Before we adjourned last night I made a brief reference to the new IDA approach as outlined in the December issue of the IDA News. This approach is welcome as an innovation and should have favourable results. It should provide what many people have been asking for for some time: that the IDA should be seen to have a greater commitment to the smaller industries. There are industries which are quite small by any standards but, at the same time, they are viable and provide a livelihood for a small number of people who would otherwise be on the unemployment list or else have to emigrate.
It is also true that there are a number of small industries in which the IDA were prepared to invest but the offer was turned down by the clients. In many cases, the refusal of this offer was due to a lack of confidence on the part of the client and, possibly, a realisation that he would not be able to cope with the effects of expansion which would result from extra investment and aid by the IDA. Such expansion might involve him in dealing with extra accounts, extra personnel, and possibly the export market. There is a lack of confidence in many of the smaller industries which, in many cases, are owned by families and may be employing only seven, ten or 15 people.
This is an area of activity in which the IDA should become more involved. Basically, it is a question of educating the owners of these industries to the need for expansion and helping them along those lines. The IDA have at their disposal a large fund of knowledge and expertise which, if imparted to the people I am referring to, would go a long way towards building up their confidence and pointing out what approach they might adopt in order to expand. For example, the IDA's expertise could identify a saleable product and markets for it. If the IDA became more involved in this area, they could help these people and build up the confidence in themselves which they have not got at the moment. Where expansion is feasible and the market situation is favourable, a promotional programme should be undertaken by the IDA to encourage small industries. In the present climate of increasing unemployment, this would go some small way towards improving the situation. Basically, this is a long-term objective, but we could very well start now.
Many Senators have asked where and how this money will be spent if and when the IDA get it, and what the returns will be. To get some of the answers to these questions, we should look at a very comprehensive document, a study entitled Regional Industrial Development Trends in Ireland, 1960-1973, by Dr. O'Farrell. This study was commissioned by the IDA. It gives very interesting data on many aspects of the IDA activity. For example, one of the facts it gives is that between 1961 and 1971 there was a net increase in manufacturing employment in Ireland of 34.197. The IDA's new industries programme produced 33,000 jobs over the same period. Dr. O'Farrell states that the net employment growth in manufacturing industry was negligible outside the grant assisted sector. He says it is likely that, for the foreseeable future, IDA sponsored projects will constitute the primary growth area in Irish manufacturing industry. In other words, what he is saying is that, without the IDA, we would have been much worse off. Surely this is sufficient evidence of the value of the work done by the IDA during that period.
Another interesting piece of information in that document concerns the dependence of different areas of the country on the IDA. For example, looking at the contribution of the IDA's new industries programme in that decade, we find that almost 16 per cent of all manufacturing employment was in IDA grant-aided industry. That 16 per cent overall ranged from 7.6 per cent in the east to 30.8 per cent in the west and north-west. This shows beyond doubt that we in the west are particularly dependent on the activities of the IDA simply because we have not within ourselves the capacity to expand and to invest the large amounts of money needed for expansion in industry. The same thing does not apply to the same extent in the east and in the south.
People bandy around figures about the failure rate of the IDA. In this document we find we can look with pride on their record of success in that the mean closure rate for that period is 1.17 per cent which, according to other figures supplied concerning three studies in the UK, compares very favourably with them in that the three figures there are 1.67 per cent, 2 to 2.5 per cent, and 2.81 per cent respectively. Ours is 1.17 per cent, which gives an indication of the depth of study by the IDA into applications for grants which come to them both from within this country and from abroad.
Last night references were made by the Opposition to the high rate of unemployment. We all know there is a very high rate of unemployment. On the one hand, we find that some Members of the Opposition are clamouring for a statement of the true state of the economy while, on the other hand, they criticise the Taoiseach and members of his Cabinet for doing this very thing. Day after day they are giving the people the facts as they see them and nothing is being hidden. The logic of that argument escapes me.
Another aspect of the Opposition's criticism of the unemployment rate is, to say the least, farcical. We all know that there are in the region of 109,000 people unemployed at the moment. From what has been said from the other side, one would imagine there was no unemployment during their term of office. We all know that during those halcyon days, the so-called good days, we always had 60,000 to 70,000 people unemployed. That was at a time when the so-called safety valve of emigration was there, which accounted for possibly upwards of 20,000 emigrating every year. That safety value is no longer there. In that light, our record in the midst of a very serious depression, is not that bad. The most appalling feature of what I am saying is that in those days that level of unemployment, 60,000 to 70,000, was accepted as the norm and nobody saw anything wrong with it. That level of unemployment, in those days, would not have been tolerated in any other progressive democracy.
In a document by Dr. Geary to a conference of the International Association for Research in Income and Wealth, he stated that Ireland has had, historically, one of the highest rates of unemployment in Europe. Between 1966 and 1971, despite good economic progress and the increases in employment brought about by IDA incentives, the unemployment problem became worse. Before the present recession, the problems that faced the Irish economy was to reduce the customary level of 60,000 to 70,000 unemployed down to acceptable proportions. That was said by an independent authority. As I said, the most amazing feature was that this kind of level was accepted as the norm by the Government of the day. This, of course, was completely wrong. In the present circumstances of nil emigration, the solution is becoming more serious. Because of nil emigration the increase in the labour force is reckoned to be about 25 per cent over the next ten years. This will add to the difficulties of achieving the target set for full employment in the mid-1980s.
From the statements made by Members of the Opposition one would think nothing was being done by the Government so solve the problem. One would think that the Government's attitude was one of passive acceptance of the situation. Nothing could be further from the truth. Indeed, the efforts already made to remedy this malady have met with a great degree of success. Despite the recession, investment in industry is at a very high level. The attitude of industrialists is very far from despair, if one looks at the comparative figures between 1972 and 1975 of industrial investment by domestic industry. For example, in 1972-1973 that investment reached a level of £65.8 million whereas today, on a comparative basis, the figure is £190.9 million. Surely, in the middle of a very serious depression and recession, this is something we can look to with some confidence.
The IDA have a leading role to play in our recovery from the economic recession in which we find ourselves. Anybody who has been watching the performance of the IDA down the years must realise this. That is a good reason why this Bill before us is very welcome. It is an enabling Bill to enable the IDA to raise the limits and provide extra capital for investment. I am very grateful to the IDA for what they have done in my part of the country, the part of north Mayo which for many years has been very depressed.
In many cases it did not show that depression because remittances from abroad which thousands of emigrants send home helped to provide the people who stayed at home with means to live in dignity. Without this money and these remittances from abroad which families send home this part of the country—indeed, not only north Mayo but the whole west coast —would have been in a very poor state. We are now thank God—in north Mayo at least—in the very happy position that over the next 12 months in my town of Ballina and in Killala we expect to have something like 1,500 new industrial jobs created, and over the next three years we expect to have over 2,500 new industrial jobs created. This is due to the efforts of the Industrial Development Authority in going out—one is an American firm, one is a Japanese firm—and enticing people to come in here and establish industry.
This brings me to one important area of activity in which the IDA might become more involved. The idea of developing the west coast is very welcome. There are problems in that before an industry is prepared to set up a project in an area like the west there is, above and beyond the normal input of capital for the provision of a factory, the extra investment needed for infrastructure. What is happening at the moment is that the IDA go out and find an industrialist who is prepared to invest, and that is their job completed. In normal circumstances in a county like Mayo for example, the provision of the infrastructure is left to the local authority—the provision of water, sewerage, housing and all the other factors which go to make up a viable community.
The problem here is that a county council or an urban council wrestling with these problems are doing so with the normal allocations from the Department of Local Government. The IDA are involved in this in that, at this stage of the input of capital into infrastructure, they are dealing with the local authority on behalf of the company they brought in. The money must be spent on this aspect of development. It would be much better if there were some change of approach on the part of the IDA. They should be prepared to look at the overall picture of industry in an area and, when they provide an industry that is coming in to set up a factory, their operations should not cease. They should be prepared to provide the necessary infrastructure in the form of water and sewerage and so on. They are involved at the moment to some degree in the provision of housing for industrial workers.
I say this because in my part of the country we have come up against this in a very very substantial way. If we have an industry which is initially taking 5,000,000 gallons of water per day the problem of the provision of that kind of volume of water is left to the local authority. This year the Department of Local Government provided the necessary funds for the pipeline for this water. There have been delays and my contention is that, if the IDA got themselves involved in this kind of thing, it would expedite matters. They would be able to tell their industrialists, or their prospective industrialists, that they would handle this aspect of the work on their behalf and that they have £X available to do this kind of work. At the moment they must go elsewhere and emphasise the need for this infrastructure to the different Departments which must provide the finance for it. That is one area of activity where the IDA should see what might be done in future.
There is also the other aspect of the provision of piers, and so on, for industry. The provision of berthage facilities is another area. This is apart from the fishing industry altogether. I am talking about industry. We are now on the brink of a breakthrough in the offshore oil and gas industry. This will come up in the not-too-distant future. The IDA will be involved in many aspects of this industry. They will have to go through the normal channels, the Office of Public Works, the different Departments, the local authorities, if proper berthage is to be provided for the activities which will result from the gas and oil finds which we hope will become a reality in the not-too-distant future.
I should like to end by saying I welcome this Bill. I hope the IDA will continue to play their part in our industrial development as they have done in the past.
