In a Seanad debate on 12 May 2000, I said:

We have lived for so long with a situation where there are more people than jobs that it is not surprising we find it hard to come to terms with the very reverse. The most important constraint on our economic future is a shortage of people.

I am not saying a shortage of skills, as I have often heard the Tánaiste say. We have a skills shortage, but one of the mistakes we could make is to believe that that is the whole problem. If the skills shortage was the beginning and end of the problem the way to tackle it would be to put all our resources into upskilling people and into trying to attract as many immigrants who have those skills that we could. We need to take those actions, but we are fooling ourselves if that is all we do and if we do not address the whole problem.

The skills shortage is part of a much wider problem - a shortage of labour.

It has caught us by surprise, but we have arrived at a position where we are short of people at all levels of skill and pay. This is not easy to talk about and can easily be misunderstood. The result of a shortage of skills and levels of pay is that the economy is being held back at all levels. At the same time an inflationary head of steam is being built up - we can see signs of that happening every day and I have argued that we should watch the danger of inflation on a weekly basis to ensure we do not take our eye off that ball.

We need to look at the opportunities we have to increase our labour force.

For instance, we must encourage more women to take up jobs outside the home, although the rapid changes we have seen in the last 20 years means there is far less scope for growth in this direction than there once was, but action has been taken on that this year.

We need to encourage older people to stay in the workforce, although that creates problems with retraining and in changing people's attitudes regarding the roles older people can play. That is an example of how we have changed from encouraging people to retire early some years ago. Wearing my business hat, I have discovered an enthusiasm to work and skills that were not being used in this area.

We need to allocate more money to the difficult task of reintegrating the long-term unemployed, particularly those who have never been in the workforce in the first place, including the particularly difficult task of preparing a significant number of people who have never had a job for the world of work. I have some experience of the new applied leaving certificate and I am thrilled to see the opportunities to pull people back into education who would never have had that chance. We have set a target of having 90% of people complete their education, but we are still at 80%. Even at 90% one person in ten will be left out, but we are still at 80%, which means two people in ten are being left without those opportunities.

We must also step up our efforts to get Irish people who have emigrated to return to Ireland, although we must recognise that many who left in previous times will probably never return. However, even if we do this well and attract significant numbers of people back into the workforce, we are still not doing enough.

We will still be short of people at all levels. That is the reality we face.

We have built up a head of steam against immigrants when the truth is that the economy needs immigrants. This week a headline in The Economist stated that Europe needs more immigrants and there are interesting articles in the magazine on that topic. Instead of making life difficult for immigrants and ourselves, we should put in place a structured scheme which would allow a set number of economic immigrants to enter the country each year and put these people to work as soon as they enter Ireland.

The Government has put in place a fast-track scheme to provide work visas for immigrants with special skills. The welcome mat is out for software engineers, architects or nurses which is well and good, but we should also be attracting people with other skills. When the scheme is up and running we may find it will attract fewer takers and not be as successful as we wish. The reality is that those skills are in short supply throughout the world and we are competing with other countries.

We are not catering for planned immigration in less skilled areas. There are many thousands who want to come to Ireland because they want a job. These economic immigrants come from places where the economic circumstances are in many cases dire. They are driven by the same wish to better themselves as previous generations who left this country for America, Australia and Britain.

They are prepared to start at the bottom, work their way up and do the jobs which, increasingly, Irish people are no longer prepared to do or interested in doing. They are also prepared to work for wages which are attractive to them but less attractive to many Irish people. As a result they are ideally suited to fill the jobs which otherwise will tend to be left unfilled, which will constrain our economic growth and add to congestion and overload.

I am not making a case on an ethical or moral ground for immigrants, but am trying to make an economic case which I do not think has been made strongly enough.

A fast growing economy needs a way of taking in at the bottom people from outside. They enrich the society they come to simply because they bring diversity into an otherwise homogeneous society. Because of their ambition, their readiness to work hard and their anxiety to get on, similar to that of Irish people who went to America and elsewhere in previous generations, they provide a strong upward thrust from the lowest levels of the economy. Within one generation many of them rise to the top.

A fast growing economy such as ours has two choices. Either we can legislate for a process which involves bringing in immigrants which through control and encouragement can result in the best situation for the host economy and the immigrants, or things can be allowed happen illegally.

If the economy is strong enough to create the needs I spoke about people will find a way of entering the country and many will manage to stay because of the inefficiencies of the administration system. However, because of their illegal status they will always live on the hunted fringe of society, never becoming part of it. They will find it impossible to integrate fully and will always be liable to exploitation, as happened the Irish abroad, by those who take advantage of their illegal status.

The real choice is whether we want immigration to take place legally or illegally, as immigration will happen in any event.

If we put in place a structured scheme to welcome economic immigrants we can help our economy grow and build a stronger, more richly diverse society for the future.

However, if through a lack of vision or courage we simply allow the economic gap to be filled through illegal immigration which creates a new underclass on the fringes of society, we will sow the seeds of future social and racial unrest.