Industrial Research and Standards (Amendment) Bill, 1979: Second Stage.

Minister of State at the Department of Industry, Commerce and Energy (Mrs. Geoghegan-Quinn)

Molaim go léifear an Bille seo an Dara hUair.

Is é feidhm an Bhille seo cumhacht a thabhairt don Institiúid Taighde Tionscail agus Caighdeán iasacht a fháil chun críocha áirithe atá luaite ann.

The purpose of the Bill is to enable the Institute for Industrial Research and Standards to borrow temporarily such sums as it may require for current expenditure and to borrow on the security of its own lands and premises, without any guarantee by me, such sums as it may require for the purpose of purchasing capital equipment. These latter powers will be exercised by the institute only where it can fully service the borrowing through the earnings effected with the equipment.

Before dealing with the Bill I would like to say something briefly about the institute and its operations. This, I trust, will assist the Deputies to see the Bill in its proper setting. Deputies are, no doubt, aware of the central objective of the institute: to promote the efficient operation of industry and to maintain and stimulate where possible industrial growth. Its activities are distinguished from those of other State bodies such as CTT and IDA in that they are centred on industrial technology. The function of the IIRS is to ensure that industry has access to and uses the most up-to-date technology available for the creation of wealth, high quality employment and a higher standard of living for the Irish people.

The institute strives to achieve this objective in two ways. Firstly, the provision of technological advice to industry in the form of solving technical problems, providing technical information, and testing of manufactured products on behalf of firms to certify that they are up to certain standards of quality. The demand for the services of the institute can be gauged from the £1.6 million income which the institute earned in 1978, over half of which came from charges for the services I have just mentioned.

Simply solving industry's problems, however, is not enough. The institute also engages in applied research and development which can lead to the development of new industrial processes and products and to the creation of new jobs. This research and development service now represents about 20 per cent of the institute's activities and the institute is hopeful of increasing this figure. I am sure Deputies will agree with this aim; the more new products and ideas which originate in Irish-based industry, the more resources which are built up in Ireland for research and development, the more secure will our industrial base become.

The institute also acts as technical adviser to the Government. Indeed, as Deputies know, only recently the institute was given the lead role in the Government's Energy Saving Campaign.

The institute receives the bulk of its funding from State sources. In 1979 the total Exchequer grant-in-aid amounts to over £5.1 million, of which £1.4 million is earmarked for building and construction at the institute's headquarters at Ballymun Road, Glasnevin. On top of this £5.1 million the institute expects to increase its earned income this year to over the £2 million mark. It is this very growth in fee income which is one of the reasons for the Bill now before the House.

Over the past ten years the institute's income from clients has increased from £83,000 in 1968 to present levels. In 1968, income as a percentage of the current expenditure of the institute came to only 15 per cent. It now represents over 33 per cent.

This increase in earned income has brought its attendant problems. Experience has shown that because of the inevitable delays in clients settling their accounts, there is a substantial amount owing to the IIRS at the end of each accounting year. This money is received in the early months of the following accounting year. Since 1975 the outstanding amount has had to be financed by bank overdrafts to meet the cash flow problem at the end of the accounting year. The Industrial Research and Standards Act, 1961, makes no specific provision for borrowing powers for the institute. Section 2 (1) of this Bill proposes to permit the institute, with my consent and the concurrence of the Minister for Finance, to borrow temporarily by arrangements with bankers such sums as it may require for the purpose of providing for current expenditures.

Deputies can be assured that these overdrafts will be cleared very quickly in the new accounting year, when the first instalment of Exchequer funds for the new Vote year is paid. This has been the practice since 1975, and the overdraft facility has been a purely year-end phenomenon brought about by a combination of the usual delays in clients paying bills and the sharp growth in income from clients.

The Bill also proposes in section 2 (2) to extend the borrowing powers of the institute to cover the acquisition of capital equipment which can pay for itself on a self-financing basis from the fee income of the institute. With the increasing technological content of our exports in recent years, and the demand for certification of exports as meeting certain standards, it is more and more obvious that there are certain areas of product testing where the income generated from testing is capable of paying for the investment necessary to meet the demand. This Bill proposes, therefore, that in such cases the institute be allowed to borrow money on the security of its own assets—its lands and buildings— without State guarantee for the repayment of the sums borrowed. These borrowing powers will only be exercised with my consent and with the concurrence of the Minister for Finance. Indeed, in relation to capital equipment in general it is essential for the institute to have equipment which is as technologically advanced as that available to its clients. These borrowing powers should assist the institute in keeping abreast of technological change in equipment needs.

Molaim go léifear an Bille an Dara hUair agus táim cinnte go n-aontóidh Teachtaí le críoch an Bhille, is é sin, cumhacht a thabhairt don institiúid iasacht a fháil faoi mar atá mínithe agam cheana.

Mr. Kelly

I apologise in advance to the Minister of State for the fact that I cannot be here when she comes to reply. I do not intend any discourtesy in putting questions, the replies to which I will not be present to hear, assuming that she is good enough to deliver such replies.

I wish to comment on a couple of points which arise on the central section of the Bill. Section 2 (1) has been explained by the Minister of State as intended to allow the institute a certain amount of elbow room in regard to covering difficulties which cash flow problems might cause at the end of the year when outstanding debts have not been paid. I understand that a business whose entire income is derived from people with whom it does business and which gets no money from any other source may need to have recourse to a bank until such time as people begin to pay the sums owed. That is not the case with this institute.

The Minister of State has recited the very welcome and much to be applauded increase in the proportion of the institute's revenue derived from fees for testing this and that, but that proportion still adds up to much less than half of the institute's entire revenue, representing only one-third. It cannot be the case that the institute is strapped for money at the end of the year merely because there are bills which have not been paid. If the only source of income were fees for these tests, of course that would be an understandable point of view. But the Minister in putting the matter as she has—although I appreciate she has read only what she has been told to read—has skated over the fact that if the funding of the institute from State sources were adequate the temporary shortage caused by the delay in meeting accounts would not arise. I hope I have made that point sufficiently clear. Only one-third of the institute's revenue is accounted for by clients; and if there is a squeeze for money at the end of the year it is due not only to clients being slow in paying up but also to the inadequate funding of which the chairman of the IIRS has repeatedly complained in recent years.

I appreciate that the amount of the State grant to the institute has increased every year in real terms except in 1975, which was the depth of the recession and in which year a large number of public services had to be pruned. For the kind of work which it is the institute's duty to do these step by step increases are obviously not adequate. I know it is easy for Members on this side to call for further expenditure and it is not so easy on the Government's side, because enough must be kept for all the other little thrushes in the nest with their beaks permanently open. I think we are agreed that the major—perhaps the only—growth area in the Irish economy is industry in one shape or form. I do not think anyone would quarrel with the idea that the maintenance of standards and assistance to industry in making the right product and maintaining its perfection is absolutely vital. If money has to be skimped it must not be skimped on that. But it is not good enough for the Government to pretend that the purpose of this subsection is merely to relieve the difficulties caused by delay in meeting accounts, when the difficulties are a cumulative result of a slowness in paying accounts and of the fact that the institute does not get enough money from the State.

With regard to the first subsection, I was somewhat foxed until I heard the speech of the Minister of State by the expression "the institute may borrow temporarily by arrangement with bankers". As far as I know all borrowings are temporary. There is no such thing as a permanent loan of money; there may be permanent loans of items of antiquarian interest to museums and so on but, by definition, a borrowing is temporary. I do not know how one goes about borrowing money unless it is by arrangement with the person lending the money. The expression "temporarily by arrangement" is merely redundant verbiage. The subsection fails completely to make explicit the matter which the Minister of State explained, namely, that in each case it is only a matter of helping the institute over the end of the year into the early months of the spring. I am not making a meal out of this. All I am saying is that I think it is a rather odd piece of drafting inasmuch as the words "temporarily by arrangement with bankers" might just as easily be dropped from the subsection and it would mean exactly the same thing except that I suppose the word "bankers" implies that they cannot borrow from anyone other than a bank. Otherwise it does not seem to me to delineate the duty or the rights of the institute in any way. If it is the explicit intention of the Government that the borrowing power should only run into the early months of the year and no further—I am not saying I would necessarily support such a policy—it does not come through in this subsection.

The second subsection was the subject of an even stranger lapse on the part of the Minister of State and of the Department. She said:

With the increasing technological content of our exports in recent years, and the demand for clarification of exports as meeting certain standards, it is more and more obvious that there are certain areas of product testing where the income generated from testing is capable of paying for the investment necessary to meet the demand...

That is, in the purchase of capital equipment. The income from testing is only a minor fraction of the revenue of the institute. It is not good enough to say that the reason the institute may need a leg up in the purchase of capital equipment is to give it increased scope for earning revenue, because the institute has functions other than testing and the Minister adverted to them a few moments ago. The institute has functions that are inherently incapable of earning fees; it has functions vis-à-vis the Minister himself in respect of which presumably fees cannot be charged. The chairman of the institute has drawn attention to the fact that a large proportion of the work they do and of the expenses involved are by their nature not capable of earning fees.

I am not technically instructed and, therefore, I cannot guess how much, but presumably much of that work if it is to be of any use must depend on adequate capital equipment. We are talking here about the acquisition of capital equipment for purposes that are not necessarily fee earning and some of which cannot be fee earning. Why cannot the Minister and the Government recognise that we are talking about the proper equipping of an institute which has a spectrum of functions of which fee-earning testing for industry is but one function? If the institute is needed—and it is—it should be properly funded. Let us not pretend, as the Minister of State has done, that it is merely in connection with the testing function that provision has to be made for funding the purchase of capital equipment. The institute needs capital equipment even if it never had a testing function or never earned a fee from industry. That was almost the situation as recently as ten years ago. The Minister said that in 1968 the income from testing was only £85,000—a flea bite.

I dislike the way in which this measure is being slipped through as though it was only the testing function which called for the investment of capital equipment. The Minister has not explained the very curious provision—in my experience the unique provision but I do not pretend to have all our legislation at my fingertips—in subsection (2) which specifically excludes the Minister from guaranteeing any borrowing carried out by the institute. The subsection specifies that the institute may only borrow on the security of its land and buildings.

I have been a member of either one House or the other for more than ten years and I have watched much legislation going through, but offhand I cannot recall another Bill in which a State body is limited in this way. If I am wrong about this, I am quite willing to take it back. I cannot recall any legislation which said that a State body could borrow only on the security of their land or premises. That necessarily puts an automatic ceiling on the borrowing they can do because a banker will not lend on more than a certain proportion of the estimated value of the security. It would be more frank if the Minister were to say the State body can borrow to the extent of some hundreds of thousands of pounds or a few million pounds. So far as I know there is no precedent for this in other legislation. I shall not be here when the Minister is replying but I shall ask one of my colleagues to note her reply to my specific question whether there is any precedent for empowering a State body to borrow only on the security of their own land and premises and in no other way and where the Minister is specifically excluded from guaranteeing the loan. If there is a precedent it may be that the Minister will also be able to supply an explanation for this curious mode. If there is not a precedent or if no explanation is forthcoming, I should like to ask the House to take a little interest in what is happening here. We have here a State-sponsored body performing a work of major national importance who are being held at arms length. Something less than trust is being reposed in them; they are being given something less than a vote of confidence. The Government are showing themselves less than willing to back them in their requirements. The whole thing is being done in a system of presentation which tends to obscure this truth and to shove the whole issue off onto the exigencies of testing and temporary cash flow difficulties.

The brutal naked truth seems to be that the institute needs money but the Government cannot give it any. That is not an uncommon thing with State-sponsored bodies, but when one thinks of the immense sums that CIE are able to swallow almost without rating a headline and when one considers the niggling sums we are dealing with here in long term work comparable in importance with the work of CIE, one must ask oneself if the Government have scraped the bottom of the barrel so fast that they cannot even provide £1 million or £2 million which would make a great difference to the institute. Why cannot the Government bring in a Supplementary Estimate for the institute if it has a shopping list of capital equipment which it wants to buy? Are we so far down the drain with regard to revenue that all the institute is able to borrow is something on the rather modest security of its own modest land and buildings? I am sure they have a fairly substantial sale value if such a thing were to happen and the institute's equipment must be worth a great deal. But it is still a very niggardly and, as the Germans say, step-motherly way of dealing with this child of the State which should be one of its most favoured offsprings. I shall ask one of my colleagues to require from the Minister an absolutely clear statement in that regard, whether there is any precedent for this form that we see in subsection (2) and, whether there is or not, what is the reason for adopting it rather than allowing the institute, with the consent of the Minister for Finance, to borrow with a State guarantee as is normally the case with all State-sponsored bodies, whether the ESB, Nitrigin Éireann, or the Industrial Development Authority. We have seen several Bills go through in the past couple of years in which astronomical sums were put within the borrowing capacity of State bodies of one kind or another, of course with ministerial permission, but then enjoying the benefit of ministerial guarantee.

The final thing I want to say—and I hope the Minister will not regard it as a blow beneath the belt—is something which again she may wish to contradict or put me right about. This Bill was circulated on 15 August. It came through my post in the ordinary way. I saw it, I suppose, on 16 August, looked at it briefly, noted the peculiar provision in the second subsection of section 2 and put it aside. A little later in a non-official context I had an encounter—the Minister will understand if I do not specify the person or persons—from which it became evident that the Institute for Industrial Research and Standards did not know that this Bill had been presented and perhaps did not even know that it was in the pipeline. It was only when I passed on the information that the Bill had arrived in my post that it came within the knowledge of the institute that such a Bill had been drafted and presented. If that is wrong I should like the Minister to contradict it. I can certainly vouch for my memory and the genuineness of the encounter I have described, but if there is a mistake or misunderstanding somewhere I should like the Minister to clear it up. If there is no mistake and this is in fact the case, as I believe it is, that the institute did not know about this Bill, I should like to know the background to the institute being treated in such a way. I should like to know if there is any precedent for it particularly in the case of a child of the State which instead of being treated at arms length should be warmly cherished by it.

That is all I want to say except for the usual expression which is expected of spokesmen and which in our case is very eagerly and warmly forthcoming, the usual expression of congratulation to the institute for all its hard work and the expression of our good wishes for its future.

Mr. B. Desmond

I believe that the Institute for Industrial Research and Standards could play a pivotal and very dynamic role in the further development of Irish industry but I have considerable doubt that as presently operated it is playing such a role or that without very considerable change it could play such a role. I have chosen these words carefully. They are somewhat outside the ambit of this Bill and I hope to elaborate on them directly to the Minister on another occasion. I do not propose to do so at this stage. I have held these views for some time and I hold them very strongly.

In the Bill itself we are dealing with permission to the Institute to borrow temporarily for current expenditure. There is no quibble on our part about such permission being given. Like Deputy Moore here, I am a member of a local authority and each year end and often in mid-year we seek temporary accommodation. This should be a normal part of the powers of any State-sponsored body. There is nothing unusual in giving that power to the institute. Naturally, such borrowings are extremely expensive and the difficulty with permissive borrowings even at local authority level is that they tend to become a normal feature of work. This can be open to question. It can mean that in the last quarter of every year the pressure is no longer on the accounting officers to bring in the money nor is the pressure there very frequently to ensure that one lives within one's budget for a full 12 months. Inevitably where borrow ings of that nature are permitted there is always a tendency to avail of accommodation because the taxpayer at the end of the year is picking up the tab. But since such temporary borrowings are subject to the consent of the Minister for Finance and also the consent of the Minister for Industry, Commerce and Energy I have no doubt that the borrowings and arrangements with bankers will be stringently checked. That should apply to every State-sponsored body. Either we provide sufficient funds in the current budget to enable it to operate on a normal basis throughout the full twelve months accounting period or we do not. If we do not, we should be very careful about sanctioning temporary borrowings, particularly nowadays when one is sanctioning substantial profits for the bankers concerned who pick up 17 or 20 per cent interest on such borrowings. We are not in the business of transferring taxpayers' money to the bankers just because some of our State-sponsored bodies do not keep within their normal 12 months' budget. That is not to say that the institute has been in any way negligent in that respect. By and large it has managed to keep within its financial allocations. On that aspect of the Bill, section 2 (1), I have no quibble and our approval is given. I regard section 2 (2) as somewhat unusual. I am not quite clear as to the precise intention of the Department or the Minister in advancing what I would regard as such an unusual—if not unique—financial provision in respect of the day-to-day operation of a State-sponsored body.

We have a situation where, for capital purposes, State borrowing powers can be exercised for certain capital expenditures provided that the cost of such borrowing is met from the fees earned from such equipment. This is unusual. The Minister might seriously have another look at it. I have a fair knowledge of quite a number of State-sponsored bodies throughout the country and I do not know of any where powers for the purchase of capital equipment are granted only where it can fully service the borrowing through the earnings effected by the equipment. That means, in effect, that within the IIRS now one would have two criteria for capital borrowing. The Minister, apparently, has said to the institute: "If you want to buy that particular piece of capital invested equipment, if you want to spend a half million pounds on it and to borrow to buy it, you may so do, provided the fees earned by that equipment pay for the borrowing". That is a bit odd, to say the least.

There are other aspects of capital expenditure within the institute to which the same criterion does not apply. The institute has purchased a good deal of capital equipment over the years. If my memory serves me right, the institute has even received capital equipment on a gift basis from industry over the years, so there are several types of capital equipment in the institute, material received from manufacturers to equip the institute generally in several divisions; material bought, perhaps out of the institute's current expenditure; capital equipment which it has bought out of capital allocations and equipment which now, apparently, it is going to buy and will only be permitted to buy from borrowings provided that the fees from such equipment pay for the borrowing—I could see the Committee of Public Accounts casting a jaundiced eye on such an odd management criterion being laid down by a Government Department towards a State-sponsored body.

Of course current capital borrowings must be paid for, and I fully agree that any borrowing powers invested in the institute for capital expenditure should be exercised only with the consent and concurrence of the Minister for Finance and the Minister for Industry, Commerce and Energy. However, to incorporate it in the formal layout of the Bill is indeed rather unusual, unless it is intended to be a temporary provision.

The Minister has, as is public knowledge, appointed consultants to the IIRS in relation to future developmental work and the whole role of services for Irish industry. Whether their work will encompass all that is contained in the Bill and the report remains to be seen. Perhaps we should have a new Bill relating to the institute itself. That may come about and I would certainly welcome it.

With these somewhat jaundiced comments on the provisions of the Bill, we would not, in any way, stand in the way of the Minister and the Department in giving the institute the power to borrow for temporary current expenditure or for capital expenditure. On that basis, we approve of the Bill. As I said in the very first part of my contribution, I believe we could have a consolidation of legislation relating to the institute. The 1961 Act is now rather dated. The functions as laid down under this Act are still quite broad, but should be updated. As we enter the 1980s, I suggest there is a good case to be made for a root and branch examination of the 1961 Act within the Department, consolidation with this present Bill and the bringing forward of a new Act in the early 1980s. Irish technological development has changed dramatically since enactment by this House of the original 1961 Act. Indeed, in the context of the report which the Minister will receive in due course from the consultants, it may well be that such an Act could also incorporate, if necessary, the consultants' report.

Accordingly, I approve of the Bill. With the very considerable changes in the whole structure and role and operation of the IIRS, I can see it making a tremendous contribution to Irish industry provided, for example, the work of the institute was integrated and properly co-ordinated with the work of other Irish developmental agencies in the technological field, whether with the Irish Productivity Agency, the Irish Management Institute, the National Board of Science and Technology or atomic energy institutes and so on. I see a major role developing for the institute. It will require considerable political courage and muscle to get to grips with the situation, but that could be done. This Bill in no way purports to do that but, in so far as it provides a measure of accounting relief to the institute, I certainly support the Bill and we do not at this stage intend putting forward any amendments to it, although the Minister might seriously consider deleting from the Bill that section relating to the fees from capital expenditure. Rather than spend time going back to the Department of Finance to have the Bill amended, it is better to let it go through in its present form and see how it works out in the long term.

Mr. Moore

There are very few Members of the House who would oppose the Bill and I add my voice to welcome it and to compliment the Minister on its contents, brief as they are. The IIRS is now 33 years old and we can see the stamp of the late Seán Lemass on its whole conception. I pay tribute to the staff for their great work and the confidence they have given to Irish industry.

This is a very short Bill. Deputy John Kelly queried why the institute should borrow in this way without guarantee. I look on the Bill as a vote of confidence in the institute, that they will be able, without any guarantee, to raise sufficient moneys for themselves. This shows a confidence that the institute has displayed in handling technological problems in industry. It is a vote of confidence in the institute that the Minister should have devised the Bill in this way.

I would question, perhaps, the institute's accountancy. The Minister's brief mentions that it has got quite a lot of money and it is wrong, when people are taxed to finance the work of the institute, that industrial firms benefiting from the techniques of the institute should not pay more promptly. Why should the taxpayer have to pay on time if industry does not? The institute might ask their accountant to examine the possibility of charging interest on money owed because this might encourage people to pay what they owe. A poor struggling firm which cannot pay will be excused but there are big firms which use the services of the institute and which could pay more quickly. That is a very small point.

The institute provides a great service but I wonder if it goes far enough. It provides 66 services for industry but the ordinary man in the street does not know much about them. I see the institute as being a very powerful factor in helping to keep down the costs of manufactured goods, whether it be clothing, footwear, food or anything else. By its examination of products it ensures a very high standard. This ensures that people are not buying faulty goods and wasting their money. At the same time the institute is ensuring that our exports are of a standard that they can be sold in competition with similar products of other countries. Many countries demand high standards for their imports.

Could the institute examine and report on our imports? If those goods do not reach the required standard, the institute could warn the public not to buy faulty or substandard commodities because they would not be getting value for money. In that way it would raise the standard of our imports. We want our people to buy more home-produced goods but we must always import certain goods. We have all seen very shoddy imported footwear and wearing apparel. The institute could help the housewife to buy quality goods, whether they are imported or home produced. I have the utmost confidence in its ability to do this.

I would like them to give more time and attention to the construction industry. They are doing a great service for which that industry is very thankful. The building industry division is number 1 in the main service. On building sites one sees a great deal of materials being wasted. Perhaps they are not durable enough to stand up to the treatment they get because a building site is not a place where materials are handled in a delicate way. A young couple buying a house are paying for that waste. I would like the institute to set a standard for the products which go into the building of a house or factory.

This institute is one of our best semi-State bodies. I cannot praise it highly enough. I have had experience in dealing with it because it advised a firm I know very well on certain matters.

As regards new techniques and new industries it must be remembered that without the institute we would not have made very much progress in the industrial sector. It must increase its services. This will call for a big increase in staff and that should not be denied to it. A great Englishman once said that never was so much owed by so many to so few. I feel the same about the institute. It works quietly, does a great job and the people have confidence in it. No money must be spared to enable it to expand. The Minister is giving the institute power to borrow. Even without that the Government would ensure the institute would not be impeded by a lack of finance.

There are other State enterprises which are not so successful. While it is not my intention to examine their records, I want to say that if semi-State industries patterned themselves on the IIRS, we would have a very efficient industrial sector. Practically every facet of the industry is covered by its activities. It provides 66 services. There is a tremendous task facing it. We know that because of technological knowledge, industry is facing a huge cutback in personnel. It is said that in the age we are entering there will be many thousands of workers made redundant. It is not good for a man to be idle and out of work. People will have more leisure time. The institute might perhaps provide another service to industry on how to prepare for leisure. When it is examining techniques it would be a soulless exercise if it had not a social aspect to its planning. We must have concern for people involved in industry. It is not enough to invent machinery to produce cheaper goods if it means the wholesale displacement of workers.

The great tragedy of the industrial revolution was that there was no social aspect involved in it. We know the terrible results and misery that created for many people in industrialised countries. We were lucky to have escaped the worst aspects of the industrial revolution. We must have a more humane approach to these matters. I have the utmost confidence in the IIRS and in its ability to advise industry technologically as to what they should do. However, all the planning would go for nought if there is no humanising influence in it. Planning is not the end, it is only the means to an end to improve the quality of life of those engaged in industry.

If the institute needs to increase staff it should do so. I do not know whether or not the staff is adequate but I would not deny it an increase in staff to engage in another activity. Thirty-three years is not a long time in the life of a nation. We are indebted to the institute for the service it gives to industry. In the book, it illustrates the services offered and it works in conjunction with other agencies such as the IDA, CCT and so on. It should take steps to publicise its efforts so that its services will be availed of more. CTT would naturally tell prospective developers that this excellent institute is here to advise them. The IDA, in deciding the location and nature of an industry, also avails of its services. That is essential and leads to the creation of new industries.

I read that in the United States a firm had trouble with the control of effluent from a factory. They were advised by a body similar to the institute and have perfected plant to control it. It was so successful that there was a great demand for the filter and it led to the creation of an industry. We are only a small country and we have big neighbours. We must compete with them and we are doing so successfully, thanks to bodies like the IIRS. Are we aware of the great work it is doing? I know that the Government are and Deputy Kelly's remarks were somewhat amazing. He mentioned that it was unaware of the preparation of this Bill. I am sure he had some basis for saying that but I can hardly believe it. The IIRS has perhaps silent servers but that does not detract from its effectiveness.

I do not see any faults in the Bill. I am sure the institute will continue to provide a great service. I would ask it to include a social dimension in its activities. If it perfects a new technique that would produce goods in less time than was originally taken and with fewer people, it should employ a sociologist to advise it on what should happen to the people displaced by the new techniques. Industry must not be allowed to discard people. They have the protection of the various redundancy Acts but we must watch this carefully.

The institute has the task of helping industry to become stronger. It will not become stronger if we forget the human element involved. I have every confidence that the institute can bring in this humanising influence. I am sure people would not begrudge any money to do this. They are facing a tough future. With our entry into the EEC and the dismantling of tariff barriers Irish manufacturers must be as competent as foreign manufacturers. We would not have reached our present high level of industrial production but for the IIRS. It is a tribute to the institute and the Minister.

The IIRS is a tribute to the late Seán Lemass who, 33 years ago in 1946, founded it. It was only a year after the second world war ended. The institute has done a great job for the country. I welcome the Bill.

Mr. Enright

We are very much aware of the splendid work carried out by the IIRS. We would wish to assist this important national work. As Deputy Moore has pointed out this institute was set up in 1946 by Seán Lemass. The late Seán Lemass was Taoiseach when the Industrial Research and Development Bill was passed in 1961. Part VI of that Act deals with the seal of the institute, the offices and premises, the officers and servants, superannuation, scholarships and grants for industrial research, the State endowment of the institute, the power to charge fees, subscriptions from industrial firms and other bodies, the power to accept donations, finances, accounts, audits and annual report. I wonder why it was decided then that the premises of the institute should not be mortgaged. I believe that the people who helped to formulate the Act decided to grant independence to the institute. Let us be clear that those involved in the important work of industrial research must be granted independence. The staff of the institute are working on behalf of the elected Government and for the good of the State. It is my view that they must be granted independence and freedom from worry of meeting overdrafts and mortgage repayments. For that reason, I am concerned with the purpose for which this Bill has been introduced. I believe that my views are similar to the views expressed in 1946 and 1961.

This Bill will be the cause of concern for many people. I believe that our best scientists, engineers and technologists are working in the institute. We attracted these people to the institute because they felt that they were Government backed and financed and that there was no danger of a serious cash situation arising.

In regard to section 2 (2), I grant that there could be a reason for granting the institute power to make temporary borrowings for current expenditure. However, I would say: thus far shall thou go and no further. I believe that the inclusion of section 2 (2) is a grave mistake and questions the seriousness of the Government in regard to industrial research and development. We must remember that research and development are important in this industrial age. It causes me concern to note that the institute which, as Deputy Moore said, has been prospering for 33 years without having to mortgage its land and premises, will now be able to mortgage them without the guarantee of the Minister. Why is he unwilling to give them a guarantee? Is he shy or is he frightened? It amazes me that the institute is now prepared to mortgage its land and premises without a Government guarantee.

I am sure that the Minister and her advisors are aware that we spend less on research and development than other European countries. I should like to quote some figures on research and development in 1975 which were published by the National Science Council in September 1977. These figures were produced during the term of the National Coalition Government. The Minister may say that we did not spend much in 1975 on research and development, and I will admit that that was so because I want to be fair about this matter. Page 48 of the report gives a comparison of total research and development expenditures per head of population both here and in other countries. The US spent 2.3 per cent, Germany spent 2.1 per cent, Japan spent 1.7 per cent, the UK spent 2.1 per cent, Switzerland 2.2 per cent, the Netherlands 1.9 per cent, Austria 1 per cent and we here in Ireland spent .9 per cent. According to this table the only countries spending less than ourselves are Spain and Portugal with 0.3 per cent.

This is something about which we should be worried. I have made inquiries and I understand from the figures for 1978 that they have remained more or less static, that they have changed fractionally only in respect of any of those countries. In other words, the amount of money at present being spent on research and development is more or less similar to that spent in 1975. I believe there is an obligation on us to spend a larger amount of money in respect of research and development than we are doing, because it is there that our hope for the future lies. There lies also our hope for the expansion of industrial development. Our expenditure on research and development, expressed as a percentage of our gross national product, is 0.9 per cent not nearly sufficient for a country like ours, slow for many years in making a major breakthrough in regard to industrial development.

For that reason we have an amount of ground to make up in comparison with other countries. Those figures I have quoted were carefully prepared, are accurate and are available for inspection in the Library here in Leinster House. I am pointing this out because we are already behind. Now, with ground to be made up, we are deciding that we will moragage our lands and equipment for this institute without even a guarantee from any member of the Government, the Minister for Finance or anybody else. It is a matter that causes me concern. I would seriously urge the Minister to review section 2 (2) because that is a subsection that causes me great concern.

I might just mention to the Minister some of the things on which we are missing out here in regard to industrial research and development. For example, from 24-27 October 1978 there was held a meeting and a type of exhibition organised by the Midland Regional Development Organisation in Athlone dealing with industrial components, many items imported here annually. At that exhibition the Irish Goods Council had some 800 samples of low and medium type technological components, small items of equipment used in industry and utilised by some 58 firms in the Midland Regional Development Organisation, which is comprised of five counties. These were small, simple components, of which some £6 million worth is imported into this country annually because most of them are not manufactured here. Some may have been but the firms concerned were not aware of that fact. What I want to get across clearly to the Minister is that this was £6 million worth of goods, the vast majority of which could have been manufactured here with the help and assistance of the Institute for Industrial Research and Standards, by their applying their minds to it and assisting, advising and encouraging such activity. I believe that the greater portion of those £6 million could have been saved.

That was in one region only but I am sure other regions would have the same story to relate. For example, I remember a representative of the Irish Goods Council appearing on the Late Late Show one evening exhibiting those types of components from another region. Therefore, throughout the length and breadth of the country there could be something in the region of £40 million to £50 million saved annually with assistance from the Institute for Industrial Research and Standards. At least a sizeable amount of that money could be saved had we given full support to the Institute for Industrial Research and Standards. Therefore it is important that we make a major effort to spend more money on this very important work being carried out by that institute.

In relation to the amount of money being spent by the Institute for Industrial Research and Standards, and the amount of money allocated to them annually, it is no harm to recapitulate. I have here their annual report for the years ending 31 December 1976 and 31 December 1977. I have also the Book of Estimates for the year ending 31 December 1979 which incorporates the year 1978. The Vote for the Institute for Industrial Research and Standards—I am quoting now from the Book of Estimates, page 146, subhead F1—is divided into two subheads: Institute for Industrial Research and Standards, Administration and General Expenditure, Grant-in-Aid, and then: Institute for Industrial Research and Standards, Capital Expenditure, Grant-in-Aid. In the year 1975 the total grant-in-aid under the first subhead for general revenue expenditure and capital equipment amounted to £2,966,000. In 1976 the amount was £3,240,000; in 1977 it was £3,684,000; in 1978, £3,468,000 and in 1979 the estimate is £3,675,000. Those figures are interesting in that under the first subhead, general revenue expenditure and capital equipment, there was a reduction in 1978. I agree that a sizeable amount was made available by the Government towards buildings. I accept that improvements took place and a large amount of money was made available for land and buildings but, in regard to research and development and the purchasing of capital equipment, it is of the utmost importance that we continue to make money available.

It is essential that we meet the total revenue necessary to keep in line with inflation. That is the basic minimum I would be prepared to accept: revenue must keep in line with inflation. It is my belief that more money should be granted to research and development. We are not keeping in line with inflation and I am anxious to know why. It is a mistake not to keep in line with inflation. As a country dependant on industrial expansion we must keep in line with industrial research. In regard to providing for current expenditure, I agree, with some reservations, to granting the institute, with the consent of the Minister and the concurrence of the Minister for Finance, subject to certain conditions, permission to borrow temporarily from banks such sums as the institute may require. However, to allow a situation to develop that the institute would borrow on the security of it's own land and premises and without any guarantee by the Minister would be a serious step which we must question. We need to keep pace with scientific and technological development but we cannot have the institute's work curtailed through lack of finance from the Government and being forced to borrow from different national or international banking groups. There are many dangers in such a situation. The institute is of major national importance and we cannot allow that body to mortgage its land and premises. We must cry stop to such a move. I would be failing in my duty if I did not call on the Government to stop such an approach.

As Deputy Moore pointed out, the institute, which commenced operations in 1946, has prospered and developed without having to mortgage its land and premises. We should not decide to put the premises of such a body at risk by allowing them to be mortgaged. There is an obligation on me to cry halt because it would be a mistake to allow those premises to be mortgaged. I am opposed to section 2 (2).

Mr. C. Murphy

I welcome an opportunity to speak on this brief and concise Bill, which contains three sections amounting to 31 lines. However, there are two basic principles involved in it: borrowing arrangements for current expenditure and permitting the institute to purchase certain units, which would be self-financing, with its own guarantee of its land and premises. I appreciate why Deputy Enright is worried about this section because usually when such enabling Bills come before the House they are for the purpose of getting money or guarantees from the State. In most cases we simply have to, by virtue of the type of concern involved, keep the State plunging money into such concerns. However, in this instance we are dealing with a concern that has proved its worth. The procedure set out in the Bill is one of confidence in the IIRS which has proved to be very effective in applied technology. Section 2 (2) permits the institute to purchase capital equipment, which would be self-financing, with its own collateral. What is wrong with that? Why restrict the institute and put it into the groups that depend on money from the State or State guarantees?

This Bill represents a vote of confidence in the IIRS. It has been a frontrunner in industry, quality control and applied and functional technology. The institute is very up to date and its purpose is to create technology to improve working and living conditions. It also works for better quality of employment. The institute achieves these aims through a constant active role and has a vital role to play in a continuing cycle of monitoring and assessing our development.

The institute continues to grapple with new ideas and to innovate. It should be allowed a certain amount of freedom to acquire equipment, which on a fee per item basis will pay for itself and the servicing of the borrowing for this. This is a good policy which ought to be developed. They assess equipment, they monitor its performance, they look after the area of profits control and they offer a very important aspect of certification whereby they underwrite industrial products from this country. This could be compared with the "Guaranteed Irish" symbol in many aspects. They not alone underwrite these exports but the jobs of the Irish industrial worker.

Many of us do not consider how effective the IIRS has been in society, but its effectiveness can be seen when one looks at standardisation and specifications and sees the IIRS stamp. Doors, windowframes and so on used in the construction industry all bear the IIRS stamp. The jobs of many industrial workers are underwritten through this process of certification and product control.

It has built up a national and international reputation in the field of industrial research and standardisation. It has done so by hard work and continuing assessment. It also plays the role of an impartial referee in the social economic world. It looks at services to industry and builds them up. On a visit to the IIRS with other Dáil Deputies a few years ago, we had the wonderful experience of seeing this concentrator in action, the European space agency concentrator, which links up with the documentation library service computer in Rome. It is a fantastic opportunity and investment for Irish industry, whereby through computerisation the most up-to-date papers, information and documentation is made available to us. It is right that this concentrator should be located at the IIRS and there is no better location. Perhaps the Minister when replying will offer some further information about the usage and demand for this concentrator. I would also like to know about the costings to firms for the use of it. I am aware that the National Science Council offered money a few years ago to help firms initially, but I would like to know what the position is now. I hope that many of the newer Dáil Deputies will have the opportunity to go along to the IIRS and see what actually happens there on the ground, in applied technology and to see this research concentrator at work.

One of the reasons why this Bill is before us is that this concentrator offers information and it is part and parcel of the overall system within the IIRS of earning on this earned income basis. It would be wonderful for accounting if the books for a year were closed in the same year. Deputy O'Toole is the chairman of the Public Accounts Committee of which I am a member, and we would both like to see the books for any year closed in that year. However, in practice a certain amount of carryover takes place. This is one of the problems for the IIRS. There has been such a demand for information and for advice, that fees are not paid within the year, and this section enables the IIRS to borrow for current expenditure to get over this. If we look at a table from annual reports on the income from clients, under the heading, Fees Earned Basis, we see that in 1976 the income for the IIRS on this fees earned basis was £912,614, in 1977 it had jumped to £1,149,921, in 1978 to £1,600,000 and in 1979 the estimate at over £200,000 was for £2,031,000. This indicates why section 2, part 1 of this Bill is very important.

There has been a huge expansion in demand, but I would question one or two aspects of this. Perhaps in his reply the Minister will tell who actually monitors the fee rate of the IIRS. We are very much aware of the numerous requests from industry, technologists and researchers which has brought about this big boost in the fees earned column, but I would like to know the criterion for the fixing of this fees rate basis. This is one of the most important aspects of this section.

In order to allow the IIRS to innovate, Part II of the Bill is vital. It enables the institute, on security of their land and premises, to raise money for a very specific purpose, that is, to purchase equipment which will become self-financing. If one reads the table under the heading Fees Earned why should one not have confidence in the ability of the IIRS to evolve in this fashion? Why should one feel, like Deputy Enright, that the State should continuously guarantee and offer money? It might be no harm to look at the table of grant-in-aid under the heading Building and Lands. In 1976 the grant-in-aid under this heading was £650,000, in 1977 it was £718,000, in 1978 it was £944,000 and in 1979 it was £1,444,000. If we look at the gap, the increase between 1976 and 1977 was of the magnitude of £68,000. In the following year it increased by £226,000 and in a later period by £500,000. That shows confidence. It is a practical example of Fianna Fáil policy at work for Irish industry. When people ask what are the Government doing for industry, what is being done in job promotion, those are general questions. One must look at specifics such as these which indicate clearly what is being done, what has been done, and what must be done if we want industrial expansion to continue, and to keep the momentum moving.

I regret and resent suggestions about a cut-back when these figures show clearly that there is not a cut-back. The concept of self-financing from land and premises could not be considered in 1976 when the grant-in-aid was running at about £650,000 only. Over a few years we have seen that figure increased to £1,444,000. Let no one have any doubt but that this Government are acting in the interest of the Irish worker, in the development of applied technology, in promoting and keeping the momentum of industry moving forward. Under this section the IIRS is being allowed a freedom which on its record over the years since it was founded by the late Seán Lemass, it has earned. It can stand over its reputation. I find nothing wrong with the concept in this section. It is vital.

I read through the annual report and I know the involvement of the personnel of the IIRS, but I sometimes worry about the staffing. On 31 December 1978, 578 persons were employed and nine months later the figure had reached 589. We must also take into consideration the internal reorganisation and assessment within the structure of the institute. The nine former divisions have now been condensed into four. Based on the demands being made, and having regard to the future of the Irish worker and the Irish product, it is vital that staffing should be kept up and that the best people should be brought in. I look forward to the Minister dealing with that aspect in her reply.

There was an increase in staff of 11 in the past nine months, on the figures I have. Looking at the demand for present, ongoing and future work, I should like to see that figure boosted, not for the sake of having an increase for a statistical case I might like to make from this side of the House, but so that the affairs of the institute will move forward.

The Irish people benefit in many ways from the activities of the IIRS. We should remember that in our living quarters, our roads and factories, very high and improving standards are being maintained due to the work of the institute. We are indebted to them. They have been very much involved in developing native timber for the construction industry. That is good. It is wonderful to see an Irish product being used.

I should like to mention in passing a recent problem we had on a national primary road in County Wicklow about which there was massive publicity in the media and which caused some concern. A new road surface dressing was completed in an area and the road lifted a few days later.

An Leas-Cheann Comhairle

I was wondering what road we were going down.

Mr. C. Murphy

I am not going too far. I am coming back to the IIRS.

Mrs. Geoghegan-Quinn

He is talking about standards.

Mr. C. Murphy

Yes.

An Leas-Cheann Comhairle

I presume the Deputy is talking about research and standards. Do not let us get into detail about a famous road in Wicklow.

Mr. C. Murphy

I intend to tie it up. I was told by the specialist in Wicklow that the bitumen used complied with Irish standards. I know the institute is looking at some samples to see whether there is a need to tighten up controls within those standards. That is a practical example of where standardisation is at work.

Mr. O'Toole

The Deputy had better go on to water now.

Mr. C. Murphy

Yes, another audiovisual aid to water control. I am pleased that the Government have expressed confidence in the institute in that the institute will play a leading role in the energy saving policy. Another aspect which would greatly affect my constituency is the development of biomass as a source of fuel and energy. Under the classification of standardisation and research, the institute is working on this problem. Under section 2 (2) it might be necessary for it to acquire some form of machinery to promote biomass as a source of fuel and energy.

An Leas-Cheann Comhairle

The Deputy is really stretching it now. If we start on those lines we could debate the Bill for six months.

Mr. C. Murphy

I accept that. This is a short concise Bill consisting of three sections. Under section 1, the definition section, "the Institute" and "the Minister" are defined. I have dealt with section 2 (1) and the reasons for it. I welcome the main reason for it because of demands on a fee-paying basis for the services of the institute. I regard subsection (2) as an expression of confidence in the work and future operations of the IIRS. What is wrong with the basic intent of it being enabled to purchase the necessary items of capital equipment which will become self-financing as a unit?

The third section of this Bill is simply the short title, and the Act will be known as the Amendment to the Institute of Industrial Research and Standards Act, 1961. It is vital that the institute continue to play the magnificent role that it has played in Irish society. It is vital that more and still more new ideas emerge and new products come on the market which are underwritten and certified by this institute. I wish the institute well in its endeavours and I renew my thanks for not alone its hospitality but also for the amount of information which it made available to Deputies on a visit there. I welcome the Bill.

Mr. O'Toole

Normally a Bill enabling the raising of money for a State body is very much welcome in this House by all and nobody complains or cribs about it. The contents of this Bill to a large extent are also very welcome. The past hour has been spent by speakers on the far side of the House in the exercise of evading the real crunch issue, and Deputy Murphy has displayed an amazing facility and capacity for this very art of evasion. He is a long-standing member of the Committee of Public Accounts——

Mr. C. Murphy

A senior member.

Mr. O'Toole

Sorry senior member. He ought to know that there is a grave departure in this Bill from the norm to which I will refer later, I hope more precisely than Deputy Murphy did in his meandering along badly tarred roads in Wicklow and other evasive tactics which he used in evading blatantly the issue at stake here.

We all know and accept that the IIRS is engaged in very worthwhile work. Nobody in this country could but be aware of the contribution it has made as an agency to the whole development of this country since the inception of the institute in the mid-forties. One cannot but be struck by the changes that have taken place since it was first set up when one recalls the limit which was placed on its activities by virtue of the limit placed on its expenditure at that time. Written into the Bill was the sum of £35,000 beyond which it could not go. In 1961 this limit provision in the Bill was removed and the 1961 Act provided that there would be an annual review of the sum made available in the form of grant-in-aid amounting to something over £5 million. It is indicative of the massive expansion which has taken place within the institute and in its work commensurate with the expansion in industrial development in this country.

Nobody in this House can point a finger at the IIRS and its work. In its personnel it has people of substantial ability and capacity who have shown their paces, and no Deputy in this House is not aware in his own constituency of the involvement of the IIRS. At different times it has been called in at planning permission stage to scrutinise and investigate certain aspects of development concerning environment which have been raised. It has always come up with satisfactory answers and more often than not it has been successful in advising people of the position with information based on scientific facts.

This Bill has serious consequences for the IIRS. I am sure that other boards of State bodies have pricked up their ears when they have discovered what this Bill contains, because they may think that it is only a matter of time before the same type of approach is applied to them. Up to now financing of the IIRS has been through the system of a grant-in-aid. Certain conditions apply to moneys expended under a grant-in-aid. Apart from the normal conditions the Minister concerned with the concurrence of the Minister for Finance must allocate the money and so on. There must be consent between the two and it must be shown that the money has been spent in accordance with certain norms. One condition applying is that you cannot overexpend a grant-in-aid. While any balance left over need not be surrendered and can be carried on to the next year, the reverse side of the coin is that if you do overexpend you find yourself in breach of the condition applying to a grant-in-aid. Because of the enormous pressure on the IIRS in recent years it has found itself in the red for reasons some of which were stated by the Minister in her speech, such as payments not coming in within the accounting year and so on. On paper the institute found itself on the wrong side of the fence with a debit balance. The Committee of Public Accounts as one of their functions found it necessary to point this out, and this Bill now before the House was expected to be nothing more than an enabling Bill to regularise this over-expenditure.

Like Deputy Kelly I have made some inquiries and have found that, while the institute was aware of the comments of the Committee of Public Accounts, that this matter of overexpenditure would have to be regularised through legislation, it was not aware of the sting in the tail of this Bill. It seems that this matter was not discussed with it. The Minister will clarify that. In making the allegation I have fairly good authority, as I am sure Deputy Kelly has also, to say this. I accept it at face value and will continue so to accept it unless the Minister can deny it categorically.

The enabling section of the Bill is section 2 (1). Section 2 (2) is where the problem arises, and this may have serious consequences. Like Deputy Kelly, I have made inquiries in so far as I can about this new departure.

In so far as can be ascertained by me, this is a totally new concept for the financing of State bodies which may have far-reaching effects. I cannot project what might happen. What I am saying—and again I must persist in saying it—is that unless the Minister can deny it or show me a precedent for it, this idea of mortgaging the fixed assets of a semi-State body is a totally new concept. If the Minister can deny that I will accept her statement without reservation.

Deputy Moore made a statement that the Government will not be found wanting in the provision of finance for the IIRS. Deputy Moore must not have read the Bill, because section 2 (2) is just saying that in so far as the purchasing of capital equipment is concerned the IIRS must literally work out its own salvation in that any purchase will be made from moneys borrowed on the security of its lands and premises. This is a very substantial departure from the norm of guaranteed State finance for such bodies. As has been stated three or four times today already the IIRS has been underfinanced despite the major increases in the grant aid over the years, and the chairman has constantly stated in his annual report that this has been the position and that it is finding it very difficult to make ends meet, given the kind of service which it feels it ought to give to meet the many demands made on it and on its service.

What is the significance of this new concept? To me it is this: the IIRS are now in the position where the onus is on it to provide capital equipment with borrowed money which must be repaid. In some cases the equipment may pay for itself. But in other cases, such as for example research, equipment purchased with borrowed money which is very expensive today may not pay for itself and we would have the situation where the IIRS would be forced to take some of the grant aid money to service and pay back the loan on that piece of equipment. It is the classic case of robbing Peter to pay Paul. It does not make sense. It shifts the onus from the Minister on to the board and on to the personnel of the IIRS. This is a very serious shift, and I do not think this facility which is now given in the name of freedom and autonomy to the board is worth a tráinín. It is not freedom. It restricts the institute because it is forever going to have to look over its shoulders to see where it is going to get the money to service and repay that loan. The obvious answer to this is that the Government should provide the money. We all acknowledge that the Government cannot provide adequate funds for everything in which they are involved. If that were so we would run the risk of having different agencies not taking proper care of their finance. But where we have a case like the IIRS which is at the kernel of our industrial development and research, surely that body above any other body in the country ought to be given adequate facilities to carry out the job that it was put there to do.

Cutting the umbilical cord and telling it that it must now look after itself is wrong; it is a regressive and retrograde step, and one wonders at this stage how far this is going to go. Is it going to apply to other State bodies involved in very important work also on behalf of this nation? The whole concept of underwriting expenditure by the Minister for Finance has been with us since the foundation of the State. I cannot but be amused at the logic displayed by Deputy Murphy in stating that the IIRS has underwritten thousands of jobs here. That is absolutely correct, and I accept that. If that is so is it not logical to expect that he and the Government of which he is a supporter should undertake to underwrite that same agency which underwrites the jobs of many thousands of people here? That is the logical thing to do, and any departure from that stance is a retrograde one. The Minister has said that the IIRS also acts as a technical adviser to the Government. That is so. In that area it does a very fine job. For that reason the Government should not be reluctant, as indeed they are, to underwrite the activities of that agency in the expenditure of moneys for capital equipment.

It is rather strange and curious, and I would like the Minister to give us whatever information she has available at present on that concept of allowing State bodies to raise finance without the normal, usual guarantee from the Minister for Finance. The work of the IIRS has now become very important indeed because we are now entering a phase of high technology. Very specialised personnel are required for a very specialised job.

Apart from the usual testing carried out by the IIRS we are talking about the initiation of studies into things like offshore exploration and the kind of equipment which would be most effective, micro-processing and other highly technical areas such as the development of minerals, about which we know very little. We are dependent on this kind of agency which has the expertise and, hopefully, will have the equipment to initiate research into the best way to capitalise on our resources. What is happening? The onus of responsibility for the provision of the necessary equipment is now being shifted from the Minister of the day to the board.

Section 2 (2) ought to be looked at again because it may have very serious consequences. What would happen, for example, if the board were foolish enough, though I am sure they are not, to reach the limits of their borrowing power and mortgaged their assets to a degree beyond which they could not borrow any more under this section? Would it be necessary to repeal this legislation so that the institute could be totally supported by grant-in-aid as heretofore? If that were not done they would be unable to continue their work to the standard they would wish. These questions must be answered. They raise major problems for other State bodies. This country is nationally going into hock at present, and we are now asking State agencies to put themselves into hock. This concept is wrong and is a major departure from established procedures. It is blatantly dishonest to say those people are being given freedom of choice; the onus of responsibility for the provision of capital is being shifted away from a Government Minister to a board, and that is a very unfair tactic.

I also object to the fact that this came into the House under the guise of validating legislation to provide for the validation of over-expenditure in grant-in-aid, and this was shoved in as a device to shift responsibility and to ensure that the Government would not have to spend money in this very important area of industrial development. This kind of Bill would normally be welcomed with open arms as an enabling device to allow extra money to be provided, but because of a particular section the Bill is offensive. It includes this very retrograde section which could not be acceptable to the Opposition and I am sure there are Members on the other side of the House who are speaking with tongue in cheek in welcoming the Bill, knowing that it is a retrograde step.

Mr. B. Ahern

I will not detain the House as I am aware that there is another Bill to be dealt with later. In 1934 the Industrial Research Council were set up, and this country was not then as organised industrially as it was in 1946. Ad hoc committees were set up to try to co-ordinate industrial activity and technology. In 1946 the IIRS were set up by the late Seán Lemass who did so much to get Irish industry off the ground. They had as their basic philosophy the provision of more effective organisation of industrial research with the object of promoting the utilisation of the national resources of the State. It was hoped to provide standards of specification for industrial commodities, processes and practices and the utilisation of waste products in industry. They were to make recommendations to the Minister for Industry and Commerce as to the formulation of standard specifications for various commodities on the market at that time, to test and analyse commodities for sale to the public, and to publish results. All speakers have agreed that the IIRS have done a very good job.

Seán Lemass said in this House in July 1946 that, despite the energy and enthusiasm of the council, the financial arrangements made in relation to their work were not such as to give them the freedom of action which experience had shown to be necessary to implement a useful research programme. I heard the same thing today from the Minister. She is trying to expand and take some of the red tape and bureaucracy away from an area which requires flexibility. She is not trying to put an onus on a semi-State board. The purpose of the Bill is to allow the board to borrow temporarily such sums as may be required for current expenditure and, secondly, to borrow on the security of assets for the purchase of capital equipment.

The central objective of the IIRS is to promote the efficient operation of industry and to maintain and stimulate where possible industrial growth. They co-operate with all the other semi-State bodies involved in trying to promote Irish industry and improve living standards. They ensure that industry has access to and uses the most up-to-date technology available anywhere in the world, and assist in the creation of wealth for those industries and their workers and the raising of living standards. It is fair that a semi-State body should have as much freedom as necessary in carrying out its functions.

The IIRS assist industry in many ways. They provide advice and help to solve technical problems and also test products for sale either at home or abroad. A recent example of their useful work is the publication of a document on the installation of back boilers which is of great help to the public at large. The institute will have an income of about £2 million this year due to their services to industry and the assistance they are providing in solving problems. Their initial income in this area was in the region of £70,000 and has grown considerably.

As the Minister said in her speech, simply solving industrial problems is not enough, and the institute also engage in research leading to the development of new industrial processes. In the past few years much has been done in conjunction with the IDA to help small industries to get data on various products we have imported up to now so that such products can be made at home. I live near the IIRS and I have been there many times. Anyone can make an appointment to visit the institute and if one has some good ideas with regard to technology and so on one can discuss them with the personnel there. Many small industries have been given valuable advice by the IIRS. The institute carried out a survey last winter when there was a major freeze-up of oil supplies. In an estate of 2,000 houses in my area the IIRS examined each house and provided an excellent report to deal with the problem.

While it is easy to say that finance should be provided to cover all aspects of the work of the institute, the resources of the Government are limited. The IIRS will never have to sell the assets of their valuable estate but it is obvious that they could borrow much more from their bankers to provide finance in an easier way and thus allow them to continue to promote Irish industry and technology.

The Minister mentioned a grant-in-aid of £5.1 million. I do not know how much of that is for productive machinery purposes and how much is in respect of salary. Anyone in business knows that the IIRS are providing a commercial service and that it stands on its own feet. We are always complaining about the large grants-in-aid that are given to semi-State companies, but here is a case where the organisation in question are trying to stand on their own feet. I am sure the Minister has discussed this Bill with them.

There is a shortfall because people are not paying their bills quickly enough. One speaker this morning suggested that the firms who have not paid their accounts may be trying to expand and thus have a cash flow problem. Perhaps the Department would take note of the way some other Government Departments try to have some arrangement to keep bank interest down to a minimum. Since this Government came to office some Departments have done this effectively to decrease the amount of interest the banks get from semi-State bodies or from Government Departments.

I realise that the Opposition will not give an outright welcome to the Bill. In cases where services are required in order to assist the public, such as the instance of my own constituency or with regard to the oil problem which was of concern to the entire nation, perhaps the Minister would consider giving the institute grants for equipment. I do not know if provision is made for such grants in the £5.1 million mentioned by the Minister.

I referred earlier to a statement made in this House in July 1946. In that same report there is the following statement:

The Bill has been framed with recognition to the fact that for research, especially industrial research, elastic conditions of control and development are required.

The Minister has followed the same line and has allowed for flexibility of control. The semi-State bodies can stand on their own feet and do their work efficiently. It is necessary on occasion to cut through the red tape and I congratulate the Minister on an excellent Bill.

Mr. L. Lawlor

We all welcome an opportunity to discuss the workings of the IIRS. The institute is in the top group of successful semi-State organisations. This Bill gives us an opportunity to consider its operations in the past and to point out some of the directions it will have to travel in the future.

This morning Deputy Kelly was concerned about the question of finance and the way the Bill will allow the institute to raise capital, particularly for the purchase of equipment. I have visited the institute and I know the workings of that organisation. A very progressive stand has been taken by the Minister to ensure that the IIRS will not be short of funds, particularly for capital equipment. That in itself is an investment, especially when one sees the direction the institute has gone in its sub-contracting services. It provides a service to industry as well as to Government and is the watch dog for the environment and for other major complex technical areas.

Some of the growth in development of the IIRS has been in a commercial capacity. This is desirable, particularly in a small economy like ours. Small Irish developing companies need technological expertise. Obviously because of their size they cannot afford the capital outlay themselves but they can go to the IIRS for the most up-to-date information on technological development. In addition, they can have their products tested, they can have research carried out and they can be given recommendations. The IIRS staff are in a position to improve products and they can go to the shop floor of businesses to give the best advice available. If this Bill and the funds which the IIRS is going to raise as a result of this legislation will further assist in that direction, that should be welcomed and supported by the House.

The issues in the publication Technology Ireland dated March 1978 regarding future technology and methods of forecasting which were raised by the IIRS are worthy of serious consideration. It is sobering for politicians when the technicians put forward some of the up-to-date views that are available on technological development. It is particularly challenging when in that article it is pointed out that the Yale historian Mr. De Salla Price feels that we know 20 per cent of the scientific and engineering technology as discovered and by the end of the century we should literally have 100 per cent information on the availability of new products, designs and technologies. That being so and, as is mentioned in the article:

If this forecast proved even approximately accurate then it is a very sobering thought for anyone under the impression that our knowledge of basic science is reasonably complete. Scientists and engineers as well as those informed on scientific and technical affairs know however that the explosive growth of knowledge continues. This trend has ramifications for all sectors of society intent on industrial development. All Governments want to be involved in whatever technological developments there are but, that being the case, for the remainder of this century the IIRS are going to play a very major and significant role in the further development of our economy.

If one is to look at the previous forecasting of technological development up to our present-day situation, when we find ourselves with industry not capable of securing adequate staff with the necessary experience to enable them to fulfil their real potential—the Minister for Education and the Minister for Labour have actively promoted schemes recently to endeavour to solve this problem—it is an indication of how rapidly technological development can proceed, and if that is so, particularly as we come to the close of the seventies with developments in micro-processing, the chip and electronic and computer advances putting up a real challenge to industry, the IIRS in particular must be the watch-dog for this country in advising Government, industry, the IDA and other interested parties so as to ensure a co-ordinated policy as we enter the eighties.

The IIRS to date has certainly lived up to expectations outlined when it was set up. It has expanded along a number of different paths which were possibly not envisaged then. It must continue in this way to develop and have an open mind on the services it provides. It must be extremely well qualified in technological matters and it must be capable of coming down to the mundane duties of explaining to the public what is best for them in consumer goods particularly in engineering and electrical areas. It has a number of challenges in that area. Its consumer advisory service is a very essential part of consumers' protection against manufacturers who deliberately or otherwise may market products that can be dangerous. On a number of occasions the IIRS has had to advise on products on sale that were dangerous, and some problems were experienced. We all owe a debt of gratitude to the IIRS for recognising its need to expand and for the many different directions it has taken.

When dealing with technology of the type in which the IIRS is involved capital needs can never be fully satisfied. There is a question of priority, of considering investing in equipment that can best support existing-industry and also leave it in a position to invest in experimental areas which can possibly generate development in areas where it does not presently exist. This is the dilemma facing the IIRS directors and managers. As a Government we recognise this, and the Bill gives it such a degree of independence that based on its assets it can raise necessary funds, particularly in areas that are to be selffinancing, as stated in the Bill—that is the intention. It will give the IIRS the opportunity of purchasing capital equipment where hopefully it will be used in extension of the sub-contractor services area of providing to industry on a fee-paying basis the type of information the organisations themselves are not capable of providing internally.

Because of the growth of the economy in many directions the IIRS should probably look to the prospect of bringing some of its expertise and services outside Dublin. I am aware of a major development by the IIRS at Shannon. Probably in the Munster area where there is a very heavy concentration of chemical processing and other industries which need the type of service that the IIRS is providing, it should look in that direction. Setting up separate units of this type tends to bring about a good competitive, technical, internal activity which can give rise to much innovation and new thinking and development. I suggest that the IIRS should consider setting up a more specialised type of operation outside Dublin to meet the needs of developing industries in other parts of the country.

I should like to comment on one particular area of activity. During my visit I saw the excellent work at present going on in research on Irish timber, a resource which is becoming freely available. We have a great deal of timber imported at present. The IIRS is doing very extensive experiments on Irish timber in an effort to introduce it into the construction industry and so redress the export-import imbalance. A good deal of thinnings are now becoming available as a result of the foresight put into our plantations and the IIRS is, I think, the organisation to maximise the potential of this Irish product. I saw its up to date work in this area of timber utilisation and house construction, and it is very encouraging. If the Bill provides additional funds for equipment that will allow that work to proceed as rapidly as possible it is to be welcomed and commended.

Another aspect of IIRS activity I wish to mention is in connection with standards of plant installation and safety standards, which are the responsibility of the Department of Labour. Complex plant in many cases is installed without guidelines or compliance with any statutory standards. Difficulties or problems afterwards mean that the IIRS is inevitably called in to report on the problems, how they can be remedied or avoided in future. In one issue of Technology Ireland the subject of welding was dealt with. I am aware of a number of accidents in welding operations where there is no proper control or compliance with standards necessary to ensure safety of the people operating the plant. The IIRS should have a more expanded role in recommending here the adoption of standards recognised in other countries or an amalgamation of different standards, whether British or continental, which are accepted generally and backed up by legislation.

We are now installing very complex engineering equipment, much of which will contain very lethal gases and liquids, and operate in plants with a high concentration of personnel. I would like to see the IIRS introducing a set of guidelines which would, in time, be backed by legislation, ensuring that the standards of installation of plant are to a proper level of safety and operational satisfaction. On a number of occasions, the institute carried out investigations and discovered defects which, with a proper level of standards, could have been avoided.

In the area of safety at work, the IIRS has often been called in to recommend guidelines for safety and, in particular, for the wellbeing of staff working in many gas processing operations and in engineering. Sir Peter Cassells of the Irish Congress of Trade Unions wrote a very lengthy article in one of the Technology Ireland issues dealing with the subject of safety at work, which interlinks with what I said previously about the standard of plant installation. The Department of Labour have taken recommendations from the IIRS, from the trade unions and, no doubt, from employers, to set up an investigation body to look into this important matter. The IIRS has a very important function and role here, and I would like to think that it will play a much more dominant role in that area of industry.

An Ceann Comhairle

Deputy, I am afraid that this Bill does not permit of your going into all the details of what the IIRS might or might not do and the details of schemes. The Deputy is going outside the scope of the Bill.

Mr. L. Lawlor

I apologise. In conclusion, the engineering industry has been recognised as one of the industries with most potential. The IIRS has kept itself abreast of technological advancement and is to be complimented on its work to date. The future challenge to that organisation will be great, especially when multi-national organisations and some of the worlds' better equipped economies can invest vast sums of money. It is our task to ensure that we provide the industrial base for investment and it is the IIRS's duty to ensure that we can provide the necessary personnel and standards to ensure that we get our fair share of investments in this complex industry. We should always recognise the importance of the IIRS and by giving it this facility of raising additional funds should see it improving on its role to the benefit of Irish industry in the future.

An Ceann Comhairle

The Minister to conclude.

Minister of State at the Department of Industry, Commerce and Energy (Mrs. Geoghegan-Quinn)

I thank the Deputies who took part in this morning's debate on this Bill. The people involved in the IIRS would be pleased to realise that so many Members of the House are interested in their work and in ensuring that the funding of the institute is sufficient to enable them to do the important job which they are at present performing.

Very many points have been raised by the Deputies in relation to the IIRS and, in particular, in relation to the Bill. I hope in my remarks to cover all the points raised, but I am sure the Deputies will remind me if I forget some.

The first point I mention is that made by Deputy John Kelly and reiterated by Deputy O'Toole. These two Deputies said that this Bill was not known to the IIRS. The Bill was discussed with the Director and the Deputy Director as far back as late 1978. The proposals in an advanced stage were not put to them. The Bill was sent to them after circulation and the IIRS was not advised of the limitation of the borrowing powers before they got the Bill. The director of the institute, in September last, acknowledged receipt of a copy of the Bill and stated, in his letter to the Department, that his board were satisfied with the Bill which is here before us and I quote: "adequately caters for the particular difficulty that the Institute has experienced in this regard during the last few years".

Deputy Enright, in his contribution, talked about figures. It is very important when figures are tossed around on the floor of this House or, indeed, anywhere else, that they be accurate. I take exception to the fact that Deputy Enright feels that the Government grant-in-aid to the institute was reduced in one year—I think he said in 1978. In fact, if we look at the figures, we find that in 1976 the institute got a grant of £3,240,000; in 1977, £3,684,000; in 1978, £4,412,000 and in 1979 £5,119,000. The Deputy may have confused the amount given for current expenditure in 1978 and the full amount for 1977. I am sure he did not intend to misrepresent the figures in any way.

If we look at the increase in the vote itself, 1973-1974 to 1977, there was an increase of 84 per cent. That would work out at 16 per cent per annum, approximately, and from 1977 to 1979, an increase of 39 per cent, which would work out at about 20 per cent per annum. Deputy Enright asked that, as a minimum, the grant at least rise with inflation. I assure the Deputy that we try at least to do this and, indeed, to do more than that because it is important.

Mr. Enright

I was trying to separate the subheads.

An Ceann Comhairle

When the Minister has finished, then it will be the time for questions.

Mrs. Geoghegan-Quinn

There was no reduction of any kind in any of those years whether on current or capital expenditure. That is my point.

Deputy Enright spoke about import substitution. As we all know, the Deputy's point has some validity. The Industrial Development Authority and the IIRS are very much alive to this possibility. Every proposal put forward to them can have help from those two bodies and would have the full support of the Government and its agencies in this regard. If the proposal is viable it should be pursued. In this connection, I refer to the IIRS annual report for the year ended 31 December 1977. On page 14, it is shown that the IIRS was instrumental in getting most of the Kinsale Head development work jobs for Irish firms who were capable of supplying the work, and I quote:

The total value of contracts placed by Marathon in Ireland for the development phase of the Kinsale Head Field was £15.7 million at the end of 1977, with an employment content of 630 man/years. Irish participation is now some 15% of the overall project, which represents some 95 per cent of the business that Irish industry was capable of handling at the time.

It is important to realise that the IIRS and the IDA will give any help possible to any proposal which they think is viable, in the case of an import substitution.

Deputy Desmond spoke about the consultancy study being undertaken and wondered what matters would be included in this. Earlier this year, it was decided that, in the light of demands being made and likely to be made in the future on the Exchequer by a major building programme begun some years ago by the institute, and other factors, the time had come to undertake a detailed examination of all the activities of the institute in relation to the expanding needs of Irish industrial development.

Debate adjourned.

Dáil Éireann debate - Thursday, 1 Nov 1979

Industrial Research and Standards (Amendment) Bill, 1979: Second Stage.

Dáil Éireann debate -
Thursday, 1 Nov 1979