Vol. 454 No. 5
8 Mr. Andrews asked the Minister for Enterprise and Employment the efforts, if any, which are being made by him to assist GATT and the World Trade Organisation in formulating effective rules for the textiles trade in view of the fragile state of the Irish textiles sector. [10795/95]
14 Mrs. O'Rourke asked the Minister for Enterprise and Employment if he will consider setting up a Special Task Force to chart a future for the textile industry in view of the recent spate of closures in this sector. [10972/95]
59 Mr. Killeen asked the Minister for Enterprise and Employment the efforts, if any, which are being made by him to assist GATT and the World Trade Organisation in formulating effective rules for the textiles trade in light of the fragile state of the Irish textiles sector. [11015/95]
I propose to take Questions Nos. 8, 14 and 59 together.
Responsibility for overall trade in the context of GATT and the newly-formed World Trade Organisation is primarily the responsibility of the Minister for Tourism and Trade. That Department represents Ireland in the decision-making process at official and ministerial level with appropriate back-up from other Government Departments, including the Department of Enterprise and Employment. The Uruguay Round is a major boost for the world economy and should have positive benefits for Ireland, as an export oriented country, in terms of output and employment. The achievement of a stable world trading environment and the benefits of ongoing liberalisation of world trade should by far outweigh any adverse sectoral specific impacts of the agreement.
The agreement provides challenges to some sensitive sectors, including clothing and textiles. During the GATT negotiations particular account was taken of the fact that the clothing and textile sectors could experience difficulties. My Department ensured that particular attention was paid to the sensitivity of these sectors for Ireland. Our objective was to ensure that the integration of the Multi-Fibre Arrangement — MFA — into GATT would be gradual and linked to a strengthening of GATT rules and disciplines. The latter would address the question of lower tariffs, fewer non-tariff barriers, more transparent anti-dumping provisions, restrictions on the use of subsidies and greater protection of intellectual property rights. This overall objective has largely been achieved in the agreement finally adopted in April 1994 which came into effect on 1 January 1995. A ten year integration period — in three phases — for clothing and textiles, beginning on 1 January 1995, was agreed. This is designed to allow these sectors time to restructure and reposition themselves to concentrate on the higher quality segment of the market. The overall opening up of new markets under the Uruguay Round will facilitate this process. I should add that arrangements for the first phase of the integration have been agreed at EU level. My Department took an active role in ensuring that this phase of the transition period does not include products which are sensitive for Ireland.
As regards the broader issues raised in the questions relating to the current state of the clothing sector, I am anxious to ensure that the publicity arising from recent specific problem cases does not detract from the overall performance of the sector where output continues to increase. I want to state categorically that this Government, and in particular my Department, is fully committed to supporting the efforts of the clothing sector to restructure and develop with the objective of maintaining the maximum number of jobs possible. I met the representative body for the clothing sector, the Irish Clothing Manufacturers Federation, to discuss the issues facing the sector. In addition, regular meetings are held with the federation at official level. I am well acquainted with the environment in which this sector operates arising from my contacts with the ICMF and individual companies. I reiterate that there is no let-up in support or no policy change in relation to the clothing sector and clothing companies continue to benefit from a wide range of schemes operated by the various industrial promotion agencies. In addition to these incentives, a number of sectoral specific initiatives have been taken. Two special schemes covering research/development and training were introduced; FÁS has drawn up a comprehensive training programme encompassing 12 separate training initiatives ranging from management training to multi-skilling; my Department assisted the ICMF in securing EU funding for a special training scheme which is designed to train "in-house" instructors, and clothing companies have also been significant beneficiaries under the European Commission RETEX scheme.
Clothing companies will also be in a position to benefit under a new programme to help Irish manufacturing firms to adapt to changing internal or external conditions. ICTU and IBEC have been involved in drawing up a scheme to give effect to this programme. This is aimed at indigenous and traditional manufacturing sectors with a need to adjust to increasingly demanding conditions of competition.
On a more general note, I should mention that labour-intensive, low income industries like the clothing sector benefited from the PRSI and income tax changes introduced in this year's budget. This shows the Government's commitment to address the key issue of cost competitiveness vital for the future of the sector. I know from my contacts with the industry that this has been a major help in tackling this issue. The changes in the budget earlier this year are part of an ongoing process of tax reform aimed at increasing the incentive to work and reducing the tax wedge.
A major study of the sector was commissioned by FÁS in 1991 which comprehensively identified the issues which need to be addressed. My Department carries out regular policy reviews of the sector in consultation with the State agencies. My Department and the development agencies are working closely in a co-ordinated and focused manner with the main industry associations with a view to securing an agreed approach to tackling the problems facing the sector, thereby improving the competitive position of the industry. This process is already well under way and it is intended to meet all bodies who have expressed concerns about the sector. Therefore the main players will be involved in charting a way forward. I believe that the process should proceed rather than delay it further through the establishment of a separate initiative.
Ireland is not unique in experiencing problems in the clothing sector. Other EU member states have not been immune from the effects of increasing competition. I assure the House that our policies are geared towards building strong companies that can compete in both the domestic and international markets. I am satisfied that every effort is being made to ensure that the sector will have a viable and secure future.
The Minister has become expert in engaging in gobbledegook, giving five pages of an answer rather than answering a direct question.
Very exciting.
Will the Minister inform the House how much of the £22 million allocated for the adaptation of industries to modern technology — announced on the day the Silverlea factory in Athlone closed — he has invested in Pretty Polly, Sunbeam, Silverlea and within the textile industry where there has been a 20 per cent fall in employment in recent years?
The purpose of this adaptation initiative is to endeavour to foresee problems and position companies to deal with them before they arise. In the case of Sunbeam, the moneys provided for its relaunch in Cork did not come from this fund but from Forbairt. We are endeavouring to introduce a programme to assist companies to respond to challenges in a timely fashion. This will apply to research and production processes, entailing actions to foresee problems before reaching the point of rescue or encountering serious problems of the type described.
Will the Minister agree that the Government demonstrated a clear lack of foresight of the problems besetting Sunbeam Industries, resulting in a tardy, rather late intervention with the potential of saving 100 jobs only as 200 others effectively have been lost in that industry in Cork? The Minister of State, Deputy Rabbitte, may smile as much as he likes but he was very much more energetic in relation to Packard than to Sunbeam.
The Minister said that the scheme Deputy O'Rourke mentioned was designed to foresee problems, to allow for early intervention and prevention of crisis. Will he agree that was not the case in relation to Sunbeam, in respect of which he was caught and was too late in intervening to save the jobs there?
Deputy Martin is going off beam completely on this issue because there was very clear, active involvement in Sunbeam by Forbairt over a sustained period——
Not in the recent crisis.
The Deputy will be aware that Forbairt made funding available to Sunbeam in 1984. Unfortunately, despite that, Sunbeam was unable to turn the corner and restore profitability to its operations. Following those renewed difficulties Forbairt engaged in a number of consultations, deployed consultants and worked with the then owners and other potential investors. I am delighted to note they have now discovered new investors to put forward a viable project. Therefore, it would be unfair and untrue to suggest that the agencies were caught off-guard on this——
Two hundred jobs have now been lost.
Is the Deputy disappointed at the success?
How can that be called a success?
They have been working continuously with this company in an endeavour to secure its future.
The Minister quite rightly referred to the sensitivity of the clothing sector. Will he accept he should do everything possible to save jobs in that sector? Will he also accept that, in the case of the Dunnes Stores dispute, we are not talking about 5,000 jobs but 20,000 when one takes into account suppliers, manufacturers and all those involved in the clothing sector? What is the Minister doing to avert this strike and save those 20,000 jobs? I am amused sometimes when the Minister of State, Deputy Rabbitte, shakes his head——
Why did the Deputy not table a question?
——because, when on this side of the House, he was expert at raising issues of the day, which I do.
We are working to put in place an adaptation programme to allow the various sectors, not just the clothing one, but including it, to foresee difficulties, to adapt their production processes and products and develop the type of niche in which they operate with a view to the maximisation of jobs. That does not mean we can prevent every potential job loss; inevitably there will be changes within industry and job losses will occur, as has been the case in this sector over recent years. What is important is that we endeavour to maximise jobs through policies that will allow us invest in a timely way in restructuring those businesses, giving them a long term future, with the maximum possible employment content.
What about the Dunnes Stores dispute?
No, Deputy Kitt, I cannot allow that question; I am calling Deputy Ned O'Keeffe.
Will the Minister agree that the policies being pursued by his Government are placing the textile industry at risk? Its failure to introduce the market development fund for export purposes, with the high 9 per cent PRSI levy on employers, compared with 5 per cent in the case of their British counterparts, are the main causes of the problem within that industry, putting jobs like those in Sunbeam Wolsey in Cork in jeopardy where 200 people will be thrown on the scrapheap thus reneging on the promise of a Member of the House in the last by-election in Cork.
I reject Deputy O'Keeffe's suggestion. If he reflects on the last budget he will see that——
The Minister paid off the banks. He gave them back £10 million.
——this Government made cuts in PRSI particularly affecting the clothing sector. The cuts we implemented were those sought by the federation when I met its members. We also cut PRSI for the workers. The tax wedge was narrowed on two fronts in the way we dealt with PRSI issues.
It is 9 per cent here, 5 per cent in the UK and we have to export.
That is the way we must deal with the issues which the Deputy correctly says are important.
In respect of the take-over at Sunbeam, will the Minister tell the House the identity of the new owners? Is there is any connection between the new and previous owners or between the new owners and any other company in the textile industry here? Also, will he tell the House the conditions, if any, that were attached to the State investment of £400,000 in the new company? Is it a matter of concern to him that 100 only of the 175 jobs in the plant have been saved?
The Deputy is raising a completely different matter.
I put down a question.
It is unfortunate we have not reached it. The company is Millfield Textiles, a company with considerable experience in the sector. Forbairt has worked with it to put together a viable business plan. The company plans to re-employ 100 people at full production. We would like to see more people being employed but we have seen a successful relaunch of the company which will preserve the excellent skills of the existing workforce. I pay tribute to the workforce which is not only very skilled but has been exceptionally flexible——
Will they all be re-employed?
——in dealing with many difficulties. That has enhanced the successful relaunch of the company.
Will the existing workforce be re-employed?
The Minister has not answered my question.
I am calling Deputy Batt O'Keeffe for a final question.
Various Government Ministers and a Democratic Left Deputy indicated that the number of people employed in Sunbeam would be far greater than subsequently was the case. This is a 60-40 investment between the private and public sectors. Is the Minister concerned at the amount of money being invested by the private sector? Can he guarantee the House that the assets from the private sector will not be leased to this company, as happened on a previous occasion? Given that there is a 40 per cent public investment in the company, what guarantees did the Minister receive that the former employees of the Sunbeam plant would be re-employed? Given that level of investment, will the Minister agree that such a guarantee should have been written into any agreement with private investors?
That should be adequate, Deputy. We are already stretching the time.
I am concerned about the uniformity of approach to the textile industry. I am aware of a company in Dublin which approached the Minister's Department four months ago——
That should be adequate, Deputy. The Minister to respond.
——for a feasibility grant which it has yet to be contacted.
I am very pleased that Forbairt has put together a viable business plan with new investors that will secure employment in this plant, something many Deputies on the opposite side of the House believed could not occur. I am glad the agencies have successfully relaunched Sunbeam. Issues concerning the re-employment of workers will be addressed by the trade unions dealing with both Forbairt and the new investors and that is as it should be.
We do not have any commitment on that score.
This achievement by Forbairt is to be welcomed and it should not be suggested that it was caught off guard. Forbairt has invested——
We could not get the Minister into the House two weeks ago.
——much time and effort into securing this investment and is to be congratulated on its efforts.
Who are the new owners?
That concludes questions for today.
