Michael McGrath (Cork South Central, Fianna Fail)

At the outset I want to thank the Ceann Comhairle for selecting this important matter for the Adjournment. I also thank the Minister, Deputy Batt O'Keeffe, for taking this matter this evening. Having represented Cork South Central for many years I am aware he would have a strong affinity with the company, GlaxoSmithKline, GSK, and with many of the employees and the management. I thank him for the personal interest he has shown.

Everyone in Cork was deeply disappointed to learn of the news on Monday that 55 jobs were to be lost at GlaxoSmithKline following the completion of the formal business review and also confirmation that another 66 jobs would be lost following consultation with the trade unions and other employee representatives and after changes to shift patterns and so forth. It is clearly a significant blow for Cork and for the pharmaceutical industry in the area, particularly coming on top of recent job losses by Schering Plough in Brinny and also Pfizer in Ringaskiddy in recent months.

The main purpose in raising this is to urge the Government and the Minister to ensure that the people who are directly affected by Monday's announcement at GlaxoSmithKline are given every possible support by Departments and the relevant State agencies. The company intends to implement an out-placement support service for those who will be made redundant, which I welcome. It is in keeping with the company we are dealing with in GSK and I trust that the work by FÁS and the other State agencies will complement the work the company intends to do to ensure that the people being made redundant will be given the required training and every opportunity to find alternative employment, whether it be in the pharmaceutical sector or any other sector.

The second reason I raise this issue is to call on the IDA to work closely with GSK and the other pharmaceutical companies in the Cork region to maintain the remaining jobs because it is clear there are major challenges. It is important to point out that the announcement by GSK on Monday was not to do with the quality of the employees at the plant, the cost base or anything else. It was directly linked to the continuing decline in product demand globally. These companies are operating in a very competitive environment. There has been a decline in global demand for certain products and they must deal with that. The announcement on Monday was a direct consequence of that but even after that announcement, GSK will still have 340 employees left at the Cork plant and my priority - I know it is also the Minister's - will be to ensure we can retain those jobs and also retain the jobs in Pfizer, Novartis, Centocor and all of the other companies that have invested in the Cork area.

I welcome the statement by GSK on Monday in which the vice president, Finbar Whyte, made it clear that the company is committed to working closely with all employees to ensure we are able to safeguard the future of GSK in Cork. That is a very welcome commitment. Ireland has been particularly successful in attracting all of the major pharmaceutical companies to our economy. We want to maintain that presence and develop it further where possible.

I want to comment briefly on the reference by Commissioner Rehn earlier this week on the issue of the 12.5% corporation tax rate. From my perspective it would be economic suicide for us as a country to increase our corporation tax and I welcome the Government's commitment, following the Commissioner's comments, that such an increase will not be considered because it would do major damage to us as an economy.

While the GSK decision was not directly related to the cost base it is important that we are vigilant on the issue of the cost base for all companies, small and medium enterprises and multinationals. I welcome the various initiatives the Minister has announced to do with cutting down on red tape for businesses but we will have to be increasingly vigilant on the issue of energy costs, waste management costs, labour costs, transport costs and the cost of compliance with health and safety and other regulatory requirements, including the cost of local authority rates, water rates and so on.

It is quite simple. Undoubtedly, there is a direct correlation between our cost base as a country and our ability to attract inward investment. If we can maintain the quality of our workforce and our strong regulatory environment while at the same time reducing costs, we will be successful into the future. I look forward to the comments by the Minister on GSK and the employees.

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