Vol. 398 No. 10
20 Mr. S. Barrett asked the Minister for Industry and Commerce if the cost monitoring group in his Department have identified any escalating cost handicaps for small Irish businesses in the past six months; and if he will make a statement on the matter.
The Industrial Costs Monitoring Group have noted a significant improvement in the cost competitiveness of Irish manufacturers in recent years across a range of cost factors, including in particular public utilities such as electricity and telecommunications. This, combined with restrained wage levels, lower inflation and interest rates and a stable currency within the EMS, has provided the basis for the considerable turn-around which has been experienced in industrial job creation.
Despite the cost improvements which have been achieved, there is no room for complacency. The group have identified the weakening of sterling as a factor which will tend, in the short-term, to restrain the rate of growth of exports to the UK. Beyond the immediate short-term effects, however, the considerably higher inflation, interest rates and wage rate increases in the UK will aid the competitiveness of Irish companies relative to UK competitors on both domestic and overseas markets.
The Government are determined to do everything possible to maintain our competitiveness; our hope is that economic decisions in the UK will assist the achievement of currency and economic stability there also.
I would recommend that the Minister change his script a little from the continuous statements on favourable interest rates and remind him that interest rates have risen by 4 per cent in the last 12 or 18 months. Is the Minister aware of a recent survey carried out by the Small Firms Association which clearly indicated a lowering of confidence as a result of high interest rates and a failure to tackle the problem of fluctuation in currencies? Is he also aware that we are still not getting the benefits of the improved position of the Irish punt against other currencies in the area of retail outlets and indeed in some wholesale outlets, one example being the yen which has dropped to the June of 26 per cent but there has been no sign whatsoever of any benefit being passed on to the consumer?
The Deputy, of course, fails to take into account that whereas interest rates in this country have risen by 4 percentage points in the last 12 months, they have also risen by at least that amount everywhere else and our comparative position, particularly vis-à-vis Britain——
That is not true and every other country has not an unemployment figure of 18 per cent.
——remains extremely favourable and strong. That is why, in spite of the movement and the weakness in sterling, we have been able to maintain our exports into the British market.
The time has come to deal with other questions.
