Is there an amendment on the Order Paper?
Committee on Finance. - Industrial Grants (Amendment) Bill, 1961—Committee Stage.
There is no amendment.
Section 1 agreed to.
SECTION 2.
Question proposed: "That Section 2 stand part of the Bill."
Could the Minister explain why he wants to increase the number of members of this body from three to five? It is an administrative body with an expert staff at its disposal. Is it necessary to add to the number of directors? It could be said you know that this is simply the creation of two new jobs. I think the Minister will want to justify it before he asks the House to provide for the addition of two persons to a body which seems well able to do the work it has to do.
Since the Undeveloped Areas Act was introduced in 1952 there were three members of An Foras Tionscal, which was the body entrusted with the examination of proposals for grants for new industrial undertakings, or extensions of existing undertakings. Initially their work was confined to the Undeveloped Areas Acts. In 1956 Deputy Norton, then Minister for Industry and Commerce, introduced the measure known as the Industrial Grants Act and entrusted the administration of that Act in a similar way to the Industrial Development Authority.
When the Industrial Grants Act was amended and extended in 1959, the Industrial Development Authority represented to me that since they were a promotional body it would be difficult for them to be asked to assess the industries they had helped to promote, and the applications they had helped to make. It would be difficult for them to decide whether or not the industry qualified for the grants and if so what grants should be given. They asked to be relieved of that function. I acceded to their request and gave to An Foras Tionscal the grant giving functions formerly exercised by the Industrial Development Authority. They then had two Acts to administer, the Undeveloped Areas Acts and the Industrial Grants Act. Immediately, there was a considerable increase in the amount of grant applications An Foras Tionscal had to examine and determine.
The main purpose of this Bill as the House has seen is to increase the overall maximum amount of money available for grant purposes, largely because the number of applications has been considerably increasing in recent years. Having regard to the increased duties given to An Foras Tionscal as a result of the transfer of the Industrial Development Authority function under the Industrial Development Act, and having regard to the increased work thrown on that body as a result of the increasing number of applications it was thought that it was only fair that two extra members should be appointed.
As well as that, having regard to the amount of money administered by this body I thought that two heads more would be a good thing to add to the three already there. I can say that the Chairman of An Foras Tionscal agreed with me that it would be a good thing to have two more people on the board. I think the explanation I have given is reasonable, and I think the House should agree to having five members in An Foras Tionscal instead of three. I should add that this body meets every week.
Can the Minister tell me who are the present members of the body?
The original members: Mr. J. Beddy, Chairman, Mr. J. Glynn, Assistant Secretary of Roinn na Gaeltachta and Mr. O'Neill, formerly a member of the staff of the Department of Industry and Commerce and now a member of the Board of the Industrial Development Authority.
What did the Minister say was the official status of the second gentleman?
He is Assistant Secretary of Roinn na Gaeltachta.
Question put and agreed to.
SECTION 3.
Question proposed: "That Section 3 stand part of the Bill."
Section 3 raised the total sum by 50 per cent. from £10,000,000 to £15,000,000. Can the Minister give us any indication of how long he expects this sum of money to last or has any realistic estimate been made?
I think on the basis of past performance, if I may call it that, one may be able to give an estimate. The Undeveloped Areas Act and the Industrial Development Act have been in operation for nine years. In that period, between the two Acts, a total of over £8½ million has either been granted or committed for grant. It was anticipated at the rate the proposals are now coming before the Board that £10,000,000 might be exhausted by the coming autumn. On the basis of roughly £10,000,000 in the past ten years, the longest the increased amount would last would be five years, and having regard to the accelerated rate of applications that may be reduced to three. Since the amount must be increased upwards to ensure that no application would be rejected because An Foras Tionscal had not money at their disposal, it should be raised to a sufficiently high limit to avoid the necessity of coming back on frequent occasions to the House seeking approval to increase that sum.
Could the Minister say up to date what sum has actually been allocated and what sum has been hypothecated, making a distinction between what is actually granted and what is committed?
As I say, there are two Acts. Under the Undeveloped Areas Act the amount of grants approved was £5,430,700—say £5½ million. Of that sum, £2,318,700 has actually been paid, leaving roughly £2 million hypothecated but unpaid. Under the other Act, grants approved amount to £3,086,200 as against grants paid totalling £648,000, leaving roughly something short of £2½ million hypothecated but unpaid.
Could the Minister tell us what is the difference between the 1959 Act and the 1956 Act?
The 1956 Act limited grants payable to industries outside the undeveloped areas to £50,000 in each case.
That was subsequently amended in 1959.
One of the purposes of the amendments was this. These grants were limited to new undertakings. There was a difficulty that if a company which was in existence for the purpose of manufacturing a certain product decided to manufacture, perhaps in an adjacent site, another product, it would not qualify for a grant under the Industrial Grants Act. The 1956 Act did not provide either for grants for extensions. The 1959 Act extended the upper limit to £250,000 in any one case, except in the case of an industry employing a very high number of people. The figure given during the course of the enactment of the Bill here was 2,000. It was not a statutory condition. It was given as an indication of the type of industry in respect of which a grant exceeding £250,000 might be given. Such a grant would be given only by a decision of the Government as a result of a recommendation to it by An Foras Tionscal. That is the main difference.
It did something more than that. It also made it harder to get a grant if you were going to build outside the undeveloped areas. You had to establish you could not operate the industry in the undeveloped areas.
That was one of the qualifications—if An Foras Tionscal were satisfied the industry was not one which might otherwise be established within the undeveloped areas and also if they were satisfied that the undertaking was one of exceptional national importance, by reason of the type of commodity it would manufacture and the proportion that would go into exports.
Under the Industrial Grants Act, 1956, it was open to a person to decide to put up an industry anywhere he liked outside the undeveloped areas. In that case he got a grant equivalent to two-thirds the cost of the building. He himself was the sole judge of where the building would be put. He had to manufacture an essential commodity and it had to be a commodity not produced here. But once he decided to do that and fulfilled that qualification, he could then get a grant of up to two-thirds the cost of the factory. Under the 1959 Act admittedly he could get a bigger grant but he had to be able to establish to the satisfaction of An Foras Tionscal that the industry proposed to be set up could not be located in the undeveloped areas. If he failed to do that—and it was not an easy job sometimes—he got no grant at all.
There is a slight qualification to what Deputy Norton said. The provision was "if there were good reasons why it could not be set up".
It was a fairly tough order, all the same.
I think there was a fairly liberal interpretation.
I am not so sure.
Suppose the case arises where a man is unable to set up his industry in the undeveloped areas and has been refused a grant and he succeeds in setting up his industry effectively outside the undeveloped areas on his own initiative. Is he still eligible for a grant for machinery?
In the amount of grant given, both the amount allocated to buildings and machinery are taken account of at the same time. So that, if he set up an industry on his own initiative without recourse to a grant, he would not get a separate grant for machinery if he applied later.
That seems rather odd.
I should say the amounts I have been mentioning are maximum amounts.
Question put and agreed to.
SECTION 4.
Question proposed: "That Section 4 stand part of the Bill."
I should like to get an explanation of this. The section says that "every reference to machinery shall be construed as including a reference to plant." Would the Minister mind telling us what is intended here?
Perhaps if I read out what is in my brief, it might be more explicit.
Legal advice recently received by An Foras Tionscal raised doubts as to whether plant as distinct from machinery and equipment qualifies for grant purposes. By the term "plant" is meant such fixtures as electric transformers for general use (as distinct from ones for use in a particular industrial process), cranes, roof tanks for the supply of water, etc. An Foras Tionscal have in practice been giving grants covering plant in addition to machinery and equipment and it is considered desirable to place beyond doubt their legal right to do so.
Therefore, the distinction is machinery is what we know as such. Plant is construed as electric transformers for general use, cranes, roof tanks for the supply of water and the like.
Take a boiler used partly in the processing and which also produces steam and hot water for heating. What is that?
I could not say whether it is plant or machinery. In any event, it does not arise now.
In what way would it be treated under this now?
It would not necessarily be treated one way or another, so long as it is included in the overall cost of machinery and equipment.
Is the purpose of the amendment to make sure that this almost indefinable thing called a boiler will qualify?
Yes.
This fascinates me. I have not been able to get my intelligence around it. Suppose I am Pat Murphy, born in Ballinskelligs, and I build a factory here in Finglas. I want to instal plant and machinery in my factory. Can I get a grant?
That is a thing I could not answer off-hand.
You would want to know what your project was and how meritorious it was.
As well as that, if it were a project which An Foras Tionscal would consider to be the normal development of an industry, it should be capitalised out of profit and out of the industry's own resources. In such a case An Foras Tionscal would not give a grant. If the installation of the machinery were for a completely new type of project, or some new field not related directly to what had been done in the factory, then An Foras Tionscal would consider the giving of a grant. In the case of what is considered normal development and expansion in a factory, that ought to be financed out of the company's own resources, in ordinary circumstances that would not get a grant.
There is abroad a queer kind of feeling that, if you come from Nagasaki, you will get a grant and V.I.P. treatment but, if you come from Ballydehob, you are inclined to get the brush-off. I should like to be quite clear that if a fellow coming from Ballydehob wants to set up a factory in Finglas his enterprise will be treated on exactly the same basis as an enterprise sponsored by any foreign company.
I can say quite categorically that the man from Ballydehob will receive the same treatment. There is no truth whatever in suggestions made to the contrary. The two Acts are there for administration, equally applicable to all applicants whether they are Irish citizens, foreigners, or a combination of both. There is no distinction whatsoever made as between people, whether they are Irish or non-native.
It is true, as Deputy Dillon suggests, that there is a feeling abroad—it may be for want of intelligent information on the subject—that you can get these grants if you come from the far ends of the earth but you cannot get them if you are Irish. There is no foundation whatever for that allegation. The nationality of the applicant never matters; where he comes from never matters. It is the quality of the project. If Pat Murphy has a project which can stand on its own two feet and withstand the test applied to every project that is proposed, he is entitled to and will get a grant just the same as the man from Nagasaki, or any other part of the world. I do not think that can be said too often because there is a widespread feeling on the part of some people that that is not the position. I think these are people who will not take the trouble to inform their own ignorance or who are motivated by self-pity into making these unjustified allegations.
Deputy Norton has put the position much more colourfully than I could.
Question agreed to.
SECTION 5.
Question proposed: "That Section 5 stand part of the Bill."
Is this a new power being given to An Foras Tionscal?
It is giving statutory effect to a condition normally inserted in the agreements made between An Foras Tionscal and the grantees. There was some doubt as to whether this condition, which precludes the grantee from disposing of the assets of the undertaking for ten years after the grant has been given, or disposing of his interest for five years after the grant has been given, was legally enforceable. This is giving statutory effect to a condition invariably included in these agreements.
A change was made extending the period during which the premises must be held from five to ten years. Is that done under the 1959 Act?
It was not written into any Act.
It was imposed as a condition.
It was a condition written into the agreement.
It was a kind of executive act on the part of the authority itself.
Quite so.
And the period was extended from five to ten years.
Offhand, I cannot say. There is a distinction between the assets which are non-disposable for ten years and an interest in the undertaking which is non-disposable for five years.
Does the Minister know what that distinction connotes? I do not want to press the Minister if he has not got the information readily available.
It means the company can be restricted from selling the building for ten years and the proprietors must not sell their shares for five years.
I will give the Deputy the terms of the condition written into the agreement:
The Company agrees that it will not alienate, assign or part with the possession of or otherwise dispose of the said factory premises or the said machinery and equipment specified in clause... hereof or any part thereof or remove from the factory premises the machinery or equipment or any part thereof either before the date of completion of payment of the grant or within ten years thereafter without the prior consent in writing of the board.
The ten years applies to the factory premises, machinery and equipment.
The company agrees to procure that the individuals who were the original promoters of the company and by whom or on whose behalf the application for assistance under the Acts was made will not sell or otherwise dispose of their ordinary shares in the capital of the company either before the date of completion of the payment of the grant or within a period of five years thereafter except with the prior consent in writing of the board.
In each case they are disposable only within these periods, provided the consent in writing is given by An Foras Tionscal. I do not think that is unduly restricted.
Question put and agreed to.
SECTION 6.
Question proposed: "That Section 6 stand part of the Bill."
I cannot resist raising on this section a rather remarkable fact. There have been several Acts designed to extend this kind of work, one of which was promoted by Deputy Norton when he was Minister for Industry and Commerce in the inter-Party Government. That was the Act of 1956. The Long Title of this Bill manages to refer to the Undeveloped Areas Acts, 1952 and 1957 and the Industrial Grants Act, 1959, but, by Jove, they have managed so to arrange things that the Industrial Grants Act, 1956, which is the root of the Industrial Grants Act, 1959, has now been forever blotted out of the Statute Law of Ireland.
That is not done with any ulterior motive. The 1959 Act carried in it some of the provisions of the Undeveloped Areas Acts, 1952 and 1957, and of the Industrial Grants Act, 1956. Under the review, which I have mentioned is taking place at the moment, it might be as well if we could consolidate all these in the one Act.
The Industrial Grants Act, 1959, consolidated the contents of the Undeveloped Areas Acts, 1952 and 1957.
That is right.
Is it not interesting that the 1952 and 1957 Acts could survive but the 1959 Act is not referred to at all?
In that respect I was completely in the hands of the Parliamentary Draftsman and I had to abide by his superior knowledge.
I think the Minister ought to tell Deputy Dillon he was very blessed in that the Industrial Development Authority was not wiped out, as his predecessor promised. I pay tribute to the Industrial Development Authority and An Foras Tionscal for the manner in which applications that come within their province are dealt with. I have had occasion to see both bodies at different times in respect to different projects. Not only is the fullest possible assistance given to promoters of new industries but every weakness in an application is pointed out and every effort is made to guide the potential promoters along lines which will command the submission of a satisfactory application. Both boards have been extremely helpful and extremely painstaking. Their literature and documentation generally, which help to expand their activities, are something which go well outside what in other spheres might be thought to be the inhospitable red tape of a Government Department. Both bodies perform as if it is in their own interest to have a new customer come in to see them. They appear to be delighted with any effort which helps to develop the activities which are their special assignment.
I wonder how many Deputies in this House recollect that to which Deputy Norton is referring when he says the Minister ought to be grateful that the Industrial Development Authority had not been slaughtered. I see a kind of mystification spreading over Deputy Faulkner's face. What Deputy Norton means is that when we instituted the Industrial Development Authority in this House in 1950, Deputy Lemass, as he then was, the present Taoiseach, standing approximately where I am standing now, said that the institution of the Industrial Development Authority was an act of folly and he solemnly pledged himself there and then—he wanted to give notice to anybody who contemplated accepting an invitation to join the Industrial Development Authority—that, at the first opportunity he got, he would repeal the Act, dissolve the body, and abolish its functions. It is that to which Deputy Norton now refers. But, to make a long story short, he learned the value of the Industrial Development Authority just as he has lately learned the value of the British market. Deputy Faulkner and the Minister for Industry and Commerce will excuse some of us who listened to his predecessor playing a somewhat different tune if we now find the present symphony grating a little on our ears.
The Deputy is entitled to a few little items in the success story he has to offer.
Question put and agreed to.
Title agreed to.
Bill reported without amendment.
Agreed to take remaining stages now.
Question proposed: "That the Bill be received for final consideration."
I do not think I should let this opportunity pass without endorsing what Deputy Norton has said about the Industrial Development Authority and An Foras Tionscal. As a result of my association with them I have nothing but the highest praise to offer to those who constitute the respective boards and those employed on the staff. I should like to say that I think it is a tribute to the Taoiseach's broadmindedness and objectivity that, having examined the position for himself on reassuming office as Minister for Industry and Commerce, he endorsed what Deputy Norton had done in setting up the Authority as something worthwhile. There is an Industries Division within the Department and, as he knew it, he assumed that the promotional work that was to be done by the Industrial Development Authority was already being well done within the Department. Having looked at the matter objectively, he decided the Industrial Development Authority was doing a good job and he was man enough, therefore, to retract what he had said about it, and keep it in operation.
In other words, the Taoiseach found that King Herod was not a good mentor.
I must say that the reform of the most abandoned criminal is an admirable development educationally. In the case of the most ignorant of men it is something about which we should rejoice. I do not know, however, if somebody habitually pulls down the house about your ears, that he is entitled to emerge from the ruins, picking the thatch out of his hair and saying: "That was a slight mistake. I will not do it the next time." I think we are entitled to say at some stage, after you have led us through an economic war and fiercely obstructed our creation of the Industrial Development Authority, that we will not continue to have the house pulled down about our ears.
Deputy Norton will remember that certain of the persons who were proposed for that Authority were deterred from accepting by the assurance that they would be swept out of existence if Fianna Fáil returned to office. When are we going to reach the stage when the house will not be pulled down around our ears by the present Taoiseach to the comforting obbligato, as he picks the thatch out of his teeth: "The next time I come to visit you I will not do that again". It is getting a bit tedious, and what maddens me particularly is that, as he picks the mortar off his clothes, he says: "Am I not a wonderfully broadminded man? I am always prepared to pull your house down but, when it comes down, I say I am sorry", and he saunters off down the road. Somebody is going to suspect at sometime that he is the man with the most brazen face of anybody in Ireland.
If the inter-Party Government had a tenth of the industrial building record in this country that the Taoiseach has they would be very proud.
I do not know so much about that.
I think they would.
Question put and agreed to.
Question: "That the Bill do now pass" put and agreed to.