I move that the Bill be now read a Second Time. In considering this Bill, which involves a more comprehensive approach to industrial development than has been attempted before, the House should, I think, have some indications of the progress made in industry since the establishment of the State. Deputies will, of course, realise that because of the inadequacy of the statistics relating to the earlier years of the State and because of the various changes in the scope and extent of the statistical surveys, it is not possible to trace industrial progress scientifically. In 1926, which was the first year of the census of industrial production, there were some 102,000 persons engaged in the industries and services covered by the census; the corresponding figure for industrial employment in 1949 has been estimated at 200,000, representing an increase of 96 per cent. on 1926. The most reliable information available to me at present suggests that when the final figures are compiled, the volume of industrial output will reflect an even more spectacular increase over the same period, and that production last year will prove to have approached two and a half times the 1926 dimensions. Output in terms of value, and also industrial earnings, have, of course, increased by a much greater extent on account of the rise in the general level of prices since 1926.
Despite the great progress shown by the indicators which I have given, the country is still in an undeveloped condition industrially. Beyond question, there is an urgent need for further and intensified industrialisation. The proportion of our occupied population engaged in industry is among the lowest, if not actually the lowest, in Europe. Less than one-fifth of our working population are so engaged, as compared, for example, with two-fifths for the Netherlands and one-third for France. I may say that this fraction of one-third is a familiar one in the statistics for continental countries and that it approximates closely to the proportions dependent on industrial occupations in other countries with which Ireland is sometimes compared.
I am convinced that the origin of many of our social and economic problems lies in this low proportion of our population employed in industry. Our emigration rate is high because of the inadequacy of employment in industry and ancillary occupations; the capacity of agriculture and other non-industrial pursuits to absorb the surplus population is subject to certain limits, and unless we can provide openings for them in industry I am afraid that the emigration rate cannot be very greatly reduced.
Our balance of trade, as Deputies know, is heavily adverse, partly because of substantial imports of many goods which we could and should produce ourselves, and partly because our exports of industrial products to countries other than Great Britain are so relatively trifling. From an examination of the 1948 and 1949 import statistics, I am of opinion that in each of those years approximately £60,000,000 worth of goods which could have been produced in the country were imported. If the current labour content of transportable goods may be taken as a guide, the production of this volume of goods would have kept 45,000 additional workers in industrial employment over the last two years. While industrial exports have been increasing in volume and value, they are not yet approaching the stage when they can make any significant contribution to the cost of our purchases from countries other than Great Britain.
Sufficient has, perhaps, been said to demonstrate the necessity for further industrial expansion. I should like to ask Deputies to consider the scope that exists for development and the means and resources that are at our disposal for utilisation. We have a plentiful supply of labour and I might mention in that connection that many industrialists in Ireland and abroad have complimented our workers on their efficiency and adaptability in familiarising themselves with new processes.
I think nobody will deny that capital is available in quantities sufficient to finance many industrial undertakings. Deputies have some idea of the extent of our assets abroad. An authority has recently stated that the amount of Irish capital invested abroad per head of the population, namely, £150, is probably larger than that for any country in the world. The existence of this phenomenon in conjunction with the serious under-investment at home to which the Taoiseach has already drawn public attention, provides, I suggest, unflattering testimony to the extent to which we have developed our resources up to the present. As the Taoiseach has intimated, it is the Government's wish that private investment in industrial and other productive projects should be substantially increased.
The House will, I am sure, agree that in the circumstances of this country there is a clear need for a courageous, imaginative and vigorous effort to change radically a situation that contains obvious dangers from the national standpoint.
The Government are certain that in the national interest the development of industry should not be left to follow a course set by the uncoordinated activities of individuals, companies and groups working to cater for market requirements as determined by themselves. There is still a wide field for further industrial activity, but it is one in which there is need at Government level for assisting and supplementing the efforts of private enterprise, firstly, by careful research and planning so that it may be determined by reference to national as well as to individual interests what precisely remains to be done and how and where it may best be done, and secondly, by taking the necessary step, to ensure that developments regarded as necessary or desirable will be undertaken and carried out.
In this task of formidable proportions and of paramount national importance, the Government have felt the need for a specialised autonomous organisation. They have, therefore, set up the Industrial Development Authority to advise and assist the Government in the intensification of industrial development on the best possible lines; the primary purpose of this Bill is to give statutory effect to the Government's action, with effect as from the 26th May, 1949.
The Government appointed four members of the authority, and have selected those members because of their wide knowledge and long practical experience of industrial affairs, and of their contacts with industrialists, with traders, with workers and with financial and professional organisations closely connected with industry. To these members the Government have given that degree of freedom which they consider essential to the effective discharge of the functions of the authority. The members will not be civil servants, neither will they be subject to Civil Service regulations or procedure. They will have their own offices, their own staff, and their own finances. Provision has been made in the Bill for an annual grant to defray their remuneration and to meet such expenses incidental to their work as they in their sole discretion consider necessary to enable them to discharge their functions. They will, therefore, be free to frame their own programme, to regulate their own procedure, to travel where and when they consider it necessary, and generally to operate as a fully autonomous body. Already the Government has had ample evidence of how this self-governing, flexible type of organisation has made for expeditious, practical and efficient handling of various problems on which advice has been tendered by the authority.
From Section 3 of the Bill it can be seen how wide is the field over which the operations of the authority will range. So many sided are its functions and so closely related are most of them to the daily work of portion of my Department that at the outset it was obviously necessary to avoid duplication and overlapping and to ensure speedy co-ordination of effort. With this in view it was decided that the work formerly undertaken by the trade and industries branch of my Department should be assigned to the authority, and hence the officials engaged in that work in my Department have been appointed by me to assist the authority, and now constitute the staff of the authority.
The primary function of the authority is that of planning new industries. As part of this work the authority have been examining the steps necessary to undertake a survey of industrial resources and possibilities so as to obtain as clear a picture as possible of what has been done and what still remains to be done and what resources and facilities are available or can be made available. This survey will be carried out by the staff of the authority under its direction and supervision, and thereafter will be maintained up to date on a continuing basis for the use and information of the Government, of industries already established and yet to come into being, and for the use of the authority itself. The survey will show for the first time in comprehensive form the structure of existing industrial enterprise and will be a valuable indication of industrial possibilities. By this means supplemented by information obtainable from the Central Statistics Office and other Government agencies, there will be available for each important manufacturing activity information on many aspects about which little is known at present, except in so far as an individual concern is aware of its own background.
We do not know at present, for example, how much capital is invested in industry or how it is represented by buildings, by plant and machinery, by stocks of raw materials or of partly finished or finished goods, by debtors and by other assets. Neither do we know how these vary from year to year and from industry to industry. We do not know how industry is financed—e.g. the extent to which the capital is provided by shareholders, debenture holders, bankers, creditors and reserves. We do not know how many shareholders have provided the capital nor have we any information as to the dividends they receive, which is itself an indication of whether times are good or bad. Much more information can be obtained than is now available in respect of each principal industrial product, as to the extent and type of employment given, as to wages and earnings, labour turnover, welfare schemes, unemployment experience, etc. So also can information be obtained bearing on the manner in which the distribution of industrial products is organised. Generally the survey will show how and where the country is industrialised, the yearly progress in the case of each important activity, and the extent and location of the human and natural resources which allow of further development.
The compilation of this survey will take time, but meanwhile the authority is engaged in initiating the development of industries in which a preliminary survey made by it suggests there are promising prospects. I am aware, for instance, of an approach by the authority which has resulted in immediate steps being taken to establish a factory of considerable size to meet our requirements in an essential product hitherto wholly imported. I am also aware of visits by members of the authority to factories in various parts of Ireland, including the Six Counties, in England and in Scotland, which have given rise to proposals to establish industries of importance or have revived desirable proposals which had lapsed. I also know that the members of the authority are personally conducting negotiations in a number of directions which are likely to result in definite proposals to establish industries.
Broadly, the authority's method of approach in the case of a commodity not already being manufactured in the country will be first to satisfy themselves that the commodity in question can be technically produced here. Then the possibility of manufacture will be examined in all its aspects and such factors as capital, labour, raw materials, power, fuel, plant, etc., will be fully examined. Having satisfied themselves that manufacture is feasible, the authority will not wait for proposals, as has been the general practice heretofore, but will themselves initiate steps to secure the establishment of the industry. Groups interested in learning of suitable industries will be contacted; if there is no such group in the area considered suitable, the authority will endeavour to bring about the formation of such a group. The formulation of a sound manufacturing scheme and the steps necessary to bring the project to fruition will be pushed ahead by the authority, whose business it will be to remove all obstacles in the way of industrial promoters.
Of equal importance is the function of bringing about an expansion of the activities of existing industrial enterprises. Indeed, it is in this field that results can often be achieved most rapidly. In its examination of applications for tariffs, for quotas and for duty-free import licences, the constant aim of the authority is to bring about as wide as possible an expansion of existing industrial activity. Again, an instance of which I am aware will illustrate what is being done and what can be done in this respect. In the examination of a tariff application, the authority undertook a survey of an industry in which so many competitive firms operated that a comprehensive picture of output did not exist. The goodwill of the manufacturers concerned towards the authority enabled confidential figures of output to be assembled by the authority, which, in conjunction with its statistical research, showed for the first time a very substantial scope for increased output and employment in a particular direction, which hitherto had been obscured in the complexities of the industry itself. In the examination of other tariff applications similar results emerged through co-ordinating the aim of expansion of output with that of affording protection.
Apart from pursuing opportunities for expansion which come to light in this way, the authority has taken the initiative in urging the need for expansion of output in other industries. It is the view of the authority, and I may say I endorse it, that there is considerable scope for manufacturers to increase output and employment, and that being already established, it is very much easier for existing industries to meet market requirements than to have those requirements met by newcomers. By market requirements I do not mean domestic market requirements only. The authority has as a major item on its programme the aim of increased exports of industrial products and have already furnished me with an interim report in this matter.
In carrying out its functions relating to the establishment of new industries and the expansion of existing industries, the authority is giving and will continue to give special attention to the question of promoting industrial activity outside the main centres of population. While it has been the undoubted desire of every Government since the establishment of the State to decentralise industry and in particular to divert it from Dublin, no Government has sought statutory powers to control the location of industries, and at present, apart from externally-owned and controlled concerns requiring a licence under the Control of Manufactures Act, I have no authority to prescribe a particular location for a factory. The claims of many towns and districts for industries have from time to time been noted and the records are in the possession of the Industrial Development Authority.
In accordance with a long-standing practice, these claims are brought to the notice of parties likely to be interested. I am bound to say, however, that in the vast majority of cases in the past industrial promoters had decided on a location before approaching my Department, and there was very little I could do to influence them in the selection of a site. I myself had experience of an industrial project which was proposed and which was approved by me on the basis of a provincial site, but which was afterwards located in Dublin. This example will serve to give Deputies an idea of the impotence of the Minister for Industry and Commerce in the matter of having industries set up in particular districts.
The Government preference for a provincial location and the advantages attaching to the operating of a business outside Dublin are invariably brought to the notice of industrial promoters. Despite official persuasion, however, the majority of those promoters show an unmistakable bias in favour of Dublin, with the result that the population of the city continues to increase and that the major portion of the country's additional industrial population since 1926 is resident there. The question of any measures that might be taken to induce persons interested to locate their factories in provincial towns and rural areas is under examination by the authority which will make a report to me on the matter in due course. I cannot make any definite statement on the matter until the views of the authority are fully considered by the Government.
An important function of the authority is the examination of all applications for tariffs, quotas and for duty-free import licences. During the emergency, many quotas and tariffs were suspended for obvious reasons. Now that emergency conditions are passing, there are numerous applications for the reimposition of protective measures. These require careful examination so as to ascertain the degree of protection required and to estimate the probable effects of such protection in the light of present conditions and with due regard to any special disadvantages under which our manufacturers operate. I have used the phrase "in the light of present conditions" having in mind that when an industry is first established it is problematical how much protection it really needs, but as it gains strength and experience, it should be possible to measure more accurately its reasonable need for protection and to require that with such protection it produces goods of satisfactory quality at a reasonably competitive price while giving maximum employment, proper wages and good conditions. These are matters on which the Government must get an unbiased view and hence they have referred them to the authority as being a body on whom they can rely for a recommendation which will take into account the views of industrialists, workers and consumers.
In addition to the examination of applications for either new protective measures, or the reimposition of suspended protective measures, the authority will also have under constant review the entire scale of protection with the same aims in view as I have just indicated. I am aware of certain industries whose critics point to a high measure of protection but whose products sell at lower prices than in neighbouring countries or at prices very much below those which would obtain if the industry took anything like full advantage of its protection. It is in the interests of such industries to relate the degree of protection to realities so as to meet unfounded criticisms so damaging to Irish industry. In general, it is obvious that irrespective of the degree to which protective measures are being availed of, there is need for a periodic examination of the tariff position so as to ensure proper consideration of the interests of all parties involved, industrialists, traders, workers and consumers.
The authority is also charged with the examination of applications for licences for the free importation of dutiable goods. No less than 51,523 such licences were issued in the year 1948 and the duty remitted amounted to £3,601,086. Not only does the issue of these licences give rise to considerable administrative and executive work but the very fact that they assume such large proportions suggests the need for close secrutiny with two objects in view. Firstly, it may be found, and indeed has been found in some cases, by the authority that dutiable goods for which free import facilities are sought are goods which could and should be made here by the manufacturers for whose protection the duty was imposed. In such cases by arrangement with the manufacturers, the authority is endeavouring and will endeavour to secure an increase in domestic output to meet market requirements. Secondly, it has been found that certain goods are of a kind which cannot be made here or are unlikely to be made here at any time, and in such cases the authority recommends the amendment of the tariff description so as to make it unnecessary to seek duty-free licences. The continuing careful examination by the authority of applications for such licences will, therefore, have a double advantage of increasing industrial output and reducing administrative and executive work.
The authority will also be responsible for the work involved in the administration of the Control of Manufactures Acts and of the Trade Loans (Guarantee) Acts since this work is ancillary to their other functions.
Numerous matters affecting industry are being considered by the authority either on their own initiative or at the instance of the Government. Among those are industrial taxation, provision of external technical assistance, methods adopted abroad to further industrial development, methods of developing industrial exports, etc. Reports on some of those questions have already been submitted by the authority and their recommendations on others are awaited.
The authority, as well as advising the Government, will be able to give advice, guidance and assistance to industry in general. I may say that I am already aware of cases in which the authority has intervened to provide an alternative activity to one which did not prove successful; to arrange the provision of financial accommodation required for industrial purposes; to nullify devices adopted by outside interests to evade tariffs, and to indicate to applicants for protection more suitable alternatives to meet their difficulties.
I have said sufficient, I think, to indicate how wide is the field of activity in which this body will operate and how important are its functions. No Government Department has hitherto been asked to exercise the specific and comprehensive functions assigned to the Industrial Development Authority, nor has any Government Department been empowered to operate with the flexibility and independence allowed to that body by the Government. The Industrial Development Authority is thus a new conception involving a planned approach to industrial development by selected personnel with wide industrial experience operating as a self-governing body assisted by a skilled and experienced staff of State officials. I am satisfied from the results achieved to date that this amalgamation of outside practical experience with the existing administrative and executive official machine has fully justified itself. The Industrial Development Authority, I suggest, deserves the widest degree of support and co-operation in the carrying out of the task which so profoundly affects the national well-being. On the Government's part the authority will have its fullest support. To it will be referred all industrial matters and it will be by reference to its recommendations that the Government will decide on industrial policies. In short, the Government have set up an organisation which, with the prestige and influence which its functions imply, and the flexibility of which I have already spoken, should, in my opinion, be a fully effective instrument in the vital national task entrusted to it.
