Dáil Éireann - Volume 362 - 17 December, 1985
Irish Steel Limited (Amendment) Bill, 1985: Second Stage.
Minister for Industry, Trade, Commerce and Tourism (Mr. J. Bruton) John Bruton
Minister for Industry, Trade, Commerce and Tourism (Mr. J. Bruton): I move: “That the Bill be now read a Second Time”.
Under European Community rules, member states are prohibited from providing operating or investment aid to steel undertakings after 1985.
When I moved the Supplementary Estimate in the Dáil last July, I indicated that the Government were not prepared to provide additional funds to Irish Steel unless there was agreement between the company and their workforce on a cost-cutting rationalisation package which involved: (i) a pay freeze to the end of 1986; (ii) a redundancy scheme which would have the effect of reducing the company's present labour costs by at least 10 per cent, and (iii) the elimination of restrictive practices.
I also indicated that the Government were not prepared to support Irish Steel at any price as the taxpayer had already contributed handsomely to the maintenance of employment at Irish Steel. On the other hand, I indicated that the Government were very conscious of the  adverse impact that the closure of the company would have on the economic life of the Cork region.
As Deputies will be aware, the rationalisation measures were eventually accepted by Irish Steel employees and this cleared the way for the payment of £6 million to the company.
Following the Government decision last July to invest an additional £6 million, I requested the board to reassess all aspects of the company's operations with a view to making the Haulbowline plant more efficient, productive and, hopefully, profitable. I also asked Irish Steel to continue their investigations towards finding a joint venture partner or third party investor.
Irish Steel had just four months to report back to me about the prospects of the company becoming financially viable. I have considered very carefully the submission made to me by the company in mid-November. On my recommendation and having regard to the company's financial projections, the Government have decided to invest a further £18 million.
I would like to outline to the House some of the main considerations which prompted the Government to approve this additional investment. There have been a number of positive developments in recent months which resulted in Irish Steel being able to demonstrate that, at long last, there is a real prospect of the company having a long term future. The most obvious development is the saving which will result following on the acceptance by Irish Steel's workforce of the package of cost-cutting proposals put forward by the board of Irish Steel. Last July, I said that as a first step towards achieving viability, the company's workforce would have to make sacrifices and should recognise the acute financial position of the company. Despite a hiccup or two, along the way, a sensible cost-cutting package was duly accepted. The realism displayed by Irish Steel's workers augurs well for the future but I must emphasise the absolute necessity for the longer term continuation of this realism. By accepting a pay freeze until the end  of 1986 and in accepting 117 redundancies, the company should cut costs in excess of £3 million in the 18-month period to the end of 1986. In other words, the company's labour costs will be reduced by over 10 per cent on an annual basis.
The second factor which has improved Irish Steel's position is the recent decrease in scrap prices. As scrap represents nearly 34 per cent of the cost per tonne of finished steel any significant price development affecting this essential raw material impacts quite significantly on the financial prospects of the company. I explained to the House last July that a main cause of Irish Steel's poor performance in 1984-85 was the high price of scrap relative to the sales price of steel. The fall in scrap prices which was evident in July has continued and while it is very difficult to say if this reduction will be maintained there are some signs that the market has stabilised somewhat. I would hope the price of scrap will not exceed its current level and allowing for seasonal variations in prices, that the average price Irish Steel pays will not increase in real terms over the years.
Although Irish Steel have been successful in achieving a gradual build-up in sales volume, they have found it very difficult to increase their prices in the face of keen competition in a depressed market. There have, however, been some signs of a very modest recovery in prices in their markets in 1985 and it is hoped that this will continue into 1986. Latest reports from Brussels are that the market is relatively stable. The Commission is, however, very cautious about forecasts for the steel market and its report General Objectives 1990 indicates that price increases will continue to be modest in the years ahead. I should point out that a relatively small variation in the selling price of steel and in variable costs such as scrap could have a substantial effect either favourable or unfavourable, on the company's financial position. This said, I am encouraged that Irish Steel, so far in their financial year (which ends on 30 June 1986), are achieving the prices  they had projected, which was not the case in previous years.
The fourth factor which has influenced the Government in taking their decision to invest more money in Irish Steel, is the results of consultancy studies which have been carried out in recent months into practically all aspects of the company's operations. The board of Irish Steel, management and employees must do their utmost to implement, with an urgency which I could not over-emphasise, the improvements in working practices and operational efficiencies which have been identified by the consultants. Any failure in this regard can only be detrimental to the company's long term interests.
The final factor which has worked in Irish Steel's favour in recent months is the value of the dollar and a consequential reduction in interest payments.
The Government have decided that a further £18 million should be invested in Irish Steel before the end of the year. This will bring to £24 million the total amount of State investment in the company in 1985. This is the maximum amount which the Government may provide to Irish Steel in 1985 under the ECSC aids code for steel undertakings. Of the £24 million, £6 million has already been paid to the company. The House will recall that a Supplementary Estimate was passed on 10 July this year to enable a grant of £5 million to be paid to the company in the period to December 1985. An additional £1 million was provided by way of share capital under existing legislation.
The purpose of this Bill is to facilitate the additional investment of £18 million in Irish Steel by way of advance from the Central Fund and to provide retrospectively for the conversion into share capital of the £5 million grant already paid to the company. The Bill also provides for a reduction in the statutory limit on State guaranteed borrowings bringing this into line with the amount of guaranteed borrowings currently held by the company.
Specifically, the provisions of the Bill are as follows:
 —to increase the authorised share capital of Irish Steel Ltd. from £120 million to £125 million;
—to provide, as a consequence, a similar increase in the value of the shares which the Minister for Finance may take up;
—to reduce the limit to which the Minister may guarantee borrowings by Irish Steel from £100 million to £32 million; and
— to enable the Minister for Finance to advance up to £18 million to the company from the Central Fund.
The House and indeed the taxpayer will want to know why such a substantial sum as £18 million is now being provided to Irish Steel. Deputies might well ask why a sum below £18 million would not suffice. In answer to this question, I would first of all point out that the £18 million is being provided to the company by way of an advance from the Central Fund. Certain conditions are being attached to the advance. For instance, the Exchequer will be able to recoup part or all of these funds in due course, should they at any time become surplus to the company's requirements, which I hope they do. I should stress that there is no set time for the repayment of the advance and that any demand for repayment will take account of the company's financial position at the time, and their ability to make a repayment. Given the vast investment which the State has already made in the company, I consider it is not unreasonable to expect Irish Steel to repay the advance to the Exchequer, when the company's financial position permits.
The additional £18 million will be used by the company to repay one of their State guaranteed loans; to meet increased working capital requirements which will arise as the company continue to increase their level of output; and to cover capital expenditure items.
Perhaps I might explain a very important point. This £18 million equity is being  used to reduce debt which is already guaranteed by the Exchequer. This means that if the company were to close we would have to pay this £18 million one way or the other. What we are doing by converting it into equity is making sure that the company will not have to pay the interest to the banks. We are not increasing the State's exposure, but simply saying that the State will have to pay the interest, not the company. That is the essential effect of this transaction. We are not giving them £18 million, we are simply transferring the responsibility for the interest on £18 million because if the company were to close the State would have to find some money since all borrowings are guaranteed by the State. I hope that will be taken into account and that this £18 million will not be seen as a gift to Irish Steel. We are converting debt, which we already guarantee, into equity on which we hope eventually to get a profit, but not immediately, and the effect will be to reduce the financial charges facing the company and, unfortunately, increase those facing the State. That may not be explained as fully as it should be in my circulated speech and I wanted to put it on record in case tomorrow's headlines screeched a story which may not be entirely in “synch” with the facts, although I know that rarely happens.
The main reason why the Government accepted that further investment should be made in Irish Steel was the clear improvement in the company's forecasts and the indication that the company are capable of making a trading profit and a net profit in the not too distant future. The Government would view with grave concern any significant deviation from the company's financial projections, particularly if Irish Steel make trading losses and the additional Exchequer funds were being used to finance such losses.
For some months now, the company's chairman and chief executive have had discussions, on my instructions, with potential joint venture partners. I have asked the company's chairman to continue to search for a partner. I would add  that the Government's commitment to support Irish Steel with additional investment will improve the company's prospect of finding a potential partner.
It is important that the House understand why I asked Irish Steel to look for a joint venture partner. It is not that we want to achieve a position where the Government no longer own 100 per cent of the company, but we want to achieve a situation where the company's debt will be reduced, hence the interest charges they have to pay will be reduced. If somebody buys a share in the company for cash, and that cash is used to reduce debt, then the ongoing expenses of the company are thus reduced and the prospect of the survival of the company is increased.
The relevance of a joint venture partner is, first, that the money invested would be used to reduce the debt, hence to reduce continuing interest charges and to improve the company's prospects. The Government cannot invest more than we do because the ECSC rules do not allow it, but if the company can make a deal with another investor, that is not forbidden by ECSC rules. The effect of that investment would be the same as a further equity injection in the sense that it would further reduce debt levels which, even after this injection, will be too high, and consequently the interest payments would be too high.
The second reason why it makes sense to look for a joint venture partner is that Irish Steel is a small single plant in a very big and aggressive market-place and association with another company, which is bigger or has other technical or marketing capacities, to bring to the board of Irish Steel and the policy of the company, would be valuable in ensuring Irish Steel's long term survival. That is why I am glad the company's chairman has spent an enormous amount of time travelling around the world looking for a joint venture partner. This is an extremely valuable exercise, which, if successful — and I cannot guarantee that it will be, nor can the chairman — will further strengthen the position of the company.
I would like to take this opportunity to  pay a personal tribute to the chairman. Mr. Kevin McCourt, for the work he has done in the company over the last few months and in particular for the personal effort he has put into this joint venture activity which had to be undertaken, alongside other internal matters.
The House may be aware that I asked my Department to make an application to the EC Commission to secure funds from the European Coal and Steel Community to assist Irish Steel workers who were made redundant in recent months. When the workers voted on the company's rationalisation plan last August, the availability or otherwise of EC funds for redundant workers was a key issue. I have been keeping a close eye on developments since the application was lodged with the Commission. I understand that a decision on the application is expected before Christmas and funds could be paid in the early New Year, all going well. It will be recalled that we have applied for £832,000 in respect of a package of social measures which includes redundancy lump sum payments, tideover allowances, which are a supplement to unemployment benefit, as well as allowances for early retirement, wage support and retraining. I am hopeful of a Commission decision very soon though it is possible that we may not get a positive response in regard to all these areas. If the Commission indicate their willingness to provide funds in the New Year I am sure this will be welcomed by the House and the redundant workers and their families.
Deputies should appreciate that Irish Steel are trading in a difficult environment. It would be unrealistic to expect a dramatic improvement in the steel market in the foreseeable future. The surplus production capacity in Europe, combined with the liberalisation of the quota system may well put a downward pressure on prices. The behaviour of exchange rates and, in particular, changes in the dollar rate, can have a substantial impact on results. Thus the company's path to viability will, to a very large extent, depend on Irish Steel achieving significant efficiencies and  improvements in productivity and, above all, reducing costs to a minimum.
I would like to take this opportunity to pay special tribute to Irish Steel's employees and their union representatives. The realism and co-operation displayed by them in accepting the rationalisation measures clearly demonstrated a high degree of commitment and loyalty to the company. There is no doubt that they have made a major contribution towards securing the future of Irish Steel.
I appreciate that the morale of Irish Steel's employees and management must have suffered because of the uncertainty facing the Haulbowline plant over the past few months. By committing further scarce Exchequer resources the Government have. I hope, reassured the company's workforce that Irish Steel have a future and a future that is worth working for. The task facing Irish Steel in the coming years should not be underestimated. The company and their workforce must do all in their power to produce as much steel as possible and more competitively and efficiently than has been the case in the past. For example, yield factors can be improved significantly in my view.
To conclude, it is my view that Irish Steel have the potential to reverse their fortunes and to make a modest net profit in the foreseeable future. Because of this the Government have done all within their power to assist the company. Under EC rules, no more money may be made available to Irish Steel from the Exchequer. The success or otherwise of this Cork company rests fairly and squarely in the hands of their board, management and workforce themselves.
I am confident that the Bill will commend itself to the Dáil and I recommend it for approval.
Mr. Lyons Mr. Lyons
Mr. Lyons: I welcome the Bill. It is a ongoing measure we were expecting in view of the debates on Supplementary Estimates and indications earlier in the year. In July 1985 we had a Supplementary Estimate for £5 million for Irish Steel and £1 million in equity was given to them  to help them to survive—those were the words used at the time. The money was given to allow the company to meet their commitments to the end of the year and it was said that the question of the remaining money would be considered in the light of what might happen in the meantime in the company.
In the last part of his contribution the Minister paid tribute to the workers of Irish Steel but I wish to do this at the beginning of my contribution. The commitment of the workers to survive must be acknowledged by everyone. One of the main factors in that commitment was the experience gained by other firms in the region who suffered closures and redundancies. When debating the Supplementary Estimate on 10 July last the Minister said that the Government had considered the option of closure. This is stated in columns 1394 and 1395 in the Official Report. We condemned that attitude of waving the big stick over people. The horrifying experience of closure of factories in the Cork area in recent years was the main factor that motivated the workers in Irish Steel to agree to the terms issued at that time for survival of the company. I am pleased that the option of closure of the factory did not require to be considered further. The workforce must get our highest commendation. The jobs of 100 people were sacrificed in order that the plant should survive.
We have always contended that the steel plant at Haulbowline, the only one in the country, is a national asset and it behoves all of us, the Government Opposition, management, board and workers, to ensure that that asset should survive and thrive. This Bill gives effect to the financial commitments and arrangements already outlined and it gives effect to the request of the Government to the European Commission in May 1985 for approval to invest additional equity to the amount of £24 million in Irish Steel. I agree with the Minister that we would not like to read headlines that gave the impression that Cork is getting £18 million to allow Irish Steel to keep going. I agree that could be  a misleading interpretation of this Bill. We sought from the Commission approval to invest additional equity to the tune of £24 million. However, it should be said that we were not alone in our request to the European Commission. Other countries were making similar requests; the Germans made a request for £350 million, the Italians for £5,000 million and the French for £250 million.
We should also acknowledge the benefit of Irish Steel to the economy. Figures I had at mid-year indicated that the benefit to the economy was in the order of £24.85 million and the operations at Irish Steel benefited our balance of payments to the extent of £45 million. In July we were told that the company's balance at 30 June 1985 was £7.5 million. at 5 July it was £3.4 million, by mid-August it was £1.4 million and we were told that by September it would be down to £700,000. Irish Steel had been given a sum of £89 million, much of the money to pay off the original borrowings that were used to modernise the plant. I am saying these things so that the rest of the country does not consider we are getting special treatment to recover from the ashes into which we have fallen in recent times.
I had intended to ask the Minister for the up-to-date position of the Government's application to the European Coal and Steel Commission for aid for redundant workers. That commitment was given last July. I note from the Minister's speech that he hopes an announcement will be made during this month. It is long overdue for the 117 workers who were made redundant.
This whole exercise in relation to Irish Steel indicates that the cost of employing people nowadays must be examined. It appears to me it is a more practical and viable proposition to employ a number of people and to pay them overtime rates for many hours of work rather than to employ more additional people. This is because of the cost factor of employing people. If any industry is an indication of what it costs to employ people, surely  Irish Steel is such a company. As I indicated, the company were getting to a break-even point provided they got the necessary equity to clear the old borrowings. We accept that the price of scrap has dropped and that is an essential element in the operation at Haulbowline. It is acknowledged that the market has stabilised because of reductions in the number of workers in other countries and the EC operation to stabilise the market. There has been a small but steady increase in product prices and, as the Minister has indicated, and I concur with him, the value of the dollar against the punt and sterling has helped to reduce our interest payments and to increase the value of the product of Irish Steel.
The workers in Cork and their commitment to the survival of the plant through acceptance of redundancy conditions have helped the plant to survive. Efficiency has been improved——
Mr. J. Bruton Mr. J. Bruton
Mr. J. Bruton: Common sense.
Mr. Lyons Mr. Lyons
Mr. Lyons: Whatever it is. I wish to pay a tribute to all concerned, particularly the workers. The cost of marketing is so high that it is better for an enterprise like Irish Steel to pay larger amounts in overtime than to put in even one more employee and be saddled with all the deductions inherent in employment — PAYE, PRSI, levies and the rest. The cost of employing people nowadays must be reconsidered by the Government. The mill shop at Irish Steel works on a four-shift basis and this causes a good deal of overtime.
The Minister spoke of the consultants' report. When if ever will it see the light of day? Will the Minister ever tell us why the report is not being dealt with? When somebody from the Government benches rises to speak, would he indicate to us why the report is not being published and whether action will be taken as a result of the report? I hope somebody over there will give attention to that during the debate. The Minister pre-empted a question I intended to ask about the possibility of a joint venture in Irish Steel. Has he any indication that somebody  would be prepared to participate in such a joint venture?
In 1984 and this year we heard about the cost of energy in the plant. We are all aware this matter needs to be addressed. Would the Minister and the Government tell me what is their attitude to the failure of the ESB to carry out the Government's directive to reduce the cost of electricity there? I am aware what a computer test is being undertaken in the plant in the hope of making a reduction to 37 mega-watts of electricity, but whether that can be brought to a successful conclusion or not. I suggest that the Government's directive to the ESB to reduce energy costs to Irish Steel should be followed up. As far as I can ascertain, that has not been done. Section 4 of the Bill states:
Section 9 of the Principal Act (which imposes a limit of £100,000,000 on the guarantee by the Minister of the repayment of moneys borrowed by the Company) is hereby amended by the substitution in subsection (3) of “£32,000,000” for “£100,000,000” (inserted by section 2 of the Irish Steel Limited (Amendment) Act, 1983), and that subsection, as so amended, is set out in the Table to this section.
Is it because the borrowing guarantee is not now required and that £100 million is unlikely to be needed that this provision to reduce the amount to £32 million has been inserted? We welcome this new finance and the inclusion of further equity in Irish Steel because of the company's strategic importance and the employment it has created and the commitment to the workforce to ensure the continuance of the plant.
I request the Minister to ensure that the people made redundant will be taken care of through the Coal and Steel Community so that the redundant workers will be retrained to face the future. They sacrificed their jobs to ensure the continuance of the plant and for the benefit of the nation, and they should not be thrown on the scrap heap like so many other Cork workers. Long may their sacrifice  be appreciated by us. Long may Irish Steel be there as the only viable labour-intensive plant in the country. Let us do all we can to ensure that the sacrifices of the redundant workers will not be forgotten.
Mr. Allen Mr. Allen
Mr. Allen: Like previous speakers I welcome the Bill. The money involved and the further investment form a life line for the company. Irish Steel as an industry is in a much more healthy state than was the case a number of months ago. This is due in the first place to the dedication of the workforce and secondly to the good sense of the management and the unions in that time. I wish to pay a tribute to everyone concerned in Irish Steel for that improved performance. With Deputy Lyons I pay tribute also to those whose jobs had to be eliminated. These people made the supreme sacrifice in accepting redundancy so as to ensure the future of the plant.
The good performance of the company in recent months has been brought about to some extent also by the improvement in external factors — the decrease in scrap prices, the increase in steel prices, the drop in interest rates and the improvement in the performance of the punt vis-à-vis the dollar. All these factors will help to ensure that the company will continue in operation. I trust that in the months ahead efficiency at the plant will continue to improve and in that regard that the performance of the workforce will continue to improve. I trust, too, that the performance of management, which has been the subject of some hard criticism here in the past, will continue to improve also. With co-operation all round, I am confident that the plant will survive and will be viable in the years ahead. I wish the management well in their efforts to find potential joint venture partners. Success in this area would be a great bonus. It would be a positive factor in the years ahead.
I share with Deputy Lyons the hope that the negotiations in progress in Europe in relation to the redundancy package for those whose jobs had to be eliminated will be brought to a favourable  conclusion within the next month or two and that these 117 people will receive further compensation from Europe for the sacrifice they have made.
This Bill is an indication of the Government's continued commitment to the Cork region. This commitment together with other major investments and decisions in regard to Cork in recent months should ensure the revitalisation of the industrial sector in that region.
There have been dramatic job losses in the Cork region in the past two years as a result of the closure of a number of our traditional industries. Two factors which contributed largely to those closures were the Anglo-Irish free trade agreement and our accession to the Common Market. However, we must regard this Bill as another bright light so far as the future of Cork is concerned. Though the Minister says that some of the money being made available will be used to finance loan repayments, a considerable amount will be devoted to increasing the level of output at the plant while a large amount will be used also by way of capital expenditure. Therefore, this Bill is a commitment to the plant itself.
Mr. E. O'Keeffe Mr. E. O'Keeffe
Mr. E. O'Keeffe: I join with the other speakers in welcoming the Bill. We are all happy to celebrate what has been achieved in this area in the past months but this Bill is a very welcome bonus. It offers a ray of hope and we look forward to further such initiatives from the Government.
In the past number of years the Cork area has suffered severely in terms of employment losses as a result of the closure of many of our traditional industries. We have not been successful in finding replacements for those industries nor in finding work for those who lost their jobs. Cobh is a very important part of County Cork but in that area there are between 800 and 900 people unemployed. This year alone the increase in unemployment in Cobh was of the order of 200. High unemployment detracts from the economic wellbeing of an area because other sectors such as the service industries and business generally depend for success on  employment in any area. Public houses, shops and hotels all do well when employment is at a high level. The Cobh area was very buoyant in the past but the loss of employment there has been catastrophic.
The workforce in Irish Steel have made sacrifices and it was difficult to blame them for questioning the proposal that was before them. Their jobs were on the line but they have co-operated very favourably in relation to the rationalisation programme and thereby encouraging the Government and the EC to invest in the company. One factor that must not be lost sight of is that Irish Steel have been our only outlet for scrap so that without the company we would have to export our scrap.
The total investment in Irish Steel this year will be up to £25 million. That is very significant for the area. I am confident that it will result in solving the problems the plant has been experiencing. I notice that the guarantee of borrowings for Irish Steel is being reduced from £100 million to £32 million. That is a substantial reduction so perhaps the Minister would elaborate on how he arrived at the reduced figure.
It was encouraging to read in the Minister's speech that there is no set time for payments to the Exchequer. That proves that the Minister has confidence in the continuation of that industry and that he believes that the increased working capital will help and will possibly lower the bank interest payments so that Irish Steel will become viable. Our steel industry is relatively small in the European Community and world context. We are a small nation trying to build an industrial base. For that reason the EC should be more sympathetic to us. It is hard to compare our level of activity in any industry with that of the Germans. Belgians, the Italians or the Britons. I hope that the £800,000 in the package of social measures to come from the EC will assist the workforce. If granted it will be a very welcome bonus.
Irish Steel are now the largest employer in the Cork area employing about 560 people in the workforce. There  will be a further contraction in those numbers bringing them down to about 440 employees. That is something I never thought would happen. I did not contemplate losing our largest traditional industry. We are back to a situation where a semi-State body is the largest employer in that area. I welcome the Minister's foresight in continuing this industry in the Cork area. Irish Steel has come from a substantial loss-making industry to what is now likely to become a profit-making operation, and I welcome that.
Joint ventures are a new phenomenon in the private sector, semi-State sector and the State sector generally. If a project is worth while why do the State have to get a mix of private and State investment? If private investment is provided by a foreign individual, he will only be interested in profit. When times get difficult he will request the return of his investment and will leave the country, leaving us with our original venture. If Irish Steel become successful we should not encourage outside venturers.
Mr. J. Bruton Mr. J. Bruton
Mr. J. Bruton: He cannot do that.
Mr. E. O'Keeffe Mr. E. O'Keeffe
Mr. E. O'Keeffe: Because of our EC membership?
Mr. J. Bruton Mr. J. Bruton
Mr. J. Bruton: If a person gets into a joint venture, he takes shares in the company and he cannot take his money away.
Mr. E. O'Keeffe Mr. E. O'Keeffe
Mr. E. O'Keeffe: That is in the private sector.
Mr. J. Bruton Mr. J. Bruton
Mr. J. Bruton: It is the same everywhere.
Mr. E. O'Keeffe Mr. E. O'Keeffe
Mr. E. O'Keeffe: Energy costs is one of our biggest problems in the industrial field and the problem must be tackled. All our service costs, whether in postage. telecommunications or roads, are too high. The roads cost money because, due to their condition, we do not get the same life from trucks and equipment as do other countries. These problems must be tackled if industry is to become competitive.
 I wish the board and management of Irish Steel every success. Their task is difficult, but I have confidence in them and I hope they will see the fruits of their work in the years ahead. I hope Irish Steel will be one of our largest industries in the Cork area employing many more people than they now employ.
Mr. M. Ahern Mr. M. Ahern
Mr. M. Ahern: Like other speakers, I welcome this Bill. Coming from Cobh, I am well aware of the trauma that occurred a couple of months ago when the future of Irish Steel was in the balance. It is significant that unemployment in the Cobh area is around 1,200 and not 900 and that it has jumped in the last couple of months mainly due to the number of people made redundant in Irish Steel. I commend the workforce, the management and unions, who showed great level-headedness and a sense of reality in facing up to their problems. As the Minister said, there has been a turnabout in the returns of Irish Steel over the last number of months due to the change in the value of the dollar and due to the fall in the price of scrap. This injection of £18 million will reduce the expenses, and the interest charges will now be borne by the State rather than by the company. It should help the company improve their performance further.
The Minister asked the chairman of the board to continue in his efforts to get hold of a joint venture partner. I hope that that will be successful, not that I am in favour of joint ventures in State companies but because, if a private individual or company is willing to buy into Irish Steel it would indicate that there is a feeling that the steel industry is likely to succeed and that Irish Steel in Haulbowline have a favourable future.
I look forward in the coming months to success in this area. From speaking to the many people who worked in Irish Steel I detected that there will be a real effort to ensure that Irish Steel will succeed. The workforce feel they can increase their productivity level to ensure that there will be jobs for themselves and their families and that there will not be further unemployment in the Cobh area.
 I welcome this Bill and congratulate all those involved in ensuring that Irish Steel has taken a U-turn and is progressing in the way we would hope other firms would progress.
Minister for Industry, Trade, Commerce and Tourism (Mr. J. Bruton) John Bruton
Minister for Industry, Trade, Commerce and Tourism (Mr. J. Bruton): I thank Members of the House for the welcome given to this Bill. There is not a guarantee that this will be sufficient. From henceforth the company will have to act entirely on their own in that no further State aid will be given after 31 December. They will essentially be in the same position as companies in the private sector. They will not be able to turn to their shareholder for a further injection of equity. The company will have to be extremely commercial in their operations. I hope that is fully understood by the board, management and everybody involved.
Deputy Lyons paid fulsome tributes to people who entered into what he described as great sacrifices. I do not want to take away from that, but it is not a great sacrifice to apply common sense. The common sense that must be involved here is that people must realise that, if Irish Steel did not make the economies they made in the past, and if in future, of their own accord without prompting from the Government, they do not make further necessary economies, they will not survive and everybody will lose.
Therefore, what is the choice? In this instance it is between making a small sacrifice in order not to have to make a greater one. That is simple common sense. I hope that attitude of common sense — which is now perhaps more evident in Irish Steel Limited and other State companies than it was in the past — will prevail. It should be said that this was a result of a very firm and realistic approach having been adopted by the Government. In this instance it is fair to say that the Government gave the lead in so far as Irish Steel Limited are concerned, clearly indicating what were the parameters and saying that those would be adhered to. It  was in response to that firm stance by the Government that Irish Steel Limited have now put themselves on a more sound footing than they might otherwise have been on.
I was asked about the application to the ECSC for assistance in regard to further help for redundancy.
Dáil Éireann 362 Irish Steel Limited (Amendment) Bill, 1985: Second Stage.