forward which is a definitive document of policy which contains the statement that a system of monitoring the performance of commercial semi-State bodies was being introduced to ensure that they operate efficiently and remunerate a substantial amount of Exchequer capital invested in them and that manning levels and pay rates consistent with this policy and with the specific efficiency requirements will be one of the elements taken into account in this monitoring system.

The Minister for Industry, Trade, Commerce and Tourism could have written that. If it were taken literally and if the other party were in power, we might not be presiding over this relatively happy event this evening. It is ridiculous of Fianna Fáil to say that they want an open cheque for Irish Steel. Such an attitude is not fair to the taxpayer.

Proinsias De Rossa

I expect that most Members were under the impression that only Cork Deputies would be contributing to this debate but I wish to make just a short contribution. The closure of Irish Steel would have far-reaching effects in addition to the devastating effect it would have on Cork and particularly on the Cobh area. The Minister's emphasis on the need to push the workforce into accepting redundancy is an example of the way in which the Irish workforce have been carrying the weight of the crisis in the economy for the past number of years. The Minister has made a mistake. He should back off from pushing in that direction. I appeal to him and to the Government and indeed to the management of Irish Steel not to force the workers into a corner because that line could only have the kind of result that we all fear most. My appeal is that calm negotiations be entered into.

It is frightening to contemplate that the Government would even consider closing Irish Steel in view of the contribution the company make to the economy. I do not intend referring to the various areas and cost factors except to say that the figures do not seem to add up. Apparently 100 redundancies would save the company about £1 million but I understand the cost to the State in terms of unemployment benefit and tax and insurance loss would amount also to £1 million and that is why I appeal to the Minister not to push the workers into a corner.

Miss M. Barry

I welcome this Supplementary Estimate. It represents a step forward and is an indication of the commitment of this Government to Irish Steel. Since the Government have been returned to office I have been aware at all times of the commitment of the Minister to Irish Steel and of his confidence in the company. Last year when we agreed an Estimate of the order of £89 million we did not expect that Irish Steel would be the subject of a Supplementary Estimate once again but the losses last year of £17 million were disappointing by any standards.

Deputy Lyons expressed grave concern about the 100 redundancies but we are talking about 650 redundancies and about approximately 1,000 families. It seems to me that the Deputy would prefer that the livelihoods of 1,000 people would be lost as opposed to the livelihoods of 100 people. More than half the workers come from the Cobh area which is represented by Deputy Ahern and myself and he has indicated that there is an awareness on the part of the workers of the need for restructuring and for streamlining. Deputy Lyons represents the Blarney area and he is inclined to think that there is no need for restructuring within the company. However, the important point is that in effecting the 100 redundancies, there is a break with what has been the practice in the past and that the redundancies are effected from top to bottom in the company.

The important point to be made in seeking these 100 redundancies is that, unlike many cases in the past, they are to be effected from top to bottom. We are not talking merely about worker redundancies; we should also be talking about the same level of management redundancies. It is within that framework that we must ensure that we retain a steel plant in this country. As Deputy De Rossa said, it is not only a question to be considered for the Cork region; it is a national asset and one we must endeavour to maintain.

I am confident that Irish Steel Limited will remain in being and that there is a bright future ahead for them once they get over this difficult passage. This phase will not be overcome by irresponsible statements but rather if approached in a cool, rational and objective manner. That is what is needed in the months ahead. Statements that practically incite violence will not help in any way. When the workers of Irish Steel Limited read Deputy Lyon's statement next week they will see that he has not given them any credit for any intelligence. They know how business operates. They know that one cannot run a business incurring a loss of £17 million annually. They are not fools; they are intelligent people and know the redundancies must be sought.

The question of redundancy, not only in relation to Irish Steel Limited but in the country generally, must be tackled. Certainly the people of Cork know that redundancy is of no great benefit to anybody, because after one year of pay-related and unemployment benefit one is then means-tested for unemployment assistance, when redundancy payment is taken into account, often leaving a person with only £3 or £4 per week.

An Ceann Comhairle

I must ask the Deputy to conclude.

Miss M. Barry

At times one would think it would be better if we reverted to the old system of stamps whereby one's year's work, the amount of time one spent working, would be taken into account.

An Leas-Cheann Comhairle

The Deputy is now getting into a Social Welfare Estimate debate. I must ask the Deputy to conclude.

Miss M. Barry

I welcome the Estimate.

Vote put and agreed to.