The main object of the Bill is to increase the funds available to An Foras Tionscal from which grants may be made up to 31st December, 1963, for the promotion of industries both in the undeveloped areas and in the rest of the country. The Bill also provides for the increasing of the number of members of the Board of An Foras Tionscal from 3 to 5. Its remaining provisions effect comparatively minor changes in the Undeveloped Areas Acts 1952 and 1957 and in the Industrial Grants Act, 1959, arising out of the experience of An Foras Tionscal in the operation of these Acts.
The aggregate amount of the grants which may be made by An Foras Tionscal is being increased from £10 million to £15 million. This increase is necessitated by the fact that the provision of £10 million is likely to be exhausted sooner than was anticipated: as at 31st March, 1961, commitments of the order of £8 million had been entered into against the "ceiling" of £10 million. On the basis of these commitments and taking into account projects at present under examination but which have not yet reached the approval stage it is expected that the limit of £10 million may be reached before the end of the present year. Projects for which grants had been approved by An Foras Tionscal as at 31st March, 1961, involve an estimated total capital investment of over £26 million and are expected to give employment to close on 15,000 workers. For details of particular grant payments by An Foras Tionscal, I would refer Senators to the report and accounts of that body for the year ended 31st March, 1961, which were recently presented to the House.
The present legislation relating to industrial grants is due for renewal on 31st December, 1963. I believe that the time has now come to undertake a comprehensive review of the present scheme, designed to assess the extent to which it has been successful and to see whether any modifications of the system are desirable. Among the matters which will have to be brought under review are the question of whether the present concept of the undeveloped areas has outlived its usefulness and whether the time has come to adopt some alternative such as "development areas" to replace the existing "undeveloped areas" with the object of enabling other parts of the country to qualify for the more favourable grants at present applicable to projects sited in the undeveloped areas. The reaching of decisions on these matters must await the outcome of the review to which I have referred. As a preliminary to the undertaking of the review, An Foras Tionscal has in hands a detailed study of grant aided projects, designed to assess the measure of success achieved by the existing grants scheme. Pending the outcome of the review and the enactment of any consequential amending legislation I intend to continue to implement the policy laid down when the Undeveloped Areas Act 1952 was before the House of confining the scheduling of areas outside the undeveloped areas proper to "fringe areas" which are contiguous to the undeveloped areas.
Senators will be aware that the Industrial Grants Act 1959 specified that the maximum grant which may be given by An Foras Tionscal in respect of an industrial project proposed for establishment outside the undeveloped areas may not exceed £250,000 unless the Government, having regard to the amount of employment likely to be afforded by an undertaking, approve of the making of a grant in excess of that figure. When the Industrial Grants Act 1959 was in course of enactment, it was stated that the Government would not be disposed to avail of this special provision unless in the case of a project offering prospects for the employment of 2,000 workers or more. I intend that this requirement should stand pending the outcome of the review to which I have referred and the implementation of any ensuing amending legislation. Nevertheless, I foresee that an exceptional case might arise which would warrant An Foras Tionscal in recommending to the Government the making of a grant in excess of £250,000 for a project which might not have a minimum employment content of 2,000 workers. The type of project which I have in mind as possibly warranting such an exceptional recommendation by An Foras Tionscal would be one of major importance to the general wellbeing and economy of the State and involving an exceptionally large capital investment. A possible example of such a project might be a timber pulp mill or a chemical industry.
The reason for augmenting the board of An Foras Tionscal is that since the passing of the Undeveloped Areas Act 1952 which limited the Board to 3 members, the responsibilities of the Board have been very considerably widened due to the extension of their activities to the whole of the country instead of to the undeveloped areas, as previously and due to the very substantial increase in the number and size of projects which has come forward as a result of the programme undertaken by the Industrial Development Authority for the attraction of external investment.
The object in providing that An Foras Tionscal may make grants towards the provision of plant (e.g. items such as cranes, roof tanks, electric transformers for general use as distinct from one for use in a particular process) is that legal advice recently received by An Foras Tionscal raised doubt as to whether they were entitled to make grants for plant, as distinct from machinery and equipment, as they had been doing.
The provision relating to restrictions on the sale of assets or shares in a grant-aided concern does not introduce any new concept: it is intended to remove any doubts which may exist as to the legality of the present practice of An Foras Tionscal of writing into the agreements entered into with the promoters, a clause that they will not sell the assets or their shares in the concern, without the previous consent of An Foras Tionscal, for a stipulated period.
Finally, I wish to avail of the opportunity of again stating categorically that the facilities under the industrial grants scheme are available to Irish promoters on exactly the same basis as to foreigners.
I confidently recommend this Bill to the House and I should be glad if it could be given an early passage.