Bertie Ahern (Dublin Central, Fianna Fail)

I wish to express my sympathy to the staff of NEC in Ballivor, who have been good and committed workers for three decades and have been working to the best of their ability. This announcement has been a real shock to them.

The manufacturing sector represents 23% of total employment while the services sector accounts for 62%, including 31% of exports and more than 50% of our total GDP. Last year, we created 95,000 jobs and, as has been the case for a number of years, we continued to get the lion's share of foreign direct investment from the United States into Europe. The reality is that our strength is now in the high-tech areas, including in the pharmaceutical, chemical and electronic industries. While there is severe competition both for investment and jobs, it is in these industries we do best. It is true that we have continued to suffer job losses over a number of years in some sectors of the manufacturing industry. As has been pointed out in report after report, the only way we can protect ourselves is by developing our research and development and innovation and providing higher quality and higher skilled jobs so we move up the value chain. As is already the case, higher salaries and lower company and personal taxes create a competitive environment. As Deputy Kenny said, the intensification of competition from low cost locations has exposed a sharp rise in the cost base here. The average cost of Irish goods and services has increased by approximately 20% relative to our trading partners. The increase in the value of the euro and faster growth in domestic prices and wages has played a major part in this development. We must continue to be conscious of this development.

As the House is aware, in order to tackle development, we introduced the One-Step Up initiative, the Outreach initiative, programmes run by FÁS and the programmes run by Enterprise Ireland. The national training fund has been allocated €353 million this year. These initiatives are active in the economy each day to protect existing jobs, help people who have been relocated and to try to protect ourselves from difficulties in the future. I do not believe we can ever be complacent about our competitive position. Maintaining our attractiveness as a competitive and profitable location in which to do business is a key priority. As we undergo fundamental change, we can no longer compete as a low cost location for basic manufacturing investment. We will not be able to compete in that environment because we are no longer a low cost economy. Quite frankly, we are not trying to compete at that level. Our workforce and the people do not want us to compete at that level. However, it means companies at that level must be helped to be more innovative, otherwise they will not survive.

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