THE cost to the taxpayer in saving 395 jobs at Irish Steel has worked out at £94,000 a person, the Independent member, Mr Feargal Quinn, said in the Seanad yesterday. Speaking on the Irish Steel Ltd Bill, 1996, Mr Quinn said that the reality of the legislation was that Irish taxpayers were paying £37 million "to have somebody take the company off our hands".
Mr Quinn was speaking on the second stage of the Bill, which was initiated in the Seanad.
The Minister for Enterprise and Employment, Mr Bruton, had earlier declared that when the outstanding matters were finalised between State negotiators and the representatives of Ispat International, it would "mark a momentous milestone in the history of Irish Steel Ltd and will see ownership of the company pass from State to private ownership".
"Ispat International has entered a contractual commitment to employ a minimum of 300 full time workers in Irish Steel for the first five years of their ownership of the company. It has agreed also to honour in full all commitments of Irish Steel with regard to labour contracts and pension plans," the Minister said.
However, Mr Quinn said that six months ago, when the deal was struck, a cost price of £27 million was agreed. Now they were being told that the real bill would be £37 million.
"Is that £37 million good value for money? To find the answer we have to ask what are the benefits that flow to the State from it?
"The main benefit would seem that a number of jobs are being saved, at least for the time being. There are 395 jobs which would be completely lost if the company went to the wall. Under this deal, there is a prospect that these jobs will continue to exist, for some time at least.
"It does not need a computer to work out that the cost per job saved comes out at about £94,000 each. Is that good value or not?"
Comparing these figures with the standard State agencies' benchmark, Mr Quinn said that the average cost per job created and sustained by the IDA is £12,000; for Forbairt, it is £10,000.
"When you put those figures side by side with what, under the terms of the deal, it is costing the taxpayer to preserve the 395 Irish Steel jobs, you realise this is a very, very expensive deal."
He added that for the best part of 20 years, governments had said they wanted to attract "sunrise" industries to Ireland. But steel was a "sunset" industry, not a sunrise one.
"Today's steel industry", Mr Quinn stressed, "has no room for minnows. It has room for only a few players, who have the economies of scale and who are the cutting edge of technology".
Mr Quinn said that the Irish Steel deal rated very badly in a value for money test. In such a situation, he said, "we should have the courage to refuse the deal".
Mr Frank Fahey, the Fianna Fail spokesman on enterprise and employment, welcomed the legislation. He found it difficult to understand the attitude of the British government and British Steel to the sale, when it was acceptable to the other 14 EU countries.
"It was British commercial jealousy since the 18th century that greatly retarded Irish industrial development - at one time excluding Ireland from whole branches of industry. This must never be allowed to happen again," he said.
Mr Fahey said he was concerned about the safeguards built into the deal to protect Irish workers and the Exchequer. The workers were a key part of the company and had helped to turn it around to prepare for its sale.
But what would happen if there was a bad downturn in the world steel industry by the end of the century? Would there be lay offs or redundancies and could the State be liable? he asked.
Mr Joe Sherlock (DL) predicted that the Bill would herald a general upswing in the economic outlook for Cobh and surrounding areas. The agreed deal marked the end of over a decade of uncertainty for the area, he said.
The decline in Irish Steel, which had a workforce of 1,000 two decades ago, mirrored a similar decline in other European plants.
"Democratic Left has long argued for the formulation of a Common European Industrial Policy which would control state aids to the richer central regions of the EU, while supporting industries located at the periphery."
The second stage was passed.
The second stage of the Refugee Bill, 1995, was resumed and passed.
The House adjourned until 10.30 am today.