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Dáil Éireann debate -
Friday, 10 Jun 1988

Vol. 381 No. 10

Estimates 1988. - Vote 35: Industry and Commerce (Revised Estimate).

I move:

That a sum not exceeding £200,522,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1988, for the salaries and expenses of the Office of the Minister for Industry and Commerce, including certain services administered by that Office, and for payment of certain loans, subsidies, grants and grants-in-aid.

The Estimate before us, provides, as indicated, for net expenditure of just over £200 million in 1988. This compares with an outturn of £217 million in 1987, an overall decrease of £17 million. The reduction must be seen in the context of our overall budgetary situation. The situation was such that, when we came into office, cuts, and severe cuts, in virtually every area were unavoidable. I am satisfied, however, that taking all factors into account the reductions made in my area of responsibility were achieved in such a way as to ensure that the areas of highest priority from a developmental point of view were least affected.

The progress made over the past 15 months in controlling public expenditure has been a major factor in the transformation of the environment for private sector investment — including that for the manufacturing sector. The evidence of the improved climate for investment over the past 15 months is clear-cut: our rate of inflation is now below the average of our EC partners and is at its lowest level for a quarter of a century; interest rates have fallen by up to 6½ percentage points; each fall of 1 per cent is worth about £16 million in reduced annual interest payments to the manufacturing sector alone; electricity prices have been reduced for industrial users and are now lower for Irish industrialists than for many of their EC competitors; telecommunications charges are coming down later this year; the public finances have been brought under control for the first time in years and the budget projections have been on target in stark contrast to the situation that had prevailed in recent years; considerable progress in the rationalisation of the State industrial promotion agencies has been made and these make the promotional efforts of the State more efficient and cost-effective; and I have initiated a new programme to cut the bureaucracy with which business firms have to contend in dealing with Government Departments and agencies.

These developments, together with a reasonably favourable international economic situation, have brought about a real change in our economic prospects: investment in IDA grant-aided enterprises increased by some 14 per cent in 1987 after a 4 year period of continual decline; manufacturing output increased by over 10 per cent last year, one of the largest annual increases over the past 20 years; exports have soared to record levels and the balance of payments on current account showed a surplus in 1987 for the first time in 20 years; the upward spiral in unemployment has been halted and levels are now at their lowest for 19 months; and fuelled by the record export performance real GNP increased by 5 per cent — the highest rate of increase in economic activity for almost 20 years.

The progress achieved in 1987 is only the start. We have put in place, in consultation with the social partners, a pragmatic framework — the Programme for National Recovery— within which our economic and social problems can be tackled in a coherent and balanced way. The programme charts the way forward for the public finances, taxation reform, social equity and economic development with a mutually consistent set of practical measures, which are now being implemented.

We are on course to achieve the employment targets set out in the programme and the most recent review of progress undertaken in consultation with the social partners indicates that almost 20,000 new jobs will be created in manufacturing and international services this year.

In the Programme for National Recovery, we have set ambitious but realistic job targets. At the same time the public finance resources available will remain limited. The industrial promotion agencies — IDA and SFADCo — have restructured their organisation and approach to reflect the new realities. Greater selectivity in approving projects for State aid will be the key to securing better value for money. Grant payments will be matched tightly to the achievement of specific job performance targets. There will also be a stronger repayable dimension to State assistance in the form of preference shares, equity stake, royalties or repayable grants.

We will continue to aggressively promote the suitability of Ireland as a location for foreign companies — of which there are 900 at present employing 80,000 people — and to strengthen the base of these companies in Ireland by encouraging their further expansion. We will encourage, in particular, investment in the areas of research and development, linkages and marketing. We will continue to seek investment projects from Europe and the United States and will intensify our efforts to secure additional investment in Ireland by Japanese and other Far Eastern countries. The IDA have targeted a 20 per cent increase in new job creation by overseas firms over the period of the Programme for National Recovery and on the basis of trends to date are confident of their ability to achieve this.

For indigenous Irish firms the policy changes which I announced in April will result in a new emphasis on management development, strategic planning within companies and product and market development. These changes are designed to prepare Irish industry for the completion of the single EC market by 1992. In line with these changes a new directorate has been established by the IDA to promote more intensively the development of mainstream Irish industry which has the potential for growth.

In small industry too we have revised the incentive package to distinguish between projects which have genuine prospects of creating significant job numbers and export potential and those which will involve relatively small job numbers. Projects with significant employment creation potential will continue to be eligible for the full range of incentives. Projects, with more modest projections for growth, will be eligible for employment grants of up to £5,000 per employee and payments will be directly linked to actual job creation. Management development grants will also be available where justified by the need to upgrade management expertise. The objective is to ensure that scarce resources are concentrated on those small firms with real growth potential.

Indeed, with the reduction in the level of direct support for industry, grant assistance will, in all areas, only be paid where it is necessary for the project to proceed and where projects can be shown to have a direct benefit for the regional development of Ireland. Also, grants will only be paid as and when projects come on stream. In implementing this policy, no action will be taken which discriminates against goods and services originating in the other member states of the Community.

As a further means of assisting the development of industry, I recently announced the designation of Counties Louth, Wexford, Wicklow and Offaly and an eight acre site at Mayfield in Cork for the higher rate of industrial grant for a period of three years. Industries in designated areas may benefit also, at the discretion of the local authority, from a two-thirds remission of rates for a ten year period. The formal approval of the EC Commission under the Treaty of Rome will be required before the designation of these new areas becomes fully operational.

Since the beginning of this year, Shannon Development have been given responsibility for the promotion and development of medium and large industry in the mid-west region in addition to their existing responsibility for small industry. SFADCo were also given responsibility for all aspects of tourism development in the region. This major innovation is a step towards opening up for the first time real prospects of integrated regional development at local level.

One of the most imaginative new development initiatives promoted by the Government in 1987 was the establishment of a financial services centre at the Customs House Docks site. The IDA are responsible for marketing the centre. So far 24 projects have been approved by the financial services certification committee and have been sent to the Minister for Finance for certification as eligible for the 10 per cent corporation tax rate. These projects have the potential to create approximately 1,000 jobs.

A major element of the Government's strategy of improving the cost environment and creating the conditions under which enterprise can flourish is to ease the administrative burden of Governmentimposed regulations on industry and business. The Government have taken the first step in addressing this problem through the recent launch of a major programme throughout the public service aimed at reducing the legislative and administrative burdens that modern-day Government pose for industry and business generally.

The new programme requires a methodical examination in all Departments of existing requirements which affect industry and business generally. The objective is to do away with those requirements no longer necessary and to simplify those that remain. A senior officer has been given responsibility for the programme in each Department. All new proposals which would give rise to any additional paper work for the business sector will be critically examined to see if their introduction is genuinely required.

The National Development Corporation is now in its second full year of operation and has maintained its momentum in fulfilling the active, innovative and developmental role envisaged in its legislation and in the Government's Programme for National Recovery. The reduced level of grant-in-aid allocated to the corporation for 1988 reflects an increasing level of own resources and the fact that it is required to be self sufficient for administrative purposes by 1992. By end December 1987 £11.5 million was provided to NADCORP by way of capital for investment purposes and the provision this year is £6 million. To date NADCORP has approved investments totalling over £12 million in its own right as well as completing over £1.5 million of investment commitments taken over from NEA. The corporation's current investments in over 40 separate enterprises is valued at close to £15 million.

Science and Technology is continuing to receive a very high priority from the Government in 1988. The manufacture and use of high technology products and processes now represents the greatest potential source for new industrial employment in all developed countries. We have brought together, since the beginning of this year the combined resources of the NBST and the IIRS in a new Irish Science and Technology Agency called EOLAS. The new agency will bring a fresh impetus to the urgent task of raising the technological capability of Irish industry. I will leave the details of the science and technology programme to my colleague, the Minister for Science and Technology to elaborate more fully later in the debate.

The Government have allocated £20.862 million to Córas Tráchtála to enable them to carry out their activities in 1988. The figure reflects the need to cutback on Government spending overall but the level of the reduction which is not as large as for many other sectors, also shows the continuing importance attached by the Government to export marketing. Of this figure £19.612 million is being allocated to CTT promotional and strategic marketing schemes and £1.25 million is being allocated to the market entry and development scheme which provides assistance to small and medium sized companies with the initial marketing costs associated with breaking into and developing new markets. The assistance is in the form of guaranteed loans to companies which are repayable to the Exchequer on the basis of additional sales generated over a period of five years. The 1988 allocation, together with the recent more commercially focused redirection of CTT, reflects the Government's commitment to improving the marketing capability of Irish industry and is a clear indication of our recognition of the central role of export growth in our national development.

The work of CTT in developing exports is complemented by that of the Irish Goods Council which provides marketing support for small manufacturing firms in respect of the home market. The council undertake this important work through marketing programmes and trade shows, the provision of marketing advice and the operation of an industrial subcontract service. Irish manufactured goods account for a low share of the domestic market by the standards of our European partners. If we were to improve on this by a relatively modest amount it would generate many thousands of additional jobs. These are objectives well worth striving for and the council have a key role in this. My colleague, the Minister for Trade and Marketing, will elaborate further on the activities of the council later.

Ireland's economic fortunes are highly dependent on the European market, as a purchaser of our goods and services. The growth and further liberalisation of that market for our exports under the Community internal market programme is vital for our future prosperity.

The price paid by the Community for its failure to capitalise on its enormous economic and human potential has been high. The performance of its major competitors, the USA and Japan, in regard to output, research and development, application of new technology and employment, is far ahead of that of the Community. In the period 1973 to 1986 the USA created 20 million jobs and Japan 7 million. In the EC, however unemployment continued to rise and today 16 million of the Community's labour force are out of work. A major cause of this problem is the fragmented Community market of 12 countries.

The Commission's White Paper on Completing the Internal Market sets out a programme and detailed timetable for the achievement of that target by 1992. Physical, technical and fiscal barriers are being systematically and progressively removed and the free movement of goods, services, capital and people throughout the Community, ensured. A recently published study undertaken for the Community — the Cecchine report — estimated that up to 5 million additional jobs could be created throughout the Community in the medium term together with an increase of 7 per cent in GDP if the completion of the internal market is achieved and actively built upon.

The completion of the internal market is the most important single factor that will affect Irish firms over the next four to five years. It will create opportunities but there are no guarantees. Every business firm in the country must examine in detail what the completion of the internal market, and specifically the 300 or so proposals which the Commission has put on the agenda to achieve this, will mean for them.

The Government have already been active in bringing this message home to firms in speeches which the Taoiseach and I and other Ministers have given over many months. A number of conferences have already been organised by State agencies on the theme. We are co-operating very fully with the representatives of business and with the other social partners in assessing the implications of the completion of the internal market and in getting the message across to the business sector. This campaign of information and awareness will be stepped up further through a national launch at which the Taoiseach will preside shortly.

As a follow-up to this and the work already underway I will shortly be starting a nationwide campaign to personally make every firm in the country aware of the major implications of the steps being taken now towards the completion of the internal market. The objective will be to ensure that every Irish company knows what lies ahead and what it must now do to prepare for both the major opportunities and the very real threats that will arise.

The Government have had considerable success over the past year in reducing the costs faced by the business sector. High insurance costs is an area where further progress must be made. The Government are seeking to have insurance costs reduced by the measures set out in the Programme for National Recovery. Our court and legal procedures are being changed and a drive to improve safety in the workplace is being undertaken. I will be pressing to ensure that the benefits of the steps now being taken to reduce costs are passed on quickly to policy holders.

The Companies (No. 2) Bill, at present in the Seanad, is the culmination of many years of hard work. It aims to tackle the many abuses that have eroded confidence in the business community. The Bill tackles existing problem areas by introducing a wide range of new procedures to deter abuse under company law. On the positive side, the Bill proposes a radical new form of company rescue and reconstruction to help put firms having temporary difficulties back on an even keel and remove any excuses for trading while insolvent.

In the area of consumer protection, there have been a number of significant developments over the past year as a result of action which I have taken. These include: the restructuring of Government agencies involved in competition and consumer protection to give a more effective and efficient use of resources as well as an overall improved competitive environment and an increased level of protection for the consumer; the requirement that the true cost will now have to be given in advertisements which make reference to the cost of credit; the requirement for manufacturers to provide more detailed information about food additives on food packets and labels.

Other new consumer protection measures which I will be bringing forward include: the EEC Directive on Product Liability, which imposes legal responsibility on producers of products for injury or loss occasioned to any person due to a defect in the product, if it is shown that the defect existed when the product was put into circulation; and a right to a cooling-off period, not less than seven days, in the case of what are known as "doorstep sales". During this cooling-off period the consumer will have a right to cancel the contract.

The past year will, I believe, go down as a watershed in our economic development. It was the year that we drew back from the path that led to economic insolvency through decisive and coherent Government action. We have done a great deal to recreate the conditions for significant economic development and made a degree of progress in a relatively short period that few could have foreseen 15 months ago. We have started but not yet finished the task that requires to be done.

The development of our industrial and services sectors lies at the heart of the Government's Programme for National Recovery. Government activities are geared specifically to recreating the conditions within which investment, output and employment in these sectors can resume significant growth. The progress which we have achieved to date shows what can be done. We are determined to build on this and in the process to restore again confidence in our own economic future.

Industrial policy in Ireland has not been a great success. After 30 years of State spending there are only 180,000 people employed in manufacturing industry, but there are 250,000 people unemployed, and 150,000 have emigrated. Our export figures give a completely misleading picture of the contribution that manufacturing makes. Ministers know this. Yet they continue to quote these export figures as if they meant more than they do.

The fact that Ireland has the lowest corporate tax rate in Europe, 10 per cent, means that firms will locate high profitlow cost activities in Ireland. Unfortunately, this is not a great policy from the point of view of jobs. It is the costs, R and D, marketing, etc. That create the jobs. If firms have an incentive to locate the profit part of the business rather than the cost part here, we tend to get large financial figures and small employment outputs.

Policy should be changed. Why should we give capital grants at all? Would it not be better to give grants related to capital equipment in the form of social insurance tax credits? In other words, the firm would receive a financial benefit only on the basis of people they actually employ rather than on promises to employ. They would not get the grant up front. They would only get it when they had employed somebody and would otherwise be paying social insurance, but for the credit.

The Government have, I acknowledge, reduced capital grants somewhat, but this further step would be a sensible one.

I will comment now on the new system of industrial grants announced by the IDA a few months ago. Broadly speaking, the move to give more aid to the human resources in industry and less to capital equipment is a good one. But I have a few criticisms. I think that 90 per cent management development grants are unwise. The rate of grant should be no more than 50 per cent. If the firm is not paying at least half of the cost it will not have the incentive to ensure that management advice is bought only on a cost competitive basis. In any event much of the type of advice that firms will get under this scheme will simply involve telling people what they know already but putting it in a more glossy form.

I am totally opposed to the fact that the Government intend to continue giving 100 per cent training grants to firms. No firm should get a 100 per cent grant for anything. Training grants should be paid at no more than 70 per cent of approved costs. I am afraid that this 100 per cent grant is being retained so that it can be used to beef up grant packages to achieve the targets set by firms in terms of State aid. This is what happened in the disastrous Hyster case. Training grants were given in a form that essentially meant that the State were paying the firm's employees to work in the factory. This of course made the package very attractive for the firm, but it was very bad for the taxpayer. There should therefore be an upper limit on the State share of training costs.

The new package puts a considerable amount of emphasis on the IDA giving loan guarantees rather than capital an grants. I am not sure that I think this is a good idea. Many firms are already over borrowed. If they are to be told that the only way that they can get more assistance is by borrowing more money they are likely to get themselves into trouble. If the loan is then guaranteed by the taxpayer the losses and the trouble will be borne by the taxpayer.

At least, when the State gives a grant it knows exactly what it is paying out. If it gives a loan guarantee it has no idea of its real potential liability. The loan guarantees are most likely to have to be met by the State in times of recession. This is when businesses are least likely to be able to meet their repayments and call on the guarantee. Yet this is the very time, the time of recession, when the State itself is likely to be short of money. So you would have a situation in which the State will be called upon to meet guarantees when it is already struggling with its own financial situation. Surely this is the type of pro-cyclical financing for industry that the State should avoid.

I note that the IDA are now going to take equity in firms on a more substantial basis. Will this solely be in the form of redeemable preference shares? Will other forms of equity be taken? What criteria will be used in deciding which firms to invest in? Has the Minister laid down any industrial policy guidelines in this matter? Is this not a matter of industrial policy on which the Minister, rather than the IDA, should be making the broad decisions? I think it is.

The level of profitability of Irish-owned industrial firms is disastrously low. It is only 2.4 per cent as against 24 per cent for foreign-owned firms. I asked the Minister a question about this in the Dáil recently. He blamed the cost environment and a lack of buoyancy in the domestic market for this discrepancy. Surely foreign-owned industry in Ireland also suffers from the cost environment? There must be deeper reasons for the weakness of Irish-owned firms. I asked the Minister what he was going to do about it. He told me that the IDA were now going to invest more of their time and money in domestically-owned firms. This presumably means less time and money on foreign-owned firms. In other words, we are going to devote more time to firms that are relatively unsuccessful and less to firms that are successful.

In a sense this is a perverse industrial policy. Have the Government any concrete commercial, as distinct from patriotic, reasons for this shift? Have they set any quantified targets for the IDA in regard to their activities with domestic industry? If the Government do not set specific targets against which IDA performance can be measured, this could be another black hole. The IDA could go on pouring money into domestic industry and get nowhere. There must be externally set, objective, targets for performance and results from the IDA's new thrust in the area of domestic industry. Otherwise, we could waste a lot of money on firms that are intrinsically unprofitable — the living dead, so to speak, to use the commercial term. I know that the IDA's answer to this — and they always have an answer — will be of course that they will only spend money on firms that are potentially profitable. We cannot afford simply to take their own word for this. There must be external targets and measurements of performance set by the Minister, not by the IDA.

The Government's policy in regard to science and technology is not going well. We were promised a White Paper on Science and Technology 14 months ago and it has not appeared yet. The previous Government established a National Software Centre, in order to give special emphasis to the development of a home owned software sector. Increasingly it is software, the brain-based part of the electronics business that is taking over from hardware in the electronics industry. Certainly brain-based activities like software are more suitable to Ireland than equipment-based activities like hardware.

Yet, the Government continue to give substantial funds to the National Micro-Electronics Research Centre, whose activities are concerned with computer hardware, and in particular microchips. These are technologies that are not suitable to direct development and employment creation here in Ireland as we saw in the case of the two abortive chip plants and one plant that closed down. At the same time, although spending a great deal of money on this sector which is not suitable here, they are closing down the National Software Centre. It is software that is more appropriate than microchip production to the Irish economy. Why are the Government taking this stand? I realise the Minister will answer that the decision to close the National Software Centre was a decision of the IDA. The IDA, however, report to the Minister.

And I approve.

If the Minister wanted them to keep the software centre open he could have ensured that they did. Why did he let them close it and still keep the National Micro-Electronics Research Centre open with State aid? What was the relative performance of the two institutions? Perhaps the Minister will indicate why he took a decision which on the surface does not seem to make much sense.

One of the effects of IDA capital grants is to encourage people to buy new machinery. There is evidence that this leads to a mark-up in the price of new machinery sold in Ireland. Because a grant is being paid a higher price is charged by the suppliers in the knowledge that the manufacturer can pay a higher price because he is getting a grant from the Government. Has the Minister considered making an investigation of the relative prices of capital equipment here in Ireland, as against other countries where grants are not paid for capital equipment?

The Commission on Taxation recommended that the corporation profits tax capital allowances should be available for secondhand machinery as well as for new machinery. This would remove the distortion which encourages people to buy something new, even though it need not be any better than something that can be obtained more cheaply secondhand. Capital is scarce in this country and we should not have a State grant and tax allowance system which encourages its inefficient use. I would ask the Minister to re-examine the position in regard to assistance for secondhand machinery in the light of these considerations.

I would like to say a few words now about the Custom House Docks site, which is being promoted by the IDA. One developer has been given charge of developing this site. Is the development up to schedule at the moment? Was a schedule set by the Government for the developer and has he lived up to it? How do the rents being charged or proposed to be charged by the developer compare with those for similar accommodation that is not within the Custom House Docks area? Is there any danger that the availability of tax concessions in this limited area will give the developer the opportunity of charging much higher rents in that area than would be charged for comparable accommodation just outside it? If this happens, will it not mean that the Government's concessions will go to the developer, rather than to the benefit of the new activities to be attracted to the centre? Why did the Government decide to give the entire works to one developer, anyway? Would it not have been better to have split the work up and had some competition between them?

What controls are there to ensure that the activities attracted to the centre will not simply be activities diverted from some other part of the country, with no or little net extra employment? I see that major banks and the ESB are going to be in the centre. Surely these would have been doing this work elsewhere anyway. Is it possible, furthermore, for firms establishing in the centre to get both a building allowance and a rent allowance for the same building by clever arrangements? I have been told, but have not heard confirmed, of one firm that is building a building for another and renting it to it in return for having a similar process operated in reverse. Thus, both firms are able to qualify for a rent allowance and a capital allowance in respect of the same new building. If this is happening, will it be stopped?

Why is so much of the centre devoted to non-productive activity under the plan approved? I understand that a good part of the area will be covered by amenities of one kind or another. Surely, the city of Dublin at large could provide these amenities without them having to be in the centre itself.

I am convinced that the best future for the Irish economy lies in the natural development of small business. Small businesses will fail from time to time. Those involved in them must be encouraged if they fail to start again. The Companies Bill, however, says that anyone who carries on a business in "a reckless manner" may be personally liable without limits for the debts of the company, and disqualified from setting up a new company. It is not easy to define or anticipate the definition of "recklessness." What is entrepreneurial for one person might be reckless for another. Unlimited liability is a very severe penalty. Is there a danger that the fear of the consequences of failure will now be so great that people will not set up small businesses in the first place?

I acknowledge that the legislation which contains these terms was promulgated by the previous Government and I did a considerable amount of work on it. However, the purpose of legislative scrutiny is to deal with any problems that could arise from the legislation and that issue of the effect of those sections on encouragement for the setting up of small businesses and encouraging people to try, fail and try again is something the Minister might advert to in his reply or later when the Bill comes before us.

In the review of designation why did the Government not designate part of Dublin in view of the very high level of unemployment in the city and county of Dublin? Are there not parts of Dublin with far higher levels of unemployment than the areas which were designated? When will the Government be making decisions about the corporation profits tax regime to apply after 11 years from now after the expiry of the 10 per cent in the year 2000? Why did the Minister not refer in his speech to what he referred to last year, namely, his concern to develop an active market on the Stock Exchange for smaller firms? The Minister did not refer to that this year.

In 20 minutes I could not refer to it.

All right, I am raising it. Has any progress been made on that front? In regard to the 1992 campaign which the Minister is proposing to launch personally and to travel around the country to offer some personal advice — there are many good precedents for that — I am sure he will do it very well but he might be asked to consider that it is not awareness but decisions we should be looking for on this subject. We all were, or should have been, aware at least a year ago of the importance of 1992. I hope the Government will take the necessary action and will encourage firms to take decisions now and not simply to attend seminars about this subject.

Listening to what has been said here this morning, it is obvious that in the area of industrial policy, at last there has been a recognition that industrial policy is at a crossroads. The Government are attempting to address the areas that need to be looked at for a proper and cohesive future to be guaranteed in the industrial area. However, while many good ideas are floating about and attempts are made to grapple with them and somehow get them implemented, there is a danger that we are leaving still in place many of the ways of doing things in the industrial area that are now no longer relevant and are going out of date. It is not enough to identify what is good without identifying the necessary measures to achieve our objective.

Deputy Bruton this morning referred to industrial grants. I have heard a lot of comment from economic commentators on this issue and there is no doubt that there is a need for a change in that policy. The Minister told us that the grants amount to £5,000 per employee, but it must be obvious to him that the central feature in job creation is the cost of the employee from the point of view of taxation. We give grants to create employment but we do not recognise what the problem is. That is a contradiction there, and it is not the way we should proceed when trying to create jobs. By giving grants to create new jobs we are not solving the problem; in fact, it amounts to a waste of money.

It would be better if we changed over to giving preference shares, loan guarantees or interest subsidies. I do not accept that interest subsidies would mean that we would be helping companies when they are in trouble. The Government would have an input into how the company should proceed. They would have access to all available information. A grant is written off shortly after it is paid out and the firm that receives it either succeeds or not. If we are to create more jobs we will have to concentrate on establishing smaller industries. No longer can we depend on multinationals establishing big concerns here, because technology has taken over. Our future lies in small industrial units; but there is a need to introduce legislation to help such small companies get off the ground. This was dealt with by the Minister in his speech and I hope he pursues the matter. There is a need to improve company law as it relates to small concerns. There is no doubt that the larger concerns must cope with a lot of red tape but bureaucracy hinders the development of small companies. I am referring to companies that may have two directors who must comply with regulations governing meetings and so on. Such regulations should be removed and we should allow small companies to be more flexible and more relevant to their business.

There is a need to update competition law in order to break cartel-type arrangements and free-up the markets here. Such changes should be part of any new industrial policy. It is correct to say that low inflation, low interest rates and so on are important, but on their own they will not achieve the type of industrial expansion we need. If we sit back and hope that those features will lead to industrial expansion we will not be successful. The Government have not indicated what they propose to do in regard to introducing legislation that would help create jobs. Job creation should be the priority.

I accept that efforts have been made to rationalise the agencies involved in job creation and industrial promotion. The IDA and CTT may have separate functions to perform, but it is wrong that they should operate in the autonomous way they do. I am not saying that we should amalgamate the IDA and CTT overnight but we should consider establishing a single board for the two organisations. Much of their administration could be dealt with by one unit. With 1992 in mind, one dynamic unit, under the aegis of the Department of Industry and Commerce, would be better than two units working in different directions.

The marketing of Irish products has been one of our greatest failures in recent years. If small industries are to develop the greatest difficulty they will face will be the cost of marketing internationally. We should establish a unit that will be capable of giving all the necessary information on export opportunities available within the EC and outside. Such information flows from the IDA and CTT, but there is no link between the two. One single organisation would achieve a lot more in that area. We should continue to encourage multinationals to establish industries here. I have no doubt that there are many companies anxious to get access to the EC market before 1992 and we should be selling Ireland as a base for such companies. There is no doubt that companies that produce an end product will locate on the mainland where the majority of consumers live, but we should try to attract the companies that produce components. There are many companies in Japan servicing major industrial producers and we should be trying to attract them to establish industries here.

Up to now the Department of Industry and Commerce have not been at the centre of the formulation of industrial policy. Too many agencies in an autonomous way have been formulating their own policies and pursuing them. Some of them have succeeded, but if we are to have a three or five year rolling plan the Department should be the instigator of such a policy. Agencies such as the IDA, FÁS and so on should be the implementors of such a policy and should do so in a controlled way under the aegis of the Department. The Minister appears to recognise the need for this. I suggest that an advisory committee consisting of representatives of the industrial and commercial sectors should be appointed to formulate such a policy. All aspects of industrial life should be covered by the inclusion of accountants, financiers and experts in marketing and administration. They should be there not simply to put forward their own vested interests in their own areas but in an overall capacity to advise the Department on the broadbased industrial policy and to monitor what is happening. They should not simply meet with the officials in the Department every six or 12 months but on an ongoing basis. Civil servants are not in the marketplace and responsible to employees for keeping them in their jobs and making a profit for companies. People who are in the marketplace have a hands-on effect on the day to day events occurring within the markets. If that type of element was brought into the Department of Industry and Commerce it would make a great difference and there would be a much more flexible industrial policy.

The example of what is happening to Irish Distillers at present is a very good one in that if Irish companies do not now recognise that they must instigate their own joint ventures, mergers or partnerships in Europe, their own hostile competitors will be the first to take them over, gobble them up and eliminate competition. I am not trying to be critical of Irish Distillers as a group, but one can learn many lessons from the type of take over that is being attempted there at present.

The Minister referred to his tour around the country to bring home the message of 1992. The CII have done a very good job in producing, on a weekly or a monthly basis very good information relating to 1992 and they should be complimented on that. But is the effect of that getting through to the businesses themselves, particularly small businesses, who are probably more at risk and who in a contradictory way probably have more opportunity than many others? That opportunity will be taken from them if they do not now recognise that to have 40 per cent or 50 per cent of a major company is much better for the future than to have 100 per cent of what ultimately may be nothing. The Minister should try to get this point across to those in the marketplace. They have a vague idea that there will be opportunities in 1992 but that there will also be disadvantages. But I do not believe that Irish industry across the board have looked at their own products and their own markets to see how best they can explore the benefits and opportunities that will exist in 1992.

Some of the things outlined by the Minister are correct. The Department are approaching industrial policy in the right way, but they must be extremely careful not to simply take the good ideas and try to put them onto another layer of ideas that have either gone out of date or have not succeeded. There needs to be a root and branch review of the whole area sector by sector and, having done that, we can decide on the areas that offer the best advantages and the type of industries that we could develop to create an image of Ireland for future opportunity throughout the EC in the years ahead.

I thank the Deputies for their comments on this debate so far. In regard to Deputy Cullen's suggestions on company law, some of those are well worth teasing out and we will have an opportunity to do so on the forthcoming Companies Bill, which will come to the Dáil when the Seanad have finished debating it.

I wish to express very great disappointment with Deputy Bruton's speech. No doubt, my colleague, the Minister for Industry and Commerce, will deal with the long list of questions posed to the Government in this question paper from Deputy Bruton. I express real disappointment that nowhere in his address to the House on the Estimates for Industry and Commerce did he address what I understood to be a major challenge facing the economy: the question of marketing and our trading relationships with other countries. I had understood that by now most serious commentators, in seeking to develop this economy, could not but focus on the need to improve the marketing capability and the need to follow it through with some hard-nosed practical examples. I can only assume that other members of the Deputy's party will concentrate on this vital area, without which one cannot fully address an industrial debate seriously. I can only assume that that is an oversight by Deputy Bruton which will be addressed by other members of his party.

I had 15 minutes.

One cannot address everything but I assumed——

I preferred to address properly what I did address rather than superficially mention every topic, as the Minister did.

I take that point, but I think I am entitled to express disappointment that a very central policy tenet——

The Minister is wasting his own time. He should get on with his speech.

Does the Deputy want to Chair the House as well as the debate in it?

No, just to advise the Minister to get on with his speech.

I want to start by expressing that disappointment, which I think is a major oversight. This country has to be increasingly export driven because we have a very small home market. In the past few years we have had an improved export performance which is central to national recovery. We had a record export performance in 1987, which showed a 10 per cent volume of growth, and a record trade surplus. There is a £12 billion export figure forecast for 1988 which is equal to a volume growth of about 9 per cent. I note, quite interestingly, from this morning's OECD forecast that they suggest we might make an 11 per cent increase in volume growth. It will be very exciting if we can make that happen. They call that a "good competitive position" and they describe Ireland, as of now, as being in a "good competitive position". That reflects the new dynamism of Irish exporters. It also reflects strong efforts by Government to improve the competitive position in the economy.

There has been a fall in interest rates of about 6 per cent over the period. The Government have given a very strong commitment to currency stability, which is very important for our exporters. Inflation is running at about 2½ per cent. I think there is general agreement that there is a new sense of direction and confidence in our economy, but we have to improve even further on this impressive record. In particular we will have to get an improved performance from our domestic exporters and ensure that exports lead to increased employment and increased value added. It is disappointing sometimes to see export figures soaring while no jobs are coming directly from those increased exports. One of my greatest disappointments to date has been that our very impressive export figures do not seem to be seeping through and providing additional employment as quickly as they should. That can only lead to the conclusion that we must concentrate more and more on our indigenous domestic manufacturers because we are more likely to get an immediate increase in employment from that area. That is a very important point. A major challenge for this House and the country in the next year will be to try to find a clearer way to link the successful increasing exports with real jobs. That seems to be a very difficult task.

I would like to report to the Dáil on some new initiatives which were taken during last year to give a new impetus to the domestic exporting sector. The first one is the special trading house area. As the Dáil is probably aware, we have licensed two of these houses in recent weeks, with a projected turn-over of £25 million over a period, and there are several more in the pipeline. The Dáil will be fully aware that these were approved by the European Commission as substantial initiatives to offset the marketing disadvantages of small and medium-sized industries because of our position on the European periphery and the difficulty of marketing our goods in that area. There will be an immediate pay-off in terms of jobs and exports from this special trading house initiative and this will build up cumulatively, I hope, in the medium term to give some real employment. I hope to license two more of those houses in the coming weeks and I am happy to tell the House that there are more exciting ones in the pipeline.

We also launched a fostering scheme during the year, a scheme which we initiated with the Marketing Institute, which provides marketing expertise at no charge from larger companies to small and medium-sized companies. There are now 50 such schemes in operation and they are working very well indeed. The larger companies make their marketing expertise available to newer smaller companies free of charge so that they can have a marketing capability as quickly as possible. As I said, there are 50 schemes in operation and I think we can double that number over the next few months.

We have carried out a major review of two State agencies for which I have a direct responsibility — Córas Tráchtála Teoranta and the Irish Goods Council. I have completed an assessment of the activities of Córas Tráchtála Teoranta in 1987. It is important to remind the House that we gave that organisation some new guidelines towards the end of last year which will make them increasingly self-financing. I am pleased to tell the House that they have signed a number of contracts based on a royalty system, a payments by results system, where the potential exporter reimburses CTT on the basis of results achieved rather than just on the basis of activity. We are getting a sort of no foal no fee type of thinking there which is very important. I take this opportunity to compliment Córas Tráchtála Teoranta for grabbing that new policy initiative so enthusiastically. As I said, they are becoming an increasingly self-financing organisation.

They have also been addressing the weaknesses in indigenous industries and are concentrating on trying to build up those industries. Of course, they have suffered cutbacks like any other organisation, but there will be no retrenchment by Córas Tráchtála because of reduced funding but rather there will be an increased commitment and in the business approach of that organisation, forming business relationships and going ahead in a way which will offset any cuts the organisation have suffered.

Córas Tráchtála Teoranta have been restructuring with the aim of generating additional indigenous exports of some £750 million in 1988-90. CTT and other State agencies are looking to improve efficiency and effectiveness in our marketing representation abroad and have been looking at ways of improving that efficiency in New York, for example, and other cities. The market entry development scheme is being looked at with a view to strengthening it, and I hope to have more to say about this in future weeks.

The Irish Goods Council are working with what I call domestic exports. They tell me that of the £9 billion which we imported in 1987 some 15 per cent is immediately substitutionable by homebased production. That means that, if we were to increase the share of our own market — we have 43 per cent-to 50 per cent — that would give us £1 billion of additional sales and would account for up to 30,000 new jobs in Irish manufacture. That is a target we should try to achieve as quickly as possible. It is a staggering figure to focus on, that Irish manufactures have only 43 per cent of our own marketplace, one of the lowest in Europe.

I pose this question: if we can get only 43 per cent of our own market, how will we get a share of the new internal market in the years ahead? Forty three per cent is too little. We should have at least 60 per cent of our domestic market to compare with the best in Europe. That is the target I have set the Irish Goods Council — £1 billion of additional business for Irish manufacturers to sell at home. That is the major challenge I put to the Irish Goods Council and to the country today: to develop business which will produce that £1 billion of additional sales which will bring us into line with the rest of Europe.

The Minister, Deputy Reynolds, spoke about the internal market. We are all concerned about that because 75 per cent of our exports already go to the EC. As the CII put it so well recently, there are only 1,000 working days left in the 1992 deadline. We have the choice of seeing that internal market either as an incoming tide which will swamp us or as a golden opportunity. I would encourage industry to see it as the latter and to prepare for it. I do not think there is any need for us to get over excited about massive campaigns and insisting on them at too early a stage. It is important that industry get practical advice and that we do not scare the living daylights out of them in regard to 1992.

There are no more than perhaps a dozen directives which affect any one industry. I would say to Irish industry that they should get those directives and read them very carefully. If they have not been passed — and the likelihood is that they have not been because only 70 out of 300 have been passed — and if they do not like what the directives say, they should make sure their industry representatives, CII or whatever, know. I advise industry to be very practical about this. Get the directives and read them. I do not believe most people in industry have taken this very simple step. When they read them they will be able to decide how the directives will affect their industry and they will be able to take the necessary step then.

I want to comment briefly on the steps we are taking in the insurance industry. The Minister, Deputy Reynolds, has laid out the Government programme to reform the court and legal procedures, changes in the counsel rule, the pre-trial procedures and our initiatives in regard to young drivers. In all these areas we are beginning to see the effect of insurance costs reducing. For the first time in many years there is a real market in the motor industry on the insurance side. One of the reasons is that the industry are looking ahead and seeing the results of these changes we are brining about.

ICI and PMPA are proceeding satisfactorily and their full recovery is well on target. However, I will keep the House informed of their progress. The Insurance Bill, which is increasing the efficiency of the industry generally, is completing the Committee Stage in the Seanad and will be available for the Dáil as soon as possible. This will take some important steps forward in the insurance area.

As regards the EC non-life insurance directive, 1992 is the date the insurance industry have to be ready for. There is a feeling in the industry that because I negotiated a postponement of the most severe aspects of the directives the industry can relax a little. They cannot do that because 1992 is the date and the additional postponements I arranged at EC level are only for certain areas and will not affect the overall need for the insurance industry to face up to their decisions whether they need to rationalise or to take whatever other steps are available to them.

In conclusion, our exports are going well and our challenge is to link those exports to employment and ensure that we get growth in employment. We have been taking steps to make CTT and the Irish Good Council much more effective and efficient, albeit on reduced funding. I want to take this occasion to thank both organisations for their very valuable work. I believe 1989 will be another important year for trade, exports and marketing. I honestly believe, particularly with the trading house initiative, that we have moved the whole question of marketing and trade up the national agenda. It is only when you consider that this country is proportionately more dependent on exporting than, say, America and Japan, that you see how absolutely essential it is for this country to keep its export performance going — not just its export performance from the multinational companies; we must make sure our own industries perform also.

One of my disappointments this year, and one on which I hope to make some progress next year, is that something like one-third of all exports are provided by only ten companies. We have to broaden our export base and marketing internationally. That means getting small domestic industries into the exporting business. There are about 7,000 small manufacturing companies in Ireland and only about 2,000 export. I challenge the remaining 5,000 to get into the exporting business as early as possible because the future success of this economy depends on winning those markets.

Naturally, I compliment the Minister of State for many of his constructive and innovative remarks and many of the actions he has taken since he became Minister.

In relation to the approach of 1992 and the various Directives with which we will then have to comply, the Government and the Minister's Department seem to be falling down drastically on creating an awareness of the implications. For the last three or four months, on BBC, UTV and other television stations across the water, an obvious campaign has been launched to create an awareness in industry of the coming of 1992. That campaign got off the ground at a very early stage and is now up and running. The same applies to France and a number of other European countries. In this country to date we have not even become remotely aware of all the serious implications of 1992. There are challenges and benefits, but also threats, as I said in relation to a previous Estimate. I suggest that, notwithstanding the proposed promotional campaign of the Minister by way of a tour throughout the country, a great deal more than that is required to alert our business interests as to what we can expect in 1992 and what we must do in order to succeed on and after that date. I implore the Ministers present and the Government to take on board that serious and constructive criticism. If we do not very shortly wake up, we shall have a very serious problem on our hands. That is not just my opinion but that of many business people at the moment. What we lack in this country is forward planning and anticipation. We react to something when the unfortunate scene is upon us. We take measures when we see the avalanche descending upon us. We should take those measures three, four or ten years in advance and then we will avoid the serious problems that have arisen in the past.

I want to refer very briefly to the Minister's speech in which he said: "The public finances have been brought under control for the first time in years and the budget projections have been on target, in stark contrast to the situation that had prevailed in recent years". The previous Minister, in speaking on his Estimate, made very derogatory remarks on what had transpired in the preceding years. Whether we like it or not, the base line from which this country was pulled in 1981 and 1982 is now a dim vision on the horizon as far as some people are concerned. Very few people on the opposite benches are prepared to recognise just how far this country has come since 1982 when the public annual wage expectations were somewhere in the region of 20 per cent plus, when interest rates were in the region of 20 per cent plus and inflation rates in the region of 20 per cent plus. Many areas had gone seriously awry and, for the four years to which the Minister referred critically, all that emanated from the benches of the then Opposition were destructive criticism and calls for more Government expenditure and a further decline in what the Minister now claims as being something for which he and his Government are directly responsible.

People should be fair and give credit where credit is due. In the Minister's speech what has been completely forgotten is the fact that a great deal of hard slogging work without any great deal of encouragement from the Opposition of the day had to be undertaken for the four or five years up to now and a great deal of success was achieved as a result of decisions taken during that time.

I wish to make sufficient time available for my colleague, Deputy Kelly.

May I take it that the Deputy seeks to share his time?

There is no need to share the time because there is sufficient time available, that is as long as there are no other speakers wishing to contribute.

I wish to mention the frustrations that some of us have to face in relation to industrial expansion, job promotion, unemployment, etc. If one puts down a parliamentary question relating, for instance, to the utilisation of IDA lands in a particular part of the country, the stock reply is received that the Minister has no direct responsibility to the Dáil. That is all very fine and probably is quite true, but the Minister should be taking a closer interest as to who has responsibility and who is doing what in relation to the promotion of the various IDA sites which have been lying fallow throughout the country. There are quite a number of these in my own constituency of Kildare. With all due respect to the Minister, the IDA and the various Departments involved, I might as well not have bothered putting down the parliamentary questions that I did. There was no information available, no indication that anything dramatic was likely to happen, or that the success rate in the future would be any better than that for the last 12 or 18 months, or two years. In the present climate and with the greater competitiveness which will emerge in 1992 and thereafter, there is a greater need now than ever for the IDA, the Irish Goods Council and the Minister's own Department to take on board the serious challenges that lie ahead of them and recognise that what may very well have suited and brought adequate results in the past is no longer sufficient to meet present day requirements.

The Minister claims a certain responsibility for the job market now being in a rather healthier state. One of the reasons for that is that 30,000 people have been exported. That was one of the exports for which no Government seeks responsibility, but it is an unfortunate and unacceptable fact. I am suggesting today that the Government realise that we cannot allow that trend to continue. There is no use in saying that we cannot do anything about it; we must. Others are doing something about it and are opening up new markets in our own backyard. Other people are selling their products within our immediate market area. The Minister of State said just now that if we cannot succeed in our own marketplace it is very unlikely that we will be dramatically successful in foreign marketplaces. We need to take a whole new look at what is happening around us and adopt a much more aggressive attitude in so far as attracting industries here is concerned, be they home based or foreign based.

There has been much criticism in the past in relation to repatriation of profits on the part of multinational corporations. Multinationals will invest their money in a country which gives the best dividends and the biggest profits. That is what we should be looking at. If prospects are sufficiently good, they will make their investment in that country. That is a matter for us.

There are a number of other areas to which we could address ourselves. A redefining of the objectives of the IDA is essential at present. We have far too many industrial sites and, notwithstanding the present poor economic climate, there is an urgent need for the IDA to come to grips with the situation and do something urgently about attracting people into these sites. It may mean multinational corporations, local small industries or cluster industries, but something must be done because the public will lose confidence in the system otherwise.

I do not want to be parochial in such a short debate but in my constituency Bord na Móna and the ESB have been scaling down their operations and will continue to do so over the next ten years or so, with obvious job losses. A meat processing plant in Leixlip closed down a few years ago; I remember when over 1,000 people were employed but there is nothing there now. There has been no replacement factory despite the fact that there is a vast, expanding population in the immediate area who are highly qualified and willing to enter the job market if there is any employment for them. Those people are interested in Dáil questions which I and other Deputies put down to various Ministers but the response is not very encouraging or does not instil confidence in a young population. The replies say that it is the primary responsibility of the IDA to market the various sites and to attract new industries. We heard all that before and it cuts noice with the public.

In relation to launching new products, which we will experience to a greater extent as 1992 comes closer, we do not take advantage of the established brands already here. A previous speaker referred to Irish Distillers. Irish-based companies have an obvious advantage in taking brand products, such as those marketed by Irish Distillers, under their wing and also marketing them in the European or world marketplace where they already have sales. It is not good enough to be critical of firms who are in trouble at present. If the new competition gets too much, we must try to steer those firms in a direction which will be beneficial not only to themselves but to the economy generally.

The Minister of State referred to insurance costs. From my dealings with the public and business interests, it is clear that insurance costs are the primary cause for lack of investment in certain areas. The colossal insurance costs, public liability and all that goes with it discourage people who are anxious to invest to take on employees, to provide services or to manufacture. They are now not prepared to provide jobs because they cannot possibly carry the high insurance. It is all very fine to talk about derogations after 1992 but the Minister and the Minister of State should be very wary of the negative effects which some of those derogations might have on the business community who already have to suffer the ill-effects of high insurance costs. While the derogations could assist the insurance industry, they may well be of no assistance to the rest of industry who have to compete with many other competitors.

The awareness campaign in relation to 1992 which is already running in other European countries is not taking place here. The Government should do something about this apart from sending the Minister on a trip to the various constituencies. The IDA and the Irish Goods Council have done very constructive and helpful work in the past but there is now a need for them to take on a new role, to become more aggressive and to launch their activities from a new base.

I am sure Deputies are all well aware of the Government's commitment to science and technology. We have, in our universities, industries and farms all the ingredients to create a high skill, high productivity economy providing real and lasting employment. However, we cannot sit back waiting for the transformation to come about. Positive action is needed to put technology to work.

Governments all around the world recognise the vital importance of new technologies and this Government are no exception. We have taken new steps in this area over recent years and are particularly well placed to succeed as a result. One of our first actions was to create the new Science and Technology Agency, Eolas, by bringing together the National Board for Science and Technology and the Institute for Industrial Research and Standards.

The creation of this new agency — Eolas — is a major step forward. Higher priority for science and technology will better equip our industries to adapt to the change which is essential to their survival. Even more important, it will create new sources of wealth and lay the foundation for a high-technology, high-income economy.

I can assure Deputies that Eolas are not sitting back waiting for Irish industry to become aware of their existence. The task is a difficult one. The Government see a major developmental role for Eolas not only in science and technology but also in the development and implementation of industrial policy generally. Indigenous Irish industry urgently needs to raise its technological capacity if it is to succeed in today's business environment. Eolas are the vehicle by which the State will support this effort and industry must avail of their services.

In order that the agency can meet this challenge more efficiently, a number of sub-committees have been established under the chairmanship of members of the board to develop technology-related sectoral strategies. Committees have been established for electronics, advanced materials technology, software, advanced manufacturing technology and pharmaceuticals and chemicals. In addition, a further committee have been established to overview the internal activities and business strategy of the whole organisation. Finally, the National Standards Authority of Ireland have been re-established with an even more important role than hitherto. They will continue to develop and promulgate the use of Irish standards but will now concentrate on increasing Irish industry's consciousness on the need for quality in the run into 1992 and harmonisation in the internal market.

The creation of the internal market will present tremendous opportunities to Irish industry, large and small. We can no longer accept a situation in which no more than a dozen companies are responsible for a third of Irish exports. There are more than 5,000 manufacturing companies in Ireland, each having the potential to supply this lucrative market on our doorstep.

It is vital that Irish industry should be fully familiar with the existing and proposed market requirements and be prepared to meet them. Harmonised standards for quality and reliability must be met and product approval procedures completed. Up to 5,000 standards will be drafted by the European standards bodies between now and 1992 and the National Standards Authority of Ireland will have the task to transpose those into national standards.

The NSAI recently launched a membership scheme which has been designed to assist members to meet the challenge of the internal market. It gives them the opportunity to: participate in the development of European standards thus ensuring that our interests are protected and promoted; gain access to the information needed to trade successfully in Europe; undertake detailed consultation on particular aspects of the internal market relevant to our requirements; and attend regular regional meetings of members to exchange information, discuss the latest developments in Europe and advise the NSAI of their particular needs.

I would recommend that anyone who seriously wishes to prepare for the single European market should participate in the NSAI's standards membership scheme. Here, they will receive expert advice on the implications of the technical developments in the European Community. They will also be able to participate in the development of the European standards that are of particular interest to them.

Before I leave the question of standards a lot of media attention was focused recently on the problem of flammable foam in domestic furniture. I announced in this House on 25 February last that new regulations will be introduced in early 1989 relating to the fire safety requirements for upholstered furniture. I am happy to inform you that significant progress has been achieved since that announcement. The NSAI have now drafted and circulated for public comment two new standards on the flammability behaviour of single filling components, foams and fibres, used in domestic upholstered furniture and on the ignitability requirements of mattresses tested with secondary ignition sources simulating unknown bedcovers. An order making compliance with these new standards mandatory is also being finalised by officials in my office.

I also met on 20 April last with representatives of the foam furniture and bedding trades representing all stages of manufacture, import and export, and retail to explain the details of the new regulations. While some concern were voiced over certain technical aspects of the regulations, general agreement was voiced at the need for and desirability for tough regulations in this area.

The electronics and information technology industries have continued to develop and a number of significant expansions and set-ups have been announced or are in the pipeline. Of significance are the decision of Claris Corporation, one of the world's leading software houses, to establish in Ireland, and a decision by Microsoft to expand operations here. It is noteworthy that Ireland will now be host to the top four software companies worldwide, an indication of the attractiveness of this country for these operations.

On the hardware side, Nixdorf announced the establishment of a research and development centre, considerably enhancing their existing operations. A major Japanese company, Alps Electric, announced recently that they are to commence a 160 job investment in Cork. A number of other significant proposals are at an advanced stage of negotiation.

There has been considerable activity within the European Community of relevance to our economic development.

In November last year I announced details of the EC's STAR programme to stimulate supply and demand for advanced telecommunications services. Ireland will receive £38.8 million of European Regional Fund money over a five year period under the programme. Almost £6 million of this will be for projects which come within the ambit of my brief as Minister for Science and Technology. Matching funding from the Irish public and private sectors will mean a total expenditure in excess of £11 million on this aspect of the programme.

The EC's policy in the telecommunications are includes full integration of the less-favoured regions, including Ireland, into the emerging Community-wide market. This should include examination of additional needs for further extension of available Community funds for this purpose.

In the legal sphere, my office have made a significant input into the text of a proposed Bill on software copyright, to ensure that the legislation will reflect the needs of industry. In 1987 we decided to initiate a special programme in the area of science and technology.

Deputies will recall the Taoiseach's announcement, in June 1987, that a special budget was being provided to advance the Government's science and technology development programme. This programme is being continued in 1988 with a budget of £3.1 million. I would like to inform the House of some of the new initiatives under this programme.

Biotechnology, which uses living organisms to make new products and to improve plants and animals, is not a new science but there have been developments in recent years which have significantly increased its scope so that it now encompasses areas such as chemistry, medicine and pharmaceuticals, as well as agriculture. It has been identified as an area which holds real promise for Ireland; an area whose potential has not yet been adequately developed. I am confident that the national biotechnology programme is the way to exploit this potential.

In 1987, £600,000 was allocated to biotechnology and that sum, combined with the £1.5 million being allocated in 1988, has enabled the national biotechnology programme to get off the ground. Already Bio Research Ireland, the programme's contract research organisation, has set up, equipped and staffed centres of expertise at UCG, UCC and NIHE, Dublin, to carry out research and services for industry on a contract basis and two further centres are planned as soon as additional funding becomes available. I am told that the centres expect to become self-financing within the next four or five years, through contract income and patent royalties.

The national programme for technological innovation, which was also initiated in 1987, has a budget of £1.4 million in 1988. The programme which is being managed by Eolas, the new Science and Technology Agency comprises three main elements, namely: (i) a teaching company programme; (ii) a co-operative research programme; and (iii) a south east region pilot programme. Each of these elements shares a common theme — the technological capacity in Irish industry.

The teaching company programme which subsidies the placement of highly qualified graduates in industry has been developed specifically to assist indigenous industry to develop a nucleus of technical capacity. This type of capability is a prerequisite to the successful development of any company.

There have been over 30 placements to date under this scheme and a further 20 are planned in 1988. The early results of the scheme indicate that this infusion of expertise has enabled the participating companies to reach a level of technological development which would otherwise have been totally beyond their reach. As a result, their productivity and most significantly, their ability to compete in export markets has been dramatically increased.

The programme also reflects another key feature of our efforts: to tap the rich seam of expertise within our third level educational institutes and inject it into industry. It is very important that the two should work closely with each other and we have succeeded in bringing this about.

The co-operative research programme involves a number of support programmes to encourage industry and the higher education sector to work together. The key elements of this programme include: (a) Higher education-industry co-operation projects. This involves the promotion of collaborative work and partnerships between industry and higher education colleges. A special emphasis is being given to developing the role of the RTCs in this area; (b) Collaborative research and development which aims to bring together groups of companies with experts in the research institutes and colleges to collaborate on pre-competitive but market-related research and development; and (c) Innovation awards which are designed to encourage and recognise technological innovative achievement in Irish industrial and commercial development.

Last year, a programme, was established on a pilot basis, to see how technology could be used to accelerate the economic development of the south-east region. During 1988 the pilot programme will receive further Government funding of £300,000. My hopes are that the programme will be a living example of how technology can be applied in industry and that it will demonstrate the importance of science and technology to the people in the region through the creation of new and viable jobs. This pilot programme will pave the way for Irish submissions to new Community Regional Funds earmarked specifically for science and technology infrastructure. The funding provided for 1988 will cover, inter alia, (1) the establishment of industrial liaison offices in the Regional Technical Colleges at Carlow and Waterford; (2) research and development projects involving local industries and higher education co-operation; and (3) the provision of technology audits for industry in the region.

All over the world Advanced Manufacturing Technology (AMT) is being applied in industry to cut costs and raise output. AMT is especially relevant to Ireland because it allows smaller manufacturers to achieve these objectives and to increase significantly the flexibility of their operations. By building on existing AMT expertise in the third level sector I am endeavouring to make the most prudent use of State funds. In fact, the bulk of the personnel employed by this programme are funded by contract research undertaken for industry.

The increased funding for this programme in 1988 (£200,000) reflects the first full year cost of the programme. However, it is intended that this programme should move towards self-sufficiency over the next two years with the AMT Research Units at UCD, TCD and NIHE Limerick becoming self-supporting from their industry contracts.

The National Microelectronics Research Centre was established at UCC in 1981 in order to provide research and development in microelectronics and educational support for Irish industry. The centre both undertakes contract research on behalf of industry and co-operative projects in conjunction with industry. In addition, the centre caters for some 150 undergraduate students and ten post-graduate students per annum.

The NMRC is widely regarded throughout Europe as a centre of excellence: it has established links with both European industry and research institutes. It has been noticeably successful in winning research contracts and has been a major participant in the EC Strategic Programme in Information Technology (ESPRIT). An index of the centre's success is the fact that contract income now generates employment for 42 researchers at NMRC.

Funding provided in 1988 allowed the centre to make a major change in its integrated circuit fabrication process, moving from the three to five inch silicon wafers which have now become the industry standard. In addition, a computer-aided design system was installed to cater particularly for the design of application specific integrated circuits. These circuits are designed for low volume production runs and, as the name suggests, product-specific applications. Together these developments will maintain the centre's competitive standard and increase its capability to meet the needs of Irish industry.

Technological development is essential, not only for Ireland's prosperity but for the future welfare of Europe. By whole-hearted participation in EC programmes of research and development we can tune into the best brains in the world and take part in projects beyond the scope of our resources.

The Minister might now bring his remarks to a close.

As we are not under pressure, Sir, I am sure nobody would mind if the Minister finished reading his script.

The Chair is merely seeking to conform to the order of the House this morning allocating time to Members and Ministers. I propose to conform to that.

I will conclude by mentioning the European Space Agency (ESA) another important international organisation of which Ireland is a member. The agency has three main activities, first, the development of high technology industry in the member state, secondly, construction of applications satellites and thirdly, scientific research. In deciding to join the agency, Ireland took account of all these elements but the primary motivation was the opportunity ESA membership offered for the development of the high technology manufacturing sector in Ireland.

The "just return" principle on which the agency operates ensures that Ireland's financial contribution to the agency flows back in the form of industrial contracts for the design and production by Irish firms of space-related components and systems. Frequently such development is undertaken in collaboration with major international consortia. This has proved to be a very effective means of transferring technology to the Irish companies involved.

The signing, earlier this year, of an agreement with the space agency for the establishment of a high technology space research facility in Cork is the newest and most exciting development yet in terms of Ireland's involvement with the space agency. This new facility will be set up by the space agency, staffed by ESA personnel, and will involve Ireland in the most advanced, high-technology research and testing carried out by the agency. This represents a tremendous opportunity for this country to develop expertise in this area.

Deputy John Bruton was worried about the fact that a White Paper had been promised and has not yet been produced. We have not ruled out the presentation of a White Paper. However, I am sure he will be happy in the knowledge that the Government are moving ahead in the field of science and technology and are making progress. One can have all the White Papers in the world — which may achieve nothing — but we are acting.

I notice that in the entire speech of the Minister of State who introduced this Estimate, Deputy S. Brennan — although there is a great deal of sunburstry in his remarks; the whole thing is very up-beat, to use the kind of language one's children use — there is not a word about the two or three absolutely dominant features on the Irish industrial scene of 1988. There is not a word in it which would appear to show that the Minister realises there are substantially fewer people working in industry now than there were in 1981 or 1982. That appears to me to be something that should make him worry. One would expect the odd word thrown in by any Government to the Dáil on that theme but nothing of the sort appears in the Minister's speech.

The two absolutely topical matters in the industrial arena, which have had a very high profile in the newspapers here over the past ten days, do not seem to have happened in a form which would penetrate the Department across the street under its present leadership. There is not a word in the Minister's speech either about the Longford factory closure, which has been making headlines for the past ten days, or about the proposed take-over of Irish Distillers. I quite appreciate that both of these are matters within the private domin and that the Minister does not have direct, or perhaps any, control over what happens in either of these cases. Nevertheless, they are both highly relevant to the general industrial outlook, prospects and conditions of this country. Again, I would have expected that the Minister would show some sign that he and his Department were watching what was going on and were willing to share their thoughts on these subjects — if they have any — with the Dáil.

I do not know the owner of the Longford ambulance factory, nor do I know any of the workforce or about the manufacture of ambulances. However, I certainly can appreciate that in a relatively small county town of a small not particularly prosperous county the loss of an undertaking like that would be an extremely serious blow, the sort of thing they might expect to encounter perhaps once in a century. When it happens because of a dispute between the management and workforce, and not because — as is so often the case — there is suddenly a slump in the market for their product, not because world trading conditions are difficult it is all the more regrettable. On the contrary, as far as I understand it, this firm is able to sell as many ambulances as they can turn out. But, for reasons which I am perfectly certain Mr. Hanlon thinks are good — and, since I am not in a position to dispute them with him, I do not intend to take sides in the matter one way or the other — he feels he must apply economies on the labour side. The people in Longford, rightly or wrongly — it may indeed be wrongly — are faced with the stark choice of having to accept that those economies will be effected by the man who started and owns the business, or there will be no business there at all.

As I have said, I do not take sides in the matter and I do not want to have it thought that anything I say here is intended as a reflection on either side. It is not but I do think that the whole scene shows something is radically wrong with our whole industrial policy. While it is not the Government's business directly to take over the factory — as I know was suggested by our friends on my right who have not troubled to show up for this debate today — we might have expected a few words in the Minister's speech on the subject.

Before I leave our absent friends over here — who are probably out distributing scripts to the media that will get a prominence far above that which the proportion of votes which they harvested would appear to justify; they are very well placed there when it comes to debating in the national Parliament issues in respect of which they have all the answers at the seminars and workshops, they are conspicuous by their absence. They wanted us to set up a National Development Corporation with a budget of £200 million. I must say I do not see what that corporation are doing spending even a fraction of that sum that other bodies there for much longer could not do but that was the idea of the geniuses over there. They are not here when the actual Estimate is being debated; they have better cats to whip somewhere. Possibly they are promoting measures of social reform. Possibly they are ascertaining whether there is some way they could stand the Constitution on its head in such a way as to flatter some pluralist crank somewhere, but they are not in here doing what they always pretend to have all the answers about, namely, debating industry and commerce.

Neither is there any word in the Minister's speech to which I will revert — there is not a lot of satisfaction in hopping off people who are not there to listen to one — any more than there is about the Longford factory, about the attempt to take over Irish Distillers. Again, that is a matter in the private domain. I do not want to appear to be shifting to the left in saying that the State ought to stick its nose unduly into the operations of private capital but I do think there is something rather special in regard to the Irish Distillers and I hope that the matter which so easily lends itself to facetiousness or to being treated lightheartedly will not seem to be so when I put it in this perspective.

Every nation which is trying to do business and sell its products depends very heavily on having a number of products with which it is peculiarly associated. These products must be of the first class, unique and distinctive. Most European countries which have been much longer in various departments of industry than we have been have a large range of such products — and I do not need to waste my few minutes by giving examples — but we have extremely few. I am afraid that the few we have, so far as industrial techniques can adapt them and apply standards of taste to them which may be presumed to appeal more to outside markets than to objective standards or our own standards, have already somewhat twisted the nature of the product.

I hope I will not stand on too many corners by mentioning two things which are peculiarly Irish. One which is produced just outside the frontier of the State, and I have no doubt the workforce includes people who live within the State, is Belleek China, and the other is Waterford Glass. I must say frankly — and I am probably one of a very small minority on this as I am on other matters — that I do not like either of these products. I simply have no taste either for Belleek China or Waterford Glass. I am not even very excited at the sight of antique 18th century Waterford Glass, let alone the new stuff. I will say that the Waterford Glass Company, whatever their achievements — and they are very considerable achievements indeed in commercial promotion — have succeeded in producing a certain number of products of surpassing beastliness. Unquestionably, there are products in the range produced by that factory which would be in the short list for anyone's prize for something which is tasteless and hideous. That is done not because they are short of taste but it is in response to what they suppose other people's — foreign — standards of taste are going to be. That is fine in the short run but in the long run it will undermine the prestige which attaches to this product and which the, company concerned have most admirably sustained and built up over the years.

In 1981 when I was Minister for Trade I was forced to go to New York — I do not like these long exhausting, being on your best behaviour sort of trips — by Córas Tráchtála in connection with an Irish trade promotion in the biggest or most famous store in that city. It was indeed very impressive but in the course of this promotion I passed a production which I was told was one of three made to the order of an Arabian sheikh. I cannot describe to the House what it was but it was a nightmare in crystal. It stood about 5 feet tall and occupied a space — by the time there was a respectful path left around it for the admirers to give it living room — roughly equivalent to the middle of the floor of this House. If there had been a poker nearby I believe I would have done that nightmare fountain an injury. That is the sort of thing that happens when a firm get obsessed by the necessities of marketing, exporting and making anything that will sell. I am all for doing that at a certain level but when one is dealing with a unique national product one has to apply more restrained standards.

I am afraid that what I have described as having happened with Waterford Glass — and I accept that what I am talking about is purely a matter of taste on which others will certainly disagree — will happen in regard to whiskey. No one must suppose that a product like whiskey is less valunerable to change and adaptation than a product like Waterford Glass; the opposite is the case. It is possible over a relatively short period of time radically to change the taste of something of that kind which is difficult to appraise and to which ordinary chemical standards and so forth are not easily applied in such a way as to guarantee a standard product.

I have at home the remains of a small quantity — and I have it by accident — of 1948 Kilbeggan Whiskey. On very special occasions I give a friend a nip of this drink and have one myself. I have to tell the House that although it is not something I should like to spend an evening on it is an extraordinary experience. The taste of a vanished Ireland comes back through that small sip of 1948 Kilbeggan Whiskey. I am assured by people who are much older than me that in those days all Irish whiskey tasted like that but impalpably and imperceptibly over the years the taste has been changed in response to what people imagine are the wishes and preferences of consumers but in the process something unique has disappeared. A sip of that whiskey brings me back — and I was not a whiskey drinker in my schooldays — to the earliest perceptions I have of Ireland, the smell of steam locomotives in Limerick Junction or some now vanished moment that connects in one's mind with a taste or a smell in a way which everyone can recognise instinctively but which naturally does not lend itself to rational explanation. These things are unique. Irish whiskey, even in the modified, less turf smokey form that it now has, is still a unique Irish product and I am afraid, perhaps even under existing management, but most certainly under the ownership of a foreign company, it will simply be used as a product like any other product to be adapted according to the formula which is calculated to produce the greatest number of sales. It would be a tragedy to allow that to happen.

During the 1975 or 1976 distillery strike an awful period ensued during which there was no proper Irish whiskey to be had. Certainly stuff was sold as Irish whiskey which reminded me of the description given by Myles na gCopaleen to the bootleg which used to be put up by people to fool unsuspecting Northern Ireland visitors during the War, compounded Myles na gCopaleen thought of Portuguese brandy and turps. It may not have tasted quite like that but it certainly was an exceedingly inferior product. I should like to know what assurance there is that a product like Irish whiskey can be protected no matter who owns it. As I said, I believe even the existing ownership would be capable of making this change but I would suspect it particularly if it passes out of Irish hands. What can be done to preserve, so far as a taste can be maintained and preserved, a product of that kind which is unique and which will impoverish the world if it disappears? We ought to have a system, which should perhaps be grounded in statute, whereby a product carrying a certain brand name can be subjected to whatever analysis is possible — and no doubt it will be possible only in terms of a minute prescription of the recipe according to which it is distilled — and no product deviating in any single respect such as might be chemically significant from that prescription should be entitled to carry that label. In other words, it will be free and open to people distilling in Ireland to distill what they like but they must not sell it with a "Paddy", "Jameson" or "Powers" label.

I believe that is the right way to treat a national product like whiskey. It is not simply a matter of selling it in the way Jameson is being very expertly marketed in England now as simply an Irish product. There was a time when branded Irish whiskey was well known all over the world. When I lived in England I spoke to people who were a lot older than me who told me that before the war at certain levels of English society one would have expected a gentleman to have a bottle of Irish whiskey and a bottle of Scotch for his guests. I remember reading a very early detective story written about a city of Sydney or Melbourne, I forget which, in the 1880s or 1890s by Fergus Hume — it is a sort of collectors item — called "The Mystery of a Hansom Cab" in which characters offered one another glasses of DWD, which is a long since vanished Dublin whiskey. It was known in Australia and was spoken and written about by someone who did not have any special point to make in the course of a novel, and a detective novel at that. That product was known by its name and, presumably, valued for its name.

I hope the Minister — although I know he is not a serious drinker — will understand that some of the products which represent parts of Irish industry are unique and must be subject to some standardisation. They must have some security, whoever owns them, so that they will not be indefinitely tampered with in response to what are assumed to be market preferences. Naturally that respect for market preferences must exist and I constantly deplore the absence of it in other fields, for example, the inability of the dairy industry apprently to explore with sufficient diligence the wishes of the market when it comes to different varieties of cheese. We all know that problem. There are some things which for one reason or another have a certain uniqueness, a peculiarity about them in the Irish setting, and one of those things is whiskey. We should not be lighthearted about what is happening under our eyes. I am speaking not merely about the question of the financial control of a large operation but about the stability of a very modest range of Irish products for the loss of which the world will be a great deal the poorer, not least ourselves.

Will the Minister when replying tell us exactly what his Department do and what is their role? Will the Minister outline the Department's successes over the past number of years? This year it is claimed that we have had 4½ per cent economic growth. For the past number of years our inflation rate has been in single figures and is now as low as 2 per cent, which is half the British rate. We certainly have one of the lowest inflation rates in the developed world. Interest rates have also come down by as much as 6½ per cent, and yet employment has been reduced by only 25,000 in the past year. I presume the Minister sees the principle role of the Department of Industry and Commerce as being to order things for industry so that there is growth in industry leading to growth in employment. If that is the mission of the Department it is time that this House challenged the way in which the Department do their business.

The Department of Industry and Commerce affect industry directly and indirectly and the policies of other Ministers can seriously hamper industry. Over the years the costs of post and telecommunications services for industry have grown steadily to the extent that they have become a burden on industry. What have the Department of Industry and Commerce done to try to moderate or stop those increase and what are they now doing to reduce postal and telecommunications charges, which are higher here than in many of our competitor countries in the EC and the OECD? What role have the Department played in relation to transport costs, which are 20 per cent to 30 per cent higher than in the UK? What role have the Department played in trying to prepare industry for 1992? Do the Department see themselves as having a role in convincing Government that there must be an effort now to get our transport costs into line by 1992? Energy costs must also be tackled.

The cost factors I have outlined relate to Government decisions. Many of the drawbacks and the penalties on industry have arisen directly from Government decisions, whether Government decisions in the late seventies and early eighties to force the escalation of postal and telecommunications charges or whether by decisions of Government over the last ten to 15 years to escalate the cost of fuel, which greatly adds to transport costs. Government policies in relation to excise and taxes have greatly increased export and energy costs. In this year's Budget, for instance, there was a raid on the ESB by the Government seeking £30 million. That will be reflected in high costs to industry at a time when 250,000 people are unemployed and at least 30,000 people are leaving the country each year. Where have the Department of Industry and Commerce had an influence? It seems to me that the Department of Industry and Commerce, whatever their efforts, have not been particularly successful in bringing sense to Government in this area.

The IDA are the direct responsibility of the Department. Some years ago from these benches I challenged the job creation figures of the IDA. The IDA have always been very good at parading their Minister around the US and elsewhere and they have been good at making excessive claims about job creation. We have heard them claim that they created 30,000 and 40,000 jobs in a given year only to find at the end of the year that unemployment figures had increased. I challenged the IDA figures and I was invited to IDA Headquarters by the chief executive and treated to a slide show which Deputy Kelly would have really enjoyed. They tried to persuade me that 2+2 amounted to 50. They were creating jobs, but nothing like the number they claimed they were creating. Mostek in Blanchardstown were supposed to create 2,500 jobs in five years. Within five years they did not produce 200 jobs; yet the IDA claimed that 2,500 jobs would be created. Of course, this made the grant per job look relatively small. What are the IDA doing now? Are they any longer the most relevant vehicle for job creation? Have they got into a public relations groove in which they are good at selling themselves but are not good at selling Ireland and at getting investment here? Given what is continuing to happen to employment, where there is a consistent decline in the numbers employed, notwithstanding good indicators like low inflation and good industrial relations generally and lower interest rates, the Minister for Industry and Commerce should tell this House the reason unemployment is so high and why his Department and the agencies under his control have not been more successful in job creation and job maintenance.

Industrial relations throughout the country are generally good, so it is sad that in this very week in the Minister's own constituency 200 jobs will be lost because of a breakdown in industrial relations. What happened in Longford despite the best efforts of many people, including the Minister, is that 200 jobs have been lost. I do not know whether there is still a chance to reverse that decision; if there is, I would appeal to everybody concerned, in circumstances in which we are losing jobs daily, to think again and to try to come to an agreement to save those jobs. I will not go into that issue at any length here today.

I want to deal with the question of jobs because that must be our central occupation and it must also be the central role of the Department of Industry and Commerce. Jobs depend on selling goods, and selling goods is influenced by a number of things such as price, which we have greatly improved, competitiveness, which is related and which we have also improved but still needs further improvement, marketing and getting our goods to the marketplace. The Minister has a Minister of State with responsibility for marketing. I hope that there will be ever-improving standards of marketing of Ireland generally and of the individual products. The agreement from the EC to allow us set up trading houses is a very significant development. It is the via media used by Japan to sell their goods so successfully around the world.

I want to put to the Minister — I put it before in this House on other relevant Estimates — the idea of a transport trading house in Europe. One of the major problems we have as a country is that we are an island off an island off the mainland of Europe. Our industry, therefore, is at a major disadvantage in having direct access to the market compared to, say, continental and even British industry because of the short sea haul across the Channel, and even that will be gone in a few years time when the Channel tunnel is built. Getting goods to the marketplace of Europe can be a major problem especially if there is inclement weather over a prolonged period, which can happen every winter and sometimes in the summer or, if there are strikes or go slows just as we had a few weeks ago in Britain.

If we are to make the most of the opportunities of 1992 in relation to supplying the market there is a major case for a national Irish distribution centre on the north west coast of the Continent of Europe. In this I would see a major warehousing and distribution facility where Irish lorries, with Irish crews, could base themselves in continental Europe and have the catering, overnight, office, photocopying, telecommunications, translation and garage facilities, and thereby would not be at a major disadvantage, and Irish industry could forward advance goods which could be sent on to the marketplace. This is relevant both from an export and from a transport point of view because the market of Europe with 320 million people — even 1 per cent of the transport aspect of that market — could employ some thousands of Irish drivers. We have plenty of qualified drivers. I would ask the Minister with the Minister for Tourism and Transport to engage in urgent discussions with CTT and with the transport industry — the Irish Road Haulage Association etc. — to advance the idea of a major national Irish distribution and warehousing centre on the north-west coast of Europe as a bridgehead to make major inroads into the markets of Europe and as a major bridgehead to create thousands of Irish transport jobs based on the Continent of Europe.

The point must be made in relation to this debate on Industry and Commerce that jobs and job creation, as a topic, is very rarely discussed in this House. Despite the fact that unemployment is still close to the 250,000 mark and emigration from the State is in the region of 30,000 per year and has been at that level for at least the past five or six years, the question of how job creation can be approached is rarely dealt with as a major topic of debate in the House.

So far as The Workers' Party are concerned the industrial and economic policies of successive Governments have been hopelessly inadequate to deal with the type of growth which is needed in this economy. It is not that no growth has occurred; indeed, the output of manufacturing industry has increased by nearly 50 per cent since the start of the eighties. The problem is that in the same period, over 40,000 manufacturing jobs were lost, industrial employment dropped by nearly 20 per cent and employment growth is our primary need. A few years ago the right wing consensus was that competitiveness was the key to growth in jobs. There was a substantial slow down of wage and other labour costs relative to our major trading partners but the promised growth in employment still did not materialise and now the right wing consensus has shifted its attention elsewhere. The latest dogma is getting at the national debt by cutting public expenditure. There is no doubt that we agree that labour costs must be kept within reason but in the context of planned development and the control of all incomes and costs. Yes, the national debt must be reduced and kept under control but primarily through the expansion of both output and employment. However, none of these things will happen without a clear break from the ineffective and hugely expensive policies of the past and of the present.

At present Irish industry is getting £900 million in tax breaks per year and another £400 million in direct subsidies and grants. The various fiscal incentives encourage the use of capital rather than labour and the result is that employment is still contracting and exports are booming — exports of goods, services and increasingly, of course, our own people. Nor should we have any illusions about the notion of reducing the national debt through cuts in public expenditure. The frenzied hacking and axing of recent times consists, for the most part, of utterly false economies which, apart from creating more misery and poverty in the short term, will lead to much higher and increasingly uncontrollable costs to the State in the future. The cuts in health services are a case in point.

The same arguments apply broadly in the case of privatisation of other services, hitherto provided by the State. Ultimately, the cost of providing local authority services, health services and social services by private rather than public enterprise is bound to escalate uncontrollably simply because there can be no real control in a private enterprise econmy over the hunger for profit. Publicly owned companies have not been without flaws but these, in my view, will pale into insignificance for Irish society by comparison with those created by private companies in their relentless pursuit of private profit. The difficulties for public enterprise in Ireland have been well trumpeted by its opponents but the fact is that any enterprise has difficulties in the present situation. Historically, public enterprise has been more successful in more difficult sectors of the economy than private enterprise has been in more favourable circumstances.

I would like to refer briefly to a number of other specific areas. I would like to refer to the question of the Irish Distillers takeover which is being proposed at present. I would welcome the Minister's proposal to refer any such takeover to the Director of Fair Trading. Given the enormous implications of the proposed takeover, it is essential that every aspect of it be considered in full and the Director of Fair Trading is the person most appropriate to undertake that task.

The interests of Irish Distillers' 1,100 employees must be a crucial factor in determining whether the takeover should be allowed to proceed. In this context talks by those behind the takeover bid on rationalisation plans seem ominous. This is unique as the bid involves not simply the takeover of an individual firm but of, in effect, an entire industry. There must be concern at the prospect of such an important industry passing out of direct Irish control and the implications this would have for the future development of the Irish distilling industry. It is ironic that this bid should be made for an important Irish industry by foreign interests when so much Irish capital which could and should be invested to create jobs at home is going out of the country for investment abroad.

I want to deal with the Hanlon closure. The decision by Mr. Noel Hanlon to close his ambulance plant with the loss of almost 200 jobs is despicable and will cause untold hardship in that area. This is a case of one individual putting his own interests before those of almost 200 workers and their families and the welfare of the entire community in Longford. Mr. Hanlon has displayed what can only be described as a Victorian attitude to management and industrial relations since this dispute started and is apparently now prepared to deliver an economically crippling blow to the town of Longford by robbing almost 200 workers of their jobs. It is astonishing that somebody who has displayed these attitudes should have been considered suitable by a previous Fianna Fáil Administration for appointment as Chairman of Fóir Teoranta and the board of Aer Lingus. Securing replacement jobs must now be a priority for the Government and the IDA.

Deputy De Rossa is normally very much in order, but I have to remind him there is a tradition here that we do not make personal attacks on anybody who is not here to defend himself.

Hear, hear. He was a good Chairman of Fóir Teoranta whatever about——

I am not attacking the person personally in the sense of his personality or anything like that. I am attacking a person who has made a decision who, as I have said, was considered suitable to be appointed to State boards.

And was good at the job.

He is, therefore, open to criticism in this House or outside the House. All of these criticisms——

The Deputy is not criticising him in that capacity and even then the tradition is that we refrain——

I am not saying anything here that has not been said already by me and other members of my party publicly in the press and elsewhere outside this House.

This place is different from outside. This is not outside. We have our own high standards here in respect of not attacking somebody who is not here to defend himself and I hope we will continue to exercise that high standard here.

I have said nothing in any way which has not been said outside this House. It has been said already and I am sure I will find an opportunity outside this House to repeat it, and Mr. Hanlon is entitled to defend himself wherever and whenever he chooses.

As I said initially, I suppose Deputy De Rossa is one of the best respecters of Standing Orders. That is why I put it to you again that we do not have to import standards from outside unless we regard them as improving our own standards.

I am not going to pursue the discussion between you and me, Sir. I do not believe I am in breach of Standing Orders and I do not think you have said I am. You consider I am in breach of what you consider to be good standards of debate.

The Chair would remind you of the normal traditions of the House which I think should be maintained.

Do we not enjoy privilege in here of immunity from libel action, which is different from what is said outside?

If Deputy De Rossa had proceeded to criticise the management of that company he would be perfectly in order.

Is the Deputy suggesting anything I have said is libellous?

It is not for me to decide that, but I am a long time in this House and my understanding is that we do not attack private individuals who are not in the House and thereby not able to reply in the same fashion as a Deputy is able to attack.

The person is free to counter-attack if he chooses.

Not in the House.

If he stands for election as a member of a party he may well be able to stand here and defend himself. If he wants to meet me outside the House and have a debate we will have the debate. It will not reach fisticuffs. He has had standing in the community. He has been appointed to various boards. Public money has been invested in this company and my contention is that he has a responsibility to the area where he has his factory and from which he has drawn his workers and to the workers who have assisted him in reaching the pre-eminence he has achieved in the community with regard to the factory there. It is a matter of record that what I have said here has been said by my party outside this House. We have no compunction whatsoever in repeating it.

I hate prolonging this, but the Deputy is not entitled to presume——

I appreciate that, but the time——

I will give you "injury time". The Deputy is not entitled to presume that what is appropriate for his party outside the House is automatically suited to the rules of this House. This House rules itself in the tradition of and by the Order laid down. It does not justify coming in to break those rules to say you have done something outside which you want to do here.

I do not know why you are pursuing this point but if you want to pursue it further I ask you to indicate what Standing Order I am in breach of.

There are Standing Orders and orders which have established themselves by tradition. The Deputy will appreciate that in fair play you do not attack somebody who is not in a position to defend himself or herself. If the Deputy does not accept that that is a fair, decent and honest standard to have, I do not know how I can convince him further. Personally I think it only fair that anybody who is under attack outside should have an opportunity to defend himself. Similarly, we in this House should not attack anybody who is not in a position to respond to the attack being made.

I do not accept your interpretation of the tradition of the House, perhaps because I am not as long here and as engrossed in the tradition as you are. I take from what you have said that there is not a specific Standing Order which I have breached; therefore, I will continue with my contribution.

Securing replacement jobs must now be a priority for the Government and the IDA. The Programme for National Recovery referred specifically to the job creation potential of the automative components and mechanical engineering sectors. A number of companies including Aer Lingus, Bord Na Móna and CIE have considerable expertise in these areas and consideration should now be given to taking the Longford plant into public ownership and ensuring that the experience and expertise developed by the Hanlon workers is not lost to the country. There must also now be full disclosure of all the financial assistance paid to the Hanlon company by the IDA or other State agencies over the years and the Government have a duty to the taxpayers to ensure that this money is recovered in full.

I make these points. Because of limited time I am not in a position to go further into the question but before I sit down I want to refer to Dublin North-West, which you and I, Sir, have the honour to represent. As you and I am sure, the Minister knows there is a very high level of unemployment in that area. Indeed, in some parts there is 60 per cent unemployment and in many cases it is young people who are unemployed. Many young people have emigrated to Britain, Australia and the United States. I raised questions yesterday about some of my constituents who have gone to the US, unfortunately without visas, and it appears that they are being exploited there more than they were at home.

In the Ballymun area a task force has been established, consisting of local residents, public representatives, corporation officials, representatives of the health board and others interested, in an effort to come to grips with the problem of deprivation, social decay and dereliction in the area. In the course of a report, that task force suggested a number of measures to upgrade the environment and improve the services in the area. One of the main conclusions of the report was the need to tackle the problem of jobs if there is to be any improvement in the area. I should like to urge the Minister to request the IDA, and the other job creating and training agencies under his jurisdiction, to consider declaring Ballymun and Finglas priority areas. If that is not possible he should select districts where unemployment is serious for the location of major industries. I am not thinking in terms of industries and that would provide two or three jobs, although they would be welcome, but if we are to tackle the problems of Dublin North-West we need industries that will provide a big number of jobs. If that does not happen the efforts of local people and agencies to deal with the problems of dereliction and social decay will come to nothing and we will have to face greater problems in the future.

Many questions have been put to me by those who contributed to the debate but it will not be possible to deal with all of them. I should like to ask the last speaker to listen attentively to what I have to say in regard to the grants paid to the Longford firm. The total amount of grants paid to N. Hanlon (Ireland) Limited since the industry was set up was £336,663. There was a total employment peak in that industry of 280. If the Deputy takes the employment figure at 280 or 230 he can calculate the cost per job. At 230 employees the cost per job was £14,063. That matter was referred to in the Telesis Report, a review of industrial policy. The industry was referred to as one that was very suitable for Ireland. I hope that information takes away some of the unnecessary attention paid to this matter by the Deputy, the Leader of The Workers' Party who do not have a branch in the constituency of Longford/Westmeath. I find it unusual that the Deputy is taking such an interest in that matter. Most Members are aware of the facts but for some unknown reason The Workers' Party are anxious to paint a picture that is at variance with the facts. I hope the Deputy will take that information with him. The suggestion has been made that a fortune was paid out in grants.

The Minister has not told me anything new. What about the other companies that person is involved in?

I am sure the information I have given has sickened the Deputy. I have the information in relation to one company and if the Deputy tables a question about any other company I will give him the relevant information.

A Minister never gives that information but says that the IDA will not allow him give that information.

I was asked for this information and I gave it because of the amount of hype that has been created over this matter. A lot of misinformation has been given about this and it is only right that the public should be given the facts. I was asked to refer to the proposed takeover of Irish Distillers. I should like to remind the House that I have a duty and responsibility in regard to this.

On a point of information, I should like to know if that was the only assistance given to the Longford firm?

The Deputy should not interrupt the Minister when he is concluding. The Deputy will have another opportunity.

Was that the only assistance received by Mr. Hanlon from all agencies?

If the Deputy tables questions between now and the end of term I will be only too delighted to answer them. I should like to remind the House, in response to the query about Irish Distillers, that I have a statutory responsibility in relation to any mergers or takeovers where a turnover of £10 million and assets of £5 million are involved. Notification was given to my Department two evenings ago. It is very extensive and I will be examining it in the normal way before deciding whether to refer the matter to the examiner under the Mergers and Monopolies Control Act, 1978. It would be inappropriate for me to comment any further on the matter.

Deputy Kelly referred to the traditional and unique taste of Irish whiskey and was worried about that being changed. I am not an expert on that and I cannot comment with any authority on the question. However, I imagine that companies will only change their tastes or presentations having undertaken long and detailed market research. If they did not do so on that basis they would be very foolish because it would not take a customer long to reject the product. I agree that there is a certain uniqueness about many Irish food products. In fact, many of the old tastes are coming back in high quality products and there will always be a place for them.

Deputy Cullen stressed the need for co-ordination on industrial policy. I should like to tell him that there is a committee in existence representing the Department and the agencies under it. The committee meet on an ad hoc basis to discuss issues which arise from time to time, and they co-ordinate industrial policy. I have also established a small industries forum which gives small industries an input on industrial policy as it concerns small businesses and small industries. That is a good forum and we get the views of the real world.

I should like to remind the House that I have made changes in the system of paying industrial grants for those employing from one person to 15 people. We removed all the red tape and pay on a job-in-place basis, half of the grant when people are employed and the other half six months later. I am referring to small companies that do not have great growth potential but have a certain contribution to make to economic development. A grant of £5,000 is involved. In spite of all the speeches I have made there is still a misconception about grants. No longer do the IDA pay grants on job approvals. They pay grants on jobs created. Grants are paid if there is compliance with performance agreements. The old system has been changed and we are rigidly adhering to the terms of the new scheme.

Some Members hold the view that manufacturing industry is the sole component that will solve our unemployment problem. Other speakers have made this general point. I would like to point out that manufacturing industry is one single component in contributing to job creation. In manufacturing employment, the services industry, including international services, and other industries have their own inputs. In the Programme for National Recovery we identified the areas where we saw growth and we put targets on jobs in those areas which are not under the remit of the Minister for Industry and Commerce but they will make their own individual contributions towards the solution to the major problem facing this country which is unemployment.

I would remind Deputy Jim Mitchell that the upwards spiral in unemployment has been halted and levels are now at their lowest for 19 months. He asked what is the role of the Department of Industry and Commerce. It would take longer than the short time that I have available to me to point out the role. The lead role is taken by the Department of Industry and Commerce, and I am sure was taken by my predecessors in Government, in firstly identifying what decisions will impact on industry, on industrial development and the costs that will appertain to any decisions. The Deputy also asked what have we to show. We have taken that lead role in many areas. We constantly remind everybody that the return to a competitive cost environment is the first prerequisite for economic development and recovery.

What have we achieved in that regard? The rate of inflation is now at its lowest for 20 years. Interest rates have fallen by up to 6½ per cent since we came into office. The total borrowing in the business sector is over £6 billion. Every 1 per cent reduction in interest rates means a saving of £60 million. The reduction of 6½ per cent in interest rates represents relief to the entire business sector of £390 million. The manufacturing sector has borrowed £1.6 billion. Every 1 per cent drop in interest rates represents £16 million to that sector. That is an immediate relief of £104 million to the manufacturing industry. One can quite clearly see the huge impact that the reduction in interest rates can have on the cost environment of manufacturing industry. I did not, and would not, apologise for reducing IDA grants because I have always believed that to produce a better cost environment would provide the Government or the Minister of the day with the opportunity of putting away grants and that is the policy we are pursuing.

I have always taken a leading role in focusing Government attention on other input costs which are not my responsibility. Benefits can flow from them such as the creation of a cost-competitive environment. Deputy Mitchell asked what we had achieved since we came into office. There were no increases in postal and telecommunications charges or in electricity charges in 1987. There was a 5 per cent reduction in electricity charges to industrial users in the budget this year. Later this year reductions will be made in international telephone charges. That is what we have achieved in that area of cost environment. All areas make their own contributions to a better cost environment. That is the only way we will stop job losses on the one hand and create a better climate for investment on the other hand.

Irish exporters to the British market will now enjoy an inflation rate of less than 2 per cent, almost half of that in Britain. I cannot remember when the Irish inflation rate was below the British inflation rate to that extent. We also dealt with rationalisation of State agencies and bringing them together in a more costeffective way. The merger of the NBST with the IIRS is one area which represents part of the whole industrial cost that Deputies referred to. Those two bodies were brought together so that there would be a better co-ordinated approach to industrial development. Above all we will get better value for the money spent.

The area of exports has been dealt with by my colleague, Deputy Séamus Brennan. As I have said, we reached record levels in 1987 and expect to export approximately £12 billion worth in 1988. There are other people-related industries such as the software industry referred to by Deputy John Bruton which will be major contributors to employment in that area in the years ahead. I would remind Deputy Bruton that there was open tendering for the physical infrastructural development of the Financial Services Centre and that was dealt with by the Department of the Environment. The taxation area which the Deputy talked about is dealt with by the Department of Finance. That project is another one of the people-related industries.

Deputy Bruton asked why continue to give money to the National Micro Electronics Centre while at the same time allowing the National Software Centre to close down. As he said, the IDA decided to close it down. I was fully appraised of the situation and if my approval was needed it would have been forthcoming. They were given a period of time during which their prospects would be evaluated and they were not successful. I can assure the Deputy and the House that no gap will be left in the development of software in the future. One of the new trading houses that was set up markets our software abroad.

That is not why the National Software Centre was closed.

It was closed because it was losing money at a fair rate and was not making any serious contribution.

The National Micro Electronics Centre gets grant aid.

The suggestion that the Irish industry should not be involved in electronics hardware is misconceived and false.

That is not what I said. I said there is a discrepancy in the Government's policy of getting out of software.

There is not. The decisions in relation to the National Software Centre and the Micro Electronics Centre were very clear-cut and did not demand my approval. Had I been asked I would have totally approved of that decision and I have made that clear.

It was stated that Irish industry should not be involved in electronics hardware. Micro electronics technology goes far beyond computers. For instance, integrated circuits are used in products as diverse as telephones and sophisticated production systems in industry. The National Micro Electronics Centre is geared towards the whole computer industry. Research and development relevant to the needs of Irish industry has been extremely successful. Much work has been done on a contract basis and it brings in quite a considerable amount of income. It is a necessary part of the infrastructure as I and the Government see it.

But the National Software Centre is not a necessary part of the infrastructure.

Of course it is, but it is a question of how it is operated. The Deputy has not done any great study into the development of software because if he had he would not be saying things like that.

The Minister has not explained it.

The Minister has explained that the National Software Centre was closed for obvious reasons and that there will not be a gap as a result of its closure. The National Micro Electronics Centre is an essential part of the infrastructure and it is being helped along the way. It is continually expanding into the area of commercial contracts and will continue to do so. As long as it is successful we will continue to support it.

The question of stock markets for smaller companies was raised. Deputy Bruton took initiatives in that regard when he was Minister and I am following them up. Considerable progress has been made in the past year in enhancing the role of the stock market as a fund raising vehicle for small firms and quite a number of them have availed of it. Seven companies were listed in the small companies market as of December 1987 compared with one at the end of 1986. Despite the slowdown caused by the October crash in world financial markets the momentum is expected to be maintained this year. Many of these companies are in the business expansion scheme and the continued progress being made by that scheme will ensure that more and more companies will be looking to the Stock Exchange for additional growth.

At my request the Stock Exchange and the IDA are currently drawing up a joint programme to promote the exchange as a vehicle for industrial development. They will, as part of that programme, focus on the company preparations necessary to ease the cost of obtaining a quotation. I am sure the Deputy and the House will be aware that we are trying to put together a package that will reduce the cost for small companies going on the market. It will be a package involving the accountancy functions, legal functions and so on. The Stock Exchange recently produced a booklet giving full information to facilitate small companies which might be thinking about going on the Stock Exchange.

Deputy Cullen said the Department of Industry and Commerce should be the instigator of policies. We are. The policy function which had been undertaken by other agencies has been returned to the Department in recent years and the policies are being written and directed——

I said it was beginning to go in that direction and I hoped it would continue.

I do not want to misrepresent the Deputy. Lacking marketing ability in Irish companies is a major weakness and has been identified as such for a long time. The special trading houses will make a fairly decent contribution for the companies which do not have the financial strength or the marketing expertise to get their products on the international markets and hold their position there. Now they can do what they are good at, and that is produce. We have been production-oriented for far too long and this new initiative will provide the initiatives for small and medium-sized companies to continue in the areas of product development, improving efficiency and leaving the marketing to experts in the trading houses area.

Deputy Mitchell asked what is the real focus of an improved investment climate and how do we go about it. The Government do not create jobs. The Department of Industry and Commerce do not create jobs. We are continuing to focus on an improved investment climate and a better cost environment. However, there are still other areas to be tackled. Deputy Mitchell mentioned the cost of petrol and oil. I tackled these problems earlier this year. The cost of distribution in this area is very expensive because of the makeup of the Irish market. My colleague, the Minister for Energy, is looking at that now.

The cost of insurance has been the subject of much debate during the passage of the Courts Bill, the Final Stages of which will be debated in this House next week. If both Houses pass this Bill before July, it will remove juries in personal injury cases from 31 July 1988 and reduce legal costs appertaining to claims on a personal injury basis. That will make its own contribution and we will ensure that the cost reductions are reflected in the insurance industry because insurance is a major cost factor in employers' liability and in public liability.

Training grants have been reduced to 50 per cent in the expansion area——

Why not have 50 per cent overall? Why have any 100 per cent grants for anyone?

Training is being directed more at management and other areas where there is a major weakness and there is an ongoing evaluation as to what other changes will be made during the year. Developing policy is an evolving matter. This is one of the areas which is under close examination at the moment. As I said, we have already reduced the grants to 50 per cent in the expansion area and we will continue to look at different aspects as we evolve policy.

Deputy Durkan asked why I do not give more details in the House about the location of industry. It is an accepted fact that the location of industry is a matter for the day-to-day functioning of the IDA. It is not my intention to get involved in locating industry. At different times in this House Deputy De Rossa and Deputy Mac Giolla asked what was my role in relation to the location or relocation of private companies. I do not have any function, good, bad or indifferent, as to where private companies locate or relocate.

The closure in Longford was a disaster and a calamity for industry in County Longford. It creates a bad image not alone in Longford but nationally, and will wipe out the good image which has been built up for this country abroad. It is a matter of regret that it should ever have happened. As Deputy for the area, I spared no effort in trying to find a basis for a resumption of work. There has been a problem in this industry for the past 18 months or two years, despite the fact that the industry enjoyed industrial peace for 18 years and managed to gain 60 per cent of the British market. This was an industry nobody thought could succeed and it is a matter of regret for everyone in this House that that black spot should occur in our industrial development at this juncture. As I said, no effort was spared to try to resolve the problem and get a resumption of work but, unfortunately, we were not successful. This will not help the image of this country or the image of Longford. It is a tragedy for a very good workforce and their families, because they will feel the brunt of it in the long term.

Would the Minister agree to look at the criteria used by his Department in ruling out or refusing to answer questions on the IDA? I understand that at the moment his Department freely provide information at Question Time about the activities of SFADCo, but when it comes to the IDA, virtually everything we ask is considered to be a matter for the IDA and not for the Minister. Perhaps he would agree to look at this because it is very difficult to raise legitimate policy questions about industrial development in certain circumstances when the questions are not being answered on the grounds of lack of responsibility.

I will look at it, but I have certainly made no changes in this area.

I am not saying the Minister did.

As a former Minister for Industry and Commerce, the Deputy is familiar with the system. There should be no question of policy decisions not being raised in this House. Unfortunately, the majority of questions put down recently have dealt with the day-to-day activities and confidential information——

I think there has been a slight change and I am suggesting that the Minister correct it.

I will look at it.

Vote put and agreed to.
The Dáil adjourned at 4.30 p.m. until 2.30 p.m. on Tuesday, 14 June 1988.
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