(Laoighis-Offaly): I wish to share my time with Deputy Broughan.
Industrial Development Bill, 1993 [Seanad]: Second Stage (Resumed).
Is that agreed? Agreed.
(Laoighis-Offaly): I welcome the opportunity to contribute to this debate. This Bill is part of the overall long term strategy for tackling the industrial development and employment generation problems with which we are all too familiar. The agency structures proposed in the Bill will ensure that greater emphasis is placed on catering for the real needs of indigenous firms. This is one of the most welcome features of the Bill.
The challenge of developing our indigenous industries will be left in the hands of Forbairt, which will bring together the existing functions of Eolas and the IDA. I hope this will lead to a change in the perception within industry and State agencies that grants are the primary way of ensuring industrial development. The problems of Irish indigenous firms have been well identified for a long time. For example, too few existing firms have the necessary competences to develop and grow. We are not developing sufficient new start-up firms to expand our overall indigenous sector to the level required to solve our unemployment problem. We should not be looking for quick fix solutions in this instance. I do not think the Bill proposes any such solutions. Rather it sets out a planned approach for expanding indigenous industry and replacing the piecemeal manner in which the existing structures dealt with the problems in this area.
One of the functions of Forfás, which will be established under the Bill, will be to advise on the development and co-operation of policy for Forbairt, the IDA, An Bord Tráchtála and such other bodies as the Minister may designate. The co-ordination and development of policy as outlined in the Bill is extremely necessary. I trust that the Minister will ensure that this takes place, thus avoiding the possibility of agencies being at cross purposes and in competition with each other. If these agencies do not work together in moving industry in the same direction, they may muddy the waters for the people involved in industry. This policy function has to be made extremely strong and outlined clearly. It needs to focus on the sectors in which Ireland as a country has a strategic advantage. However, it must be more than a sectoral policy. One of the problems with our industrial policy is that it has been mainly sectoral since the changes introduced by the IDA in 1984. Prior to that the emphasis was placed on regional and local development. Most people would admit that the policy prior to 1984 was somewhat biased in favour of regional development, with insufficient emphasis placed on the development of the strong sectors in Irish industry. However, policy has moved in the opposite direction since 1984. This matter needs to be addressed.
Studies have shown consistently that regional development contributes to national development. How ironic it would be for a country that argues so successfully in the European Community for regional policies not to promote it within its own borders. For that reason I am glad that Forbairt is being set up as an agency specifically to develop indigenous industry. There is a recognised need for innovation, research and development as well as investment. We have concentrated too much on meeting the needs of those with a grant mentality without looking at the other needs of indigenous industry.
The provision in the Bill for investment by Forbairt needs to be spelled out in more detail. Culliton recommended that the IDA should take equity in companies rather than simply dish out grants while Moriarty on the other hand held that the State should not become a significant shareholder. The tension between the two approaches needs to be resolved clearly and promptly if the strategy is to be successful. I am not arguing for the heavy hand of the State that was so unsuccessful in the Soviet bloc to be introduced here at a time when its moment in history has clearly passed, but handing out money to entrepreneurs in the hope of creating jobs, without monitoring seriously the effectiveness of such intervention, is equally objectionable and will be fruitless.
Culliton argued well for equity rather than grants so that if State agencies work hard to help firms grow, the public will benefit if those firms are successful and are later sold on in the market. There will be a return on the public's investment if equity stakes are taken and this return should form part of a specific industrial development budget, the return on which would allow firms to be assisted in the future.
Culliton took a different approach from Moriarty on the role of public enterprise in industrial development. Culliton stated clearly that commercial public enterprise could make a significant contribution to the economy, whereas Moriarty stated that subsidies should not be introduced to cover the cost of non-commercial activities carried out for social reasons. How are commercial public enterprises to be commercial while having to execute social and regional policy objectives without receiving subsidies when so many hidden subsidies are available to the private sector? There is a definite need for this to be clarified and I trust the Department will do this quickly. I do not agree with all the Culliton report recommendations but many of them need to be implemented in a stronger way than recommended by Moriarty in his task force report. The general thrust of the Moriarty task force is in favour of subsidised competition for private industry with little quid pro quo either in jobs or equity. If we continue with that approach it will mean a very small return on the public investment in terms of jobs.
Forbairt as an agency to develop indigenous industry will help to meet what has been the key recommendation of all policy reports from the NESC report of 1972 to Telesis and Culliton — that is to focus on indigenous industry and a look at the different levels of finance for the foreign and indigenous sectors show the clear need for this. At the time of the Telesis report the division of support was 75 per cent to foreign industries and 25 per cent to indigenous industries. Telesis urged that this should be 50:50 by 1985 and by 1990 75 per cent of support should be for indigenous industry. At present 75 per cent of support goes to foreign industry and I believe Forbairt will help to redress this imbalance.
I welcome the Bill and look forward to hearing the Minister elaborate further on specific policy measures relating to the development of Irish industry, its financing, its strategy, the branding and marketing of Irish products and the factors that will ensure our success in the international and domestic traded sectors. This will be the key to turning us around from our Euro-dole mentality. The bones of the turnaround have been laid before us in this Bill and I look forward to this being fleshed out in greater detail after the successful passage of this Bill.
Like my colleague, Deputy Gallagher, I very much welcome this Bill which I hope will be a launching pad for a new and more vigorous approach to job creation. I noted there was some controversy over the name of the supervising body, Forfás, as some civil servants felt that this was a breach of the innate rules of Irish grammar. It seems that "Forfás" means a super-growth agency and it is appropriate that we should have such a body.
A glance at our industrial history shows that we have been competing against countries which do not rely as heavily as we do on exports and imports. Countries such as Japan have a much more concentrated and dynamic industrial policy. Members are aware of the Ministry of International Trade in Tokyo which has played a dynamic and influential role in co-ordinating indigenous industry, in particular to produce a massive export led growth. This makes Japan an amazingly prosperous and developed country. It is about time that we began to follow in its footsteps.
I welcome also the proposals which the Minister and his colleagues have informed us about. We know that the top civil servants who have left and gone into business have done extremely well and I think it is a tremendous initiative that there will be a constant crossover from the Civil Service to business and industry. Civil servants will be seconded to industry and I hope businessmen will be seconded to the Civil Service. This will lead to a better understanding of the problems in each others' areas and this in turn should lead to a more dynamic policy for the economy.
Forbairt has a key role to play in rebalancing the thrust of our industrial policy. I disagree profoundly with the thrust of the Moriarty task force and those who are against the State taking, if necessary, a majority shareholding in industrial concerns. It is unfortunate that even with zero inflation and low interest rates private enterprise has not done the job for us. I think one of our heroes — and this transcends party political affiliations — was Seán Lemass, whose picture is outside this Chamber. He rightly recognised that the State had to take a role in developing industry in a small open economy. This created the first industrial base in this country and there is no reason we cannot do that again. I dissent from the view taken in the Moriarty task force report on that. When we get away from this grant mentality I believe the State should take an equity holding in various enterprises. Weak management has been one of the underlying reasons for the failure of many small businesses and under the powers given to Forbairt we will be able to look at all aspects of weak management. This morning the Minister referred to Professor Michael Enright's comments on competitiveness and this should be taken on board.
Eolas has been incorporated into Forbairt. In recent years Eolas has been going down the right avenue and I welcome the enormous strides it has made to try to improve the level of technology transfer between the universities and business. Last year it carried out approximately 145 technology audits, an area in which Irish industry traditionally has been reached, but Forbairt will strengthen and continue the work of Eolas. Likewise, it will continue with its quality management programme, the timber technology programme and the many other programmes it has embarked upon. I note that the national standards authority will become a more or less autonomous agency within the new structure. I believe that is right because it will have access to the best international standards which we need to meet.
IDA Ireland, the external wing of the new organisation has been the subject of a long controversy which was basically fuelled by the Sunday Tribune and by one or two of their economic journalists in recent years to the extent that much of the money we had spent on attracting foreign industry was totally wasted. On close study it is a view we cannot agree with because the transfer between foreign and domestic industry — which has been referred to by Ministers in recent speeches — is such an important and vital impetus to our economy that you disregard it only at your peril. As the Minister said this morning, we depend for three-quarters of our industrial exports and for half the total workforce in manufacturing on the achievements of IDA Ireland. We have kept job losses in manufacturing lower than most other EC countries. I would like to think the Minister could get a much more vigorous approach for the IDA.
One of the things which concerns me about IDA Ireland on the north side — where there are several estates in the vicinity of the airport — is that we have a lot of hi-tech electronic development but recently we appear to be going more towards pharmaceuticals and low tech. That is a development with which I am not in agreement because we have made a huge investment in education and have brought about an electronically aware technological generation. Some of that investment will be thrown away if we go back to the old assembly type industries. I support the improvements made in the Bill.
I should like to make a few brief remarks about external factors. No matter how well the three Ministers do in the coming years unless we get the external environment right we will not make progress. It was astonishing that the Governor of the Central Bank said recently that we had the right external currency exchange rate up to a few months ago, when we were struggling desperately. Some of my colleagues have said privately that perhaps the Governor of the Central Bank should be sacked on the spot for that type of judgment. It is shocking that he should have felt in his economic judgment we should have maintained a totally artificial rate which would now put us at £1.10 or £1.15 in terms of sterling and at a decided competitive disadvantage. If there is a Single European currency that is fine but we should not be expected to pay for the unification of Germany or for whatever further developments that occur in Eastern Europe. It is critical that we get the exchange rate right. We need a serious response from the Governor of the Central Bank and not these silly mantras we heard when I became a Member of the House before Christmas.
In regard to the whole area of competition and the Single Market, some of us have serious reservations about the performance of the last two Irish Commissioners, namely, Mr. Sutherland, who has gone on to greater things in GATT, and Mr. MacSharry. Perhaps with the best will in the world Mr. Sutherland pursued a vigorous competition strategy but in our small open economy — a peripheral economy — some of the things he worked for were mostly beneficial to the golden triangle but not to the State on the periphery. I hope the present Commissioner, and any future Commissioners, while they have their duties to Europe, will also look at their homeland and at its particular difficulties. Pressing ahead willy nilly with certain types of deregulation did not serve all the best interests of this country. I fault Mr. Sutherland very seriously in that regard; in relation to GATT, I fault Mr. MacSharry. Both of them did not pursue the real interests of this country at the Commission table. If the external factors are not right whatever we try to achieve in our internal re-organisation will not go far enough.
I was heartened by the Taoiseach's words in Copenhagen on Monday last in relation to the size of the Structural Funds. While this House is meeting this afternoon, the other assembly of which I am proud to be a member — Dublin City Council — is also meeting and is receiving its report on the economy of Dublin. In that other assembly we are very concerned that Dublin, which has lost 16,000 jobs in the past ten years, has the highest unemployment rate in Ireland. It is a region which has been gravely discriminated against. If Dublin is doing badly, Ireland must be doing badly. That judgment could be applied to other contemporary discussions as well.
The programmes being submitted by the four new county councils to Government are of the order of £2.5 billion. Infrastructural development in relation to transport, communications, education and local development is vital for this region. We have huge unemployment blackspots in Dublin. Unfortunately, we do not have the quality of life which many areas of the west, the midlands and other areas experience. We do not have that beautiful scenery, the music, the language——
There is plenty of bog.
(Laoighis-Offaly): And plenty of floods.
We just do not have those things. We live in crowded conglomerations and very often many of us are unemployed. I represent an area in which the mean unemployment rate is about 55 per cent, rising to 90 per cent in some places. This Government will succeed if it tackles the unemployment problem. I realise there are other areas throughout the country which need good regional development. I note the comments made this morning in relation to SFADCo and Údarás na Gaeltachta and I support them, but we must not forget our capital city. That is what my colleagues in Dublin City Council would want. We must have a reinvigoration programme for the capital city during the next couple of years and I am confident the Minister and her colleagues will bring that about.
As somebody who has come up through the local small business employment movement I warmly welcome the creation of the county enterprise boards and the co-ordination at local authority level of a range of community and local initiatives in job creation. During her campaign and since, our President has rightly said that empowering people at local level is the key element of local development. It could be said that if people felt sufficiently empowered there would be no unemployment in any locality. In summation, I welcome the Bill and hope it sets the framework for a vigorous development during the few years which will result, in four years time, in a much lower unemployment rate, because that is what we need.
This Bill is appallingly bureaucratic. I suppose it is no accident that it is being sponsored by the Minister for Enterprise and Employment who, as one can see, is a committed and enthusiastic socialist. The Labour Party have a great ability these days to be totally beside the point, even to the extent that Deputy Bhamjee is favouring us with one of his rare visits to the Chamber at at time when all his colleagues in Clare County Council are busy elsewhere up here lobbying the Minister for Transport, Energy and Communications, and, I hope, lobbying other people in favour of Shannon.
Is the Deputy sure that is where they are?
Deputy Bhamjee has done his lobbying already.
Please desist from interrupting.
I had lengthy conversations with him. It is interesting to be here listening to Deputy Broughan witnessing the emergence of one of the new economic gurus of the Labour Party who has shown his slip seriously in the remarks he has made here. Deputy Broughan dislikes the kind of competition policy promoted by Mr. Sutherland when he was a member of the Commission.
If Deputy Broughan could slow down his mad gallop towards the socialist Nirvana, he would remember that even his own Tánaiste and Minister for Foreign Affairs actually said that what Mr. Sutherland tried to bring about in the application of competition to industrial policy in the European Community is what we need to give our agencies the elbow room to help us with our development because competition policy in the European Community will stop some of the heavier competition in terms of inducements and attractions that encourage foreign firms to by-pass us and invest elsewhere. Deputy Broughan then made an interesting slip, which may have been deliberate. He took grave exception to the fact that the Governor of the Central Bank should occasionally give his views to the public. Deputy Broughan does not like the idea of us having an independent Central Bank.
(Laoighis-Offaly): That is not what he said.
Deputy Broughan does not like the idea of a public official, such as the Governor of the Central Bank——
He was mistaken on a key policy matter.
——expressing a view in public that is inconvenient to the daft doctrine that Deputy Broughan would like to foist on us. Is there no tolerance in the Labour Party of an independent view on economic issues? Has Deputy Broughan understood or even read with any attention what the Governnor of the Central Bank actually said? Deputy Broughan would do well to note this point because he may not have been privy to it. Before the formation of this Government, I recall talking to a member of Deputy Broughan's party, who is now a member of Government, whose main concern about exchange rate policy was not about what we should do to resolve the problem which existed at the beginning of the year. He was hoping that the Fianna Fáil party in the outgoing Government would have it resolved before the Labour Party had to take responsibility for it.
Was the currency not overvalued?
Deputy Broughan will have to learn that if he is going to throw stones he must ensure that he is not surrounded by glass because, from what he has said here today he is covered in glass which is completely shattered.
When I first read the section of this pretentiously styled Programme for a Partnership Government — although I can see no partnership, its members appear to be fractioning in every direction, with Fianna Fáil holding one view and the Labour Party three or four — dealing with the creation of jobs and tackling unemployment, I felt weak with shock.
I have never seen a more determinedly bureaucratic approach to industrial structures. It is interesting to note the timing of the publication of the programme. The programme was published when the two parties finally decided to consummate the marriage, but at that stage we had not received the Government's response to the Culliton report. For once Deputy Broughan decided to take the liberty — I welcome the emergence of independent thinking from that side — of saying that the Culliton mantra is not everything to him, but the Government has not figured that out yet. While the Government go around chanting "Culliton, Culliton, Culliton" every time it refers to a policy position, it is busily doing things that are totally against Culliton's philosophy. This Bill more than anything shows that the Government has ditched the proposals in the Culliton report. However, I must give the Government some credit. I am suspicious of commissions and expert bodies set up by the Government which produce reports claiming that all or none of its proposals must be implemented. I am not being critical of Mr. Culliton or his colleagues in that respect, but such reports are unrealistic. While the Government has taken the view it can justify everything, including higher telephone charges, by reference to Culliton——
That is Peter Sutherland's policy.
——at the same time it introduces a Bill which drives a coach and four through the Culliton report. It also drives a coach and four through the Government review of the Moriarty report on the Culliton report. The question of the structure of our industrial agencies has been talked to death and it is now about to be strangled, stifled and suffocated by the structures of this Bill.
This Bill is a monument to Labour Party adherence to bureaucracy and to Fianna Fáil's laziness, who simply do not want to think. The IDA as we know it is about to be split in two. A new monster called Forfás is about to be set up. I have read all the rubbish in the papers recently about whether or not that is a legitimate word; it is not. It has nothing to do with grammar, but then logos rarely do. It is a daft name for a daft organisation. This monster is to be set up to co-ordinate all the other agencies although they are supposed to be autonomous. It is intended also that Forfás will swallow up the functions of Eolas and distribute them to the other agencies. It is not clear how that is to be done. This monster will give policy advice in the area of industrial development generally and co-ordinate Forbairt, the remains of the current IDA and An Bord Tráchtála. I note a very ominous phrase in the explanatory memorandum which says that Forfás will co-ordinate "any other relevant bodies designated by the Minister". It is obvious that if the Minister finds any type of industrial policy area that has not been locked into this Bill, Forfás will be empowered, without reference to anyone, to co-ordinate its activities.
Unless the Government is careful in the way it writes the rules for the multiplicity of bodies being set up throughout the country, Forfás could claim to have a role in co-ordinating the activities of the county enterprise development boards, which in turn could stifle many local initiatives that have taken place already and which in counties Clare, Tipperary, Cavan, Mayo and elsewhere are producing results. Such initiatives are in serious danger of being swallowed up by the new county enterprise development boards. That would be a retrograde step and a blow to the type of bottom up economic development that the Labour Party is supposed to favour. We have all heard the Minister for Arts, Culture and the Gaeltacht, Deputy Higgins, stating that we need a new model of industrial development and the nonsensical mantra from the Labour Party stating that trickle down economics do not work, but the first substantial Bill on industrial policy which it introduces creates a new monster that will stifle that bottom up model of development.
If Forfás is to have such a co-ordinating role, what will it do that could not be done properly by the Department already in place? What will it do that could not be done by the Department of Enterprise and Employment, the former Department of Industry and Commerce section of this new monster Department? That Department does not seem to have got its act together yet. The functions of Forfás are more appropriately the field of activity of the Department of Enterprise and Employment. Shifting functions from a Department of State is a new development. It has been done in the past by setting up companies such as Telecom and An Post, but to shift responsibilities to agencies such as Forfás is a new development. Is it a half way step on the road to State privatisation of some kind? I am concerned that the functions of a State Department are being hived off in such a manner. It could mean that we in this House will not have the locus standi or right to question the Minister in this House about the activities of that agency. We run the risk of being told that such questions are disallowed on the grounds of there being no ministerial competence. I am concerned that we are about to see here the emergence of a new and superfluous parallel administration which will waste time, effort and money.
A section of the split IDA will be a body called Forbairt. Deputy Broughan made philological considerations about Forfás, which he stated gives a sense of supergrowth. On the other hand, a subsidiary body which is to be co-ordinated in this way is called Forbairt, which merely means expansion.
Names are important.
Yes, but the Deputy must know what the language means. Therefore, we are going to have a super monster in Forfás co-ordinating the activities of Forbairt expansion. The job of Forbairt is to focus on the development of indigenous industry and in doing this it is supposed to exercise the indigenous industry functions currently exercised by the IDA and the technology development functions of Eolas. If the language sounds somewhat stilted, the people who drafted the Bill and the explanatory memorandum are to blame, because I am using their phrases. That combination, looking after the development of indigenous industry and the technology development functions of Eolas, is nonsensical. There is no obvious link between them. The technology and development functions of Eolas cannot pretend to be specific to indigenous industry. Non-indigenous industry also needs technology development. There is no reason for Eolas not being involved, which is recognised in the explanatory memorandum to the Bill which continues — awkwardly —"the allocation of responsibility for indigenous industry to Forbairt will not preclude the agency from generating fee income from technology services to overseas industries." That sentence makes my point precisely. It is an overt admission of how unreasonable it is to try to combine these two functions in the way proposed. There is nothing in principle — there could not be in the Bill but there is nothing in any of the literature or examinations of industrial policy that I have seen — to indicate that there is any difference in principle between the technology development requirements of indigenous industries and overseas firms. There is no reason there should be any difference between them.
There would be——
I will come to that in a minute. The Minister should not anticipate too far ahead. Neither is there anything to show, as far as I can see, that these requirements can be better met by a unit attached to an indigenous industry promotion agency than if they are handled by one involved in overseas firms. In the logic of this Bill it could be in either place. I do not see any reason it should be in either, and nothing the Minister said convinces me that there is any reason for it. There is no convincing case for the merging of Eolas with any other agency, that is the nub of this. Certainly there is no convincing case for merging Eolas with Forbairt, which is what is proposed, or the IDA.
To be fair, I suppose one could say there is a case for merging Eolas with a single industrial development agency if we were to retain one. There could be a case for example — and I can imagine how it would be made — for merging Eolas with the IDA as it is today, but there is no case for merging Eolas with either part of a sundered IDA, which is what this Bill proposes.
The other part of this split IDA is to be the new IDA which will have the mission of attracting overseas firms to Ireland and facilitating further expansion of overseas firms here. Again, we see the incoherence in this Bill. What is so different about the development needs of overseas firms which justifies the creation of a totally new body? They fall into two categories. There are, on the one hand, the multinationals which seem to need assistance here only to the extent that they are looking for grant assistance, to benefit from the tax regimes or various schemes. They are not looking for assistance or advice here on how to run their operation, in fact most of the activities of Irish branches of multinational corporations are planned by the parent corporation. Their planning and investment programmes — even their marketing — is usually done for them by the central planning structure of the firm. I am delighted that there are many foreign firms here, in spite of the best efforts of some of the gurus on the Left to demonise foreign industry, who are in exactly the same position when it comes to technology development as any Irish firm. Firms on their own are looking for assistance with programmes to support them in research and development, in the development of their technology, in knowing what is going on in their sector and in deciding how to latch on to the latest bandwagon or even get ahead of it. There is nothing to differentiate them from indigenous firms which would justify the super bureaucratic structure proposed in the Bill.
Section 9 of the Bill deals with the allocation of powers and functions to the agencies, it is a masterpiece of vagueness and ambiguity and should not be foisted on unsuspecting entrepreneurs. We have to look at it from their point of view. They will now be faced with this whole new superstructure. If they thought it was difficult to deal with the IDA and other bodies they will find it twice as difficult to deal with this proliferation of bodies. There are even more, because in addition to all these agencies, although we have not heard much about it, there is supposed to be an employment protection unit in the Department of Enterprise and Employment. The Minister of State has told us at various stages what sections of the Department, the IDA and the Employment Protection Unit are doing in various emergencies.
The Deputy must have missed it yesterday.
This unit is to provide advisory services to small firms, regardless of whether they are experiencing difficulties or trading well and eager to grow. I am reading from the Government programme. This is a kind of polyvalent unit that can do everything for any firm. If we have that kind of unit in the Department why do we need the IDA and Forbairt and two autonomous agencies to be co-ordinated by Forfás. It is more incoherence and bureaucracy.
There are curious provisions in section 12 of the Bill about how these monsters and the inarticulate outfits to be set up will deal with grant packages. Section 12 provides that Government approval will be needed for any grant package exceeding £2.5 million. It also requires that specific approval will be needed for any further grant to an individual project of £2.5 million or more and that means a single stage project looking for grant assistance of £2.6 million or more needs specific Government approval. If, on the other hand, a project can be carried out in two stand alone stages in two successive years, and in the first year £2 million is required and another £2 million in the second year, Government approval is not needed because the project falls under the limit of £2 million for the first grant. Therefore, it does not have to go to the Government and, in the second year the project is getting an increment of less than £2.5 million so Government approval is not needed there, whereas if the project cost £.5 million over that one would need the full panoply of Government approval and all the delays that can go with that.
Particularly from the Department of Finance, as the Deputy knows, having been there himself.
I must confess — and the Minister will not be surprised to hear me say this — I would far rather see all these operations run by the Department of Finance than by this totally inarticulate mixum gatherum of agencies with which we will be saddled.
I am very much afraid that what is happening here is that because the Government does not have a clear policy it is trying to divert attention by having new gimmicks for the sake of having new gimmicks. There is nothing in this Bill to indicate any shift in the direction of industrial policy or any change in the inspiration of quality of industrial policy. We will get old goods in new packages, but they will be just more packages with more red tape. The result will be more rather than less incoherence in Government industrial policy, more rather than less difficulty for entrepreneurs and more rather than fewer people unemployed.
With the permission of the House I would like to share my time with Deputy Foley.
Is that agreed? Agreed.
While Deputy Dukes made a number of constructive points, I do not necessarily agree with everything he said.
I could not find any constructive one among them.
By describing these bodies as "gimmicks" Deputy Dukes spoiled what he was saying because I do not think anybody in their sane senses could say that the Bill is a gimmick. It has come about as a result of the industrial policy review group chaired by Jim Culliton. I am sure Deputy Dukes would accept that was a good group.
This Bill throws out his central recommendation.
The Moriarty task force then reviewed Culliton's report and following its recommendations this Bill is now before us.
The Government had a look at the Culliton report.
It is important when major changes are taking place in the IDA that there be recognition of the excellent work undertaken by the IDA in the past. I do not wish to be parochial but I want to pay tribute to the manager and staff in the IDA office in my north east region for the excellent work they have done. We were fortunate to have a manager who was very good at carrying out his responsibilities but who also has a depth of intellect and a good philosophy in regard to industrial development.
The Minister in his speech referred to Culliton, pointing out that industrial development comes about through the harmonisation of a broad range of factors. I wish to refer to that aspect of his contribution. I have referred to this previously on Second Stage of the Finance Bill and in the budget debate. I am concerned about the lack of co-ordination between various public authorities, public Departments, local authorities and agencies. There is a lack of focus on job creation and on the maintenance of existing jobs. The Minister referred to a fact, of which the former Government can be proud, that 118,500 jobs were created between 1987 and 1992.
Some 108,000 jobs were lost.
It is unfortunate that 108,000 jobs were lost during that period. Could more jobs have been created or fewer jobs lost if there had been a more co-ordinated approach and a greater sense of urgency in those agencies to which I referred of the need to create jobs? The Programme for Government refers to the requirements for industrial development. One of the points in the programme is that the Government will encourage a dynamic new spirit of enterprise. It is appropriate when this new organisation is being established that all Departments of State, local authorities and agencies should examine their area of activity to see what they can do to assist in creating more jobs and prevent the loss of jobs. I am concerned about the gap between the theory of job creation and the implementation of various plans to create jobs. I recognise the excellent work performed by public servants, but I wonder if the lack of co-ordination or a rigid implementation of the law hinders the creation of jobs. Most Departments of State have a role to play in this regard.
The Bill deals with the co-ordination of Forfás and the local authorities. Local authorities have major responsibilities. For example, one local authority has not processed 55 per cent of planning applications within the statutory two months. Local authorities must also be considered in regard to job creation. Job creation is not just the responsibility of the Department of Enterprise and Employment. Co-ordination between various Departments must also be considered. I am aware of a meat factory which received an order for 20 tonnes of beefburgers, but because a new European Community directive had not been implemented and a decision was not made in this regard by the Department of Agriculture and the Department of Finance, that order was lost. Those matters should be addressed. There should be more co-operation between Departments and they should focus more on job creation. Perhaps in that way more jobs could be created and existing jobs secured.
People come to Ireland to pursue educational studies. Recently the Taoiseach made a successful visit to Malaysia. I am sure more people will travel to our country to pursue educational studies, particularly at third level. The Department of Justice has major responsibility in the provision of visas for those people and that is an area which must be considered to avoid a bureaucratic barrier to people coming to this country to pursue educational studies.
We must also consider co-ordination between the new bodies being established and other bodies with responsibilities. In my region there is the International Fund for Ireland and the Interreg programme. How will the activities of the bodies with responsibility for such programmes be co-ordinated? This raises the question of the central and regional responsibilities of Departments. Deputy Dukes suggested that the Department of Enterprise and Employment should carry out much of the work in regard to job creation. I would prefer responsibility to be devolved. For example, should the responsibility FEOGA now has be devolved to the regions because it has an important role to play, particularly in the food industry? It could play its role in association with Forfás, Forbairt and IDA Ireland which will deal with foreign industries. I would question whether the responsibility FEOGA now has should be devolved to the regions rather than managed centrally.
Which body will have responsibility for firms in Northern Ireland, in Belfast for example? Will responsibility be given to IDA Ireland or Forbairt for such firms? There is a danger of overlap in this regard and this area needs to be teased out carefully.
I have referred to whether rigid implementation of the law hinders employment creation and the maintenance of existing jobs. Do local authorities take their responsibility in regard to job creation seriously? I referred to delays in the planning process in regard to rigid implementation of the law and how this may adversely affect job creation. I am in favour of laws enacted by the Houses of the Oireachtas being implemented, but I would query whether rigid implementation of law should interfere with job creation or the maintenance of existing jobs. All Departments of State and their agencies, local authorities, including health boards through the environmental health service, have a major role to play in regard to job creation and the maintenance of existing jobs. Those bodies should be instructed to focus more on job creation. There should be a rapid response mechanism when problems arise, like that to which I referred in regard to the Departments of Finance and Agriculture, Food and Forestry no decision was taken in regard to the implementation of a European Community directive. Where there is evidence of a lack of urgency or a lack of focus on job creation, some sort of penalty should be imposed rather than the issue of a circular letter from the Minister responsible. All Departments and agencies of State must focus on job creation and act in co-ordination with the new bodies established.
I thank my colleague, Deputy O'Hanlon, for sharing his time with me.
I welcome the opportunity to speak on this Bill and to highlight a number of aspects of it. Before I concentrate on those aspects I would like to address the misconception that the Government are being complacent about the unacceptably high level of unemployment.
When the Taoiseach was first elected 17 months ago he stated at his subsequent press conference that creating jobs would be his highest priority. In the Fianna Fáil six point plan for national progress, the first point was entitled "Making Jobs The First Priority"— indeed, a large portion of the recommendations made in that document are contained in this Bill. Following on from that the Programme for a Partnership Government highlights most of what is contained in this Bill. This week in Copenhagen, the Taoiseach announced the plans for a new Government scheme to take 30,000 people off the unemployment register over the next 18 months. The Taoiseach outlined this scheme during the EC Summit. He stated that the scheme would form a part of the National Plan due to be submitted to Brussels next month. This surely highlights the fact that Fianna Fáil are committed to creating jobs.
Much has been said about the industrial policy review group chaired by Mr. Jim Culliton and the task force chaired by Dr. Paddy Moriarty. The effect of Culliton was to widen the whole industrial policy debate. Culliton built on his new analysis by calling for a different approach in which the requirements of industrial development would become the driving force in many areas of economic and social activity. The Moriarty task force reinforced and undertook with great commitment the difficult job of translating the need for a more co-ordinated approach to enterprise development.
I wish to put on record my appreciation of the outstanding work done by the Industrial Development Authority over the past number of years. People criticise the IDA for occasional mishaps but it is always able to hold its own against any development agency in the world. It is in competition with agencies from more developed and better off economies and has succeeded in attracting many worthwhile industries to Ireland.
I appreciate also the work carried out by our local development agency, the Shannon Free Airport Development Company. SFADCo has done outstanding work in developing large and small firms, indigenous and foreign. Its success can be seen in the initial financial services centre set up in Shannon which led to the establishment of the centre in Dublin. The promotion in Dublin and Shannon has led to many outstanding companies coming to Ireland and establishing financial services and other industries.
North Kerry is now within the remit of SFADCo for industry and tourism purposes. I wish to take this opportunity to thank the local manager, Ogie Moran, for his work in this area. He has shown tremendous drive and initiative as he did on the football field.
He can go back to it now after last Sunday.
In the past few years many tourism developments have taken place in Tralee in which Ogie Moran and SFADCo have played a major part. The importance of this can be seen in the early success of GPA, which we should not now ignore. GPA was the motivating force behind the aviation park in Shannon. It was also the impetus behind the aerospace project which employs hundreds of young people. I compliment the Shannon Free Airport Development Company on establishing financial services and high technology industries in the Shannon aviation park. It was a novel proposition and has made an impact on employment in the mid west. This is why it is important to put on record the vital importance of maintaining the trans-Atlantic stopover at Shannon. Shannon has been a success story for many years. It was thought in 1958-59, when SFADCo was established the fall in aviation business meant Shannon as a location would fail. That has all been turned around.
The development of the aviation park and the initiative drive and incentives in the region mean Shannon is thriving. While jobs have unfortunately been lost in some industries there, business in the industrial estate in the mid west are strong. This is largely due to the efforts of SFADCo, battling against the decline of the trans-Atlantic business, shrinking markets and changes in transport patterns. When one system has become out-moded SFADCo has succeeded in moving quickly into a new area and developing new ideas and trends. The aviation park is a unique development which will be of great importance in the future.
The Bill addresses the need for the restructuring of industrial agencies. It establishes the new State agency structures for industrial development. The creation of the new bodies represents a major step forward in the development and implementation of industrial policy in Ireland, as highlighted in the "Employment Through Enterprise" report.
Three new bodies will be created, Forfás, Forbairt and IDA (Ireland). Each of the agencies will be autonomous and will have its own board. Each will have its own distinct mission and goals. Forfás will be responsible for overall policy co-ordination and administration. It will also play a proactive role in ensuring co-ordination in those areas of industrial development currently outside the parameters of the Department of Enterprise and Employment, such as food and foreign trade.
Forbairt will develop indigenous industry by bringing together the existing functions of Eolas and the IDA. Forbairt will work closely with An Bord Tráchtála and will focus on industrial development from the perspective of competitive advantage at the level of the individual firm. Its regional and sectoral based approach will build upon this company based approach. This new approach will lead to a more effective response to the needs of the individual enterprise.
IDA (Ireland) will continue to promote the attraction of overseas industry to Ireland. It will strengthen its efforts within the single European market. IDA (Ireland) will demonstrate the attractiveness of Ireland in terms of other factor advantages, such as the quality of the labour force, our clean environment and other infrastructural assets such as our excellent telecommunications system.
The creation of these new bodies represents a major step forward in the development and implementation of industrial policy in Ireland. To put this Bill into context I would like to briefly outline its progress as I see it. The parameters of the Bill were explored and developed through the work of the Industrial Policy Review Group.
The provisions of this Bill should not be taken separately. It should be examined in the broader aspects and we must also examine the provisions in the Finance Act, 1993, which were introduced to encourage the growth of small enterprises and remove the barriers to investment in such businesses.
As I have already stated, this Bill was outlined in the Programme for a Partnership Government. The programme states that the Government would strengthen Ireland's industrial, scientific and exporting base; increase the level of directly productive activity; encourage a dynamic spirit of enterprise; put a new emphasis on building up small industry; and broaden industrial strategy to take in all the factors that affect output and productivity.
The Moriarty task force re-emphasised this programme and undertook the difficult task.
The Government outlined its proposals in the document Employment Through Enterprise, in the areas of taxation, energy, ports, communications, transport, environment, commercial State enterprises, education and training and competition policy.
The most far-seeing aspect of this approach is that from this point onwards the formulation and implementation of industrial policy will include all aspects of public policy which have a significant impact on the creation and maintenance of competitive enterprises in the industrial sector.
So far as the industrial development agencies are concerned, the conclusion of the Culliton report was that their role is an important but limited one. When reviewing industrial performance there has been a tendency to date to believe that the agencies are responsible for job creation and also for any failure to meet this country's employment needs, when in fact the situation is that the current agent structures are inhibiting the most efficient and effective development of industry and we must change them.
In the past we have generated more bureaucracy and red tape than was necessary, and by generating this red tape we inhibited prospective economic growth. The separation of indigenous and overseas functions, with the development of the three new agencies, will lead to a greater understanding of purpose at agency level.
I am delighted to have had the opportunity to discuss this Bill. As I have already stated, I welcome this Bill in general terms. It is a very significant measure in its own right. It is part of a far-seeing and progressive policy on the part of this Government, a policy that is very much in the Fianna Fáil tradition of promoting growth and enterprise. It reaffirms Fianna Fáil's commitment to creating jobs and eliminating the red tape that has hindered us in previous efforts to create employment and tackle the high level of unemployment.
I welcome the opportunity to speak on this important legislation, although I am not sure that I welcome the Bill before the House. I am not convinced that it will have the desired effect. The starting point at which this debate should begin is the very raison d'etre of agencies such as this. If one adds to the 300,000 on the live register the number who are on FÁS courses, on social employment schemes and those who, by one foul stroke or another, have been removed from the live register, one realises we have a problem on our hands far in excess of 300,000.
It must be recognised that over a number of years the IDA made valiant efforts to attract investment to this country against stiff opposition from abroad. It also facilitated indigenous industrial development here. The economic climate within which the IDA operates is significant and cannot be ignored in a debate such as this. In that context, the fundamental economic environment for employment creation cannot be divorced from this debate. In order for a person to avail of a job opportunity the climate must be attractive. Unfortunately, because of the linkages between our tax and welfare systems very often it is not economically viable for an unemployed person to extract himself from the vice-like grip of the welfare code and enter the marketplace by taking up a job.
It must also be attractive for investors and people with money to take risks with their capital in job creation. In both instances the Government is to blame for lack of job creation. Who would risk their hard earned capital in job creation when they can put it in bank accounts where they get returns for in excess of anything they would receive by risking their money in job creation? Until such time as the special savings accounts which are available at present are made less attractive the task of the IDA in encouraging indigenous industrial development, in particular, will be more difficult. We may talk about all sorts of structures but until the fundamental problems are solved the IDA will be burdened with a load which it will find difficult to carry.
Red tape and bureaucracy are anathema to people endeavouring to set up in business and employ others. This Bill is a recipe for further bureaucracy and red tape. It has all the hallmarks of empire building, with a number of State agencies and boards involved in industrial development. Another hallmark of this Bill is compromise between Government Ministers, namely, the Minister for Enterprise and Employment, Deputy Quinn, and the Minister for Tourism and Trade, Deputy McCreevy.
It is interesting that in reply to a Dáil question of mine yesterday asking the Minister for Enterprise and Employment about specific targets his Department had set itself in terms of the unemployment crisis, the Minister trotted out what is becoming a very irksome and irritating response, that the Government has been in office for only X number of months and has not yet had an opportunity to set targets. That response is trotted out all too often by Ministers in an effort to cover up their shortcomings. As it is almost nine months since the last general election surely the Minister would have come to terms with his brief and set legitimate targets in terms of resolving the unemployment problem.
The Bill is largely about cosmetic surgery. In no way does it address the fundamental problems of unemployment. For the Taoiseach and Ministers to announce throughout the country that X number of jobs have been created is no substitute for policy. About two or three weeks ago the Minister for Enterprise and Employment visited Cork and announced the creation of a series of jobs. The announcement made headlines in The Cork Examiner that Saturday. Each Saturday I hold a clinic in Millstreet. On the same day that the Minister announced, at a press conference in the city, the creation of an additional 25 jobs in Alps Electric, which provides valuable employment in the town, 25 people had received their last pay cheque from that company, and an additional 25 people were laid off the following week. That sort of posturing without substance or policy is an insult to the 300,000 people who are unemployed. No later than yesterday, the Taoiseach on his return from the EC Heads of State Summit spoke about 30,000 jobs. Undoubtedly the funding we will secure — the exact amount has not been determined yet — will create additional jobs, but the public is becoming increasingly cynical about announcements when there seems to be very little substance to many of them. It shows little regard for the feelings of the people who are unemployed.
Some people have likened the Bill to a rearrangement of the deck chairs on the Titanic, but I would not be as defeatist as that. However, the Bill is fundamentally flawed in a number of areas, for example, it is very short in outlining policy. Coming from the Cork North-West constituency I want to familiarise the Minister with the number of agencies that will be involved in job creation in my constituency. As the constituency includes the Gaeltacht area, Údarás na Gaeltachta will be involved. The Gaeltacht has secured Leader funding and therefore that body is involved. The County Enterprise Board and the IDA, particularly Forbairt, are involved and SFADCo, which operates in a small corner of the constituency. Where do potential investors, who are not familiar with bureaucracy and for whom bureaucracy and red tape are anathema, begin? Do they go to the Leader programme — there are three Leader programmes in operation in the constituency — to Údarás na Gaeltachta, Forbairt, SFADCo or the County Enterprise Board, or do they avoid all of them, as many people tend to do because they get bogged down in bureaucracy? This is a legitimate question. Layer upon layer of red tape and bureaucracy stifles initiative. In order to facilitate industrial development we should lift this weight of bureaucracy from the shoulders of people who are prepared to invest their time, money and abilities in job creation.
There has been much ado in this debate about the Culliton report and undoubtedly there are laudable objectives in that report. However, rather than interpreting and taking on the Culliton report the Government decided, with the classic kick to touch, to set up the Moriarty task force to review the Culliton report. It then undertook its own review of the Moriarty recommendations. Because some very thorny and unacceptable disection of responsibilities then occurred we had the Quinn v. McCreevy debacle at the Cabinet table. This has resulted in a mish-mash report on the Cabinet review of the Government review of the Moriarty review of the Culliton report. Then we have the six agencies which will now be involved in my constituency in developing and promoting job creation. Is it any wonder that there is such scepticism and pessimism about the Government's ability to resolve unemployment? A great many people take the view that what is really involved is cosmetic surgery to give the appearance of doing something while in reality achieving nothing for the unemployed.
Figures have been extensively quoted about the number of jobs created by the IDA in recent years. The figures are credible and 118,000 jobs are not to be sneered at. Unfortunately, the down side is that the net increase is only 10,000 108,000 jobs have been lost in the intervening period. That is the critical factor in assessing industrial policy. We have the ability to compete with the best. The IDA had the ability in terms of creating jobs here despite the strictures placed on it by Government policy and economic circumstances. They could compete with other international development agencies.
Too little time and energy have been directed towards the preservation of jobs. A classic example of that is what is happening in the clothing and footwear industry. The IDA has striven in recent years in this sector to halt the jobs lost because of the alarming cost differential between manufacturing bases here and in the UK and particularly in the Far East. Despite all of that, we have built up a reasonable textile and footwear manufacturing industry. Yet in one fell swoop the Government can undermine all that with an imposition of VAT which every day is causing the loss of jobs. There is no coherent industrial policy emerging from the Government. Both the Minister and Deputy Dukes referred to the job preservation unit in the Department. It is an ineffective token. It achieved nothing since its establishment and will achieve nothing. We have no job preservation policy.
With hindsight, I question the wisdom of the decision in this House to abolish Fóir Teoranta. The Companies (Amendment) Bill was used as the pretext for that. It is now clear beyond doubt that an agency charged with responsibility for job preservation on a statutory basis is necessary. We must reconsider the possibility of re-establishing Fóir Teoranta.
This legislation is short on policy and on initiatives. The Culliton report is used as a fig leaf to cover up inadequate legislation. There is little information in this Bill about the Government's view on attracting further multinational investment. Should we move away from intensive capital investment in plant and machinery or should we move-towards equity investment as suggested by Culliton? In that regard, this legislation does not acknowledge the recommendations of Culliton. Culliton suggested that we should tilt the balance in terms of the moneys available for industrial investment in favour of indigenous industry. We seem to be setting up two State agencies, IDA Ireland and Forbairt, without any indication as to the magnitude of each of these enterprises or the policies which will underpin them. For all those reasons, this legislation is seriously flawed. It is the classic compromise highlighting the tensions at the Cabinet table and highlighting the fact that with regard to job creation policies the cupboard is bare. There is no flair, initiative or backbone and there is no policy-making in this legislation. It is a fudged compromise which will achieve nothing. It will not contribute to reducing the unacceptably high level of unemployment.
I propose to share my time with Deputy Michael Ahern. I see that Deputy Creed is shedding crocodile tears today but he was not a Member of the House and cannot be blamed for some of the things which were done between 1983 and 1987. Deputy Creed says the Bill is short on substance, but as a result of this Bill we do not want to establish three organisations whose hands are tied, who cannot do the job. Nine times out of ten legislation introduced here is enabling legislation. This Bill will deal with future development and future industrial strategy for this country. It is no harm to reflect on how we have fared. Over the past number of years the IDA has done a good job but because of the worldwide economic climate in many cases their efforts have been thwarted because of jobs losses. If it had not been for their efforts, where would we be today? On Deputy Creed's figures we would be talking in terms of 400,000 unemployed. It is in that light that we should consider the entire operation of the IDA over the years.
In the context of this Bill we should look at our problems with regard to infrastructure and incentives. Recently two or three major projects have been snapped away from this country by other EC member states who were prepared to present grant packages which were way beyond anything that could be considered here. When we seek multinationals to set up in Ireland we must look at their track records. They are the sort of people who will move from country to country and from continent to continent for profits. They are there for profits and we have to accept that. In doing so, we should look at where we can out-score other countries. We can out-score other countries with our education system which produces people of a calibre not found in any of the countries against whom we are competing.
Our computer industry has been successful, despite the hiccups, and that was as a result of the educational background, the type of graduates and general personnel available to multinationals who come here and create the atmosphere for job creation. We must remember that if people cannot see something for their efforts they will not create jobs whether in business employing two people or larger concerns. The multinationals go for the highest net profit on their balance sheets and make no apologies for that. Their responsibility is to their shareholders.
It is time we recognised that some areas are more disadvantaged than others. In this respect Deputy Creed is lucky to have organisations such as Údarás na Gaeltachta operating in his constituency. My area has suffered enormously through loss of its young people and we have the highest rate of third-level pupils per capita in the country. Where do they go when we have educated them? They go to Irish cities or abroad. Those young people are not given an opportunity to remain in their localities because the industries that could employ them do not exist in their regions. Many multinationals will not head towards the north-west because of the lack of a proper infrastructure. Our area was the last to have automatic telephone dialling but I accept the digital system now in operation is the best in the country.
We should sound a word of warning to the new agencies. Their function will be to create jobs but they will have to be risk-takers with regard to grant-aid and the provision of capital. We should not criticise people because one decision out of ten may go wrong. The person who makes six out of ten correct decisions is on the right road. We have heard too often here the IDA and other grant-aiding agencies being attacked and not being in a position to defend themselves.
With 300,000 people unemployed we must be risk-takers and create a climate to encourage people who are capable of creating jobs to do so. They will not do so if their position is jeopradised by lending institutions or others. In conjunction with the passage of this Bill our lending institutions should be asked to play a more pivotal role, especially in regard to small indigenous companies. We have now very low interest rates but the difference between what is paid to depositors and charged to borrowers is enormous, in the latter case the amount running into double figures. That cannot be allowed to continue. Lending institutions should examine the margins.
We must also examine the system of taxing single people. People involved in the clothing industry or any labour-intensive operation are being squeezed out of business by the sweat shops of the Far East and so on. We do not want to see a sweatshop mentality here. It is important that these labour-intensive industries be examined by the new agencies and given whatever encouragement is necessary to enable them compete on a reasonably level playing field. The position of cheap EC imports should be examined also.
Our well educated young people are being sold cheaply, to put it mildly, to other nations to help boost foreign economies. We must create the economic climate to secure jobs for them at home. I am sure that at the end of the term of office of this Government the initiatives taken under this Bill will have helped reduce the unemployment figure to something in the region of 200,000. Those who criticise the job creation initiatives taken at national and European level should remember that these are people who want to work.
I am delighted to be afforded an opportunity to contribute to the debate on this important Bill which will be of special importance for job creation. The greatest problem confronting this and future Governments will be our enormous unemployment figures. I should like to compliment the Industrial Development Authority on their excellent work over the years which, as has been acknowledged by Deputy Creed, led to the creation of 118,500 jobs between 1987 and 1992 in a most difficult world climate. That was an excellent result by that industrial promotion agency.
The greatest economic boom since the First World War; there was no recession.
The Industrial Review Group drew attention to the limited success of existing policies and approaches for the further development of industry, in particular, to the poor results achieved by indigenous industries. It recommended a change in the structure of the industrial development agencies to give new impetus to indigenous industries and the promotion of investment within the country. Indeed, the intention of this Bill is to put those recommendations into action.
I am sure there is no politician who over the years has not received complaints from Irish industrialists wishing to start up businesses about their experiences when seeking assistance from State agencies. I hope the provisions of this Bill will constitute a new impetus, aiding those who wish to set up their own industries with more help from both the IDA and Eolas.
In recent decades industrial policy has been led by the relative success of the IDA in attracting overseas industries. That has been of tremendous significance, but has tended to distract attention from the failure to develop a strong, leading-edge indigenous industry. Indeed, this leading-edge, indigenous industry is a fundamental requirement of our national advancement. Nonetheless, the task of developing indigenous industry is difficult and demanding, more so than the task of attracting mobile projects here. To be successful it will necessitate a different focus and commitment. The new agencies, especially Forfás, will be responsible for this new focus.
In the past heavy emphasis was placed on the provision of grants to finance projects for the production of goods and services with the object of creating jobs. The allocation of a large amount of Exchequer resources has not achieved the necessary results. For example, a whole range of analyses — most recently the Culliton report — concluded that the relatively poor performance of Irish industry related to factors of scale, such as management, marketing expertise, product development and technology and that those weaknesses were due in part to the encouragement of a dependency culture within Irish business, fostered by the emphasis being placed on grants and incentives by the industrial promotion agencies. In industrial promotion policies we must now adopt a market-led and enterprise-based approach. In this Bill the emphasis is being put on that approach.
It is proposed to amalgamate Eolas and the IDA. During the years Eolas has provided a great service to industry. The value of the work it has done for small businessmen and companies has not been recognised. However, it only provided advice in the area of technology. The IDA provided expertise in the area of management and company development. In many instances Eolas and the IDA worked from two sides and did not come together. Now that they are to be amalgamated in one agency, to be known as Forfás, there will be liaison and one will be able to avail of their expertise in one agency in the areas of technology, management and company development with the result that industry will benefit.
I note that the NSAI will no longer be associated with Eolas. Again, this is of importance from the point of view of industry. The NSAI makes the ISO and other awards. When Eolas and the NSAI were under the one roof the standing of those awards was questioned, but now that the NSAI will be an independent body those awards will be looked at in a different light.
It is vitally important that research and development be carried out in industry. During the past few years the funding available for research and development has been greatly increased. As a result many of our graduates can stay at home to carry out research and development in industry. There is evidence to suggest that new hi-tech industries are being developed due to the fact that our graduates, instead of moving abroad to work for Philips or Siemens or to Japan, are staying at home to carry out research and development to produce goods and technology which can be developed here rather than abroad when they would have to be imported at great expense.
I am glad the Minister stressed in his speech that it is his intention to ensure that funding for research and development projects will continue to be provided because it is his belief that if we fail to increase the funding available for research and development we will not develop indigenous industries. The steps taken by the Minister and the Government in this Bill are positive, will benefit industry and lead to an increase in employment.
Two remarkable facts would strike any foreigner immediately on looking at the State of Ireland for the first time from the outside in 1993. First, Ireland is the only country in the world where a married man with four children earning £8,000 per annum is better off than a married man with four children earning £15,000 per annum. Second, one of the great political and diplomatic triumphs of the Government in recent years, of which it regularly boasts, is that it has acquired from the United States the right to an almost unlimited number of emigrant work visas to enable its citizens to settle in that country.
Ireland is therefore a sick society. Its economy, so far as employment is concerned, is gravely ill. One of its Government's principal reactions to that situation, after full consideration by an expert commission, is to reject most of the recommendations of the commission and produce this Bill. After six months of intensive and very productive work the Culliton Review Group produced an unusually powerful and coherent report. Its messages are clear. It is equally clear that its messages have been rejected, both in this Bill and this year's budget, each of which equally flies in the face of the Culliton report.
The explanatory memorandum to this Bill refers to the Culliton report twice — first, in respect of a trivial recommendation to charge for services under section 7 and, second, to expand the triennial reviews of industrial performance to include a policy under section 13, which again is a minor recommendation. Outside these two points the Department cannot find any specific recommendations of the Culliton report in the Bill to which it can refer.
From the time the Culliton Review Group reported its report has been the subject of shameless political manoeuverings. The strength and coherence of its recommendations as a unit were such that the Government likes to justify its unpopular actions by referring to it. It does this even when it is acting in clear defiance of the Culliton report, as in the increase of 400 per cent which it imposed on local telephone charges.
While the Government that was in office in January 1992 by and large accepted the Culliton report's recommendations, both in the spirit and the letter, the Government that came into office in February 1992 decided, for no obvious or compelling reason, to take a different view while continuing to pay nominal lip service to the recommendations. The present Government, which dates from January 1993, has gone even further in this direction. I find it depressing that arguably one of the best public policy reports every produced is jettisoned in this way.
While this Bill relates entirely to agencies which are important in themselves as instruments of policy, they are not necessarily the most important part of what the Culliton report suggested needed to be done. Our requirements as a country with a huge unemployment problem relate to public policy generally, particularly to fiscal policy. Ireland is the European country with arguably the greatest obstacles to industrial development and expansion. The Culliton report makes it clear that we need to tackle these obstacles on a broad front cutting across every Department of State. The report also makes it clear that we need to streamline and rationalise our agencies and the delivery of our support services.
In the past six months not alone are we not doing any of this but we are actually making the position worse. The backward movement culminates in this Bill which creates a layer of further institutions and quangos and which fragments further the unity of purpose which we require. Where once we had one Department dealing with industrial development we now have three. Instead of fewer agencies we have more, and instead of the famed one-stop-shop, as it used to be called, we now have as many stops as an underground train.
The biggest joke of all is the proposal for 36 county enterprise boards referred to by the Minister, but which are not mentioned in the Bill. Needless to say, Culliton never recommended such nonsense. While these boards will apparently come under the aegis of the Minister for Enterprise and Employment, their genesis was the Department of the Taoiseach where they were dreamed up in September 1992 apparently as some kind of personal and political counterweight to me and to Culliton and for the purposes of the then obviously planned election. The Minister appears to have reined back these boards from some of the lunacies proposed for them last September, nonetheless they will serve no useful purpose and only get in Forbairt's way. If the Government was genuinely committed to these boards it would abolish Údarás na Gaeltachta and SFADCo as, logically, the boards and regional agencies can hardly co-exist. The fact that SFADCo and Údarás na Gaeltachta are to continue is indicative of how pointless the Minister thinks the county enterprise boards are. If that is his view, he should not establish them.
The central institutional prominence in the Bill is given to Forfás. In my proposals of October last, when I was forced to have a central body against my will and against the recommendations of Culliton, I proposed simply a holding company which would be run by the Secretary of the Department. It seems from the Bill that Forfás will be a great deal more than a holding company. Under the Bill it has the possibility of becoming a single super agency with two subsidiary bodies completely under its thumb. This has nothing to recommend it and, in spite of his efforts in his remarkably visionless and defensive speech this morning, the Minister cannot justify it either.
A great deal will depend on the appointment of the chief executives to the three bodies referred to in the Bill. I have seen newspaper reports to the effect that, Mr. Kieran McGowan, the managing director of the IDA, will be the chief executive of Forfás, the central company. That has not been denied and I assume it is true. If Mr. McGowan, possibly the best person available to run one of these agencies, is made the chief executive of Forfás it will inevitably mean that the centre of gravity moves there and it will become the dominant agency. Forbairt is the most important of the agencies from the point of view of our national need, and the difficulties experienced in indigenous industries for so long. I should like to see the best person available appointed to Forbairt and not to an agency above it in relation to which Forbairt, in effect, will be only a subsidiary.
The whole thrust of what Culliton recommended, and which I whole-heartedly accepted as I believed he was right, was that our weakness was on the indigenous side, that there was a major difference between the attraction, assistance and promotion of overseas companies and the promotion and development of indigenous companies. Overseas companies do not usually require assistance with marketing and research and development and they do not require hand-holding in the broadest sense of the word. On the other hand, our indigenous companies need all these things. Culliton and the numerous groups, people, bodies and institutions who looked at our economic problems identified the two great weaknesses of our manufacturing companies as marketing and research and development. That is why Culliton recommended that Eolas and An Bord Tráchtála should be amalgamated to form one agency with the indigenous side of the present IDA. That is the agency with all the challenges and difficulties which we will have to promote successfully.
The IDA which is a splendid organisation — I worked with it for seven or eight years — was always able to hide the drawbacks and deficiencies on the indigenous side by highlighting its undoubted successes overseas. Under the present proposals there will not be a distinction between the two sides, which Culliton thought was vital. In 1977-78 when almost no effort was being made to promote small industry here, I gave that specific task on a pilot basis to Shannon Development. The company carried out its task quite well but, more importantly than succeeding in its own region, it provoked the IDA into doing something it had never bothered to do before. The value of that kind of inter-institutional rivalry, when it can be used in a useful and positive way, is frequently under-estimated. Instead we have jurisdictional defence between various agencies. God knows, enough of that went on in the lead-up to this Bill. One of the reasons the Bill is imperfect and removed from Culliton is that the defence was successful.
It does not seem clear, even to the Minister, where is the centre of gravity. He referred to the incorporation of Eolas with Forfás and later referred to the integration of Eolas with Forbairt. I do not think these statements are misprints. He envisages this integration in respect of both institutions. This should not happen. Eolas should be integrated with Forbairt, there should be no question about it going anywhere else.
In that connection, the Minister referred to science and technology which he wants to assure people will not be downgraded. He paid the usual lip service to science and technology when he said:
Technology development is a vital part of company development and it is something which Irish firms are showing a growing awareness of. This was demonstrated by the huge demand for the new Structural Funds supported industry R & D scheme launched by my Department last year.
Of course, that is nonsense. There was a huge demand for Structural Funds supported research and development schemes but it nearly all came from the universities, so much so that about a year ago I was forced to set up an informal association of people in indigenous companies interested in research and development to give than a voice and co-ordinate and assist in applications for these funds. My Department was inundated with applications from universities which are highly skilled in this area and, inevitably, they get the vast bulk of the assistance available. That is the truth of the matter rather than what the Minister described in his speech. I hope that things are beginning to change in that respect and that we can interest Irish companies to a greater extent than heretofore. The central reason that Culliton made the recommendations he did is because of the huge difference, as I have described, between the requirements of indigenous companies and that of overseas companies. It seems to be a very great pity that this difference is fudged and that we will have another fudge that will result in a lack of transparency and that we will not have the clear cut division between the two which could have been so useful and, which, in my view, could have produced very fruitful results.
I have gone carefully through the speech the Minister delivered this morning and it seems to be very similar to the speech he delivered in the Seanad. I do not see any significant differences between them. Why that is I really do not know. What strikes me is that the speech is lacking in any vision of industrial promotional philosophy; it does not reflect the needs we have today and how we might respond to them. More than three-quarters of the text is spent on defending the institutional proposals in the Bill, in particular, defending the parts, which is most of them, that run counter to the recommendations of the Culliton report. Frankly, I do not think that is good enough. Even though I do not agree with this Bill, it is important because it is making major changes, which I believe are in the wrong direction, and is not availing of the opportunities that are there. This important Bill called for more than what we got. Whether the Minister in his reply will be able to do a bit better remains to be seen, but it is certainly very disappointing.
There are many other areas of detail that I would like to dwell on, but at this stage I can only express my disappointment at the weakness of the speech and the lack of vision in it. I extracted a list of the words and phrases that were used in the speech, which goes as follows: "linking, co-ordinating, striking a balance, links in a chain, inter-departmental co-ordination and day-to-day interaction". In my view that is a load of Government-speak to try to paper over the inherent fundamental structural flaws in this crazy agency jigsaw that has now been spawned. The House should award the Minister a prize for audacity for the following sentence that appeared in the course of his speech:
I have been anxious to guard against the creation of additional layers of bureaucracy when establishing the new structures.
It is hard to believe that he said it, but he did. I can give a list of how they go on and on. Even on this very day the Taoiseach launched yet another body at Dublin Castle or Kilmainham, or one of the fashionable places that are used for these purposes, the National Economic and Social Forum. That is different from the National Economic and Social Council and is also different from the Central Review Committee and different from the 36 county enterprise boards, the regional boards and the additional national boards. If boards could have solved our problems, if the spending of billions of pounds could have solved our problems, we would not have any problems. We know that type of approach is not the solution; nonetheless the Government brings forward this Bill. We know, therefore, that this Bill is not the solution.
I welcome this Bill. It is a significant one designed to further indigenous industrial growth and encourage further investment in the Irish economy into the next century and beyond. For that reason I welcome its provisions.
Rural communities have had to learn the hard lesson that a centralised approach to the creation of employment has failed. Certain areas of rural Ireland have been fortunate and have experienced employment growth, but in general a top down approach to the creation of employment in rural Ireland has failed. If evidence of this is required one only needs to look at the census of population figures for the various decades and one will see that there has been a flight from rural Ireland, that over the decades there has been a flight from the land. Very often no replacement industry was put in place to enable people to experience a sense of place and the possibility of working in their own place. That is the truth. It is in this context that I welcome the establishment of county enterprise boards, but I do so with certain reservations.
During the course of the debate several Members outlined their fears of obfuscation, that there are too many boards and too many agencies dealing with the one problem — in other words, that there are too many chiefs and not enough Indians. It is difficult to counter that argument because it is a truism that there is indeed a great number of organisations dealing with precisely the same objective. I would like to see what I would describe as a bottom up approach to the creation of employment. It has been established in local communities throughout the length and breadth of Ireland that the public and private sectors operating separately and independently of one another have failed to halt rural decline. This serves to indicate that partnerships are required and that partnership is desirable.
In the context of the county enterprise boards, the area partnership companies and the enterprise trusts, a strong local organisation, where the people concerned have a sense of place and a sense of being in their own place, is without doubt the best way forward. In this respect, while the Industrial Development Authority has done an excellent job — and no doubt the new agency Forbairt will do an excellent job also — it has to be accepted that in the past there has been a natural reluctance to bring new ideas to higher authorities. Very often this is because there are real issues of disclosure of confidential business information. The strength of local organisations in the employment creation process is that there is enthusiasm, a sense of place and belonging and a wish to make progress, to which I have already referred. This in turn creates in the individual and throughout the community a sense of confidence and a spirit of hope which becomes part and parcel of a community's belief in how it should progress.
It has been accepted both internationally and in Europe that there are certain guiding principles to the bottom up approach to the creation of employment which must be outlined. These guiding principles can be ultilised when one speaks of creating employment in response to local demands and needs. The first theory is the concept of subsidiarity whereby decisions are taken at the lowest practical level. In this way power is devolved through local control of funds. It would be accepted by everybody that this principle should be adhered to. In turn this leads to local accountability and reporting procedures which are an essential feature of the concept. It leads also to integrated planning which is so necessary to the concept because it leads to strategically focused plans. Coherence is another principle which would be enunciated in this respect as would the question of participation involving an entire community in the planning process. This in turn leads to the support of the community and enhances the status of local community organisations who want to do their best for their own place.
Crucial to all of this is the concept of management. In this respect one can look at the recent Leader programme at where it succeeded and failed. Where management of the Leader programme was good, it succeeded in creating employment directly and indirectly; where management was poor the results were far from satisfactory and, in some few instances were disastrous. The Leader experience has been extremely good, one that can be developed and spread throughout the country. It is important that the pilot areas chosen for Leader funding should not be abandoned. There is an urgent need in the pilot areas for funding to continue. Failure to continue with the Leader programme in the pilot areas concerned would mean that the job which was intended to be done will be less than half done. This would be a tremendous pity, something which should not be allowed to happen.
We must ensure so far as we possibly can at local level that the Leader programme and the partnership companies on the one hand and the county enterprise boards and other more national organisations on the other are not confused and that the concept of bureaucracy coming in the way of the creation of employment is not allowed to evolve.
In this country many business people who could create employment will say that while some of the agencies and some of the individuals in the agencies concerned are excellent, an unnecessary amount of red tape and bureaucracy ultimately leads them to despair. They throw their hands in the air and say: "Let us forget about it because there is too much red tape and bureaucracy and there is no point in continuing with the effort".
There is little doubt, therefore, that there is a great necessity for the compartmentalisation of the objectives of each of the organisations concerned. If there is a failure in this respect I have little doubt, to use an old cliché, that we will be unable to see the wood for the trees. The problem of unemployment facing this country today is an enormous one. It is the most serious difficulty facing the Irish people for many years. Clearly, it is the bounden duty of Government, whichever Government is in power, to ensure that the problem is tackled in a coherent, transparent and open manner in a way that individuals, companies and businesses clearly understand. Our failure to do that will lead to the problem becoming much greater than it is today. It is not an easy problem to tackle and, indeed, very few would envy the job of the Minister for Enterprise and Employment in the task which faces him. Nonetheless, pessimism will almost certainly lead to further unemployment. The only way forward is through optimism, the creation of an air of confidence in the business community and in the workplace and a sense of optimism among those who feel there is no future for them in Ireland.
A considerable number of young people who left second level school this summer genuinely believe they will never have the opportunity of working in this country. There are many young people who feel there is little point in their proceeding to third level education because they will be left without any hope of employment in this country. In this context it is extremely important that it be stressed again and again to the younger generation, those leaving second level, that there is no substitute for education and that education is crucial for an individual to obtain employment.
One of the saddest features of the unemployment record in this country over the years has been the fact that people feel a sense of despair and hopelessness which leads them to believe it is not worth pursuing the objective of securing employment. That kind of pessimism exists in parts of the unemployed sector. We have to eradicate that pessimism and try to give people a sense of hope and optimism about the future and a belief that the day will come when this country will be able to adequately cater for those in search of jobs.
I am calling Deputy Ó Cuív, who has five minutes.
Sar a ndéanaim plé faoin ábhar seo go ginearálta ba mhaith liom pointe a ardú faoi theideal na heagr-aíochta nua atá á bunú. I would ask the Minister to consider the title of the new agency, which is shown as Forfás. I understand that the "fás" part comes from the old Irish word "ás" without an f. It is common in languages to either drop a letter or add a letter; in this case one was added. In modern usage one would be talking about forás. One could argue that there is an inconsistency here because we are talking about "forbairt", not "forbhairt". The word "forbairt" is old Irish. Because of the inconsistency in the use of old and new forms in the Title, the new agency should be called Forás. That may sound a nit-picking point, but the word would be easier to pronounce if it was spelt in that way.
The question of whether setting up agencies is the solution to our industrial problems needs grave consideration. We are talking about the amalgamation of two agencies and their replacement by three. There is no point in going down that path unless we give freedom to such agencies to develop indigenous policies. For example, the IDA appeared to implement the same set of policies for high technology mobile industry as applied to indigenous industries. Its policies were geared towards attracting mobile foreign industries, but it did not develop specific policies for three other sectors, namely, the food sector, the indigenous traditional footwear and clothing industries and local industry. The county development teams were too small and the IDA was too big. I hope the county enterprise boards fit the bill, but if they do they cannot operate the old mix of grants and subsidies.
We must develop policies that tackle the problems with which people are faced. In general, our policy in regard to mobile industry was effective. However, we did not protect or develop policies geared towards our high labour manufacturing and low sales cost industries, such as clothing and footwear. We did not develop policies in respect of small indigenous industries or solve the problem of a person who has great ability and good ideas but no seed capital. From my experience, a person with £1 million wishing to set up a business could probably get a further £2 million from banks and agencies, thus starting off with a total of £3 million. In contrast, a person who has £10,000 would probably get £20,000 to match it but, from my experience, nobody can start a business with £30,000.
I tried to do that once and by twisting and turning and with a certain degree of luck I succeeded but I would not like to have to repeat the exercise. The question of providing seed capital in a user-friendly manner must be considered seriously. In most cases, particularly in rural communities, there is money available in the community, but we must examine how we can channel money back into developing the community.
I accept that Forbairt is geared towards the manufacturing industry. However, I would ask the Minister to ensure that, like SFADCo and Údarás na Gaeltachta, it would not take a narrow approach within regions, but instead co-ordinate its efforts to create total development of an area rather than dealing with issues as if it existed in a totally isolated world.
Is oth liom nach bhfuil níos nó ama agam an cheist seo a chíoradh. Tá go leor rudaí ba mhaith liom a rá faoin ábhar tábhachtach seo. Ach b'fhéidir go bhf-éadfaí an Bille seo a úsáid mar bhunús, ní le teideal no struchtúirí nua a chur in a áit ach le polasaithe fíor-nua a chur ann a shásódh na riachtanais tionsclaíochta.
It is timely that we should be addressing this Bill because one of the greatest cancers in our society at present is unemployment. We must redeploy all our energies in an effort to do something about it. The Minister referred to the county enterprise boards and after a long gestation process it appears those boards will come on-stream. While I was critical of them at the start I now accept that we should give them a chance. I could visualise a vacuum in many counties, particularly in relation to small industry and community enterprises in regard to these structures. I hope the county enterprise boards fill that vacuum and give a certain amount of scope in each county to community initiatives. I hope also that they will be afforded sufficient funding so that they can use it in local economies for justifiable ventures within the county enterprise board parameters.
I agree with Deputy Ó Cuív's point in regard to seed capital for start-up businesses. Although banks may state that they are more sympathetic towards small businesses, from my experience they could be much more sympathetic because in most cases they seek high collateral for loans. The mid-west region has featured in the news a great deal recently and the greatest capitalist employment region of that area is frequently classified as the golden circle in regard to industrial employment, on the Limerick, Shannon, Nenagh and Ennis axis. Within that area, Shannon is the fulcrum. As a result of setting up Shannon originally as a trans-atlantic airport, many industries located there and various attractions and inducements were offered to industralists to set up in the area. In recent times there has been a proposal to set up an aviation park in Shannon. This has helped to create much needed jobs in the area. Successful companies, such as Shannon Aerospace, GPA and Shannon Turbines are located in the area.
I want to read something into the record which was quoted in this House on 27 October last when we all enthusiastically greeted the announcement by the Minister, Deputy Maire Geoghegan-Quinn, that the Shannon stop-over was to remain the transatlantic gateway for scheduled flights. At that time no less a man than the Tánaiste stated:
I welcome the Minister's announcement about the Shannon stop-over. I now believe that a Government decision to desert Shannon would help Aer Lingus and I have always argued that the Shannon issue should be treated as an issue of regional rather than aviation policy.
I have not selected those words in isolation because the brief reference he made to Shannon was encapsulated in his remarks. Those words ring hollow at this stage in respect of what I suspect is likely to be the status of Shannon in the future. I would not like to think that the industrial advances in regard to employment in the Shannon area would be stifled due to retrograde policy that may emanate from the Government. I hope the Tánaiste will reflect on his words that a Government decision to desert Shannon would help Aer Lingus. He always argued that Shannon should come into the category of regional rather than aviation policy. I fully agree with that because Shannon is a classic example of regional development in action. We hear much talk in Dáil Éireann and from the EC about the principle of subsidiarity. Here is a model, a model that should be used but instead we see the present situation developing.
For many years the Shannon Estuary has been described as the jewel of the western world. On assuming the mantle of Taoiseach, the Leader of Fianna Fáil announced at an IMI conference in Killarney that the Shannon Estuary would be available for trans-shipment and that there would be a new dawn for the estuary. In recent times there is talk not of trans-shipment but of a trading bridge-head. Much energy has been put into sussing out potential industrialists by Dr. Con Power, SFADCo and the IDA. So far there is no evidence of increased industrial activity. However, we wait in hope.
If the Government and the agencies are serious, they have a great chance now to set up a project in Foynes which is on the estuary and has all the infrastructural requirements. I refer to a project which has received a lot of media attention in the last few weeks, the Louisiana-Pacific project, a joint venture with Coillte Teo which would provide 150 jobs and, potentially, another 350 jobs in the forests around the country. That type of project would prove that the Government is serious about industries along the estuary. This is a project that would involve shipping and exports to the EC markets. It would be a lifeline in an area that has a heavy dependency on casual labour at present.
I was disappointed when the regional office of the IDA was moved out of Limerick. With the IDA structure in Dublin liaising with SFADCo to work out the best possible stategy, I have always felt that this was industry by remote control. If we had an IDA office in the area there would be more continuous contact with local representatives but because these agencies are in Dublin they are fairly remote.
Much emphasis has been put on Leader funding. The Leader programme has been a success in aiding worthwhile projects into rural areas. We have a very successful Leader project in our area in Ballyhoura Fáilte. I certainly hope that other projects such as the West Limerick Rural Resources Group will get sanction. There are people involved in these projects at community level who are working very hard to try to get things moving and they need the fullest encouragement we can give.
I welcome the reference to FÁS in the report. As a person who worked for FÁS for over ten years many years ago, I often wonder if a serious look is being taken at FÁS. Has FÁS kept pace with the industrial advances that have been made in our economy in recent times? Are they running training courses which relate to what industry is looking for in the context of technology, etc? It is necessary for the Government to give grants to FÁS to enable them to update their equipment and machinery in order to meet industrial requirements. I welcome the fact that FÁS is to be looked at. I know many people in FÁS. They have a great commitment to the organisation and I have a lot of praise for them, and some of their courses bear a strong relationship to what is required outside. I would like to think that people who go on training courses to FÁS come out with the expertise that allows them to tap into what is required by industry. We all want skills to be transferred to the workplace because if a period of unemployment follows a FÁS course the skills, the discipline and the motivation may be lost.
There is a reference to training for industry. There was a classic example in Shannon Aerospaace where FÁS were involved at the very start with the trainees and they dovetailed with industrial requirements. That is extremely important when new industry is coming into the country and is something I would very much encourage.
Another area of concern are the ports. We all know the importance of the harbour ports around this country. Foynes and Limerick are very successful ports. Lest the Minister be surprised that I raise this matter, there is a reference to ports in the Bill. I am concerned about the harbour ports Bill which will be coming up, possibly not in this session but in the next session. At the moment councillors are represented on the harbour boards. In Foynes there is a compact board of nine people on which the councils are represented. The only interest of councillors is in relation to the development of that port and doing something meaningful for the local community. I am concerned that under the new Bill all those councillors will be kicked out to make way for Government appointees. This Bill will have to be looked at. It is not right to say that we want to strengthen the powers of local authorities and at the same time remove something concrete that we can do. That is the intention of this Bill. It is all very well to tell councillors that they will get new powers. Many of those new powers have to do with animal health, health and safety, looking after courthouses, etc. That sort of thing only heaps more responsibility on to councillors and involves them in more costs. The Government is hiving off responsibilities to the councils around the country but are not giving them the finances to take on those responsibilities.
I will certainly speak on the ports Bill when it is introduced because the ports are vital to industry. I will be very concerned if councillors' input into the 12 commercial ports being set up around the country is done away with.
Obviously I will not have enough time to respond in detail to many of the points that were made. I trust that things I cannot refer to now can be picked up on Committee Stage tomorrow. Let me say at the outset that this Bill is an enabling piece of legislation. It does not purport to rewrite policy. It consists of 21 sections and two Schedules. Time is very much of the essence because we have to get the structures in place before the summer recess so that we can begin to restructure the agencies in a flexible and open manner as we start to develop and formulate policy.
I do not apologise for introducing enabling legislation which is flexible in respect of how Forfás will be able to assign to Forbairt or IDA Ireland various functions and types of co-ordination. I will go into this matter in greater detail on Committee Stage or, if time permits, I will return to it later.
I will refer briefly to the range of issues on which Deputies reflected today. The genesis of this Bill is the Culliton report. A fulsome tribute was paid by Deputy Cullen to Deputy O'Malley, the former Minister for Industry and Commerce in relation to his contributions to that Department. Deputy O'Malley commissioned the Culliton report and when it published its recommendations after six months he referred them to the Moriarty task force. Nothing happened for 18 months in the Department at political or ministerial level in regard to the two reports. When I came into Government on 12 January the Culliton report had been digested by the Moriarty task force and the third and final report of the Moriarty task force, which had digested the 61 recommendations which Culliton had analysed and proposed, was ready for implementation. Within a short time we were able to get most of those decisions, including some of the difficult ones, through the Department and the semi-State agency system. A document entitled "Employment Through Enterprise" was published on 4 May recommending setting up this new structural system.
There is an additional genesis to the structure of legislation and agencies we are discussing. In addition, the Culliton and Moriarty reports recommended major restructuring of the IDA, Eolas and An Bord Tráchtála. The Programme for Government proposed the establishment of Forfás, Forbairt, the IDA as set out and the Department of Tourism and Trade. Consideration must be given to the response of this administration to the implementation of legislation before this House in the context of those decisions.
I refer Deputies to the erudite contribution by Senator Lee in the Seanad when he said that Culliton was particularly effective and to the point when its members spoke about matters of which they had immediate experience. They were less wise and less penetrating in their recommendations when they spoke of matters with which they were not familiar. The members of that erudite group of people, chaired by Jim Culliton had many attributes, they had a knowledge of Governmental and Civil Service operational structures but did not have a knowledge of semi-State agency structures.
I wish to refer to the Culliton report itself apart from the recommendations of agency structures. There was a debate in regard to recommendation of agency structures in respect of the quotations to which Deputy Bruton referred. Deputy Rabbitte made the point that the Culliton group said there was no quick fix solution. They said that if Culliton's 61 recommendations were implemented it would not create a major impact in respect of industrial jobs created. I personally regard the body of the Culliton recommendations as essential and necessary and they should be implemented. However, the task is akin to rebuilding and modernising a football stadium without any guarantee that the quality of the game that will be played in it will be automatically improved. One will not be possible without the other. Culliton falls far short of specific interventionist measures in relation to industrial policy other than major tax broadening and widening, which I endorsed. The Government and I will return to this House with specific policy initiatives. The reason the Bill is before the House is that we are unashamedly putting new sets of structures in place around which we will construct new policies. It would not be possible to do it the other way around. If I did not do this between now and the end of the session it would not be discussed until Christmas. I ask for Deputies' indulgence in this regard because we cannot construct new policies which are clearly needed if the old, inadequate industrial agency structures are in place. On Committee Stage I will explain the structure of Forfás, Forbairt and IDA Ireland in the Bill.
There was a common conclusion that a critical factor for indigenous industry was the lack of adequate finance in the form of equity, grant aid, soft loans, IDA repayable grants, venture capital or whatever. I agree with the analysis that Forbairt will have to play a major role in developing in different categories and sectors the matters to which the Deputies referred. Perhaps a venture capital unit may be established. The county enterprise board at local level will have in effect a seed capital-venture capital role in the order of approximately £18 million that will be available for small industries. There was a reference to running down the science and technology side of Eolas by virtue of its incorporation into Forbairt. Some other references were made in relation to the money available and the downgrading of the amount of State money, as distinct from EC money, which was made available. It is a reasonable debating point to which I will refer later. Apart from the consultancy, certification and measurement services undertaken by Eolas, the separation of technology from the cutting face of industry, which is the current position, will be immeasurably improved by the integration of Eolas and its science and technology functions into the mainstream of Forbairt. The focus of the Department of Enterprise and Employment is not to indulge — I use the word advisedly — in pure research in the halls of academia. It is to have a direct link with industry and to ask those engaged in industry what type of new technology and resources they need. Those engaged in industry should be sent in the direction of academic infrastructure and those engaged in industry should commission the type of applied technology, research appropriate for their perceived needs in the market place. That is something we have not been doing. Many industrialists will say that there is a mismatch between the research carried out on one level and the needs of industrialists on the other. This enabling legislation merges the science and technology wing with the indigenous industry wing, which will be Forbairt, to fill the gap.
Deputies Rabbitte, Cullen and Bruton referred to the focus on indigenous industry. I share Deputy Rabbitte's analysis that Telesis got it right. Regardless of the IDA's manifest success in attracting mobile investment in comparative terms against the other competing agencies on the indigenous side, the perception by the industrial customer is that the IDA was not user friendly. We are in the business of politics. We must recognise that whatever we may think of our policy or our political persona, if the electorate or the market form a view at variance with ours, we will have two choices. We will either insist that we stay the way we are or respond to the way the market perceives us. This is what we are trying to do in this instance. Forbairt will have to overcome the very real prejudices in certain sections of the indigenous industrial market which regards the IDA as not being user friendly. I believe we will be able to do that and one of the ways we will do it is by providing for a much greater degree of clarity and uniformity in what is required by the various agencies of an applicant firm seeking help and assistance. The frequent complaint to Culliton — I spoke to Jim Culliton directly about this matter — from people who felt they were not getting sufficient help or who were getting confusing information from the State agencies was that they had different sets of requirements imposed on them in relation to forms, economic profile and data from An Bord Tráchtála, Eolas, IDA (Ireland) or from the indigenous sector. From the Department of Enterprise and Employment, through Forfás, down to Forbairt and right on through to the county enterprise board, it is essential that the profile of data and information that would be required of any individual applicant for assistance would be integrated and harmonised, so that people would not be required to duplicate, replicate and in some cases extend and subtract the kind of data which can only come from availing of the services of expensive consultants. That is where the need for co-ordination, linkage, and all the things Deputy O'Malley castigated me for, is so important. This was one of the matters identified as being negative in terms of perception.
In that area one of the problems we must address — I am glad Deputy Cullen raised it — refers to the phenomenon in the business sector known as lifestyle companies. Many Irish companies reach a certain level of growth. The Deputy referred to the antipathy towards equity, the need for grants of a certain kind and the need for flexibility. However, certain sectors of Irish industry are not prepared to share equity or ownership. Some family firms are incapable of planning for succession. Ireland is littered with a three generational cycle of growth and decline — and J.B. Keane has probably written about this better than most — where we must encourage people to change the culture in indigenous industry to allow them get over that critical second generation stage where succession is blocked or is not planned.
To this extent I recognise that our taxation system, particularly in the area of capital acquisitions tax within family firms and to a certain extent within farms, is an impediment rather than an incentive. That problem must be identified, analysed and resolved. Where there is a blockage of internal capital and a need to secure additional capital, we must help. We are moving away, as I believe we should, from a policy of grants to equity or even preference shares, but there must be a change in attitude.
Many traditional industries that have now gone out of business could still be in operation if they had been allowed to expand and attract outside investment.
On that point — and I acknowledge the Deputy's intervention — the skills and focus that Forbairt will be required to have to address that problem are manifestly different from the skills needed to identify companies in Silicone Valley which have the technology that will last a product lifecycle of between ten and 15 years. It is for that reason that we are separating the agencies in the way we are. However, they cannot be separated into two totally stand alone agencies, which was the thrust of earlier arguments put forward, because they have so many things in common. One is starting from a single agency and I wish to give an example of this. If one had to chose between a super agency attracting inward investment on the one hand and a domestic agency trying to build up indigenous industry on the other, how would one decide on, for example, the land bank, the pension funds, personnel who wished to move from one agency to another for a certain period of time? From a personnel and infrastructural point of view, the existence of Forfás gives us much flexibility, which, quite frankly, we need.
I appreciate the constructive contributions that have been made by the parties represented in this House. This Bill is part of a process. I would not like anybody to think that this fairly modest Bill, despite the difficulty in getting out of the system of legislative generations that we continue to have here, is not the last word on industrial policy from my Department. It is not. It is an enabling legislative measure and represents a step on the right road. On 12 January we inherited the Moriarty task force, on 4 May we published the document Employment Through Enterprise and, having been in the Seanad, here we are on 23 June with the Bill, which hopefully will be enacted by the end of this month — less than six months after our coming into office. On that basis I recommend the Second Stage of the Bill to the House and thank the Deputies for their contributions.
- Ahern, Dermot.
- Ahern, Michael.
- Ahern, Noel.
- Aylward, Liam.
- Bell, Michael.
- Broughan, Tommy.
- Browne, John (Wexford).
- Burton, Joan.
- Callely, Ivor.
- Collins, Gerard.
- Connolly, Ger.
- Coughlan, Mary.
- Dempsey, Noel.
- de Valera, Síle.
- Doherty, Seán.
- Ellis, John.
- Ferris, Michael.
- Fitzgerald, Brian.
- Flood, Chris.
- Foley, Denis.
- Gallagher, Pat (Laoighis-Offaly).
- Geoghegan-Quinn, Máire.
- Haughey, Seán.
- Higgins, Michael D.
- Howlin, Brendan.
- Hughes, Séamus.
- Hyland, Liam.
- Jacob, Joe.
- Kavanagh, Liam.
- Kemmy, Jim.
- Kenneally, Brendan.
- Kenny, Seán.
- Killeen, Tony.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lawlor, Liam.
- Lenihan, Brian.
- Bhamjee, Moosajee.
- Bhreathnach, Niamh.
- Bree, Declan.
- Brennan, Matt.
- Briscoe, Ben.
- Leonard, Jimmy.
- McDaid, James.
- McDowell, Derek.
- Moynihan, Donal.
- Mulvihill, John.
- Nolan, M.J.
- ÓCuív, Éamon.
- O'Dea, Willie.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Leary, John.
- O'Shea, Brian.
- O'Sullivan, Gerry.
- O'Sullivan, Toddy.
- Penrose, William.
- Power, Seán.
- Quinn, Ruairí.
- Reynolds, Albert.
- Ryan, Eoin.
- Ryan, John.
- Ryan, Seán.
- Shortall, Róisín.
- Smith, Brendan.
- Smith, Michael.
- Stagg, Emmet.
- Taylor, Mervyn.
- Treacy, Noel.
- Upton, Pat.
- Wallace, Dan.
- Wallace, Mary.
- Walsh, Eamon.
- Walsh, Joe.
- Woods, Michael.
- Ahearn, Therese.
- Boylan, Andrew.
- Bradford, Paul.
- Browne, John (Carlow-Kilkenny).
- Bruton, Richard.
- Carey, Donal.
- Clohessy, Peadar.
- Connaughton, Paul.
- Connor, John.
- Crawford, Seymour.
- Creed, Michael.
- Crowley, Frank.
- Cullen, Martin.
- Deasy, Austin.
- Deenihan, Jimmy.
- De Rossa, Proinsias.
- Doyle, Avril.
- Dukes, Alan M.
- Durkan, Bernard J.
- Flaherty, Mary.
- Foxe, Tom.
- Gilmore, Eamon.
- Gregory, Tony.
- Harney, Mary.
- Hogan, Philip.
- Kenny, Enda.
- Keogh, Helen.
- McGinley, Dinny.
- McGrath, Paul.
- McManus, Liz.
- Molloy, Robert.
- Nealon, Ted.
- O'Donnell, Liz.
- O'Keeffe, Jim.
- O'Malley, Desmond J.
- Owen, Nora.
- Quill, Máirín.
- Rabbitte, Pat.
- Sargent, Trevor.
- Shatter, Alan.
- Sheehan, P.J.
- Timmins, Godfrey.
- Yates, Ivan.
When is it proposed to take Committee Stage?
Tomorrow morning, subject to agreement between the Whips.