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Dáil Éireann debate -
Thursday, 7 Feb 1963

Vol. 199 No. 9

Industrial Grants (Amendment) Bill, 1962—Money Resolution. - Committee on Finance.

I move:—

That it is expedient to authorise such payments out of moneys provided by the Oireachtas as are necessary to give effect to any Act of the present session to extend the duration of certain provisions of the Industrial Grants Act, 1959, and to amend that Act and the Industrial Grants (Amendment) Act, 1961.

Can the Minister say what is the necessity for a separate finance company? Is it intended to establish an entirely separate company from the Industrial Credit Company, with separate directors and separate staff. If so, what is the need, in view of the fact that both companies will be largely dealing with the same matters? Also, assuming that it is to be a separate company, what capital provision will be made for it and how will it be financed? Is it to be considered a subsidiary of the Industrial Credit Company or an entirely separate body?

The simple answer to Deputy Cosgrave's question is that a separate Bill will be introduced setting up the separate company, but, since it is part and parcel of this Bill, to that extent I owe an answer to the Deputy on his question. The Industrial Credit Company is, of course, the company normally charged by the State with financing loans for industrial purposes, that is, loans that are not normally sought through the ordinary financial means, like the banks. However, in future, it is envisaged that the Industrial Credit Company will have this subsidiary, so to speak. It will not be a new organisation. It will be a company managed by the Industrial Credit Company but the new holdings company will be able to make separate arrangements perhaps on more favourable terms than would be normally expected from the Industrial Credit Company for special loan facilities or special holding facilities in industrial enterprises.

During the Second Reading of this Bill I gave some indication of how the new finance company would work. In the first place, in the case of capital intensive industries, that is, industries where the capital invested is very high in proportion to the number of workers employed, there will be a requirement that whatever grant will be given—if a grant is given—and whatever loan assistance might be given, the grant-cum-loan assistance will not exceed two-thirds of the entire capital invested in the project. Therefore, one-third of the actual capital invested will have to come from the promoters themselves.

Loan investments by the State will take two forms, an ordinary loan on the usual rates provided by the Industrial Credit Company and a loan on more favourable terms provided by this new finance company. As I pointed out during the Second Reading debate, the finance company's loan will be at whatever rate can be negotiated, perhaps a favourable rate, but it will be up to the promoters to redeem that loan at any time, and if it is redeemed within seven years, it will not be interest-bearing. If it is not redeemed within the seven years, it will then bear the same rate of interest as the commercial loan which has been negotiated with the Industrial Credit Company, plus a percentage of the profits over and above that rate, that is, a percentage of the dividend over seven and a half per cent.

That is just an indication as to how this finance company would operate in this instance, but in the future, there may be other capital intensive industries that would come into the country requiring public financing over and above what we envisage now, and the purpose of setting up this company, which, as I have said, will be set up under a Bill to be introduced shortly by the Minister for Finance, will be to answer future demands, to make finance provision for such industries in order to ensure we will have the necessary legislative machinery at our disposal and further, to ensure that, with the aid of that legislative machinery, we will not endanger the prospect of such industrial projects coming to the country. In the very near future, the Deputy will have a fuller opportunity of discussing this on the Bill to be introduced by the Minister for Finance.

Is it necessary to have a separate company? One of the criticisms that have been made in regard to persons having to start industrial projects is the multiplicity of bodies to be negotiated with and the various organisations who interview these entrepreneurs. Could the finance not be provided on advantageous terms by the Industrial Credit Company?

In the great majority of cases, the new finance company would not enter into the picture at all. It will come into the picture only in the matter of grants of over £250,000. The number of grants exceeding £250,000 would be about six out of almost 200. Initially, in the event of some promoter coming into the country, the organisation he first deals with is the Industrial Development Authority, which is the promotional body whose function is to ensure that the promoter of an industry is in full possession of facts about all the available facilities. Therefore, the promoter is in no doubt about the extent to which facilities will be made available to him. Another good reason, and one that would weigh heavily with me and with Deputy Cosgrave, I feel sure, considering his experience in the Department of Industry and Commerce, is that this system was suggested by Dr. Beddy, Chairman of the Industrial Credit Company and of the Industrial Development Authority, as the system he saw best suited to the type of industries we have in mind.

May I ask the Minister whether any grants have been sanctioned in the eastern part of the country for the extension of existing industries within the past three or four months? I want to put it this way to the Minister: the impression was created outside this House that any group who wished to extend their I industry, or any group who wished to start from scratch, might make the necessary arrangements to be ready, if and when legislation would be introduced here. I want to know whether or not any grants have been sanctioned for the extension of existing industries in the country, outside the undeveloped areas, which will cater for the export market.

Does the Deputy refer to the re-adaptation grants provided for in this legislation?

No grants have yet been made available under the Bills we have now before us. I did announce after the first interim report of the Committee on Industrial Organisation that as of a certain date—14th December, 1961—any firms who went ahead with re-adaptation or re-equipment for the purpose of making their undertakings competitive under free trade conditions could go ahead with their plans on the assurance that the loan assistance recommended by the CIO, and the 25 per cent. grant assistance the Government had decided to make available, would be there for them. My simple answer to the Deputy is that no grant has yet been given.

Have there been applications?

There have been.

Can the Minister say how many?

Nearly 100, approximately.

I should like the Minister to explain in regard to such firms, in the course of re-adaptation and preparation for free trade competition, whether, where such applications have been made pending the enactment of the legislation now before the House, the Minister envisages that in that re-adaptation, a large number of employees will lose their jobs and whether, if so, arrangements are being made to re-employ them in other industries or to have them retrained for alternative employment?

That strictly is a question outside the scope of the Bill, but one of the purposes of re-adaptation and re-equipment grants is to ensure that an industry will be enabled to maintain its existing complement of employment and possibly to increase it. As far as redundancy is concerned, apart from re-adaptation plans, that matter is being considered by the CIO and a special inter-departmental committee which has been set up. In the meantime, I feel confident that the provisions we are making available here will help to create employment opportunities that will take up any slack that might be left as a result of free trade conditions and that new jobs will be created as well.

I want the Minister to assure the House that in the course of these re-adaptation grants being made available, he will ensure that the workers displaced will either be given alternative employment or retrained. I want now to give a specific example of a firm within 20 miles of Dublin which was employing over 300 people. That factory has now reduced its number of employees by 35 to 40 per cent. and within the past three months, it has been promised a grant of £50,000 for re-adaptation. Within the past fortnight, they have begun to lay off a number of their workers and within the next six months will be laying them off at the rate of five or ten a week. In other words, get rid of the workers as quietly as possible over the longest period possible.

Is the Minister taking that into consideration? I shall name this particular company for him. This is a chewing gum factory situated outside the city in which the Minister's Party, through one of his Deputies, has a personal interest. I am informed that factory is in line for a grant of £50,000 to get its re-adaptation programme in order. It is a company that sells on the world market. It has industrial manufacturing centres in many big cities but they decided to come to Ireland because labour in Ireland was so cheap and so plentiful, but in spite of that they are now reducing the number of workers, and at the same time, getting a State grant to carry out that.

The Minister should be very careful in such circumstances about sanctioning any grant that will mean a reduction in the number of employees without any apparent increase in efficiency and without, at the same time, giving an opportunity for the re-employment in some other sphere of these workers. One of the arguments put forward by this Government and indeed by the Opposition Parties was that on our accession to the Common Market, funds would be available for the re-training of workers. Now we have the Government making funds available for the re-adaptation of industries but no funds available for the re-training or replacing of employees. It will be no use in 12 months' time when we find out that the employment content in a number of those factories is reduced by 50 per cent. to talk about re-training workers. That is why, deliberately, at this stage I bring to the notice of the Minister the information available to me, as a matter of urgency. If there are any other plans or suggestions, on the lines put forward by this group, the Minister would be very wise to give them most cautious approval in the circumstances.

All I can say is that if we are going to discuss the affairs of a particular industry on the floor of this House, we might as well throw our hats at any attempt to induce industrialists to set up undertakings here. I am conscious of the need to ensure that alternative employment opportunities be made available to anybody who becomes redundant by reason of our entry into freer trading competition, but, as I said this morning and on a number of occasions, the Government have set up this Committee on Industrial Organisation and also the inter-departmental committee to look into the question of re-training and re-employment of redundant workers.

As Deputy Corish observed on the Second Reading of these Bills, there is no point in having a training scheme unless we know for what purpose we are going to re-train the people concerned. That naturally takes time and one cannot decide, while standing up here in this House, the kind of training that is to be given. It is for that reason that the Government set up the inter-departmental committee to examine the position as broadly as possible. In reply in general to the point raised by Deputy McQuillan, I can only say that these considerations are being kept in mind and I am sorry that it should be sought to discuss the affairs of a particular company on the floor of the House because I think it is doing damage to our industrial effort.

Is the Minister not prepared, in the re-adaptation programme, to have the two schemes working side by side? Nobody is criticising the idea of re-adaptation, provided the workers engaged in that industry are safeguarded. I do not want, and I am sure many other members of the House do not want, to see a re-adaptation grant given to any group, without a guarantee at the same time that the workers in that industry are given an opportunity for re-employment. What is the use of re-adaptation if it means getting workers out of jobs and out of the country? If the Minister is so concerned with the workers, surely he would have the grants that are now being given, paid only on condition that the investment funds which he is talking about and the re-training funds would be made available so that when there is a surplus of workers, they will be re-employed in other lines of industry? That is all I am asking and it is a very reasonable request. The Minister seems to be more anxious about the private companies, most of which are getting State help. He seems more anxious about them than about the workers employed by them. I want to make it quite clear to the Minister that he must have an interest in the workers' welfare as well as in the particular industrialist who he is now suggesting here is getting a raw deal.

The Deputy is not going to get away with the suggestion that I am interested only in the welfare of the private concern. I am not going to be drawn into a slanging match in the House but I can assure the Deputy that I have as much interest in the workers of this country as he ever had.

Deputies

Hear, hear.

The "hear, hear" is about all you have for him.

All belonging to the Deputy were Black and Tans.

(Interruptions.)

Over and above what I have said——

(Interruptions.)

I think I shall let it go at that.

Question put and agreed to.
Resolution reported and agreed to.
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