When the Dáil adjourned last Wednesday, I had mentioned industrial relations and was dealing with industrial grants. I wish to revert for a moment to industrial relations because of remarks passed to-day by Deputies Tully and T. Lynch about the non-intervention of the Minister for Transport and Power in the recent CIE bus strike. It is only fair to the Minister to say that so far as it is the function of any member of the Government to intervene in industrial relations matters, it is the function of the Minister for Industry and Commerce. So far as the bus strike is concerned, the Minister for Transport and Power would be doubly inhibited in any attempt at intervention in that he would be usurping the function of another Minister and he is the Minister responsible for CIE. The Minister for Transport and Power has had that charge levelled against him inside and outside the House for a number of weeks past. He has made no attempt to defend himself and in view of the two suggestions made against him this afternoon, it is only fair for me to say that.
Committee on Finance. - Vote 42—Industry and Commerce (Resumed).
Would the Minister say why he did not interfere in some other disputes which occurred and in which the Government were involved? He has carte blanch to interfere anywhere he likes.
One must have regard to the amount of public hardship and inconvenience caused by such strikes. It is not desirable that a member of the Government should intervene in strikes at all, and if he does, it is when the hardship suffered by the public is such that his intervention would appear to be necessary.
In regard to industrial grants, I refer to the charge—repeated in this House during the debate—that it is easier for a non-national than a national to get grants under the Industrial Grants, and Undeveloped Areas Acts. I said I thought that the figures I had given in the course of the debate on the amendment of these Acts early in the year would have to be scotched by false impressions that might be abroad in this respect. I have since taken the trouble to find out what the most recent figures are for grants given to nationals, to non-nationals and to nationals and non-nationals in association with each other.
As at 31st December last, 67 grants had been approved under the Industrial Grants Act. The number of promotions sponsored by foreign promoters was 33 and by Irish promoters 28 and six projects had joint Irish and foreign participation. Under the Undeveloped Areas Act, 123 grants were approved up to 31st December, 1962, the number of promotions sponsored by foreign promoters was 59; by Irish promoters, 58 and there were six projects with joint Irish and foreign participation. These figures clearly prove the allegations are absolutely unfounded and that Deputies should think before they come in here and lightly make such charges.
The allegation made by Deputy Clinton about procrastination on the part of the authorities who examine and process industrial proposals is not in accordance with the facts. It is true that some delay might occur in connection with some proposals for industrial projects which involve the giving of grants or the making of loans by the Industrial Credit Company, but it is only because in any such case there may be a weakness or some other problem affecting the proposal itself that the delay arises. The experience is that the number of complaints has been very small.
Another suggestion made by Deputy Clinton was that there seems to be a bias against Dublin. I was surprised some western Fine Gael Deputies did not take up the challenge and repeat what they said on a number of occasions previously, that any bias in the giving of grants is in favour of Dublin. I suppose, with the by-election pending in Dublin, it would not be good politics for them to deny what Deputy Clinton said but the fact is that Dublin is doing very well under the industrial grants legislation and if the complaints made by Deputy Clinton's colleagues from western counties and other rural areas are true, there is no justification for Deputy Clinton's allegation. I assure the House that is the case.
There is only one other specific matter in this connection that I might refer to, that is, the reference by Deputy Harte of Donegal to a proposal in connection with the processing of Muckish sand. I have heard about this proposal. There was a suggestion, however, that certain persons associated with the proposition had discussed it with me. If anybody has made that statement in Donegal, I should like to assure the House that nobody from anywhere has discussed that proposal with me, nor was I asked by anybody specifically to discuss it with him except perhaps in the past couple of days. There was a letter received recently—I forget whether there was a suggestion that I discuss it with certain groups or not—but no individual asked me to discuss this proposal with him on any occasion nor was any appointment made by anybody with me in that connection.
With regard to the proposal itself, a proposition has been before the Industrial Development Authority. I believe there is some local agitation and, that, in fact, some local capital was raised or promised for this specific project. Lately the Industrial Development Authority have seen the local development group and explained to them there were certain weaknesses in the application and that in its present form they could not see their way to recommend it. It is only right that not only An Foras Tionscal but also the Industrial Development Authority should be satisfied beyond reasonable doubt that an industry has a prospect of success in order to ensure as far as is possible, first, that any local capital that may be put into it would not be lost, that any grants payable out of the Exchequer would be secured properly and that the employment attracted to that industry would have a reasonable chance of being maintained. If these factors are not found to be present, it is only right that the Industrial Development Authority should not encourage such an industry. Similarly, it is only right that An Foras Tionscal should not make a grant towards such an industry.
I say all this only because of my knowledge of certain local agitation about this proposal and of certain claims made by or on behalf of persons that I personally had been seen in the matter. I had not been seen. As I told the House on many occasions, An Foras Tionscal, as far as grant giving is concerned, are an autonomous body. I do not interfere with their functions in that respect, nor would I like to have the obligation of interfering at any time.
To come now to more general matters, Deputy Cosgrave asked me in connection with the turnover tax whether I had any functions under the Prices Act in relation to this tax. As Deputy Cosgrave said last Wednesday, he believes—and I believe with him— that the most effective brake on prices is free and full competition. That free, full and fair competition has been operating in relation to all consumer goods since the Act was passed and there has been no reason why the Minister for Industry and Commerce should take any power vested in him for the setting up of committees to investigate the prices of particular commodities since then.
The only suggestion made for the reference to a committee under the Prices Act for an examination of a particular commodity was in respect of motor insurance. One of the reasons for the liquidation of the company discussed here during Question Time today was the severe losses it incurred in the motor insurance business. I have told the House over and over again that the companies have been incurring this loss as far as motor insurance is concerned. Beyond that, there have been no suggestions I can remember offhand for the setting up of an inquiry into the price of any commodity. Certainly in the price of consumer commodities I do not expect the two and a half per cent turnover tax will lead to necessity for doing so either.
Deputy Norton made some inquiries about quotas—quotas which were to be removed or which were to be extended. I will be having a Bill dealing with quotas immediately after the passing of this Estimate and I think it would be more proper for me to deal with them on that occasion. I shall leave them until then.
Deputy Dillon raised a number of matters I should like to deal with. He asked in particular about grants for adaptation and modernisation made for the purpose of helping industry to adapt itself to meet free trade conditions, particularly with an eye on breaking into the export market. It has been made clear that the purpose of these grants and loans is to help finance re-equipment and adaptation and not simply to provide for routine replacements. The decision on any application for such a grant rests with An Foras Tionscal. Deputy Dillon asked in particular whether An Foras Tionscal would regard an application from a cleaning and dying works as qualifying for an adaptation grant. The position in this case is that the Board of An Foras Tionscal would consider the application from such an industry for an adaptation grant if it could be proved that the necessity for the re-equipment arose out of the dismantling of tariffs. Any special circumstances apart from that would be examined on their merits. I do not think An Foras Tionscal would give a grant to such a concern which was clearly not affected by freer trading conditions.
The Deputy also expressed his concern about State bodies and the manner in which they account to the Oireachtas for their administration and activities generally. It is not absolutely proper in this debate to discuss the whole range of State-sponsored bodies. Many of them are under the aegis of the Minister for Finance, some are under the Minister for Transport and Power, while some, certainly, come within the functions of the Minister for Industry and Commerce. However, there are a number of different types of State bodies, trading companies perhaps first, and promotional companies. On the trading side, you have monopolies and companies in opposition with outside interests. As far as the promotional bodies are concerned, I do not think there is any special reason why we should adopt any new system of bringing them into account in so far as their administration and expenditure are concerned.
Their administration and expenditure figures are set out very fully in their accounts and there is full opportunity for discussing all these accounts here. In any event, their finances are usually provided by Vote of this House and the House has that most effective control over promotional bodies such as An Bord Fáilte and Córas Tráchtála to ensure that nothing can be done without the authority of the House.
Then we have on the other side the trading companies and I think it would be unfair and in fact unwise from the national point of view, that the trading companies, who are in opposition to outside companies, should be brought to account by this House and in public, as they inevitably would be. I instance the nitrogen company whose detailed administrative functions, if discussed freely in the House, would expose them to the machinations of the very big cartels operating on the Continent of Europe and in other places, to the detriment of the company and of the purposes the company was set up to achieve.
It is different in the case of State monopolies, perhaps, who are given their finances by way of advances from the Exchequer, by equity shareholding by the Minister for Finance and a variety of other ways. However, I have no such company under my control and I would suggest to Deputy Dillon that the proper occasion on which to bring his views to bear on these matters would be during the Estimate for the Taoiseach's Department or the Estimates of the particular Ministers dealing with these companies.
Deputy Norton asked what was being done about the adaptation councils and a question was raised during Question Time earlier on the same matter. As the House is aware, the Committee on Industrial Organisation recommended generally in its third report, and specifically in reports on a number of industries, that these councils should be set up. Following on that, an industrial reorganisation branch was set up in my Department whose function it is to follow up the CIO reports, to ensure that the steps recommended are carried out in so far as possible by the various industries, and in particular, that the adaptation councils recommended should be set up. CIO have taken up with a number of industries the desirability of establishing adaptation councils without delay.
In a number of cases, the approach to an industry has been made in anticipation of the CIO survey itself on that particular industry. As well as that, some industries which have not been investigated by the survey team of CIO have established adaptation councils themselves. I informed the House this afternoon during Question Time that adaptation councils had been established for the following industries: linen, cotton and rayon, leather footwear, structural steel, iron foundries, paint and hosiery. In addition, the Irish Paper Mills Association, which represent all the firms in the paper and paperboard industry, have decided to act as an adaptation council for the paper and the paper board industry.
Discussions have taken place with other industries and I think it is very likely that in a short time adaptation councils will be set up, following these discussions between the industries concerned and the CIO. Deputy Tully asked on the same matter what the Minister for Industry and Commerce could do if an industry did not carry out the CIO recommendations. That is a difficult enough question to answer; but the answer comes readily here: the Minister can do little though it may be too early yet to answer the Deputy's question because the Minister may be able to take some positive action to encourage the recalcitrant or laggard industry. It must be assumed, however, that any industry will realise, when its own interests are in jeopardy, that it should do everything possible to ensure its survival. If it is an industry in which a number of firms are already engaged in adaptation measures, example would be the best spur and other firms in the same type of industry would follow suit to preserve their own interests.
I have no reason to think firms will not follow the advice of CIO. I have encouraged them to treat the implementation of the recommendations as urgent, notwithstanding the breakdown in the Common Market negotiations, and I feel there is clear realisation of the approach of the competitive conditions which most firms will meet in the years immediately ahead. In the course of my opening remarks, I mentioned I had reason to be disappointed initially because firms were not responding to the facilities made available under the adaptation grants scheme, but I had occasion later to say that latterly I had become quite pleased with their responses and that there were many more applications now for re-equipment and expansion grants to meet freer trading conditions. Deputy Cosgrave asked me specifically to deal with our state of international trading.
Before passing from adaptation grants, might I ask the Minister if he is in a position to answer my query in that regard?
I dealt with it before the Deputy came in but I am satisfied to deal with it again so that I can also deal with any question the Deputy may raise on it before I conclude. The position is that adaptation grants are given to industries whose existence might be threatened by the lowering of tariffs and the entering into freer trading conditions. In the case of, say, the cleaning and dyeing industry, unless it could prove clearly that this certain position existed in its case, I doubt if An Foras Tionscal would deal with applications for grants from firms in that industry. I dealt with the matter quite extensively but that is the sum of what I said.
And I am obliged to the Minister. Anybody who wants to inquire about grants can address himself to An Foras Tionscal?
That is the body dealing with it.
The question of our future trading relations is one which I cannot very easily answer. The majority of Deputies share the disappointment of the Government at the suspension of the Brussels negotiations. Since then, of course, the British Government and their partners in EFTA have agreed to accelerate their tariff reductions and the question has been put to us in the House and outside why we should not join. The answer to that is very easy to anyone who knows the pattern of our foreign trade. EFTA is an organisation which so far has not paid any regard to agricultural products. For that reason, it was not attractive to us. As well as that, dealing only with industrial products, Britain's partners in the EFTA agreement would, as a result of the gradual reduction of tariffs, enjoy a position ultimately—initially it was to be in 1970—in Britain's markets that we now enjoy to a substantial extent. The amount of trade we do with Britain's EFTA partners in industrial goods is very limited.
Therefore, for those three reasons, the absence of any arrangements for agriculture, the fact that we enjoy most of the benefits the EFTA countries will get in the elimination of tariffs exercise, and the fact that we have a very limited trade with Britain's EFTA partners, there was not any great attraction in EFTA for us. So far, the position as far as EFTA is concerned has not changed, and the reasons for our not joining are still valid. In any event, we were not invited to the initial meeting at Stockholm where the agreement was made, nor has an invitation been extended to us since.
In the absence of negotiations for Britain's entry into the European Common Market, the obvious course for us would be, first of all, to try to strengthen our trade relations with Britain and, secondly, to improve so far as we can our bilaterial trading with other countries. As the House knows from statements made by the Taoiseach last week, and from statements made previously, we have already been in consultation with the British Government about our future trading relations with them and, following Mr. Sandys' visit to Dublin the week before last and the statement issued afterwards announcing that further meetings are to be held in a short time, I do not think there is any more I can say, short of trying to conjecture on our future trading relations.
In the meantime, we are going ahead with the exercise of tariff reductions. I shall be dealing with quotas later on. So far as the general proposition is concerned, Deputy Cosgrave asked whether we should not seek some reciprocal advantage for the tariff reductions we put into effect.
Before the Minister departs from that point, may I ask him if EFTA opened negotiations for reciprocal agreements with the EEC, would membership of EFTA by us be a possibility?
I have not discussed that with anyone but, in my opinion, it would change our thinking about it if, as a result of that eventuality we were left on our own, so to speak, without any prospects of making international trading arrangements that would benefit us. So far as the reduction of tariffs is concerned, whether we should seek reciprocal benefits for what we are doing now is a question that is easily enough answered.
Deputy A. Barry referred to ghosts walking around office corridors in certain industries and on factory floors as if there were some great fear about the tariff reductions that have already taken place and the ones to be effected at the beginning of 1964. As the House is aware, the purpose of the tariff reductions was to ease our industries into the position we expected to meet at the end of 1970, in which all our tariffs would have disappeared; secondly, to give the necessary incentives to our industries to improve their productivity and efficiency. I think it is necessary, in order not to create too severe and impact on industry, to continue at least for another year this tariff reduction rhythm we have embarked upon. If as indications now are, the Common Market negotiations will not be reopened for about two years, that will bring us into 1965—it might well be later—and if the term within which we must eliminate our tariffs ends at the end of 1969, that would give us only five years in which to carry out this exercise.
That might prove too severe a jolt for some industries. It might, therefore, be worthwhile, on that score alone, to proceed with what has already been announced, the tariff reductions starting on 1st January last, and the ten per cent reduction on 1st January next. The position may then have clarified itself and we may be in a better position to know whether we should proceed with that rhythm or accelerate or reduce it.
The Minister understands that under the Euro-market conditions there was a reward for this punishment?
The Common Market is still the most suitable for this country and it is still the situation we would like to reach. We would like to reach that situation fairly well equipped to stay alive in it. I do not think the Deputy need have any doubts that the people in Britain believe they will get into the Common Market ultimately. The bridge which was demolished is now being re-built. Therefore, I think it is worthwhile to have these two tariff reductions, the one which has gone into effect, and the one we propose for next year.
Has the Minister had any examination made of those steps backward? There was a loss of trade in some degree?
If the tariff reductions were effected without any corresponding improvement in efficiency, there would undoubtedly be a loss, but the purpose of the tariff reductions is to achieve a greater degree of efficiency and therefore to enable our manufacturing firms to withstand whatever extra competition the reductions bring about. In the belief that greater efficiency is being achieved, I do not expect any adverse effects by reason of these tariff reductions.
In any event, it is not so much the reduction of a tariff when it is fairly high but when it comes to the vulnerable point which would be lower down the scale that the real cold blast might be felt. I do not think that in any cases we have reached that.
Does the Minister expect any increase in imports as a result of the drop of those two points?
I do not think it would be realistic for me to say there would not be.
It is the most realistic thing we could talk about.
I said it would not be realistic for me to say there would not be some increase in imports.
Can the Minister say if any indication has been given by the EEC or EFTA that account will be taken at a later stage of our tariff reductions?
I am afraid I cannot say that. EFTA hardly——
On account of the discussions between the two.
If I may depart from that for a moment, Deputy Cosgrave mentioned the increase in the number of petrol stations and the effect that increase was likely to have on petrol prices. As the House is aware, that is a matter which was taken up by the Fair Trade Commission. The Commission decided that it would not be in the public interest to interfere too acutely in the right to set up or the right to control the setting up of outlets in the retail trade. Therefore, they did not accept a suggestion that they should be in a position to license the setting up of these stations in order to regulate their growth. I think it could be argued that there are too many retail outlets in other trades as well as in this but, nevertheless, in a free competitive economy, it would be difficult to justify the licensing of such outlets.
However, the Commission did make recommendations which were designed to check the growth of needless or uneconomic stations. They recommend that the practice of the distributing companies of giving incentives, such as advance rebates and low interest loans to new entrants to the trade, should be completely discontinued and the companies have accepted that recommendation. In general, the Commission's recommendations aim at providing a check on intensive competition for outlets and the promotion of price competition by providing for the elimination of arrangements relating to the collective fixing of prices. In the case of the company stations, it recommended the Motor Spirit Order which has since come into operation by reason of an Act of the Oireachtas which I think was passed in July, 1962. The Act provides that any petrol company proposing to build or acquire a retail station should notify the Commission in advance and should furnish the Commission with any information they might request. In that way the Commission will have full knowledge of any increase there might be in retail outlets of petrol and, therefore, be in a position to take action if they feel action is justified.
One of the other matters to which I should like to refer is mineral development. The matter was first raised by Deputy Dillon and a specific matter was raised by Deputy Tully. Deputy Dillon expressed fears that people were coming in here, getting prospecting licences, doing little work and then going abroad to places like Canada, and Canada principally, and giving exaggerated accounts of the minerals that were to be found in the area covered by the prospecting licences. He said that this would inevitably do damage to this country. I agree with him wholeheartedly in that respect and I want to say that the greatest care is exercised in the giving of prospecting licences. In the first place, the financial background of the applicant is examined; his technical ability to do what he proposes is taken into account and only then is he given a prospecting licence. In most cases, and in all cases where the applicant is not a resident of the country, or not a person with property within the country, he is asked to make a deposit in the event of any claims for compensation arising in respect of people's property over which he may prospect. It has happened in recent times that people who either had prospecting licences or had letters of intent from the Minister for Industry and Commerce that prospecting licences would be given tried to assign these for fairly sizeable considerations.
In all cases where I had any doubts about the bona fides of such a transaction, I refused to give my consent to that assignment. If, on the other hand, a person had done a reasonable amount of prospecting and had spent a reasonable amount of money to establish whether or not there were some minerals there that were at least worth looking at further, then I was quite prepared to sanction such an assignment as long as the consideration was reasonable. In so far as prospecting is concerned the prospector must give a return to the Geological Survey Office of any findings he makes. He will have to give assays of the minerals he extracts from the bore-holes and if there is any publication of the ore content of these minerals in foreign newspapers in order to stimulate dealings in stock, then I will have an opportunity of comparing whether or not the publication in these foreign newspapers corresponds with the particulars given to our Geological Survey Office.
In most cases, the figures published abroad coincided with the figures made available to the Geological Survey Office. In some cases, unfortunately, it did appear that the ore content indicated abroad for a particular area, was, in fact, appreciably higher than what was returned here and in these cases I took immediate steps to ensure that any transactions to be induced by reason of that publication abroad would not have my sanction and any rights I was in a position to give were immediately withdrawn. Therefore, I want to assure Deputy Dillon and the House, that I am fully conscious that in this business, which is a highly speculative business, there is a great danger of non bona fide speculators coming in and doing damage to the reputation of this country.
I think it is only fair to say that the usual pattern of mining is that somebody seeks a prospecting licence, discovers an area either in Ireland or else-where, and, having discovered an interesting property, will try to have a company established by means of floating shares or selling his rights to another company who will stimulate the market to provide the money to investigate the property in which the ore is found. It is not unusual that these activities take place, it is a matter of form, but it is important that we should ensure that the Irish economy and Irish landowners will not be exploited by any shady deals in that respect.
Deputy Tully raised the question of Tynagh and he raised the question of the delay in giving them their mining lease. One might be forgiven if one felt that there was some assistance given to Deputy Tully in raising that question. Whether the company or an individual officer gave it to him does not matter. I may say a letter of intent to give the lease was issued on 22nd November, 1962, the company having indicated at that time that a letter would enable them to go into the negotiations necessary for the major financing that would be required for the development of the mine. A draft lease was subsequently drawn up in consultation with the Chief State Solicitor's Office and was forwarded to the company's solicitors for approval or 16th February, 1963. The company proposed a large number of amendments which they desired to have inserted in the draft lease. These matters were discussed with the company's representatives. I need not tell the House that they were discussed and that there was good, hard bargaining on both sides. It was not easy to reach agreement on all matters. However, they objected to some provisions in the lease that were in standard form —provisions designed to protect the interests of the State and the interests of neighbouring landowners. A final draft of the lease, then, these matters ultimately having been agreed, was forwarded to the company's solicitor's for approval on 10th May. We have heard nothing since. I hope I have established reasonably well to the satisfaction of Deputy Tully that if he has been instructed to blame the Department for some delay all the blame is not on the Department's side.
Thanks for the explanation. It is true that I contacted the Minister's office last November as a result of which certain steps were taken and the letter of intent was issued. I thank the Minister for taking the action he took then. My information is not that which the Minister has just given to me. Yesterday, I was informed that the delay is with the Department. I am rather surprised to find that the company's solicitors are supposed to be holding up the signing of the lease, because the company are most anxious to have the deal completed.
They have the draft lease. There may be some provisions in it which they do not like. Many of these provisions are standard provisions from which I cannot readily depart. They have had it since the 10th of this month.
Some of the provisions in the original lease were included here and never appeared in any lease in any other country. Provisions were inserted in the lease which were not standard unless they were made standard here. However, if it is with the company's solicitors, then the matter is one for them to decide upon.
We are still waiting to hear from them.