Vol. 365 No. 2
I move amendment No. 1:
In page 5, subsection (1), lines 8 and 9, to delete ", Trade, Commerce and Tourism" and substitute "and Commerce".
This is a technical amendment which is necessitated by the change in the title of the Minister from the Minister for Industry, Trade, Commerce and Tourism to the Minister for Industry and Commerce. The change of titles took effect on 19 February 1986.
I move amendment No. 2:
In page 5, lines 28 to 30, to delete subsection (2).
The Bill's provision for developing the service industry is a welcome one. International trade services now represent one-third of total world trade. The White Paper on Industrial Policy identified a number of target sectors which are judged to have considerable benefit for Ireland by way of new jobs and export earnings. These included financial services, including off-shore banking. I am disappointed, therefore, that the Minister chose to ignore the financial services sector in the Bill, especially in view of its potential for growth. The Irish banking sector has seen exciting changes over the past two decades. Technological change, and the achievement of internal markets within the European Community, will ensure that the next two decades will see even more exciting and dynamic developments. Experts have pointed out that just as the market in the financial services industry is in transition the world over, the industry in Ireland is moving from a relatively stable environment categorised by the distinct business and product segments through a period of rapid change where broadening and overlapping product lines and expanding distribution options will become more the norm.
The financial services sector covers a broad area, the associated banks and other banks, building societies and national savings. The market in which they operate has been seen to be having increasing demand for longer term saving mechanisms, tax efficiency and inflation heading. The operating environment will continue to change as consumer demands will dictate that the banks innovate to create new products. Experts have pointed out that there is no doubt that the domestic financial services industry will undergo a radical restructuring as they adapt to change with new competitive developments.
It is clear, therefore, that the Minister has a duty to ensure that all possible measures are taken to improve the effectiveness of Irish banking services as an instrument of industrial policy. I am proposing that we delete subsection (2) because it excludes the banking service from the list of eligible services. Deletion of subsection (2) will ensure that industrial policy takes due account of the productive and job-creating potential of the financial services industries by including all sectors of the financial services which engage in international trade. As it stands the exclusion of a banking service under subsection (2), except for consultation with the Minister for Finance, discriminates against a major sector of the financial services industry in Ireland.
I should like to point out that the numbers at work in banking and finance in 1984 exceeded 22,000 which is almost 50 per cent of the total number at work in the financial services sector. Employment in the sector doubled between 1971 and 1984. It is clear that the Bill should take cognisance of the changes which occurred in the financial services industry over the last few years and that will take place over the next few decades as the barriers between the financial institutions and markets are gradually eliminated and competition in the services increases. The sector embraces some 2,000 institutions and companies covering banking, insurance, building societies, venture capital, accountancy and management consultancy, stocktaking, leasing and finance companies inter alia.
It has been estimated that the financial services industries contribute some 6 per cent of growth gross value added to the economy and employ nearly 46,000 skilled personnel. Internationally that is a high growth sector which is likely to contribute strongly to economic growth here. Over the period 1972 to 1981 it is estimated that the numbers employed in financial services, for instance in the US, grew by 46,000. One must compare this with an increase of 95 per cent in Ireland. The industry should be encouraged by appropriate Government action to develop strong internationally traded financial services enterprises. It is appropriate, therefore, that financial services trading internationally should be eligible for assistance given to other sectors under the Bill.
Within the EC the liberalisation of financial services linked to that of capital movements will represent a major step towards Community financial integration and the widening of the internal market. The accent will be increasingly on the free circulation of financial products made ever easier by developments of technology. I contend that this will offer considerable scope for expansion to the financial services industries as the sector seeks to meet the needs of 320 million people within the EC market. Within a purely Irish context the Governor of the Central Bank noted last September that the development of an efficient financial sector is essential to economic development here especially from the point of view of financing foreign trade and channelling domestic savings into productive investment, Government policy, therefore, must be influenced by the fact that a modern industrial economy demands a very wide range of financial services. It is for that reason that I am proposing that we delete subsection (2).
The broad thrust of the Deputy's arguments is understandable and, indeed, has my support but the important words are that the Minister for Finance must be consulted. He does not have the last say. This subsection merely repeats, with only minor drafting changes, section 3 (2) of the Industrial Development (No. 2) Bill, 1981, which provides that the Minister for Finance must be consulted about the making of an order in regard to the banking service. We all accept that the Minister for Finance is responsible for the banking sector, for monitoring the international monetary situation and the protection of the Irish currency. It is appropriate that any order in regard to banking services should be made only following consultation with him.
The Deputy will know that it is not the intention to preclude the Minister from making an order specifying a banking service as a service industry for the purposes of this section. It merely places an obligation on the Minister to consult with the Minister for Finance before doing so. I believe that is a reasonable requirement and, for that reason, I cannot agree with the amendment proposed by Deputy Lyons. The services sector specified by the Minister includes international financial services. The Deputy may have missed that. We are really not at odds here. It is merely a consultation procedure that is logical within the context of governmental responsibility. I suppose, taken at its most devious, I would want to talk to the Minister for Finance, and he may want to talk to other people regarding integrity, potential and so on. It is merely a consultation process that does not in any way detract from the provisions of this Bill.
This section is an enabling one simply to encourage the undertaking of the provision of service industries in this country. It is not a devious subsection. It is merely to ensure that everything is being done in the right order and with appropriate consultation at Government level.
In section 3 (1) we have dealt with the provision of services. I do not wish to use the Minister's own word but, when speaking, he reminded me that perhaps there is something devious about the insertion of a section giving special treatment to such an important sector of our industrial financial services industry and, on the lines I have mentioned, its effects and benefits for the banking structure. In the Bill there has not been specified any other sector of the financial services than banking. I quoted a whole plethora in my earlier contribution — insurance companies, building societies, venture capital funds, accountancy and management, consultancy, stocktaking. None of those sectors has been singled out for special reference. That is what prompted me to re-examine why one sector of the financial services should receive this specific treatment under the provisions of subsection (2). There must be some reason for doing so, but I have not yet heard it. For example, why was none of the others picked out? Again, I hope it is not a devious subsection.
No, it is not intended to be so. I will give the Deputy the range of service industries specified by the Minister which are: data processing services, software development services, technical and consulting services, commercial laboratory services, administrative headquarter services, research and development services, media recording services, training services, publishing services, international financial services, health care services. As I said at the outset, it is merely a repetition of a provision already contained in the Industrial Development (No. 2) Act, 1981. So there is nothing sinsister in it. In fact, it was the Deputy's party who introduced the 1981 Bill.
In relation to banking services, I should say that, first, banks take deposits and, second, they are licensed by the Central Bank. Third, they come under the aegis of the Minister for Finance, unlike the insurance industry which is under the aegis of my Department, the Department of Industry and Commerce. Therefore, I can supervise them, have consultations and take decisions with regard to insurance. But the primary responsibility for banking is that of the Minister for Finance. There is nothing devious in the subsection. We are anxious to have a flexible Bill, one that will encourage development of the services industry. I can assure the Deputy that this is merely a procedural mechanism to ensure that the Minister with primary responsibility for the banking sector would be consulted before I would make an order allowing them to partake in the services industry.
I am reaching the stage of being almost satisfied with the Minister's assurances on this subsection. It is well to note that we have now had read into the Official Report a number of the sectors, as outlined by the Minister. None of those sectors carries any requirement to refer to the Minister for Finance. This one does have this extra requirement — perhaps superfluous would be a better word — to seek the approval of the Minister for Finance. I am not suggesting that those outlined by the Minister should be put in the same category to qualify for reference to the Minister for Finance.
The Minister has said, and I agree, that for the purpose of industrial development we need some flexibility in the provisions of the Bill. He has said that he wishes to see the provisions as flexible as possible. I go along with that provided that we draft the legislation technically to so ensure. I am sure the Minister would agree that there is no desire to have any section or subsection that would militate against the flexibility we require for industrial development. So far the debate on this section seems to indicate that section 3 (2) will not impede, discourage or erect a barbed wire fence around the financial services of the banking sector. If I can have that assurance from the Minister I will be satisfied.
I can give the Deputy the assurance that we are not endeavouring to erect a barbed wire fence around our activities in relation to the development of the services industry. On the contrary, we are anxious to ensure the flexibility to which the Deputy referred. I might refer the Deputy to the words used in subsection (2). The only responsibility on me is to consult with the Minister for Finance. In legislative, in parliamentary terms, the word "consult" is less onerous than, say, a phrase such as "the approval of", which would necessitate seeking the approval of the Minister for Finance. Here we only have to consult with him. That is a normal, logical procedure in Government administration. The Minister for Finance has primary responsibility for the banking sector and has serious obligations in relation thereto. We are merely following former procedure. The provision is not intended to be a stricture on the Minister for Industry and Commerce — there is no intention to put barbed wire anywhere. Given the primacy of the Minister for Finance this provision is necessary from the point of view of Government responsibility.
I am not sure that we cannot find another means to get around this than by withdrawing the amendment. The point I have made is reasonable and it has been understood by the Minister, who knows what I am trying to ensure there will be no inhibitions in the performance of this subsection. In view of the fact that the contributions from both sides of the House are on record, I agree to withdraw the amendment.
Amendment No. 3 should be to subsection (3) of section 4. It appears under section 3 on the amendment sheet. Therefore, a correction in the print is necessary.
I move amendment No. 3:
In page 5, lines 41 to 43, to delete subsection (3).
Further on there is another mistake in regard to another section, and subsections (2) and (3) have to do with designating areas. I have much to say about such designation. In the section, the Minister is taking power to designate areas and in subsection (3) the Minister may, with the consent of the Minister for Finance, by order terminate the designation of any area, or part thereof, as a designated area.
Will the Deputy deal with the amendment first and then we can deal with the section?
There is no difference. This subsection follows as another adjunct — it all has to do with the designation of areas. In other words, I could have put the amendment down to any subsection of section 4. The Minister is taking power to redesignate counties. This was not part of the original industrial development legislation — it is something new, and this is clear in the NESC report on the designation of industrial policy. The essential part of that report is that a larger share of designation would be focused on the many small towns and villages, the objective being to get the highest return from Exchequer resources, subject to location constraints in regard to approvals. The report stated that this is essential.
However, there is a move already to depart from the original industrial development structure. The NESC report argued that there are compelling reasons for adopting a concentrated approach to industrial locations and it recommends that designation be retained for specific disadvantaged areas defined on the basis of objective criteria. I have no objection to a review, but the report argues that the objective of industrial policy is to develop functions other than production, for example, marketing, distribution, headquarters activity and so on. The report argues that business functions often lead to higher infrastructural demands because they demand a higher level of infrastructure in a few areas from the point of view of having a more feasible industrial policy. It seems to me that much of this section has arisen out of the NESC report, and that is why I am not at all satisfied with aspects of the section. Perhaps the Minister would like to comment on what we have said.
Perhaps I should give some background details for the Deputy's information. The White paper on Industrial Policy stated that the Government believe that a more flexible and effective use could be made of the designation instrument to promote an even rate of industrial development throughout the country. It said that a detailed analysis would be carried out on the relative strengths and weaknesses of all the counties on the basis of objective criteria and at regular intervals.
The NESC, who have undertaken a number of studies on regional policy, were asked in September 1983 to advise on these criteria. The objective is to ensure that areas were designated for higher grant purposes for clearly defined industrial sectors and limited periods, so that limited resources can be continuously reallocated to the areas of greatest need and potential. The NESC completed their report in late 1985 and outlined a mechanism for determining designation along impartial lines, using objective criteria based on labour market imbalances. The ESRI in recent weeks advised my Department of the practical implications of implementing the NESC recommendations. Their report is being considered in my Department at present. However, all decisions on changes in relation to the existing designated areas will be made only after the matter has been carefully considered, not only by my Department but by the Government.
What is proposed in section 4 (3) is that the Minister, with the consent of the Minister for Finance, will have the power to terminate a designation of any area. I take it that this is what Deputy Lyons is concerned about. It is merely an enabling provision which will allow the Minister of the day to use the designation instrument in a more effective manner in the future. For designation to be effective, there must be a limit on the total area covered for designation purposes. Members on all sides of the House will see the inequity of the situation where certain areas continue to benefit from a higher limit of grant assistance for industrial prospects, irrespective of changes in their relative positions vis-à-vis other areas. The provision as it stands makes good sense in that it allows the Government of the day to use the designated instrument flexibly and effectively. Therefore I cannot agree to the amendment put down by Deputy Lyons.
I should add that as Minister of State I have been involved in industrial matters for a few years now. Practically all deputations that come to me are seeking designation for their county. They see it as a panacea for all their ills. They are jealous of other perhaps adjacent counties being designated and want the designation to be extended. One would have to accept that the national funds are limited. Any Government, on expert advise coming from say, the ESRI or on other independent expert reports which showed clearly that an area had gained in prosperity while some other area had fallen drastically in prosperity, would be able to use this mechanism of flexibility in the context of scarce funds for the promotion of industrial policy more intensively in one area as opposed to another.
I realise that this is a delicate instrument which would be used only after great care and consideration had been given by any Government. This Bill, when enacted, will carry through for quite a number of years and, by the nature of politics, will be the responsibility of a number of Ministers. Great care will have to be taken that it will not be used for by-election purposes or for frivolous reasons. Before even considering the inclusion of this section, the Minister thought it proper that the NESC should be commissioned to make an independent report. That report having come to hand, the Minister further thought it proper that the ESRI should examine the Bill and make recommendations. That report is now being considered by my Department. I do not imagine that this will be a quick process, as quite an amount of consideration will have to be given to it.
It is an enabling mechanism which I am sure any Minister would use only after great consideration of the effects on any area and the cost benefit analysis for the national economy and industrial policy overall. I consider it an important aspect of the Bill. This Bill is in many ways a consolidating and modernising Bill. It tries to bring into the legislative framework of modern, flexible approach which can be used by Ministers for quite a number of years to come. It should be seen as an enabling Bill that reflects the flexibility being brought into the overall legislation. It is a section which would want to be used with great care and there is no intention on the part of this Government to do anything but take great care in its use. In including it, we realise that many Ministers will have the same responsibilities.
I agree with many aspects of the Minister's contribution just now, especially concerning requests for redesignation. I have been asked in a number of places to give almost a commitment, on return to Government, to designate some areas, the most recent being the entire county of Wexford. This county's unemployment level has now surpassed that of my own county by about 2 per cent. That is only an example. People in the west are very concerned that some aspects of this Bill might lean that little bit too heavily on them.
I accept that this Bill seeks to consolidate all the Acts relating to industrial development over a 30 year period. That is to be recommended and I agree with it. However, we must be careful in the light of experience of much legislation. Up to now we have been designating particular areas for various levels of grant. We have disadvantaged areas, the western package, proposals for a number of smaller segments for higher rates of grant. If we include the agricultural industry, we are almost at the point of designating the whole county, not just small sections of it. Instead of designating sections for special allocations, we should be able to pick out a few areas which do not require designation and designate the remainder. That is the way it looks at the moment. I hope it will not continue much longer.
It is a bit frustrating that this Bill has been under consideration for at least four or five years and that this morning we are talking about a further report from the ESRI. Will the recommendations of this report be available in time for inclusion in this Bill before it becomes an Act?
I question the designation section of the Bill which says:
(1) Subject to subsection (3) each of the areas set out in the Third Schedule and any areas which the Minister with the consent of the Minister for Finance, by order declares to be a designated area shall be a designated area for the purposes of this Act.
(2) An order under subsection (1) may declare an area to be a designated area for such a period as is specified in the Order.
(3) The Minister may, with the consent of the Minister for Finance, by order terminate the designation of any area, or part thereof, as a designated area.
That section is a cause for concern. The proposal to give the Minister power to terminate designation offers the possibility for the first time of cutting out by order areas which traditionally have been designated areas. That sort of action should be taken in this House where it can be debated and fully considered by the House. Apart from the requirement to obtain the consent of the Minister for Finance, other restrictions are not placed on the Minister.
This Bill does not outline any criteria to indicate why an area might be designated. We must look for the criteria elsewhere. I looked to the White Paper on Industrial Policy and to the NESC report which I already mentioned. The White Paper on Industrial Policy says that the aim of Policy is mobility and flexibility in the economy so industry can be placed where it can make the greatest progress rather than stick rigidly to job targets or particular town groups. That is significant. As a result of the introduction of the White Paper, NESC were asked to advise on criteria whereby the relative strengths and weaknesses of all the counties could be ascertained. Pending completion of the NESC report, the Government asked the IDA to give priority in industrial location policy to allocating projects in areas where growth and job creation prospects were considered greatest, in areas which are most seriously affected by unemployment and job losses and in areas which have the highest prospective labour force growth. I do not have an indication whether these requests from the Government were replied to by NESC and the IDA. The Bill does not indicate whether the questions posed are criteria for the Minister who will make the decision.
The NESC report on the designation of areas for industrial policy suggests that the question of objective criteria for designation status can be addressed in two ways: that designation could be based on need, in which case the highest grant levels would apply to areas defined as economically disadvantaged or underdeveloped and that the higher grant level would be intended to promote a more rapid development in these disadvantaged areas than would occur in the absence of the more preferential grant treatment. The alternative would be to designate areas on the basis of economic potential. This would result in a grant system which would contribute to a maximisation of industrial growth in the economy and which might require that industry be actively encouraged to locate in centres where growth prospects would be higher and infrastructural costs lower through the realisation of economies of scale.
The report in chapter five, deals with designation criteria based on potential. It is their view that the increased emphasis should be accorded the potential approach to regional industrial policy. Why was it necessary to have that remark in the report? Is it because there is a shift from the regional development policy within the IDA? I hope the Minister can assure me that there is not a shift from IDA regional policy. However, that statement in that report causes me some concern. The bulk of the arguments put forward to support the NESC approach are based on work undertaken as part of studies done in 1967 in the Buchanan report, where towns are ranked in terms of the development potential. The present report, while it accepts that it is still desirable to update the assessment, says that if it is proposed to pursue a growth centre strategy it is likely that substantial changes in ranking would not have occurred since 1967. That is the first option.
The second option is concerned with designation criteria based on need. The report identifies a total of 39 separate potential indicators which might be taken into account if designation criteria were to be based on need. These would include demographic aspects, labour market aspects and economic aspects. The NESC recommend that the concept of need on which designation should be based should be labour market imbalance. In the past designation has primarily been based on income/employment/unemployment/ migration. The concept of labour market imbalance is a narrower criterion. The specific indicators which are recommended for measuring labour market imbalance are unemployment as a percentage of the 1981 labour force; the percentage increase in numbers unemployed between 1981 and 1985; migration of labour force — age of persons — as a percentage of the 1971-1981 labour force; growth in labour force on assumption of no migration between 1981 and 1991. It is suggested that each of these indicators be given a weighting and that counties should be ranked in order of need, on a league table 1-26 or something like that.
The argument for the de-designation in the west, for instance, has not been adequately made in economic or social terms. Even the NESC report concedes that sufficient information is not available to make the argument. If the new designation approach de-designates the west it will remove the one aspect of regional policy which in the past has helped to lessen the economic and social disparities existing between the more favoured and the less favoured regions of this country. The criteria have not been conveyed to us. I am afraid that the proposals outlined in the NESC report on the question of designation will be used from the enactment of this legislation. I contend that the proposals for designation are based on a narrow view focused purely in terms of industrial policy. The matter should be seen in the wider context as an instrument of regional policy.
The follow-on effect of designation on other activities has not been examined. For example, the effects in relation to FEOGA assistance for the development of an effective and efficient agricultural processing industry has not been examined. Similarly there has not been consideration of the effect of designation on agricultural development generally, within or outside areas qualifying for FEOGA grants.
If, for example, a policy of designation based on opportunity were to be adopted, it could conceivably result in the designation of a great part of the east coast and no other area of the country. Would it then be the case that all agricultural processing would have to be located in that area to obtain FEOGA assistance?
The Minister will bear with me for spending some time on this aspect because it is very important in relation to the whole question of industrial development now and in the future. Perhaps the Minister will give an indication of the criteria to be used in designation and redesignation with the consent of the Minister for Finance. Are the criteria used to be based on the NESC report?
I have mentioned a few areas but the question is of particular relevance to the west where the designation of disadvantaged areas had its foundation. I want to know what is proposed, what the thinking is, and what criteria are to be used. If a proposal is brought forward to de-designate the west, it will have the effect of alienating the population there. While the people of the west have seen the economic disparities lessen in the past they are well aware that a substantial degree of disparity still exists. People there are naturally concerned about these proposals. Many feel that the population structure in that part of the country is still rather fragile. People there would no doubt be able to testify that emigration, one of the greatest social and economic scourges of that community, has already re-emerged as a developing problem. I realise that the problem of emigration is not just confined to one area but it is manifesting itself much more strongly in the western counties where the population structure is still fragile. A decision to de-designate before that section of the country has had an opportunity of really establishing itself in a self-sustaining growth position would be catastrophic.
There are other areas of the country where emigration is taking a serious toll. I have mentioned several counties and I will not neglect my own county which had the dubious distinction of being the forerunner of the current decline in economic and industrial development and suffered alarmingly. I know attempts have been made to redesignate minute areas within Cork city and county for higher rates of grant. How will designation or redesignation be applied to that part of the country known as the Border region? What criteria will be applied there? In effect, section 4 of this Bill covers designation and redesignation in the north, south, east and west of the country. I trust the Minister will indicate what criteria will be in operation, with the consent of the Minister for Finance, in regard to designated areas for the purpose of this legislation.
The provisions of this section of the Bill can make a very important contribution for the future based on experience of the designated and the disadvantaged areas in the past. The shift from traditional industrial development to modern industry, the shift away from some of the traditional industries, are experiences that can be used in relation to industrial development in the future. We in the south know very well what are the effects of the closure of traditional industries. I agree that this Bill which represents a consolidation of many pieces of legislation is likely to be in operation for a substantial period. Consequently, all aspects of the Bill are of the utmost importance.
In regard particularly to the designation of areas, there must be laid down clearly established procedures. There are many areas of the country that are in need of industrial revitalisation. That is why I am concerned that this section does not outline a number of important factors which should be outlined. Much importance must be attached to the designated areas, to redesignation and to the qualifying criteria for designation.
I appreciate the constructive manner in which the Deputy has approached this section, a section that involves one of the more important aspects of the Bill.
As I said earlier, this is not only a consolidating measure. It is also a modernising measure. It is inevitable that when dealing with such a measure there is a fresh look at the whole area concerned and that one may wish to adopt a whole new approach to well established policy. In this context the question of the designation of geographical areas for the purposes of grants manifested itself as a problem. In the past number of years Ministers have had deputations from a number of different areas in relation to unemployment and a breakdown in the manufacturing and construction industries. The general consensus was that the designation of the various counties or townlands being represented by the delegations would be of vital importance to the re-establishment of economic progress. Almost every deputation I have met in recent years claimed that their individual areas were experiencing the highest level of unemployment in the country. At Question Time here almost every Deputy refers to the closure of some industry in his or her constituency.
Categorically.
This exercises the minds of Ministers and officials but a change in the matter of designation is an important matter. It is not a task that any Minister would take lightly. It would be very foolish to make any change in regard to designation without first having the benefit of expert advice. It was because the then Minister, Deputy Bruton, wished to take a fresh look at designation that he commissioned a report on the matter. Designation is only a weapon in the hands of the Government and in the hands of the IDA to promote industrial progress. I have said here many times that designation per se is not a panacea for ills of any region. There are many other equally important factors in the matter of industrial progress.
Immediately one can specify such factors as the availability of third level education which would produce technologically qualified graduates, the environment that might appeal to an enterpreneur, the availability of qualified labour and good industrial relations. The latter are as important to the promotion of industrial prosperity and to the success of any undertaking as is designation. This is because the amount of money that could be lost because of bad industrial relations could exceed by far the marginal increase in the grant to an industry. I would regard industrial relations as being far more important than the gaining of a high level of grant and we are talking here about a maximum differential of 15 per cent.
In the context of the White Paper on Industrial Policy the question of designation arose. The Minister took the only course that could ensure a new view of designation and consequently he asked the NESC to prepare a report. That report is entitled Designation of Areas for Industrial Policy and I quote from Chapter 7.5 which is entitled “Objective Criteria for Designated Status” and which indicates the philosophy of the council to designation:
While recommending that designation status should be retained for certain specific disadvantaged areas, the Council believes that the criteria for delimiting these areas, and the periods for which the preferential grants might be available, should be drawn much more tightly in the future. Specifically, the Council recommends that designation status should be given for a maximum period of five years after which it should be reviewed. Designation status should encompass, at most, 25% of the country's labour force. Ideally, designation would be focused on as small an area as possible. Data limitations, however, suggest that in most cases the county would of necessity form the basis of the review. Designation status itself should be awarded only on the basis of objective criteria and specific position relative to national average. The criterion on which designation status should be assessed should be labour market imbalance which is intended to encompass a comprehensive measurement of unemployment. The indicators which should be used are unemployment rate, growth in unemployment, migration and labour force projected growth. These indicators should be aggregated with a higher weighting for the unemployment variables.
The NESC came up with a different attitude to designation. They saw it as more flexible and not something permanent. One instance is the Ferenka factory in Limerick. Designation was to be for a short period and to give an impact to attack industry where there was a suddent major loss of industry. One can see the philosophy of the NESC when they say that designation should be (a) in the smallest area possible and (b) only for a period of time. They see it as a tool to be used where and when a major problem should arise.
That is a different attitude than prevailed under the Undeveloped Areas Act, 1952, which established designated areas for the purpose of the IDA. This is an independent report with more modern attitudes. It does not see designated areas over a long period of time as being the most suitable IDA weapon. The Minister considered the report and called for a further report from the Economic and Social Research Institute. We should not be afraid in any legislation to provide a section that could take account of a more modern attitude to industrial development. It would be unwise for any Minister to change something that has been there traditionally without knowing that it is very sound footing and without taking the advice of independent consultants. That is nothing devious in this. We have tried in the Bill to take a modern look at industry and at the weapons available to the IDA. There have been a number of changes.
In the last few years the IDA have gone into the regionalisation of small industrial boards. They have taken on the industrial services sector. These were innovative moves which were thought out by the IDA. There is nothing wrong with taking an innovative look at designation. The advice of consultants is that designation could be used more effectively in small areas and for short periods of time. In other words, it is an intensive treatment mechanism. I see that as a good thing. We should not be afraid to take different attitudes.
The criteria suggested by the NESC are not bad ones. They compare different areas of employment to the national average rate. There are many other aspects to it: the growth in the labour force, the migration of people from one area to another, the sudden collapse of a major industry and the availability or lack of availability of infrastructure. These are all components which show whether or not an area is progressing well industrially. It would not be possible to inscribe all of the possibilities in a Bill. The Minister should take the final decision but would be very unwise to do so without full consultation, as has been done in this case, with the independent research institutes.
The Telesis report recommended a reduction in the rates of grant assistance. There is a feeling in Europe that the level of grant assistance is on the high side. We are recognised as being a developing country. We have the highest rates of grants allowed under the age code for industry in the EC. It would be a good idea to look at traditional mechanisms. We should not be afraid to change them where it is felt that there might be a better balance achieved and more progress made by using old weapons in a new way. That is what this is doing.
The ESRI report has been received only in the last three weeks. It will take quite a while for the Government to consider the matter. There will not be any immediate moves made for some time. It will give Ministers in the next Government, or in the next two or three Governments, the facilities to use the weapon of designation in a more specialised sense and to pick out growth centres or smaller areas that need intensive treatment over a short period of time. I do not think there is anything negative, dangerous, devious or unwise in the provisions of section 4. We have spoken about section 4 rather than about the amendment because they are intertwined.
The Minister accepts that what I wanted to elaborate on was the question of the designation of areas which is contained in section 4. I agree with the Minister that the designation of areas is not the be-all and end-all of industrial development. I am sure that the Department could indicate that where grant aid was increased from 40 per cent to 60 per cent in many designated areas it was not successful in encouraging development in these areas. It is useful as an encouraging factor to have industrialists visit an area which has the designated area status for the higher rate of grant and other criteria such as infrastructure, communications and industrial relations. As the Minister rightly indicated, with so many people unemployed, each Deputy in each constituency claims, with justification, that his area is the hardest hit. This helps to highlight the situation in the industrial arena.
The Minister talked of innovation and, of course, the whole purpose of the exercise is to create an innovative spirit. I would be concerned about the urgency which exists in our country at this time for legislation such as this. The Industrial Development Bill, 1985, is its title and we dealt with that in the first section. Because of the industrial situation and the number of jobs which have been lost in manufacturing and supporting industries each and every one of us with responsibility at whatever level would hope to see this Bill go through the Oireachtas to give encouragement to reversing the trend over a recent number of years of more and more job losses. The workers involved in industry would be hoping, dare I say against hope, lest I dampen any enthusiasm there may be in the country for an Industrial Development Bill, for a situation where the downwards trend would be corrected. That is why I put tremendous emphasis on the urgency which should be seen in our discussions and our passing of this piece of legislation.
Whether areas are designated or redesignated, in this debate and in the enactment of this piece of legislation we must give hope and encouragement to everybody involved in industry, manufacturing, services, and small businesses. We want to include — and I certainly want to include — all strata of industry and not have any hang-ups or emphasis on any one particular sector because the entire industrial sector needs a boost at this time and an indication from us, the legislators, that by the production of this Bill and its passing through the Oireachtas, we realise the industrial position we are in and see the need to give this encouragement and boost.
As I have already indicated in my previous contribution, designation and redesignation take in the entire country, north, south, east and west, urban and rural, village and city, town and country. The Minister referred to the White Paper. In 1984 people waited with bated breath for a document which would lift morale and raise the spirit of industrial Ireland.
To be quite honest, when the White Paper did appear in July 1984 it fell very far short of what all of us had hoped for. The principal let down in the White Paper is that it offered no hope of making any real impact on mass unemployment which stood at around 211,000. With the publication of the White Paper hopes were definately raised. Unemployment, which I quoted as having been 211,000 at that time, is now registered at well over 240,000. We have mentioned emigration. With the White Paper, the introduction of this Bill and the ESRI reports, can we now put the whole thing together? With that much information available to them and the availability of all the studies which have been done, can the Government now embark on a new, improved industrial policy which is so badly needed at this time?
I want to be as hopeful as industry in general. People seeking employment in industry are looking to this legislation for a real new beginning in addressing the problems which we have in creating an atmosphere conducive to the expansion of industry. If we can achieve that through this Bill, then we will be doing something positive for industry, for the people who are prepared to invest in it, for the many thousands of people who have lost jobs and for the many thousands of young people who are at this time in a state of hopelessness about the future. Can we give them some hope, some standard, some criteria, something to hold on to and make it worth their while to achieve academic qualifications at school? This matter of industrial development and the creation of employment has to be seen in perspective. Collectively we have a tremendous responsibility to all sectors of industry and to our young people seeking employment in their own country. We are charged with that responsibility and we had better face up to that fact and ensure that this Bill will create an atmosphere for industrial expansion. When published in 1984 the White Paper did not create that measure of confidence, nor did it inspire confidence in the industrial sector.
There have been many studies carried out and a great deal of work done on this legislation over the past five years. Much depends on this long awaited legislation and we must emphasise that there will not be any section, subsection, paragraph or line in this Bill which will inhibit industrial expansion. Section 4 (3) reads:
The Minister may, with the consent of the Minister for Finance, by order terminate the designation of any area, or part thereof, as a designated area.
That terminology at this particular time is dangerous because there may be a time in the future when areas would profit by designation for a higher rate of grant.
The Deputy is going outside the amendment.
I beg your pardon, Sir, I may have been but I have come back to the section. At another time the wording of that subsection might be acceptable but not at present. Every area of the country, areas which show even the slightest trace of industrial potential, areas which suffered the loss of potential industries, areas that have the necessary labour force, infrastructure and so on need industrial expansion. In my view it is negative to talk about terminating the designation of an area or even part thereof. It would be better if we did not use such terminology at a time when we should be trying to encourage industrial development.
I hope Members will make an effort to ensure that every section, subsection, paragraph and line of this Bill will encourage industrial development. Not one word in this legislation should hinder or cast any doubt on industrial development because a great deal depends on passing legislation that will encourage positive thinking not just among legislators but outside this House where it matters. That is why I am concerned to see a negative aspect in this subsection terminating designated areas without a criterion being outlined. I would like the Minister to put on record the criteria by which the Minister for Industry and Commerce, with the consent of the Minister for Finance, may terminate by order the designation of any area, or part thereof, as a designated area.
I agree that there are many other aspects of industrial development besides designated areas. I can quote as an example an area in my constituency, Mayfield, which has a voting population of 17,000 — and the total population is even greater. There are many towns in the country which do not have such a high population. There is no industrial development in Mayfield, Cork city. There are 33 people in industrial employment in that huge area. There may be other areas where circumstances are similar but in Mayfield there is no industrial manufacturing industry and no industrial sites. This Bill should give areas like Mayfield some hope that industrial development will take place there in the future. This Bill should be seen as a new and determined beginning based on experience and used efficiently to change the present position and to encourage the setting up of industries.
The Minister says that designation is not the be-all and end-all of everything, and I agree, but the provision of the necessary labour force, good industrial relations, a proper communications network — roads and telecommunications — is very necessary. If there are areas where industrial development is being hindered because of the lack of essential services, we should address ourselves to those problems. We are doing nobody any service by just mentioning the need for environment, industrial relations, labour force or communications. If they are required in areas and they are not there, then we had better address ourselves to providing them. That would be more positive than saying that we will terminate the designation of an area of part thereof. I do not want to have an awful hang-up about the designation of areas, but I feel that an important aspect of encouraging industrial development is designation of an area for higher rate of grant. I am concerned at the criteria by which the Minister may in consultation change the designation, terminate it or reduce it.
Of course we may, as I hope, arrive at a situation where the designation of an area will help that area to take off and in time it may be so successful in industrial development that it will be able to stand on its own merits and development at the normal rate of grant without the extra amount of grant that follows designation. Such development being productive, well managed and so forth, many other areas of the country would require that assistance to help an operation at the start after it has taken off.
I have said that in the future that section may be relevant. At this time it is rather negative to have it there. The Minister has said — I agree with him — that this industrial development legislation might just be around for a long time because in this Bill and even in this section we are referring to 1952, 1969 and so on. That is why it is so important that every aspect of it should encourage a progressive attitude to industrial development. That is why I put down that amendment. I thought it a little negative to be talking about de-designating areas or part of areas at this time.
I can accept Deputy Lyon's reservations and it is proper that we have a full discussion about the matter here. There have been two major publications on industrial policy in recent years. The first was the Telesis report and the second was "Industrial Policy" which was published in July 1984 by the then Minister for Industry, Trade, Commerce and Tourism, Deputy Bruton. It was the Government's expression of industrial policy's direction and what it could achieve. It was an innovative policy. It pointed to new directions and new attitudes and generally took a more modern view of industrial progress and the need for Government to take new views towards industrial progress. I cannot agree with Deputy Lyons's comments on it but I understand why he made them. The industrial policy White Paper was a substantial input into the evolution of industrial policy. A large part of that White Paper has been transplanted into legislative form in this Bill. Other State agencies and Departments also have a responsibility here. Córas Tráchtála, the IIRS, the Department of Communications, etc., all have a part to play in the comprehensive attitude to the development of our industries.
I am trying to confine myself to the amendment under consideration. It is only an enabling amendment, nothing more. I do not see it being used for quite some time because of the consideration that would have to be given by any Minister to the implications of a decision and need for consultation. Undoubtedly the comments of the NESC fortify section 4 as it stands. That independent recommendation that designation should be focused on a small area and for a specified period is an innovative approach to the designation weapon which we must take note of, and section 4 takes note of that approach. I feel that the Deputy's concerns, though proper and well expressed and which I can understand fully, should not rule out the existence of this enabling section. If an area now designated and having an employment rate below the national average suddenly for some reason or other attracted a major, huge industry and, of course, the supply industry and, therefore, the area and the people there prospered, taking into account that any Government have limited resources at their disposal, would it be proper that that area, now very prosperous, should continue to be designated? Would it not be wiser for a Minister to say, "You have done extremely well. We cannot give the higher rates across to your area. Other areas of the country need to be designated——
I accept that. I mentioned it.
——and we wish to tell you to carry on, you are doing well, you are not going to be designated, we are going to move to some other county or area that needs to be designated"? That is all that is encompassed in this amendment. I think it reasonable. It would not be possible to specify the terms, conditions and criteria to be used when one decides to designate or de-designate but it must remain for the Minister. No Minister will put his neck on the block by saying that he is going to de-designate an area without the fullest consultation and with full argument for such de-designation. It is only an enabling Bill. Even before the section was finally included the whole concept received very serious consideration. The NESC report was important in that area. The subsection will not be used in the very near future. It can be used only very wisely and after fullest consideration.
I take the Deputy's concern. I, and I think the Deputy, believe that this Bill will remain on the Statute Book for some time. It is only enabling and reflects flexibility in the weapons and armoury of the Minister and of the IDA in relation to industrial progress. It is only an enabling Bill. Even before the section was included the whole concept got very serious consideration. It will not be used in the very near future. It will be used only after the fullest consideration.
I take the point the Deputy is making. This Bill will remain on the Statute Book for some time. It is only an enabling Bill and reflects the flexibility in the armoury of the Minister and of the IDA in relation to industrial progress. No Minister would come into this House and lightly make an order to dedesignate an area. It would have immense implications for his party if he did the wrong thing. One would need to have good justification for dedesignating any area. I accept the Deputy's concern, but it would be a very unwise Minister who would move an order to dedesignate an area. I assure the Deputy that this section is necessary but it will have to be used very wisely by any Minister and I do not think any Minister will be acting on it in the short term.
I thoroughly agree with the Minister's last comment. It would be the nearest thing to political suicide for any Minister to make an order to terminate the designation of an area. He would need to have proof that by virtue of progress in the area, the designation was no longer necessary. The political considerations would have to be taken into account. That section deals with the termination of designation of any area or part thereof. But in the broader context the Minister must accept that areas have gained because of political considerations. I do not hesitate to say that if we in the Cork region had a stronger political input in government, practically the whole of the city and county of Cork would be designated because of the way they have been decimated industrially. Political considerations will always be part of any Minister's decision on the designation or dedesignation of areas.
Is Deputy Lyons going to withdraw his amendment?
I do not want to withdraw it because it is very relevant. What other option do I have? I will be guided by the Leas-Cheann Comhairle.
If the Deputy does not withdraw it, it will have to be put to the House.
I have given my reasons for putting in that amendment. More talk about it might have the opposite effect to what I was trying to do. Since the Minister has indicated that it is just an enabling measure I am prepared to withdraw my amendment.
I move amendment No. 4:
In page 6, subsection (2), line 5, to delete "next following that".
Section 5 (2) as presently drafted will have the effect of making the occupiers of an industrial undertaking liable to rates for one year before remission can be applied for the following ten years. The intention is that the remission should apply in the year in which the premises is first rated and the following nine years and the amendment as set out will achieve this effect. It is to ensure that if a person takes occupation he will not have to pay rates for the first year which the other wording would have necessitated. It is a clarifying amendment to ensure that the rates will not have to be paid for the first year. It is a helpful amendment.
The reference to subsection (3) has to be considered as well. During the Second Stage debate this aspect was highlighted by some speakers. This is a welcome change in the Bill.
I move amendment No. 5:
In page 6, line 29, to delete all words after "1986" and substitute the following:
"and in any year thereafter, prepare a review of national industrial performance in respect of the previous year and shall cause the review, and the conclusions arising from such review, to be laid before each House of the Oireachtas."
There is a printing error in this amendment. The phrase "in any year" is incorrect and should read "in every year". The section provides that, every third year after the year 1986, a review of national industrial performance in respect of the previous three years should be prepared and the review and the conclusions arising from such a review should be laid before the House. Preparation for this legislation and the reports and examinations have been going on for years. Given the situation we are in at the moment, that timescale is unacceptably long. I am suggesting that we have a report on industrial performance every year at least until such time as this country is restored to the level of industrial activity it had some years ago.
I do not believe it is practical or useful to have a formal review of industrial performance on an annual basis at ministerial level. It would not be possible to get the drift of domestic and international changes every year. We have the annual industrial report of the IDA on an annual basis and that gives a very detailed and intimate assessment of the success or otherwise of industrial policy as seen by the IDA. Córas Tráchtála Teoranta give an annual photograph of the industrial situation. When one is looking for the pulse of industrial change one needs a period longer than a year to see such changes evolve and to see their effects. A year is too short a time to do that, given that there already exists quite an amount of annual published accounts and commentaries on industrial policy. A ministerial report which will reach conclusions and is laid before the Houses of the Oireachtas needs to have substance which would not be the case if it was done on an annual basis. It would be possible to have a substantial review on a three year basis when the effects of policy could be seen and it would also be easier to see if changes were needed. A three year period is short enough but it is necessary to achieve a clear vision of what is happening and what needs to be done to rectify adverse movements. It would also allow a Minister to review and reach conclusions on industrial policy and the fact that it would be debated in the House is constructive and good.
We also have an annual debate on the Estimate for the Department which affords Deputies an opportunity to discuss annual problems arising in industrial policy. However, we are talking about an important review of industrial policy and to do so on a three year basis would be more comprehensive, farreaching, meaningful and more relevant to the needs of the Minister, his Department and this House.
The section does not mention a review of policy annually; it says "national industrial performance", which is quite different from policy, with hindsight, if we had had a performance report over the last number of years — go back as far as you like — we would have seen the lack of performance and would have been able to address any problems in that regard. Instead, a White Paper was published in July 1984 and we had to wait until April 1986 for the Bill to give effect to the White Paper. During that period the loss of employment and economic activity in the industrial area continued to take a downward turn and that is why there should be an annual industrial performance review. The Minister said that we could discuss this in Estimates time but I am sure he will agree that the debate on the Estimates is not the best arena to address something as important as national industrial performance. We know the structure: the Minister delivers a 40 page speech, the spokesperson for the Opposition replies in another long speech; other speakers in the restricted time available — probably on a Thursday when we finish at 5 p.m. — contribute to the debate and the Minister gets 15 minutes to reply. This would not do full justice to industrial performance.
We appreciate that the State agencies provide us with annual reports and from studying those reports individually it is obvious that there should be a forum for discussing them collectively at a time to be allocated in this House. We should discuss the relevancy and effectiveness of the reports of the State agencies in so far as industrial development is concerned. Despite what the Minister said, I still think that a three year period is too long in which to review industrial performance.
A three year review of national industrial performance is an improvement on the present position where no review is specifically devoted to national performance. Policy would be affected by the conclusions reached as a result of this report and obviously the Minister will reach conclusions. Action will be taken on various aspects of industrial policy. I disagree with the Deputy when he says there is a need for an annual report, because that would not give sufficient time to come to major policy conclusions. We need to see the drift of the economy and what is happening outside the economy. However, there is a need for a mechanism which would enable us to see what is happening annually in the economy.
I suggest that the budget debate is the right time to discuss industrial policy, as the budget is the most important financial instrument which comes before the House annually. There could be other mechanisms also, including the Estimate of the Department, which is an annual review of industrial policy and performance. There are also other parliamentary occasions on which this matter could be discussed — Question Time, a question on the Adjournment and in debates on sectoral interests involving industrial policy. There are many reports published outside the House every year on industrial performance which would enable a Minister to keep up with events. The CII produce occasional publications which would keep everybody on their toes. The FUE also bring out publications regarding sectoral interests. There are also international comments on the economy from the OECD and the EC. There are many mechanisms whereby people can be kept fully informed of what is going on.
I do not see any difficulty in this area. What is intended is a more important global review of performance upon which one could reach policy conclusions that may require legislative or other action. One can only reach a conclusion based on performance over a period because annually one sees shifts and movements. Over a three year period one has a better opportunity to get an overall view of drifts in economic and industrial policy and performance. That is the type of review that is intended. It will be a major review that will lead to policy decisions and I do not think we could do that on an annual basis.
I understand the Minister's thinking on this because there may be many reports emanating from different bodies in the course of a year. However, the timescale allowed to put them together so that a conclusion can be formed is rather restrictive bearing in mind that time has to be allowed for the Houses of the Oireachtas to debate them. Will the Minister consider getting his Department to publish on an annual basis a conclusion or an analysis of the annual reports of the various State and semi-State agencies involved in industry and commerce as well as reports issued by the OECD, the IIRS and so on? The Department should issue a report based on the conclusions and the performances of the bodies I have mentioned. We should get an annual report from the Department on the performance of industry countrywide.
It is because of past experiences, and the changing pattern in industry and technology, that I wonder if there is a danger of us losing out further in our efforts to keep abreast of changes because it will take three years to review our performance. I accept, as the Minister said, that it is open to us to raise questions in the House but the matter is of such national importance that we should have an annual analysis of the reports of the various agencies. We should be given the observations of various commentators such as the Governor of the Central Bank and so on. They are relevant to industrial promotion.
I will bear in mind what the Deputy has said. Any publication of importance, whether it is issued by the OECD, the CII or NESC, is considered in my Department. Quite often we have responded in public to suggestions in such reports. They are all part of the work reviewed in the Department and brought to the attention of the Minister. We respond to such reports because we recognise their importance. Where necessary we take action. What is proposed in the section will mean that the views expressed in the annual reports will be taken on board and effective action will be taken at the policy end. There is adequate response by Ministers, in the House and outside, to reports on economic policy and industrial performance. I am not aware of any Minister who has not been kept well informed and reacted in a positive sense to suggestions about changes on the industrial scene. We have always been kept on our toes by the Opposition and outside interests and that is the way it should be. I should like to assure the Deputy that we react very quickly to any changes on the industrial scene in the best interest of industry.
Amendments Nos. 6 and 7 are related and may, by agreement, be taken together.
I move amendment No. 6:
In page 8, lines 11 to 13, to delete subsection (3) and insert the following: "(3) The terms and conditions of every delegation made by the Authority under subsection (2) or under section 4 of the Shannon Free Airport Development Company Limited (Amendment) Act, 1970, as amended by section 6 of the Shannon Free Airport Development Company Limited (Amendment) Act, 1983, and by section 9 of and the Fourth Schedule to this Act shall be subject to the approval of the Minister.".
This is a drafting amendment designed to make delegation by the Authority of their grant-making powers to Shannon Free Airport Development Company Limited, subject to the approval of the Minister. Section 4 of the Shannon Free Airport Development Company Limited (Amendment) Act, 1970, as amended by section 6 of the Shannon Free Airport Development Company Limited (Amendment) Act, 1983, does not make explicit provision for ministerial approval of the powers delegated to the company by the Authority. The amendments will make such delegations subject to the same approval procedure as would apply to the delegations made by the Authority to boards and committees constituted by them. Amendment No. 7 is a drafting amendment consequential on amendment No. 6 which provided for the approval of the Minister of delegations of grant-making powers to Shannon Free Airport Development Company Limited.
I do not have any objection to the amendments because they do not change the section greatly from what is in the Bill. I should like to make an observation about the success that has been achieved in the area under discussion. Would the Minister not consider giving statutory authority to other regions, any or all of them — the south-west, north-west, north-east, south-east, the midlands and so on? It is time that the success of the Shannon Free Airport Development Company in the mid-west region was used as a criterion for similar much needed development in other regions. In saying that I am acknowledging the success that has been achieved in that region. We should examine all of the other regions with the same objective in view. For example, I am sure the Minister would like to do something for the south-east region. I should like to see consideration given to the south-west where one step has been taken in the right direction by way of the legislation enacted for the establishment of the free port area at Ringaskiddy. In the light of the success achieved in the mid-west region, perhaps the Minister, his Department and the Government would give consideration to the establishment of similar statutory authorities in other regions.
We have done this to a large extent by devolving full responsibility for the decision-making process in relation to small industry to the regional development offices. We have established regional development boards in all the regional areas of the IDA. I think that is what the Deputy has been advocating. In relation to industrial policy, the grant-making process, we do not need new legislative measures. The IDA have been empowered to do so and the Minister's approval has been forthcoming for the delegated responsibility in relation to small industries to these regional small industry boards. Therefore it has already been done; the regional small industry boards have been established. For example, there is one in Cork and one in Waterford, which are fully operational and where the initial response has been most encouraging. Indeed a number of approvals for small industries have been granted.
Obviously that has been an effective weapon employed by the IDA. It renders it easier for industrialists to go to the IDA locally with problems. In addition there is the one-stop shop which has also been created, where there is a mixture of State agencies all housed in the one building, for example, CTT, the IIRS, IDA and so on, where an industrialist can feel close to the people with whom he is negotiating and have all of his problems analysed and resolved within the one building. That is a very innovative move and is a reflection of Government thinking in relation to the whole of industrial policy. Therefore we do not need a new legislative body. We have been able to establish the small industries boards under existing legislation. We are here allowing the Minister to sanction the delegation of IDA responsibility to the various committees. For the information of the House, there are the executive board, the enterprise development committee, the small industries committee, the international services committee, the domestic industry committee, the overseas industries committee and the regional small industries boards. This is in order to render the work of the IDA more professional and make their task easier. What has been done has been innovative and progressive and I do not anticipate any other moves to be necessary at present.
I agree with the Minister that the establishment of the regional boards by the IDA constituted a step in the right direction. However, the effectiveness of the regional development boards — take as an example the south-west regional board — to date has been marginal only with regard to the standard and volume of development required. In this respect they have a huge task on hand. For example, the regional development board undertook an immense task in the south-west area. I compliment them on the measure of success they have achieved to date but it is marginal only in the context of the huge need obtaining in that area. Indeed the experience gained by the mid-west region should at least be considered, with a possible extension to other areas needing a boost by way of industrial development. I am not saying that the regional boards, as established, are incapable of achieving what is required but we will have to give them more legislative authority to strengthen their hand. The Minister may say how successful boards have been in other areas. My experience of the south-west region — the one in respect of which I am best qualified to speak — has been that their success to date has been marginal only in the context of the task facing them.
What I am advocating, leading on from the success of the mid-west region, is that we should extend those facilities to those other areas that have suffered so badly, industrially in recent times. An area such as the south-west should be given the required power, functions, statutory authority of a regional board, if necessary calling it the south-west regional development board. There is such a board there already. Perhaps they should be given statutory power so that they can address themselves in a more meaningful way to the industrial situation obtaining there. If there are other regions requiring the same encouragement to reverse the trend of failing industries, they should be given an opportunity to do so through this Bill. Then we would be able to get off with our industrial development plans.
The Deputy seems to be suggesting that some IDA statutory powers in relation to large industries, such as international servicing, would be delegated to regions, per se, with full autonomy. That is not necessary and it would not be wise. The IDA are charged with the administration of Government policy on Industrial development. They have a substantial corps of experts not only in Dublin but in their regional offices. I do not believe it would benefit regional development should any particular region be delegated with responsibilities now in the IDA. It would lead to regional imbalance. If all the regions were to have such functions there would be a serious duplication of manpower and resources.
The IDA are charged with the regional development of the country as a whole and they must ensure that there is a balance in regional development and industrial policy. The present structures are necessary and sound. In relation to small industries, decision making has been delegated to regional boards. The IDA are responsible overall because they must ensure regional balance. The regional small industry boards have a mechanism which tries to ensure that the boards will have their problems dealt with under one roof, so to speak, so that final decisions will be made locally.
That is as far as I would like to see devolution of responsibility going. To suggest that one area, the south-west, should have major responsibility delegated to it does not meet with my agreement because it could be damaging to the national interest.
I did not indicate or insinuate or attempt to suggest that total responsibility of the IDA would be spread throughout the regions. I accept that the IDA are charged with overall responsibility for national industrial development. I was emphasising that the regional development boards are being given certain responsibilities in regard to small industries, and I did not suggest it should be otherwise, but present legislation inhibits their efforts to be as effective throughout the regions as they would wish. That effectiveness should not be constrained in any way.
That is not to suggest that these boards, locally, should take over responsibilities with which the IDA are charged overall. My concern is that the regional boards would not be restricted in any way by any overseeing activity of the IDA. I doubt very much if the IDA would inhibit any of the regions. Neither am I saying that the regional boards should be given, or that they would look for, responsibilities proper to the IDA. However, every consideration should be given to the regional boards to expand, subject to their terms of reference. If the experience of success in the mid-west could be applied to other regions which need development, we should try to achieve that.
I have not heard any complaints about the work of the small industrial boards. I am aware of their composition: they are well balanced as between the IDA, local interests, industrialists and other State agencies such as CTT. They are not inhibited by the IDA and they have specific responsibility delegated to them by the IDA. In time we hope they will be very successful. I can assure the Deputy that any complaints received in the Department will be investigated immediately. The IDA are throwing their weight behind their efforts in order to ensure success. They have been welcomed and have been a success. Local people like the idea of going to a local officer to have all their problems resolved. Given a proper chance, they will be very effective. They need time. I do not agree that they have only a marginal influence. My information is that the numbers of inquiries and of projects are on the increase. This has been an electric shock which has been administered rather successfully. This would be an ideal subject for comment during the three yearly review mentioned earlier. I assure the Deputy that if any complaints come to him or any other Member of the House they will be examined fully. My understanding is that they are working well and have the full support of the IDA and the people involved locally.
I move amendment No. 7:
In page 8, lines 19 to 27, to delete subsection (6).
I move amendment No. 8:
In page 8, lines 31 to 35, to delete subsection (2), and substitute the following:
"(2) A directive under subsection (1) shall not apply to any individual industrial undertaking or to giving preference to one area over others in regard to the location of an industrial undertaking.".
The experience in relation to the Hyster plant in Limerick was sufficient to prompt me to put forward this amendment. The IDA specialists had completed an agreement with that company and, as far as my information goes, the Minister was also in agreement with those proposals, but the Government scuttled them. In this section the Minister is reserving the right, to put it very simply, to move the goalposts and he is setting down a restrictive criterion for the Industrial Development Authority. The sad experience of Hyster is typical of what happened and may happen again unless we ensure that there are provisions to guard against the loss of an industrial plant. I said at the time that the decision in that case was disgraceful. I hope that situation will not arise again.
In relation to the Hyster plant I disagree vehemently with the Deputy. The Industrial Development Authority have a serious responsibility to ensure that the terms associated with any application for an industrial grant are reasonable, are a good deal for the country and have the prospect of being permanent. The Government and the IDA were completely aware of the Hyster package and were insisting on more suitable arrangements, which reflects the degree of responsibility shown with regard to industrial promotion. I do not wish to say more about that at this time.
In relation to the Deputy's amendment, in effect it proposes to delete the last two lines of subsection (2). This provides that the Minister may not give a directive in regard to IDA industrial location policy, otherwise than as part of a general review of the industrial policy for the country as a whole. This section specifically excludes the Minister from giving directives in relation to any one project. It would be disgraceful if legislation did otherwise. It would be unwise if any Minister were put in that position. Great care has been taken in the drafting of this section to put adequate safeguards in place with regard to the use of directives. For this reason directives are limited to policy issues which must have regard to the provisions of the Act.
Such directives must be laid before the Houses of the Oireachtas and be the subject of full and open scrutiny. The directives shall not apply to any individual industrial undertaking. That covers the point the Deputy was trying to make, although in a completely different manner. Directives in relation to industrial location policy can be made only in the context of a general review of industrial policy, which review must be referred to in the directive. There are very important and desirable safeguards in this section which the Deputy's amendment could weaken. Accordingly I cannot accept it.
