Thursday, 30 June 1983
Dáil Eireann Debate
That a sum not exceeding £89,758,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1983, for the salaries and expenses of the Office of the Minister for Industry, Commerce and Tourism, including certain services administered by that Office, and for payment of certain subsidies, grants and grants-in-aid.
This revised Estimate provides for a total of £89,758,000 for the year 1983 as compared with an outturn figure of £85,037,000 for corresponding services in 1982, an overall increase of £4,721,000 or approximately 6 per cent.
The principal increases arising this year include £3,131,000 for Bord Fáilte's administration — tourism promotion expenses and £119,000 for that body's capital expenditure on tourism development works; £314,000 for Shannon Free Airport Development Company Limited, administration and general expenses on tourism-traffic development activities; £3,277,000 for Coras Tráchtála's administration and export promotion expenses. The credit financing of certain capital goods exports provision is up by £390,000, while the provision  for bread subsidy is up by £1,042,000. The additional amount of £186,000 under the office machinery and other office supplies is to meet the cost of additional facilities for the Companies Registration Office and to provide weights and measures inspectors with the necessary equipment for carrying out tests as required under weights and measures legislation. Post Office services are up by £155,000 because of higher postal and telephone costs.
I might comment at this point, as a matter of interest, that both Bord Fáilte and Córas Tráchtála will also have recourse to additional funds which are provided in the Estimates for the Office of the Minister for Finance, under the Special Border Areas Programme Fund, to finance programmes aimed at improving the economic and social situation of the border areas in implementation of an EEC regional development measure.
Invariably, Deputies would have many opportunities throughout the year to discuss various facets of my Department's operations because of the considerable volume of its business which comes before the House whether by way of legislation, motions or questions on specific matters. On this, the occasion of my first presentation to the Dáil of the Estimates for my Department, I am, therefore, concentrating on those subjects which I consider call for particular mention at this junction.
The first topic I shall deal with is the very important one of trade. I am very conscious of the pressing obligations which are placed on me in my capacity as Minister responsible for international trade. On the international scene my officials take part in various negotiations and discussions in relation to trade in bodies such as the European Communities,  GATT, UNCTAD and OECD. These activities represent a significant part of the work of my Department and their objective is to try to direct the affairs of those organisations towards decisions which will facilitate Irish trade. The ground rules for international trade are those of the General Agreement on Tariffs and Trade and my Department played a prominent part with our Community partners in the GATT ministerial conference in November last which was, in a nutshell, seeking ways and means of increasing the flow of international trade. In addition, I am the Minister responsible for the affairs of Córas Tráchtála, the State body charged with the promotion and development of exports. CTT with headquarters in Dublin operate through a network of offices abroad giving a variety of services and support to our exporters.
Being an open economy Ireland is very dependent on foreign trade. If we are to maintain existing employment and improve prospects for creating new employment we must seek to achieve the maximum growth in exports and, as a corollary, to improve the world-wide trading environment in which those exports may take place. Indeed, the Programme for Government specifically recognises the place of exports in our plan for economic recovery. We are, of course, also very dependent on imports for a considerable proportion of our energy and raw material requirements and that, in turn, places further emphasis on the need for increased exports so that the resultant earnings will pay for the imports and contribute to general economic well-being.
It is therefore of vital importance that we should seek for, and contribute to, a system of international trade free from restrictions and barriers and, in so far as we can, try to ensure that the countries to which we export would not increase protection for their own industries at our expense.
As I said, the conditions under which our foreign trade takes place are governed by Ireland's membership of the European Economic Community and by  the General Agreement on Tariffs and Trade. As a result of our membership of the Community we have duty-free access for our exports to the member states of the EEC and because of a special agreement we also have the same access, in respect of industrial goods, to the EFTA countries...
On a wider front the GATT provides a system of rules governing international trade which facilitates our exports to markets other than the EEC and EFTA. On the other hand it will be appreciated that our obligations as members of the GATT and the EEC put strict limits on the extent to which we can protect Irish industries. However, in certain very sensitive areas, such as textiles and clothing, we have been able to obtain some relief as a result of measures by the EEC to deal with the problem of imports from low-cost countries.
In recent years the deepening world-wide recession has put increased pressure on all governments to take action to protect their industries and, taking the broad view, the progressive growth of restrictions on trade and the degree to which trade is being managed by special arrangements is very disturbing. Trade between the EEC and Japan and between the EEC and the USA are areas of the international free trading system showing particular strain at present. However, I hope that a continuing series of patient and co-operative discussions on the problems will avoid what could only be economically destructive trade wars. I recognise that it is necessary for Ireland to make whatever constructive contribution we can to such negotiations and to strive, both in the EEC and in the GATT, to ensure that the multilateral trading system continues to function effectively.
Still on the subject of the general business environment in which our trade takes place I now turn, specifically, to the markets of the EEC. Apart from trade with countries outside the EEC, attention is now being increasingly given to the internal market of the Community. Formal obstacles to free trade between member states such as tariffs and quantitative restrictions were of course, removed in the early stages of the EEC.
 However, the problem of technical obstacles to trade remains and there has been increasing concern that these may prevent European industry from gaining the full benefit of the large EEC market. Increasing competition from Japan, the USA and newly industrialised countries has made it clear that European industry must adapt itself to take full advantage of the economies of the scale of the huge EEC market and the possibility of co-operation in research and innovation which it provides.
Following on the decision of the heads of state of EEC member states, last December, four Council meetings on the internal market have been held. Priority has been given to the possibility of obviating barriers to trade which might arise from having different standards or testing procedures in different countries and also to simplifying various customs formalities. Agreement may soon be reached on a procedure for certifying products coming from third countries and this would enable a large number of directives setting up Community standards to be finalised thereby facilitating trade in the products concerned. A number of draft directives for simplifying customs formalities between member states has been examined by the Council and agreement has been reached on two such directives.
At a later stage it is proposed to give consideration to such matters as freedom of establishment and trade in services, harmonisation of consumer protection measures and adjustments in relation to company law and patents, to which I will refer later. Progress in securing the maximum degree of free trade within the Community is of considerable interest to Ireland. About two-thirds of our exports of industrial products go to member states of the EEC and free access to a market of over 200 million people is of vital importance for the expansion of the exports of existing industry and the attraction of new export-orientated industry from abroad. In a nutshell, the common purpose of all the measures proposed in relation to the internal market is the freeing of trade between member  countries and this is advantageous for Irish exports.
Because of my concern for the maintenance and increase of exports which, as I have already said, are crucial for economic recovery. I have taken considerable interest in this matter and, either personally or through the Minister of State at my Department, have played an active part in the Council meetings on the internal market.
Having dealt with the question of the general climate for international trade, I come to our export performance. In an era when nearly all the economic indicators show a dismal and depressing trend, that for exports, I am happy to report, continues on its upward slope. As Minister with responsibility for international trade and exports I am, of course, heartened by the statistics but, more important, I would draw the attention of the House to the realities inherent in the continuing growth. Were the figures to be stagnant or falling the economic crisis, already very worrying, would be far worse and the consequences for the balance of payments and for employment would be dire. I cannot stress too much that a continued growth in export performance is one of the nation's key economic objectives.
Because of our open economy Ireland's economic recovery depends to a considerable degree on the development of our exports — and the continued growth of this trade is vital because it is the basis for maintaining and creating employment in both manufacturing industry and services. Notwithstanding the world economic recession, which shows hopeful signs of abatement, I am confident, on the basis of past performance and of the willingness of exporters to meet challenges with determination, that our exports will continue to grow. 1982 was a year of considerable achievement. Irish exports reached £5,690 million which was an increase of £915.5 million or a growth of 19 per cent over the performance in 1981. Manufacturing industry, mainly electronics, pharmaceuticals, machinery and transport equipment, accounted for 61 per cent of the value of all goods exported and made an  even bigger contribution to the increase in value over the previous year. Exports of live animals and food, drink and tobacco accounted for £1,704 million and, in turn, represented an increase on the 1981 performance. The significant elements in those categories were a recovery in meat sales and an upsurge in exports of drink.
By any standards, therefore, our export performance in 1982, notwithstanding the very difficult world trading conditions which prevailed, was a highly creditable one. Accordingly, it is my pleasant duty to put on the record of this House my congratulations to our exporters for their very important contribution to our economy and for their splendid efforts in the face of severe difficulties. In the same breath I urge them to persist with this very important business and wish them continuing success in 1983 and beyond. In all of their activities our exporters have the valuable support of Córas Tráchtála and their services.
The Government have recognised Córas Tráchtála's vital role in economic recovery by allocating £16.2 million to it for 1983. This represents an increase of £3.277 million or 25 per cent on last year's outturn and by any standards, particularly in times of public financial stringency, this is a generous allocation and an indication of the Government's concern. The increased allocation brings with it increased responsibilities and the necessity that all the funds made available for the development of exports be utilised with maximum effect. As a measure of my concern I have established a high-level group comprising senior officials of both my Department and Córas Tráchtála to review existing export promotion policy and strategies, to analyse developments in our export markets and to reassess the spread of them, to set realistic targets for the different sectors of Irish industry and to ecourage the development of new export-orientated products. I recognise that there are some sectors of industry which have continuously outshone others in terms of export performance and I have asked the group to consider how best to increase the dispersion of exporting sectors by learning  from the approach of the most successful firms. The objective of the group is to identify how Irish industry can best cope with changes on the international trading scene.
Those longer-term activities will not diminish the more immediate promotional efforts of Córas Tráchtála which will be aimed, as far as possible, at maintaining existing employment. Córas Tráchtála will provide national stands at 31 trade fairs across the world. Trade missions will go to different countries including Saudi Arabia and Japan and store promotions will be organised to cities as diverse as Berlin, Toronto, Tokyo and New York to display Irish food, drink, clothing, knitwear, furnishings and giftware. For my own part I will, of course, lend all my weight to these endeavours.
Various eminent commentators have spoken of the deficiencies in Irish industry in relation to marketing. I would agree that we are deficient in this critical area of business activity and that deficiency affects our exports. I consider that in the cut and thrust of the modern international business world there is little hope of success for amateurs relying on opportunism alone. On the other hand, any business activity that is carried out on the basis of a well planned marketing strategy which embraces the vital elements of research, analysis, design, promotion and after-sales service in relation to market demands, is assured of sustained profits.
With my encouragement Córas Tráchtála are taking active measures to improve the quality of Irish marketing skills with their employment support scheme. This scheme, introduced in 1981, involves the training of specialist export-marketing personnel and it has been applied to selected companies for which it is envisaged the executives will make a significant contribution to increased exports. In its limited existence the scheme has given every indication of being successful and with substantial funds Córas Tráchtála have been enjoined to give it special attention again in 1983.
During 1982 the UK continued to be  our main market taking about 40 per cent of our exports; 32 per cent went to the other countries of the EEC and about 8 per cent to the USA. There are, therefore, various other markets which present opportunities for our products and services such as those in the Middle East and South East Asia and I would like to see the rate of export growth to these areas accelerated.
The House will be aware that as part of the quest for increased export earnings, the Export Promotion (Amendment) Act, 1983, and the Insurance Act, 1983, have recently been passed by the Oireachtas. The former broadens the range of Córas Tráchtála's existing activity, which was mainly concerned with merchandise goods, by enabling them to promote and develop the export of service activities. Their activities will be supplemented by the Insurance Act which extends the existing export insurance facilities, which already exist for goods, to the services activities.
The services, specified by order, are those rated as having the greatest export potential and include a range as diverse as agricultural development, medical services, computers and various training services. If these Acts achieve their objective of increasing the export of service activities, it follows that a new downstream demand for Irish manufactured goods will be the result and I am naturally hopeful about this outcome.
While those hopes are high I am realistic enough not to magnify too much the contribution which the export of service activities can make to the balance of payments and, consequently, economic recovery. With all the means at my disposal I will be encouraging those involved to realise the maximum growth possible in the export of services with attendant advantages for export earnings and job creation at home and abroad. At the same time, I recognise, and the House should also recognise, that exports of services will never match up to our manufactured or agricultural exports, nor should they be viewed as making up for shortcomings in merchandise exports.
If our hopes as regards exports are to  be realised it is necessary to provide appropriate financial support to the firms involved. I recognise the increasing importance of our export credit insurance operations as a valuable security for our exporters who must contend with conditions of intense competition and, from time to time, with financial instability in certain markets. A new agreement has been reached with the Insurance Corporation of Ireland, which acts as my agent in relation to export credit insurance aimed at improving all aspects of the existing scheme.
Mr. Cluskey: I am happy to report that in 1983 the premiums expected as appropriations in aid under subhead M(3) — £1.3 million — should exceed the amount being provided in 1983 under subhead I.1. This is very satisfactory when it is borne in mind that premiums must be pitched at as low a level as possible so as to minimise the cost to exporters.
Also for the support of our exporters, there is the special scheme of credit financing for capital goods which normally attract from one to five years credit. The scheme is operated in accordance with the International Arrangement involving OECD countries and provides export credit finance at concessionary interest rates to exporters of capital goods. The facility is administered by the Associated Banks on the security of export credit insurance documents and with the aid of the interest subsidy which is provided for in subhead I.2 — £2.459 million. Generally the amount of the subsidy in any particular case relates to: the amount of export business financed; the gap between the concessionary interest rate to the exporter and the prevailing rate of interest at which the banks must get the funds; and the exchange rate of the Irish Punt in relation to foreign currencies, principally the dollar and sterling.
 By way of further support for our exporters I am pleased to tell the House that during 1982, the working capital for exporters scheme was extended, in the aggregate from £10 million to £45 million. The scheme provides subsidised loans to meet the additional working capital requirements of small and medium-sized manufacturing industry and particularly exporting firms.
This scheme which was introduced on the basis of the arguments and initiatives of my Department, is administered by the Industrial Credit Company and provides subsidised loans to meet the additional working capital requirements of small and medium-sized manufacturing industry and, particularly, of exporting firms. While the loans under the scheme are provided in Irish Punts, the rates of interest are related to low interest-rate EMS currencies.
The rate of interest charged to the borrower includes an exchange risk premium as well as a margin to cover credit risk. Loans are made to firms operating in accordance with an approved export development plan and while the up-take is rather slower than expected I am confident that it has an important role in funding any export efforts.
As regards the operations of financial institutions generally in the area of trade-related finance, my Department have been pressing forward with consultations with most of the institutions with a view to the introduction of improved and more competitive schemes of export credit finance linked to export credit insurance; the involvement of a broader range of financial institutions than previously in the operation of the schemes; and the increased promotion and marketing of export credit insurance as a valuable security to Irish exporters as they diversify from traditional to new markets. I am glad to inform the House, as I have announced publicly recently, that these discussions have been satisfactorily concluded.
I would also remind the House that the current budget provides for the remission of VAT at point of importation on materials used by firms exporting 75 per cent of their output and this decision will provide  a further very welcome boost to exporters.
While on the subject of export credit insurance it is, of course, true to say that, in keeping with our trade policy, Ireland's trading pattern is diversifying from our traditional markets into expanding markets which present greater long-term opportunities for our export potential. Some of these new markets, and particularly those in the Middle East, represent considerable medium to long-term potential but on a short-term perspective can be perceived as being volatile with resulting increased exposure for claims under export credit insurance. It is, I think prudent that the Oireachtas should be advised of this risk and should recognise its possible financial consequences.
There is a compelling need, however, to take a more long-term view of the returns accruing from the development of markets rather than the simple outturn of the export credit insurance scheme. This is the policy adopted by our competitors who, with a view to the development of exports, extend export credit insurance cover for particular projects or markets which, in their view, offer considerable potential for development. It is clear that if we want to get new business, and to extend our export frontiers, we cannot dictate the terms ourselves, but must respond as best we can to the realities of the various markets.
I think that all the foregoing activities and arrangements demonstrate clearly that I am sparing no efforts to carry out my duties and obligations as Minister responsible for international trade and in the national interest. I would invite the co-operation of Deputies on all sides of the House to do anything they can to assist and encourage the development of our exports.
In concluding this topic of my speech I might add that the making of economic forecasts is a dangerous exercise at the best of times but there is reason for cautious optimism about the prospect for the major world economies. There are signs in the USA and elsewhere that the world may be entering a period of more general and more sustained recovery and various  international gatherings have the objective of trying to get the world economy moving again.
Turning now to tourism, let me say that the Government regard the tourist industry as an integral part of the economic life of the country. The appointment of a Minister of State to my Department, to whom responsibility for tourism has been assigned, is indicative of the Government's commitment to this industry. This commitment has been further underlined by the Government's decision to reduce the VAT chargeable on hotel and other similar accommodation. There is a clear appreciation in Government that tourism brings major economic and social benefits to Ireland through spending by foreign visitors. The Government's objective is to nationally maximise the benefits accruing from overseas tourists and from domestic tourists, in the most cost-effective way, while, at the same time, ensuring an equitable spread of the advantages throughout the regions of the country.
The negative factors prevailing in our society for the past few years continue to have their effect on the tourist industry. The years following 1979, which was a record year for the industry, proved difficult for several reasons; industrial relations problems and world recession affected 1980, and in 1981 good prospects were negatived by the Northern Ireland situation and attendant massive publicity overseas. Over the last couple of years, of course, high inflation levels have continued to adversely affect the competitiveness of the industry. Notwithstanding these difficulties, 1982 saw a marked revival in tourism and, while the early part of the year was slow, by early summer business had picked up significantly. Tourism earned £500 million of foreign currency in 1982. Without these earnings the deficit in the balance of payments on current account, of course, would have been significantly higher. In addition, spending by Irish people on holidays in Ireland put a further £260 million into circulation particularly in the more remote areas of the country. The total value of tourism in 1982 was £760 million  and represented a 2 per cent increase in real terms over the 1981 level.
While there are signs that the world economic recession is easing, 1983 is likely to be a difficult year once again for tourism. In their published tourism plan Bord Fáilte set a target of 4.5 per cent growth for this year. As a positive support to Bord Fáilte in their efforts to reach this target, the Government have provided the board with a current expenditure allocation of £21.258 million — an increase of £3.131 million over the 1982 out-turn. In real terms this represents an increase of about £1 million. This additional money will be spent in expanding the board's promotional activities abroad.
Proposed initiatives to help achieve the growth target set include effective marketing abroad of the country as an international tourist location, increased emphasis on the need for the private sector in tourism to complement the board's efforts by an even greater marketing presence and the encouragement of Irish people to opt to a greater extent for home rather than overseas holidays. The possibilities of extending the tourist season will, in so far as possible, be pursued to ensure greater utilisation of tourist resources and to increase the profitability of enterprises engaged in the tourist business.
The VAT reduction provided for in the Finance Act will be of particular assistance in this regard. With effect from 1 May last the VAT chargeable on accommodation provided by hotels, guesthouses, hostels, holiday camps, motels and camping sites was reduced from 23 per cent to 18 per cent. Ancillary activities carried on by hotels etc. such as the letting of conference rooms, ballrooms and various sporting facilities also benefit from this reduction. This is a concession which had been sought by the industry and I am very pleased that it has been possible to grant it. The decision is indicative of the clear appreciation by the Government of the high export content of tourism. It has been warmly welcomed. I am sure it will be of real benefit to the industry and help it not only to earn more foreign currency for the  economy but also to safeguard the jobs of those employed in tourism.
This year, Bord Fáilte will be employing extra resources in the British market. A three-year programme is being launched aimed at raising awareness and improving the image of Ireland among potential British holidaymakers. Ireland has an image problem in Britain which has caused our tourism industry to lose out on the growth in holiday-taking there in the past five years. The goal of the new programme is to arrest this trend particularly in the principal segment of the market, among non-Irish-related holidaymakers. Bord Fáilte's long-term campaign will include advertising, publicity and public relations activities. It would be foolish to expect immediate success from this programme. The board has set itself a target of a 5 per cent increase in visitor numbers from Britain in 1983. Present indications are, however, that this target will be difficult to achieve.
On the North American market, promotional activities this year are geared to maintaining the 1982 growth in visitor numbers and to increasing the Irish share of US-Europe traffic. In 1982 Ireland's performance, aided by attractive air fares and a strong US dollar, was well ahead of other European countries with an approximate 15 per cent increase in US traffic to Ireland. However, there has been a reduction in our price competitiveness this year vis-á-vis other markets competing for American tourists and best estimates at this time would indicate a total traffic level similar to 1982.
On the Continent, despite recessionary and other problems, there are also some encouraging signs. For the first time in a couple of years it seems likely that we will have real growth on a number of markets. In Germany — our most important market in mainland Europe — the level of advance bookings, coupled with a renewed interest in Ireland as a holiday destination, strongly supports this prediction. Even in France, where the recently introduced currency restrictions on foreign travel have created problems, there are still some grounds for optimism. Bord Fáilte, working closely with Irish tourism interests have responded with revised  holiday packages to meet this situation. In fact, Bord Fáilte had the distinction of being the first tourism body out on the market promoting new packages in the wake of the French measures.
On the domestic front, the general outlook suggests that the holiday market both north and south will not be buoyant for 1983. The market place is highly competitive and it will be a question of the industry fighting hard to maintain the trend towards an increased domestic market share of total Irish holiday spending.
It is clear that if 1983 is to be a good year for Irish tourism the full commitment of the industry throughout the year is needed. As costs within the industry rise, it is essential now more than ever that attention be paid to the key areas of value for money, standards and quality of service. Ireland, putting it bluntly, is no longer a cheap country for the holidaymaker and it would be unrealistic to expect our tourism industry to compete purely on a basis of price with destinations which, for a variety of social and economic reasons, are cheaper. If we cannot offer low prices, we can — indeed we must — offer value. The only sensible way of tackling the problem of steeply rising costs and restricted demand as a result of the international recession is to increase the perceived value content of the product so that the customer is left in no doubt that the value he receives is as good, or even better than that offered by the competition.
We must be careful, however, not to become so involved in our short-term difficulties that our long-term prospects are ignored. It is essential that the industry is, when the upturn in the world's economy takes place, in a position to benefit from the anticipated growth in tourism business. It is essential that the industry be sufficiently developed to handle the expected growth in the years ahead and have the flexibility to adapt its products to changing tastes and the innovation to create new products. The Government for their part will continue to examine ways to ensure that the full potential of the tourist industry is reached.
 The accommodation development programme which includes the self-catering scheme and the caravan-camping scheme continues to aid the industry by encouraging the improvement and development of accommodation stock. In addition, the £6 million provided by the European Investment Bank to the Industrial Credit Company to aid capital development in the tourist industry is now being supplemented by a further £4 million. Another important contribution to tourism development has been the working capital scheme for tourism introduced in 1982. At that time £5 million was made available at preferential interest rates to enable tourism concerns to benefit from loans up to a maximum of £250,000 for periods of up to three years. I am happy to say that, in the light of the considerable interest shown in the scheme and the rapid take-up of loans by the industry, it has been necessary to double the initial fund to £10 million. This additional financing will undoubtedly be a boost to development in tourism.
As I have said already the Government will continue to play their part to ensure the development of this valuable industry to the fullest extent. I hope to bring legislation before the House shortly to raise the statutory limits on the amounts of money used by Bord Fáilte for capital development in the accommodation and amenity areas. I may also use the occasion to propose one or two other legislative amendments.
The House will be aware of the review of tourism policy which has been undertaken in my Department. A significant factor which has emerged is confirmation that effective tourism marketing abroad is of the utmost importance. Promotional publicity is considered to be a highly effective and indispensible policy approach to securing more overseas tourists. The Government accept this and, as I have already said, an extra £1 million in real terms, has been provided to Bord Fáilte for increased promotional activity in 1983. I am sure that this expenditure will have a very positive effect on tourism receipts.
The whole tourist accommodation area  and Government assistance towards its development have been looked at in the review. The findings which have emerged would indicate that, in the past, development grant schemes may not have produced the maximum possible benefit. In particular, schemes as originally conceived seem to have had too little regard to changing circumstances between their launching and the final implementation of projects aided. Bord Fáilte have been asked for a complete assessment of present and future accommodation needs and, when this is received, I will be looking into the question as to how we should go about ensuring that supply will be able to match future demand.
The activities of the regional tourism organisations is another area which has been examined. It is clear that there is a need for greater efficiency and cost-effectiveness in their operations. Bord Fáilte and the regional boards are already moving to introduce certain efficiencies and improved work practices in the regions and I hope that this effort will be accelerated to reap early positive results.
I will be looking at other aspects of tourism policy over the coming weeks with a view to ensuring that the State's continuing investment in tourism will be more cost-effective in future and of maximum benefit to the industry and the country as a whole. Any future State investment must, of course, be matched by renewed and more vigorous effort on the part of the industry itself. Without this high level of commitment from those directly involved in tourism, the broad objectives which I have outlined are unlikely to be achieved.
In my opening comments I referred to the considerable volume of legislation promoted by my Department. I will now deal with that aspect. A wide-ranging programme of amending legislation has been planned to reform and update company law over the next few years. This will give effect to the provisions of various EEC Directives which have been adopted in the area of harmonisation of company law in member states and also deal with other issues of a domestic nature arising from a number of abuses  of the existing law that have been highlighted in recent times.
The Companies (Amendment) Bill, 1982, giving effect to the Second EEC Company Law Directive and related matters has recently reached the Statute Book. It will become operative shortly under a commencement order.
It was a largely technical and uncontroversial measure which I was anxious to see enacted as soon as possible, not least because the legislation was long overdue and we had been taken to the European Court by the EEC Commission for failing to implement the Directive by the due date. Later this year, I shall be taking steps to implement three EEC Directives relating to the Stock Exchange. These deal with admission of securities to listing, prospectuses for listed securities and interim reports furnished by listed companies. Their requirements will not result in any significant change in the existing Stock Exchange procedures and requirements.
At the moment, however, my first priority in the area of company law is the preparation and introduction of legislation designed to prevent abuses and evasion of responsibilities in the operation of limited liability companies. The proposed Bill, which will realise a commitment given in the Joint Programme for Government, will strengthen, as appropriate, the existing provisions in the 1963 Companies Act and will introduce new measures the objective of which is to eliminate, deter or penalise with severe sanctions, malpractices in the conduct and direction of companies generally.
Limited liability status is a privilege and not a right and it is appropriate, therefore, that those who enjoy such status should be left in no doubt as to the standards of behaviour required of them and the serious consequences of blatantly ignoring or failing to comply with these standards.
We have seen, all too frequently, the situation where company operators liquidate one company — without any regard to the debts outstanding to creditors or employees — with the unmistaken objective of forming another company and, if it suits their purposes, to repeat  the process and deceive further creditors and employees. I have asked my officials to give this particular problem the most searching analysis with a view to achieving the most effective solution. As regards the treatment of offenders who persist in this kind of activity, I will be seeking to impose the stiffest penalties acceptable within the legal code generally.
The enactment of legislation is, undoubtedly, a fundamental step towards the elimination of the various abuses to which I have referred and which have, unfortunately, now become all too widespread. Lest too much be expected of such legislation it is only right to recognise the fact of life that, as with other laws, its presence on the Statute Book will not, by itself, rid the business community of those who are intent on fraud or wrongdoing. Moreover, it cannot protect the many people who are foolishly induced by the prospect of a marginal gain over normal rates of interest to invest their savings in doubtful investment bodies. The best possible situation can only be achieved if all who are parties to corporate activity are continuously prudent and vigilant in their transactions and dealings.
A later Bill will follow to translate into Irish law the provisions of the Third Directive on mergers and divisions of public limited companies and a related directive on divisions of such companies. Mergers by fusion and division are rare in Ireland. Therefore, the legislation ensuring on the two directives is not expected to have any widespread application in practice.
An important EEC Directive in relation to company law is the Fourth Directive on the preparation, publication and auditing of the individual accounts of public and private limited companies. The implementation of this complex measure will have a major impact both by significantly increasing the level of detailed disclosure required in accounts and, in particular, because private limited companies will for the first time be required to publish their accounts. There are certain optional provisions in the directive, however, which vary its full  impact on different sized companies, particularly as regards publication of accounts and disclosure generally. Ireland is at present behind schedule in implementing this directive but so, too, are the majority of all other member states. I am hopeful, however, that when I have completed my examination of the issues in question I will be able to bring forward the necessary legislative proposals as soon as possible to give effect to this directive.
A Co-operative Societies Bill, designed to replace the existing industrial and provident societies legislation, is at present being prepared in my Department. I hope to be in a position to introduce this Bill early next year.
The Registrar of Friendly Societies, at my request, is undertaking a review of the Friendly Societies Acts, 1896-1977, to see what changes are necessary or desirable. Those Acts govern the registration and operation of friendly societies and certain other types of societies, including benevolent societies. The objective of the review is to provide a modern legislative framework for such societies. They are mainly of the self-help voluntary type and provide insurance and other benefits for members.
Before leaving the subject of companies and other incorporated bodies I should like to refer to a particular associated aspect. My Department have received over the years a considerable number of complaints from the legal profession and others who use the Companies Registration Office about company files not being readily available for inspection. While the great majority of inquirers are facilitated without significant delay, some files cannot be produced immediately either because some other inquirers are using them or because the staff of the office are working on them. Because of the huge volume of files in the office and the ever-increasing demand for services, operational difficulties have arisen.
Before dealing with the question of tackling these difficulties I should like to refer to the remarkable increase in the amount of business transacted in that  office in recent years. At the end of 1972 the total number of companies on the register was less than 28,000 and at the end of 1982 the total was over 70,000 — an increase of 150 per cent. There was also in that period an increase of over 75 per cent in transactions relating to business names. Additionally, the other services provided by the office to the community, mainly legal, accountancy and other business interests, have increased no less dramatically. In the area of access to company files for search purposes, for instance, less than 50,000 inspections were made in 1972 whereas the number in 1982, at over 106,000, showed an increase of 112 per cent.
Against this background of increased activity should be noted that staff resources in that period increased by only 60 per cent. That the office have been able to provide a service to the extent that it has done in the past number of years is a remarkable tribute to the hard working and highly skilled staff, who will continue to do their best to give the public the quality of service they are entitled to.
The operation difficulties to which I have referred cannot, however, be overcome by dedication on the part of staff alone. It has been necessary to devise new systems with a view to having immediately available the information most frequently required by the public. When current plans are implemented, hopefully within two years, the main information on company files will be stored on computer and will be available both on visual display units and as printouts. Needless to remark, the planning and implementation of such a project is both complex and expensive but it is being pushed ahead as quickly as possible and provision has been made in the Estimates for the necessary expenditure. In the meantime certain complementary changes are being introduced which should considerably reduce the delay in obtaining information. These include the installation of new mobile shelving to increase storage capacity and make files more readily accessible and a modern card retrieval system.
A further important piece of legislation — the Casual Trading Act, 1980 — is  now fully operative. On 12 February of this year the Street Trading Act, 1926, was repealed and the Casual Trading Act, 1980, applies to Dublin city and other urban areas which had adopted the 1926 Act. With a few exceptions specified in the Act, any person who proposes to engage in retail trading on the roads or in any other public place must now have a casual trading licence. These licences are issued by my Department. The Act empowers local authorities to designate casual trading areas and when an authority has designated such areas it is an offence to engage in casual trading elsewhere in that authority's area. The local authorities are also empowered to make by-laws to regulate casual trading and they can attach conditions to the casual trading permits they grant. I am satisfied that the local authorities have all the powers they need to ensure that all the nuisances associated with unregulated street trading can be abated, and it is for them to achieve this objective. They do not have to get my approval of their plans.
Insurance is, needless to say, a very important sector in my Department's functions. In recent years, the non-life insurance sector has seen increasing participation in the market by new entrants following the implementation in 1976 of the First EEC non-Life Insurance Directive. A similar trend in the life assurance area is likely to emerge when the First EEC Life Assurance Directive is implemented into law later this year. The resultant increased competition and greater variety of classes of cover on offer should be of benefit to the insuring public. When the Insurance Bill, 1982, to control life commission levels was introduced, the then Government indicated in their press release that, if agreement were reached, the Bill would not be proceeded with. I am happy to note that all life companies have now signified their agreement on a maximum scale of rates. Such agreement will undoubtedly redound to the benefit of all concerned. However, I want this House and the insurers to be clear that should the commission's agreement run into difficulties, or its continued existence be thrown into doubt, I will immediately reintroduce the  Bill and add to it any further measures which would be considered necessary or desirable to deal with the situation.
The rising cost of motor insurance continues to give cause for concern. Each application for an increase is rigidly scrutinised in my department and also by the National Prices Commission. The inescapable fact, however, is that the cost of claims on which the ultimate size of premium rate increases depends, continues to escalate at an alarming rate. Motor underwriting losses amounted to £26 million in 1981, an increase of over 36 per cent on 1980. There is a need, therefore, for motor insurance to be kept under constant review. In this connection the Prices Advisory Committee, established in November 1981 to inquire into the factors contributing to the cost of motor insurance, has now reported. The committee's wide-ranging recommendations are being considered in my Department and in the other Departments concerned. A further expert committee, the Motor Premiums Advisory Committee, is currently finalising a long-term exercise aimed at establishing a statistical basis for the application of loadings to insurance premiums. These investigations will help to determine whether the loadings applied to premium rates reflect the additional risk involved.
In speaking of motor insurance, I must refer to a relatively recent phenomenon, which is of particular concern to me, namely the introduction of so called “discount schemes”. I am concerned by what seems to be a departure from prudent underwriting in the interests of increased cash flow. I am also concerned about the attempts by some insurers to corner what might be termed “the better risks”.
Schemes designed to achieve these aims carry with them the inherent danger of severe underwriting losses as well as distorting the motor insurance market. I have clearly indicated to all insurers that any losses which may be incurred on such schemes will not be permitted to be spread onto the general insuring public. In other words, such schemes must stand or fall on their own merits. Adverting now to the area of competition policy I have received a report from the Restrictive  Practices Commission into restrictions placed on dental technicians by sections 45 and 46 of the Dentists Act, 1928. I have laid the report before both House of the Oireachtas and arranged for its publication. The report recommends that section 45 of the Act should be amended to allow for the provision by non-dentists of dentures to a person of 18 years of age, or over, provided it does not involve work being done on living tissue.
The commission have also produced a report of their public inquiry into the effects on competition of the restrictions on conveyancing and restrictions on advertising by solicitors. The recommendations contained in the report are at present being studied in my Department and I expect to be in a position to take decisions on it fairly shortly.
The Commission have also carried out an inquiry into the provision of tour operator and travel agency services insofar as they are affected by the activities of associations in the travel trade and are at present preparing a report to me in the matter. In the coming year I also expect the commission to carry out an inquiry into the policies of building societies in relation to insurance and valuers' or surveyors' reports in respect of mortgaged properties.
While on the question of building societies there are a few general remarks which I would like to make. The House will be aware from the last report of the Registrar of Building Societies that comparisons between the management expenses of Irish and UK Building Societies did not indicate any cause for concern about the performance of Irish societies in this area. It is to be pointed out that the management expense ratio is only one measure of the efficiency of societies and the Registrar has exhorted all societies to keep their overall performance under continuous review and to ensure that maximum efficiency is attained. It should be widely recognised that building societies occupy a privileged position under law, the object of which was to enable them to provide a better service to the community. It behoves us, therefore, to see to it that the public are  properly treated in their dealings with societies. It is pleasing, consequently, to note that the Registrar of Building Societies, who is the person charged statutorily with responsibility for the supervision of societies, will continue to monitor the performance of societies, both generally and at the level of individual societies. This exercise will also be concerned with such other aspects of building societies operations as redemption fees charged, legal expenses and other related matters.
In the area of competition, I am also responsible for the operation of the Mergers, Take-overs and Monopolies (Control) Act, 1978. A report on the cases considered under the Act is contained in an annual report which is presented to the Houses of the Oireachtas. I expect to be presenting, shortly, the report for 1982. I understand the report will show that the number of applications received results in a considerable decrease on the 1981 figure. This, I think, reflects the very difficult year experienced by business in general and is a good indication of the retrenchment which has taken place in most areas. It is also fair to say that a larger proportion of the cases considered during 1982 fell into that category which might, broadly, be described as rescue operations.
I will now turn to the subject of prices and price control. As the House is aware, the National Prices Commission advise me on prices matters and examine and make recommendations on price increase applications. The commission examine applications in accordance with strict criteria which lay down what increased costs may be recovered by applicant firms by way of increased prices.
Generally speaking, only unavoidable increased costs that have actually been incurred are allowed to be passed on to the consumer. Applicant firms must be in a position to verify that cost increases claimed have actually been incurred. In the case of material costs, for example, this is done by way of providing documentary evidence, in the form of invoices, of the cost increases claimed. Price applicants are also obliged to submit their financial accounts certified by auditors and detailed to the extent ordimi  narily required by the income tax authorities.
In deciding the level of price increase warranted under the guidelines the capacity of an applicant firm to absorb at least some portion of allowable cost increases is taken into account. A company's trading record and the influence of competitive factors must also be assessed and evaluated.
There is no obligation on the commission to compensate price applicants in full for increased costs and occasionally less than full compensation is given to encourage productivity and efficiency. The commission are very aware of the need for companies to at least maintain, if not increase, efficiency in the production of goods and the provision of services in order to ensure that consumers should not have to pay for inefficiency or lower standards. As Minister, I am very concerned that these principles in the operation of price control are upheld.
Occasionally, applications are received from companies seeking price increases to improve their profitability for investment purposes or to generate employment. Approval of such price increases is usually limited to companies whose prices are already competitive, who have a proven track record of investment in the past and who have viable investment plans for the future. I am particularly concerned that capital generated as a result of price increases approved in this manner will be spent in this country on productive job creation projects.
During 1982, 374 price proposals were considered by the National Prices Commission. The applicants who made these proposals claimed that they had sustained increased costs amounting to £661 million approximately on an annualised basis. Based on recommendations by the commission it was considered that £300 million of these costs could not be allowed. The effect of the cut-back was that consumers at retail level paid about 45 per cent less for the products and services covered by the applications than they might otherwise have had to pay. This figure more than likely understates the true saving to the consumer when one  takes into account the efficiency improvements and the costs absorbed by firms arising from the mere existence of a price control mechanism.
In the operation of an effective price control system it is necessary to maintain a balance between the competing needs within the community. To adopt a simplistic approach to price control by suggesting that all applications for price increases be rejected would have serious repercussions. If companies whose costs continue to be affected by imported and domestic inflation found that they could not recover increased costs in higher prices, supplies of goods and services to the consumer would be seriously curtailed within a short period and in some cases would cease altogether. The inevitable consequences of such an approach would be redundancies and firm closures on a large scale. The social costs inflicted on the community for such policies would be intolerable.
I would now like to mention some reservations I have about the effectiveness of the existing price control procedures. One of the features of the present system is that it tends to create in the minds of businessmen the idea that if they incur extra costs they can expect to be compensated by means of commensurate price increases. In that kind of environment one must wonder whether cost increases are resisted as strongly as they ought to be. Some new thinking is required here and it seems to me that more effective means of measuring competitiveness, rather than costs incurred, may have to be introduced. At any rate the notion of automatically passing on increased costs to the consumer is firmly rejected by the Government.
In recent months there has been clear evidence of a slackening in the underlying rate of inflation, particularly in relation to imported inflation. This slackening is due largely to the current international recession and the action taken by our competitor countries to reduce their own levels of inflation. When this recession ends, we cannot expect them easily to allow their economies to return to the double figure inflation rates that were so widely prevalent in recent years. The  decline in imported inflation has been reflected in the reduction in the number and the level of price increase applications received in recent months. In 1982 the rise in Irish consumer prices was 17.1 per cent compared with 20.4 per cent in 1981. Projections for the current year suggest that, despite the devaluation earlier on of the Irish pound within the EMS, the rate will be less than 10 per cent in 1983. However, considering that most of our competitors will expect to have rates of inflation of half this level, there is no room for complacency on this issue. A greater moderation in domestic cost increases is essential if Irish industry is to maintain its markets both home and abroad. This factor will be obvious to firms exposed to international competition, but it may not be as obvious to firms — whether importers, manufacturers, or service industries—operating in the sheltered sector of the economy and it may have to be made clear to them that price control procedures will ensure that excessive cost increases will not be permitted to be passed on to the consumer.
In the context of prices matters I might mention here what is a very considerable element in the Estimate, that is the amount for food subsidies. The sum provided for the consumer subsidy on bread in the current year is £40,621,000, an increase of 3 per cent on the final out turn for 1982 of £39,579,000. The consumption of bread in 1982 was less than anticipated and the 1983 allocation is considered adequate to meet the expected demands.
Turning finally to consumer protection, I am pleased to note an increased focussing nowadays on the needs of the public as consumers; to some extent this can be traced back to the Consumer Information Act, 1978, which has created a new awareness. Indeed, apart from my specific responsibility, other Ministers and their Departments have a general  responsibility for protecting the interests of the public as consumers within their own functional areas, whether it be in regard to medicines, safety of manufactured products, transport, traffic safety or otherwise. The House will be aware that there are a number of EEC Directives at various stages of development which have important implications for consumers. Regulations have been made to implement the Food Labelling Directive which requires particulars such as ingredients, storage conditions, durability marking and quantity declarations to be given. Deputies on both sides of the House have spoken in support of the implementation of the directive requirements. Industry obviously needs some time to introduce the necessary changes into labelling practices. My Department have been in direct discussion with the Confederation of Irish Industry and individual manufacturers/packers regarding the requirements of the regulations and I plan to bring them into effect later in the year. Already the effects of the directive are becoming evident on the shop shelves in the range of new information being provided on labels and this represents an important step forward for consumers.
I have recently signed regulations which will encourage the rationalisation of a number of sizes in which household goods are sold. Regulations to give effect to the unit pricing of foodstuffs are at an advanced stage of preparation and I hope to sign them shortly. Other directives being discussed in Brussels cover such items as product liability, doorstep sales, consumer credit and misleading advertising.
The Product Liability Directive would impose strict liability, irrespective of fault, on a producer of a product in respect of injury caused by a defect in the product. The injured party would simply have to prove the defect, the damage and the causal relationship between the two. This draft directive would give an important and additional form of protection to consumers as liability would be created whether or not the manufacturer was negligent. It obviously has important ramifications for manufacturers and  there are also insurance implications. It is not surprising therefore that progress has not been as fast as originally envisaged. Nevertheless, all member states accept the principle of strict liability on which the directive would be founded and there is a fair measure of agreement as to the general shape the directive should take.
The Doorstep Sales Directive is at an advanced stage of development and I expect to see it adopted without much more delay. The Directive on Misleading Advertising is making progress, again after being the subject of protracted discussion on some fundamental aspects of scope, and the Consumer Credit Directive has been reactivated in the past year.
Most of the EEC initiatives under comtemplation derive from the EEC First and Second Consumer Programmes. In some ways, progress with many of the elements in these could be regarded as disappointing. The reality is that it reflects in part the general difficulty of getting the member states to put aside national differences in favour of a Community agreement. It also reflects, however, a certain hardening of attitudes towards consumer protection by member states because of the continuing worldwide recession. There is evidence that in some of the countries which have been to the fore in consumer protection in the past two decades the general zeal for new initiatives displayed in earlier years is easing back and is being replaced more by consolidation measures within the framework of existing consumer legislation.
I have stated already in this House in response to Dáil questions that I am examining certain matters relating to consumer credit to see if they can be effectively dealt with using existing powers. I believe, for example, that on the tourism front consumers, both foreign and Irish, would welcome menu prices being displayed outside restaurants and dining rooms. This is the practice at present in many other countries; it is also fairly widespread here. I now propose to make such price display a requirement.
The foregoing do not purport to show the relative priority or gravity of consumer  issues facing us but are intended simply to illustrate the type of measures which it might be appropriate to consider under existing legislation and which could have beneficial consequences all round. However, I believe that no amount of formal consumer regulation or regimentation will ever be the complete substitute for the application of reasonable care and intelligence by consumers when making purchasing decisions.
I would now like to refer briefly to weights and measures, prepacking and hallmarking legislation which have strong consumer implications. A weights and measures Bill has been under preparation in my Department and is now nearing completion. This Bill will update and modernise the existing weights and measures legislation to take account of technological progress, EEC developments, and the general pace of change. The Bill will make provisions for a unified inspectorate under the control of the Office of Weights and Measures and will lay the foundations for the development of a modern progressive metrology service able to serve the needs of traders and consumers.
The Packaged Goods (Quantity Control) Act, 1981, provided for the establishment of a comprehensive system of quantity control for prepackaged goods, thus significantly increasing the protection afforded the consumer from short weight while at the same time increasing the acceptability of our exports by bringing our control procedures into line with practice elsewhere in the European Community. A special inspectorate within my Department concerned with enforcing this legislation has been concentrating on helping and advising packers in meeting the requirements of the legislation.
Finally, this country lodged recently the instrument of accession to the International Convention on the Control and Marking of Articles of Precious Metals. The Hallmarking Act, 1981, was introduced to enable this to be done and as soon as the accession formalities are completed I will sign the necessary regulations to bring the Act into effect. The advantage of accession is that Irish traders in precious metals will be able to  compete favourably in the markets of other contracting states but especially in the UK which has been the most lucrative market for Irish exporters. The whole regime of hallmarking provides a valuable protection for the consumer in terms of the quality of the article of precious metal purchased and arising out of our accession to the convention this protection is now being extended to platinum.
Having dealt as comprehensively as possible with the topics I had decided to include in my speech to-day I now conclude by saying that I will also, in my reply, endeavour to deal with matters which may be raised in the course of the debate.
Mr. Flynn: Ba mhaith liom ar dtús mo bhuíochas a chur in iúl don Aire as an méid atá raite aige. Dar ndóigh lean sé ar aghaidh píosa fada leis an Mheastachán seo, ach sin mar ba chóir dó a bheith mar is Meastachán fíorthábhachtach é do mhuintir na tíre. Tá tábhacht faoi leith ag dul leis an Mhéasteachán seo de bharr fostaíocht, infheistíocht, déantúisí, praghsanna agus a lán rudaí eile a bhaineann leis an ghnáth duine.
An ráiteas atá curtha os ár gcomhair ag an Aire, bhí sé an-leathan agus do thagair sé do chuid mhaith gnóthaí a bhí os comhair na Dála i ith na bliana. Níl mise chun tagairt don uile ghnó atá faoi chúram an Aire ag an am seo ach tá mé chun tagairt a dhéanamh do chúrsaí éagsula a bhfuil baint agam leo agus a bhfuil suim faoi leith agam iontu faoi láthair. Os rud é go ndúirt an tAire go mbeidh leasuithe ag teacht os ár gcomhair roimh dheireadh na bliana i leith a lán de na rudaí atá faoin a chúram, beidh seans agam ansin dul isteach go mion sna hábhair sin.
The Minister dealt very effectively with a considerable number of matters. It is obvious from the sheer volume of his speech that his Department have a considerable influence on life in this country. However, it is regrettable that there is not a better attendance in the House on occasions like this. The various aspects  of this Estimate concern both the economy generally and individuals. It is not my intention to deal with the whole range of business in the same way as the Minister dealt with it. His speech amounted almost to a brief on his entire Department. As he has said, these matters can be dealt with on other occasions during the year. I shall confine myself to dealing with special aspects in which the general public might have a particular interest.
In passing one must draw attention to the enormity of the Estimate figure. The Minister has a great responsibility in discharging more than £98 million of our money. He must discharge this money over a wide range of subjects and disciplines that affect every aspect of Irish life, that affect the housewife, that affect Bord Fáilte, that affect imports and exports, that affect employment and a whole range of economic and social matters. Even the bread subsidy alone is enormous. One must realise the impact that £40 million has on the Exchequer. Such matters are often not highlighted in terms of Government expenditure but I should like to impress on the Minister the need to maintain the bread subsidy of 15½ pence per 800-gramme loaf. It was suggested in the recent past that a think-in on subsidies was being held. I should like the Minister to give an assurance to the House that in these difficult times when households budgets are under attack it is not his intention, as a Labour and socialist Minister, to contemplate the reduction or obliteration of this subsidy.
The Minister dealt with a range of items. I put down some questions recently to the Minister and his colleagues about some items which are relevant to the Estimate. The Minister did not find it possible to reply to one of my questions because of the extra burden it would place on his officials, who are hard pressed as I know full well, but I was delighted to see that he made some reference to it in his speech. It was in relation to a number of price increases. I asked him for information concerning all the prices increases which had been granted since the beginning of January. In his speech, he afforded me that  information and said that 374 price proposals came before his Department in 1982 and that these would have accounted for £661 million but for the fact that a number of them were not granted and £300 million of these costs could not be allowed. The figures I wanted were in relation to price increases since January 1983. I look forward with interest to receiving that information.
The Minister made reference to certain matters relating to the Companies Office. By way of written reply to a question I asked, the Minister told me that 42 companies in the manufacturing sector closed between January and June 1983 with a loss of 3,646 jobs. While it was not possible to calculate the cost of this to the Exchequer it bears out the fact that there is considerable difficulty being experienced by manufacturing industry at present. It also means that we will have to make considerable efforts if we are not to have a continuation of company closures for the rest of the year. I also ascertained by way of written reply to another question that the number of applications for finance aid to Fóir Teoranta since I January this year was 114. These came from 109 companies employing 7,849 workers. While financial facilities amounting to £12.437 million have been made available to 45 companies looking for aid, it is indicative of the number of companies which are in serious trouble.
The number of people made redundant is staggering. While the Minister may not have a direct responsibility in regard to these matters, nevertheless his Department and others must co-operate in order to relieve us of such dire consequences as far as company closures are concerned. We will have to have an end to the crystal ball gazing which we have indulged in. The reality is that there are close on a quarter of a million unemployed. Pious hopes for a reduction in the number of unemployed or electoral excuses have run their race. The sooner we recognise that Government institutions, some of which are under the control of the Minister, have a part to play, the better for all concerned. We have come to the end of the road as far as unemployment figures are concerned. It is not possible to  tolerate an escalation of these figures. What is required is action. People have been waiting too long for the Government's response to unemployment. The Minister made reference to efforts being made and I accept that the institutions under his control have made a significant contribution, but that is not enough. If it was, we would not have a quarter of a million people unemployed, a substantial proportion of them under 25 years of age. Some of them have never held a job and it is now accepted that people will be born who will never have gainful employment.
Unemployment must be our primary concern. Long-term planning requires considerable Government action. Our economic plan, The Way Forward, set out what was needed but the Government did not accept it nor did they take what was most useful out of it and utilise it to the best advantage. They did not offer any substitute. The first few months of a Government's term in office might be granted as a honeymoon period but it is no longer to be tolerated that a long-term strategy has not been laid before the House incorporating all Departments to deal with this enormous national, pressing problem of unemployment.
Whatever about long-term strategy surely in the short-term the Minister and his colleagues should be outlining what proposals they have to bring about a situation where confidence can be generated and hope given to parents and young people that they will have gainful employment in their own country. It is depressing to see how frustrated people are. Unemployment is not confined to the sons or daughters of working-class people, not that they are any less citizens than anybody else, but now affects nearly every family. We now have thousands of graduates who cannot find employment even in the most menial jobs. They have no hope of emigration because the situation is often just as bad in countries to which they would like to go. The Minister must utilise the power and the institutions of his Department which have a tremendous role to play because they spread across the social and economic structure. While the Minister referred to some good  things that have happened, it did not seem to me that there was any kind of national plan to deal effectively with what must be regarded as a national disgrace, namely the Government's ineffectiveness in bringing forward either long-term or short-term strategies to deal with unemployment.
I have to compliment the Minister and his staff on some of the measures they are taking in the promotion and marketing of our exports, but there is also the question of ordinary confidence among the business community. That confidence has been seriously undermined during the past few months. It may be easy to say it from this side of the House but I must lay the major portion of the blame at the feet of the Minister and his Government. The decline in business confidence has accelerated apace since this Government assumed office and the lack of confidence has permeated the whole economic scene.
The work force are disturbed and frustrated not only in regard to their pay but also because of the number of closures. Many of them are working short time and many companies are seeking assistance from Fóir Teoranta. Workers know that their jobs are not secure and something must be done to restore their confidence so that we can get the best from them. The unemployed have no confidence. Should they ever be welded into a unified force then the consequences for the economy do not bear thinking about. Business has lost confidence because many of the measures contained in the budget, the Social Welfare Bill and the Finance Bill have undermined the structure of business, to the extent that it is not now in the interest of many people to continue operations.
It is possible to take only so much from the business community. They suffer considerably from much of the drochphoblíocht atá ag dul leo le tamaillín anuas. Much of that bad publicity is illfounded. While there are cowboys, flyby-nights and moonlighters of all kinds operating the vast majority of ordinary businessmen are decent, honest PAYE workers like the rest of us, doing a good  job in the face of considerable difficulties.
We must support private investment. How else can we expect venture capital to be made available by the private sector? We must give them an opportunity to get a good return on their investment. Praiseworthy as are the efforts of CTT, all will come to naught in the long term if we do not make business worthwhile.
I understand that CTT have been given an increase of £3.277 million this year. I think the Minister has short-changed CTT somewhat in comparison with the amount we intended to provide. From my recollection of the Estimates we had prepared, we would have provided £17.240 million, an increase of £4.157 million. Surely this is an area where there should not be cheeseparing because CTT have a magnificent track record. It is absolutely essential in increasing exports that the marketing agency should be given increased funding rather than suffer a decrease.
I am happy that CTT will be sending delegations to 31 trade fairs this year, a substantial number of them in new market areas. I accept what the Minister said about these new market areas. Much of the outlay will be speculative and some of it will be venture. So what? We have now reached the stage where we must have enough confidence in ourselves to speculate a little on export drives. If the Minister expends taxpayers' money in opening up and developing new markets and if some of them fail, he will wait a long time to hear any criticism from me concerning this investment. All the best indicators are that there are enormous markets in the Middle East and we should certainly get in on the first rung of the ladder now that these markets are opening up. I will be hoping that CTT can improve their attendance at trade fairs. I would regard expenditure of this nature as money well spent and in the past it has never failed to deliver worthwhile orders. I heartily congratulate CTT on their efforts in this regard. There will be bigger risks and export credit finance and insurance will be more sought after. So it should be. If the Minister's office gets involved to a very serious degree in  improving these new export markets, he will have the full support of this side of the House.
I am particularly happy that the export of services has had a significant impact on the balance of payments. There is no doubt that the recent Bill which came before the House to help exporters has given assistance to people who are prepared to push exports. We will support wholeheartedly any assistance the Minister can give to them.
Of course, I must refer to employment, because exports have a big bearing on future employment. During the years there was a carefree optimism here about employment. There was the feeling that continuous growth would be there automatically and that irrespective of what happened it would be improving. That carefree optimism has come to an end and only production and sales can bring it back. There must be progression, first of all in production, followed by sales. That must be followed by income increases for those who provide productivity and those who make the sales. That will lead to prosperity. If you have increased growth, production and sales, that leads to increased incomes, increased revenue for the State and increased prosperity for us all. There cannot be economic success otherwise.
However, if one area is given impetus rather than another, it leads to distortion. Recovery for this economy is a matter of national determination, and forthwith we must cease to downgrade our work force. We must stop running down aspects of productivity. National determination can be brought about by individuals. First of all, there must personal determination and commitment by Ministers. We require personal dedication and commitment primarily by the Minister now in the House, because he more than anybody is responsible for the growth of our economy through exports. The Minister for Industry and Energy and the Minister for Finance also have something to do with this and so has the Minister for Labour, but all of them together will not be of any advantage unless the Minister for Trade, Commerce and Tourism can  deliver the goods by way of production and exports.
Sometimes we get the balance wrong in this House because we lay greater emphasis on other Ministers. I do not want to be derogatory in regard to anyone's responsibility, but the Minister now in the House has a much bigger bearing on the future prosperity and growth of our economy than is often attributed to him. He must be given the necessary funding if he is to improve our tourism and our exports. Although on the face of it he has been given £89 million, he has much less than £50 million if you subtract subsidies.
We must have an alternative to our hairshirt attitude. We must strive to restore confidence and we must cease this tittle-tattle across the floor of the House that we would do better than they. In relation to our competitors, it will not do for us to run in the same race as they do. We must win. Because of our open economy we must not be just equal with our competitors. We have to be better than they if we are to achieve our targets and if we are to bring prosperity to our people.
It might appear that the beginning of my remarks would have greater relevance to another Department. It has not. Though the Department of Trade, Commerce and Tourism can achieve what their institutions have set out to do, this cannot be done without a higher standard of training and of technological knowledge among our work force. Of course, that involves the employers. Perhaps we have missed the boat in regard to these elements, and that is why I had hoped that in their six months in office the Government would have dealt effectively with the problems and utilised the skills, manpower and training and consequently would have provided short-term schemes in regard to training and technological knowledge. It is only by doing that, by providing these facilities, that we can cultivate pride in our achievements. Our work force must have simple pride in doing the job well and in knowing they are better than their competitors.
There is much work to be done and it has to be done properly, and if it requires  national discipline to achieve it that is what government is all about. We are limping along with 250,000 people unemployed and the PAYE sector will have to continue to break their backs. Surely we have something better than that in store for us. We do not want a continuation over the years of this limping along. As I said earlier, we do not want this talking across the floor of the House because the hundreds of thousands outside will be right when they say that that kind of thing does not achieve anything for them.
I am convinced that the bureaucratic, administrative and ministerial skill is here in this House if it could be tapped fully and if we could get away from this limping along attitude. Unless that kind of initiative is there it will be forced on us before too long. It will not be easy to take it then.
I would go so far as to say that the State cannot finance every demand of the people. The State cannot support every demand, and I would be the first to admit that. Whether it is ambition to go up the political ladder here, or to achieve the top spot in the bureaucracy of a Department, or to be the managing director of a company, or to be the supervisor on the plant floor, ambition is always unlimited — but the public purse is not. We will have to take all the ambitions of the general public into account and the extent to which the public purse can support them. The expansion of our educational system, the expansion of our training facilities, the expansion of our agricultural development, health and transport services, our urban development and our environmental development, will have to be put into one plan. Priorities will have to be set, so that what I said earlier will take its proper place in the progression towards achieving prosperity.
I said earlier that there must be an alternative to the hairshirt. It is a cardinal error to cut public expenditure on investment at this time. In a period of decline such as we have had over the past few years, we should not neglect the sources of growth, our agricultural sectors and our infrastructures. If we neglect those  areas by a massive reduction in the public capital expenditure programme, how can we benefit from the turnabout in the international economy to which the Minister referred? It is only a very slight improvement but, if we neglect the investment necessary to develop our infrastructures and our agricultural and manufacturing sectors by withholding money, we will be limping along again when growth starts.
We will be trying to arrange development programmes and making grand announcements about four year plans for our roads. Now is the time to utilise the public capital expenditure programme to keep up job opportunities and to achieve the infrastructural development we will need in two or three years' time. Somebody said it before me but it is well worth saying again: if you expect the hen to lay golden eggs you will have to feed her.
Mr. Flynn: If you starve her she will stop laying. If the Minister starves the capital expenditure programme we will not have the roads and the railways to carry the eggs when the hen starts laying again.
Mr. Flynn: —— in whatever capacity, I will see to it that he will get a seat on the inaugural flight. In all seriousness, I referred to the alternative, which is the investment programme. It is worth making that point because it is very relevant to the Minister's responsibilities in this area and to his responsibility for tourism. The public capital programme is expected to fall by about 10 per cent this year I understand. The largest fall will be in industrial buildings. Perhaps that is not the Minister's responsibility, but I regret it. There is a further decline in private sector investment in building and construction.  Overall investment in building and construction is due to fall by about 8 per cent. Local authority housing and private housing will be seriously affected. These matters will have a big bearing not just on the future growth of the economy but on employment levels as well. I know the Minister is as concerned about employment as he is about export growth. In one way or another they are both related.
A very disturbing statistic has come to hand. Expenditure on plant and machinery will be down by about 9 per cent this year. That involves a reduction in investment in new industries. That can mean only one thing, a slowing down in IDA assisted projects. The reduction in capital investment in this economy will have very serious repercussions next year. That is why planning is vital. In his speech the Minister placed great importance on world recovery and in particular in so far as it relates to industrial exports. As the Minister knows, the only way we can sustain increased exports and the improved trends in that area is by maintaining our competitiveness. In case I forget it later on I should like to congratulate the exporters who have achieved this result and to congratulate CTT on their efforts in that regard. A Leas-Cheann Comhairle, could I ask you what time have I got?
Mr. Flynn: I intended to refer to import substitution, cross-Border smuggling, an inquiry into ESB prices, the hotel industry, the Buy Irish Campaign, and a whole range of subjects, but we will continue on.
Mr. Flynn: I will have to leave out a considerable portion of my speech but I am sure I will have another opportunity at another time. I want to refer to the Buy Irish Campaign and the Guaranteed  Irish promotion. I know the restrictions on the Minister in that regard, but the same restrictions do not apply to me. Despite the fact that those two schemes have failed in that imports are taking a greater portion of the market year by year, I want to make a plea in the National Parliament for something to be done about a matter which has been brought to my notice recently. Walking around some of our supermarkets is no different from walking around the supermarkets in London. That is a national scandal. I know there are restrictions on the Minister in dealing with this. However, some measure must be taken to bring home to the people who own these businesses, who are selling to the consumer here, that there is an onus or national responsibility on them to give first preference in their displays and promotions on their premises to Irish-made articles able to withstand the competition and meet the price criteria the consumer wishes. Some method must be devised to bring about an educational process under which our teachers could be deployed, whether by display programmes, by slides or whatever other type of promotional equipment to bring home to our youth the advantages and benefits that would accrue from buying home-produced products.
On a recent visit to a supermarket I had to turn over the labels on many articles to discover that they had been manufactured abroad whereas the Irish product had it clearly written on the front of the label. I had to look at some obscure place on the back of the label to discover that the article had been manufactured in a foreign country. I would make it obligatory on such producers, when labelling their products, to have clearly shown “made in Great Britain”, “made in China” or “made in Ireland” and that it would be clearly shown on the front of the label so that people could readily identify the home-produced article.
Also in regard to the food situation I was alarmed to find again on a recent visit to a supermarket the enormous number of ordinary goods — even those as ordinary as salt and pepper — marked “packaged in Great Britain” for a particular group here. This takes place while thousands of our people are made redundant and factories close. Housewives are not given an opportunity of buying Irish. The ordinary sales people in these supermarkets could do an enormous amount of good for our economy if they put the Irish-made article on the front of their shelf, allowing the housewife the advantage of seeing it first anyway whether or not she buys it.
Something drastic needs to be done there because the penetration of imports on our market has continued apace. The Government's import substitution policies have failed. It is a well known fact that £1.5 billion worth of imported products could be produced here and that one-fifth of our annual import bill of £8 billion is comprised of products that compete with ours. The import penetration has reached an alarming level. The percentage of sales are somewhat as follows: in electrical engineering goods 95 per cent; leather and shoes, 76 per cent; clothing, 74 per cent; and foods, 22 per cent. Each sale of imports represents lost opportunities and a drain on our balance of payments. The Minister may not have the power to deal with it, but import substitution is just as important as export promotion. Import substitution has not been given the same importance as has export promotion despite the import penetration of our markets and our unemployment situation. If we paid more attention to our import substitution policies then the IDA would not be losing the race in creating new jobs or endeavouring to catch up with redundancies.
We must sell Irish; it is as simple as that. Whatever about buying Irish, let us get the programme right: we must sell Irish. It must be remembered that every £20,000 worth of sales is the equivalent of one job. We can see clearly then that £200 million would provide 10,000 jobs. If the total of £1.5 billion of imports into this country could be turned around it would create 50,000 new jobs. As we know the spin-off effect would be to create a further 50,000 jobs, when our unemployment  difficulties would be eroded overnight.
The Government and semi-State bodies spend hundreds of millions of pounds every year on imports. I should like to hear the Minister say that he has made arrangements in so far as import substitution was concerned, to the effect that he will make it mandatory on the Government and semi-State bodies to buy in our economy, thus saving thousands of jobs. That is something directly within the capacity of the Minister and his colleagues. I cannot see, again in so far as import substitution is concerned why the Minister and his colleagues, in a situation in which companies are importing equipment and goods, could not ask them to make these articles themselves, bring it to their notice that instead of going off and buying some of the goods they need for reprocessing for some of their industries they should produce them themselves, provide the services, ask their young middle management, the young entrepreneurs obviously available in those companies, to set up on their own and provide the job opportunities necessary to relieve our unemployment situation.
The Minister referred to company law and said he would like to eliminate malpractice and abuse of company law. He said he would deal with limited liability in the near future. As he quite rightly said, it is a privilege to be allowed to work with limited liability but there will have to be some control of those entitled to do so. It is difficult to prove fraud because it is also difficult to prove that the intention of defrauding was there in the first instance. I should like to see the definition of “wrongful trading” being clarified by the Minister at an early date, that wrongful trading that has the personal liability attached to it. I would see it as making purchases willingly and knowingly when one is unable to pay. There will have to be devised a licensing situation, an endorsement situation in which it would be recognised that those who continue to trade with such people would know there was an endorsement on their licence. It might relieve an awful lot of the anxiety that has been brought  about here in the recent past in so far as abuses of limited liability are concerned.
Ordinary people should understand what company law and limited liability mean. They should understand the basis of law, the formation of companies and their liabilities. After all, they are using public money and the public should know how they are using it. Employees should have the situation explained to them. Perhaps if the situation of companies getting into difficulties was explained in somewhat more detail to some of their employees then we might not have had some of the wild-cat situations we have had to endure with resultant job losses and company closures in the recent past. The balance sheets are not that difficult. If some middle management in some companies would take the time to explain to their employees the exact extent of their difficulties, how they are forming, then quite an amount of relief could be brought about.
The Companies Office was referred to by the Minister. There is need for computerisation there. They have done a fairly good job. Also with regard to the question of endorsement of licence for a limited liability operation here certainly an endorsement could be imposed if the information being sought was not being filed.
The Minister referred also to the report of the inquiry into the cost of motor insurance, which was published in December 1982. The cost of motor insurance imposes a very severe burden on all our people and there are large numbers of people evading their legal obligation to insure. The only way that situation can be relieved is through more efficient enforcement of the law, with realistic penalties and greater policing activities. It is important to note from that inquiry that there was no evidence that insurance companies were making excessive profits. While investigating the matter there are some aspects in respect of which the Minister could take immediate action. For example, he could make a simple order that brokers when looking for their money from their clients at least would have to provide a copy of their renewal  notice to the person paying for the insurance.
The Minister might have consultations with the Department of the Environment in order to bring about a speedy allocation of moneys from the Road Fund to deal with the black spots well known throughout the country, the cause of a considerable number of accidents. That is something that could be done without any great difficulty. He might increase the money allocations significantly to the Road Safety Association so that proper and effective campaign material can be made available for school and adult promotions. He could impress on those responsible the need to clear the backlog of High Court actions rather than have people waiting three and four years for their cases to be heard. This would reduce the cost of these cases and it would certainly reduce the cost of insurance.
Driving and drinking has been given special attention in the report. I have no sympathy with the drunken driver but I think the time has come to take another look at the different levels of alcohol in the blood which might be tolerated in different age groups and different circumstances. I am personally aware of considerable hardship in a number of cases. In a majority of cases it is essential that men should drive in order to earn a living and I cannot see why an arrangement could not be entered into whereby men would lose their licences to drive during leisure hours but would be allowed to drive in order to earn a living. This is an area which can be discussed. It is something worth considering. We will have to have a more enlightened approach. While being very hard on the drunken driver who earns the full penalty of the law, certain other aspects should also be taken into consideration. Uninsured drivers are on the roads every day. The penalties imposed are a joke when and if they are caught and the Minister should take immediate steps to solve the problem in that area. There would seem to be a good case for recommending a method of identification to show whether or not a driver is insured.
I come now to the price of electricity. The Minister referred specifically to  prices and price control. It is time we got all the facts. While major responsibility in this area comes within the ambit of another Department the Minister has responsibility for price increases which are recommended to him. It is time there was a cessation of ESB bashing. All the facts should be put on record. The bashing has been going on for years. It is the result of the apparent high price of electricity here as against European prices. There are two problems involved, capacity and overmanning. In 1978 the ESB were told to plan for an 8 per cent average growth up to 1991 which would result in a demand for 5,500 megawatts per year. That target could not be achieved unless the Government decided, as they did in 1978, to allow the Moneypoint project to go ahead. What options had they? The EEC and the energy agency gave them the options. It was coal or nuclear power and they took the coal option. Now they have serious overcapacity. I wonder what overcapacity they will have in 1991. If we are going to make future planning for growth in this economy we will have to take due note of the energy requirements as well. I would welcome an inquiry because it will bring about a situation once and for all of itemising the components on which electricity prices are based and identify the cost applied to those charges here as against Europe. It will also identify and analyse the reasons why there are higher costs here than in other parts of Europe and perhaps it might examine the ESB debt as well. When all that has been inquired into we will have the Minister come back to say there is a very good reason for our costings and pricings of electricity.
It has not been possible to deal with many other matters with regard to insurance and the registration of intermediaries which I would like to have dealt with. Again, tourism is a major industry and to my way of thinking it could command a much bigger budget and bring about a much greater potential as far as foreign earnings are concerned to say nothing of job creation. I would press the Minister to utilise the promotional and marketing money made available to him  to bring about a better and more sustained effort in enticing people to spend their holidays in this country.
Mr. Connolly: Owing to the arrangements made between the Whips, I, as the spokesman of my party, am unable to speak on this Estimate but I would like to say that there are many very important matters I hope to get an opportunity of airing in due course. I thank the Leas-Cheann Comhairle for allowing me the courtesy to put that on the record.
Mr. O'Donnell: On a point of explanation, in view of the fact this debate has to finish at 8.30 p.m., something of which I was not aware, I wish now to give my time to the Minister to enable him to reply.
Minister for Trade Commerce and Tourism (Mr. Cluskey): I thank the Deputies. I thank Deputy Flynn for his contribution, a very positive contribution in many respects. If he does mind my saying so, sitting here and becoming subject almost to delusions of grandeur I was beginning to think I was the Taoiseach.
Mr. Cluskey: Many of the aspects referred to do not actually come within the ambit of the Department for which I have responsibility. The question of employment was mentioned and Deputy Flynn was very concerned, understandably so, about unemployment. I share this concern. I am sure every Deputy shares the same concern. However, except in the matter of exports and their direct relationship to job creation or job maintenance, the Department have no overall responsibility and the Deputy indicated that when he referred to the IDA's activities as being a major input in employment and also to some aspects of the activities of the Department of  Labour. I am referring to AnCO. The Government have collective responsibility and it would be a mistake to say there was no overall plan or medium or long-term approach. In the Joint Programme for Government there is reference to the task force which has been set up and the planning board which is in operation and which was announced recently by the Taoiseach. There is therefore a medium and long-term view being taken of our very serious unemployment situation.
Deputy Flynn spoke about the significance of exports to our economy and economic recovery. He spoke very positively about them and I wish to express my appreciation for that approach. He did not try to score any political points. He had a very clear grasp of our export situation and how it affected employment. Two out of every three jobs in manufacturing industry are directly dependent on exports. This shows how important our exports are and why I laid such emphasis on that activity.
While we can be optimistic for the current year because we will achieve a 17 per cent increase in exports, we cannot afford to be complacent, because the competition on the international market is fierce. This is an area where all our skills and marketing abilities are utilised to the full. We have been very fortunate in the professionalism shown by Córas Tráchtála over the years. We have also been very fortunate because of the calibre of our industrialists involved in the export market. We have laid great emphasis on the fact that there is a defect so far as marketing is concerned in some firms engaged in the export business. Córas Tráchtála are directing their attention to this matter because, no matter how well we manufacture a product, if we cannot sell it on the international market we are not backing a winner. When times were good many of our companies could get by, but there is no way they will get by on the international market today without employing highly skilled marketing techniques. Fortunately there is a growing realisation among Irish manufacturers of the necessity to do something about this. I am not pessimistic as regards the export trade. As I said, we can look  forward in the current year with a considerable amount of confidence to a 17 per cent increase in exports. When one realises that two out of every three jobs in manufacturing industry are directly dependent on the export market, one can see how significant our exports are.
Many of the subjects touched on do not come under my direct responsibility. Company law was mentioned and the number of companies that were closing down. I gave some figures of some of these firms and Deputy Flynn referred to them. My responsibility deals with the legal requirements for the operation of a company. There is no way we can legislate to make a company successful. My direct responsibility is to ensure that companies operate within the law — keep accounts, fufil their responsibilities to the community and so on. The law as it stands has been seen to be defective because it has allowed a small number of firms engaged in trade to behave in a way which was extremely damaging to the business community and very damaging to their employees. It is not an exaggeration to say that these firms have been acting in a fraudulent manner within the law. Their intent was to get away with as much as they could, with no sense of responsibility towards the people with whom they were doing business or towards those they employ. As I said in my opening remarks, they would open companies, milk them for what they could, fold up, not meet their moral obligations but meet their strict legal obligations, and then open a new company the next week. They would repeat this procedure time and time again. It is my intention to put an end to that type of activity and it will be done in the Bill which will be coming before the Oireachtas in the autumn. It is essential that it not only be done but that it be done in a responsible manner which will ensure that it will be effective.
I would like to thank the House for the way they have dealt with this Estimate. I particularly want to thank Deputy O'Donnell for his co-operation and again express my appreciation to Deputy Flynn for his responsible non-political approach to some very important areas of work in my Department, particularly the section dealing with the export trade.
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