Dáil Éireann debate -
Tuesday, 8 Dec 1981

Vol. 331 No. 7

Fóir Teoranta (Amendment) Bill, 1981: Committee Stage (Resumed) and Final Stages.

Question again proposed: "That section 3 stand part of the Bill."

Mr. Gene Fitzgerald

During the course of the debate on this section I raised a point about the ESB and I am still awaiting a reply. I recognise the independence of that board but at a time of high unemployment the letter I referred to amounted to a tough line for the board to be adopting when negotiations could take place with the State agencies concerned in an effort to save the jobs in the enterprise. My contention was that a letter had been sent by the ESB to the Department of Industry and Energy, and to the State agencies, one of which is concerned in this Bill, to the effect that in the event of future receiverships or liquidations and money being due to the ESB, before power would be restored all arrears would have to be paid or arrangements made for payment of them in respect of the company that had gone into receivership. While realising the importance to this State company of having their moneys collected, one must be concerned about their adopting such an attitude.

I recall a case of receivership in my constituency some years ago in which a private concern were supplying the power needs of the company in question. When the threat to discontinue supply arose and jeopardised the continuance of a receiver and also a few hundred jobs, I intervened. Immediately, and to the credit of the private company concerned; they withheld the threat to disconnect supplies. Certain arrangements were made in the meantime and at the end of the day that company was saved and the whole episode worked out to the satisfaction of everyone involved.

In the event of the issuing of a threatening letter of this kind one would think that the Minister, having responsibility in the areas of both energy and commerce, would take particular note of what was involved from the point of view of industry on the one hand and from the point of view of employment on the other hand. The Minister of State who is present, and whose Department have responsibility for the agency we are talking of, should have some concern in this area, especially in the aftermath of the announcement yesterday of those frightening unemployment figures, figures which prove that the policies of the Government have been designed to cut back and, as we know, cutting back is one of the easiest of operations. It is typical of hardline conservative monetarist policies. However, one might expect that from one of the parties in Government; but one can only express amazement that the Labour Party should see such policies as the cure to our country's ills during a period of recession. I am amazed that they can agree with such policies, policies that have been blatantly proved wrong. They are wrong because of our very young population and because the growth we are experiencing in unemployment is more serious for us than it would be for any of our European counterparts. It is time the Government began to govern instead of continuing a propaganda campaign with which the public are totally browned off. The people do not want to hear any more of it. This is particularly true of Labour party supporters who are calling for employment, for movement and for investment, none of which this Government show any signs of providing.

Fóir Teoranta have served ailing industries well. Their successes have been remarkable; but, understandably, they have had failures too. They are an agency of last resort who are called on only when a serious situation arises. I am aware that in accordance with the criteria laid down in the Act there must be a prospect of viability in the foreseeable future before this rescue company will act. In my dealings with Fóir Teoranta during my ten years in politics I have always found them sympathetic and well disposed. I am sure that some of my colleagues will be anxious to know the outcome of the recent meetings between the Minister for Energy and Fóir Teoranta in connection with the very serious position which is affecting 470 people in Clondalkin Paper Mills, that indigenous industry which is of such important and strategic value. However, as my colleague will be raising this question, I shall not go into it further.

On Second Stage the Minister of State said that his disappointment was that there was not a trade union representative on the board of Fóir Teoranta. In his absence I made the point that, if he wishes to move an amendment on Committee Stage to remedy this situation, he will find us accommodating. It is not sufficient for him now simply to support pious platitudes.

An Leas-Cheann Comhairle

The Deputy's invitation to others to depart from the subject matter of section 3 will not meet with the approval of the Chair.

Mr. Gene Fitzgerald

To what aspect of my speech is the Chair referring?

An Leas-Cheann Comhairle

I am referring to the representation on the board of Fóir Teoranta.

Mr. Gene Fitzgerald

I accept that. But since the Minister of State was not available — he was engaged on Government business — when we were discussing this Bill on the last occasion, I merely wished to make it clear to him that we would accommodate the Minister, as I have outlined.

An Leas-Cheann Comhairle

The Deputy will appreciate that in the matter of such accommodation the Chair would be the judge of whether what was suggested was appropriate to section 3. It would not have been in order for the Minister of State to have developed to this question during discussion on section 3 or, as I see it, during discussion on any other section.

Mr. Walsh

Surely at a time like this a person is entitled to ask the Minister if he is in a position to give the House the up-to-date situation regarding discussions with Fóir Teoranta concerning Clondalkin Paper Mills. I endeavoured to raise this matter here today and the Minister has spoken on it on another occasion.

An Leas-Cheann Comhairle

What the Chair referred to was one specific point made by Deputy Fitzgerald as to whether there should be a trade union representative on the board of Fóir Teoranta. Deputies are perfectly entitled to refer to any matter relating to the expenditure of the money that is being voted here and the Deputy may refer again to the Clondalkin case provided he does not cover ground that has been covered already.

Mr. Walsh

Like Deputy Fitzgerald, I was alarmed to read this morning of such an increase in the unemployment figures. Having regard to the situation in Clondalkin Paper Mills one fears that the figure will increase further but I hope sincerely that Fóir Teoranta will endeavour to come to the rescue of this plant.

I wish to repeat a point that I made here before. I said that Clondalkin Paper Mills are the only national fine paper mills. Indeed, the paper used in this House is produced there. I went to the trouble of asking the Minister for Finance the total value of paper purchased monthly by the Stationery Office from these paper mills from January of this year to date. The figures are as follows: In January purchases were £60,789.48, February £62,455.85, March £72,508.42, April £29,179.91, May £165,882.67, June £191,519.85, July £192,943.85, August, £90,588.57, September £229,745.83, October £81,243, and up to 27 November £72,877.06, giving a total of £1,249,714.49. Surely that merits some consideration from Fóir Teoranta? It must relate to this Bill. I again appeal, on behalf of Clondalkin Paper Mills and on behalf of the workers, that Fóir Teoranta come to the assistance of Clondalkin Paper Mills to ensure that this mill continues and to ensure that the jobs will continue.

Mr. Lenihan

We have covered much of the ground in our discussion on this Bill but I would like to give it a new angle, having regard to events which have caught up on the debate. On an earlier section of the Bill and on Second Stage I made the point that in view of the specific commitment made by the Labour Party, particularly, and by the Tánaiste to a national development corporation this was a practical example where Clondalkin Paper Mills could be viewed in the commitment to a national development corporation and receive the appropriate help from Fóir Teoranta required to deal with what, I emphasise, are the short-term problems of the company, not the medium- or the long-term problems. I suggested on Second Stage and also on section 2 of Committee Stage that some form of equity participation by the State or a State agency would meet the commitment of the Labour Party and the Tánaiste to a national development corporation and show bona fides in that respect in this particular instance.

Since I made that suggestion it has been followed up by the workers in Clondalkin Paper Mills and by the board of Clondalkin Paper Mills. A specific proposition has been put to Fóir Teoranta, which up to now has apparently been rejected because of lack of Government indemnification of Fóir Teoranta in this matter. This specifically means a lack of Government commitment to the specific share which it was felt that the State, through Fóir Teoranta or whatever other means, might put in by way of equity participation in the proposed new structure. The proposition involved 45 per cent initial capital input by Clondalkin Group Limited, 45 per cent by Fóir Teoranta and 10 per cent by the employees of the new company. This was a tremendous commitment from the employees concerned. This, in effect, meant that while there would be some reduction in employment from 470 to 300 people there would be an input into the new company in the region of £2 million on a 50:50 basis between the State, through Fóir Teoranta and the company and 10 per cent of that or £200,000 from the workers. With that input of approximately £2,200,000 split 90 per cent between Fóir Teoranta and the company and an input of approximately £200,000 by the workers that broad scheme of equity risk investment by the State and by the company, with their management expertise, and by the workers with a certain agreed trimming down in regard to employment but still retaining 300 skilled workers in employment, presented the broad basis on which very real consideration could be given to maintaining the company in the short-term and providing a bona fide investment by the State to enable the company to survive in the short-term and the undoubted medium- and long-term prospects to be put into effect.

The one thing that is agreed on in regard to this matter is that the medium-and long-term company prospects in regard to timber and pulp processing are good not alone nationally but internationally. This section is designed to increase the funds available to Fóir Teoranta by the Minister. If the Minister wishes by direct action to ensure that these increased funds being made available are utilised, this is the first practical example of a company requiring such funds and requiring further equity participation by the State in the utilisation of those funds. It meets the points of view that have been put forward so often by Labour Party spokesmen. In doing so one is investing in an industry with very real medium- and long-term prospects.

One is also investing in an industry which is basic to our economy. I want to emphasise again that it is the only such industry at the present time. It is the only wood pulp, paper processing industry which eventually could develop further into more sophisticated areas of paper processing such as newsprint, which the company have plans to go into in the future.

Clondalkin Paper Mills are the only nucleus of that type of industry existing in the country at the moment. If one looks at the medium- and long-term and thinks in terms of an expansion in the economy in the years ahead and not a retraction, which appears to be the obsession of the Government, this is an industry which in the medium- and the long-term must be retained. We would get over the immediate short-term difficulties because the long-term prospects are good. The sort of money which would be involved in setting up such an industry in five or ten years' time, if this industry goes with its workers' skills, supervisory skills, trade skills and managerial skills, and if the existing plant and premises are allowed to go, would be enormous. The costs involved would not be in the context of the £2,200,000 that I am talking about for the restructuring of this company at the moment but in the region of £100 million.

An industry like this could be fundamental because of the absorbtion of Irish timber products in which it could engage in a few years time in a properly organised industry of this kind. I appreciate that in Clondalkin Paper Mills there is only the nucleus and we want a fully integrated industry there, as was recommended by the study commissioned by the IDA and the Forestry Division of the Department of Lands two years ago. This very advice was given to the then Government. They said that the medium- and long-term prospects of that industry were excellent, that the Clondalkin Paper Mills only represented a nucleus and much more needed to be done in the way of the provision of sophisticated plant, further diversification and further investment. Now, to throw the whole lot out and to come back to a situation where there is no nucleus on which to expand, no skills on which to build, no management on which to build, is in my view very short-sighted business. It is particularly short-sighted in view of the commitment to precisely this sort of State involvement and State investment in a risk-bearing way in a joint venture arrangement with a company such as the Clondalkin Paper Mills. It would be very hard to think of a more appropriate industry for precisely this kind of joint venture risk investment by the State than the Clondalkin Paper Mills. The company have a pool of skills, in any new re-organisation they will be relying on native raw materials to some extent and they can fill a need in regard to the import of newsprint, which is not processed in this country. The company had planned to go into this area if the economic climate had not deteriorated.

I understand that the Minister for Industry and Energy is again meeting Fóir Teoranta today with regard to Clondalkin. I am concerned about getting this industry going again. Undoubtedly there are short-term difficulties involved, but the medium- and long-term prospects are good. On that basis and for the reasons I have mentioned the State should consider it a worthwhile risk investment. I hope the discussions between the Minister and the board of the new company will be fruitful. One of the most encouraging features has been the commitment by the workers to a 10 per cent involvement of the order of £200,000 in the proposed restructured industry. Such a commitment deserves a response. There has also been a commitment by the trade unions representing the workers to trim the labour force if necessary, but to have a basic force of at least 300 who would be able to operate efficiently. I understand that agreement was reached on that.

There has been agreement between the trade unions, the workers and management. All that is required here is a bona fide indemnification by the State in regard to Fóir Teoranta. I understand that such bodies sometimes take a purely financial attitude with regard to possible commitment by them. That is the kind of advice a good accountant gives to a company and the kind of advice that might have been given by Fóir Teoranta to the Government. However, it is up to the Government to make the political decision and in this case it is my view that such a decision is all on the side of making an equity investment through Fóir Teoranta by way of Government indemnification for the necessary investment.

The Government should take action on this matter. There is not much point in passing section 3, which makes extra capital available to Fóir Teoranta, unless the Government act in a practical way.

The Government should ensure that some of these extra funds are made available in the risk investment manner I have outlined and thus enable the State to participate with the company. Even though the workers' share is only 10 per cent, the goodwill and the attitude of the workers more than matches the 45 per cent put up by the company and the 45 per cent by the State. The workers have put a real investment into the company. They have all the necessary skills and they consider that they and their children can contribute in a new environment and in a restructured company when the prospects will be better than they are at present.

Mr. Mervyn Taylor

In considering Fóir Teoranta, the present state of development of the company, the moneys voted and the allowances under section 3 of this Bill, one has to review the history, the brief and the functions of the company. We must consider what they were established to accomplish and the limitations within which they operate.

As I understand it, the board of the company is largely made up of businessmen who by virtue of amending statutes have been given the task of a rescue company. They tend to look at the proposals and propositions put forward as businessmen. They examine the situation as it is put to them and they assess the profit or loss history of the company concerned and I suppose when it comes to them it is always a loss situation rather than a profit situation. They appear to devote themselves entirely to considering whether in their view as businessmen the failing industry in question can be bailed out, whether it can be kept afloat for a short-term period until it gets on its feet, becomes viable and eventually gets to a profit-making situation.

It is desirable that a State agency should have the job of carrying out that rescue function but it appears to me they do not go far enough. There is a limit to their range of activities, irrespective of the amount of money that is voted, such as in section 3 of this Bill. There is a limit to the range of activities Fóir Teoranta are enabled to tackle and the considerations on which they tackle them are limited to business considerations.

An Leas-Cheann Comhairle

I am sorry to interrupt the Deputy. The Deputy will appreciate that on this section a passing reference may be made to management policy. However, to develop the point that other requirements should be made which would require new legislation would not be appropriate on this section.

Mr. Mervyn Taylor

I take the point made by the Chair. I am talking about the use of moneys that are being voted under section 3.

An Leas-Cheann Comhairle

The Deputy is also suggesting a change in the format of the board of management.

Mr. Mervyn Taylor

I am talking about the manner of exercise of the discretions vested in the board of Fóir Teoranta and the manner of disposition of the moneys being voted here.

An Leas-Cheann Comhairle

The Chair took it that the Deputy was making the point that the board of Fóir Teoranta as at present constituted was not representative enough of all agencies and was suggesting some remedies in that regard.

Mr. Mervy Taylor

I was intending to direct the drift of my comments in a very important and definite direction.

An Leas-Cheann Comhairle

The Chair will allow the Deputy to so drift for the moment.

Mr. Mervyn Taylor

In considering the disposition of these moneys being voted from State funds, Fóir Teoranta should take into account not only the question of the immediate business interest of a proposition coming before them and not merely the question of whether a company can be turned around from a profit situation, in the ordinary businessman's sense of that term, but whether it would make sense in the national interest that a firm in a special situation should be kept alive and made viable. Such a situation relates to the analysis very ably made by Deputies Lenihan and Walsh and other speakers.

The case of Clondalkin Paper Mills is very much a live issue because the skilled jobs of 470 people are placed on the line.

It seems that Fóir Teoranta have not given adequate attention to the national importance of preserving this firm. I am aware that discussions and negotiations are still in progress. But Fóir Teoranta took the view, initially at least, that this plant could not be made viable in the short or medium term and that for the foreseeable future it would be a lossmaker. I would assume that this was the basis on which they reached the decision announced at the weekend. Quite clearly they have not taken into account any of the matters rightly adverted to by Deputy Lenihan and the importance from a national point of view of preserving the last of our paper-producing capacities. There were six such units at one time involved in making paper — a vital product which will always be needed in very large quantities. I hope that Fóir Teoranta will reconsider the position and take into account the national importance of maintaining and preserving these skills and this manufacturing facility.

The financial considerations facing an individual company in the ordinary business sense are different from the overall financial considerations facing the State. Fóir Teoranta should remember that they are acting here not in the narrow context of an individual firm but as an agency of the State and they should take into consideration the overall interests of the State. In reaching their decision I wonder whether they took into consideration that, if Clondalkin Paper Mills close down, the State — not Fóir Teoranta — will have to pay out very large sums of money in redundancy payments to the 470 skilled workers, will have to make continuing payments of social welfare pay-related benefit to those workers and their families and will make those payments to the men for sitting at home and doing nothing. For the foreseeable future the State will also have an adverse balance of payments situation, because paper will have to be imported from France, Germany, Canada, North-America and other places. This paper could be produced at home by the same employees to whom the State will be making substantial social welfare payments. I fear that Fóir Teoranta have been too intent on viewing the Clondalkin case in the narrow businessman's context without paying sufficient attention to the overall picture. From the point of view of the State it makes good financial sense to ensure that this firm is kept intact and that the ancient skills of paper-making are preserved. If the company go to the wall I fear that these skills will be lost forever.

Of course, this cannot be a one-sided thing. The firm themselves have major responsibilities to these workers, and one would hope that they would recognise their responsibilities to the national interest also. I regret that speakers opposite have not referred to the responsibilities of the firm in this matter. The Clondalkin Group is a major public company making substantial profits, but nothing has been said about their responsibilities. It must be pointed out that the paper-making facility at Clondalkin was the origin, key and nucleus of the entire group and it was through the operation of this facility, which is now precariously poised, that the great successes of the Clondalkin Group were built up. It is to their employees in the paper-making facility that the group owe their present success and it behoves the management to remember that fact. Now that the paper-making end of their business has hit upon hard times, temporary hard times I hope, and the other sides of the business who had their origins in this paper-making group are doing well, it might not be unreasonable to expect that they would tide over and subsidise the paper end of the business during the current difficult times. The Government agencies, Fóir Teoranta and the IDA, also had an input in this and it cannot be said that they have taken no steps in the matter, that they have been callous as to the fate of those jobs. They have made an offer of a substantial amount of money, £1.5 million, to enable the firm to re-equip, to provide the new machinery and equipment that would be essential if Clondalkin is to be a viable organisation.

As we have heard here many times previously, the key factor in the paper-making business is the cost of energy, and whoever would put money in there — Fóir Teoranta, the IDA or anybody else — would surely know that there would be no point in doing it and that they would be throwing that money away were it not to be used for installing in that firm the most modern machinery and equipment so that the most economic use would be made of energy in the production of paper at that mill. I regret the decision of Fóir Teoranta in this matter. The proposals put forward seemed eminently good, taking all the factors into consideration. The contribution and the participation of the workforce along with Fóir Teoranta and the Clondalkin Group are to be welcomed. It would have meant, I presume, worker representation on the board of that new company with a representative of Fóir Teoranta — all a very desirable and progressive development. I regret deeply that Fóir Teoranta did not see fit to endorse that proposal at least sufficiently to carry on further detailed discussions that obviously would be necessary to get that project off the ground and operative. I trust sincerely that there will be a rethink on this and that the current discussions will produce some turnabout on that score in that field. I urge the Minister to use what leverage he has with the board of Fóir Teoranta, those businessmen who control the affairs of that body, to ensure that they have a rethink about it. I do not know exactly what powers the Minister has with regard to Fóir Teoranta. I confess that I have not got out the original Act which set them up, but the Minister of State mentioned here on the last occasion that he is not empowered under the legislation to issue a directive that would compel Fóir Teoranta to make any commitment of the funds that we are voting here for any particular purpose. However, we all know the old saying that a nod is as good as a wink, and if the appropriate nudge was given to Fóir Teoranta one would suspect — I may be wrong in this, I do not know how these things work at that level — that it must carry some appreciable and considerable weight with Fóir Teoranta.

Mr. Lenihan

We notice them in Scarriff. It is still there but they cannot be nudged.

Mr. Mervyn Taylor

They cannot be nudged?

Mr. Lenihan

Where there is a will there is a way.

Mr. Mervyn Taylor

If they can be nudged, then my urging would be that the appropriate nudge should be given to them. In the national interest it makes financial and economic sense to the country as a whole that that facility would be preserved and kept on. If that fails, then any other option open to the Minister should be taken up by him. There is the possibility of assistance through the IDA or some other agency. It is a most important matter. I urge the Minister to use his influence with the IDA. I understand that his influence there is rather stronger than it is with Fóir Teoranta. I urge him to take that matter up with them and also I urge the board of that company at least to meet the Government agencies on this matter half way. I do not say that they have not made concessions on the matter until now. They have. The proposal that they put previously seemed to be fair and reasonable. Further discussions and negotiations can be carried forward with goodwill on three sides, the sides of the workers, the Government agencies and the company, wherein a sensible solution could be found and continuity provided for and preserved at Clondalkin, and I hope sincerely that that will be the outcome.

Minister of State at the Department of Finance (Mr. B. Desmond)

The House is somewhat tied for time in considering the Bill at this stage but I want to put the picture exactly straight, exactly as it is and no other way. The Minister for Energy met representatives of the trade unions this afternoon and there may be further developments from the company and other approaches may develop also in relation to matters as they stood this morning. However, I am aware that this morning Fóir Teoranta did not and could not accept the approach of the company because in effect it meant that a massive effort would be made to pin the responsibility on the Government. We got it crystal clear on this because undoubtedly, in the event of the company closing and redundancies coming into effect on 19 December, this is what would happen. This effort, which I reject utterly and totally, will be made by the managing director of the company no doubt and probably by a number of politicians also.

The figures are threefold: an expectation on the part of the Clondalkin Group that the State would put in £6 million; that the group themselves would put forward £900,000 and that the workers in the company would put in £200,000. Deputy Lenihan referred to a new company being established, Clondalkin Group Limited, who would put in 45 per cent, Fóir Teoranta would put in 45 per cent and the employees of the new company would put in 10 per cent. I will quantify that for the House. The 45 per cent on the company's side would be £900,000 and their proposal would be that Fóir Teoranta would put in £900,000 and the employees £200,000. What Deputy Lenihan did not advert to may be in the document he has in front of him which I recognise. I am referring to the further proposal by the company that a further £3 million in preference shares would be provided by "your goodselves". This is to Fóir Teoranta. In other words, to sum up the package: the Clondalkin Group would put in £900,000, Fóir Teoranta £900,000, the employees presumably £200,000, that is to be arranged as yet: a further £3 million in preference shares to be provided by Fóir Teoranta and in addition — I quote here the proposals by Fóir Teoranta —"we would expect substantial training grants would be available from AnCO". These are not quantified but presumably they will represent some amount of money. The IDA offer of 21 October would apply to the new company which, as we all recall from my previous contributions to the debate here, amounted to £1.5 million. Therefore, let us add up the sum very calmly and quietly. We have £900,000 from Clondalkin, from Fóir Teoranta an initial immediate £900,000——

Mr. Lenihan

That is the only hard cash involved.

Mr. B. Desmond

It is all cash.

Mr. Lenihan

That is the only——

Mr. B. Desmond

May I finish? A sum of £900,000 from Fóir Teoranta, £1.5 million from the IDA ——

Mr. Lenihan

That is an IDA grant to which any firm is entitled.

Mr. B. Desmond

The IDA package, as the Deputy is well aware, is a total of £1.5 million, not all that the company are entitled to. Certain grants have been released. I have no objection to a joint venture in relation to this company provided it is on a joint basis.

Mr. Gene Fitzgerald

The Minister should go ahead and do that.

Mr. B. Desmond

I did not interrupt any Deputy. I have no objection to the proposition put forward by Deputy Lenihan of 50-50 which he repeatedly used, but there is no equity and no prospect of this company being saved on the basis that the State must put in £6 million and the company will put in less than £1 million. That is not a proposition that has proved acceptable to Fóir Teoranta. May I remind Deputy Lenihan that in 1972, when he was a member of the Government, they passed a Fóir Teoranta Bill through this House which laid down basic criteria for giving of State rescue package money to private companies to rescue those companies? These criteria are quite clearly laid down. Fóir Teoranta have considered the package from the company in the light of all the criteria and have rejected it. I said on the last occasion, and I repeat it, that there must be a clear, unequivocal cash commitment on the part of the Clondalkin Group that they are going to put real money into maintaining the 470 jobs in the company so that there is some prospect of a contribution being made by the group and the company to maintain this industry.

The level of commitment must be such that Fóir Teoranta are satisfied that there is a prospect of some viability. Unfortunately and tragically, this level of commitment is not there. I am aware of the circumstances surrounding this company. As a member of Dublin County Council, I had a letter on 8 September from the Clondalkin Paper Mills, as had Deputy Mervyn Taylor, about rezoning of land in the possession of this company in order to maintain employment. Deputy Walsh and Deputy Harney also had letters and we were assured that this land was urgently needed. We rezoned, there were a lot of questions about it, but the work has been done to maintain employment. I speak as a member of the local authority.

It is not the responsibility of the State to rescue a company which fails to accumulate sufficient financial reserves to tide it over a major difficulty in world trading conditions. Fourteen separate paper mills have closed down in the UK in the past 18 months and 9,000 workers in that industry have lost their jobs. There have been massive redundancies in this area.

Mr. Gene Fitzgerald

That is because of the Thatcher administration. Surely the Minister is not following that line.

Mr. B. Desmond

I am in favour of retaining this industry and of the State making a massive injection of financial aid to it. Fóir Teoranta are a separate State-sponsored body in daily contact with Government Departments and with the IDA. They have a statutory obligation to give the maximum possible assistance to all such companies facing financial difficulty, but there is a limit to what Fóir Teoranta can do to discharge their financial obligations. It goes beyond the limit when a company say they want £6 million and that they will put in £900,000 before there is any prospect of continuing the company. The figures are stark: £900,000 to be put in by the company, £900,000 to be put in by Fóir Teoranta, £200,000 by the employees, with the State taking up another £3 million in preference shares. On top of that the IDA are to put in another £1½ million. Frankly, the managing directors of some companies have a hell of a nerve to put forward propositions of that nature when their own group and their own company will not put in sufficient basic financial capital to keep a company going and to prevent massive redundancies.

Mr. Gene Fitzgerald

What is the message to the 470 workers?

Mr. B. Desmond

The odium for the closure of this company if it comes to pass — hopefully it will not because the company still has an opportunity of retrieving its position in this regard through negotiations — will not be accepted by the State; it rests with a company which has not put up a viable financial package to the State rescue agencies. The money is there, including immediately the £1.5 million from the IDA. It is up to the company to accept it. If it does not keep the factory open and the workers in employment, it must accept the responsibility. I wonder if there is any real commitment on the part of the company to the workers and to the people in Clondalkin, which it must and can discharge if it is serious in not wanting to dismantle the company, sell it off to the nearest outside bidder and close it down.

Mr. Gene Fitzgerald

That is good, sound Tory policy.

Mr. Lenihan

The Minister of State deliberately runs away from the basic factor that extra State involvement, over and above the immediate equity cash of £900,000 to match the £900,000 from the company, of further preference investment, which the State should rightly invest in this company anyway, covers a preference right to premises and property which, as the Minister of State knows, is worth far more than £3 million at present. One could put a value of double that which would fall to the State in the event of the preference shares being lost in the future. If there is a rejection by the State of 400 workers, an unwillingness to put in through this agency the equivalent amount in immediate cash of the £900,000 the Clondalkin Group are willing to put in and the £200,000 which the workers in the paper mill were also willing to put in, it means that for less than £1 million of immediate injection over 400 jobs are lost ——

Mr. B. Desmond

That is not true.

Mr. Lenihan

That £1 million injection was to be matched by almost £1 million from the company's group also and the preference shareholdings which the State were asked to put in of £3 million would be more than guaranteed by the value of the land and the premises there, on the spot, in Clondalkin——

Mr. B. Desmond

The Deputy knows that that is not true.

Mr. Lenihan

——and the other moneys involved by the State to run this company are moneys to which this company are entitled as of right, like any other company, from the Industrial Development Authority. Four hundred jobs are being thrown out on that basis. We as a Government backed Fóir Teoranta to revive Scarriff and keep it going as a proper timber processing outlet. We have done the same with other firms over the years. This Government have reneged on this position by not indemnifying Fóir Teoranta. They have not faced up to their responsibilities to set up a joint venture to ensure that the——

An Ceann Comhairle

Deputy Lenihan——

Mr. Lenihan

——skills available in that area would be retained and maintained for the better medium and long-term prospects.

An Ceann Comhairle

As it is now 7 o'clock I am, in accordance with the order made this morning putting the question "That the Bill is hereby agreed to, is reported to the House, that Report Stage is hereby completed and the Bill is hereby passed, the Bill to be sent to the Seanad."

Question put and agreed to.