In the short time this debate ran last Thursday I drew attention to the very short speech of the Minister of State. He devoted only two lines to how exactly the Industrial Development Authority expected to absorb a further £350 million in the next three years and I pointed out that that sum is almost equivalent to the total amount of grants that the authority have paid out since their establishment 20 years ago. It hardly needs to be said that everyone on this side of the House will support, encourage and praise the authority for their good work, but I should have expected more than a couple of lines on what major developments they foresaw which would require this enhanced rate of expenditure. I should have liked a few words about the reasons which led the authority to seek an increase to £1,125,000 in the amount of a grant that they will be entitled to make without going to the Government for approval. I am sure the reasons are good but I should like to have heard more about them.
I should like to dwell in some detail on the authority's task in general, about some of the obstacles with which they have to contend and about the place which industrial development—for which the authority are the main vehicle—plays in the development of our economy. In their last report and in one of their recent publications dated April 1978, Volume 4, No. 8, the authority pointed out how heavy our dependence is and must remain on foreign investment. In April the authority said:
Without a consistent flow of projects from abroad we would have no prospect of attaining our national job creation targets and implementing our programme for regional industrial development.
At the same time it must be said that, quite rightly, the IDA have adopted the policy of trying to reduce this dependence on foreign-based industry and of trying to increase the ratio of industrial investment from Irish sources. That is a wise policy, for reasons which I am sure are the same as those of the authority. Worthwhile foreign investments which do not require us to contribute too much as regards the environment or some other loss that another country would not be prepared to suffer are becoming increasingly hard to get. Foreign competition, even from rich countries, is becoming more intense each month; and while it might have been possible when we were outside the EEC to match that with more intensified incentives, obviously there is a limit to our freedom now to adjust or to improve incentives. As the Minister knows, it is likely that our entire incentive structure will be increasingly under EEC control and will be geared decreasingly to the special needs of the Irish economy. For those reasons the IDA are quite right to match it with efforts at home and always to maximise Irish participation in industrial development.
I should like to say here in parenthesis that the frequent prejudice I hear voiced against multinationals is very misplaced in the Irish setting. The facts which the IDA have circulated make it clear that multinationals in the ordinary sense of the word do not really play much part in our industrial scene, and what part they play is very heavily export-oriented. The IDA have made this point very clear. The moment any foreign-based company comes here, even if it only has one other settlement, it is a multinational because of that very fact.
Early this year the IDA published a Study on a Profile of Grant-Aided Industry in Ireland by Dermot McAleese. In a section that summarised the findings of the study it was pointed out that the substantial volume of trade between overseas firms and their parent affiliated companies also reflect to a certain extent the high degree of multinationality of many of the firms. The multinationals with their marketing and personnel links and their knowledge of market conditions in other countries are able to export an above average proportion of what they produce. That is an advantage to us but I do not hear it mentioned in the occasional condemnatory discussions of multinational companies.
The IDA are trying to diversify investment. In the last year for which they have reported they succeeded in increasing the Irish share of new industry to more than 50 per cent. That is a substantial achievement. But it appears that the inherently vulnerable nature of industry is even more vulnerable in the case of some foreign-based industry who may be impelled, by factors that do not entirely arise in this country but in places over which we have no control, to curtail their operations here. The disastrous effects that this can have on a region or country were exemplified this time last year. The single act of the closure of the Ferenka plant meant that that entire region reported a net loss in industrial employment for the year. That single closure meant that the efforts, so far as they were to be evaluated regionally, of the IDA and of everybody involved in industrial development had been put back. The number of jobs involved was so enormous it exceeded the net job creation.
The confidence of the IDA in their 1978 targets, which are ambitious, appears to be related to new job creation and not to a net increase in industrial employment. The Taoiseach made a speech a few weeks ago and I tried to have a crack at it a couple of times but no one took much notice. He seemed to be imparting an extraordinary piece of wisdom. He said that failure to reach industrial employment targets this year would be due to redundancies. An industrial programme must take account of potential redundancies as well as the creation of new jobs. You might as well say that a failure to reach inflation targets is due to continuing high prices or that a failure to lower unemployment rates is due to a shortage of jobs. To say that the failure to reach employment targets is due to redundancies is only telling us in a different language that they have failed.
Between June 1977 and June 1978—the June 1978 figures have not yet been printed but it is possible to extract them in a rough form from a written answer given last week by the Minister for Economic Planning and Development—manufacturing industrial employment seems to have risen by only 3,300 jobs. Conveniently enough, June 1977 was the last quarter for which details were available before the change of Government. By this time tomorrow we will probably have the printed figures from the Statistics Office. This is a small increase in industrial employment. In the same answer the Minister for Economic Planning and Development gave figures for job creation in the public sector, in other words, for the installation of young men and women at desks. He said that public service jobs increased by nearly two-and-a-half times that volume, by 10,700. Many people have computed that it takes four jobs in industry or agriculture to sustain the drain on an economy represented by one public sector job. In a year in which an incoming Government were going to fulfil their promise of producing tens of thousands of secure jobs in natural resources and of reducing unemployment in 18 months by 25,000, we have the situation that they have made only one conspicuous inroad by creating 10,700 jobs, not one of which will make an extra blade of grass grow or produce so much as a matchbox.
Against that, the industrial growth for which the foundations were laid before the change of Government has succeeded, notwithstanding the efforts of a Government dedicated to increasing job creation in producing less than 3,500 new jobs in 12 months.
That is another slightly negative feature of the industrial development scene and one which must worry the IDA a great deal. I am sure that they sometimes find, as they did during the recession, that they had to run very hard in job creation just to stand still in the overall industrial employment picture. That is hard on them but it makes me wonder whether our structures in the Department of Industry, Commerce and Energy or anywhere else in the public service are sufficiently effective in keeping an eye on the exigencies of existing industry. I doubt that they are.
I cannot find any fault with the operations of the IDA and I am known to be fair when I point at any fault in the way in which the Department of Industry, Commerce and Energy arrange their watchdog functions in regard to existing industry. Since a job in an old factory is as good as a job in a new one, we ought to have the same kind of attention, inventiveness, innovative talent and beneficial public relations put into the business of trying to guard against redundancies, which the Taoiseach thinks are an excuse for our failure to reach job creation targets. We should have an authority which puts at least that much effort into that aspect of industrial life as the effort which is put by the IDA into the creation of new jobs.
These are qualifications on the IDA's overall point of view because they have only got one partial brief in this situation, which no doubt is a happy one for them and one which they can be congratulated. When put into perspective it somewhat qualifies it.
Some initiatives of the incoming Government which were ostensibly aimed at seconding the efforts of the IDA, turned out 18 months later to have been merely electoral ploys which were not seriously meant to work in a grownup world. The simplest and most evident example is the Employment Action Team which as recently as October and November last year was still being described by the Minister for Labour as the most important measure so far introduced in the field of youth employment and as the most important measure so far introduced in the area of job creation. These speeches were delivered by the Minister for Labour on 7 October and 25 November respectively. The situation in regard to the Employment Action Team is that the Opposition have grown almost ashamed to ask about it for fear of embarrassing the Minister on his rare appearances in the responsibility to which he was appointed. It is a long time since anyone heard much about it. Once it is admitted that it was only an election stunt no more scares will be heard about it from this side of the House. It was not seriously intended to produce anything worthwhile and has now been quietly forgotten.
The Sean Lemass-type industrial consortium was the subject of a question to which a written answer was given a week ago. It turns out that this consortium—I have complained before about the name of Seán Lemass being attached to such a twopence-halfpenny institution—met on three occasions between January and March. They had another meeting in June and another in July. From that day to this they have not held another meeting. It might not matter if this were a body with a staff and a permanent on-going existence but from questions I put down on this matter, the Industrial Development Consortium is only a name. They have no office, no premises, no staff, no budget, no resources and no equipment. They do not have as much as an office cat. That is the Seán Lemass-type weapon which was going to swing into action as soon as the new Government were formed, to second the IDA to put Irish industry back into the situation which only the Coalition's malice and incompetence had deprived it of. I unashamedly describe the Seán Lemass-type Industrial Development Consortium who manage their highly important work without so much as an office cat and without holding a meeting for four months, as an electoral ploy and nothing more. As soon as that has been frankly admitted I will lay off the subject of the Industrial Development Consortium, but until that moment comes I propose to keep on saying it.
The Industrial Development Authority are not expected by this Government, any more than they were by the last Government, to carry the entire weight of industrial development here. Both Governments would have been glad, although I do not think our appeals were ever quite as shrill and as anguished as this Government's, if the efforts of the IDA had been, in effect, backed up by the efforts of the private sector. A very curious dialogue could have been observed earlier this year between the Government and the private sector in this regard. Around 1 June you could have heard the two sides chiming at each other like church bells across the city. The Government side said: "We did all we could for you. You have nothing more to complain about. The wealth tax has been removed. Your incentives are clear to see. Your profits are safe. Go ahead and create jobs". The private sector retorted: "We cannot create jobs unless we can be sure that our profits are absolutely secure. It is not just a matter of this and that fiscal manoeuvre or manipulation which can be set at naught in the next budget. It is a matter of giving us even more". I do not intend holding up the House by documenting that statement because I am sure the Chair would not like me to be citing Minister and princes of industry against one another. You may take my word for it that I could easily document this little dialogue which went on for a couple of weeks in the summer and is still going on to a certain extent.
There was a kind of response from the private sector—I do not mean to belittle any effort made, even though I have to, to put the dimensions in perspective but I do not propose to sit back and be overawed by it just because it is something for the good rather than something for the bad—which was supposed to go some distance towards making up the ground the IDA could not make up. The consortium is described as being equipped with a six-figure budget. I do not despise six figures; I do not even despite three figures, but a six-figure budget is not serious material for making inroads into industrial development or job creation. Six figures could be as little as £100,000. I assume it will be higher than that. I want to put that kind of figure into perspective. I admit I am taking an extreme example. I have no doubt that £100,000 would go a long way towards saving a couple of relatively small enterprises in temporary difficulties but it would not go very far to keep them on their feet permanently. It was envisaged that the smelter could cost £100 million at present prices and that it would employ about 500 people. I remember the Minister saying that it would be wrong to run away with an inflated idea of the employment potential of the smelter because its employment content is known to be limited. That, of course, is not the only factor in a project like the building of a smelter. There are many other factors involved.
I am in favour of the smelter being built if it can be done economically irrespective of the relatively poor return on capital in terms of cost per job. If we look at it from that aspect and get into perspective this six-figure budget with which the private sector are responding to all the Christmas presents the Government have given them, it works out at £200,000 per job. In other words, each man working in that smelter, if and when it is built, will be standing in front of £200,000 worth of capital investment. I mention that figure to put this matter into perspective, in case anyone runs away with the idea that the private sector are breaking their necks to help the Fianna Fáil Government because I must say with all politeness and respect that their response is not much more than a token response.
I think it very naive of a Government to suppose that businessmen who may be rolling in apparent wealth one day but who could have the backsides out of their trousers the next are out of mere altruism going to put significant sums, which they could use to develop their own businesses, into businesses of which they understand nothing, merely to please a Government for abolishing a taxation measure which they thought should never have been introduced.
Another feature of the industrial development scene here is the relative lameness—I do not call it a culpable lameness because it would have been naïve to expect much more—of the response from the private sector in regard to job creation. Even the IDA have pointed out that the private sector have been very slow in coming forward with industrial investment probably because they got a fright during the recession and have to make up lost ground, build up reserves and so on. That is another unfortunate factor against the background of which the IDA's task must be viewed.
I refer again to the very poor ratio which the productive side of the job creation programme—if it can be called a programme—bears to the number of unproductive jobs created. I rely on the authority of the Minister of State at the Department of Industry, Commerce and Energy, Deputy Ray Burke, in a speech which he made on 10 March this year. In passing, let me pay tribute to the Minister in regard to his indefatigable efforts in the "Buy Irish" campaign. There is hardly a day when I do not receive a script from the Minister and that means he has been out somewhere trying to persuade people to buy Irish. It was another electoral ploy of the Government to suppose that they could guarantee a switch of 3 per cent in money spent on consumer goods to home produced goods. At the same time, I sympathise with and admire the man who has been given the awful job of trying to make that programme stick. He works very hard at it and I am glad to have the opportunity to say so. During his speech in Waterford the Minister of State said:
As we are all aware, the Government is committed to creating new jobs at a greatly increased pace. This is our first priority. However, creating jobs is not enough to stimulate and maintain economic growth. These jobs must be productive.
I draw attention to this part of the Minister's speech in order to underline the very disappointing record when the recession is over and industrial recovery has been going on since late 1975 or early 1976, according to the IDA and the CII. It is disappointing that in an entire year this fairly disappointing growth in industrial jobs has to be measured against a growth in unproductive jobs between two and three times that size.
Industrial development and the maintenance of existing industrial employment have been dealt a blow by the Government's failure to combat real threats to existing industry. Part of that failure is attributable to neglect. Every real threat to existing industry makes heavier the load which the IDA are expected to carry. If a branch of industry folds up or loses half its manpower because of competition from abroad, the IDA are expected to make up the loss by enhanced targets in their next programme. We are putting too much on an authority of this kind.
The British temporary employment subsidy alone was reckoned by the CII to have cost between 3,000 and 3,500 jobs in the clothing and footwear sectors. Those sectors—which are not very different from many other sectors—are in panic at the prospect of this country being part of the EMS while the British remain outside it if the consequence of that is that the Irish £ floats up in relation to the British £. These sectors have been weakened by events during the past few years and I understand they feel this will polish them off altogether.
That does not conclude the debate on the EMS which has other features we debated here and, no doubt, will debate again. During the debate here I would have liked the Taoiseach, the Tánaiste or the Minister for Economic Planning and Development to say something about these matters on the ground. What would happen to these sectors if we were in the EMS and Britain were not in it? Necessarily the currencies would be divided and the British £ might, through a devaluation of their own, float down vis-à-vis the Irish £. I would have wished the debate to include material on such matters from any of the Ministers.
The British temporary employment subsidy did damage in traditional industries which are labour-intensive where the wage cost differential is particularly severely felt in the price at which Irish firms are able to sell their goods. Other parts of our industrial arm have also been damaged by heavy and sometimes unfair competition from low-cost countries. I realise that protection of Irish manufacturers against imports from low-cost countries is not something which is carried out in Dublin, but some explanation must be forthcoming from the Government as to how it is that jobs are being lost in other areas where we were told 18 months ago jobs were waiting to be created, namely, the area of natural resources. Two recent instances are the leather and timber industries. Both of these are under threat from competing imports which are too cheap. These are both natural resources of the textbook kind; they are old-fashioned, traditional natural resources of the kind we learned about at school. They are not glamorous, trendy natural resources like zinc or natural gas but they are nonetheless natural resources. The leather industry is labour-intensive. It must be said that there has been some neglect when these industries have been so badly hit.
I wish to refer to another matter which is not specifically related to the IDA, though it very quickly will be if the desired result is achieved. I refer to the long-term exploitation of the Irish and adjacent sea bed. Technology has not reached the point where it is possible to exploit economically the mineral deposits of the sea bed but there is no doubt that technology will, within measurable time, reach the point where it will be possible to mine at depths which previously could scarcely be reached, let alone exploited. Potentially we are in a very favourable situation. We have a long Atlantic coastline and a large Continental Shelf. The only difficulty lies in the extent of that Continental Shelf. Here we are talking about a potential area for exploitation of immense size, possibly much bigger than the size of the country itself. That area is in dispute with the British because of various unsettled matters, mainly concerning the status of Rockall and whether Rockall can generate a territorial status of its own. That matter was the subject of negotiations with the British during the term of the Coalition Government and the intention was to submit the matter to arbitration in order to have the Continental Shelf divided between us. I was involved in this for the few weeks in which I held the Office of Attorney General.
