Irish Steel Holdings Limited Bill, 1960 —Second and Subsequent Stages.

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

Minister for Industry and Commerce (Mr. J. Lynch)

The purpose of the Bill is to provide for an increase in the share capital of Irish Steel Holdings Ltd. to £4,000,000, to be taken up by the Minister for Finance, in order to finance a major expansion of the steel works at Haulbowline Island.

Irish Steel Holdings Ltd. was incorporated under the Companies Acts in June, 1947, to acquire the assets of Irish Steel Ltd. (in liquidation) and to maintain the steel works at Haulbowline as a going concern. The nominal share capital is £100 of which three shares have been issued and are held by the Directors. The Company acquired the assets of Irish Steel Ltd. for £125,000 (of which £69,000 was eventually paid to the Exchequer by the Receiver on foot of a guaranteed loan to Irish Steel Ltd.). The industry has since been financed by fluctuating bank accommodation, guaranteed in part by the Minister for Finance, by guaranteed loan and by the trading profits of the company since its inception.

The company operates open hearth furnaces to produce, largely from native scrap, mild steel ingots and billets, which are then converted by rolling into mild steel bars shaped as angles, rounds, flats and squares. Flat and corrugated galvanized sheets are also produced by the company, the raw materials being imported black sheet and zinc. The accumulated net profits of the company up to 30th June, 1959, are over £600,000, and the assets of the company were valued by outside valuers at nearly £1 million.

The profits of the company have been fully used to pay taxes, to buy machinery and equipment, to amortize loans, to provide the working capital necessary to maintain stocks, stores, etc. and to finance ordinary trading credits. In addition to supplying home market requirements of its products, the company has succeeded in exporting in the face of very severe competition.

A major development scheme put forward by Irish Steel Holdings Ltd. was approved in principle by the Government in March, 1958. The company was authorised to proceed with the development of its plans on the basis that, if a satisfactory scheme emerged, Government backing would be given. These expansion proposals were subsequently outlined in the White Paper Economic Development which was laid by the Government before each House of the Oireachtas in November, 1958. The cost of the developments as then planned was estimated at about £2 million.

Subsequent investigations, with the help of consultants, have resulted in proposals which in general are similar to those of March, 1958, but which envisages greater increase in output, a wider range of products, and consequently an increase in capital expenditure. Tenders obtained from firms of international standing form the basis of the company's statement of costs.

Briefly, the main proposals are:—

(a) increase in ingot output to 80,000 tons per annum of ingots of 30 cwt. each by the installation of a new oil-fired furnace of 60 tons capacity and by improvement of the two existing 37 ton furnaces and by extension of scrap handling and casting facilities. Current output is 23,000 tons per annum ingots of 3 cwts. each;

(b) installation of a new 750 m.m. blooming mill and a new 650 m.m. large section mill; with the necessary ancillary gear to roll billets, blooms, sheet bars and large sections;

(c) re-arrangement and mechanisation of the existing merchant bar mill to improve its rate of working and to enable it to feed a wire rod mill;

(d) installation of a new modern wire rod mill;

(e) completion of a sheet mill, which the company acquired in an incomplete condition from its predecessors, Irish Steel Ltd.

The estimated cost of the development proposals is of the order of £3½ millions. It is proposed to provide the sum necessary, less £99,000 which the company will provide from its own resources, by the purchase of shares by the Minister for Finance. In addition, the company will require additional working capital commensurate with its enlarged operations and for this purpose the Bill empowers the Minister for Industry and Commerce, with the consent of the Minister for Finance, to guarantee borrowings by the company not exceeding £500,000 at any one time. The Bill also empowers the Minister for Finance to dispose of his shares at any time.

Extra employment for about 200 workers is envisaged which will bring the total number of workers to over 700 at peak periods.

As at present the main raw material for the industry at Haulbowline will continue to be scrap. The source of the scrap will be domestic, supplemented by some domestic scrap which is at present exported, scrap arising within the industry, shipbreaking scrap and scrap or pig iron which can be purchased on the world market.

The scheme is designed to cover the bulk of home requirements for merchant bars, large sections, wire rod, and sheet steel, including galvanized sheet steel. It is estimated that about 65,000 tons per annum of end products will be produced from the 80,000 tons of ingots. It is expected that 45,000/50,000 tons will be disposed of on the home market and 15,000/20,000 tons on the export market. The London agents of the company are confident that they can dispose of much more than this amount on terms which the company has been heretofore able to meet.

Pending the passing of the necessary legislation, the Dáil has voted Supplementary Estimates totalling £1.5 millions, and practically £1.0 million of this has been issued to the company, to enable it to put the work in hands without delay.

I believe that the proposal to develop this nationally important industry will meet with the same general welcome in this House as it did in the Dáil. I have already given figures of the employment which the expanded works will give. The management of the company are confident that, when the expansion and reorganisation are complete, they will be able to effect important reductions in the price of their products. Increased output will mean an improvement in the balance of trade as a result both of increased exports and diminished imports, and while all these are benefits which we may expect to flow from the Haulbowline undertaking in normal times, we must not lose sight of the fact that in the past, during the Emergency years, the works there made an important contribution to our basic requirements of steel, and the expansion of its capabilities provides the best form of assurance of adequate supplies should imports be interrupted for any reason in the future. I confidently, therefore, seek the approval of the House for the Bill.

I shall, if Senators who are not familiar with the technical terms to which I have adverted in the detail of the expansion envisaged, explain what these mean. I admit that I am not completely familiar with all the activities or technical terms outlined but having taken advantage of a visit to the mill to familiarise myself with the operations, I hope I shall be able to explain any of the points on the technical side upon which Senators might require an explanation.

Professor Hayes

I shall not make any attempt to ask the Minister to explain any technical points. I do not think there is anybody in the country more ignorant of this kind of thing from the technical point of view than I am. The Bill is one which deserves support. It is a Bill for the expansion of Government holdings in capital in an Irish steel company at Haulbowline. It marks not only an extension and an expansion of that company but also an expansion and extension of Government investment in industry.

As the Minister said, it is very technical, but I suggest to the Minister that it is impossible for Parliamentarians, whether ordinary members of either House or Ministers, really to grasp properly the technical details of a proposal such as this. The Minister in this instance made an excellent case. Such a case was made in every instance and the sum of all the cases amounts to a very formidable investment by the State and a very formidable amount of State control.

Perhaps one of the most convincing things the Minister said was his allusion to the important work done by the project during the Emergency. It is agreed that such projects are necessary. If private capital is not available for it, then the course the Minister is taking would appear to be the only course available.

As far as this Bill is concerned, it is worthy of remark that the Dáil has already agreed to it, not only in principle but also in practice. The sum of £1 million has already been paid. This Bill in effect, gives legislative sanction post factum to something which has been done already. Parliaments nowadays have to do this kind of thing with no skill or knowledge and, I would suggest, with no opportunity or capacity to acquire either the skill or the knowledge necessary to give a proper judgment on this kind of measure. As I say, the Minister made an excellent case and I believe the Bill is one with which we should agree.

Professor Quinlan

I welcome this Bill as I welcome any effort to expand industry in this country. The Minister has made a very reasonable case but if we do a little arithmetic, we find that we are to have 200 more workers employed and the cost is to be an investment of £3½ million; in other words, the cost per worker is £17,500, which puts it into a very high grade cost category. It is a type of industry in respect of which we cannot afford much of our capital.

If our primary consideration is to provide increased employment for our people or to hold employment as it is at the moment, I welcome it in the sense that I welcome every new industry which has a prospect of success, even though it does cost us a great deal. This money is being provided so that we shall get this extra small increment of employment but I cannot let this opportunity pass without pointing out again, as I pointed out on several occasions in this House, the failure of the Government to provide corresponding capital for placing Irishmen and boys on the land of Ireland.

Let us take the question of land at the moment which is carrying three workers to 250 acres. Does anybody suggest that it would cost £17,500 to employ another worker in that case? In other words while we are chasing after industry, we are falling down on our primary industry, which is agriculture. We are falling down in the matter of creating employment and holding the employment line. I hate to think that at present we are allowing what is really only a secondary effort for us, our industrial effort, to divert our attention from our real problems.

We read of the great industrial expansion which is taking place at the moment and we are thankful for it, but what are the prospects which that holds out—7,376 new positions when the factories both on the drawing board and otherwise have been completed? That, I take it, is about a two years' expansion effort; in other words, expansion at a rate of something like 3,000 to 4,000 new jobs per annum in industry, while sliding down at the rate of 9,000 per annum in agriculture.

As a nation, we have not yet faced up to our responsibilities, to the job of holding the line where it is. For 9,000 new jobs per annum, we are providing 3,000 or 4,000. It may be a good thing to think up industries which could profitably and with hope of success, compete in foreign markets and develop that number of new jobs but side by side, we fiddle and play and let agriculture slide into decay. We have waited for four years for the farm apprenticeship scheme and yet there is not the slightest sign of it on the horizon. I feel that our whole policy is strangely lopsided. I congratulate the Minister and his Department on what they are doing but I must hold the Government responsible for their failure even to hold the employment line at its present level.

Éamon Ó Cíosáin

I did not think that it would be possible within the scope of this Bill to have a discussion on agriculture.

An Leas-Chathaoirleach

Well, the farm apprenticeship scheme at any rate.

Éamon Ó Cíosáin

Perhaps at some future date we shall have a legitimate discussion on that. I think we should all regard the manufacture of steel as a very important industry and I must say that Senator Hayes has already given expression to that view from the opposite side of the House. It proved itself a very worthwhile industry during the emergency years when it was very difficult, if not impossible, to get any material of that kind in here. One would think from the remarks of Senator Quinlan, when he referred to the cost of this industry, that the amount mentioned, £3,500,000, was being given as a free grant by the Government. Such is not the case. Apart from the £99,000 the company itself is putting up, what is happening is that the Minister for Finance will take shares in the business. In other words, it will be an investment and we sincerely hope— and some of us believe—that that investment will pay good dividends to the nation in the years to come.

We cannot, of course, have industries of this kind and of this importance established without capital. Everybody knows that and it has always been said that where private industry fails, then it is the duty of the State to step in to supply the needs of our industrial proposals and industrial policy. Having regard to that, it is right and proper for us to support this Bill and I welcome it.

Professor Stanford

There is one aspect of this Bill which puzzles me, and perhaps the Minister would help me. We are going to sink a lot of money in this proposal. In what way will the policy of the company be controlled, or supervised, or directed, by the Minister? Is it under Section 4, resulting from the shares which he controls? What I would have expected would have been something like this: that the Minister would have a representative on the board of directors and a very powerful say in the direction of policy. Perhaps I have overlooked something in the Bill, but if there is not some control or supervision of that kind, it is rather surprising. How will the Minister see that this money is properly spent, properly used? Who at the moment controls the policy? Presumably, it is the directors. Are they private persons or are they not? I should like to go even further and ask how have the profits been distributed in the past? I am speaking from a good deal of ignorance on the matter. But there is a large sum of money being transferred, so who is to see that it will be properly expended? It is a very big outlay. Unless there are good safeguards, we should be very careful about approving of it.

Pádraig Ó Siochfhradha

Ní dóigh liom-so gur ceart an Rialtas a cháineadh fé mar a dhein cainteoir nó dhó mar gheall ar an Rialtas a bheith ag beartú an gnó seo i Haulbowline a chur i dtreo níos fearr chun an gnó atá beartaithe le déanamh a chur chun slachtmhaire agus cumais. Ní dóigh liom gur cóir don Seanadóir Ollscoile a labhair bheith ag iarraidh a thabhairt le tuiscint gur ar an gcinéal seo tionscail amháin atá an Rialtas sásta airgead a sholathár agus a chaitheamh nó bheith ag iarraidh go dtuigfí faid atá an Rialtas dhá dhéanamh sin go bhfuil siad ag tabhairt faillí i gcúrsaí eile—go mór mhór i gcúrsaí talmhaíochta sa tír.

Má dheineann an Seanadóir scrúdú ar na cúntaisí agus na Meastacháin, chífídh sé go soiléir nach bhfuil faillí ar bith dhá thabhairt ag an Rialtas i gcúrsaí na talmhaíochta chéanna agus chífidh sé go bhfuil breis agus £8,000,000 curtha i leith a gcaite ar mhaithe le gnóthaí curadóireachta agus talmhaíochta.

Ach i leith an ghnó seo atá ar siúl i Haulbowline, is ní chomh teicniciúil sin é go bhfuilim féin agus measaim a lán eile Seanadóirí chuid mhaith ar neamheolas ar cad é díreach atá ar siúl san áit sin. Ba mhaith liomsa fios d'fháil cad iad na hábhair is gá chun an obair sin a choineáil ar siúl agus cad as a thagann na hábhair go dtí an monaracha ann. Measaim gur fuíoll mhiotail a bhailítear in Éirinn agus a déantar a athleaghadh is mó atá dhá úsáid. An bhfuil ábhair eile dhá thabhairt isteach sa tír d'aon-ghnó chun úsáid a dhéanamh de in obair na monarchan i Haulbowline?

Ar mo ghabháil síos ar na Céanna seo i mBaile Átha Cliath is beag lá ná feicim cruacha móra 200 nó 300 slat ar fad de shean-iarsmaí iarainn agus fuíoll mhiotail ar thaobh na gCéanna ann. An go dtí an monarcha i Haulbowline a bhíonn sé sin ag dul nó an bhfuil cead fós ag daoine an chinéal sin a cheannach i nÉirinn agus a bhreith ar siúl as Éirinn le húsáid i dtíortha eile? An bhfuil a ndóthain le fáil den cinéal sin sean-mhiotail chun an obair a choimeád ar siúl sa mhonarcha cois béal na Laoi nó an bhfuil gá le hiomportáil ar aon chuid de nua-mhiotal ó dhúthaigh thar lear?

Ba mhaith linn fós fios níos soiléire a bheith againn ar na haidhmheanna agus na cuspóirí a bhaineann leis an obair sin atá ar siúl i Haulbowline. An é amháin is cuspóir dó ábhair mhiotail chruaidh a sholathár agus a dhíol le monarchain agus lucht tionscail eile nó an gnáthach leo earraí miotail a dhéanamh agus a chríochnú iad féin agus a dhíol i riocht cruthanta chun oibreacha i nÉirinn nó oibreacha thar lear a dhéanamh?

Séard ba mhaith liom fios d'fháil an ndéanann an mhonarcha i Haulbowline earraí cruthanta críochnaithe ullamh chun úsáide i dtógáil tithe nó gnóthaí poiblí troma nó an é amháin atá á dhéanamh aca fuíoll seanmhiotail a leaghadh agus a dhíol le monarchain eile a tháirgeann miotalóireacht de shaghasanna éagsúla agus chun riachtanaisí áirithe maidir le hinnealltóireacht agus foirgneoireacht?

Ba mhaith liom, leis, fios d'fháil ar iomlán tonna den mhiotal in aon fhoirm a chríochnaitear sa mhonarchain sin agus fios d'fháil cá mhéad fear oibre a bheidh i gceist tar éis an airgead nua seo a chur ar fáil don tionscal.

Mr. J. Lynch

The first speaker suggested that there might be some abrogation of the rights of the Oireachtas in introducing a Bill post factum to the extent that the Dáil had already provided £1½ million of the £4 million required for the expansion of the steel mill in Haulbowline. The Dáil, on each of two occasions when making provision, by way of a Supplementary Estimate, for this £1½ million, discussed very fully the requirements of Irish Steel Holdings Limited and the merits of their proposals, and on each occasion, without dissent, the necessary moneys were voted. That was done for the purpose of enabling the company to proceed, with all expedition, with the plans they had prepared and were, in fact, about to put in hand. I think the merit of the Dáil taking that course is amply shown by the fact that the company were able to take advantage of tenders at advantageous levels. Had they waited for the introduction and passing of the Bill through both Houses, the probability is—in fact, I think it would be a certainty—that the costs of the development would be much higher than are envisaged in this Bill, and indeed the costs which have already been contracted for with reputable constructional engineering firms.

Senator Quinlan also suggested that it appeared to be an undue expenditure of capital to apply an outlay of the order of £17,500 for each additional worker employed. The simple comment on that is that, in Britain, the new installations for steel-making cost between £10,000 and £20,000 for each additional worker, but I suggest that is not the test that ought to be applied here. In the first instance, we have in Haulbowline an industry that is gradually becoming obsolete. I am not suggesting that it is, in fact, obsolete but it soon would be obsolete to the extent that its production would become uneconomic and its products would be priced out of the market, with the result that justification for maintaining it on economic grounds would no longer exist.

It is in the nature of the steel industry that advances in techniques take place and as they arise, unless advantage is taken of them, the possibility is that that industry will lose its place as a viable economic unit on the market. Therefore, one should apply the £3½ million by way of capital outlay, and the £500,000 for working capital, not to the employment of the 200 extra workers but to the maintenance of work for the 500 men at present employed there and for the 200 extra, making 700 in all. Without this capital outlay, it is likely that there would not be employment for that number or even for the 500 already working there at peak periods.

Senator Quinlan also commented on the fact that if similar capital were made available for the placing of men and boys on the land of Ireland, we might perhaps be doing much better work. He also referred to the farm apprenticeship scheme. I think the Senator ought to know—and I am sure it is accepted by all members of the Oireachtas—that the first charge on moneys available for the acquisition of land must be, and must continue to be, for the relief of congestion until that problem is solved. That problem has not yet been solved and as land comes on the market and is available for the relief of congestion, it will be the purpose and indeed the duty of the Government to acquire it without undue interference with the rights of the landowners to free sale.

The Senator knows, too, that the assistance being given by the Exchequer for agricultural purposes is very considerable. It runs into several millions per annum by way of subsidies on prices, by way of subsidies on fertilisers and by other means of supporting our agricultural production. That is not a matter for me to deal with in any great detail but I think it right to refer to it as the Senator tried to suggest we were applying an undue proportion of capital to the maintenance in employment of one worker.

In reply to Senator Stanford, this company was set up as a result of the acquisition by the Minister for Finance of the shares of the original company, Irish Steel, Ltd., which was then a private enterprise company which went into voluntary liquidation. The mills were lying there for a considerable period without any appearance of private enterprise taking up the steel-making activities down there. It was only at that stage that the Minister for Industry and Commerce, with the assistance of the Minister for Finance, came in to ensure that this industry would be kept going and kept alive thus ensuring a reasonable supply of essential steel goods during a period when we would probably have found great difficulty and been involved in great expense in procuring them.

The money having been put up by the Minister for Finance, it was arranged that the directors would be appointed by him. There still exist three directors appointed by the Minister for Finance, each of whom has been allocated a single £1 share to justify his seat on the board. At present, the three directors are the chairman, who is a serving civil servant and a senior officer of the Department of Finance, a serving civil servant and a retired civil servant. Replacements to the board, if and when they occur, will be made in similar fashion by nomination.

Apart altogether from the provivisions in the Schedule for the due operation of the business under the surveillance of the Minister for Industry and Commerce and the Minister for Finance, the directors at present are appointed by the Minister and any replacement of them or expansion of the board which may prove necessary will also be by way of ministerial action. Therefore, there is full assurance that the interests of the Minister and of the State will be adequately looked after.

Is main liom a rá leis an Seanadóir Ó Síochfhradha go bhfuil cosc fé láthair ar easportáil dramh-mhiotail as an tír seo. Ní cheadaítear d'aon duine an miotal d'easportáil gan cead ón Aire Tionscail agus Tráchtála. Fé mar atá an tionscal anois, gan dramhchruach a chur san áireach, tugtar cead do dhaoine áirithe an fuíleach d'easportáil. Ach, nuair a bheidh an tionscal nua fé lánseol, ní dóigh liom go mbeidh aon fhuíleach miotail le heasportáil. Is é is príomh-chúis leis an tionscal ná cruach a sholáthar in Éirinn. Ins an chlár atá romhainn anois, beidh 65,000 tonna á tháirgeadh. As an méid sin, coimeádfar sa tír idir 45,000 agus 50,000 tonna de chruach agus beidh idir 15,000 agus 20,000 le heasportáil. Dá bhrí sin, isé an phríomh-aidhm atá romhainn cruach a sholáthar le haghaidh tionscal nua in Éirinn. Tá súil agam go mbeidh an méid eile a bheidh á dhéanamh sa bhreis acu sa mhonarcha seo saor a dhóthain agus go mbeidh ar a gcumas é a dhíol thar lear.

I do not think any other points were raised which I am required to answer. I am pleased with the way the House has received and accepted the Second Reading and the principle outlined in the Bill.

Mr. Ahern

I have a letter here dated 19th October, 1960.

An Cathaoirleach

The Senator will have to confine himself to a question at this stage. The Minister has concluded the debate.

Mr. Ahern

I have a letter here in regard to the subject of this Bill and I am anxious to hear the Minister's views on it. I shall pass the letter over to the Minister for his consideration and opinion.

Question put and agreed to.

Agreed to take remaining stages today.

Bill considered in Committee.

Sections 1 and 2 agreed to.

SECTION 3.

Question proposed: "That Section 3 stand part of the Bill."