I agree. The Department of Industry, Commerce and Energy have a large part to play in the encouragement and introduction of industry and are concerned with all foreign industrialists and problems arising from labour relations. The day may come when the Minister for Industry, Commerce and Energy will also be responsible for industrial relations. I do not want to put a Fianna Fáil Minister out of work or make his Department defunct but there seems to be overlapping in this regard.
The small industries programme has been very successful over the years. It is in this area of activity that the greatest scope for future development lies as far as industry is concerned. In the case of consumer goods and services, small firms have a special role to play in satisfying local needs that cannot be met by mass production. Customers seeking individuality can only be satisfied by the small scale operator. This is especially true in catering for such clients as tourists and foreign customers. This is an increasing market and should be encouraged.
So far as repairs and services are concerned, we are all aware that the small scale operator provides the best service in this field. Paradoxically, economic and technological progress, which many of us feared would eliminate the small firms, has created new needs which the small operator is best able to provide. When it comes to servicing cars, television sets, washing machines and so on, the small firm gives the greatest satisfaction. God help anybody who has to go to the big operator because he can be waiting a a long time for service.
In industry the small operators supply large industrial concerns with the goods required. Many of our large sophisticated production groups depend to a large extent on small businesses to supply them with specialised components. Small companies have the advantage of being able to specialise and co-operate with one another. It is by specialising that the small operator can often supply technically advanced goods and services much more cheaply than the large firm.
A small firm is also best equipped to stimulate development in rural areas. It has proved to be very difficult at times to set up large industrial complexes in the west but it has been proved eminently more profitable for small firms which require relatively little capital and labour to set up in that area. It has often been said that if some of the capital made available to attract foreign industries on a large scale had been left for small Irish industries, much cheaper and more secure development might have taken place.
It is agreed by all that the development of medium and heavy industries should be energetically pursued but at no time should it be allowed to monopolise existing capital so that there would not be sufficient for the development of small industries. Unfortunately the small industry, despite specialisation, will not of its own have the resources to solve marketing and research problems. That is why the IDA should encourage small firms to co-operate. They should encourage firms to concentrate on certain aspects of production and to economise on marketing, purchasing and advertising. Groups of small firms could join together to seek new outlets and thus become more export minded. Agreement could be reached between small firms to share the research costs which are so necessary to develop new products and techniques and to help maintain their share of the exports market.
To encourage greater development in the small industry division, it will be necessary to give county development teams much greater autonomy. As it is, those teams have no discretion in the small industries programme although they can make recommendations. If better results are to be sought discretion above the £1,200 limit will have to be given to the special regional development fund. I suggest that £5,000 might not be too much to put at their disposal. It would be safe enough to assume that there is no danger of things being let slip through because there is enough expertise and management expertise on the development teams to guarantee scrutiny of all applicants.
It is only when we look at the complexity of the application form for a small industry that we begin to realise why many young entrepreneurs are scared off. Existing measures applied to applicants looking for small industries grants are stifling the initiative of people who are most anxious to get into this scheme. The application form has all kinds of questions—about design, building, machinery they have and or which they want, raw materials, employment potential, training, management and technical control, finance, turnover, costings, working capital, liabilities, marketing, had they been in touch with the CTT, NDA and so on. When gentlemen from these organisations arrive in their pin-striped suits to talk to small industrialists or people in their working clothes who are anxious to start new industries, they can easily be scared off by all this talk of high finance and marketing through various organisations.
The people from the IDA do great work for medium and larger industries but the small-scale operator should not be put through this rigorous test before he is given a few thousand pounds to get on the road. These operators have proved to be most successful. The county development officer scrutinises the first application. Then it goes before the county development team. They have always been most anxious to help. It then goes to the projects officer of the IDA, small industries section, and is given an in-depth scrutiny. A report is often required from the industrial research and standards department on financial projections for operations up to two years in advance. What small industrialist or entrepreneur starting off can give that kind of programming to the officers? They require a breakdown on the relationship with agriculture, market breakdowns, cash flows, chartered accountants' reports—all resulting in delays of six to 18 months. This is often the critical period for the man who has not the formal education to withstand this kind of pressure and he is put off. The initiative is often lost and valuable job creation opportunities are lost with it.
The requirements of the application are too rigid. Greater trust should be put in those willing to take their courage in their hands and set up small industries. The enterprise development programme is very necessary in the developing of jobs needed in the small towns and in servicing the needs of new large scale industry. While the enterprise development programme should seek out graduates and others engaged in local authorities, semi-State bodies and public institutions as well as executives in manufacturing and service industries who have skills and ingenuity, we must never forget the number of small businessmen in rural towns who have very special skills and who are always willing to utilise the training they have got—many of them have got the training in Britain—to create new job opportunities here.
The vast majority of those people have no university training but they have the expertise which is required. All they need is the financial assistance to create the job opportunities we so badly need in rural Ireland. There is one classic example which is used very often as far as Mayo is concerned. A man, after spending a few years in England returned home with less than £1 in his pocket. He started a small project in his village and today he employs 40 people. If that is not the success story of the year I do not know what it is.
There are many areas that the small projects team call sensitive and they will not give support to them. There is a long list of them given. In many cases people like carpenters and joiners provide a social need. They provide very worth-while local employment. They were refused grant assistance by the IDA while joinery is still being imported not only into Mayo from other parts of the country but from the United Kingdom. I do not believe that it is true to say that the sharpening of the tools in one small business in an area leads to unemployment in an adjoining area. It must be remembered that there are many developing towns in the country and large industries need the services of those small-type industries based on joinery and such related craft industries.
The IDA should lift the blanket refusal and grant this type of operation some assistance. They would then find they could generate many job opportunities in rural Ireland. Small engineering works, particularly in the agricultural engineering sector, are being refused grant assistance. This happens in an area where agriculture is and will continue to be the livelihood of the vast majority of the people. It is hard to comprehend how the IDA can justify refusing grant aid assistance to such type of small engineering industries when one considers that approximately £42 million worth of this type of agricultural equipment is imported every year. Much of this could be made in some of our industrial engineering concerns.
We all know how the Sugar Company have developed agricultural machinery. It is not only holding its own on the world market but is leading the world market in many areas. It is obvious from that one example that we have the expertise and the enterprise. Why are the IDA not grantaiding small- and medium-sized agricultural engineering projects? They must lift the blanket refusal from this type of project. The job opportunities which could be created there are vast. It was mentioned in a report I saw recently that one person started off that type of industry with a welder in the back garden. I know of no small engineering industry that started off on that scale that had not a turnover well into the four, five and six figures within a few short years.
A special section should be set up in the IDA to investigate the engineering industry. It seems ridiculous in an agricultural country like this that we should import £42 million worth of agricultural engineering goods in a year. This is a suitable time to examine the policy in relation to small-type industries. Will this programme cater for local enterprise in joinery and other related industries? We have the enterprise, the technique and the expertise waiting to be tapped. Considerable jobs could be created if sufficient grant aid is willingly given to the IDA.
Perhaps the IDA might have a word with the ESB in this regard. There are many small-type operators who are being denied the chance of getting a start in life by excessive demands by the ESB for connecting electricity. If necessary grants should be made available to defray the cost of those connections. When a man has the initiative to go ahead that initiative often lasts a very short time and can be stifled by the smallest setback at the initial stage.
I saw some trade statistics from the Central Statistics Office for the different years. They cover importations but they give them under global headings. Division 72, under electrical machinery, gives the imports for April as £10 million. What machinery? Could we have a list of the type of machinery imported? Under transport equipment we find that £15 million worth of goods were imported and under Division 83, travel goods, we find that £318,000 worth were imported. How many small industries are engaged in this type of industry? They should specify what type of travel goods are imported so that the young entrepreneurs who are interested in setting up industries in that field would have an opportunity of seeing what is coming into the country and then can say to themselves: "I can do that." This would then put an end to another importation.
The Central Statistics Office should differentiate the different sections under engineering, science, textiles, plastics, chemistry and so forth so that those people will have the opportunity to see where their talents can best be utilised. There should be a new system of licensing in regard to industries in the United States and the United Kingdom. There must be a huge European market in that field. If proper programming was done under a licensing scheme we could produce many of the goods under licence from larger firms to supply the home market and the export market on the Continent of Europe. This should be updated every year. The IDA should seek those arrangements.
It is also hoped that this new Bill will provide support not only for the individual but for partners and limited companies as well. It has always been accepted that the formation of a limited company is a very sensible exercise for anyone starting out in manufacturing or other business. The IDA should broaden their base to cover such projects. It will be disappointing if support is there only for working capital. In a small industries programme the person who has the ideas, expertise and knowledge of the markets and perhaps an excellent chance of success does not always have the capital or collateral. Will this kind of operator get only the normal grant of 60 per cent in the designated area of the fixed assets? If so how will he be able to secure the remaining 40 per cent? There would seem to be a missing dimension there. I would be delighted if the Minister would clarify that in his summing up. In his statement introducing Second Stage he said, as reported in the Official Report of 2nd November, 1977, Volume 301, column 158:
Accordingly it is proposed in this Bill to provide for the giving of loan guarantees and interest subsidies to first-time industrialists, in respect of loans raised to provide working capital.
The IDA might be persuaded to take equity in such small projects. If they would it would be interesting to know if they would allow the promoter to buy out the business from the IDA if and when it was successful. If so, would it be possible to have the terms of the purchase laid down in advance? This would be a considerable incentive to young promoters who would like, as would all of us, to be the owners of their own projects.
In a progressive society the greater part of a country's wealth is generated by the private sector. Privately-owned business has always been less wasteful of its resources than has public business. If it is intended to allow the private sector to develop its full potential as far as industrial development is concerned it will be necessary to have another look at the taxation system as it applies to private industries operating in this country. Many long-established industries have been brought to the wall in the past and they might have been saved if they had had the necessary reserves from an enlightened tax system. It would have given them the resources that were so necessary for their development. Most industries expand and they replace their equipment from their own financial resources, but how can these resources be built up if the company tax system as it presently exists in this country so denudes them of capital resources that they are unable to expand or replace old and worn-out machinery? So they end up with declining profits and become another dead body of Fóir Teoranta. It is well recognised by small business in this country that there has been over-taxation of company profits over the years which has resulted in the lessening of working capital available to industry. Consequently job opportunities could not be created and all too often Fóir Teoranta had to be called to the rescue, or indeed to preside over the final obsequies of many a fine Irish industry. It is very little comfort to established Irish industry trying to make ends meet to know that the IDA are granting tax-free holidays to overseas concerns coming here to set up a business.
It has been touch and go with the IDA who have been endeavouring with might and main to attract new industry here for the purpose of job creation, so as to keep pace with the loss of jobs in other industry often caused by impoverishment brought about by a penal tax system of long-established Irish business interests. As well as supporting the IDA in attracting industry by offering all kinds of tax concessions, grant aid and so on to foreign investment, we should make every effort to remove handicaps placed on Irish industry. The greatest handicap at this time is the company taxation law. If there were a more enlightened taxation system applicable to Irish industry some of the provisions of this Bill might not be necessary. Some of the provisions would lead one to believe that we are now trying to redress the situation created by our own taxation greed in the past. If we are to accept the policy which says that we must promote maximum private investment, it is logical to assume that the source of such investment must be allowed to be accumulated in this country. Money held here must be encouraged to be channelled into this investment rather than to lie idle or, worse still, to be invested abroad. If capital taxes force Irish wealth to leave this country or doom it to low-yield activity, then a disservice has been done to the nation. The Minister should look at these taxes with a view to having them revised or, better still, abolished.
I welcome the Minister's statement concerning the setting up of a consortium for the purpose of job creation and generally monitoring our performance in this regard, identifying obstacles to the growth of industry and suggesting solutions that would be in the common interest. It is important that Irish people control their own destiny, and the control of the major part of our industry is very desirable. In this regard I welcome the section of the Bill that allows equity participation by the IDA in Irish business. The personal and corporate taxation systems applied in Ireland have actively worked against the accumulation of private reserves and investment funds which are required in a developing country such as ours. The results are inconsistent with the Government's policy of seeking to create a domestic climate conducive to private investment. There are many indications that over the past few years the private sector has been unwilling to undertake further investment in this country. This is forcing the IDA and the Government to pick up the slack out of public funds. There is a body of opinion which feels that the corporate tax system is acting as a disincentive to private investment and that instead of bringing in revenue to the Exchequer it is putting further burdens and pressures on the Exchequer through an increased demand for public investment funds.
If this is the case it is time that the abolition of direct tax on businesses should be considered. The results of such abolition would be that more money would be obtained by companies for use in their own reinvestment programmes so that they would be in a position to build up capital stocks and thus reduce their dependence on borrowed funds the servicing of which has aggravated the difficulty of many businesses and has been the cause of many of them ending up in financial difficulties in the past. I cannot see how the abolition of company tax would in any way mean the evading of tax by the companies concerned. If the company decided to pay dividends to their shareholders out of their surplus this would be taxable against the personal incomes of the recipients. Even if some of the surplus or profits were distributed as bonuses to the staff that would also be attached to the personal taxation system.
Some Deputies from the eastern part of the country mentioned here on more than one occasion that Dublin now had a crisis situation as far as unemployment was concerned. I agree that Dublin is a special case and indeed in some respects has been a special case since the foundation of this State. Some new strategy must be worked out for the east coast and the conurbation of the city. I do not like the suggestion that the west has benefited out of proportion to its needs to the detriment of the city area.
Since the foundation of the State, 90,000 people left County Mayo on the emigrant ship. There were no jobs for them. I will regard the balance as having been levelled off when the IDA or any other agency provide the 90,000 jobs to bring my fellow countrymen back from foreign shores. The score will be levelled then, and not until then. I say that with the greatest respect for the IDA who in the recent past made a dynamic improvement in Mayo.
Let us take two figures which are important in this context. In September, 1977, the unemployment situation in County Mayo was as follows: a total of 5,272 persons were drawing unemployment and assistance benefit, and there were 4,376 small holders in the same region. That is the official position of unemployment in County Mayo. I suggest those figures mask, to a degree, the real position, considering that girls who left school in 1976 and 1977 and are not entitled to unemployment benefit are not included in those figures. Neither are school leavers with academic qualifications for whom there are no jobs.
The position in County Mayo has changed dramatically in the past ten years. In 1965, 1,371 persons were employed in manufacturing industry in the county. By 1st January, 1977, that figure had risen to 4,052. Great efforts were made by the IDA in the location of sizeable industries in Mayo to achieve that figure. The one single industry which is the talking point along the west coast is the Travenol laboratory which came with the promise of 200 jobs, and we now have 1,000 people employed in Castlebar with spin off industries located in Belmullet, Swinford and Tuam, and further developments on the way.
However, that industry has brought its own problems and, coupled with the decentralisation of the Department of Lands to Castlebar, it has brought a unique problem to Castlebar. There is now an imbalance between the male and female population structure in the area. This imbalance has to be corrected because, if it is allowed to get out of control, we will end up in a worse situation than the one in which we started.
The population structure has gone out of balance in my area and it will require at least one sizeable male-orientated industry located in the west Mayo region to correct that imbalance. There are many suitable and ideal locations in west Mayo for such a venture. I would ask the IDA to pay particular attention to this problem and to generate new jobs to correct the population imbalance which has grown up in the past few years.
There is a rumour afoot—and I hope it cannot be substantiated—that the decentralisation programme is being stifled by moves from the city to cut off work from it and thereby lessen the number of people employed in the Castlebar office. That programme was initiated by the Fianna Fáil Government in office and nothing in the past few years has improved the situation so far as the location of the Department of Lands in Castlebar is concerned. I hope my Government, the new Government, will proceed with new initiatives to finish off the job they started: the total decentralisation of the Department to Castlebar.
There is another figure which is very interesting and which has to be referred to here, that is, the number of people in County Mayo between 15 and 19 years of age and 20 and 24 years of age. In 1966, the 15 to 19 year age group stood at 10,895 and, five years later, in 1977, the 20 to 24 years age group stood at 5,928, a loss of 4,967—in other words, 45.6 per cent of the young people of County Mayo. If those figures alone do not suggest to the Minister and to the Government that there is a continuing need for job creation in Mayo, nothing else will—and I do not care what goes on on the east coast.
How can you lose almost half of the teenagers and young men and women and hope to have a community which can survive and thrive? We must pay attention to these figures. The IDA must gear their operations to these figures. If by spending a few thousand pounds, on a small entrepreneurial industry, or a few million pounds on a large-scale male-orientated industry, we solve this problem, a decent job of work will have been done by the Minister and the Government to provide the infrastructure which will keep 100 per cent of our young men and women in our own native county.
Not one of those people between 19 and 24 years of age wanted to leave County Mayo. I will tell the House why. It is the last uncommercialised area in western Europe. It will become the playground and the main tourist attraction of Europe in the future. It is the only place left which is unpolluted, uncommercialised and still has the native hospitality for which the Irish are famous.
Since we are discussing industrial promotion it would not be out of place to refer to Asahi and the fears expressed by many people about the raw material being transported to that industry. It is a pity all the people who criticised it were not present when the tests were carried out on the inflammability of acrilic-nitrate. It was found that petrol was much more explosive and much more inflammable than this material. Those types of trucks are passing our doors every day of the week.
That industry is a very useful addition to the industrial scene in County Mayo. It cost a great deal to put it there. As I said before, perhaps enough equity was not taken up by foreign promoters. There was a huge capital allocation from the financial interests involved in this country. I hope phase two will come to fruition. There is a feeling of unease that phase two will not get off the ground. Everything must be done to ensure that happy labour relations will exist in that company. It would be a national tragedy of immense proportions to County Mayo if anything were to happen in an industry of that size. It is the first large-scale heavy industry we have seen in our county. We need others, especially male-orientated ones. Imbalances must be corrected.
I am happy to welcome this Bill which strengthens the legislative structure and financing designed to make the IDA more useful in its promotional activities, more efficient in attracting industry and with a direct say in the future of industry. I look forward to the Minister for Industry, Commerce and Energy and the Minister for Labour becoming the inseparable twins of Irish industry, all the time taking initiatives and introducing legislation which will improve the industrial relations structure and industrial development generally. Indeed, this will be demanded by the people. The people have given us the right to govern and to do everything necessary for the nation's well-being.