Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 1: To ask the Minister for Enterprise, Trade and Employment the action he intends to take to stem the tide of job losses in the manufacturing sector; and if he will make a statement on the matter. [6428/05]

Micheál Martin (Cork South Central, Fianna Fail)
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World trade, global investment flows and consumer decisions influence the pattern of economic growth, company development and job prospects here. In recent years I recognise that Irish manufacturing firms, particularly in the more traditional sectors, have operated against a backdrop of significant downward price pressure and an increasingly competitive international environment. I have to recognise that some firms, which are unable to generate sustainable returns from the modern Irish economy, will inevitably be attracted by lower cost environments abroad.

In the same period we have become a more sophisticated and developed economy, where technology and intellectual endeavour are becoming more important than simple cost competitiveness as the foundation for future enterprise and growth. A process of structural evolution is inevitable as our economy maintains a dynamism to grow and expand employment across different sectors. This inevitably brings some plant transfers and other adjustments. Because of the importance of manufacturing, we cannot afford to be complacent about any consistent erosion in employment in such an important economic sector, nor about the impact on employees affected. Manufacturing remains at the heart of overseas investment and is likely to do so for a considerable time.

While there is no denying that manufacturing employment has declined we must view these losses against employment expansion in the broader economy. The latest quarterly national household survey, quarter 3, 2004, shows that the total at work rose by 57,400 to more than 1.893 million in the year. Total employment has increased in each of the past five years. Some 227,800 more people or an extra 13.7% were at work in the June to August quarter last year, than in the corresponding period in 1999. This is a remarkable achievement at a time when there is considerable debate and comment about the impact of competition from lower wage economies on employment levels in developed economies.

The focus of enterprise policy must concentrate on developing sophisticated activities that will justify continued levels of high income and productivity. These will allow us to maintain current levels of economic growth and living standards. Key to this is greater and more intensive investment in skill levels and a concentration on activities that are innovation based rather than production led. It is up to entrepreneurs to make these decisions, but it is the role of Government to design the framework conditions that will help them succeed and maintain an economy in which it is attractive to do profitable business in and from Ireland.

Additional information not given on the floor of the House.

For manufacturing and the services sector, sustainable employment will be based on competitiveness, higher productivity and the application of technology and skill in both existing and new enterprises. The challenge for my Department's agencies is to assist companies move into higher value added activities and help up-skill employees that will provide more sustainable employment. The enterprise development agencies have been clearly mandated to align their operations around this policy objective.

The enterprise strategy group recognised the potential for high value added manufacturing to be a key driver of employment and growth in the future as part of a new strategic direction for the economy. Earlier today, I announced the main findings of the Government concerning implementation of the ESG recommendations in which advanced manufacturing will play an important part. As part of this process I will make regular reports to Government on progress in implementing the ESG's prescriptions, which are imperative to providing the enterprise economy with the momentum for continued prosperity and profitability.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I asked the Minister what action he intends to take to stem some of the recent job losses in the manufacturing sector. We are all aware of the progress made in recent years and the level of job creation. However, during the past three months there have been a number of job losses as follows: 220 at Circum Solutions in Clondalkin, 70 at Smurfit Papermills in Clonskeagh, 55 at Parian China in Ballyshannon, 250 at Greencore in Carlow, 350 at Allergan in Westport, 200 at APW Enclosures in Tallaght and an announcement that 150 jobs will be lost at Castlemahon Foods in Limerick. That is a total of 1,094 job losses in the past three months and a worrying trend in the manufacturing sector. We have been warning for many years of the cost base required for Ireland to enable it compete against lower cost-based countries in the Far East, eastern Europe and China. The Minister will be aware from his recent trips, particularly the one to China, of the huge challenge for the manufacturing sector. I ask the Minister to co-ordinate a series of policies to keep costs down, not the 27 stealth taxes and charges introduced in recent years which need to be put aside. Waste management and energy are serious cost issues and there is not enough competition in the telecommunictions area. Will the Minister outline his proposals for policy changes to ensure Ireland is competitive in the manufacturing sector?

Micheál Martin (Cork South Central, Fianna Fail)
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Earlier today I announced the Government's consideration of the enterprise strategy group's report and the endorsement of the broad thrust of its recommendations. That will involve a fundamental and significant restructuring of Enterprise Ireland's structures, so far as they pertain to overseas marketing and the supports it can give to Irish small and medium-size companies in terms of internationalisation. The internationalisation agenda will be key to the growth and competitiveness of Irish-based companies in the future. They will have to go out and get a presence in markets such as China, which they are doing, thereby guaranteeing core activities at home and at corporate headquarters.

In addition, the key for Ireland will be research and development and innovation and in terms of attracting foreign direct investment we are endeavouring to bring a greater amount of research and development investment into both existing multinational companies in Ireland and in any new companies we can attract into Ireland.

The Deputy read a list of company closures. We have had company closures for many years. However, every year we have also had significant job creation. Already in the first two months of the year we have had announcements of seven major overseas companies wishing to locate in Ireland. The sectors will change where jobs will be created. As the economy changes and as we move up the value chain the job profile will change and in particular sectors there will be stronger growth than in others. A classic illustration is financial and international services which grew 68%, from 39,800 jobs to 67,100 jobs between 1999 and 2003. That is a dramatic increase in a short period in the financial and international services sector. We will concentrate on high end manufacturing and the innovation agenda is key to that.

Rory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Ceist 2.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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May I ask a brief question?

Rory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Deputy, we have gone over seven minutes on the question. Perhaps the Chair will make a suggestion. The purpose of Question Time is to elicit information from the Minister. If Deputies submitting questions would confine themselves——

Brendan Howlin (Wexford, Labour)
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Is there injury time for this?

Rory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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——to a brief question, hopefully, we would be able to fit in more supplementary questions for each Member.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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What happens if we do not get the information?

Rory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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If the Deputy confines himself when submitting a question to just the question we will have time for a second supplementary.

Brendan Howlin (Wexford, Labour)
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The clock starts now.