I move: "That the Bill be now read a Second Time."
Before proceeding to the detailed provisions of the Bill, I feel I should make some general comment to place these proposals in perspective.
My responsibility as Minister for Industry and Commerce relates to the industrial development and housing activities of the Shannon Free Airport Development Company Limited and any other function it may carry out except those concerned with tourism and aviation which are within the province of the Minister for Transport and Power.
Some time ago, in connection with the overall review of the whole industrialisation programme, my predecessor announced that the company would function as an organ of industrial development within the Limerick-Clare-North Tipperary region—known as the mid-west region—having due regard to the overall national responsibilities assigned to the Industrial Development Authority.
This decision was intended to satisfy within the area a need that exists for services to assist industrial development at regional level. The services to be provided by the company will, I hope, assist the redevelopment and expansion of existing industry; bring about better co-operation and use of initiative by local and regional groups and stimulate linkage and mutual customer relationships between existing and new industries and services. The company will also have the task of increasing the effectiveness of the facilities being provided for development of small industry.
The mid-west region is important as a key location in the west of Ireland, capable of development to a degree which would counter-balance the attractions of the eastern area for people and for business enterprises. Limerick-Shannon has already a considerable industrial base that is suitable for planned expansion so as to stimulate and create opportunities for enterprise and employment in the region and contribute to the reduction of emigration and the improvement of social conditions in the whole area.
The proven expertise of the Shannon Free Airport Development Company Limited in the promotion and development of industry and amenity should be a great asset to the mid-west. SFADCO was incorporated as a limited liability company in 1959. Its functions are as authorised by its memorandum and articles and the State is the sole shareholder. Consequently the Acts relating to the company from 1959 onwards merely authorise the appropriate Minister to grant sums for specified current uses and the issue of share capital and repayable advances by the Minister for Finance for capital purposes. This practice is followed in the present Bill.
The objectives adopted by the company in 1959 were related to the safeguarding of the airport and its employment potential and were in short:—
(i) to develop an industrial estate alongside the airport for industries oriented towards air freight;
(ii) to develop warehousing facilities to encourage carriers to use the airport as a break-bulk centre;
(iii) to promote Shannon as a point of entry for tourists to Ireland, particularly to western areas, and to develop and encourage commercial and passenger air services to and through the airport.
The success, which has resulted from efforts generated largely by the company, is such that it is now possible to change the aim from that of maintaining an airport to using it as a major asset in regional economic development.
The achievements of the company in the development of an industrial estate have attracted attention internationally as well as given us encouragement at home. At a recent date, over 4,500 workers were employed on the estate and these comprised about 2,900 men and 1,600 women.
The staff of the company itself, plus those employed at the airport, in community services, construction and other activities, accounted for the employment of a further 2,360. At the moment there are 30 manufacturing firms from six countries, including Ireland, on the industrial estate and 17 servicing and warehousing concerns. The net balance of trade arising from the industrial estate, exports less imports, was over £13 million in 1969 as compared with less than £3 million in 1964. Industrial exports from the estate are about 20 per cent of national industrial exports. Up to the present capital expenditure by the company on industry and tourism is about £6½ million of which about 90 per cent has been spent on the industrial estate at the airport, about 9 per cent on industry in the region and 1 per cent on tourist amenities. In addition, something over £5 million has been expended on housing and on the creation of a Shannon community.
The capital expenditure in so far as it relates to industry and tourism has been met out of share capital subscribed by the Minister for Finance and in so far as it relates to housing out of repayable advances made by the Minister for Finance and housing grants made by me. In addition, the company receives grants-in-aid which are used to meet industrial, including training and equipment, grants at the airport and the company's running expenses. The total amount of grant-in-aid issued to the company up to March 31st, 1970, is about £4½ million and this can be broken down roughly to £2½ million for grants to industries and £2 million for the running expenses of the company. In the selection of projects for the airport, the company has placed emphasis on the provision of worthwhile skilled employment, the maintenance of a proper balance between male and female workers, aiming towards 60 per cent male employment, and diversification of industry. This policy, despite the few inevitable setbacks, has maintained the overall stability of employment at the airport.
The achievement by the Shannon Company of an average of 450 new jobs a year has been due in no small part to the customs-free facilities and special tax concessions made available at the airport. The company has also been aided by the very significant investment in infrastructure and housing. But the expertise and dedication of the management and staff has been a major factor in getting good results from whatever natural advantages were at their disposal. I take this occasion and opportunity of complimenting the company and its team on their enthusiasm for the job in hand and on maintaining a consistently high level of achievement.
The company has recognised that an integral part of the programme to develop an industrial estate at Shannon was the establishment of a strong resident community near the estate. Because of the industrial development proposals for the remainder of the region, and the large commuter element in Shannon's work force, this objective has now assumed increased importance. As the population expands, every effort is being made within the limits of the company's resources to provide essential facilities appropriate to the nature and size of the community. Apart from the State investment of £5 million in housing and community services, already mentioned, there has been a private investment estimated at £½ million. Speculative builders are already operating successfully at Shannon Airport and the company hopes shortly to complete negotiations with a property developer in relation to town centre developments. The company's present house building programme is designed to reach a population level of 6,000 by March, 1974. This is an achievable target on the basis of the current annual rate of construction. There were at a recent date 877 completed company houses and 187 under construction at the airport to which private enterprise had added 66 completed houses and 34 under construction. The Shannon town population now exceeds 3,000 persons and its natural growth plus the expected influx should reach the set targets in due time.
Planning for Shannon must, of course, now be related to industrial planning for the region as a whole. The company, with the full co-operation of the local authorities and of the regional development organisation, has already published a regional plan which represents its thinking on optimum development for industry and related matters in the region. The publication of this plan was intended to stimulate comment on its implications. I understand that, following up-dating and examination of its capital budgeting, revisions in the plan will be made by the company from year to year.
Certain action in the region does not have to await this detailed planning. Work has started at two industrial locations in Limerick city and a factory has been constructed for Scanglo Ltd. to establish an engineering operation at Newcastlewest. The company's promotional work in attracting industry and in stimulating local initiatives in the region is, of course, a continuing process.
The construction of factories and the attraction of firms forms only a part of the industrialisation drive. Attention to the physical and social environment within which industry and workers must operate and to the provision of infrastructure is also essential. Coordinated action by many bodies at local, regional and national levels is required before the company's efforts can bear fruit. The co-operation forthcoming in the mid-west region is encouraging.
The major new provision in this Bill is set out in section 2 which enables me, as Minister, to issue grants to the company for industrial promotional work in the region. It includes a reference to the fact that regional activities are undertaken having regard to the general functions of the Industrial Development Authority.
The company's existing powers in relation to industry at the airport will not be diminished or otherwise affected by the Bill.
Sections 3 and 4 make it clear that industrial incentives in the region outside the airport will be payable by the Industrial Development Authority although the authority may delegate to the company powers to approve grants or other financial facilities in respect of industries in the region.
Section 5, 6 and 7 are designed to make it clear, in the first place, that the conditions on which State finance has been provided for the erection and subsidisation of dwellings at the airport do not oblige the company to confine lettings to persons employed in the industrial estate and, in particular, do not imply that the widows and dependants of such persons or an unemployed worker cannot continue as tenants. It had not, of course, been the policy of the company in the past to take such a strict view of their powers but the sections mentioned are deemed necessary to remove any doubts or anxieties which may exist.
The conditions on which capital grants for housing were made to the company were related to general housing legislation and the payment of grants thereunder as it stood in 1963. Sections 6 and 7 also provide a necessary up-dating in the 1963 terminology to take account of revisions in the Housing Acts. The effect, briefly, is to continue to make available to the company the housing grants and repayable advances in the manner to which it has heretofore been entitled.
Previous legislation has set out the maximum amounts of financing which may be made available to the company under various heads for periods of about three years at a time. The Act of 1968 made provision for the period up to about 31st March, 1971, on the basis of the company's then existing responsibilities. It was intended that any developments in the company's ex-additional financial arrangements for tended area of operations would be provided for in subsequent legislation.
It is now necessary to extend the relevant maxima so as to provide for the financing of the company's regional industrial promotion, including the erection of factories for sale or rent as may be deemed appropriate in places in the region outside the airport. It is intended in this Bill to provide for all the activities of the company in the period up to about March, 1973.
The maximum amount which the Minister for Finance may subscribe in taking up shares of the company is at present fixed at £8 million and section 8 of this Bill provides for an increase of £9 million in the amount of such share capital which is used mainly for the provision of factories and ancillary works.
Section 9 relates to the maximum amount of grants which may be provided to meet the running expenses of the company in respect of its activities at the airport and in the region, and to enable the company to give grants and other assistance to manufacturing industry at the airport.
The total amount of grant-in-aid which may be made by the Minister for Industry and Commerce, or in respect of tourism and aviation activities by the Minister for Transport and Power, is being increased from £6 million to £10 million. In this connection, I should explain that a substantial part of the company's running expenses arises from tourism promotion and that this is now met by a special grant-in-aid for which the Minister for Transport and Power is accountable but which, nevertheless, comes within the overall limitation in section 9 of this Bill.
Section 10 of the Bill relates to repayable advances by the Minister for Finance to the company in relation to the provision of houses and community services at the airport. The aggregate of such advances is being increased by £3 million from the existing limit of £7 million to £10 million.
In regard to section 11 my predecessor was advised at the time of the making of Statutory Instrument No. 219 of 1968, which transferred to my Department the ministerial functions in relation to the activities of the company, other than tourism and aviation, that the relevant portions of the Ministers and Secretaries Acts do not clearly avail to adapt the principal Act in the manner necessary to achieve the desired transfer of consequential functions. Accordingly, section 11 is designed to clarify the manner in which certain formal matters relating to the reports and accounts of the company and to approval of pension schemes shall be carried out.
The remaining sections of the Bill are self-explanatory and are in the usual form; they relate to the date of commencement, meeting expenses out of voted moneys and legal citations.
It is my intention to bring these provisions into operation by Order very shortly after their enactment since the company is already engaged in regional work in anticipation of the necessary legislative approval.
I have no doubt that the House will agree with me as to the suitability of the company as an active agent in industrial promotion on a regional basis and in setting guidelines for regional expansion and co-operation in this country. I have no hesitation in recommending this measure to the House as one which will produce tangible benefits in terms of standard of living, reduction in emigration, and improved living conditions generally, not alone directly in the mid-west region but, by its influence and example, throughout the whole country.