Industrial Development (Amendment) Bill, 1991: Second Stage.

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

Minister for Industry and Commerce (Mr. O'Malley)

This Bill has three functions. The first is to amalgamate the National Development Corporation with the Industrial Development Authority, and to transfer all NADCORP's assets, liabilities and commitments to the IDA.

Secondly, the Bill makes provision for a number of amendments to the Industrial Development Authority Act, 1986. These will allow the Industrial Development Authority to hold or dispose of stocks, shares and securities transferred from the National Development Corporation. The proposed amendments will also increase the financial limits relating to the aggregate amount of grants which may be made to the Industrial Development Authority by the Exchequer, as well as extend the applicability of employment grants to all industry. Additionally, the Industrial Development Authority is being given greater power in relation to the holding of preference shares, and the power to hold shares in its own name. Finally, the Bill will increase the aggregate financial limits applicable to Shannon Free Airport Development Company which are contained in the Shannon Free Airport Development Company (Amendment) Act, 1986.

It is the provisions in sections 9 and 10 of the Bill, increasing the aggregate grant limits applicable to the Industrial Development Authority and Shannon Free Airport Development Company, which make it a matter of urgency that the Bill be enacted before the Christmas recess. I would like to stress that these provisions will not increase the amount of Exchequer funds which are actually allocated each year to the agencies as part of the budgetary process. The provisions are intended simply to increase the cumulative amount of Exchequer funds which may be allocated to the agencies over a period of years. The cumulative figures were originally set by enactments in 1986. Amending the now almost exhausted cumulative limits will simply allow the agencies to continue carrying out their respective mandates.

To this end, I propose, with the agreement of the House, to amend the Industrial Development Act, 1986, by increasing the aggregate amount of grants that I can make to the Industrial Development Authority. This aggregate limit was set by section 14 of the 1986 Act at £700 million. The grants concerned are used by the Industrial Development Authority to meet its administrative expenses and to discharge its obligations or liabilities of a capital nature and are, of course, the basic resources used by the Authority to fulfil its statutory functions. By the end of 1991, the Industrial Development Authority will have used up £688 million of the limit, and it is expected that the £700 million limit will be exhausted in a few weeks' time. It is, therefore, critically necessary that the limit be raised now, so that the Authority can continue to carry out its statutory function without interruption. The proposal in section 9 of the Bill is to raise the aggregate limit to £1,200 million, which will enable the Industrial Development Authority to continue assisting industry, without recourse to the Oireachtas for legislation, for a further period of five years approximately.

I also propose, subject to the agreement of the House, to increase the aggregate financial limits applicable to Shannon Development. The figures concerned were last increased in June 1986 and the cumulative limits were exhausted at the end of last month. Thus, it is equally urgent that the aggregate limits applicable to Shannon Free Airport Development Company should also be raised as soon as possible.

As far as Shannon Free Airport Development Company is concerned, section 10 of the Bill provides for an increase from £130 million to £150 million in the aggregate amount the Minister for Finance may subscribe in taking up shares in the company; and an increase from £105 million £150 million in the aggregate amount of grant-in-aid, voted annually, which may be made to the company.

Share capital subscribed to the company is used for capital expenditure on the industrial estate at Shannon and in the mid-west region. The main elements of expenditure are land acquisition, construction of factories and ancillary works. The grant-in-aid moneys are applied towards meeting the company's running expenses and providing financial assistance to companies on the Shannon Industrial Estate.

The report of the Industrial Policy Review Group which I established last June is due to be completed very shortly. I intend to take all appropriate action open to me once the report becomes available. I would like to stress that this Bill should not be confused with any measures which the review group may recommend, as I propose to deal with these swiftly at a later stage. The reason for proceeding with this Bill at this time stems from the fact that the statutory limits on the grant giving powers of both the IDA and SFADCo are just about exhausted, and new legislation is required to extend them. Furthermore, by amalgamating the National Development Corporation with the IDA, I am continuing the process of rationalisation and refinement of the State's industrial promotion activities.

The review of industrial performance published in December of last year drew attention to the large number of promotional measures undertaken by different State agencies, the increasing use of equity by the IDA in assisting companies, and the move to a situation where up to 50 per cent of financial supports to medium-large indigenous industry would be in the form of equity or other remunerating forms of aid. The review also pointed to the improved flow of equity into Irish industry from other sources, for example, through private venture capitalists, the smaller companies market and the Stock Exchange generally.

Such developments have lessened the justification for a separate State agency mandated to promote equity investment. It has become difficult to distinguish NADCORP's developmental role from that of the IDA. Furthermore, with the IDA increasingly taking equity in projects it supports, as well as imposing stricter conditions relating to job performance and repayability of grants, any distinction between the two agencies on the grounds of commerciality is somewhat nebulous. By 1993, the IDA share-holdings are likely to be considerably greater than anything to which NADCORP could aspire. The review concluded that in order to provide a more cohesive and integrated approach to State equity investment in enterprise, the activities of the corporation and the Authority should be more closely integrated.

The legislation now before the House is the latest in a series of significant developments which have taken place since 1987 in the restructuring of the State agencies involved in industrial development and promotion. Other such restructuring included the establishment of FÁS to take over the functions previously undertaken by AnCO, the Youth Employment Agency and the National Manpower Service, the merger of the National Board for Science and Technology and the Institute for Industrial Research and Standards to form EOLAS, a single agency with responsibility for the development, application, co-ordination and promotion of science and technology in Irish industry, and the merger of Córas Tráchtála and the Irish Goods Council to ensure that the State provides marketing support to Irish companies from a single source. The integration of the activities of the National Development Corporation with those of the IDA is a logical step in this process of restructuring of our industrial development mechanisms.

The National Development Corporation, established under the National Development Corporation Act, 1986, was set up at a time when there was a shortage of investment funds in the Irish economy. It was felt that there was a need for a State role in equity investment in order to move away from a traditional reliance on bank borrowings as a means of financing start-ups and expansions.

NADCORP's primary function, as set down in section 10 of the 1986 Act, was to establish, invest in or manage any enterprise which the corporation considered to be profitable or capable of becoming so. It was also required to establish an investment fund, known as the "Revolving Investment Fund for Employment" into which was paid any money realised on investments, dividends and any profits earned by the corporation. The fund was intended to be used to fulfil any investment objects of the corporation.

The performance of NADCORP, however, has fallen below expectations, with the corporation rarely drawing down its budget allocation. To date, NADCORP has invested approximately £26 million and it currently holds shares in 57 companies which employ around 2,000 people. It is generally accepted that State support is necessary to encourage new developments and to help offset the various diseconomies facing Irish industry. However, State support can take a number of different forms, such as equity, grant payments, preference shares and remunerating forms of participation.

In January 1990, I emphasised NADCORP's developmental role, with the corporation participating as an integral part of the Government's overall industrial development strategy. While the private venture capital market was relatively under-developed when NADCORP was established, there had, in the intervening years, been a significant growth in venture capital support mechanisms. I pointed out, therefore, that it was necessary to reassess NADCORP's role with a view to increasing the focus on developmental and strategic projects.

I expressed the view that there was a need for a switch in emphasis with NADCORP becoming more developmental while retaining a long term commercial objective. There was, and still is, a pressing need for the development of certain indigenous sectors of strategic national importance, such as electronics and software. I indicated that an important objective for me as Minister for Industry and Commerce would be to integrate NADCORP's operations more fully into the central focus of industrial policy.

As of 30 September of this year, the IDA held both ordinary and preference shares in some 113 companies amounting to a total value of £21 million. This amount is likely to increase significantly in the next few years as the IDA, in order to ensure a better return for the State's investment in the development of industry is increasingly using this form of support to indigenous industry.

In the light of these considerations, I believe there is no case for the continuation of NADCORP as a separate entity, and one of the purposes of this Bill is to merge its activities with those of the IDA. This will provide a more coherent and integrated approach to State equity investment. Allied to this are the proposals contained in the Bill to allow the IDA to hold or dispose of stocks, shares and securities transferred from the National Development Corporation. The IDA will be permitted to hold more than 50 per cent by way of preference shares, and will also be given the power to hold shares in its own name. Such shares were previously held in the name of the Minister for Finance.

In merging the activities of the two agencies, I do not propose to extend the IDA's existing remit, which enables it to invest in industrial and international service activities. While NADCORP's mandate was somewhat broader, allowing it to invest also in most commercial undertakings, its investments were mainly concentrated in manufacturing companies. Nevertheless, section 7 in the Bill will allow the IDA to invest by way of the purchase or taking of shares in enterprises where NADCORP currently has holdings to which the IDA's remit does not extend. It is intended that all NADCORP's property, rights and liabilities will transfer in the first instance to the IDA. Subsequently, in so far as SFADCo and Údarás na Gaeltachta are charged with responsibility for development in regions where certain NADCORP holdings are situated such holdings will be transferred to SFADCo or Údarás na Gaeltachta as appropriate.

The Bill also provides for the preparation of the final accounts of NADCORP and their presentation to the Houses of the Oireachtas. As is usual in legislation of this sort, there is a provision in the Bill to exempt the IDA from the payment of stamp duty in respect of the properties and rights transferred to it under this Bill. There are also provisions to ensure the continuity of any contracts and agreements entered into by NADCORP and to ensure that any legal proceedings to which the NADCORP is a party, will not be brought to a halt on account of the transfer of NADCORP's assets and liabilities to the IDA. The rights and liabilities transferred by the Bill may be sued on and recovered by and from the IDA.

As I mentioned earlier, the Bill proposes to make a number of amendments to the Industrial Development Act, 1986, and I have already referred to the urgent need to raise the aggregate grant giving limits permitted by law. In addition to these and amendments stemming directly from the amalgamation of NADCORP with the IDA, I also intend, for example, to extend eligibility for employment grants from the current restriction to small industry, to all industry. Small industry is defined for this purpose as companies employing fewer than 50 people and with fixed assets of less than £800,000.

The IDA has found that employment grants, which are more targeted on employment per se and less on the acquisition of fixed assets, can provide a useful additional flexibility in its industrial promotion activities. This is also in accordance with the commitment made in the Programme for Economic and Social Progress to widen the use of such grants.

The Bill also amends the provisions of the Industrial Development Act, 1986, which requires that shares purchased or taken by the Industrial Development Authority shall be registered in the name of the Minister for Finance. This requirement does not exist in relation to the existing NADCORP portfolio. I believe that the provision in the Industrial Development Act, 1986, acts as a disincentive to the increased use of investment by the Industrial Development Authority in its industrial promotion activities. Consequently, the Bill provides for the transfer to the Industrial Development Authority of shares which have been purchased by the Industrial Development Authority but are currently held in the name of the Minister for Finance. The Industrial Development Authority will also be given the power to retain all amounts representing the dividends from these shares.

I emphasise to the House that industrial policy must be seen in its broadest sense as including all of the factors through which public policy can influence industrial development. It is not just a question of Government and State agencies providing industrial incentives, but must of necessity include the active participation of all participants in the economy, employers, employees and consumers.

As I pointed out in the preface to the review of industrial performance last December, I will continue to make further changes in our industrial policy as are required. The full range of promotional and advisory activities must be subjected to a continuing system of objective evaluation which relates expenditure undertaken to defined objectives and measures of performance. I will be keeping under consideration the possibility of further refinement of our policies with particular emphasis on the need to develop a strong indigenous industrial sector.

I mentioned at the outset that I established the Industrial Policy Review Group last June to examine all aspects of public policy which inpinge on industrial development, including the taxation system, PRSI, manpower, education, training and industrial supports. The group has been concentrating on the development of Irish owned companies and examining how policy could be adjusted to boost the development of indigenous industry in the medium and long term. I expect to receive its report shortly and I will act on it with all necessary speed.

The actions which I am now proposing do not in any way detract from whatever actions may be necessary as a result of the group's report. They are very relevant and will ensure further progress in refining our range of industrial incentives. They will also ensure that we can maintain a flexible response allied to securing the best possible value for the expenditure of scarce State resources.

Finally, I reiterate the particular difficulties which make it necessary to have the Bill enacted as soon as possible — the exhaustion of the aggregate grant limits applicable to both the Industrial Development Authority and Shannon Development Company.

I commend the Bill to the House.

Mr. Howard

This Bill was first published on 5 December, 1991, less than two weeks ago. It was debated and approved under the pressure of time in the Dáil within a matter of days and this evening the Seanad is asked to take all Stages of the Bill in three hours. The reason advanced by the Minister is that two State industrial development agencies are about to run out of funds for grant aid, and for other purposes. The Industrial Development Authority are almost at their present limit and that limit will be exceeded in a few weeks' time.

Shannon Development Company have already exceeded their limit and therefore are undoubtedly already restricted in their activities to some degree. It would be a very serious matter if the Industrial Development Authority and the Shannon Development Company were to find themselves so restricted and this House would be willing to accommodate such a situation. This House would also be justified in asking why the Minister, the Government or the State bodies concerned had to wait until virtually the 11th hour before coming forward to rectify the problem that had arisen in relation to the financial limits.

The Industrial Development Authority and Shannon Development Company are major State bodies and it must have been apparent to each, as it must have been to the Department of Industry and Commerce and to Government, that these financial limits had been reached or were about to be reached. I find it difficult to accept that legislation should be introduced in the last sitting days of the year to put this matter right. This is not a commendable way for high powered semi-State bodies to carry on and it should not be allowed to pass without comment.

I believe there would always be a willingness to rectify this situation but this Bill proposes to do more than that. The Minister pointed out that the House is being asked to vote through, on the back as it were of the capital requirements of these two State agencies, a proposal to abolish a worthwhile national body, the National Development Corporation. It would be preferable in order to deal with the contents of the Bill now before us to introduce two separate Bills, one to deal with the immediate problem of funding and another to be taken over a reasonable period of time during which every opportunity would be provided to discuss the merits or the demerits of the proposed abolition of the National Development Corporation. As far as I am concerned, to present both in one measure is an attempt to compromise the House in its examination of the merits of what are basically two or even three separate objectives.

The Minister told us that the Bill has three objectives. The first is the abolition of the National Development Corporation and the second and third are to increase the financial limits of the IDA and of the Shannon Development Company. Frankly, I regret the proposal to abolish the National Development Corporation and despite what the Minister said in his speech I still doubt the justification for that move. In the short period of its existence the National Development Corporation has filled a valuable role in industrial development and job creation particularly in small and medium size industry. Its role as originally intended has been discharged fairly well; that role was the provision of venture capital to industries in the categories I mentioned.

The National Development Corporation was set up in 1986 to help to reduce Ireland's immense problem of unemployment by investing venture capital in job creation projects. It is the only State-sponsored venture capital body and it is empowered to invest in the following type of job creation projects: manufacturing projects, tourism projects, agriculture, fisheries and food projects, long term contracts between food producers and food processors designed to improve the consistency and quality of supply, marketing companies helping particular sectors and projects derived from work done in researching universities and research institutions financed by the State. In all of these areas of economic activity jobs can be created and the State is already spending substantial sums of money there in the form of grants and tax breaks without any direct return to the taxpayer. In contrast the National Development Corporation has been empowered to invest in these areas on an equity basis where the taxpayer could receive return in the form of a dividend or a capital gain. The return would then be used for job creation.

At a time when 265,000 people are out of work it is wrong for the Government to abolish a body such as the National Development Corporation. The work of that body is all the more necessary at a time when banks are restricting drastically the credit available to expanding businesses and when private venture capital is scarce. To abolish the National Development Corporation at this time is very foolish.

The National Development Corporation's role is different from that of the private venture capital bodies. Private venture capital bodies require a rate of return which will satisfy their private clients. The National Development Corporation in contrast can take a long term point of view and can look to longer-term job creation at a time of high unemployment. I believe such a body is still most necessary.

In the mid-eighties when the National Development Corporation was set up, venture capital was a relatively new form of finance. That body filled a void especially when one contrasts the attitude of the banks then as compared with the present in regard to high risk finance. Many firms are viable today because of the presence over the years of the National Development Corporation. The high risk nature of investment has contributed to the growth and maintenance of jobs and, as the Minister outlined, the investment has been something like £26 million in almost 60 projects involving 2,000 jobs.

The attitude of the Government towards the work of the National Development Corporation changed dramatically in 1987 following the change of Government and the position of the corporation from then on was gradually eroded. It was not wanted by the Government. I believe that had the attitude of the Government of the time been different, it is possible the continued success of NADCORP would have contributed to job creation in a most effective way.

The Minister has indicated that the State will have a certain role in the provision of venture capital in future, but is the Industrial Development Authority really the right vehicle to make such decisions? The Industrial Development Authority first get a project into the country, then they assess the level of grants they will play to that body. They are further expected to decide, under this legislation, on the level of venture capital they will invest and the size of equity they may take in the firm in question. To me that is stretching objectivity to the limit. It would be much better form a body which is independent of the Industrial Development Authority, such as NADCORP to make such decisions.

The Minister has stated he has set up an Industrial Policy Review Group which he expects to report to him shortly. He has confirmed, this evening the review group will look at all State agencies involved in industrial promotion. I suggest that before abolishing NADCORP he would have been much wiser to wait until the report of that review group was available.

The Minister, in his speech, has mentioned a number of amalgamations or cases of streamlining of bodies associated with his Department. Not so long ago Córas Tráchtála and the Irish Goods Council were amalgamated into a new body called An Bord Tráchtála. Now the Minister is proposing that the Industrial Development Authority should swallow up NADCORP. I believe that while common ground existed to make worthwhile the amalgamation between Córas Tráchtála and the Irish Goods Council the situation in regard to the Industrial Development Authority and NADCORP is quite different.

Of course the role of the Industrial Development Authority is crucial in promoting industry in this country as is their role in relation to foreign investment. I expect that the Industrial Policy Review Group will have some interesting views to express on the performance of the Industrial Development Authority and how successful or otherwise they have been in the discharge of their functions over the years. It is often difficult to find a method by which the success or otherwise of a body such as the IDA can be measured. Nonetheless, such an examination is crucial, as we are expected to approve this increase of £500 million.

It would have been helpful to the House had the report of the review group been available to us now. It would also have been very helpful if the Minister in his speech this evening, had expanded on his own analysis of the progress or otherwise of the IDA as he sees it. On the basis of information available to us we would find it very difficult to refuse to agree to extending by £500 million the financial limits of the IDA but I would be much happier if we had had the report of the Industrial Policy Review Group before us or if the Minister had been more forthcoming in his own views and analysis of the performance of this body.

The other industrial promotion body involved in this legislation is the Shannon Development Company, which is affected by section 10. The effect of what is proposed here is, again, to increase the financial limits, in this case by a sum in the region of £65 million. The Shannon Development Company is a unique organisation whose objectives as prescribed in law are: "To secure sustainable economic growth through the integrated application of industrial and tourism development and by exploiting the comparative advantages withing the Region and to secure the growth of Shannon Airport in trade, passengers and services". It is what could be described as a regional development authority, perhaps the only one in the country; I do not know how I would describe Údarás. It is a prototype, a model of what people claim should be the type of organisation that should be brought into existence if regional development authorities were to be created for other parts of the country.

The western bishops, for example, a few weeks ago held a two-day conference in Galway. They are concerned at the population decline, the lack of jobs and so on throughout the province of Connaught and the west in general. It was very obvious from the tone of the conference that they believed that a regional development authority would have a valuable function to discharge in the west of Ireland. If the Shannon Development Authority is a regional development authority, as I believe it is, and if the Government created it, support it and would use it as a basis on which to develop the concept, then there is a very clear obligation on the Government to protect and to encourage such an organization.

The effectiveness of the Shannon Development Company should now be assessed and the Industrial Policy Review Group are undoubtedly doing that. Its work, its capacity to meet its target and to have a positive influence in its area of activities should be examined. I think it is reasonable to ask if the mid-West has fared better because of the presence of Shannon Development. It is also relevant to ask if its role or its functions as a regional development authority is in competition with national bodies for the same customers and the same resources.

Shannon Development has been criticised by public representatives, and in a sense I deplore their readiness to criticise so often. I believe that such criticism is unfair because basically, the Shannon Development Company is a progressive organisation that has shown enterprise and initiative in quite a number of areas. Where enterprise and initiative are involved there is always an inherent element of risk taking and it is impossible to guarantee 100 per cent success on every occasion. If public representatives focus on the unsuccessful aspect and, at the same time, ignore the real achievements of such an organisation, then the effect of that criticism is to damage the morale and confidence of the staff and board of the company. There should be a balance in criticism. Not all the criticism I have heard is justified. SFADCo is a worthwhile organisation which brought benefit to the mid-western region in both industrial promotion and tourism. They did so very effectively in their earlier years — but perhaps not so well in more recent times.

This Government and perhaps previous Governments, have failed to protect that regional development authority from the cuckoo in the nest attitude displayed by other State agencies. I ask the Minister when replying to comment on the relationship between the IDA and the company in attracting industry to Ireland. Is the relationship one of cooperation or conflict and competition? If the relationship is not one of co-operation, then it is a contest between David and Goliath, a national body with vast resources competing with a smaller regional body. To what extent does Ireland and, in particular, the mid-west lose out in such a situation? Are the Industrial Policy Review Group examining this question? Tonight, presumably we will be voting to increase the resources of one organisation by £500 million and another by £65 million and I do not want to see the positive results that could flow from that being negatived by petty bickering.

I want to address another question to the Minister in relation to a suggestion that has surfaced, which may or may not be accurate. Is it true that the Minister, on an overseas promotion trip within the past few years, was astonished to find a map of this country, supposedly circulated by industrial promotion agencies on behalf of Ireland, in which the mid-west and the Six Counties were blotted out? That is a reasonable question to ask, and the Minister may or may not wish to respond to it.

Mrs. Honan

They do not know we are there.

Mr. Howard

I am concerned about this possible conflict between certain State agencies and the regional authority in the Shannon area.

I wish to make a passing reference to tourism. One of the statutory obligations placed on SFADCo is to secure the growth in trade, passengers and tourism of Shannon Airport. One of the projects of the Shannon Development Company which we may be funding tonight, is the concept of a hub in the Shannon region. Unfortunately almost every North American airline that has been approached by Shannon Development Company was advised by two other State agencies — Bord Fáilte and Are Lingus — to forget about it because the Shannon stop-over is going to end.

I deplore the attitude of the chief executive of State agencies who, in recent months, have come out publicly and contradicted and disputed Government policy on strategic matters in the mid-west. I want to ask the Minister, as the representative of the Government here this evening, if the Government have any authority or self-respect left, when they permit these individuals to challenge and criticise their policies in relation to very sensitive issues in that area. These are fundamental matters which I felt should be referred to.

I would ask the Leas-Chathaoirleach to permit me to present Senator Wright with a copy of the Aer Lingus winter time table, in case he might ever wish to fly to Moscow and should seek information from Aer Lingus as to how he would get there.

Mr. Ross

Present him with a one-way ticket.

Mr. Howard

He can get a flight daily through Paris, Copenhagen or Frankfurt, but there would be silence about the daily flight from Shannon to Moscow. That is what I refer to as undermining. There is a good service from Shannon to Moscow daily.

Having voted — and we very likely will — to increase the financial limits of SFADCo by £65 million, we have a duty to ensure that the value of what we do is not negatived by this sort of conflict of interest within State agencies.

I want to make one final point. There is a Mercedes car parked outside this House with an engine that runs on vegetable oil. It has been around for 18 months. From what I have heard I believe it has outstanding development potential for the creation of jobs and benefit to the economy. I have been told there is a market across northern Europe for those engine units — for example, for pleasure boats — of something like £300,000 per annum. It is friendly to the environment and has many other advantages. The enthusiasm of the promoting agencies in this country towards this have been remarkably lukewarm compared to other jurisdictions. There is a lack of interest and of hunger for exploring its possibilities. When it is in production elsewhere, we may then ask if the person who brought it to the attention of the industrial promotion agencies in this country had been a slick German, a Japanese, a Jew or a Yank instead of an Irishman, this engine would be in production in Ireland now. I do not think the promoting agencies would have let it slip so easily through their hands.

I hope the Minister will deal with all the points I have raised. In conclusion, I reject the proposal to abolish the National Development Corporation and support the funding for the IDA and SFADCo. I look forward with interest to the Minister's reply.

Mrs. Honan

I welcome this legislation and I also welcome the Deputy Minister, O'Malley, to the House. I do not understand why on the Order of Business the Opposition voted that we would not pass this legislation this evening. Senator Howard knows that the money is needed in our constituency and I do not know why he could not be gracious and let it through. He wants two Bills instead of one. This one Bill, is sufficient.

I understand its objectives are threefold and it makes provision for a number of amendments to the Industrial Development Act, 1986. It will allow the IDA to hold and dispose of stocks. The IDA have been given greater power in relation to the holding of preference shares and the power to hold shares in their own right. The Bill also looks after SFADCo.

It is because of the second and third of these objectives that the Minister has asked us to pass this legislation before the Christmas recess. I was quite surprised that my colleagues on the other side of the House could not see the sense of letting this Bill through this evening. The difficulty is that the IDA by the end of 1991 will have utilised an amount of money almost up to their limit and, therefore, further moneys must be provided as the present £700 million it will be exhausted within the next few weeks, and certainly before the Dáil resumes. An extraordinary amount of money has to be put in place for the IDA. If the integration of the activities of NADCORP and the IDA is a logical step in the restructuring of our industrial development, I welcome it. Since I came into this House in 1977 I have opposed duplication of services. I have seen confusion where two authorities are supposed to be doing the same thing.

I pay tribute the work of the IDA, but, if we have to give them £500 million I would beg the Minister, Deputy O'Malley, to watch what they do. I do not have much to do with the IDA as SFADCo is the regional body in my area but I worry at times because of their treatment of other industries in the past.

Senator Howard said the IDA were the authority who looked after smaller industries. I could never understand successive Governments humouring, entertaining and trying to encourage large foreign companies and giving them colossal grant aid while good Irish-owned companies got into financial trouble. We would have more unemployment if we did not have grant aid from Government.

A company I know of in the past two years needed certain protection and when the banks tried to use the big stick against them they could not fold up their tents and move, they stayed and they survived. This has happened all over the nation. Senator Howard is correct; companies have gone to the wall because of being dealt with too roughly, at too early a stage, by the banks and also the IDA did not seem to be there at the time to help. I note also in this Bill that the industrial services were only available to small units of industry.

There are three aspects to this Bill. It amalgamates NADCORP with the IDA; it makes a number of amendments to the Industrial Development Act, 1986 and it raises the grant-giving limit permissible from the IDA and SFADCo. May I say I welcome the employment grants currently available to small industries.

It would be wrong of me not to refer to the grant aid to SFADCo. It would be foolish of Senators or others to think Shannon and SFADCo concern only three constituencies in the west of Ireland. That is not the situation where Shannon Development, Clare, Limerick and Tipperary are concerned. If a Government have a policy of decentralisation, putting offices here, there and everywhere, having big official openings, they must not at the same time allow pressure groups to take from the west coast of Ireland. Shannon concerns not just three constituences but is a matter of concern to places from Donegal to Waterford and the midlands as well.

The limit for funds to SFADCo is rising from a total of £105 million to £150 million to be devoted to day to day administration costs of the company plus grants paid to Shannon industries. The share capital of the company is being increased from a total of £130 million to £150 million for factory construction programmes. This will allow not just Shannon but the whole western region to continue to do for itself what it has shown itself to be capable of doing in the past; it will create the economic base which will sustain activities, individual jobs and the whole social community in the western area. It would be good for some of my Dublin colleagues to remember that we are not just talking about one constituency.

I understand that Shannon has been setting out to have an aviation centre to rank alongside other internationally accepted centres such as Singapore. Shannon already has a background in aviation and it employs 2,000 people in aviation-related business. However, perhaps more significantly, it is a major owner of aircraft spearheaded by GPA but including a number of other companies based at Shannon. This small area now has the third highest ownership of aircraft in the world after the US and USSR. Because of its current position in terms of aviation, Shannon has been chosen as an obvious primary location for the ongoing development of the sector and Shannon Development have been given the responsibility to make Shannon a true world aviation centre. This is all relevant to section 10 which provides for the allocation of money. Aviation is now being developed as the electronics were 20 years ago. To date Shannon Aerospace has been the most significant project in terms o size. They are due to become operational in October 1992 and the company already have in excess of 300 employees with another 400 engaged in construction work. It is predicted the full employment potential of this project will not be reached until 1996 when employment reaches 1,100. I could go on and on about Shannon Development — I suppose I have a right to do so, as I am probably be the oldest serving member from the area.

When I talk about Shannon Airport I am not taking into consideration just one or three constitutencies but the entire coast from Donegal to Waterford, including the midlands. When there was a strong challenge to Shannon Airport about 18 or 20 years ago we had the top brass in State bodies making similar statements but no chief executives would have challenged the policy of the Minister or the Government. The chief executives today should realise they are being paid substantial salaries from taxpayers' money and, therefore, should not challenge Government policy which is good for this nation. As I said, it is not just the areas of Shannon, Limerick and Clare we are talking about but the entire west coast, including the midlands. If we overfly Shannon and fly direct to Dublin — which is already overcrowded — Dublin Airport will not be able to deal with the extra traffic. It is unlikely that other Senators will make a similar statement because they will be thinking about votes. However, whether in Government or not I have no trouble making this statement because if decentralisation is part of Government policy no chief executive or group of pilots in a company should challenge that policy. When the Government decides to change that policy so be it.

I want to refer to the marina at Kilrush. My late husband, Derry, who had the honour of serving in this House before me, had strong views on the development of the lower Shannon region from Kerry to Carrickaholt. For that reason and, also, because it borders the Minister's constituency, I ask him to consider the development of the marina at Kilrush. I have charts and files on the plan for the development of the lower Shannon region; there is enormous potential there and nobody knows that better than the Minister.

In regard to the Minister extending the IDA's financial limit, I ask that he provide a watchdog because I do not have the same confidence as others in the IDA. If I am wrong I will have no trouble admitting that, particularly if somebody can tell me they are doing everything right and that all the money is being spent in an appropriate manner. As a former Cathaoirleach I visited the United States officially. While there on a trip I wanted to do something for my country. However, on the IDA industrial maps I looked at the mid-west region was blacked out because the IDA were not responsible for that area, and on the Bord Fáilte tourist map the mid-west was also blacked out because SFADCo had responsibility for that area, not Bord Fáilte. I ask the Minister to ensure that there is no conflict between these semi-State agencies.

I appreciate Senator Howard's worries about the conflict between senior officials or executives in State-sponsored bodies such as SFADCo, Bord Fáilte and the IDA, but I am concerned when I hear that State agencies are not willing to cooperate but rather compete to such a degree that they do not want one agency to get ahead of the others. I have seen the results of this. There should be more give and take, because it is not good policy to see one part of the country blacked out on a map. The people in America do not know why there is a black spot on those maps. I do not know how Senator Howard is going to vote, but I expect he will vote that the money goes through for Shannon and not vote for something else. I ask him to reconsider this matter. We should all work together to pass this Bill this evening.

Dr. Upton

We certainly will not.

Mrs. Honan

He is here — this is the man who is confused about whether he is from Clare or Dublin.

I welcome the Bill and hope the Minister, Deputy O'Malley noted my remarks and concerns. If people in State sponsored bodies or elsewhere have to be disciplined, so be it. They should be told what Government policy is because there seems to be some confusion about that at the moment.

Dr. Upton

It is always a pleasant and stimulating experience to listen to Senator Honan. I must confess I share many of Senator Honan's prejudices, whether that is good or bad, I am not so sure. I agree with her attitude about the way certain people conduct themselves.

I would like to refer to one or two points made by Senator Honan, particularly in relation to the marina at Kilrush. I am based in Dublin. That is the area I hope to represent, the area I try to represent, but, of course, I come from an area about three or four miles outside Kilrush and I am disappointed and concerned at the failure to develop the marina there over the past year or so. This is disappointing in view of the high hopes for this area which has a considerably high level of unemployment. I join with Senator Honan in exhorting the Minister to look again at the problems which exist in relation to that venture and to find solutions to them. There is no doubt about the enormous potential of the Shannon area. Therefore, it is difficult to understand why a venture such as a marina in a place like Kilrush cannot succeed. I do not know the reasons for the failure to develop the marina but I would like the problems to be solved. To some extent, that is irrelevant to the business we are discussing here this evening.

I would like to mention the timing of this debate and the time restrictions which are in place. We have an enormous unemployment problem; the Estimates published this evening reckon an average unemployment figure of 275,000 people in the coming year. At the same time, over a period of three hours we are discussing a Bill which deals with fundamental aspects of industrial policy; just three hours to discuss a very important issue. We are also discussing it in the runup to Christmas, a time when a great deal of legislation will be pushed through the Seanad. This is not the proper way to address the problems of industrial policy or, indeed, the problems that arise from key decisions of a fundamental nature such as this decision to abolish NADCORP. It is a very foolish way to conduct our business and is indicative of the deficiencies in this Government's industrial policy.

The Government do not have a coherent industrial policy. They make it up as they go along, stumbling from day to day. Therefore, I do not know why the Minister and the Government could not restrain themselves until the report and the review on industrial policy are published. That review and report are scheduled to be published at the end of January. Why did the Government not wait until then to introduce this legislation? The Government have an open mind on what will be proposed in this review of industrial policy. It is that type of contradictory behaviour which leads me to believe that they are stumbling along from industrial post to industrial pillar as far as policy is concerned. They have not got a coherent view on where they are going or on the objectives they would like to attain. They certainly do not seem to know how the objective of increasing employment will be realised.

The Bill before us is short-sighted and foolish. The National Development Corporation should not be abolished. At the same time, I am not really surprised at this decision. The National Development Corporation have had a difficult existence. There was tremendous trauma before they came into existence and indeed, when they were established. It was a traumatic process and many political wounds remain. The setting up of the corporation was opposed tooth and claw by people, some of whom I would consider to be pillars of the new right, for resons that derived from the deepest ideological beliefs. This was regrettable because those people, from time to time, describe themselves as pragmatic. In effect, the National Development Corporation were starved to death. They were subjected to financial malnutrition and, finally, were finished off this year. The amount provided for the corporation in the Estimates this year was only 50 per cent of what was needed to keep them viable. The corporation never got going and, for that matter, were never given an opportunity. Notwithstanding their limited existence and the small amount of money made available to them, they provided a useful service and this is an indication of the potential which exists for an organisation such as the National Development Corporation.

It is now proposed to merge NADCORP with the Industrial Development Authority. I have grave reservations about that type of process and those reservations are derived mainly from my assessment of the lack of achievement by the Industrial Development Authority. I have grave reservations about the Authority and, like Deputy Molloy's attitude to the establishment of a windmill on islands off our coast, I have held that view for a long time. Our food industry is in a chaotic state. The IDA have failed abysmally to create an environment in which the food industry could develop. That industry has enormous potential but it is in a dreadful state. It is bedevilled by scandals, has failed totally to get branded products on the market, to develop new products and to reach criticial mass in respect of research and development. The key organisation in determining the shape of the food industry should have been the IDA but they have been all over the place in relation to that industry. At one time they talked about plant, now I gather it is going to be about marketing.

It is to the credit of the Minister, Deputy O'Malley, that in 1981 he commissioned the Telesis report. It is a pity so little has been done about that report because it marked a new, far-reaching and, indeed, far-sighted view of Irish industry. It identified the fact that this country was concentrating to much on foreign manufacturing firms coming here to generate the type of employment we need. It also illustrated clearly the need for the development of strong indigenous Irish industry and that has not happened. We have failed to develop a strong indigenous industry and we have been failing to do that for the past ten years despite the recommendations of the Telesis report. That failure did not happen by chance. Following the publication of the Telesis report, the Industrial Development Authority opposed tooth and claw its contents. They did everything in their power to rubbish it. It is because of that carry on that the necessary developments, change of mind and shift in policy had been slowed down to the detriment of a strong indigenous industry. That is a great pity. History, of course, sorts out all these matters and we now have a widespread belief that a strong indigenous industry is essential. However in the early eighties, the IDA firmly resisted that report and did so for a long time. I am concerned about the merger of development corporations with the IDA because of the IDA's view at that time.

Over the last few years there was much talk about developing the "climate". We all know it is not easy to change a climate and changing the financial climate can be a difficult process as well. It is like trying to adjust the weather, it does not always work. The pillars of the new right believe that if we get the climate right there will be industries and jobs everywhere. However, the stark reality is that 275,000 people will be unemployed next year. So much for the climate and the capacity to change it. The Telesis report clearly indicated that the lines of policy we were taking were wrong, and yet for a long time we were unable to make those changes and accept the contents of that report.

The ESRI predict that over the next five years employment in manufacturing industry will decline, and in this context we are talking about closing down the National Development Corporation and handing it over to the IDA, an organisation with this record of failure and total inability to create more jobs. Nowhere is that more true than in their failure to exploit the potential of the food industry. It is a miserable and appalling failure. It is a dreadful failure because the IDA were, in many ways, the central formulators, the key generators of industrial policy to the extent that an industrial policy existed in this country. They set the pace and had the resources and capacity to do so; they were a dominant force in the genesis of industrial policy. Over a ten year period they have got it wrong and that is particularly true in the shambles we now see in the food industry.

I am happy that in the latter days of his reign, Deputy Reynolds, as Minister for Finance, was beginning to accept that some intervention was needed and to talk in terms of following the model set in the Swedish and Nordic countries. I welcome that. That is a very desirable change and a welcome move from the policy of generating the climate and then hoping everything else would work out.

The Minister spoke about the need for research and development, areas which have been neglected. Research and development are fundamental to industrial development, to generating new products and getting new products on the market. Unless we are prepared to make a far greater investment in research and development there will be difficulties in the long term. That is particularly true in the case of the food industry. Over the years we have failed for the most part to put in the kind of research and development investment needed. We have failed to generate new products but I do not want to pretend that that is easy and that it does not, on some occasions, results in considerable losses. However, we have to be prepared to make that investment and to absorb enormous losses so that we will succeed in generating winners.

The level of research and development and the way we have approached it has not been done in the most appropriate way. There is a much greater need for investment in research and development which will result in new products and getting them on the market. It is important that we spend more on that type of research, using the fundamental knowledge which is already available and trying to apply it. It is very important to develop research in some of our key industries.

Anybody who looks, for even a second, at the state of research and development in some parts of the food industry could be driven to despair. The amount of research and development which has been invested in the meat industry is dismal, indeed appalling. There are no worthwhile products on the market, no new products of any value are being generated; we are just not performing at that level of research and development. Yet if we are to exploit our potential we must have branded products, which people will clearly identify, on the European and world markets. I do not know how we can expect to do that given the levels of technology employed in the meat industry, which still centre around killing animals, sawing them down the middle and putting the meat into boxes. It is better than sending them out on the hoof, but it is a long way from what is needed. That is the type of end product the key generators of industrial development ideas in the IDA have allowed to happen over the years and why I am critical of them here this evening.

I repeat I am very disappointed that this Bill has been introduced at this stage. I am particularly disappointed that the Minister has not waited to see what is in the review of industrial policy which will be available in the next month or so. Why is it necessary to rush this Bill through in three hours in Christmas week when it relates to matters of fundamental importance, to the greatest economic challenge this country has faced in a long time, namely, creating jobs to reduce the number of people — 275,000 — we estimate will be on the dole queues over the next 12 months?

Mr. Ross

I am glad that I am able to agree with one item in Senator Upton's speech — but one item only — that there is unanimous disapproval and dismay that the Bill is being pushed through this House tonight. While I accept the urgency of one part of the Bill — about financial limits — I do not think that applies to the second principal part, that is, the amalgamation of the two State organisations. Senator Upton or any other member of the Labour Party, should not be allowed make speeches of that sort without their being examined or analysed. It is very easy for many of us in Opposition to oppose a lot of what the Government do, because we never have to explain or answer for our actions while they do. I resent and dismiss what Senator Upton says about the National Development Corporation being frustrated by those he described as the new right and their deep ideological beliefs, not that I feel I am one of them, but simply because the National Development Corporation was the product of the deep ideological beliefs of the Left at the time. It is no secret that there were difficulties within Government about that and that the Labour Party in Government got their way at the time.

As a result of the deep ideological beliefs of the Left — incidentally, they have now changed dramatically, and Senator Upton's speech was an indication of the schizophrenia which is attacking the Labour Party — the National Development Corporation was born. They were born out of totally false hopes, out of fairyland promises from the Labour Party. My memory is not very good, but I think the authorised capital was about £300 million. It was portrayed in Labour Party folklore as the solution to the unemployment problem at the time. Somehow the State was going to produce all this money and create jobs. That is what it was to be.

This Bill recognises one thing with which I agree — and the Minister's speech is a euphemism throughout because he talks about it not living up to expectations — the Bill that is, that the National Development Corporation, by the standards and the hopes set for it by the Labour Party, have been a dismal failure, because they have created a negligible number of jobs. I would dispute the figure of 2,000 contained in various reports. The National Development Corporation was a false political expectation and it is now, unfortunately, being looked at in that light by the Government. They really do not know what to do with this creation of the Labour Party. The Labour Party, having been in Government and having produced it, landed the next Government with the National Development Corporation. They now say they do not want it removed, because they are not in the position of having to decide whether to remove it. They are starved of finance because this do not have the sort of finance that Socialist parties, the once Socialist parties, the former Socialist parties, believed in pumping into the economy willy nilly. It is important that we recognise that any analysis of the National Development Corporation simply does not live up to the expectations or the hopes we all had for them.

There is more schizophrenia in Senator Upton's speech. He referred to R & D. We would all love to spend lots of money on research and development in industry. That is a very worthy objective and is always a primary objective of the left but it is never costed. They never say we will have to pay for it and we will get the money from X, Y and Z. The real problem with the Labour Party is this: unlike the other parties who threaten to spend money while in Opposition and then find that the realities of Government do not allow them to do it, I have a feeling that if the Labour Party got into Government again they too would spend the money they did not have. That would be a serious problem, because from what Senator Upton said, I suspect we would find them spending money they did not have on research and development, expecting the results to come through later. That was what they expected from the National Development Corporation. They promised jobs at any capital cost to the Exchequer, money to be borrowed here there and everywhere.

Although I oppose this Bill for several reasons, I am afraid some people are opposing it for all the wrong reasons; they made promises and no Government could have delivered on the expectations of the National Development Corporation and I am afraid the National Development Corporation failed in that way. What we are seeing in this Bill is the mercy killing, the euthanasia, in many ways, of a creature which was created by the Labour Party.

Dr. Upton

The Senator is suffering from schizophrenia.

Mr. Ross

I did not interrupt Senator Upton, because I will have plenty of time to reply to him. I am opposed to the Bill because I think one of its problems is that we have one white elephant of the State swallowing another white elephant of the State, we do not have any particular thought going into it and this part of the Bill certainly could have waited. I accept the Minister's bona fides in regard to the first part, that the Bill has to be passed by the end of Christmas but what we have not done, and what nobody has done in the last few years, is a thorough analysis of these semi-State companies and deciding what to do. To a certain extent we are saying we will jumble them all up together and see what happens because if one does not work, it may work in the other.

The IDA, constantly the subject of criticism, suffer from one particular defect — it is almost impossible to cost the expense and the return, as is the case with money State companies, like Bord Fáilte, CTT and others. They make their own particular efforts; they make a stab at it from time to time and usually use the yardstick of cost per job. That is a very laudable effort — I think the cost per job now is £14,000 — and they go on to say that half of that amount is recouped by the Exchequer, and that the cost per job is constantly declining, as it has done in the last few years. While we do not dispute those figures, especially the way they are calculated, it is an intangible concept to say how many of these jobs would have been created if the IDA were not there. We know how many jobs would have been created if NADCORP were not there, because they created so few, but it is very difficult for the IDA to say this. The merging of NADCORP with the IDA, the takeover of one by the other, will not help us to do an individual analysis of what those two organisations were doing. We are in real trouble and I await with interest the report of the working party the Minister set up in this area. I think we are in serious difficulties when we get into that area because we can draw any conclusions we like. Senator Upton's thesis cannot be totally destroyed because this whole area is up in the air and could be open to any sort of interpretation.

I worry about the use of the IDA by the Government and the fact that it is politicised to a certain extent. I also worry about that board of directors are political appointees. As a result, it is very difficult for us to say it is an independent authority. I worry that there are those on the board — and on many other boards — whose loyalty is to a party rather than to the State. It is a pity the IDA, which use so much State funds and make very sensitive decisions in terms of grants, loans and taking equities in companies, can be subject, and undoubtedly are subject, to political pressure, especially in the present circumstances.

I, and I am sure many other Members of this House, have been subjected to pressures in this area. I have had people telephone me asking if I could organise something with X who is on such and such a committee of the IDA. They believe that politicians can influence grants, permissions of one sort or another because they get in touch with their friends. I do not believe the IDA should be subject to this sort of pressure but I do believe this practice has developed because many appointments are politicised. One area where I personally received a certain amount of pressure was the International Financial Services Centre. Somebody rang me up looking for the go ahead from the IDA in this area. I thought it was unfortunate they felt I could do such a thing, but they made certain connections and felt it could actually be done. I did not do it, but I imagine other politicians are subject to the same sort of pressures. If that sort of politicisation were removed the IDA would certainly be seen not to be a party political organisation.

I would like to take the single example of the International Financial Services Centre to dispute some of the claims made by the IDA. Because their brief is so wide, and because the returns and the analysis of what they do is so subjective, it is very difficult to judge if they are a success or failure. However, the IDA by their very nature — the same is true of all these State-sponsored bodies — have to issue an annual report; and have to claim enormous successes for themselves. The IDA, which were delegated responsibility for selling the International Financial Services Centre, each year have to claim great success, emerge with a long list of names of companies which have come here, and, indeed, with employment numbers. I think these claims are very doubtful. In the last report they list the International Financial Services Centre projects announced in 1990. They claim credit for about 30 companies that are listed there — some from Ireland and the majority from overseas, as they are meant to be — and they claim credit for producing 600 jobs there.

Certain questions should be asked about those particular claims and about the International Financial Services Centre. I do not think any serious analysis has been done of that Financial Services Centre yet. Despite the fact that, quite rightly, it is claimed that up to 150 companies moved into the International Financial Services Centre during the period in question, the employment figures are dismal. While well known names like Morgan Grenfell and others came here, despite the enormous trumpeting about catching an international fish, the numbers employed in each of these organisations and these units are in single figures — they are very small. In fact, in the last report of the International Financial Services Centre I read the projected employment remained very small.

Those expectations have not been fulfilled. The number of new jobs that were promised in the original Fianna Fáil manifesto, I think of 1987, ranged between 8,000 and 10,000. It is impossible to know how many new jobs were created, as is the case in so many of these projects, but we know the companies from overseas are employing only very small numbers. We also have to ask how many Irish people are employed by those overseas companies. How many of these jobs are being given to foreigners who are repatriating the money? What is the net effect and benefit to the Irish economy? Is it negligible? We have to ask also why the IDA have been unable to attract an anchor tenant, because I believe the original objective of the International Financial Services Centre was to gain an anchor tenant, a world famous name which would be attracting high quality, operations to the centre. No international company set up a large operation in Dublin, despite the fact that well known international names have been attracted.

The other question I would ask about the claims for the Financial Services Centre which were made by the IDA is: how many of the jobs being created have simply meant people relocating across the Liffey? It is very difficult to know how much revenue is lost to the Exchequer because so many Irish companies simply relocated — I am thinking of the major banks and other Irish companies — from Ballsbridge to the Custom House Docks site. What loss was there to the Exchequer providing incentives to induce them to do that? How many new jobs were created there and how many would have been created anyway? That is something I suspect we will never know.

We should also ask why a financial services centre promoted by the IDA has now agreed and allowed a large amount of the space there to be taken up by solicitors and by accountants. Once again it seems they are moving in and taking advantage of the rates and rent allowances which were designed specifically to attract people from overseas and to produce a net added value to the Irish economy. We have solicitors and accountants simply relocating there getting tax advantages. That whole area is shrouded in confusion because it is very difficult to get answers; in fact, it is impossible to get an accurate answer to what the net loss to the Irish economy is against the net benefit.

I doubt the extravagant claims being made by the Government every time they announce a new fish has been caught and brought into the International Financial Services Centre. In reality, it is usually a very small operation and not all that is happening there is a plus. In reality, the centre is falling way below the expectations which were part of the Fianna Fáil manifesto of 1987.

The problem with this Bill is that we are merging two white elephants, and without any particular plan. NADCORP have not produced the socialist Utopia of Senator Upton's former dreams and, as a result, they are being merged with the IDA, which are not really subject to proper analysis and scrutiny. What we have to do, and what we should have done, is await the report. This is jumping too far; it is merging two white elephants and it may even produce a few little baby elephants. We ought not jump the gun. We could acknowledge the failure of NADCORP, but we could also have asked to see the report because now the process is irreversible and the real focus and scrutiny should not be on NADCORP but on the IDA. This serves only to prop up the IDA when I think it really is in need of serious reform.

Minister for Industry and Commerce (Mr. O'Malley)

I thank the Senators who have contributed to this debate. I have listened to their views with some considerable interest and I will endeavour to deal with a number of the points raised.

I would like to start with some of the points made by Senator Upton because he was trying to confront some of the issues. However, I felt he was quite erroneous in his approach to a number of them. He did, of course, have to lament the demise of NADCORP and — admittedly, not very enthusiastically — he tried to suggest that it had been a great success. He did not overplay that one, and I think he was right there. Its genesis, which was touched on by Senator Ross, is interesting. That is why I was particularly fascinated to hear Senator Howard tonight lament its passing. I think he is going to vote against it, because it was announced, as I recall, early in 1983 by the late Deputy Cluskey, who was Minister for Industry and Commerce. He announced that the Bill would be drafted and would be up and running in a matter of months. The Bill finally appeared, somewhat reluctantly, in 1986 in an extremely watered down form from what Deputy Cluskey had originally in mind. The reason it took three years was that the Fine Gael party were adamantly opposed to it. They made it abundantly clear that they did not agree with the idea and they did no see it working. Of course, they were right.

On the question of its being starved for funds, this point was made in the Dáil and I did not get the opportunity, unfortunately, to reply to it there. The point was made by Senator Upton, by Senator Howard and others tonight. I would like to give the House some figures. NADCORP have been in existence for six years — from 1986 to 1991, inclusive. During that time their Exchequer capital allocations totalled £33 million; the amount they sought to draw down from the Exchequer was £20.1 million and the total amount they invested during that time was £25.83 million.

Dr. Upton

It would buy just three Carysforts.

Mr. O'Malley

I do not know what it would buy, but what I do notice — and I sought to inform the House to that effect — is that they chose to draw down, rather remarkably in these days of shortages of money, £13 million less than the Exchequer had allocated to them. I wonder why. Their investments of £25.83 million at the moment have a book value of £19 million but, of course, their market value would be significantly less than that.

Senator Upton went on at some length about the deficiencies in the food industry. I do not disagree with him that there are very serious deficiencies, and it is particularly regrettable because it could be and should be the strongest part of our indigenous industry, but I hesitate to speak about it at any length here because I and my Department have no responsibility for the food industry. In fact, we are excluded from it; I wonder whether that is one of the institutional strengths of the arrangements that were made in 1987. I doubt it. I think it is a matter for the review group to report next month I do not know whether they will or not. Senator Upton deplored the lack of research in the food industry. That is certainly true. There is no question about that. It really is very regrettable, but it is not just on the manufacturing alone.

Somebody was comparing for me recently the amount spent in this country on breeding and the quality of the breeding and the rate of improvement in genetics in animals in recent years. It is sad to have to admit that the rate of improvement in our animals, particularly in cattle, both beef and milk, is the lowest in the European Community. To listen to some of the people who pontificate about it, one would think it was almost the opposite. It is a very sad fact. The lack of commitment and not just money — to research, the inability to see the need for it and the value for it in agriculture, is regrettably, reflected on the food side of industry as well. One reason we are so very weak is because we have never accepted that. I do not know whether any changes in the structural or institutional side of the food industry will be recommended. I imagine they will. One of the outstanding and most successful Irishmen in the food industry is a member of that group, Mr. Hoskins of Northern Foods, a company turning over more than £1 billion, and doing so very profitably and very successfully. He is an ideal man to give a sense of direction to the Irish food industry.

Senator Upton went on at some length about the IDA and the way they resisted the Telesis report. He is right in that. I thought they, perhaps, overdid it, but he should be fair enough to admit that some of them at least resisted it because they thought it was wrong; more of them resisted if for a totally different reason.

It is interesting to come into this House in the nineties and hear Senators talk about the IDA, because when I was here in the seventies and early eighties there were paeons of praise for the IDA from all sides of the House. It has changed. I think it is healthy, because it was sycophantic in the seventies. Senators kept telling the IDA how great they were, and they were even greater when they put a factory into Deputies' or Senators' constituencies, but at least an attempt is now being made, I am glad to see, in both Houses to analyse the IDA critically and to weigh up and assess the value or otherwise of agencies like the IDA and Shannon Development, Eolas etc. These agencies are very expensive and we are entitled to analyse their relative success or otherwise.

A number of Senators were concerned that there was not sufficient evaluation and monitoring of the IDA but I assure them that their policies are monitored as is their spending.

The point was made that because the Telesis report was not accepted or implemented as fully as it should this county lost out. Perhaps it did. I was associated with obtaining the Telesis report. I was Minister about the time it was delivered but I was not in the Department when the time for implementing it came about. It is probably fair to say that the views of the IDA prevailed at that time, as they so often did at different stages of our history. Senators are quite right to say there should be a far more critical analysis and evaluation of the success or otherwise of policies that have been followed. That is exactly what I am endeavouring to do and that is exactly what this review group are being asked to do.

I had a verbal report from the chairman today who told me they will be finished on time which is remarkable. It is a radical report. I may not like a lot of it but at least I will have something to think about. I look forward very much to reading it because it will be valuable. He told me that the group with whom he has worked is one of the most successful he has worked with because of the qualities of the individuals concerned. I was very glad to hear that because they are people of outstanding calibre.

Senator Ross referred to the 2,000 jobs and said it was not correct to say that they were all created by NADCORP. Of course it is not correct nor did I suggest that. I simply said that there were 2,000 jobs in companies in which NADCORP invested but most of those jobs would probably have been there anyway. It is certainly not correct to say that the 2,000 jobs exist only because of NADCORP.

The Senator chose to make what I thought was a pretty cheap point about members of the Authority of the IDA and about the IDA as an organisation being subject to political pressures, particularly in the present atmosphere. That is an example of how badly he reads the situation because if they were ever subject to political pressures they certainly are not in the present atmosphere. It is my experience of the IDA that if people did try to subject them to political pressures, they very rarely, if ever, succumbed to those pressures. That is still their position and it will remain that way. It was a particularly unfortunate remark to make about the members of the Authority because I have taken some care in the appointment of members even to the extent of leaving vacancies on the Authority sometimes for prolonged periods. I have taken care that every member of that Authority whom I appointed, and I believe those who were appointed by people before me are people of outstanding calibre — I am satisfied on that — whose integrity is beyond any doubt and each of whom is qualified in their own way to make a significant contribution. I believe they do so. It is grossly untrue and a travesty of the facts to say that the loyalty of members of that Authority is to a political party or parties and not to the State. That is absolutely totally untrue and I repudiate it with contempt.

Deputy Ross went on to discuss at some length——

Dr. Upton

He is only a Senator. He will not be a Deputy until after the election.

Education clearly must be of fundamental importance. The relevance of our education system to industrial development must be very important because the people in industry are the biggest single input and the preparation of those people — I do not mean in short term training but in their educational background — is of fundamental importance. The training and manpower policies which are run separately from my Department or from the IDA and so on, are of great concern because the amount of money involved is enormous. We spend £180 million a year — most if it from the European Community — on industrial and vocational training. We have to ask ourselves if we get good value for this huge amount of money. We may well not, and that is why I look forward with considerable interest to what they are going to say.

Mr. Lanigan

I do not wish to interrupt the Minister's deliberations, but I believe we are not getting good value.

An Leas-Chathaoirleach

I ask the Senator to allow the Minister to finish.

Mr. Lanigan

Successive businessmen have not gone through the training for business that is being imposed upon them——

An Leas-Chathaoirleach

The Minister without interruption, please.

Mr. O'Malley

There is a range of other matters, such as aspects of taxation, and not just corporate tax but personal taxation; and the whole field of social welfare, even though it may seem a long way from industrial policy, as we have tended to practice it. It all comes back to trying to draw together all the matters that impinge on it either positively or negatively and trying to make changes on a broad front which will contribute to greater industrialisation and employment here.

Both Houses could usefully and profitably debate these questions based on that document, which I hope will be available in about a month's time. They have been asked to concentrate especially on the development of indigenous industry, because that is our particular weakness but not exclusively. This is most important because our industrial successes, as they are perceived from abroad at least, tend to be those which emanated originally overseas. We do not have the same level of success among Irish owned industry, or anything like it.

I hope I have dealt with the main points that have been raised. I will be glad to reply in detail to specific points on Committee Stage.

Question put and agreed to.

Agreed to take remaining Stages today.

Seanad Éireann debate - Tuesday, 17 Dec 1991