Because of a prior and long-standing commitment overseas in the cause of industrial promotion, the Minister for Industry, Commerce and Energy cannot himself be here today as he would have wished. So, it falls to me to reply to what has been a very lengthy debate on a subject of major importance. First, I should like to thank on my own behalf those Deputies who in the course of the debate extended their good wishes to me in my new office. I also want to thank, for the Minister, those Deputies who likewise extended similar good wishes to him.
The debate has truly been a very wide-ranging one, extending well beyond the questions of industrial development and of job creation which depends on industrial development. Indeed, at one stage the contributions from the Opposition took in such topics as the need for large-scale reclamation of land west of the Shannon and the difference between "work" and "toil". Apart from some reservations, expressed particularly by Deputy Kelly, Deputy Desmond and Deputy Collins on the proposed establishment of an industrial development consortium, there has been a considerable degree of consensus on all sides of the House on many of the matters raised during the debate and there has been a general welcome for the Bill which was recognised as being, in Deputy Kelly's words, "plainly desirable and overdue".
With one exception, those Deputies who spoke of the work of the IDA expressed their appreciation of the work of the authority and of the magnitude of the task before it. These expressions of appreciation were by no means uncritical and are all the more valuable for that. There was, however, one dissenting voice, that of Deputy Browne whose criticisms of the authority went beyond what was fair and reasonable, and who was, in fact, taken to task from the opposite side of the House for some of the things he said.
Despite the Minister's opening references to a more comprehensive review at a later date of the powers and functions of the IDA, some Deputies opposite, particularly Deputy O'Donnell and Deputy White, seemed to think that the introduction of the Bill should have awaited a review of the IDA. Such a review at this stage, apart from delaying overdue and necessary legislation, would inevitably have led to some diversion of the scarce resources at a time when urgent attention has to be given to the work of job creation and job maintenance and related industrial promotion.
The work of the industrial development consortium would also be relevant to any such review. However, from what I know of the Minister's thinking, I would envisage that the main emphasis in any such review, and indeed in the work of the consortium, would be on how to intensify and give greater impetus to the development and expansion of domestic industry, especially small firms located in smaller towns. In this regard the views of Deputies from all sides of the House as expressed during this debate are particularly valuable.
Indeed, I am struck by the fact that some of the criticisms made during the debate mainly had to do, not with what is in the Bill, but with the proposals for the establishment of an industrial development consortium and the fact that the Minister for Industry, Commerce and Energy chose the floor of this House to announce these proposals. I am rather surprised by the attitude of Deputy Kelly in this respect, because I cannot think of a more appropriate place to mention such a proposal than the floor of this House, nor a more appropriate time than at the introduction of a Bill dealing with industrial development. Certainly the Deputy's criticism is in contrast to the criticism we have heard from time to time in the past that Ministers tended to avail of functions outside the House to make statements that should more properly be made within it.
If there was one theme which might be said to have run right through the debate, it was that the most urgent and the greatest problem confronting us is that of job creation, and that the Industrial Development Authority have a major contribution to make to the solution of this problem. Other recurrent themes were the importance of small industry, particularly to smaller towns and communities; the need for further development of industries based on natural resources, particularly agricultural products and beef especially; the need to maintain and if possible improve our industrial incentives; and the importance of proper industrial relations to industrial development, a point which we did not require a tragedy like Ferenka to bring home to us.
Neither the Bill nor the consortium is envisaged as a panacea for the very great problems of employment and job creation that confront us. They are intended as a contribution—not a radical solution—to the solution of the job creation/industrial development problem. In the coming years we need every job we can manage to create on a sound basis and we equally need to maintain every job in existing industry that can be maintained on a sound basis.
The concluding stages of the debate have taken place in the shadow of the very upsetting developments at Ferenka, which have very serious implications not just for the Limerick area and the mid-west region but for the country as a whole. The Taoiseach said in the House on 29th November that the Minister for Industry, Commerce and Energy would now pursue in conjunction with the Industrial Development Authority such proposals as there are to see if employment can be sustained in the Ferenka factory and that the Minister for Labour will be looking into the question of personnel relations in factories such as Ferenka to see how they can be improved. I want to comment, however, on the wider implications that the Ferenka situation could have for the country as a whole.
The dominant theme running through this debate was that of the urgent need for job creation, and the magnitude of the effort needed to provide jobs for all our young people over the coming eight to ten years. We have never in our history been able to create jobs on this scale. A very great deal of effort and co-operation will be required if we are to do so. In fact, the National Economic and Social Council some weeks ago expressed the view that the achievement of our employment targets was not an unattainable objective
Export sales relief as an aid is provided the community, that is to say the Irish people, will its achievement and accept the policy that will achieve it. What has happened at Ferenka and the events leading up to last Monday's announcement certainly make the achievement of our employment objectives much more difficult than they were.
Concern was expressed more than once during the debate about the need to retain our industrial incentives at their existing levels at least. I will have some comments to make on that later, but the point I want to make now is that our incentives, generous though they are, would in future be of diminishing value to us if in the eyes of the world there appeared to be the prospect of a Ferenka-type situation recurring.
In his visits to the United States within the past two months, the Minister for Industry, Commerce and Energy has, as part of his industrial promotion efforts, met and spoken to hundreds of United States businessmen, a number of whom have been showing interest in establishing factories here. One of the first questions the Minister was asked—and I am sure it was also being asked of him with even greater emphasis at similar meetings yesterday and today—had to do with the state of industrial relations in Ireland.
There are many problems to be sorted out in connection with Ferenka, and many lessons to be learned if we are willing to learn them. I am sure I speak for everybody in the House when I say I hope the IDA will be successful in their efforts to sustain employment in the factory. But, above all, I say to the House—though it is not a matter for the House or for the Government but for all of us as a people—we cannot afford to let another Ferenka-type situation develop.
During the debate a number of Deputies raised the question of export sales relief and indeed this question has again been in the news in the past few days. The Minister made a detailed public statement in this matter on 21st September last and copies of that statement were made available to Deputies. generally considered to be incompatible with the spirit of the Treaty of Rome. We have always accepted that at some stage it might be necessary to change the system. However, it was recognised in the declarations associated with Protocol 30 to the Accession Treaty that, if the system had to be changed, it would be replaced with a system which would be equally effective as an incentive.
The Government have decided that the time has now come when we must look for a new system. Apart from any other consideration, export sales relief is beginning to lose its attractiveness as an incentive for new industry because of the expiry date of 1990. A number of possible alternatives are being examined, but a final decision has not been taken and in any event a change will not be made for at least two years. In examining possible alternatives, considerations such as those mentioned by Deputy Ruairi Quinn regarding the encouragement of developments downstream of export projects will be very much to the forefront. In the meantime those enterprises which have qualified for export sales relief, or which may qualify before the changeover to the new system, will continue to benefit from export sales relief up to the expiry date of 1990. Those who qualify under the new system can expect to do as well and to get as much support as they would under the present system.
Since 21st September, discussions have continued between member states and the Commission concerning the establishment of new arrangements to co-ordinate the regional aids of all member states, including Ireland. A document has been drafted by the Commission and will be finalised following consultations with the member states beginning in mid-January, 1978. This document enunciates general principles only and the manner in which these principles will be applied to individual member states will be settled in bilateral discussions with the Commission.
At this point I should like to refer to the position of Dublin which was mentioned by several of the Dublin Deputies during the course of this long debate.
The IDA Regional Industrial Plans 1973/77 stated that "while recognising the need to contribute to the provision of jobs for the natural increase in Dublin's population, the IDA, in accordance with the Government policy, grant aids manufacturing industries in the Dublin area only in the case of new enterprises for which an alternative location is not feasible, and expansion of existing enterprises in Dublin".
The IDA strategy with regard to Dublin was based on the assumption that non-grant-aided growth of existing industries would be adequate to meet employment needs arising from the natural increase in population. This was the case until the recession, which resulted in very high levels of job losses in established industries and which reduced the growth rate of non-grant-aided industry. It is estimated that in the four years 1973-76, manufacturing employment in Dublin declined by approximately 12,000 compared with a net gain in the rest of the country of approximately 8,000. Dublin also experienced a faster rate of growth in the number out of work as measured by the live register; at present there are over 36,000 persons unemployed in Dublin.
As a result of these developments, the IDA reviewed their strategy with regard to grant-aiding projects in the Dublin area within the overall objective of retaining the population growth of the Dublin area to the equivalent of its natural increase. The following are among the initiatives that have been taken in this connection :
(i) The Dublin area is now being promoted as a location for large scale industries.
(ii) The small industries programme was extended to Dublin early in 1976 for the following selected sectors: engineering, plastics, and chemicals and pharmaceuticals.
(iii) The IDA are building two 70,000 sq. ft. advance factories at Coolock and Finglas; other advance factories will be provided if required.
(iv) Under the recently announced programme for the construction of cluster units, two cluster units for small industries are to be constructed in Dublin.
Another point which occurred and recurred during the debate was the role of the IDA in connection with domestic industry and the encouragement which should be given to it. It is an inescapable fact that we must continue to attract new overseas projects and this will continue to be the case for many years to come. But side by side with that we need, as Deputies on all sides urged, to do everything possible to maximise the contribution of domestic industry, particularly small industry, towards increasing output and employment. In fact the IDA are at present organising specialised divisions dedicated to small and domestic industry and its special problems and needs. More staff resources are allocated to these areas than to overseas industry. The contribution of domestic industry, and in particular small industry, to the IDA's overall programme over the past year has been particularly encouraging. In his opening remarks the Minister pointed out that the purpose of the present Bill is to facilitate the IDA in giving more assistance to domestic and small industry. He also mentioned the Government's commitment to double the rate of project approval for small Irish industries and mentioned the measures recently introduced to enable this target to be met.
When people speak of assisting small firms they generally have in mind Government assistance. It has been suggested, however, that there are a number of ways in which these big or larger companies could help small firms. The Minister, I feel, would suggest to the bigger companies in Ireland, whether manufacturing or distributing companies, the following ways in which they could help small industries. First, the big companies could pay their bills to small firms on time. In general, the small firm cannot afford to wait for its cash. Secondly, in placing orders with small firms big companies should resist the temptation to use their bargaining power to the point that it stretches the resources of the small firm unfairly. Thirdly, big companies occasionally come across products of commercial interest but which are not worth developing in a large company. Smaller firms should be encouraged to develop these products against firm purchase orders for their early production.
Much of the criticism levelled at the proposal for an industrial development consortium was based on the claim that it would not have the same powers or teeth as the national development corporation which had been spoken of in the latter stages of the lifetime of the previous Administration. I was intrigued by some of the references made to the national development corporation, notably Deputy O'Donnell's assertion that the previous Government had taken a firm decision to establish such a body when in fact this is not the case. Proposals for the establishment of such a corporation had under the previous Administration been circulated by the Department of Industry and Commerce in April, 1977, to other Departments as the start of the process of detailed consideration by the Government of the establishment of such a body. With one exception reactions from Departments had not been forthcoming at the time of the change of Government.
Deputy Kelly felt that the proposed consortium, as he understood it, did not include the agricultural sector and that this was a major failing. Although the Minister for Industry, Commerce and Energy did not name the Minister for Agriculture as one of the members of the consortium that is not to say that all agriculture-based activities will fall outside its area of operations. The consortium will be flexible in its approach; insofar as developments in the agricultural sector can contribute to the process of industrial development they will receive due consideration from the consortium. It should also be remembered that some of the greatest opportunities for growth in this sector lie in the further processing of agricultural produce and these activities fall within the scope of industrial policy generally.
Deputy Desmond felt that the idea of a consortium should be buried quietly and replaced by something "more responsive to our needs" which, however, he did not define. He also referred to the views of ICTU on the matter. I can say that the Minister for Industry, Commerce and Energy exchanged views on this matter with representatives of ICTU on 23rd September last at the meeting with the Taoiseach and economic Ministers. He made it clear that there was no ideological opposition to the idea of a national development corporation but that it was not clear what it could do that could not be done by existing institutions. The Minister indicated that he was prepared to discuss the matter further with them during the present month and in the meantime would be interested in seeing their side of the case developed. The Minister will be arranging further discussions on the subject. Without prejudice to these discussions the Minister does not consider that there is very much that ICTU would expect from the development corporation that could not be equally well dealt with by the consortium.
There were many other points brought up during the debate which I think could be better and more fully dealt with during the Committee Stage of the Bill. A number of Deputies drew attention to the particular problems and needs of their own constituencies and areas, particularly the provision of new industry and also the special problems which exist in the case of Border counties. It would not be invidious if I were to mention in this connection Deputies Cowen, Flynn, Leonard, White and Conaghan among many Deputies who brought up the point. I can assure the Deputies that the Minister, the Department and the Industrial Development Authority are very much aware of the industrial development needs and the special problems that exist in these areas. The comments made during the debate by these Deputies will be given due attention and particular consideration by the Minister, the Department and the IDA.
