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Dáil Éireann debate -
Tuesday, 4 Mar 1986

Vol. 364 No. 4

Industrial Development Bill, 1985: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

The purpose of this Bill, as outlined, is to give expression to the Government's White Paper on Industrial Policy. I welcome the Bill in that context. When I spoke last week I pointed out that the labour force, with reliable estimates, will increase from 1.31 million in 1984 to 1.6 million by the year 2000. This reflects the magnitude of the potential unemployment problem. The labour force is, therefore, expected to increase by almost 300,000 by the end of the century. It must also be remembered that while employment growth increased by .8 of 1 per cent a year in the seventies, between 1981 and 1984 annual employment declined by 2.5 per cent a year. It is against this background that I would like to deal with this Bill.

Section 4 proposes that there would be a degree of flexibility in regard to classification of designated areas. Traditionally, areas have been associated with specific types of industry either because of the availability, or access to, raw materials or markets or the availability of a traditionally skilled labour force. All individual firms have life cycles of their own. In a period of recession the span of time between growth and decline can be substantially shortened. Rigidity in the classification of designated areas would ignore this problem. There is a proposal in section 5 from the Plassey Technological Park for the introduction of a broad band local area network. In jargon, it is referred to as LAN and as a computer aided design and computer aided manufacturing system. At present this country, in the context of international telecommunications, can be compared to a boreen as we are so outmoded in our technology.

The Government's White Paper on industrial development has referred to the need for the type of facility I have just referred to. A feasibility study was carried out by Wang (Ireland) Ltd. on the installation of such a facility on the NIHE campus in Limerick. This would have the effect of linking up this country with all the advanced countries of the world. I give, for example, the situation whereby a manufacturing company in Limerick wants to get market details from another company in another country. It can happen that the engineer in that country under this proposed system can, without moving from his desk, lock into this facility at the Plassey Technological Park and there lock into, for example, the Massachusetts Institute of Technology to get the most up-to-date data on the requirements of the market or the technological situation and thus help his own company.

The original proposal was that the IDA and the Shannon Development Company would provide the funding. They have since decided that because this is practicable and feasible there should be a bigger input from the private sector and that the Government should put in the infrastructure. Bord Telecom were prepared to put in the backbone of that system — the ducting and cables etc. — if the IDA and SFADCo were prepared to fund the operation. The appropriate interests in the mid-west region and in the wider industrial context are very disappointed that this project has not advanced further than it has at present. I am addressing my remarks particularly to the Minister for Industry and Commerce, Deputy Noonan. I must say that in the mid-west region we were delighted that he secured that important portfolio as I personally was not happy with the attitude of his predecessor, Deputy Bruton, towards the Shannon Development Company. There was a tacit acceptance of a pressure campaign to diminish or reduce the stature of the Shannon Development Company. There are vested interests——

He never went down to see them during his term of office.

I and other Deputies were very apprehensive about the attitude of the Government as reflected by Deputy Bruton in his neglect of the Shannon Development Company.

Hear, hear.

I would say to this Government or to any Government that any attempt to diminish SFADCo by reducing their role or mandate in any way will be resisted by every political organisation and representative in the mid-west region. There is no doubt, as those of us who are close to the scene are aware, that there are concerted efforts by tourist interests and others — and I am saying Fine Gael Deputies from Cork who seem, at somebody's behest to be mounting a campaign against the Shannon Development Company. This, to my mind, is scandalous because the Shannon Development Company are the only effective regional development authority who have received international acclaim and recognition in training people from the Third World on how to enter into areas of public administration, on how to run and develop regions in their own countries. They have been acknowledged by the Organisation for Economic Co-operation and Development as a model of their kind. Their raison d'être is to generate greater traffic through Shannon Airport. In that sense, it was responsible for making Shannon Airport the lynch-pin of progress in the mid-west region over the last 40 years. All tribute is due to Dr. Brendan O'Regan and the late Deputy Seán Lemass for their vision in allowing that concept to be developed and to the Shannon Free Airport Development Company for bringing it to the successful level it has reached today, whether in the area of industrialisation, attracting huge and major industries into this region, the promotion of greater traffic through the region or the building of houses for executives and employees of the Shannon Industrial Estate and the airport. Every venture undertaken was an outstanding success.

Bunratty Folk Park and Craggaunowen Castle have become models of their kind for students from all over the world. They have now been copied by at least six or eight other countries. We are looking to the Minister, Deputy Noonan, to redress the imbalance of neglect in respect of the Shannon Free Airport Development Company which was the hallmark of his predecessor's regime in that ministry, Deputy John Bruton. I hope there will be manifest and obvious improvement in that area.

While the rest of the region has done relatively well in the context of employment, Limerick city has done particularly badly. In the wake of the debacle of Ferenka the then Minister for Industry, Trade, Commerce and Tourism, Deputy O'Malley, was in those circumstances enabled to designate Limerick for 60 per cent grants. Limerick benefited very considerably by major industries coming in at that time. When Deputy O'Malley left office there was a definite feeling within the Industrial Development Authority that Limerick had done reasonably well and that things could now be slackened off. As a public representative and a trade union official with very close contact with industrialists in the region, I am very sorry to note that under the IDA no real development of note has taken place in recent years. While the original introduction of the IDA into the mid-west region by Deputy O'Malley was no doubt done with the best possible motives, in hindsight it was sadly a mistake. The position should now revert to the original situation where the Shannon Free Airport Development Company should be given their original mandate with responsibility for the mid-west region and south Offaly to introduce all sizes of companies.

That brings me to the position of the GAC bus factory in Shannon. I had hoped on the Order of Business to ask this Minister if it is true that, at a meeting on 25 February between himself and representatives of the unions, the workforce and the company, he put forward a suggestion to a company executive that the company should advance £3.7 million in order to keep afloat this year and that that money would be refunded to the company by the Government in 1987 out of next year's allocations and that proposal was rejected by the company? The reason I ask that question is that I think it is very politically unwise for the Government to allow the factory to close. I think I am reflecting accurately what I know to be the feelings of the workers in that factory. It should be given a reprieve until the Darlington trials and experimentations are completed. If following that the company cannot survive by way of export orders and if all of its commitments and requirements to CIE have been fulfilled it would be very difficult to sustain an argument from the point of view of pumping taxpayers' money into an enterprise for which there was no need, except in the area of school buses.

The problem with regard to school buses has ideological connotations. I understand that the Fine Gael Party are committed to the privatisation of the school bus sector. Some members of the Labour Party recently met a delegation of ICTU-CIE unions and they were very anxious that the school bus programme would not be handed over to cowboys — I use that word deliberately — who would not be concerned with anything other than profit. If some of these people get the franchise to look after the school buses, they intend to import second-hand or third-hand buses from Britain in order to meet their obligation to the school bus programme. I suggest that it is incumbent on CIE to find some device such as they already have to get around this situation — for example, by introducing a clubtype arrangement whereby CIE would have the entirely of the school bus programme. It is very difficult to argue in strictly mathematical terms with the statement made recently by one Government Minister when he said that school buses are only used twice a day, five days a week for 30 weeks a year and when they are not running it is a waste of taxpayers' money. I accept that in strict mathematical logic but I believe there is a very strong obligation on CIE in this regard if they look continually to this House and to Deputies like myself in the Labour Party with a trade union background for support. I support very strongly the strengthening of CIE's role in Irish public sector operations.

The Deputy is wandering.

I am speaking about industrial policy. There is an obligation on CIE to ensure that that industry is preserved in so far as they can.

I welcome section 12 of the Bill which deals with the concept of delegation of grant-making powers. I am aware that such a procedure is already in operation in the IDA. This is a matter which the Joint Committee on Commercial State-Sponsored Bodies, of which I am Chairman, have considered in relation to their examination of Údarás na Gaeltachta, but as the report is not yet finalised I will not comment in detail on their findings at this stage. I accept the principle that the IDA without prejudice to their general responsibility under the Act may delegate their grant aiding powers to a board or committee constituted by the authority or to any of their members or to members of the staff duly authorised by the authority in that behalf. Perhaps such provision could be extended to some commercial State-sponsored bodies. We may have in the past overloaded the boards of these bodies because inadequate statutory provision did not allow them to delegate some aspects of their work. In the absence of appropriate delegation policies I am reminded of that quotation from Virgil which says that the mountains are in labour and an absurd mouse is born. While accepting the real need for delegation of responsibility, I would emphasise that the terms of reference regarding such delegated matters must be clearly specified. In this context, I am reminded of the problems that arose in Irish Shipping Limited where basically, they had delegated responsibility for charter hire to a subsidiary company, but the board of Irish Shipping allegedly were unaware of the very significant hire contracts which had been entered into on their behalf. My view regarding delegation would be more precisely summarised by Mr. Peter Drocker where he said: "give freedom but retain control".

While accepting the criterion as outlined in paragraphs 5.2 and 5.3 of the White Paper I would refer to paragraph 5.1 of the White Paper on Industrial Policy and paragraph 21-4E of the Bill which stipulates that new industry grants would be only available where firms maintained increased employment. I am particularly concerned about that and the Shannon branch of the ITGWU have passed several motions to the effect that the whole trade union movement should not be put into a situation where huge capital-intensive multinational companies would come in here and get their generous grants which for the most part are paid by workers' taxes, and then introduce very small workforces. Some of these companies can get up to very peculiar games. They tender for public contracts at outrageously high figures and when they are beaten they try to use the well known ploy of many questionable multinational companies, in seeking to use the trade union movement to portray them as an Irish company tendering for a public contract who are beaten although they employ Irish labour, when the taxpayer would be saved in one case relating to a Moneypoint contract in the region of £4 million. Luckily in that case the workforce and the trade unions spotted what they were up to and did not support them.

In relation to section 26 the concept of providing interest subsidies particularly in relation to restructuring of industry should have beneficial effects. While accepting the need for grant aiding of fixed assets, nevertheless we have seen particularly many small industries fighting to survive and unable to restructure their finances. The characteristics of many of these companies have been a high debt equity ratio and a shortage of working capital. This shortage has been exacerbated by the requirements to meet interest charges. Naturally working capital requirements demand adequate cash flow forecasting. In such circumstances interest subsidies, particularly for working capital can be an extremely helpful aiding mechanism.

Section 31 deals with the power to purchase shares and such a provision provides for an extra dimension to the IDA's package of incentives. In this context it will be expected that the IDA will provide for the reporting annually of the financial outcome of these investments, while noting that such dividends or payments would be payable directly to the Exchequer.

Section 38 basically deals with the appointment and remuneration of members of the authority. In considering the appointment of such directors and particularly directors of commercial State-sponsored bodies it may very well be considered that the level of reward paid to such directors is discriminatory. The very nominal directorship fees paid are not in the main related to the commitment given and expected of such directors. Subsequently, it may very well be that only those who can afford to forego an appropriate level of compensation for their time and commitment will be able to accept an invitation by the relevant Minister to join the board of a commercial State-sponsored body or the IDA.

This view is confirmed by Professor Michael McCormack in his article entitled "the role of board of directors and board practice" published on 1 April 1982 in which he states "the level of net compensation is so low in some companies as to make the position of an outside director not a desirable one except for the prestige or experience". It is high time that we stopped putting people into State-sponsored bodies because of political preferment. If they are to be appointed they should have the necessary expertise that would justify their selection. Ultimately we are talking about accountability for taxpayers' money.

In his speech on 8 May 1985 in the Seanad the Minister for Industry, Trade, Commerce and Tourism, Deputy John Bruton, on the motion to amend the terms of reference to the Oireachtas Joint Committee on Commercial State-Sponsored Bodies stated:

The recent history of a commercial State-sponsored body suggests that in many cases boards have been less than successful in their policy of supervisory roles. The reasons for this are many. They can include such factors as lack of an appropriate expertise and insufficient in-depth attention by directors to their duties. There may be in some instances an attitude of mind that board appointments are essentially honorary or that there may be a lack of clarity about roles and responsibilities.

However, I would contend that in the past in some cases it has been perceived that the acceptance of such directorships was one's contribution to the State and therefore, an honour.

I would suggest that the appointment of directors should be reviewed and that a more flexible policy regarding remuneration be adopted in recognition of individual circumstances and the significant time commitment which is required to adequately fulfil a directorship role particularly in some commercial State-sponsored bodies. It may well be that only those who could afford to, would accept such a position. An appropriate level of compensation should be considered but we should ensure that at all times the best people are put on these boards. I acknowledge the committed and dedicated service given by many directors on IDA and commercial State-sponsored bodies and I acknowledge that the fees they have received were basically an honorarium rather than an adequate reward. We have been penny wise and pound foolish in the way we have dealt with this item. The best commercial talent available should not be placed at a disadvantage in accepting directorships of such bodies as the IDA and commercial State-sponsored organisations.

There is a motion down for discussion this week on the retention of Caryfort College.

It has to do with the IDA policy and industry.

Just a passing reference, please.

The amendment to that motion seeks to introduce greater learning skills for people going into industry, languages and so on. I have made this proposal to this House before. In the context of promoting industries, there is an Irish saying, "Muna mbíonn ach gabhar agat, bí í lár an aonaigh leis". That was never more true in the marketing situation. I was Mayor of Limerick up to eight months or so ago and I met a delegation from China here. Two-thirds of all our exports to China come from the mid-west region. It was interesting to see how willing those Chinese industrialists were to do business with us and with most European countries. We are looking to Europe as a market for our goods and we are in competition with some of the most advanced technology in the world from some European countries, Japan and America. It is utterly ludicrous and crazy for a country such as ours to talk about an industrial policy when we need to market our goods and a country such as China with 1,000 million population, exactly twice that of the EC, is virtually unknown to our industrialists. The time is more than opportune for someone in the IDA or in the Department of Education to set about the provision of language courses in commercial Chinese. There are people in this country doing that very successfully on a minuscule scale at present, but there is a huge opening for the type of technology that we have on offer. The Chinese have said already that Britain is moving into the Chinese scene in a big way and other European countries are doing that also. We are crazy if we neglect that type of opportunity when we have many young graduates, some of the best quality material engineers in the world, and we are being emasculated commercially because we are cutting ourselves off through neglect of the biggest potential market in the world. It is high time that somebody looked at that.

For the information of the Deputy, I met a delegation from China last November and it was not the first that Irish delegates have met. CTT are very much aware of the market.

I am aware of several delegations that have gone to China. I am merely making the point that unless we can bring out our people to do our business for us we are at a serious disadvantage.

I would like the Minister's indication of the scene in relation to the Franciscan College at Louvain, which is the business school for Irish industrialists and which is proposed as a language training centre for Irish graduates out there. The Minister for Labour, my colleague Deputy Ruairí Quinn, had that whole area refurbished. What is happening? Are we just sitting back and nothing happening about that? I understood that people from here, not necessarily graduates but marketing and sales people, would be trained there.

Marketing is purely and simply for CTT. The IDA are the basis for this discussion. They are two separate portions of the industrial wing of our economy. Marketing is for CTT.

With respect, if we do not have a marketing policy, we can produce all we like and we will not need the IDA if we do not market the goods.

It is the IDA we are talking about.

We must go back to the source anyway.

Go back to the Bill.

I would like the Minister in his reply to indicate the present situation in regard to the college at Louvain.

I am reminded of what Alfred P. Sloan wrote in his book My Years with General Motors. I quote: “Growth and progress are related for there is no resting place for an enterprise within a competitive economy”. We are talking about an industrial policy the ideal of which should be to create as many worthwhile jobs for Irish workers as possible. That policy was never more crucial than at present when more than a quarter of a million people are idle. It is high time for all Governments, especially this one and any who come after them, to look at the whole area of industry as a means of giving employment to people. I am reminded what Henry Ford is alleged to have said to the leader of the American Automobile Workers Union on one occasion when he brought him in and pointed out the whole concept of automation in General Motors in Detroit. He said “Look at that. Not a hand. Machines do not go on strike, are not out sick and do not need holidays”. The general secretary of the union said “That is all right, Henry, but who is going to buy your cars?” It might be almost blasé to quote Oliver Goldsmith, but two lines that he wrote are as valid today as they were when he wrote them 200 years ago:

Ill fares the land to hastening ills a prey

Where wealth accumulates and men decay.

This Bill recognises the content of that statement. I hope its provisions will enable the IDA to continue their good work, thereby helping to alleviate our chronic and tragically serious unemployment problem.

I am glad of the opportunity to speak on the Industrial Development Bill, 1985. It is strange that this Bill is to give effect to the new policy in the White Paper on Industrial Policy which was launched in July 1984, a year and nine months ago. That is an important document, even though we on this side of the House may have strong reservations about it.

Deputy Prendergast spoke of the appointment of directors to semi-State bodies. I was amused, although my heart bled for the man, when he made the point that these appointments should not be based on political considerations. His party have not been found wanting in having their recommendations implemented in appointments to the boards of the semi-State sector. Irrespective of political persuasion, we must have people of ability and commitment who are prepared to give their time on semi-State boards. In that area remuneration is important. Many people are successful in business or in other ways and are appointed to semi-State bodies for that reason. They are taken from their place of work or their business at a payment of, for a director of a semi-State organisation, about £750 and, for a chairman, of about £1,000 to £1,250. That is unrealistic today. We hear of members of boards walking in and walking out, just coming in and going away because they have not the commitment, they have not the time and they are not being compensated adequately. Until we have a system of paying adequately for time and effort we will not get people of the right calibre to sit on the boards of those semi-State bodies. If you have a good board, then you have good management. I do not agree with everything Deputy Prendergast said, but I must say that a busy person who does a job well is the type of person we need in those organisations and such people must be compensated adequately and properly.

The new Bill aims to encourage technology transfer, the creation of wealth and added value and to expand the international call on the Irish market by increasing exports. However, exports are reduced and foreign borrowing is increasing in the face of deficit budgeting and unemployment. Look at our national debt, which is in the region of £21 billion; and foreign borrowings are in the region of £8 billion. These astronomical figures are frightening when we have such high unemployment levels. The Bill does not appear to provide for employment of young people or to foster small industries or encourage them in acquiring fixed assets and borrowing sufficient working capital to contribute productively to a demand economy. While the Bill provides for certain development grants — a change from heretofore because it was prepaid to small industries in the past — now research and development will be paid about one-third, as I read the Bill, before the product is manufactured and on sale. This is a step forward and a help, and for that reason I welcome that development. It is an incentive to the small entrepreneur or businessman to go ahead and do a job. It gives him the incentive of moneys which he may need. On the acquisition of high technology more useful is the provision of skills at management, marketing and design production which is the only realistic way in which an increase in jobs can be created.

It is essential in the long term to develop our resources, material and human, and to identify what we can use to create jobs prior to investing in effective management. The Bill appears to ignore job creation at this level and rather to concentrate on ensuring that benefits exceed costs in existing industries in a "better value for money philosophy" which is part of this Government's philosophy. As I mentioned, with increased high technology and the low rate of employment, the number of jobs created in manufacturing industry will be fewer. Linked to this, the number of serviceorientated employment prospects and the work generated in support industries will decrease. In that area I refer to the whole area of the high technology and computerised industry which is having its effects on our employment. While we have been encouraging it in this modern age, we must look at it more realistically. There must be other ways of creating employment and creating industrial wealth rather than going altogether down this road.

The level of grants seems to be reduced in the Bill and one might feel optimistic that this will ensure that the scale of grants might be broadened to bring in more small industries. Our whole future depends on the small industry area. We have seen what has happened in the USA where small industry has been developed and has been the area of job creation in the industrial sector there. We must follow this road and we must have a special place for people who are committed to the development of small industry.

A broadening of selective criteria is a welcoming development and the increase in funding available for research and development will in the long term yield more effective and efficient production, marketing and control. However, since the facilities for borrowing in this country are prohibitive for the small businessman, a helpful provision might be to facilitate loans at a considerably reduced rate of interest. We should be able to get a greater volume of fundings and money from the European Investment Bank and have them underwritten by our Exchequer. The high cost of money in this country is prohibitive for the initial period of any industry or any development here. It has retarded and discouraged people who had the entrepreneurial flair. The high level of personal taxation and service charges do not encourage the entrepreneur to enter a competitive field when local demand is severely limited because of high unemployment and there is simply not enough capital or purchasing power at present.

New investment is needed to bring industrial production up to the level it was in the sixties, in the Lemass era. The Bill does not appear to encourage new or foreign investors or to aid the local investor in enterprise development to create the growth of that period or to increase the rate of exports. The emphasis on technology and exports might be considered a luxury when contrasted with the possibility of greater incentives and practical assistance for the small enterprise to consolidate in the absence of local demand and, therefore, to generate and increase such local demand. Tax concessions for people who invest in localised industry should create a climate for private investment. Our high tax rates are part of a disicentive and people who are prepared to invest locally in a business at development stage should have a lower taxation payment and should get consideration for their courage in investing in local industry. That is not in any of our policies and we should encourage it.

In the recent budget section 84, which was an incentive to industry, is taxed and surcharged when Irish industry, especially our dairy and beef industry, can ill afford to pay the high interest rates. Were it not for the section 84 introduced many years ago, we would not have the high level of prosperity that we have today in the area of dairying and beef.

The policy of regional activity with regard to the IDA appears to be largely ignored in the Bill. That is unfortunate because regional job targets, allocations and distribution of resources on the basis of local merit would be a greater incentive than centralised assessment and control. The IDA employ 700 people and the vast majority of these are based in Dublin.

One sector of which I would not be overcritical, because it has done good work, is the IDA food sector, but this should be more regionalised. The parts of the country where there is potential for development should be used. I am referring specifically to Munster where there is a huge concentration of dairying and bacon processing. We are talking about developing our bacon industry to the tune of six plants nationally throughout the country. It is possibly a little late for this because we had to model ourselves on international markets and competition. The Danes are among our greatest competitors. They are export orientated, as we are. There is a future for our pig industry with proper marketing, but that is one of our weaker areas. With regard to processing we are going in the right direction. This is what we should have done five or six years ago, but it has taken that length of time to put our act together. The plans were there, but we had not the necessary encouragement or leadership from those in the IDA who must have been familiar with what was happening in the competing countries.

I will make one comment of criticism. From my information, a number of these projects will be concentrated in a fairly small area in the south east. The original plan drawn up a number of years ago was much more realistic and was better structured from the national point of view of distribution of the factories. It is welcome that the IDA have taken such a keen interest in this matter, that the programme is developing and that the Government have insisted that there will not be grant aid available to every crossroads development, but only for processing.

Almost the entire country should be considered as a designated area in terms of the dairying criteria. Every area gets a turn at industrial chaos and close-downs. The situation in the Cork area is very serious. My own constituency of Cork East has the town of Mallow, up to now, a flourishing town based mainly on food processing. Mitchelstown has suffered and also the small town of Buttevant. There has been no industrial development here in the past ten years. Since the closure of a large county development there, the area has been crying out for industry. People unemployed for that number of years are now on unemployment assistance and I am worried that they will have lost the work ethic. Some industry should have been attracted to this area after that closure. If the necessary encouragement had been given, I believe that a new food processing industry would have been started there which would have helped to alleviate the serious unemployment problem. In the late sixties and early seventies there was a high employment rate there of about 250 out of a town population of 1,100. I have continuously raised in the House the matter of the suffering of the people of Mallow and I want it put on the record of the House. I have made representations throughout the constituency which have not met with any success.

The new Bill does not appear to take account of areas such as tourism. Deputy Prendergast made some good points when speaking, although I would not agree with his philosophy. He spoke about the Chinese and the Japanese. While the IDA do not cover tourism, there is a vast market for us to tap in Japan. We could encourage the Japanese to come on holiday and to invest in the country. This is one of our brightest areas of industry for attracting foreign money. China must be made an accessible market to us, but with their limited resources Bord Fáilte have not been looking into these areas.

Bord Fáilte are not in this Bill.

It is relevant.

It may be relevant, but it is not in the Bill.

An opportunity is being missed and it is worth investigating. Mariculture and such subsidiary industries as food processing, fashion, hotels all have potential. We then come to the forestry industry which is relatively new. We have not been taking the right decisions with this industry. Deputy Daly as spokesman for forestry and fisheries has been promoting a very worthwhile forestry policy and continuously trying to help the processing side. We have Woodfab, Fermoy, formerly owned by Homegrown Timbers, which is now a success. However, the real problem there is the failure of the Department of Forestry to make available adequate supplies of timber for the continuation and development of that industry. I congratulate those who have worked in that industry which I visited on a number of occasions and which is not very far from where I live: The pricing system and the new policy adopted by the Department of Forestry are a hindrance to them.

If something realistic is not done in regard to an adequate supply of timber, there will only be a limited development in the processing of forestry products. We are aware of the export of small amounts of timber, but we had vast quantities exported in the past. I cannot understand how we cannot do what Sweden and Canada can. We have failed to develop a good quality chipboard and surely the technology must be available. We have the best and fastest growing timber in western Europe, which is a further help to us. This is an area which must be further researched and State help must be forthcoming and there must be more co-operation with the Department of Forestry.

Erin Foods of Mallow was one of the last semi-State manufacturing companies to be left in the food processing industry. This is facing closure in the coming days. We will see foreign carrots, cabbages and other vegetables processed and sold under the brand name of Erin Foods. It will cost in the region of £2 million to finalise the closure of the present plant at Mallow. No alternative industry has been found, in the food processing sector or otherwise, depite promises by Government Ministers. I congratulate Deputy Hegarty on his appointment as Minister with responsibility for food processing.

I thought he had been fired.

He has not been fired yet. I ask that Minister to give almost all his time to procuring an industry for that very oppressed town of Mallow and to ensuring that we will see a continuation of the food industry there. This closure is a very retrograde step and shows a lack of commitment on the part of the State. How are they going to pay redundancy money to 160 people in the workforce there?

In the long term, it must be recognised that an understanding of economic issues beneath the economic growth is essential to integrate the distribution of goods and services in the short term. Education is very necessary here. The consolidation of expenditure for training under the umbrella of AnCO might be considered an advance in co-ordinating effort at this level, and is a welcome move. Further advance payments to small industries for research and development are a thoughtful measure to increase the present low level of innovation in Ireland, in the context of overseas advances.

This Bill represents an attempt to build on indigenous industries and to recognise the importance of overseas industry. It appears to be a shift in resources from schemes and State agencies in order to reallocate resources to build up strength in indigenous firms. This is effected by addressing the key problems of marketing, management and technology. A further move is the introduction and encouragement of new schemes with a linkage programme attached. The small industries programme and regionalisation of the IDA in the past have had good results in bringing a faster response to local industries.

The better value for money philosophy should negate the notion that grants are automatic and that firms simply have to comply with certain criteria in order to receive assistance. Both the introduction of more controlled selective criteria and the tri-annual review of enterprise projects are welcome moves on the part of the Government. The key to development and success of industrial development lies in sound business planning and a good capital base. The climate of industry needs to be improved at company level. Greater investment is needed for enterprise to develop, and for the development of the country as a whole more jobs must be created which will be sustainable and productive of both marketable produce and further employment. We need to make investment available and possible. We need to encourage the introduction of new projects and to develop the skills of people in industry in order to combat the structural weaknesses of Irish industry.

Though quasi social projects, such as the enterprise allowance scheme, may encourage people out of the black economy, there is little demand for local products. In some sense, such programmes could be considered in terms of reallocating work, their economic justification suspect and yet another addition to the proliferation of infinite schemes which are attempting to give credibility to selfhelp projects and programmes. For example, I have seen two pottery industries in one parish within a five mile or six mile radius. In recent months in food processing we have seen four or five different manufacturers going into the spreadable butter business. We must watch developments of this kind and we should not be giving grant aid to such programmes. We have seen four different manufacturers at each other's throats and having law cases. One had been a success and the others wanted to be on the bandwagon in the liqueur area. We had six or seven different liqueurs. I understand grant aid was paid, and now we are down to two or three liqueurs. We are only damaging ourselves. Some agency should advise against such duplication. It is the job of the IDA to lay down the law in such cases, particularly when State money is involved.

Efforts like that represent little real attempt at serious job creation and it evades confrontation with the fundamental weaknesses of Irish industry. Industrial development should be aiming at a policy designed to create more jobs, to create wealth, to seek to consolidate our own corner of international markets, and to relate incentives to performance on a selective basis.

Deputy Prendergast referred to the mid-west region when he was dealing with the food industry. He spoke of the enormous success of SFADCo. I urge that a Cork free port development authority be set up aimed at the industrial development of the area. We have a very fine port there. It has been the gateway to the south-east for a long time. I appeal to the Minister to consider such a structure for the development of what is now a designated area with very high unemployment. We have seen businesses closing and all that is there now are jackdaws' nests.

There has been a budget change in relation to industrial equipment. That was a retrograde step and not in keeping with job creation policy. Deputy Bruton, the new Minister for Finance, should look at this again with possible deletion of this clause in the Finance Bill.

This is an unspectacular and non-controversial Bill, basically consolidating previous legislation in 1976, 1979 and 1981. It is built on the Telesis report of 1981 and the industrial White Paper. I will quote a section of the Telesis report which must be borne in mind when we are analysing the role of the IDA:

A development effort aimed towards new indigenous industry must be re-organised to emphasise the building of structurally strong Irish companies rather than strong agencies to build weak companies.

The IDA have served the country well but I suggest that to some extent they have got off the rails and that there are aspects of their activities that need to be examined.

I believe the amount of their expenditure on administration is excessive. Section B of the Bill deals with this. There is a simple, almost colloquial, saying going around in the business community that a number of years ago the IDA had three guys out in the field acting for one administration guy, and now the ratio is the opposite: they have three administration guys in their ivory towers at Wilton Place for every one guy out there doing the job. In Business and Finance recently I spotted a colourful remark about the IDA's “all singing and all dancing” annual report. I should like the Minister to convey to the IDA that we are not interested in their public relations, that we are interested only in their policy, and that they must ensure they will not become another quango, a top heavy organisation.

Section 4 of the Bill deals with designated areas. The existing code for designated areas was based initially on the 1850 Congested District Boards legislation under the old British authority. As with many other things like the PLV, it is antiquated and outdated for today's needs. Subsequently there was the Under-Developed Areas Act, 1952, amended by the Industrial Development Act, 1969.

Through the NESC, the Government commissioned a report to get new criteria for designation. The NESC report is No. 81 of 1985 and it deals with designated areas for industrial policy. The recommendation in that report emphasises the strong need for change. In my view, it is unfair that the county with the lowest rate of unemployment at the end of January 1986, Roscommon, with 9.4 per cent unemployment, with a total on the live register of 1,909 out of a total workforce of 20,000 should be a designated county.

Similarly, Sligo had an unemployment rate of 12.4 per cent at the end of January 1986 with 2,613 unemployed, while Louth, Wexford and Wicklow, the top three countries are not designated. Wexford has an unemployment level of 8,034, a ratio of 21.3 per cent of the workforce. It is inexplicable that the criteria going back to the nineteenth century should be in force today. This is one bullet the Government must bite.

The NESC report said in chapter 6 that the granting of designation reflected the recognition of the area's needs which are special and greater than the national average needs. Further on it said that designation should therefore apply only to a relatively small part of the economy which is selected on the basis of its above average needs. That is a very clear and unambiguous reason for changing the rules. The economic problems of County Wexford are clearly greater than the national average under the criteria laid down by the NESC. Any rational and reasonable observation of the figures will show that this matter must be moved on, and designation must be given to Wexford. Most of the unemployed in that county are in receipt of farmers' assistance. Wexford is the worst hit county, as statistics show.

I believe the White Paper covered many important areas but it missed a golden opportunity to set out explicitly a new departure for industrial development. We should have a very active promotion policy and we should do our best to attract mobile international investment, but if we want real growth we must have a comprehensive policy for small business development. This will not happen simply by saying small is beautiful. The Department and the IDA must address themselves to this key issue. We need an industrial policy for small businesses because all the pointers show that the growth is in that area.

I wish the Minister well in his new appointment. Today he announced a package of 1,000 new jobs in small industries. As regards the black hole, we learned that small businesses must keep their money at home, unlike big businesses. The value to the Irish economy of small indigenous businesses is greater because we get a greater net return from them. We must discriminate in favour of indigenous industries.

All the large industries in my constituency started under the small industries programme. It must be remembered that when we are grant aiding small industries we are grant aiding a sector which has the potential to grow. Small industries are more flexible, more durable and more adaptable in good times and in bad, and can cope with market changes much more easily than companies with larger fixed assets and investments. I would like to tell the House the measures I think should be taken to develop the second tier of industrial policy.

First I will deal with IDA aid. I am not satisfied that the current system of grants is in the best interests of small industry development. The small businesses committee, of which I am the chairman, strongly recommended in favour of the regionalisation of the one-stop-shop. We will have to look at the 45 per cent fixed asset capital grant given by the IDA as it affects small businesses. I cannot understand why approvals for grant aid cannot be given for secondhand machinery. There has been a great deal of concern about taxpayers' money. We should not force small business to buy expensive machinery they do not want. This puts receivers and liquidators in a position where they can sell the assets when a company is winding down. I feel very strongly that approval should be given for the purchase of secondhand machinery.

Because of the cash flow difficulties of small firms, instead of giving an up-front payment of 45 per cent, we should give an equivalent amount of money in the form of an interest subsidy on a fixed loan over 15 to 20 years. In other words, if a person takes out a term loan of £80,000 and if the grant aid is £24,000, that £24,000 would be fixed into the term loan and would be an interest subsidy so that he would not be affected by the changes in interest rates. If one reads reports dealing with equity finance and venture capital, one will realise that what is needed is long term finance at a price small business can afford. There is a need to review grants so that all grant aid could be in the form of export marketing expenditure, if required. The White Paper moved in this direction but, in my view, even for the purposes of advertising budgets on the domestic market, IDA aid should be flexible enough to be given for this purpose.

I spent the last three years studying small business development. Small companies fail not because their order books are not full, not because they are not making money, but because they have acute cash flow problems in the second or third year of operation. Given that the banks' collateral arrangements are crazy, that they will only lend what you already have, and even then, only if you give a personal guarantee, what we must do is alter the grant aid scheme in such a way as to make loan finance available to small firms. I believe that a substantial degree of entrepreneurial potential is being stunted because of a lack of available finance, due mainly to a lack of financial security. The only way to overcome this problem is by establishing a Government loan guarantee scheme similar to that in the United States and the United Kingdom.

The objective of this scheme would be to make commercial finance more readily available to new and existing small firms on the basis that they would be a lender of last resort. They would have to get perhaps three rejection letters from the banks. They would need to have IDA approval as a prerequisite and that guaranteed loans would be repayble over periods of up to seven years with an initial repayment holiday of up to two years being made available. I believe a very simple pilot scheme could be introduced for £15 million which would say that 80 per cent of the loan requirement would be guaranteed. At the end of the day, when the IDA do their sums and the Department of Industry prepare their Estimate, it will be found that the cost is a lot less than the administration and the level of grants obtaining some of which are irrecoverable in the current situation. I am advocating that we do away with the 45 per cent grant aid on capital and instead allow an option to have an extension of the enterprise development programme to a wider sector of small business development. That would be absolutely vital.

If the purpose of granting IDA aid is to deal with the capital and equity problems of small firms or manufacturing firms generally, we must address the whole need of capital finance and loan finance for small firms. I welcome the developments in relation to over-thecounter shares on the Stock Exchange. I welcome the extension of the business expansion scheme. All of these are worthwhile measures. What we need is a simple mechanism such as a small business bond. In the United States there is a debenture system under which one can claim tax relief if one invests small business bonds in a wide variety of companies. Briefly, it operates as follows. There are bonds of £500 which, if one is paying tax at, say, 58p in the £, means that in respect of every £1 one invests one gets back 58p. One must keep the bond in the company for three to five years. There is a maximum tax relief ceiling to any individual taxpayer of £10,000 and to any company of £50,000 per annum. It is a very simple scheme. Similar to the US debenture scheme, a small business bond here would constitute a very simple but effective way of harnessing local personal finance into small industries and which would deal with many of the capital needs of firms that the IDA are endeavouring to address. That, coupled with approvals for secondhand machinery, with the loan guarantee scheme, with a widening of the restrictions in relation to marketing expenditure, expeditious payment of any grants, along with an option of grants per employee or for fixed assets, would form part of a new strategy for a second tier of industrial development for small firms. That is where the growth sector and the real value to the economy are to be found.

It strikes me as very wrong and quite improper that the second most crucial factor of business survival here, outside of finance, is one of management and that it is not a brief with which industrial development deals at all. The IDA have no brief or no business whatsoever in dealing with management. All the books published, whether by the OECD, EC, all of the consultants' reports, come to the universal conclusion that, whether one is in a good or bad trading environment, faced with high or low inflation rates, high or low interest rates, the universal conclusion is that the difference between success and failure is good management, proper planning, proper financial control and proper organisation within the firm. If we want a new generation of small industrial development, or industrial development per se, we must address the issue of management. It strikes me as quite incredible that the Department of Labour, almost in isolation, can be preparing a White Paper on Manpower Policy, along with its State agencies, such as the IMI, ICC, AnCO, without reference to this Bill, when the survival of many new firms to be established and the expansion of others is dependent on good and sound management practices. I strongly recommend that, in the same way as part of the decisions of the White Paper on Industrial Policy was to have the same board members for CTT and the IDA and to have a correlation between the two, we must move in the same direction of integration with regard to the management field.

There is no doubt that when the IDA issue grant aid of any form they should have reference to and place emphasis on the assessment of the management ability or capability prior to its approval. Part of the aid should be the "hands on" approach they have adopted in other countries to the extent that they will say: "We will give you an annual or six monthly evaluation. We will tell you where we feel your business could be running stronger." We must tie those links together. Good management must be viewed by the Government as a good investment. There should be a significant increase effected in both the expenditure and effort on management training here. From start to finish the IDA should restate that there is a fundamental need in our economy for more management skills in small industry. There should be a clear policy statement to address that issue.

I hope those two areas can be taken up in the three year review of industrial policy as set out in the White Paper. I might point out that section 13 of the Bill allows a Minister, to lay before this House, by way of ministerial order, what the IDA should or should not do. It is my belief that the economic Departments of this State have been led by the nose by the State agencies under their aegis. I believe that to a large extent the IDA wrote the White Paper on Industrial Policy. I admit it was vetted and approved. Indeed, the principal recommendation of the Telesis report was to strengthen that Department, to ensure that the policy decisions reverted to that Department, that there was a strong grip maintained and that the directive came from the top, not the IDA leading anybody by the nose.

In regard to section 16, which deals with land banks and premises, it is difficult to understand the IDA contending that they will not in any given area—in my constituency or any other—build another advance factory or buy another piece of land for land bank purposes because they have four million square feet of advance factory space already and there is an embargo on it. I can understand that from the sense of economics, but it strikes me as very much a Civil Service approach. There are many such premises from which the IDA are turning people away because they are ineligible for grant aid. Many firms have come to me—they have been manufacturing perhaps aluminium or PVC windows, engaged in certain aspects of food processing, involved in joinery, all manufacturing—but, because they are not grant aidable on account of surplus capacity, they are refused entry into these premises. Thus these premises remain idle, costing the taxpayer money—four million square feet in all. It strikes me as only reasonable to ask the IDA, under section 16, to be less restrictive and to allow manufacturing companies which are not necessarily grant-aided into some of this advance factory space so that there can be a turnover, and industry got moving. In many provincial towns there is no alternative proper infrastructure of an industrial nature by way of premises. Therefore, we have the worst of both worlds. We do not have more advance factory building. We do not have progress. There are factories remaining idle into which people want to move; but, because the IDA are too restrictive in their interpretation of the criteria, manufacturing firms cannot occupy them. They do not want grant aid, they do not want subsidies, they just want decent premises and are prepared to pay for them. I would ask the Minister and his departmental officials to take up that question with the IDA.

I might turn now to the marketing area. I am aware, a Leas-Ceann Comhairle, that you have already ruled two previous speakers out of order in relation to marketing. Never being one to question your eternal wisdom, might I say——

A passing reference only, Deputy.

——that this Bill does deal with the issue of marketing? Telesis, and the White Paper, also deal comprehensively with marketing. In fact, the most positive thing in the White Paper was that it said we must look to new marketing initiatives. The CTT proposals, the market entry and development finance scheme, the group marketing scheme for small businesses and the distributor support programme were approved in the White Paper. They are directly involved and are to the vanguard of what the White Paper was about.

If we are talking about a tier of small business development as a new strategy for industrial policy, I must point out that there are aspects of marketing which the IDA, in conjunction with CTT, will need to address. It goes away beyond the business of grafting marketing personnel, be they graduates or retired people, on a consultancy basis into firms. It goes further than teaching modern languages in schools. We must deal with the position on the ground. We need a sales agency service in our overseas markets. The problem is that small firms cannot afford to have a market presence abroad. Therefore, we must look to combining and co-ordinating small firms that are not competing with each other, the pooling of warehouse resources, such as CTT have done in Liverpool but nowhere else. Businesses should get CTT to organise a sales agency service to sell soap, handbags, sausages and other items on markets such as those in Germany on a commission basis. Every assistance should be given by the IDA and CTT for such a move. The State agencies should marry the two together and come up with an active solution to what is a barrier to growth in that sector. I hope that, with the positive measures taken in the White Paper, we can go one step further on that road.

The budget decisions affecting capital allowances and the 12 per cent duty on section 84 loans undermine the purpose of the Bill before us. There is no doubt that section 84 has not been of any benefit to the banks. It is a benefit that has been conferred on the clients of the banks. To put a niggardly levy on that is to cut off one's nose to spite one's face. The companies one is trying to help have satisfied a criteria of being the most expansionary and with the greatest potential to develop. I would push the section 84 stronger than the capital allowances and suggest that capital allowances should only be given to the extent of the amount of money put in. It was a move in the wrong direction.

Conversely, the budgetary change about expenditure in the R and D area by way of tax relief is a commendable addition. It is something that the Joint Committee on Small Businesses recommended. The whole area of technology acquisition, of foisting new technology on small firms, is something that will have to be addressed. During the year the Joint Committee on Small Businesses hope to produce a report on that.

I should now like to deal with the one-stop-shop, an essential part of any industrial strategy. If we do not get this right I do not believe we will have the type of localised development we need. There is an anomalous position in the country in relation to county development officers. In the counties along the western seaboard county development officers are responsible to the Department of Finance. They have substantial powers and resources by way of advisory services and so on. On the eastern seaboard the county development officers, the frontline of job creation where we have a regionalised IDA set-up, have a planning role. The county development officer has a sort of head bottle washer role without any teeth.

If we want to have localised industrial promotion and development that is meaningful to a local community we must try to harness the basic functions of development into it. In other words, we have to have from a pooling of all the State agencies one person in a small business centre relating to the management function. That person may be from the IPC, AnCO or the IMI. Another person should have a marketing brief, dealing with the domestic market such as those in the Irish Goods Council, or dealing with the export market, such as officials with CTT. We need somebody with a finance brief, from the ICC, Fóir Teoranta or the IDA, and we need a person with a development brief, from the IDA, the IIRS, county development officers or the NBST. Those four different briefs must be put into the one-stop-shop so that it is not a question of giving autonomy to a regional board of nice guys to decide whether to give grant approvals or not. It must be a localised advisory service that will stop this perpetual running around the southside of Dublin looking for the beautiful ivory towers to find out what schemes are available and the type of guidance and assistance that is available. If we are serious about localised development we have got to experiment further with the one-stop-shop.

We must have on the ground a coordinated service that integrates the State agency where it matters, that improves the immediacy of contact for those who need the help, and that does not duplicate the services. It should facilitate what the Minister in the course of his speech was getting at — the company development approach. All too often from the Department, and from the State agencies, we have the rhetoric and lip service going in the right direction; but the action on the ground, the single simplest way of getting a company development approach and a plan on a business by business and enterprise by enterprise basis, was not right. It is not a case of getting new personnel but of redeploying existing officials along the lines of a one-stop-shop. We need a more informal and more helpful structure on the ground.

There are many other areas that I could deal with in the course of this debate. I welcome the Bill and the initiatives taken in the White Paper. I do not think the IDA have taken on board the criticisms in the Telesis report of 1981. They fudged some of those issues and there has been an element of complicity by the Department in that they were a part of that fudging exercise. If the Department want to take on a new dynamic, positive and constructive approach to industrial development, they must say that they are committed to maintaining the policy of attracting and promoting international mobile investment into Ireland which will get more and more competitive. We have to have a second tier of industrial policy development that deals with the needs and opportunities for small business development. Within that lies the prospect for the best return to the Irish economy and the answer to the great problem of unemployment.

Like other contributors to this debate, I support this non-controversial piece of legislation. We all agree with the main purposes of the Bill — industrial development and the implementation of new policy directions and incentives for industry. I should like to pay tribute to the last speaker. His contributions on industrial development and small industries since he was elected have been refreshing. This evening's contribution by him was very worthwhile. Deputy Yates pointed out some of the defects in industrial development which I have noticed also. We are embracing in this legislation all industrial development Acts passed by the House down the years and incorporating aspects of Telesis and the 1984 White Paper on Industrial Policy.

I regret the fact that delays have occurred in regard to urgent matters like this. The White Paper was issued in 1984, the Second Stage of the Bill was introduced in December 1985 and is being resumed in March 1986.

Section 2 merits an amendment because of the recent actions of the Taoiseach. In that section the interpretation of "The Minister" means the Minister for Industry, Trade, Commerce and Tourism. Obviously "Trade and Tourism" must be deleted and I regret——

This would be more appropriate to Committee Stage.

I do not want to take issue with you but I am only making a passing reference. I regret the necessity for dropping the word "Tourism" because tourism had found a place within a Department where it could have been developed to a great extent but it is now aligned with a group of other Departments.

In section 3 the Minister may, by order, provide that any undertaking engaged in the provision of a service specified in the order shall be a service industry for the purposes of this Act. I would have thought that the Minister would have been able to do so in regard to many tourist developments. It is encouraging to note that there is an increase in our industrial exports and there is no doubt that the work of the Industrial Development Authority over the decades has been a main contributory factor. They have been extremely successful in attracting the high-tech and pharmaceutical industries which have contributed to increased exports.

I wish to pay a tribute to the Authority and staff, with whom every politician has had differences over the years, but they try desperately hard — unsuccessfully at times perhaps — and are criticised when there are failures or disasters, or when they back lame ducks which did not deserve to be backed. Development necessitates taking risks and I would complain more about risks not being taken than taking risks which do not work out satisfactorily. There is no doubt that the success rate has been far higher than the failure rate.

I am concerned about the growth of industrial exports. Deputy Yates touched on this when he referred to the fact that, while we are discussing an extremely important Bill, many other aspects of Government also affect industrial development such as what happens in industry, its attractiveness, its competitiveness and the success of our marketing and exports. All these can be catered for outside the compass of this Bill. I should like the Minister to address himself particularly to the impact which changes in inward processing regulations will have on 1 January 1987. I suspect that the value we will gain from having this Bill passed will be negatived by the impact this will have on industry generally, especially the manufacturing industries to which I already referred.

From an IDA point of view the attractiveness of Ireland as an industrial base is a prime consideration in selling it abroad. The tax benefits, among others, are obviously also an attraction so from 1 January next when this major change comes about in inward processing, the high-tech industry will probably be affected. They employ about 80,000 people and some of those jobs could well be put at risk. The Minister knows that there are difficulties in Europe at present but I understand that EC Directive 69 of 1973 has been amended by EC Directive 1999 of 1985. The implementing regulations are being discussed and, important to industrial development as the passing of this Bill is, the implementation of these regulations is equally important to ensure that industries will not suffer because of cash flow problems arising when duty will have to be paid at point of entry and not as at present. This could mean paying out six months in advance of the processing carried out here and then selling abroad. The rebate can only be got back from third countries and it could take a long time to establish entitlement to such a rebate.

This side of the House will be pushing very hard to ensure that industry does not suffer because of the changes likely to take place next year. We must be vigilant in regard to EC Directives and their impact on our industrial base. The companies who availed of the system would be exporting mostly to the European Community but also to third countries, and this new system will have a very serious impact on the cash flow of many industries. Where the duty is paid at point of entry — as happened when Fianna Fáil were in office in the mid-sixties when a UK import deposit scheme was introduced — it should be made available at very cheap loan rates to help the industry during the intervening months to bridge the gap before the money is repaid, a suggestion which may be worth considering. This problem cannot be ignored and if we procrastinate there is a serious risk of losing existing jobs and of making our base less attractive to incoming industrialists.

Deputy Yates spoke about the capital grant allowances and the necessity for flexibility in that regard and I agree with him. I notice that the Bill entitles the IDA to provide rent subsidies. The high cost of communications and electricity is an industrial burden which creates many problems and one must support the concept of giving as much flexibility as possible to the Industrial Development Authority when negotiating to ensure that the package is the best and most suitable and has the best chance of maintaining employment in the industry.

I represent a city which has been devastated by job losses in the manufacturing industry. I heard the Minister's announcement today on radio regarding 1,000 jobs for the west and that is very welcome news. However, he made this announcement on a day when 400 jobs were lost in Shannon. I understand that the final nail is being driven into the coffin today but Deputy Daly will be more aware of this than I am. When one takes this loss into account and has regard also to the many other jobs that have been lost the net benefit, if any, is very small. Successive Ministers have been announcing job numbers that bear no relationship to starting numbers.

They never tell us about the closures.

In this way Ministers create false hopes. The Minister went on in an arrogant, abrasive and confident manner to talk of the number of jobs that would be in the pipeline from the IDA within the next year or so. In that he was going much further than any of his predecessors but I would remind him that he is not dictating now in his capacity as Minister for Justice but that he is dealing with the biggest problem facing the country, that is, the provision of jobs, an area in which this Government have failed totally.

I share Deputy Yates's view regarding the lack of cohesion in Government Departments. This morning I heard a rather peculiar statement from the chief executive of the Youth Employment Agency. He was reported on radio as referring to people being given jobs for which they are much too highly educated. He told employers that this attitude was wrong but he did not offer an alternative. I appreciate the point he was trying to make — that a person who is too highly qualified for a certain job should not be given the opportunity of stealing that job, as it were, from someone less qualified but who was suited to the job. However, the jobs are not available either for those who are highly qualified or otherwise. Therefore, that comment from the chief of the Youth Employment Agency was somewhat silly. The agency itself needs a good deal of study so I would say to the chief executive and to his chairman that their first duty is to consider the problems of the agency. While some of their schemes have been very successful, others are hairbrained schemes.

From time to time we all make various requests of the IDA. I was led to believe that special attention was given to the Cork region after all the closures there. The various agencies have been diligent in their efforts, though not so successful, in bringing employment to the area. The only time we have any news is when the Taoiseach is visiting Cork when there is some reference in the papers to jobs in the pipeline but by and large manufacturing industry in the region has suffered very severely. There has been a slight alternation in the designating of the area but again with little success.

While emphasising the importance of industrial development, the necessity to provide as attractive as possible an industrial base and to ensure that we are competitive and well equipped technically, as I think we are, our emphasis in this Bill must be on section 29 which empowers the IDA, subject to certain conditions, to make grants not exceeding 50 per cent towards the cost of research and development projects. Our education has made great strides in recent years but the importance of research cannot be overemphasised.

Section 30 relates to the new schemes of grants for the acquisition of technology. The area of technology is one that the IDA must concentrate on. They have had a good deal of success in this area but we are talking of an industry that is changing rapidly. Some of the high technology industries that set up here disappeared within a short time. This was the case with even the biggest of them as has been experienced in this city and in the south.

Forestry, fisheries and tourism are also areas of extreme importance. Much has been said about the recent Cabinet reshuffle. In that regard I was disappointed that those three functions of Government were assigned to one Minister. In saying that I do not intend in any way to reflect on the Minister concerned. The point is that these are three areas with enormous potential for development. As a member of the European Parliament it sickens me to think that our second biggest import into the Community after oil is timber and timber products. Despite this we have not developed our forests. We have not developed land for afforestation to the extent that might have happened. I am not talking about the State paying for everything. The incentive, the encouragement and the expertise have not been forthcoming. This is an area which is wide open for development particularly because of the destruction of many of the forests in mainland Europe by the new phenomenon of acid rain. The same applies to tourism. We are on the periphery of Europe and while we have many difficulties relating to other industries, we have many advantages so far as tourism is concerned. It is difficult to understand why our food development has not been more successful. I heard the Deputy President of the IFA, Mr. Allen Gillis, on radio this morning give an excellent account of himself in relation to how we deal with the whole question of hormones.

The Deputy is straying a little from the Bill.

I will try to relate my remarks immediately to the Bill. Mr. Gillis emphasised the clean environment we have for food production. Apart from exports on the hoof we do not seem to have taken the best possible advantage of that clean environment in terms of the creation of employment in the food industry.

Perhaps I will be allowed to steal a little licence in the matter of referring to local problems and to draw attention to a carpet company in Youghal in which, thanks to the IDA, jobs were saved. I accept that there are serious reasons for this and that certain commitments were made at the time the company were saved but I would ask the IDA very sincerely to re-examine that position with a view to ascertaining whether anything can be done to ensure that the jobs will be sustained. This is a good company who are trying very hard to succeed.

It is becoming increasingly important for Irish industry and for jobs that the Department have more power with regard to industrial development and that there be less interference from other Ministers and from other Departments. I refer again, as did Deputy Yates to the meddling or interference with section 84. This situation together with the new interest, the tax on deposits, is undermining companies. It is hard for people to fight for industry in the climate that exists at present. They have my support and sympathy. The market-place is not getting any easier. I am talking about the market-place fighting for investment to come in. There are many locations in the world that are being supported in very attractive ways. I earnestly say that the Government must squeeze more tightly to ensure that the Minister for Industry and Commerce is interfered with to a lesser extent than he is inclined to be. I am looking forward to the Finance Bill to see what it will be doing specifically on section 84 especially and the 35 per cent.

I do not intend to delay the House any longer except to say that the importance of the Bill is one thing. We have section 84 interference, the undermining of confidence with this new type of interest and the inward processing changes which will take effect from 1 January next, all extremely important and all concerned with jobs which is what this Bill is concerned with. I hope this Bill lifts the manufacturing industry level in my own county and city of Cork and replaces some of the many jobs that have gone. We have a wonderful base, a land bank and a deep water berth thanks to the Government before this one. We have all those facilities. We need more industries because we need jobs.

I welcome this Bill and would like to say a few words, as other speakers have done, on the importance of having a sound industrial policy. Over the past ten years there has been the increased problem of unemployment which has been with us all the time. It seems to have got worse over the years. Our whole attitude in dealing with the problem will obviously be determined by our ability to produce an industrial policy which is capable of dealing with the situation we have on hand at present. By way of comparison I would point out to the House that, when we talk in terms of jobs and the number of people coming on to the job market in the sixties and today, we are talking about two totally different situations. The number of people coming on to the job market today is in the region of four to five times what it was in the sixties. We are not comparing like with like — and there are people who do this — if we say that times are far worse and we are not producing enough jobs. We are not producing enough jobs admittedly to cater for the job market that is there. Certainly, we are producing many.

This was mentioned by a number of people in recent times. We have, unfortunately, a rather negative attitude to industry and industrial development. In general, we seem to have a negative attitude which permeates right through society, through industry and through our whole way of life. To my mind, that is one of the easiest ways to defeat the whole purpose of industrial policy or any other policy for that matter. Things will not happen unless we make them happen. Things are not brought about by negative people with negative thoughts or actions. Things are brought about in a positive fashion by people with positive thinking who think and act positively all the time and who believe that the people are capable of looking after themselves and providing themselves with jobs.

I should like to refer to a discussion I had recently with a number of people, most of whom were young, who were either unemployed or had not yet got jobs. I discovered, first of all, that they were of the opinion that they were not capable of providing themselves with jobs and, secondly, they felt they were not capable of providing other people with jobs. That is a terrible indictment of what all of us in this House, the IDA and the various other State agencies are trying to do. It is a failure or lack of ability on somebody's part, probably our own, to get across the very important message to those people in the market-place who have the skills, who are highly educated and intelligent that they have the resolution of this country's problems in their own hands. They have the natural ability to provide themselves with jobs and also the ability to provide other people with jobs. Unfortunately, we do not seem to be able to fire their imagination and to tap the resource that is there. The fault is in a number of areas.

I would like to pay tribute to the IDA and the other various State agencies for the manner in which they go about their difficult tasks. Far too little credit has been given to them in the economic difficulties we have experienced over the last ten years. It is easy to criticise when things go wrong, but we do not always come forward and hand out the bouquets when things go right which are by far the majority. One thing which I have noticed is that there still seems to a reluctance on the part of the IDA in some quarters to take a chance. I accept that is probably born out of a fear that something may go wrong. That is probably the wrong attitude at present. Unless we have such agencies who are prepared to take a chance, given the opportunities that are and have been available down through the years, we will miss out in a very important arena.

If a person has a business idea and goes along to one of the State agencies to get advice, he or she should get an immediate response. There should be a fast and thorough follow up. There should be no situation which has not been thoroughly investigated. I fear, from my own experience, that there are instances where investigation of a project has not been as thorough as it should have been. As a result, opportunities can be lost and probably are being lost.

For that reason — and to a certain extent this is embodied in this Bill and the White Paper — we must be prepared to respond quickly. We must respond quickly to the ideas that are being put forward by people who in some cases may be unemployed, who are obviously capable of doing what they set out to do, who need assistance and encouragement from the agencies, and who feel they are moving into a big bad business world which is alien and hostile to them. It is vitally important that we give them the necessary encouragement in the early stages. If they do not get that, they will become disillusioned and disenchanted and will go away, become introverted and say, with a certain amount of justification, that the State agencies which are there to assist them were not in a position to give that assistance or were in some way impersonal and, as a result, they continued as they were and nothing happened.

Let me give a few examples. Some time ago the Irish Goods Council referred to the area of import substitution. They outlined £1,200 million worth of goods which could readily be manufactured or processed in this country. Some of the items which are being imported are in direct competition with items which can readily be manufactured and are being manufactured here. There should not be any excuse for that kind of situation in a country with little more than three and a half million people. Holland which has a population three or four times ours has been able to cater for that and to provide its people with jobs. I cannot understand why we are not able to fire the imagination of our people who are disposed towards setting up an industry, particularly in the manufacturing area. We are losing out badly. We should bring the services closer to those people who might be willing to take them up. Deputy Yates referred to the one-stop shops and I think that has been a good idea. We need to be able to bring the assistance of the IDA, Fóir Teoranta, Córas Tráchtála and other agencies into the marketplace and into every county. County development officers have been doing such a job to a certain extent down through the years. The discretionary grants which are available to county development officers in the western region are not available in the eastern region. Those people are restricted in what they can do. They should think in terms of going into every major town in an effort to ensure that the people who are likely to set up an industry become aware of what is available to them. They should give assistance on an ongoing basis rather than dispense it from a national headquarters where the information very often lies untouched for a long time.

There are quite a number of people in the small business sector who do not get sufficient advice from those services. For instance, people who become redundant and have a reasonable amount of money should be taken into the confidence of those services and given whatever assistance is available. They should be encouraged to set up in industry. It is no good saying that if you encourage people into one line of manufacturing it will cause a snowballing effect and put somebody else out of business. The IDA and other agencies are aware of what is available in the marketplace and of where the openings are. They should be prepared to work with those people who become redundant and who may have particular skills. They should encourage them to set up their own business. This would not only alleviate their own problem but also the problems of others. There is an old and very true saying that self-help is one's best preparation. One of the reasons we have problems in relation to manufacturing vis-á-vis import substitution is that we do not recognise that we can do things ourselves. We do not want to go to the trouble or the pain, financial or otherwise, of moving into that arena. This is something we should do as a matter of urgency, otherwise we will have nobody to blame but ourselves.

I wish to refer to the processing of grants and grant applications in regard to feasibility studies and R and D grants. A little more speed and positive thinking would be of great assistance to the unfortunate applicants in some of these cases. If a business is in existence and comes under trading pressure or some similar problem and they require assistance — they may qualify for research and development grants — it is important that they be responded to quickly. The trading situation not only in this country but throughout the world changes so quickly that unless people get a quick response it may be to no avail. Very often when assistance comes, it comes too little and too late. That is something which could and should be rectified. While recognising the tremendous work done by the IDA and other agencies, they should try to ensure that they speed up this work because time does not stand still and in the business world nobody will wait for them.

Deputy Yates also referred to the question of people in plush offices in the city. That is not where the bulk of the work should be done; it should be done where the individuals with the ideas for setting up an industry are and where assistance is needed. These people will respond if they are given the impetus from the official quarters. In my own constituency I had the experience of a large processing plant being sold on the market and nobody got any information, neither the IDA nor the Department of Industry, Trade, Commerce and Tourism, as to who bought it, or for what purpose it was bought. I wish to comment on the undesirability of that situation. The IDA and other agencies give a considerable amount of assistance to firms such as that. I am not saying that this firm has been the greatest beneficiary but anybody disposing of a major industrial operation should at least have the courtesy to tell the people who originally funded them to whom they propose to sell and for what purpose the sale is taking place. They should have the common courtesy to tell the people who have worked for them for 20 or 30 years what they propose to do with the plant. As part of our industrial policy we should ensure that in other instances firms, particularly firms who have had the benefit of IDA assistance, do not assume a dictatorial attitude and decide that they can dispose of their plant to whoever they please for whatever purpose they consider right. They should consider that they have a duty and responsibility to the bodies from which they got assistance and also to their employees — and they should not be allowed forget it.

The way to win success in the industrial arena, in the field of tourism or in the production of a service is to provide a good product and a good service and to ensure that the customer is as far as possible satisfied. The customer will always remember the time when he received shoddy treatment or an inferior product. If we did nothing else in industrial policy except instil in manufacturers a pride in the product they are selling, it would be the biggest single contribution we could make towards ensuring that we have a good sound basis for future industrial policy. Manufacturers, workers and consumers should recognise that. Consumers also have a duty. They should bring it to the attention of manufacturers when they get an inferior product or when they are treated in an offhand fashion by somebody providing a service or working in an industry. If we have a good service and a good product we will gain international recognition for providing a quality product on the market. That is something we should always strive for.

I am sorry I cannot be very enthusiastic about this legislation which, while it has some desirable aspects, does not provide us with the dynamic mechanism needed to tackle and resolve our huge employment problem. There are difficulties throughout the economic sector and this legislation has not the necessary power to deal vigorously with employment. All I see in this Bill is a shift in emphasis from fixed assets and the reequipment grants into the development of modern technology and scientific innovation. That is welcome, but we need a combination of many factors, including things not in this Bill.

I suspect this Bill when I recall that it was tabled at about the time when we were concluding the Second Stage of the National Development Corporation Bill. This was a response from the IDA and the Minister for Industry and Commerce at that time. The National Development Corporation Bill, originally promoted by the Labour Party after long discussion, was totally watered down. During the course of the debate on that Bill the Minister intervened to say that he would have to draw up an agreement between the IDA and the NDC to ensure that there would not be duplication and overlapping or disputes between them.

This IDA Bill has been talked about for some time. There was a White Paper on it in 1984, which was discussed for some time, and legislation was promised by the Government three or four years ago. This legislation is now before us, but it is a major disappointment. There is no new direction here. There is no shortage of organisations working in industrial promotion to implement the ideas proposed in this Bill. I am glad that there will not be duplication between the NDC and the IDA because we cannot afford it. As I say, there is no shortage of bodies or organisations in the area of industrial promotion. We have the IDA, SFADCo, the county development teams, Údarás na Gaeltachta, CTT, ICC, the Youth Employment Agency, the enterprise boards, the new regional boards which will be set up under this legislation, Manpower, AnCO, BIM and so on. In many of these agencies there is a complete waste of human resources, and there is overlapping and a waste of scarce financial resources. We need to mobilise experts in these areas at a time when we have scarce financial resources, but we cannot afford duplication or overlapping. We need more vigorous co-ordination between these organisations to get the best possible results for the money being spent. No one could be satisfied with our industrial promotion effort at the moment. How could we be when we see huge bills for food imports, food which we could successfully grow at home? There is a huge bill for fish imports while our fish and fish products are being dumped, and we see timber imports at a cost of £500 million to the state when the timber could be successfully grown here. At the same time we have huge employment and structural problems. A person in his proper senses would ask "What are all the agencies and Government Departments doing?" Is it not time, after all the discussion we have had here on industrial development, that we did something constructive to tackle the problems in the economy. At the same time the problems become worse and unemployment worsens by the day and company after company closes down while we have a huge volume of imports that we could produce successfully and develop here at home.

The Bill gives us an opportunity to restate what we have stated on many occasions — the need to maintain jobs. Lacking in this legislation is any provision of significance which will enable the agencies involved in the creation of employment opportunities to endeavour to maintain those jobs once they are created. In this regard I want this evening to refer again to the closure a few weeks ago of the bus building company in Shannon with the loss of 400 or 450 jobs. Here we have a unique development in the mid-west region where a bus building company were established and where it was clear and obvious that buses would be required for the school transport system, the city bus services, rural bus services and coaches. At present we are importing coaches under lease arrangements with CIE while our bus building plant is being closed down. The philosophy behind the development of the bus building operation in Shannon was that, first, it would meet the requirements of our economy for buses for the foreseeable future and, in addition, that it would develop export orders and export business which would enable the company to be firmly established in the mid-west and to prosper. There were complaints at the start. People in other parts of the country felt that they alone were the people capable of building buses, but in Shannon in that magnificent experiment it was proved that buses could be produced at a cost competitive price that would equal anything that could be got in any part of Europe, that 400 jobs could be provided in the company before they were slimmed down to their present 200, and that hundreds of other jobs could be created in industries supplying component parts.

Here is one area which has been identified by the IDA, SFADCo and all the agencies involved in the promotion of industrial development here. This linkage that we must have between either multinational industry or local manufacturing industry will enable the component parts to be supplied as far as possible from within one region or one country and we will save huge bills in the import of component parts to be used in operations such as the company in Shannon that I have spoken about. That company did exactly what was the policy of the Government, the Department, the IDA and SFADCo. They farmed out the component parts to small industry in the region where small manufacturing companies were established. This is the ideal project that we have talked about for years. We have highlighted here on numerous occasions the American experience that small is beautiful and that small industry established and running alongside major industrial developments, whether they be multinational or Irish, could provide a gainful opportunity in supplying these component parts for the manufacturing industry or whatever. Here we had alongside the GAC plant a variety of small companies established by many young people who put their whole life savings into these enterprises, who had the practical experience of working in industry within the Shannon region, who took up jobs after they left vocational school or other colleges in the area and went into manufacturing industry in SFADCo. Then because of their experties and because they saw the opportunities and openings for the establishment of such operations they set up these small industries supplying companies like GAC at Shannon with the small parts so necessary for the survival of that company, and found useful opportunities for many people and a very valuable return for their investment in the establishment of these small enterprises.

Now there is total devastation there. How can we ever again talk to people in the mid west region, the Shannon area in particular, about setting up small industry to service multinational operations or other organisations or companies under the linkage scheme which is being talked about? How can you encourage any young businessman to mortgage his house in some cases and invest his whole life savings in the establishment of an industry to supply a company which was underwritten by the State? The State needed a huge volume of buses in this case and there was an indication that the long term future of this company would be assured because we needed to supply our own market with buses. We needed to replace 800 school buses. In the school fleet alone over the next three or four years there was a viable business opportunity that they could be associated with and they could pledge their whole life savings, their work and endeavour and their future in that area. Now they are totally devastated. Is it any wonder that they have been here now since before Christmas? They picketed Leinster House. They came in here in deputations and their claim is that they are being treated shabbily because the company have been allowed to close and within 12 months, perhaps less, this summer, under the leasing arrangements which CIE have in operation, foreign coaches will be imported here. The opportunity of supplying markets here is being thrown away because this Government have neither the courage nor the financial commitment to support that project and put it on a viable footing and give them the orders they need so badly.

It is very difficult to talk to young business people in that area about creating small companies and getting support from the IDA, SFADCo or whatever when they find that the industry in which they have invested is allowed to disintegrate before their very eyes, and this Government stand idly by without lifting a finger to solve the problem. At this late stage I call on the Minister of State and the Minister for Industry and Commerce, who comes from the region and who knows well and understands fully the case I have been making and who was very vocal as a Deputy a few years ago, in 1982 when this industry was in difficulty, when the Government at that time came to the rescue to resolve the problems in the bus building plant——

Should we not discuss the Bill?

I will leave it for the moment.

If the Minister has something helpful to say——

I will respond to Second Stage debated on the Bill.

I thought the Minister might have some worthwhile interjection to make but it looks as if he is continuing the same kind of policy we have seen from this Government which is negative and defeatist. They are throwing away opportunities.

We are talking about exploiting opportunities. People all afternoon have been mentioning journeys to Japan and China but I would direct the Minister's attention to Shannon where he could do something positive and worthwhile now. He would not have to learn hieroglyphics, either. This is a simple problem which needs to be dealt with and dealt with urgently.

The Deputy is aware that I met a deputation of which the Deputy was a member on this matter before Christmas.

I fully appreciate that and I thank the Minister of State for meeting that deputation at a time when the Minister walked away and was not prepared to meet them although he knew full well what the situation was. It would have been far more honest if the Minister for Communications had had the courage to meet that deputation and explain the position in relation to the company, rather than evade his responsibilities. He put the Minister of State in to do the work which was not that Minister's responsibility at the time. At that time the company were in production and in operation and there was no necessity for any intervention by the Minister for Industry and Commerce. Full marks to the Minister of State at the Department of Industry and Commerce for standing in when the Minister for Communications had not the courage to tell the workers the position. We are still looking to that Minister to do something positive and worthwhile in that area and he can do this. It has been explained on numerous occasions that a formula can be found which will save the jobs of the 400 employees concerned and it could even at this late stage prevent the closure of the company. The Minister was very hopeful on a previous occasion when the company were in difficulties and took action to save the jobs there. I do not want to dwell too long on this aspect.

It would be better if you were to come back to the Bill.

I am talking to the Bill. It is very relevant to legislation of this nature. The Minister said that the legislation was designed to create employment and maintain jobs, both manufacturing jobs and international services. Those comments of his are on the record of the House. Surely the Minister can move in and maintain jobs. We are not talking about international services we are talking about manufacturing jobs, providing school buses and saving a transport system which is now in a shambles, with the Government again running away from their responsibilities. The Government have treated this company and their employees shamefully. I ask the Government at this late stage to rectify the situation and avoid closure. I ask them to organise the company and produce a formula with the company and the workers to save the jobs and, above all, secure buses for this country and exploit the opportunities for export. They must first provide city and rural buses and a school bus system. Something like £6 million is being capitalised to invest in the importation of coaches when we have our own coach building plant closing down, putting up the shutters and forcing people to sign for redundancy payments and unemployment assistance when they do not wish to do so.

I regret that in the entire IDA strategy of recent times, as in this legislation, there has been a shift away from the IDA policy successful since the inception of that authority of setting down targets for industrial promotion in the different regions in which they had control. While one might argue that they did not reach their targets on numerous occasions and had to revise and change these targets, we must get back to that form of policy. We cannot have a blanket target for the whole country. The White Paper talks of something in the region of 3,000 to 6,000 jobs in manufacturing employment spread over a year. This is not specific. There is a very big difference. Will it be 3,000 or 6,000? Can the Minister give us some indication when replying?

I hope that in the next few years the IDA in their promotion of industry in the different regions are not scrapping completely the system which they had in operation of targeting jobs for the different areas and trying to achieve those results during the course of the plan. I live in a remote part of the mid west region, in the south west, Loop Head peninsula area and I do not want to see the remoter areas losing out on job creation. We want a target to be set down for all the regions within an area and as far as possible the achievement of that target, either through the building of advance factories and direction of industry into those regions or whatever incentive is necessary to encourage investment and development in those isolated areas. We cannot allow a situation in which people are moving from the regions into the centralised authority and that is happening in the IDA. There seems to be a centralisation of that authority's operations in the Dublin office. We see the regions being played down and the status and decision-making of the regional managements being undermined by decisions being taken at national level. If that is happening, we certainly want to see an end to it. Originally the intention was that, for example, the office in the mid west region would make the decisions at local level for themselves but that seems to have changed in the last couple of years. The direction seems to be to centralise as much as possible and give as little power as possible to the regions. That is a backward step and if this trend is developing in the Industrial Development Authority, let them change it. The people who should make decisions about industries in a region are the people of that region. More power should be given to the regional management to establish agencies and make decisions rather than having the Dublin-based IDA office or the Minister dictating the pace, setting the scene and firing the shots.

We see under section 4 of the Bill a designation of the areas by the Minister under ministerial order and section 6 requiring the Minister to prepare a review of industrial performance every three years, which is desirable. However, it is the Minister who is involved. Why can the regions not prepare their own review? Let us see at local level what is being done. We do not want any blanket, overall review being done in head office and dished out with no detailed information available of what is happening in each locality. Section 10 provides for the Industrial Development Authority being responsible to the Minister and section 12 is concerned with the delegation of the Authority's functions. It is under that section that the regional sub-committees will be established.

I would like some clarification from the Minister on whether he is under that section giving some power to the regions, or is it just power in name? I cannot determine whether it is the intention to set up small regional boards, what authority they will have, how they will relate to the overall industrial strategy and who will be represented on the boards. Will public bodies have representation, or will it be just nominees of the Minister? The same applies to section 13, and section 25 gives more power to the Minister. This Bill is a complete and total takeover by the Minister of the IDA and the running down of the autonomy which the agency always had in making decisions regarding the different areas. The legislation shifts the money around, gives a bit here and a bit there, but there is no overall expansion in that regard. The heavy hand of the Minister is coming in, obviously attempting to get his fingers on the Industrial Development Authority and the industrial agencies. That is something about which I am not too enthusiastic.

I mentioned earlier the importance of small companies and the need to provide as much financial expertise as possible for these companies who often cannot afford it. It is very expensive for any small business to have access to this type of expertise which is so necessary to enable the companies to survive and prosper.

It should be possible for the IDA or some agency, with the help of local authorities, to provide a blanket system of financial expertise which would be made available jointly to groups of small companies who would then be able to avoid the necessity individually to provide themselves with such financial expertise. In the whole of the service industries we are losing millions of pounds because we are not able to produce components for the multinationals, for the computer industry. We have lost magnificent opportunities in this regard.

This should be possible if small companies were provided with some financial assistance and financial expertise by the IDA or SFADCo. It is not financially possible for small companies to provide themselves with expertise individually. This Bill could be useful from that point of view.

The Bill is also useful because it draws attention to marketing. I do not want to repeat what has been said on this subject but we must pay more attention to developing our marketing. Still, one of the first actions of the Government on taking office was to cut by £1 million the funding of CTT. I do not know the exact figure for that first year but I understand the CTT budget was cut by £1 million. I had an opportunity in 1982 to promote the sale of Irish fish in Cairo but I found there was nobody who could help in that entire area. There was only one agent, working on a fee basis, to cover most of Egypt and all of Africa. The Egyptian authorities told me in 1982 that they would be prepared to enter into an agreement with us and they would have taken all our surplus fish under a trade agreement. However, as I have said, there was only one agent covering the whole of Africa and Egypt. He could not give a full service to Irish industries; he did not have a chance because if the Danish Government or somebody else could play a bigger part that man would not be able to promote the Irish case at all. That is most unsatisfactory.

I am prepared to support the Government in any initiative they may take to provide new markets and finance for an agency to market Irish goods abroad. If we could produce quality commodities at the right price and can guarantee delivery on time, we could sell almost anything anywhere. At the time of the Cairo promotion I met a person from Galway who was selling in Egypt, representing Cross, Ballinasloe, who could sell because he was able to deliver on time and could give a back-up service.

We need manpower in our marketing efforts, not the twopence-halfpenny efforts the Government are putting into it. We must put more effort in future into design and after sales service and all this must be backed up by finance to enable our firms to do it properly. We cannot do it if we cut back on the budget of the very organisation we should be taking care of, CTT. We cannot expect them to go out to market our goods and to make opportunities for us in circumstances of that kind.

I said earlier that I am not enthusiastic about this Bill. There is a proposal in one section to establish management committees on industrial policy which will be chaired by the Department — more departmental and ministerial control of industrial policy. Our aim should be to have these committees providing local knowledge for local needs, chaired by people who know what the disadvantages are. However, it appears that such commitees will be centralised in Dublin. That should be changed and those committees should be chaired at local level throughout the regions. Those committees should work with the people who are concerned with regional development. I ask the Minister to tell us what are his intentions in this matter, will those committees be centralised in Dublin or based locally?

There are other sections with which I am not happy and I should particularly like to know the impact of section 21 which sets out the new selectivity criteria under which the IDA will be empowered to make grants towards the cost of fixed assets. The IDA will have to take into account a number of issues other than the operations of the company and the product it will be marketing and its prospects of long term viability. A series of criteria will be considered which heretofore were not taken into account. That will have to be done in a flexible but positive manner. The emphasis in this legislation seems to be to shift from fixed assets to technical acquisition. That is desirable but we should not try to get away from the idea of supporting fixed assets. This would be very important in areas where it is very difficult to locate industries. While it might be attractive to set up an industry in SFADCo, it is much more difficult to do so in isolated regions, particularly in the western counties.

There is a need to continue the system which has been in operation up to now and to provide substantial grants for fixed assets. It is much more attractive to establish an industry near a city or industrialised areas, but we should not do anything that would be to the disadvantage of setting up an industry in isolated areas. The Minister should take into account the fact that there are physical problems in locating an industry in isolated rural areas — telecommunications problems, bad roads and poor infrastructure. We have to provide some attractions for these areas; otherwise there will be no prospect of creating any jobs in the west.

I do not want to delay the House any longer, but I believe my comments have been constructive. This legislation is weak and will not revitalise industry. I consider that this legislation is the response by the Minister and the IDA to the National Development Corporation. We want more jobs but we do not want to see the spectacle of one State agency competing with another. We do not want any overlapping in this area. The Minister should be very careful because, if this is allowed get out of control, our industrial development will take a step backwards. As I said, this is a weak and feeble Bill introduced by this Government to tackle a chronic situation. The Government have lost a major opportunity to provide a constructive framework for industrial development over the next ten or 15 years. They have lost the opportunity to exploit the potential in many areas, particularly in the economic area, and to develop our own resources so that we need not import goods, but can create employment, as we are doing at present.

I welcome this Bill. The former Minister, Deputy John Bruton, when introducing this Bill was continuing the industrial policy discussed in the White Paper published in July 1984. At that time the Minister set out objectives and means of examining industrial performance and policies. He has done major work in consolidating a great deal of legislation.

The Irish are very conservative and this was noticeable when one listened to the Opposition speakers who seemed to be totally against change. They appear to be happy with the way the IDA are performing. Although the Minister has retained a great deal of what was in other legislation, he has made three significant omissions from the previous Acts. It is worth recalling the legislation which has been consolidated. In the Explanatory Memorandum, the Minister says:

... The Bill will therefore repeal and re-enact, with amendments, the Industrial Development Authority Act, 1950, the Industrial Development Acts, 1969 to 1981, the Undeveloped Areas Acts, 1952 to 1969, and the Industrial Grants Acts, 1959 to 1969, omitting provisions which are obsolete or no longer necessary. The most significant provisions being omitted are:

(i) IDA's powers to provide and arrange housing for employees in industry; (Sections 11 (iv) and 16 of the Industrial Development Act, 1969);

(ii) IDA's powers to pay reequipment grants (Section 38 of the Industrial Development Act, 1969); and

(iii) IDA's powers to investigate the effects of protective measures and to examine proposals in relation to the imposition or revision or tariffs, quotas or other protective or developmental measures and to summon witnesses in this regard;

I am very concerned about the closure of GAC in Shannon. The policy which established the setting up of that company at Shannon has not been questioned. This company are giving employment to many of my constituents, both directly and through the small industries programme. I am concerned that the Government do not appear to be providing the necessary funds and I appeal to the Minister to have the position reviewed before anything final is done in the Shannon area. This company have provided many opportunities for unskilled workers. While this company have not yet got any export orders, it appears that a breakthrough is imminent. They have sent a prototype bus to Darlington, Britain, and they believe they have reasonable prospects of success.

I want the Minister to convey to the Cabinet the concern of the people in my constituency about the possible closure of this company. The IDA have provided a tremendous service for this nation. At one time there was a drift from the land and people had to emigrate. In their efforts to tackle this problem, previous Ministers utilised the IDA to the best of their ability. Changes in technology and different skills which have developed over the past few years have meant that the Minister had to review the situation and he asked the IDA to put greater emphasis in different areas. I believe our greatest asset is our well educated workforce. They have a temendous grasp of the new technology.

Debate adjourned.
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