Bernard Durkan (Kildare North, Fine Gael)

Like my colleagues, I believe we need to welcome anything that improves the investment situation in the economy at present. That is positive and good. However, the introduction of legislation that is described as "urgent" worries me most of all. If the legislation is so urgent, why was it not flagged six months ago? There should never be an emergency in terms of legislation. Anybody in Government, a company or any organisation that cannot anticipate legislative requirements coming down the tracks well in advance should not be in the job. That is not a reflection on the Minister of State, Deputy Kelleher. Somebody down the tracks, somewhere else, should have been telling the Minister of State of this requirement long before now.

If the legislation is so important, why have we not had a longer lead-in? People have been raising the question of company law reform in this House for the last 12 months on a regular basis. Apart from being told that the Companies Act was about to be reformed and the consolidation legislation was in train, nothing was said. I am concerned for similar reasons to those expressed by my colleagues. However, I want to bring one aspect in particular to the attention of the Minister of State. This House can approve all the amendments he likes, but unless the economy becomes competitive we are wasting our time. One phrase in the Minister of State's speech worries me concerning the fact that the nature of the investments we attract has changed significantly over the years. While in the past Ireland concentrated primarily on manufacturing, he said, we had become a centre for what he termed "educated young Europeans".

What a lovely phrase. However, if people in Ireland think they can afford to ignore or avoid the competitiveness and cost effectiveness of the manufacturing and service sectors, they will be wasting their time. One can play around with this point as much as one likes. We can pretend that we are more clever than anyone else in the world or that our brains are better, sharper and greater than those of anyone else. We can pretend the whole world will want to invest among us simply for the pleasure and privilege of being in our midst. As the Minister of State is aware, we can forget it. For a considerable period, Ireland has slipped down the competitiveness scale to such an extent that eventually, as a nation, we will be obliged to prostitute ourselves to encourage foreign direct investment. This is a crazy situation and I cannot understand the reason this has not been recognised.

I refer to the points that already have been raised by my colleagues. I welcome the positive work being done by the IDA, Enterprise Ireland and everyone else to create the proper environment for investment and job creation. However, all of that will come to naught unless we can compete effectively with all other jurisdictions around us. It is patently obvious and as plain as the nose on one's face that at present, we are not competitive. Moreover, it does not appear as though we will become so. Why should shoppers leave this jurisdiction en masse to shop in other jurisdictions at weekends? This should tell us something and surely something should be done about it because all the other points are insignificant when considered in this context.

I wish to discuss another matter in respect of company law. The Acting Chairman, being a good and shrewd observer of the markets, is aware that when interest rates are low, greater investment in commodities tends to take place and this is one of those times. When this happens, the range of commodities is varied and far-reaching and can have a greatly negative impact on an open economy such as Ireland's. For some unknown reason, the mantra in Ireland always has been that a company director's first interest and responsibility is to the investor. In a low-interest environment, once that principle has been established and accepted, one can forget about everything else because the company will become a bank. It no longer will be a company providing a service in the manufacturing, services or utility sectors or whatever. Once the principle is established that a director's first responsibility is to the investor, one then is in the business of creating a bank by another name. All Members are aware where such thinking has led this country recently and should not need to ask for advice from anyone in this regard.

As the Acting Chairman is aware, the moral of the story is that it is extremely dangerous to get into such a position because what happens is that the investor will get a dividend. That will come first, the company will come last and eventually it will cease to exist. Regardless of the company's original business, be it in service provision, manufacturing or whatever, it will go nowhere. Interestingly, in the United States, in so far as I can ascertain, the first responsibility is not to the investor but to the company. If the company becomes trashed, someone is held responsible. However, were that to take place in Ireland, nothing would happen. Everyone thinks it was a great deal even though the service, the company and everything else has gone.

Consequently, there is an urgent need to reconsider this issue. As the Taoiseach mentioned here a few weeks ago, Members, of whom I was one, spent 18 months studying the Companies Act 1990 on Committee Stage for their sins. Every single issue that has arisen recently with regard to insolvency and everything else was anticipated. However, nothing has happened. Nothing ever happens and no action is taken. The Government and the Oireachtas allow the show to go on as though there were no regulations, no authority and no need to comply with regulations. That is what has happened and is what has left Ireland in its present economic position.

While I will not go over the points raised by my colleagues, I emphasise the urgency of the need to make this economy competitive. Unless our manufacturing sector is competitive, it will not make any difference what happens thereafter because other competing economies outside this jurisdiction also are competing for the smart economy and they are just as smart as are we. The fact that Ireland has introduced emergency legislation into this House to cater for a particular situation will make no difference. Other jurisdictions can do so as well and will do it equally quickly. However, they will anticipate it a long time in advance. Moreover, the same thing must be done in respect of the services sector.

I note the Acting Chairman is looking askance at me. I must be approaching the end of my allotted time and I will take a cue from that.

See this speech in context