Phil Hogan (Carlow-Kilkenny, Fine Gael)

I wish to share time with Deputy Perry.

Fine Gael believes that the developments at Irish Ferries are very worrying. That a former State company would resort to such tactics in order to cut costs without the slightest concern for the workers whose livelihoods it is destroying is scandalous. Whatever captain of industry decided on this course of action and thought it was a good idea to shed workers in this cavalier fashion should be ashamed.

The developments in Irish Ferries are significant not just because of those whom they directly affect. Every employee in the country is looking at Irish Ferries and saying "soon, that could be me". We have a duty in this House to ensure that it does not become the norm, and the Government has a duty to ensure that other workers do not face the same situation.

I do not believe that issues of resentment of migrant workers as a result of the displacement of existing Irish workers should be fuelled by the irresponsible manner in which Irish Ferries has handled this issue. There is a more responsible way of acting and we would like to see more of that through the existing industrial relations machinery.

In late 1999, Irish Ferries announced that it was to spend €17 million to purchase the ship MV Normandy. It is extraordinary that only six years after such an enormous capital outlay, it is taking this "remedial" action. Further, in May 2005 it became known that Irish Ferries was one of the main beneficiaries of the so-called tonnage tax scheme to which the Minister of State referred. The company saved an estimated €3 million in tax payments in 2003, the first year of the scheme's operation. It was made clear at that time that without the tax break, "jobs at Irish Ferries would be lost". So much for tax schemes, for solid investment, for planning for the future, and a strategic development plan for a company. It does not augur well for the future of a company with such managerial experience.

The House will be well aware that Irish Ferries became an industrial relations pariah when it decided it was perfectly acceptable to pay one of its employees €1 per hour to work on one of its ships — and all of this from a company that apparently buys into social partnership, a project that has served us well and served the company well over the years.

Irish Ferries accordingly stands accused, but so too does the Government. This country is a small island nation and needs two things in particular among many others: a dynamic, competition-led shipping sector and a Government determined to ensure the competitiveness of the Irish economy. Ireland currently has neither. The Taoiseach might attempt to look tough by vaguely threatening Irish Ferries over its actions but he has done little to provide the company with a dynamic, low-cost economy. We are living in a global competitive world economy and must contain costs. The Government stands negligent on this front. It has introduced stealth tax after stealth tax and charge after charge, which has ensured that indigenous Irish jobs in the manufacturing and maritime sectors are now at risk, as particularly exemplified by Irish Ferries.

People have heard me regularly in this House listing all the stealth taxes and charges so I will not bore the House with them. Nevertheless, VAT, vehicle registration tax and motor tax have all increased. All the various energy sectors which feed into a modern competitive economy are now out of control as a result of the regulators, endorsed by Government policy, who are ensuring that we have a 25% increase in energy costs alone from 1 October of this year. That is not an acceptable way of ensuring that we have a modern, progressive, competitive and globally orientated economy. Ireland has gone from fourth in 2000 to 26th this year in the World Economic Forum's global competitiveness report, mainly as a result of the failure to control our prices. The Government's own body, the National Competitiveness Council, says Irish prices rose 22% more than those in other EU countries in the years 1999-2003.

The Government fails to see that every policy influences another, and if Irish Ferries did not face high costs elsewhere it would be harder for it to engage in its "poor mouth" antics and claim it was necessary to take the approach it seems intent on taking.

I ask the Government once again to get to grips with the cost base we are facing. We have seen that the manufacturing sector is in difficulty, with 20,000 jobs lost since 1999, notwithstanding our low overall level of unemployment. We risk endangering the value added economy we have done so much to build if we do not start to take remedial steps now to make it cheaper and easier to do business in this country.

These are the issues which organisations like IBEC in particular should be highlighting with Government, rather than sleepwalking through the existing social partnership process. Recent comments by IBEC regarding the dispute at Irish Ferries were astounding. IBEC said:

The issue now for the trade unions is to decide whether it is better to have several hundred moderately paid Irish jobs remaining in Irish Ferries or to have no jobs at all.

That type of threatening attitude does nothing for social partnership and is not the constructive approach required to resolve this dispute. We now know that as far as IBEC is concerned, employers have the right to do whatever they want because it is better to be treated disgracefully by one's boss than to be on the dole.

I share IBEC's concern about the cost base of Irish Ferries but I do not share its attitude to resolving the dispute. I abhor the abuse of a system designed to protect workers for Irish Ferries' own ends. The Government is the guardian of the rights of citizens. If it turns out that those rights are being circumvented then it has a case to answer. I call on unions to take the moral high ground on this issue and use the existing mechanisms of social partnership and the Labour Court to resolve the crisis, as they have been asking to do, particularly SIPTU.

I do not advocate the action proposed by some, that the ports of the nation be ground to a halt, which will do nothing to resolve the dispute but harm the economy, damage our competitiveness and destroy jobs. That is not a responsible and constructive way to proceed. We cannot allow a situation to occur where goods are prevented from leaving or coming to this jurisdiction because of the disgraceful actions of one wayward ferry company.

Social partnership works, as does the Labour Court. Let us use them to resolve this dispute. We must have a competitive economy, but people who are working hard in Irish companies deserve respect.

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