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Seanad Éireann debate -
Wednesday, 7 Jul 1965

Vol. 59 No. 3

Shannon Free Airport Development Company Limited (Amendment) Bill, 1965 (Certified Money Bill): Second Stage (Resumed) and Subsequent Stages

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

First of all, I wish to thank the Seanad for the very constructive and friendly way in which they discussed the Bill. Senator Fitzgerald made a most constructive contribution for which I thank him.

Now to deal with the questions asked during the course of the debate. First of all, I shall deal with housing. Housing requirements at Shannon are now reasonably well advanced, and it cannot be said that Shannon development is being held up through lack of housing, although it is essential to make progress as rapidly as possible. While the financial questions associated with housing, as the Senator said, are complex in some ways, the company has given a once for all grant for each house equivalent to that made available by the Department of Local Government to those who build their own houses. It has also been given a subsidy representing the difference between the economic rent, after all the calculations are made, including costs of site and development, and the rent that could be reasonably charged to workers and others who will live there.

As I said in introducing the Bill, the rents are based on what these people can reasonably be expected to pay. We have investigated the costs of housing, and having made a detailed examination of the comparative costs of building houses at Shannon and in and around Limerick city, I am quite satisfied that the costs are reasonable, allowing for the additional costs of site development and the actual character of the land on which each house is built and allowing for the fact that the houses that have been built and are being built in what is virtually a new community have to have certain attractions for workers. They must be of a form of architecture which will be attractive to workers coming to live in Shannon and which will relate to the creation of what is an entirely new Irish community.

With regard to subsidies paid, there again it is difficult to make comparisons with a local authority because the subsidy in the case of the Shannon houses is on a flat rate basis, whereas in the case of Limerick, the subsidies are based on a differential rent system. But if a comparison is made, an allowance is provided for the difference between the costs of building at Shannon and the costs of building at Limerick so it can equally be said that the subsidy is reasonable and is not excessive or extravagant in any way.

A number of Senators asked whether the cost of developing the industrial estate, when related to the employment of each worker, can be compared with the capital cost of providing employment in other areas of the country and in other circumstances. It is almost impossible again to make an exact comparison. I think it can be said that having made the calculation in various ways, none of which is entirely satisfactory, the cost per worker does not exceed the average cost of providing a person with employment, as a result of grants received from An Foras Tionscal. There are many ways of doing this calculation. One suggestion was that the cost is £2,250.

In particular circumstances, it might be £2,400.

Some international agency suggested that even £3,000 per worker was not excessive on an average for giving employment in industry.

As an individual grant?

Yes. It is not an excessive cost. There is no element of luxury spending by the Shannon Free Airport Development Company. I think it will be found that the Shannon Free Airport Development Company comes very well out of the examination, if it is ever possible for us to establish some norms of calculation so that we can make a comparison with the cost of giving employment through other agencies.

Senator FitzGerald referred to the question of the very high export figure from the Shannon Industrial Estate. I understand that the Central Statistics Office are satisfied with the method of calculation. Of course, when he refers to the added value to production as being the real method of calculating the value of production in this country he is perfectly correct. We have been accustomed to the ordinary conventional manner of assessing our exports, and calculating them in relation to our imports, whereas, in fact, if it were again possible to do so it would be better to express them in the form of the value added to materials and in that way we would have a better idea of the effectiveness of each million pounds worth in the country. The higher the labour content the more the value added, the greater the saving on imports and the greater the returns in exports. Senator FitzGerald referred to the export of diamonds and suggested that that might swell our export figures. No doubt it does. I can only say that the total wage bill at Shannon varies from £2½ million and £3 million in the year and that in itself has some relation to added value and indicates the value of the exports from the estate.

Is that the wage bill in the estate?

Yes. Senator Rooney asked whether the rate of expansion is below or above the national average. I understand that in the best period, at least in 1964 and at present, the rate of expansion is above the national average at Shannon. I hope that will continue and I hope the national average will rise. This represents a challenge to the Shannon Free Airport Development Company.

Some Senators referred to female labour at Shannon. At present 1,538 males and 1,389 females are employed there. The object of the company is to have a balanced community there. Having allowed for those who normally live in Limerick and Ennis and those who usually live at Shannon, the employment must conform to the requirements of family life in the area. It is desirable to employ as many men as women. Quite obviously, there are some industries which lend themselves to air freight where the proportion of females may be higher than would be desirable in the ultimate. I think the company have a balanced point of view in regard to that. They are constantly looking for the kind of engineering industries which require male labour and they will continue to do so. At the same time, when one reads reports about rural life in Ireland it is very important to consider the problem in this way. It is a common feature of the Netherlands that the small farms exist through wages coming in in any form, either earned by the daughters or by the sons. It is very important to increase the incomes of small farmers by enabling some of their family, whether boys or girls, to work in an industry. It is desirable to have as many men as possible employed but equally the money brought home by girls is of very great importance.

I mention that because Senator Sheehy Skeffington referred to development in the Netherlands. When I was there, I found development which I think can be found also in Great Britain, but which is very prevalent in the Netherlands. It is the extent to which people work a half day in industry and another half day on the farm. That is quite an unusual form of double employment. One knows that there has been short time work for married women in England but the half day working is something of a novel character. It has not been developed here to any considerable degree. I merely mention that to show the importance of having an industrial community adjacent to a small farming community.

Senator Rooney asked whether there were any Irish-based firms at Shannon. The answer is that the Irish firms are concerned with forwarding and warehousing services. The remainder of the firms are run by foreign concerns.

Senator Rooney and Senator Quinlan raised the question of whether we could not have started this kind of industrial estate anywhere, particularly at Ennis or Limerick. Whatever controversy there may be regarding the desirability of starting regional industrial centres, this is a very special community. The attraction of the Shannon Industrial Estate consists, first of all, in the existence of a customs free zone and, secondly, in the proximity of the Estate to the airport. No doubt handling is required from the factory to the air freight plane. One-fifth of the freight at Shannon comes from the Industrial Estate and there are firms there which completely depend on air freight because it suits their kind of business. For example the piano industry finds it best to send heavy pianos by air because of the reduced packing and the low liability to damage.

A great deal of work done in this country is in the nature of speculative expansion, in the sense that we cannot be aware of what will happen in the future here or in any other country. Looking at the development of air transport in this country in the past ten years, I believe there will be a breakthrough in air freight. I believe that with the new types of aircraft the cost of air freight will be reduced. A time will come when more of the air companies will allot their most brilliant executives to the air freight business rather than to passengers. Two or three years ago when I asked our own company to devote attention to this they turned over some of the best of their staff to the air freight business. To promote an industrial estate along such lines at the airport is a good thing because there is a great future for air freight.

Some years ago the International Air Transport Association agreed to reduce transatlantic air freight rates. The air freight rates between New York and Shannon in contrast to those between New York and London or Paris were reduced. That, together with special commodity bulk rates, affected Shannon favourably. I hope that kind of change will continue to the advantage of Shannon.

Senator Quinlan referred to the payment of workers. He corrected himself when he said what he really meant was that, although the workers might be paid trade union rates according to their years of service, some of them might be badly paid because of the long distances they had to travel. Everything is being done to expedite the building of houses for family workers at Shannon. I have pressed the company to go ahead with this plan. I agree that in the case of some of these workers the wage is small when the bus fare is deducted. Nevertheless, it is what might be regarded as initiating an industrial tradition in an area of the country where there was absolutely no employment at all. I hope that girls will be encouraged to come to live at Shannon when there are community arrangements for them and that they will marry some of the men working there. We hope to have houses provided for them and, indeed, they are being provided for them.

Senator Quinlan also referred to one or two firms at Shannon which had not accepted trade union relationship with their workers. This comes of some tradition common to them in America, or whatever country they came from, and it is not unique at Shannon. In other words, these firms have not had trade union relationship with their workers in other places. It has been pointed out to them tactfully that they should accept the idea of trade unionism wholeheartedly. We have not been successful so far in getting them to adopt that attitude but in all cases they have been paying wages above trade union rates. Productivity in the area is satisfactory and I think it can be said that the trade unions operate successfully in the area. I think they object to the attitude of firms which do not permit trade unions to operate within the factory. Nevertheless, they understand the position and they have adopted a restrained and tactful attitude.

What the future will bring I cannot say. It would be wrong for me to intervene in that matter. It is better left to commonsense and to the goodwill of everybody concerned. Those in the Shannon Free Airport Development Company do concern themselves with the happiness of the workers, recruiting, training, and so on. I do not think this constitutes what can be described as a serious problem.

Senator Sheehy Skeffington inquired about the Shannon Free Airport Development Company property. Part of the lands was sold by me, as Minister for Transport and Power, to the Company and part was sold by private owner to the company in fee simple. Because of that no ground rents arose, or will arise.

Senator Rooney asked me to state the number of acres that were to be acquired as part of the extension of the community area. I would ask the Senator not to press me on that. Some deals have been closed. Others have not been closed. It would be wrong for me while these negotiations are going on, to give the full amount of the land. The land is necessary to ensure the growth of the housing community and it will enable proper planning to be undertaken.

I asked the Minister how much was in his possession at the moment.

I have not the figure.

From the point of view of expansion has the Minister already used it all?

We have enough land for considerable expansion. We have enough land at present to envisage a community of 3,000-4,000 people living at Shannon.

Senator Sheehy Skeffington entered into a sociological controversy about the value of the Shannon Free Airport Development Company community work. I do not intend to follow him along that line. When speaking of the growth of regional centres, we have to remember that the Planning Act of 1963 is an absolutely socialist piece of legislation, involving thousands of private landowners who may not in many cases freely dispose of their properties. This is part of modern civilisation.

In the case of Shannon, there are no people in the area or in the community who do have the tremendously conservative outlook of people living in other areas. This is an entirely new community run by absolutely first class executives. I hope it will be one of the showpieces of Ireland. I hope the standard of architecture will be as high as possible. I have done everything I possibly could to ensure that the standard of architecture will be high and have advocated the use of colour where suitable to get away from that horrible dull grey that prevails in so much of the country in the housing areas. I hope we will be really proud of the new Shannon town as it grows.

I should add also in connection with what Senator Lenehan said when he advocated the continual growth of Shannon that, of course, the growth of Shannon is relative to the rest of the community in the area. The form of the community must relate to the future development of Limerick, Ennis and other neighbouring towns. The regional consultant appointed by the Minister for Local Government and recruited through the National Institute for Physical Planning is in the area, and he will be presenting an interim plan to the Minister for Local Government in which he will make some preliminary proposals for the planning of the area, and in that connection will be examining what is happening in Shannon and making proposals as to the relationship of the Shannon community to those of Limerick and Ennis.

I should make it clear to Senator Quinlan, who said that all the people of the Shannon Industrial Estate could live in either Limerick or Ennis, that I think he was not speaking correctly. One of the most difficult things which the directors of the company have had to undertake is to try to predict how many people in a growing industrial community want to live close to the place when there are towns adjacent. They have taken advice from many experts. They have even brought over foreign experts who have gone to Shannon to help them in this very difficult work. They have investigated the feeling in the community; they have studied the development of the town of Crawley in England; they have met Dutch representatives, taken advice from Irish architects and so forth.

At the moment it is reckoned that about one-sixth of the workers will want to live at Shannon and the others will be content to live at Limerick, Ennis or the neighbouring little villages or houses in the rural areas. That is the assumption, and I think it is fair and correct, but, of course, it is a matter of personal wish and it is a difficult thing to calculate. The same thing would hold in any other area in the world wherever a new community was started 15 or 20 miles from other towns. This calculation will have to be made particularly with a view to not trying to rival Ennis or Limerick. This is a complicated planning matter in which the company, I think, is acting very wisely and sensibly.

Senator McHugh paid some tributes to the Mediaeval Banquets. I am always delighted to hear that, because it was I who recommended that the Mediaeval Banquets should be held. I also suggested the construction of the Folk Village, and might I add for the benefit of Senators that the historical experts now say that the Folk Village is going to be far more than a mere attraction to tourists? The old houses are disappearing so rapidly that we desperately need a few folk villages around the country with all the implements, house decoration and furniture used during various historical periods, if we are to preserve as museum pieces part of our heritage.

Senator Quinlan raised the question of a comprehensive school being established at Shannon. The answer is that that matter is in the hands of the Minister for Education who felt that the growth of the Shannon community was sufficiently important and its relation to other urban areas such that there could be a comprehensive school there.

Senator FitzGerald asked me about the failure to provide proper statistics relating to the production at Shannon and in the rest of the community. This is a very complicated matter and all that I can say to the Senator is that it is still being studied by the Statistics Office and I hope that good results will come from that study. The difficulty arises particularly from the fact that it is a customs-free area and it was felt desirable to reduce paper work to the minimum. The Central Statistics Office are studying the problem and apart from other considerations, the concerns involved are quite happy to cooperate. This matter is receiving the most careful attention.

I think I have answered every question that has been asked and I should thank the House again for their very favourable attitude to the Bill.

Question put and agreed to.
Agreed to take remaining Stages today.
Bill considered in Committee.
Sections 1 to 3, inclusive, agreed to.
SECTION 4.
Question proposed: "That section 4 stand part of the Bill".

There is just one point I wish to raise for clarification. With regard to the grant-in-aid provided for housing purposes, am I right in thinking this is under a different section from section 8 of the Principal Act and that in fact the provision is not exhausted and is not being increased? Is it under the 1963 Act it is being provided?

It is under the 1963 Act. It is voted annually in the Estimate. There is a continuing authority.

There is no limit?

There is a continuing authority for it.

Is there a limited sum?

It is only for housing and there is no limit?

Question put and agreed to.
Section 5 agreed to.
Title agreed to.
Bill reported without recommendation, received for final consideration and ordered to be returned to the Dáil.
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