Paul Bradford (Fine Gael)

The Minister of State's remarks are helpful and interesting but we need to concentrate on the Lisbon Agenda as much from a European as an Irish perspective. Europe's problems are Ireland's problems and Europe's solutions are Ireland's solutions. We must work together on all the economic and social issues facing us, of which there are many.

As the Minister of State said, the Lisbon Agenda was launched on the European stage in March 2000. At that stage it was considered a bold and brave statement on Europe's economic future. I am not sure the level of attention or debate it received in this country was adequate. When we switch on the debate about Europe at parliamentary level or in a wider context, we do not get much of a response. It is important that we try to disseminate to everybody involved in the political process and the wider public the importance of the ongoing debate, because no debate about Europe is more important than the one on future economic strategy.

The declared aim of the Lisbon Agenda was to transform the European Union into the most competitive and dynamic knowledge-based economy in the world. It was an ambitious project because it was to be carried out with a ten-year programme. It mentioned, as the Minister of State did, sustainable economic growth with more and better paid jobs, better social cohesion and the highest possible level of environmental protection. It was a radical plan but its delivery has been much more modest.

I am disappointed there has been so little public debate in this country and throughout the European Union on the subject of the Lisbon Agenda. If we were to conduct a poll among the citizens of Ireland, the vast majority would not have heard of it, notwithstanding its importance for the economic and social life of every citizen in the European Union. Its proposals still can transform the lives and prospects of those citizens for the better. As everybody in the House knows, the domestic political debate in the next 12 to 18 months will focus on what policies the next Government will pursue and on the parties which will make up the next Government. If we were honest, we would concede that the debate about the future economic and social direction of the European Union will have a much greater impact on every Irish citizen than any domestic consideration. The economic and social trends will be set in the Union. Therefore, we must play a full role and involve every person in the debate. To date, we have failed to do so.

I was glad the Irish Presidency decided that a mid-term review of the progress of the Lisbon Agenda should be conducted. The expert group headed by the former Dutch Prime Minister, Mr. Wim Kok, was correct in concluding that not much progress had been made. The report indicated that the agenda should be refocused with particular emphasis on growth and employment. The new report is certainly more modest than the March 2000 programme but it will be of benefit if there is the political will to drive it forward.

In Ireland and across the continent we must realise where the economy and that of the European Union are going. We know and can recite ad nauseam the story of the Celtic tiger and the great strides we have made. We would, however, be living in cloud cuckoo land if we believed the economy can continue to grow at a consistently higher rate than that of the European Union and avoid some of the pitfalls faced by our European neighbours. As the Minister of State said, the economy of the European Union cannot stand still. It will either move backwards or forwards. If it moves backwards, all of Europe's citizens, be they from Dingle or Dussledorf, Mallow or Madrid, will suffer pain. We cannot ignore the fact that the current performance of the wider European economy is simply not good enough. The Minister of State mentioned the steady Irish growth rate but we will pass or fail on the performance of the broader European economy.

Average growth in the Community is approximately 2% per annum, little more than half the rate in the United States. In China the current growth rate is 8% as the whole south-east Asian economy continues to boom. Unemployment figures across the European Union average almost 10%, almost twice that of the United States. The profile of our workforce is elderly and older people with skills are leaving the workforce. Americans often refer to "old Europe", which is sometimes seen as a political jibe by so-called "neocons" in the United States. When they speak about "old Europe", they are not just talking about politics but the fact that, demographically, the workforce in Europe is literally growing old. It is aging. The population is falling and there is a low birth rate, creating a major problem for the funding of pension entitlements and social security programmes. This is an issue we must tackle head on. We cannot afford to wait any longer. In that regard, the focus on economic growth and employment creation must be maintained.

There is no secret as to why the economy has thrived since the mid to late 1980s. Social partnership has worked well and taxes have been lowered, giving employers the incentive to create jobs and employees the incentive to take up work. There has been an easing of bureaucracy and, to some degree, regulation. This agenda has also worked well in countries that have followed the same formula. Unfortunately, in other European countries economic and political change has been less radical and the necessary adjustments to allow the European Union to compete against the United States and south-east Asia have not been made.

I accept that economic and social change is painful but we also have to recognise that without the necessary changes, there will be no guarantee of the European Union remaining a prosperous economic zone. Some will argue that it is not all about economics and they are correct, yet without economic growth and development, we will not have the jobs to employ our young people or the taxes to provide social services and pension entitlements. We must, therefore, keep the idea of economic reform, greater flexibility, lower taxation and regulatory reform to the fore of a European strategy. In this country we have made great progress in that regard but we cannot stand alone. Our adoption of such progressive measures has served us well but in the long run we must ensure it happens all across the European Union.

I will refer to two issues which cast doubt on the Government's ability to improve competitiveness and enhance basic infrastructure.

The Minister of State referred to competitiveness. The country has slipped from fourth place in 2000 to 30th in 2005 in the World Economic Forum's global competitiveness report, a steep fall. Such a fall is mainly a result of the Government's failure to control prices. A debate occurred during the summer, stimulated by a television programme, about rip-off Ireland. There is a general acceptance that there was a failure to check massive price rises across various sectors. It is crucial that the Government responds in a meaningful fashion to the issue of increased costs, be they in local shops, raw materials or production. The cost base should be examined as the country must remain competitive. The country is living on the edge with regard to competition, and perhaps it has been comfortably coasting along for the past few years. A further loss of competitiveness will bring a loss of jobs across the economy.

I welcome the Minister of State's remarks about the need to be very sensitive about the potential impact of an eventual reduction in construction output levels. That issue should be addressed as we know such an occurrence will come about. It is not a political point. The current rate of construction of new houses in the country, even taking a mathematical perspective, cannot continue indefinitely. Hundreds of thousands of people are employed in the construction industry, and we should be ready to deal with the consequences for jobs as the current rate of construction cannot go on indefinitely.

Another vital infrastructural issue is technology. I bring to the attention of the Minister of State a report stating that Ireland is 14th in a table of 15 countries with regard to broadband penetration. The survey was carried out by the European Competitive Telecommunications Association. Ireland has only 64,000 broadband lines, whereas Denmark — a country of similar size — has 839,000 broadband lines, a large multiple of the Irish number. This is unacceptable and the issue should be addressed by the Government. We cannot allow the country to be bottom of the class in the broadband school.

This leads to the education issue, particularly educational disadvantage. This issue must be addressed as part of the national reform programme and Lisbon Agenda across the Continent. In Ireland we must examine carefully educational progress. We all acknowledge that the introduction of free education in the late 1960s was not merely a major social step forward, but arguably the most important economic decision ever made by a Government. The rainbow coalition Government's decision in 1995 to pay college fees for the vast majority of students followed on from this and completed the broadest possible opening of the education door. However, challenges are now to be faced in the sector and unless they are tackled, the country's youth could fall behind their European colleagues.

I draw the Minister of State's attention to recent figures which show a drop in school retention rates. In some schools, a drop-out rate of up to 60% exists. Under the Lisbon Agenda we gave a clear commitment to increase the number of pupils finishing their schooling but we have failed on that front, and the Government has not matched its aspiration. For example, more than 1,000 children are not even making the transition from primary to secondary school, a very disappointing fact and a dreadful mark of failure. Although we speak of the Celtic tiger economy some children's education ends at 12 years of age. For more children, education finishes at 15 or 16 years of age. The gateway to the future is being shut for those young people. It is politically, socially and morally unacceptable, and the Government should be given a low mark for its efforts on the issue. Much more must be done, as education will play a key role in the ongoing economic and social development of the country.

As my time is nearly concluded, I thank the Minister of State for his presentation. This debate should be kept to the fore. The Lisbon Agenda, more modestly called the national reform programme, is at the centre of where Ireland and the European Union are going. We should be proud of where Europe has come from, with peace and democracy being spread across the Continent. The process has been an amazing success, and the European bloc is a fine solid economic unit. We must not rest on our laurels. Europe cannot stand still as countries such as the United State, China and India, as well as the south-east Asia region, are not standing still.

There are tough decisions to be made and it is in all our interests that we participate in debating and making these decisions. I look forward to an ongoing debate. I suggest that in the Seanad in particular, where we refrain from tossing political charges as often as in the other House, the debate should be kept open-ended, and a regular review of the progress of the agenda should occur.