I listened with some interest to Deputy Colley's speech. For a very long time he waffled about the prices position, the extent of inflation in the economy about which we all know and which did not give me any meat on which to comment. It was only in his latter remarks that he made a few points on which I would like to comment.
Deputy Colley took the Government and the Minister to task particularly for Government policy or alleged Government inactivity in regard to the off-shore oil position. He used words such as "dilatory". He believes what he describes as this inactivity of the Government to be unforgiveable. He said the Minister should take action, that he was good at talking but that it was action that was needed. It made me reflect on some fundamentals of our off-shore oil activity. The Norwegian and British Governments are at this moment physically getting oil onshore which will be of immense benefit to their balance of payments. Norway, which is a maritime nation like ours, is in the unique and privileged position of being practically entirely unaffected by the rampant economic problems affecting the world. Through the massive benefits that will accrue to them in the off-shore oil area they may well have a credit balance where most other European countries will be in very serious difficulty.
I should like to put it to Deputy Colley that it is utter nonsense for an Opposition spokesman to attempt to lecture a Government that has been in office for about 18 months on the necessity for fundamental pronouncements in an area as important as off-shore oil when the Government that had been in power for 16 years until February of last year made no official policy statement on this matter apart from the disastrous sellout to Marathon for a pittance. In fairness to Deputy Colley, there is some point in what he said about the Marathon position because, frankly, at that time this issue was not as serious as it is at present. That point is arguable but what we see happening in Norway and Britain at present is a result of long-term policy decisions made by Norwegian and British Governments going back over a decade and certainly at the most recent time five or six years ago because from the time of policy announcements of Governments, commercial enterprises taking up an initiative in the area of research and development and through these projects eventually coming on-stream takes a number of years. If we want to talk about dilatoriness, about unforgiveable inactivity, about the necessity for action and not talking and about the fact that oil is not coming in on Irish shores at present, the primary responsibility for this situation rests with the Government which we had until last year.
I agree with Deputy Colley on one thing and I see this area as being vital to our economic development. I, too, regret that we have not yet had the definitive policy of the Government in the area of licences but I know the Minister is working actively in this area and while there had been a promise that details would emerge before Christmas, I am hopeful that they will emerge very shortly in the new year. This is, of course, of vital importance. Some available statistics suggest that there is not all that much oil off our shores. My own view is that we cannot begin to assess those resources until we begin to physically tackle the job. I am hopeful looking at the Gulf Stream—and I am connected outside this House with an industry which has associations along the west coast of this country and in Scotland and in Norway—and looking at the similarities on the Continental Shelf that the deposits we will find may be more substantial than many people envisage. Should this come about for us there is immense benefit to accrue to the country so the more quickly this can happen the better.
I welcome the statement in regard to this area by the Minister and his definition of the areas in which he sees Irish participation. I agree completely with him. We are not looking for gombeen men or passive activity which might encourage multi-nationals outside the country to delude themselves that they will get privileged positions. We are looking for good Irish input. I agree with the Minister that if there are circumstances in applications for licences in which we have the right kind of Irish participation, where there will be an input and participation, then without question we should to a degree help such applications in particular.
Deputy Colley spoke about mining policy and said that the policy of his Government at the time of the introduction of tax reliefs was designed to offer attractive terms and that policy would have been stiffened at a later stage. We had the introduction of the attractive terms but there was no stiffening at a later stage and it was not until the election of the National Coalition Government that this problem was tackled. Deputy Colley, referring to that, talked about the enormous damage done by the initial announcement. I dispute that. In the mining industry experts in the Canadian mining industry actually asked why this had not happened many years earlier and they asked this at a time when the Canadian Government was tightening up incentives in Canada.
The analogy with the broader economy is patently absurd. Our country, in the midst of an economic crisis, but with stable government and a development authority, is managing to attract an identical number of jobs and the same number of companies to this country as was attracted last year. To suggest that what was done in regard to mining is ruining the good name of the country is simply absurd. For far too long we kowtowed to certain commercial interests; that might have been necessary in the earlier stages of development but it must be questioned at this level of sophistication. If a government introduces a new policy in so far as taxation is concerned that does create a problem for the Government in the short term because the Government, with a high level of unemployment, can run into very difficult situations, as it has done in this instance with large multi-national commercial interests from outside the country. The whip can be wielded and there can be attempts to suggest that, because 200 or 300 become unemployed, that reflects on the Government and Government policy should be changed. We must stand fast on issues like this. We must hold true to our principles because long-term interests are involved.
I shall deal briefly with inflation and prices. What is happening here is also happening elsewhere. A responsible British journal forecast a fortnight ago that inflation in Britain would be running between 20 per cent and 25 per cent in the not too distant future. How can this tiny country, depending to a very large degree on exports and imports, shelter herself from the winds that are blowing from outside? Deputy Colley's lecture to the world on the answer to inflation is really no answer. The monitoring of prices by the Prices Commission is probably the only option open to the Government. I am probably more pessimistic than other Members about the possibility of controlling prices because control is a two-edged weapon. As the Minister said last Sunday, it is open-ended. If we starve enterprise of profits the spin-off will be undesirable in terms of unemployment and a wholly unsatisfactory situation.
Our Minister is Minister for Industry and Commerce. Industry and commerce are two entirely different things. To the uninitiated they may appear to be related but they are not. There are two entirely different areas involved and it is questionable whether a rational assessment of Government Departments would incorporate both in the same Department. Industry is in a developmental area and commerce is in an entirely different area. Matters like prices are taking away from many of the achievements of the Minister and his Department in the developmental side of the economy.
Where redundancy is concerned, it might seem on surface judgment that redundancies are the result of the present economic situation. That is the argument of political critics certainly. The fact is that the redundancies occurring now were forecast five to ten years ago. We had a protected industry. The first change away from protection came with the free trade area agreement. Under that there were successive reductions in British tariffs and in our tariffs. On entry into the EEC the same thing happened with regard to imports from the other member states. On examination, it will be found that a very large number of redundancies are occurring in an area in which they were bound to occur, even had there been a boom. They are due to peculiar circumstances in the industrial sector rather than to world conditions. It is important that we should isolate this problem from what is regarded as the general problem.
A noted back bench Deputy in Fianna Fáil, whose speech was quoted in the newspapers, suggested we should develop completely new policies, philosophies and ideas in order to tackle health in industry and help companies in trouble. That was a lot of nonsense because there was no single, practicable, concise thought. There is a range of support such as does not exist in many other countries. There is the Industrial Development Authority, CTT with marketing support, the Institute of Industrial Research and Standards, to say nothing of support in the follow-up with long-term finance.
We have the work of the people in the county development offices. We have the county development teams. Finally, we have the rescue operations of Fóir Teoranta. If through all of that process, a company cannot find a niche and a means of producing a product, find a market and provide a reasonable level of employment, the problem does not lie with the Government. Today we are living in an era when everything is expected of the Government, when the umbrella of the Government is supposed to be all-embracing. In the area of free enterprise industry, there is a limit to which any Government can help. I would respectfully suggest that a range of incentives and facilities and sympathy exist at present.
I should like to make a few remarks about the specifics of industrial development policy. For a number of years before I became a Member of this House, I was a critic of the degree of centralisation of activity in many Government areas, and particularly in the area of industry and industrial development policy. Recently we have seen some welcome developments. There is obviously in the Department, and in the IDA in particular, a realisation of the necessity for more regional activity. We have seen the development of IDA regional offices around the country bringing a much greater awareness of the activities and the plans of the organisation to people at local level in our towns, in our chambers of commerce and in our trade unions.
That development is very desirable. I approve completely of it. We want to extend it to a certain degree. While the IDA, like Government Departments, are developing regional offices, we still have great centralisation in the sense that these offices might be termed branch offices. Until we look more fundamentally at this issue and attempt to get a higher level of local participation, there will still continue to be an undue degree of centralisation. Recently, in this House the Minister expressed his profound belief in the necessity to develop an Irish interest in industrial development and an Irish participation in manufacturing companies. What I am saying supports him, and gives some pointers as to what I believe should be done if we are to achieve this.
The industrial revolution by-passed us. We had no option in diversifying our economy from its agricultural base other than to attract industrialists from other countries to invest here. This has led to an unduly high level of ownership and technology and expertise in this area of activity rather than in the Irish-owned area. To a degree we have neglected to educate Irish interests in what industry is about. There is an analogy there with what I said a few moments ago. The very incorporation of industry and commerce in the same Department tends to make one think they are much the same thing. We have been a nation of commerce, a nation of shopkeepers, to a greater degree than the British. We overlooked the fact—and some cognisance should be taken of it—that while we have shopkeepers and merchants of substance and background and resources in our towns their kind of activity is in an entirely different area from industry. Many of these people, because of their training and background, simply do not know what industry is about and have not got the capacity, because of their lack of knowledge, to get the show on the road in this area.
I should like to suggest something in the specific area of grants. There is something lacking in the small industries' section. They are doing a very good job, but there are many projects which are never even developed on paper because of the expense involved to small companies and the lack of incentives to do something about them. It would be worthwhile to introduce grants for what I would term feasibility studies to cover a proportion of the considerable costs involved in the area of studies, work, travel, costings, prospecting for machinery, assessing markets, and in the consultancy area. The result is that many possible projects are not even developed on paper.
I know that in the IDA there is a research and development division but it is pitched largely at larger industries. In the smaller sector we should consider initiating some system of grants from which, in the judgment of the people looking at these applications, there is a reasonable chance of a useful study emerging. The possibility is that certain projects will develop as a result of such studies. At the very least the knowledge achieved by people in going through these exercises could be quite valuable.
In expending this issue of greater participation the same applies to the promotional activities of the IDA outside the country. This is the source. This is where we are going for our knowledge and for our technology. This is where we are meeting on the ground the individuals and companies who will ultimately decide on whether or not they will invest here. Other countries have arranged a supplementary type of promotional activity from regions, from chambers of commerce and from local authorities. Views on this matter tend to differ. It is my considered view that such work supplements to a considerable degree the work being done very well by IDA representatives abroad.
I say that for a number of reasons. The work of the IDA people is national. It is not their role to be discriminatory or to express preferences for regions. If you have the right kind of people who are sufficiently articulate and know what they are talking about visiting France, Germany or Britain, I would argue that provided the liaison is satisfactory—and, of course, this is very important—the role they are performing will be supportive and will possibly lead to projects coming to this country which otherwise might not come here. In addition, at the very least it will increase the level of self-confidence and the amount of knowledge which will be brought back into the commercial area and into the local authority field as a result of such visits.
This is part of the more fundamental regional participation in this area which I believe to be desirable. If we look at the chambers of commerce structure on the Continent of Europe and compare it with this country, we find that they are much more powerful organisations which are funded to a degree by municipal taxation. One of the problems here is that the umbrella of the State is so pervasive, and so powerful, and is controlling such large sectors of the economy, that private enterprise and its representation, especially in the provinces, is a very weak animal in comparison.
Some thought should be given to this. In the past we had, perhaps, too many instances of people in Irish towns being overawed by visiting German, American and Japanese industrialists. If we think a little bit more fundamentally of what needs to be done if we are to get greater participation by Irish commercial enterprises and by our chambers of commerce, we find that we need to take certain decisions along the areas I have spelled out.
That is not in any sense taking away from the activities of the Government, and the IDA in particular which have been enormously successful. At present, in difficult circumstances, the IDA are managing to attract a very high number of industrial projects to the country, many of them of very good quality. Whilst we have problems in our economy they are only a fraction of the problems we would have if the level of investment in the country dried up. One of the staggering successes of the country in the past year has been the extraordinary increase in the level of exports. In 1973 exports were running at a level of £869 million of which industry accounted for £552 million, an increase of 34 per cent. Exports at present are running at a level of more than £1,000 million. This is of tremendous significance and we tend to underestimate it. If there was not this buoyancy in this particular sector as a result of investment over the last two years the problems which we have would be much greater.
Until recently there was discontent in many parts of the provinces because of the imbalance in development. Happily, the position now is much better. In County Mayo we have some major projects planned such as Asahi in Ballina who are talking about employing close on 2,000 people over the next five years. This is a welcome development in an area suffering from the haemorrhage of emigration, an area which in terms of farm sizes and farm structures and per capita income has had a harrowing history. Many of us have held the view that the only answer in the long term to this is to build up our better towns and improve the quality of life in them taking into account the recognition around the world of the assets we have, our lakes and close proximity to the sea. The wheel has now almost turned full circle to the degree where it is at last appearing to be an attractive area in addition to being economically desirable to site industries in such locations. This development is welcome and the Members from that part of the country are committed to give the Minister full support in this work.
However, I should like to refer to one aspect of incentives to industry. I referred to this on a number of occasions but it never saw the light of day in the form of print. The matter I should like to refer to is the range of incentives and supposed additional incentives for the designated areas against those for the undesignated areas. There may be reasons for the present policy but I should like to make some qualified criticism of it. My criticism is in relation to the level of industrial development in Dublin. I hasten to add that I am not saying this in an unduly sectional sense. I have always attempted to be national in my comments in this House. One of the topics in recent years has been the imbalance of population, the extent to which Dublin is growing, the massive population in that city, the problems it is creating in the area of infrastructure and the denuding of the population in the country. This has been recognised to a degree in the incentives offered to manufacturing industry. It has become fashionable to say the incentives being offered to the designated are greater than those offered for undesignated areas and to say that the Government's policy is to hold the level of population in Dublin to its natural level of increase and not to offer any incentives to manufacturing industry in Dublin.
There are a range of incentives offered to manufacturing industry but if we are talking about the major ones we are talking about two; the cash grant and the complete relief of taxation on export scales. It is unfortunate that in the press, reports emanating from the IDA, and in speeches by Ministers we hear too much about the grants which have been given, the lumps of money which are physical and to which people respond. To many people who do not know about finance this is real money. However, we tend not to be commenting sufficiently on the tax incentives and on the fact that many of the better companies who do not have a liquidity problem and who are assessing their investment entirely on a return for investment basis forego the advantages of the grant and establish their industries in Dublin because of the tax relief on export sales.
It may be argued by the Government that this is valid and that we should encourage industry in Dublin to increase. When we read the annual reports of the IDA we read of what are known as "job approvals". What does the term mean? I think the terminology means that these are jobs sanctioned by the IDA for industrial grants but I do not think in their tabulation of industrial development they tabulate industrial development in the economy at large. Many industrial jobs are being created entirely outside the area of the grants given by the IDA. The proof of that is that 12 months ago when I wanted to check this matter out I found that about half of the jobs in manufacturing industry are still in Dublin. This is after a generation of policy to get jobs into the provinces. Therefore, when we talk about "job approvals" we are talking about jobs which have been approved for Government grants but we are not talking about the total creation of jobs in the country.
Obviously, the work of the Government, and the IDA, in their promotional activities abroad is all-embracing and covers the totality of industrial development. To a degree they are responsible for this development in Dublin as much as in the rest of the country. In my view the statistics we are given should show us the fullest level of development that is talking place, whether they are jobs which are termed "job approvals" or not.
Statements about attempting to hold Dublin to its present level of development are factually incorrect. The IDA do not hold responsibility for this position. It is the Government who bear the responsibility. As long as the Government offer complete relief of taxation on export sales in Dublin they are offering substantial incentives to such industrial development. We should think this out. If the Government consider it necessary that should be Government policy, we should face these facts and not use euphemisms or subterfuges to suggest something else.
There are many people in Dublin who would agree with me and who want to contain the level of development in Dublin. What I should like to see happening is a review of the position where the export sales tax relief is concerned in Dublin because at present the transport disadvantage in the south and south west militates so much against them there may be nothing in it in the end. It is my view that we are reaching the stage where we should consider scrapping the tax relief on export sales of manufacturing companies established henceforth in Dublin. Then we are being serious about statements about containing Dublin to its natural level of growth. But, unless we do that, we must stop this nonsense we are talking about. I want to temper my statement by saying that in regard to companies that have been established to date and to which successive Governments have made commitments in the tax area we should, of course, honour those commitments. For the full tenure within which companies which have started up to the present are in a position to avail of those incentives, we should, of course, continue to honour that contract. It is a fundamental point and one which I believe should be given some consideration.
Looking at the IDA report, it is heartening to see that they take the view—and, presumably, they have taken it after a certain amount of consideration, a view which many of us had at a surface level—that Ireland still retains significant cost advantages over her European competitors. In these depressing time it is important to say that and to say it again. Despite the gloom, despite the problems—inflation and its resultant problems for the nation—it is a relative thing. It is a reality. But the reality also is that this tiger is eating up Britain, Germany, France, Italy, Belgium, Holland, the United States and Japan as well as our country. Therefore, at least there is this to say for it, as the IDA have expressed in good language, we still retain significant cost advantages over our European competitors. Anybody who has travelled outside the country in the past year or two comes back horrified at the level of prices in cities and towns outside the country. It is important to bear that in mind because it is one of the reasons why there is still buoyancy in the industrial sector and, unless the world economy collapses, we can continue to expect such buoyancy to continue.
Another fundamental matter which should be looked at—and there has been some comment from some semi-State sectors—is the totality of employment not merely in industry but in the services sector as well. We have had the policy of encouraging industrial development, by grant, but we have ignored completely the services sector which has expanded terrifically, without control. I am not certain whether or not there should be control. I take the view that we should look at the position in Britain at present where, in addition to attempting to get industry moving into the provinces, they are making an attempt to get the services sector out of London and into the provinces also. They are doing this by the provision of a range of incentives in that area. I believe it is something we should examine.
The last point I want to make relates to the problems Irish industry is experiencing and the redundancies problem. I think I could compliment —as would many others in this House—Telefís Éireann on one or two recent programmes on "7 Days" about the redundancy issue and on the extent to which they spelt out the necessity to buy Irish products. To a degree we have been living in a fool's paradise here, a small, relatively underdeveloped country, placed geographically between two of the wealthiest countries in the world, the United States and Britain, countries with which we have strong ethnic associations and the continual comparison of incomes, aspirations and job opportunities which is damn nonsense. But, when the chips are down, the necessity to buy Irish—if the article is reasonable and can, in any sense, compare with its imported counterpart—is more important at present than ever. To a degree we have been living in what might be termed a fool's paradise. Without question—if we could instil the urgency of this matter, the extent to which jobs could be saved and created by buying Irish—our people could help solve this problem to a very substantial degree.
I should like to compliment the Minister on his introductory speech and wish him well in the running of a most important Department during the coming year.
