The main item in this Supplementary Estimate is the increase in the amount of money which will be made available to be spent during the year on grants for An Foras Tionscal. The figures given by the Minister indicate that there has been a large increase in the amount of money being paid towards adaptation grants whereas previously when the figures were made available to us, we found that the grants for new industries always involved much larger amounts of money than the grants for adaptation of old industries. We now find that the expenditure forecast for this year produces a 50-50 situation roughly. Old industries are availing of adaptation grants to the same extent as we are getting new industries in from abroad. I welcome that fact. From the time we first talked about entering the Common Market and got down to preparing for it seriously, I always felt it was not fully appreciated that many of our old industries were supply industries for the home market. They can now gird their loins and try to enter the export market. The fact that they are adapting themselves, as is indicated by the necessity for this Supplementary Estimate, is something which I welcome.
The report of the Federation of Irish Industries issued a few days ago made the point that there was not enough encouragement for the adaptation of old industries. There is some degree of truth in this point made by them because the maximum grant to a new industry can be up to 50 per cent, and they can then go to the Industrial Credit Company and talk about a loan and the conversion of portion of that grant, but the figure in relation to an adaptation grant is a maximum of 25 per cent.
I did some homework recently on the manner in which Northern Ireland encourages existing industries and new industries. The main difference I found between our system and theirs seems to be that they can get an automatic payment of grant on the production of invoices, statements and receipts for the goods they bought. I want to quote now from a leaflet entitled "Opportunities in Northern Ireland for faster, more profitable Expansion" It states:
Immediate cash grants of 40 per cent of the cost of new plant, machinery and buildings are offered by Northern Ireland automatically and they are not dependent on the number of new jobs an industry will create. But where a manufacturer undertakes to create reasonable employment, then the Government can make 45 per cent cash grants towards the cost of new plant, machinery and buildings, and, in the case of a project offering exceptionally attractive returns in employment or which is to be located in an area urgently requiring industrial development, grants towards operating costs can be made available in the initial stages of development.
The automatic payment of a grant there to any industrialist who purchases an article of industrial machinery is not available here. We have certain industries which got a global refusal. I can think of two of them offhand. One is the baking industry and the other is the laundry industry. Our definition is that they must produce something for export. My purpose in bringing this up is to indicate that a defence of the jobs in our existing industries which are supply industries for our own people is as pertinent today as we approach the Common Market as is the desire to produce new industries.
The anomalies presented by our system here, which I maintain is an inflexible one in relation to old industries, are demonstrable by these figures. I will not give the names of the companies involved for obvious reasons; if the Minister wants them, he can get them from me privately afterwards. There is one factory which employed a couple of hundred people, mostly girls, for 20 or 30 years in very bad premises. They eventually succeeded in getting new premises in a building which had been used as the office part of the factory. There was good space available for a new building. Eventually the whole production section of that factory was entirely new. Their adaptation grant was £16,000.
About a half a mile away there was a new factory producing almost identical products which got a grant of £138,000. The number of people employed in the old factory is slightly higher than the number employed in the new factory. Because the people in the old factory had been operating for 20 or 30 years in very bad conditions they were classified as being eligible for an adaptation grant only. I suggest that we should have a more flexible approach towards the old factories as well as the new ones. This would improve our system. I have a large volume of documentation here which proves that the position in Northern Ireland is much more flexible.
We have to compete with Northern Ireland as well as with other countries in the attraction of new industries. Another difference between Northern Ireland and here is that they tend to give help in the provision of factory space. They build factories which remain the property of the Minister. They are leased at a certain rate per square foot to the manufacturers, so the authorities always maintain their ownership of the factory. I do not want to harp on some of the costly failures we have had here, but I do want to suggest to the Minister that the fact that we have factory space which cannot be taken back by the Minister is a flaw in our system. We know that one of the reasons why a manufacturer would wish to own the factory is that if he owns it completely and entirely, he can use it as security for a loan for liquid capital for running his business. I suppose that is an argument why a manufacturer should own the factory. But, at the same time, the system in the North of Ireland is that they lease factory space to manufacturers, and they have been considerably more successful in the expansion of industry than we have been here.
I quote from the same booklet, which is just a resumé of all the things they have up there, and it is of interest on page 3:
There are no problems in finding a factory or building site in Northern Ireland! To encourage rapid industrial expansion and enable manufacturers to start production quickly, the Government builds in advance of demand, standard factories without a particular firm in mind. Ranging from 18,000 to 70,000 square feet, and with all modern services, these factories are ready for immediate occupation. Rentals are very low, from 1/6d. to 2/9d. per square foot per annum for a 21-year period which may include an option to purchase. Room for expansion of the production area by at least 100 per cent is always provided.
We have touched on this system in the Shannon Free Airport situation, where the Industrial Estate there has provided factory bays and leased them to factories, which has been a successful method of providing factory space. We are now moving a little closer to it again by the provision of industrial estates in specified places but, while we are, I think the restriction at present placed on this system is a mistake. There are certain instances in which I am sure the Minister, in his wisdom, would prefer to take a decision to provide factory space, rather than provide a large cash grant from which people build their own factories.
If, near a town of fairly large population, factory space can be created and there is at the back of somebody's mind the possibility that in ten or 15 years the first occupant might not be as successful for ever, as we would hope, then the fact that the space is there is really the best guarantee or encouragement we can get that it will be occupied again. In my own constituency I have seen certain factories left idle. Happily, they were reoccupied, not—in one case I shall not mention, by people who are employing male labour, as the first people were—employing labour in the same volume but, nevertheless, the fact that there was factory space there, near a centre of population where employees were readily available, meant that these were occupied again. In another town in my constituency a much smaller factory has had this experience, a factory which got a grant. The factory space was built and then production ceased but now, happily, another manufacturer has come in. He is starting and we hope in perhaps a year he will be in full production there as a small factory employing, possibly, 50 people; at the moment there are 15 to 20 employed. But the fact that we can provide factory space is most important.
The Minister, on 2nd March, 1967, replied to a Parliamentary Question of mine as to whether or not he had received representations for the establishment of an industrial estate at Tom Roe's Point, Drogheda, and the answer was no. He indicated that Government policy was to develop certain centres. I think large industrial towns all over Ireland—if they can provide a suitable site—should be in a position to have factory bays built there, if there are people to occupy them. Even if the planning were allowed to proceed, it might be a very good thing. The question raised by the Federation of Irish Industries as to whether or not there is sufficient encouragement for adaptation is one which, six to 12 months ago, could be entirely substantiated because it appeared, as I said, as if there was far more activity in the provision of new factories than the adaptation of old ones. But, as I said also, it appears now as if the amounts of money are about equal.
Also in the Report on Progress of Industrial Adaptation of March, 1966 issued by the Department of Industry and Commerce applications for adaptation grants and loans are added, again, up to 31st December, 1965. I refer to page 30 of the document. I indicated that the total capital investment represented by applications for grants and loans would be of the order of £55 million which is the figure given in this document and approved up to the same date there was a figure of £42 million. It means, of course, that the Industrial Credit Company are co-operating, when the adaptation grant is provided. Whether or not that can go the whole way, I do not know, but it is quite certain, with commercial banking in its present state of restriction, there is very little hope anywhere else and the industrialist who would desire to adapt is certainly in the position that he will not get the 75 per cent he desires from a commercial bank to put beside the grant of 25 per cent.
Another matter which gives Northern Ireland the edge on us is the fact that all industrial buildings there are derated as to 75 per cent. This is a considerable attraction and I have been quoted an instance of a very large factory in Belfast where the total rates paid are £500 a year. I am quite certain the volume of rates paid by relatively small industrial operations here would be as much as £2,000 a year. I am aware that if one is in full production, the rate figure will be a very small part of the prime cost but, at the same time, when one is trying to encourage people to come in, everything counts and it is clear that this is another advantage Northern Ireland has over us.
The Minister answered a Parliamentary Question by me, also on 2nd March, 1967—Question No. 46—when I asked for the total amount of grants sanctioned for industry by An Foras Tionscal to date, and the total sum represented by cancellations of projects since a reply in June, 1966, relating to industrial grants. The Minister's reply was that the total sum represented by cancellations of applications for grants, abandonments, or postponements of projects since 31st March, 1966 was £1,532,000. These are the official cancellations and abandonments. My opinion—in the credit squeeze situation as it is—would be that, internationally as well as at home, the real figure for postponements, abandonments or cancellations would be much higher. I say this in no spirit of blame to the Minister, An Foras Tionscal, or anybody else, but the facts of life are there and it is clear that people who were bent on expansion here in the past few years—and these projects generally take a year or so to get under way—will have found themselves in the position where they have had to retrench, and where cancellation at the worst and postponement at the best may be the order of the day for many.
I think it was the Minister for Industry and Commerce who answered a question by Deputy L'Estrange recently and the information given was that there were 170,000 fewer people at work in this country than in 1951. This means that the industrial effort to employ the same number of people, or even more in order to compensate for those who have had to leave the land because of mechanisation, has failed. We face that situation with our grants and our encouragement system.
There are features of the industrial expansion programme which are not to be commended. I have observed that a very high percentage of new factories in and around my area employ perhaps as high a proportion as 50 per cent girl labour. I was at a chamber of commerce dinner some years ago. I do not remember the exact year but the present Taoiseach, who was then Minister for Industry and Commerce, spoke there. Sitting beside me was the managing director of a firm who employ about 400 people in that town and when the president of the chamber of commerce mentioned employment in a certain new factory and the fact that the new factory would give employment to girls, the managing director nearly swallowed his coffee cup because the main employment in his factory was girl labour and he was in a situation in which he could not get any girls. Therefore, the large grant given to that factory was, from the point of view of employment promotion, wasted. To give the name of the factory and town concerned would be, for a politician, to commit hari kiri and I have no intention of doing it. If there was a scarcity of girl labour in that town, the payment of a large grant for a new factory to help it to do something which had been done already was largely a waste of money.
I shall give another instance. A firm went into a premises which had been vacated and they were confronted with the problem that they could not get enough girl labour. I submit that we must concentrate in such cases on the establishment of factories that employ men at a good living wage. I can point to two examples in Drogheda—it is permissible for a politician to mention the name of the town when it has been a success—the asbestos pipe factory and two others, where a large percentage of men are employed at fair wages, enabling people to rear families and to keep them at home. The other system does neither.
Another feature about which I am not happy is the proportion of factories established which are using Irish raw materials. It is, of course, a good thing to take in materials from abroad, employ people here to convert them into manufactures and then to send the finished products out again. However, experience in this city, particularly in recent months, has shown us that this is dangerous because if a big combine abroad find that the shoe is pinching, it is very easy for them to lop off the small arm in a small country like this, repatriate their executives and find jobs for them elsewhere, and no one in the organisation of such a large international combine will be hurt to any great extent. It leaves us with an empty factory in which there is no employment. That is why I asked the Minister on 23rd February, 1967—Question No. 70—for the number of new factories established in 1965 and 1966 based on raw materials available in the country at a competitive price, and the present number of people employed. The reply was:
It is not possible to give the precise information requested by the Deputy. He may, however, be interested to know that out of a total of 47 new industries established in 1965, 15 use mainly Irish raw materials and 4 use some Irish raw materials; these 19 undertakings employ approximately 1,100 persons. Out of 54 new industries established in 1966, 19 use mainly Irish raw materials and 4 use some Irish raw materials; these 23 undertakings employ approximately 500 persons.
The financial year does not end until 31st March, 1967, and we are now discussing a Supplementary Estimate for a large sum to bring total expenditure and grants up to £5½ million; yet the number of persons employed in these two calendar years in industries established on Irish raw materials is far too low. We must concentrate on encouraging industries to come here for the reason that the raw materials are available here. It is a safety measure against the time when the wind blows cold, when there are credit squeezes internationally, when employment in industrial production in the world is falling and when industrial products are not going so well.
I welcome the action in regard to Castlecomer Collieries. It would be a pity if we were to let the labour there in the production of Irish goods in the shape of coal to emigrate without a fight. Perhaps because of our tie-up with and our thinking on Bord na Móna, we have been concentrating so much on the production of turf that the question of our collieries, as far as State capital investment is concerned, has been neglected. For use in industrial boilers and for the central heating of houses, there is a very big market for the type of anthracite we produce. In small undertakings in which I am involved, I installed two industrial and one domestic boiler consuming all Irish anthracite and I can assure the House and the Minister that the cost of heating from this fuel has been less than half that of oil. The work involved is merely refuelling once a day, which takes about two minutes, and looking at the boiler after 12 hours in case a clinker may have formed, which takes half a minute because of automatic riddling.
This is something which should have been developed but we have been so involved in turf production that we may have neglected our Irish anthracite. If the costs are examined, they will show that Irish industry here would be well advised, before installing any boiler, to consider Irish anthracite fuel. For that reason I welcome wholeheartedly the investigation work going on at Castlecomer and wish it every success. The total sum at the moment would seem to be £62,000. This seems very little, by the standards we employ here and by the expenditures we are involved in here today, to keep an oldestablished Irish industry going and to try to bring it right up to its optimum in employment and in production.
Córas Tráchtála have got a small increase. I want, specially, to pay a tribute to the work of Córas Tráchtála. The people there are extremely good and diligent. There is another thing about them. They are as far removed from civil servants—I say this not in condemnation of anybody present— as it would be possible for anybody to be. They are the sort of people who will make absolutely any kind of effort, orthodox or unorthodox, to get Irish exports. Some of them have reached the stage where the volume of knowledge and experience that can literally be given to you verbatim on the telephone is extraordinary. They have a wonderful knowledge of every facet of Irish industry and the details of production of different items. I would suggest to the Minister if money were ever to be the limiting factor in regard to Córas Tráchtála, the best thing he could do as Minister would be to see that such limitation were removed. I do not think any Government has, in fact, restricted Córas Tráchtála in this way and for that reason I welcome this item in the Supplementary Estimate.
The technical assistance grants are important and it is good to see them being availed of. The fact that the Minister says his Department is arguing about certain small items in relation to this matter does not shock me. I presume we have got some benefits from our capital investment and our efforts there. I do not want to delay the House very long as this is a Supplementary Estimate and I presume we will be dealing with the main Estimate after Easter. Therefore, I end by saying that I believe the Federation of Irish Industries, while there is some evidence of improvement in the amount of the adaptation grants being availed of, have a case when they say our system is inflexible and that sufficient is not being done for old industries.
They also have a case when they point to the fact that the State took £40 million from the capital resources for private enterprise industry this year and that while there is a suggestion that there is some loosening within the last month or so in the shape of an announcement that £10 million more would be available for the private sector, such has not been the experience of people in industry. Capital is extremely scarce still. The Federation of Irish Industries in their report a few days ago made the point that while the balance of payments difficulties was corrected to a large degree, the price was high and the price was the compulsory slowing down of our industrial effort here over a year. The fact that the private enterprise industrialist found himself hampered by lack of liquid capital or lack of investment capital for the purpose of developing his plant or his building and the fact that we are restricted in our adaptation grants approach did not help.
I should now like to mention something that has been argued by me and others, to some extent, that is, our costly failures. When you mention costly failures of industries that got grants, you are very often told you are unpatriotic and that the percentage of failures is very low. I submit that the percentage was not low in regard to those costly failures. I would insist on the Minister having a full examination of the situation and taking any precautions that are necessary to see to it that those failures do not occur again in such numbers. I know we have to take risks and also, just as the banks will do, the Government should see to it that salvage is available to them and that at least the building will come back to them.
During the past week or so, I was reading the Acts of Parliament in Northern Ireland relative to industrial grants and incentives. I found there were the most stringent sections in those Acts whereby seven days after production ceased in any of those enterprises which had got grants, such had to be reported to the Ministry. In fact, the machinery could not be removed from the factories and the buildings themselves reverted to the Minister if production stopped for a period of six months. I am not suggesting that stringent measures such as those would encourage industrialists to come here but I feel if an industrialist is entirely bona fide in his effort to come here, he will have no objection to normal safeguarding precautions by our Minister. I feel such should be incorporated in new grants. I feel also that the system is, to some degree, inflexible and has not been changed in hardly any way since the Government I supported then, with the Fine Gael and Labour Parties, introduced the Industrial Grants Act. It was in fact introduced by the late Deputy Norton in 1956. The Miscellaneous Provisions Act was also introduced in that year. As this is a Supplementary Estimate, I know that this can only be discussed in passing so I will not go into it further now.
The incentive by way of relief of tax will be continued until we go into the Common Market. It would help industrialists and the House if the Minister would indicate, as he has just come back from Brussels, if there is any truth in the widespread rumours that when we go into the Common Market, we will not be allowed to give incentives to industry by way of relief of tax. I believe that market development grants should be expanded and that there should be a more detailed approach to them. The work of Córas Tráchtála is very good but perhaps the whole idea needs to be expanded.
I welcome the Supplementary Estimate for what it is doing. I have given whatever views I had in relation to certain changes which I feel might be of value. I hope that the Minister will see to it that more Irishmen are employed at home.