Vol. 887 No. 2
1. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation the actions he has taken to protect jobs following the closure of a department store (details supplied); if all relevant legislation has been complied with in this closure; the provisions he plans to introduce to avoid such closures in the future; and if he will make a statement on the matter. [28720/15]
It is nearly six weeks since the overnight take-out of Clerys by corporate interests that had no concern for those working and doing business in the store. I want to discuss with the Minister of State where we go from here. First, I want him to give an update on his work for the workers, the 134 Clerys' staff and the 330 concession holders' staff. Second, I want to tease out some of the issues raised in his report, particularly on section 224 of the Companies Act which provides that directors must have regard to the interests of the employees. It is very clear that on this occasion the interests of the employees were far down anybody's list of interests and the Minister of State needs to show how the Government will avoid this ever happening again.
We all agree that what has happened in Clerys is very shocking and quite appalling. Those who were directly employed by Clerys and the concession holders and their staff have been treated appallingly.
The House will be aware that last week I submitted a report to the Taoiseach and the Tánaiste to further inform the Government on the issues surrounding the sale and liquidation of Clerys. I also briefed my Cabinet colleagues on the report. A copy of the report, together with appendices, including documents submitted for the High Court hearing on 12 June and correspondence I have had with Natrium Limited, the new owners of the site, are available on my Department’s website. The report sets out the sequence of events leading up to the closure on 12 June, based on the information available; events since 12 June, including the engagement I have had with Clerys' workers and their trade unions, the provisional Liquidator and representatives of the 50 concession holders; and the efforts being made by the Department of Social Protection, the NERA and the liquidators’ staff to assist the workers in accessing their statutory entitlements.
The report also sets out the relevant employment and company law framework and identifies a number of issues for the Government to consider in what is an evolving situation, key aspects of which are under the jurisdiction of the High Court. The report indicates the areas of employment law that will be further considered. It also identifies the company law provisions that were designed to ensure just and equitable treatment for creditors in a liquidation, including provisions to ensure all assets that should be available to the liquidator can be accessed for the purpose of discharging a company’s debts. The liquidators have their job to do. In this respect, I understand that, at the hearing on 6 July, the High Court was informed that the liquidators had identified a number of matters which they intended to investigate as part of the liquidation process.
Separately, the Tánaiste has indicated that, given that workers’ claims for statutory redundancy and other statutory entitlements are falling to be met by the State from the social insurance fund, she intends to use every legal avenue available to her to vindicate the State's and taxpayers’ rights in this regard.
As the Minister of State said, the liquidators are carrying out an investigation. They are setting up a committee of investigation which will include five representatives of creditors. Will the State seek to be one of these representatives, either through Revenue or a representative of the social insurance fund, in order that the interests of the State, both as a creditor and in finding out what exactly happened, can be reflected at the table in the liquidation? We have to stand from this issue. This did not happen in 24 hours; it had been in planning. Highly paid lawyers and accountants had planned it up to the last minute and those who were notified last were the workers and the concession holders. Therefore, somebody somewhere has been incredibly well paid. Gordon Brothers is laughing all the way to the bank, while Natrium is laughing at the Minister of State, the Government, this House and the workers and at the innocence of the State in thinking they have not got away with it. I ask the Minister of State to pursue the companies involved in terms of the responsibilities of directors. Also, what is his response to the proposals of the ICTU about the 30-day notice requirement?
Directors have responsibilities to their employees and it is questionable in this case whether these duties have been fulfilled, but that is not something we can settle here. There are very clear provisions in company law. I refer directly to sections 599 and 600. These provisions, taken together, refer to situations where a related company may be required, for example, to contribute to meeting the debts of a company which is being wound up. They refer also to the pooling of assets of a related company or companies. The House will be aware that this provision in the Companies Act 2014, originally included in section 118 of the Companies Act 1990, has yet to be tested. I have advised the Tánaiste directly that I believe it would be in the interests of the taxpayer and addressing the overall issues in this matter that the Department of Social Protection consider taking a place on the committee of inspection to be established by the High Court in the context of the liquidation and the winding up hearing. I have referred that matter directly to the Tánaiste. I believe advice is being taken in that regard and that the Tánaiste is taking additional advice on other matters that she could potentially pursue under company law.
Under section 224 of the Companies Act, directors must have regard to the interests of employees. No one can say directors of any of the companies, shelf companies or otherwise, involved in this transaction have had regard to the interests of the employees. This is a chance to have the matter referred to the Office of the Director of Corporate Enforcement to send a signal that we will not allow this to happen again, that this cowboy capitalism which places workers who have given a lifetime of service so far down the list of priorities will not be allowed in this country. At some stage the Minister of State will have to make a call on whether he will make a complaint under section 224, or others will do so. Will he respond to the question on putting a representative of the State on the creditors' committee to monitor the liquidation?
I referred to that matter in referring to the committee of inspection. This should happen. It is rare for the Department of Social Protection to be represented on such a committee, but in this case, given that, essentially, the Minister for Social Protection will become a preferred creditor when payments are made to staff who have been left high and dry because of this transaction, it is the appropriate thing to do. The liquidators also have a statutory obligation to provide for the Director of Corporate Enforcement, within six months of their appointment, a report on the conduct of the directors of the company and to assist him in carrying out his functions. As I understand it, in the context of the High Court hearing last week, a statement of affairs is also expected from the previous directors of the company who owned the Clerys site going back 12 months. That is an interesting development. No one can be satisfied with how this saga has played out. The Clerys staff and the concession holders and their staff have been left high and dry.
I have been doing my utmost to assist them as best I can. As we have said, this is an evolving situation and we will keep a very close eye on it.
2. Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation if, following publication of the report on the sale and liquidation of Clerys, he will now amend the Companies Act 2014. [28707/15]
I welcome some of the Clerys workers who are in the Visitors Gallery. I wish to express my and my party's solidarity with them. It has been more than a month since these workers were turfed out on the street, yet nothing has been done for them. My question is specifically focused on what is available in company legislation to ensure the rights of these individuals are upheld. A number of companies and workers have got stuffed previously, and the State has been left on the hook for millions of euro. What is different now whereby this legislation will make a difference in the lives of these people?
I agree with my colleague, Deputy Nash, that this has been an appalling case. It certainly has raised issues that deserve attention.
In the context of company law, the liquidation of OCS Operations Limited is currently in the hands of liquidators under the supervision of the High Court. While the liquidation is at an early stage, I understand the High Court was informed at the hearing on 6 July that the liquidators have identified a number of matters which they intend to investigate as part of the liquidation process. It is only when all the facts and events leading up to the winding up of the company are known and any potential legal challenges are raised that an informed decision can be made on whether an amendment to company law should be made.
The liquidators have important duties under company law. They include an obligation to provide, within six months of their appointment, to the Director of Corporate Enforcement a report on the conduct of directors and a requirement to make an application to the High Court for the restriction of directors unless the Director of Corporate Enforcement has relieved the liquidator of this requirement. The 2014 Companies Act introduced stronger provisions under which a related company may be required to contribute to debts of a company being wound up, under section 599, and the pooling of assets of related companies, under section 600. The effectiveness of these provisions remain to be tested and it would be inappropriate to comment on their application in any case before the courts.
The operation of the Companies Acts are under continual review, particularly through the work of the Company Law Review Group. Its current work programme includes receivers, examinership and winding up. I will closely monitor the developments in this case and evaluate their impact on the adequacy of company law.
The Minister of State, Deputy Nash, in fairness to him, last week set out in great detail what happened with regard to Gordon Brothers and Natrium Limited. They used a precise, methodical technique to separate their responsibilities and their assets. Then the workers were callously turfed out on the street. In that report, the Minister says it was never really the intention of Gordon Brothers to operate a successful department store in the city and that their objective was a property play. The sole reason for the multiple companies was the separating of assets. Considering all these issues, why is it that the Minister believes there are no deficiencies in the legislation? Even the Minister's colleague, Senator Lorraine Higgins, admitted on the radio last week that this was an issue relating to the corporate veil. She further admitted that this is not the first time it has happened. I believe a large number of companies have experienced this.
Why is the Minister, the author of this legislation, now saying that there is a question about the legislation and whether it could or could not resolve this? Surely as author of the legislation he should know this. If there is still a question mark about it, why is he not making damned sure and inserting a provision into legislation in a watertight fashion to ensure this can never happen again?
As the Deputy knows, this section has not been tested in the courts.
Then test it.
However, the section provides that on the application of the liquidator or any creditor of a contributory company that is being wound up, the court, if it is satisfied that it is just and equitable to do so, may make an order. The legislation sets out the various issues which the court will examine, including the extent to which the related company took part in the management of the company being wound up, the conduct of the related company towards the creditors of the company being wound up and the effect which such order would be likely to have on the creditor of the related company concerned. There is, therefore, provision in the law, as the Deputy knows. The issue now is that the liquidation is in progress. As the Minister of State, Deputy Nash, said in his report, it would not be appropriate at this point to comment on the application of such a section in an individual case. However, the section is in place. Clearly, I am not the judge who will make a judgment in respect of its provisions.
As I said earlier, I will closely monitor the developments in this case and evaluate their impact on the adequacy of Irish company law. I did not make, as the Deputy sought to infer, any categorical statement about the adequacy of existing company law. We will watch the testing of this important provision.
I cannot think of another legislative measure on which the Government would respond with such a wishy-washy answer, saying that the legislation it drafted may or may not deal with the situation. Usually, the Government responds in a very robust fashion and over-eggs the strength of a legislative measure to do what it says it will do. However, in this case, involving legislation that is only in place for a year and for which the Minister is responsible, the Minister says it must be tested, and while the Government talks about the testing of this legislation, men and women throughout the country are getting turfed out of jobs. By the time we finish this so-called testing, I guarantee that another company will be in a similar situation.
The Minister of State said in his report that section 224 of the Companies Act provides, in a general fashion, for matters to which directors must have regard in the performance of their functions. He went on to say that this fiduciary duty is enforceable in the same way as any other duty of a director in a company. The reality is that multiple companies are set up, with assets being placed in one and the employment of staff in another. I am aware of a firm in Meath which did the same thing. It went to the Labour Court and secured a reduction in the wages of company B, the company without the assets. It was allowed to do that. This is happening daily and it should have been tested previously. Will the Minister use the time he has left in Government not by talking about a wishy-washy legislative measure but by inserting a cast-iron guarantee that this will not happen to workers in future?
There are two issues here. One is the behaviour of the directors, and there is an obligation on the liquidator to report to the Office of the Director of Corporate Enforcement on the behaviour of the directors. The Office of the Director of Corporate Enforcement is an independent office. It is not led or said by a Minister or anybody else. That is the important strength of the office. It is independent in making a judgment on the behaviour of the directors, and that is as it should be. A decision of that nature cannot be made by Ministers.
In the same way, there is a legislative provision under which the courts may decide that the corporate veil should not apply in this case. I have outlined the provisions in this regard, whereby the liquidator or a creditor can take a case and in deciding the matter-----
The legislation only may work.
-----the court will have regard to the extent to which the related company took part in the management and the conduct of the related company. What the court will have regard to is clearly set out. Once again, however, it is not up to a Minister to make a judgment.
It is up to the Minister to write legislation.
A judgment must be made by the courts. That is the position with company law in any country. The Oireachtas drafts the provisions but the court must apply them.
3. Deputy Clare Daly asked the Minister for Jobs, Enterprise and Innovation his plans to introduce legislation to ensure part-time workers have a legal right to seek or avail of extra hours; if he discussed this matter with the Department of Social Protection prior to the introduction of recent changes to the one-parent family payment scheme; and if he will make a statement on the matter. [28705/15]
This question relates to the Minister's plans to introduce legislation to give part-time workers the legal right to seek extra hours. The background is obviously the Dunnes Stores strike, the abuse of 15-hour contracts by that employer, the explosion of zero-hour contracts and, in particular, the Government's decision to reduce the lone parent's allowance citing circumstances whereby lone parents could seek extra hours at work. Obviously, however, they cannot do that in the absence of any legal entitlement. What discussions has the Minister had with the Minister for Social Protection in this regard?
I discuss these matters with the Tánaiste all the time. Irish employment rights legislation contains strong safeguards for part-time workers. The Protection of Employees (Part-Time Work) Act 2001, which is the main legislation governing the employment rights of part-time workers, implemented EU Council Directive 97/81/EC into Irish law. The purpose of the directive was to implement the framework agreement on part-time work concluded by the European social partners.
In general terms, the 2001 Act provides that a part-time employee shall not be treated in a less favourable manner in respect of his or her conditions of employment than a full-time employee and that all employee protection legislation applies to a part-time employee in the same manner as it already applies to a full-time employee. The Act further provides that a benefit which is determined by the number of hours an employee works shall be applied on a pro rata or proportionate basis to part-time employees.
The Labour Relations Commission has prepared a code of practice on access to part-time working, pursuant to section 13(5) of the 2001 Act, in consultation with the social partners. The code of practice was drawn up in the context of clause 5.3 of the framework agreement which provides that, as far as possible, an employer should give consideration to a request by workers to transfer from full-time work to part-time and from part-time work to full-time work. Under section 42(4) of the Industrial Relations Act 1990, the code of practice is admissible in evidence in any proceedings before a court, the Labour Court, the Labour Relations Commission, the Employment Appeals Tribunal or the Equality Tribunal. In general terms, the Protection of Employees (Fixed-Term Work) Act 2003, which provides that fixed-term employees may not be treated less favourably than comparable permanent employees, is also relevant. This Act establishes a framework to prevent abuses arising from the use of successive fixed-term employment contracts. In addition, the Unfair Dismissals Act 1977, as amended, contains a provision aimed at ensuring successive temporary contracts are not used to avoid that legislation. I have no plans at this time to amend these provisions. A strong suite of legislative protections is in place for part-time workers.
My colleague, the Tánaiste and Minister for Social Protection, has responsibility for the one-parent family payment scheme. The purpose of the phased age change reforms under that scheme, as introduced in the Social Welfare and Pensions Act 2012, is to reduce long-term social welfare dependency by ending the expectation that lone parents will remain outside the workforce indefinitely. The aim of the reforms in question is to provide the necessary supports to lone parents to help them to access the range of education, training and employment programmes provided by the Department of Social Protection to develop their skill sets and, ultimately, to secure employment and financial independence.
The Minister of State has claimed that "a strong suite of legislative protections is in place for part-time workers", but he has not addressed my point that there are no protections in the area to which my question refers. Workers who are on casual contracts - in the case of Dunnes Stores, workers were on 15 hour contracts - are aware that hours are used as a method of control by management. When Mandate conducted a survey of 1,400 Dunnes Stores workers, it discovered that 85% of them were of the view that if they spoke up or tried to do anything, their hours would be spread over five days and consequently they would not be able to avail of family income supplement etc. Ireland's rate of underemployment, which is the second-highest in the EU, has increased from 0.8% in 2008 to 7% at present. The Minister of State's colleague, the Tánaiste, told lone parents that reductions of between €36 and €86 in the weekly incomes of the most vulnerable families in our society could be offset if they went to their employers to seek extra hours. The reality is that in the absence of legislation that would force employers to give lone parents extra hours when such hours are available, the Tánaiste's comments are utterly meaningless and the cuts she has imposed will continue to butcher the living standards of lone parents. The Minister of State might want to comment on the unanimous vote at last week's Irish Congress of Trade Unions conference in favour of a motion along the lines of the point I am making, which is that if the Government is really serious about the conditions of lone parents, it will introduce this necessary legislation.
The overarching point here is really about making work pay, ensuring people can access working hours that work for them and helping people to be financially independent. It is about much more than getting a weekly or monthly pay cheque; it is about the dignity of work and dignity at work and it is about making a contribution to society. The overarching principle informing the reforms that have been introduced by the Tánaiste is the need to ensure people are enabled to work for as long as they can and get as many hours as they can to provide for themselves and their families. It is a question of incentivising workers and ensuring work always pays. This is one of the overarching principles informing the establishment of the Low Pay Commission, which is an important institutional change aimed at tackling low pay from every perspective in a sustained and structured way. We do not want to tackle the issue of low pay, which can be a soul-destroying and crushing experience for anybody, in a piecemeal fashion. We need to do it in a structured way. I have gone into some detail about the legislative provisions and the code of practice involved in the area of part-time work. As the Deputy knows, I am working with the University of Limerick to carry out the first comprehensive study of its kind into the extent and prevalence of low-hour contracts in this economy. Those involved in that study will make recommendations to me in the autumn regarding the legislative and regulatory changes that may be required to ensure work pays and the jobs that are created are good, decent and sustainable. I think we are achieving that. The share of casual and part-time workers on the live register has decreased by 9% by comparison with the figures for June 2014. That is just one example.
The Minister of State is studiously avoiding my contention that casual employment is a serious blight on our society. The changes introduced by the Tánaiste, in the absence of affordable child care and of legislation enabling lone parents to seek extra hours, represent the deliberate pauperisation of a section of society. The CSO has revealed that the overwhelming majority of lone parents are either in work or are actively seeking work. Legislation needs to be introduced to enable such people and others, including the Dunnes Stores workers who have gained the sympathy of the nation for the scandalous manner in which they have been abused by their employers and their hours have been used to denigrate them, put them in very precarious situations and - as Mandate has said - exercise control, to access extra hours and have a decent standard of living. I understand that the Government is required by an EU directive to introduce such legislation. Therefore, I am a little surprised that the Government has no plans to make changes in this regard.
Despite the protestations of some people, we fully transposed the part-time workers directive a number of years ago in consultation with the social partners, including the trade unions, which were satisfied to sign off on it. Deputy Daly is studiously avoiding the fact that the economy has been transformed over the last couple of years. We need to be conscious that we have seen a decrease of 40% in part-time underemployment over the last two years. As I said at the conclusion of my previous remarks, the share of casual and part-time workers on the live register has decreased by almost 10% since June 2014. That is the equivalent of over 7,000 workers. There was a proliferation of part-time jobs in recent years, but all the evidence suggests that when the economy started to recover, many of those jobs migrated into full-time positions. I think we should all welcome that as an illustration of the strength of the economy and the acceleration of the economic recovery. Ultimately, my party and I are interested in providing decent and sustainable jobs for people in this economy because that is the right route out of poverty.
4. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation his views on IDA Ireland actively working with companies in securing contracts for the outsourcing of jobs at Allied Irish Banks, in which the State is the main shareholder; and if he will make a statement on the matter. [28721/15]
AIB has made a series of jobs outsourcing announcements recently. For example, it announced last week that 230 jobs in its information technology department are to be outsourced. When I tabled a question on this matter to the Minister for Finance some weeks ago, he told me that as the principal shareholder in AIB, he takes "an active interest in how the bank's cost base evolves". He then let it slip that he had been informed by AIB that "the companies involved in the proposed outsourcing are establishing delivery centres in Ireland (in consultation with the IDA)". Is IDA Ireland sponsoring the outsourcing by a State-owned bank of its employees and helping that bank to pass the cost of its employees on to a third party? If so, that is not what IDA Ireland was established to do.
IDA Ireland is involved in the attraction of foreign direct investment to Ireland to service international markets. It is not involved in the day-to-day operational or decision-making functions of companies. There is a growing tendency across the world for companies to outsource certain business functions. Companies in Ireland are part of this trend. In all sectors, companies use the practice of outsourcing to enhance productivity, use their resources better, focus on more core business areas and tap into new technologies without in-house expertise. Such business process outsourcing is a fast-growing economic sector in which Ireland is winning substantial international business. Ten companies supported by IDA Ireland in this sector are supporting 4,940 jobs and 15 companies supported by Enterprise Ireland in this sector are employing 5,700 people. I should make it clear that no support is given to such companies when they are competing for Irish-based business. It would be very short-sighted not to recognise that this sector should be pursued to assist job creation in Ireland and thereby avoid outsourced jobs moving to other countries, given that modern technologies make this easily achievable in most cases. Indeed, Ireland has proven its ability to maintain and develop innovation in this sector, which is winning new business for the country. When such contracts are available, it is in our national interest that companies based here should pursue those opportunities and compete for this work.
Companies based here include AIB which employs many thousands in its IT section, but it seems to be determined to outsource that function. Will the Minister confirm that IDA Ireland is supporting a company which will take the contract from AIB and that the responsibilities of the workers currently performing that role will be transferred to it? AIB has stated there will be no redundancies and that workers will be looked after. I am not referring to a company locating in Ireland and seeking international business, but will the Minister state specifically whether IDA Ireland is supporting a company that will take existing jobs which offer very good terms and conditions in the Irish market?
No, that it not the case. There is a well developed joint strategy between Enterprise Ireland and IDA Ireland, under which competition for domestic contracts is not supported by either agency. However, companies in BPO which are internationalising are entitled to support from IDA Ireland or Enterprise Ireland in the growth of their overseas business. As the Deputy knows, a company such as Eishtech which started from nothing and has grown to employ 950 people in a very short period is one of the success stories. Others include Voxpro and SWS and numerous other such companies are growing. It is only in the context of new international business that they will be supported by either agency.
I accept that, as well as the success of the sector, but if that is the case, why would the Minister for Finance, Deputy Michael Noonan, state in reply to a parliamentary question that companies involved in the proposed outsourcing are establishing delivery centres in Ireland in consultation with IDA Ireland? He framed the response in the context of his officials taking an active interest in how the bank's cost base had evolved to ensure the State's interest as a shareholder would be protected. I did not ask him about IDA Ireland involvement as I did not think it or Enterprise Ireland would be involved, but he put it out there that whatever company was coming in to take over the contract for AIB and, most importantly, its workers, was in consultation with IDA Ireland. The sector is strong, but can the Minister, Deputy Richard Bruton, give an absolute assurance that neither IDA Ireland nor Enterprise Ireland will subsidise a company that is planning on taking existing jobs?
I can. There is an agreement and we would not tolerate a situation where Enterprise Ireland might subsidise one company and IDA Ireland another, both of which would be competing for taxpayers' money. That would be unthinkable, but that is not to say Enterprise Ireland does not talk to companies that are internationalising and which may also have Irish business. It is fine to talk to companies that are competing for domestic contracts, but we do not support them in any fashion. As the Deputy knows, a number of international companies won business here and then grew international businesses from an Irish base, which is very positive. Naturally, IDA Ireland is in consultation with companies that win business in Ireland and wants to see them develop an Irish platform to win European or wider international business. We have a strict protocol that is applied jointly by Enterprise Ireland and IDA Ireland and naturally it has to protect companies in a way that will ensure there will be no unfair competition. That is the way we operate.
5. Deputy Clare Daly asked the Minister for Jobs, Enterprise and Innovation if he is satisfied with the credibility of the source studies on which the growth in gross domestic product, the projections for growth in jobs and the Transatlantic Trade and Investment Partnership are based; and if he will make a statement on the matter. [28706/15]
This question relates to the Transatlantic Trade and Investment Partnership, TTIP. It is an absolute disgrace that we are heading into the recess without having a comprehensive discussion in the Parliament about its widescale implications. The Minister has made repeated claims that it will have a wonderful impact on job creation and GDP growth rates. In 2013 he told us it would lead to the creation of 2 million jobs and put an extra €500 in the pockets of every family of four. Earlier this year he said it would lead to the creation of 400,000 jobs. Is he satisfied with the credibility of the reports on which he is relying in making these outlandish statements?
We did have a comprehensive discussion in the Oireachtas. Three committees met together for an extensive discussion, with questions and answers, when there was a much more meaningful exchange than we could have had here. Members were able to raise concerns and the meeting ran for several hours. It was very fruitful and all shades of opinion were represented. The issues have also been discussed in numerous other fora, some of which were sponsored by my Department.
On the valuation, the European Commission’s assessment of the likely benefits of the EU and US trade negotiations is based on analysis carried out by the Centre for Economic Policy Research, CEPR, a leading independent pan-European economic research organisation. The study commissioned by my Department of the potential impact on Ireland was prepared by Copenhagen Economics, independent external experts in this field. It is based on the best available techniques of economic modelling and uses the same model and methodology as for the CEPR study to facilitate direct comparison. It shows, based on reasonable assumptions, that a potential gain of €2.4 billion in national income, over €1,200 per family, is possible from an ambitious agreement.
The studies use the computable general equilibrium model, the purpose of which is to simulate the impact of an EU and US trade agreement based on assumptions about the outcome of the negotiations. The model can give important insights into the potential gains from negotiations and the potential opportunities or challenges for specific sectors. This, in turn, helps policymakers to frame policies to maximise the opportunities and mitigate the challenges. Bearing in mind the limitations of all economic modelling, the studies provide important insights and add to our understanding of the potential of the EU and US trade negotiations. For Ireland, the studies show significant opportunities in important sectors such as pharmaceuticals, medical devices, food, especially dairy, software and public procurement. These represent an important and growing part of the exporting economy.
All of the studies cited by the Minister are based on computable general equilibrium modelling techniques and the general equilibrium theory that underpins them. They have been widely discredited by sociologists and most economists, with the exception of the neoclassical economists who are wedded to the neoliberal agenda. The methods used by these groups have been defined by some as fictional expectations of GDP and jobs growth will come from the TTIP. I am not the only one who is saying this. Even not so radical organisations such as The Economist stated, "If the modeller believes that trade raises productivity and growth, for example, then the model's result will mechanically confirm this". It is very much like what is called in computer terms "garbage in, garbage out" and the predictions around austerity. We were told it would deliver magnificent growth rates in Europe when, in reality, it has delivered the opposite. The idea of deregulating Europe, privatisation, lowering the living standards of workers and so on was very much supported. Given that the European Commission has stated ballpark figures are available, the Minister might want to revise his attitude to the studies.
The truth is that economies need growth strategies. In the case of Ireland, our strategy has been very much based on export-led recovery. In our dealings with the United States 70%, or 125,000 people, are employed by US companies in Ireland. In the case of Irish companies, some €2 billion worth of trade is done with US companies. Both categories have grown rapidly. Ireland has used its trade links in the past few years to beat the pressures exerted by declining domestic demand and on the public finances by the crisis in banking. We have done so successfully and the growth strategy places Ireland at the top of the league in growth in employment, GDP and exports. We are managing it successfully. The reduction in trade barriers in the United States is good for Irish people because we have very strong trade links and can build on reduced tariffs and non-trade barriers and the better co-ordination of regulations. That is where we can gain and the model seeks to examine the impact of a reduction in tariffs and non-trade barriers. It naturally implies gains for Ireland which trades heavily in these markets.
The problem is that the Minister's predictions which he so confidently makes are nonsense in the context of the models used. I do not say this in a derogatory way but because the same rationale was used, for example, in making predictions about other trade agreements which did not materialise.
Greatness was predicted in terms of the North American Free Trade Agreement, NAFTA, for example, which did not materialise based on this modelling. Other predictions were revised downwards because they did not live up to the so-called expectations.
As Lorenzo Fioramonti claims in his recent book, How Numbers Rule the World, numbers are used and abused to entrench the power of markets and undermine public debate. That is what we have seen utilised in this so-called debate on the Transatlantic Trade and Investment Partnership, TTIP. I asked that it would be discussed in this Chamber because three committees would not give it an adequate airing, given its impact here. Is it not just part and parcel of the neoliberal agenda to, as the Minister said, deregulate and liberalise everything, the consequences of which are environmental devastation, the destruction of workers' rights and the welfare state while those at the top with the money can scoop up the profits and line their own pockets?
The truth is that any free trade agreement offers opportunities for sectors to grow. In the case of Ireland and the United States, there is ample and clear evidence of that. For example, in terms of our growth in software and business services, 60% of that growth has been in the US market. That is a very strong market for us and if there can be better access to that market, we can gain from it. However, to take advantage of any trade agreement we have to put in place the necessary policies. That is why it is important that we do an evaluation of this nature, which models where the potential opportunities lie. We can now set about examining how we can exploit the opportunities in food, medical devices, software and public procurement that will arise, and prepare for areas where there are potential threats. That is the advantage of these models, and Ireland has proven over many years that we are adept at winning in international markets. We are a small, open trading economy. We depend on trade agreements. If we look at the evidence of the Korea Free Trade Agreement where trade between Europe and Korea has trebled as a result of the opening up of that agreement, we can see the benefits that are to be realised.
