I move:—
That a sum not exceeding £1,055,280 be granted to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st March, 1959, for the Salaries and Expenses of the Office of the Minister for Industry and Commerce, including certain services administered by that Office and for payment of certain Subsidies and Sundry Grants-in-Aid.
The total Estimate of £1,583,280 for Industry and Commerce for the year 1958-59 compares with a total of £3,287,370 granted for the year 1957-58. The provision for this year therefore shows a net reduction of £1,704,090 as compared with the provision for last year. In this comparison the amount provided in 1957-58 for losses on the disposal of surplus native wheat is not included in the 1957-58 figure of £3,287,370 as this service has been transferred to the Department of Agriculture and is provided for in 1958-59 in Vote 26—Agriculture, and has been dealt with on the Estimate for that Vote.
The principal increases are in the grant for the provision of additional laboratories for the Institute for Industrial Research and Standards (sub-head N (4)) £46,000; Grants-in-Aid to the Industrial Development Authority (sub-heads O (1) and C (4)) £20,000 and £50,000; Grant-in-Aid to An Foras Tionscal (sub-head Q (1)) £50,000; grants for Technical Assistance (sub-head T) £67,000; and Fuel Subsidy £85,000.
The principal decreases are in the provision for salaries, wages and allowances of the headquarters staff (sub-head A) £21,000 and in the amount provided for food subsidies (sub-head J (1)) £1,930,000. The decrease of £20,940 under sub-head A is mainly due to a reduction in the headquarters staff from 602 in 1957-58 to 567 in 1958-59.
A token sum has been provided under sub-head J (1) for flour subsidy to meet any expenditure that may arise during the year arising out of the final examination of the accounts and claims in respect of previous years. This is purely a precautionary provision.
Industrial production and industrial employment which had suffered a severe set-back in 1956 showed signs of recovery during 1957. In the December quarter of 1957 a slight increase over the corresponding period in 1956 was disclosed and this was the first occasion since March, 1956 on which the quarterly figures were at a higher level than in the corresponding period of the previous year. For the December quarter of 1957 the volume of production index (to base 1953=100) of transportable goods industries was 108.8 as compared with 100.1 in the December quarter of 1956; and the number of persons engaged in these industries in December, 1957 was 151,200 as compared with 150,600 in December, 1956. The outcome of 1957, therefore, so far as industry is concerned, was that, as a result of special measures taken to stimulate expansion, the decline in activity was arrested and the process of recovery begun.
The special measures taken in 1957 included the removal of special import levies on a number of commodities, and the granting of licences for the importation, free of special import levy, of materials intended for a process of manufacture or for the equipment of an industrial undertaking; the removal of restrictions on hire-purchase transactions; and the provision of tax reliefs for industry, including an extension of the tax concessions in respect of profits derived from industrial exports.
There are grounds for confidence that the recovery in industrial production will continue. The increase in the first quarter of 1958 was 7 per cent. over the same period of 1957, notwithstanding the fairly considerable upsets caused by the shipping dispute during that period. Employment in industry was 1½ per cent. higher than in the same period of last year and earnings per worker were 7½ per cent. higher. I am far from suggesting that there is any justification for complacancy regarding any aspect of our industrial, financial or economic position. To recover lost ground is not enough; our policy and objective is to expand and develop industrial activity beyond the point of meeting the normal needs of the home market, so that Irish products may find in increasing degree an economic outlet in the markets of the world.
Before dealing with specific matters, I should make a brief statement upon the basic policy of the Government in the industrial field. We believe that, if economic progress is to be maintained and the problems of excessive unemployment and emigration ended, public and private investment in developments of a productive character must be stimulated and organised.
Increased investment in productive development cannot alone guarantee permanent progress. The adoption of the most modern methods and techniques in production, efficient management, and the will to work harder at all levels of activity, in the manager's office no less than on the factory floor, are also essential.
Financial policy must be in harmony with the objective of stimulating a higher level of investment, that is to say, it must encourage savings and help their canalisation into productive enterprise. Wage policy, of employers and workers, must be directed towards maintaining competitive costs by facilitating the rise of productivity. Banks and insurance companies must join with the Government in providing long-term capital for industry, through the Industrial Credit Company or otherwise, and provide the shorter-term credits required by progressive firms, if their trade expansion is to be made possible.
In that connection, I should like to welcome the announcement made last week by the chairman of one important Irish assurance company, the New Ireland Assurance Company, of that concern's willingness to provide capital for industry. I should also mention with approval the movement which is gaining momentum and which began, I believe, amongst the workers employed by the firm of Messrs. Arthur Guinness and Co., to save in an organised way for the purpose of creating new capital, to establish new employment-giving industries. That development is a most encouraging sign, both of the growing understanding of the character of the national problem and of the desire to do something practical about it.
While it is in agriculture that the immediate potentialities of increased production are greatest, the expansion of industrial activity is necessary to achieve a better balance in the economy, and is beyond argument, the most speedy means of improving employment prospects.
We can no longer rely for industrial development, to the extent we require it, on the policy of protection. Export trade is most essential to our industrial growth and in its development we can apply the policy of attracting external investment into Irish industry and encourage the advent of foreign industrialists bringing with them new skills and techniques, and established market contacts.
Restrictive practices of a character which operate to the detriment of industrial progress must be eliminated by a more enlightened approach by employers and by workers to the requirements of a developing economy. Joint consultation leading to common policy in these matters must be encouraged. Following on a statement which I made during the course of the Budget debate, I had a discussion last week with the representatives of the United Trade Union Organisation on the practicability of examining, on an industry basis, the possibilities and problems of achieving expanded production and employment. It is too soon to say what may prove to be possible in that regard, but I consider that the definition in general discussion of reliable targets for expansion of industrial activities would be both a help and a stimulus.
The measures taken, and being taken, to encourage and induce greater industrial development are already well known to the House. An intensified drive is now being made to attract external industrial participation, in new forms of industrial activity particularly those with export possibilities. That drive is being organised by the Industrial Development Authority who have informed me that their experience so far entitles them to be optimistic as to the eventual outcome. I have no doubt that the announcement of the Government's intention to extend the period of the tax relief for exports profits to ten years will give increased impetus to that campaign. The Industrial Development Authority are actively pursuing their efforts to attract industrialists from U.S.A., Britain and Europe, and already a number of firms have started or have decided to start here. As the House is aware, the object of the Industrial Development (Encouragement of External Investment) Bill is to encourage and facilitate external capital investment in the establishment of industrial projects aimed at the development of exports.
Government policy and Government action can achieve a certain amount, but unless supported by the whole-hearted co-operation of all the interests concerned, satisfactory progress will not be realised. There are very encouraging signs that industrial managements and industrial trade unions alike are becoming increasingly aware of the necessity for reaching and maintaining the highest standards of efficiency and productivity if we are to expand our economy and provide full employment at home for our people.
In that connection I think I should refer to the technical assistance scheme for industry. Under an agreement entered into with the U.S. Government, a sum of money was provided out of the Grant Counterpart Fund for the purpose of making available to industrial firms grants towards the cost of engaging industrial consultants and technical experts, with a view to improving efficiency and productivity. The amount set aside from the Counterpart Fund proved to be insufficient to meet the demand which was in itself satisfactory and the Government, in consideration of the importance of measures designed to achieve higher standards of production, decided to provide an additional sum out of which technical assistance grants may be made in the current financial year. These grants will, in general, be made on the basis of one-third of the total cost of each technical assistance project.
During the past year the Undeveloped Areas (Amendment) Act, 1957, became law, and under that legislation the maximum aggregate of grants which can be made by An Foras Tionscal for the establishment of factories in the undeveloped areas was increased from £2,000,000 to £4,000,000. During the year the volume of grants approved by An Foras Tionscal for industrial development in these western areas continued to increase and amounted to £876,960 compared with £497,900 in the previous financial year. On 31st March last, the total commitments of An Foras Tionscal in respect of grants under that Act amounted to £2,078,588, of which £710,348 had been paid, leaving outstanding commitments of £1,368,210.
Up to now 32 projects which have reached the production stage were assisted by An Foras Tionscal and employ at present about 1,500 persons. It is expected that in the course of their normal development the employment given by them will rise to 3,000 persons. There are 21 further projects in respect of which assistance has been promised but which have not yet reached the production stage. Certain of the industries assisted by An Foras Tionscal have already entered the export field.
A number of projects which have not yet reached the production stage have been planned primarily on an export basis and if the promoters' plans come to fruition these projects should make a significant contribution to our export potential.
Under the Industrial Grants Act, 1956, the Industrial Development Authority approved of grants totalling £193,850 of which £9,000 was actually paid leaving outstanding commitments of £184,850 at the end of the previous financial year. It is, perhaps, worthy of note and may be of interest to the Dáil, that a substantial number of the applications received by the authority for grants under that Acts so far did not come within the ambit of the Act.
There exists, perhaps, a position which we can, and must at some future time, examine. There has been some recent comment to the effect that we have too many authorities concerned with industrial development. Because I have examined the position, I think I can say that nothing has been lost or unduly delayed for that reason. I think there is a situation existing which needs looking into and I intend to do that.
The general fall in the world price of metals has caused some setback in mineral exploration and developments in this country. Some of the exploratory work which has been proceeding has now ceased and a couple of producing mines have ceased production. I think that it is reasonably certain that metal prices must recover at some time, and we can hope that it will be fairly soon so that exploration and production will be resumed in the areas which have been affected by the fall in world prices.
As Deputies are aware, a loan of over £1,300,000 has been guaranteed in favour of St. Patrick's Copper Mines Ltd. in connection with the development of the copper deposits at Avoca. The company is proceeding with its plans for the development of the deposits and it is expected that the mines will be ready to go into production about August or September next. It is to be presumed that the policy of the company to which the mine has been leased, in regard to the commencement of production, will be decided in the light of the world market price trend for copper which then prevails. It is to be hoped that there will be before then a substantial rise in the world price for copper which, as we know, fell to very low levels of late. There have been some signs of recovery in recent weeks, but the price has not yet risen to the point which the management of the mines regard as their "break-even" level.
A technical assistance scheme of coal exploration in the Leinster and Connaught coalfields will shortly be launched. The scheme will be financed by an E.C.A. grant of £80,000 from the Counterpart Fund. It is hoped that this scheme will reveal valuable new deposits of coal both in the vicinity of existing coal mines and in virgin ground. The main emphasis will be in the Leinster coalfields area. The scheme which will take about three years to complete will also include experiments in coal cleaning techniques. It is hoped that, as a result of this scheme, we shall be able eventually to procure from home sources our total requirements of anthracite coal and perhaps have an exportable surplus. Other proposals for the fuller investigation of the country's natural resources are also under consideration.
In regard to the oil refinery project, construction work has since commenced, the first two stages being the erection of tankage and the construction of the marine terminal. It is expected that the refinery will come "on stream" about the middle of next year.
The output of Bord na Móna for the year ended 31st March, 1958, was 820,000 tons of sod peat of which 450,000 tons were for production of electricity, 530,000 tons of milled peat for power stations, 32,000 tons of briquettes and 200,000 bales of peat moss. The present programme is directed towards achieving by 1960 an annual production of 960,000 tons of sod peat, of which 500,000 tons will be for production of electricity and an annual production of 250,000 tons of briquettes. By 1962, it is expected that there will be an annual production of 1,200,000 tons of milled peat for power stations and 350,000 bales of peat moss.
These targets allow for the peat required for the new power station at Bellacorick, County Mayo, which the E.S.B. expect will be in operation early in 1963. It will be noted that about 50 per cent. of the sod peat production is required for electricity generation. Since mid-1957 the board has been conducting a very vigorous sales drive in order to increase its sales to industrial and commercial consumers.
The first of the new briquetting factories at Boora, County Offaly, is expected to be in production in July, 1959, and the second factory at Derrygreenagh, will be in operation by January, 1960. Each of these factories will produce 100,000 tons of briquettes a year.
New markets continue to be found for peat moss and production has been expanding accordingly. New production units are being added at the factory in Kilberry and it is hoped to achieve an output of 300,000 bales per annum in a few years' time. In addition, a new peat-moss bog has been acquired at Coolnamona, County Leix, where it is hoped to attain an annual output of 150,000 bales. About 80 per cent. to 85 per cent. of all peat moss produced by the board is intended for export markets. Approximately 150,000 bales of peat moss, value £114,000, were exported in 1957 as compared with 105,000 bales in 1956.
I stated last year that it was my intention to have the E.S.B. programme, which had been revised in 1956, reconsidered. I referred particularly to the possibility of taking stations using imported fuel out of commission for a time in order to permit of the construction of further milled peat stations. The matter was subsequently investigated. The Government decided that the erection of the peat-burning station at Bangor-Erris should be proceeded with in the knowledge that, if the rate of growth in demand for electricity should remain below 7 per cent. per annum for the next few years, the commissioning of the station in 1963 might require that existing imported fuel stations might have to be taken temporarily out of use.
In recent months, however, there has been a most encouraging improvement in the rate of growth of demand for electricity and I am informed that this is now proceeding at a rate of 7 per cent. per annum. A recent O.E.E.C. report indicates that in West Europe generally consumption of electricity is expected to expand at 7 per cent. per annum so that we are back again to the European average. We need to do much better of course, because the same report shows our per capita consumption of electricity is the fourth lowest in Western Europe. At the present rate of growth in demand, the Bellacorick station will be fully required on the date of its completion in 1963. In addition, further generating capacity will be required by 1964.
Apart from Bellacorick, work is at present proceeding on the following generating stations: Ferbane milled peat station—the last of the three 20-megawatt generating sets is nearing completion. Rhode milled peat station—two sets of 20-megawatt are under construction and the station is due for commissioning in 1960-61. Arigna, which is to burn Irish coal and where the 15-megawatt station will be commissioned in the next few weeks. It will provide a ready market for about 40,000 tons of Arigna coal per annum. Lanesboro' sod peat station of 20-megawatts, will be commissioned also in the next few weeks, and the Clady hydro-electric scheme, is due for commissioning in October-November next.
By March, 1958, the last of the four small generating stations to burn hand-won turf was commissioned at Gweedore, County Donegal. These stations will provide a market for surplus hand-won turf available in the main turf-producing areas of Counties Donegal, Galway, Clare and Kerry. Each station is designed to consume a maximum of 30,000 tons of turf per annum, for which the E.S.B. will pay approximately £70,000. Firm prices are offered by the board and, in addition, an attractive prepayment scheme has been announced in each area under which producers receive a portion of the purchase price at various stages of production. Bord na Móna recently reported to me that the purchasing operations of the E.S.B. in these areas should introduce a worthwhile element of stability into the hand-won turf market.
With the completion of the North Mayo station in 1963 the latest E.S.B. generating capacity will be 768.5 megawatts of which 479 megawatts or 62 per cent. will consist of plant based upon native resources. Last year, 80 areas were completed under the rural electrification scheme. On 1st April, this year, 184 areas remained for development. All the more populous areas have now been developed and the areas remaining are those which, for one reason or another, were considered to be the least economic. The Government have accordingly decided that the 50 per cent. capital subsidy should be restored with effect as from 1st April this year for the development of these remaining areas. The necessary legislation will be enacted as soon as possible. The extension of supply to all areas will be completed within the next four years.
Our total exports in 1957 were valued at £131,000,000, the highest ever recorded. In volume our exports were greater in 1957 than in any year since 1930. Comparing 1957 with 1956 the value of our exports increased by £23,000,000, while the value of our imports rose only slightly, from £182.8 million to £184.8 million. The increase in the value of our exports was accordingly the main factor which accounted for the reduction in our import excess. It will be recalled that the import excess, which had reached the dangerously high figure of £96.8 million in 1955 had been somewhat reduced to £75,000,000 in 1956. In 1957, it was further reduced to £53.6 million.
The largest element contributing to the increase in the export figure was the great increase in exports of store cattle. There were also substantial increases in exports of fresh, chilled and frozen beef and veal, mutton and lamb, bacon and hams. These agricultural items are, of course, traditional exports and, perhaps, a more heartening sign is the fact that several industrial exports reached sizable increases. Among these industrial exports which increased in 1957 might be mentioned yarns, apparel, glass and motor vehicles.
The overall figures for 1957 and the comparison with former years, undoubtedly reduce anxieties about the immediate future. Nevertheless it is recognised that the large increase in exports in 1957 was due partly to a number of non-recurring factors. The balance of payments position still needs careful watching and we must make certain that the gains recorded will be maintained. A study of the monthly trade figures for 1957 and the first four months of 1958 shows that we are not yet out of the wood. While exports in all but one months of the first three-quarters of 1957 were higher than in the corresponding months of 1956 the improvement slowed down in the last quarter of 1957.
Coincident with that slowing down in exports, our imports in the months of the last quarter of 1957 were greater than in the months of the last quarter of 1956. The result was that in the last quarter of 1957, our import excess was greater than in the last quarter of 1956. Similarly our import excess in the first four months of this year was greater than in the corresponding period of 1957. That reflects a drop in our cattle exports, but is no doubt also attributable to the higher level of industrial activity and the effect of wage increases on consumption expenditure.
