Industrial Grants (Amendment) Bill, 1962—Second Stage.

Minister for Industry and Commerce (Mr. J. Lynch)

I move that the Bill be now read a Second Time. I propose to take together the two Bills, one amending the Industrial Grants Acts and the other the Undeveloped Areas Acts, because of the close connection of the two and because the Deputies will wish to compare the changes which are being proposed in the legislation covering the two areas of the country.

The existing legislation is due to expire on the 31st December, 1963, and I think it necessary to continue it beyond that date. The emergence of problems in relation to certain projects, such as those projects with a relatively high capital and low employment content, also makes it necessary to seek amending legislation. Industrial firms, moreover, have now to adapt themselves to free trade conditions and will incur expenditure in doing so. It is desirable, and this is the appropriate time, to provide special financial assistance to industry to enable it to prepare for the new situation.

The main changes proposed in this Bill and the Undeveloped Areas (Amendment) Bill are the removal of the limit of £250,000 for grants which may be authorised by An Foras Tionscal outside the undeveloped areas; the fixing of new limits for grants which may be given by the Board; the substitution of a single composite grant for the separate grants for buildings and equipment; the introduction of adaptation and extension grants for the purpose of enabling firms to prepare for free trade conditions; the extension of the powers of An Foras Tionscal to enable them to give grants in areas outside the undeveloped areas for the training of workers and the construction and repair of roads, bridges, etc; the increase in the amount available for grants from £15 million to £20 million and the revocation of the expiry date of the present legislation.

Under the present scale of grants, buildings rank for higher grants than plant and machinery. In the undeveloped areas, for example, the grant for sites and buildings may be as great as the full cost, while the grant in respect of machinery and equipment may not exceed one half the cost. Outside the undeveloped areas the grant in respect of sites and buildings may be two-thirds of the cost, while the grant in respect of machinery and equipment may not exceed one-third of the cost. As the relationship between the cost of buildings and plant and machinery may vary widely from one industry to another, it is not considered necessary to preserve the present distinction between grants for building and grants for plant and machinery. It is, accordingly, proposed that the amending legislation should provide that a composite maximum sum should be paid towards the cost of buildings, sites, machinery and equipment.

Taking first the case of projects involving smaller grants, that is grants not exceeding £250,000, the proposal is that the composite grant should not be more than two-thirds of the cost of the fixed assets in the case of projects in the undeveloped areas. Outside the undeveloped areas the grant will normally be limited to half of the fixed assets, but provision is made that a grant of up to two-thirds of this cost may be given in exceptional circumstances and where the Board are of opinion that there are sound economic reasons why the industry cannot be established or developed in the undeveloped areas.

There has been strong pressure from various quarters in recent times for the removal of the distinction, in the maxima for grants, between the undeveloped areas and the rest of the country, and the Government have considered this aspect of the grant legislation very carefully. They have come to the conclusion, however, that it is still necessary to preserve a distinction in favour of the undeveloped areas and this is being provided for in the case of grants of up to £250,000. At the same time it will be easier to secure such grants up to a maximum of 50 per cent. in other areas as it will no longer be necessary for promoters to establish that their projects are of exceptional national importance and cannot be established in the undeveloped areas.

An Foras Tionscal will be able, in certain circumstances, to apply the undeveloped areas scale of grant to projects located outside the undeveloped areas. Unlike the provision in the Undeveloped Areas Act, 1952, which enabled An Foras Tionscal to apply the undeveloped areas scale of grant to projects outside the undeveloped areas only where the Minister for Industry and Commerce had previously made an Order extending the scope of the Act to the particular area concerned, under the new provisions An Foras Tionscal will have power, in certain circumstances, to give higher grants for projects outside the undeveloped areas without any action on the part of the Minister.

While An Foras Tionscal will have a greater degree of autonomy in so far as they will have power to give higher grants without a prior ministerial order, the circumstances in which higher grants may be given are more stringent than in the present arrangements.

The existing legislation lays down no criteria for ministerial orders extending the scope of the undeveloped areas and, where an order is made in respect of a particular area, An Foras Tionscal are not obliged to have regard to any considerations other than those generally applicable to grants for projects in the undeveloped areas. Under the new legislation, before giving a higher grant, An Foras Tionscal will require to be of opinion that there are sound economic reasons why the particular project cannot be established in the undeveloped areas and, in addition, must be of opinion that other exceptional circumstances exist.

Section 8 of this Bill will also be relevant in the approach of the Board to requests for higher grants outside the undeveloped areas. In addition to the specific requirements laid down in Section 2, this section imposes on the Board the obligation of having special regard in their general operations to the need for attracting industries to the undeveloped areas.

Large-scale projects—most of which have so far been located outside the undeveloped areas — in respect of which promoters seek grants in excess of £250,000 and also, in some instances, loan finance accommodation, have presented serious difficulties under the present arrangements and the Industrial Development Authority and An Foras Tionscal have stressed the need for providing a means of resolving these difficulties and removing the present state of uncertainty in the minds of industrial promoters as to what grants would ultimately be forthcoming.

The test now applicable—that is a substantial employment content—in a case in which An Foras Tionscal would recommend to the Government that there should be a grant in excess of £250,000 has been found unsuitable for major projects. After long consideration of the problem and the examination of various possibilities, including that of State participation in such projects, the following proposals appear to the Government to offer the best solution: (i) the removal of the limit of £250,000 so that the Board of An Foras Tionscal will be able to give grants in excess of this figure. The Board, however, may not give grants in excess of either 50 per cent. of the fixed assets or a sum calculated at the rate of £1,000 per worker, estimated by An Foras Tionscal to be employed in the industry when in full production, whichever of these two sums is the lesser. Should, however, the proposed grant exceed £500,000, the Board will require my consent and that of the Minister for Finance. These proposals have been written into the two Bills which also provide that, if either of the two limits I have mentioned, namely, 50 per cent. of the fixed assets or £1,000 per worker, be exceeded in the case of any proposed grant, it will be necessary to obtain the consent of the Government before the grant can be approved.

(ii) the setting up of a separate Finance Company, which would be managed by the Industrial Credit Company and financed directly by State funds to provide, on preferential terms, in lieu of a larger grant than would be available under the limits I have just mentioned, a proportion of any loan finance required. The Industrial Credit Company, itself, would be available to provide further loan finance on commercial terms. The Minister for Finance has under consideration at the moment the legislation which will be needed for the formation of a semi-State holding Company, to be managed by the Industrial Credit Company which may, inter alia, grant loans where An Foras Tionscal make a grant.

It is intended that the combined amount of grant and loan, on preferential terms and otherwise, to be provided by the Board, the new Finance Company and the Industrial Credit Company, for any project will not exceed two-thirds of the fixed assets thus ensuring that promoters themselves will provide at least one-third of the fixed assets. Subject to these arrangements, the Industrial Credit Company and the proposed new Finance Company would between them provide loan capital up to a maximum representing the full amount of the balance of the cost of the fixed assets, over and above the total provided by way of grants and promoters' contribution.

One half of the loan would be a contract loan provided by the Industrial Credit Company at commercial interest rates, repayable over 12 years, with no capital repayment for the first two years. The other half of the loan would be made by the new Finance Company on the basis that it would be repayable only at the option of the borrower and would be free of interest for seven years. Thereafter this loan would bear interest at a rate not less than that of the contract loan and at such a level as to act as a spur to promoters to repay the loan. If the promoters do not repay it then the State through the proposed new Finance Company, would share in the profits of the undertaking.

The question as to which of the two limits—50 per cent. of the fixed assets or £1,000 per worker — will be the effective one will, of course, depend on the employment content of the project. For a project with a sizeable employment content, the effective limit will be 50 per cent. of the fixed assets. The case of the capital-intensive project is also catered for, and for such a project the effective limit will be £1,000 per worker. So, for example, if we take a project of which the total capital cost is £1,200,000 and which is estimated to give employment ultimately to 300 workers, the maximum grant which the Board may give would be £300,000. In the same case the promoters could, subject to the decisions of the appropriate bodies, obtain a further £500,000, of which £250,000 would be a loan from the Industrial Credit Company and £250,000 an interest-free loan from the new Finance Company. The balance of £400,000 representing one-third of the cost of the fixed assets, would be provided by the promoters themselves.

It is my view that these new grant and loan arrangements are very necessary at the present time and, indeed, I fear that, failing their introduction, the possibility of attracting to this country large-scale projects will be seriously diminished. I believe that the adoption of these proposals will considerably improve the prospects of securing the establishment here of really worthwhile industries.

It has already been announced that the Government intend to introduce special grants for the purpose of enabling industry to adapt itself to free trade conditions and proposals for such grants are contained in the two Bills—Section 4. It will be seen that the Bills provide for the making of grants up to one-quarter of the cost of schemes for the enlargement or adaptation of industrial undertakings. Adaptation expenditure on plant, equipment and buildings will qualify for these forms of assistance, provided the project satisfies the test of competitiveness. Capital programmes of a kind designed to expand productive capacity, which would not qualify for a grant under existing legislation, will be covered by the proposed arrangements, as well as re-equipment not involving expansion.

It is the intention that these grants should be an alternative to loans on special terms from the Industrial Credit Company for industrial re-equipment. In a case where a firm might not consider the 25 per cent grant to be adequate, it would have the option of applying instead to the Industrial Credit Company for a special re-equipment loan. These special loans will cover a proportion, to be settled in each case by the Industrial Credit Company, of the expenditure involved and will be granted where that company is satisfied that there is a definite prospect that the re-equipment project will make the undertaking fully competitive. Firms will, of course, also be free to obtain ordinary loans either from the Industrial Credit Company or from some other source.

I would like to make it clear that the purpose of these grants and loans is to help finance re-equipment and re-adaptation, not simply routine replacement. In this connection, it is likely that, amongst the criteria to be observed, will be a comparison of the expenditure proposed by a firm with its capital expenditure, together with expenditure on renewals and maintenance, in recent years, for the purpose of ascertaining whether, in fact, the firm's proposals involve accelerated expenditure.

The object of these adaptation and re-equipment grants and loans is to enable firms to make themselves fully competitive and so the position could well arise that their effect would be to help a firm to compete with an existing Irish competitor. This is a position which must be accepted. Even when the home suppliers are already meeting the home market in full, applicants would still be regarded as eligibile for grants, provided that there is some possibility that they could break into the export market. Such a situation could, in fact, provide an incentive to seek export outlets rather than engage in unprofitable competition on the home market.

A further change proposed in the Bill, Sections 5 and 6, is to enable the Board to give grants for the training of workers and for the construction of roads, bridges, etc. in the case of projects situated outside the undeveloped areas. The Board already has power to give such grants in the case of projects within the undeveloped areas. No upper limit for the amount of these grants is being proposed. It would be unrealistic, if not impossible, to attempt to arrive at any estimates on which maxima could be based.

However, expenditure for these purposes in the undeveloped areas has been quite small and there is no reason to suppose that the position in this regard will undergo any radical change in the future. Up to the 31st December, 1962, grants towards the cost of training workers, totalling £134,000, were approved by the Board. No grants have been given specifically for the construction of roads, bridges, etc.

Little needs to be said about the remaining provisions of the Bills. The existing legislation is due to expire on 31st December, 1963, and it is proposed to revoke this provision and leave the date of expiry indefinite. The aggregate amount of the grants which may be given under the existing Acts may not exceed £15 million. With the removal of the expiry date, the introduction of new limits and new types of grant, it is necessary to increase this figure and a revised limit of £20 million is specified in Section 7 of the Bill.

Deputies will have seen the CIO Report on Industrial Grants which has been published and the announcement made by the Government indicating their attitude towards the proposals in the Report. One of the principal proposals in the Report is that a small number of centres should be established for development and provision made for a grant differential in favour of these centres. This proposal will be considered with the Second Programme for Economic Expansion. The remaining proposals in the Report are acceptable generally and effect is being given to them in the Bills, or will be given administratively within the framework of the revised legislation.

I recommend the Bill to the House.

Mr. Cosgrave

In order to understand fully the implications of these two Bills, it is necessary briefly to summarise the provisions of the Undeveloped Areas Act, 1952, and the Industrial Grants Act, 1956. The 1952 Act established An Foras Tionscal and empowered them to buy land, build factories and provide other services, such as drainage, sewerage and so on. The Board were empowered to make grants for the provision of machinery and equipment to an industrial undertaking in any undeveloped area. The grant in this case is not to exceed more than half of the cost. There were further grants for the training of workers for new industries in the undeveloped areas which the Board were empowered to make. The total to be provided under the 1952 Act was fixed at £2 million.

The Industrial Grants Act, 1956, empowered the Industrial Development Authority, where the Authority were satisfied that the money was needed to establish an industrial undertaking for the manufacture of a commodity, to make a grant for the acquisition, construction and adaptation of buildings or works required for the purposes of the undertaking. The maximum grant which could be made was two-thirds of the cost involved or £50,000, whichever was the lesser. The total under the Act was fixed at £2 million. In 1957, the Undeveloped Areas (Amendment) Act increased the grants under the 1952 Act to £4 million and the Industrial Grants Act, 1959, repealed the Industrial Grants Act, 1956, completely and transferred the functions from the Industrial Development Authority to An Foras Tionscal.

Under Section 2 of the 1959 Act, provision was made for making grants in respect of industrial undertakings not in undeveloped areas as follows: two-thirds of the cost of acquiring land, constructing buildings and providing other services in connection with the land; one-third of the cost of providing machinery and equipment for an industrial undertaking, the maximum grant to be £250,000. Power, however, was given to the Government in subsection (5) of Section 2 to approve of grants being made in excess of £250,000 where the Government were satisfied, having regard to the amount of employment likely to be afforded by the undertaking and where they thought it proper to give such approval. The total of the grants to be given under the Act was fixed at a maximum of £10 million. These provisions of the 1959 Act are now being altered by the present Industrial Grants Bill. The grants, as I understand it, are to be divided into two classes, depending upon whether or not the total amount of the cost of the industrial undertaking is less than or exceeds £250,000. Subsection (2) provides that where the total cost of the undertaking is not more than £250,000 grants up to two-thirds of the cost may be made where these relate to the acquisition of land, construction and so on, and grants up to half the total in any other case. This proposal will be generally welcomed as an effort to meet the needs of industrial development and expansion.

It is relevant at this stage to refer to the different attitude which is available to the Minister from this side of the House when he introduces these proposals, compared with the attitude adopted by the present Taoiseach when the 1956 Act was going through. At that time the Taoiseach, then Deputy Lemass, criticised the 1956 Act which was introduced by the then Minister for Industry and Commerce, although subsequently in the Act repealing it in 1959 the provisions were continued. It was obvious that he had by then accepted the wisdom of the policy operated by the inter-Party Government and covered in the 1956 Act. Deputy Lemass at column 1950 of volume 160 said:

It is not easy for a Party in opposition to vote against a measure introduced by a Government in office to give money for nothing to anybody and Deputies will appreciate my political difficulty in that regard but, speaking quite frankly and honestly, I believe that this Bill introduces an undesirable principle in the operation of industrial policy, that it is unnecessary, that the aid which industry requires is not this type of aid and that the whole origin of the Bill is the inability of the Government to think beyond the surface of things, to get down to an understanding of real causes which are holding up national development, their desire to appear to be doing something, whether they get results or not, in order to safeguard their political position for the time being.

As I say, subsequently Deputy Lemass accepted the wisdom of the inter-Party Government and on a number of occasions the present Minister and the Taoiseach, when he was Minister for Industry and Commerce, have given facts and figures of the number of undertakings that have been established, their employment content and the general industrial expansion that has flowed from the policy initiated in the 1956 Industrial Grants Act which was subsequently developed and extended, and which is now being further developed under these two measures.

One comment that falls to be made on the present measures is that some time it would be an advantage to get all these grants and the various provisions of the Undeveloped Areas Act and the Industrial Grants Act into one measure. It is extremely difficult to follow in view of the changes that have been made and the fact that different titles deal with more or less the same thing.

At a certain stage a person dealing with the Industrial Grants Act has to refer to the Undeveloped Areas Act and on another occasion has to refer back to the Industrial Grants Act. I believe there is a very strong case for amalgamation of this legislation into a single Act where it will be clear to all concerned what is involved.

There are certain other aspects of the matter which I believe require attention at present. The purposes behind these two measures have already been indicated in the CIO reports where problems concerning industrial development in the context of the Common Market were exhaustively examined. The problems which will arise, the difficulties to be surmounted and the changes necessary to meet conditions were considered in the CIO report under four main headings. Paragraph 16 of the interim report on what had to be granted to industry to adapt itself to meet Common Market conditions states:

Four broad problems can be distinguished, namely: (1) re-equipment within substantially the same field of activity; (2) adaptation which involves a switch from one field of activity to another; (3) inducements to new enterprises to go to places where workers are being unemployed in significant numbers; (4) the continuing problem of diversifying and deepening the industrial base.

These four headings cover the major difficulties which are likely to arise. The proposals in the Bill provide the means whereby financial assistance can be provided for industrial undertakings. It is because of these reports and because of the provisions included in these Bills that I think it necessary to ascertain what Government policy on the most important aspect of the problem is and to consider Government policy in the light of the comments made in two published documents, one of which is Economic Development, chapter 16, paragraphs 13 and 14 on page 160. Paragraph 13 states:

Since the home market has been largely catered for, further industrial development must depend largely on exports. Tariffs and quota protection are at best only of limited use in this context. A realistic appraisal indicates that if we are to have any hope of success and, indeed, if not deliberately to add to our already severe handicaps we must site our industries at or convenient to, the larger centres of population where internal and external transport facilities are best and supplies of skilled and unskilled labour, fuel, water etc. are readily available. This is not to ignore the possibility that there may be special economic advantages in doing otherwise in certain cases. Even with such siting transport costs to and from external markets will be a heavy handicap on our exporters as compared with their competitors who are, in most cases, better placed in such matters as capital resources, experience and techniques.

Paragraph 14 which follows, states:

In our present circumstances, with virtually the whole country undeveloped, it seems wasteful to subsidise remote areas especially by providing more extensive grants. Such subsidisation of this kind entails additional burdens on the community as a whole and retards progress in the most suitable areas where a concentrated effort could give better results.

This problem is further considered in the fourth interim report by the CIO in paragraph 22 on page 10 which states, having reviewed the matter and having expressed the opinion that in certain areas a number of small towns were prospering and that these towns offered advantages for industrial enterprises:

On the other hand, we are satisfied for the reasons set out in the succeeding paragraphs that direction of industrial grants policy towards achieving a widespread dispersal of industry would in the circumstances facing us under free trade, be economically unjustifiable.

They go on to give a variety of reasons why that is so.

It is not necessary to read the report further because it is available to Deputies and they can see the reasons advanced there. What I want to impress on the Minister is that those are two published documents, one of which has been approved by the Government and the other issued as a Government White Paper. I want to know what exactly is the policy being pursued when one considers Section 8 of the Industrial Grants (Amendment) Bill now before us? Anyone who reads the section, of course, will realise that it is meaningless. It states:

In performing its functions the Board shall bear constantly in mind the national aims of decentralising industry and of attracting industries to the undeveloped areas and shall endeavour to promote the attainment of those aims.

I believe that Section 8 should be deleted because it imposes no effective direction or control on Foras Tionscail or on the Industrial Development Authority. The Board may read the section at the meeting but they are not obliged to implement it in practice and there is no machinery whereby the Board can be forced to implement it or whereby some sanction will operate if the Board refuse to implement it.

On the other hand, it is directly in conflict with the views expressed in Economic Development and with the opinion expressed in the CIO report which considered this matter exhaustively. There are already in the Undeveloped Areas Act ample directives to the Board to consider the needs of these areas and the changes being made in these two measures have been made in the light of the experience that has been gained as well as the practical, economic, transport and other difficulties which arise in the context of freer trade and which will face industrial undertakings should we become a member of EEC.

The other great problem which these two measures are designed to deal with is the retraining of workers and the provision of financial assistance for the retraining of these workers who will be disemployed. I am anxious to find out something which I believe is a matter which is uppermost in the minds of most workers who may be affected by any changes or dislocation attendant on membership, or in the light of the developments which will result from our membership of the Common Market or any other consequences of the development of the Common Market elsewhere.

As I understand the Treaty of Rome, there is provision whereby financial assistance may be provided from the Social Fund for the retraining and readaptation of workers whose employment has terminated because of the Common Market. That is reasonably satisfactory so far as it goes, but it deals with only part of the problem. It depends to a very great extent on what is involved for each individual worker and for each individual group of workers. Some types of industrial employment and some occupations will readily lend those employed in them to re-training, although a short course in special techniques may be necessary, but there are other factors besides re-training involved.

The question of the age of the worker when re-training must be considered. If a person is obliged to leave his employment when he is in his twenties or thirties, he is necessarily easier to train than a person in his forties or fifties. At the same time, if a person is in a highly specialised type of employment, it may be less easy for him to be re-adapted or re-trained to other categories. Individuals differ, of course, and the training involved for one may be inadequate for another, although both have been engaged in the same occupations.

While that may deal with the question of the worker being re-trained, re-equipped and above all, re-employed, the real problem will arise for those workers who, because of the effect of the Common Market, will find themselves permanently disemployed. I believe this will affect a great many in the upper age groups. What I want to ascertain from the Minister is to what extent, should this country become a member of the EEC, we will be entitled to draw on the Social Fund for retirement or pension purposes. As I understand the Social Fund, as it at present operates or as it would operate in the event of membership being extended, it will only apply to re-training or re-adaptation for the interim period between ceasing in one employment and being re-employed in another occupation.

On the other hand, a great many workers will be affected to the extent that they will find it impossible, or virtually impossible, to get worthwhile new occupations. Those workers and their families are naturally most anxious to ascertain what are their rights and entitlement. Will these persons have available to them resort to the Social Fund to provide adequate retirement pay or pensions, in addition to the provisions which apply to those who will be retrained? We have had here limited experience, mainly in the case of the transport undertaking, where, due to the closure of lines, persons employed in CIE find themselves moved from one district to another. Those of us who have had experience of these cases realise what difficulties are involved for the individual concerned, particularly for married people with families, and what complete dislocation it means in the whole domestic position of these workers and their families. The problem has not been a very great one because the numbers involved are relatively small.

If the EEC develops to the extent envisaged, the effect on a great many workers will be considerable. The prospect of re-employment for some may be reasonable enough, but for a great many the future will be one in which they and their families must naturally feel considerable anxiety. For that reason I believe a clear and authoritative statement should be made of the position which will arise and of the entitlement of workers to resort to the Social Fund to meet these problems and to meet their needs and requirements.

These are the two main matters involved in this—the extent to which attention is being paid or official policy implemented in respect of the recommendations and comments made in Economic Development and the other comments made in the CIO Report, and the problem which will arise for workers disemployed, either temporarily or permanently. The legislation involved here is directly attributable to the consideration of some of these problems that has been undertaken by the CIO. Everybody recognises the value of the reports which have been furnished by that Committee. The various matters that have come before that Committee have already been the subject of exhaustive and intense examination and investigation. The findings reported in these various CIO Reports—so far as these measures are concerned, the fourth Interim Report —enable us to consider the matter in the light of the specialised knowledge of the members of that Committee as well as the experience and information available to them from what has appeared elsewhere. It will undoubtedly be generally recognised that the financial and other changes made in these two measures are designed to provide the incentive, both financial or otherwise, necessary to meet the changed conditions. It is to some extent difficult to discuss this matter in the light of the present stage of the EEC negotiations. But whatever the ultimate result of the present discussions, it is obvious that freer trade generally appears to be on the horizon, not only for the members of the EEC but for Europe as a whole. That situation will inevitably have reactions and repercussions here. To face that situation the changes made in the legislation now before us offer the prospect of at least meeting it in a better position than if the measures were not introduced.

An Ceann Comhairle

Before I call Deputy Norton and in case any misunderstanding should arise, I should like to make it clear that the Minister asked that the Industrial Grants (Amendment) Bill, 1962, and the Undeveloped Areas (Amendment) Bill, 1962, be discussed together. Of course, the second Bill will be formally moved afterwards.

Mr. Norton

I think there will be a general welcome for both of these Bills. They take cognisance of developments which have taken place in recent years and clearly indicate an appreciation of the society into which we are likely to be precipitated on the setting up of the European Common Market and of our possible adherence to it. Like Deputy Cosgrave, I remember that when we introduced the Industrial Grants Bill, in 1956 we were told by the present Taoiseach that it was a needless Bill, that it was not necessary at all. We were told we were giving money away to people for nothing and that, as far as he was concerned, it was quite an undesirable precedent to establish, especially in areas outside the undeveloped areas. That was in 1956. This is 1963, seven years afterwards, and the purpose of these two Bills taken together is to provide even much more money, free of charge, outside the undeveloped areas than was contemplated in 1956. In other words, the Taoiseach has swallowed all he said in 1956.

By the introduction of these Bills he admits he was guilty of a fundamental economic misconception and he now comes to the House and says: "Pass these two Bills which not only do what you did in 1956 but in this case do it even more generously". I suppose everybody has to be pleased that the effluxion of time and years brings wisdom, and the fact that the Taoiseach now realises that what he was talking about in 1956 was just so much hastily ejected hot air is an occasion for congratulation. It is also an occasion for congratulation when you see a more sane approach to the problem of industrial development as envisaged here.

One of the characteristics of the Industrial Development Act of 1952 was that it did put a substantial emphasis on the establishment of new industries in the undeveloped areas at a time when there was general agreement in the House that everything possible should be done to rescue these areas from the plight of no industries and, in consequence, a low standard of employment and a low standard of living. The House at the time generally approved the idea of giving these areas every possible chance to make good and survive and, at the same time, to make a contribution towards the development of our economic fabric.

As time went on, and through the medium of the grants made possible under the Undeveloped Areas Act, many of these places were enabled to secure industries and, in time, became better off than many places outside the undeveloped areas. The result of that you will find if you look at the undeveloped areas to-day and look at the areas outside which are presumed inferentially to mean the developed areas. You will find that in the so-called undeveloped areas more industries exist to-day than exist in the outer areas, the so-called developed areas. In other words, in many instances— I do not say in all instances by any means—towns outside the undeveloped areas are less equipped and less well off from the point of view of industrial development than many towns inside the industrial development areas.

All the indications are that that process continues and now there is a recognition, as there was in the 1956 Industrial Grants Act, that something should be done to help the areas outside the undeveloped areas, that, in other words, there should be some attraction for an industrialist to go to a town and establish an industry outside the undeveloped areas. The Industrial Grants Act was an effort to meet the needs in that respect and to some extent to meet the needs, without, at the same time, harming the undeveloped areas. Now, because of the fact that the European Economic Community has projected itself on the European scene and is calculated possibly to change the whole course of Irish economics and, indeed, of Irish political history, we find it necessary to have another look at the whole situation. The other look at the situation, produced and crystallised in the Report of the Committee on Industrial Organisation, has shown the necessity for bringing about a much greater equalisation in the grants available to the undeveloped areas as well as those areas outside the undeveloped areas, and these two Bills taken jointly provide that the grants will be available both in the undeveloped areas and outside.

Even when the present Government amended the Industrial Grants Act of 1956, as they did in 1959, I think there was a provision in the amended Act that you could not get a grant to establish yourself outside the undeveloped areas unless you could establish that the industry was of a kind which could not be established within the undeveloped areas. That, of course, meant that quite a number of industrialists who wanted to establish industries along the eastern seaboard saw that they could not do so unless they could establish that the same industry could not be established in the west or along the western seaboard, but if they were unable to show that the industry could not be established in the undeveloped areas their prospects of securing a grant from An Foras Tionscal were not bright.

However, the Minister has now recognised the necessity for a change in that respect because, recommending the Bill to the Dáil, he says:

There has been strong pressure from various quarters in recent times for the removal of the distinction in the maxima for grants between the undeveloped areas and the rest of the country and the Government have considered this aspect of the legislation very carefully. They have come to the conclusion, however, that it is still necessary to preserve a distinction in favour of the undeveloped areas and this is being provided for in the case of grants up to £250,000. At the same time it would be easier to secure such grants up to a maximum of 50 per cent, in other areas as it will be no longer necessary for promoters to establish that their projects are of exceptional national importance and cannot be established in the undeveloped areas.

Accordingly, there has been a substantial easement of the whole situation by reason of this change in the Bill—that is in the Industrial Grants (Amendment) Bill which has been effected by the repeal of a section in the 1959 amending Bill.

While, as I said, the general objective aimed at in both Bills is praiseworthy, there are some aspects of the matter to which I should like to make reference. One is the suggestion contained in Page 7 of the Minister's circulated opening statement. He refers to the facilities which will be available in future for the establishment of industries: grants will be made available and there will be two new bodies functioning side by side with An Foras Tionscal. One is the Industrial Credit Company and the other is a new finance company which will take over certain activities from the Industrial Credit Company. In his speech the Minister refers to new industries which may require money and says they will get a certain part of the capital by way of grant, and goes on to say:

One half of the loan will be a contract loan provided by the Industrial Credit Company at commercial interest rates repayable over 12 years with no capital repayment for the first two years. The other half of the loan will be made by the new finance company on the basis that it would be repayable only at the option of the borrower and would be interest free for seven years. Therefore, this loan would bear interest at a rate not less than that of a loan at such level so as to act as a spur to promoters to repay the loan.

Am I right in interpreting that as meaning that the firm in question can get a loan of half of what it requires from the Industrial Credit Company, repayable over 12 years, with no capital repayment for the first two years, and that it can get another half of the loan from this new finance company, free of interest for seven years? Am I right in thinking that it may operate on the second loan—that is, the loan from the new finance company—for a period of six and a half years without paying interest and that its obligations can be met at the end of the seven years if it passes back the entire sum which it borrowed from the new finance company? In other words, are we to assume that the new finance company will be completely satisfied once it gets back its capital at the end of seven years—say, in one sum—and, if that is not possible, that the rate of interest only starts when the firm is entering its eighth year, still holding the money which it borrowed from the new finance company? I should like the Minister to confirm that: it seems a reasonable interpretation of his speech.

I should like to refer to the position of small industries. The figures used in the Minister's speech are all on the large side and by no means reflect the classification of our industries. Most of our industries are very small industries with a relatively small amount of capital and, strangely enough because of that fact, in many instances employ much more labour per £ of invested capital than does the large highly-capitalised firm. May I take it, from what the Minister said, that within the scope of this Bill, it will be possible for people to get these loans and grants even if the projects which they contemplate establishing are much smaller than those indicated by the sums of money mentioned in his speech? Can a group which hopes to establish a business of say, £50,000, £80,000, £100,000 or £40,000 get facilities to establish an industry under the terms of these two Bills?

We have to remember—and this is true not only of Ireland but of Britain and Germany — that in countries where there are very large industrial projects and very large and heavily-capitalised industries, by far the bulk of the employment given is in the smaller factories. I think that the aggregate of firms in England employing over 100 workers is probably less than 25 per cent of the total number of industries and I think the German figure is not very dissimilar to that.

At home here, one has only to let one's mind dwell on the employment that one knows of in the various cities and towns to find that, in the generality of cases, the number of workers employed is small. It has been said and repeated over and over again that in many of these instances a small firm often gives more employment on invested money than the large firm. In many instances, too, because of the closer personal supervision and the avoidance of doubtful administrative superstructures, they can be administered more efficiently and with less cost than that involved in the overheads of the very large firm.

I hope the Minister will say, without question, that there will be a place, on merit, for these small industries in this Bill. I hope he will say that they will be encouraged in every possible way and diversified as much as possible so that people will not be tempted to abandon the facilities because they are not able to get into these large-scale industries which one conjures up in the mind with the mention of figures like £250,000, £500,000 and figures above that. I hope, therefore, the Minister will emphasise that aspect of the matter, that aspect of the provisions which does not seem to me to have been stressed in his speech to-day.

On the question of the provision of grants to 25 per cent of the cost of re-adaptation, it is a pity the Minister set the percentage so low, and indicated that in these circumstances one may not get any more than that by way of a grant. It is true that it can be got as a loan. However, it seems to me that in some cases, in order to save the industry, almost a complete reorganisation may have to take place to equip it for the battle in the conditions of the Common Market, that is, if we are admitted a member of the EEC. This percentage seems to be just a haphazard figure which came into somebody's mind. There should be more flexibility about it.

If there is a likelihood that a firm may need a bigger grant to save it, then it would be better if it could be given. It would be cheaper for the nation to help to reorganise industries now, to keep them in existence and to keep them providing employment, than to have to pay out, with seemingly no end in sight, unemployment benefit to persons who will not be able to get employment unless we take some steps to equip our industries to meet the battle of the Common Market and the keener competition which is likely to surround us on all sides.

While I am on the subject of adaptation and the establishment of an adaptation council, I should like the Minister to avail himself of this opportunity to tell us the Government's plans or his Department's plans for dealing with this question of re-adaptation. I know that in every industry you will find somebody interested in adaptation. In some industries, whole groups of people will be interested in getting on with the adaptation of their business to meet the new situation. I am not worried about these people—energetic, zealous, restless persons who want to get the best possible tools so as to produce the best possible goods and to market them under the best possible conditions and brand them in the best possible way. They are not the persons to look after at all. They are all right. Their resources and industrial restlessness will probably carry them to victory all right.

It is the inert, indolent fellow who says: "This Common Market is a great problem. I do not know where to start" who must be watched. He probably does not know where to start and he is not too energetic about finding out where to start. He draws consolation from the fact that there will be other people in the same jam as himself. His attitude is that somehow or other something will happen; that a meeting will be held; that everything will be all right. He tells himself that he has got these frights before and survived them and that he will probably survive this fright. He is the kind of fellow who must be watched.

I should like to know will anybody supervise these adaptations, will any public relations officer in the Department or elsewhere deal with those firms which show no evidence of any adaptations and where the owners of the capital may very well say: "We have had a good time over a long period; we cannot just jump these hurdles now. We made a lot of money and the premises are worth a lot; the fixed assets could be sold at a pretty good price." It is all right for the owner of the capital to decide to sell out but the problem is the employment of the people in the industry. Therefore the Department ought to supervise these adaptation grants in such a way as to encourage firms to get on with the job as quickly as possible, to ensure that they will be helped in every way possible to overcome the difficulties and, if necessary, almost taken by the hand and shown where they should start making plans to deal with the problems which project themselves on the industry for the future.

These adaptation grants should not merely be given as a palliative to industry who would be told: "Take that and see how you get on; we hope you will survive and be fit and well to compete in the production of goods." They should be told they are expected to take such steps as will ensure that the grant is not just dissipated and that it will, in fact, be utilised to the best possible advantage. Any shortcomings in regard to knowing how best to use it should be ironed out for them by people in the Department who have a competence for dealing with matters of this kind.

In regard to the retraining of workers, we are probably not giving sufficient attention to that problem. Retraining of workers is an unknown art in this country. We have never had the problem of the depressed area as other countries have had it. The retraining of workers is something that never previously had been attempted by industry in the sense of an organised scheme of retraining workers. It is new and, like everything else that is new, it will be subject to much suspicion and doubt. Many people will say: "It is a pity this thing cropped up at all. Everything was going all right until we had to retrain people"; but retrain them we will have to do if we are to save employment for many people now engaged in industries which will feel the blast of Common Market conditions. Some organised effort ought to be made to produce a scheme showing the steps that should be taken in order to provide for retraining.

I appreciate that before you can decide how you will eat the rabbit, you have to catch him and cook him. In this case, you have to find out for what type of work you will retrain the worker and that will arise only when the existing machinery has been surveyed and its prospects for the future appraised. However, this survey and this appraisal will have to be done within a relatively short time and until such time as we reach that stage, we should work out a scheme, maybe a draft scheme or a skeleton scheme in relation to what will happen in providing for the retraining of workers and possibly for the re-deployment of workers, that is, the movement of workers from one place to another which will be capable of absorbing them if they and their families could be moved.

Again, that is a problem with which we have never had to deal. It is a problem for which we have no case book. However, it is a problem that ought to be studied and to which we ought to devote some thinking so that at least we shall be able to find out what are the latest methods to adopt rather than proceed on the wasteful and time-consuming basis of trial and error. We ought, for example, to find out what some of these continental countries are doing. There are some astounding cases reported in the continental papers of whole firms transferring not from one part of the country to another but to a different country. We ought to try to pick the brains of these people who have had to deal with this retraining and re-deployment of labour and thus save ourselves and the workers many cruel headaches, some of which will be unavoidable in the conditions of the Common Market changeover. At all events, our retraining and re-deployment should be regarded as urgent tasks so that when the time comes, we shall be able to take down the blueprint and operate it.

Deputy Cosgrave referred to the possibility of getting pensions for our aged workers and probably not so aged workers from the Social Fund envisaged in the Treaty of Rome. There is no provision in the Treaty that I can see for providing pensions. There is provision for paying the cost of retraining, for the cost of re-deployment and of maintaining the worker's standard of living while he is retraining and when he is in passage from what might be called redundant employment in one industry to new, lively and current employment in another. I see nothing in the Treaty of Rome which justifies any belief that pensions will be available for the redundant worker. Everybody would like to think that was a possibility so as to ensure that people who had served in industry for a long number of years and who found it difficult for obvious reasons to switch over to a new craft and new methods of operating would at the end of their days have a reasonable modicum to sustain them for the rest of their lives.

Probably we are thinking the Treaty of Rome will do too much in that respect. I am afraid it will not and because it will not and because of the disappointment which might ensure by expecting that, the only other measures to resort to are retraining and re-deployment. In any case, it will be quite difficult for us to get money from the Social Fund under the Treaty of Rome. If, in fact, that money is to be put up by other countries which have a condition of full employment and perhaps a scarcity of labour, we may very well be confronted with this situation that while there is a certain redundancy in Ireland, there will be a scarcity of workers somewhere on the Rhine; if you look for money for severance pensions or severance pay, you may be told: "There are jobs on the Rhine; come over and take them", rather than be permitted to enjoy a pension without such burdens at home. I do not think the European partners will be anyway soft in providing pensions for our people here while they are insisting on their own workers working as hard as they can and as long as they can for the purpose of increasing the productivity of their countries.

As I said at the outset, I want to welcome these Bills. I believe that taken together, and with efficiency and unceasing supervision, it should be possible to get industries to measure up to the responsibilities involved in meeting the threatened competition of the Common Market. That is not the primary purpose of the Bills. The primary purpose of the Bills is to attract new industries but I feel there are no great grounds for terrific enthusiasm, because it may very well be that many of these people will prefer to keep their industries in places where the heaviest concentration of population is and where the heaviest demand is.

The Minister is conscious of the difficulties, I think, because at paragraph 15 of his circulated speech, he says:

That is an admission by the Minister that he fears that unless they do these things, the possibility of attracting large-scale projects will be seriously diminished, and that with these Bills, he thinks the prospects of establishing worthwhile industries here will be considerably improved.

I think the whole House will wish that the second hope of the Minister will be fully realised, and that the attractions provided, attractions which are unique in relation to the establishment of industries in Western Europe, will induce many people to come here and avail of the various facilities in the form of capital grants and capital loans and the abundance of intelligent and highly-trained labour, and that our facilities for exporting, our reasonable taxation and stable political conditions will attract many potential industrialists, not merely from Europe but from the United States also, in the realisation that in these circumstances, they will have justification for the establishment of industries with the assistance and other ancilliary advantages provided in these Bills and will be able to sow the seeds of what will ultimately be far-flung and rewarding industries for those who invest in them.

Mr. Faulkner

I am glad to be able to welcome these very realistic Bills and I should like to be associated with those, outside and inside the House, who have congratulated the Minister on the very efficient manner in which he is facing up to the problems which will confront us when freer trade is something with which we will have to contend, whether or not we become members of the EEC as the Taoiseach has said.

The two previous speakers mentioned that the introduction of these Bills brings back to their minds certain statements made by the Taoiseach in 1956. I was not a member of the House then. What 1956 brings back to my memory—coming from a highly-industrialised constituency—is that during that period industry was collapsing around our ears, and if the Taoiseach had not once more come back into the saddle, I dread to think what conditions would be like to-day.

Some changes being made in these Bills are in keeping with changes which I advocated during a number of speeches on the Estimate for the Department of Industry and Commerce over the past few years. I freely admit that, as a Deputy concerned mainly with industrial development in my constituency, it was easy for me to make those suggestions. The Minister had to consider the problems of industrial development throughout the whole country and had to concern himself with many other factors outside the simple problem of industry itself, such as social problems, and so on. The Minister and the Government had to develop a policy for industry which, in their opinion, suited the country generally, while I was concerned with a specific area.

We are aware, of course, that the Undeveloped Areas Act was brought in to endeavour to contend with a very great social problem and to deal with the difficulties being experienced from the point of view of unemployment in the western parts of the country where there were many people who could not get sufficient employment on the land. It was decided that some effort should be made to attract industrialists into this part of the country. I felt that while some industries sited there — and particularly those which had raw materials available to them locally—would be successful in freer trading conditions, there was always the danger that other industries would not be quite so successful.

If an industry is to be successful in any area, it must concern itself with the question of costs. Costs must be kept down to a minimum. When one speaks of costs, one of the first types of costs that strikes one is transport. In many industries, it is necessary to import the raw materials and to export the finished product. Where industries are established close to the source of supply of the raw material, and close to the markets, they have a headstart in foreign markets and they are, generally speaking, a sounder economic proposition. If the industries which are established here are to be successful, consideration must be given to the locations in which they are established.

In my estimation, large variations in the amounts of the grants put a very considerable pressure on industrialists who are interested in establishing industries in this country. It can happen that when an industrialist decides that a certain location is best for his industry, and when he has come to the conclusion that it is in that particular location his industry will not only continue in existence but also expand, he can be lured away from that area by a very large grant, to establish his industry in an area where it will not be as successful as it would have been if it had been established in the original area. For that reason, I am glad to note that there is at least a certain amount of levelling up in the grants system, between the undeveloped areas and the rest of the country and that, even where there is a differential—there are, of course, differentials there still—they will not be of such dimensions as to cloud the judgment of the individual interested in establishing an industry.

Under this measure An Foras Tionscal have a very much freer hand as compared with formerly in dealing with grants, especially the larger types of grants to what we call the developed areas. I note that, in the case of my constituency, grants under £250,000 may not exceed half of the total cost, but where the Board are satisfied that, for economic and other reasons, it is not possible to set up an industry in the undeveloped areas, a grant equal to two-thirds of the cost can be given. There was a somewhat similar provision in previous Bills, but it was not so clearly defined as it is in this measure. I have no doubt that when an industrialist comes to set up an industry here, the Board will give full consideration to the points of view put forward by the industrialist as to what he, the particular individual responsible for the industry, feels about the location in which the industry should be set up.

Where the grants are over £250,000, there are two bases of calculation. I am in full agreement with the decision that the grant will be calculated on the basis of £1,000 per man put into employment. When one considers the cost of putting a man into industrial employment at the moment, this appears a very reasonable and fair arrangement. In a constituency such as mine, where we have a considerable amount of industry, we are very happy with Section 4 which provides for grants for the enlargement and adaptation of industrial undertakings. There have been complaints, very rarely justified, that Irishmen who started their own industries were unable to get grants to enlarge or adapt those industries to procure increased efficiency. This section of the Bill will remove any vestige of grievance. Many industries in my constituency were established by local people. Because of the energy, skill and efficiency of both management and workers, they have expanded out of all knowledge. When they reached a certain point, they found that it would be impossible, without a further financial injection, to develop to the extent to which they might have expanded. While there were loans available to help industrialists further, human nature being what it is, many of these industrialists felt they should get grants and they were very slow to look for loans. The result was that much needed expansion and development of these industries was slowed up. A considerable amount of valuable time was lost.

I know from the Minister's statement that these grants are not being made available simply for routine re-equipment. They are being made available to help these industries to reach the peak of efficiency which will be necessary under the trading conditions just ahead of us. I have no doubt that the Board will deal expeditiously with all applications for these grants. The very fact that the Government over the past year have been asking concerns, which are considering adapting their industries to increase efficiency to enable them to be in a position to compete in foreign markets and to make application for assistance for that purpose long before the introduction of this measure is an indication of the urgency the Government feel with regard to this matter. I have no doubt that that sense of urgency has been transmitted to An Foras Tionscal and I am sure some applications have already been dealt with. It is very important that industries which have already got a foothold in foreign markets and which are anxious to improve their position in these markets should have their applications dealt with as quickly as possible.

I welcome also the introduction of the grants for the training of workers in skilled processes. A well-equipped factory with up-to-date machinery is very important in the development of industry, but the most important factor in the development of any industry is the efficiency of management and workers. Even for the purpose of holding our place in foreign markets, it is essential that the management should give every encouragement to workers to avail of all opportunities to acquire skills. Some of the industrialists in my constituency are already sending their workers for specialised training, even without the aid of grants, but there are not sufficient of them doing so and I think this offer, which is a very reasonable one, should encourage management generally to ensure that their workers get opportunities of acquiring skills and passing them on to others.

I expect this provision has also been inserted to deal with the retraining of workers. That, again, as has been mentioned earlier, is a matter of very considerable importance. It is difficult to say very much on it at the moment because we do not know exactly what conditions will be when we enter into freer trade, but it is obvious that some industries will be in difficulties and there will be redundancy. It is essential that workers likely to become redundant should get opportunities for training in other types of work.

The Minister mentioned the CIO report regarding development areas, and stated that the Government will be considering this matter in the future. These measures should help towards this particular objective. Some of these industries will be established in the undeveloped areas. If we take cognisance of the CIO report that projects, to be eligible for a grant, must satisfy An Foras Tionscal that they are capable of surviving in free trade conditions, then it is essential that some of these development areas, if they are decided on, will be located in what might be termed now the developed areas.

If I were asked what areas I would select in the developed areas, I would be inclined to suggest areas where there is an industrial tradition, areas which have proved themselves industrially, where there are good ports, and also, areas which, in freer trade conditions, might incur redundancy. It is clear that wherever there is a fairly large accumulation of industry, there are bound to be some casualties. I need not add that my constituency of County Louth would fill the bill admirably as a development area. We have the tradition there. We have first rate ports and sea connections, not only with our principal market in Britain but with European ports. I would commend that area to the favourable consideration of the Minister for development.

There is a section of the Bill which deals with grants for roads, bridges, and so on. There is a section dealing with the provision of houses and other dwelling accommodation. I am convinced that there is no single factor so important in the development of industry as this matter of housing. In my estimation, we cannot achieve any major industrial development unless we concern ourselves very deeply with this matter. In order to develop an area industrially, it is essential to be in a position to attract workers to the area. That applies whether the area is already industrialised or whether there is no industry existing in the area.

We as a people have been used to emigration, for historical and economic reasons, but we have very little experience of migration, except perhaps to Dublin. That also is due to economic reasons. Up to the present, there were very few employment opportunities, apart from those available in Dublin, and very little reason why people would transfer from one part of the country to another, but that situation in now changing. Over the years, people living in areas where emigration was relatively heavy were quite willing to go to Britain to secure employment and, in the initial stages to live in very poor housing conditions. The main reason for that was that they found in the cities in Britain many of their friends and relatives and did not feel that they were isolated from their own people. In the event of the east coast becoming fully developed industrially and migration becoming a necessity, we must have the houses ready if we are to get workers because the same factors will not obtain.

If we are to develop areas industrially, it is essential to provide houses for the people in those areas. If there are houses available, there will be no difficulty in getting our exiles to come back to areas where industry has improved to the extent that it is necessary to get workers.

An Leas-Cheann Comhairle

There is no reference to houses in either of the Bills.

Mr. Faulkner

"Provision of housing and other dwelling accommodation"—Section 6.

An Leas-Cheann Comhairle

I am sorry.

Mr. Corish

Even Homer can nod.

Mr. Faulkner

The building of houses, both urban and rural, is in arrears in my constituency, even for present needs. While the Drogheda Corporation and Dundalk Urban Council are doing a very considerable amount of work now to improve the position, if we are to deal with a development of industry, we need to do very much more. It is necessary to make use of every possible method. There is local authority housing and private housing and there is the National Building Agency and now, under this section, industry can get grants towards the building of houses. If we are to develop, it is essential that everything possible should be done to improve the housing position.

Finally, I just want to say that our application for membership of the European Economic Community may or may not be successful but the intense interest our people have displayed in our application and in the effects our application will have on employment and on their lives generally has done a world of good and certainly the need for greater efficiency and a greater effort by all of us has been highlighted. I can say that the efficient manner in which the Minister has faced up to the problems involved in the whole question of free trade is greatly appreciated in my constituency.

Mr. Kyne

It is only right that I should say a few words of welcome for both these Bills which are to be operated jointly. I think I am right in the assumption that these Bills indicate the acceptance by the Minister and the Government of the fact that the majority of the people of this country felt that the time had arrived when areas outside the undeveloped areas should be brought in line with the undeveloped areas for the purposes of State industrial grants.

No one, I am sure, quarrelled with the idea that the undeveloped areas west of the Shannon did need, at the time of the original Act, a shot in the arm. The land was poor; emigration was prevalent; and industries were scarce. The effort to alter that position in favour of development of that portion of the country was not resented by those who lived and worked in better agricultural areas or in more industrially developed parts of the country. However, the time has come, I suggest to the Minister, for a review of the position. In fact, I would say that "undeveloped areas" can be a misnomer as applied to some portions of some counties west of the Shannon at the present moment. I would suggest that my constituency of Waterford, with its ghost towns of Lismore and Tallow, as far as industry is concerned, would qualify as being an undeveloped area more than many places which now go under that title.

In Lismore and Tallow, emigration is practically 100 per cent. That means that every boy and every girl on reaching working age have to leave the area to seek employment either in some other more developed part of Ireland or, as is usual, unfortunately, in some other country. Had Lismore and Tallow qualified, as they very well might, as undeveloped areas, and had the liberal grants that were available in the undeveloped areas been available to them, there might be now in Lismore and Tallow industries which would have given a new lease of life to both these towns and, in fact, a new lease of life to the whole of west Waterford. Were it not for the good fortune of a home industry being established in Youghal, taking up a percentage of the unemployed, the position would be much worse.

The new Bill helps, in my opinion, to redress that position. I notice in the Industrial Grants Bill under Section 2 that should a certain condition be fulfilled, the two-thirds grants may be given, similar to those in the undeveloped areas. I trust that the Board, which will administer this Act when it becomes law, will accept and act in the spirit of that as well as in the very letter of the law. When considering grants under that section, the Board should give due consideration to whether or not that area has been endeavouring to help itself. There is an old saying that God helps those who help themselves and I would suggest to the Board and to the Minister that that is a very good principle to be followed in industry. If there is a development association in an area and due to their efforts they have attracted an industry there which might not have come to the country otherwise, they should not be penalised because of the success that crowned their efforts. It should not be held against them when considering the question of a two-thirds grant for a further industry being attracted there. It should not be held against them that they have already succeeded in attracting one industry.

I feel that if the Board interpreted Section 2 (a) in that fashion, you might very well break the spirit of any development association and it should act in a contrary fashion. If a development association realise that their own efforts will be helped, and will receive the co-operation of the Board, they will be influenced to exert themselves to the utmost in seeking further enlargements of their town. I am particularly glad to welcome Section 4 and that part of the section which states that any industries which have, without waiting for this Bill, come into operation, and since December, 1961, endeavoured to equip themselves for the struggle which they believed was facing them at the time, and is still facing them, and enlarged their industries, will qualify for the percentage grant, the same as those who have waited until this Bill was published. I merely stood up to say to the Minister that I am glad that those of us who reside in the south of Ireland, on the seaboard, and who are anxious, and are endeavouring in every possible way to secure additional industries, outside industries, will have his co-operation and the co-operation of the Board and that, better still, we will have improved grants.

Mr. Clinton

The primary purpose of this Bill, as I see it, is to attract new industries to the country, to provide additional employment and thereby raise the standard of living of more of our people. In so far as it may achieve that purpose, it should be welcomed by every Deputy. I welcome the Bill because it appears to indicate a more favourable attitude toward the establishment of industry outside the undeveloped areas. I believe there are many would-be industrialists who come to this country to investigate it but who refuse absolutely to go to remote parts to establish their industries. Their reasons for that may not always be purely economic.

One of the references which I was sorry to see in the Minister's speech is that on page 4 to the fact that, under this legislation, before giving a higher grant, An Foras Tionscal will require to be of the opinion that there are sound economic reasons why the particular project cannot be established in the undeveloped areas and, in addition, must be of the opinion that other exceptional circumstances exist. Those are difficulties with which people are confronted when they come here. They have to prove, first of all, that it is not possible to establish their industry in a remote part of the country and they also have to prove that it is of exceptional national importance. These are very difficult things to define and will, I think, create a lot of trouble and frustration.

I am in favour of some discrimination in favour of the undeveloped areas but it should be a graded sort of discrimination. We should have grants available to industries which are prepared to go to these remote areas and which can normally be carried on there, and certain other lesser grants available to industries who refuse to go there but who, nevertheless, are anxious to come to a part of the country where their top executives and top technical people will be prepared to live. In many cases these people have come from cities and urban areas and just will not go to remote parts of the country in any circumstances.

Another matter which disappoints me somewhat about this legislation is that, again, it seems to favour the establishment of big industry only. I think that, when people go to the Industrial Development Authority with a proposition which does not indicate a very big expenditure on building and equipment, they get a very poor hearing. They are met with very little enthusiasm. We are losing many small but valuable industries on this account. There is no enthusiasm for the small industry and a small industry very often can grow into a very big industry. I have come across people who are not allowed to take big amounts of money out of their own country to establish industries here. They were people with very well established organisations in their own country, with a very big export trade from their own established industry at home, but they could not come in here and get any encouragement to establish themselves in a small way to begin with. That is a very definite defect.

There are many small industries which will have quite an important employment content for areas where there are no large pools of labour available. Nevertheless, quite a number of people require employment. During the year, I tried very hard to get industrial grants for the establishment of mushroom farms. I believe that is an industry and I know that an ordinary economic mushroom unit employs 25 to 30 people at good wages. They should get every encouragement. I referred also to the industry of hatching and exporting day-old chicks. At present we are losing a valuable industry because we refuse to give any aid whatever and we refuse to allow the industry to sell day-old chicks in the Irish market. That industry can go to Northern Ireland, as it has decided to do, because of lack of interest on our part and it can set all the chicks it likes to hatch and sell them here across the Border and we cannot do anything to stop it, so that it has the Irish market when it goes across the Border. We are losing these very important employment opportunities, due to lack of interest and enthusiasm.

I am very glad that there is provision for the training of workers in areas outside the undeveloped areas because I have contact with a number of industrialists who have to meet big expense in training workers. Also, workers when trained often change their jobs or leave for some reason and more training has to be undertaken. I am told this causes considerable expense and deserves the consideration which it is getting in this Bill.

There is reference to the provision of housing and this is important especially to us in County Dublin because there is quite an inclination to come in here and set up in County Dublin, which creates a very big housing problem for the local authority. No matter how many houses are provided, there will always be people waiting for houses. I do not know if it would be possible to allocate this grant to the local authority, in addition to the existing grants, and have the houses built in that way in the areas of new industries where it is obvious that there will be considerable employment.

Another thing that has kept, and continues to keep, industry out of the country is the continued existence of the Control of Manufactures Act which requires 51 per cent. of the capital to be held by Irish nationals. People come in here to establish industries and a very large element of the products of these industries may be for export. They get no manufacturer's licence or a restricted licence because there is somebody who is perhaps manufacturing in a very small, tinpot way and not manufacturing for export and who says he is in a position to supply the market even though he is not supplying the market adequately and is not exporting. That matter should get serious attention and I think should be rectified as soon as possible. It operates very much against employment in industry here.

Under this Bill, we propose to set up still another organisation to deal with the establishment of industries but there is already a considerable amount of confusion and frustration for people coming here because of all the organisations that have to be contacted and dealt with. They should be able to come in here and meet one organisation and finish the business with them. They should be able to get whatever they are entitled to through that body and as far as possible, there should be greater definition of what industrialists are entitled to. I have often found that when somebody goes to the IDA, they meet an attitude of suspicion, a suggestion that somebody is making an effort to foist something on the country.

There is no indication that we believe this is something we should go out after as a person selling insurance would do. If at all possible, we should show enthusiasm and excitement about a possible industry and make every effort to follow it up. If you are looking for a grant, there seems to be very little interest and even a discouraging tendency. I have seen people going away with a very bad impression, perhaps not well justified, because of the attitude and the excessive caution of the Civil Service type of mind they meet with.

Mr. MacCarthy

Deputy Norton, in his otherwise able speech, justified very fully the attitude of the present Taoiseach seven years ago towards the development of industry. Deputy Kyne has confirmed that. From other speeches that followed, we can well understand that if the undeveloped areas at that time did not get priority and if an effort had not been made to bring them into some kind of generally-balanced economy, they would have been left to their sorry fate and we would now have the same problem facing us in a general way again. Deputy Norton admitted that the Undeveloped Areas Act was a success and that many parts of those areas are now far better fitted industrially and financially to meet the present trends than are some of the contiguous areas between the developed areas and the big centres of population, the various cities and their suburbs.

That is the problem now to be dealt with in these Bills but it can be dealt with on the basis that the country has now been generally brought into a position where they all more or less stand on the same ground. Undoubtedly there are areas that have not yet been touched. There are some in my constituency which stretches from the Old Head of Kinsale to the Limerick boundary and the same would apply elsewhere. I am sure the provisions of this Bill will tend to get rid of that situation and help out these areas because if there is an industrial centre in the area, it not only helps the town where it is sited but also those in the neighbouring districts who can have no hope of employment in agriculture and would have to go further afield. It keeps them nearer home and encourages development in every way by increasing the population. Seaports undoubtedly attract industry but there are some industries which will be very favourably located in those districts that have not yet been touched.

It is very important that housing be taken into consideration. Some of the bigger industries established here in recent years have met a problem in that respect. The workers have to travel long distances and this is expensive, to the industry itself, if it subsidises the travel of its workers, or to the workers' paypackets, if they have to pay for it themselves. Recently I have heard some of the directors of the Whitegate Refinery deploring the fact that they built houses for their workers removed from the lines of public transport and are now finding difficulty in getting workers to occupy them. They also built the houses to too high a standard with the result that the rents and rates were too high. They did not build them to the general standard suitable for their workers. As we go along, we learn of these difficulties.

It can be said that over the past seven or eight years, since industry was tackled in the way it was by the Taoiseach, wonderful progress has been made and that a spirit of confidence has arisen. Every town now hopes for some development to give employment to the rising generation. These Bills are to be commended for their progressive outlook. The Minister has let no opportunity pass of bringing before the House Bills to assist our industrial potential, to develop local industries and to attract other badly-needed industries to bring up the standards in parts of the country where, up to this, employment was not possible.

Mr. Gallagher

It is pleasant to sit here and listen to the welcome extended from all sides of the House to this Bill. It is a solid indication that, as a result of the introduction of present legislation, progress has been made and that that legislation has done what it was intended to do, to encourage industrial development here. The lessons learned from the undeveloped areas in the west are being gradually extended now to the whole country. The Industrial Grants Act, 1959, went some distance towards helping other parts of the country but this Bill goes the whole way and puts both areas on an equal basis. I have no doubt in my mind from speaking to industrialists that many of them do not like to be located in the undeveloped areas. Many of them would like to be located near the larger towns, such as Dublin and Cork, where there are many more services, much more technical know-how and indeed all-round facilities to help industry. Anything to encourage industry here, be it east or west, is to be welcomed. However, I should like the Minister in a quieter moment seriously to consider the position that might arise having regard to the drawbacks in the undeveloped areas and to consider, for the purpose of maintaining and improving the good work already done there, whether further facilities might not be granted. I need not suggest anything in particular because it will occur to the Minister himself.

The improvements in the grants themselves are to be welcomed. The figure of £2,000 goes as far as anybody would wish, unless they would wish the Government to finance the project entirely. I will not deal further with that aspect.

The Bill deals with the training of workers. If there is one field in which we are somewhat weak, it is in regard to technical training for industry and the provision of the right outlook to encourage such training. Speaking from experience, it is sometimes a painful experience to take in a green worker and try to get him to do any kind of technical job. It is doubly difficult when that worker is in his middle thirties. One finds that the youth is by far the easiest person to train, but in the west the small-farmer-cum-industrial-worker presents a problem. Whereas the young worker after gaining a couple of years' experience sometimes decides he will go abroad for a few years, the settled man usually stays. In the training of workers, there is the operation that takes very little training, the operation that takes a long time and, occasionally, the education of an operative in the development and use of his hands takes five, six or seven years. No full provision had been made heretofore and for that reason I welcome this very clear-cut provision in the Bill.

The introduction of these two Bills at this time speaks well for the progress that has been made and the need for further expansion and development. Coming as it does when there is talk of greater and freer international trade, I think it becomes more necessary for the Department from time to time to emphasise the progress being made. Many of us in industry must now look as far ahead as ten years to see more clearly the picture in respect of capital needs and this calls for new thinking, for replanning and redesign. It is well to know that most industrialists to-day are thinking along those lines and if the advent of the Common Market did nothing else, it did a wonderful job when it put the gun to the industrialist's head, so to speak, and forced him either to modernise or get out of business.

The grants being provided here for replacement and adaptation, at one quarter the entire cost, are generous but I think that in certain sectors industrialists will probably find difficulty, even with these generous grants, and the Minister might, in certain circumstances, look into the possibility of increasing the amounts of such grants. The provision of houses for industrial workers has been mentioned before and it is high time we did something about it. Previous legislation made provision for assistance to industrialists to provide houses for their workers but I do not think very much use has been made of such provision. While industrialists who decide to build houses for their workers are eligible for the normal grants for house building, I think they should get special consideration, in addition. The provision in this legislation to give effect to that suggestion is therefore very welcome.

Watching industrial development in the west of Ireland particularly, it seems to me that industrialists have no idea of where they are heading— they are like a dog chasing his tail. Therefore I submit to the Minister that there should be in Dublin an office or at least an officer of some kind capable of compiling local history and of selling, as it were, towns to industrialists coming into the country. At the moment industries go only to towns which have energetic groups to put their claims before the public; towns where there are no such energetic communities are neglected from this point of view. The efforts of such an office could be directed to areas where there are pools of labour and where the other necessary facilities for industrial development are in existence.

The Committee on Industrial Organisation recommended that industries should be concentrated in seaport areas. I thoroughly agree. In such areas, existing industries complementary to the newly-established industries should be developed. Where there can be a concentration of one type of industry or of kindred industries in the one area, that should be done and labour, management and technical problems which exist in such localities could then be overcome by local discussion. I look to the benefits of such concentration for Sligo, particularly. In Sligo, we have a number of industries, some allied to one another and some not so allied. Sligo has a good seaport and can draw on an excellent labour pool from surrounding towns and villages as far away as Leitrim and even Donegal.

An ambitious programme of that kind would have far-reaching effects and would give tremendous encouragement to areas interested in industrial development for the good of the citizens. We all admire what has been done at Shannon. If something like what is being done there could be extended to other areas which have the same natural facilities, we would be heading in the right direction. Some Deputies who spoke earlier described this measure as not being designed to cover large undertakings. I see this legislation as providing for industrial development, large and small. I do not see that it mentions minimum amounts of grant; it merely says that provision will be made for two-thirds of the cost of undertakings.

We all appreciate that on the whole small industries employ the most people because there is in such small undertakings more work in the handling of the goods they manufacture. Wherever possible, we should see that use is made of locally-produced raw materials as against imported materials since this would affect industrial costings to a considerable extent. I would again urge the necessity to concentrate on keeping similar industries in particular localities—that like should go with like and the manufacture of complementary products should be restricted to areas where the main product is manufactured. In that way we would be providing a comprehensive pattern of our national industrial effort.

Debate adjourned.

Dáil Éireann debate - Tuesday, 29 Jan 1963

Industrial Grants (Amendment) Bill, 1962—Second Stage.

Dáil Éireann debate -
Tuesday, 29 Jan 1963