Deputy O'Donnell is in possession.
Industrial Development Bill, 1977: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time."
Would the Chair allow me to interrupt for a moment to give me an opportunity to correct a figure I gave when speaking on this Bill last week? I gave a figure in regard to unreclaimed land which I said at the time seemed incredible. I have since checked this figure and it was, of course, wrong. The correct figure given by the director of the Agricultural Institute was 750,000 unreclaimed acres in the counties of Galway and Roscommon.
When we last discussed this Bill I referred to the magnitude of the problem of creating full employment which we are facing at present. Looked at superficially this Bill might appear to be a non-controversial measure. It is substantially the same as the Regional Bill introduced last May by the Minister's predecessor. The Bill is designed to give obvious and very necessary additional powers to the IDA to enable the authority to accelerate industrial job creation. The Bill is more significant than the measures contained in it. Its real significance lies in the fact that the IDA are the main job creation agency in this State and on them will fall the main brunt of meeting the challenge of creating full employment in the years ahead. To analyse the Bill one has to look at this legislation against a background which contains two very important component parts. First, we have a situation where we have a growing population, an increasing labour force and no emigration. Second, we have to analyse and assess this Bill against the background of the Fianna Fáil election manifesto.
In that manifesto under the heading of "Industry and Commerce", three or four pages dealt with the plans proposed to be taken to accelerate industrial development. There are two very important sentences dealing with that section. One says that a revolution must take place in the management of industrial expansion if the essential employment targets are to be achieved. The other sentence is on page 15 at the conclusion of that section. That extraordinary statement says that there are tens of thousands of secure jobs only waiting to be created.
The Government have been in office for four months and this Minister was his party's spokesman on Industry and Commerce for a considerable time prior to that. Surely it would not be too much to expect that the Government, and particularly the Minister, would have availed themselves of the opportunity offered by the presentation of this Bill to indicate and give some evidence of new thinking, or a new approach, to lend some credibility to the extraordinary statement that there are tens of thousands of secure jobs only waiting to be created. There is no evidence in this Bill of the revolution which must take place in the management of industrial expansion.
As I said, this Bill is substantially the same as the Bill introduced last May. The provisions in the Bill presented last May must be looked at against the background of a then major Government decision to establish a national development corporation. This Bill is being introduced in the context of the establishment of what the Minister calls an industrial development consortium.
In his opening statement a fortnight ago, the Minister dismissed the concept of a national development corporation. He did not make any effort to indicate the reasons why a national development corporation was not on. Instead of that corporation he outlined, not just briefly but in the vaguest possible terms, a new concept of an industrial consortium. He said they would have the function of monitoring industrial progress. He gave no indication of what the role and function of the proposed consortium might be, or what function they would have vis-à-vis the IDA or the other industrial employment agencies.
I believe we are in a totally new ball game in relation to the creation of industrial employment. As the Fianna Fáil manifesto said, a revolution must take place. The point I want to emphasise is that after four months in office there is no evidence in this Bill of the proposed revolution in industrial expansion and there is little, if any, evidence of even new thinking.
There is nothing in this Bill which will release a new dynamism, or accelerate industrial development in a way which would ensure that we can tackle quickly and effectively the major challenge of creating full employment for a growing population. The Coalition Government were very much aware of the problem. It was in recognition of the fact that previous policies in relation to industrial development and that the existing industrial development agencies were no longer adequate to meet this challenge, that the last Government decided to proceed with the concept of a national development corporation while also recognising the fact that national plans and policies, particularly in the area of economic development and job creation, had to be implemented at regional and local levels. Side by side with the concept of a national development corporation, there was provision for the establishment of effective regional development agencies.
One can validly conclude from the Minister's speech and from other indications from the Government over the past four months, despite the predictions and the flowery phrases in the Fianna Fáil election manifesto in relation to industrial development and job creation, that they have no new or original ideas. Surely, not merely to lend credibility to the Fianna Fáil manifesto but with a view to taking Dáil Éireann into his confidence, the Minister should have made some effort to explain and spell out the role, the functions and the likely effectiveness of the proposed industrial consortium.
Much has been said and written about the challenge of creating employment. All sorts of plans and schemes have been put forward as ways of dealing with this major problem but very little real action has been taken. Irrespective of which side of the House one is on, one must be concerned with this problem. We are anxious that the IDA in particular— they are the main job-creating agency —be given the necessary powers to proceed with their work at a much accelerated pace. The Minister indicated also that he proposes at some time in the future to review the role and the functions of the IDA. Should that not have been the first step if the Government were serious in regard to the promises contained in their manifesto? I recall the Minister, while he was on this side of the House, speaking loudly, eloquently and at great length on the creation of new industry. In particular I recall an extraordinary statement of his and one which he repeated on many occasions. At one point when he was calling on the then Government to proceed with the establishment of industries, he said that he would be prepared to take a gamble even if it resulted in a 50 per cent failure rate. That type of thinking will not generate the additional employment that is required.
A review of the IDA is very necessary. That is an obvious and logical starting point if we are serious about the whole question of industrial development and job creation. In addition to paying tribute to the IDA for their efforts in this sphere credit must be given, too, to the associated job-creating agencies. The IDA was established in 1950. It represented a new dimension in the whole area of industrial promotion and development. I regard the establishment of the IDA as the single most important event in the industrial history of this State. Another very important related activity has stemmed from the decision that came to be known as the Sweetman Finance Act, 1956, which made possible the participation of foreign industrialists in industrial development here.
I was very pleased to note this morning in one of the newspapers a statement by An t-Uasal Ó Slatarra who, I understand, is Cathaoirleach of the IDA, in which he very rightly and fairly said that, despite the serious worldwide economic recession of the past four years, substantial and even remarkable progress was made in generating new industrial development. As well as paying tribute to the IDA, mention must be made also in this context of SFADCo, Gaeltarra Éireann, the Industrial Credit Company and even Fóir Teoranta. In a manner that has been remarkable, all these agencies, both individually and collectively, have faced up to the almost impossible challenge of generating new industrial employment in the past four years.
However, the time has come for a serious examination and for a comprehensive review of the mandate under which the IDA have been working. At this point I should like to refer to another extraordinary statement in the Fianna Fáil manifesto and something that is very relevant to the Bill. Referring to the development of natural resources Fianna Fáil said that it is in this area their efforts will lie in the future rather than in the exclusive encouragement of ephemeral foreign finishing industries using foreign raw materials. I see this statement as being a shocking indictment of the politics that were pursued by four successive Fianna Fáil Governments between 1957 and 1972 during which time the bulk of the industrial employment was created by foreign industrialists.
In reviewing the activities of the IDA and in the context of this extraordinary statement from Fianna Fáil about ephemeral foreign industry, it might be no harm to look, for example, at the industries which folded up during the economic recession, to consider the reasons for their folding up and the reasons for many of them, at the first advance of adverse trade winds, hoisting their sails and disappearing almost overnight.
I have said here on many occasions that the mandate given to the IDA was too narrow and too restrictive in the sense that there was over-emphasis on the attracting of foreign industry and in particular industry which to a large extent was merely of an assembly nature and not requiring large scale investment by the industrialists concerned. This was the type of industry that was easy to fold up quickly. The great failure in our industrial development policy down through the years has been the appalling manner in which our greatest natural resources have been ignored. When one talks of natural resources generally what he has in mind are minerals and offshore oil, but I regard the land of the country and the sea surrounding it as our greatest natural resources. I am not in any way attributing all the blame to the IDA, to SFADCo or to any other associated agency in this respect because these agencies must operate within the terms of Government directives but it was a tragedy particularly in the boom years, worldwide, of the sixties that the vast potential of these two major natural resources was neglected.
With proper policies and the right approach there is vast potential in Ireland for a massive expansion in food technology and the food-processing industry. Likewise on the sea in fisheries development, which has been grossly neglected, there is potential for the establishment of a fish processing industry and ancillary activities which in a small country like this must be absolutely enormous.
During the past four-and-a-half years when I had the privilege of being Minister for the Gaeltacht with a major responsibility for promoting economic activity and employment in those regions, I directed Gaeltarra Éireann to assess the potential for fisheries development. An in-depth study was carried out both here and in other countries. One thing which came to light was how poorly this country compared with other maritime countries in relation to the processing of fish. We discovered that there was no fish cannery here. I am glad to say that a major new fish cannery was opened some months ago near Burtonport, County Donegal. Greater emphasis will have to be placed in future on the development of the maximum potential of the opportunities of our food processing and fish-processing industries. Another area, that of mari-culture or marine biology, has been totally overlooked down the years. A start has recently been made in west Galway in the cultivation of shellfish and so forth.
All these have employment potential. They are industries based on the natural resources of this country. Previous industrial policy, as admitted in the Fianna Fáil manifesto, was wrong in that it did not place enough emphasis on this aspect. In recent years, particularly in the four years during which I was a member of the Government, the manufacturing industrial development strategy of the IDA underwent considerable change. There was a re-orientation, a change from the traditional approach of perhaps over-emphasising the ephemeral foreign finishing industries which are referred to in the Fianna Fáil manifesto, and a greater emphasis on high technology, export-oriented, high-capital industries. The Minister will be aware of this because we have three outstanding examples in the mid-western region. We have the massive Syntex pharmaceutical plant at Clarecastle. We have the outstandingly successful Burlington high-technology textile plant near Limerick city which has another branch now in Tralee and I understand intend to have two further ones in other parts of the country. We have perhaps the highest technology industry in this country in the Analog electronics plant at Raheen, near Limerick.
The IDA were extremely successful in recent years in attracting this type of high technology where there was massive capital investment by the industrialists concerned and therefore a commitment by the industrialists, and a substantial stake in the country. Foreign industries of this kind are what we should be trying to attract to Ireland. Apart from the massive capital investment involved, they are high technology industries which provide a range of job opportunities for highly skilled people, professionals and graduates.
There is reference also in the Minister's speech to an aspect of industrial development which is of tremendous importance, again something on which there was nothing like enough emphasis down the years. It is what has come to be known as the small industry. I have a personal interest in the development of small industries. I recall that in the sixties a major survey or study was carried out into the potential and role of the small industry in modern industrial nations. I am sure the Minister has a special interest in this matter also because the two people who spearheaded this survey and this study were the then Limerick County Manager, Mr. Tom O'Connor, and the present Bishop of Limerick, Dr. Jeremiah Noonan. Mr. O'Connor was seconded a short time afterwards to help the small industries section of the IDA. That study, and subsequent studies that have been carried out, into the role of the small industry and the contribution a small industry can make to industrial job creation all confirm that these small industries, particularly in a developing nation like this, have a vital role to play.
I would support any measure that might be taken to enable the IDA to encourage and accelerate the creation of small industries. The definition of what is or is not a small industry varies from place to place and from country to country. The significant thing is that even in the most industrially advanced nations, such as the USA and West Germany, an amazing proportion of the total industrial employment emanates from small industries, very often, in Germany in particular, from the one-man and two-man craft industries. In some countries also the importance of the small industry has been recognised by many Governments to the extent that they have special agencies responsible for organisation, developing and expanding small industries. It probably was inevitable over the years that when a local community sought an industry or in a national approach to attracting an industry to this country there was over emphasis on the size of the industry. A small industry employing ten people in a village did not attract very much attention compared with an industry which came into a big town employing 200 or 300 people, but the economic and social significance of that small industry was very important. There is great scope in the country for the promotion of small industries. During the past four years I had the opportunity of studying at first hand the difficulties and the possibilities of small industries, because the greater part of the indsutrial development strategy of Gaeltarra Éireann is centred around small industries. There is need now for a new look at the whole approach to the development of small industries.
I know that the IDA, through the small industries section, have been doing a very good job, but perhaps something additional may be necessary. I believe the time has now come when it might be more advisable to follow the example of other countries who have special agencies responsible for the promotion of small scale industries. The outstanding example of how local initiative and local enterprise can develop natural resources and effectively create small industries is Glencolumbkille, one of the most remote parishes in the most westerly part of the country. We have an outstanding example here of what small industries and craft workers have achieved. There are now 11 commercial companies in that small parish. Fish processing, horticulture, farming and tourism have been developed in this village. It is believed that in five years' time there will be full employment in that small parish. I am not saying this to gain any political points but I suggest that the methods adopted in Glencolumbkille should be examined by every organisation in the country, Government, semi-State and private local development. The success of what has been achieved in that village is due to the dedication of one man, Fr. James McDyer.
I suggest to the Minister that a new look at national level be taken, first of all, at small industries and, secondly—and perhaps more importantly—at the possibility of the development of craft industries. One associates western Germany with large scale advanced industry, but it is gratifying to find the tremendous number of people there who are engaged in what are called craft industries. There are inherited skills in the small villages and towns of the country which could be developed. The problem with craft workers is that they work in isolation. I believe some national institution should be set up to co-ordinate their efforts.
I believe that science and technology and research and development have failed in the creation of industrial jobs. I am disappointed that our university institutions have not played their proper role in the development of industry. I make one notable exception, University College, Galway, with which I had very close association when I had the privilege of being Minister for the Gaeltacht. The contribution of science and technology to industrial development has not been very remarkable. We have in our university institutions great manpower and research resources. We have brilliant scientists and technologists. But the effort has not been made to convert that scientific research, technology and expertise towards job creation. There have been some noteworthy examples of this in recent years. I want to pay special tribute to University College, Galway, for the close co-operation in which they are working with Gaeltarra Éireann, the development agency for the Gaeltacht.
I want to give a few examples of the potential in this direction. I refer to the extraordinarily successful research work carried out over the years by the Marine Biology Faculty in UCG and the still more remarkable results obtained in the past couple of years where this scientific research was applied to the creation and development of jobs Over the years the Agricultural Institute have amassed a tremendous volume of scientific documentation. I am not at all satisfied with the effort made to translate that scientific research into practical economic development.
There is a tremendous challenge here. The IDA, the main job creation agency of the State, will have to look much more closely at this aspect of industrial development. The closest relationship will have to be built up between the IDA and the research institutions of the State. I discovered in the past few days only—and perhaps the Minister will tell me if I am right—that the National Board of Science and Technology has been transferred from his Department to the Department of Economic Planning and Development. That is a disastrous mistake because we are talking about a major challenge facing the nation.
It was in the Bill. The Deputy's Government passed it.
It has been brought under the jurisdiction of the Minister for Economic Planning and Development. Previously it was under the aegis of the Department of Industry and Commerce.
It was not under any aegis because it did not exist.
The Minister for Industry and Commerce had a role in its administration. Be that as it may, it does not invalidate the point I am making. There will have to be closer links between our scientific and research institutions and the industry and employment creating agencies of the State.
I believe in giving facts and examples and not shouting my head off about something I know nothing about. I referred to the Marine Biology Faculty in UCG and how the research there has been translated into practical development, fisheries development, shell fish farming, and so on, all of which provide jobs. Another example is Professor Seamus Timoney of UCG who has made a major world breakthrough in the development of his armoured car. I am very proud of the fact that Gaeltarra Éireann are associated with Professor Timoney in the commercial exploitation of this vehicle. In 1974 or 1975 Gaeltarra Éireann agreed to support the Timoney invention with the result that they established a Gaeltarra Éireann-sponsored industry in Baile Ghib in County Meath.
In all our university institutions there are people like Professor Paddy Keady of the Marine Biology Faculty in Galway and Professor Seamus Timoney in the mechanical engineering section of UCD. No encouragement has been given to these people in the past. I am sorry to say that, very often in my experience, an inventor or somebody like that was looked on as being an oddbod or a crank. I recommend that the Minister should take a very serious look at this whole question and set up the necessary lines of communication between our research institutes and the IDA.
My colleague, Deputy Kelly, referred to another instrument of economic development which is very relevant to the whole question of industrial development and job creation. He referred to the potential in local communities for people to do their own thing, to establish small industries, and so on. I referred already to what one man was able to do through community development in Glencolumbkille. I referred also to the possibility of encouraging people with special skills in craft work and otherwise to develop their talents. I referred to the question of small industries and the need to encourage people with special skills and training to set up their own businesses.
I want to mention now the concept of community development, that is, the ability and the possibility and the potential local communities have through their collective organised efforts to promote economic development in their regions. In this respect, Glencolumbkille is the outstanding example. There are others too. We have local development associations in practically every town and village, people who give of their time and voluntary service to the development of their own localities. A top priority in the programmes of practically all development associations is to secure an industry for a small town or village in their area.
The IDA could very effectively look at the whole question of community development. In 1974, Gaeltarra Éireann embarked on a very successful experiment in the promotion of community development which resulted in substantial development in remote areas and job creation as well. We have a number of national organisations, notably Muintir na Tire, who could play a major role and be of tremendous assistance to the IDA and the other job creating agencies in devising new ways and means of creating jobs through industrial development or otherwise.
I have a note here headed "Enterprise". A key factor in accelerating the development of industry is the need for enterprise and initiative. This is very relevant to the significance of the small industries and their role in national development to which I have already referred. We are not short of talent. We are not short of initiative. We are not short of enterprise, and we are not short of capital. How are we to marry these four factors into a situation where the individual with the talent, or skill, or initiative, can be encouraged and facilitated in taking the final step forward in setting up his own small industry or business?
In the context of small industries special attention will have to be paid to encouraging enterpreneurs. This is a matter I have discussed with many people and I believe there is a vast potential not merely at home but among our own people in Britain and in the United States of America. They have acquired skills, expertise and a special knowledge of industry. They would like to come home and they could be attracted provided an appropriate and suitable formula is devised which will encourage them to take this final step forward. There is no shortage of ideas or initiative. Getting what exists translated into an actual project seems to constitute some sort of problem. Some people with whom I have discussed the matter have said they are afraid to take the final step because they fear failure. The media may have contributed to this fear which now inhibits those with the potential from taking the final plunge.
In this context I welcome the recent trend on the part of the media and I particularly commend the weekly article in the Irish Independent under the heading of “Opportunity”. Prior to that there was a series of successful case histories involving entrepreneurs. It would be invidious to name them but certain sections of the media have undoubtedly shown a lack of balance down through the years because failure has been highlighted and success has never got anything like the same attention. There is need to encourage entrepreneurs. How that can be done may pose a problem, but encouragement is necessary. Special financial arrangements must be available to tide over the man who makes a genuine effort but who, through no fault of his own, fails in whatever the particular enterprise is. I would not condemn him. I would give him another opportunity to try again.
All Members of this Parliament are concerned about the magnitude of the problem with which we find ourselves confronted in providing employment for our young people and re-employment for the many thousands who were victims of the international economic recession in recent years. It is a very great problem. We have no emigration. We have a rising population and a better educated young people coming on the employment market every year. It is, as the Minister said in Mitchelstown, a daunting challenge. The IDA will have a major role to play in facing this challenge and I hope that before long we shall have some evidence from those who are now in the hot seat and shouldering leadership that they are serious in what they said in their manifesto about the tens of thousands of jobs waiting to be created.
I agree with the Minister that this Bill is urgently needed. It provides an ideal opportunity to look back briefly at the workings of the IDA. The experience and knowledge gained since their formation has created a wealth of information of tremendous value now. During the first years of the IDA in the fifties that body were going through a process of management structure. The economy was depressed and on the assumption of office by the Fianna Fáil Government in 1957 the late Seán Lemass was given the portfolio of Minister for Industry and Commerce. With his colleagues he set about drawing up the First Programme for Economic Expansion. That was a positive recognition of the need for detailed planning. It provided the IDA and other Government agencies as well as private enterprise with a blueprint. The IDA set about their task in the sixties of achieving what had been laid down in the ongoing programmes for economic expansion. It is not necessary for me to dwell on the sixties. We are all familiar with the excellent promotional work the IDA carried out in selling Ireland as a base for industrial development. Programming under Fianna Fáil Governments ceased from 1968 to 1972 and since then there has been a lack of detailed planning. During the last Government's period in office we referred to this on many occasions because we believed there was a need for detailed planning.
The Minister in this Bill is paying due recognition to the need for a return to controlled planning so that bodies like the IDA can set their own targets and endeavour to achieve their own aims. It is the responsibility of the Government to do the overall planning and programming and that is what the Minister has in mind in setting up this Industrial Development Consortium. I was surprised to hear some Opposition Deputies criticise the Minister when, in the past, we have heard many criticisms of Minister not bringing before this Dáil detailed information. The Minister has now provided us with an opportunity of assessing and discussing the workings of this consortium as well as those of the IDA.
In the present Minister for Industry, Commerce and Energy, Deputy O'Malley, we have a man with the scope and opportunity to carry out the well-established Fianna Fáil tradition of implementing legislation designed to provide more muscle for Irish industry. It is opportune to restate very briefly the main aims of the Bill. It is designed to encourage the development of domestic industry with particular attention to small- and medium-sized enterprises. This is a section in the Bill which has been called for for quite some time. With a world-wide recession the real need was to get back to the smaller, less heavily-invested type of structure and I believe the IDA recognise the need for assistance at a level lower than that of the multi-nationals.
The second part of the Bill is designed to stimulate those who have ideas and skills and to help them to become industrialists. The French call such people entrepreneurs; perhaps we should apply our own term and, in looking up the word in the native tongue, I find it is fear fiontrach. We have to try to create our own initiative and expansion and perhaps we should look to a source other than the French for the term. The third aim in the Bill is to introduce new investment powers particularly suitable to new enterprise development programmes.
I see this Bill as a practical approach to these objectives. Given the powers in the Bill, Irish industry can meet the demands and provide its fair share of jobs so vitally necessary at this stage. I see the Bill as a change in the IDA financial strategy. It is a new form of Government investment and it is worth while trying to assess in detail the necessity for this financial change. If we look back over the last four years we find we had a number of Irish operations with a very narrow financial base. With continual expansion, particularly in the late sixties, some companies found that when their profit margins and their trading situation declined they had undertaken the building up of an administration and an overheads figure which quickly brought them into trouble and created problems for them. In 1977 we had a number of brilliantly executed studies and reports initiated by the banks and the IDA. These reports showed that a number of very viable companies were short of liquid capital at the time. There is a recognition in this Bill that in future the IDA can take some positive action when it sees an enterprise with the management, structure and plant and everything bar liquid capital.
Our hopes lie in a number of existing and new markets. There are numerous opportunities to sell through our traditional outlets. There is a market rapidly opening up in the Middle East but some of our companies do not have the financial and marketing muscle to expand into these areas. The Bill gives an opportunity for IDA personnel to talk to existing concerns about expansion and if one of the areas that need attention is the injection of equity into companies, the IDA can take positive action according to the detailed wording of this Bill.
What is put before us now as politicians and legislators is a demand that we respond to the requirements of industry, harmonise with it and that we plug into the market place by meeting its practical requirements. We are now proposing an infrastructure that will provide us with the best available flow of information. It will be a form of guidance with an efficient channel to ensure that our commitment to genuine enterprise is efficiently demonstrated in the most practical terms, that where money is needed it can be provided.
The consortium under the Minister's chairmanship and comprising the other Ministers as detailed in the Bill with the top civil servants and heads of semi-State companies will ensure co-ordination of interest and effort at the very top level. In recognising the need for the setting up of this consortium, the Association of Business Administration Graduates recently brought together the heads of the major semi-State bodies to outline State agencies' aid to private enterprise. That, in itself, was a recognition of the need for the body the Minister is suggesting in the early sections of the Bill. It will clarify responsibilities and in the present circumstances it is quite on the cards to have such bodies as the Institute for Industrial Research and Standards, An Foras Talúntais. An Foras Forbartha, the National Board for Science and Technology and others competing for research and development capital. I see the Bill as providing a forum for co-ordinating debate. When the Minister sits down with his colleagues in the Cabinet and requests approval for finance he will have had the opportunity of assessing in detail requests for finance from these other bodies who may be overlapping to some extent.
At present we have a number of different Government agencies carrying on or intending to carry on research and development. We have universities doing likewise. Deputy O'Donnell referred in detail to Galway University. Some of the universities, particularly in the marine area, are presently doing research and there is positive overlapping. In setting up the consortium the Minister has recognised the situation and will ensure that all available resources are brought together in a positive way.
In referring to Fóir Teo., I believe the Minister intends to take it out of the area of patronage of hopeless cases. It is far too often associated with bankruptcy or at least bad financial circumstances with the result that help from Fóir Teoranta can in itself be a drawback and can easily put a stigma on a particular industry and damage its trading prospects. Again, the Minister is recognising a very important fact here and he proposes to bring up-to-date State aid to industry and enterprise. The consortium is a guarantee that the IDA will be constantly sensitive to what is happening in industry in two fields that are equally important, job creation and job maintenance. Little would be gained if new jobs were created and other jobs lost. We have seen a number of jobs lost and this could possibly have been avoided if the powers that the IDA will have when the House passes this Bill were available.
There must be a change in the job situation. There is always need for rationalisation and changes in production methods—perhaps we have seen too much of that—but there are also many areas in industry where jobs are lost because even very good companies with prospects and good management do not get help at the right time. The consortium, plus a stronger IDA, can overcome some of the problems that have arisen in the past, particularly in the mid-seventies.
The Bill calls for the encouragement of growth of domestic industry with particular attention to medium-sized industries. In this area we can be well satisfied with the IDA's track record to date. The latest major study of its involvement covers the period from 1966 to 1974. In 1974 firms grant-aided by the IDA accounted for 30 per cent of gross output, 28 per cent of employment and 61 per cent of manufacturing exports. The comparable figures for 1966 were 11 per cent of gross output, 9 per cent of employment and 42 per cent of manufacturing exports. The medium-and smaller-sized companies have been playing a vital role. During that period new enterprises accounted for one-third of the increased industrial output and almost two-thirds of the increased industrial exports, and firms grant-aided by the IDA accounted for almost all of the increase in the manufacturing employment sector. The evidence is that the IDA has come up with the goods in the past.
We are now in the situation where expansion must begin again, where new opportunities present themselves and where different approaches are called for. Many of our private and co-operative enterprises have good premises, a sound plant, welltrained personnel, sound management and good profits; they have everything except the money required to get out and attack the market place. Their problem may be that the depressed years have drained their financial resources. The need for capital may be holding them back. I am familiar with the sort of situation where there are good possibilities for different operations, but where the necessary capital is lacking. A number of companies had to stand still during the last three or four years, and with the continual rising cost of administration and so on, if they cannot move forward they will gradually slide back. Unless the IDA can give assistance, so that companies with excellent potential can expand, they will not be providing the type of help necessary to Irish industry.
The IDA are being given tremendous financial muscle under this Bill. They have justified that type of support from the new Government. During the sixties when there were surpluses in the developed countries and when it was easier than it is now to attract multi-national companies the IDA globe-trotted and put their complete force and drive into that area. This Bill recognises that a double-fronted programme is needed from now on. We have created an industrial base and we can play a major role within the country to expand it. The Minister outlined that the IDA's situation from here on will be 50 per cent foreign job approvals and 50 per cent Irish job approvals. That is a major change in trend.
In achieving those job approvals the IDA will need the financial muscle provided in the Bill. The IDA can now step in and take a share in companies; they can share in the risk involved in the development stage and in the profits, and they can ensure that the taxpayer's money is used properly. The IDA in being involved will be of major assistance in the expansion of a number of companies. For the taxpayer it will mean a full follow through of the investment, and for the owners of the business it will mean a minimum of pressure for repayment, compared with the situation where a substantial loan is involved. For all concerned it will mean getting more products on the road. In former days there could have been an outcry against the prospect of a State board as a partner in a company. It would have been regarded as anything from big brother to a tax boy. Today the industrial situation is different. The business approach, the presence of professional and financial expertise and the existence of genuine profit and tax records ensure that a State board can be a very welcome partner. It can provide an essential ingredient for progress, in this case money on acceptable terms. If companies can afford absolute independence, they are welcome to it, but if they need State assistance they must think in longer terms than this year's balance sheet. The proposals in this Bill ensure that no one goes to the wall for doing the right things. We have seen several firms that would have been a McKinsey dream, in terms of added value processing and good marketing approaches, but they have been allowed to slip out of a viable situation for the last three or four years. We do not know what their real problems were, but if the IDA were part of their company we would certainly find out and profit from that information.
Recently the IDA saw fit to commission a study into the meat packaging and processing industry as a result of a continual request for investment from the meat plant operators. They did not know how long the demand for State investment and aid to these operations would continue or whether it was along the right lines, so they commissioned a firm of consultants to produce a report. I hope that the IDA will now give due recognition to the document published. Major recommendations were made in relation to what is probably our real natural resource, and will be for many a day to come. Even though oil and gas are reckoned to be natural resources, it is worth while to reflect that we have one of the most rare natural resources in the world today, the capacity to produce quality food in large volumes.
The main recommendation in the report is that every effort should be made to develop the beef-processing industry to its fullest potential, and it suggests a significant share for us in the British and German canned beef markets. The principle has been established already because the IDA have recognised the beef-processing industry's great potential.
I welcome that report and I trust the Minister and the IDA will implement it in as much detail as possible because this is positively our largest industry. There are several co-operative movements in that sector of industry and we have heard repeatedly that they have been short of liquid capital for the reason that their beginnings were small, their expansion has been phenomenal and has caused a continuous drain on their resources: any profits they made were going back into expansion and they had not an opportunity to invest in longer-term projects. The powers being given to the IDA would enable them to give detailed assistance to the co-operative movement and to other such private enterprise elements.
In Ireland we have not been giving ourselves enough credit as manufacturers. We have tended to look to others to show us how, and in the process we have been selling ourselves short. In 1976 no fewer than 236 small enterprises were approved for grant aid, resulting in 3,000 job approvals. Three-quarters of these were set up by Irish entrepreneurs. Therefore, we have scope to develop a lot more.
Twenty-four per cent of our work force are engaged in agriculture but if we travel along any country road and look out for Irish-made farm machinery we will not see nearly enough of it being used. A detailed study in this area of engineering was carried out by the National Science Council and it is easily recognisable that the fall-down occurs between the dissemination of such information as was gleaned and its detailed implementation. I hope that the proposed industrial development consortium will bring about much greater implementation of such recommendations from bodies such as the National Science Council.
It has been noticeable that the IDA have not been able to assist enterprises they would have liked to help, not because the enterprises did not seem viable but because the powers were not there. That is why the new consortium are being given this specific added power.
It is our duty to discuss this Bill in detail because nothing can be more important to the employment increase element than the detailed provisions in the Bill that will enable financial assistance to be given to industry. It is our duty to make it crystal clear to existing Irish industries and to potential ones that we, the politicians, are aware of this and that we are doing something positive to assist in a constructive way. This Bill, and the positive proposal on the consortium, are clear indications of a message from Dáil Éireann about the Government's new strategy: that behind the IDA we have a Government committed to industrial development and progress. The consortium and the IDA will have the real financial and energy muscle necessary.
The change the Taoiseach made in re-naming the Department and transferring energy to Industry and Commerce was worth while. The Department of Industry, Commerce and Energy are now a co-ordinating body in regard to finance and energy. Perhaps the Minister can try to find the quickest way to give industry a shot in the arm through the medium of State bodies that we have. At the moment the ESB have all the power necessary and that might be one of the quickest ways to provide assistance. In the meantime the industrial development consortium, together with the Departments of Economic Planning and Development and of Industry, Commerce and Energy can look at a number of areas through which an urgent change in industrial strategy could be achieved.
At the moment the IDA are looking generally at industrial potential, CTT are endeavouring to open up markets for the production of IDA-sponsored industries and the Industrial Credit Company are providing the finance. There is need for co-ordination of effort and the proposed consortium is the right move. Those in Opposition at the moment were looking for a national development consortium. The structures are there and this move is a progressive and positive step to bring together existing units of organisation, instead of getting involved in the setting-up of further bodies. It is a co-ordination of resources and is the right move. This Bill will give the Minister and the Parliamentary Secretary the opportunity to follow in the footsteps of the late Seán Lemass, who is now considered to be the architect of our industries.
The Bill will also give us an opportunity to expand the food processing industry. Any expansion of this industry must be done in a controlled way. When there is too much material it is processed in an unsatisfactory way. On the other hand, if the material is short, production is switched off. The food processing industry has made great progress, particularly in relation to meat. However, we are still exporting 700,000 live cattle each year. The processing of these animals at home would create employment. We should concentrate on this area because the cost per head job approvals would be less than in the manufacturing sector.
The IDA announced recently that they have reduced the cost per job approval from £5,900 in 1973-74 to £3,500 in 1976, which is a move in the right direction. The figure of £3,500 is an acceptable one, though it may have increased since 1976. Attracting industry from abroad is no longer as easy as it was. Other countries have had unemployment problems and are trying to create employment by expanding at home. The IDA are aware of this fact and the Bill clarifies it.
The Bill provides for an ideal mix between State investment and private enterprise. While a number of companies have returned to profitability during the first half of 1977 it is likely that they will continue to be cautious in regard to expansion. It is right that the IDA should have the financial strength to invest in private enterprise. This Bill will help to produce results in the area of job creation and I welcome it for that reason.
I support the Bill. The IDA also deserve our support. Since its establishment the IDA has proved to be the best employment creator we have ever had.
The last speaker gave the impression that the IDA was established in the sixties under the late Seán Lemass. I should like to point out that the IDA was the brainchild of the late Gerry Sweetman and was established by a Coalition Government. At that time the Bill creating the IDA was subjected to severe criticism in the House on the ground that what we had was adequate to create employment.
The IDA always had the support of both sides of the House because of its dedication to job creation and to giving us an industrial image abroad. At present we are exporting our expertise. The ESB and other companies have sent engineers to Third World countries. In sending our people abroad we are helping to develop Third World countries and creating an image of ourselves as an industrial nation. The IDA is interested in this type of exchange.
We should develop our training programmes for middle and top management. If we are to attract industries to invest here we must have sound industrial relations. We tend to lay the blame elsewhere for bad industrial relations. Where you have efficient management you will have few, if any, industrial disputes. The IDA can play a role in this regard. If the view goes abroad that we are a nation of undisciplined workers and are prone to strikes we will not succeed in attracting any industry, irrespective of the inducements we offer.
The only way we can develop a proper attitude is by enlightened management. By and large management here is enlightened and highly developed, but that is not to say that sufficient is being done. I do not think it is. We must have constant training and the development of right attitudes in industry. We are a young developing country and we should not adopt old traditional methods. It is never too late to change. The IDA has the management with new ideas to develop the type of enlightened thinking we require to attract industry. Members on this side of the House spoke in favour of the establishment of a national development board but it does not matter whether it is called a consortium or a development board as long as it has some function and meaning. The consortium was thought up to counteract what we were talking about. It will be a meaningless body. There is talk about getting together a number of groups that can be brought together at any time and I have no doubt they meet regularly to discuss common problems.
I note that one austere group are missing from the consortium, the banks. It can be stated that we cannot force the banks in, that they are private concerns, but they have a role to play in this regard. They have been remiss in the past and did not play their part in Irish industry. The last speaker spoke about liquid money and cash and that is what makes industry advance. In many ways the banks hold the purse strings. I am not asking the banks to rescue lame-duck enterprises, because we are not interested in such concerns. We are interested in commercial enterprises which can show a profit. The profit motive is important if we are to expand. We should never be afraid of the word "profit". Any concern that does not realise a profit does not remain in business too long.
The consortium should have the authority to go into business, like the IDA. That is another reason why I would have welcomed the inclusion of the banks. The consortium will be a nice cosy group, but it will not function. There is nothing wrong with the idea and I am not against such groups meeting, but the consortium should have been given more bite.
It has been stated that we have sufficient boards. A similar statement was made when the IDA was set up but that negative attitude should not be taken too seriously. We should always take a chance and be prepared to look at opportunities. I would eliminate a number of existing boards because they are of little consequence. A national development board would have had an important role to play had it been given proper authority and the right people to run it. I have no doubt that the idea of the consortium will be adopted by this House because Fianna Fáil have the necessary majority to pass this legislation and I hope it will work effectively. I have nothing against trying any idea but I must state that I do not like this one because I consider it a useless exercise introduced to counteract the idea put forward by the National Coalition. It is a gimmick.
The IDA should take an active interest in worker cooperatives. It is hard for a group of workers who have spent most of their working life on the factory floor to take over a concern that has failed because of lack of finance or lack of orders. The IDA has a role to play in this regard. In the event of a group of workers deciding to take over a concern that has gone to the wall the IDA should give all the managerial assistance required because workers would not have the knowledge of management. Without proper management the workers could fail also. We could stave off redundancies if we adopted that type of approach. The IDA could examine the case of a company which may be in financial difficulties and if they think it is viable, or if the workers think it is viable, the IDA should take the chance and support the workers.
In various areas there are groups of people with ideas and expertise. The IDA could generate the will to form worker co-operatives. Very often people lack leadership and knowledge and the IDA could play an important role in this regard.
The worker co-operative idea originated in the north of Spain about 1964 and it has been very successful there. The employment content might not be high but we should not be too worried about that. Small industries can develop in time and that is where I believe our future lies. We tend to think of companies like Alcan and imagine that they will solve our unemployment problem. We thought that the Ballymun scheme would solve our housing problems but big undertakings do not necessarily solve problems. We must not be like the fishermen waiting to catch the big ones and letting all the small ones pass by. The worker co-operative is just another string in the bow.
The unemployment problem will be with us for some time because of the increase in our population and the number of young people coming onto the labour market. This is not a party political point; it is a real problem which confronts us all as legislators. It is most distressing to see young people walking around the streets and anything which can be done to alleviate this problem is important. We should not be afraid to innovate. One idea is to form worker co-operatives and the IDA may be working on other plans. They are not a body to lie down and wait for things to happen. We must pin our hopes on the development of small industry.
The Dublin city area has been neglected over the years. I do not blame the IDA because this area was completely excluded from grants. The previous Government included Dublin in the grants scheme but much damage was done before this happened. From the point of view of unemployment, Dublin is a disaster area. Very little is happening, particularly in the centre city area. Plans have been initiated in part of my own area, the Coombe, and a number of small factories are to be built there. I am happy about that, but it is only a small development. I was preaching about small developments earlier on and I will continue to do so, but it is important that we look upon the situation in Dublin as an emergency. We should declare an employment emergency, particularly in the centre city area. I know and represent this area and I do not say this in any emotive way, but the social problems and evils springing from unemployment are there for all to see. It behoves us to work towards solving this problem.
I should like to see development within the port of Dublin. It has been neglected over the years for one reason or another and various groups of people saw to it that development should not take place. By and large the port is an industrial area and there is great potential for employment. We have the capacity for industrial development and further land can be provided by reclamation.
Much can be done if we are really serious about providing the jobs required in Dublin. Passing any of the unemployment exchanges and seeing the number of able-bodies people heading towards them, one would imagine that one was in close proximity to either Dalymount Park or Lansdowne Road. The IDA must tackle the problems that are holding up any real progress regarding employment in the Dublin area. Since 1967 every industry that started up in the port area was strongly objected to and that has quite a distressing effect upon people who want to develop industries in this area. It behoves the IDA, with their new-found money and muscle, to ensure that such industries can get off the ground. The unemployment situation will be very lopsided if this problem is not tackled.
When we were going to school the only resources we had were the green grass and the boglands. Since then we have discovered rich mineral resources with great potential. Gas has been discovered off our shore and, hopefully, we will discover oil to add to our future wealth. When we mine our natural resources it is important that we not merely ship the raw ore out of the port of Dublin, Drogheda or from whichever port it emanates to other smelters and industries. That would be of very little use here. In those circumstances, we could still accrue wealth from it but a small proportion only. The industrialists of Europe and elsewhere might well be the people who would exploit our mines. This is something we must watch carefully also.
I realise the major problems to be faced in the setting up of a smelter here. But we must take our courage in our hands and say: we are going to have a smelter; we are going to have it soon. While there are arguments against and while there is under-utilisation of smelters in the European markets—that is why the large empire builders will not come in here—nonetheless, that is all right. We have to attract them here and offer the right kind of incentive because once the smelter is established it will have a large employment content. It is the spin-off industries with which I am concerned, a whole new area. Once a smelter is established with that type of industry here a whole new field of industry can start up with tremendous potential for employment. Let us not under-estimate that. The whole face of industry could change once we establish a smelter here, with spin-off industries. Then industrialists will tend to come to the raw material rather than vice versa. That is a function of both the IDA and of the Government. The vast amounts of money required should be obtained. We should go ahead and develop and, in time, we will have been proved to be right.
The same can be said about our agricultural industry, about processing our raw materials to their fullest potential. It is becoming more sophisticated and has proved to be such in the last few years. However, there are still too many unprocessed cattle going out of this country. It can be said that, even with regard to dead cattle, further processing could be carried out, with cuts being available on the market. The same applies to our agricultural produce. I am not saying there has been any neglect in this area, there has not been but the position could be improved still further, creating more jobs and wealth for the nation.
If we develop our wealth, in turn, we can develop our country in the manner we want which is something the under-developed countries cannot do. If we develop quickly enough along the right lines then we can provide the type of services we, in this House, would like to see, particularly those geared to the aged, the infirm and disabled. That can be done only if we provide our own wealth, process our raw materials and utilise their potential in the right way.
I am glad that a new board on science and technology has been set up. It was to have come under the aegis of the Department of Industry, Commerce and Energy. It has been shifted now to the new Department for Economic Planning and Development. I think it was somebody from this side of the House who said this was disastrous. I do not think so. Once it comes under the aegis of a government department and can play an effective role that is all that matters. We have neglected the question of science and technology over the years. Indeed, we have tended to go for the academic rather than the technological and, as a result, I believe we have suffered. The new board can and will make the necessary recommendations, will plan and budget for the development of science and technology. We must remember that we live in a highly technological world today. We must match the technology of other countries, ensure that we keep up with what is happening in the rest of the world, indeed not alone keep up with it but, in certain respects, be ahead of it so that we can develop our industry and perhaps supply other parts of the world with our expertise. That can be achieved only if the right type of board is set up and I have no doubt but that that will be accomplished.
This is an excellent Bill containing the right ideas which, when implemented, will make a tremendous change in this field. The same can be said of the whole of our educational structure. Bias here has always been towards universities and the academic side of universities with the colleges of technology always—and to some degree even to day—being regarded as the poor relation. The attitude has been that if you are not so bright, you can go along to one of those places and they will look after you. That was the tendency—if you were not bright you went to the technical college and, if you were, you went to secondary school and afterwards to university. I suppose that reflected the attitude to the whole of our educational system, that possibly one should not get involved working with one's hands, that rather one should get a job in the civil service, be a secondary school teacher or something of that nature; that was the thing to do.
We must change those attitudes. The fact that there is such unemployment amongst graduates at present seems to be bringing about that change. Such graduates are now scratching their heads asking themselves who directed them into this area when perhaps they might be more profitably employed in the area of technology. The Department of Education had a role to play in that respect. But our technological development happened more by accident rather than by plan. Only by having a highly trained and sophisticated work force can we hope to attract sophisticated industry, indeed not alone attract it here but built it up.
It might be said that we tend to emphasise the importance of attracting industry here. A potential Irish industrialist always seems to have the impression that the IDA tend to favour the foreign rather than the Irish company. I know that is not correct. But, when one speaks to people endeavouring to set up industries here, one always gets the impression that they have the feeling that the foreigners have one up on them and will get the better deal. A good public relations exercise in this respect might help the IDA to break down that false impression. We must develop our industry. We are a young country but we do not seem to have the innovative, industrial mind to work for the creation of a new type of product, of development, which can be identified with us. This must be examined.
Now that the IDA have a little more money with which to involve themselves in enterprise they might take it upon themselves to get involved in this type of initiative because certainly the banks will not do so. Unless they are working on a gilt-edged security, they will ignore one and one can look for one's money elsewhere. The banks did not help in any way in industrial enterprises. Now that the IDA have got a little more capital they can take some chances. We must take chances particularly with the Irish in-industrialist, the entrepreneur, or the small or large co-operative that wants to establish an industry. If the enterprise is viable it should be helped. I am sure the IDA will adopt a constructive approach. If that is done the future of the country will be good.
Another reason why I consider it desirable for the IDA to get involved in companies is that the multinational companies may not find it so easy to pull out. The fact that the IDA have a stake in a company may help to stabilise it. It would be desirable for the IDA to have a stake in as many multinational companies as possible to ensure that they do not withdraw from this country. This is an area where the State and private enterprise can work together in an efficient way. When the IDA are involved in a company that is profitable they can reinvest their profits and develop industry further. It should not merely be a question of siphoning off profits; they must be ploughed back into industry to extend it further.
I welcome the Bill. The IDA have done worthwhile work and I am sure they will continue. This measure will enable them to improve still further and to develop more native industries.
Fianna Fáil stated in their manifesto that they would tackle seriously the problem of unemployment. This Bill is a significant contribution in that direction. We are all aware that unemployment is our greatest problem and that we must make an all-out effort to solve it. Admittedly it is a world problem but I do not think we should look at it from that point of view. Looked at in that way it is a really terrifying problem. Rather, the very large unemployment figure should stir us into action, it should bring about a situation where we can honestly say we are doing something to cure the problem.
It is futile and silly to blame outside influences and conditions as being responsible for our present situation. We had enough of that from 1973 to 1977 when members of the National Coalition constantly came up with the excuse that our unemployment problem was due to outside influences. We should not regard the unemployment problem as insoluble. Some 30,000 school leavers each year will require work but we should look to the next ten years with courage and conviction and commit ourselves to tackling the problem. There are more than 115,000 unemployed at the moment. We must ensure that that will not be the position in four years time when Fianna Fáil's first term of office will be over.
We know about the job requirements for the next decade but we must supply the means for people to get employment at home. Our country has the capacity and the natural resources to support our growing population. Many of these resources are virtually untapped and others are not developed to the fullest extent. In some cases our resources are exported in an unprocessed form—another way of exporting employment. Here the Minister and the IDA should take some steps with regard to processing our agricultural produce. We must instil confidence in our people. We must have strength and faith in our country's ability to survive and to thrive. I should imagine that a little national pride would not be out of place. Our new industries would be helped and stabilised with the addition of some patriotism.
In the recent Irish Catholic Bishops Pastoral on Justice, it is stated:
One of the primary duties of society is to create employment opportunities for the greatest possible number of its citizens. Work is one of man's most important means of self-fulfilment.
The message continues:
In our kind of society productive work and the independence which goes with it are important conditions for retaining the respect of the community. Those who remain workless for long inevitably become marginalised in society. Being out of work tends to breed resentment against society.
It is the primary function of the Dáil to create worthwhile, fruitful and useful work for the greatest possible number of our people. We would then be saying to our fellow citizens that as a society we have need of them. The Government, the Minister, the Parlimentary Secretary and this Dáil must do something.
The aim to maximise employment should be accepted by everyone as a national challenge. This will not be easy because any sane person must know that our economic situation will never be improved without more work, more restraint, increased saving and sacrifice. Sacrifice is a word none of us cares to mention but I am convinced that sacrifice is needed now more than ever to help industry. Sacrifice is a word that scares most people. It is not a popular word. Any Deputy would be failing in his duty, in justice and in honesty, if he did not mention sacrifice as one of the essential means of solving our economic and unemployment problems. By sacrifice I mean that those who employ and those who have secure employment should remember that it is not good to have more than 100,000 people out of work and that it is a danger for society to have 30,000 school leavers added to the unemployment register with very few job prospects.
It is significant that we have the highest proportion of young people in Europe—more than half our population are under the age of 29. That clearly highlights the fact that many of our young people are unemployed. As I said, it is not just the Government's job to ensure that those people are employed, it is a task for each and every citizen. To bring about a situation where most people are employed, it would be essential that those in good jobs show restraint from seeking disproportionate increases in wages which naturally increase inflation which in turn brings about further unemployment. We have these twin evils, as they are called, affecting our economic and industrial development—unemployment and inflation.
This Bill is part of the Government's contribution towards economic growth and job creation. The IDA have done great work in the sixties and in the seventies, but they need more muscle and power as we go into the eighties because we still have these twin evils and 30,000 annual school leavers coming on the scene. The IDA from now until the early eighties will have to show a great deal more enterprise, muscle and power to provide job opportunities for those people at home.
It is good to see that section 3 provides encouragement for men and women of vision and courage to establish industries. Our people are our greatest natural resource. We have always had people with initiative and drive in industry, but unfortunately in the past many of them emigrated and brought about a situation where many job opportunities were created through their initiative and drive in their adopted lands. It was unfortunate that they had to leave their native land but the time is coming when they can stay at home. It is my belief that if the initiatives and help contained in section 3 had been in operation for the past ten years, we would have tens of thousands of our present unemployed in productive jobs.
As I said, more than half our population are under the age of 29 years. There must be many among this vast number who, if given the opportunity and financial aid, would become initiators and creators of employment. Section 3 is praiseworthy because it takes into account for the first time the fact that we have a large supply of well-educated, talented, skilful workers who are receptive to new ideas. I would like to see Irish entrepreneurs get all the benefits provided under this section.
In the past I have heard criticism of the IDA. It was said that one had to be a foreigner to get maximum benefits. There were times when I thought the same myself. Sometimes those rumours are based on false assumptions. Very often the native industrialist might not have measured up to the required standard. However, it is my conviction that native industrialists should have at least an equal chance with foreign industrialists. There is the opinion in some quarters that grants have been available more freely to people who are not of Irish nationality. If this has been the situation I trust the Minister will ensure that there will be no grounds for such fears in the future.
Section 2 of the Bill provides for financial aid to amalgamating industries in order to enable them to gear themselves to greater productivity and efficiency in terms of modern competition. Through the IDA the Government will be giving individual loan guarantees of more than £500,000. These are large amounts of money but the worthiness or otherwise of applicant firms will no doubt be examined scrupulously by the IDA whose regulations will ensure that the public funds concerned will be spent profitably and well.
In regard to amalgamation, I should like to sound a note of warning. Where amalgamations take place there is a tendency to loss of employment. We all know of cases in which amalgamation improves efficiency and profit margins, but there is also very often a loss of employment in the industry concerned. Consequently, I trust that in regard to the application of sections 2 and 3 of the Bill, every step possible will be taken to minimise, if not prevent, job losses. The primary aim at all times must be that of job creation. Having said that, I agree that in some instances amalgamation is necessary. However, I am confident that the Minister will be ever watchful of the situation in order to ensure that there is no drastic reduction in any instance in the number of people employed.
Amalgamation tends also to reduce the number of the smaller type of industries and these are the sort of industries that are very necessary and desirable in rural areas so that people can be employed in their own areas. There is much scope in rural areas for development particularly from an agricultural point of view. Unfortunately the situation in some of our under-developed rural areas is not being improved and there are cases in which the situation is becoming worse. We all know of towns and villages in which industrial development is taking place, but for every area in which development has taken place one can think of at least ten areas in which there has not been development. From that point of view it is essential that small industries are encouraged; otherwise, our young people will not be able to find employment in their own areas. In the smaller industries also there is the tendency for employment to be spread on a more equitable basis than is the case in single larger units.
The creation of jobs in industry leads automatically to the creation of further jobs in the service area. An additional 5,000 jobs in a new industry could mean in effect the creation ultimately of 10,000 new jobs. While I am on this subject I would refer to the number of factories that were set up with IDA approval and help but which have since been closed. In some cases it must be conceded that the closures were unavoidable. I do not suppose it would be reasonable to expect more than an 80 per cent success rate in regard to new industries, but we must realise that when an industry closes there is the loss not only of the jobs in that industry but also in the related service industries. Therefore a loss directly of 100 jobs locally could mean effectively a loss of 200 jobs on national level. Apart from the factories that have closed there are also IDA financed premises that remain unoccupied. Because of the investment of public funds in these premises they should be given priority and, where possible, immediate commitment.
In this context I would direct the attention of the House to my own county where there have been four IDA factories idle for the past number of years. These are at Edenderry, Clara, Tullamore and Birr and all of them have been built for more than two years. Indeed, the factory at Clara has been closed for almost five years. The total employed in the town of Clara prior to 1970 was in the neighbourhood of 1,000 people. Since then and since the redundancy within Goodbodys that figure has been reduced to 500. In 1970 when that redundancy problem arose the Fianna Fáil Government took action and two IDA factories were built in Clara. One was occupied within months of being built and I am glad to say it now employs almost 200 people. There were redundancies in the region of 400 to 500 at that time in Goodbodys. The Minister through his Department will be aware that the second factory was occupied in 1970 for a short period, about six or nine months, and has been left vacant and idle since then. Clara was then declared a designated area and the higher rate of grants was made available through that designation. As a result quite a number of people who have been redundant did get job opportunities in their own town and were re-employed. However, when the National Coalition came to office in 1973 the designation of Clara was lifted, and naturally no further industrialists could be attracted there. The Minister should ensure that an industry goes into that vacant IDA factory which will provide job opportunities for a town which has been an industrial centre since the time of Grattan's Parliament. Clara is unique in that sense. I doubt very much if there is an older industrial centre in the 26-county Republic. I hope the Minister will give that matter serious and quick attention.
I have mentioned Edenderry. Tullamore and Birr. I was led to believe quite recently that an industry is taking up the idle IDA factory in Birr. Let us hope that it will be a success and will bring job opportunities to people there. Tullamore is another town which has been sorely neglected from the industrial point of view for quite a long time. It is the capital of the county and has had an IDA factory idle for the past three or four years. I understand that a section of that factory is being taken up by an industrialist who will be employing a very small number. There was hope that the very much larger industry would be coming to Tullamore but I am sorry to say that recent rumours about that are not good. Let us hope they are not true.
I stress again the need for industry in County Offaly. The fact that Bord na Móna and the IDA have been so aligned in County Offaly has resulted in serious neglect of that county from an industrial development point of view. Statistics indicate that we are almost at the bottom of the scale in regard to industrial development, only County Leitrim being lower. Because of the Bord na Móna and ESB developments there was a tendency at all levels to say: "Those people in Offaly are all right. They have the power stations and the bog developments and that is enough for them". Naturally when we had the ESB and the bog developments we had a lot of young people—now, I am glad to say, well-educated young people—coming on the market with no job opportunities available to them in their own county. The Minister, his Department and the IDA must see to it that industrialists will be brought to the idle IDA factories in Offaly.
When the provisions of the Industrial Development Bill are being applied I hope pride of place will go to agriculture-based industries. After all, in that respect we have the industrialist's dream in raw materials, technicians, innovators, a youthful work force, and a hungry world. Regarding the encouragement of entrepreneurs that I mentioned when referring to section 3, I would like to refer to the many technicians and planners in bodies such as the ESB and Bord na Móna who would make ideal entrepreneurs. They have the development skills, the knowledge and the necessary drive. I believe that people engaged in research in bodies like the two I have mentioned would be particularly suited to branch out and to be encouraged to do, as it were, their own thing, in different industries. The people I have in mind have over the years a very good record in efficiency and in applying their skills. In this matter it is most encouraging to see in section 9 of the Bill a much-needed enlargement of grants for research. This will contribute enormously to the growth of output in industry and will bring about a better use of our natural resources and diversification and proliferation of goods manufactured, all of which will increase home consumption and bring about a marked increase in exports.
On much the same lines, section 9 gives a realistic grant which will ensure efficiency of training in industry. Where possible priority should be given to research and training in ancillary industries. For example, in agriculture, where less raw materials are involved, less will have to be imported and there is more there to be exported.
There is a great opening for the development of many lines in the meat industry. Quite a sizeable number of our cattle are still exported on the hoof. I recently read an article about the development of meat processing, having different cuts of meat to ensure that a greater number are employed in our meat industry. It seems there was some problem with MCA payments and also in regard to the different cuts and the different weights of cuts of meat. The Minister for Agriculture will be more concerned with this than the Minister for Industry, Commerce and Energy. I believe both Ministers should get together on this to ensure that this problem does not continue. I believe that if that matter is properly dealt with a great number of job opportunities can be created in the meat processing industry.
It seems that the number of cattle exported on the hoof is decreasing but is not decreasing fast enough. I feel that through the further development of our agricultural land we are reaching the stage when almost 80 per cent of our total cattle production can be slaughtered and that meat processing and other ancillary developments from this processing can be developed. In that way thousands more people could be employed in that industry.
This Bill shows that the Government realise that other countries are in a much worse plight than we were in the last century. If we want justice for our people we must be just towards others. I hope that section 4, which provides for technical and advisory assistance to developing countries, is not merely a pious wish. International co-operation brings peace to the world. Our best way to co-operate is to give what we have in abundance. I suppose what we have to give is our knowhow, our techniques and our experience. By this we will make friends abroad and create a responsible, active and balanced community at home.
There is a great need for everybody outside the Government and the Minister concerned to face this huge task of reducing the great number of people on our unemployment register. It will not be very easy to ensure that all our people are employed. I believe that this Bill contributes towards alleviating our unemployment problem. I know that the Minister will ensure that everything is done to create jobs, especially jobs for young people. I hope the Minister will bear in mind the necessity of ensuring that most if not all of the 30,000 school leavers available will be able to find job opportunities at home. The people have now come together to ensure that this is done. Those who are employed and those who employ have got to co-operate to ensure that job opportunities are available.
In my remarks I will try to avoid repeating many of the very cogent and important arguments that have already been put forward. I hope, principally, to introduce one or two matters which I believe are important and which have not been dealt with in any great detail as yet. I assume this Bill may be interpreted as part of the frontal assault which presumably the Government wish to make on the unemployment problem. We welcome this. I will go so far as to say that it may be said to be rather little and rather late but nevertheless it will undoubtedly enhance the competing prospects of the IDA. It will also introduce the very important notion of equity and of increasing the role which the IDA will be able to play in ensuring that, by their participation in companies, the public interest is well and truly served.
I should like, in wishing this Bill every success and in wishing the Minister every success in the very onerous duties which lie before him to point to some of the assumptions which underline this Bill which I consider are important. It seems to me that, if one discusses economic and employment issues generally in relation to specific items such as this, one rarely gets the opportunity of standing back and seeing if our basic policies and our basic philosophies are the right ones. The whole impetus and attraction of this type of Bill lies in compounding the very valuable enticement factors which the country has for investment from abroad and within its shores.
As I hope to point out in a few moments, this may not be enough any longer because, to a degree, there is an element of what one might might almost call industrial prostitution. A previous speaker referred to towns with facilities for industry and for job creation waiting anxiously, with bated breath to use a cliche, for someone to come in and give them life and hope. I have to be honest. There is a certain indefinable sadness about that. We should put a little more emphasis on personal initiative and personal effort, and on the State encouraging us and creating the structures necessary for the evolution of that effort.
For historial, cultural and other reasons, perhaps, we have been too wont to be satisfied with what blows in the wind in terms of the jobs created here. As time goes by there will be increasing competition for jobs. This Bill is designed to cope with it. I anticipate therefore that our policy, right though it has been and is, of opening our arms to the commercial interests of the world may lead us eventually to lower the price somewhat. An extension of that has dangers, it is proper to point out.
I do so in the context of a debate in which other speakers have rightly pointed out the necessity for recognising the enormous difficulty for individuals in terms of their social role and their peace of mind, and for the economy in terms of the whole jobs situation. I do not wish to underestimate that. Obviously the need to create jobs will remain with us for a considerable time.
This Bill strengthens the hand of the IDA. Whether it goes far enough, I am not certain. My disquiet in that regard is underlined by the admittedly relatively short period of approximately four months during which the new Government have been in office. Although it is a short period, it is fair to say a casual or objective observer might reasonably have expected that a little more could have been done. I say that particularly in the light of the fact that very strong and assertive claims were made that jobs were there and were merely waiting to be created.
I do not wish to introduce a shallow political note into a matter of great national importance, but I have seen no evidence of this immediate wizardry in terms of jobs. It does not exist for this Government or any future Government. There are no easy options of waving a magic wand and creating jobs overnight. This does not happen. Perhaps it is a disservice to democracy, to the unemployed, and to the young, to pretend that overnight one can create the kind of solutions we need.
Some people queried the effectiveness of the IDA in this debate. One speaker said the IDA have failed lamentably, or words to that effect. I do not agree with that. The IDA have done a good job. Obviously they have not done the job some politicians believe they should have done, which, presumably, would be to try to create full employment. Let us not forget that the effectiveness of the IDA, or any other State or semi-State organisation, will only be as good as the political will and wisdom of this Chamber, and only as effective as the sense of vision of the Government and Parliament.
If there has been a failure it has been a failure of Governments, a failure in our attitude to the creation of jobs and the way we have tried to sell people the idea that jobs can be created overnight. When one talks about the relative success of the IDA, it is difficult to be certain what one is speaking about. One of my own preoccupations and concerns has always been to what extent one can judge success in what might be called loosely the public service. What are the goals in the public service? By what standards do the IDA operate? How are they to be successful? I suppose one could say success for the IDA might be the achievement of their targets. That has not happened, is not happening, and is unlikely to happen.
On the basis of their own projections and performances, the IDA have had considerable setbacks. In terms of job creation, from 1973 to 1976 there has been a deficit. In terms of gross job gains and losses from 1973 to 1976 there has been a deficit of nearly 4,000 jobs. Obviously some areas have suffered particularly in this regard, and principally the heart of the eastern region, the Dublin area. I am aware, as I am sure other Members of the House are aware, of the valiant struggle by the IDA to cope with their enormous problems.
1976, the year for which the most recent annual report of the IDA is available, was the fourth year of a five-year period covered by the IDA's regional development plan from 1973 to 1977, first published in 1972. This plan set targets for the creation of new jobs and undoubtedly tried to achieve those targets in the context of enormous international problems and the recession which beset them. In that climate they did a good job.
The fact is that the net job creation over the first four years was substantially below target. There was a decline of 1.9 per cent in the number of persons employed in manufacturing industry. This compares with a gain of 7,600 jobs required to achieve the net growth rate projected in the 1972 plan. Ironically one could pass the comment that, despite this brave struggle by the IDA to cope, if they were a private commercial company they would now be in serious difficulty by reason of not achieving their targets. That is no reflection on them.
The IDA admit that historically approximately 60 per cent of their job approvals have been translated into actual jobs during the five-year period immediately subsequent to the approvals. If one analyses rationally and objectively the function of the IDA in relation to job creation and maintenance, it seems their role is essentially to try to maintain in terms of numbers the reservoir of jobs which exists. That takes into account the new jobs they create which, unfortunately, have tended numerically at least to replace those jobs which went out of existence, presumably through market forces and unprofitability.
There is evidence to suggest this topping up of the reservoir of jobs will become more difficult for the IDA and the Government by virtue of the apparent net contractions across the whole employment pool. From 1970 to 1974, there was a net increase of 5,000 jobs which, apparently, cost something in the region of £225 million. From the period 1973 to this year, the indications are that there has been no net increase in jobs and that we have simply maintained the situation as it was. That does not diminish, or attempt to diminish, the fact that new jobs were created but, as I said, they were counterbalanced by jobs going out of existence.
Whether designedly or otherwise, the IDA have operated, in effect, as a catalyst for insuring that this reservoir of jobs—I am speaking numerically— was kept continually at a certain level. They do this by commitment and dedication. Obviously they have coped very well as a job creating agency of a small country in a rather enormous international economy. They have been helped by the support of both sides of this House in doing their job. However, I wonder if perhaps the time has now come when we should consider a much wider dimension and a much wider vision as essential if we are to create the kind of conditions in the heart of every Member in relation to employment and the social harmony of our nation. Without the IDA the present unemployment problem would be much worse. In fact, the situation would be nothing less than catastrophic and probably inestimable. Remembering that, the nation owes a debt of gratitude to the IDA.
Some have blamed the IDA and said they have failed. That is not a realistic approach. The IDA are the executive arm of the Government and Parliament and specifically of the Department of Industry, Commerce and Energy and, if there has been failure, then that is the area in which it has occurred. The IDA or any other body will function only as well at any time as the powers entrusted to it by this or any other Dáil and as the vision which generates that particular entrusting allows it to function. If is, if you like, an economic catalyst powered, or otherwise, by the Government and bobbing about on an enormous international economic sea.
This was underlined in 1976 when the authority's experience mirrored the improving economic fortunes at home and abroad and the general up-swing which occurred in the international economy. The better than predicted outturn of 18,312 job approvals, over 1,000 more than the target set for the year, reflected a substantial increase in the number of projects successfully negotiated in the latter part of 1976. In the second half of that year industrial companies at home and overseas began to move ahead with new plans presumably buoyed up with the obvious evidence internationally of economic improvement. This benefited the home economy to the extent that the IDA's fight for jobs began to show positive results, higher than the average six monthly period prior to that over the last three or four years.
This was also evident in relation to developments in other areas because, when one talks about jobs, there are many areas of the economy to which one can refer. In the past year there were, for example, a number of significant developments which should lead to a strengthening and expansion of the heavy industry sector. Indeed, earlier this year we had the proposed zinc smelter project to process part of the output from the Navan mines being announced. One hopes this is not merely in itself a creator of jobs but an omen that we are moving into a new area of industry and job creation in which we do not have either a tradition or a history.
The IDA's small industries programme was particularly successful during 1976 with a total of 236 small industrial projects approved for grant assistance. These are expected to generate something in excess of 3,000 jobs. There was solid evidence, particularly during the last year, that things are on the upturn and that there is cause for reasonable optimism about the degree to which we will be able to maintain the number of jobs in existence. As I said, the creation of new jobs is a different problem and needs to be tackled with a wider vision than has been traditional.
In passing, I should mention—it has not been mentioned so far to the best of my knowledge—that the IDA, charged as they are with responsibility for getting new jobs and winning new jobs in the face of international competition, could hardly be faulted if they had thrown caution to the winds from the point of view of ecology and protecting the environment and therefore it is very laudable, and certainly to be welcomed, when the contrary can be said, when in fact the IDA have operated antipollution measures and made efforts to eliminate dirty industry, the type of industry and projects other countries would not accept, with a vigour and a wisdom other countries could envy. This obviously is very difficult and it will be more difficult in the future because of the increasing pressure to lower the price. The IDA's difficulty will be that there will obviously be calls from all quarters to create jobs almost at any cost. We saw an example recently of what would have been undoubtedly a desirable attribute to our economy in the Cork area when one understands the price offered amounted to something like a package valued at approximately £50 million for the Ford factory. I am not sure if that figure is accurate but it is the figure one heard mentioned.
In their attempts to preserve the ecology and conserve the environment the IDA will at all times need the support and the backup of local authorities and, indeed, these local authorities paradoxically are in some respects in a strange position because they have not operated standards the IDA put into operation although they are charged specifically with the job of monitoring and ensuring such standards are implemented. Not merely then in terms of the way the IDA have combated the problem but also in terms of the way in which they have gone about the problem and the respect they have shown for the environment do they deserve our gratitude.
This jobs challenge generally, the difficulty and the need to create new jobs, what exactly is the nature of it and what are its dimensions? Two of the great god words of the age are "job creation". It is important that we should have some idea of precisely what we are talking about, how serious the problem is and how many jobs we need. The figures most of us have available indicate that something on average in the region of 23,000 jobs were necessary some time back outside of agriculture. Since 1974 we have had more up-to-date information which indicates we are talking basically between now and 1986 of the need to provide something in the order of 250,000 jobs. This figure allows for a certain degree of unemployment. I need hardly point out that no Government in the history of the State have ever come anywhere near that figure. I have to be honest and say that I am not impressed to date with the evidence over the past four months that that job and that figure will be tackled in any better degree. In fact, the expectations built up may yet provide and may yet be a great problem in terms of the credibility of many young people in their Parliament and in terms of their aspirations and their view of the integrity of public life generally.
One of the lessons we have learned in the context of unemployment is that we must not ever risk the temptation of including ever again a man's or a woman's job as a political carrot and that goes for all parties. It is far too serious and far too tragic if the aims do not materialise and the objectives are not realised. I have no doubt the aims will not materialise. I am not saying that in any sense of triumphalism. I say it more in sorrow than in anger.
We have, of course, seen the need, if we are to create the kind of desirable employment prospects we hope for, to create an increase of more than 50 per cent in the 1976 level of industrial employment and 25 per cent in the 1976 level of employment in the services industry. This is an enormous challenge and I wish the Minister and the Government every success in undertaking it. Once upon a time a Minister or Government could, perhaps, have held faint hope that the safety valve of emigration would take away some of the pressure. That is no longer true. That has gone and I welcome that situation because it is a sad thing for any nation to export its people. Thankfully, that has now ceased. I look forward to the day when this Parliament will be able to cope with the problems of its people to the extent that they will return in increasing numbers and bring with them accumulated expertise and cultural experience that they have gained abroad.
So, for the 51,000 people out of work in 1965 emigration provided no answer, or for the 90,000 out of work in 1975 or for the 108,000 out of work last year. It is clear that the old solutions will no longer work and that a major effort by all parties to resolve what must be seen as a national crisis will be needed. As our spokesman on Industry and Commerce indicated, I have no doubt the Minister will readily be provided with every co-operation from this side of the House in trying to ensure the welfare of our people.
I am particularly concerned with the difficulties of young people. What are the figures? In the seven largest OECD countries there are nearly six million young people under the age of 25 listed as unemployed. Young people account for about 42 per cent of all recorded unemployment, the average incidence being about three times as great as among the 25-64 age group. In other words, youth unemployment is now chronic at home and abroad. It has been rising since the sixties in virtually all OECD and other European countries, whether judged by measured rates of unemployment or by young people's share of total unemployment. It now falls most heavily on school leavers seeking work. It falls particularly heavily on girls unemployed under 20. At present we are told that there are 3,700,000 young people who left schools and universities, presumably qualified, throughout the EEC countries who are still out of work. We are also told that by 1982 there will be nearly 3.5 million 16-year-olds out of work while the number of people reaching 65 years will reach only two million leaving a net surplus on the job market of around 2.3 million.
One of the tragedies of statistics and figures is they tend to dehumanise what is essentially a human problem. How can anyone visualise one million people? In my very first election, a local election, I awoke one night during the campaign almost in cold perspiration wondering how in God's name I would get 500 people to vote because I thought of 500 people in a line or queue and it seemed a great number. Fortunately, that number was considerably exceeded when the poll came around and I have not since suffered a similar nightmare —nor do I expect to do so—but it underlined for me the difficulty of gauging what we mean when we talk about one million. We are talking of millions of young people without jobs. In some countries since 1973 unemployment among the young has doubled; in others, trebled and in still others, quadrupled. It would be unrealistic for this House or any similar House in any country to expect that this demographic time bomb situation will be allowed to continue without major international revolt. Experts in Brussels tell us that those under 25 represent about one-third of the more than five million wholly unemployed in EEC member countries. Attempts are being made by the employment of various funds and portions of funds to cope with it.
In Britain we see an even more drastic position where, obviously, industrial contraction of any kind will tend to precipitate enormous numbers of young people into the ranks of the unemployed. Sure enough, the unemployed numbers exploded there from 174,000 in mid-1974 to 436,000 in mid-1975—one year. In France and Italy, figures earlier this year were reported as around 400,000 and some experts place them closer to a half-million in France and 600,000 in Italy. And I am only speaking of people who may be considered young, approximately 25 years old or under.
Therefore, on the whole, the economic and employment picture throughout the Community in 1975 is generally considered to have been the worst since the end of the war in 1945. We should bear in mind that here we are only talking about creating jobs, units into which people are automatically slotted. We are putting aside for the moment all the noble attributes inculcated into us over the years in regard to what is desirable in a job—job satisfaction, self-fulfilment, contribution to the community, dedication in terms of selflessness, service to others. We are omitting for the moment all these high-minded, noble ideals, although I suggest we cannot leave them out altogether. We are leaving them out because our primary concern is to create jobs and have young people and not so young people employed. That is perfectly understandable, but there are very deep social implications involved as well as numerical implications that I have tried to underline. What about young people looking for more stable or satisfactory work more befitting their education or natural aspirations? What about those who do not even bother, those who suffer from the social alienation of not even troubling to register for work because they do not believe they can get it? There is also the lack of opportunity for self-fulfilment.
Debate adjourned.