I move that the Bill be now read a Second Time. The main purpose of the Bill is to provide for the registration of caravan sites and camping sites, the continuation of the scheme of ministerial guarantees in respect of loans raised for the construction or improvement of holiday accommodation and the provision of resort amenities and continued arrangements for the financing of the various activities of Bord Fáilte Éireann.
The Tourist Traffic Acts, 1939, 1952 and 1957 provide for the registration by Bord Fáilte of certain categories of holiday accommodation, namely, hotels, guest houses, holiday hostels, youth hostels, holiday camps and motor hotels or motels. The effect of the registration system is that no person may describe or hold out any premises as an hotel, guest house, etc., unless the premises are registered in the appropriate category with Bord Fáilte. To secure registration, premises must comply with standards prescribed by Bord Fáilte with my consent and proprietors must file with the Board a statement of maximum prices. Registered premises benefit from inclusion in the Official Guide published annually by Bord Fáilte and also from various schemes of financial assistance for works of improvement and extension.
Caravans are playing an increasingly important part in holiday-making and Bord Fáilte say that the present patronage for caravans is predominantly for static caravans for hire on site. The patrons are mainly family groups and include many families who for financial or other reasons could not take a holiday in hotels. Caravan sites are not intrinsically attractive, and close control over this form of development is essential to ensure the safeguarding of scenic and other natural amenities.
The Local Government (Sanitary Services) Act, 1948, provides for the control of certain aspects of caravan site development and general standards for such development have been laid down by the Minister for Local Government. These powers are operative only in areas to which they have been applied by Order of the Minister for Local Government. In addition, the use of land for the purpose of caravanning is subject to the approval of the local planning authority under the Local Government (Planning and Development) Act, 1963. Local Government legislation in the matter of caravan sites, however, relates mainly to standards for physical planning rather than operational standards so that in general it may be said that local authorities are concerned with the planning, public health and public amenity standards of caravan development. Bord Fáilte, however, are anxious to encourage higher operational standards also.
Up to the present, little progress has been made in the provision of caravan sites to a standard comparable to the best sites in Britain and on the Continent. An essential step towards the raising of standards of facilities and operations is the introduction of a system of inspection and grading. Bord Fáilte intend also to attract camping visitors from European countries where camping holidays are very popular and it is intended, therefore, that the registration system should extend also to camping sites. Provision has accordingly been included in the Bill for the registration of caravan sites and camping sites by Bord Fáilte in accordance with regulations made with the consent of the Minister for Transport and Power after consultation with the Minister for Local Government.
The Bill also provides for certain minor amendments of the scheme of guaranteed loans for the provision of holiday accommodation and tourist amendities, which is operated by my Department under section 17 of the Tourist Traffic Act, 1952. Under this scheme the private developer raises a loan from a bank or other lending institution and the repayment of capital and the payment of interest is guaranteed by the Minister. All loans guaranteed to date have been in sterling and there is some doubt whether the existing legislation would enable a guarantee to be given in other currencies. This doubt is being removed under the Bill by making it clear that guarantees can be given in currencies other than the currency of the State.
The 1952 Act restricted guarantee for loans raised for the provision of amenities and services to works related to particular tourist resorts. With the creation of the regional tourism organisations, and the growing popularity of motoring tourism, initiative in tourism is now growing in places other than those which are traditionally regarded as resorts and it is considered desirable that guaranteed loans should be available for worthwhile tourist enterprises even though they may not be in a recognised tourist resort or associated with a particular hotel. This is being effected by a modification of the scope of the scheme as set out in the 1952 Act.
The 1952 Act limited the operation of the scheme of guaranteed loans to a period of five years from the date of passing of that Act. This period was extended by two further periods of five years by the Tourist Traffic Acts, 1957 and 1961, so that the present scheme is due to expire in 1967. The Bill provides for a further extension of five years which would have the effect of authorising the continuation of the scheme until 1972.
The Bill also contains provisions for the future financing of the various statutory functions of Bord Fáilte. These functions are paid for out of funds voted annually by the Oireachtas in the form of grants-in-aid to the Board. There are statutory limits on the aggregate amounts that may be issued to the Board for specified purposes and accordingly it is necessary from time to time according as these statutory limits are reached, to ask the Oireachtas to enact enabling legislation to permit the voting of further funds so as to provide for the continuation of the Board's activities. It so happens that we are at present nearing the statutory limits applicable to the three main divisions of the Board's activities, namely, the major resort development scheme, the scheme of cash grants for the development of holiday accommodation and the general function of increasing tourism in Ireland. Accordingly, the Bill contains enabling financial provisions relating to all three functions.
The resort development scheme was inaugurated under the Tourist Traffic Act, 1959, which provided for the payment to Bord Fáilte within a ten year period of sums not exceeding in the aggregate £1 million for the giving of grants for major tourist resorts. From this fund a grant scheme has been operated by the Board to enable such essential schemes as basic site development, provision of promenades, parks and other recreational activities to be undertaken. The major resorts and resort areas selected by Bord Fáilte for development were:
Galway/Salthill, Killarney, Bray, Dún Laoghaire, Tramore, Skerries, Kilkee, Youghal, Ballybunion, Lahinch, Arklow, Greystones, West Cork, County Donegal, Achill Island, Dingle Peninsula, River Shannon and Lakes.
The scheme is carried out by Bord Fáilte in consultation with the local authorities and other local interests. One of the main conditions of the scheme is that there should be a minimum local contribution of 20 per cent.
The progress of the scheme in the first four years was slow in terms of physical work but a great deal of work was undertaken in the form of discussions with local interests, formulation of proposals and drafting of plans, the acquisition of land and so on. With the acceleration of actual development work in the past couple of years, grant payments have increased and we are now reaching the £1 million limit. The scheme was the first comprehensive programme of its kind and the initial plans and estimates were necessarily of a tentative nature and were subject to modification as the scheme progressed and experience was gained.
The work programme for some resorts had to be varied because of local conditions, resulting in the abandonment of some items and the substitution of others. Overall, Bord Fáilte have found it necessary to adopt a more extensive programme to ensure that a significant impact was made and that moneys would not be wasted through inadequate scale or incomplete planning. Costs have risen considerably since the first estimates were prepared so that, even to finance the original proposals, additional moneys would have been needed.
A further factor is that the Shannon waterway was not originally included among the areas to be developed and the subsequent addition of the Shannon has absorbed some of the initial fund. It will be clear from all this that the original £1 million provision is now inadequate. It is estimated that by the time the complete programme of works at the seventeen resorts and resort areas has been carried through the total cost will amount to £2.5 million. The rate at which the work can proceed will, of course, depend on the availability of capital. The provision of funds for this purpose will be covered in the usual way in the annual Vote for my Department.
This is an opportune time to look ahead and to consider what form resort and amenity development should take to meet the requirements and the tastes of the tourists of the future. All the areas selected for development under the original scheme, with the exception of Killarney and the Shannon waterway, are coastal and the basic attraction in each case is proximity to the sea. With the development of additional early-season and late-season traffic it is clearly necessary to consider other types of amenities also, as coastal resorts have diminished attraction outside the main summer season. Visitors outside the peak season are increasingly of the "special interest" type, seeking active sporting holidays such as game-shooting, pony trekking, hunting, angling and golf, as well as national monuments and places of historic interest, and they can thus be attracted to inland as well as coastal tourist centres. A major increase is expected in motoring tourists from Britain during the next few years as a result of the improvements in the cross-channel services. The motoring tourist will circulate extensively and will expect to find inland places to visit for interest sake. I am, therefore, asking Bord Fáilte to undertake the planning of a new resort programme with these criteria in mind.
The introduction of a new scheme involving new centres would obviously involve the provision of additional funds. It is not possible to make any precise estimate at this stage of what funds would ultimately be required but I am proposing to make provision for a sum of £750,000. Expenditure from this fund will be authorised annually in the light of the availability of capital moneys. Should the financial position permit relatively early exhaustion of this fund, the Dáil will be asked to increase it in due course. The Bill, therefore, provides for the raising of the existing limit on the resort development fund from £1 million to £3.25 million—an increase of £2.25 million, of which £1.5 million is in respect of the completion of the present programme and £0.75 million to provide for a second resort programme.
The Bill also provides for the raising of the limit of the amount which may be provided in the form of grants for the development of holiday accommodation. Provision was made in the Tourist Traffic Act, 1959, for the payment to Bord Fáilte of amounts not exceeding in the aggregate £500,000 for this purpose and this limit was increased to £1.5m. by the Tourist Traffic Act, 1963. From these funds grants have been provided by Bord Fáilte for the construction of additional holiday accommodation, the improvement of existing accommodation, the provision of indoor and outdoor entertainment facilities for visitors and the provision of staff accommodation.
The grants, which amount generally to 20 per cent of the cost of the works subject to certain maxima, have stimulated a considerable amount of hotel development involving a total investment of approximately £10 million, including the grants, over the past five years. The scheme of grants was revised in February, 1964, to provide for increased assistance for new accommodation in resort areas and the grants were extended to include guesthouses providing at least ten guest bedrooms. Provision was also made for assistance for youth hostels and other categories of visitor accommodation such as colleges or other institutions catering for groups of visitors during the holiday period.
The amount issued to Bord Fáilte at 31st March, 1965, out of the existing £1½ million fund for holiday accommodation was £1.166 million and the sum voted for the current year is £255,000. The position at the end of the current year will, therefore, be that £1.42 million will have been expended, leaving a balance of only £79,000. It is, accordingly, necessary to raise the limit of the existing grant fund in order to provide for the continued financing of accommodation development.
Despite the expansion of accommodation that has taken place, it is clear that further expansion is necessary to accommodate the increasing number of visitors that are being attracted to Ireland each year in accordance with the Second Programme target of doubling 1960 tourist income at constant values by 1970. In recent years we have been recording an annual increase of 500 to 600 registered rooms, not counting rooms in supplementary accommodation such as boarding houses, private houses, etc., but a recent assessment of the position carried out by Bord Fáilte following detailed investigation, revealed that a far greater rate of increase will be necessary if the 1970 target is to be achieved. We must therefore continue the scheme of grants for a further period.
It is impossible to make firm estimates of what grant commitments will amount to as this will depend on the rate of investment by the hotel industry itself. The proposal in the Bill is to raise the limit on the amount which may be provided for holiday accommodation grants from £1.5 million to £3 million. This provision, like the provision about resort development grants, is of an enabling nature. The amounts to be provided in any year will fall to be voted by the Dáil in the normal way under the Vote for my Department.
Apart from the special funds for accommodation grants and for the development of major tourist resorts the cost of administration and general activities of Bord Fáilte are met from an annual grant-in-aid. From this grant-in-aid the Board are required to meet the cost of overseas publicity and advertising and a wide range of activities, including improvement works at minor resorts, access works and other improvements at places of historic or other special interest, assistance towards developing angling tourism and other sporting attractions, assistance to hotel staff training schemes, grants to meet interest on loans for accommodation and resort development and promotional work in connection with festivals and international conferences.
Up to 1961, this grant-in-aid was subject to a limit of £500,000 in any year but this limit was removed by the Tourist Traffic Act, 1961 and replaced by the provision of a global sum of £5 million, the intention being that for a limited period the level of State expenditure on the development and promotion of tourism would be substantially increased. It was indicated at the time that, on the basis of annual provisions related to the then current requirements, the sum of £5 million be expected to meet requirements for a period of seven years.
Circumstances have since made it necessary to modify the objective of allocating the £5 million over a seven-year period. Increased interest grant commitments, resulting from the increased rate of investment by the hotel industry in the development of holiday accommodation, made it necessary initially to reduce the period to six years and the annual grants-in-aid to Bord Fáilte up to and including the financial year 1963-64 were allocated on the basis of a six-year period. The grant-in-aid for 1964-65 was, however, increased very substantially to allow Bord Fáilte to initiate a programme of increased activity, particularly in overseas publicity and in marketing. This was necessary because of the growing competition in international tourism, because of the great importance of tourist income in the national economy and particularly because of the formidable target set for tourism in the Second Programme for Economic Expansion.
At the beginning of the current financial year, the amounts issued to Bord Fáilte were just in excess of £3.5m. and the sum of £1,847,000 voted for this year will bring expenditure above the £5m. limit. This renders it necessary to enact new legislative provisions to cover the Board's future activities. The fact that the statutory limit is expected to be reached very shortly makes the enactment of the present Bill a matter of urgency.
It would be difficult to work out in advance a rigid programme of expenditure on tourism. The amount to be provided in any year will depend on the progress made towards the achievement of the 1970 target and also, of course, on the availability of resources. I am proposing, therefore, to depart from the concept of any fixed limit. Accordingly, the Bill provides for the deletion of the existing limit of £5m. contained in the Tourist Traffic Act, 1961, and does not substitute any new limit. The position then will be that in accordance with section 2 of the 1961 Act the amount to be provided to Bord Fáilte in any year will be determined by the Minister for Transport and Power and the Minister for Finance and will be included in the annual estimates. There will be no diminution of the degree of control by the Dáil as the money will form part of the Vote for my Department which will come before the Dáil in the usual way.
As I have already mentioned, the Second Programme for Economic Expansion aims at doubling income from tourism between 1960 and 1970, in terms of constant 1960 prices. This is a formidable target and represents an average annual increase of 7.2 per cent compound over the ten year period. When the Second Programme was adopted in 1963, this rate of increase had not been achieved and consequently the actual rate required from 1963 onwards to double the 1960 income was in fact 7.8 per cent. It was recognised that competition from other countries was increasing, that the target could not be regarded as an automatic projection of a previous trend and that active promotion and the provision of adequate Exchequer assistance would be necessary during the period of the Second Programme if the target was to be achieved.
The actual income from tourism, including income earned by Irish carriers, in 1960 was £44.2 million. Deputies will have seen from the Bord Fáilte annual report for the year ended 31st March, 1965, that the income for the year 1964 amounted to £68 million which in terms of 1960 values represented £57.4 million. These figures indicate that the increased promotional activities of recent years are showing results and that if the present rate of increase can be maintained, the 1970 target of £88.4 million in 1960 values will be achieved. There are no grounds for complacency, however, and continued efforts will be necessary in the shape of promotional activities, resort development and provision of accommodation to maintain and provide for the required increase in tourist traffic. With the increase in the number of visitors to the country the services provided at local level and the interest and enthusiasm of local enterprise take on great importance. The new regional companies have provided a new impetus for local and regional activities and I would like to take this opportunity of saying how valuable is the contribution of the regional companies—the officers and members and all who co-operate with them—and I have no doubt that we can look forward to the continued growth of this excellent work.
Deputies are, I am quite sure, aware of the important contribution which the tourist industry makes to the country's economy. Income from tourism for the year 1964 represented more than one-sixth of the country's total overseas income on current account for that year. It is the largest of our invisible exports accounting for nearly 50 per cent of such exports. In comparison with visible exports, tourist income was second in importance only to food, drink and tobacco in 1964 and exceeded the income from exports of live animals for that year by more than £1 million. An important feature of the tourist industry is that it is primarily based on domestic resources, involving little dependence on imported goods. Because of the decentralised character of the industry its benefits extend to all parts of the country and it is an important factor in assisting the less developed areas of the West and South.
I am confident that as a result of the increased promotional activities of recent years and the improvement in travel facilities, the upward trend in tourist traffic to this country can be maintained, provided the necessary resources and facilities are made available. The principal purpose of this Bill is to enable these resources to be provided and I accordingly confidently recommend the Bill for the approval of the Dáil.
