Dáil Éireann debate -
Wednesday, 30 Oct 1957

Vol. 164 No. 2

Undeveloped Areas (Amendment) Bill, 1957—Second Stage.

Minister for Industry and Commerce (Mr. S. Lemass)

I move that the Bill be now read a Second Time. The principal purpose of the Bill, as Deputies will have understood, is to extend, for a period of five years, that is, until 31st December, 1963, the period during which grants may be made for industrial development in the undeveloped areas and to increase from £2,000,000 to £4,000,000 the maximum aggregate of such grants. That is the principal purpose of the Bill and other provisions of it are either supplementary to that or effect comparatively minor changes in the Act. One of the additional provisions of the Bill is to deal with the possibility that An Fóras Tionscal will cease to exist at the end of this additional five-year period.

I do not want to suggest that any decision has been taken that it will cease to exist at that date. It will be a matter for consideration by the Government of that time. It is, for a reason which I will explain, desirable that the legislation should contain provisions of that kind. The original 1952 Act had no such provisions in it. What is proposed is that if An Fóras Tionscal ceases to exist, the Minister for Industry and Commerce will take over its assets and liabilities. The reason it is desirable to make that provision is that it is the practice of An Fóras Tionscal to pay out the moneys which it has agreed to grant to the promoters of any industrial enterprise only when the promoters themselves have expended a reasonable share of their own money on the project. The aim of that arrangement is to ensure that the intention of the promoters to invest their own resources in the project is made clear by the physical evidence of factory premises and plant.

Because of that provision, it is obvious that a considerable time must elapse before any grant which An Fóras Tionscal has agreed to pay is actually paid over and certain figures which I will give later will reveal how that practice affects the finances of An Fóras Tionscal. If provision is not made in the legislation for the assumption, by the Minister for Industry and Commerce, of responsibility for the liability of An Fóras Tionscal, then An Fóras Tionscal would have to cease entering into grant commitments some considerable period before the Act was due to expire. By inserting this provision in the legislation, An Fóras Tionscal will be enabled to continue to discharge its functions for the full period of its existence. The provisions of the Bill in that respect will come into operation only if the grants scheme is ended and, as I said, that provision in the Bill does not imply that any decision to end the scheme in 1963 has been taken.

There are a couple of other amendments being made in the 1952 Act arising out of the experience of An Fóras Tionscal in its operation. The first of these relates to the provisions in the Act for the making of grants for the training of workers. An Fóras Tionscal has experienced rather serious difficulty in the operation of that provision because under the 1952 Act, the amount of wages for which training grants may be made may not exceed the normal trade union rates applicable to a learner in similar employment in the same or a comparable area.

In the case of industries of a new kind it has not been found possible to establish in a legal way the normal trade union rate applicable to a learner. Even in industries of a kind which were already established in the country, difficulties have arisen and where workers were sent abroad for training even greater difficulties were experienced. It is proposed to get rid of these difficulties in this Bill by removing the limitation upon workers' wages so that it will be left to the discretion of An Fóras Tionscal to decide how much of the wage expenditure will be borne where these training grants are being given.

The second of these amendments relates to a point which was drawn to my attention by the Minister for Local Government. The aim in that regard is to remove an anomaly. Where a project is assisted by An Fóras Tionscal it may obtain a relief of rates under the Local Government (Temporary Reduction of Valuation) Act, 1954, for a period and, having enjoyed the relief of rates under that Act, it may then invoke the procedure under the Undeveloped Areas Act to secure a rates relief for a further period of ten years.

It was never intended that projects should qualify for rates relief under both codes. The Minister for Local Government suggested to me that this Bill should include a provision requiring that remission of rates under the Undeveloped Areas Act should have effect in respect of the local financial year immediately after the completion of the factory and for the next nine years. That provision, which is being made here, will preclude a project qualifying for rates relief twice.

There are 46 projects which have been approved by An Fóras Tionscal and which either have reached the production stage or are at various stages of development. Thirty of these projects have reached the production stage and the remaining 16 are either factory premises in the course of construction or are projects which, for some reason or another, have not yet reached the production stage.

The total grants approved for these 46 projects as at the 30th September last amounted to £1,565,098; but of that sum, representing the total amounts of grants approved, actually something slightly less than £500,000 has been paid out. The total amount so paid to date is £493,848. There are outstanding commitments of £1,071,250, that is to say, grants which the board have undertaken to pay when the assisted projects have reached the agreed stage of their development.

Applications for assistance under the Act are at present under consideration which will almost certainly absorb more than the balance remaining of the £2,000,000 authorised by the 1953 Act. That is the reason this amending legislation is required and required rather urgently. The total estimated capital investment involved in the projects which have been assisted under the Act is £4,500,000. These projects are expected to employ something more than 3,500 persons, possibly 4,000, when in production, and I think I am entitled to hope that the number will increase as the firms concerned extend the scale of their operations.

Deputies are aware that An Fóras Tionscal may assist in the establishment of industrial undertakings in the undeveloped areas in a number of ways. They can make grants towards the cost of the acquisition and erection of factories and the provision of services for these factories. They may acquire land and erect factories for renting for approved projects. They may assist by adapting existing premises or by making grants for that purpose. They can make grants not exceeding 50 per cent. of the cost for the acquistion of machinery and equipment. As I have indicated, they can provide for the training of workers and, by the issue of certificates, can secure, at the discretion of the local authority concerned, a two-thirds remission of rates for a period of ten years.

In most cases the assistance given took the form of a cash grant related to the estimated requirement of the undertaking under the various headings of the Act. Before giving assistance under the Act, An Fóras Tionscal must be satisfied on a number of points. They must be satisfied that the industrial undertaking is likely to provide or maintain employment in an undeveloped area. They must be satisfied that financial assistance is necessary to ensure its establishment, maintenance and development. They must be satisfied that the undertaking is of a reasonably permanent nature and that it will be carried out efficiently.

Generally the board has worked on the principle, which I outlined when introducing the 1953 Act, that its aim should be to offset any competitive disadvantage associated with a western location. In most cases where the board has refused grants for which application was made, it was due to a decision of the board that there was no competitive disadvantage associated with the location. In addition to these statutory obligations, An Fóras Tionscal when deciding on applications has to have regard to the question whether the giving of assistance by way of grant in any case would be unfair to other concerns established already in other areas without assistance from the State. The board is empowered to give grants to undertakings already in existence but only where a substantial expansion of that concern is proposed.

Deputies will be aware that the Undeveloped Areas Act applies to what were formerly described as the "congested" districts, as defined in the Land Acts. There is power in the Undeveloped Areas Act to the Minister for Industry and Commerce to declare by Order any other area to be an undeveloped area. The areas specified in the Act are Counties Donegal, Sligo, Leitrim, Roscommon, Mayo, Galway and Kerry together with the most of County Clare and the four former rural districts of Bantry, Castletownshend, Schull and Skibbereen in County Cork. In the case of certain areas which are contiguous to these undeveloped areas, as defined in the Act, I have indicated that, if concrete industrial proposals emerge, they will be referred to An Foras Tionscal for consideration and, if An Foras Tionscal indicates its readiness to give assistance, I will be prepared on my part to give sympathetic consideration to the question of making a Scheduling Order under the Act in respect of the area concerned.

I think it is fair to describe the results of the working of the Undeveloped Areas Act, 1953, to date as encouraging if not spectacular. When that Act was framed, when the policy of giving exceptional State assistance to encourage industrial development in those Western seaboard counties was adopted, it was recognised that the pull of economic advantage in the Eastern areas was very strong and was likely to remain strong. I think it is true to say that many of the projects which have been established in these Western counties, or which will in the future be established, would not have gone to Western locations but for the inducements offered by the Undeveloped Areas Act.

I endeavoured, when introducing the 1953 Act, to discount, any excessive optimism. I argued that results were likely to come fairly slowly. However, it is interesting to note that the rate of progress in industrial development in these areas in tending to accelerate as the promoters of new industries are becoming increasingly aware of the advantages available under that Act. In the first full year during which An Foras Tionscal was operating and the Undeveloped Areas Act was in force, the total of the grants allocated was £150,000. For each of the next two years they averaged £300,000 and for the following two years they averaged £400,000. I think that quickening of tempo may be expected to continue. Indeed, the indications are that a considerable number of propositions will be under examination in the next few months. Not all of them, of course, will be approved by An Foras Tionscal as coming within their terms of reference and deserving of their support but a number of them will almost certainly be so approved.

It is perhaps worthy of mention that many of these new industries established in the Western counties since the Undeveloped Areas Act was passed are contributing in a fairly substantial way to our export trade. That is a very welcomed development. A number of the firms already in production have succeeded in opening up export markets. It is perhaps even more interesting that some of the new proposals coming along for consideration are being planned on a scale which means that export trade must be secured if an economic volume of production is to be realised. In all the circumstances, I think the case for continuing this legislation is incontestable. Therefore, I have very considerable confidence in recommending the passage of this Bill to the Dáil.

Mr. Cosgrave

I do not think there will be any objection to the increase of the money which is required under Section 15 but I should like to ask the Minister a few questions which he left unanswered in his opening speech. He referred to the fact that, when in production, a total number of 3,500 to 4,000 persons would be employed and the total capital investment would amount to £4,500,000. I take it that that included the amount advanced from grants by An Foras Tionscal and the private investment together.

While it is generally accepted that the aim of this Bill has been to promote employment in what were formerly known as the "congested" districts, I think it worth considering at present whether we are not storing up future problems. When the initial Act was introduced in 1952, the question of a Free Trade Area had not been considered or, if it had been considered, it was only a remote possibility. Recent developments show that that situation has changed rapidly and, in so far as opinion is available with which to guide industrialists or persons concerned in industry, people who have studied this question all appear to agree that it will involve considerable problems when it comes, so far as industries are concerned— that it may mean advantages for some and disadvantages for others but that the changed circumstances which will come about will involve major questions not alone of national policy but for the industries concerned.

I should be glad to know from the Minister, when he is concluding, if future policy by his Department or by An Foras Tionscal will take into account the advent of the Free Trade Area and the position which will arise for industries who are now seeking or who may in the future seek assistance from the grants available from An Foras Tionscal. While all sections in the House wish to see employment provided in the congested areas, if, in a very short time, these industries are obliged to meet, not alone the disadvantage which they have had to face from their inception of being in remote places, competing with industries established in the Eastern part of the country, but also the problems which will arise as a result of the advent of the Free Trade Area, then I think we should consider carefully where we are going in this matter and what will happen if that situation arises.

I would also like to hear from the Minister greater details of the actual numbers employed at present and the value of the output from the industries concerned. The Minister mentioned that some encouraging exports had taken place and we would be glad if he could give details, not necessarily mentioning the concerns by name but the total value of the exports and the type of commodity which has been exported and if he can say whether this is a new development which was not formerly carried on here. Subject to these queries we gladly give this Bill approval. I should like the Minister also, in cases where factories closed down, to give details of the losses incurred.

Mr. Norton

I think there is only one issue arising on this Bill and that is whether the House should give approval to the continuance of the Undeveloped Areas Act and the procedural arrangements which have made it possible under the Act to encourage the establishment of industries in these areas.

I do not think there will be any two views in the House on that. The original Bill was welcomed, not in any spirit of gushing enthusiasm but as an endeavour to establish industries in some areas — in undeveloped areas is perhaps a more correct description— in the hope that we could stop emigration from these areas and permit them to make a contribution to the economic development of the country. Some noteworthy progress has been made by the establishment of some of the industries although I agree with the Minister that, on the whole, we could not say the progress made has been spectacular.

The State has already committed itself to spend £2,000,000 in encouraging the establishment of industries in undeveloped areas and the proposal now is to extend this sum to £4,000,000. That represents evidence of the earnestness of the State in encouraging development of industry which, without State aid, clearly would never be established, because the absence of State aid over the past 30 or 35 years has shown that these industries would not come to life of their own volition in the undeveloped areas.

While I say that progress has not been spectacular, I think on the whole it has been fairly good and has certain encouraging facets about it. Some of the industries have been started in a manner which gives evidence of growth and success. There have been some failures, some regrettable failures and it might indeed be well if An Foras Tionscal, the body responsible for the administration of the grants, profited by the experience in those industries which fell down and if perhaps they applied more rigorous tests to the management of industries in the undeveloped areas in the future.

Two industries that failed to my own knowledge, appear to have failed very largely on the managerial side and I think, perhaps, more experienced direction or more skilled management might have avoided the closing down of these industries and the consequent loss of substantial State capital and the disemployment of workers. I am sure the directors of An Foras Tionscal are aware of the two instances I have in mind and I do not think there will be much disagreement between them and myself as to the infirmities from which both industries suffered at managerial level. In a business of this kind one must, I suppose, take risks of losses as part of the inevitable risks which have to be undertaken in encouraging projects of this kind.

I believe it is a good national policy to encourage the establishment of industries in the undeveloped areas but at the same time I must say that the emergence of the Common Market and the Free Trade Area is, in my view, calculated to make the going much more difficult in regard to the establishment of industries, either in the undeveloped areas or outside those areas. I cannot share the simple enthusiasm of some people who have no association with industry in a practical way for the Free Trade Area, because the citizen of this country who can to-day with his hand on his heart say that the Free Trade Area will be a heaven-sent panacea for our difficulties is a person who should be locked up in an economic mental home. Anybody who has given even the most casual study to the proposals for a Free Trade Area knows it is bound to have immense repercussions, not merely in respect of the establishment of new industries, but also in respect of existing industries here.

For 35 years we have looked at our industrial development as development which necessitated protection against outside competition in order to foster the growth of new industries here and to make up for the lack of traditional know-how and the absence of mechanical knowledge which were not possessed by our people. What we have to contemplate in connection with the establishment of a Free Trade Area is — I do not want to develop this point to any great length——

An Leas-Cheann Comhairle

The Deputy may not discuss the pros and cons of the Free Trade Area on this Bill.

Mr. Norton

I do not propose to do that. I merely propose to utter this warning, that since 2,000,000 good looking pounds are now in the weighing scales we should remember the difficulties into which we are likely to run and we must have a sobering review of our industrial development if some of the enthusiasts for the Free Trade Area have their way. I fear that those who so lightly think that adherence to the Free Trade Area is likely to inaugurate the era of the gravy train —as the Americans would describe the situation here—are going to be sadly disillusioned.

Our own approach to industrial development has been to assist development on the basis of protection of new industries against foreign competition, against the intensity of that foreign competition, against the highly capitalised foreign competition and against the skill and ingenuity which went with the long established craftsmanship of other countries. But if we are in the Free Trade Area then have no doubt about it, if Britain is also in the Free Trade Area every manufacturer in Britain will be able to send in his products here without any duty whatever on them. Every industry here whether in the eastern or western portion of the country, when that stage of free trade has been reached must be able to produce and sell goods, not merely in the foreign markets comprised in the Free Trade Area of the Common Market but also able to sell goods where they are made and elsewhere in Ireland in competition with other industries from the Free Trade Area. Up to the present, they have not been able to do that. They are not able to do it to-day.

We would close 75 per cent. of our industries to-day if we were to repeal the tariffs the free trade area contemplates. That type of development has got to be watched. We have got to be extremely careful before we take a definite step. If we take a definite step either to go in or stay out it should be done after the Parliament or perhaps, the people—it will have a tremendous effect on life in this country—have been given an opportunity of weighing the pros and cons of the whole situation. We are presented in this regard with a situation in which going in is bad and staying out is bad.

An Leas-Cheann Comhairle

The Deputy should deal with the matter before the House.

Mr. Norton

I think it has a serious effect upon the Bill. Deputy Cosgrave referred to the matter, too, because he, without any consultation with me, apparently sees the danger of these new industries being able to start or survive against development of the kind he had in mind and which I have in mind.

An Leas-Cheann Comhairle

The Deputy seems to be developing the subject.

Mr. Norton

I am not. This is a development in regard to which I do not think there should be much Party disagreement. The whole question is a national one. From our point of view, it is not a Party question. When it arises, I think it has to be approached from a national point of view and not from a Party point of view. I myself would certainly be prepared to say to the people we represent that all our resources and ingenuity must be pooled in order to offset the worst possible reactions of the development of a free trade area in which we may be the extremely poor relations.

As I said at the outset, I welcome the Bill as an effort to continue a policy which has given us fair and, perhaps, encouraging results. It is an investment which I think we must make. I hope the continuance of the legislation will, notwithstanding the difficulties we see on the horizon, encourage other industrialists and potential industrialists to avail of the facilities which are offered under this Bill and which represent striking encouragement financially to those who are interested in the establishment of industries within the undeveloped areas.

Mr. J. Brennan

I, too, agree with what has been said already. The continuance of this legislation, is welcomed by both sides of the House, particularly by those of us from the Western seaboard areas, referred to in the Bill, as the undeveloped areas. I am one of those who would have liked to see greater success under the Act since it came into operation. That was no fault of anybody who at the start foresaw what might be the future of industry in the Western areas under that Act. It was no fault of those who operated the Act.

There was, as the Minister pointed out, sufficient activity under the Act to justify its existence and while we realise that industry, particularly large industries, are something which do not spring up overnight and require a good deal of forethought and examination, it is only natural to realise that the amount of activity under the Act over the past few years was not so great. We hope that it is only a signal of what the future will hold. God knows, the Western seaboard badly needs industry, and unless we have an increasing number of industrial concerns moving into those areas with a corresponding increase in what little native industries there are in those areas, I cannot see much hope of arresting the steady flow of population from those areas, not merely through emigration but actually within the country itself.

The movement towards the eastern seaboard, particularly towards the larger towns and cities, is, to my mind, not a healthy sign because people moving into those areas where the population is concentrated do not usually go into productive employment and very often too many of them become a burden on the social services of the State. It would be better if more employment could be found in the areas along the western seaboard and thus give encouragement to the population who eke out an existence but who are inclined to lose heart and do not even make an effort to carry on by the means through which they have made a decent enough living in the past. They are inclined to be attracted by those already gone. It is a serious matter.

I hope this Bill is only one of the many things that will eventually tend towards the amelioration of that problem. I said I did not think the operation of the Act had any serious effect on progress in the past few years, but I do think — the previous speaker spoke about an element of risk in these matters — that the authority dealing with problems in connection with applications for grants under the Act were unduly careful.

I believe that many of those who came along to find out what assistance was available to them were not satisfied with the manner in which their applications were handled. The amount of probing and examination done was done in the best interests of the proposed industries. It was done to ensure that the industries would be of a permanent nature with a reasonable hope of success, that they would employ a certain number of people and so forth. But I think the nature of the investigations which take place before it is finally decided that a grant is payable very often creates a bad impression with the outsiders who came in here to seek these facilities. It often tended towards their calling off the proposals altogether.

I think we should approach such people in a more hospitable manner. Very often when a proposal is before the board of An Foras Tionscal for a long period, it transpires that just at the time when they think, after 12 months, that the scheme should be ready to be sanctioned or put into operation, some petty question again arises which throws the whole thing back into the melting pot and as often as not the concern making the proposal is only then being seriously considered a bona fide firm capable of carrying out the work at all. When a proposal is made by some outside concern, the first duty should be to ascertain whether or not it is a bona fide firm or a representative of such that has the necessary technical know-how and reputation and that what they are going to produce is something for which there is a market.

First of all, it should be ascertained whether they are really worthy of consideration at all. Having at the outset satisfied ourselves as to the qualifications in that respect, it would only be natural then to get down to the smaller details of hammering out a working scheme with regard to the costings, the volume of production which was hoped to be achieved, and the employment to be given.

I make the statement for what it is worth, but I believe the officials concerned have been much too wary. They have examined proposals much too cautiously and have been entirely too anxious to probe the smallest details in respect of any proposal put before them. In some cases, this has resulted in certain proposals being decried and people being discouraged.

I should like to see some grading of the scale of grants payable in respect of proposals, in accordance with the location or the area in which an industry is to be established. If an industrial concern decides that they will open a branch in this country to avail of the benefits given under the Undeveloped Areas Act, they will look at a map and see the entire undeveloped areas boundary along the western seaboard. They are likely to decide on locations along the borderline, in Counties Galway, Clare and Roscommon, which are much nearer to the hub of things, and are more likely places in which to set up an industry than Valencia in Kerry, or Glencolumcille in Donegal. They know that they will get the same facilities by just moving across the boundary of the undeveloped areas as they would by going back to the farthest extent. You naturally do not expect to have the same enthusiasm or chance to secure industries, in the areas where they are most needed, as you will have on the fringe of the undeveloped areas.

I would suggest that there should be a scaling down of grants, or better still, an increase in the amount available, to those prepared to go to the more decentralised areas. For that purpose, it might be necessary to have a zoning of the area as it already exists. There are areas in which industry is seriously needed and it is doubtful if many of the worthwhile concerns would select those areas in preference to some that are much nearer to main traffic routes, to the centres of population and so forth.

In Donegal, we cannot say the success of the Act has been any too encouraging. We have got grants for a few projects that more or less were not foreign to the soil. We were glad to get them, however. They created necessary expansion in one case and, in another case, we hope they will succeed in giving us an industry that is badly needed. But I should like to point out to the Minister that one of the largest towns in the county, Ballyshannon, is easily one of the worst towns as regards unemployment in the Twenty-Six Counties at the moment. What authority An Foras Tionscal has for directing industries to particular areas, I do not very well know. I do realise and appreciate that when an industrial proposal comes along, they cannot in all cases say: "You must go to Ballyshannon, or you must go to Bundoran", but there are occasions when an industrialist does approach An Foras Tionscal and indicates that he hopes to start an industry somewhere in the undeveloped areas. In such a case, the board should use the function which they have of directing, or suggesting a number of areas, where that industry would be welcomed and suitably received.

As far as Donegal is concerned, I hold we are the most undeveloped county and in the most disadvantageous position, by virtue of the Border, and by virtue of our position on the North-West coast. I mention particularly Ballyshannon and I say that there is no town in Ireland where the draught of unemployment has been felt so severely as in that town. I have made these facts known, time and again, and I do hope that in all fairness the spirit which is enshrined in this Act, the continuation of which we are supporting to-day, will prevail. Certainly the people of that area will do everything possible to co-operate in the establishment of new industries. I do not want to dwell on that parochial side too much, but I do emphasise there should be greater encouragement given to those concerns which are prepared to go farther into the undeveloped areas, than to those who are just prepared to stay on the fringe and qualify for the benefits available under this legislation.

I do not want to deal with the question of the Free Trade area, but I thought the previous speaker, an ex-Minister for Industry and Commerce, was unduly pessimistic and did strike too much of a panic note with regard to what he felt the Free Trade area was likely to hold for industry here. I doubt if anybody can predict what the effect of the free market will be. I had occasion to listen to it being discussed at an international conference, superficially, I know, but even those who were directly concerned or interested, were themselves very doubtful as to what its outcome or effect would be. It is a serious thing to strike any note of panic with regard to industrial development in this country at this time and I do not think it is justified. There may be an insinuation that we should be cautious about entering into commitments in regard to the Free Trade area, but, as the speaker himself admitted, to enter it may mean taking certain risks with regard to certain spheres of production and not to enter it may mean taking greater risks.

An Leas-Cheann Comhairle

I am afraid the Deputy is getting away from the Bill before the House.

Mr. J. Brennan

I am merely referring briefly to a few points which a previous speaker made. I think it is a pity that a note of panic should be sounded at a time when we are hoping to continue to expand the development of industry in this country. No panic is justified at this stage. Those people whose duty it is to produce and who are prepared to invest their money in production are usually people who can see sufficiently far ahead to know what are their chances of succeeding in the particular business in which they are involved. If the business is run efficiently it is all to the good for themselves. They will be able to compete with any producer in any part of the world. If they are not able to produce efficiently and cheaply they cannot expect to compete on the outside market, free or otherwise, with any other concern.

I cannot see that the British export trade is a very competitive trade, as it used to be. I noticed in England that in many of the picture houses films are being shown warning against the high cost of production that is likely to drive Britain out of many of the export markets of the world. If the powers that he have seen fit to issue such a warning by means of a propaganda film strip, they must be worried in regard to the high cost of production there. I do not think it is difficult for any country to compete with them or with any other producers if the necessary standard of efficiency is attained. If our industrialists go all out for greater efficiency in production, better management, and consequently cheaper goods and more competitive prices, then they will be doing a good thing for industry generally in Ireland.

There is no need to sound any note of warning. I hope and believe that our industrial exports will accelerate and expand. Goodness knows that result is very badly needed in the areas to which this Bill before us today applies. I sincerely hope that the measure will eventually be one of the main contributing factors towards creating the necessary increased employment in these areas, that it will eventually arrest the flow from those areas and the depopulation of what used to be many happy homes along the hillsides on the Western seabord.

Mr. Blowick

I welcome this measure, but my welcome for it is not by any means as enthusiastic as that for the original Bill in 1952. I thought then, and I suppose many others thought also, that we were laying the foundation stone in that Bill of something that would help to establish industries in the undeveloped areas, and I must confess to disappointment in the results. In my own county only one small factory has been established under this Act and I am sorry to say that my latest information is that even that one is not going well. I do not want to lay the blame for that on the 1952 Act or on Foras Tionscal. It would be very unjust for me to do so, but there are deficiencies in that Act which should be remedied now.

While it is essential to bring industries into the towns in rural areas, such as Galway, Westport and Ballina, where they are very beneficial, I submit that this does not help to stop emigration from the areas 10, 12 or 15 miles away. The Minister will probably say that it is the aim of the original Act and of this one that the initiative to start an industry, as well as a certain percentage of the capital, should come from the local people. I am speaking of areas where the initiative will not come from the people. It is very different in a town where you have a certain amount of business experience, It is easy for those people to come together and make the effort to establish an industry in their town, as groups of businessmen have done in several towns, sometimes with success and sometimes without success.

The day has come when the Minister should take the initiative to start industries in the rural areas outside the towns. That is one thing which is lacking in the original Act, and the Bill at present before the House should remedy that. If we do not establish industries in the rural hinterland we will not get far. We may provide employment in the towns and stop emigration there, but that will not help the countryside some miles away.

Deputy Brennan has criticised Foras Tionscal for being too particular in their examination of proposals by industrialists from outside. My experience has been that, while many honest and reputable industrialists from outside were interested in our scheme of giving grants under the 1952 Act, that scheme was bound to attract every crook from outside who thought he could make money soft. I know that, in one instance at least, Foras Tionscal saved the people of a town in the West of Ireland from becoming the victims of a person who I believe to be an international crook, and who knew as much about industry as I do, which is practically nothing. Foras Tionscal have not been too careful, and they deserve the highest praise we can give them in this House for the manner in which they have sifted the wheat from the chaff, as they will always have to. They must abide by the Act. In some cases, grants have been refused, but, if there is any flaw, it is in the Act and not in that particular body. On any occasion that I went to the board on a deputation I found them courteous and willing to help as far as possible.

The Minister should introduce an amendment on Committee Stage to allow him to take the initiative in starting industries in rural areas. For instance, there are many fishing villages that would benefit by the establishment of a small industry such as net-making or some other industry that would supplement a local industry already established or the method of livelihood of the people. Even if such industries were run at a loss for a time, they would create employment and introduce skills into the areas which would not be lost in future years. That was my aim when I was Minister in trying to create new forests in such areas. The present Minister for Industry and Commerce could do as useful, if not more useful, work in that direction by extending this Bill.

I welcome the Bill, but I do hope that the undeveloped areas will benefit more by it than they did under the original Act. I cannot see that happening unless the scope of the Bill is widened along the lines I have indicated.

Mr. M.P. Murphy

We all welcome a measure designed to improve the undeveloped areas. When the original Act was introduced in 1952, it was acclaimed in this House as likely to bring a good deal of prosperity to the undeveloped areas. Five years later, we have this measure to extend the original Act for a further period of five years. This would be an opportune time to get full particulars regarding the operation of the Act. Instead of that, this measure has been introduced in a rather sketchy fashion. We are told by the Minister that the Act was a success, but not spectacular. The ex-Minister agreed that the measure was a success, but could not be described as spectacular. Would I be wrong in describing it as a failure? I think I would be nearer the mark than either the Minister or the ex-Minister.

It is surprising that we did not get particulars as to the administrative cost involved under the Act, as to who has benefited by it, as to the districts in which the money has been spent. This House is entitled to know the places in which public money has been expended and the persons who have received money collected from the taxpayer. There is nothing secret or private about such information and we should have got these particulars from the Minister. The Minister contented himself by telling us that, under the Act, £473,000 has been given in grants. The next bit of information we got was from the ex-Minister, who told us that two projects have been complete failures. That is a peculiar way for Deputies to get information. We should have had a comprehensive statement by the Minister at the outset. I protest against the failure to give that statement.

The ex-Minister for Lands has told us that, so far as County Mayo is concerned, the Act has been of little or no advantage. Deputy Brennan informed us that, so far as Donegal is concerned, it was of no advantage there. I can say, so far as West Cork is concerned, that it was of no advantage, and I believe Deputy Palmer could say the same of his constituency of South Kerry.

It would be interesting to know where the £473,000 has gone. Deputies would also be interested to learn about the two projects that have been complete failures and how much public money has gone down the drain as a result of these failures.

I do not wish to go outside the scope of the measure, which asks us to extend the Act, but we are within our rights in commenting on the results achieved under the Act. It would not be out of place to term the measure a failure. I expected far more from it and, like Deputy Blowick, hoped that An Foras Tionscal would send technical advisers to the various undeveloped areas to advise interested parties as to the best procedure to adopt. I have never heard of anybody from the board being in West Cork. I think the same is generally true of all the undeveloped areas.

The board could be helpful in advising people living in remote islands as to how they could improve their position. Did they consider that their activities were confined to establishing factories? I thought the existing industries in these areas would get certain help under the measure. It would not be out of place for the board to help agriculture and fishing or advise on how the general position of the people around the coast could be improved. We got no help whatever, and for that reason I hope the Minister will give us details as to where the £473,000 has gone and as to the administrative cost, the number of people employed and the total cost of the two projects which Deputy Blowick has referred to as having failed.

We will probably read in the paper to-morrow that £4,000,000 is available for the promotion of industries in the undeveloped areas. I think we are deliberately creating a false impression because many people reading the Minister's statement to-morrow will believe that £4,000,000 is readily available whereas, judging from past experience, it will be the year 2057 before that £4,000,000 is expended.

In making that statement, I quite appreciate that every application should be judged closely and carefully. I am surprised to learn in the course of this discussion, from another ex-Minister, that the bulk of the applicants, so far as his definition of them goes, could be termed "crooks." That is an enlightening statement from an ex-Minister. In view of all these statements, I hope the Minister will clarify the position when he is replying.

Deputies could mention areas in their own constituencies which need development at this time. I could name every town in West Cork, the Berehaven Peninsula and the numerous islands as needing help. I would like the Minister to change the policy of the past and send technical advisers to these districts to advise interested parties there as to the best way of promoting suitable industries that are likely to be economic. They would be more usefully employed in spending part of their time at least in that way rather than in the office in Dublin where they can meet only a few people who may come to them as a deputation.

I rose to make a protest regarding the fashion in which the Bill has been introduced. I am not adopting a pessimistic attitude, but we have to be reasonable and judge by what happened in the past. If the same is to continue in the future, this measure will scarcely be worth the paper it is written on.

In conclusion, I welcome the measure and hope it will be much more successful than the original one. I hope those in offices in Dublin and in receipt of salaries for administering this scheme will be sent by the Minister from those offices to the western and southern seaboards to meet the people they are supposed to help. I ask also that the two industries— fishing and agriculture — in the remote areas be taken into account. They are industries just as important in those areas as a factory or a tomato-growing plant. I hope the position will change in the future and that the prospects for this measure will be brighter than those for the measure introduced in 1952.

Mr. Palmer

When the Undeveloped Areas Bill became an Act, those of us who come from the undeveloped areas had great hopes that factories would arise because of the Government aid. However, knowing that our people in Ireland as a whole, and especially those in the remote western areas, are very slow to invest money in any local project, no matter how hopeful may be its prospects of success, we considered that it was a drawback in the original Act that the initiative should come locally and that there must be a certain percentage of local investment.

However — although Deputy Murphy said I, too, would say Kerry did not benefit — I can say that in my constituency good efforts were made to set up factories to deal with local raw material. I regret that failure followed in one place and in another it is only barely existing. It is too bad that when State money is invested and local people invest their money, it should not be successful. The people to whom I refer invested their money in these projects, not because they would benefit personally — in fact, they did not expect any dividends at all for years — but so that they as business people would help to raise industries and give employment. Where money is invested by the State or the people of the State in this way, the type of industry to be set up and the type of people to be responsible for it must receive great care. However, as other Deputies said, perhaps the officers of An Foras Tionscal have been a bit too cautious in some instances. Especially when applications are made for the further development of those industries, I think the Trade Loans Advisory Body are also too cautious.

The industries to which I refer are known to the officers of An Foras Tionscal and also to the Minister. I admit that steps were taken to endeavour to help them. I would ask the Minister not only in order to try to save the money invested by the State, but even more especially to help those who invested their money, to try to devise some means by which they could be brought into operation. In one instance, where there was failure, it was due simply to the withdrawal of imperial preference by the British Government in connection with the export of the material from that factory, so that really the industrialist who initiated the project and the people who invested were not really to blame at all. The management was perfect. In the other case, it is hoped that the erection of the factory can proceed.

In the case of the area in South Kerry where attempts have been made by the local people in two important towns to start industries, I would ask the Minister to see once again what help can be given, either by a further portion of the grant being advanced or by a loan, so that the State money and the local investment will not be lost. The Bill itself, when first operated as an Act, was most welcome. We from the undeveloped areas are pleased to see this further extension of it and that an extra amount of money will be provided.

The Act has now been in force for four years. I do not know exactly what benefit it has been to the undeveloped areas as a whole. However, the idea is good and whatever effect a free European market will have on our industrial production, we only hope that this Bill and the original Act will result in further helping the development of industries in these areas.

Mr. S. Lemass

With regard to statements which some Deputies have made that the 1952 Act, when passed, was paraded as an instrument which would bring immediate prosperity to the western counties, I can only say that I took exceptional pains when speaking on that Act here and outside to discourage hopes of any immediate spectacular industrial developments in these counties. I emphasised then what I am emphasising now, namely, that the pull of economic advantage in the eastern part of the country is very strong and that it will take some time to reverse, or even slow down, the trend which had persisted for many years, the trend of economic activity to centre in eastern cities and towns. I expressed the hope that, once we got that trend checked and a flow of industrial activity moving into the West, that flow would tend to strengthen in time, and that is what is happening.

The figures which I gave here when introducing this measure indicate that my expectations in that regard are being borne out and I am fairly confident that the development of industry in the West will tend to accelerate. It will, of course, be greatly helped if the new enterprises which are already in operation or may soon come into existence are shown to be successful. Nothing succeeds like success and the example given by some firms in establishing successful and profitable enterprises in the western counties will tend to kill for all time any mistaken idea that a western location is an unsuitable one for industrial activity and major industrial development.

Deputy Cosgrave referred to figures which I gave for capital investment totalling about £4,500,000 induced by reason of the introduction of the 1952 Act. Arising out of that investment employment of something between 3,500 and 4,000 workers will take place. A certain interesting calculation can be made by anybody who studies these figures; the indication is that it takes an investment of about £1,500 in industry to employ one worker. Consequently, it will be appreciated that any extension of industry on a scale which will make a real impact upon our unemployment situation will involve a very substantial investment in the aggregate. In our circumstances we just cannot expect that that will come very quickly. This is a case in which we have to think in terms of a long pull instead of speedy results.

In reply to one question by Deputy Cosgrave concerning industries which have undertaken export business from the western counties, industries which were brought into being or assisted in developing with the aid of grants from An Foras Tionscal, I have not available to me figures which would enable me to indicate the extent to which export business is taking place or the proportion which it represents of the total output of the industries concerned. It is interesting to note that of the new projects which have recently been approved, but where production has not yet started, no less than five are based upon export trade, either mainly or entirely and those who have started these new factories do not feel that their prospects of securing that export trade will be seriously reduced by reason of the western locations which they have chosen.

Reference was made to failures. It is rather remarkable that of the 30 concerns which have come into production the record of failure is so small. Deputy Norton spoke of two concerns. I am not quite sure what two he had in mind. There was one concern which went into liquidation. Everybody knows about it because it was published in the Press. That was Tralee Moulded Products, Limited. Even there, I am not without hope that the industry may be revived or that some other industry of a similar kind will be established in the premises. Deputy Norton may have had in mind the same concern as Deputy Palmer. In that particular case, there was an undertaking to give a grant when a certain stage in the process of manufacture was reached. That stage was never reached and no grant was paid. So far as that particular enterprise is concerned, I appreciate very fully the importance of endeavouring to ensure that where local businessmen invest capital in an industrial undertaking the investors should not suffer a total loss.

No doubt everybody who undertakes to invest in an industrial enterprise has to recognise that he is taking some risk and it would be altogether wrong to remove completely the element of risk. But if that particular concern can be revived on a basis which will ensure that it will have a reasonable chance of survival in a very competitive trade and if faith in its future can be demonstrated by the investment of new private resources, then I certainly will personally be disposed to do everything I can to help it get going ahead again. A number of concerns which were assisted did not realise all the initial hopes of their founders, but some realised these hopes very abundantly. Nobody can guarantee, when a new industrial enterprise has started, that it is going to have a completely uninterrupted story of success. However, on the whole I think it is true to say that most of these concerns are doing well enough.

It is also true to say that their survival and growth must depend upon the enterprise of their managements and upon the skill of their workers. As far as the Government are concerned, however, they have given the opportunity and it is for the people concerned to use it. If they find they cannot use that opportunity completely there is not much use coming looking for further Government subventions and aid. They are not likely to get it on the one hand, and our experience is that once a concern has to resort to support of that kind its future is very doubtful in any case.

Deputy Brennan criticised an Foras Tionscal on the ground that it was too careful, that it submitted applications made to it to a too meticulous examination and, in some instances he contended, those who were associated with the application did not proceed with their project because of the delays involved in that examination. I have as much desire as any Deputy in the House to see industrial development going ahead quickly, but where we are dealing with grants of public money it is very important indeed that the utmost care should be exercised to ensure that the grants will produce the results which the Dáil intended when passing the legislation. Free money cannot be given away lightly, and An Foras Tionscal are, I think, quite right in insisting that applications of this kind must receive detailed examination.

The submission of detailed proposals is at least evidence that the promoters of a project have themselves thought out all the problems associated with the project, have made realistic calculations of the investment required, of the costs they are likely to encounter and of the markets that will be available to them. It is perfectly true to say that far more applications for assistance were turned down than were granted. That was not altogether for the reason which Deputy Blowick advanced — that the prospect of free money brought a whole lot of undesirable characters into the picture. It was mainly due, as I said initially, to the fact that many of the applications could not be supported by the argument that there was any disadvantage at all in the location chosen, partly to the fact that the proposals put forward had been ill-conceived and that An Foras Tionscal could feel no confidence that the enterprises would succeed. Only in a few cases were applications turned down because of a suspicion that any fraud was intended.

It is, in my view, in the interests of the undeveloped areas themselves that this meticulous examination should be made and that no grant should be given until the members of An Foras Tionscal are reasonably satisfied that the project they are supporting is likely to succeed and to be a permanent source of wealth and employment in the area concerned. I think Deputy Brennan does not understand the system of the grading of grants. It is not true to say that a concern putting up proposals for a location across the Shannon in Athlone will receive the same relative grant as the promoters of an industry in Gweedore. There is no such uniformity of assistance. Indeed, the grants are related to the difficulties likely to be experienced in the locations chosen. The selection of the location is a matter for the promoters but An Foras Tionscal will be disposed to give more help where the location chosen is one in which the prospect of industrial development without that help is more remote than it is in areas which are not at any great disadvantage at all.

It is clear, however, that there must be some substantial investment of their own resources by the promoters of such industries. That is not merely a device for minimising the amount of Government assistance; it is a necessary condition for the success of the enterprise. Unless those who are going to manage it have, themselves, a substantial stake in its success, success is not likely to come. When Ballyshannon, Bundoran, West Cork, and any other areas concerned seek to secure the establishment of new industries, they can reckon as a certainty on getting for sound proposals substantial Government aid in the form of free grants towards the cost of providing buildings and machinery whether such proposals are prepared by local interests, local development committees or industrial interests from any area or country. They can reckon that the aid will be given not merely generously but willingly and happily. That should encourage people in these areas to investigate industrial possibilities with enthusiasm.

This Bill is designed to continue this form of aid for five years. I do not say it will stop at the end of five years, but one cannot foretell what the conditions will be in 1963. Therefore, those who want to take advantage of that aid would be well advised to try and get going during this five-year period. Deputy Blowick was not correct in stating that only one small factory in Mayo got assistance. According to my information grants were given to seven concerns, which are described as being in production, and to one not yet in production. These were not all new concerns. In some cases the extension of an existing enterprise was involved. I cannot say whether any of these grants were substantial. Many projects for Mayo emerged because of the passage of the Act. Some reached a certain stage of examination and then did not proceed. We have often had references made to the famous Ballina biscuit factory. This project was brought to the point where agreements for its establishment had been signed and where a specific grant of a substantial amount had been allocated by An Foras Tionscal. However, because of the withdrawal of one of the external partners for reasons of their own the project did not go ahead. There was also the case of a textile factory for that part of the country for which a large grant was allocated. Again it did not go ahead due to the withdrawal of the promoters.

The same story could be told in many parts of the country. Not all the projects which come to An Foras Tionscal and are approved by them reach the production stage. My Ballina experience has made me particularly cautious about forecasting industrial development until I see the factory going up.

Deputy Murphy talked about administration expenses. Information on that matter is contained in the Annual Report of An Foras Tionscal, which is submitted to the Dáil. I note that he started off by describing the Act as a failure, and ended up by welcoming the Bill, so that he covered himself both ways.

Deputy Blowick suggested that instead of holding ourselves out to assist by way of grants industries promoted by private enterprise we should establish State concerns, particularly in the rural areas of the West, and I think Deputy Murphy had the same idea in mind. Whatever case can be made for that, it should not be made on this Bill, which is designed to assist private enterprise in these counties. Possibly that case could be argued on the next Bill which I see my colleague, the Minister for the Gaeltacht, is ready to take.

One further matter I should mention. Deputy Cosgrave asked if the decision of Foras Tionscal upon new applications would take into account the possible emergence of a European Free Trade Area. The answer to the question is "Yes", because Foras Tionscal is bound by the Act to have regard to the prospects of permanency and, indeed, it is now standard practice in the Department of Industry and Commerce to notify everybody coming into the Department to discuss new projects whether in the West or elsewhere, that this Free Trade Area plan is likely to proceed and to examine their proposals on the assumption that the Free Trade Area will come into existence and that this country will join.

I do not want to discuss the Free Trade Area proposal. I merely want to say that the emergence of the proposal is a very important factor bearing upon our industrial policy, whether it is industrial policy as a whole or that part concerned with western development. We have not to take a decision yet on that proposal, but when we do have to take a decision, when the matter comes to the Dáil and when that very vital decision is before us, it will not be a question of whether we want a Free Trade Area or not. The question will not come here for a decision until the agreement for the establishment of a Free Trade Area has been negotiated. Our vote will not decide whether or not there will be a Free Trade Area. The question we will have to answer is whether we want to be in it or whether we want to remain an isolated unit on its fringe.

The Dáil cannot take any decision on that now, nor do I think we should attempt to take the decision until we see the whole of the proposals together. We can only guess now what form they are likely to take. Whatever form they are likely to take they will not involve a situation in which we will have tariff protection one day and none the next. The process of dismantling barriers to trade will be a long-term one. No doubt the emergence of the Free Trade Area and the prospect of the dismantling of tariffs, even over a number of years, will affect many of our industries. It will, indeed, affect industries in every country in Europe.

The most satisfactory feature of all comments on this proposal, to my mind, is the indication that the great majority of Irish industrialists are not afraid of it at all. Some industries brought into being by high tariffs may have no hope of survival, but many of our manufacturers see in the prospect of a Free Trade Area an opportunity which they are quite keen to take a crack at, and so long as that spirit exists among the leaders of industry— and the decision of the Central Trade Union Organisation in this regard has also to be taken into consideration, and indicates a refusal to be intimidated by future prospects of European free trade — I think we can face up to whatever is coming with the certainty that even though some adjustment in our industrial organisation will be involved, we are more likely to gain than to lose on the whole in the new situation.

I repeat that our decision will not be whether to have that situation or not. We are going to have a new situation, anyway, and, so far as industry is concerned, the question will be whether our industrial progress is more likely to be fostered in the context of a European Free Trade Area or by maintaining an isolated position when every other country in Europe has entered a Free Trade Area. I think, however, that Deputy Cosgrave can be quite certain that everybody who from this embarks on a new industrial enterprise, whether in the West or not, will be conscious, as he is, of what the future may hold and will not risk his own resources in promoting enterprises unless he is confident in his capacity to make his investment pay off in dividends no matter how that situation may develop.

Question put and agreed to.

Committee Stage ordered for Wednesday, 6th November.