Mary White (Fianna Fail)

I welcome the Minister of State. I was honoured to be nominated to Seanad Éireann by the Irish Exporters Association. The company I co-founded with Connie Doody exports 75% of its product to the United Kingdom and now employs 200 people in Navan, County Meath. I draw the attention of the House to an innovative proposal made recently to the Government by Mr. John Whelan, chief executive officer of the association, and Mr. Padraig Walshe of the IFA on behalf of the Irish agriculture and food companies exporting to the United Kingdom. Companies which traditionally have exported to the United Kingdom, including in the agriculture and food industries, are being undermined by the 30% depreciation in the value of sterling since January 2008. The innovative proposal made by the Irish Exporters Association and the IFA is that the Government should introduce a sterling equalisation fund. It is estimated that 13,500 jobs in companies exporting to the United Kingdom will be lost and that the recession will be more protracted if action is not taken to support such companies. The aim of the Irish Exporters Association and IFA's proposal is to give exporters an opportunity to smooth out the current cycle of weakness in the value of the currency until it reverts to a more normal and acceptable level.

I will describe how the scheme works. Exporters to the United Kingdom have sterling goods to sell each month. At the same time, Government agencies have sterling assets to purchase throughout the year. It is proposed that an option be underwritten by banks with two counter parties, one being the approved exporting company and the other a Government agency such as the National Treasury Management Agency. The proposal would give the exporter the right to sell sterling goods at 80 cent for a set amount of sterling at set dates for the lifetime of the scheme which would be for a limited period. For example, if the rate at the end of March is 90 cent, the exporter would exercise the option and sell an approved amount at 80 cent to the bank. The National Treasury Management Agency would buy sterling at 80 cent from the bank. If the rate at the end of April is 75 cent, the option would simply not be exercised and the exporter would sell sterling at the prevailing market rate. The National Treasury Management Agency would buy sterling at the rate of 80 cent rather than 90 cent. This is an opportunity cost but the agency would have the ability to spread it in the long term. This opportunity cost has to be weighed against the potential cost to the Exchequer of doing nothing. Mr. Padraig Walshe quoted the Government's own figure that for every 1,000 people made redundant, the cost to the Exchequer was €11 million. Therefore, the loss of 13,500 jobs in companies exporting to the United Kingdom would result in a cost to the Exchequer of almost €150 million.

We should support this innovative proposal. This is a time of national crisis and we must be innovative and imaginative. These are challenging times but there are also opportunities.