Dáil Éireann debate -
Thursday, 3 Jul 1975

Vol. 283 No. 3

Industrial Development Bill, 1975: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Cunningham

I welcome this Bill which is necessary and desirable for the continuation of the work of the IDA. However, I should like to pose a few questions to the Minister which could have the effect of making the provisions of the Bill more effective and eliminating problems for industrialists, and others who may be availing of the extended financial provisions. I should like to know if the Minister's attitude towards imports will be helpful to industrialists wishing to expand or establish new projects. Will the attitude of the Minister towards imports encourage outsiders to establish industries here? These people should be aware of the intentions of the Minister in this regard. They should be made aware if full protection is to be given to them in order to protect their investment, production and sales against imports. Imports of the dumping type should be stopped.

I do not think the provisions of this Bill will be effective if the present state of affairs is allowed to continue. During the last 18 months we alleged that dumping activities were taking place and we alleged that no action was being taken in this regard. We told the Minister of the procedures he could adopt, but the Minister told us that it is not within his powers or those of the Government due to our membership of the EEC to do what we were suggesting in spite of the fact that the other members of the EEC took measures which benefited their economy, their industrial development and their balance of payments. It is 12 months since we raised the question of the textile industry. I assume that some of the finance sought in this Bill will go towards helping this industry.

My interest is in the shirt manufacturing end of this industry. The Minister said that he was having problems in relation to that industry investigated, that officials from the EEC had visited this country and that he was keeping an eye on the situation. However, nothing has transpired. I asked if the abolition of VAT on textiles applied to imported textiles as well as home manufactured goods and I was told by the Minister for Finance that it did. In other words, the people who may wish to avail of the provisions of this Bill can say that the Minister for Finance and the Government have given the same reduction of VAT to imported textiles. They have given this facility to textiles imported from Korea or Thailand. I accept that the Minister for Industry and Commerce made an effort to eliminate the problem in regard to imported textiles, but I should like to quote for him an article in an issue of The Evening Herald under the heading: “Shoe Industry If For EEC Review”:

EEC Commissioner Mr. Albert Borschette said at a news conference at Dublin Airport today that the Minister for Industry and Commerce had raised the situation in the shoe industry and the textile industry in discussions with him.

"We have examined possible solutions", said Mr. Borschette. He pointed out, however, that as the EEC Commission had only looked at the problem for the first time last Wednesday, he could not say at this stage what final decisions would be reached.

This is an alarming statement. For a year Members on this side of the House protested and were given promises by the Minister.

Minister for Industry and Commerce (Mr. Keating)

Deliberately misquoting as usual.

Mr. Cunningham

Is the Minister accusing me or The Evening Herald?

Mr. Keating

I am accusing the Deputy of deliberately misquoting.

Mr. Cunningham

Is the Minister accusing me of deliberately misquoting The Evening Herald?

Mr. Keating

I am accusing the Deputy of deliberately misquoting the contents. The Deputy knows that Mr. Borschette was not talking about the whole year's proceeding. The Deputy knows that he was talking about the immediate initiative. He knows that and he is deliberately misquoting it.

Mr. Cunningham

I only know what The Evening Herald printed.

Mr. Keating

In normal circumstances that is illuminated by intelligence or by a will to understand, but in this case it is illuminated by a will to misunderstand.

Mr. Cunningham

Perhaps the Minister, when replying, will refer to his disagreement with what I am saying.

Mr. Keating

I have no disagreement with what Mr. Borschette is saying; I am disagreeing with what the Deputy is saying.

Mr. Cunningham

Does the Minister not agree that the situation as outlined is a factual one?

Mr. Keating

The Deputy is deliberately confusing two things.

Mr. Brennan

The Evening Herald said that the Irish problem in relation to imports affecting the textile and footwear industries was only taken up by them the previous Wednesday.

Mr. Keating

There is a deliberate confusion of separate issues.

Mr. Brennan

Why was the approach not made sooner?

Mr. Keating

It was. This is a separate initiative, as Deputy Cunningham knows perfectly well.

Mr. Cunningham

I know that the Minister will explain these things when he is replying but I have not got the expert knowledge which the Minister has and has available to him. I am genuinely interested in this. I am not trying to put the Minister in a spot. I am referring to a problem which we have discussed in this House over the last 12 months. I prefaced my remarks by saying that the Minister made statements which I believe. When he indicates that before the end of last year officials of the EEC were in this country actively engaged in this I accept that. I appreciate that there may be several stages of progress towards this situation. The reason I am quoting this is to get the Minister's explanation of why Mr. Borschette said that it was only on Wednesday last that something had reached somewhere.

Mr. Keating

Because it was only raised a few days before. He is referring to a particular initiative.

Mr. Cunningham

He said:

We have examined possible solutions.

That is Mr. Borschette and the Minister. The report continues:

He pointed out, however, that as the EEC Commission had only looked at the problem for the first time last Wednesday, he could not say at this stage what final decisions would be reached.

I would like to know if outside the Commission any solutions have been reached on previous approaches by the Minister. I admit I am not terribly au fait with the nitty gritty finer points of EEC regulations. I would be glad if the Minister would put this statement in context. Was Mr. Borschette referring to the whole problem or some aspect of the problem of the footwear and textile industries? If, after the Minister's efforts over the last 12 months, the end result is that there is nothing taxwise, quotawise or dumpingwise the Minister can do he had better say so. Our textile industry is suffering. I will not repeat points made here over the last 12 months.

I want also to raise the point of development in western areas. I know that the regulations of the IDA provide for extra grants in western areas. In this context I would urge that the Minister take into consideration the very special problems in counties like my own county of Donegal. We have additional problems due to the troubles across the border. This has affected industrial development in counties contiguous to the border. Would the Minister consider providing special grants and facilities for industrialists who set up in those areas? The unemployment figures are alarming and new industries are badly needed. I would also like to know whether any of the regional fund will be added to the sum provided here for projects in the western areas.

Mr. Keating

What I have to say will be a little disjointed, because I will take points in the order in which they were made.

This is a Bill which increases from £350,000 to £850,000 the amount of money which the IDA can expend without clearance from the Government. That is its sole purpose. It is an extremely brief and concise Bill, and while I will make some reply on wider points that were mentioned I would like to indicate to the House that while the other estimates have been passed in the very recent past my own is before the House. Apart from my own estimate I have indicated further IDA legislation in the near future, and we also have the debate currently going on on the Government's package of economic measures to which some of these wider issues would be more appropriate. I would also like to remind Deputies, especially people like Deputy Brennan who held ministerial office, that it is not appropriate for one Minister to comment on the area of responsibility of another.

There are some points which are general to a number of speakers. Fundamental questions were raised about State participation by way of equity. Two Deputies seemed to be under the impression that new legislation would be required. That is not the case. Equity participation is within the powers of the IDA and is something they practise. This participation sometimes takes place by the appointment of a director.

Mr. Brennan

The Minister will agree that this is more in relation to the Industrial Credit Corporation. They give supplementary assistance.

Mr. Keating

I am referring to the IDA. There may be a genuine misapprehension on the part of two Deputies in regard to their powers. The Industrial Development Act, 1969, reads as follows in section 44:

Where, in the opinion of the Authority, an industrial undertaking conforms to the requirements of sections 33 (3) and 34 (3) of this Act, the Authority may out of funds at its disposal purchase or take shares in the body corporate owning, controlling or managing the undertaking.

One former Minister and a Deputy made that point, not appreciating the actual situation.

A number of people talked about co-ordination of State agencies of which there are a number in my Department and a number in other Departments but which must necessarily cooperate with those in my Department in the course of the development of the economy. This raises fundamental questions which are more appropriate elsewhere. Co-ordination is essential but pushing together of separate bodies is not essential and is counterproductive. We have developed interesting organisations of a flexible and valuable kind. They are a part of devolution. The IDA are referred to in this Bill. They are able to call on a wider sector of the community than the elected representatives, and these people can participate in some of the decision-making in regard to the State's role in the economy. The real purpose of this Bill is to increase the level of that decision-making. We have increased the amount of money that it is possible for them to give. If there is not serious devolution to the IDA and serious power of a financial kind, serious people will not be interested. Such a body can only be really good if they have real power and are let use it.

This seems to be one of the arguments for keeping up-to-date in money terms and keeping ahead of inflation. Co-ordination is real and important. Any good executive will defend his own area of responsibility and strive to increase it. That is a virtue in a person. A little constructive conflict can be fruitful. We should not try to eliminate it. We should not eliminate all boundary difficulties between different organisations. Organisations can be spurred on to greater efforts. If we put them together we take away their separate initiative. The organisation then becomes big, cumbersome and bureaucratic. I know that Deputies were not suggesting that we put all semi-State bodies together. Conflicts occur but as a result of my limited experience over the past two years in office these conflicts are few. My Department is the co-ordinating body of many organisations. Many people in charge of bodies working under my Department have regular access to me in order to discuss matters and they certainly have access to me any time they deem it necessary. Part of the role of a Minister in my Department is to be watching the co-ordination aspect and to see that disputes do not get out of hand. He must see that there is not fruitless conflict or duplication.

In the future we might hear from Deputies whether they want fundamental reorganisation of such bodies or whether they just feel that the existing mechanisms can operate provided there is continuous surveillance. I find that the existing mechanisms, each functioning in a separate area such as training, industrial, export promotion or the promotion of design, are working well. Single organisations should not have separate tasks. There should be a correlation between the structure itself and the job it has to do. If too many jobs are put into a single organisation situations can arise which annoy politicians and the public at large.

Deputy Brennan talked about the manpower service and AnCO and the IMI which all come within the Department of Labour. I suspect that Deputy Brennan knows that the telephone service comes under the Department of Posts and Telegraphs.

Mr. Brennan

I am painfully aware of that.

Mr. Keating

If I do not comment on those observations it is because I wish to remain in order. It was inquired by Deputy W. Ryan that in regard to SFADCO—which he looked on as an agent of the IDA although I understand the relationship is much more equal—if there was any intention to develop the core of the SFADCO area to the detriment of the periphery of that area. I can assure him that is definitely not so.

In the matter of industrial development one functions in a real situation. One can help something to happen but when one is dealing with overseas investment one cannot say "You must go there". You can coax them there, but a degree of choice and freedom must remain to those who come in to invest.

Some Deputies such as Deputies Connolly, Staunton and Enright referred to the particular regions of North Tipperary and Laois-Offaly and a particular piece of Mayo around Westport. I want to put on the record of the House that the people with the first claim to help are those who live where the need is greatest. That is all there is to it. The definition of greatness of need is made on an economic and sociological basis. The only way to order the priorities is to say what has been the evolution of population, industry and income and what has happened about emigration. I will not permit any other guidelines than those objective ones of an economic and sociological kind.

Mr. Wilson

Good for you.

Mr. Keating

That does mean that one can make objective lists about the greatness of need. Many Deputies could have spoken about every constituency in this country. It was appropriate in the sense that this sort of objective criteria I am talking about—economic and sociological—tend uniquely to pick out these areas as being disadvantaged. They are disadvantaged but there are others as well. I can only say —and I say it at a time when the available jobs we would like to create are fewer in a world recession than we would like and when we have to work, particularly with incoming industrialists, on a basis of persuasion and urging and not of ordering—that the guidelines are objective, that even at the risk of annoying people, which I have done, I will not permit political distortions of those guidelines. They will be and they are and they have been objective guidelines worked out statistically on the sort of criteria I have said. All that people need to know if they want to be sure that they are at the top of the IDA or SFADCO lists is that they are the most disadvantaged. That is all that is required, and I do assure the House that the mechanism works that way.

Mr. Brennan

On that criteria the nuclear energy station would be in Donegal.

Mr. G. Collins

That is an ongoing situation.

Mr. Keating

I pointed out earlier that the Deputy had ranged over a large number of Departments. He has now added the Department of Transport and Power.

Mr. G. Collins

He is expressing confidence in the Minister.

Mr. Keating

I thought Deputy Seán Moore made an interesting point because he talked about the sociological effects and the effect on the whole environment of the establishment of a new industry and about the need to study when an industry was put down in a certain place not just what it did to industrial jobs there but what it did to the whole fabric of life there. That is an approach and an attitude that appealed to me very much and with which I very much agree. I would want to assure him— and he made the point in regard to Dublin—that in many of the larger cities of the world we are seeing a process—it is a cliche to call it alienation but that is what it is—a process of social disruption. It is very important to analyse what industrial development does to the fabric both of cities and of the countryside.

I do not want to talk about it in detail, but a commendable voluntary body is very much concerned particularly with Dublin city. It is right that I should say that in my opinion the Economic and Social Research Institute bridges those aspects; it is economic but it is social as well. As I understand their work, they do not like a deep cleavage between what is sociological and what is economic. They see these as inter-penetrating. They are very good indeed as an institute. They are not people in my Department. They are not, indeed, people who, apart from reading what they do, I have had any formal contact with since becoming a Minister, but on the basis of what I hear about them out of Ireland and what I read about what they produce, they are people who are able to stand comparison with any comparable institute in the world. They are available to us. They are very good. It is right that we should use them very fully in looking at the sociological aspects as well and we should affirm their importance. It is right, if there is a consensus in the House, that we should express the view which I believe expresses a consensus in the House that in industrial development their research facilities and their past work should be drawn on, not just at Government level but at local level too because there is very little joy, we could agree, in developing industrial jobs even with good employment and high salaries and high wages if in the course of doing it we tear apart the fabric of the country and the culture of the country which is very precious to us.

Mr. Wilson

How much of their work is commissioned or what is the procedure of commissioning their work? Do the Government commission most of their work?

Mr. Keating

I believe there are three sources. One is requests from State sources. Another is requests from outside sources. The third is the generation of policy. When I say policy I mean the generation of areas themselves which need to be looked at. I think there are those three.

Mr. Wilson

Do they do anything at local rather than national level?

Mr. Keating

Yes. Some of the work is directed to the one good book, in fact, that is now some years out of date but to local influences and to comparing the effects of industrialisation in specific societies.

Mr. Brennan

Without in any way deriding the important work of the ESRI, they did find themselves in conflict on major pronouncements in relation to the economy with the Central Bank. I am afraid the Central Bank turned out to be the more accurate forecaster.

Mr. Keating

I am neither surprised nor disappointed at this. If you have valid academic people with a sense of liberty they may often disagree with other bodies. Indeed, it is a little depressing for politicians trying to get good economic advice that economists of the very highest quality all over the world are continuously producing opposite economic diagnoses. This is often difficult when you have to decide between conflicting advice from able and honourable people. It does not surprise me that this should happen.

The point was made, which I referred to earlier, by Deputy Cunningham about the right to take an interest in and to have a director on the board of the IDA. This is important. It is something that could be strengthened, and I have indicated that thought to them in the past but I quoted and put on the record the section of the 1969 Act which makes that possible.

Deputy Staunton raised a point which comes back to this matter of democracy, as to whether the transfer from £350,000 to £850,000 was not going too high. In other words, were we moving the powers of decision too much away from the Government and too much to the authority of the IDA. There are two replies to be made to that. First—I say this with regret but it is the case—if you adjust for things like certain sorts of labour costs or certain sorts of material or certain sorts of charges from 1969 to now, if you take 1969 as base year and apply the increase to £350,000 you do not get to £850,000 but you get to fairly close to it. So that we are not going very far from the reality which obtained in 1969 at £350,000.

The second thought that I want to reiterate is that I believe that while a bit of centralisation and centralisation away from Dublin and to Brussels and things like that is inevitable it is only tolerable if we structure the movement in the opposite direction as well and if we push away from the centre. People who serve on State boards do it for very little money and give a lot of time to it and they are in fact benefactors in that sense, bringing expertise to the service of the State which if they wanted to sell it elsewhere they could get a great deal of money for it. If we want to get good people willing to do that we have to give them real power. I believe we do want good people. We want that sort of devolution. I had a doubt between £850,000 and £1 million. It was in my own mind quite a narrow thing as to whether the limit should not be a little higher. I certainly do not think it is too high.

Deputy Cunningham asked me a number of questions. I was foolish enough to reply to them because I doubt that they are relevant to the Bill. Since I did so it is proper that I should clarify one thing. He quoted an interview with Commissioner Borschette in the evening paper. The particular sentence was relating to what was called "the problem". M. Borschette was quoted as saying the commission had only looked at "the problem" for the first time. Deputy Gallagher was taking "the problem" there used to mean the problem of the textile and footwear industries in Ireland. To say that the commission had only looked at that for the first time is nonsense. They have been looking at it at my instigation since November in individual cases and December of last year. I want to say that the problem was not the general problem of the difficulties in these industries but the particular problem they are now faced with and how they will respond. I have not stopped trying to get some satisfaction. It was to that particular very recent initiative the Deputy was referring and not the general problem. The problems of the Irish textile and footwear industries have been considered. This is simply for clarification, though it is not strictly in order. Within the limits of the Bill, I have tried to answer the points raised by Deputies.

Mr. Brennan

On the question of participation instead of free grants, there is provision in existing legislation, but what I am anxious to know is whether the Minister might not go entirely for participation in major legislative changes. He may not be prepared to show his hand.

Mr. Keating

I am not ready to show my hand but I would agree in a general sense with what the Deputy says. I am also a great believer in maximum flexibility, and there would be instances where the grant mechanism would be the only one that would work and instances where participation mechanisation would be better. I do not want to anticipate.

Mr. Brennan

With the indulgence of the Chair, we are giving the Minister all Stages and the Chair stopped me in my tracks when others were allowed to ramble on when I was trying to make the point that much of the funds given to the IDA may be used for other purposes, such as developing an infra-structure in undeveloped areas. I do not want the Minister to comment, but this is very important where the west is concerned.

Mr. Keating

It is a matter for examination and deep thought.

Question put and agreed to.

Agreed to take remaining Stages today.