Chuaigh an Ceann Comhairle i gceannas ar 2.30 p.m.

Paidir.

Prayer.

CEISTEANNA - QUESTIONS.

Official Engagements.

1. Mr. Gormley asked the Taoiseach the agenda for the upcoming December 2003 EU summit on the IGC; and if he will make a statement on the matter. [27093/03]

2. Mr. Sargent asked the Taoiseach the issues he will highlight at the upcoming EU summit on 12-13 December 2003; and if he will make a statement on the matter. [27094/03]

3. Mr. Rabbitte asked the Taoiseach if he will make a statement on the outcome of his visits to Cyprus and Slovakia. [27095/03]

4. Mr. Kenny asked the Taoiseach if he will report on his meeting with the President of Uganda on 10 November 2003; and if he will make a statement on the matter. [27146/03]

5. Mr. Rabbitte asked the Taoiseach the matters discussed with the President of Uganda, Yoweri Museveni, during their recent meeting in Dublin; if he raised with the President allegations of corruption and human rights abuses in Uganda; and if he will make a statement on the matter. [27265/03]

6. Mr. Kenny asked the Taoiseach if he has received an agenda for the December 2003 meeting of the European Council; and if he will make a statement on the matter. [27315/03]

7. Mr. Kenny asked the Taoiseach the bilateral meetings he intends holding on the margins of the forthcoming December 2003 European Council; and if he will make a statement on the matter. [27316/03]

8. Mr. Kenny asked the Taoiseach if he will report on his meeting with the Italian Prime Minister, Mr. Silvio Berlusconi, in Rome on 13 November 2003; and if he will make a statement on the matter. [27543/03]

9. Mr. Rabbitte asked the Taoiseach if he will make a statement on the outcome of his meeting on 12 November 2003 with the Italian Prime Minister, Mr. Silvio Berlusconi. [27544/03]

10. Mr. J. Higgins asked the Taoiseach the matters discussed and conclusions reached at his meeting in Rome with the Prime Minister, Mr. Silvio Berlusconi; and if he will make a statement on the matter. [28058/03]

11. Mr. J. Higgins asked the Taoiseach if he will report on his visit to Budapest; and if he will make a statement on the matter. [28059/03]

12. Mr. Rabbitte asked the Taoiseach if he has received a final agenda for the forthcoming EU summit on 12-13 December 2003; his priorities for the summit; and if he will make a statement on the matter. [28276/03]

13. Mr. Rabbitte asked the Taoiseach the other EU leaders he plans to meet in advance of the EU summit of 12-13 December 2003; and if he will make a statement on the matter. [28277/03]

14. Mr. Rabbitte asked the Taoiseach if he will make a statement on the outcome of his meeting on 19 November 2003 with the United Nations High Commissioner for Refugees; and if he will make a statement on the matter. [28278/03]

15. Mr. Rabbitte asked the Taoiseach if he will make a statement on his recent visit to Bulgaria. [28817/03]

16. Mr. Rabbitte asked the Taoiseach the response he has received to his letters to European Union colleagues calling for a focused approach to the 2004 spring economic Council and outlining the key areas that Ireland intends to focus on at the European Council; and if he will make a statement on the matter. [28818/03]

17. Mr. Kenny asked the Taoiseach if he will report on his recent visit to Bulgaria; and if he will make a statement on the matter. [28824/03]

18. Caoimhghín Ó Caoláin asked the Taoiseach his priorities for the December 2003 EU summit. [28859/03]

19. Mr. Sargent asked the Taoiseach if he will report on his meeting with the President of Uganda; and if he will make a statement on the matter. [28872/03]

20. Mr. Sargent asked the Taoiseach if he will report on his November 2003 meeting in Rome with the Italian Prime Minister, Mr. Silvio Berlusconi; and if he will make a statement on the matter. [28873/03]

21. Mr. Rabbitte asked the Taoiseach if he will make a statement on his recent visit to Denmark for discussions with political leaders in advance of the Irish Presidency of the EU. [29272/03]

22. Mr. Rabbitte asked the Taoiseach if he will make a statement on his recent visit to Latvia for discussions with political leaders in advance of the Irish Presidency of the EU. [29273/03]

23. Mr. Kenny asked the Taoiseach if he will report on his meeting on 26 November 2003 with the President of the European Union; and if he will make a statement on the matter. [29274/03]

24. Mr. Kenny asked the Taoiseach if he will report on his recent visit to Latvia; and if he will make a statement on the matter. [29275/03]

25. Mr. Kenny asked the Taoiseach if he will report on his recent visit to Denmark; and if he will make a statement on the matter. [29276/03]

26. Mr. G. Mitchell asked the Taoiseach the outcome of his recent visit to Cyprus. [30394/03]

The Taoiseach: I propose to take Questions Nos. 1 to 26, inclusive, together.

I have undertaken a number of visits in recent weeks as part of my ongoing series of meetings with European counterparts in advance of Ireland's Presidency. On 5-6 November, I travelled to Cyprus where I had a productive meeting with President Papadopoulos. Later on 6 November, I travelled to Slovakia for discussions with Prime Minister Dzurinda. I met Prime Minister Medgyessy of Hungary in Budapest on 13 November. My visit coincided with an Irish trade mission to Hungary and the Prime Minister and I addressed a gathering of Irish and Hungarian companies.

I travelled to Bulgaria and Romania on 19 and 20 November last. In Sofia, I met Prime Minister Simeon Saxe-Coburg Gotha and later that day I travelled to Bucharest for discussions with the Romanian Prime Minister, Adrian Nastase.

On 27 November, I travelled to Denmark and Latvia. In Copenhagen, I had talks with Prime Minister Rasmussen and in Riga, I had discussions with Prime Minister Repse. These discussions with my counterparts were both useful and timely and focused on a range of matters of mutual concern in the European context. In particular, the meetings presented a valuable opportunity to outline Ireland's Presidency priorities, to review matters arising in the Intergovernmental Conference and, in the case of the accession states, to discuss preparations by those countries for European Union membership.

I met Italian Prime Minister, Silvio Berlusconi, in Rome on 12 November. I took the opportunity to express, on behalf of the Government and the Irish people, my sincere condolences on the tragic loss of 19 Italian soldiers and civilians in Iraq earlier that day. Our discussions focused on the Intergovernmental Conference and Ireland's forthcoming Presidency of the EU. On the IGC, I made a number of points to the Prime Minister regarding the negotiations. As the House knows, Ireland is broadly happy with the Convention draft. However, we have concerns on tax, justice and home affairs, and defence which I outlined to the Prime Minister. I also emphasised our attachment to the principle of equality among member states in the Commission. I indicated our strong support for the Italian Presidency in ensuring that the IGC is successfully concluded this month.

I met President Museveni of Uganda on 10 November. Our discussions covered a broad range of issues, including regional security issues in central Africa, Cancun, and the opportunity for joint venture enterprises with Irish companies that could contribute to the economic development of Uganda. In the course of our discussions, we discussed the UN panel of experts' report to the Security Council. The report made serious charges regarding the illegal exploitation of natural resources in the Democratic Republic of the Congo, DRC, against a number of countries, including Rwanda, Zimbabwe and the DRC itself. In the case of Uganda, it referred to a number of individuals, described as an elite network, which included the army chief of staff and a half brother of the President.

In recent weeks, a further report has appeared. It noted that the panel had significant contact with the Ugandan authorities on this issue, that the independent Porter commission has been established by the Ugandan Government to investigate the allegations and that the army chief of staff has been removed from office. President Museveni assured me that he will act fully on the recommendations of the Porter commission, which has recommended formal investigations and prosecution of a number of senior figures in the Ugandan army and administration. The President expressed his appreciation of Irish support for development projects in Uganda.

On 19 November, I met the UN High Commissioner for Refugees, Mr. Ruud Lubbers, during his first official visit to Ireland. We discussed in outline certain ongoing UN considerations and initiatives on asylum and refugee issues, including the funding and operational experience of refugee programmes. We discussed a number of crises that have included high flows of refugees and-or internationally displaced people, including Afghanistan, the Middle East, Iraq and Liberia. Our discussions also included Ireland's forthcoming Presidency of the EU, with specific reference to the desirability of common standards and procedures in member states.

I met the President of the European Parliament, Pat Cox MEP, on 26 November. It was the first official visit to Ireland by Mr. Cox in this capacity. We discussed a range of issues, including the priorities for Ireland's Presidency, the Intergovernmental Conference and other issues on the EU agenda. Mr. Cox has indicated his intention to attend the "Day of Welcomes" ceremony in Dublin on 1 May.

I wrote to my European Council colleagues, including the ten observer member states, on 14 November and set out the approach Ireland intends to take in its EU Presidency towards the spring European Council in March 2004. The text of both my letter and the pre-Presidency priorities paper, Europeans Working Together for Growth and Dynamism in the Enlarged Europe, have been laid before the Houses of the Oireachtas and are available on my Department's website. My letter contains a clear message to Heads of State or Government about the urgency of progressing the goal agreed at Lisbon in 2000, namely, the Lisbon agenda. The paper addresses the twin priorities of growth and employment. The specific areas that it proposes for attention are promoting growth-oriented economic policies, fostering competitiveness, delivering more and better employment, and ensuring sustainable growth.

In my discussions with Heads of State or Government during my round of pre-Presidency meetings, their response to my proposed approach has been generally positive. The European Commission has also indicated its broad agreement with our priorities. On 26 November last, the Commission President, Romano Prodi, wrote to the Heads of State or Government outlining the areas he believes need priority action at next year's spring European Council, and noted that the approach and views expressed by the Irish Presidency are in line with his own. Official reactions from member states have likewise been supportive of the Irish approach. I will develop these priority areas further in the light of developments over the coming months, including the European Commission's Synthesis report to the spring European Council. This is the recently published report of the task force on employment and developments regarding the initiative for growth.

I will attend the European Council in Brussels later this week. While the agenda is still being finalised, it is expected that the meeting will focus on economic growth, freedom, security and justice issues, enlargement, and external relations. We will also attempt to conclude the Intergovernmental Conference successfully. Clearly, a successful outcome to the IGC that protects Ireland's interests in the key areas where we have concerns will be of the highest priority.

I have no plans at this time for bilateral meetings with my counterparts in advance of or on the margins of the European Council.

Mr. Gormley: I wish the Taoiseach and his colleagues well at the forthcoming EU summit. Where does the Government stand on structured co-operation and closer co-operation, as referred to in Articles 40.6 and 40.7 of the draft constitution? I have noticed that the Minister for Foreign Affairs, Deputy Cowen, often refers to structured co-operation and says the Government does not want to become involved in it. However, he is less vocal on the question of closer co-operation.

Does the Taoiseach intend, even at this late stage, to try to seek an amendment to the two articles? I have read that the Finnish Government is seeking such an amendment. Will the Taoiseach support it? What amendments to the Constitution will the Taoiseach recommend to ensure we do not become involved in either structured or closer co-operation without first putting it to the people by way of a referendum?

The Taoiseach: I thank Deputy Gormley for his best wishes. He knows the matters to which he referred are being discussed today and were discussed yesterday as well. The Convention text establishes the possibility of an inner group of member states establishing a structured co-operation arrangement within the European Union. The Presidency proposals on structured co-operation circulated at the end of the Intergovernmental Conference on 29 November differ significantly from the Convention text. The focus is now primarily on capacity building for Petersberg missions at short notice. Therefore, the proposals have changed quite significantly since they were first made in the summer.

Membership of the structured co-operation group would be set out at a later stage whereas the criteria for participation would be contained in a protocol to the treaty, which would be agreed by all. The decision to establish structured co-operation would be taken by qualified majority voting. Throughout the discussions at the IGC on security and defence issues, the Government, together with some other member states, held the position that any new arrangements or arrangements that would alter the existing ones should be based on openness, inclusivity and accountability. We have argued this position since the mini-summit that took place on 29 April at which the Germans, French, Spanish and Belgians came together. The draft article and protocol on structured co-operation is moving in the direction of fulfilling the criteria we have set out, namely, being open, inclusive and accountable.

The focus on the development of capabilities in the context of Petersberg Tasks operations, as well as on EU support for the United Nations in crisis management, is welcome and in line with what we have argued throughout. Together with other parties we are working to ensure the proposal is sufficiently open, inclusive and accountable, as we believe it is. Further progress was achieved regarding the issues discussed yesterday. Ireland has a good record in peacekeeping and crisis management, most recently demonstrated by our participation in the UN mission to Liberia. It should be possible to agree within the EU on arrangements to facilitate the contribution of all parties that can bring this about. It is on this basis, and only on this basis, that the discussions are taking place.

An Ceann Comhairle: I call on Deputy Sargent.

Mr. Gormley: Will the Taoiseach-----

An Ceann Comhairle: Sorry, I have called on the Deputy's colleague.

Mr. Sargent: I am following on from Deputy Gormley.

An Ceann Comhairle: Is Deputy Sargent giving way to Deputy Gormley?

Mr. Sargent: I am.

Mr. Gormley: I thank my colleague for giving way. The Taoiseach is doing what the Minister for Foreign Affairs has done in recent weeks. He refers to Article 40.6 but avoids Article 40.7 on closer co-operation.

An Ceann Comhairle: Has the Deputy a question?

Mr. Gormley: Yes. Will the Taoiseach comment specifically on Article 40.7 and state if an amendment is being proposed thereto? If it is not, will the Government amend the Constitution to facilitate a referendum so that the people can vote on closer co-operation?

The Taoiseach: In terms of the Constitution, at the end we will look at the overall agreed treaty and see what happens. That would arise with any such question. I have outlined how we see structured co-operation within the European Union. As the Deputy knows, there has been an emphasis on enhancing military capabilities within the European Union and our position on this is very clear. If the Deputy has concerns about our position I can bring him through it. Our commitment to enhancing military capabilities is to ensure that the EU can effectively undertake humanitarian crisis management operations. That is the area of co-operation, if the Deputy is concerned about it.

Mr. Gormley: What about Article 40.7?

The Taoiseach: If the draft treaty states that enhancement of member states' military capabilities is in the context of the Petersberg Tasks, that is very clear. If I give the Deputy a long answer he will say I am giving him a long answer, so I will give him the short answer.

Mr. Gormley: Taoiseach---

An Ceann Comhairle: Sorry, Deputy Gormley, you cannot monopolise Question Time. Seven Deputies have tabled questions.

The Taoiseach: Deputy Gormley wants me to say this is outside crisis management. It is not. The position is that this is within the Petersberg Tasks.

Mr. Gormley: Does the Taoiseach agree with that?

The Taoiseach: Yes, I agree with this being within the Petersberg Tasks. I do not agree with it being outside the Petersberg Tasks.

An Ceann Comhairle: I ask Deputy Gormley not to create disorder during questions.

The Taoiseach: I want to give Deputy Gormley a clear position on this because in fairness he has worked hard in the Convention. I am in favour of the Petersberg Tasks, I am in favour of this being within the Petersberg Tasks and I am not in favour of it being outside the Petersberg Tasks. Is that fair?

Mr. Gormley: I am looking for answers.

The Taoiseach: That is the position and I will stick to it.

Mr. Gormley: The Taoiseach is in favour of it.

Mr. Sargent: He did not mention Article 40.7.

Mr. Rabbitte: On behalf of the Labour Party, I wish the Taoiseach well in his efforts on behalf of all of us.

Does he consider that the IGC will conclude its business this weekend? Does he think it will edge towards agreement after the fashion of Nice, which left us with a somewhat flawed treaty and its subsequent implications? In respect of the five or six outstanding matters, is it the case that nothing is agreed until everything is agreed? In that event does the Taoiseach look forward to carrying the torch into the Irish Presidency?

The Taoiseach: The answer to that series of questions is that obviously I do not know if this will be completed or not. I will give the Deputy my feeling as to what will happen. There seems to be an overwhelming view across member states that we should face this weekend in an attempt to complete matters. Nobody has indicated to me that they would not like to see this concluded. Equally, as with all these issues, nobody has moved much on what have been termed red line issues. We have red line issues, as have others, so the cumulative number of red line issues is fairly substantial. There are some very difficult issues, with which I will deal in a moment, but there is a determination to attempt to deal with the work of the Convention and of the IGC, which has been going on for almost two years. I would like to tell Members that it will not be a drawn-out affair but the agenda has been set with meetings on Thursday to deal with social dialogue and Wim Kok's report. We must attend that meeting as the incoming Presidency and it looks as if those meetings will take up all of Thursday, while on Friday we deal with the normal agenda. There are a substantial number of items and while it should not require substantial discussion, it is in the nature of things for these meetings to turn into substantial discussions.

It looks like the IGC will not really commence until Friday evening. If that is the case and the Italian Presidency intends to finish it, we are in for a long weekend. I will be lucky to be back by this time next week.

Mr. Rabbitte: There will be no canvassing next Saturday.

The Taoiseach: Definitely not. There will not be on Sunday either, nor will I have a day off. The Italian Presidency has worked hard since 4 October. There has not only been conclave but Foreign Affairs Ministers have had a number of meetings. There has been substantial engagement with most countries with which I have been in contact. If the Italians try to complete it, it will be a long weekend. That is the intention. Everybody is trying to resolve the matter.

There is a few difficult issues and there will be resolutions in many areas. There has been no movement on the issue of the weight of votes which pitches France and Germany against Poland and Spain. Their representatives are saying precisely the same as they were in the Convention and in the various discussions throughout 2003. It is difficult to believe discussion is not taking place in the background but I am not sure that there is. Everybody will be aware of the style of Jose Maria Aznar who does not move on issues easily. The Polish Prime Minister, Mr. Miller, was due in Dublin last Friday but he had an accident on Thursday night and I wish him a speedy recovery. He is in a difficult political position on this. It is a potentially difficult area and I do not see a resolution at this stage.

Mr. Kenny: I am glad the Taoiseach said there will be no canvassing on Saturday. There probably would not be room for delegations on decentralisation.

Mr. Naughten: The people of Boyle would love to hear from the Taoiseach.

Mr. Kenny: I wish the Taoiseach the best as he heads into an important Council meeting. Does he agree with the comment of the Irish EU Commissioner, David Byrne, that many countries, including Ireland, had been squeamish about acceptance of mutual defence obligations? Will he confirm Ireland is one of the four countries that have requested a change in the wording of article 147 in respect of the mutual defence clause? Does he agree with the Commissioner's comment that neutrality is not about sitting on one's hands? Has he spoken to the Commissioner since he made this comment? Has the Government changed its view on this? Does the Taoiseach accept that, at the commencement of a structure for mutual and common defence in Europe, Ireland should be involved in the discussions to shape it rather than having it imposed from outside?

Under the Nice treaty, a proposal from the Council of Ministers must satisfy three criteria. It must be passed and approved by member states, it must have a majority equal to at least 62% of the EU population and it must achieve at least 232 votes out of 321. The double majority proposal by the Germans is simpler, requiring that a proposal must be passed by a majority of states representing at least 60% of the EU population. The four largest countries have 29 votes each while Poland and Spain have 27, even though Germany has double Spain's population. What is the Government's view on the double majority proposal on the voting arrangements for the Council of Ministers?

The Taoiseach: Throughout the discussions, we have been prepared to accept a number of alternatives on the voting arrangements. I probably have a preference to maintain the Nice treaty provision because we have been through that process. The other system is simpler and more easily understood. On the basis of our voting position, I do not hold the view that any of the proposed changes is enormously important. There are about four different systems, but they do not make much difference. However, the 60-60 or 50-50 approach is more easily understood and transparent, and far easier to explain. That has been the view at a number of meetings I attended here. People see it as a logistically easier system. However, there would be a different view from the perspective of Spain and Poland, which are in a strong position post-Nice and that has enormous political repercussions.

On the common defence issue, I have not been speaking to Commissioner Byrne but I am aware of his views. The common defence language proposed by the Presidency would commit member states to come to the aid of a member state in the event of an armed attack, using all means in their power. We have indicated that we could not enter into an obligation of this nature and that we would wish to see the draft article revised to take account of our position. We have submitted amendments accordingly, having taken that position over the last week from the time the last wording emerged.

The position was stated clearly at the IGC yesterday by the Minister for Foreign Affairs and by his colleagues from Finland, Sweden and Austria. On Friday, Ireland, Finland, Sweden and Austria sent a joint letter to the Italian Presidency, proposing an amendment to the draft article which will respect the position of neutral and non-aligned member states. I played a full and active part in the preparation of that position last week in discussions with my colleagues and officials from those countries. We received support from a number of our partners and the Presidency undertook to redraft the article on mutual defence to take account of our concerns. We are now awaiting that and we will have a further opportunity to discuss this important issue at the weekend in the IGC.

The Presidency proposal on mutual defence contained in Article 147, to which Deputy Kenny referred, states that if a member state is a victim of armed aggression in its territory, the other member states, "shall have towards it an obligation of aid and assistance". That restricts the issue very tightly for many people, apart from our difficulties on mutual defence. In accordance with Article 51 of the UN charter, the joint proposal as between Ireland, Finland, Sweden and Austria, suggests the following wording for Article 147:

If a member state is a victim of armed aggression, it may request that other member states give it aid and assistance by all means in their power, military or other, in accordance with Article 51 of the UN charter.

As I said, the Presidency's proposal on mutual defence, as currently drafted, is totally unacceptable to us and other neutral and non-aligned member states. I believe our position is clearly understood. This country has never been afraid to take a very active and appropriate role under a UN mandate. However, we are not disposed to move into a mutual defence situation on the basis which was proposed. I know the reason for the proposal, which has nothing to do with Ireland but is part of the ongoing arguments and difficulties on NATO issues and the transatlantic issues involving Germany and France versus the UK. It does not really take our view into account, as I believe was understood at yesterday's meeting, as reported to me.

Mr. J. Higgins: Is it the Taoiseach's intention, during the Irish Presidency of the EU, to invite President Bush to Ireland? Has it been mooted that he would be invited to attend a summit, or some other meeting of EU leaders during the Presidency? Will that be discussed at the forthcoming summit?

The Taoiseach: That will not be discussed at the summit, but the issue will arise in the new year in the context of the location for the EU-US summit. As yet, there is no agreement as to where and when that will take place. It could be around the time of the G8 meeting, which is far earlier in the Irish Presidency. In that case, it would take place in the United States. Otherwise, it is likely to take place in June and it could possibly be held in Ireland.

3 o'clock

Mr. J. Higgins: Does the Taoiseach consider it appropriate that President Bush should be awarded an opportunity to pose as an international statesman, to assist his re-election campaign? In light of the criminal invasion of Iraq which President Bush perpetrated on foot of a falsehood which the Taoiseach himself swallowed and repeated and for which he has not yet apologised to the people, and the ongoing catastrophic situation for the Iraqi people, does the Taoiseach agree that the Government should veto a proposal to invite President Bush to Ireland during the EU Presidency term?

The Taoiseach: The Deputy is asking me to refuse to have the EU-US summit in Ireland. That is not a position I will take.

Caoimhghín Ó Caoláin: Returning to the defence elements of the draft EU constitution, does the Taoiseach expect that these will be signed off at the forthcoming EU summit? Some of the sections have been quoted but what position will the Government take at the summit on Article 142 of the draft constitution which states that EU defence policies shall not prejudice NATO states and shall be compatible with NATO policy?

The special rights and responsibilities of militarily neutral states such as Ireland do not have the same explicit acknowledgement anywhere in the document. Should we not have due recognition of the position articulated by this country and other militarily neutral states which have presented a common position on other elements? Will the Government seek a specific article in the draft EU constitution explicitly recognising the rights and duties of neutral states within the Union and their right to require a UN mandate for military operations?

The Taoiseach: The rights of neutral countries and Ireland's special position are clearly provided for in the existing EU treaties. Article 17.1 states that "the policy of the Union in security and defence matters shall not prejudice the specific character of the security and defence policy of certain member states". That article also recognises the specific security and defence policy of those member states that are members of NATO. It is a clear position of what we and NATO members want. The provision has been included in the draft treaty at the request of the Government and other member states. It has been properly dealt with.

Caoimhghín Ó Caoláin: Will the Government seek a specific article for the explicit recognition of the rights and duties of the militarily neutral members of the EU in the event of a military situation and their right to require a UN mandate before participation in a military operation?

The Taoiseach: It will be very clear from Article 17.1 and from what I said previously will be in the amendment we have put forward. Not only will our position be clear but also that of the four other neutral countries. The wording of article 17.1 will not be changed. I informed Deputy Gormley that, while other articles are different and new, this position will be stated in the article and Ireland's position will be covered by that.

Mr. Gormley: That is what I asked.

Mr. G. Mitchell: Will the Taoiseach inform the House as to what we have in common with Austria, Finland and Sweden that requires us to take a common position such as this? Each of these three countries is armed to the teeth. The real question is who will defend Ireland if we are attacked? Will the Taoiseach agree that what he proposes with these other three countries is no more than the existing arrangement and is, therefore, untenable? Would it not be better for the neutral and non-aligned four states - it will four out of 25 shortly - to seek an amendment which will permit them to take a part in common defence only after the prior approval of their national Parliaments?

If the other three non-aligned countries do not want that, we should say that in the case of Ireland this would only take place with the prior approval of Dáil Éireann. Would that not buy us some defence and give us an opportunity to participate in common defence in the European Union on the best of terms? Why are we keeping our heads down and offering unrealistic positions which the EU Commissioner, Mr. David Byrne, quite rightly described as sitting on our hands?

The Taoiseach: I know the Deputy's view on this issue. I believe he understands this view is not shared by the people.

Mr. G. Mitchell: Some 52% say they support a common EU defence.

The Taoiseach: I admire the fact that the Deputy has put this forward and has done so forcefully over the years. The Deputy will recall the research that took place in regard to the Nice treaty. He will also recall why we had to amend the treaty and insert a constitutional provision. Perhaps in the future the people will change their position. However, that is not the position of the people now. The matter is in the Constitution and in our laws. It is not a question of the people believing that whenever we debate a UN-mandated posting, the House is not delayed too long. People accept, understand, are prepared for and honoured by the fact that our people participate, sometimes fight and do whatever they have to do under a UN charter. As of now the people are not prepared to be in that position under EU defence arrangements. That is the position at present. The Deputy knows the answer to the question. The other countries take a like-minded neutral position, which is non-NATO, non-aligned, and because they are in that position we work with them as we have traditionally done.

Mr. Sargent: While the question I raised may be defence related, it seeks clarification from the Government on the EURATOM treaty. Does the Taoiseach agree that by attaching this treaty as a protocol to the EU constitution, nuclear power is in effect given special treatment by the EU in terms of energy generation? Is this not clearly at variance with what is happening with wind power here, which is being blocked from the grid due to lack of priority being given to that sector? Does the Government accept it has a mandate to block the EURATOM treaty based on article 3.4 of the EU constitution requiring the integration of a high level of environmental protection?

Does the Government wish to scrap the protocol? Will the Taoiseach clarify the position given that the many issues dealing with nuclear safety and regulation can be incorporated into the EU constitution with specific measures, framework laws etc.? As we go into the Irish Presidency, ironically the Government will be seen as giving special treatment to the nuclear industry unless we delete this protocol.

The Taoiseach: There is a detailed note and position on this, which I have been using. I do not know whether I have it, but I will come back to it. Deputy Gormley, Deputy Quinn and others raised this with me when we had a meeting at the end of the Convention and I have pursued it since then. It was not negotiated in any detailed way either in the Presidium or in the Convention, as I understand it. The issue was whether it should be left as it is in its present position or whether it should be separately examined and updated to take account of all that has happened not least in nuclear energy. We have been saying that for now it could just be left unchanged, but there should be a separate in-depth examination of EURATOM. We should agree on the process when that takes place.

Mr. Sargent: Will the Taoiseach insist on a sunset clause?

The Taoiseach: We would not only do that, but separately examine, update and reintroduce the EURATOM treaty. For the time being, it would remain as it is.

An Ceann Comhairle: The Taoiseach should not to answer questions that come by way of interruptions.

Mr. Sargent: Is it intended to reintroduce the treaty?

The Taoiseach: Yes, but in a reformed version and having accepted that the position is no longer the same. This process answers the questions raised in the discussion we have had.

Mr. Sargent: We will see.

The Taoiseach: I have been referring to a detailed note to reply to Deputies and I will be happy to forward its contents to them.

Mr. Quinn: I refer to a related matter which is relevant to the Council meeting which will take place this weekend and to the Irish Presidency. Just over two weeks ago, serious damage was done to the operation of the European Monetary System in general and to the Stability and Growth Pact in particular. Was the Taoiseach consulted by the Minister for Finance before deciding not to support the Commission on that fateful evening? Have concerns on this matter been expressed to the Taoiseach as incoming President? Does the Taoiseach anticipate that it will be on the agenda of the forthcoming Council meeting? As incoming President of the Council, does the Taoiseach propose to request ECOFIN Ministers to review the Stability and Growth Pact with a view to changing the rules rather than pursuing their abandonment, which is the current position?

The Taoiseach: As the Deputy knows, the procedure is that the decision is left to ECOFIN which has the Council's authority to make it. I will give the House my view on the matter. The position of the Stability and Growth Pact must be maintained and its important work must continue. While I have arguments on certain issues pertaining to EUROSTAT which require to be changed, I do not consider the matter significant. I am a strong supporter of the fundamental principles of the Stability and Growth Pact and these should not be breached. We must all take our medicine. We in this country had to take some a few years ago.

There may be a case for flexibility. I have informed the House previously that, when one has an infrastructural deficit and low public debt, there should be some consideration of the matter. That is all. I support the Stability and Growth Pact. The objective of sound and stable finances is not a luxury but a fundamental requirement for economic growth, business confidence and job creation.

Mr. Quinn: Will it be discussed this weekend?

The Taoiseach: I imagine it will. It depends. I assume it will return to the agenda. As the Deputy is aware, ECOFIN has presented a report of its views. I intend at the first opportunity to make our position clear on the matter. If the pact is used to move things around for people who have difficulties, that will feed in the short term into the stability of the currency.

Deputy Quinn will recall the debate about the Maastricht guidelines and criteria. These could be undermined. They have stood Europe in good stead and moved us away from the instability of ten years ago. The great benefit of a single currency and the locking of our exchange rates has been a low interest rate environment based on a strong currency. To move away from that would be short-sighted. I do not agree with what happened.

Mr. Quinn: Will it be on the agenda at the weekend?

An Ceann Comhairle: We are coming to the end of Question Time and I must call Deputy Kenny.

The Taoiseach: The matter will come back to allow us to state our positions. I will state what I have said today.

Mr. Kenny: Does the Taoiseach agree with the recent comment of the President of the Commission, Romano Prodi, to the effect that member states which fail to ratify the proposed constitution may well have to leave the European Union?

EU Enterprise Ministers recently failed to reach agreement on the issue of embryonic stem cell research. Will the Taoiseach confirm whether the matter will be dealt with during the Irish Presidency? If so, will there be an opportunity to have full and thorough discussions in the House before the matter is put to the Council of Ministers?

Caoimhghín Ó Caoláin: I have a related question.

The Taoiseach: As Deputy Kenny knows, Mr. Prodi, President of the European Commission, made a number of statements recently on this matter, as Deputy Kenny is aware. It is clear from the draft of the new treaty that it must be ratified by all member states according to their constitutional requirements. Nobody at the IGC seriously challenged this requirement. If one or more member states experienced difficulty in ratifying the treaty, we would have to get together to see what could be done. While the Commission attends the IGC as an observer, it is the Governments of the member states which make the decision to sign the treaty, and that is how it should remain.

On the matter of stem cell research, there does not appear to be a basis for agreement. While that remains the case, the matter is not likely to return to the Council agenda.

Priority Questions.

Job Creation.

58. Mr. Hogan asked the Tánaiste and Minister for Enterprise, Trade and Employment if, since 2000, there were cases in which jobs that she announced would be created in enterprises did not subsequently materialise; if so, the number of jobs and the enterprises involved; the reasons such jobs did not materialise; and if she will make a statement on the matter. [30057/03]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney): Job announcements of new greenfield and expansion projects are made when negotiations have been completed and the projects have been approved by the relevant State development agency and, where required, the Government. A total of 127 such projects with a job content of 15,168 have been announced since 2000. Three of these projects, Sumicem, Thomson NETg and Quantum Electronics, with a job content of 533, have indicated that they will not proceed. There has always been an unavoidable element of risk that some change in circumstances between approval of the project and the final stages of implementation of the project will occur which will impact on the achievement of all the jobs projected for a particular project. This is not surprising since the time period from approval to the final stage of implementation is usually in the order of several years.

Examples of the circumstances referred to include an unforeseen change specific to the investing company's business situation or environment or, as witnessed in the past two years or so, a global economic downturn that impacts on the investment plans and strategies of companies in several sectors. In many cases the result of the changed circumstances is a delay, alteration or, in some cases, a total cancellation of a planned investment project. In these circumstances the State development agencies have clauses in the relevant grant agreement designed to ensure that the State does not grant-aid projects that do not materialise or fail to reach agreed levels of employment.

There is usually a time lag between job announcements and the creation of jobs projected to be achieved over a number of years. There is usually a one to three year time lag between job project announcements and the jobs coming on stream. Therefore, only a small number of jobs announced in a given year will be created within the year of the job announcement. In 2002, companies supported by the development agencies created over 25,000 permanent full-time jobs. This represents a strong performance in the face of the downturn in global economic activity. Data from the Forfás annual employment survey on the performance in 2003 will be available at the beginning of next year.

Mr. Hogan: I am interested in the fact that announcements are made at sensitive political times, for example, just before the last general election. The Tánaiste, in the company of two Progressive Democrats candidates, made a major announcement of jobs for Thomson NETg in Limerick and Birr on 18 April 2002 and promised 360 jobs for these locations. I am sure she can understand the frustration of workers and communities when these jobs subsequently did not proceed.

Even with the best will in the world, surely the rush to make these announcements still involved our State agencies' understanding of the financial well-being of the company involved and its medium and short-term strategy regarding its European operations. Will the Tánaiste agree that the headlong rush to make these announcements in advance of the general election, for Macroom, Longford, Birr, Limerick and Galway, led people to believe that the jobs were real and were about to be created? Will she agree that the inordinate number of jobs which failed to proceed or progress leads people to the conclusion that these announcements were for phantom jobs announced for the purposes of electoral gain?

Ms Harney: I totally and utterly reject the Deputy's suggestion. I remind him that my predecessor and I have observed the protocol which is in place in respect of job announcements in the immediate election period. That is the way it should be. Job announcements are to a large extent determined by the companies, when grant approval has been given. Many companies apply for planning permission before job announcements are made. Local information is often available about projects before they are announced. Additional jobs at the Seagate plant in Clonmel, announced during the rainbow coalition's period in office, did not materialise. Nobody suggested that the announcement was partisan in any way and I am not making such a suggestion now. The reality is that circumstances in global economy change-----

Mr. Howlin: The former Deputy Michael Ferris got it in the neck.

Ms Harney: He did not get it in the neck from me. I am not certain that the Deputy is right. I was at many meetings around that time. Everybody understands the reality of the competitive environment in which we work.

I would like to put things in perspective. Over 15,500 jobs have been announced since 2000, of which 533 are not proceeding. It was announced in recent weeks that the proposed expansion to the Birr operation of Thomson NETg, which has a major facility at Limerick, will not proceed. The project was approved by the board of IDA Ireland. Is somebody seriously suggesting that an international company and the board of our development agency were involved in a partisan announcement? If Deputy Hogan reflects on the matter, he will appreciate that it is not the case. Many jobs which are created with the benefit of grant aid are not announced because the company in question does not wish to announce them, for whatever reason. I have been involved in many projects in respect of which there has been no public announcement, in deference to the wishes of the company. I do not accept that my colleagues or I were involved in electioneering on the back of job announcements in the instance mentioned by Deputy Hogan or on any other occasion.

An Ceann Comhairle: I cannot allow Deputy Hogan to contribute further because the six minutes allowed for this question have elapsed.

Mr. Hogan: I did not use any of it.

An Ceann Comhairle: Sorry, Deputy-----

Mr. Hogan: If the Tánaiste wants to read out a long reply to a very simple question-----

An Ceann Comhairle: The Deputy took two minutes to ask a question, which mainly took the form of a statement.

Mr. Hogan: I have to respond to the Tánaiste's reply.

An Ceann Comhairle: Priority Questions are specifically for one Member. The Chair allows a certain amount of flexibility in the Member's use of his or her time. I suggest that Deputies should confine themselves to short questions so that-----

Mr. Hogan: What about short answers?

An Ceann Comhairle: -----they will have an opportunity to ask more than one supplementary question.

Mr. Hogan: Will Ministers confine themselves to short answers?

An Ceann Comhairle: We have to move on to Question No. 59.

Mr. Hogan: We will come back to this matter.

Health and Safety Regulations.

59. Mr. Howlin asked the Tánaiste and Minister for Enterprise, Trade and Employment when she expects to publish the long promised legislation to increase penalties for breaches of the health and safety legislation, especially having regard to the continuing level of accidents in the construction industry; if her attention has been drawn to the serious concern expressed by the trade union movement, and especially those representing construction workers, at the delay; and if she will make a statement on the matter. [29993/03]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Fahey): Legislative proposals to repeal and amend the Safety, Health and Welfare at Work Act 1989 have been developed at departmental level. The Office of the Chief Parliamentary Counsel is undertaking a process of legal drafting in that regard. Although drafting is at an advanced stage of development, it is a long and complicated process because it involves a detailed revision of the legislative occupational health and safety framework. Consultations between officials of the Department of Enterprise, Trade and Employment and the Office of the Chief Parliamentary Counsel are ongoing. I expect to be in a position to introduce a safety, health and welfare at work Bill in 2004, perhaps in March or April. I intend to consult the social partners before any such Bill is published.

Mr. Howlin: I will try to keep my remarks in line with the Chair's admonition to Deputy Hogan. Those listening to the proceedings of the House will consider it totally unacceptable that the Minister of State has said it has taken two years to bring forward a Bill, which relates to matters of life and death, because it is long and complicated.

Has the Minister of State been in contact with representatives of the 3,000 building workers who staged a mass demonstration outside this House almost a year ago to demand this legislation? How many inspectors are in place to enforce the existing legislation? How many inspections have been undertaken this year to date?

Mr. Fahey: It is a complicated Bill which will run to several hundred pages. The fact that it is taking so long is a cause of concern to everybody. It is a good Bill, however, as it will provide for a significant number of improved sanctions. There will be increased fines, including on-the-spot fines.

I regularly meet members of the construction safety partnership, which includes representatives of unions and employers in the construction sector. Not only do we discuss the contents of the new Bill on an ongoing basis, but we also consider health and safety matters. I am glad to say that there have been improvements this year. The number of fatalities is not as high as it was last year. All partners in the construction sector are making a significant effort to try to ensure that there are reductions in the numbers of fatalities and accidents in the workplace. Some 100 health and safety officers are active at present. It is difficult to quantify the exact number of inspections because inspections of various types take place all the time. It is impossible to put a figure on it.

Mr. Howlin: I find it alarming that the Minister of State has expressed anything but dismay at the continuing high number of fatalities. Can the Minister confirm that the number of fatalities last year was 61 and that the equivalent figure for the first nine months of this year is 49? There has not been an significant reduction. Does he feel that health and safety, which is a matter of life and death for workers throughout the country, should be his priority? Is it possible for the cross-departmental team, which examines and monitors legislation, to ensure that the Bill is brought before the House before March or April of 2004?

Mr. Fahey: The Deputy's initial question related to the construction industry, in which there were 22 fatalities last year. I have said on numerous occasions in the House that it is a serious matter any time there is a fatality in any workplace.

Mr. Howlin: What is the fatality rate in the construction industry so far this year?

Mr. Fahey: There have been 11 deaths in the construction industry so far this year. Four county council workers involved in various types of construction, or construction-related activity, have died. Four members of the public have died in the workplace. Last year, 22 people who were directly involved in the construction industry died. The Deputy may recall that there were several fatalities this time last year, but there have been reductions this year. I agree that any fatality is one too many. We have to work to ensure that the significant effort being made by all parties at present is continued.

It is not possible to bring the proposed safety, health and welfare at work Bill to the House before March or April of next year. The Deputy is aware that the Office of the Chief Parliamentary Counsel, which is involved in the process, has a significant workload at present. The legislation is being delayed for that reason.

Price Inflation.

60. Mr. Eamon Ryan asked the Tánaiste and Minister for Enterprise, Trade and Employment the research her Department has carried out on the supply chain for food, drinks, fashion and footwear prior to and since Ireland joined the euro; her views on the fact that some prices may be inflated as certain retailers still treat the Irish market as being part of the sterling area with products from the euro economies being inflated by unnecessary currency transaction costs; and if she will request the Competition Authority to investigate whether informal market restrictions may be in place which discourage the direct importation of products from the euro currency area. [30111/03]

Ms Harney: Research into price behaviour during the euro changeover period was carried out by Forfás last year, at my request. A report which was published in June 2002 can be accessed on the Forfás website, www.forfas.ie. The report concluded that the euro changeover had not been used as an opportunity to introduce excessive price increases, generally speaking. There are grounds for concern, however, as a consequence of price increases in the non-traded sector. This sector consists of businesses that do not face direct foreign competition. Further Forfás research earlier this year highlighted this sector as a significant driver of inflation in recent years.

While some price pressure may be associated with the rapid pace of economic growth in recent years, it is possible that deeper structural factors, such as informal restrictions inhibiting imports, may exist. I have asked Forfás to focus on a small number of selected product or service areas as part of the next phase of its price investigation work. This work will complement the competition enforcement activities of the Competition Authority. My Department has drawn the matter to the attention of the authority. I am not aware of current practice relating to inappropriate currency transaction charges in connection with products imported from other eurozone countries.

Mr. Eamon Ryan: I thank the Tánaiste. This is an important issue. A great deal of attention has been paid to price inflation in the food and drink sectors, as well as the general retail sector, in recent times. The fact that 60% of goods sold in this country are imported from the UK, rather than the eurozone, is startling. I am concerned that this statistic may have contributed to inflation in recent years, particularly when products are imported from Europe, via the UK, into Ireland. A series of currency transactions occurs in the supply chain in such circumstances. We know that businesses making such currency transactions are often very conservative. It is therefore adding to the price quite significantly.

The Tánaiste said she has asked Forfás to examine informal restrictions that may be in place. In the news earlier this week concern was expressed that certain retailers were considering restricting themselves to exclusively Irish suppliers and no longer dealing directly with other retail stores. I was more concerned with instances where an agency or product supplied from Europe could not be sold into the Irish market, except through a UK distributor. Perhaps the Tánaiste could provide more specific details. Is that the type of informal restriction about which she is concerned? What are the exact powers of Forfás in the area? Would it not be more appropriate, if there are such informal restrictions, to have the Competition Authority investigate the matter, given that I assume the companies concerned are in breach of European competition rules? It is less of a problem, since our inflation rate has dropped dramatically following the rise of the euro over sterling. However, it could have very important long-term consequences.

Is the Tánaiste concerned that Ireland is increasingly seen as part of the British market in consumer goods, and, in particular, part of the Manchester market? Ireland is seen as an add-on to that distribution chain. That Manchester market usually has quite a high mark-up in the UK, and that is worsened by exchange rate differences. Is the Tánaiste concerned that the Irish market is now seen by many UK suppliers in that light?

Ms Harney: I share the Deputy's concern at the rapid price increases in some product categories, particularly in the food sector, which is among the areas which I have asked Forfás to examine. For example, that Lidl and Aldi have gained such a major share of the Irish market so quickly indicates that there is great scope for competition and that consumers are voting with their feet. Prices in some of those categories seem to be substantially lower in Northern Ireland than in the Republic. However, those are among the issues I have asked Forfás to examine.

There are competition rules that apply within the Single Market, but since we have not completed it in many respects, several directives are under discussion regarding sales promotion and unfair trading practices that may have an impact here. Unfair barriers or requirements that people must purchase from a certain importer are among the issues we must examine to ensure they are removed. I hope the change in the value of the currency will be passed on to consumers. It has had a major impact in reducing inflation over the last few months. During the years when the currency was at a different rate, we were constantly told it was the reason for higher prices. I hope we see the benefit now that it is the other way around. I repeat what I have said in many fora: the most effective way to get prices down across all sectors is enhanced competition, and, quite honestly, one cannot have enough of it.

Mr. Eamon Ryan: Regarding the informal restrictions that may be in place and the Tánaiste's request that Forfás investigate them, perhaps she might outline where those concerns were raised with her. Was it regarding individual companies, or were certain suppliers coming to her saying they were unable to access specific products owing to such restrictions? Has the Tánaiste asked Forfás to investigate specific examples?

Ms Harney: We have given it quite an open agenda. Obviously they must be category-specific. I do not want them going all over the shop. I want some quite specific hard data that might help us take whatever action we can at domestic level. Some may be on distribution and some, as the Deputy suggests, on import restrictions through certain companies. In some sectors many companies see Ireland and Britain as one market. They certainly see the island of Ireland as one market, but that does not cause the difficulty we are discussing here, because prices in Northern Ireland are substantially lower for many of the same product categories. I do not accept that all differences are accounted for by higher costs here.

Food Industry.

61. Mr. Murphy asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the recent report on food production and food prices published jointly by IBEC and RGDATA; if her attention has further been drawn to the findings of that report that high food prices are a factor of high business costs here, including insurance, energy, communications, professional fees and labour costs; her views on the fact that the Government has failed to tackle those costs and has added to the high cost of doing business here; the steps she is taking to reduce such costs; and if she will make a statement on the matter. [30058/03]

Ms Harney: I am aware of the findings of the recently published analysis of the Irish food industry, entitled Food Production and Food Prices in Ireland, to which the Deputy refers. The report points to increases in business operating costs in the food manufacturing, distribution and retail sectors as having contributed significantly to food price inflation in Ireland since 1990. Notable among the business operating costs mentioned in the report are payroll, rent and property, transportation, insurance and professional fees. While the report relates primarily to the Irish food industry, the issues it raises extend to the whole national competitiveness agenda.

The National Competitiveness Council stated in both its recently published reports that Ireland's immediate priority must be to slow the growth of prices and costs. The Government is committed to enhancing Ireland's competitiveness status, and an essential component of that is to provide a business environment with low inflation. Low inflation will stabilise firms' costs and provide them with a solid competitive business environment from which they can successfully compete in both domestic and international markets. Ireland's inflation rate fell to 2.3% during October. However, we cannot afford to be complacent. We will continue to reduce our inflation rate, bringing it into line with our EU partners and other competitors. In that context, the 2004 budget demonstrated that keeping inflation low was a key priority.

The NCC presented us last week with a set of key priority areas on which we must monitor progress. At its meeting on 25 November, the Government discussed both reports of the National Competitiveness Council. It was agreed at that meeting that the Government should consider Ireland's competitiveness status every six months. That would also include discussing the recommendations of both National Competitiveness Council reports. The Government also agreed to set up a monitoring process to consider and track progress on the implementation of the council's recommendations.

Mr. Murphy: I note that the Taoiseach has quite clearly stated that there is to be no change in the Restrictive Practices (Groceries) Order 1987 or the retail planning guidelines. On the broader issue, would the Tánaiste ask or instruct the Competition Authority to carry out a study to ascertain the wholesale and retail margins in all aspects of the food industry? It is very important now that the whole issue be transparent, since accusations are flying in all directions. Certain sectors are being blamed wrongly for high prices.

Ms Harney: We carry out many official studies and analyses, and if I thought that more study or analysis would solve our problems, I would be very keen on that. However, ultimately we must enhance competition. As the report suggests, in sectors subject to international competition, prices are much lower than in those sectors that are sheltered here. Among the factors that have been identified as contributing to the higher operating costs is the minimum wage, yet no one is suggesting that we return to €4 an hour. Shortly we will move to €7 an hour. The high cost of insurance is also clearly a factor, and we are tackling that very effectively. A third issue is infrastructure, particularly transport, which is having an impact on businesses operating from this island.

Ultimately, having said all that, the thing that will drive down prices for business and regular consumers will be as much competition as possible, and we should embrace competition in all its aspects - not just the rhetoric but the practice. As a small country, we are sometimes not that good at doing so, as we can see from the views expressed by various lobby groups. I understand that the Taoiseach said last week that if we removed the Restrictive Practices (Groceries) Order 1987, it would substantially reduce prices.

Mr. Hogan: He said more than that.

Ms Harney: I read the record.

An Leas-Cheann Comhairle: Order. Deputy Murphy, please.

Ms Harney: Is the Deputy asking me to remove the Restrictive Practices (Groceries) Order 1987?

Mr. Hogan: Absolutely not. I was asking for the Tánaiste's views.

Mr. Murphy: Independent traders seem to have been taking a hit in this regard. The figures show that their net profit is just 2.13%. In the same context, they have had to deal with inflationary pressures in that period, with light, heat and power going up 36%, insurance 70%, and transport and motor expenses 27.9%. The large increase in foodstuff prices has more to do with the Government's failure to control inflation and stealth taxes in the area. For that reason, a request that the Competition Authority examine the issue, including how the multiples and independent traders operate, is essential so we may see clearly, once and for all, where the differences are.

Ms Harney: As I said in response to the last question, the rapid growth of the discount stores Aldi and Lidl in the Republic shows that there is a place for those charging lower prices. One of the greatest acts of consumerism that I saw last week in the newspaper was the lobby in one of the Meath towns for planning permission to be granted to one such store. If I recall correctly, I read that 2,000 signatures had been collected. That is highly unusual. It is probably the most pro-consumer lobby I have seen emerge anywhere. We can have studies and analysis but in Northern Ireland both these stores charge less for their products and are still profitable. Therefore, when competition is enhanced, everyone benefits.

The most recent advertising campaign produced by the Director of Consumer Affairs, Ms Carmel Foley, is proving very successful. There has been much positive anecdotal feedback, although we do not yet have hard data. People are shopping around and are more vigilant and sensitive to the prices which are being charged. I hope retailers across all sectors will respond to that.

Mr. Hogan: I can refer the Tánaiste to the website.

Ms Harney: Will the Deputy tell me what needs to be done?

Mr. Hogan: The Tánaiste is in her job long enough to know. She has held the post for seven years.

Job Creation.

62. Mr. Howlin asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of jobs created in each case to date in respect of the series of job announcements made by her on 18 April 2002 in respect of Galway, Limerick and Birr; when it is expected that the balance of the jobs will be created; and if she will make a statement on the matter. [30020/03]

Ms Harney: On 18 April, 2002, I announced that Churchill Insurance Group plc, UK was to create 600 new jobs in Galway over the next five years. This facility, a customer interaction centre, was necessary to support current and future growth of Churchill's insurance business in the UK market, which consists mainly of household and motor insurance. The company currently employs about 130 people in the Galway facility.

On 18 April 2002, I also announced that Thomson NETg, one of the world's leading providers of learning solutions to the corporate and academic markets, was to expand its e-learning product development and innovation centre operation in Limerick with the creation of 360 new jobs, bringing total employment at Thomson NETg in Ireland to 700 by the end of 2005. As part of the proposed expansion, the company agreed with IDA Ireland that up to 80 of the new jobs announced in April 2002 would be located in Birr, County Offaly. However, the company subsequently decided to postpone its expansion plans and indicated that it would not undertake the establishment of an operation in Birr due to the adverse economic climate, particularly in the e-learning sector.

On 19 November 2003, NETg announced that, as part of an ongoing assessment and reorganisation of its global business operations, a decision had been made to consolidate its global product development activity in Naperville, Illinois, USA. As a result of this decision, the company's product development facility in Limerick will cease operations with the loss of 173 jobs. The plant is expected to close in March 2004.

It is understood that the Limerick closure decision was only taken after considerable examination of the corporate structure and a review of options. The group is operating in an increasingly challenging IT environment which necessitated taking measures in order to align the cost base with revenue. The availability of the Limerick facility for a new project will be marketed strongly by IDA Ireland in co-operation with NETg. FÁS has already been in contact with the company and offered its range of training, job placement and other services to workers affected by the proposed closure.

Mr. Howlin: I am taken by the tone of the Tánaiste's response to this question and the previous one from Deputy Hogan. She is positively hurt by the suggestion that electioneering could have been contributory to the timing of these announcements. In that context, why did the Tánaiste attribute the name "golden Thursday" to this series of job announcements made at the edge of the general election campaign?

What did she say to her colleague, Deputy Parlon, when he was the Progressive Democrats candidate in Laois-Offaly and announced at the time: "I am different, I deliver" and campaigned on that basis? If the Minister of State's delivery of decentralisation matches his delivery of jobs to Birr, there is no hope of any civil servants moving out of this town.

Ms Harney: "Hurt" may be too strong a word. I understand politics, therefore to describe me as being hurt would be a gross exaggeration. I refute any suggestion that this State was picked because of the run in to the general election. The IDA, in conjunction with the companies, asked me to announce these company expansions on that day. I did not go after the IDA looking for projects out of the bag to announce in the run up to the election.

Like other Deputies, if one wants to survive in this business, one needs to deliver to one's constituents in whatever form that takes. That applies to the Minister of State at the Department of Finance, Deputy Parlon.

Mr. Howlin: Does that mean empty promises?

Ms Harney: They are not empty promises. I opened a technology centre in Birr a couple of months ago. A great deal is happening in the town as there is elsewhere, about which we should be proud. International companies respond to international circumstances. I could give the Deputy a long list of companies about which we made announcements in regard to the creation of 200 or 300 jobs, which subsequently became 500 and 600 jobs. As Deputy Howlin knows, having sat at the Cabinet table, the job approval figure is always substantially higher than the job announcement figure in order that people are not accused of exaggerating the positives.

Mr. Howlin: Of the 1,300 jobs announced on "golden Thursday", how many have materialised, discounting the 173 which were lost in Thomson NETg? The Tánaiste referred to a protocol dealing with job announcements during a general election. Will she read that protocol into the record?

Ms Harney: The protocol has existed for some time. It was in place during the reign of the previous Government and perhaps the one before that. After an election is called, no job announcements through the IDA or Enterprise Ireland should be made by Departments. People have been asked to respect that protocol and have done so for a number of years.

Of the 960 jobs I announced, 130 have been created in Churchill in Galway. The Thomson NETg jobs are not proceeding. The Churchill jobs accounted for 600 of the 960. The remaining 360 were the NETg jobs, but they are not proceeding and the existing jobs in Limerick will unfortunately be lost.

Mr. Hogan: What about the announcement of the 300 Elan jobs?

OTHER QUESTIONS.

Job Protection.

63. Mr. Gogarty asked the Tánaiste and Minister for Enterprise, Trade and Employment the measures in place to assist Irish companies maintain back office functions such as sales and accounting functions here, even if their manufacturing operations are transferred to another location. [29959/03]

Ms Harney: The strategy of the industrial development agencies is to focus on supporting the development in Ireland of those elements of a company's operations which best fit Ireland's competitive characteristics. The rapid development of the economy in recent years has resulted in a need to outsource some production activities in order to maintain competitiveness. On the other hand, other competitive factors such as the increasingly well-educated and skilled nature of the labour force makes it feasible for us retain and attract higher value-added activities such as the back office functions.

The development of Irish-owned enterprise and its funding support is geared to the expansion of existing companies and the establishment of new high potential companies through innovation and internationalisation. Enterprise Ireland's support is provided through a planned, structured development process designed to strengthen all aspects of a client's business which are critical to achieving accelerated profitable growth.

Considerable attention is focused on developing the areas of marketing, finance, human resources, research and development and business strategy, which usually involve a significant amount of high-value activity and often form the bulk of back-office functions. Many Irish-owned companies have employed or are considering competitive outsourcing as a key part of an internationalisation strategy necessary to enable them to grow and develop and, in some cases, to survive. Enterprise Ireland assists such companies to identify opportunities abroad for outsourcing production, but only in the context of the retention of the higher value-added back-office activities in this country. This often involves maintaining time-sensitive or specialised production here, alongside development, design, marketing, finance and customer service functions.

In respect of overseas companies, IDA Ireland targets a wide range of activities undertaken by clients, including shared services functions such as sales and accounting, as part of its drive to attract new investment and embed existing client companies more firmly in the Irish economy. This reflects a recognition that such activities can have a cost-skill profile which is better suited to Ireland's circumstances than some manufacturing functions, particularly where its basic manufacture is, by today's standards, of relatively low technology products.

Mr. Eamon Ryan: I thank the Tánaiste for her reply. She stated that the rapid development of Ireland led to the necessity for certain companies to set up manufacturing outside the economy. However, the rapid inflation which came in the last three or five years, particularly of the previous Administration, was the key factor. The lack of competitiveness was the issue rather than excess development.

Will the Tánaiste supply more detailed specifics as to what exactly Enterprise Ireland can do? I realise it is a difficult job, particularly when an agency, which is responsible for trying to locate manufacturing here, is now recognising the reality that we will lose many of those manufacturing jobs. It is seeking to assist companies in relocating manufacturing, so long as they maintain back-office functions here.

Will the Tánaiste give some more detail as to where the responsibility lies for this issue? Does it lie exclusively with Enterprise Ireland or does IDA Ireland have a role in the process? Are financial, training or overseas support programmes and systems in place for companies or is advice just being given by Enterprise Ireland?

Will the Tánaiste supply specific information regarding the restructuring of Enterprise Ireland and State industrial development agencies to deal with the situation whereby, due to our high inflation and lack of competitiveness, we will lose between 80,000 and 100,000 jobs in the manufacturing sector in the next three or four years? The only strategy in terms of retreat in that area is to try to retain some of the associated back office functions. Is it purely the function of Enterprise Ireland to assist in the retention of these functions or does IDA Ireland have a role to play? Is the Tánaiste in a position to refer to specific programmes, rather than merely stating the general advice she has been given?

Ms Harney: Most of it would be by way of identifying contacts for companies. Some companies have done this on their own and have never approached Enterprise Ireland. A number of Irish companies have outsourced manufacturing and I am aware of one successful textile company, which began life six generations ago, that employs more people now than it did when all its production was done here. The latter has outsourced the making of its products and retained the design, finance, logistics and marketing functions in Ireland. The same applies to some of our electronics companies which have done so essentially using the overseas offices and contacts of Enterprise Ireland. Companies are often put in touch with partners that can facilitate them in terms of taking over some or all of the manufacturing aspect. Production-sensitive or time-sensitive manufacturing is usually retained in Ireland.

We must be flexible in terms of how we assist companies. However, our job is not to help to grow other economies, our job is to help to sustain Irish companies operating out of Ireland. The latter is foremost in the mind of those who run Enterprise Ireland, who have exclusive responsibility in this area.

We recently established a competitiveness fund which contains a small amount of money to help companies overcome particular competitiveness challenges. Sometimes it is merely a question of whether a company will survive. If we can retain brands and all the work associated with developing them in Ireland and move other activities elsewhere, that could be a recipe for success.

In the event that there is a misunderstanding, this policy is only pursued where there are no alternatives. We still remain extremely competitive but we have the second highest wage level in the eurozone. Where wages are a high cost of production, as is the case in labour-intensive sectors, it makes sense to move labour-intensive activities elsewhere and many companies are doing so. Some software companies are outsourcing software development to, for example, India, where software engineers are paid the equivalent of between €5,000 and €6,000 or $5,000 and $6,000 per year. It is difficult to compete with countries in which those are the wage levels.

Company Closures.

64. Mr. M. Higgins asked the Tánaiste and Minister for Enterprise, Trade and Employment the progress to date in regard to the liquidation of IFI; if all obligations to the workforce have been satisfactorily discharged; if all pension entitlements will be met; the amount the State will receive as a 51% shareholder in IFI; and if she will make a statement on the matter. [29912/03]

Ms Harney: I understand that the liquidation is progressing in an orderly and efficient manner and that considerable progress has been made regarding the realisation of the company's assets. However, while the company's principal properties in Arklow and Marino Point have been placed on the market, I am advised that it may take some time to sell them.

I also understand that most of the company's obligations to secured creditors have been settled, while payments to preferred creditors, which would include some amounts due to former employees, have been or are in the course of being made. Unfortunately, it is unlikely that payments will be made to unsecured creditors until the main property assets are sold, which I understand could take some time. I understand that the liquidator will hold a creditors meeting shortly to outline progress with the liquidation.

All claims received by my Department under the redundancy payments scheme and the insolvency payments scheme have been processed. Similarly, all applications received from employees for payments from the ex gratia fund of €24.5 million, established by ICI and the State, have been processed. Payments from the fund were made by the trustee thereof in accordance with the basis for distribution determined by him following consultations with employee representatives. A ballot open to all employees endorsed this basis for distribution.

Based on legal advice received, the liquidator has admitted, as unsecured creditors in the liquidation, claims from the employees of the company to have entitlements to enhanced redundancy payments. It must be emphasised that the amount to be paid in due course in respect of such claims is a matter solely for the liquidator.

I understand that the pension schemes covering all employees in the Republic, apart from a scheme covering two former CEOs, have sufficient funds to meet all the entitlements provided under the scheme, as well as pension increases of up to 3% per annum. However, there may not be sufficient funds to pay some discretionary benefits, which employees had hoped to receive.

With regard to the Belfast pension scheme, I understand that the scheme will only be able to pay active members, that is, employees still working at the time the company ceased operations, less than half their entitlements under the scheme. Existing pensioners are given priority and, as a result, they are largely unaffected by the shortfall in the fund. The shortfall involved arises primarily from a combination of stock market losses on investments and the impact of the regulatory regime in the North, which provides that pension schemes fund on a going concern basis. Our regulations require defined benefit schemes to fund on a more rigorous discontinuance basis. This ensures that provision is made for the additional costs of acquiring annuities when a scheme is wound up. I have only very limited information available about the scheme covering former CEOs, but I understand that this may be significantly underfunded. At this stage, I do not expect that the State will receive payment in respect of its shareholding in the company.

Mr. Howlin: Will the Tánaiste indicate her knowledge of an article that appeared in the Sunday Independent on 16 November last under the headline "DPP gets file on former IFI bosses' special pensions"? In the course of that article by Mr. Jody Corcoran, it is alleged that an investigation into secretive pension plans for three former executives of IFI is under way. The article further states: "On foot of the IFI management board recommendations, the Tánaiste-----

An Leas-Cheann Comhairle: It is not in order to quote at Question Time.

Mr. Howlin: I will merely refer to the article, which indicates that on foot of the recommendations to which I refer, the Tánaiste shut down the company. It appears, therefore, that the Tánaiste made the critical decision to make more than 600 people redundant based on advice from those who are allegedly under investigation. Will the Tánaiste indicate what she knows about the investigation? Who is carrying out that investigation? On her comment that the State will receive nothing from its 51% shareholding, has Mr. Jackson, the liquidator, indicated that he expects to raise over €100 million? In that context, why will the State, which owned 51% of IFI Holdings, not receive anything?

Ms Harney: I know very little about the article in the newspaper. I did not know anything about that article or its subject matter until it appeared. Responsibility for pension funds rests with the trustees, not the shareholders. The latter have no role in respect of pension funds. As I understand it, the article refers to the scheme I referred to in my reply, namely, that covering two former retired CEOs. I place on record that there are no financial irregularities involved and no one has suggested otherwise. However, I understand that the Pensions Board has referred the matter to the Director of Public Prosecutions. I am, therefore, unable to say anything more about it. Neither the shareholders nor I had, nor should we have, any hand, act or part in this.

In terms of the amounts realised from the disposal of the two sites, there are many others, such as, for example, the unsecured creditors to whom I referred in my reply, who will have to be paid in the first instance. We have an undertaking to the employees that we would reconsider some of the issues surrounding their concerns in the event that assets are realised. I am not saying that the State would not wish to recoup some money, but it is not our intention to recoup any money from this sad and sorry episode. If there was a surplus of funds, it would be divided on a fair basis between the employees who worked for IFI when it closed.

Mr. Howlin: Is the Tánaiste making a commitment that any surplus remaining after the liquidation will be distributed to the former employees on a pro rata basis? What is the estimated cost of the liquidation, in other words, how much will have to be paid to KPMG and the liquidator?

Ms Harney: I will have to communicate with the Deputy later in respect of the fee because I do not have information on it. There are clean-up issues that arise in respect of the sites which must be taken into account. When I met the employee representatives, I stated that in the event of there being a surplus of funds when everyone else had been paid and site liabilities taken care of, it would be the intention of the Government to reconsider the allocation for the employees. That is my commitment which I reiterate here.

4 o'clock

Mr. Timmins: Have serious offers been made for the site in Arklow? Has any group or individual expressed interest in the site? Will the Tanáiste confirm if it is possible that unsecured creditors will not receive full payment? Is there a chance they will not be paid and when will they know their final fate?

Ms Harney: Payment is dependent on realising resources from disposal of the sites. I would be surprised if we could not dispose of at least one, if not both, of them. I have no information in that regard and I have not had any recent discussions with the liquidator on what interest has been expressed in the Arklow site.

I am aware that, following the announcement of the closure of IFI, there were indications of planning related difficulties with activity on that site. I do not know if that is the case. As Deputy Timmins comes from County Wicklow, he would be much more familiar with the case than I am.

Mr. Timmins: Unfortunately, we always have planning difficulties.

Ms Harney: One would have to be from the Wicklow area to buy it.

Mr. Timmins: That is Government policy. I hope the Tanáiste is enlightened enough to introduce change.

Ms Harney: The Government does not decide where a person lives. I thought that was a matter for Wicklow County Council.

Mr. Timmins: We are told that we must follow Government instructions.

Ms Harney: No, definitely not.

Mr. Timmins: I hope the Tanáiste is enlightened enough to change it.

Ms Harney: There are many lovely places in Wicklow.