Seanad Éireann debate -
Wednesday, 30 Jun 1976

Vol. 84 No. 8

Fóir Teoranta (Amendment) Bill, 1976: Second and Subsequent Stages.

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

Minister for Finance (Mr. R. Ryan)

The purpose of this Bill is to extend the statutory limit on the amount of capital available to Fóir Teoranta to finance their operations.

The company was set up under the Fóir Teoranta Act, 1972, and began operations in April, 1972. Their function is to provide reconstruction finance for industrial concerns which may be in danger of having to close down or suspend activities because they are unable to raise necessary capital from the normal commercial sources. They must, however, be basically sound and be capable of becoming viable. It is, therefore, an important link in the chain of State assistance for industry. The governing legislation requires that industrial concerns fulfil a number of conditions in order to be eligible for assistance from Fóir Teoranta. The employment content and the capital employed in them must be significant, the owners must have made a reasonable contribution to the initial capital, prospects of profitability on a permanent basis must be reasonable and there must be evidence that failure to receive financial assistance would have serious repercussions at national or local level. In this context industrial activity has been interpreted in the broadest possible terms to include all economic activities that can reasonably be described as being of an industrial nature.

It is necessary, therefore, for the board of Fóir to consider applications thoroughly and with full understanding of all the implications. In a period of economic difficulty such as we have recently experienced the task of the company has been especially onerous. However, while continuing to operate within the statutory criteria, the company have shown sympathetic understanding of the difficulties which some firms have encountered and have been able to provide the assistance which enabled the firms to remain in operation. In this way Fóir Teoranta have been able to avert dangerous threats to industrial production and employment while also preserving part of industry's productive capacity.

It is inevitable, of course, that some applications for assistance must be rejected because they fail to meet the tests applied by the company. Most of the rejections have taken place because the applicant firm was unable to show that, even with assistance from Fóir Teoranta, it had a reasonable prospect of ultimate success as required by the Act. Before such cases are rejected, Fóir Teoranta investigate the firm's circumstances and normally consider whether the firm might survive in association with some other group. It is ironic that while the firms which fail attract publicity, there is little attention paid to the achievements of the company and the success attained as a result of Fóir intervention.

The grant of assistance by Fóir Teoranta does not, of course, guarantee success for a firm. The difficult conditions of the past two years have interfered with the recovery of some firms to which aid was given by the company and have even contributed to the failure of some such concerns. As opposed to this, however, some of the firms assisted by Fóir Teoranta over the past years are making notable progress, and most of those assisted are meeting their obligations to Fóir.

To date Fóir Teoranta has disbursed £15.0 million and has commitments for a further £1.5 million. A measure of the company's activity is that in slightly over four years it has provided assistance to some 175 firms with a total job content of about 30,000 people. The bulk of Fóir assistance has been by way of loan finance, but it has also availed of its powers to take an equity stake in firms and to guarantee loans raised from financial institutions.

Apart from providing finance the company takes all possible steps to strengthen the position of any applicant firm which, despite its immediate problems, has reasonable prospects of succeeding in the longer term. Such steps frequently include investigation of association with a stronger firm, changes in management and at board level, and the introduction of consultants to deal with particular functions within a firm. Inadequate or defective management constitutes one of the basic causes of the difficulties leading up to an application for assistance from Fóir Teoranta. Many of the firms find it difficult to attract and retain persons of proven managerial calibre. For this reason Fóir Teoranta established their own management services unit, the members of which are specialists in the main areas of management and are available for assignment to firms where assistance at managerial level is urgently necessary. This has proved a valuable service to certain firms, and it also has the merit of enabling Fóir personnel to gain firsthand knowledge of the operations of some of the firms with which it is associated.

Fóir Teoranta are reaching the limit of their borrowing powers, which was fixed at £17.5 million by the amending Act of 1973. Amending legislation to increase its resources is therefore necessary to enable the Company to continue the valuable work it has been doing to date. Section 2 of the Bill before the House proposes that the new limit on borrowing by Fóir Teoranta be fixed at £35 million, an increase of £17.5 million on the present limit. On the basis of disbursements since the establishment of the company, the extension proposed should suffice for another three to four years depending on demands for reconstruction finance.

Up to now the company has been almost entirely financed by borrowing from the Exchequer as the returns on the Company's share and loan investments including those taken over from its predecessor, Taiscí Stáit Teoranta, have been comparatively small so far. While the company's income from investments and the repayment of loans may be expected to grow, it will be far short of the amount which it is likely to have to advance in respect of new applications for assistance, nor will it meet the cost to the Exchequer of providing the funds in the first instance. It is proposed, therefore—in section 3 of the Bill—to raise from £17.5 million to £35 million the limit on the power of the Minister for Finance to provide loan capital to the Company.

Fóir Teoranta provide an orderly procedure for assisting Irish firms, giving worth while employment, which are unable to obtain their financial requirements from commercial sources. The services of the company have been of particular value in coping with the effects of the recent world-wide economic recession. The proposed legislation will make available to Fóir Teoranta an additional £17.5 million to carry on their functions. Apart from increasing the limits on the finance available to the company, no further changes in the legislation are considered necessary at this stage.

I confidently recommend the Bill for the approval of the House.

Mr. Lenihan

The establishment of Fóir Teoranta under the Fóir Teoranta Act, 1972, is a good example of forward thinking in regard to a problem which has, of course, become enormously aggravated since then. I refer to the question of supplying loan capital, taking up share capital in firms which are potentially viable and have a capacity for profitability but which because of management problems primarily and others—such as cash flow problems-are just not making it. They do not accord with ordinary commercial banking or financing criteria and have found themselves—and are still finding themselves—unable to raise the necessary finance. Fóir reorganise their management structures so as to make themselves competitive in accordance with the basic profitability and viability inherent in the actual firms operations.

That, in sum, is what Fóir Teoranta is about—to ensure that such firms do not go to the wall when they are inherently engaged in a potentially profitable productive operation but for one reason or another are not making a go of it. Fóir Teoranta can step in and, rather than let the firm drift into bankruptcy or receivership, by judicious financing and management control contrive to get the firm back on the rails into a profitable position. That was the thinking behind the establishment of Fóir Teoranta in 1972. Certainly that Act has been proved a far-seeing one having regard to experience since 1972.

As the Minister said in his statement, to date Fóir Teoranta have disbursed £15 million since 1972, has commitments for a further £1.5 million and, over that four-year period, have provided assistance for some 175 firms with a total job content of about 30,000.

There are certain constructive points I should like to make. Firstly, I welcome entirely the doubling of the financial limits from £17.5 million to £35 million, within which the organisation will give financial assistance. That goes without saying. There was one matter which arose in the Dáil debate which slightly perturbed me and which I should like the Minister to answer. I would have expected at this very difficult stage in our economic development that the facilities offered by Fóir Teoranta would be utilised to a far greater degree. There was some suggestion in the debate in the other House—it is not in the Minister's brief here—that there was a reduction in the demand for the facilities of Fóir Teoranta in the current year. That would appear to me to be serious, if that were the case, because it would seem that in this period of recession there should be a growing demand for the sort of facilities that Fóir Teoranta offer. If there is a reduction in the demand for such facilities it would appear that there is an ominous ring about it in that entrepreneurs firms are not going for Fóir Teoranta finance and management help. If it is indicative of a throwing in of the towel, as it were, on the part of entrepreneurs and firms I would regard that as serious. Provided firms and entrepreneurs have the drive at present, are willing to have a go, expand and rescue an operation, put it right and move on; if that sort of capacity, spirit or will, call it what you will, is there, I would have expected in the present climate a growing rather than a reducing demand for the services of an organisation like Fóir Teoranta.

I know the Minister referred to this but I should like him to comment on it again because it is a valid point. If my interpretation of it is wrong the Minister may reiterate what he said in the Dáil or put another interpretation on it. But on a surface reading that would appear to be one interpretation of the reduction in the demand for Fóir Teoranta services in the current year. If that is an interpretation it is one the Minister should look at because it is all important at present. Fundamentally I believe in the future economic progress of our economy; I regard present difficulties as being either Government engendered or due to factors outside our control. I certainly do not think there is anything fundamentally wrong with our economy and, provided the right leadership is given, I believe it can recover and improve.

One of the agencies that can give that leadership is that being discussed in this Bill today. If there is one aspect of Fóir Teoranta's activities which should be accentuated to a greater degree it is that of the early warning. I appreciate that the Minister and the board of Fóir Teoranta have that in mind already. But it is very important that Fóir Teoranta are not regarded as a lender of last resort or anything of that kind, that the attitude to them at every level should be positive rather than negative. The notion of them merely being a lender of last resort should be discounted positively.

For that reason I welcome what the Minister says about the establishment within the organisation of the management services unit. I should like to hear more on that aspect from the Minister in his reply. That is a very important aspect. They should not be regarded merely as a lender, as it were, in times of difficulty; the positive aspect of making available specialist management, in terms of personnel and advice at an early stage, is very important. I have had experience of one or two instances of this— and the Minister bears it out—that a large proportion of the problems are management problems. If there is a management services unit of this kind built up and expanded I believe this is the right sort of progressive approach.

Side by side with that there should be a public relations drive within industry itself—through the CII, the trade unions and within the IMI— emphasising the positive aspects of Fóir Teoranta; that while they are a lender when the commercial institutions cannot come forward with the necessary finance, they are more importantly an advisory body, a body to whom industry can go for advice at an early stage with the utmost expectation of confidentiality. Therefore when a businessman or company director foresees problems arising what they should do at that stage is go to Fóir Teoranta. Possibly pre-emptive action can be taken at that stage with more limited finance than would be possible at a much later fire brigade stage. Before the fire starts at all the necessary pre-emptive action can be taken by providing limited finance and positive specialist advice. It is in that area the board can make a very positive contribution. I am certain that is the Minister's view as well. Certainly I am glad that that positive aspect of the board's activities in the form of the build-up of a management services unit is being encouraged.

There is one other point I should like to make: is it really necessary to have the Minister for Finance coming in at this stage for every loan in excess of £250,000? Again £250,000 was, I think, fixed in the Act of 1972. As we all know that has been reduced considerably in value since then. If it is not fixed in the Act it has been in practice, at any rate, that ministerial approval is sought for any loan in excess of £250,000. Is that really necessary? Should a more flexible approach not be adopted? In all the circumstances of the difficult economic situation we have had over the past three years, the board's record has been a good one. Why the restriction of £250,000? It seems somewhat niggling and takes from the flexible sort of approach needed on the part of a board of this kind that has to deal with immediate business decisions in regard to financing and advice. The record of the board has been very good in all the circumstances and would certainly warrant the sort of confidence that the Minister might place in them by having a much higher limit rather than circumscribing them in the way of having a £250,000 limit on their financial lending operation without ministerial approval.

I take it the Minister would agree— it has been the practice—that in all these cases, apart from the management aspect, there should be board representation in the case of any substantial investment, that there should be Fóir Teoranta representation on the board of the company concerned. Obviously it is not just enough to make the decision to lend money. There must be the decision to provide specialist management personnel and supervision. This should be an ongoing operation in which the company's progress can be monitored with, if necessary, the proper interlocking or merging with other companies subsequently, where it can be done for the company's benefit and the overall benefit of the operation. That should be done as well, the necessary advice given and pressure applied to ensure that that is done. I am certain that the Minister will respond to that aspect in a positive manner.

I have nothing more to say except that this whole area of reconstruction of finance is all important and fundamental at present. It is allied to what I am talking about and can render a very real service. Allied to a growing participation at management and board level on the part of this agency, such companies can produce fruitful only results. We on this side of the House welcome the Bill.

Mr. Markey

We all welcome this Bill, of course. The Minister's opening address contains quite an amount of information. While he gives general figures in regard to finance and assistance given by Fóir Teoranta in recent years, a further breakdown of such figures would have helped us delve deeper into the subject. For instance, a breakdown of the number of companies who found themselves in difficulties and sought assistance in the first instance: what were these types of industries, whether they were in the textile, engineering or small industries field and the type of assistance given by Fóir Teoranta, whether financial or managerial?

Perhaps this is not the most opportune time to have a reappraisal of the activities of Fóir Teoranta and how they should perhaps better operate in the future. As the Minister said in his address, recovery is about to commence in regard to industry here. Perhaps at some future date we will be able to delve more deeply into how we can improve Fóir Teoranta's activities.

My experience of the involvement of Fóir Teoranta in the difficulties industries have run into has been that very often these industries find themselves in the position of not having undertaken any degree of rationalisation of their product, management or operative strength. Difficulties have arisen also from lack of adequate productivity and from, worst of all, inadequate management. It is unfortunate that these difficulties have been aggravated by a number of factors. First of all, the public relations exercise carried out, or perhaps not carried out at all, by a large number of these industries in difficulty, has been inadequate, inopportune and handled very badly.

In quite a number of instances no notice was given to Fóir Teoranta and, worst of all, no notice of pending difficulty given to the unions representing the employees. At some time in the future we will have to look at the activities of Fóir Teoranta, because in such assistance being available to small and large industries I foresee the difficulty being one of assistance being taken for granted: that industries which run into difficulty will feel they have a right to State assistance. In my experience this assumption has extended to the factory floor and the workers concerned, who feel that help will be given them. There is in all of this the concept that the State will always look after lame ducks. We must be very careful lest such an assumption gathers strength in the future.

There are certain criteria which any agency such as Fóir Teoranta should have regard to in a rescue operation. It is not good enough that, just because an industry has got into difficulties and because a certain type of industry has always given employment, it should be taken for granted that that particular type of employment should continue. After all, this State in a very short period of 50 years has seen the majority of its work force rapidly transferred from certain categories of work into others. On the foundation of this State the great majority of our work force were in the agricultural and domestic service fields. Where are those two employment fields as regards the percentage of our work force at present? Fóir Teoranta's overall objective should be not only to retain jobs but, if necessary, to channel people towards other jobs. If this involves the worst happening, then bodies like AnCO and the National Manpower Service, by stepping in and retraining people for future vacancies in another field, would be performing the most important national task in overall industrial structure. The worst situation that can happen is that we might continue to keep alive bad jobs instead of trying to turn them into good jobs. There should have to be a limit to the amount of assistance given by Fóir Teoranta in any particular case. There should also have to be a limit on the number of times an ailing industry can go to Fóir Teoranta for assistance. If the present economic situation is not the most opportune time to reappraise the activities of Fóir Teoranta, the above points are ones which could be considered when such a reappraisal can be tackled.

By and large Fóir Teoranta have done a tremendous amount of good work. The real benefits lie in the fact that they are there to assist ailing industries. It is desirable that those ailing industries would give a little more attention to advising Fóir Teoranta in adequate time, and perhaps seeking assistance in fields which are not entirely associated with financial subvention. The management activities of small industries are perhaps most important. In this respect Fóir Teoranta have found it very difficult to recruit management for a small industry which has run into difficulties. No young management executive is going to take the risk of landing himself in a small industry which has had a bad performance record to date and which is seen at that time to be depending on the State for survival. Perhaps it would be better if Fóir Teoranta were to send in, as it were, trouble shooters into industries who would be able to go from one industry to another having served perhaps six, nine or 12 months implementing proper management procedures.

I welcome this Bill. I have no doubt that Fóir Teoranta's good work will continue. If, at any future time, we have to come back here seeking a further broadening of the ambit of Fóir Teoranta, it will be readily given.

Mr. Dolan

I, too, welcome this Bill. It is one which provides a procedure for assisting Irish firms giving worth-while employment who are unable to obtain their financial requirements from commercial sources. That is of tremendous importance. The people who set up this body had great foresight. In a country such as this, only now awakening as far as industries are concerned, it is important that Fóir Teoranta be in existence. So far as I am aware, they have performed their duties very satisfactorily in the past.

We are asked in the Bill to increase the amount from £17 million to £35 million. Bearing in mind the increase in inflation and so on that has taken place in recent years this seems quite reasonable. I too, would have liked to have seen a list of the firms assisted in this way, not for any personal reason but because it might have given us a better insight into what has been done. In the north-eastern area experience has shown that there has been a great fall-off in industrial employment. We are all well aware of the fact that there are almost 120,000 people unemployed and that this situation is gradually worsening.

Consequently it is of great importance that bodies such as Fóir Teoranta have available to them the capital and expertise so that they, in turn, can advise in every way possible, thereby ensuring that if at all possible existing industries be kept going provided they are viable and eventually able to finance themselves. This is of particular importance in view of the employment content and of the tremendous difficulties it would create for a Government and our people if each week we found that, instead of curing the unemployment situation, it was worsening, when we would be paying pay-related benefits, unemployment assistance and so on, necessary when a country finds itself in a situation such as that whereas, were such people working, we would be gaining in income tax and so on.

I do not know what liaison exists between Fóir Teoranta and firms at present, but I would like to see the IDA, regional development organisations, county development teams, Fóir Teoranta and the management of these factories getting together to administer the necessary treatment before it is too late so far as any firm is concerned.

An industry situated on the fringe of County Cavan, based on gypsum products, closed down recently. It was associated with the gypsum plant in Kingscourt. It has been said to me that one of the reasons for the closure was because it was interfering with the parent factory. If that is so and if gypsum is available in that area and, as alleged, is within 14 feet of the surface, and is a viable product, some attempt should be made to ensure that such an industry is kept going.

In County Cavan some time ago we heard reports that gas was found in small quantities. Those reports were correct but no notice was taken of that and yet we are exploring in the North Sea and off the Cork coast using the most modern machinery in order to tap these resources. Firms should interest themselves in this.

Recently, many people in the footwear industry lost their jobs because firms found themselves in difficulty. I do not know what consultation took place between Fóir Teoranta and the management of these firms, but textile and footwear industries which find themselves in difficulty should be given the best assistance, financial and advisory, by Fóir Teoranta so as to ensure that these people remain employed. There is a lot of unemployment in that area.

Fóir Teoranta have a difficult job to perform but never was such a board more important than at present. They should do everything to ensure that the industries we have do not go out of production, if possible. If the market is available and the machinery is there it is a tragedy to see factories going out of production. Expert advice should be made available and the IDA should be consulted at an early stage if a firm experiences difficulty. The State has a big say because many of these factories have been assisted by State grants. The full amount of these grants should not be paid all at once because it is important that there should be some tie to ensure that the State would not lose money. It is important that jobs be created and work found for the unemployed. Fóir Teoranta should be able to ask for any assistance the Oireachtas can give in order to remedy the disastrous situation we have at present with regard to the unemployed.

Mrs. Robinson

This is the kind of Bill which the Seanad is not qualified to comment on or to examine in a useful way. It is perhaps appropriate that we are discussing it in an almost empty House on a hot June afternoon. If it were an isolated case it would be excusable but we are getting more and more Bills of this sort introduced into the Houses of the Oireachtas asking for more money in direct aid or for more borrowing power to different State agencies, in this case to Fóir Teoranta.

The House is not in a position to evaluate the performance of Fóir Teoranta, has not been provided by the Minister with adequate information about the success—if one can talk about success without having terms on which to evaluate success— the details of the breakdown of the firms assisted, the type of assistance given, the type of problems which Fóir Teoranta have met with in giving this assistance—the sort of information which could be available in order to evaluate the actual work being done by this agency. I do not think this House should be asked to evaluate the performance of Fóir Teoranta in isolation from the other related State agencies. It is an absurd exercise to come before the Oireachtas in this way and seek approval of further borrowing powers, which are borrowing powers from the State, in isolation from the work and role of other State agencies such as the IDA, the ICC and, in a training capacity, AnCO.

In other words, we should have the benefit of an overall Parliamentary view on the work of these agencies. We cannot get this sort of view until the famous long-promised and, as yet, still unestablished Committee on State Sponsored Bodies is set up. A motion has been lying on the Dáil Order Paper for a very considerable time, but this Committee has not yet been established. Therefore, the Houses of the Oireachtas are not evaluating on an overall basis the performance of State agencies in this or other areas. Despite this lack of evaluation and this lack of information Senators make a gallant effort. I compliment Senator Markey, and the other Senators who spoke, on their attempt to respond in a useful way to the Minister's opening speech.

In referring to the performance of Fóir Teoranta the Minister said:

The grant of assistance by Fóir Teoranta does not, of course, guarantee success for a firm. The difficult conditions of the past two years have interfered with the recovery of some firms to which aid was given by the company and even contributed to the failure of some such concerns. As opposed to this, however, some of the firms assisted by Fóir Teoranta over the past years are making notable progress. Most of those assisted are meeting their obligations to Fóir.

That is so vague as to be meaningless. It gives no real idea to the Seanad of the performance of Fóir Teoranta, of how it operates in relation to other agencies, of whether it would regard its performance as successful. The Minister went on:

To date Fóir Teoranta has dispersed £15 million and has commitments for a further £1.5 million.

Senator Lenihan regards this as evidence of great success. I do not know if that is evidence of success; I do not know how to evaluate it; I do not know how I am supposed to respond as a Senator to this information. I do not know how we can possibly be satisfied that we are fortifying the democratic process in the House this afternoon. We need a proper overall committee-based structure to do this. We need to know in much more detail the criteria. We need to set down the policy guidelines for these State agencies. It needs an overall coherent approach.

Not only does the Oireachtas itself need to adopt that sort of coherent co-ordinated approach but I submit that at Ministerial level there is a very strong need for a co-ordinated and cohesive approach. I do not understand why it is the Minister for Finance who introduces a Bill in relation to Fóir Teoranta and is the Minister with responsibility there, and why, in relation to the IDA, it is the Minister for Industry and Commerce and why, in relation to AnCO, it is the Minister for Labour. Surely, this must only aggravate the lack of coherence, a lack of co-ordination at Ministerial level? It is time in face of the gravity of our economic situation, the critical unemployment, the difficulties for industry in Ireland, that we have some sort of economic Minister with responsibility for the related agencies in this field which are providing assistance to firms, which are providing attraction to industry coming to the country and which are providing training for employees in these firms. Surely, instead of going on holidays for five-and-a-half months, we could apply ourselves to thinking about a rationalisation both at the Parliamentary level and at Ministerial level?

The sort of problems this country faces at the moment only sharpen an awareness of the farcical exercise of bringing in a brief Bill looking for greater borrowing power for State agencies. It is a farcical exercise because we do not have sufficient information on which to assess the reasons for increasing £17½ million to £35 million. It is a farcical exercise because we have not defined the criteria to evaluate the performance of the particular agency that we are allowing greater borrowing powers to today. It is farcical because we are not judging the State agency in the overall context of the performance of other agencies in a related field.

Mr. Harte

I welcome the Bill not because of its successes or failures as indicated in the Minister's statement. The real basis on which I support the Bill is the fact that 175 firms have been helped with a 30,000 workforce, and this is a great influencing factor to me, particularly when dealing with a world-wide economic recession. I would be the first to admit that this is a very pragmatic approach to welcoming any Bill but, nevertheless, in the type of society and times we are living in that is the only approach I can have to it.

I accept Senator Robinson's view about us not having sufficient information about the activities of Fóir Teoranta and a breakdown and so on so that we could examine it extensively. Since that is not available I am confined to dealing with this in a pragmatic way. I would welcome an opportunity of seeing exactly how these State bodies function.

Possibly when the Fianna Fáil Minister introduced the Fóir Teoranta Bill in 1972 the intention was very good but it looks like a glorified version of the Guinness Workers' Employment Fund where the Guinness workers paid one shilling per week to assist other people to keep jobs that were in danger of going out of existence. Speaking in ratio to the amounts of money, the Guinness Workers' Employment Fund did nearly as good a job if one takes it that the people were only contributing one shilling a week. They were, in fact, sending people out to have a look at the small firms affected, were providing a service for them and examining their books. There is a similarity there. I do not know whether this type of body is the best to help us over our ills.

Finally, while it may not be strictly relevant to this particular Bill, not much assistance is given in the private enterprise area to industrialists. I would be delighted if somebody would introduce me to somebody who by their own initiative without State help or assistance or the many grants that come from the State would show me an Irish entrepreneur who by his own efforts, endeavours, ideas and imagination and without dependence on public money brought a substantial amount of employment to the country. I welcome the Bill in a pragmatic fashion.

Miss Walsh

I welcome this Bill. While I find myself in agreement in part with some of what Senator Robinson has said, I also find that her view is rather pessimistic of the operation of Fóir Teoranta. I would not be as incredulous of the value of this State agency as she is. From my own knowledge in my constituency this year it has done magnificent work and the results can be seen today in the operation of firms which otherwise would have gone to the wall.

The statement made by the Minister in introducing the Bill that it is inevitable that some applications for assistance must be rejected because they fail to meet the test applied by the company is interesting. Some of the Senators who have spoken seem to lay most of the blame for failure of companies on mismanagement. While in certain instances a deal of the blame can be attributed to bad management, it is not always the case, because some firms depend on world market trends. In these days of economic recession and falling world prices it is not always the fault of management. I would like to think that these tests which have been referred to will be applied more stringently by Fóir Teoranta with regard to forthcoming applications. I would hate to see a situation where workers would become complacent, that all they have got to do is to cry wolf and in walks a State agency to rescue the operation. I would like to think that everything possible will be done to keep a firm in existence, that all these tests will be applied and that Fóir Teoranta assistance will be a last resort.

I agree that it must be applied for in time. There is no point in closing the stable door after the horse has gone as some industries have done and then blamed Fóir Teoranta for not having rescued them in time.

I welcome the Bill. It is money well spent. Senator Harte referred to the employment situation. If for no other reason than the fact that it maintains the workforce in factories suffering from the economic recession, it is well worth while.

I agree, in part, with Senator Robinson when she says that closer liaison and more stringent tests should be applied to the State agencies in general and that we should have a report with regard to their operations. Many of the State agencies I disagree entirely with, but in this instance I wholeheartedly agree that Fóir Teoranta is well worth while. I agree with the introduction of the Bill.

Minister for Finance (Mr. R. Ryan)

I must express my gratitude to all Members of the House, with one exception, for their contributions. While I am pleased to have heard the other contributions I cannot say I am gratified with what was said. I am sure the Senator has quickly identified herself. I am referring to Senator Robinson, and I shall come in a moment to what she said. Her criticism was not deserved.

The annual reports of Fóir Teoranta give detailed information about the firms assisted and the money advanced by them. For instance, the most recent report, for the year ended 31st December last, contains in addition 36 supplementary notes which deal with the more significant advances which have been made and some of the more significant enterprises which have been involved. Short of reading out a similar list once again and giving such information once again to the Seanad I could not have given very much more information. In the nature of things, a great deal of the affairs of the firms assisted by Fóir Teoranta should be treated confidentially. It would be harmful to the best commercial interests of many of the concerns in question were the full weaknesses and possibilities for those firms to be identified in public. I can entirely accept, however, the desirability of having an early establishment of the committee which I proposed should be established to allow the Oireachtas to review commercial State bodies.

It is not the Government's fault, and particularly it is not the fault of the Minister for the Public Service whose responsibility it is to move the motion, that it has not been taken, but as soon as time is afforded in the other House for the motion I will move it. I am ready, willing and anxious to move it and to see the formation of such a body because it would help understanding of what commercial concerns are doing——

Mrs. Robinson

Surely, time could have been found since last December.

Mr. R. Ryan

——and of the way in which they dovetail their work. I was chastised on the last occasion I addressed the Seanad because I seemed to be implying criticism of the doings in another place and I am not putting on record my anxiety to see this motion moved and time being made available to move it. There has been immense pressure on Parliamentary time, but I would hope that people revitalised by the pending recess will find time and a willingness to take the motion early on resumption so that the committee may be established. I do not blame Senators, Members of the Dáil or the public generally, for not first reading the matter which they receive in annual reports from State companies. At best we tend to put them aside and, at the same time, accompanying them with a resolution of intention to read them but usually other pressures intervene between the resolution and its implementation. In fact detailed information is given in the annual report, and Fóir Teoranta are always only too anxious to accommodate any Members of the Oireachtas who wish to discuss with them particular problems or the overall workings of Fóir Teoranta in general.

I should like to deal with some of the other specific points raised throughout the debate. The beginning of last year opened with a considerable growth in demand for the services of Fóir Teoranta. This demand grew so fast and the amounts which were sought from Fóir Teoranta were so considerable that half way during the year I doubled the proposed allocation of money for Fóir Teoranta for 1975. We had allocated £4 million which was an increase from, if I recollect rightly, £2.5 million in 1974 to £4 million in 1975. By June we saw a possible need to increase the figure to £8 million, which I did in the June budget of last year. In fact, the additional £4 million was not required, only £0.8 million was used and the total for the year was only £4.8 million as against £8 million anticipated. What happened was that the impact of the recession throughout 1974 and 1975 identified the weak firms. It was quite clear that a number of these were related to the construction industry and quite an amount of their problems were associated with over purchase at a time of very rapid rises in cost of materials.

Other firms got into difficulties arising out of the global recession and the domestic recession too. These weaknesses were identified and it is not unlikely that a lot of these firms would have got into trouble eventually anyway, but the speed with which they got into trouble and the coincidence was much greater because the recession came upon us all so rapidly and so dramatically. Having been identified, help was given and they have restructured themselves. They are now in a much healthier position to face not merely the recession but also to take advantage of the possibilities of growth which are now there and which will grow in the years to come.

It is not extraordinary that having collapsed in the first belt of the recession the weak ones are now fewer and that so many firms are not coming. That is one aspect of it. The other aspect is that many firms are working well under capacity at the present time because the demand is not there for the product. Therefore, they have little need for additional capital to expand at a time when, even if they did expand, they would not be able to sell their product, but come an acceleration of growth and of market possibilities we anticipate there will again be further demand made upon Fóir for assistance. Our plea now, the one that we have voiced again and again and that Fóir repeatedly advances to all the financial institutions and commercial institutions, including the private banks, State agencies, the IDA, Córas Trachtála and so on, is that firms should not wait until they get into serious trouble before looking to Fóir for help. Fóir Teoranta is not merely a fire brigade service; it is also a service to give people advice as to how to stop a fire breaking out in the first instance. It is more anxious to give advance help to firms to avoid difficulties than to have to put in a lot of money and effort to try to prevent a collapse at the last minute. If everybody understood the real purpose of and the most helpful way in which Fóir can help we would be advancing on the right lines.

There are, in fact, monthly meetings of officials from the Departments concerned in the field of manufacturing industry, and Fóir Teoranta is concerned with manufacturing industry and not with other areas of business. The monthly meetings take place between officials of the Department of Industry and Commerce, the Industrial Development Authority, the Industrial Credit Company and Fóir Teoranta. Senator Robinson asked why the Minister for Finance is involved; he is involved because Fóir Teoranta was set up under the Ministry of Finance because it was closely associated with the Industrial Credit Company. Indeed, it still calls upon the services of the Industrial Credit Company to provide it with the necessary management and assessment skills.

Having regard to the development of Fóir, and the way in which I would see it as best being in a position to help —in preventing difficulties arising by giving adequate assistance, not merely financial but managerial, in good time —I have urged, and the Government have accepted, that responsibility should be transferred to the Department of Industry and Commerce, and the necessary steps in that direction will be taken shortly. I am sorry that they have not been completed long before now. I have been anxious to rid the Department of Finance of a number of areas of activity which I consider could be better conducted by other Departments because they have the field workers experienced in the areas in question. The Department of Finance should have overall economic and financial management and that is enough for any one ministry to be concerned with without also trying to provide the field services ranging from the National Stud to manufacturing industry rescue services.

It is proper that the figure of £¼ million ceiling should be kept in relation to assistance which must receive Government approval. It is not written into the Statute of 1972, but such a ceiling was originally provided in relation to assistance provided by the Industrial Development Authority. The number of concerns which have received assistance of that sum is about ten or so. It is not many. It is proper that where substantial amounts of public money are involved and substantial employment is involved the Government should be consulted. Fóir have never complained that this was in any way a hindrance to their work and there has been no undue delay, as far as I am aware, by our predecessors or by ourselves in Government in processing any applications which involved assistance of more than £¼ million. I should like to correct the figure of ten which I mentioned earlier, 15 is the total number of cases where assistance in excess of £¼ million or more has been given in a period of four years. So 15 out of 175 indicates that there is not any tremendous burden of work thrown on to Government by this provision and it is no hindrance to the workings of Fóir Teoranta.

Senator Markey struck the right note when he expressed his desire that Fóir would operate as a trouble shooter. This is the function of the managerial services unit. It has been strengthened in the last year. I would like to see it strengthened further because quite a number of the firms that have met with difficulties met with them not for financial reasons but because of managerial weaknesses. Once young, dynamic managers have straightened things out it has been possible for these firms, with that assistance and with their financial arrangements restructured, to stand on their feet.

As I said in my opening speech, it is a pity that so much attention has been given to the failures, which are very few when compared with the tremendous overall success. A great deal of the success was not due to providing managerial services or to direct money from Fóir by way of shares, or equity, or loan assistance, but simply to giving guidance to the firms as to where they could get assistance from the private sector and from State agencies. All these services have strengthened many firms and enabled them to face the problems of the present and the opportunities of the future.

Any Members who are looking for immediate additional information should look at the annual reports. If there are any questions arising out of their review of such reports which they would like me or Fóir themselves to answer, by all means let them put their questions. We will welcome them and be only too happy to assist in giving replies.

Senator Markey referred to the possibility of Fóir giving assistance towards training and retraining. It is important that the State should give assistance in this area. Even in the midst of very high unemployment, we have bottlenecks where a number of activities cannot be engaged in through lack of skilled people. That is the greatest of all ironies and is something we wish to avoid. The agency to provide training and retraining services is AnCO. Fóir could advise an interested concern that they could get assistance from AnCO.

Arising from the pace of life, many of them have not been aware of the multitude of services available and which could have been availed of in good time to prevent the collapse which ultimately came. Fóir and the other State agencies, meeting together as frequently as they do, ensure that there is a better feeding-in of all the services and that they are moved in the right direction.

There is no need to have any change in the criteria of eligibility which are set out in the original Act. In the circumstances of 1972 those criteria were applied with greater rigidity than now. I do not suggest changing the criteria because circumstances have changed. What we should do is to consider how these criteria should be applied in changed circumstances. When we have, as now, a much greater number unemployed, it is obviously desirable to help even small industries in an urban area, because any addition to the number of unemployed is something to be avoided at present. In more normal times—and please God they are not too far away—when we can reduce the overall number of people unemployed, it would be appropriate that the application of the criteria should be changed again.

The criteria involve not merely the ultimate viability of a firm but also that the loss of employment would be significant in the area in which the industry is placed. A loss of 50 people in an area which is sparsely provided with industrial activities is more serious than the loss of employment in an urban area where there might be other opportunities for industrial employment. At a time of considerable unemployment, as at present, we consider that any number of unemployed persons is undesirable. If unemployment can be avoided at a reasonable price, then that price should be paid. I want to emphasise that Fóir have not had to pay a high price for their success—and it is a record of success.

Some people consider assistance from Fóir Teoranta as the kiss of death, like a bankruptcy or receivership. It is no such thing. It was never intended to be such and people should not consider it in that way. If people consider it in that way it could hamper the very work of Fóir Teoranta. If traders and creditors were not prepared to trade normally with firms assisted by Fóir Teoranta, it would hamper the operations of Fóir Teoranta, and I am sure nobody would wish that to be so.

I appreciate the remarks of Senators Harte and Walsh and all the other Senators who added words of encouragement to Fóir Teoranta. If Senator Robinson had had time to read the annual report I am sure that she too would be pleased with all the work Fóir have done and would see the need to increase the capital so that the work will continue. Needless to say, the money will not be advanced unless and until a need is established and, if not, there is no loss arising to anybody by virtue of increasing the statutory authority to increase the advances if such should be necessary. If it is not necessary it is all the better; if it is, we will be doing the right thing.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, received for final consideration and passed.