I should like to discuss the question of the small industries grant now. In my work as a Deputy I have found that what happened in the case of the adaptation grants is now happening in the case of the small industries grants. A firm which went into the cabinet-making business is now employing 18 people instead of the one employee with which it started off and, because it is now employing 18 people, it is disqualified. I do not know why. The employer was merely told he could not get a small industries grant because he was in competition with others, and so on and so forth. I do not think it is good policy that there should be a recurrence of what happened in the case of the adaptation grants. There was a long history. A bakery could not get an adaptation grant. A laundry could not get one. Now, in the case of the small industries grants, a cabinet maker cannot get a grant. How many more global disqualifications are there? How many more agitations will we have to carry on to get someone who is disqualified into the category of being, at least, able to apply? Small industries giving employment and creating new jobs should get their grants.
It is legitimate to discuss the degree of failure in regard to grants. The Minister indicated on the Industrial Grants Bill that the number of failures was 10 per cent initially but, by getting some other industry to take over, the failure rate was reduced to 4 per cent. No one relishes naming particular industries here and I, for one, have always eschewed doing so. It is true, however, that in some cases where the failure rate of 10 per cent was converted into a failure rate of 4 per cent by the installation of another firm the second occupant was not nearly as important as the first from the point of view of the economy and the employment potential. The Minister, the Industrial Development Authority and An Foras Tionscal have to compromise but one can pay too high a price for compromise from the point of view of the economy and the employment capacity. In one particular instance the initial applicant would have employed male labour in the order of 400 or 500 men. The occupant who succeeded him employed girls exclusively and that in a town where female labour was quite scarce. That sort of thing militates against the Minister's statistic and the end result is not as good as it might appear to be at first sight.
We have then the case of Potez. Potez is a household name now. The four walls still stand. The position is highly unsatisfactory. I understand the Minister cannot take over the property. It would appear to me that the grant was not properly applied in this case. Sufficient safeguards were not demanded. I think some stricture should be written in so that assets would be available should production not commence or cease within a certain period. No stricture was applied in the case of Potez obviously and so the debacle goes on. I am sure the Minister and his predecessor tried to get some way out of this and I hope the efforts will continue and a way out will be found. What is done is done. There is no point in trying to make political points out of this now.
I believe the failure rate is higher than the Minister's statistic. I believe it is more unsatisfactory than the Minister's statistic would seem to prove. This is a position that could be improved by a change in the approach to the giving of grants. There is necessity for a closer appraisal than that carried out in either the Devlin or the Buchanan reports. When large grants are in question there should be a most detailed appraisal of the infra-structure of the situation so that we will know exactly where to establish the industry and what the manpower potential of the areas is.
Entry into the EEC is important in this respect. Grants should not be given to industries which might be less than viable in the EEC conditions. Employment must be long term if a grant is to be justified. Permanency of employment is most important from the point of view of risk capital and we must bear in mind at all times the likely changes which may occur on our entry into the EEC. There are two figures I should like to give the House, figures indicating our weakness as far as the manipulation of our own affairs is concerned.
We have employed in industry here 200,000 people, or 18 per cent of our labour force. In Britain 38 per cent of the labour force are employed in industry. We have here a tariff and duty situation which gave us a sort of Shangri-La. It was possible for people to negotiate wage demands in industry, not on the basis of what the community could afford but on the basis of what they could force their employer to give. He, in turn, duly applied for a higher level of tariff or a lower degree of quota on the goods which were competing with him from abroad, paid his workers and we all lived in a well-insulated, warm atmosphere.
That will no longer be the case when we go into the EEC. A very doctrinaire socialist—the Right Hon. Barbara Castle—produced in Britain, with direct regard to Britain's industrial situation if they went into the EEC, a prices and incomes policy which did not succeed. It only partially succeeded. In Britain where they could not even dream of applying for membership of the EEC there was a change over to a situation whereby, apparently, as far as industry, the balance of payments and everything else are concerned they have achieved at least a position in which they can apply. We here were insulated against that sort of exercise but we are no longer insulated because our industry will be subject to the full blast of British competition in 1975.
It is far tougher than that because it is quite clear that as tariffs are reduced a stage is reached where they do not matter any more and, again, there is a question of dumping. When goods produced here are sold the end cost includes many factors such as advertising, transport and many other costs and when proof is needed as to whether or not there is dumping this is particularly difficult. Therefore, in a situation in which there is a tariff of 10 per cent or 15 per cent on some commodities, our industrialists here will face a very severe blast of competition in 1971 and 1972. In such a situation we have got to examine our whole industrial structure and ensure that our industry prospers and that more jobs are provided. Only 4 per cent of the work force in Great Britain are engaged in agriculture. With their cheap food policy for the industrial worker it paid off to subsidise those people to bring up their incomes to something comparable to the industrial worker.
That meant that we had to export to Great Britain our butter at very much lower than cost price. When that changes and when the Common Market agricultural policy is applied to Britain, even though they will get some years to adjust themselves, our food prices will go up but not as much as in Britain because we were not insulated by the Queen's subsidies to farmers.
Our costs over the years went up more than Britain's. In 1963, for instance, Britain had an increase in costs of general consumer items of about 1¾ per cent. Ours was 2½ per cent but by the time we reached 1970 our annual increase was about 5½ per cent, whereas in Britain the increase was only 2¾ per cent. Industrially this could not be a worse situation for us at the moment because it means that our workers are all demanding more pay because they find it more difficult to live and this means that the cost of our goods in competition with British goods is at a disadvantage. However, let us look at what will happen when Britain enters the Common Market. Various pundits are putting the increased figure at anything from as high as 30 per cent to as low as 18 per cent. When food prices increase 25 per cent it is estimated and accepted in a British White Paper issued last week that there will be a wage increase of around £5 a week. The very best industrial situation for us would be if our industrial worker had fewer pound notes than the British industrial worker but was living better.
The tide has being going against us in that regard over the years, due principally to the cheap food policy in Britain, but the tide now could change and the reality of the Common Market could lead to the removal of the disadvantage under which industry now suffers.
One must consider where we are going at the moment as far as remaining competitive in the export of our goods is concerned. The Taoiseach indicated, and the Minister for Industry and Commerce in reply to questions last week clarified, that the sort of income increase that could be afforded in this country this year was 7 per cent or 30s a week, whichever was the greater. Now we have awards of 23 per cent in the case of paint workers and awards of that order are not uncommon at the moment. This means a weakening of our competitive strength and a situation in which the export of our goods becomes less significant.
We may as well face the truth about this matter. Price control, as applied by the Minister for Industry and Commerce in this regard, has not worked and I believe it is impossible for it to work. I should like to instance one experience I had of a businessman, well known to you all, whose name shall not be mentioned, who told the story about price control and when you had to buy eggs from the ladies of the parish because nobody else would buy them. You always suffered quite a severe loss on the purchase of those eggs but you could not pay them any less because they would not accept any less. It was the same with tea. When matters became so bad that you could not tolerate it any more you reduced the quality of the tea and charged the same for it. That was in the days when all the shops in Ireland mixed and blended the tea themselves. This is the story of a good, decent businessman who had to face up to realities.