Why size, vision matter for government

Mary Harney wasn't beating about the bush

Mary Harney wasn't beating about the bush. When she was asked on Morning Ireland about the 5,000 high-tech jobs lost here, most of them in the last six weeks, her answer was unusually blunt.

Ireland was a fully paid-up member of the global economy and the high-tech sector was "in a downturn". Employment was buoyant, but low-skill jobs were hard to hold. We would have to suffer the consequences. And that was that.

It sounded as if she were describing, not just the state of a sector of industry with headquarters in one country and a scatter of branches in another, but a relationship between states. And a mighty unequal relationship at that.

There could be no question of changing the corporation taxes (for manufacturing industry) which had proved such a potent attraction to American companies investing here. Our partners in the European Union had tried to convince us to raise corporation tax by a modest 2.5 per cent as part of a programme of harmonisation. The Progressive Democrats wouldn't hear of it. Neither would Bertie Ahern, Brian Cowen or Charlie McCreevy.

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That was what the long, sleepless weekend in Nice had been about. In the end we got by with a promise of change by 2004, from 10 per cent to 12.5 per cent, or half of the rates applied by others.

The American corporate sector is less accommodating than our European partners. As Harney explained, companies respond very quickly to protect their own interests. But not, it seems, to acknowledge anyone else's.

Charlie Flanagan of Fine Gael had, quite reasonably, proposed a forum to discuss the difficulties. Richard Bruton was to speak later of setting the best brains in the country to the task.

"Companies with responsibility to their investors," Harney said, with an air of finality, "are not going to give information to a forum that we establish." Coming from a humble councillor in a town stricken by job losses, this would have been bad enough. But here was the Tanaiste, the Government's second-in-command and Minister for Enterprise and Employment, talking about a forum at which one of the key elements of Ireland's industrial policy would be discussed.

The Coalition believes in small government and a minimum of regulation. And administrations of all shades favour low corporation tax and encourage moderate wages, stable conditions and co-operative unions. Our English-speaking, well-educated labour force is a distinct advantage.

So is Ireland's membership of the European Union - provided, as Harney warned, we don't fall for social democracy and become too European. We must always remain closer to Boston than Berlin, especially if it means avoiding obligations to labour or co-operating with unions.

It's the package being sold by Ahern, McCreevy and Harney to the American investors. These, for their part, are less happy about co-operation and sharing information. But should that be the end of discussion on industrial strategy?

Des Geraghty of SIPTU repeated yesterday that our concentration on the high-tech sector should not blind us to the potential of food and agriculture (industries in danger of being ignored) or the pharmaceutical sector. The Western Development Commission has argued for the high-tech sector's role in regional development, specifically the use of broadband communications to make towns and villages accessible to industry.

But, as John McManus warned here last week, such infrastructural improvements also depend on the eventual owners of Eircom having the funds to invest in it, and the availability of adequate power supplies and improved transport. The truth is we don't need small government in this State. We need visionary government. And we should not be fobbed off with a refusal to engage in serious debate.

In the absence of a serious debate on industrial strategy, we've had a chorus of anti-State, anti-public enterprise, anti-public service guff whenever there's an attempt to make this a fairer place; a more balanced society, not a happy huntingground for free-marketeers. Like their friends in high places, whose memories fail them in DIRT inquiries or tribunals, the ideologues of the right see no reason for consistency. So they rail against State monopolies and forget that, in the most profitable private monopoly, the chairman, Des Traynor, ended up running an unlicensed bank on the side.

There are some for whom it's always payback time, others for whom it never was. And you don't have to look too hard to discover where the Coopers, the Kiberds and the Dunphys stand. Tune in to Today FM if you want to hear - straight from the stockbroker belt - how McCreevy should continue to help the greedy in his latest budget.

dwalsh@irish-times.ie