Deputy O'Toole is in possession and has five minutes.
Private Members' Business. - Industrial Development: Motion (Resumed)
The following motion was moved by Deputy B. Desmond on Tuesday, 16 December 1980.
"That Dáil Éireann, concerned about the substantial and increasing dependence of Irish industrial development, employment and economic growth on foreign and multinational capital, and about the implications of such trends for the future:
—calls on the Government immediately to ascertain and publish details of the extent to which our industrial base and employment is dependent on foreign and multi-national capital:
—asks the Government now to review the policies of the Industrial Development Authority in relation to over reliance on foreign and multi-national capital: and
—agrees on the need for the establishment of a National Development Corporation with a legislative and financial basis adequate to enable it to launch an industrial development programme based on Irish resources and utilising the most advanced technologies under Irish control."
Debate resumed on amendment No. 1:
To delete all words after "That" and add:—
"Dáil Éireann endorses the industrial development strategy being pursued by the Government and its Agencies and notes with approval that the Government has already announced the carrying out of a fundamental review of industrial development policy by the National Economic and Social Council which review commenced early in 1980."
—(Minister of State at the Department of Industry, Commerce and Tourism.)
When I reported progress I had been dealing with the work of the IDA and the need for some form of new impetus to get over the present economic problems which have given rise to a very high unemployment rate. Today in the House the Minister for Industry, Commerce and Tourism made the point that Córas Tráchtála were deeply conscious of the value of the small industrial unit and drew attention to their track record. I reiterate what I said regarding what might be done to complement the commitment by CTT and the IDA who are emphasising the need for and the value of the development of small industries. I am convinced that one of the major solutions to our economic problems lies in the sphere of small industries. I say this not because I am suggesting that the IDA will not continue to have such success in inducing large companies to come to this country, but because they know that competition for such industrial units is now very stiff indeed. While they must be encouraged in their efforts to attract such industries here, there is nothing wrong with a parallel impetus in the development of small industry.
The Government should show their commitment in this area by appointing a Minister of State at the Department of Industry, Commerce and Tourism who would have total responsibility for the small firm sector, backed by a national agency to help small firms to set up and to assist them in dealing with Government and various agencies. Such small firms face an enormous amount of red tape and have not the capacity and the personnel to deal with it.
Regarding our industrial development generally, we must retain our clean environment and the social fabric of our society. These are matters on which I could speak at length, but time does not permit. The warning lights are flashing regarding our treatment of the environment, and the existence of toxic waste as a consequence of industrial production is a matter which must be treated far more seriously. There is an urgent need for the safe disposal of this toxic matter, and the Minister should examine this problem because it will get worse as time goes on and our industrial base broadens.
I do not endorse the Government record on industry, and they have blatantly failed in their attempt to deal with the retention of jobs. I endorse the work of the IDA, the Government agency. Long may they continue to attract industry from anywhere they can get investment from abroad.
This motion strikes me as a somewhat inept one in the sense that it was put down two days after I made a speech early last week on many of these points, and it displays, for that reason, if only for that alone, a singular lack of originality. It contains the potential danger of creating an appearance of xenophobia. I am glad Deputy Desmond in proposing the motion last night did not take that approach. In fairness to him, he almost went to the other extreme and made a very low key speech. I propose to respond on the basis that no element of xenophobia will be engendered here and no ammunition will therefore be given to those who spend part of their time abroad trying to run down this country.
I can assure the Minister that xenophobia has never been part of the philosophy of this party.
Depending on how the motion was dealt with it could give rise to that. That is why I said I appreciated the manner in which Deputy Desmond approached it and it enables me to approach it in the same way without having to say things that might otherwise be necessary. I want to pass from that to make some general remarks in regard to our present industrial strategy.
We have two main ambitions for our economy — full employment and a rising standard of living. Together they provide the foundation for the stable development of our society — expanding opportunities, broadening the choice of goods and services, providing more resources for those in need and a feeling of confidence in the future. In their absence — particularly over a long period — this foundation is at risk; opportunities diminished; choices are narrowed; social justice becomes a luxury as the limited available resources go to those with the strongest muscle; confidence is displaced by doubt and uncertainty; and stability itself is threatened by internal conflict and, ultimately, by social disorder.
Over the past 25 years Ireland has undergone a "crash course" in industrial development. We have had to go through this process to ensure the foundation for the stable development of our society. Seán Lemass saw this need and began the highly successful programme of planned growth, based on rapid export development, a high level of investment and selective attraction of foreign enterprise to strengthen the industrial base. This period has seen a dramatic growth and broadening of employment opportunities and a steady rise in the country's living standards.
This country has been enormously successful in adapting in such a short space of time to the disciplines of modern industry. We have today the fastest growing industrial sector in the European Economic Community. Our growth rate in output, investment and jobs has been faster than any of our EEC neighbours. This growth has taken place in a free market economy in competition with the best of other countries. We have today an industrial management force with skills, experience and vision who are not dismayed either at the prospect of foreign competition or at the necessity to penetrate foreign markets to sell their products. We have, perhaps for the first time in our history, a healthy Irish industrial base with competent management personnel who know what they can achieve, who know they can measure up to competitive international standards. We have a general work force who have assimilated the latest manufacturing techniques and technologies with commendable speed.
The remarkable role played by the IDA in achieving this situation should not be underestimated. I do not need to recite again a litany of statistics in order to convince this House of the professionalism, the effectiveness and the achievements of the IDA. Through their efforts foreign enterprises operating in international growth markets have been persuaded in considerable numbers to locate in Ireland. As a result, an increasingly wide range of products is being exported and new markets — especially in Western Europe — are being opened up. During the last 15 years, this kind of investment has provided many of the new jobs that have been created in our economy and it has also taken up much of the slack as the older, more traditional industries have shed workers and as the number of jobs in agriculture has continued to shrink.
We should make no mistake about this. If it were not for these foreign industries coming into the country and the IDA's efforts we would be in a very poor state indeed job-wise.
Let no one underestimate the importance of the contribution made to our growth by these multinationals. They have been fundamental to the growth of the economy over the last quarter of a century. Without the solid base of productive effort represented by these foreign industries, we would not be able to afford many of the present expenditures on social welfare, health, education and housing.
For this country direct foreign investment has been "a means to an end". The "end" I am talking about is the acceleration of the transition of the Irish economy from a primarily rural, agricultural-based one to a modern industrial economy with some of the most modern factories in Europe, with a solid base in the new growth industries of chemicals, electronics and pharmaceuticals. This is an economy which provides challenging and worthwhile employment opportunities for our rapidly growing young population and enables them to stay at home and to contribute to the development of their country. It is an economy in which young Irish businessmen can experience the best international management practices and technological developments; an economy in which these young Irish businessmen are stimulated and motivated to set up their own indigenous companies to complement the thrust of the foreign multinationals and go on to develop new overseas markets for new and innovative products made and rooted in this country.
There was no other realistic way in which these extraordinary results could have been achieved in as short a time frame and I am proud to have been a part of, and indeed to have made some small contribution to this process. I am particularly pleased to see during the last three years especially, the growth of indigenous Irish industry and the emergence of high-quality native Irish managers and entrepreneurs to manage these industries.
I have encouraged this trend because I believe it is the way of the future and that the eighties and nineties will increasingly see the growth of indigenous industries in all kinds of sophisticated and technologically advanced areas — industries which are owned and managed by Irish entrepreneurs and managers.
Even today there are clear signs that this is happening. While there is a widespread impression that the IDA have concentrated most of their efforts on the introduction of large overseas companies to Ireland, this is to a great extent due to the fact that the establishment of such companies here usually attracts much more attention in the press than similar investments by Irish firms. In fact, the most up-to-date estimates based on IDA employment surveys suggest that foreign-owned firms account for only about 33 per cent of total manufacturing employment. The IDA, with my strong support, are heavily committed to the maximum support and encouragement of Irish industry.
Over the last three years the number of jobs approved from domestic industry has increased significantly mainly as a result of the decisions I took in late 1977 regarding indigenous small industry. In 1973-74, for example, job approvals from domestic sources represented 41 per cent of the total job approvals while last year this figure was 58 per cent — a very substantial increase.
Last year small firms employing 50 persons or less accounted for 24 per cent of jobs approved for assistance by the IDA. This year the figure will be at least 33 per cent of the total approvals. The rapid growth of small industries in Ireland can be appreciated by a comparison of the results of the first year of the Small Industries Programme in 1967 when a total of 34 projects were approved, with 1979 when, on average, three projects were approved every working day.
I am particularly pleased to see this kind of progress not only because over 90 per cent of these projects are Irish-owned but also because small firms play a very important role in developing a balanced industrial structure. They bring jobs to towns which are not large enough to sustain major industries. Since 1967 small industries have located in 440 separate locations throughout the country. On top of this they encourage native entreprenurial talent. One in four projects helped by the IDA is created by persons not previously engaged in manufacturing, persons who are developing and exploiting their own ideas.
At the beginning of this year 23,000 persons were employed in small grant-aided firms, equivalent to 10 per cent of the manufacturing labour force. Over the decade of the 1980's the growth potential for small industries will be greater than ever due to the increasing number of spin-off opportunities arising from new larger scale industries. The 1980s will also see a vast array of new business and job opportunities becoming available to Irish entrepreneurs and managers. We will need these job opportunities and we will need to capitalise on them if we are to continue the momentum of the past 25 years.
Looking out into the 1980s our expanding population will place ever increasing pressure on our manufacturing industry to meet the future job requirements of our young people.
This pressure will be greatly increased by the continued labour shedding in the agricultural sector. This is expected to continue for a number of years to come, because productivity in Irish agriculture is on average below that of most European countries and the proportion of the population engaged in agriculture is still, by far, the highest in the EEC.
The international environment in which our industrial sector will have to operate to provide the job opportunities I refer to is likely to be dramatically different from that of the sixties and the seventies. We are likely to see only moderate economic growth in the developed countries of the world. Almost uniformly, forecasting institutes in most western countries are predicting slower growth in output, increasing inflationary forces, persistent monetary instability and increasing unemployment. We are likely to see rapid technological change continuing to be an essential element for development. We are likely to see increased free trade between countries and, despite current protectionist pressures, we are likely to see increasing participation from developing countries in world economic exchanges.
Here in Ireland we must be prepared for the fact that the determinants of economic growth in the decade ahead will be different in quality and in intensity from those that dominated the economic growth in earlier times. It is in this context that the Government last year asked the NESC to undertake a major review of our industrial policies and recommend the most appropriate strategies for the eighties.
This review, which is being carried out by a team of international consultants, will deal with: the competitive position of Irish industry at present; the prospects for new growth industries; the cost efficiency of the instruments of industrial policy; the lack, until very recently, of significant growth in indigenous Irish industry; the role of foreign industry; the sources of funds for industry; the likely consequences for Ireland of shifts in international advantages, and the co-ordination of industrial development policies with infrastructural and manpower policies.
The consultants involved expect to present their final report to NESC in early spring 1981 and the Government will consider what action is needed in response to these recommendations at that time.
The task of shaping our industrial policies and our industrial strategies to face the challenge of the eighties will not be an easy one. The next ten years will present many challenges and many problems. However, I believe that Irish industry today is capable of continuing real growth in the years ahead. There is no question in my mind that we have the resources here to make it happen. Let me enumerate some of the more important ones in my view: we have a high degree of political stability; Irish people have a clear sense of identity and a self-confidence greatly strengthened by the experience of the past 20 years, a period during which manufacturing industry grew by 6 per cent annually in real terms; we have had consistency of industrial development policies for over two decades; we have successful and dynamic promotional agencies and an attractive, well developed range of incentive programmes; we have some of the most modern plant in Western Europe, arising from the fact that our drive for industrialisation is less than 25 years old.
We have a skilful and adaptable work force who have proved themselves in modern technology. Our skills are not inhibited by hide-bound tradition and our industry is increasingly oriented towards sectors of long term growth. Finally, and perhaps most significantly, for the first time in the history of this country there is available a substantial group of Irish managers, capable of competing with the best in the world.
This, I believe, may be our greatest resource, and it is one that has only become available to the Irish economy in very recent years. In the fifties and earlier the enterprising Irishman too often went abroad out of necessity and was lost forever to us. But the Irish emigrants of the sixties have begun to come back bringing with them the skills, experience and vision acquired in their years abroad.
In the final analysis it is this human resource, and the attitudes, the vision and the motivation of our own Irish people, that will determine how successful we will be in the next decade. We need enterprising native businessmen to grasp the challenge of the eighties, to exploit the new product and market opportunities, to build a new generation of indigenous companies, technologically sophisticated and rooted here.
If I were to pick one example of the benefits to this country of the marriage of multi-national technology with local brainpower and of the opportunities available for native Irish talent, I would pick the electronics industry. The huge advances made in electronic technology and the fact that this country now houses some of the best companies in this field presents us, in my view, with a golden opportunity. The revolution in information processing is only gathering momentum. There are literally thousands of applications to which microprocessors can be put. Advanced electronics in the office, in industry or at home have a scope that knows no bounds. Electronic starting and fuel efficiency control in the most basic of cars is likely to become the norm of the future. Robot assembly is now quite common in almost every new car assembly plant and it is only a question of time before they are used in many other sectors of production line industry.
Ireland is now ideally placed to exploit this downstream development of the microprocessor. We have the technology, we have the educational infrastructure and we are acquiring the personnel. By 1985 the Industrial Development Authority reckon we should have over 30,000 people engaged in the electronics industry — we have 13,500 at present. By 1985 we will be turning out a plentiful supply of trained technicians and graduates. But will these people have the vision to see, and the motivation to exploit the development potential that the new technology affords us? It is being done in the United States all the time. Employees of one company move out to start up on their own, either in competition with their former employers and deploying greater efficiency, or in developing another product. Surely we can do it here.
Given our commitment to the free enterprise system and our industrial incentive programme, there is all the more reason why such spawning should occur here. This country offers ready-made factory units, substantial capital grants and a 100 per cent write-off of the investment in year one. Manufacturing industry in Ireland, whether for export or domestic consumption, will pay tax on profits at a maximum of 10 per cent from the beginning of next year until the year 2000. There is little excuse, therefore, for our businessmen and entrepreneurs not to seize the opportunities that are facing them.
I believe we have the opportunity to undergo in the eighties the most significant shift in emphasis in our manufacturing profile since Irish manufacturing industry got off the ground 25 years ago — and we have the chance to do it ourselves. The technology and the work force are here and, increasingly, the infrastructure is being set in place. The key ingredient that will determine our success is motivation. What is the attitude of the graduates and technicians likely to be?
Ireland has never really been regarded as a nation of enterprise. The next few years will afford us the best possible incentive to prove the world wrong. I not, then the enormous downstrean potential of the electronic revolution will pass us by, or what we do see of it will be as a result of foreign enterprise yet again taking the initiative.
Apart from electronic hardware the other areas of potential of the 1980s, such as bio-technology, synthetic fuels, software development and so on are areas of potential suited ideally to Ireland in that they are low energy, often low capital but always high brainpower technologies. The key requirement in all these areas will be enterprise.
Enterprise of all kinds will have an important contribution to make. I hope that domestic private enterprise will play a key role along the lines I have developed earlier in this speech. Foreign enterprise will continue to be a vital source of new investment and new jobs. Public enterprise, either alone or together with the private sector, has also a contribution to make. This potential contribution was recognised by the Government and discussed in detail with the unions and the employer organisations who took part in the negotiations leading to the last two national understandings. In that context, as all Deputies will be aware, the Government have undertaken already to provide for the establishment of a national enterprise agency.
Before going on to deal with this proposed agency I would like to make it clear that I do not share the view often expressed that only public enterprise can provide a really effective answer to the country's employment need. I acknowledge that public enterprise has, and must continue to have, a part to play. Unfortunately, the performance of many of the commercial State companies has been nothing short of abysmal. In fact, with only a few exceptions, they add up to a litany of financial failure. This may be due to some extent to the fact that the ventures themselves may not have been attractive in commercial terms in the beginning but quite obviously other factors are at work also. In the light of these unhappy experiences can anybody honestly or convincingly make a case for further large-scale direct State participation in commercial activities? The milestones along such a road would very soon become millstones round the necks of taxpayers. Is this what we want? The answer must definitely be no.
It will be recalled that the commitment to set up the National Development Agency was given in response to sustained requests from the trade union movement for a national development corporation which would research new ideas for industrial development and establish new industries based on native resources and on improved technology. The preparatory ground work needed to bring the new agency into operation has taken longer than anticipated but, given what I have said about our experience of public enterprise, Deputies will appreciate the importance of assuring that the necessary framework and modus operandi are worked out fully before its launching. Great care must be taken to ensure that there is no overlap between its functions and those of other State agencies, particularly the IDA and SFADCo. We must also avoid a situation where the agency would be bidding in competition with other State bodies for the same projects. I expect that detailed proposals for the establishment of the agency, taking those problems into account, will be considered by the Government shortly.
From all that I have said here tonight it is clear that in continuing the momentum of our industrial development the task which we face as we head into the 1980s is a daunting one. None of the difficulties which I have mentioned will be solved in any final sense, but they seem more manageable than those that faced Ireland 20 or even ten years ago.
The opportunities for progress, as I have said, will be there. However, to take advantage of opportunities calls for effort, co-operation and discipline. Progress will not come by sitting around waiting for things to happen and allowing those opportunities to slip by. Our country can be only what we make it. For too long this was a country where the feeling that nothing can be done lay heavily like lead on the soul. That era is over now.
We all agree that full employment and a high standard of living are important, but statements of hope or good intentions are not enough. To achieve our ambition we have to produce and sell goods and services that are wanted in home and overseas markets and we have to do this in a highly competitive world which does not owe us a living. We will have to be clear about the scale of the challenge that confronts us. We have to define the choices open to us, to set realistic targets and, above all, to commit ourselves to the action which is required to achieve these goals. This will call for leadership of a high order at all levels of our society from the Government down to individual workers on the shop floor.
For my part I assure the Deputies here tonight that I myself, my Department and all of the State agencies under my control are striving hard to provide an example to the industrial sector in this regard.
I would like to speak in support of the Labour motion and to respond to the speech that the Minister for Industry, Commerce and Tourism has made and to the tone of that speech. I respect and appreciate the way in which he has proposed to deal with the resolution and the motion that we have put down.
As I said in my intervention, this party, unique in this House, have not traded in the obnoxious, political ideology of xenophobia which has beset this country for so many years and there is absolutely no suggestion of xenophobic antagonism in this motion. On the contrary it is fitting and right that a political party in a democratic assembly of the free Irish peoples should after 60 years look at the extent of their control and development of their own industrial base if we are to give any sense or meaning to the struggle for freedom that our forefathers had over many years. To celebrate the partial victory of our antecedents and forefathers in achieving freedom for ourselves is in no way to claim or assert to be xenophobic at all; on the contrary.
The present occupants of the Fianna Fáil benches like to refer to the late Deputy Seán Lemass and his contribution to the development of the State of this country. However, like most politicians they tend to be rather selective. I was brought up in a Fianna Fáil house with long memories, and, without being disrespectful in any way to the positive ultimate contribution that the late Deputy Lemass made to this country without any great personal gain — indeed, with very little personal gain to himself — the record will show that in coming to Government in 1932, with the support of the Labour Party, the late Deputy Lemass spent 19 years establishing a Sinn Fein tariff-protected economy to enable private enterprise to create an industrial base. When he saw the abysmal failure of Irish private enterprise he spent the last ten years of his life, from 1957 to 1966 when he retired, in dismantling it. The fact that he was more successful in dismantling it than in erecting it in terms of its net impact on the growth of this country is something that we welcome. Let the House be quite clear that if the record was to be objective, the strategy of Sinn Fein tariff-protected industrial growth in this country failed and was seen to fail by the return in 1957 of Fianna Fáil to office, and clearly so by Deputy Lemass in 1959, when he became Taoiseach.
Those years were lost at a time of difficult economic development internationally. We are being assured now by the present incumbent of the post once held by Deputy Lemass that this time Fianna Fáil have got it right, that this time the magic formula of industrial growth and development has been discovered and that they are going to deliver in a way that they were not delivering before the two objectives, if I quote the Minister correctly, of full employment and rising standards of living.
The Labour Party would like, first of all, to clarify the consensus of agreement which we share with other parties in this House, particularly with the Government. We share those objectives. I suspect that we share them to a degree far greater than the Minister realises fully, but we are not the ideologues in this House. The ideologues are over there. They are the people who believe consistently and frequently in the unique ability of private enterprise to deliver the jobs.
We have had the Fianna Fáil manifesto of 1977 and the subsequent and constant reiteration of private enterprise whether at chamber of commerce dinners in the US or at CII gatherings here. The ideologues, if one wants to read Deputy Desmond's speech yesterday or listen to me now, are not on this side of the House. We have frequently and consistently stated that we are in favour of a mixed economy with the dynamic role for the public sector. We accuse successive Governments of not having recognised the real dynamic contribution that a well-managed — I emphasise that phrase — public sector can make to the development of our economy. There is no such thing as private enterprise in our economy. The present Minister for Industry, Commerce and Tourism. I suspect, is better aware of that than any other occupant of that Department with the bleating queue of industries that do not want to pay taxes when making profits and are banging down his door seeking grants and bail-outs either from himself directly or from Fóir Teoranta when they are in trouble. If that is private enterprise it does not square with usage of the English language.
We already have a mixed economy — some would say a mixed-up economy. The public sector which in terms of direct employment is the largest sector is being misused and abused by elements within the private sector and in private industry where it is required to provide at below cost level an infrastructure for the development of the private sector without any guarantee that the private sector will automatically reinvest within the economy to create employment. I do not wish these comments to be seen as an attack on the private sector; on the contrary, this party believe the representatives of private industry when they say they represent private interests. They do represent private interests first and foremost. The history since 1977 as represented by spokesmen for the industry, Mr. Liam Connellan and others, clearly indicates that the survival of their own companies and the interests, not of their employees, but of their shareholders and debenture holders are their first concern and will be looked after first.
What then does this motion seek? We say there is a mixed economy. We recognise the role and positive dynamic interaction of a mixed economy. We say that the so-called privacy of that sector is very small and that the potential for dynamic growth and development within our economy from the public sector has been denied by successive Governments. Specifically the present Government and the present Minister whose competency is in no way doubted by any Deputy — have regrettably failed to implement a commitment in relation to the industrial consortium — if that is the correct phrase — in the manifesto. There may be difficulties attached to this. The Minister indicated some of them. The reports and analyses that now for the first time are being made available directly to Deputies and Senators by the State Sponsored Bodies Committee would indicate that for far too long the involvement of the Oireachtas in the public sector in terms of accountability has resulted in considerable mismanagement in more than one State enterprise.
One swallow does not make a summer. The bankruptcy of not one but of hundreds of private enterprise firms does not in any way diminish the faith of the Fianna Fáil ideologues in the propriety of private enterprise, so why should those who believe in and argue for an increasing role for the public sector accept that faults and mistakes in management in the public sector somehow remove the correctness of that side of the economy for economic growth and development. I say that so as to suggest that the dynamic positive mix between public and private has never really been sought and will not be sought until such time as the rather mild terms of our motion are implemented by some Government.
We are asking the Government immediately to ascertain and publish details of the extent to which our industrial base in employment depends on foreign and multinational capital. We are asking the Government now to review the policies of the Industrial Development Authority in relation to over-reliance on foreign and multinational capital. Finally, we ask them again to look at the whole question of a national development corporation. There are many ways in which this might be done. In my personal view there is an argument for taking all of the semi-State bodies under the wing of one Department and of creating a Department of Public Enterprise and assigning, for example, to the Department of Transport the role of regulator and not have it trapped as it currently is by either Irish Shipping on the one hand or Aer Lingus on the other. Instead of being an independent agency between the commercial interests of that company and the general public it somehow becomes a political lobbyist for the semi-State company as every working politician will readily concede. Until such time as you can get all the semi-State companies together, separate those providing direct services which can be seen as services of a social nature — such as CIE — from those clearly in the business of manufacturing products, whether energy or foodstuffs, and look at the deployment of capital, how the capital is used, the return on it, its long-term and short-term benefits in the way any banking consortium would evaluate a proposal for funding from a group of commercial companies, we shall not get the growth-orientated, job-producing public sector that our economy desperately needs.
I referred earlier to the consensus between this party and the Minister for Industry, Commerce and Tourism who is present — I am not sure that it would extend to all the members of his party — in regard to the commitment to full employment and to increasing living standards. I recognise that the Minister is personally committed to that as the former Minister for Economic Planning and Development was very sincerely committed to it. The strategy of the last three years has not produced from the private sector the kind of response that the present Minister and Deputy O'Donoghue hoped for. They gave every possible incentive to the private sector to produce. In the same way as the late Deputy Lemass learned from his mistakes over 19 years of trying to protect Irish businessmen from foreign competition, in the vain hope that they would produce a wealth base in the country which would obviate the need for emigration. I should like to think that just as he learned from the mistakes of that strategy and set about dismantling the tariffs he had spent many years establishing and critically — and this is what we are looking for——
Would the Deputy not agree that Deputy Lemass had no option in the thirties because the whole world was protecting or was "sinn féin" if you like in its outlook then. If he did not protect the Irish market he would have no other market available for manufacturing industry here because everybody was doing the same thing. Our difficulty was that we had such a tiny market.
I welcome the Minister's intervention and I accept it is a fair point. The option was whether one went for a public involvement, a mixed involvement or an exclusively private involvement. Regrettably because of the ideology of the 1930's — and neither the Deputy nor I were responsible for that — the thrust was exclusively in the private sector with very few State companies. Perhaps the most successful was the sugar company which was established in 1936.
The Labour Party have no illusions about the matter. We cannot wave a magic wand and get rid of the problems that face the country. As the Minister stated, re-echoing again the much-quoted Deputy Lemass — nobody owes the Irish people a living. We live very well relative to the rest of the world. It is up to us to look after ourselves. The Labour Party recognise the contributions made to this State by people before and after independence but we ask if it is wise to have 50 per cent of our GNP controlled by foreign-owned companies. Even though we are directly involved in the technology of the micro-processor and the whole question of the silicon chip, despite the positive efforts of the Minister to locate and integrate that technology with NIHE, Limerick, the control does not rest within our economy. There is a hope and a belief that there will be a spin-off in this technology and that it will generate secondary and tertiary industries on the basis of the managerial expertise that exists now. I would like to think that will happen — in many cases it will — but I must point out that the same hope and belief was shared when Shannon was established in the late 1950's and early 1960's. The Minister knows better than I that there has not been that kind of spin-off either technologically or industrially in the Shannon region. It has only been in the last two or three years with the commitment to the small industries programme, initially at SFADCo and then with the IDA, that we have had a take-off in terms of employment.
I suspect that the majority of people are agreed on this issue which has not been well articulated either by this side of the House or by the Government. There is a belief in the comfort and solidity of State employment. Why not build on that? Why not extend it? As the Minister said, we have the technology and the expertise. In my opinion we have the marketing capability to sell our products to hundreds of countries. What is preventing the State from getting involved? In his speech the Minister mentioned the level of capital investment by various countries since 1960. He told us that from 1960 to 1976 there has been an investment of £200 million from the UK, £106 million from the FGR, £133 million from Holland, £74 million from Japan, £120 million from Canada and the same amount from the United States. All of this investment has been in a period of 16 years. However, we are talking now of a current account budget of more than £3,000 million. We are talking about capital funds that exist now. Not only do we have the technology but we also have the capital resources to fund ourselves.
Any Finance Minister will have to consider again the investment potential and role of pension funds in the matter of our economic and infrastructural development. It is clear that the private individual operating through the stock market in classic capitalist terms is a minor, insignificant component in the overall investment area. It is major companies and institutions who are providing investment capital or, alternately, it is people such as the Minister who are investing taxpayers money into private companies without an equity involvement in the belief that somehow private industry will do the job. Why is it that, after 20 years of struggling to get a satisfactory standard of employment, with 100,000 employees in the public sector investing each month part of their salaries in investment funds, that some of those funds cannot be diverted into the ownership of some factories and the provision of infrastructural facilities. whether it be toll roads or harbour facilities?
People in State companies take certain matters into account in making provision for the future — pensions for themselves and their wives, as well as jobs for their children and their grandchildren. We should look at the capital investment potential of State employees who, by the success of the labour movement, have got solid and substantial pensions that are not being used to the full. One of the things a national development corporation could do would be to look at the entire public sector as a whole, at the various corporations and companies that operate in it, at the 100,000 employees concerned, at their pension fund investment capital and consider how to make this marvellous achievement of Irish endeavour work to its full capacity. That achievement was not as a result of executives of the IDA going to Japan or Germany in the same tradition that Dermot MacMurrough went to Pembrokeshire in 1160 — in saying this I do not wish to denigrate the efforts of the IDA — begging people to come along to do something for us. The State sector gives more than ten times the amount of employment generated on the multinational side. We could use that as a base to develop and expand.
I will conclude by using the phraseology used by the Minister when speaking at a meeting of the National Dairy Council when he referred to some of the promises made by his party in their manifesto in regard to growth and development. One such area is the food processing sector. Since 1977 the record has been abysmal even though there are companies with considerable capability in this area. What is stopping the Irish people from putting together the acreage now owned by us, which was reclaimed from the bogs that countless generations of British administrations said were useless and which are now developed by Bord na Mona? When a land area the size of County Louth becomes free of peat with the technology put together by General Costello in the Sugar Company, in Erin Foods, the skills and abilities of Bord Bainne and the marketing experience of CTT, what is stopping the Irish people from using together, under the umbrella of a national development corporation, the incredible resources of these four or five organisations and producing intensive foodstuffs in prime land the size of County Louth, from packaging and marketing it in a world which daily sees the deaths of millions of people from starvation? Is it the Arabs who are stopping us, the bankers in Zurich, the bankers in New York? What major constraint is preventing us? What better utilisation could there be for the pension fund of 100,000 State employees than to go into that kind of endeavour? What better pension could anyone have than secure employment for children and grand-children?
Is this not the very essence of what the Labour Party are saying in this Motion? Is it not the very logic of the rational application of our own technology, our own resources, our own skills and our own endeavours, free of the control of foreigners? I use that phrase without any sense of denigration because in hard times—and they will come—someone sitting on the board of a company based in New York or Tokyo, owned primarily by New Yorkers or Japanese, will and must have regard to their own and where shall we be left then? What we are doing —and perhaps far too mildly—is simply asking this House to agree on the need for the establishment of a national development corporation. We are not prescribing the way or manner in which that should be done. We are leaving that open to those people who have immediate— and hopefully temporary—access to the resources of the civil service and the specialists to establish the most appropriate framework. Can this House seriously deny the real need for such a development, and at a time when the BBC and RTE are showing on screens here, in the UK and the Six Counties the history of the struggle of our people for a measure of control over their own destiny? Can anyone in this House seriously oppose a request that a certain section of our economy, which currently employs 100,000 people and which produces light, heat, shipping, aviation, foodstuffs and has the capability, from the existing combined resources and technology, should expand into an opening and ever demanding market? Can anybody seriously oppose the need for such development? If they do, and if it comes from the right wing. Ronald Reagan republicans who sit on the far side of this House. I should like to hear the ideological justification for such opposition. Having heard it. I should like them to match and stitch it into their own historical ideology.
Deputy Horgan concluding.
I get the last ten minutes.
The Minister gets ten minutes now, if he wants it, but he will get no ten minutes later.
I was keeping the good wine until last.
Deputy Horgan, I presume, is concluding.
I was sorry that Deputy Moore did not take the opportunity to speak. I should like to have heard what he would have said about the splendid contribution of his fellow representative in Dublin south east.
Tomorrow.
First, I want to make clear the stance from which the Labour Party approaches this topic. The Labour Party is a socialist party. It is not a Leninist party. It is not a party which believes that the State must own everything and that nobody else can own anything. It does so because one of the central beliefs of socialism is in a diffusion of political and economic power and the maximum degree of participation by people in the economic and social life of the country in which they live. For this reason, our approach to questions such as industrial policy is basically a balanced one. It is because we see the present situation in Ireland becoming dangerously unbalanced that we have put down this resolution. It has prompted an excellent debate in this House.
The first question which must be asked is, what exactly is the situation in relation to the balance between foreign and domestic-owned industry in Ireland? The sad fact of the matter is that, while we may have some suspicions in broad outline, we simply do not know. I asked the Minister for Industry, Commerce and Tourism a number of parliamentary questions which were answered yesterday, about the percentage of industrial jobs in firms or industries which were foreign owned, about the percentage of Irish industry, excluding agriculture, which was foreign-owned and for the approximate breakdown of IDA investment in relation to firms or enterprises owned by Irish nationals and firms or enterprises owned by non-nationals. The reference is questions 351, 353 and 354 of yesterday's date. The answer was "The information which is maintained on the ownership of industry is not in the form requested in these questions. Because of the difficult problems of definition which arise, it has not been possible, in the time available, to re-process the data into the headings which the Deputy appears to have in mind."
Now, that was not a total put-down, but it was as near to it as you will meet in a long day's walk. The Minister, apparently, did not see fit to tell the House or me exactly the form in which the data is kept, so that I could rephrase the question and get the necessary information.
I also asked the Minister whether he had, at any time since assuming office, indicated to the IDA his or the Government's view as to what their policy in relation to foreign or multi-national investment should be and the nature of any such view or instruction in relation to IDA policy. The reference is Question No. 352 of Tuesday 16 December. The Minister replied:
My Department has frequent liaison with the Industrial Development Authority and my views on all aspects of industrial development policy are conveyed to and implemented by them. Moreover, in formulating their industrial plan, the authority take full account of the Government's overall economic targets and policies.
I would point out that the 1978-82 IDA industrial plan has set a very high target to provide 75,000 new grant-aided manufacturing jobs in the period. A central target of this plan is that over 50 per cent of these jobs should come from within Ireland. This reflects my desire that the employment creation potential of Irish industry should be developed to the maximum, while at the same time recognising that, in the medium term at least, overseas-sponsored investment will continue to make a very important contribution to the industrial base.
The Minister enlarged, to some degree, on these rather inadequate replies in his speech here this evening in which he gave his estimate that some 33 per cent of industrial jobs in the country at the moment were jobs in foreign-owned industry. I do not know if it is too unrealistic to project from that figure the hypothesis that roughly one-third of our industry is foreign-owned. If that is correct, this raises very serious questions for our economic stability in the long term. I spoke not very long ago to the former Prime Minister of Finland, a member of the Socialist Party, whose country has a population of four million people, who are not very rich in their own resources and who have several large, somewhat suspicious and antagonistic neighbours. The percentage of foreign-owned industry in that country is about 3 per cent, one-tenth of what it is here. He expressed concern, which we share, over this high proportion here.
The next question is to ask what is the cost to us of this heavy and increasing reliance on foreign industry? The latest IDA report has some very interesting figures on this on page 7, which deals with the year 1979. It states:
The average fixed asset investment per job in new overseas industry increased in real terms by 20 per cent from £13.167 in 1978 to £15,684 in 1979. This increase is largely due to the capital intensity of several major overseas electronic and mechanical engineering projects negotiated during the year. If these industries are excluded the trend shows a decline in real terms. This continues a trend evidenced in 1978, reflecting a move in new investment towards the more labour-intensive industries.
I would like to parse and analyse that paragraph because it has the air of a paragraph that was written by somebody who had his mind made up in advance when he came to look at the figures and used them in a way which would best justify a certain point of view.
It is obviously true that several major projects were, as the report makes clear, negotiated during the year. It is not so very clear why those industries should be excluded from the calculations in relation to fixed asset investment per job. If we are to exclude the industries which have a high capital ratio, then obviously we will get a situation in which the trend in cost per job will decline. There is no reason I am aware of why we should exclude things in order to make it easier for us to prove our case. The IDA may argue that this is a once-off type of investment and that therefore there is a logical reason for excluding it. I suspect it may well be true that in relation to some of the other industries the initial cost per job is low but the major part of capital investment, especially in very expensive machinery, may come at a time when the plant has been open for several years. The degree, therefore, to which these industries are labour or capital intensive cannot be estimated adequately until they have been in operation for a number of years and have reached their full running potential.
I find it hard to believe that there is a move in new investment towards the more labour intensive industries, or if there is such a move that this trend in any sense can be long lived. When we turned to the trend in average grant costs per job, the problem of the cost of these jobs in foreign-owned industries is even more marked. The report states:
The average grant cost in real terms per job approved in new overseas industries increased from £4.998 in 1978 to £7.063 in 1979 prices.
That is a 75 per cent increase in one year. The report goes on:
This largely reflects the very stiff international competition encountered in attracting the electronic and mechanical engineering industries. The expected spin-off benefits from these industries should more than offset the extra initial cost.
We have here a mixture of fact and optimism. I hope, like the IDA, that the optimism is justified, but standing here tonight we have not a guarantee that it will be.
I have talked about the costs in cash and money terms of the present IDA policy, supported and promoted by the Government. I would now like to turn to how our present industrial situation has been brought about. The IDA coin has two sides. On the one hand it has succeeded in attracting to the country a considerable measure of foreign investment in the electronic and mechanical engineering fields. Much of this is very modern industry. I predict it will become more capital than labour intensive in the long run, but it is modern. It is viable at least for the immediate future.
The other side of the IDA coin is that the older industries here have been allowed to die. The problems of the old and dying industries are reflected in the ferocious rate of redundancies and job losses in those traditional industries. It has been a very hard-hearted policy in many ways. The Minister and the Government may justify it on the grounds that there were no alternatives, but there are families and whole communities on this island who still wish that the transition from a small and perhaps inefficient but largely nationally-owned industrial base to a larger, more efficient, more profitable, more modern foreign-owned industrial base could be less traumatic for them and for their families.
In all this, the IDA have been assisted by the tax situation under which the rate of corporate taxation has effectively been reduced almost to nothing. It has also been assisted by the fact that this country is in a very real sense the only underdeveloped region of the EEC which has its own national Government. There are many other underdeveloped regions of the EEC looking for grants of one kind or another, infrastructural support and this, that and the other. Wales, Scotland, Southern Italy and we presume large parts of Greece, Portugal and Spain will be looking for them. In relation to countries that form part of the EEC at present, when underdeveloped areas look for money from the EEC they must compete with their own Governments. When the British Government look for money from the EEC for its own purposes and its social fund, in a certain sense what Wales and Scotland are looking for represents a threat to what London is looking for. There are many areas in which the claims of peripheral regions of other EEC countries cannot and will not, for political reasons, be pressed at Brussels with much assiduity. The situation in Ireland is different. We are, in the entirety of our State, an underdeveloped region so that when the Government go to bargain it is not with an eye cocked over their shoulder to see what, as in the British case, the Welsh and Scots are doing.
Listening to the Minister's speech, I was intrigued by what he said and what he did not say. I was especially intrigued by the reference—it was so fleeting that I barely caught it—to new and larger State industries which he said would be a feature of the scene of the eighties. We in the Labour Party are delighted to hear that. It is somewhat at odds with his categoric refusal, in the same speech, to countenance any further major State involvement in industry. Further on in his speech the Minister itemised five reasons why we had a good chance for the future —political stability, consistency of policy, modern plant and equipment; a skilful work force and good managers. He omitted or ignored one of the main reasons why IDA policy has been so successful and that is the fact that the majority of us speak the English language. When we realise the huge bulk of investment that has come from the United States we must also realise that a US investment manager faced with the prospect of locating a plant in this country or in another European country in order to gain access to European markets will most likely come to the conclusion, all other things being equal, that he would prefer to locate in a country where he does not have to set up language courses as well as factories and where managers will be able to communicate directly with the work force without intermediaries.
The problem about foreign investment is that it is mobile capital. If it can be moved in, it can be moved out again: and, if world conditions, recessions or trends in the parent countries of these investments cause it to move out, it will move out and leave not a rock behind. We are being short-sighted if we regard the present policy as an adequate basis for industrial development. I was intrigued by the Minister's reference to the fact that in the 1978-82 industrial development plan 50 per cent of the new jobs should come from within Ireland. He half tried to imply by the fact that only 33 per cent of the jobs at present in industry in Ireland are in foreign-owned firms that the situation is well under control. The former Minister of State. Deputy Burke, told me not long ago that since 1977 six jobs out of every ten new ones provided have been in foreign-owned industry. Let us not be fooled by the figure of 33 per cent. The proportion is not only high but it is rising despite the targets of the 1978-82 plan.
I would also enter a caveat in relation to the Minister's praise of the electronics industry. One of the main features of the new electronics industry is low pay and female employment. One of the reasons it is able to get away with low pay is that it is able to maintain that the work it is providing has not been previously done by men and, therefore, it can pay women the going rate. The going rate is very low. No wonder Ireland is a profitable place for foreign industrial development.
I was astonished to hear the Minister's effrontery in claiming that we have the educational infrastructure for industrial development within days of a report put out by a committee, of which his colleague — the now Minister for Finance — is chairman, pointing out that the situation was precisely the opposite and that we have huge shortfalls in the kind of skills that schools, third level colleges and universities should provide and which could produce young people to take up the industrial and mechanical jobs which will be available in the future. It is not so long since I overheard a very senior personage in the IDA laughingly remark to a senior personage in the Higher Education Authority that perhaps the IDA should allocate some of its funds to the HEA to let the HEA do things they knew have to be done but for which they could not get money from the Department of Education. The Department have been one of the biggest log-jammers in the drive towards industrial development that the country has ever experienced.
We need a national development corporation, and views about what it should do will differ. Deputy Quinn spoke about the possibility of all semi-State bodies being grouped under it. There is another alternative which deserves thought. It should act as a goad to every Government Department. They are all hide-bound by the Victorian tradition of making sure that money is not spent for anything that it was not voted for and saving money wherever possible. If every Department is to be a development corporation in its own right as Seán Lemass used to say he wanted the situation to be, they will have to be goaded to the point where they are all busy thinking of ways to spend money whether or not they have it to spend. There are times when money comes on stream for projects and if the projects are not there the money goes away.
The modern approach to industrial development and social planning is evident in the EEC and is one based on projects. Projects are on the shelf to create jobs and industries. If the money is there they are taken down from the shelf and put into operation. At present I doubt if many Departments have a shelf and the role of the National Development Corporation would be central in promoting public enterprise through the public Departments of the State. That is one of the main things they are set up to do and should do but unfortunately it is something they do not do.
Amendment put.
The Dáil divided: Tá, 60; Nil, 37.
Tá
- Ahern, Bertie.
- Ahern, Kit.
- Allen, Lorcan.
- Andrews, David.
- Andrews, Niall.
- Aylward, Liam.
- Brady, Gerard.
- Brady, Vincent.
- Briscoe, Ben.
- Browne, Seán.
- Burke, Raphael P.
- Callanan, John.
- Calleary, Seán.
- Cogan, Barry.
- Colley, George.
- Conaghan, Hugh.
- Connolly, Gerard.
- Coughlan, Clement.
- Cowen, Bernard.
- Daly, Brendan.
- Doherty, Seán.
- Fahey, Jackie.
- Farrell, Joe.
- Fitzgerald, Gene.
- Fitzsimons, James N.
- Fox, Christopher J.
- French, Seán.
- Gallagher, Dennis.
- Gallagher, James.
- Geoghegan-Quinn, Máire.
- Haughey, Charles J.
- Herbert, Michael.
- Hussey, Thomas.
- Keegan, Seán.
- Kenneally, William.
- Killeen, Tim.
- Killilea, Mark.
- Lawlor, Liam.
- Lemass, Eileen.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leonard, Tom.
- Leyden, Terry.
- McEllistrim, Thomas.
- Meaney, Tom.
- Molloy, Robert.
- Moore, Séan.
- Murphy, Ciarán P.
- Nolan, Tom.
- Noonan, Michael.
- O'Connor, Timothy C.
- O'Donoghue, Martin.
- O'Leary, John.
- O'Malley, Desmond.
- Reynolds, Albert.
- Tunney, Jim.
- Walsh, Joe.
- Walsh, Seán.
- Wilson, John P.
- Woods, Michael J.
- Woods, Michael J.
Níl
- Barry, Myra.
- Barry, Peter.
- Begley, Michael.
- Belton, Luke.
- Boland, John.
- Bruton, John.
- Burke, Joan.
- Burke, Liam.
- Byrne, Hugh.
- Corish, Brendan.
- Harte, Patrick D.!O'Keeffe, Jim.
- Hegarty, Paddy.
- Horgan, John.
- Keating, Michael.
- Kenny, Enda.
- L'Estrange, Gerry.
- McMahon, Larry.
- Mitchell, Jim.
- O'Brien, William.
- Cosgrave, Liam.
- Cosgrave, Michael J.
- Creed, Donal.
- Crotty, Kieran.
- Deasy, Martin A.
- Donnellan, John F.
- Fitzpatrick, Tom (Cavan-Monaghan).
- Gilhawley, Eugene.
- Griffin, Brendan.
- O'Keeffe, Jim.
- O'Toole, Paddy.
- Pattison, Séamus.
- Ryan, John J.
- Spring, Dan.
- Taylor, Frank.
- Timmins, Godfrey.
- Tully, James.
- White, James.
Tellers: Tá, Deputies Moore and Briscoe; Níl, Deputies L'Estrange and Horgan.
Amendment declared carried.
Motion, as amended, agreed to.