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Seanad Éireann debate -
Wednesday, 19 Dec 1956

Vol. 46 No. 17

Industrial Grants Bill, 1956—Second and Subsequent Stages.

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

It is scarcely necessary for me to emphasise the importance which must be attached to the development of industrial production as a means of providing employment and easing the balance of payments position by the production of goods here which would otherwise have to be imported and by contributing to our export potential. Successive Governments have accepted the need for creating conditions favourable to the expansion of manufacturing activity; these conditions have taken a number of forms including the grant of protection where necessary, the provision of facilities for securing capital and the provision of information and advice to industrial promoters. More important, perhaps, than the forms of assistance which I have mentioned is the fact that persons contemplating the establishment of industries here know that if they invest their capital and use their abilities in establishing efficient manufacturing units they can be sure that at all stages of their operations they will enjoy the goodwill and encouragement of whatever Government is in power.

Considerable progress has already been made in the field of industrial development. But the need for increased employment, reduced dependence on imports and the expansion of exports requires that further steps should be taken to stimulate and if possible speed up the tempo of industrial development. The Government have therefore decided on certain measures to afford additional incentives for industrial development. Deputies have recently been considering proposals for tax relief in respect of industrial exports and for industrial buildings and the present Bill is designed to implement the Government's proposals for grants to aid industrial development.

The Bill empowers the Industrial Development Authority to make grants of up to two-thirds of the costs of factory buildings and other works required for the establishment of industrial undertakings, subject to a maximum grant of £50,000 in any one case. Before the grant is given the Authority must satisfy itself that the project concerned will be reasonably permanent and is likely to be carried on efficiently and that its establishment will be in the interests of the national economy and is likely to provide substantial employment or to make available substantial quantities of the goods concerned or to provide an opportunity for exports. I do not think that any promoter of a worthwhile project should have the slightest difficulty in satisfying the Authority under these heads as they are in effect the essential prerequisites for the establishment of a sound industrial project. The assistance to be given by the Authority under the Bill will, as I have said, take the form of a grant and once the project has got under way and the grant has been paid the industrialist concerned will be free to manage his affairs in whatever way he thinks best.

When it was decided to introduce the scheme of industrial grants we were conscious that there might be some fears among existing manufacturers that their position might be worsened by competition in a saturated market from new units established with the help of grant moneys. While I could not conceive that the Authority would make grants available in such circumstances, nevertheless, I thought it well to have a provision written into the Bill which would allay any fears on the part of existing manufacturers. Accordingly, the Bill provides that when considering applications for grants the Authority shall have regard to the extent to which the requirements of the public in respect of the commodities to be manufactured are sufficiently met by undertakings already established.

The announcement by the Taoiseach on 5th October of the Government's intention to introduce a scheme for industrial grants indicated that it would be administered in accordance with the accepted policy of decentralisation. The Bill does not contain a specific provision to this effect, but it is my intention when the legislation has been enacted to issue a policy directive in the matter to the Industrial Development Authority. The directive will be in the sense of the reply given in Dáil Éireann to a question on 25th October, 1956, when it was indicated that the accepted policy of decentralisation of industry is to encourage so far as it is practical to do so the dispersal of industry throughout the country so that areas away from the centres of largest population shall secure industrial projects and thereby share in the employment and other advantages resulting from industrial development.

The Bill provides for a maximum aggregate of grants of £2,000,000 for the seven years to the 31st December, 1963, but I must admit that this estimate may fall wide of the mark as the volume of grants will, of course, depend on the extent to which projects came forward for consideration by the Authority. I would be very gratified if the estimate should prove to be too low, as I cannot think of a better way of spending money than on industries which will provide permanent employment for our people, reduce our expenditure abroad on the goods which we need and increase our export potential.

The Bill will not apply to areas to which the Undeveloped Areas Act applies; these areas will continue to enjoy the benefits of that Act.

When the Bill was before the Dáil fears were expressed in certain quarters that its enactment would have adverse effects on industrial development in the areas covered by the Undeveloped Areas Act. I am satisfied that these fears are groundless as projects located in these areas will continue to be eligible for the very substantial facilities made available by that Act under which An Foras Tionscal are empowered to make grants up to 100 per cent. of the cost of factory buildings plus 50 per cent. of the cost of plant and machinery plus a grant towards the training of workers. Compared with these facilities the assistance proposed in the Bill for projects outside these areas is quite modest and will not react adversely on development in the western areas.

As Senators are aware, there are certain areas which are in the unfortunate position of being too far west to share in the benefits attaching to location near the large centres of population on the east coast and of being too far east to enjoy the benefits available under the Undeveloped Areas Act. It is hoped that this new measure will help such areas to secure a share in the benefits to be derived from future industrial development in this country.

I do not think that there are any other matters arising on the Bill which call for comment by me at this stage and I will conclude by expressing the hope that, as the Bill is one which should commend itself to Senators of all Parties, it will be given a speedy passage as an agreed measure.

Tá an Bille seo cosúil leis an mBille eile a ritheadh sa Teach inniu. Sé an gnó céanna atá iontu araon. Táimid go léir ar aon aigne idaobh an tír seo do thionscalú chomh tapaidh agus is féidir ach nílimid ar aon aigne i dtaobh conas chur chuige. Sin í an cheist. B'fhéidir go bhféadfainn a theasbáint don Aire go bhfuil gnéithe áirithe san mBille seo go bhféadfí iad do locthú ach tá tairbhe san mBille san am gceanna. Sé tá i gceist an mó an tairbhe atá ann nó an mó an mhí-thairbhe i slite áirithe?

The provisions of this Bill could be said to be complementary to the provisions of the Bill which we have just disposed of. Both, I take it, are designed to stimulate industry in this country, with the view, it is to be hoped, of providing more employment for our people. The Minister has mentioned certain conditions attaching to the grants for new industries under this measure. It is, he has said, the Industrial Authority that will administer this measure when it becomes an Act and the Authority must satisfy itself that the project considered will be reasonably permanent and likely to be carried on efficiently and that its establishment will be in the interests of the national economy and likely to provide substantial employment. I would say that the latter condition is the most important of the whole lot, that is, the provision of employment for our people, but at the same time the other conditions also are important.

As the Minister stated in his opening remarks, it has been the policy of successive Governments to establish industries here as quickly as possible and to do everything within reason towards that end, but while it is certainly the policy of successive Governments, perhaps there may be a difference in approach. I must confess that there are certain features of this measure with which I would be inclined to find fault. First of all, as we have said in connection with the last measure, the Finance (Miscellaneous Provisions) Bill, there is a discrimination, if I could put it like that, as against existing industries. I notice that in Section 2 of the Bill, which is the operative and important section, there is not a single reference to existing industries, so that if it happens that any industrialist finds that he is in need of capital to expand his industry and increase the output from that industry, he will get no assistance whatever under this measure. I do not know if that is the case.

Sub-section (3) of Section 2—is that it?

I am dealing at the moment with Section 2. Sub-section (3) states:—

"The Authority, in considering applications for grants under this section, shall have regard to the extent to which the requirements of the public in respect of the commodities to be manufactured are sufficiently met by undertakings already established."

That has nothing whatever to do with what I am saying. That sub-section refers to the danger of a new industry being set up in opposition to an existing industry. That is what it deals with so far as I can interpret it. I repeat that there is no provision being made for those people who are already engaged in industrial enterprises and who are in need of capital to expand their business and put it on a sounder financial footing. I do not know if my interpretation is the same as that of the Minister, but I would like to hear the Minister, on that aspect of the problem. After all, it is not right, as we said before in connection with the other measure, to place existing industrialists at a disadvantage vis-á-vis newcomers and that is exactly what we are doing if we are not making any provision for them in this Bill.

Again, the Minister referred to the Undeveloped Areas Act and he gave us an assurance, or something in the nature of an assurance, that this measure would not cut across the operation of the Undeveloped Areas Act. The question is whether the Minister is in a position to give us that assurance because, if a prospective industrialist comes in here to start an industry and finds that he will get almost the same benefits from the State when he establishes the industry in any part of the country—in some part of the country nearer to the big centres of population—as he would get if he established it in the undeveloped areas, where is he going to put it?

The whole object of the Undeveloped Areas Act was to compensate intending industrialists for the disadvantage they would suffer by going to the far-off, isolated parts of the country in the West of Ireland and along the western seaboard to establish their industries. No matter what the Minister says and no matter what assurance he gives us, I think that the effect of this Bill will be to negative to a great extent the operation of the Undeveloped Areas Act. I am not one who would say that there have been very spectacular developments under the Undeveloped Areas Act, but at the same time good progress has been made and I am afraid that, despite any statement to the contrary, a lot of that good work will be halted.

I remember, when the Undeveloped Areas Bill was passing through this House, some of us referred to the Gaeltacht because we realised that giving economic assistance to the Gaeltacht was a problem that should be considered by the Government, too. The Minister of that time admitted that the Gaeltacht was a problem in itself, but that it was not being specifically catered for under the Undeveloped Areas Act; that the Undeveloped Areas Act applied to the congested districts of the country. Now we are opening up the field throughout the whole country and we are, as it were, declaring the whole country to be a distressed area.

The Senator hardly believes all that himself.

That is what we are doing, because otherwise it would not be necessary for the State to give financial assistance to intending industrialists. I mentioned the conditions under which it is proposed to give those free grants and it is well to remember that in this case they are free grants—free unrepayable grants, every penny. Industrialists coming in here and establishing industries outside the undeveloped areas will get up to two-thirds of the cost of buildings and works to a maximum of £50,000. I submit that £50,000 is a hefty sum and any industrialist who gets up to £50,000 towards the establishment of an industry would not be inclined to go into the undeveloped areas of the country, to the far-off places for which the Undeveloped Areas Act caters.

As somebody said in the Dáil, it was not necessary at all to bring in a measure like this because there is provision already in the Undeveloped Areas Act, under Section 3, to extend the area, so I do not know why the Minister considered it necessary to bring in separate legislation.

The Minister, in concluding his statement, gave us to understand that, despite the fact that there is nothing in this Bill to ensure that its provisions would not prejudice the operation of the Undeveloped Areas Act, he would issue a directive to industrialists coming in here. I do not know what force will be behind that directive. Those people need not accept it and if they do not accept the Minister's directive, will they still qualify under this Bill for the rather generous grants that will be given?

Might I correct the Senator? The directive will be given to the members of the Industrial Development Authority who will be administering the grants and not to the industrialists——

If this directive is to have any force at all, it will be the duty of the Industrial Development Authority to pass it on to the prospective industrialists——

——otherwise the directive would be of no value.

The directive would be given to the Industrial Development Authority for the purpose of telling them that they are not to give grants in respect of already cluttered up areas from an industrial point of view and in administering the grants, therefore, they will have regard to where the industry is located.

They are not bound to accept the directive.

Well, now, the Senator——

We will leave it. There is a lot of speculation, I must say, about these things. There is an old proverb in Irish which says: Tar éis a tuigtear gach beart—it is afterwards that everything is found out. I think it is after this measure has been in operation for some time, we shall find out exactly what the position is. I hope we will be all in a position to have another look at it. We all subscribe to the policy of industrialisation and in doing so we must be prepared to spend a certain amount of the money of the State towards promoting that policy. I do not know whether the idea of grants is the better one, especially for would-be industrialists who will not be under the disadvantage of going to the far off parts of the country.

As was advocated in the other measure by certain members of the Dáil at the time, if the policy of giving loans was regarded as the better one for the undeveloped areas surely it should be regarded as the better one for the other areas? Here we are proposing to give grants free, gratis and for nothing, up to £50,000 towards the establishment of the industries envisaged in this Bill. I do not know if it is the best method but I suppose the Minister and the Government have given that some consideration.

In conclusion, I for one shall be glad if the results the Minister has in mind flow from this measure. If the beneficial results which he thinks are likely to flow from this measure are realised, we shall all be glad. We all realise that while agriculture must get the primary place in our consideration, it is necessary also to expand the industrial arm of the country.

I should like to compliment the Minister on this Bill. It is a necessary thing if the country is to get new industries and capital has to be found. One of the great difficulties is to find capital. The Minister has acted very wisely in introducing the present measure. What has been done in the undeveloped areas has been quite successful and the Minister is very wise in extending the experiment.

No mention has been made so far of one part of the Bill, the Schedule, which deals with the setting up of the Industrial Development Authority as a corporate body. I should like, if I might be permitted, as one who had a good many dealings with the Industrial Development Authority, to express a sense of the very admirable way in which those who constitute that body have carried out their work. I think the country and the various Ministers who have been in office have been very lucky to have had their assistance. The experiment of setting up such a body has proved to be an extremely wise one.

As regards the provisions of the Bill itself, reference has been made to Section 2 (3) by the Minister. He has explained that protection is given by the sub-section against a prejudicial use to existing industries. I do not know whether the Minister would be prepared to consider, instead of the words "sufficiently met" some word such as "sufficiently already met or capable of being met by existing industries". There are certain industries which have been getting up on their feet and which might not sufficiently answer the needs of the country already, but in these cases it would be rather unfair to set up by public money a competing industry. Therefore, the Minister might consider whether the scope of that direction to the Industrial Development Authority goes quite far enough.

On the Finance Bill I referred to the very strong feeling I have that the Control of Manufactures Acts are impending the industrial development of the country. As it is rather relevant to the matters in this Bill, I think one should refer to this again. It may perhaps be very undesirable, but in fact most of the new industries which are set up in this country, in my experience, come very often through an initiative from abroad. I have had personal experience again and again of how much outside people, who might be attracted to this country for various reasons to set up industries here, are deterred by the provisions of these Acts, even though there are many ways of complying with them.

I think the Control of Manufactures Acts have never achieved the objects for which they were introduced, that is, the strengthening of the Irish element in industry, but have resulted in introducing a great deal of sham into a great many companies and, to my mind, quite certainly have interfered to a considerable extent with the setting up or bringing to this country of new industries. I know that the Minister has met this to some extent by a more effective policy in the granting of new manufacture licences, but I think it is a thing which has kept on doing injury to the development of industry here.

A good deal has been said about the necessity to spread industries in the country. I fully appreciate and agree with that, but one should remember that this is a very small country. It is probably only about the size of a county in an American State. It is quite possible that, while trying to bring life to every part of the country, one may be defeating one's own object. I have often felt that if this country had had a more fortunate history and could have developed as an independent country over the centuries, the natural centre for the country would have been along the Shannon, with its great navigation. I am not at all sure that sooner or later there should not be a certain amount of industrial planning, not merely to try to help one small industry in each town but rather to build up semi-industrial areas, possibly towards the centre of the country. It seems to me that the present geographical set-up of the country indicates completely an historical development in which we were dependent entirely on England for the east coast development and the west coast remained entirely undeveloped. The remedy there probably is to try to move things a little more towards the centre. It is quite right to try to spread industry, but it would be a mistake to try to spread it too much and perhaps it may become ineffective and inefficient in that way.

As I have said, I think the policy adopted by the Minister is the right one. There is no doubt that these new industries, under existing circumstances, require help to obtain their capital. I think that the policy he is suggesting of outright grants is probably the wisest way to meet the difficulty. It does seem queer at first sight that a country should make a present of a large sum of money to people who are setting up plainly for their own benefit but the fact remains that unless there is a considerable stimulus to industrial development it will not occur in the shape in which we want it. The Minister is quite right in selecting this form of injection. The Bill provides that grants are to be made under conditions which the Industrial Development Authority would approve.

It has always seemed to me that there is one thing possible in the case of these grants which we should guard against and that is what I might call quick realisation. Supposing people come in with £30,000 or £40,000 capital and get a grant of say £50,000, just start an industry and then sell out in a very short time, they might get away with something worth getting away with, but the fact would still remain that the Minister would have succeeded in his object of having put there an industry that had not been there before. I think it is worth while running these risks, but I think the Industrial Development Authority would need power to impose certain conditions which would enable them to give safeguards in those respects. I should like to support the Bill.

I should like to join with other Senators in congratulating the Minister on introducing the Bill. The Bills which we dealt with yesterday and to-day were foreshadowed in the Taoiseach's speech of October 6th when he disclosed the Government's positive policy for dealing with our economic conditions. I should like the Minister, as suggested by Senator Kissane, to elucidate Section 2——

Sub-section (3).

No, the whole section. I shall deal with it later. When it became known that grants would be made for industry I approached a progressive young industrialist and asked him what would be the possibilities of exporting to Britain the products which he was manufacturing. This industry was established originally for the purpose of supplying an article or articles which were imported. He caused a survey to be made of market conditions in Britain and of the prices at which these products were sold in Britain. He has since informed me that it would appear to him that a remunerative market could be established for these products. He did stress the fact that freight would probably be one of the deterrents but I shall refer to that problem later.

His suggestion to me is that there should be a large extension of the factory and that it be used for the export of these goods. He further informs me it would have the effect of allowing them to reduce the price of goods for the home market because the output of the factory would be larger and more efficient machinery would be capable of being used economically for a proposed output of twice the present magnitude.

I want the Minister to tell me, can grants be made in that very desirable way? This industry is established and can demonstrate to the Industrial Development Authority that it can produce goods that are at least equal to the quality of goods produced in Britain and in other markets to which it is proposed to export. The industry is owned exclusively by Irish nationals and they have the technical know-how to produce these goods. I give that example because I know of it in a practical way and I know it from the facts. I am not stating a hypothetical case and I think it would be wholly desirable if extensions of that type of industry were encouraged.

Frequently, when industries were started, capital was raised and, perhaps, the industries had not the technical know-how. They changed ownership and there were years of disappointment, sometimes even financial loss, on the investment of other people's capital as well. This Bill envisages grants of up to only two-thirds of the cost and I presume it would only be in the extreme case that the Industrial Development Authority would be so generous as to give two-thirds. I imagine in most cases it would be one-third or 50 per cent. that would be given and that the other half or two-thirds of the capital would have to be raised here.

Those who have shown they are able to produce goods for the home market up to standards that this exacting market requires, are the people who are likely to get private capital to put down, pound for pound, for the grants that will be given by the Minister. I think the Minister was right in taking power to give a directive to the Industrial Development Authority with regard (1) to decentralisation of industry and (2) to location.

One of the disadvantages which an island country like ours will always have to contend with—pushed, as we are, out in the Atlantic, away from the Continent of Europe—is the cost of transport, the cost of bringing in materials and sending them out. Therefore, the location of factories must be considered by the Industrial Development Authority.

Recently a very interesting example of the efficient and intelligent use of shipping came to light. The Clyde Shipping Company in Waterford found that owing to the location of the port it was possible to use one of their steamers to go to Liverpool early in the week and then to go to Dieppe with cattle in the latter part of the week. I have been informed that the ship would not be able to do that turnround from any port in the country other than Waterford. That shows the importance of location and Senator Cox did raise a very important point when he stressed that. The location will also depend on the type of goods being manufactured. As Senator Hartney said on a previous Bill, if we were to export whiskey it might be possible to fly it out, but we might also be exporting something which would require the chartering, building or provision of shipping to allow that industry to succeed. When the goods are manufactured, they must be moved out of this island to suitable markets.

A very interesting survey of the effect of transport and location on industry was dealt with very extensively in the Economist on the first week of October of this year under the heading “John Bull's Model Island.” The group who wrote the series of articles on this economy, which is very similar and complementary to ours, stressed the necessity for the development of efficient shipping facilities. They said that one of the greatest disadvantages to the Northern economy, closely allied as it is to Britain, is the cost of the transport of materials from Britain to the North where they are manufactured and then their re-export. Anything that can be done to facilitate the economic handling of the goods which we propose to export at the point of export from our country and at the point of import into the country to which we are sending them will, in the long run, greatly help us and assure the continuance of the types of industries which are being suggested under this Bill.

This is a short Bill and I think it would be wrong to speak at length on it. I would again ask the Minister if there is not power to make grants to existing establishments—line 24, Section 2.

It is not clear to me whether or not it is possible or whether an extension of the Bill would be warranted to assist in giving money to these people. If some well-established industries here can demonstrate to the public that they can make a success of it, I feel they will create a climate for industries here. If they are able to get the money, then others will follow their example because it will be shown that it is a good thing to invest in Irish Industry and that the Irish are able to export to the world markets. It would be a boost to the morale so far as exports are concerned.

I congratulate the Minister on introducing this measure. As a person engaged in industry myself, I think the grants are very generous. This Bill shows the wide compass of the Minister's mind. He realises that there may be cases where it is necessary in this economy to establish industries and he is even prepared, if the Industrial Development Authority so decide, to make grants up to two-thirds of the cost of the provision of the factory buildings.

I should like to join with Senator Cox in asking the Minister to satisfy himself that the Bill as set out will not prejudice existing manufacturers in any way and that they will be able to derive the same benefits under the Bill as those to which a new industry would be entitled.

I do not agree with Senator Cox, however, that industries should be confined to the larger areas. I feel that industries should be more equitably distributed throughout the country. To some extent, industry is complementary to agriculture. Some of the members of families from small farm holdings who work in these industries in the towns and villages help to supplement the family income and therefore enable parents to rear families and maintain themselves on uneconomic holdings.

I live in a small village in a congested area. It is an industrial village. Were it not that there are industries in that village, I am satisfied that quite a number of the people living on smallholdings would not be able to maintain themselves and that the holdings would be left derelict and would possibly be used only for afforestation purposes.

The aim of this Bill is to secure industrial expansion outside the undeveloped areas. I feel that the Bill will injure the prospects of the further development of industry in the undeveloped areas, as such. I would refer the House to a statement which the Minister made in 1951 when the Undeveloped Areas Bill was being discussed. As reported at column 900 of Volume 128 of the Official Debates of Dáil Éireann, the Minister said:—

"It will be extremely difficult to induce the ordinary private person to establish industries in the West even with the facilities provided in this particular section."

On 12th December of this year, when this Bill was under discussion in the Dáil, the Minister said, as reported at column 2230 of the Official Report:—

"If you could get the same facilities for establishing an industry in Meath or County Dublin as you would by establishing it in Donegal or Connemara, it is quite clear nobody would go to Donegal or Connemara; they would all clamour around the capital of the country and draw the same benefits there ..."

In view of the fact that possibly up to 90 per cent. of our existing industries are concentrated in or around Dublin, it is obvious that Dublin has tremendous advantages. People running industries in rural districts far removed from the capital and far removed from large centres of population have to pay a substantial freight on the importation of the raw material and on the transportation of the finished article. They require warehouses and agents. They have not contact with the buyers which industrialists in or around Dublin have and definitely they are at a tremendous disadvantage.

People have suggested that the grants under the Undeveloped Areas Act were generous. They were. Nevertheless, there is still an unexpended sum of approximately £750,000 in that fund. This Bill reduces the advantages of a building grant by two-thirds for those people who now propose to erect or to take up an industry in the undeveloped areas. Obviously, if the grant for a building in the undeveloped areas were 100 per cent., and if one can now get a grant of up to 66? per cent. for the erection of a building in an area other than an undeveloped area, then the advantage has been reduced by the amount which I have stated.

Apart from the blow which this Bill will inflict on potential industries in the undeveloped areas, it will also prove a considerable disadvantage even to proposed industrialists in rural Ireland in general. The tendency is to come as near as possible to the city. The Minister suggests he proposes to issue policy directives to the Industrial Development Authority to encourage industrialists to go further out. That is indicative of the fact that it is anticipated that the industrialists will naturally come as near to the port and as near to the population centre as possible. I wonder why the Minister does not include that policy directive in the Bill. I do not know what authority he will have for issuing a policy directive when the Bill is passed. Even if that is his idea—and I am quite sure it is—there is no guarantee that another Minister in some other Government will not discontinue the policy which the Minister has suggested. I feel it would be a desirable thing if the idea which he suggests could be incorporated in the Bill itself.

It is not right to exclude the undeveloped areas from this Bill. I appreciate that the undeveloped areas have advantages at the moment, but if there is only £750,000 left in the kitty at the moment, what will happen when that sum is exhausted? There is no guarantee that further moneys will be voted by the Oireachtas to provide for any further demands from those areas. There will be £2,000,000 available for the country generally. The Minister has already stated positively that the Act will terminate in 1958. Therefore, unless a new Bill is enacted in the meantime, it will mean that those areas will be excluded from any grant whilst other areas will be allowed benefit until 1961.

Who put 1958 in the other Act?

I am not concerned with who put it in the other Act. I am simply concerned with the future.

The Senator is concerned to conceal that I did not put it in.

I am not suggesting the Minister put it in. I am trying to be constructive in any criticism I have. I feel the undeveloped areas will definitely suffer when this Bill has been passed. The reduction in population in the congested areas is still proportionately much greater than in the rest of the country. I would refer the Minister to the fact that the reduction in population in Connacht, Donegal, Clare and Kerry, according to the last census, amounted to 44,399 out of a total reduction of population in the country of 65,771. Therefore, over two-thirds of the reduction in population has taken place in the areas which the Undeveloped Areas Act was supposed to help.

For that reason, I believe it is vital and essential for the national economy that every effort possible should continue to be made to allow the people in those areas to maintain themselves; otherwise, whole areas may be denuded of their population in a very short space of time. Undoubtedly, Dublin and its suburbs have a tremendous attraction not alone for industrialists but for people, for instance, who retire from business and professional posts. If the industrialists in these large centres are now to benefit to the extent proposed under this Bill, the position may be aggravated and the whole economy may consequently suffer.

I feel the farming class is still a depressed class. Their income is going down because their produce which has been exported to Britain has obtained a lesser amount, while the prices of the commodities which they have to purchase are steadily rising. Therefore, it is natural that a great number of the small farmer class have emigrated and they are continuing to emigrate and take up very hard work in public works in Scotland and England. Were it not for the work which these workers from Connemara, Donegal, Kerry and Mayo are doing in Great Britain it would not have been possible, perhaps, for that country to achieve the progress it has in hydro-electric schemes and other spheres. When there is such a demand for that type of labour in Great Britain, I believe those men would be very suitable for employment in their own area.

A number of people have suggested that at the moment industries find it difficult to get sufficient capital to expand their business because of the credit squeeze and the rate of interest. They say that industries are feeling the pinch at a time when the population is decreasing. I feel that, if this £2,000,000 was partly spent in the provision of loans to companies for extending their industries or making them more efficient, even if these loans were provided at a reasonably low rate of interest and the money spread over a greater number of industries, ultimately a much better return would be secured by the community. I am aware that grants such as contained in this Bill are fairly common in the Six Counties and that a large number of industries have come from Great Britain and established themselves there. The advantages which these industries have there are greater than those provided in this State, because of the fact that, apart from anything else, they do not have to pay rates for a number of years. Many of those industries are very successful there.

If this Bill enables or encourages people to come in here and establish further industries—industries which our own people could not establish because of a lack of capital or technical knowledge—I trust it will be successful; but, as I said our areas will undoubtedly suffer unduly.

I agree with one thing Senator Cox said, that is, that it might seem funny to introduce a Bill for the purpose of giving money grants to people to persuade them to come and manufacture and put money into their own pockets. It does seem funny. My reaction to this Bill is that it is a surprising Bill. Frankly, in the present context, in which we are all told about the necessity for saving, tightening our belts and practising austerity, I find it very strange for the Government to come along and say: "Now, I would like you to give £2,000,000 in grants to new industrialists who are not yet in production."

In relation to this question of new industries; in our economy, I think a normal question, if a new industry is to be set up, is: Will it be viable; will it be able to run itself at a profit; will it be able to continue? Of course, the Minister has reserved the right in this Bill to ask that question before such grants are made; to ask the question, in other words, whether such a new industry would be an economic proposition? If the answer is "Yes, such a new industry will be demonstrably an economic proposition," I would be inclined to ask the further question; why does the ordinary process of supply and demand of credit not function? If this new industry will satisfy the demand for a product either at home or abroad, if the industry in question is needed, if such a new factory is needed, if clearly a profit is to be made out of it—if, in other words, it is a sound proposition, as the Minister tells us he will assure himself before he gives any grants—then, why cannot such an industrialist go to the banks and get all the money he wants on the ordinary moneylending terms? Because, as I understand the system in which we exist, it is possible to borrow money from the banks for demonstrably sound undertakings, be they new or already in existence.

If, on the other hand, such industries are not demonstrably sound, if they are unsound, why should the State give grants? Why should we be asked to step in where bankers fear to tread?

On the other hand, it is quite possible—I think it is arguable, and the Minister may make the point—that banks may not be prepared to lend money, even if it is a sound proposition. Is that really true? Are we in this country in a position where the banks would refuse to lend new industries money, even when the proposition is demonstrably sound and would be in the national interest? I should like to hear the Minister's answer to that question.

Is that the situation, that where a new industry is demonstrably a sound economic proposition that would be to the national benefit, our private banks will not lend the money? I think the Minister might in that case explain to us just what is wrong with the system. Why does it break down in this way? If we have a perfectly good proposition, economically sound, why do not the ordinary economic forces come into play? Why does the State have to step in?

Is it that the banks could only lend such money at interest rates which would be, owing to Government policy, too high, because I think it is legitimate to say that Government policy has put the interest rates up? Is it that the banks could not lend the money at interest rates which would be sufficiently low, or is it, as in the case when a bank is asked to lend money to a farmer, that too great caution is practised by the banks in lending money for new undertakings. It is well-known that a farmer, in order to borrow money from the bank, must prove absolutely that he does not need it. Otherwise, he will not get it.

Is it one of these two reasons that might lead a bank, in the case of new industries, not to lend the money— either that the interest rate will have to be too high, owing to Government policy, or that the banks will have to exercise too great caution in lending to new undertakings, owing, again, to Government policy of the credit squeeze, the cutting down of credit, the greater reluctance of the banks to issue credit?

However that may be, it seems to me that, since the private banking system apparently cannot or will not make sufficient credits available, the Government is asking, by the terms of this Bill, to be allowed to step in and find £2,000,000 to lend or give away. I do not know whether it will be lent or not. Other speakers have suggested that these were outright grants, but Section 2 (1) says that "the authority may on such terms as they think fit make grants"—"on such terms". Frankly, I do not know whether that includes the payment of interest, or the eventual repayment of the grant. I do not know whether it is an outright grant, an interest-free loan or what it is, but, at any rate, we are asked to permit the Government to step in through the medium of the Authority and find £2,000,000 to give or to lend to these new industrialists with less precautions and at more favourable interest rates, if there are any interest rates at all, than the private banks find it possible to do, under the present credit squeeze conditions.

Although, in a few weeks' time, the profits of these banks over the past year, I am prepared to hazard a guess, will be found to have been enhanced by this credit squeeze policy of the Government, nevertheless they "cannot find" the necessary money, and so the Government will step in, and is asking us to allow them to do so, in order to counteract the Government's credit squeeze policy.

I find that puzzling. Senator Cox has suggested that some of us might find this Bill rather funny. If it were not so serious a matter, I would say that it is funny to see the Government asking to be allowed to lend money which is not otherwise made available to such people—presumably they are reputable people with sound economic propositions to put forward—by the ordinary banks, apparently owing to Government policy on the credit squeeze. So, the Government will pledge its credit and thus try to counteract the effects of the Government credit squeeze policy; and £2,000,000 are being asked for to start with, £2,000,000 of what I should call easy money.

I am sorry, in a way, that the Minister for Finance is not here to explain to us how this will be done without inflationary tendencies, because I am quite confident that, if Senator Hickey were to propose that £2,000,000 were to be made available in this way, he would be warned that, of course, he was merely printing bank notes, and that the effect of this would be inflationary.

I should like to know why the injection of this fresh £2,000,000 of credit, which cannot be found in the ordinary capitalist banking system, will not, in effect, be inflationary, and I should like to ask where will this money come from. We were told in relation to pensions for civil servants, the other day, that £140,000 was an absolute maximum. We were told in relation to voluntary health insurance that £50,000, all of which would have to be repaid, was an absolute maximum. We shall be told presently to-day, I think, in relation to I.R.A. and Army pensions that only about £40,000 is available, that there is no money there. But, for new industrialists, people who are not yet in business, people who have not yet got their factories on the ground, we will be able to find, not £140,000, but £2,000,000.

If this money which the Minister is asking for, and which the Government is prepared to put up, were to be devoted, as certain Senators have suggested, to the undeveloped areas, for further development there of industries, I would feel perhaps a little less reluctant. If it were to be devoted to education and the building of schools, along the lines you find in relation to secondary schools in the North of Ireland getting two-thirds of the cost of building from the Government just as we are to give two-thirds of the cost of building up to a certain maximum, to the builder of a new factory, I certainly would not grudge it. Or, if it were to be given to agriculture, as certain Senators have suggested, for, say, parish tractor and reaper and binder stations, or if it were made available to subsidise cheaper fertilisers—I see to-day that the price of superphosphates, so far from being subsidised, will go up—or, even if these millions were to be given to existing industries which are temporarily feeling the effects of the credit squeeze, and of the import levies on a whole host of commodities and certain raw materials, it would be more understandable. But, in spite of all that, the Minister says that he "cannot think of a better way" of spending State funds than to give it to new industrialists. I hope that we in the Seanad can think of a few better ways. Several people have already told the Minister several better ways of spending this proposed £2,000,000.

These £2,000,000 then are not for education, not for schools or education and not for agriculture. They are not for existing hard-hit industries. They are for new industries, the real need for which is so very much open to doubt that the private banks will not risk their money to back private enterprise in establishing them. And, so, as usual in this country, the State, when there is going to be a risk, is asked to step in and help foot the private industrialists' bill without, apparently, having as a result of this grant any lien on the company, or any proprietory rights in relation to the new factory.

Consequently, I find myself totally against the principal of this Bill. This Bill does not represent State planning for the community welfare but State moneylending, or money-giving, because as I say, we have not yet understood whether it is to be simply moneylending or money-giving. It represents State money-giving, shall we say, for enfeebled industrialists whose moral fibre has apparently already been so far sapped, whose desire for individual effort has been so far supplanted, and whose spirit of self-reliance has become so enfeebled that they are no longer able even to stand on their own feet. This represents a system of State doles, in other words, for severely weakened industrialists of apparently very limited business initiative and business capacity. Admittedly, these doles are a mere matter of £50,000 to each new industrialist—a bagatelle. In actual fact, £50,000 is not too bad, even if you say it quickly. Three such individual grants would have been enough to double the Civil Service pension increases we gave last week. They only amounted to £140,000. Three such industrialists together will get £150,000 as a gift. Just one such grant of £50,000 would cover, and more than cover, the entire anticipated grant for Army and I.R.A. pensions, on which there will be a further talk this afternoon.

Consequently, I am opposed to this Bill. If, however, the Bill is passed, I would suggest to the Seanad that we ought quite radically to cut down the amount made available in this way. Let us limit it to a more reasonable sum. Let us say we will put up £250,000 for the present. I would suggest that far better purposes could be found for the £1,750,000 thus saved and, with that in mind and those purposes, I intend to put down an amendment to that effect.

I come from an undeveloped area, one of the first to avail of the opportunities provided by the 1951 Act, and one of the first to set up a local industry under that Act. I do not believe for one moment that this Bill, when it becomes law, will in any way interfere with the benefits that the 1951 Act was designed to confer. This Bill, as the Minister pointed out, is a dual purpose Bill. Its object is to increase our export trade and to help in the manufacture at home of articles and commodities now imported, thereby reducing the balance of payments. Its second purpose is to relieve unemployment.

Now in the developed areas, as well as in the undeveloped areas, numbers of people are unemployed for whom some provision must be made. If it is the function of Government to provide employment in the undeveloped areas, I do not see how they can shirk that function in relation to unemployment in the developed areas. The conditions of the unemployed in the areas which will be covered by this Bill are more rigorous and more difficult than the conditions of the unemployed in the undeveloped areas.

I do not believe for a moment that this Bill will in any way nullify the effects of the 1951 Act. I cannot understand the criticism that this Bill is an effort to sabotage the Undeveloped Areas Act passed in 1951. It was stated in the Dáil that the Government were introducing this Bill because they were jealous of the success of the Undeveloped Areas Act. They have no reason to be jealous. Even though the Undeveloped Areas Act was passed by the late Government, the inter-Party Government have utilised it to a greater extent since they came into office. That can be proved from the figures available.

From 1952 to June, 1954, a sum of £69,000 was paid in grants to people setting up industries approved by Foras Tionscal in the undeveloped areas. From 1954 to 1956 £232,000, or over, was paid by the inter-Party Government by way of grant to people setting up industries in the undeveloped areas. In so far as approval of new industries is concerned, whereas the figure from 1952 to 1954 was £373,000, the figure for 1954 to 1956—that is, under the present inter-Party Government—is £800,000 in relation to industries approved by Foras Tionscal. I submit, therefore, that instead of being jealous of the success of the Undeveloped Areas Act, the Government have every reason to be proud of the manner in which they have operated it.

It has been stated here to-day, and it was also stated in the Dáil, that there was no need for this Bill, that it would be possible to amend the Undeveloped Areas Act to cover the object for which this Bill is intended. I do not think that is so. I believe if the Government did approach this work by way of an amendment of the Undeveloped Areas Act, they could reasonably be accused of endeavouring to interfere with the success of that Act. I hold that any persons interested in the setting up of an industry have far more attractive terms to avail of when they decide to set up that industry in the undeveloped areas rather than in the areas for which this Bill provides.

As the Minister pointed out to-day, the maximum grant that can be given for the setting up of new industries in areas which this Bill covers is £50,000, whereas, under the Undeveloped Areas Act, grants of up to 100 per cent. of the cost of erecting a factory, 50 per cent. of the cost of the machinery and a grant to train operatives can be voted. Therefore, I hold that as far as the attractiveness of the respective measures is concerned, there is no comparison.

I do know that a certain amount of criticism has been directed at the manner in which the Industrial Development Authority approaches the consideration of applications for new industries. As I stated at the outset, I was in a small way connected with a successful effort made in 1951 to avail of the Undeveloped Areas Act to bring an industry to my native town. Once the project was mooted, it was enthusiastically received. I can assure the House, however, that enthusiasm is not quite enough. The effects of this legislation must be backed up by something in the nature of local effort. Were it not possible in that town for the Town Improvements Committee to make available a sum of £3,000 for the purpose of developing a site selected by the people who came to set up the industry, I do not suppose the town would have got the industry. Whether the industry has developed the area to the extent that was anticipated, I do not know, but it has provided employment for about 40 people who might otherwise have to emigrate. I think this Bill is a good one and I do not imagine for one moment that it will in any way interfere with legislation of a similar kind passed for the benefit of the undeveloped areas.

By introducing this Bill, the Minister has paid a very high tribute to his predecessor and to the Fianna Fáil Government inasmuch as he has copied the Act introduced by them for the establishment of industry in the undeveloped areas. Imitation is, I suppose, the very best form of praise. There is a very exact imitation in this Bill of the Undeveloped Areas Act. The only fear is, as has been expressed by a number of Senators, that in extending the advantages of the Undeveloped Areas Act to the whole of Ireland, as this Bill does to a considerable extent, we may injure those areas.

The Undeveloped Areas Act sought to tilt the scale very heavily in favour of the western counties. The margin of incentive that was offered in that Act has been considerably reduced by the introduction of this measure. When the time comes to introduce legislation for the continuance of the Undeveloped Areas Act, I hope the Minister will see fit to improve somewhat further the concessions provided under that measure. In that way, the incentive in favour of the west would be maintained to a certain extent.

I do not think anyone could oppose a measure of this kind. It certainly gives incentives to increase production and to increase employment in protected industries. I can never follow— perhaps because I am not intelligent enough or intellectual enough—arguments made by Senator Sheehy Skeffington. His arguments to-day appeared to be based entirely on pure theory, far removed from reality. You do not cause inflation, as far as I know, by injecting more money into production, provided that the injection of more money does actually lead to more production and that markets are found for that production, particularly external markets. Senator Sheehy Skeffington said he could see no justification whatever for giving assistance to productive industries here, particularly when they are owned and managed by private enterprise. He even went so far as to suggest that the money would be better spent on increasing pensions and salaries, or even on the dole.

I mentioned neither the dole nor salaries.

Senator Sheehy Skeffingtion certainly did mention the dole in this respect: he described the concessions provided in this measure as a dole to industrialists. He may not have mentioned salaries and I accept his correction in that respect. He did mention pensions. Senator Sheehy Skeffington asked what case there was for giving State assistance of this kind; he asked why the State should step in here to assist industry. The reason why the State stepped in through the Undeveloped Areas Act was in order that the scale might be tilted in favour of these areas.

In a sense, we are extending that principle to the whole of Ireland under this measure. If one compared this country with Great Britain, one must admit that the whole of this country is an undeveloped area. It is necessary to tilt the scale in favour of this country as against others because it is not always possible to protect industrial development here by tariffs or other such methods. As we are seeking to cater for the British market, our industries cannot be protected to any great extent by tariffs. If an inducement is offered to industrialists such as is offered in this Bill, in order that industrialists may produce goods for export, I think that is a good thing. If such inducement were not offered, the same financial interests might decide to set up their industries outside this country. As somebody said earlier, we are operating an open economy, not a closed one. Industrialists will go to the country where they will find the highest reward.

When travelling through the town of Newbridge a great many years ago, I was struck by the derelict condition of many of the huge buildings in the town. Anyone who passes through that town to-day will see that there is a number of thriving industries there. Those industrialists were not induced to come to Newbridge by any overwhelming desire to get inside the Minister's constituency, or from any other romantic or sentimental reason. They made their way to Newbridge because there were buildings there which were comparatively cheap to purchase. In this Bill we are providing buildings at a very reduced rate by giving grants for their erection. In that way, the same principle applies and we may have as a result some new industries established. It is our hope that the balance will not be upset against those counties which demanded and required special assistance, that is, the areas covered by the Undeveloped Areas Act.

I do not for one moment agree that the injection of new capital into the erection and establishment of productive industries causes inflation, and I do not agree with another Minister who spoke to-day when he said that the plans outlined by Deputy Lemass for the injection of substantial sums into productive industry over a period of years would cause inflation. It would do nothing of the kind, provided the money was put into really productive industry and that it had the effect of producing goods to balance the expenditure incurred.

Apart from the industries which will cater for external markets—and they are many and varied—there is need for the further development of industries catering for the home market, particularly industries which provide vital needs. There is a vital need for the production of some substitute for imported motor fuel and tractor fuel. That is a matter into which research must be made and in regard to which something definite must be done. The development of our export industries and the development of industries which complete and are complementary to our agricultural production are of vital necessity. There is opportunity for further development and I think this Bill will be availed of to the full.

The Minister may have been coerced, if you like, into bringing this Bill forward rather hurriedly. It has gone through the Dáil hurriedly at the end of the session and the Minister has been coerced into taking that action by the alarming position in respect of unemployment. Unemployment as compared with last year is up by over 15,000. Yesterday I was reading an article in the Irish Times in which the matter of manufacturing industries was discussed. It was pointed out in that article that there has been a decline of 4 per cent. in employment in manufacturing industries during the last quarter of the present year as compared with that of the previous year, and that there has been also a decline of 9 per cent. in production in manufacturing industries.

I hope this Bill will have some effect in remedying that position. I hope also that industries which are already established here and which find an opportunity to enlarge their scope of production and to enlarge their premises and buildings, will be able to avail of this Bill to the same extent as an entirely new industry. The Minister should make it clear that that is so, because there can be no justification for excluding an established industry from the benefits of this Bill, when it is proved that they must incur capital expenditure on the provision of additional buildings and constructive works of a permanent nature.

Senator Sheehy Skeffington has asked why the banks do not provide the capital required. It is not the function of the banks to provide fixed capital. The moneys which banks lend are borrowed by them from their depositors and they are liable to repay those depositors at very short notice. Consequently, it is necessary that they should maintain their assets in liquid form so that they can be collected in at short notice. It is the function of the banks to lend working capital to industry and not fixed capital.

The Senator also referred to the possibility of uneconomic industries being created under the terms of this Bill. I do agree with him there is that possibility. It is difficult to understand, if there has been an adequate demand for a product, why that product has not been produced. One would have thought that industry would have seen its opportunity and taken the necessary action.

Under this Bill, the attitude of the industrialist must be somewhat different. In respect of the provision of a certain capital sum, he will receive a grant to which I understand no strings are attached. In view of that, he probably will be prepared to accept risks which he would not otherwise take and we may find ourselves after some years in the position that industries which have been entered into under the terms of this Bill will prove uneconomic and those industries may need to be supported and assisted by further protection. I hope I am wrong in that view but it is a view I feel we should air.

There is another point which I think was also referred to. Under the terms of this Bill, as I understand it, the State will provide up to £50,000 for the provision or adaptation of buildings whereas the promoter will put up £25,000. In the course of some years one of two things will happen. Either that industry will be a success, a failure or a partial failure. If it is successful it is open to the industrialist, I presume, to sell his shares in the business. In fact he will sell shares, which cost him £25,000 and assets which cost £75,000. In turn he will put in his pocket £50,000 that has been put up by the taxpayers of this country, either directly or indirectly. If the business is a partial success he has to realise only half of its cost in order to obtain a profit of £12,500 and if it is a total failure he should be able, with luck, to sell it for one-third of its cost. I do feel there should be some restriction to prevent a thing of that kind occurring. The Minister may say: "If it is a success what does it matter? The State has lost nothing." On the other hand I think provision should be made for that contingency.

I welcome this Bill. I must say I was rather surprised at the treatment which Senator Sheehy Skeffington gave it. I think it should be borne in mind that the object of the Undeveloped Areas Act was primarily to encourage industrialists to go to a particular part of the country to which they might not normally go. This Bill seeks not only to do that but to bring industrialists to this country who might not come here otherwise, and to encourage Irish industrialists to create new industries. I do not think that the greatest or most important question is who the State actually gives the money to, but the use that is made of the money and the effect the spending of that money has finally on the economic structure of the State.

I was surprised that Senator Sheehy Skeffington should say that the money could be used to double Civil Service pensions or, alternatively, that the money could be given to existing industrialists. Usually Senator Sheehy Skeffington makes the case that industrialists here have had the benefit of protection and that they should not be in need of further assistance. He also stated that the giving of this money might cause inflation. I do not know how the Senator can arrive at the conclusion that money spent on something that leads to greater production of goods and services could lead to inflation. I find that there is something contradictory in that approach to this Bill.

It should be remembered that the giving of this money is based upon a sound proposal which has first to be examined to ascertain what it is intended to produce, whether or not the product is something that is saleable on the Irish market and will not interfere with existing markets and how much can be exported. On the basis of that one gets a grant. In no circumstances, or only in exceptional circumstances, will the full two-thirds grant be given and then only for an exceptional proposal that would have very good results as far as the economy of the country is concerned. I cannot see that there should be any fear about giving money to industrialists when in the final analysis it will mean greater employment, less emigration and more goods for export.

Fears were expressed when this Bill was in the Dáil, and again here to-day by Senator Kissane, that the Bill might interfere with industrial progress in the undeveloped areas. At the same time he referred to the fact that the Minister had power, under the Undeveloped Areas Act, to extend that Act rather than introduce a new Bill.

Frankly, I was amazed at that line of reasoning coming from somebody who had stated that the Bill might hinder industrial expansion in the undeveloped areas because it would automatically mean that one would get the same benefits as one would get by going to the undeveloped areas, in centres which were, perhaps, nearer to the cities, and consequently nobody would go to the undeveloped areas.

I believe this Bill, in conjunction with the Undeveloped Areas Act, provides a correct balance. One is entitled to get two-thirds of the cost of erecting factories if one goes to any place in the country except the undeveloped areas and, if one chooses to go to the undeveloped areas, one has the possibility of getting an additional 25 per cent. of the cost of the factory and, in addition to that, 50 per cent. of the cost of plant and machinery and an allowance for training operatives.

I think the additional encouragement to go to the undeveloped areas is still sufficient to induce any industrialist who can go. There are, however, industrialists who could not go to the undeveloped areas. An industrialist might come here from abroad—he might already have an industry in Britain—to establish an industry here. That would require a great deal of travelling backwards and forwards especially when the industry was in its early stages. That industrialist would have a certain value upon his own time. It might well be that he would not come here at all if he found that the advantages to be gained by going so far west were counterbalanced by the fact that it would be impossible for him to promote the industry in an efficient and economic way.

I believe this is an excellent Bill and gives the correct balance and incentive to industrialists to come here. In the final analysis it will put more people in employment, result in the production of more goods and more exports. I think it is worthy of the support of this House.

I want, like my colleague, Senator Bohan, to welcome this Bill. It is, like the Finance Bill which we had earlier to-day, a constructive measure by the Government to develop the economy of the country. I feel it is a good measure even though we had, earlier in the debate, something of a criticism from the Opposition benches of the £2,000,000 which is being provided for industrialists. When I came to look at the £2,000,000 and how it was to be paid out, my reaction was surprise at the smallness of the sum. We have under this Bill a maximum sum of £2,000,000 to be paid out in grants over the next seven years. The maximum grant that can be made in any case is £50,000. It seems to me that even if maximum grants were paid in all cases the total number of factories that would be set up would be about 40 in seven years. That would be about 6 a year. I cannot quite understand the note of criticism voiced earlier this morning of the £2,000,000 being supplied.

Because of that, I was rather glad to hear the Minister say that, whilst this money was being provided, he would certainly be delighted that the money was expended quickly and that it would be necessary to come back in the next few years to seek further assistance. I wonder if the maximum sum of £50,000 to any individual factory is a proper maximum. I wonder whether the Minister has given consideration to that aspect of the matter. You may have—and we hope to have— large industrial concerns set up here and £50,000, in spite of what was said by the Senator on my left, is not, when you are building a factory, a really substantial sum. I wonder why has the Minister put down that particular maximum, because he does seem to be tying himself to that extent in giving such assistance within the next seven years.

There is another aspect of the assistance to industry upon which I should like the views of the Minister. We are providing financial assistance towards the construction of factories in order to provide employment and produce goods here which are not being produced and, we hope, to produce goods for the export market. Senator Guinness raised the question as to whether we might not be wasting some money in doing this. I hope we are not, but it seems to me that consideration might be given in the future—I hope we will continue to assist industrial development—to an alternative policy.

That is the policy in operation to some extent in Northern Ireland, where, instead of giving financial assistance to industrialists to build factories, the Government itself builds the factories and rents them to industrialists. It would seem to me that if that practice were followed here, it would certainly overcome the objection which Senator Guinness saw in the present measure.

We have spoken in the Seanad, as the Minister will be aware, of the need for decentralisation during the past 12 months, but, quite frankly, I was rather puzzled by Senator Kissane. He seemed to think that we were, by passing this measure, in some way undermining the Undeveloped Areas Act, 1952, and it prompted me to wonder what exactly Senator Kissane wanted. Does he think that the assistance given under this measure is at too high a level and would he seek to have it reduced so that thereby the value of the assistance given under the Undeveloped Areas Act would be comparatively better?

On the other hand, does he think that further financial assistance could be given or should be given to the under-developed areas? I ask the latter question because I wonder how that could be done, because, as the Minister pointed out, there is power, under the Undeveloped Areas Act, to give financial assistance to a maximum of 100 per cent. towards the cost of the building, 50 per cent. towards the cost of machinery and financial assistance towards the training of operatives. I should not ask the Senator the question —he has not the right to reply——

I may have later on.

——what exactly he wanted, whether he thought the financial assistance here was at too high a level or some further assistance could or should be given to the undeveloped areas.

The House will excuse me if I return to a matter which I mentioned earlier to-day, that is, the campaign of buying Irish goods. I then directed my remarks, under the Finance Bill, and here, again, I think it would be appropriate to say to the House—I think there is no need to say to the Minister—that every effort should be made to encourage the buying of Irish products. Here we are attempting to help the establishment of Irish industries and another assistance which could be given to Irish industries would be a good market here for our products. By having a good market here, we would be able, to my mind, to branch out into the export market.

I said earlier to-day that probably the people who purchase most, who expend the money earned, are the housewives. I am afraid we fail in many instances to get across to them the benefit to them and their families of purchasing Irish goods. In other words, when we decide to export any money, we at the same time decide to export our children after that money eventually.

There is one further aspect of this "Buy Irish" campaign which I should like to mention. It seems to me that the business community could themselves give assistance, that there is a tendency in some businesses to avoid Irish products. I understand that in some shops in Dublin there is difficulty in getting Irish products; that if you specifically ask for something manufactured here, you will get a down-thenose sort of answer that it is not in stock and is not very much good. I do not want to raise this question of profits under the levies again to-day, but it seems to me that in many shops there is a tendency to encourage the sale of the foreign product in spite of the price differential and in spite of the high prices, when an Irish product of equal quality can be sold at a cheaper price.

Perhaps the people selling want either a profit made on that increased price for the foreign product or there may be a commission on the actual sale. It may be that if the foreign product is sold, the commission might be higher. I would ask Senators who have influence in this respect to encourage amongst chambers of commerce and the business communities generally a realisation that they should assist in this "Buy Irish" campaign. I think they owe it to themselves and they certainly owe it to the country to do everything possible to assist the sale of Irish products in this country. All of us can assist in some respect. I do not want to appear critical of anybody except to suggest that we should have co-operation in the sale of Irish products which would help to expand industry in this country and provide employment for our own people at home.

In welcoming this Bill, I will not say very much except to support what Senator Murphy said in regard to the desire, or what seems to be the desire, on the part of shopkeepers to press certain articles of foreign manufacture rather than to sell the Irish goods. I myself for quite a long time have tried to purchase Irish machine thread in shops in our principal shopping centres. To use Senator Murphy's phrase, I have been subjected to the "down the nose" attitude and also have been forced to listen to long lectures on the superiority of English thread. I have used Irish thread and English thread and all kinds of machine thread. Irish machine thread is far and away a superior machine thread to the English product—you get more for your money, you get a very wide range of colours and you certainly get good quality.

I have almost formed a hobby of going into shops in Dublin, just for the amusement which it has come to be now, though it used to be anger, of listening to the learned lectures from the shop assistants on the inferiority of the Irish article and the superiority of the English article. I would like if the Minister could tell me the reason for that, because my own experience has proved beyond any doubt that the Irish sewing cotton and Irish machine thread is very much in advance of the English product.

I am pleased to note that fairly large amounts of money are to be spent in helping to establish new industries and also that the undeveloped areas will not be interfered with in any way. I would like to mention a point which has been crossing the minds of a lot of people in my locality during the past 12 months. It is an undeveloped area and we have been seeking a suitable industry for the locality. I refer to the people's intention to erect a creamery or separating station in that area. I have been deputed with other members of different Parties in the county to approach the undeveloped areas authority, but so far we have drawn a blank and have been able to get no assistance whatever. We were told at all times that the matter was always under consideration, that is, the giving of a grant for the proposed erection of a creamery and separating station in that area; but we can get no further. If help could be given, it would be a very useful thing, in my view, and would benefit not alone the people in the country but the Government.

The small farmers along the western seaboard never can be described as farmers in the real sense of the word, because their small holdings can never enable them to make a living and therefore they can be described generally as half farmer and half labourer. In other words, there is competition always on the labour market between those people who themselves hold small holdings of land. Let us say 1,000 such small holders are supplying to a local separating station. There would be a cheque, small or large, finding its way into each home every month. In a case like that, it would take the owner of the small holding immediately away from the labour market. That would mean taking 500 or 1,000 people, who otherwise would have to seek employment from the county council, out of that employment and leaving it more freely available to those people who are genuinely deserving of employment.

These are the arguments we have been putting up and so far they have borne no fruit. I am making the suggestion to the Minister to consider, that it would be a good thing, particularly in the undeveloped areas, if a little financial assistance could be given. There would be no need for a big grant. A reasonably good separating station could be erected for £5,000 or £7,000. If a little help, a certain percentage or whatever would be thought fit, could be given, I can assure the Minister that it would have a very beneficial effect on the locality. Not alone would it be producing something which would be valuable for the general community, but it would also take away so many people, who now feel they are entitled to be called labourers as well as farmers, and put them in a position where it would be unnecessary for them to look for work of any kind at the labour exchange.

Therefore, whenever an amount of money would be available for relief schemes and such employment in the locality, if one of these new creamery milk suppliers ever approached the exchange to look for such work, he could be turned down immediately, because there would be an income, small as it might be, finding its way into his home. I would like the Minister to consider whether such a project would be worth while for the purpose of an advance.

Mr. Douglas

I intend to speak very briefly on this Bill. Unfortunately, I was absent when the Minister introduced it and did not hear the speeches of Senator Kissane and Senator Cox. I gathered from the speeches made in the House that there was a certain amount of fear that this Bill was rather like the Finance (Miscellaneous Provisions) Bill, in that it was penalising or attempting to penalise existing industries. Knowing the Minister for Industry and Commerce, I am quite satisfied that nothing was further from the intention of this Bill.

I have a fear, which I share with Senator Burke, I think, that, in the wording of the Bill, there is a danger to certain small established industries, which are struggling to carry on their existing production, and who could, with financial assistance which is not available from the normal sources, extend their production for export. I would like to feel that these people would also be able to benefit under this Bill. For that reason, I have tabled for the Committee Stage two recommendations which I hope the Minister will at least consider or give reasons why he feels they cannot be incorporated in the present Bill.

Section 2 (1), I suggest, should be amended as follows, after subparagraphs (a), (b) and (c):—

"If the authority is satisfied that financial assistance is necessary (1) to enable an existing industry to extend its production or (2) to ensure the establishment of an industrial undertaking to manufacture the commodity to a substantial extent, that the undertaking will be of a reasonably permanent nature and will be carried on efficiently, it may on such terms as it thinks fit and proper, make a grant towards the cost of acquisition, construction or adaptation of the buildings and other works required for the purpose of—"

I think one could also insert the words:—

"establishing or extending the undertaking."

If these words could be added, it would enable the Minister, in desirable circumstances, to provide a certain amount of capital for established industrialists and so enable them to draw benefit from the Bill and to extend their production for export.

I am grateful to the House for the manner in which the Bill has been received and for the successful way, on the whole, in which Senators have endeavoured to understand the relationship of this Bill to the Undeveloped Areas Act. Inevitably, perhaps, there has been some confusion which I would like to try to set right in order to arrest the fears which some Senators have expressed in that regard.

Senator Kissane, and a number of other Senators later, referred to the fact that they did not see any benefits in this Bill for the existing industrialist. So far as the existing industrialist already has a factory, it is not proposed to give him another factory because the need does not arise. The position of the existing industrialist is that if he wants money for development—and I take it that is what Senator Kissane has in mind—he can approach the Department of Industry and Commerce and see to what extent he can get the benefit of the Trade Loans Guarantee Act. The Trade Loans Guarantee Act is available for the purpose of giving trade loans guarantees for industrial purposes in the name of the State, and when the State gives such a guarantee the industrialist can take the guarantee to a bank, insurance company, to a finance house or to anybody willing to lend him money and the State will guarantee the repayment of the principal and interest.

Because the industrialist has that guarantee he is invariably able to negotiate an advance at a rate of interest substantially less than he would be able to get if he went into an ordinary bank, insurance company or finance house without a Government guarantee. That is a very substantial facility.

That is only a loan.

But the others are given grants.

We will come to why in a moment. As far as the industrialist is concerned, he will get advances in that way for the development of his business. If he is short of capital, he may approach the Industrial Credit Company, explain to them what exactly he wants capital for. As anybody who looks at their balance sheet will see, they have taken substantial blocks of shares, ordinary and preference, in a number of companies and in that way have helped companies to develop and to expand substantially because of the shareholding interest and financial support for their undertakings.

Senator Kissane said that this Bill made the same, or much the same, grants available for the whole country outside the undeveloped areas as for the undeveloped areas. I cannot imagine how anybody can consciously make that mistake. Under this Bill we are giving a two-thirds grant provided the person engages in the activities set out in paragraph 2 of the Bill—to provide employment on a substantial scale or to make available in the State quantities of the commodity, or to provide an opportunity for developing an export trade. He is not required to comply with all these rather tight conditions in the case of the Undeveloped Areas Act. One may get a grant in the undeveloped areas for small industries; this is not intended to deal with the problems of small industries but with the problems of the larger industries which will make an impact on the absorption of the unemployed.

It is not correct to say that the grants under this Bill are virtually indistinguishable from the grants available under the Undeveloped Areas Act. Under this Bill one may get a two-thirds grant for a factory; under the Undeveloped Areas Act you are entitled to get 100 per cent. of the cost of the factory buildings, 50 per cent. of the cost of the machinery and a grant-in-aid for the training of workers. Putting a two-thirds grant on one side— that is the maximum available under this Bill—and putting 100 per cent. of the cost of buildings, 50 per cent. of the cost of machinery and a grant for training of workers, on the other, how can anyone say that these facilities are virtually the same? Of course there is a very substantial difference between them, and An Foras Tionscal grants will apply to certain types of industry which probably will not qualify under a Bill of this kind.

Senator Kissane expressed some fears that this Bill might somehow or other disadvantageously affect the undeveloped areas, and having said that, he asked me why I had introduced this Bill at all, that in fact by using my power under the Undeveloped Areas Act I could have avoided the introduction of this Bill. Of course I could. If I had wanted to do it I could have made an Order under the Undeveloped Areas Act bringing in the whole of Leinster, the whole of Munster or the whole of the northern part of our country. I could have given them grants and made them eligible to qualify for the 100 per cent. grant for factory buildings, the 50 per cent. for machinery and the grant for training of workers. But does Senator Kissane know any better way of killing the undeveloped areas than by doing that?

If I made the Undeveloped Areas Act grants available in Leinster, Munster and in the northern counties, is it not clear as daylight that nobody would go to the western areas? It is because I did not want to put these areas in the same position as the undeveloped areas that I disarmed myself of the right to apply the Undeveloped Areas Act to the eastern, midland or southern counties and instead introduced this new Bill which makes clear as daylight the distinction between the undeveloped areas and the areas which will be covered by this Bill. If I were to do as was suggested to me and use my power under the Undeveloped Areas Act, that would be the last you would hear of the undeveloped areas. I wanted to keep the Undeveloped Areas Act and to have the facilities provided under it and enable it to carry on as at present because I believe valuable work has been done, is being, and will be done under that Act as it stands.

Senator Cox raised the question of the provisions of Section 2, sub-section (3) and he said that one of the conditions of the grant was that it could not be got where the commodity was being sufficiently manufactured at present by an undertaking already existing. I think he wanted to make sure that if an existing industry is potentially capable of providing the full requirements of the home market that should automatically disqualify a competing firm from the possibility of getting a grant. The existing position in this respect is already catered for under the Control of Manufactures Act and there the Minister is required to have regard to a number of considerations before he gives a new manufacturing licence. One of the considerations is that he should have regard to the extent to which a commodity for which a new manufacturing licence is being sought is already being manufactured by an existing manufacturer. My invariable practice—and I think the same applies to An Foras Tionscal and the Industrial Development Authority in their approach to their respective problems—is always to lean over on the side of the existing manufacture, if he is doing it, if he is attempting to do it or if he shows evidence of an energetic desire to manufacture to a greater extent for the home market. I think Senator Cox need not have any worry on that score.

The functions under this Bill will be administered by the Industrial Development Authority. They will have to decide the grants on the basis of the available information at the time the application is under consideration. If they had imposed on them what Senator Cox suggests—a statutory obligation to consider the possibilities of future expansion by existing firms —it would be very difficult for them to deal with applications. It is not an easy matter for the Industrial Development Authority to decide in that kind of way where possibility ends and where possibility is still alive. That whole matter can best be left to the Industrial Development Authority to deal with in the way it has been dealt with so far when the issue of a new manufacture licence under the Control of Manufactures Act is raised.

Senator Cox also raised the question of the Control of Manufactures Act itself. I agree with him and with everybody else who says that, in the main, the Control of Manufactures Act has long since served its purpose. I have been considering applications for the past 2½ years from firms or groups of industrialists who sought a new manufacture licence for the purpose of establishing an industry here. I take the view in all these cases that, so long as the applicant group would not engage in cut-throat and undesirable competition with an existing Irish industry, I would give them a new manufacture licence in order to enable them to operate here to produce goods which we must import at present and to provide employment for people who, if that employment were not provided for them, would probably be emigrants to-day. That will continue to be my policy.

I am certain that any industrialist or group of industrialists who desire to establish an industry in Ireland to manufacture commodities not made here will be warmly welcomed and, so far as I am concerned, the Control of Manufactures Act will not stand in the way of their operating here. I should like to see this Act, if not revoked, at least substantially amended. However, I am reluctant to throw the question of its revocation or its amendment into a political cauldron in which there will be allegations that this is an attempt to ruin Irish industry, that this is an attempt to kill the Irish manufacturer, that this is an attempt to promote the commercial conquest of Ireland by people from all over the world. Any discussion on such a barren field as that would not only, I think, do harm to existing industries but would do immense harm to the potentialities we have to offer in the way of industrial development here.

If there is a disposition on the part of all Parties in this country to evolve a Control of Manufactures Act, if there be need for one at all, which will protect the interests of the Irish manufacturer who has borne the heat and burden of the day, who has shown commendable enterprise and a real pioneering spirit, I should like a committee to examine a Bill of that kind and let it go through the House as an agreed measure, without all the turmoil of the vituperation and the recriminations which would be bound to arise if the repeal or the amendment of that Act were made a Party issue either in this House or in the Dáil.

So far as I am concerned, no industry will be prevented from starting to produce goods which are not made here at present. I will entertain favourably applications from reputable people for the establishment of industries here to produce these goods in factories which will employ our Irish people.

Senator Burke asked about the export possibilities of a certain firm. This firm could qualify for consideration under this Bill by setting up a separate factory. A new factory will be a new factory and if it is for the purpose of operating any new lines of activity, whether in the home market or in the export market it will be a new factory for the purpose of this Bill. In addition, that firm now, for the first time, will get the benefit of the taxation concessions which are set out in the Finance (Miscellaneous Provisions) Bill which was dealt with by the House to-day.

Senator Walsh was concerned about the possibility that the Undeveloped Areas Act might expire in 1958, while this Bill runs until 1963. When the Undeveloped Areas Bill was going through the House, 1958 was stated as the deadline for its life of operation. It is a good Bill. I think it is one of the ways in which we can bring some hope and some light into some of the dark economic recesses in the undeveloped areas. It would be my objective to promote legislation to continue the Undeveloped Areas Bill so that we might continue to make grants available for the establishment and operation of factories in those areas. We have done well in that respect.

I have some figures here which might be of interest to the House. The Undeveloped Areas Bill was passed in 1951. In respect of the years 1952-53, 1953-54 and up to June, 1955, the total approvals for grants amounted to £373,000. Since the 2nd June, 1955, the total approvals of grants for new industries in these areas amounted to £898,000. Therefore, having found £898,000 since the 2nd June last for the purpose of financing industries in these areas, I think the House will feel that the operation of the Undeveloped Areas Act is at present in very safe hands. Senator Kissane will be happy to know that we have given approvals since June, 1955, which constitute an increase of about 150 per cent. on the grants given up to that date. I would say to Senator Walsh and to those who think like him that I am most anxious to continue the Undeveloped Areas Act. I believe it is capable of doing valuable work in the undeveloped areas.

Senator Sheehy Skeffington engaged in the delightful recreation of putting up Aunt Sallies. I must congratulate him on the skill with which he knocked them down. The Senator asked one question after another and almost immediately afterwards provided the answers to his own questions. He wanted to know why there were grants at all. If I were to debate that question here, I would have to debate it not merely in respect of industry but, in respect of agriculture, education and of almost every other field of activity in the country. It would be out of order to do so and I do not propose to break the rules of the House during my short sojourn here.

The fact of the matter is that Senator Sheehy Skeffington is far too experienced and skilful not to know why there is a need for grants. Why was there a need for grants in the undeveloped areas? To stimulate employment. Why is there a need for guaranteed prices in agriculture? To stimulate the growing of wheat. Why is there a need for these grants? To stimulate the establishment of factories. The Senator goes off at a tangent on this Bill because he gives the impression that it is a Bill to put money into the pockets of industrialists.

I am not worried about the position of industrialists in this matter at all. I am concerned with providing factories which will give work for Irish men and women, where they can earn the wherewithal to lead a decent life in their own land. I hope that these factories, by creating more wealth in Ireland, will make it possible to aggregate and distribute that wealth much more equitably than it has been distributed and provide a decent living for all. Giving two-thirds the cost of a factory building is purely a means of priming the pump to ensure you can stimulate people to do things under this kind of attraction——

Have the banks broken down?

I do not speak for the banks in this House. Take an absurdly simple example to illustrate the philosophy behind this. How many times has a person told a child: "Do that and I will give you threepence or sixpence"? In a minor way, that is the stimulation behind this, to encourage people to interest themselves in industrial development, people who probably would not be interested and who up to the present, in fact, have not shown a great deal of interest in industrial development.

The Senator knows Ireland as well as the rest of us. Anybody going through Irish towns is struck by one thing—and certainly the visitor from overseas sees it at once—that is, the rows and rows of shops, where people engage in distribution, and the all too inconspicuous presence of factories. The whole truth of the matter is that industrially we have leaned very decidedly towards the shopkeeping and distribution line. Our policy is to produce goods for our own requirements. I say that, economically, that is better than distributing the imported commodities of other countries. In so far as we can convert our people to being industrially minded instead of being just shopkeeper minded, I think we can create wealth here. Its creation is much more vital than its distribution in the form of commercial distribution. As I say, this scheme has the same stimulation behind it as the Undeveloped Areas Act. Whether the grant is provided for building an ordinary house, a farmhouse or any of these other activities, the State's assistance is for the purpose of priming the pump to provide the stimulation without which it could not perhaps be got going.

Senator Murphy asked why was the grant limited to a maximum of £50,000. So far as Foras Tionscal is concerned, it has no limit to the amount of money which it may advance for any one project. Anybody whose appetite for industrial development cannot be satisfied by a maximum grant of £50,000 under the present Bill will have to move to the undeveloped areas where there is no limit to the amount. But in these days I think it is not a bad start to provide, for the first time after 34 years of native government, that we would give a grant for the establishment of new industries in areas outside the undeveloped areas. Up to the present, these areas have got nothing. Senator Murphy could upbraid me by saying: "Why not make it £100,000?" A start had to be made some time. I was dealing with the situation in which you got nothing if you established a factory here, and I was moving to a situation in which, in order to ensure more factories in the rest of the country, we would stimulate interest by providing a grant of two-thirds, subject to a maximum of £50,000.

When people try to set up a rivalry between the undeveloped areas and the rest of the country, I think there are some facts they should know. The undeveloped areas consist of places like Donegal, Sligo, Roscommon, Mayo, Galway, Clare, Kerry, Leitrim and some smaller areas of West Cork. For them, the House provided facilities which are still in existence, and which I hope will continue, for industrial development in those areas; but the House has never provided any grants whatever for the establishment of industries in counties like Louth, Wicklow, Wexford, Waterford, most of Cork, Kildare, Meath, Westmeath, Monaghan, Cavan, Laois, Offaly, Tipperary, Carlow, Kilkenny, Limerick and Dublin. So that in a substantial area of the country, there are no grants whatever for factory buildings, for machinery and for the training of workers, while in the undeveloped areas, as I said earlier, there is the possibility of obtaining a 100 per cent. grant for the factory, a 50 per cent. grant for the machinery and a grant towards the training of workers. This Bill is an effort to balance up the situation so far as it concerns those areas which, up to the present, have got no grants.

I do not think the provisions here are unreasonable, nor do I think they will be harmful to the undeveloped areas. After all, I know—and I am quite sure many Senators know—towns in these counties not covered by the Undeveloped Areas Act where there is no industry whatever. In that respect, they are just the same as the place in the undeveloped areas which has no industry whatever. In so far as the workers in that town are concerned, it is just as bad to be idle in the east as in the west of the country, or in the south or in the midlands. From the point of view of the prosperity of the town, if there is no industry, it is affected as adversely as towns in the west or east. This Bill is an effort to obtain a balance but by far the preponderance of facility still remains in the undeveloped areas.

Senator Murphy referred to the position in the Six Counties where factories were built and let to potential industrialists. I think our scheme is a better one than that, because, by giving the industrialists here a grant of two-thirds of the cost of the factory, it will at least ensure he will build the factory. He will know his own requirements and that factory will satisfy his precise industrial needs. There is a further consideration which I should point out to the Senator. Once he gets the grant and once he builds the factory, it is then his own factory and, being his own factory, the buildings can be used by the promoter as a security for a bank loan for working capital. Therefore, if he has a building in respect of which he got a grant of £50,000, and that ultimately becomes his own because he operates it, he has a very valuable asset which can be used from time to time to stimulate further activity and provide further employment, so far as the factory is concerned.

He has capital tied up in the building but, if the factory had been built by the State, he would have that capital as working capital.

It might not have started at all. He might still be a distributor. Let me say one thing to Senator Sheehy Skeffington in the end. While he was speaking, I made a rough calculation. He was worried about this £50,000 going to industrialists. I do not think it is going to the industrialists as such. I think it is going to the nation to strengthen its economic fabric, to strengthen its industrial front, to provide employment for Irish workers here instead of seeing them emigrate to find employment elsewhere. If it is inevitable that there is an industrialist somewhere in that set-up, it is inevitable, and it is probably around him that that money has to be spun and that activity created and generated. It is a mistake to look at it in that one-sided way, finding the industrialist and saying: "Ah-ha, I knew you were here looking for the money" as if nothing else was happening, apart from just giving him the money.

If you had to deal with 330 unemployed men to-morrow, who had a wife and two children each, it would cost £50,000 to keep them on social welfare benefits which would not amount to £3 a week, for 12 months. In other words, taking 330 unemployed men with a wife and two children each, getting less than £3 a week social welfare benefit, although they would qualify for more under the Social Welfare Acts, it would cost £50,000 to keep them in unemployment for 12 months. If you set up an industry and give it £50,000, if it survives for ten years and employs during that period 33 persons per year, you would get back the amount that you would have spent if these people had remained unemployed for a period of ten years. They might well be changing people, but in an economy in which you would always have unemployed, if you take 33 people off the unemployment register for ten years and put them into a job, you save the £50,000 that you provided in giving a grant of two-thirds of the cost for the factory building. You would be doing more than that. You would be giving them a better life. You would be giving their wives and children a better life. You would be keeping them in Ireland. You would be strengthening the whole fabric of the nation. They would be creating wealth out of which taxes would be paid and the strength of the whole nation improved.

I know that you can nag about this £50,000 and about industrialists. I know you can work yourself into almost a rage and a craze over the thing, but, stand back and look at it, with economics of that kind to some extent impregnating your mind, and I think Senator Sheehy Skeffington, with all the prejudice that he showed in his approach to this matter, will realise, on second thoughts, that, on the whole, in our country, in our circumstances, in the year 1956, it is a good Bill.

Question put and agreed to.

An Leas-Chathaoirleach

When is it proposed to take the Committee Stage?

It is proposed to take all stages to-day. It is agreed to finish this business, I think.

Before we proceed to the Committee Stage, is there any arrangement that we can make so that we may submit recommendations? I think Senator Douglas has certain recommendations.

They are being circulated now.

Are they by Senator Douglas because, if he does not do it, I would do it myself.


Bill considered in Committee.

Section 1 agreed to.

Mr. Douglas

I move recommendation No. 1:—

In sub-section (1), line 23, before "to" to insert "(i) to enable an existing industry to extend its production or (ii)".

Recommendations Nos. 1 and 2 are really on the same section. I was hoping to deal with them very briefly together. I have already on the Second Stage given my reasons in some detail for tabling these two recommendations and I do appreciate that, with the desire of the Government to have this Bill passed as promptly as possible, it is probably not possible for the Minister to consider or to accept these recommendations, but I do submit them in the hope that, if a similar Bill has to come before Parliament at a later stage, dealing with industry or other types of industry, the Minister will consider endeavouring to cover industries which have already been established so as to give them the benefit of interest-free grants. I think there is a basic difference between the grants available to established industry and the grants which conceivably can be received under this Bill.

It is perfectly true that the Bill does not state whether or not the Industrial Development Authority will charge interest, but I rather assume that in many circumstances the grant will be free of all charge. So, I propose formally to move these recommendations and possibly the Minister would say a word on them before I press or withdraw them.

I should like to support the idea behind these two recommendations, but, at the same time, I should not like to go as far as the Senator proposes to go. As I said, in my Second Reading speech, I was concerned about existing industrialists and could not see any reason why they could not qualify for financial assistance under this Bill to the same extent as new industrialists. There would be, of course, I admit, one great difference between the two because an established industrialist who wanted to expand his business would not be expected to undertake the same amount of expense as a new industrialist would have to undergo. In other words, the expansion of an existing industry would not involve anything like the same expenditure as the establishment of a new industry would involve. I do not know if the two recommendations that have been tabled by Senator Douglas entirely meet the point. I was inclined to submit a different recommendation, something like this:—

If the authority are of opinion that an existing industry is capable of expansion and by its expansion would fulfil the conditions laid down in paragraph (c) of Section 2, sub-section (1) the authority shall make a grant of two-thirds of the cost of such expansion subject to a maximum of £10,000.

I would imagine that the existing industrialist, in expanding his business, would derive as much benefit out of a maximum of £10,000 as the new industrialist would derive out of a maximum of £50,000. There is a fundamental difference between the two.

I should like to support the suggestions made by both Senator Douglas and Senator Kissane. I can see the Minister's difficulty. He may leave himself open to the criticism that he was helping an industry which is competing with an already existing industry. It is a problem. I believe that more immediate results would be achieved in stimulating industrial production, providing employment and creating greater national wealth by assisting existing industries.

I appeal to the Minister to consider the points that have been raised with regard to these matters. Possibly the Minister may consider bringing in another Bill to deal with them, something on the lines suggested by Senator Douglas and Senator Kissane, with a lower ceiling than £50,000 and, at the same time, not granting quite the same amounts as are given under the provisions of this Bill where in it is proposed to give up to two-thirds. Possibly, one-third would be sufficient in the case of existing industries because they already have their plant and machinery. With the help of that one-third, they would probably be able to borrow the balance either from the public or from the ordinary financial houses. Nevertheless, I believe more immediate results in relation to employment will be gained by helping existing industries to provide themselves with the facilities to export rather than establishing new industries for that specific purpose.

I indicated, when replying, that, so far as existing industry is concerned, it is protected inasmuch as State moneys will not be provided to set up a rival. Therefore, from that point of view, industry has substantial protection at the moment. In this case, however, State moneys could be used to give one person a grant to extend his premises and his activities at the expense of somebody else who fails to apply for it. I do not think the problem can be dealt with in the way suggested. It certainly cannot be dealt with under this Bill. The idea can be considered if amending or supplementary legislation is contemplated at a later date.

If an existing industrialist wants to start a new industry, which will satisfy the conditions set out in Section 2, then the thing for that person to do is to establish a new factory. If he does that, he can get the benefit of two-thirds of the grant and in that way he will have a factory subsidised to that extent, provided his purpose is to provide employment on a substantial scale, or make available in the State substantial quantities of a commodity or provide an opportunity for developing an export trade. If that person intends to do an export trade in a new commodity, the obvious thing would be to establish a new factory. If he wants to provide employment on a large scale, it may well be that what he will require is an entirely new factory, leaving his existing activities to continue as at the moment. In that way, he can be helped under Section 2. I do not see that he can be helped in any other way under this Bill or at this stage of the Bill.

I think the Minister has side-tracked the issue in relation to these recommendations. What we have in mind is the case of an industrialist who is engaged in the manufacture of a certain commodity. If his business is capable of extension and would, by extension, provide employment, surely there should be provision for such a case. Surely such a person should not have to undergo the same expense as a person venturing on an entirely new project. That is why I would limit it to one-third of the cost or, perhaps, a maximum of £10,000. Of course, if the Minister says that cannot be considered in connection with this Bill, we are talking in the air. If the Minister is not in a position to enshrine in this Bill the principles laid down in the recommendations, I hope he will bear it in mind in relation to future legislation.

It seems to me that the discussion is rather unrealistic in one respect. An existing factory, set up to cater for the home market, has the machinery and the buildings. If that factory increases production, it will increase it for an export market. As a result of the Bill we passed this morning, we are encouraging that factory to increase production and to get into the export market. Most factories can do that without having to build extensions. Even if they have to extend, there is assistance for them under the Finance (Miscellaneous Provisions) Bill which we passed this morning.

There is certainly provision in the Bill we passed this morning, but there is one fundamental difference: there is no financial assistance to be obtained under that measure except in relation to an export market. We are not confining ourselves to exports here.

If a factory is not producing fully for the home market at the moment, when, in all probability, it is protected, it is a very poor lookout. Existing industries already have capital. What is provided here is assistance towards the establishment of new industries.

Mr. Douglas

Senator Kissane and Senator Murphy have shown, with my own argument, that there are certain factories which may feel unduly penalised under the present Bill. I agree that the present Bill cannot be amended to cover those cases. I am satisfied, however, that it is the Minister's intention to examine the possibility of introducing legislation at a later date with the idea of giving assistance to factories of the type we have in mind, should that prove necessary.

That assurance will meet the position.

Recommendation, by leave, withdrawn.
Recommendation No. 2 not moved.
Question proposed: "That Section 2 stand part of the Bill".

What exactly has the Minister in mind when he says "on such terms as they think proper" the authority can make grants and so forth? Is he thinking just of the calculation of the amount—£50,000 or £30,000—or does he envisage some partial repayment? Will he charge a nominal rate of interest?

The Minister said that, instead of being able to avail themselves of the provisions of Section 2, existing industrialists can have recourse to the system of trade loan guarantee, whereby they are enabled to approach banks and get advances on such guarantee at, I think he said, a reduced rate of interest. I do not know what the reduced rate of interest would be in a case like that.

In conclusion, the point I want to make is that when I referred to this matter on Second Reading, there were Senators who doubted the accuracy of my interpretation of the section. Now that they have heard the arguments for and against it, and now that they have heard the Minister, I think they will have no doubt whatever as to whose interpretation was correct. In other words, it is not possible for an existing industrialist to get financial assistance under this section for the expansion of an industry in which he is concerned.

I do not know when the Senator's heart started to bleed for these people, because his Government had about 20 years in which to provide these facilities if they were concerned about the industrialists now so present to the Senator's mind, and if these industrialists were in such urgent need as he suggested this afternoon.

They are now; they were not then.

This is an effort, with £2,000,000, to stimulate people to produce new factories in which to produce new goods. It is not intended to give grants to a person to extend a factory by 1,000 square feet, to buy another store, to buy another motor car, to put up a new loft or to put a roof on an old one. This is an effort to use this £2,000,000 in the best possible way, not by saying to those already in industry: "Do another little piece here and there". All we want is to induce people to go into industry in a vigorous, courageous way. These grants are being stepped up to a maximum of £50,000 in the hope of bringing into industry people who are not there already. We do not propose to go around trying to stimulate existing industrialists. If they want to build new factories, to do things in a big way, they should avail of the provisions of this Bill when they will be eligible for two-thirds of the cost of the factory. If such industrialists want more facilities than that, they can go to the undeveloped areas. These two facilities taken together are as good as can be found anywhere in the world. This is a start in this field and I think it is a good start. In regard to Senator Sheehy Skeffington's point, the sub-section means that arrangements will be made as to the conditions under which grants will be paid. These are free, non-repayable grants.

Might I ask the Minister one more question? Am I right in assuming that these grants will be made available only to industrialists who will build from now on—from 1st January next? Will these grants be applicable to people who have already started building? Is there any operative date in the Bill?

There is no retrospection about the Bill. The Industrial Development Authority will be the operative body which will receive applications. These applications will be considered and arrangements arrived at. We will announce in due course when the Industrial Development Authority is ready to receive applications.

Question put and agreed to.

I move recommendation No. 3:—

In sub-section (2), line 6, to delete "two million" and substitute "two hundred and fifty thousand."

My aim in putting down this recommendation was to underline the fact that the putting up of such big sums of money—£2,000,000—is at this juncture rather going against the sort of policy we have been asked to accept in relation to other things—voluntary health insurance, pensions and everything else. The section says that the aggregate amount of grants shall not exceed £2,000,000. Even if we accept the principle of the Bill, we must still regard this as being too high. I should like to start more cautiously. The point was made by Senator Guinness that if we go too generously without sufficient circumspection, some of these new industries may prove uneconomic. He made the point that industrialists may be tempted to take risks, which they would not otherwise take, at the State's expense. If that were to happen, I do not think it would be wise for too much of it to happen. That is why I would like to put a limit to the amount that would be lost. We might start with small amounts which would give us a sum total of a quarter of a million pounds.

It used to be considered that the justification for the payment of a dividend was that the capitalist was lending and risking his money. In this case, the risk is taken by the State but the dividend is taken by the private industrialist. I do not quite understand why, in the giving out, to such a generous maximum, of these grants the three Labour Senators who spoke supported the Minister, apparently unanimously, in the suggestion that sleepy industrialists would be stimulated.

I am afraid the Senator is misinterpreting us.

I am very careful not to interpret it as Senator Hickey's attitude. Senator Hickey, had he spoken, would not, I feel sure, have agreed with the other three Labour Senators. Perhaps I am wrong, but I feel he is not as enthusiastic as the others about the proposal to give these free grants to industrialists. In relation to these grants, the point was made by Senator Murphy that the Government might build the factories and rent them to these people, that in that way they would be buying or retaining a measure of control. I should like to ask, again in relation to this quarter of a million pounds as the sum will be when the Seanad accepts my recommendation, where the money is to come from? I do not think we were told that. There is also the question of the pump priming. I should like to know who owns the pump, who decides on the distribution of the water. The Minister said the creation of wealth is much more important than its distribution.

The Senator will not get away with that. What I said was: "Than its distribution in a commercial sense". No doubt the Senator will look up the Official Records of the House.

Perhaps I misinterpreted the Minister. Perhaps the Minister's point that you would be giving wealth to the nation was quite a sound one, but my question is about ownership. We are getting no lien on the factories. We have considered such a lien necessary in other enterprises and the State has done remarkable things where private enterprise just could not enter the field—in turf production and electricity production —on the lines of social democratic economic planning which, perhaps, the Minister still slightly thinks about, and not just by bolstering tired industrialists——

The Senator must not go on with this repetition. He must have said that a dozen times to-day.

We are getting a lecture.

I was just finishing off and saying that my reason for putting down this recommendation was that I did not want to see such a generous distribution of grants without the retention of a measure of control. Therefore, I feel the maximum ought to be far smaller than the £2,000,000 lightly thrown out for this Bill.

I would prefer to see that sum reduced to £250,000, which does not seem to me to be such a very small sum.

I think Senator Sheehy Skeffington's idea is to destroy the effectiveness of the Bill by putting down this recommendation to reduce the figure from £2,000,000 to £250,000. If the Minister has proved—and he has proved—that this Bill is necessary, it is ridiculous to make this suggestion, and the Senator might as well have proposed that the whole thing be struck out. On this Bill, in relation both to people who were elected here to represent labour, industry and commerce, and everything else, Senator Sheehy Skeffington adopted a holier than everybody else attitude towards us all.

The giving of grants is not an uncommon thing. It is certainly new in regard to the building of factories, but for a decade or so we have had the practice of giving grants for the building of houses, grants from the Central Fund and, lately, grants from the local authorities. I wonder does Senator Sheehy Skeffington think it a very wrong thing, that these houses, when they are built, are not owned by the State? They have no vestige of control over them. In fact, we could say that they are practically owned by the local authorities by the rates that have to be paid on them. However, the principle is more or less the same as here. You encourage the building of houses because they are needed, because you know it is a good thing. Now we are trying to encourage the building of factories because we think it is a good thing.

In reply to Senator Murphy——

The whole principle of the giving of grants is not in issue on this Bill and we do not want to wander any further afield, I want to suggest to Senator Sheehy Skeffington, than the confines of this Bill will permit.

Have you any grounds for thinking I am about to wander?

The Chair will make certain that you do not.

I take it we are in Committee and that I may answer this specific point made by Senator Murphy. That is all I intend to do. I see a difference between the granting of money to a person to buy his own house and the granting of it to a person to equip and buy a profit making machine.

A factory is not a machine.

I do not suppose Senator Sheehy Skeffington would hotly dispute this statement by me, that, unless he drafted this Bill himself, it would not please him.

That is quite right.

So you start off on this with the conviction that no matter how strong or convincing your arguments are in the long run, you may chip off odd bits of objections by Senator Sheehy Skeffington, but the main body of the Senator's, opposition to the Bill remains, because, as he said, you could not please him unless he drafted it himself.

I would not draft such a Bill.

I know. The trouble about the Senator is that he is wrapped up in ideologies which I cannot explain.

Social democratic.

As amended by the Senator. The Senator has brought that philosophy to a fine art. He has never been held down yet to any single interpretation as applied to any given set of circumstances. The Senator is a very experienced controversialist and conversationalist. There is nothing he delights in more than the difference between a grant to industry, a grant towards the national economy and the application of social democratic principles to industrial development. On that, the Senator is out on his own and I do not propose to compete in that race with him because I have no chance of winning, even if I were off the limit mark. Therefore, all I have to do is to say how I interpret the Bill and what the Bill is intended to mean for the people outside who will be affected by the Bill and for the people here who are going to pass it.

I propose to grant £2,000,000 under this Bill which can be drawn upon for the purposes of stimulating industrial development through the medium of factory grants. The sum ought to be a substantial sum if you are to give the impression that you intend to do this thing in a big and visionary way. To make the grants small, to make the aggregate sum small, would make it a puny effort which would not strike the imagination of those whose enthusiasm and co-operation we must get if there is to be any success in this field. There is no value in putting down £250,000. If this is going to be an outstanding success, it is only a matter of coming back to the House and looking for more money. If it is not going to be a success, we will know that in the very early stages of it because the extent of the demand for these facilities will determine almost entirely whether this Bill will be a success.

We have never done this before. No Government for 34 years has done it. This Government has decided to do it, has decided to blaze the trail in this direction to see if it can induce and stimulate an interest in that form of development. If you like, it is a calculated risk which we are taking to see whether this method will ensure wider industrial development than we have got up to the present. I imagine, holding the convictions which he does, Senator Sheehy Skeffington will share my view that excessive caution could be a disease and what we must do in this case, having made up our minds that some new method must be tried, giving us quicker results than we have got, is to take the risk and hope we will be justified in the end.

These grants will be administered by a body which is prudent in its general administration, the Industrial Development Authority, which has taken risks, and calculated risks. It has not allowed anybody to pull the wool over its eyes and has proved itself to be progressive as well as prudent. That is the body which will administer these grants. I think the State and the Houses of the Legislature must take the risk of trying out this experiment. If it does not succeed, we must confess that it has not succeeded and we must try some other methods by which to stimulate industry. A mere fear of taking risks and making ourselves a prisoner of caution is not the way to deal with this problem at a time when it needs to be dealt with in a manner which will provide many more thousands of jobs each year for those who are looking for them and are arriving to claim them on the industrial market each year. The money for this purpose will be raised in the ordinary course on the strength of the Government's credit and will be utilised to finance the activities designated under the Bill.

Is the Senator pressing the recommendation?

I have the impression that I have not quite enough support to carry this recommendation. So I withdraw it.

Recommendation, by leave, withdrawn.
Section 3 agreed to.
Section 4 to 6, inclusive, agreed to.
Schedule and Title agreed to.
Bill reported without recommendation.
Agreed to take remaining stages to-day.
Bill received for final consideration and ordered to be returned to the Dáil.