I move: "That the Bill be now read a Second Time."
The provisions of the Bill are explained in the memorandum which was circulated to Deputies on 7 November.
The Bill provides for the upward revision of the statutory limit on the aggregate amount of grants and payments of a capital nature which can be made by and to the Industrial Development Authority. It is also proposed in the Bill to raise the limits, which may not be exceeded without prior Government approval, on various grants which the authority may make to an individual undertaking. The opportunity is also being availed of to introduce a minor technical amendment to the statutory provisions governing the authority's powers to operate superannuation schemes.
The limit on the aggregate amount of grants and payments of a capital nature which may be made by the authority, and on the aggregate amount of grants which may be paid by the Minister to the authority for this purpose out of moneys provided by the Oireachtas, was increased to £400 million in accordance with the provisions of the Industrial Development (No. 2) Act, 1975. The total amount of capital issued to the authority to the end of 1977 was almost £317 million and the authority's capital allocation for 1978 is £69.75 million. It is, therefore, again necessary to amend the statutory limits in order to enable the authority to continue to discharge their functions after the end of this year. It is proposed in the Bill to raise the limits on aggregate expenditure of a capital nature by the authority and on the aggregate amount of grants which may be paid to the authority by the Minister to £750 million. These higher limits will permit the authority to carry out their functions for a further three years or so.
The limit, which may not be exceeded without the approval of the Government, on the total amount of grants which the Industrial Development Authority may make to a particular undertaking towards the cost of fixed assets purchased or leased and towards the cost of factory rents was raised to £850,000 by the Industrial Development Act, 1975.
Because of the continuing impact of both domestic and imported inflation on the cost of fixed assets, an increasing number of projects would have to be submitted for the approval of the Government, if the present limit were to remain unchanged. To avoid prolonging the period of negotiation with the promoters of what could not be regarded as major projects, it is proposed to raise the limit to £1.25 million.
The limit on the amount of grants which the IDA may make, without prior Government approval, towards the cost of fixed assets purchased or leased by an industrial undertaking for re-equipment, modernisation or expansion was also raised to £850,000 by the 1975 Act. For reasons similar to those which I have already outlined, the Bill proposes to increase this limit also to £1.25 million.
Prior to 1977 there was no legislative limit on the amount of training grants which the IDA could make. The Industrial Development Act, 1977, however, provided for a limit of £850,000 on the amount of such grants which the authority might make, without prior Government approval, to an individual undertaking. Training grants will continue to be an important component in the authority's overall range of incentives. Moreover, training grants now constitute a very valuable incentive in the authority's programme for the encouragement of suitable service industries to locate here. I consider that the statutory limit on training grants should be kept at the same level as the limit applicable to capital grants. It is, therefore, proposed in the Bill to increase to £1.25 million the limit on training grants which the authority may make without prior Government approval.
Section 27 of the Industrial Development Act, 1969, empowers the IDA to operate a staff superannuation scheme, subject to Ministerial approval. As the provisions of this section may debar the IDA from operating a widows' and children's pension scheme, I propose to remove this limitation on the authority's powers by the amendment of section 27.
About this time last year the House had a full and what I consider to have been a very useful and constructive debate on the activities of the Industrial Development Authority. The present Bill is a technical one and is much more limited in scope than the legislation which we were then discussing. Nonetheless I intend to use this occasion to outline to the House the progress which has been made in implementing the provisions of the 1977 Act and in general to provide a quick review of the authority's activities over the past year.
I am pleased to say that it now appears that the authority will exceed by a significant margin its job approvals target of 27,000 for 1978. This target represented the most ambitious annual level of job commitments which the authority ever aimed to secure. Significant and encouraging as this achievement is, there can be no question of the authority resting on its laurels. In its industrial plan for the years 1977-80, published in April 1978, the authority set itself the challenge of creating 49,500 new grant-aided jobs in the period. This in turn would necessitate the negotiation during the four-year period of the plan, of industrial and service projects which would have the potential to provide over 100,000 jobs at full production. In addition to adopting regional strategies, the plan embodies a programmed approach to the development of selected sectors with good growth potential, with particular emphasis on the development of natural resource based industry. A key element in the plan is the objective of securing over half the new job commitments from within Ireland. The plan is an interim one and has been the subject of extensive discussions with a wide range of interested parties throughout the country. It is currently being revised and a new blueprint incorporating some significant new features and, more importantly, higher job targets will be published in the new year.
Deputies will recall that the Industrial Development Act, 1977, provided for a new kind of incentive to encourage the establishment of new industrial projects by persons having the necessary qualifications and experience but who would be unable to raise the necessary finance to put the project on a sound commercial footing. The enterprise development programme, as it is named, was launched by the IDA in January 1978 and I am pleased to say that the response to date has been very encouraging. Nineteen projects with a total job creation potential of 850 have already been approved for grant assistance, and worth-while inquires are continuing to be received at a steady rate.
The promoters of the projects already approved for grant assistance come from a variety of backgrounds—from university, banking, manufacturing and semi-State—and have individual skills and experience in such diverse areas as management, production, finance, research and marketing. These first-time entrepreneurs have shown a true spirit of economic patriotism by giving up well-paid and secure jobs to begin a new manufacturing operation, and in so do-ing are active participants in the Government's job creation drive. When introducing the Bill this time last year I said that the enterprise development programme was intended as an experiment. I am now satisfied that the response to the programme demonstrates that there are many people of adventure and enterprise in the country who under this programme can establish and direct viable enterprises.
The 1977 Act also gave new powers to the authority to promote the restructuring of Irish industry. A committee representative of the Department of Industry, Commerce and Energy, CTT, Fóir Teoranta and the IDA has been established to help administer this imaginative measure. The aim of the programme is to encourage amalgamations or acquisitions within selected in-dustrial sectors and thereby reduce wasteful competition between firms, strengthen sectoral bases, secure home market sales against imports and develop export potential. There have not been any dramatic results to date, but the behind-the-scenes work is in progress and in time I have no doubt that this programme will prove to be a most effective instrument of industrial policy.
Finally, let me say a few words about the authority's programme of advance factory construction. At present the authority is drawing up plans for a new programme comprising small, medium and large scale advance factories and cluster units to be completed in the period to mid-1980. On 22 September I announced the first phase of this programme and I expect to be in a position to announce a further "batch" of factories shortly, as soon as the preliminary design and planning work is completed. The advance factory is an important weapon in our industrial development armoury at the national level. It is particularly suited to certain types of project particularly those in the electronics field which can get into production rapidly once the investment decision has been taken. It is a facility which is increasingly being offered by our competitors for mobile international investment.
I would like to stress, however, that it is only one in our very wide battery of incentives and other factors may be more critical in deciding the location of a project. A town which is not "allocated" an advance factory under this programme should not feel that it is being neglected as a possible location for suitable new industry. In many cases a promoter will prefer to build his own factory, towards which there are exceptionally generous grants available. Equally in many cases the authority will agree to build a special factory tailored to the needs of the particular project. The crucial factor is that there should be a suitable site available for the prospective project. To this end the authority has built up a land bank of nearly 4,000 acres which is available for industrial development. The IDA is always prepared to consider purchasing additional sites where these are available and suitable for industrial development purposes. Industrial promoters can thereby be offered sites with outline planning permission for industry and many of the delays associated with land purchase are avoided.
Having described the provisions of the Bill and briefly reviewed the authority's activities over the past year, I accordingly recommend the Bill for the approval of the House.
