The case for this Bill rests, I think, upon two main contentions. The first is that it is in the general interests of the country as a whole that manufacturing industry should be attracted into the congested areas and into the part of the country which is covered by that term and to the adjacent districts which are undeveloped in an industrial sense; and, secondly, that, in so far as industry controlled by private enterprises is concerned, it cannot be secured unless inducements of an exceptional character are provided. If either of these contentions can be disproved the case for the Bill falls but, in fact, in the course of the debate on the Bill in the Dáil, it was demonstrated that both of them were generally supported by all Parties.
The tendency, which has been noticeable during the past 20 years, for industry to concentrate in the eastern counties and particularly in the main cities and towns on the eastern coast, was natural. It is in the eastern areas and particularly in the towns in the eastern counties that the main markets of the counties are to be found. It is these towns which are the principal centres of financial and commercial activity. There also are to be found the main ports of the country—those which are best equipped and which are most conveniently located in relation to the main sources of supply of raw materials. In so far as there exists at all anything in this country that could be described as an industrial tradition it also is located in the eastern part of the country. In fact, I think it is true to say that all the factors making for the economic operation of industrial undertakings and their commercial success predominated in the eastern counties.
The contention which I have made that it is in the general interests of the country, as a whole, that that tendency to develop industry in the East should be arrested and, if possible, reversed was, as I have said, generally supported during the discussions on this Bill in the Dáil. That concentration in the East has created and will, in increasing degree, continue to create social and economic problems both in the East and in the West.
In the congested areas—these counties along our western seaboard and in the adjacent areas—there has been, for a number of years, a steady decline in population, due almost entirely—if not entirely—to the continuing flow of emigration. There has been a movement of population out of these counties for the purpose of emigration. If these conditions are to be changed, if the decline in population of these counties is to be checked and the flow of population out of them reduced, improvement in the social and economic conditions there is necessary. More than that, the introduction of a wider variety of occupations is necessary so that those who feel that their personal talents can most usefully be-exploited in activities not now carried on there will have the opportunity of developing them within reach of their own homes. That means the introduction there of industrial activity. The general desire which exists—a desire which we all have—to check the flow of emigration from these areas can be helped by the introduction—if we can succeed in doing it—of manufacturing industry.
The purpose of this Bill is to help the development of manufacturing industry in congested areas by private enterprise. I think it is necessary to emphasise, in view of certain misunderstandings that arose in the Dáil, that that is the sole purpose of the Bill. It is limited in that way. It is not put forward nor could it be fairly regarded as a comprehensive plan for economic development in the congested areas. It certainly does not represent any idea that all the problems there can be solved by encouraging the development of privately owned manufacturing industry. There are other developments possible and for which arrangements are being made—development of turf bogs for power purposes, the improvement of agricultural facilities and productive methods, afforestation, the improvement of harbour and port facilities, the improvement of roads and mineral exploitation, the development of fisheries and numerous other matters that were mentioned in the course of the Dáil debate. In so far as these things are possible and desirable, the encouragement of them has been entrusted to various State Departments and statutory organisations and, if necessary, the powers of these Departments or organisations will be increased. The sole purpose of this Bill is to supplement what may be done by national enterprise of that kind by encouraging, if possible, privately owned industry to locate itself in the congested areas rather than in other parts of the country.
I do not think it is necessary to argue at any length that inducements are necessary to arouse any substantial interest among those who are likely to undertake industrial development in the possibility of locating it in the areas west of the Shannon and on the western seaboard rather than in the eastern areas to which economic considerations naturally attract them. In fact, the development of industry in the congested areas has been less rapid than in the East because of the competitive disadvantages of a western location. These disadvantages are, I think, well known to everybody. It is not merely that a factory located in these areas producing goods intended for sale in the main markets of the East has to incur costs, particularly transport costs, which its competitors located in the East would avoid but also because there are other disadvantages as well. The absence of any corps of workers with industrial experience of any kind, the lower efficiency of the public services, the higher cost of power, problems associated with the housing and accommodation of workers, and many other factors, tend to discourage private firms from voluntarily locating their enterprise in the West when it is open to them to do it in the East. The existence of these competitive disadvantages was always recognised.
This idea of encouraging industrial development in the West of Ireland is not new. Many Senators will recollect earlier debates upon the desirability of pursuing that policy and on the measures necessary to make it effective. I told the Dáil, and I do not mind repeating it here, that in the initial stages of the industrial development policy we miscalculated the difficulties of securing the decentralisation of industry towards the West and thought that the powers which the Government then possessed would be adequate to secure it. These powers were not very definite. In so far as industry required in its initial stages at least some form of protection by means of customs duties or quantitative restriction of imports or Government help in some other form, we thought we could make the giving of that help conditional upon the promoters of any new enterprise selecting some midland or western county in need of the benefit of an industry within its borders. It is, I think, fair to say that to some extent results were achieved in that way.
While the rate of industrial development west of the Shannon has been a lot slower than it has been east of the Shannon, nevertheless there was some and it was secured mainly by these methods of exhortation accompanied by a greater willingness to give the help required if Government policy was complied with in that respect. However, many of those who began a new industry at the Government's request in some western location subsequently found themselves up against the competition of another firm in the same business in an eastern location. Once the Government had restricted imports or had given some other encouragement to the development of an industry here, it could not prevent, and did not desire to prevent, other firms from going into the same field. Naturally, the pioneers, who had conformed to the Government's policy, considered that they had a legitimate grievance, and they had a legitimate grievance, when others who were less compliant in that respect secured a competitive advantage over them by starting elsewhere. It was the realisation of the ineffectiveness of the powers we had when the industrial drive was launched that led to the reconsideration of the question and the inclusion in the Control of Manufactures Act, 1936, of the reserve commodity provisions, which some Senators may remember.
I have mentioned that anybody who complied with Government policy and who started a factory for the operation of a new industry in a western area complained if, subsequently, another firm went into the same line in an eastern location and secured the competitive advantages of that location. We thought we could check that by introducing the reserve commodity arrangement. That was an arrangement by which, in consideration of some firm's undertaking to establish a new type of industry in a western location, a reserve commodity Order would be made which would prevent anybody else from entering the same business except in the same area. That proved almost completely ineffective. I think that only one reserve Order was made and that—as some Senators will remember—was the subject of very considerable controversy. In the first place, the reserve Order could operate only in respect of some industry that did not exist previously in the country and, secondly, it conferred a monopoly on the first comer into the industry which, if not abused, at least gave the critics of the whole policy of industrial development the opportunity of suggesting that it would be abused.
What we are trying now is a new method of securing the results which we have always desired to get. The form of help which it is proposed to give under this Bill is, as Senators will note, not dissimilar to that provided in corresponding legislation in Great Britain for the benefit of the depressed areas of that country, and legislation in the Six-County area. The British problem was, of course, different fundamentally from ours. Their problem arose out of the excessive specialisation in industry in particular localities. When depression occurred, the effects upon these localities were widespread and profound. The desire of the British Government was to introduce into these areas a greater variety of industry so that the effect of trade fluctuations would be less pronounced. They enacted legislation not dissimilar to this in order to help towards that end. In the Six-County area the problem is different still. They may or may not have undeveloped areas such as we have but they have not power to afford protection to local industries in the home market. Consequently, any help they give towards industrial development must be along these lines.
In considering what inducements would be effective in getting private enterprise to undertake industrial development west of the Shannon we came early to the conclusion that it must have certain definite features. The help which any particular industrial firm would get for a particular project must be known to it in advance. We are talking now of the development of industry by private enterprise. That means that some individual or group of individuals must be prepared to take the financial risk in securing the establishment of a factory. It must have available to it the technical knowledge and managerial capacity to make a success of it. Any such group planning a new industrial project in the congested areas would desire to know in advance clearly and definitely the amount of help it could expect, before it incurred any expenditure from its own resources.
There are other reasons why it is desirable that the amount of help to be given should be given initially and that it should be clearly understood that there will be no further help. If we are to get any result at all in industrial expansion in the West by private enterprise, it must be made clear to the private groups who undertake it that by accepting help under this Bill they are not submitting themselves to the danger of bureaucratic control or continuous supervision or regulation by Government Departments. The idea is that they should be given a measure of help, the amount of which would be assessed in relation to the competitive disadvantages of the location chosen, having regard to the nature of the industry, and that they would get that without any condition attached whatsoever. There would be no suggestion of a continuing obligation to the board to be established under this Bill, no suggestion of a mortgage on its assets to secure the amount given, or any other impediment whatever. The group concerned would be quite free if, having made a start, they decided that their plans were unsound and the enterprise was not likely to succeed, to close up again and get out of business just as any private firm in the East could do. That, it is appreciated, involves certain risks— risks which will be minimised by the efforts of the board to assess the genuineness of the intentions and the soundness of the plans of those who come to it for help.
The amount of help will be related, as I have said, to the competitive disadvantages, if any, which are associated with the project because of the location chosen. There will be, I am sure, many applications from firms or individuals who would be held to be under no competitive disadvantages whatsoever. There are many small industries which, for one reason or another, operate successfully in rural areas and in western counties and which cannot be said to be at any disadvantage, in so far as they are mainly concerned with supplying local markets. All over the country there are small bakeries, mineral water factories, small furniture factories, vehicle repairers and other enterprises of that kind which, in my view, would not qualify at all for help under this Bill.
It is only where the board decides that the economic considerations would have justified the location of the particular project in Dublin or Cork or in some eastern county, and that its transfer west of the Shannon or to any of the west coast counties involves a competitive disadvantage which should be offset, that help will be given; and the amount of the help will be decided on the basis of the board's calculation of what the economic disadvantage is. That decision, that the help to be given should be calculated initially and given finally, is also important from another point of view.
I have been at pains in the course of the discussion in Dáil Committee on this Bill, to make it clear that there is no intention to give continuing help to any industrial project which may be started in consequence of it. If an enterprise is launched with help under this Bill and fails, then it will go out of business and will have no right to come back to this board for a further measure of help. It may come to the Department of Industry and Commerce and get from the Department whatever advice or help it can give, advice or help which would be given equally to the industries located in the eastern areas. It is desirable to make it clear that, so far as this Bill is concerned and the board established under it, once the decision has been taken as to the amount of help given, that will finish all contact between the board and the enterprise. Any subsequent difficulties into which the concern may get will have to be resolved by itself or resolved otherwise than by a further appeal to this board. The reason why I think it important to emphasise that aspect of the scheme in this Bill is that I believe that any prospect of a continuing subsidy or renewed help to meet avoidable difficulties tends to promote inefficiency and I think it is desirable to make it abundantly clear that it will not be forthcoming.
Under the Bill, when the board has decided that help is needed and has made some assessment of the amount of help, it can give that help in one of a number of forms, or in all the forms specified in the Bill. In certain cases it can build factory premises and lease them to a firm proposing to carry on an industrial activity in them. The British Government, in its efforts to solve the problems of its depressed areas, developed what were known as industrial estates. They opened up various areas, put in the necessary services— gas, electricity, water and sewerage— they built factory premises and then sought people to carry on in those premises any industrial activities of the kind they desired to encourage. I do not think it will be practicable for us to proceed precisely on those lines— at any rate not for a considerable period. It is to be assumed that An Foras Tionscal will not undertake the construction of premises for leasing for industrial purposes until they have in sight an occupant for the premises and an occupant whom they know has the capacity and the intention of carrying on a desirable form of industry there.
The reason why it is considered desirable to afford help of that kind is that one of the factors that would discourage a private firm, relying entirely on its own resources, from establishing a factory in the West rather than in the East, is that in the event of failure the premises would have a low sale value. If a firm started a factory in Dublin and it failed in its object, the firm could hope to dispose of those premises in Dublin to some undertaking without loss; but if it located a similar factory in some town in the West of Ireland it would have difficulty in getting a purchaser for the premises. Any firm likely to be deterred from going to the West through that consideration could have that fear completely eliminated by the help given by the board under that provision.
Alternatively, the board could give a grant towards the construction of the firm's premises, which would then be in the ownership of the firm carrying on the business, and a grant which no doubt the board would relate to the estimated loss on sale if the premises had to be sold again. Similarly, it could give grants up to 50 per cent. of the value of the machinery installed. In that connection, I want to refer to an undertaking which I gave in the Dáil when a query was raised as to the operation of that provision.
It was suggested that there was a danger of some group getting help in this form from the board, buying machinery with the aid of a 50 per cent. grant, then selling the machinery again at a profit to itself and not carrying on the undertaking at all. During the course of the discussion in the Dáil Committee I suggested that the board could make the grant subject to terms, and that it could attach a condition which would involve a repayment of the grant in the event of the undertaking not being carried on. It was only on reconsideration that I realised that in doing so I had departed from my own conception of the Bill, in fact doing the very thing I suggested should not be done, because any repayment condition would have to be secured by a mortgage on the plant or on the premises or some other continuing obligation on the firm. Any such mortgage would be a commercial handicap because it would restrict the ability of the firm to raise working capital by bank advances or in any other way, and the operation of any such condition would imply some continuing supervision by the board to ensure that the conditions were being observed. In fact, while recognising that there is some risk of a dishonest practice of the kind mentioned, I do not think there is any safeguard against that risk except the judgment of the members of An Foras Tionscal on the bona fides, the intentions and the capacity of the people coming to them. In any event, presumably they will have other means of assessing the bona fides of the people concerned rather than reliance on their declarations or intentions.
There is provision also for giving a grant to meet the cost of training workers. One problem which anybody launching an industrial undertaking in the West would have to solve would be the collection of a body of workers trained in the process involved in the industry. Many of the concerns which started in the West had to incur expenditure on sending workers to Great Britain or the Continent for a period of weeks in order to acquire the knowledge that they could transmit to other workers at home, although sometimes that training was possible within the country. The proposal in the Bill is similar to that contained in the Northern Ireland legislation and provides for the giving of training grants not exceeding the recognised trade union rate for learners in the trade, plus any travelling or subsistence expenses which might be incurred. That help would, I think, be important. The expenditure which a new concern would have to undertake in the training of workers would have to be regarded as unproductive if there was open to that firm the alternative of putting the factory somewhere else and recruiting workers already trained in other factories.
Another problem which may confront anybody undertaking industry in the West is the absence of suitable houses for managerial staff or hostel or similar accommodation for workers. If that problem should arise in any particular instance, it will be open to the board to give a grant for the construction of houses, hostels or canteens. It may also incur expenditure on the construction of railway sidings or loading facilities, the construction or improvement of roads, or the provision of harbour facilities wherever these are considered necessary for the development of a particular industrial project.
I want to emphasise the significance of that qualification, because it became apparent to me that that section of the Bill was being misread in some parts of the country and that the Board is likely to receive applications for grants for various harbour works or construction projects which are desired in particular parts of the country which have no particular relation to any specific industrial project and are just desirable public works for which Government financial help is required. Harbour works at Youghal, a viaduct to Valentia Island, and things of that kind were mentioned. This board would have no power to spend any money on any road or bridge or harbour work except the expenditure was deemed to be necessary to secure the development of a particular industrial project in the locality.
The Bill also provides power to local authorities to grant a remission of rates to new industries established in those areas and there is a provision which requires the Electricity Service Board, on order from the Minister, to provide power for industrial purposes in those areas at the lowest rate at which power is provided for similar enterprises anywhere else.
When framing the Bill, the Government endeavoured to relate the form of help which can be given under it to the particular disadvantages which private enterprise engaged in industry in the West was likely to experience. It is obvious, however, that the outstanding disadvantage a western factory has to overcome is the higher transport costs of distributing its products to counties in the East or bringing raw materials from eastern ports. There was no device that we could think of to enable that particular disadvantage to be offset by help given in the form of a single payment made before the undertaking was launched. There were many reasons why anything in the nature of a transport subsidy was regarded as undesirable. The Bill emerged in its present form without any particular provision directly related to the disadvantage of higher transport costs and we are proceeding on the assumption that the other advantages which can be given under the Bill by An Foras Tionscal to an industrial enterprise in the West will be sufficient to attract industries into those areas even though they know that the disadvantage will continue.
I should, perhaps, make it clear also at this stage, because some misunderstanding emerged during the Dáil debate, that this Bill does not purport to indicate all the help which can be given from Government sources to industrial enterprises west of the Shannon. It represents the help which can be given over and above the help which would be given industrial enterprise anywhere. Protection of the home market, restriction of imports, aid under the Trade Loans (Guarantee) Act or any other aid which might be given to the advantage of industrial enterprises anywhere will still be available for enterprises established west of the Shannon. But, over and above all that aid, there will be the possibility of the further aid given by An Foras Tionscal under this Bill and, of course, any industry started there encountering any particular difficulty can, as any existing industry would do, come to the appropriate Government Department, frame its problems and seek help for their amelioration.
It is perhaps desirable at this stage that I should make some reference to the organisation established under the Bill, Foras Tionscal. Senators will notice that it consists of three members. I have received suggestions that certain citizens who have a wide experience in industrial management or special knowledge of conditions in the congested areas should be included on the board. As I explained in the Dáil, however, the sole function of Foras Tionscal will be the administration of the funds entrusted to it. It will have no duty to initiate industrial projects for the West. In so far as it may be necessary to initiate industrial proposals of interest to the West or to provide information as to industrial possibilities, that will continue to be the function of the Department of Industry and Commerce.
People who are contemplating starting new industries or have got an idea for a new industry will come as at present to the Department of Industry and Commerce and discuss their plans there. When these plans have been proven to be feasible and sound, then their attention will be drawn to the fact that if instead of locating their new factory in Dublin, Cork, or the eastern counties, they locate it in the congested areas, they will get from the board certain forms of financial help.
The sole function of the board will be to decide in relation to the proposals submitted to it the amount of financial help, if help is necessary, required to offset any competitive disadvantage associated with the selection of a western location. As it will, therefore, be mainly concerned with the administration of funds it should I think consist of people who have got practical experience of the administration of public funds.
That does not mean that the board will consist entirely of civil servants but I think it is likely to be confined to those who have got experience in civil service or statutory organisations of a somewhat similar character. Neither do I think it will be necessary —I do not expect it will be—that the members of the board will be engaged whole time in the discharge of this work. The board will, of course, be completely independent of the Government. Its decisions will be final. It will not make recommendations which the Minister can either accept or reject. Once it comes to a decision, that decision will be implemented without reference to any Government Department.
It is a desirable feature of the Bill that it is possible for the board to enter into discussions with the promoters of industrial projects in the knowledge that it can reach decisions which are not subject to subsequent review by others who have not had the same opportunity as the board will have of intimate examination of the proposals. Many Deputies during the course of the debate in the Dáil commented on the fact that I did not express myself as being very optimistic as to the possible effects of this Bill upon the situation in the congested areas. Frankly, I have no means of estimating what the effect of the passage of the Bill and the establishment of Foras Tionscal may be upon the future of industry west of the Shannon. I know that various people who have been discussing industrial plans or ideas in the Department have shown considerable interest in the Bill and have expressed also their intention of entering into discussions with Foras Tionscal, when established, to ascertain the inducements that will be given to them to locate their enterprises, if they proceed with them, in these congested areas rather than elsewhere.
I think it is likely that some useful results will be secured but I think it would be foolish to suggest that as a result of the enactment of this measure there will spring up a crop of factories in every western town which will completely revolutionise the whole social and economic aspect of that area. In that connection I should mention that the Bill provides for Grants-in-Aid to Foras Tionscal to the extent of £2,000,000. In so far as that represents any attempt to assess the extent to which the facilities provided by the Bill will be utilised, it can be nothing more than a guess. It certainly is not intended to be any indication of a desire to limit the operation of the Bill in any way. Whether the amount mentioned in the Bill was £2,000,000, £10,000,000 or £20,000,000 that would not alter in the least the number of proposals that will be forthcoming or the amounts which Foras Tionscal might decide to make available in any individual case. It does mean that if the amount granted for industrial development in the West by Foras Tionscal exceeds £2,000,000 amending legislation will be required and, as a general rule, I think that is a desirable safeguard.
Different members of the Dáil or Seanad may have different ideas as to the extent to which public funds should be allocated for the making of grants of this kind. I think that if the amount granted seems likely to run beyond the figure in the Bill the Oireachtas should have an opportunity of having another look at it; but I think that most of us would feel so pleased in getting results on that scale in the industrial development of the congested areas we would have little hesitation in recommending the enactment of further legislation to raise the limit.
The procedure will be that in each year the Estimate for the Department of Industry and Commerce will include a sub-head providing a certain amount out of this total for expenditure in that year. I should perhaps say that the Estimate next year and the following year will be just as much a guess as the present limit in the Bill. Nobody can calculate in advance how much will be required. If the amount provided proves to be inadequate a Supplementary Estimate will be taken.
I do not think it is likely that every town in the West will benefit equally under the Bill. It is certainly not intended to exercise any discrimination within the limits of the congested areas in favour of any particular town or county. If two sound industrial propositions come from one town, both will be supported even though a neighbouring town has not been able to produce any proposition at all. The operation of Foras Tionscal will be directed to getting industrial development within that area leaving it to the private firms concerned to select the location that appears most advantageous to them bearing in mind that the amount of help they will get under the Bill will be related to the disadvantages of the location. It might be true, therefore, to say that the further west they go the greater the measure of help on which they can count.
In that connection the Dáil got itself into quite an involved discussion upon what I think must have been a misunderstanding of certain remarks regarding the effect of the Bill upon the Gaeltacht and Fíor-Ghaeltacht areas. So far as the Bill is concerned the word Gaeltacht does not appear in it at all. It is a Bill designed to deal with the problems arising from the undeveloped character of a wide stretch of the country which was defined previously as the congested areas. We recognise, however, that within these congested areas there are Gaeltacht areas and that particularly in relation to the more restricted Fíor-Ghaeltacht areas national policy has a double aim. It has not merely the object of improving economic and social conditions there but also the desire to do so without damaging the prospects of the survival of the language as the spoken language of the people in those areas.
I expressed the view—I still think it is correct—that it is unlikely that the measure of help which can be given under this Bill will be effective in inducing private enterprise to establish competitive manufacturing industries in the isolated districts around the western seaboard. I think that if there is a possibility of developing special forms of industry there, that will have to be explored and carried out in the main at Government risk and by State organisations. Certain proposals in that respect may be submitted to the Oireachtas during the course of the next year.
When Comhdháil Náisiúnta na Gaeilge came to me and expressed apprehension lest this effort to induce private enterprise into the Fíor-Ghaeltacht areas would not be accompanied by safeguards for the language I expressed the view that the inducements given under this Bill would be effective in getting industrial development in the towns of the congested areas and only in very exceptional circumstances would they be sufficient in getting industrial development in the isolated areas. But there certainly is no ground for any suggestion that these areas, the Fíor-Ghaeltacht or otherwise, are excluded from the Bill, and if anybody produces a sound proposition for industrial development based either upon some natural resources or other local advantage for any of these areas then it will be open to An Foras Tionscal to give them whatever measure of help they require and is possible under the Bill.