Seanad Éireann debate -
Thursday, 18 Dec 1969

Vol. 67 No. 8

Industrial Development Bill, 1969: Second Stage.

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

Minister for Industry and Commerce (Mr. Colley)

Since Senators have had in their hands for some time an explanatory memorandum on this Bill, I will not detain them unduly. This House is, perhaps, aware that the statutory limit on expenditures by An Foras Tionscal will have been reached within a few weeks and that consequently it would be desirable that this Bill be given a speedy passage. I look forward to the goodwill and cooperation of all sides of this House in bringing this about.

Briefly, this Bill is designed to integrate and to make clear the incentives available for manufacturing projects and to bring them up-to-date in the light of experience as well as adding the flexibility needed for assisting the more sophisticated type of operation which is now needed to achieve rapid growth and complement our existing industrial structures.

After prolonged consultation with the interests concerned the views of international consultants, A.D. Little, Inc., and of the National Industrial Economic Council were obtained. The Bill incorporates the broad terms of the advice given by these bodies.

Since this is an amending Bill it does not contain within itself all the provisions affecting industrial promotion or the operations of the Industrial Development Authority. The Authority is, however, being expanded by absorbtion of An Foras Tionscal and by the creation of adequate structures for its future tasks. Careers are being offered to staff chosen from outside the Civil Service. It is hoped that their expertise will operate the improved promotional and advisory services which we will require.

The IDA promotional work, so far, has been effective and to this is due in no small measure the expansion of industrial employment which in June, 1969 was almost 11,000 higher than in June, 1968. Similar or greater increases will, I hope, result from new industrial projects which were approved or commenced production in the early part of this year. These new projects will give rise to 9,800 new jobs at the end of their first year and an estimated 17,800 jobs ultimately. At the current rate of increase, manufacturing industry is succeeding in bearing its share of the new job creation required for higher living standards and full employment in the foreseeable future. A similar indicator is the value of industrial exports which is now six times that of ten years ago and is estimated to be over half of our total exports.

I do not seek personal or political credit for these events which are due to the efforts, co-operation and adaptability of the whole Irish people and in particular to the improvement in technical and managerial skills in industry and to increased knowledge of design and marketing.

The extent of the international scale on which this operation is working can be seen in a breakdown of the projects I have mentioned plus others currently under negotiation. Approximately 25 per cent are British, 20 per cent Irish, 20 per cent American, 15 per cent German and there are others from Holland, France, Austria, Norway and Denmark, Sweden, Italy, India and Spain.

I would also like to mention the small industries scheme which has been providing outlets for the enterprise of our people and will, I think, make a substantial contribution in the time to come. In the first half of this year, 119 small industry projects were approved for grants; these projects are estimated to give employment to 700 persons ultimately.

The House will be interested in the development of regional policy. The Industrial Development Authority are about to set up regional offices and provide services on a regional basis in co-operation with local interests. With this regional policy is linked the development of industrial estates, advance factories and the provision of housing for key workers, where appropriate.

In contrast to the smaller scale of home based industry, we now have under consideration a number of large industrial projects which have both substantial employment and growth potential. These will be needed to diversify our existing industrial structure and to provide linkage with other home firms or demand for our own raw materials. These projects must be chosen carefully, in view of their heavy capital cost and the limited resources at our disposal. To assist the IDA in formulating and appraising such projects, consultants will, in future, be increasingly used in pursuance of a selective policy of industrial promotion geared to our requirements and resources.

Changing circumstances have required new forms of industrial financial assistance. Senators will note that it is proposed now that grants can now be given towards the cost of leased assets and that interest rates may be assisted within certain limits, the repayment of loans may be guaranteed and grants may be provided for industrial research and development. It is intended that a package of such incentives will be available in the larger cases in addition to first-tier and second-tier grants. The Bill also contains improved provisions for training grants and for re-equipment grants which take the place of the adaptation grants available to existing industry until September, 1967.

The designated, formerly undeveloped, areas are being favoured by a differential of 10 per cent under the re-equipment system and of 15 per cent in new industry grants.

The powers being conferred on the Authority to provide factories for purchase or leasing will also enhance the range and suitability of the package of incentives.

On a matter of detail, I should draw attention to the limitations imposed on grant issues. The total of this kind of expenditure plus expenditures on industrial estates is being fixed at £100m. Almost £50m. has already been issued under the existing enactments relating to industrial grants. The percentage limits set out in the various grants sections may not be exceeded even where the required Government consent to the Authority's proposal to give grants totalling over £350,000 to an enterprise has been secured. Certain types of grants are being grouped together to count towards the specified grant maxima.

As well as these main provisions the Bill contains a number of ancillary provisions which relate to the merger of IDA and An Foras Tionscal and to pensions, staffing, procedures and to the calculation of grants.

Since the provisions of this Bill are generally based on successful experience of sound and practical measures for industrial development which have made such a substantial impact on our economy and our way of life I have no hesitation in recommending it to the House.

Business suspended at 6 p.m. and resumed at 7.30 p.m.

Mr. Russell

In his statement the Minister for Industry and Commerce mentioned it would be desirable if this Bill was given a speedy passage and he looked forward to the goodwill and the co-operation of all sides of the House in bringing this about. I assure him at the outset, on behalf of myself and my party, of our co-operation in achieving that purpose. This Bill is a logical successor to the various enactments passed during the past 20 years, beginning with the IDA Bill of 1950 passed in the face of severe criticism from Fianna Fáil, then in Opposition, and threats wisely not carried out to repeal it.

It can be said truthfully that the 1950 Act marked the turning point in the whole idea of industrial development in this country. Prior to that date, and particularly during the years 1932 to 1948, the main impetus in industrial development was provided by tariff protection, that is substitution of Irish manufactured goods for imported and foreign made goods in the home market. From 1948 onwards, successive Governments have, through a policy of financial inducements, encouraged the establishment by foreign and home-based firms of industries producing goods mainly for the export market. In other words, it was the national policy to buy know-how and to establish export markets as a quick way to providing industrial employment.

During the same period efforts were made to attract as many as possible of the new industries to the west or undeveloped areas by offering higher inducements to firms located in those areas. Notwithstanding some notable failures, the policy of inducement has been generally successful as evidenced by the rising proportion of industrial exports each year in the face of keen competition and, I might say, empha-sised by the Minister in his statement before the adjournment.

Inevitably, some criticisms have persisted in spite of those successes. The more serious may be summarised as follows: preferential treatment to foreign industrialists, the preponderance of industrial development of industries in the Dublin area in spite of the higher incentives available in other areas, the neglect or apparent neglect of small industries, of small family business, the difficulty in dealing with various departments and organisations concerned with industrial development, the delay in getting replies and decisions from those departments and the costs involved, that is accountancy, solicitors, et cetera, and the amount of form-filling required.

Recent developments within the IDA structure have done a great deal to eliminate those criticisms, particularly the establishment of the Small Industries Division a few years ago under the competent and enthusiastic management of Mr. Tom O'Connor, former Manager of the Limerick County Council. The establishment of this section recognises that the predominant type of industrial undertaking in this as in more advanced countries will continue to be the small and mediumsized firm. Apart from the instigation and production of specialist type goods, the small firm has a viable economic function to fulfil in subcontracting to larger firms whose main production methods do not permit the economic manufacture of specialist items in small runs. The policy of recognising the small firm's difficulties and its potentialities and catering for them at local level has paid off handsomely in the number of new and extended industries and increased employment in this area of our industrial sector.

The Bill before the House takes the IDA a further step towards the provision of a co-ordinated and comprehensive service for Irish industrialists and potential industrialists. The merging of An Foras Tionscal's grant-giving function with the IDA is a sensible and logical development but the services of other organisations should also be transferred if the IDA are to act as a single body giving a fully comprehensive service to industry in this country. I have in mind, in stating this, particularly the Institute for Industrial Research and Standards, Córas Tráchtála and certain services provided by the Department of Industry and Commerce. With all those services under one roof, so to speak, we would have an authority capable of providing all or nearly all the services required by industry quickly and cheaply.

Two further services should be closely associated with the reorganised IDA, namely manpower, including technical and technological facilities and infra-structural requirements. Those may be more appropriate to the Department of Labour and the Department of Local Government or, preferably, the proposed Department of Physical Planning, if that proposal ever gets off the ground. In any event, they must be jointed to the IDA either by incorporation or by representation on the board of the Authority. Furthermore, the Industrial Credit Company, which are logically associated with the financing committee section of the IDA, should be more closely related to the Industrial Development Authority.

I should like, dealing more specifically with the points in the Bill, to take the explanatory memorandum which was issued with the first draft of the Bill principally because I am not aware, though perhaps the House is aware, in what form the Bill was finally passed but I am assuming the amendments presented on the Fourth Stage of the Bill in the Dáil have not been in fact included in the final document.

Mr. Colley

That is correct.

Mr. Russell

In Part 1 of the Bill, section 6 defines the designated areas which will take the place of the undeveloped areas as defined in section 3 of the Industrial Areas Act, 1952, and provides for the extension of these areas by Ministerial order. I feel that the areas, whether they be designated or non-designated, should be related to existing or proposed development areas. I have in mind particularly the mid-western area, more properly known as the Limerick, Clare and Tipperary North Riding Development Organisation, which are as far as I know the only regional development organisation so far established.

In that area there are at the moment three types of incentive schemes. There is the designated area which is that part of the mid-western area formerly named the undeveloped areas; there is the area outside the designated area; and finally there is the Shannon Free Airport Development area. In the case of the designated areas there is what I think the Minister described as the first-tier grant of 40 per cent plus a possible further 20 per cent, and outside the designated area the present grant is 25 per cent with a further possible 20 per cent, and in the Shannon Airport then we have the different series of grants plus the 20-year tax free facility or inducement. I think that a common rate of grants or other incentives should be established in the mid-western area and that the same should apply in other areas as they are established throughout the country.

I do not know—and perhaps the Minister will inform the House when he is replying—what the position is in regard to the establishment of other development organisations throughout the country, but I do think that if the purpose of the Industrial Development Authority in its reorganised form is to be fully achieved the establishment of these regional development organisations is an urgent necessity, and I think that the Minister himself should do everything he possibly can to induce their early development. I might say in that regard that reading the various accounts of the establishment of the mid-western area, that is Limerick, Clare and North Tipperary, the impression might be deduced that this particular development organisation was established through pressure from above.

I should like to say that there was considerable encouragement from the relevant Departments including the Minister's own Department, the Department of Local Government and other Departments concerned, but there was also an organic or local impetus from the people concerned in those areas, and we have in this particular area a board comprising a very wide interest. The reason I mention this is because there was a good deal of talk recently on the question of growth centres and industrial estates. The argument has been put forward that if you establish industrial estates or growth centres or cores of development, or whatever you like to call them in this new terminology, the areas contiguous to them, that is the rural areas, will be denuded. I would like to say with regard to our area, which comprises the two counties and the North Tipperary Riding as I have already mentioned, we have representatives from all the statutory bodies in that area, including Limerick City Council, Limerick County Council, Clare County Council, North Tipperary County Council, Limerick Harbour Board, Limerick Chamber of Commerce and so on.

Mr. Honan

It is all Limerick.

Mr. Colley

Clare is in it too.

Mr. Russell

The important thing is that we have representation from the smaller areas including Ennis, Thurles, Nenagh and other similar-type areas, who have fair representation and indeed whose contributions to our meetings, as I think Senator Honan will agree, are very valuable.

Mr. Honan

I have never been at one so I do not know.

Mr. Russell

Then the Senator must take my word for it. I have been at all of them. They have resulted in influencing the industrial development programme drawn up recently for the Shannon Free Airport Development Company, which does provide for the establishment of advance factories not only in the bigger urban centres like Limerick but over a wide part of the rural areas in these centres, including particularly Clare.

Part III, chapter 1, section 12, contains general provisions. I hope the Minister will forgive me for saying that I think he has been to some extent influenced by the arguments and amendments put forward in the Dáil even though he did not accept them. From his statement to us here this evening, I would say that he has taken cognisance of the views put forward, because I was very encouraged to read in the record of the establishment of regional offices of the Industrial Development Authority that he has accepted this as a definite policy.

As my notes were prepared before I had an opportunity of listening to him, possibly to some degree I will have to adjust them, but this section in the Bill in its present form is quite wide. It states: "The Authority may in the exercise of its functions have regard to the extent to which an industrial undertaking will serve to promote national objectives for regional development." I think that the Minister accepts as a firm commitment the necessity of having regional offices at the Industrial Development Authority in the various regions throughout the country. The Minister, in his statement here before the adjournment, gave a much firmer indication that this is what he had in mind than the actual wording in the Bill. Perhaps he would confirm that when he comes to wind up the debate.

We have been talking about regional development, growth areas, industrial estates, et cetera, for a long time. I am sure the Minister recalls the various reports produced during the past seven or eight years. I should like to refer specifically to the CIO Report of 1962 which came down very emphatically in favour of the establishment of growth areas. They were called pools of development at that time. That report refused to accept the argument that the establishment of growth centres necessarily meant that the contiguous rural areas would be denuded of their population or employment opportunities. I have always accepted that point of view. When you have a viable development centre, prosperity and opportunities tend to move out from there and to result in the establishment of satellite or smaller industries in the towns and other smaller urban centres in the area. Two further reports were issued in 1964 by the Committee on Development Centres and Industrial Estates. They corroborated the views expressed by the CIO Report two years earlier.

In the same Chapter 1 of the explanatory memorandum, section 14 excludes the authority's grant giving functions from the Shannon Customs Free Airport. The Minister is aware that SFADCO, almost 12 months ago, were charged with the responsibility of promoting industrial development in the entire mid-western area of Limerick, Clare and North Tipperary. As I mentioned before, they have drawn up a very comprehensive programme for the development of the area during the next five years. That programme is showing tangible signs of progress. There is at least one industry in Newcastlewest which is very close to completion. Several advance factories under construction in the city of Limerick and other advance factories are scheduled for construction in other smaller centres throughout the area.

I should like the Minister to clarify the position of the IDA vis-a-vis SFADCO. Are SFADCO to continue to promote industrial development? The Bill gives the impression that, apart from what it describes as the development on the industrial estates, the Shannon Company will not have the powers which they now have to promote development in Clare, Limerick or North Tipperary. Does it mean we will have two bodies with the same powers and functions?

On the same lines, I should like the Minister to clarify the relationship which will be in existence between the reorganised IDA and the Mid-Western Development Organisation. In that board we have two representatives of the Department of Local Government, but if there is to be the close liaison which is absolutely necessary between the IDA headquarters and the regional areas as far as the mid-west is concerned, some form of close liaison, possibly through the board, will have to be found to provide that close contact between them. In Chapter 2, section 25, we have something which has been rejected by the Minister. It provides:

Where a member of the Authority is nominated either as a candidate for election to either House of the Oireachtas or as a member of Seanad Éireann, he shall thereupon cease to be a member of the Authority.

I wish to record my disapproval of that. It has been accepted as a precedent. I remember as a Member of the Dáil seven or eight years ago protesting, but the precedent was established then, has been continued and will be continued. It is wrong that a man or woman must resign from the Authority and possibly be beaten afterwards in the subsequent election. Chapter 3 is headed "Provisions Relating to Grants". Section 33 of the same chapter in referring to fixed assets, states that fixed assets are defined in the Bill as machinery, plant, equipment, lands, building and services, and other works of or for an industrial undertaking.

I should like to ask the Minister would fixed assets include entrance roads, rail-sidings, and jetties or wharves if such had to be built in connection with the establishment of an industry? Section 38 provides for grants "towards the cost of fixed assets required for the re-equipment, modernisation, improvement or expansion of an industrial undertaking". It goes on to say that these grants will be at the rate of 35 per cent in a designated area, or 25 per cent elsewhere, subject to a maximum of £350,000.

Perhaps the Minister will have a counter-argument to this but I feel that the rate of grants for the modernisation and improvement of existing industries, which would mainly be established Irish firms seeking to modernise and expand, should enjoy the same percentage grants as new industries. I may be wrong in my interpretation of the Bill but it seems to me that is a point which I touched on earlier. That criticism would certainly exist to a greater extent in the past. There has been a discrimination between new foreign industries and old-established firms. This discrimination would appear to be perpetuated in this section of the Bill. The Minister may have a very good argument against the point I have made. I should like to hear him on this.

Section 40 provides a new scheme of grants for projects of research and states that the scheme is confined to work carried out wholly or mainly in the State. It is quite possible, though not probable, that a research project of use to this country might have to be carried out entirely outside the State. I do not think such a project should be precluded from assistance on those grounds. The sum involved is quite small. The grants will ordinarily not exceed 50 per cent of the approved cost, or £15,000. There is a principle in this which might react unfavourably against us. If some project were initiated or had to be carried out outside the State, it might suit us to give full grant terms.

Section 43 makes provision to enable the authority to reckon the value or cost of assets or other benefits in determining the amount of grant. I should like to ask the Minister if there is any appeal from the authority's valuation of the cost of the assets: in other words if an industrialist is seeking assistance from the IDA for a new factory or in regard to extension of an existing factory, must the authority's valuation be taken as final and not subject to appeal to any other authority, even the Minister himself?

Section 44 empowers the authority to purchase or to take shares in an industrial undertaking. I am glad the Minister included this provision in the Bill. With the increasing proportion of foreign investment in Irish industry—I should like to make it clear that I do not object to the participation of foreign capital in Irish industry where the foreign capital is accompanied by know-how that we do not have at home or where it can give us entry into markets which would be difficult if not impossible for us to enter—but we all regard as undesirable the passing into outside hands of a large proportion of Irish industry. The Minister might consider, and possibly he has already done so in this section, taking a part of the equity or share capital in foreign industries established here.

Perhaps that is the intention of the section and if so I am glad to have it included. However, I do not approve of the next paragraph in which the authority must register these shares in the name of the Minister for Finance. I should prefer to see the State setting up a separate independent holding company into which these shares would be transferred and I should like to see it free from direct Ministerial or Departmental control, with its own independent board of people experienced in the handling of shares and so forth who might be permitted, with the concurrence of the Minister for Local Government, to sell these shares at a suitable date to Irish nationals. What I have in mind is that in the early stages of development of a foreign-owned industry the State would take a minor percentage of the capital, say 15, 20 or 25 per cent, and later on if the industry progressed the State would dispose of its shares to Irish nationals. This would be one way of ensuring that successful foreign industries had a proportion of their equity capital in Irish hands.

Section 46 makes provision for grants to secure reduction of factory rents on industrial estates. I should like to ask the Minister whether such grants will be payable to industrial estates provided by private enterprise, local authorities or harbour commissioners. There is also a provision that a member of the authority who may wish to contest an election shall not be eligible for membership on the authority. I think it might be desirable to have a member of a local authority as a member on the board of IDA and I regret that provision was inserted. However, I suppose it is now a fait accompli.

Much will depend on the membership of the board; the whole success of the IDA in its new form will depend on the nine men who will be charged with the encouragement of industrial development in every form and in providing quickly and cheaply the type of services an industrialist needs. The question of membership is vital and I trust the Minister will not mind my saying that I hope he will exercise an independent and critical mind in the selection of personnel on the board of the IDA. I have some qualms about the membership having regard to the sudden departure of Mr. J.J. Walsh from membership of the IDA and I am sure other Members of the House, and certainly many people outside, agree with me on this. I have had dealings with Mr. Walsh for a number of years and I feel my contribution to this debate would be incomplete without paying tribute to a very competent and dedicated man. I regret the Minister or whoever was responsible for the change did not see fit to allow Mr. Walsh at least to remain in his post as chairman until the reorganised authority was in operation for a few years.

Having said that I should like to deal more specifically with the membership question. I think the House will agree with me that membership should be widely representative and should include persons experienced in industrial promotion. It should also have some representation, if not directly from the universities, at least from somebody competent to contribute on technological and technical matters, because this is most essential. The trade unions will obviously have to be represented. The regional bodies will also have to be tied up with the IDA. The mid-west comes to mind first but there should be some representatives per se of the regional organisations to tie them up even closer with the IDA.

Transport, shipping and agriculture obviously should be represented. I noticed in reading the Dáil debate that there was reference to whether the members should be whole-time or part-time. Obviously the Chairman must be whole-time—nobody will cavil at that. The present board of five are persons transferred from the civil service and if the IDA is going to succeed in its task, which will be a heavy one in view of developments and particularly the accession of this country to the Common Market, the responsibilities of the IDA are going to be very heavy and it should not be a body for political appointments in any form. I do not wish to be offensive in any way whatsoever but there is definitely no place for politics on this board. I express an opinion that the Minister will be independent and not be influenced by considerations other than the best men for the job. I suggest that if there are to be nine members, five of these should be full-time members of the board with four part-time members. Of course, this is only a personal opinion and the Minister may have very good reasons for having a different set-up. If so, he will probably tell us the reasons when he is replying.

Towards the end of the Bill I notice a reference to a quorum of three. As far as I can remember, the way it was put was that three members will be empowered to act. A quorum of three would mean in effect that two people out of nine could possibly decide on the location or the desirability of giving grants or otherwise to a very important industry in the country. Perhaps I am wrong in my interpretation but it is my opinion that a quorum should consist of at least one more than 50 per cent of the total membership because in view of what the Minister said when talking on the imposition of duties, one of the decisions that they will have to take will be in regard to regional industrial undertakings. I would be quite dissatisfied to leave the decision in the hands of two men out of three.

I should like to know why the consent of the Minister for Finance is necessary for the appointment of members to the board of the IDA. I am sure I can speak for every Member of the House when I say that each of us would be satisfied to leave the appointment of members entirely in the hands of the Minister for Industry and Commerce. There may be reasons for having the consent of the Minister for Finance because of possible connections with the financial reward of the members, but it is my opinion that the actual appointments should be made by the Minister for Industry and Commerce. I would be much happier if he could make these appointments of his own volition and without having to consult with the Minister for Finance. I do not mean that in any personal sense but this in a very real sense will be his baby and it will be a very lusty baby and we hope a very successful one.

I am aware that the Minister is anxious to get the Bill through the House and I share his anxiety in that regard. It is most important that we start the New Year with the IDA firmly set up and I would like to express my personal good wishes for their future. The merger between the existing IDA and An Foras Tionscal is a sensible one. Some years ago when An Foras Tionscal was being set up I took the view that it was an unnecessary division or responsibility but I hope it will be possible for the Minister at some future date to consider adding to the responsibilities of the IDA some of the services which I mentioned because they are so closely allied to the work which the IDA will be doing.

The Minister has a good deal more experience than I in dealing with industrialists but in this day and age when one is dealing with industrialists in particular one finds that they like to go to the one source for almost every service. One might say this about present-day shopping where the housewife likes to buy everything under the one roof in the shopping centre. That philosophy is equally applicable in regard to industrial development.

I hope the Minister is bringing into effect a very successful body subject to what I have said in regard to the members. The Minister is acting very properly in his efforts to provide a full service to industrialists. I do not know to what extent the Minister has taken our entry into the EEC into consideration when framing the terms of the IDA. I hope he was influenced to a great extent by this very likely eventuality but if he was not he should change his ideas.

This authority offers this country a very good opportunity of sharing in the challenge of the Common Market but when we are talking about the Common Market, and its great potentiality, we must remember that we are to have a market of upwards of 300 million people and we must remember also that we are opening up our small market with our three million people to the continental giants and it is obvious that unless we trim off the fat from our industrial undertakings not only will we be unfit to complete in the Common Market but we will leave ourselves open to severe and deadly competition with the industrialists on the continent.

I wish the IDA every success and I congratulate the Minister in bringing forward this Bill. I endorse his request to get it through quickly so that it can be put into effect in the New Year.

Mr. Honan

At the outset of Senator Russell's contribution he told us that he would not take very long in his deliberations. All of us have heard the Minister's speech and I consider that it is almost self-explanatory. I do not wish to become involved in any kind of tussle with Senator Russell but there are one or two points to which I should like to refer. When Senator Russell referred to section 6 concerning the designated areas he suggested that the grants should be levelled up for all areas and irrespective of whether——

Mr. Colley

What he said was that they should be equalled, but maybe he meant levelled down.

Mr. Reynolds

Even on this side of the House we would not be in agreement with him on that.

Mr. Honan

It is only fair to say with regard to the western areas that these grants were brought in because of the complete failure on behalf of new industrial promoters to attract industries to the west unless some special concession were given to them.

Mr. Reynolds

Hear, hear.

Mr. Honan

It has been proved that even with these special concessions it is still almost impossible to attract the kind of industry that everyone would like to see into the western and other sparsely populated areas because the advantages in the build-up centres outweigh the value of the grants and are more attractive to prospective industrialists. I want to put on record, in case Senator Russell is thinking that in this famous council they have in Limerick they will initiate a programme to level out the grants that are applicable to the designated part of West Clare, that we will not see eye to eye with him on that one.

In his second point, he referred briefly to the question of whether one talks about development areas or development centres. I have felt the groundswell on this one. When one talks about development centres apparently the idea is that one builds up a centre and brings everybody in there and when there are too many one tries to push them out again, back to where they came from.

Mr. Russell

Where did the Senator get that theory?

Mr. Honan

The Clare County Council, our urban council, Limerick County Council, Limerick Harbour Board and the mid-Western Tourist Development Association spent a considerable amount of money in employing consultants to give us a forecast of economic development within our region. That cost a sizable amount of money. Having got this thing down on paper and all these reports submitted to us everybody closed the book and then they decided they would require new designations. The designations were laid down in the Litchfield Report and we want to see these implemented.

No Bill which is ever likely to be brought in to cover a wide range of projections and hopefulness is likely to succeed completely but everybody will agree that the Minister has made a very sincere effort to include in this Bill the machinery that he sees as being necessary to promote industrial development and to ease out some of the abrasive characters enshrined in trying to promote industry at the moment. He is to be commended for this. I know he has put a lot of effort into seeing how this can be done.

I should like to join with Senator Russell in recommending the Bill to the House.

Mr. McGlinchey

I have listened with interest to the argument between Senator Russell from the booming city of Limerick and Senator Honan from the booming county of Clare. Although they may differ in some of their opinions, I think it would be agreed that both areas have done extremely well in recent years.

If any Member of this House were to drive from Dublin northwards he would cross the border at Monaghan and when he reached the end of the six counties he might discover to his surprise that there is still a part of Ireland left in the Republic. This fact may not be known to many, particularly to the IDA.

I live in a town similar in size to Senator Honan's town. I remember Whit Monday 1952. It was a red letter day in my town because on that day a factory opened which gave employment to 15 to 20 men. That was 17 years ago. Since then no factory has been built giving employment to men in that town. If the Minister for Industry and Commerce were to announce tonight the establishment of a factory in Donegal to employ 15 or 20 men I would say that there would be bonfires and torchlight processions that could not be equalled by any political parade and we are pretty good at that too.

Mr. Colley

They were nearly closing two factories in Donegal a week ago.

Mr. Reynolds

I would say the IDA knew about that.

Mr. McGlinchey

It certainly was not the IDA that was closing the factories.

Mr. Reynolds

No, they were trying to keep them open.

Mr. McGlinchey

Yes, I think if the reasons were given...however, I shall not go into that. I am dealing with one section of Donegal.

Mr. Colley

Ah, now!

Mr. McGlinchey

I am dealing with the largest town in Donegal. Donegal is 150 miles from Dublin. Kerry and Clare are about the same distance.

Mr. Honan

Clare is 150. Kerry is probably 200.

Mr. McGlinchey

This will strengthen my argument. I think we will all agree that both these counties have progressed much better, as far as the establishment of industry is concerned, than Donegal. We should consider for a moment just what is wrong. I realise that a discussion on partition would be irrelevant in this debate but on the Appropriation Bill I pointed out that one of the terms of reference of the boundary commission was that the geographic and economic conditions were not taken into consideration when the boundary was created and that my county of Donegal suffered as a result.

If we were to look for an explanation as to why Donegal has not made the progress that it should under the legislation that has been provided I think we could pin it to this: Donegal county has suffered economically as a result of the partition of Ireland. For that reason I feel that my county is entitled to be made a special case. It is cut off from the rest of Ireland by the six counties under the Stormont Regime. It is in the national interest that it should be made a special case.

We read the statements made across the border, many of them grossly exaggerated, comparing the standard of living in the six counties with the standard of living here. We hear of the unemployment comparisons made. We should remember that when politicians across the border are quoting like this they are not quoting County Louth, County Monaghan or County Dublin. They are certainly not quoting County Clare or County Limerick. They are quoting County Donegal. To attempt to prove that these statements are untrue, no one in any part of Ireland will criticise the Minister for Industry and Commerce if he were to decide that because of the partition of Ireland, because of the fact that Donegal is cut off from the rest, it is entitled to be made a special case. The Stormont Regime receives by way of subsidy something like £130,000,000 from the British Government. If the British Government can see their way to spend £130,000,000 in six of Ulster's counties we would not criticise the Dublin Government if they could see their way to spend a few million pounds in the three remaining counties.

I would ask the Minister to consider that before Donegal can benefit from the grants given, even the present grants under this Act, an airport must be established in our county. An airport is a must for Donegal if the county is to benefit economically and industrially. Some years ago the Glasgow-Derry boat was taken off and as a result my county suffered considerably.

I notice that in the Dáil the then Minister for Transport and Power refused to negotiate to have Irish Shipping Limited have a boat from Glasgow to the port of Rathmullen in County Donegal, which is one of the deepest ports in the country, deeper than Cobh, on the grounds that it would not be economic to do so. I feel the economics of the operation should not be taken into consideration. I appeal to the Minister to realise there are more Donegal people working in Camden Town, Birmingham and Manchester than there are in my native county. While we wish Waterford, Cork, Limerick, Clare and Galway well, we also express the hope that some extra encouragement would be given to industrialists to come to the northern part of the country.

Mr. Reynolds

I want to be very brief on this because I do not want to detain the House. There are just a few points I should like to make. When Senator McGlinchey started to leave Dublin and get to Donegal one would have thought, listening to some of his statements about Donegal people, that he would have gone to Donegal through the whole Republic of Ireland and travelled through West Cavan right through into north Leitrim and then into Donegal. He certainly would have got a very good view of west Cavan and north Leitrim, an area mind you for which there has not been much done as far as the industrial world is concerned. Then if someone travelled into south Leitrim he would find an area which is improving very much in the industrial world with the advantage of the grants which it has got from the small industries section.

I feel obliged to mention here that in the town I live in there were six new industries opened in the past 12 months, which give employment to 60 people at the moment and will give employment to 100 people in the next two years. I feel obliged to say that that situation was brought about through the efforts of the local people with the help they receive from the small industries section here in Dublin. I often wonder if county development teams are accepted sufficiently by the Minister's Department. The county development teams, for the information of Senators who probably do not live in the areas they operate in, are made up of the county manager, the county engineer, the chief agricultural officer, the CEO of the vocational committee and the chairman of the county council. I have experience of being a member of a county development team for the past three or four years and I certainly think county development teams are putting a tremendous amount of work into each and every one of their own counties to try to get industries for those counties.

Quite recently at a regional meeting of county development teams in Athlone it was suggested that the Department of Industry and Commerce should give them a limited amount of money that they could spend each year because if they want to get money from the Department it is a rather slow process. I could not attend the meeting but I think the figure mentioned was in the region of £2,000. They had in mind giving grants to small development groups in every town in their respective counties, which would enable them to advertise in various papers and they would pay a percentage of the cost. They did not intend to pay the full percentage as the local people would have to make a contribution of more than 50 per cent. Those grants would help them to purchase brochures so that they could send them abroad. I would ask the Minister to have a serious look at this matter when it comes to his Department.

As I said at the outset, county development teams are made up of responsible people and they certainly would not be prepared to spend public money in a wrong direction. I am sure they would be quite prepared to submit, prior to the spending of the money, what it was to be spent on or even when it is spent let the Department know what it was spent on.

We see on page 3 of the Minister's speech reference to the development of a regional office. When one reads the Buchanan Report one can become weary of regional offices. People who find themselves in a regional office just think of the town they are living in. It is clearly mentioned in the Buchanan Report that Sligo town should be a growth centre and that it would serve an area of north and south Leitrim. If one looks at that one realises that people from south Leitrim would be asked to travel as far as 50 and 60 miles to work every morning and evening and I do not think that is humanly possible.

If we are serious about supplementing the income of the small farmers, which has been stated by the Minister for Lands in reply to his debate, it can only be done by giving employment to them within a reasonable distance of their holdings. If those people are compelled to travel this distance night and morning the day is over when they get home and they are not able to do things they would like to do, such as milking. For that reason I think the industries will have to be established in all those small towns, such as Senator McGlinchey has mentioned. That is the only way the income of those people can be supplemented.

Mrs. Farrell

We have here before us a very important Bill which deals in a large measure with the general economic development of our country. I am sorry we have not more time to debate this Bill but we spent such a lot of time talking about a tribunal earlier on that we are short of time now. I would like to compliment the Minister in his approach to this Bill and in his own dealings with people who approach him about industries. He is tireless in his efforts to create a situation in the country where full employment will be the order of the day. While I welcome this Bill there are a few points I would like to make on it. It is proposed under this Bill to create regions for economic development. Regionalisation is a good idea and it could and should be able to supply all the dynamism that is necessary for development in the underdeveloped areas. I suppose hereinafter we have to call them the designated areas.

We have heard a lot of talk about the Buchanan Report and indeed some of it is not complimentary but in the Buchanan Report there are some charts and figures where we have populationwise the north west part of the country which could be classed as a disaster area. This is part of the region about which Senator McGlinchey spoke a very short time ago. I would like to feel that something very special would be done for this region.

The whole western region suffers because it is far from Dublin and because Dublin has grown so much more quickly. Part of the reason that industry cannot develop in the West, we are sometimes told, is transport costs. There is talk sometimes of subsidising transport for the West of Ireland. I think that this would be a very difficult thing to do, and that perhaps if we thought along the lines that with the ports we have in the West of Ireland that could and should be developed we would be doing an immense amount of good for the area as a whole. Senator McGlinchey will excuse me for mentioning Galway, but Galway after all was a very big and important port in its day and now with the development of an industrial estate there I think that Galway should be for shipping what Shannon Free Airport is for air freight.

Might I mention as an aside that down in Cork a lot of people are not very happy about having a nice big smelting project going in there. Perhaps the Minister might be able to say something to the promoters to tell them to turn their eyes towards the West.

Mr. Russell

That is going to Shannon.

Mrs. Farrell

We are told that we are now going to have regional officers and I think that Senator Russell seemed to think that the Minister was only now making up his mind about the regional officers, but there was an advertisement in the papers some time ago for the regional officers and areas were set out for the different regions. I would hope that when these men, if they are going to be appointed, are appointed perhaps a little change of mind might come about in the regions as they are now drawn, because Roscommon is in with Offaly and Laois, and for the life of me I cannot see what we have in common with those counties. If nothing else they are on the other side of the Shannon and we in the West stay on our own side of the Shannon most of the time. Perhaps this is not a good way to be but our situation there is peculiar to that region and it does not have much in common with those counties.

I really am very uncertain as to whether I approve of these regional officers and the regional offices as they are at present proposed. We have a very good county development team doing a very good job of work, and if the regional officer is coming in to help to implement those county development teams and give this thing a further impetus I would be very delighted, but I wonder if those people are going to be set up in offices eventually with budgets of their own something like the Shannon Free Development Company. I know that this is the type of regional development we all like to see but I hope that the Minister would be able to set our minds at rest on what is envisaged in relation to the duties of these officers.

I would like to refer to the provisions relating to grants under section 34 because I think that as it stands at the moment it could give a grant of up to 45 per cent outside the designated areas in certain cases. I would like, in common with every Deputy and Senator from the West, to see a greater differentiation in grant allowances between the designated and non-designated areas in the country, because we must have great incentives to bring people to the designated areas, and I would join here with Senator Russell in saying that I think it might be no harm if there was a change of mind about giving grants to existing industries who because they must rebuild their plants to become efficient and streamline their operations and enlarge their premises would be regarded for this purpose as a new industry, because in many cases the capital cost which these people are involved in would run into as much as a new industry and I think, though I am open to correction at the moment, that all these people could get is an adaptation grant. I know that there is a question of money in this, but something could be done about this. It is a good thing, our industrialists are being told that they must go into the Common Market and they must get ready for this. I hope that the Minister will in his wisdom see fit to do something about helping existing firms.

There should be, too, I think, an incentive given to firms in Dublin to move to the West. Again I am open to correction on this but I think that they would not get any great concessions by way of grant to move to the West. They would just get the 25 per cent grant. I would like to say that the small industries have done a lot for the West of Ireland. It was a very wonderful scheme when it was envisaged first, but it would appear now that there are such a lot of industries being excluded from grants and that it is going to defeat its purpose. I have always held that if there is a demand in any area or region for a particular product that the person setting up that industry or producing that product should get some assistance. I know that now the overall national picture is taken into consideration and grants are given or withheld on the information that is available as to what the supply or the capability to supply the needs of the country are. I would like to mention joinery as a typical example of this. There are no grants now for small industries like this yet you have what appears to be a great demand for and a continuing shortage in certain areas of ordinary joinery products.

I would like now to refer to section 34 again, dealing with further grants by the Authority, and unlike many of my fellow Senators here I cannot prefix my statements by saying "speaking as a lawyer". I can only speak as a lay-woman and I would think that there are in subsection (3) certain specifications for further grants enumerated. It would appear on the reading of this that three of the four specifications must be present before a full grant will be given. I would like to ask the Minister should not the word "or" not be in subsection (a) and subsection (b) as well as subsection (c).

There is also section 40 which deals with research and development. Development is mentioned in (1) and (2) but after that the word "development" is missing. Perhaps the Minister will clarify this for us in his reply.

Also I should like to say that I hope this will be the dawn of a new era for the Industrial Development Authority and I wish them well. When he spoke about the setting up of the board, Senator Russell blandly assumed that the nine board members would be men. I would remind the House that there is another sex and that they are not completely brainless and might have something to offer to the board.

Mr. Russell

I have been married to one for 30 years.

Mr. O'Higgins

I do not want to worry the House on this. I may say that I have very considerable sympathy with Senator Farrell on what she has said with regard to the time available to us. Senator Russell on behalf of the Fine Gael Party has already engaged to the Minister that we are prepared to respond to the wishes expressed by the Minister to give a speedy passage to this Bill in the Seanad, but I do think that it is unfortunate that the Seanad should once more be put in the position of having to consider a measure such as this, a Bill of quite substantial importance to the industrial development of this country, in a matter of some hours.

The Minister should not take these remarks as being critical of him. I am aware that he brought this Bill to the Seanad as soon as it came out of the Dáil but it is unfortunate that the Seanad find themselves in a position that with a Bill of 46 sections and two Schedules we are not being given an opportunity of considering some amendments which I think might be very worthwhile asking the Minister to consider. Senator Russell pointed out one matter in relation to the Second Schedule. So far as I can see, he was correct. It means that while the board will consist of nine people it may act with any three of those members. Unless I am entirely mistaken, and Senator Russell is also mistaken in his interpretation of it, that seems to indicate that while having a board of nine, in effect, a situation could arise where decisions of very considerable importance would have to be taken by two members of the board only. If they are authorised to act by any three of those members and if a meeting consists of only three members then presumably the decision can be taken by the majority vote of those three.

If that interpretation is correct, that is a matter in which it would have been well worth the while of the Seanad to discuss and consider an amendment on the lines indicated by Senator Russell so that the majority, that is, one over 50 per cent, would be required. Perhaps there would be difficulties about this but at least it might be worth considering.

Senator Mrs. Farrell referred to a point in connection with section 34. It may be that it is intended to be exactly as it is, namely, that subsection (3) (a), (b) and (c) are lumped together and paragraph 4 is an alternative provision to the other three taken together. There again it might have been worthwhile for the Seanad to consider whether or not each of these paragraphs might not have been considered as sufficient standing independently rather than that we should have a situation where three of them go together and the fourth is a counterbalance to that. I know that the Seanad wish to facilitate not merely the Minister in this, but also those who are awaiting grants or facilities which would be available from the IDA under this Bill. While wishing to facilitate those interests the Seanad must not be hamstrung in the consideration of this measure.

The Minister referred to the Bill as being designed to integrate and to bring them up to date in the light of experience. I do not want to quarrel with that description of the Bill. The Minister went on to refer to the fact that this was an amending Bill and does not contain within itself all the provisions relating to the IDA. I do not quarrel with the accuracy of what the Minister says but I would like to suggest to him that he might take an opportunity to try and codify the legislation in relation to the IDA at some stage. I know the importance of this from the point of view of a lawyer, as I am sure the Minister himself will appreciate, but it is not merely a matter of convenience to lawyers. It is a matter of convenience to all who, for one reason or another, turn to the IDA for assistance by way of grant or general promotional activities in development. A measure such as I envisage would not be a controversial one. It might consume some time in the Minister's Department to undertake the work, but it would be worth doing. I would recommend it to the Minister.

The Minister mentions that the promotional work of the IDA has been effective. I do not want to indulge in politics in this but it is good to see the Minister or any Minister of the present Government Party acknowledging so whole-heartedly the work of the IDA. It seemed at one time when the authority was being formed that it had not the best wishes of the Minister's Party. I am glad to say that the Minister has put himself on record so generously with regard to it. In the second page of his speech the Minister referred to the value of industrial exports as being now six times that of ten years ago. That seems to be an achievement.

The Minister will agree that we must really look at the figures when we think in terms of money values. Money values are approximately one-half of what they were ten years ago so that the actual value of the industrial exports is about three times what it was ten years ago. I am not entirely happy about the practice shown by the breakdown of the projects mentioned by the Minister in the course of his opening speech. At page 2 he mentions that the extent of the international scale on which this operation is working can be seen in a breakdown of the projects he has mentioned plus others "currently under negotiation". The Minister gives the breakdown as being 25 per cent British, 20 per cent Irish, 20 per cent American, 15 per cent German, and also mentions that there are others from different countries. The Minister is, in fact, saying that in all these projects the Irish interest is limited to 20 per cent. I agree with Senator Russell's remarks regarding the injection here of foreign capital and the conditions which he laid down for welcoming them. It is just a little disturbing to find that of the projects described or mentioned by the Minister only 20 per cent are Irish. It is worth bearing that figure in mind. Many people will feel that while we may welcome and indeed we must welcome the injection of foreign capital and endeavour by incentives of one sort or another to attract foreign capital in order to further industrial development, at the same time I have the feeling that many people in this country would like to see the Irish arm of that effort strengthened, vis-a-vis foreign injection.

On the question of the setting up of regional offices by the IDA, I can appreciate there may be two views as to the value of this. Generally speaking, my own view would come down fairly heavily in favour of the establishment of regional offices, particularly if the idea and the establishment of the regional offices is to have them manned by officers who fulfil a twofold function: first, that they will be able to make available from their own knowledge and their own exploration in the particular region information regarding the region itself, and secondly that they would be able to make this information readily available if there are local inquiries regarding industry. It would be a pity if the situation developed that because a regional office was in a particular town it was assumed that it was the town which had sole importance in the region and was accepted as a kind of sinecure for all forms of industrial activity rather than being spread and spaced out more evenly throughout the region.

I am puzzled about a reference made by the Minister on page 3 of his report when he said:

In contrast to the small scale of home-based industry, we now have under consideration a number of large industrial projects which have both substantial employment and growth potential.

What is the significance of the phrase "home-based industry"? It would seem to imply that the Minister or the IDA were considering the establishment of industries that were not home-based, which would be based outside this country. I do not know whether the Minister intended that or not and I simply put it down as a query.

I should like to ask the Minister for some information on his statement:

The powers being conferred on the Authority to provide factories for purchase or leasing will also enhance the range and suitability of the package of incentives.

Am I correct in thinking that the power which the Minister refers to is the power given to the authority under section 15 of the Bill? I am not criticising or objecting that the power should be given to the IDA, although this is a matter on which there might be two points of view. If the IDA are being put in a position where they will either erect or purchase industrial premises of one sort or another and where they will go into the market either as landlords leasing out the premises or into the property market selling off their premises as they become vacant, there will be a number of people who might object to this kind of activity. However I shall not go into this in more detail at the moment. I shall merely ask the Minister if the powers he referred to in the second paragraph of page 4 of his statement are the powers contained in section 15 of the Bill? It does not seem to me that this is made entirely clear by section 15 and I think many people reading that section might be surprised that this section gives the power of purchase, leasing and so on to the IDA.

Mícheál Cranitch

Is mian liom cúpla focal a rá ar an mBille seo. What I have to say will not be an extension of what has been said already; it will hardly be even parallel to what has been said but rather will it be taken to be complementary to what has already been said here. We are now in the festive season of Christmas, the buying season as we all know in every sense of the word. It is alarming to find many shops completely full of foreign-made goods, displayed to the best advantage with the intention of attracting as many customers as possible. Unfortunately a very large number of customers come along, buy these goods and do not bother to see whether they are made at home or abroad. In my first lesson at the school of nationality I was given three precepts: be Irish, speak Irish, buy Irish, and perhaps for a moment we will look at the third dictum.

It behoves us as patriotic Irishmen, and especially as Members of the Oireachtas, to do everything possible to ensure that Irish-made goods are displayed to the best advantage in our shops, stores, markets, and supermarkets and to encourage the public to purchase these goods in preference to the foreign-made product. This is patriotic duty of the highest order. Every penny we spend on an article made here will find its way into the pocket of the bread-winner of an Irish family. There may have been an excuse not to buy Irish-made articles in years gone by because unfortunately it was true that quite a number of articles were of inferior quality or were too costly but that day is now past and Irish-made goods, textiles, footwear, canned foods et cetera are comparable with, if not better than, similar products from abroad. Therefore there is no excuse not to buy Irish-made goods.

As I have already said, the shops seem to be full of foreign-made goods —Christmas cards and presents of all kinds—and I suggest now to everyone in this House that we must be firm when we go to purchase goods, we must give our views clearly and insist on buying the home-made product even at the risk of being regarded as tedious, over-bearing or even superpatriotic. The greatest danger any country can face is, in my opinion, not poverty but opulence and in this era of ever-increasing prosperity we are inclined to forget ourselves and to regard the purchasing of the foreign-made articles as an indication of our superior social status.

Some time ago I was speaking to a widow who has a small public house and grocery business right in the heart of a rural community. She told me that of the farmers and farmers' sons who come in at night to watch television and have a drink, 75 or 85 per cent of them when calling for whiskey, ask for Scotch. That is alarming when one realises that we have such fine whiskey in Ireland with the finest distilled at Cork—that is not a commercial. I was also surprised to hear this considering that the half glass of Scotch probably costs two pence or three pence more than Irish. It is an alarming tendency and we, as Irishmen and as Members of the Oireachtas, should dedicate ourselves by example and precept to counteracting that tendency.

Mr. O'Higgins

By abolishing the Free Trade Area Agreement.

Mícheál Cranitch

To turn now to the question of small industries, I cannot emphasise too strongly the importance of the small industry in Irish life, the industry which requires a comparatively small capital outlay but a high degree of skill. Switzerland has shown the world what can be done in this field. That inland country having no iron or coal mines and having to bring steel and fuel long distances— they have electric power and plenty of it—concentrated not on heavy machinery but on making watches, surgical instruments and things that required an extremely high degree of skill.

I know the Minister is very sympathetic to this idea and has given every possible encouragement to it and with the emphasis on our education system moving from the purely academic and professional status to the more practical manifestation of intelligence we look forward to a greater desire among our young people for the acquiring of skills in woodwork, metal work and plastics. The basic objective in industrial development should be the establishment of one or more industries in every small town, village and parish. The large centres of population are able to fend for themselves but what a change it would be if we had a good thriving industry in every parish in our country especially in these areas where we have the great problem of the small and unproductive farm.

There is one section of the Bill which I commend most heartily and that is section 16 which reads:

The Authority may provide and arrange the provision of housing intended for occupation by employees in industry and, for this purpose, may buy, lease or sell lands, subsidise rents and do everything necessary or ancillary to such provision.

I regard it as a basic principle that people should live where they earn their living. In that way they will give back to a district and its people at least part of what the district has given them. They will have a greater pride in the achievement of that community and their lives will be richer and most rewarded.

It is very heartening to read the Minister's speech and, in particular, page 2 where he says with regard to new projects that these will give rise to almost 10,000 new jobs at the end of their first year and an estimated 17,800 jobs ultimately. I notice that the Minister says he does not take personal or political credit for those events which, he says, are due to the efforts, co-operation and adaptability of the whole Irish people and in particular to the improvement in technical and managerial skills in industry and to increased knowledge of design and maketing. Although the Minister says that in all humility our thanks are due to him for his untiring efforts to promote industrial activity. I notice that at the end of page 2 the Minister says:

In the first half of this year, 119 small industry projects were approved for grants; these projects are estimated to give employment to 700 persons ultimately.

That is most encouraging and we offer our congratulations to the Minister and everybody associated with this excellent work.

Anois, an focal deiridh. Ba dheas an leagan Gaeilge d'ainm an údaráis nua a bheith i mbéal an phobail i gcónaí. Faoi mar atá, ní bheidh acu ach an IDA nó an Industrial Development Authority. Glacann an pobal go fonnmhar leis an leagan Gaeilge d'ainm an údaráis ar bith ach é chur ós a gcomhair. Luaim mar shampla CIE, nó Córas Iompair Éireann.

Tá súil agam go ndéanfaidh an tAire gach iarracht monarchana a bhunú ins na Gaeltachtaí. Is é is lú is gann dúinn ná deis a thabhairt do mhuintir na gceantar sin a slí bheatha a bhaint amach ina ndúthaí féin. Tá fhios agam go bhfuil an-shuim ag an Aire sa Ghaeltacht agus, mar sin, tá fhios agam nach ndéanfaidh sé aon dá leath dá dhícheall. Tréaslaím dó. Gura fada buan é.

Mr. Keery

I will endeavour to say what I have to say in two minutes flat. I just want to touch on a few points and I shall make them relevant to the IDA and to the Bill.

My first point is that whenever I am speaking at a meeting about incentives for development in this country at least one member of the public gets up and says: "Oh, but services like the IDA are not readily available to Irish people and Irish enterprise and anyway in dealing with bodies like this we find too much Civil Service red tape and so on". This is a commonly-held attitude. I welcome this Bill. I feel that many of its arrangements are intended to break down this image. It is well worth stressing on this occasion that the IDA, as I understand it, is there to serve Irish people and Irish enterprise equally with its job of attracting foreign industry and also that from now on it will be run on a much more commercial and enterprising basis than heretofore and much of the red tape is being got rid of.

With regard to sections 11 and 12 of the Bill involving the implementation of national objectives for regional development it seems to me that one of the problems at the moment is that nobody is completely clear as to what our national objectives for regional development are. It seems to me that this underlies the urgent need for decisions on Buchanan, for announcements of decisions on regional development, because there are many alternative strategies and apart from the IDA being involved in it bodies like CIE are involved as well.

I welcome the development of regional offices but I think that regional organisation to be effective should follow on the lines of the suggestion which I very much approve of in an addendum to the Devlin Report by T.J. Barrington, Director of the Institute of Public Administration, whose comments about regionalisation are at page 483, paragraph 19, of the Devlin Report and I suggest that they are well worth studying.

I particularly welcome the grants for research and development. I wonder if the Minister could clarify whether it would be possible for an individual enterprise to sponsor industrial research completely outside the firm, research to be carried out in any one of our universities, whether a firm could get a grant for research to be entirely carried out at a university.

Finally, I should like to make one query. Section 19 on page 7 seems an unusual sort of section. It reads:

The Authority may accept a gift of money, land or other property on such trusts and conditions as may be specified by the donor.

I should like to know what is involved here? If the hope is to attract funds from the Henry Ford or Andrew Carnegie of the day I hope it will be successful. Even if we had an individual philanthropist who wanted to make a Christmas present to the IDA, would it be possible to make such a public-spirited gesture under this section?

Minister for Industry and Commerce (Mr. Colley)

I should like to express my appreciation to the House for the co-operation it has shown and for the very constructive comments which we have had on the Bill. I shall endeavour to deal as quickly as I can with as many of the points raised as I can.

Senator Russell made reference to failures. He mentioned some notable failures in that connection. The House should know that to date our gross failure rate is approximately 10 per cent but if account is taken of new industries which have started up in the premises of those that went wrong we have what might be called a net failure rate of 4 per cent. This, as far as we can ascertain, is quite low by international standards though other countries are not quite so open about their failures as we are.

Another significant factor about those failures is that 60 per cent of those which have occurred relate to projects approved before 1960. This is a reflection of a number of things—the growing expertise and sophistication in the IDA in assessing projects, the increasingly capital intensive nature of the projects which means that the promoters are much less likely to pull out, and some other aspects. We must, of course, always accept that in the kind of programme that we are pursuing the risk of failure is there at all times and we must accept that risk. If we do not accept that, our programme will not bring in one single industry.

With regard to the question of co-operation and co-ordination with the Institute for Industrial Research and Standards, Córas Tráchtála and the IRB of my own Department, there is in fact very close co-operation and co-ordination at the moment and they are taking further steps to make that even closer. Of course, the relationship with An Chomhairle Oiliúna must be extremely close and will become even closer in future. With the development of industry the importance of training will grow and I certainly expect the necessity for this kind of very close co-operation and co-ordination.

I do not think I should get involved in the argument between Senator Russell and Senator Honan about the levelling up or levelling down——

Mr. O'Higgins

Or levelling out.

Mr. Colley

——of the level of grants in the mid-western region except to say that while I am aware of a number of arguments I would be slow to agree to any change which could have the effect of reducing the advantages for the western regions.

Mr. Russell

That was not my intention.

Mr. Colley

Well I think to increase the level of grants in the non-western regions would have that effect.

Mr. Russell

I was talking about the mid-western region. I think that the middle of the country and the west should be higher but related specifically to the designated areas, in other words that the centre of the country and the west should have higher grants than Dublin and the east. The only levelling up would be within the designated area. That was what I meant.

Mr. Colley

Yes, I see what the Senator meant but in practice this is what happens administratively. There are certain projects which will not get a grant at all in the Dublin region. There are others which if they qualify for a grant in the Dublin region they will get a low one whereas in other parts of the country they will get a much more substantial one.

Senator Farrell made the point, but I had better make it myself anyway, that it was not as a result of the debate in Dáil Éireann on this Bill that I accepted firmly the idea of regional development, regional offices or their evolution. In fact I would draw the attention of the House to the statement which was issued by the Government quite a few months ago in relation to the Buchanan Report. That statement specified each of the nine regions into which the country is being divided for industrial development purposes and specified that regional development offices would be opened there and indicated, what I want to make clear, that there were special reasons why we were able to do what we did in the mid-west region. We had the existence of the Shannon Free Airport Development Company and the expertise that it had built up over the years. In addition, and very important, we had the Lichfield Report on the region. This meant we were able to go ahead there.

I want to make it clear that what I envisage is that some similar kind of structure will evolve in each of the other eight regions. Obviously this cannot be done quickly, certainly not overnight. The creation of eight other SFADCOs will not be an easy operation, but steps have been taken to provide the kind of information within each region that was available already under the Lichfield Report and the regional offices will, I hope, be opened and staffed within a matter of a few months in each of the regions.

I should perhaps, because a number of Senators referred to this, say something about what is intended, even from the beginning, as functions for the regional officers. As I have indicated, one of their first tasks will be to assist in the preparation of industrial plans for the region. It is also intended to give them these functions: (a) to increase very considerably the present ability to service external industrialists who wish to explore the possibilities for industrial development in this country; (b) to afford an improved basis for after-care services for new industries which is a very important thing in the stimulation of further development; (c) to assist in the expansion part of existing industry; (d) to enable better use to be made of the initiative and energy of local development groups; (e) to increase the effectiveness of the small industries programme within the region; (f) to explore the possibility for a greater degree of linkage between existing industries and between new industry and existing firms.

They will have functions in relation to industries throughout their region and will also discharge the present functions of the local estate management officers of An Foras Tionscal in relation to industrial estates. They will also represent the IDA on regional organisations, which are at present being instituted, and will work closely with the local authorities on the physical planning and development of each region. It is also expected, and hoped, that those regional offices and their staff will be a stimulant to existing Irish industries in their expansion and that they will provide more detailed information on the regions and on their development potential, that they will assist industrialists to formulate industrial projects, co-ordinate housing for industry with the requirements and the functions of other housing bodies, achieve liaison with the Department of Labour and An Chomhairle Oiliúna in relation to regional manpower availability and also have certain functions in relation to the building and maintenance of advance factories and increase in the local industrial linkage.

It will be clearly seen then from all of this that it is not intended that they will be some kind of a window dressing operation. They will have a major job to do and as I said I visualise they will evolve in each region into something on the lines of what we have now in the mid-western region or the Limerick, Clare and North Tipperary region.

A point was raised, I think by Senator O'Higgins, about the powers I had referred to in my speech. He asked if I was referring to the powers conferred in section 15 and the answer to that is "yes I was." I might perhaps point out that the powers of compulsory acquisition under section 15, (2) are not new. They were contained in fact in previous legislation. The only additional thing is that they are now being extended to cover the establishment of advanced factories and industrial estates. Heretofore they were available only in relation to the establishment of a specific industrial undertaking otherwise they are as they were before.

I do not wish to delay the House unduly about the relationship between the Shannon Free Airport Development Company and the IDA but broadly speaking the intention is that, subject to the exclusion of the actual industrial estate at Shannon, which is remaining as before under the control of SFADCO, within the whole of the region the responsibility of SFADCO would be for industrial promotion. Indeed the activities they have undertaken so far give a fair idea of what is intended.

They have drawn up a programme for the region. They are securing, I think successfully, assent in the region to the kind of priorities that seem to be necessary. They are indulging in a good deal of promotion. They will act as agents of the IDA within the region but their promotional activity abroad must be co-ordinated by the IDA themselves with that of the IDA and of other regions when this develops. The final decision on grants must rest with the IDA although in practice a certain amount of delegation from the IDA to the Shannon Free Airport Development Company is taking place but the ultimate decisions on grant-giving in the region will be retained by the IDA.

I would point out, in regard to the comments made on re-equipment grants for the designated areas, that in fact in this Bill we are stepping them up from 25 per cent to 35 per cent for the designated areas. I would also like to make it clear that this has been so for a very long time but a number of Senators referred to it. The treatment meted out to Irish firms on the one hand and foreign firms on the other is exactly the same where the circumstances are not the same. When an Irish firm is applying for a re-equipment grant it can get this automatically and with no question about scaling down the grant from the 25 per cent in the non-designated and now 35 per cent in the designated areas provided it meets the normal criteria and submits the evidence required.

However, in the case of new industry starting up, whether it is Irish or foreign, the criteria can be quite different. First of all, it will very often be insisted on that it export all or virtually all of its production. It has to face various difficulties about location, perhaps building the new factory and getting services. It has quite a number of other criteria applied to it. So, what I want to make clear is where the circumstances are the same Irish and foreign firms are treated exactly the same way but in most cases where you have applications from Irish firms the circumstances are different from those of foreign firms. I want to make it clear the position has been, still is, and will continue to be, where an Irish firm applies in respect of a new industry it gets the same treatment as foreign firms and in some respects it could be said it gets extra special treatment because it has certain facilities available to it that foreign firms do not have, but by and large it would be true to say it gets the same treatment.

In that connection I should like to comment further on the information I have given about the spread of new industries. I said that it was 25 per cent. This was related to the new ones —25 per cent American, 20 per cent Irish and so on. Of course the comment was made, which was fair enough, that it seems to be a very small percentage which was Irish, but I would remind the House that we are talking about new Irish projects and that in fact that 20 per cent represents a fairly substantial increase on what we have been having in recent years. You must take into account the fact that the bulk of our industry is of course Irish and Irish controlled and we are talking here about new projects. I may also say in that regard that the wide spread of it is one guarantee to us against undue dominance by any one foreign country in our industry.

The question was raised by Senator Russell also as to whether roads, rail sidings and so on are eligible within the term of fixed assets. The answer is that they are. All sorts of things including jetties and so on are eligible within the term of fixed assets provided that they are inside the perimeter of the factory. If they are outside then they are not so eligible, but of course the decision on whether a grant should be awarded in respect of expenditure on those items is a matter which has to be left to the Industrial Development Authority, which would have to decide each case on its merits, and they are certainly eligible for consideration provided they are within the perimeter of the factory.

With regard to the taking of equity shares in projects such as this, this is a new power. In the development of a number of projects coming in the promoters would not be prepared, I think, to offer shares to the State, but there are others coming from countries where they are more used to this idea and prepared to do so. The thinking behind this is not, of course, that we are going to have shares in all these new industrial projects, but when we have perhaps big projects where the State is giving a very substantial grant and where the prospects for the industry look very promising—as indeed they would have to if we were giving a very substantial grant—one method of ensuring that the State gets some return for its investment, some cash return, is to invest in portion of the equity. The fact that these shares would be vested in the Minister for Finance is merely a convenient way of having them held by him as a trustee for the State. This is normal practice. The advice available in regard to such shares is of course quite extensive, particularly from the Industrial Credit Company. I should perhaps say that I would visualise that providing the companies concerned had agreed to this condition at the beginning it would be possible for the State at what was considered to be an appropriate time to offer these shares in the equity to investors in the Irish market, and the time when that should be done would I think be related to the return to the State on the investment. I would certainly, and have always, visualised this as a possibility.

Mr. O'Higgins

That might in fact throw them open for foreign purchase.

Mr. Colley

I am conscious of this difficulty. With regard to the members of the board I would like to say that there would be certain people appointed to this board in representative capacities to ensure very close co-ordination and so on, but apart from those I do not intend to have people on this board in a representational capacity. I think that this can be fatal to the working of the board. What I want to do is, apart from those particular appointments, to appoint the best people that I can get, the best qualified to do the job here and I hope of such calibre and standing that it would be impossible to have any allegations urged against them of leaning one way or another in the exercise of their activities.

Although the Bill does not specify clearly whether they are to be full-time or part-time, or some of them full-time and some part-time, for the information of the House I should say that apart from the recently appointed chairman, who I visualised would be managing director hereafter, I visualise all the other members of the board as being part-time. The functions of the board would be the laying down of policy and its review from time to time and the assessment of the performance of the Industrial Development Authority in reaching targets which would be set down for it from time to time. It is virtually impossible for full-time members of the board, or of any board, to perform this kind of function. On the other hand there are considerable advantages in having full-time people available, as we have had heretofore, and I am trying to achieve this by utilising one of the provisions in the schedule to have the board delegate certain powers to the people who are at present full-time members of the board. I think that it should be possible to have the best of both worlds this way. In real life one finds difficulties both ways, but we will try it anyway, and this is what I have in mind.

With regard to the quorum, I agree that it looks extremely small. I would, however, suggest to the House that in practice the practical quorum will be considerably higher, but one can visualise situations in which an urgent decision on a very vital matter might be required and this is the reason that the quorum is relatively quite low, but as I say, in practical terms I do not visualise a quorum of three operating at all. In other words I do not see meetings taking place with only three persons unless in an emergency situation of the kind that I have suggested. Even then I would think that if it were to happen it would be for a formal meeting to confirm something that the members of the board had in substance agreed to.

Mr. Russell

I would suggest that in an emergency you would want more than three. That would be the one time that you would want more than three.

Mr. Colley

It will be appreciated that it is not always possible, especially when you have part-time members, to get them all together very fast, and sometimes this has to be done.

Mr. O'Higgins

That is an argument for Senator Russell's point that there should be more full-time members.

Mr. Colley

The problem is that if you have those full time members as time goes on they might tend to dominate the board. There is no ideal solution to this problem. I can assure the House that I have given a very great deal of thought over a long number of months to trying to arrive at the ideal solution. I do not claim that I have arrived at it but I think that I have arrived at the best available solution.

Mr. Russell

It can be altered, I presume, if necessary.

Mr. Colley

Yes. The Bill is so drafted that it can be dealt with either way. I do not think that Senator Farrell was here when I mentioned what I visualised as the evolution of the regional development offices, but if she were here and heard what I had said about it I hope that what I said will satisfy her as to what is likely to develop.

She raised two points. With regard to section 34 (3), I want to assure her that all these points (a), (b), (c) and (d) are alternatives. The drafting is done in that way to achieve that purpose, as though the word "or" were in after each one. If Senator Farrell looks at subsection (1) she will see that research and development grants are described as research grants. Thereafter, when that phrase is used we are referring to research and development.

I appreciate the point made by Senator O'Higgins about consolidating this legislation. I will give some thought to it. I appreciate the point which he is making and think it is important. The phrase "home based" which I used was a rather unfortunate one but it was intended to convey Irish ownership and nothing else. With regard to the small industries projects programme to which a number of people referred, I believed in it originally when I introduced it and I believe in it now more than ever. I am satisfied it has considerable potential and has achieved considerable success.

When introducing the Second Stage of the Bill I referred to the 119 small industries approved in the first half of this year but I did not make it clear that these would involve 700 additional jobs in small industries. The figures which I have given about the projects, other than small industries approved in the first half of this year, are extremely heartening, but lest anybody think we are only talking about the potential of these, I would remind them the figures also show that in the 12 months ending June of this year there were just 11,000 new jobs created in manufacturing industries which is a little higher—having regard to the fact that I said "manufacturing industries"—than the target set in the NIEC Report on Full Employment. There is every reason to believe we will go ahead of that target. The sooner we do the better. We can all feel some satisfaction that we have now such momentum behind the industrial development drive that we can see the end of the tunnel, which is a position where no Irishman or Irishwoman will be forced by economic circumstances to leave this country.

Senator Keery dealt with the question of Irish and foreign ownership. Plans have been initiated and will be developed under the new IDA specially related to Irish industry in order to develop it further. I assure Senator Keery that work carried on wholly or mainly in universities will certainly qualify for grants. Universities are already been used by the IDA in a consultancy capacity in certain cases. On the question of accepting gifts I would like to say that while we are not visualising soliciting gifts we do not want to be in the unhappy position where we could not accept gifts if offered.

Focal scor anois: D'aontaigh mé leis an méid a dúirt an Seanadóir Cranitch i dtaobh an Ghaeltacht agus cúrsaí na Gaeltachta, ach baineann sé le Roinn na Gaeltachta agus ní bhéinn in eagar labhairt ar sin anois ar an mBille seo. Ar an dtaobh eile den scéal, tig le daoine deontaisí d'fháil gan dul chuig Roinn na Gaeltachta.

Mr. Russell

Would the research grants be payable in the North of Ireland at Queen's University?

Mr. Colley

We say "Wholly or mainly in the State". Therefore, on a quick reading of it, I would think if the work were to be carried out wholly or mainly in Queen's it would not qualify for a grant. It could be carried on partially in Queen's.

Mr. Russell

Ninety-nine per cent?

Mr. Colley

I do not want to be tied down.

Mr. O'Higgins

Is it agreed that we finish the Bill even if we are not finished at 10 p.m.?

Mr. Colley

Yes.

Question put and agreed to.

Agreed to take remaining Stages today.