Industrial Development Bill, 1993: Second Stage.

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

I welcome the opportunity to deliver upon the commitment I made previously in this House when we debated the Culliton report to initiate in this House the Bill implementing the recommendations which the Culliton report and the Moriarty task force report proposed in relation to agency restructuring. I hope we will have ample time to debate in full the implications of the agency restructuring set out in this Bill.

The purpose of this Bill is to create the new State agency structures which will underpin industrial development in coming decades. Three new bodies will be created — Forfás, Forbairt and the Industrial Development Agency (Ireland) — IDA. Each of the agencies will be autonomous and will have its own board. Each will have a distinct mission and goals. However, all three agencies will operate within a framework which facilitates co-operation and mutual support. Forfás will be responsible for overall policy co-ordination and administration. In addition, Forfás will play a proactive role in ensuring co-ordination in those areas of industrial development which are outside the direct remit of my Department, such as food and foreign trade. Forbairt will develop indigenous industry by bringing together the existing functions of Eolas and the IDA, and finally IDA Ireland will continue to promote the attraction of overseas industry to Ireland.

The creation of these new bodies represents a major step forward in the development and implementation of industrial policy. I will return to this point in detail later, but first I would like to place the Bill and the topic of industrial development within the broader context of Irish economic development. As the House will be aware, the boundaries of this broader area have been explored and developed through the work of the Industrial Policy Review Group, chaired by Mr. Jim Culliton, and in the subsequent task force chaired by Dr. Paddy Moriarty.

The real breakthrough in Culliton was the realisation and the acknowledgment that industrial development comes about through the harmonisation of a broad range of factors and, furthermore, that the requirements of industrial development should be the driver in many areas of economic and social activity.

In the Programme for a Partnership Government, my ministerial colleagues and I indicated our clear agreement with this approach and stated that we would: strengthen Ireland's industrial, scientific and exporting base; increase the level of directly productive activity; encourage a dynamic spirit of enterprise; put a new emphasis on building up small industry, and broaden industrial strategy to take in all the factors that affect output and productivity.

The Moriarty task force reinforced this central message and undertook, with great commitment, the difficult job of translating the need for a more co-ordinated approach to enterprise development into a series of specific tasks to be fulfilled by various Government Departments, State agencies, and the semi-State sector.

In the document Employment Through Enterprise, the Government has set out its proposals for dealing with the task force recommendations in the areas of taxation, energy, ports, communications, transport, environment, commercial State enterprises, education and training, competition policy, the legislative process and of course, the re-organisation of the State agencies. Taken together, the programme set out in that document represents the most concerted effort ever undertaken to address the requirements of employment and enterprise development in the State.

As far as the industrial development agencies are concerned, the conclusion of the Culliton report was that their role is an important but limited one. When reviewing industrial performance there has for too long been a tendency to believe that the agencies are responsible for job creation and also for any failure to meet this country's employment needs. Set against the broad panorama of issues addressed by Culliton this view is patently seen to be flawed. However, this broader view should in no way allow complacency to creep in. The fact is that the current agency structures are inhibiting the most efficient and effective development of industry, and we must change them.

The problem to be tackled is evident when we look at the breakdown of jobs gained and lost in both Irish and overseas firms over the six year period, 1987 to 1992 inclusive. During this period an impressive total of 118,500 jobs were created but, unfortunately, this was accompanied by total losses of 108,600. Effectively, the net change in the period was just under 10,000 jobs. What is even more disconcerting is that whatever net gains have been made have arisen through the attraction of foreign firms. In the period in question, Irish-owned firms actually managed to lose 600 jobs.

Let me be clear from the outset that the contribution which overseas firms have made to Ireland and the success which the IDA has achieved in attracting them is not to be dismissed. On the contrary, it deserves the highest possible praise. Around three-quarters of our industrial exports come from foreign firms and those same firms employ half the total work force in manufacturing. What has been happening, however — and the figures I have given the House for job gains and losses bear this out — is that our successes in the field of attracting mobile investment have been obscuring our failure to develop a sound base of indigenous industry.

The current situation, where a single agency is responsible for both indigenous and overseas firms, exacerbates this lack of clarity. This is understandable and inevitable, since any organisation will strive to present its performance in the best possible light. But the very inevitability of it means that we must change the structures to get the clarity we require. This is what this Bill is about.

The challenge of developing indigenous industry will be addressed by Forbairt. It is a challenge which will demand a different package of solutions from those which have traditionally been dispensed. In particular, it will mean changing the widespread perception within industry and the State agencies that cash grants are the main vehicle for development. If this were the case we would have solved our problems long ago. The truth is that the developmental requirements of industry are far more fundamental, and the problems more deep seated. The key issue is whether our firms have the necessary competences to produce the technologically sophisticated, high quality goods and services which international markets require; and, also, whether firms have the internal efficiencies needed to bring those goods to market on time and on budget.

At present we have two problems. Not enough of our existing firms have the necessary mix of such competences to develop and grow. Second, we are not developing sufficient new start-up firms to expand the overall indigenous sector to the levels that our unemployment problems require.

These problems are being addressed by the existing agencies. The IDA, for example, is developing capability-related programmes, focusing on company development and management development. It is also increasing its equity participation in firms and tying its financial supports to the development of strategic fundamentals in firms. At the same time, Eolas is offering technology audits, quality programmes, graduate placements and a host of other technology development facilities. However, this short list of initiatives demonstrate the piecemeal approach which the existing structures bring about. In creating Forbairt, this Bill will allow a much better planned approach to the development of indigenous industry.

We should not delude ourselves that the new structures will bring results overnight. The problems I have referred to will take time to solve. Professor Michael Enright of Harvard Business School and an advisor to the Culliton Review Group pointed out:

Firms and governments must take the long view if they are to be successful in improving their competitiveness. Industrial competitiveness is built over decades, not business or political cycles.

The objective in creating Forbairt is not to achieve a quick fix solution. It is, rather, to create a clear focus on the problem and, in so doing, to ensure that performance targets for the new agency can be set out and appraised in unambiguous terms.

The same holds true of IDA Ireland which will be mandated to maximise the return to Ireland from the attraction of mobile international investment at the minimum cost to the taxpayer. This involves more than just "selling" Ireland as an attractive location. It means being aware of movements in the business and technological environment and of being able to make a successful appraisal of the strategic fundamentals of potential client firms.

In the interests of minimising grant expenditure, it also requires that IDA Ireland should be able to demonstrate the attractiveness of Ireland in terms of other factor advantages such as the quality of the labour force, our clean environment and other infrastructural assets such as our telecommunications system. In these regards, the importance of the wide ranging reforms which the Government has instituted in response to the Moriarty Task Force recommendations can once again be seen to make eminent sense.

I also want IDA Ireland to strengthen its efforts within the Single European Market. All of the assets which I have referred to above are as attractive to European firms seeking to expand as they are to US or Japanese firms. The opportunities offered by the Single Market are also conducive to the development of joint ventures, strategic alliances and technology transfer between Irish and other European firms. This is another area which I want IDA Ireland to explore in conjunction with Forbairt.

Having just mentioned linkages between the agencies, I would like to turn now to the issue of co-ordination. As I have shown, the separation of indigenous and overseas functions will lead to a greater clarity of mission at agency level. However, we must also be on our guard that this separation will not lead to the area of overlap between the indigenous and overseas functions being ignored. This necessity for co-ordination is part of the raison d'etre for Forfás. The Programme for a Partnership Government established this point. It was further reinforced in the document Employment Through Enterprise where we pointed out that Forfás will have a vital co-ordinating role and will promote greater linkages between the indigenous and international sectors of Irish industry.

In the context of promoting linkages, it is vital to ensure that opportunities to exploit synergies between indigenous and foreign firms are exploited to the greatest extent possible. Such business linkages are of vital importance for employment creation, indigenous business development and the continued attraction of new greenfield investments. Because of the small size of the country, indigenous companies have a limited domestic market in which to grow their businesses. This is a significant drawback.

As Professor Michael Porter pointed out in The Competitive Advantage of Nations, the size of the home market and, more specifically, the nature of home market demand, is a major determinant of the rate at which a nation's firms can develop. The opportunity to supply multinational companies based here represents a very significant expansion of the domestic market for Irish firms. It also represents the kind of challenge, in terms of buyer standards, which indigenous firms need to rise to if they are to compete internationally. By developing as successful suppliers to multinationals in Ireland these firms can develop world class standards with less investment in marketing and product development than would otherwise be the case.

The whole area of linkage development also raises the question of industrial clusters as developed by Porter and recommended in the Culliton report. The issue of cluster development is a complex one since it requires the formation of linkages between overseas and indigenous companies, and between companies in different sectors. For example, an agro-industrial cluster could involve companies in food processing, engineering companies in production equipment fabrication, and electronics and software companies in process control and monitoring. Clearly it will be difficult for either Forbairt or the IDA to implement the clusters concept while at the same time focusing on their sectoral responsibilities.

This is a perfect example of the type of area where Forfás can play a role. That role will involve developing policy for cluster and linkage development, and working with staff from Forbairt and IDA Ireland to ensure that, at an executive level, policy is implemented in a flexible and pragmatic way. For example, Forfás will need to work with the two agencies to determine the operating guidelines to be used in negotiating particular support packages with companies. The objective will be to ensure an equitable approach to overseas and indigenous companies operating in similar sectors or in competition with one another.

Another area where co-ordination will be required is company ownership changes and take-overs. The global nature of business today means ownership of companies cannot be seen as a static phenomenon. As the Culliton report pointed out, overseas companies have transferred to Irish ownership and vice versa. This is frequently in response to the developmental needs of those companies and can be a positive step. In the agency context, such transfers of ownership need to be managed to ensure full support is provided during the transitional period. Forfás will play a co-ordinating role.

This policy and evaluation role of Forfás is most important. In this regard, I see Forfás as an important link in the policy chain between my Department and the two agencies. The centralising of policy and evaluation activities of the agencies at the level of Forfás will make for more open dialogue in the industrial policy area. Since Forfás will not have direct involvement in the implementation of programmes it will be in a better position objectively to analyse the performance of the executive agencies and on foot of this to provide policy advice to my Department.

In referring to Forfás as a link in the chain, I emphasise that I and my Department will be the driving force in the policy area. The Moriarty Task Force made a number of recommendations as to how my Department's resources in that policy area could be strengthened. These are being pursued. I will be continuing my programme of restructuring and organisational development within the Department to ensure the changes proposed in this Bill at agency level will be fully reflected within the structures of the new Department of Enterprise and Employment.

I will touch specifically on the question of policy for science and technology as I know there is some concern amongst the scientific community that the focus on science and technology which has developed under the aegis of my Department in recent years will be distorted or diluted by the new structures. I am fully committed to continuing to develop the role technology can play in industrial development. I am convinced the incorporation of Eolas into Forfás will create a structure in which the technological needs of firms can be better serviced. Technology development is a vital part of company development and Irish firms are showing a growing awareness of this.

It was demonstrated by the huge demand for the new Structural Funds-supported industry research and development scheme launched by my Department last year. Under our plans for the next round of Structural Funds, Forbairt will continue to respond to industry demands for research and development support. This is entirely in line with the capability development approach I want Forbairt to pursue with vigour.

The integration of Eolas into Forbairt will bring science and technology into the spotlight, not relegate it to the shadows. I am totally committed to extracting the maximum value from the entire industrial development budget over the short, medium and long term. This means science and technology activities will be subject to the same scrutiny and performance appraisal as the other programmes of the agencies. Expenditure on science and technology is necessary; but it is equally necessary that such expenditure should provide value for money.

These sentiments also correspond with the recommendations of the Culliton report that my Department's science and technology activities should be fully responsive to the needs of industry. However, I am aware that the views of Culliton on science and technology were interpreted in some quarters as being too concerned with short term gain at the expense of a long term strategy. Such a view would be inconsistent with the need to take a strategic long term perspective on the development of industry and is not based on the facts. Under Forbairt, longer-term science and technology initiatives such as the programmes in advanced technology which are harnessing the capability of our third level institutions will continue to be supported. There is no question of this longer-term perspective being disregarded.

On the subject of policy and evaluation, I must return again to the role of Forfás. Eolas is currently undertaking a comprehensive programme of science and technology evaluation, providing a valuable input to the policy formulation process in my Department. This activity will now be integrated into Forfás and will continue. The same is true of the broader science and technology policy functions incorporated in the Science and Technology Act, 1987. In particular, I refer to the important horizontal rôle which Eolas exercises in international programmes such as the EC Framework Programme. This function extends across a number of Departments and agencies and I am anxious it continue within the Forfás context.

When speaking of interdepartmental co-ordination, I address the role of Forfás in trade and marketing. Much has been made of the fact that An Bord Tráchtála has not been merged with Forbairt. In the Programme for a Partnership Government we stated our intention to establish the new Department of Tourism and Trade which would bring a new dynamic to this area. The retention of ABT as a separate body reporting to the Minister for Tourism and Trade is consistent with our belief that export development and trade promotion should be the main focus of that organisation. The Culliton and Moriarty reports support this view.

I have reviewed the question of incorporating some elements of An Bord Tráchtála into Forbairt in consultation with the Minister for Tourism and Trade. Our conclusion was that any splitting up of the trade and marketing functions of An Bord Tráchtála would simply lead to a damaging sub-optimisation of both elements. Such an outcome would not serve the objectives of industrial development or trade development. That is why we made the decision we did.

The need for co-ordination remains and this will be achieved in the first instance through the mechanism of Forfás. To assist in this process, the chief executive of ABT will be an ex officio member of the Forfás board. In addition, close co-operation already exists in the regions between ABT and IDA/Eolas personnel. This will continue and will be strengthened under the new structures. With these arrangements in place, I am confident industry will continue to be fully supported in its marketing requirements at the level of the individual firm.

As the House will be aware, the development of the food industry is of key importance. I have discussed the new agency requirements with the Minister for Agriculture, Food and Forestry. We have agreed that the current position where the industry division of IDA is responsible for all food companies, regardless of ownership, will continue in the new structures. Forbairt will have sole responsibility for the development of the food industry. I will also be ensuring the industry is represented on the board of Forfás. The Bill also provides for a general enabling provision to allow the type of co-ordination I have proposed between An Bord Tráchtála and Forfás to be extended to any new marketing body which may be established in the food area.

In matters of practical administration, I have been anxious to guard against the creation of additional layers of bureaucracy when establishing the new structures. It is my intention, therefore, that central administrative functions relating to areas such as finance, land and personnel for the agencies will be centralised in Forfás. This approach will allow for the smoothest possible transition to the new structures and will minimise the administrative overheads and costs in the operation of the new bodies.

As I have been stressing to the House, the plans for agency restructuring are part of a concerted effort by the Government to bring a spirit of enterprise and progress to all areas of economic development with a view to tackling the pressing problems of unemployment. In a related area, the establishment of the county enterprise boards will help to bridge a gap in the current support system for local enterprise initiatives. That is why I have placed such emphasis on the county enterprise boards having unequivocal enterprise and job creation objectives in those business areas not already covered by Forbairt. The operation of these boards at county level will be complemented by Forbairt's industrial development role at regional level.

It is my intention to ensure the proposed administrative arrangements for the new boards are kept simple and non-bureaucratic. The support team will be headed by a county enterprise officer who will act as facilitator, directing individual projects or local community enterprise initiatives to the existing State agencies where this is appropriate. We will thus ensure the county enterprise system picks up those worthy projects which might otherwise slip through the net but at the same time ensure that the activities of Forbairt and other agencies are not duplicated.

The county enterprise boards will draw on the skills resident in Forbairt wherever possible. In particular, the expertise the IDA has developed in project appraisal techniques will be available to the boards through the presence of a Forbairt specialist on the evaluation committee each board will be establishing. These committees will consider all project proposals and will make recommendations on the most appropriate degree and form of assistance for projects, having regard to the quality, local relevance and cost effectiveness of project proposals.

In devising the structures and organisation for the county enterprise boards, I have sought to ensure that their operations will be consistent with the need for a flexible yet comprehensive approach promoting local enterprise and economic development. The new boards will, by working closely with Forbairt and other relevant agencies at regional and national level, help to develop a local initiatives approach which generates community support for integrated efforts to promote economic development through making maximum use of local resources.

The combined objectives of Forfás, Forbairt and the county enterprise boards must be actively to foster and promote the creation of new enterprise and the growth and consolidation of existing indigenous firms. This is the central task upon which we must focus our energies and concerted efforts.

I would propose to turn now to the detailed structure and content of the Bill. The central purpose of this Bill is to enable the new agency structures to be put in place in a rapid but orderly way. The Bill, does not seek to reinvent the wheel. As I have already emphasised, the point at issue is not whether the established agencies are doing the right thing, but rather whether the existing structures within which they are operating are allowing them to optmise their approach and deliver their programmes in a way which best benefits firms. Against this background the House will, I hope, appreciate that the activities of the agencies are, for the most part, adequately catered for in the existing corpus of legislation.

This is not to say of course, that the creation of Forfás, Forbairt and IDA Ireland will not give rise to innovative new approaches to industrial development which will require to be given substance and power through legislation.

This is not to say of course, that the creation of Forfás, Forbairt and IDA Ireland will not give rise to innovative new approaches to industrial development which will require to be given substance and power through legislation. If that is the case, and I expect that it will be, then I assure the House that I am ready and willing to bring forward the appropriate proposals as and when the need arises.

In the meantime, the Bill before the House is the first step towards a new and more clearly focused strategy for industrial development. There are a number of detailed points arising in respect of the Bill which I propose to highlight.

On the question of the repeals referred to in section 4 and in the Third Schedule, I have not sought to remove any of the existing IDA or Eolas functions. The purpose of the repeals which are listed is to remove inconsistencies arising out of the bringing together of IDA and Eolas within the new structures.

In section 5 I propose to fix the establishment day for the new agencies by order so as to allow some flexibility in catering for the substantial logistical arrangements which will require to be made on foot of the transition.

Sections 6 to 9 deal with the functions of Forfás and the agencies. It is consistent with the spirit of this enabling legislation that these have been stated in general terms. In order to provide flexibility, the existing functions of the IDA and Eolas will be vested in Forfás but will, for the most part, be exercised by the two agencies subject to my direction. I would assure the House that there is no question of Forfás acting as a super agency and, in this regard, I would draw the attention of the House to the substantial fact that the provision of grants to companies by Forfás is specifically prohibited by section 9.

Section 10 provides for the normal powers of delegation of functions and for the constitution of committees or other bodies for the purposes of exercising the functions thus delegated. In this regard I refer Senators to the recommendations of the Moriarty Task Force on the need for a separate body for industrial standards. This arises out of the need to separate the certification activities of the National Standards Authority of Ireland from the consultancy activities of Eolas. I propose, therefore, to constitute the NSAI as an autonomous body attached to Forfás for this specific purpose. A similar arrangement will also be made for the Irish Accreditation Board which accredits industrial testing laboratories, if required.

Returning to the question of autonomy for the agencies, I would refer the House to section 11 which provides that Forfás and each agency will have separate grants-in-aid, thus ensuring their financial autonomy.

In section 13, the provision of the 1986 Act for carrying out a review of industrial performance has been restated and expanded to include a review of industrial policy. This is in line with the recommendations of the Culliton report that the policy activities of my Department should be strengthened and is one of a number of initiatives which I am currently examining in this regard.

The transitional provisions in the Bill which are dealt with in sections 14 to 21 provide for the normal transfers from the existing agencies to the new structures and for the dissolution of IDA and Eolas.

The First Schedule, provides for the appointment of boards for Forfás and each agency, for the conditions of office applying to board members and for other matters such as the provisions for annual reports and accounts. This schedule contains the normal provisions applying to the members of the existing IDA authority.

The Second Schedule deals primarily with matters relating to the staffing of Forfás. In this regard I would ask the House to note my concern that the minimum disruption is caused to staff of IDA and Eolas in the establishment of the new structures. The Bill provides that all staff of the new agencies will hold their contracts with Forfás but will be seconded to the agencies as appropriate. Staff will effectively be able to move from one agency to another, bringing their experience and expertise with them. This interchange of staff will create a dynamic, open and pro-active culture which is required for the development of industry in the 1990s and beyond.

I conclude by once again recalling to the House that this Bill forms part of an overall long term strategy for tackling the industrial development and employment generation problems facing us. The agency structures for industrial development will usher in a new era which will be marked by a greater clarity of mission and a strengthened emphasis on catering to the real needs of indigenous firms. It will also promote better value for the taxpayer in the moneys expended on attracting overseas investment and it will maximise the benefits to be derived from linkages between the overseas and indigenous sectors. All this will lead to a new dynamic in Irish firms and I commend it to the House.

I welcome the Minister to the House. Much has been said in the Minister's address about changing structures but little about the enormous industrial and employment problems facing the country. The Industrial Development Bill, 1993, is a feeble response by the Government to the development needs of the country. It is out of touch with international trends and it illustrates that the Government is continuing to shed the philosophy of the Culliton report while invoking the report as a shield behind which the Government parties are hiding.

In the title of the Bill and throughout, continuous reference is made to industry and industrial development. These are somewhat dated phrases at a time when the rest of the world is talking about business, enterprise and services, in addition to manufacturing industry. The Bill does not adequately reflect the capabilities and opportunities which the country possesses and on which much future prosperity will depend.

In splitting industrial strategy between undertakings within the State and those outside the State, the Government is showing itself to be living in the past. The past has not served the country as well as we might have wished. Most investors and firms cannot be classified by nationality in the world of today where business and investment is transnational. The Minister himself has pointed out in his contribution that many firms have interlinked between the mainland of Europe and Ireland and between America and Ireland. The Bill fails to address this. In practical terms it also fails to focus the Government's efforts on the problems firms face rather than whether they are indigenous or foreign owned.

The Bill also seems to be based on the view that the Government in some way engineers industrial development. This discredited view has more in common with political parties in Britain in the 1960s and the early 1970s who thought the State should be involved in the control of most companies, the commanding heights of the economy and the application of the white heat of technology. This is a failed concept in my view, and I believe the Government parties are going down the wrong road. These proposals are not suitable for the 1990s.

The methods chosen in the Bill to financially assist firms over-emphasise State investment in firms. Such investment should not be over-emphasised, emphasis should be on developments which will help firms develop in a way that will not alone protect existing jobs and create further ones but will also help to create new markets. The function of Forbairt and the IDA to place marketing investment in undertakings ahead of providing supports is an unusual approach given the extent to which international policy has moved to less "hands on" involvement by Government and business.

The Government holds this Bill up as representing a major plank of their approach to businesses and to the economic development of the country. The Bill shows this country is in greater trouble than it appears. Not alone have we major difficulties but the Government appears oblivious to the urgency and extent of the changes in thinking required to tackle the difficulties we are experiencing.

A number of proposals have been made in relation to the division of agencies. The Culliton report proposed that there should be two major agencies. Over a period of months the Minister who is here and another Minister discussed the division of CTT and which of them would be responsible for the new agencies. Instead of implementing what Culliton proposed we now have six different agencies dealing with this area.

I compliment the Minister for mentioning the county enterprise partnership boards. Recently he announced that he is to establish 36 of them; this is only a restatement of a decision that was made last September or October. This is an example of the worst type of policy making because there are six major agencies dealing with major companies and there will be 36 county enterprise partnership boards dealing with firms locally. We must presume that these boards will be involved in supporting new business. However, this Bill does not deal with the basic question of how these boards will relate to the State agencies in order to avoid duplication.

The Culliton report made a simple appeal. It stated: "We see little operational logic in state finance and advisory services being allocated to the development needs of a firm through separate State development agencies". This is not mentioned nor taken into consideration in the Bill. We will have between 42 and 50 agencies dealing with industrial development. The experience of SFADCo, Údarás na Gaeltachta, the county enterprise partnership boards and the Programme for Economic and Social Progress partnership is not mentioned in the Bill and would have been ignored but for the Minister referring to them in the House.

Devolution is to be welcomed if it is based on locating powers at the lowest effective level with a clear system of accountability; instead we have a number of boards the functions of which are overlapping with those of the main agencies, the names of which have been changed. We have no specific details of how these boards, especially the county enterprise partnership boards, will work.

I question the sense of separating the development of foreign industry from the development of indigenous companies. A foreign firm receives grants amounting to 66 per cent of the cost of setting up and providing jobs in Ireland whereas Irish firms receive much less. Firms are finding it more difficult on a day to day basis to get help to deal with the problems they are experiencing. I have been dealing with this problem since I became a Member of the Oireachtas 12 years ago.

Could the Minister tell us who will be responsible for the way decisions are made at the county enterprise partnership board level? The secret to success in creating large numbers of jobs well depend on where the decision making powers of each board will rest. The Minister informed us today that this will be the responsibility of an evaluation committee. To whom will such a committee report? Who will eventually make the decision? How much will be made available to these boards? How much will they be allowed to allocate in grants? Will there be grants for employment or for machinery? What details will the companies involved require for assessing markets? Who will assess markets abroad for small companies or new companies who wish to export? This is where there will be overlapping and duplication of functions by the different agencies involved. What involvement will IDA Ireland have with the county enterprise partnership boards vis-a-vis small companies who are looking for help, many of whom have good ideas but are not in a position to get funds? I am sure the Minister knows of such companies in her own constituency.

It is interesting to note that the figures given by the Minister show that 118,500 jobs were created and 108,600 were lost between 1987 and 1992. There has to be an answer to the problem of how only 10,000 jobs in real terms were created in this period. Grants to attract foreign investment amounting to 66 per cent of start-up costs helped to ensure that foreign firms set up in the State, and they are all very welcome. However, many small Irish companies have gone out of business because of the lack of help at a critical stage in their development.

Because of a policy decision the IDA was not in a position to provide assistance. I am not saying that the IDA should give grants for the sake of it. I welcome the policy change which involves grants being given for actual jobs provided rather than for the number of jobs it is estimated will be created, but why have many of the companies which were in difficulty not been given help and allowed to postpone the repayments they would have to make on a weekly basis to the Exchequer until such time as they overcame their difficulties?

I can list ten company owners who have told me they had serious problems during and after the currency crisis, and some companies still have serious problems. Subsidiaries of foreign companies — from the UK for example — have decided to introduce a three day week. Such decisions may have been made in a boardroom in another country because of the difficulties caused by the difference in the exchange rate of the Irish pound and sterling. We need to continue providing help if these companies are to sustain existing job levels. Sufficient emphasis has not been placed on protecting existing jobs. As Members of the Oireachtas, we are aware that greater efforts could have been made in this regard. Difficulties existed because there was no policy to help these companies when jobs were lost. The problem could have been avoided if help had been given and leniency shown.

Last Friday I heard of a company which required the postponement of payments for three months — only a small number of jobs were involved. The individual in question mortgaged his house six to 12 months ago in an effort to save his business. However, he could not defer payments for three to six months and was unable to save his business. The Minister mentioned that 108,600 jobs were lost over the past six years and 118,000 were created. This shows that we are not doing enough to help firms, small indigenous industries, who are trying to maintain jobs.

Yesterday four Meath County Council members were appointed to the county enterprise partnership board, and I have a copy of the correspondence sent to the county manager. It does not mention how these boards will operate. Perhaps the members of the board will receive appropriate instructions but I would have thought when discussing a major industrial Bill we should have information about how IDA Ireland will work abroad, how indigenous industry will be created and helped, and how the county enterprise partnership boards will operate. We must make proposals, and if necessary introduce amendments, to ensure that these boards work. It is interesting to note that to date we have not any details about the county enterprise partnership boards, although the boards have been appointed.

It is important that help is available for the development of companies in Ireland. I can name a company which approached the county development officer of Meath County Council for assistance. The company created 16 to 18 full-time jobs without any assistance; other industries in the county were also looking for help to create employment but no help was forthcoming. This is a competitive world and people with good ideas, who have markets for their products, should be helped.

Will existing firms be considered for expansion under the proposed county enterprise partnership boards? Is there a limit on the size of a company which can seek assistance from the enterprise partnership boards? At what point will IDA Ireland or Forfás be asked to help with a company's proposals? Will the work of IDA Ireland or Forfás and the county enterprise partnership boards be duplicated? Will IDA Ireland continue to encourage foreign companies to come to this country? Will Córas Tráchtála be solely responsible for the sale of goods produced in the State? Will all companies work through Córas Tráchtála when looking for markets?

During the past three or four weeks I became aware of the plans for a major leisure development which will cost £12 to £15 million. I asked the individuals concerned if they had contacted the authorities about the availability of grants. They said that a grant of 25 per cent of total expenditure was available. I thought this would help to establish a project which would benefit tourism but the sting in the tail was that the larger proportion of the investment had to come from outside the State. We have gone too far in the wrong direction when it comes to development proposals. This should not be the position. It is inappropriate that people can only avail of a grant to develop facilities if 50 per cent of the total investment is available from outside the State.

There are many family run companies in this country. Last night a problem was brought to my attention. It involved a young unemployed man who decided to work in the family business. His PRSI and PAYE were paid from the day he joined the business. However, he was informed that he was not entitled to a tax allowance. This is the fourth case of this kind which has been brought to my attention in one month. In one town there were six cases where persons were not entitled to a tax allowance because they were employed in the family business.

The black economy has been mentioned on numerous occasions and the Minister has taken decisions in relation to tax evasion, etc.

As far as the development of industrial policy is concerned, all we are doing is changing the name of a number of agencies. We must deal with the real problems why only a small number of people are trying to set-up their own businesses. We have been informed that there will be no duplication of the work of IDA Ireland or Forfás and the county enterprise partnership boards but I believe duplication will take place. Once these agencies are established, it will be interesting to see how counties develop and the help that will be available for companies. The duplication of the work of these agencies is not a positive step forward. I thought there would have been a real effort to ensure that we would not have one board answering to another because this would lead to confusion about who makes the decisions.

What is happening with regard to mortgages is interesting. People may walk in from the street looking for a mortgage and if they have the required information and satisfy the necessary criteria, within the space of 24 hours they may have details of whether they are eligible to be approved for mortgage. People require fast, effective details of approvals for their proposed developments. Since the enterprise boards were first contemplated I have been aware of many people waiting to see what, if any, help will be available. Those with an existing business who want to expand have not received any help. It will be interesting to see if help will be available. I hope for their sakes that it will.

In small, rural parishes and villages there are many people producing saleable goods in sheds at the backs of houses. Those people should be brought into the system and helped to develop, with all the safeguards for a viable small industry which will keep people in employment. There is one parish in the north of my constituency where five firms started up in sheds behind houses and now they employ a total of 196 people. They were in a position to get help as they were exporting. There are many other people who are in a position to develop products and ideas but are not eligible to receive help as they do not satisfy the criteria.

The county enterprise partnership boards must be able to deal with these cases in a quick and efficient manner, rather than delay decisions, sometimes for weeks, as one report or another is awaited. This is important if we are to do something about the real problem of unemployment. People are crying out for help to ensure that the company they are proposing to set up and the ideas they have can work and that they will not be out of business in the first six months. Figures released not long ago indicate that the majority of companies which go out of business do so in the first six to eight months.

Two things are needed. The enterprise boards to be set up must deal with these applications in a fast and efficient way. At the same time, a system should be put in place whereby, when a company has PRSI or PAYE payments to make to the State, moratoriums can be given if, on the advice of whatever board or authority is dealing with the development, that company looks viable.

Three days after Christmas I had to leave my home to go to CTT and the manager had to come in to deal with a project that had not been dealt with efficiently before the holiday. I remember trying to keep a number of people employed as a result of the decision that was being taken. Will contacts be lost with those who are selling the products abroad? How will the new structure work and who will be the co-ordinator? Will there be a list of people to whom projects must be presented before they get to a point where profits can be made?

This Bill should include all the details of these developments, not only the changing of the names of the companies, but also the county enterprise partnership boards. The last Government decided that these boards would be established. This Government decided to change the way the boards would be constituted. The responsibility is on the Minister and the Government to make this work. We have no details of the way the boards will work. My greatest fear is that there will be different criteria applied by the various boards and, consequently, different boards will make different decisions on similar applications. How will that be avoided and, if that occurs, how will it be dealt with? Will the individual involved go straight to the politician to see what can be done?

I would like to debate the larger question of changing the IDA and seeking investment from abroad. It has been successful in doing that and I have met its personnel in many countries, individuals who work hard and get companies to invest in Ireland. In the enterprise boards there may be people thinking differently about similar projects. How will that be dealt with? I would like to have the opportunity to debate the grants that will be made available, particularly, employment grants. I am not saying that grants should be given for the sake of it as that old system was, in part, unsuccessful. Money was spent unwisely when jobs should have been created, in real terms, on the basis of grants. If elected representatives are not prepared to accept that was the case they are going around with their eyes closed.

This is an interesting issue which, regrettably, is not dealt with here. We cannot deal with this aspect of legislation without all the details of the way the proposals will work. The majority of the applications will be for indigenous industries, yet we are passing a Bill today to put new names on offices without a mention of the way indigenous industry will be dealt with.

I welcome this Bill for a number of reasons. First, I am delighted that this important measure is being introduced and debated in the Seanad. We always welcome new legislation and I thank the Minister for initiating this Bill here. Second, I welcome the Bill as it is in line with the timetable the Minister outlined recently with regard to the implementation of the Culliton report, as reflected in Employment Through Enterprise. Third, I welcome this Bill as a serious attempt to meet rapidly changing circumstances in the industrial development field.

It is clear from the Minister's opening speech that the agencies themselves do not create jobs. they are there to facilitate and promote job creation which, as we know, is the key economic, social and political problem facing the country. The Bill therefore has the twin objectives of helping to facilitate further the growth of indigenous industry side by side with a new impetus and intensification of promotion for overseas investment. It is the job of the State to put forward and enact the best possible legislation and structures in this regard for industrial development.

It has been said that change is the only constant in modern conditions and that is true of the area we are discussing today. I see the Bill as a response to changing circumstances. Among those circumstances is the Single European Market. On the one hand it is a major challenge for us to try to compete in more competitive conditions. On the other hand it presents opportunities, not least in the area of joint ventures. We should not be preoccupied with other EC companies taking over operations here, we should be looking outwards and working out joint ventures with them.

Competition for internationally mobile investment was never more intense and in addition there is now competition for investment in the emerging economies of eastern and central Europe, which makes it even more difficult to attract investment here. We are still faced with global recessionary conditions. It is arguably the deepest and longest recession since the second world war. We also have the constant challenge of changing technology. We must be mindful of the basic fact that job creation is the bottom line for the Bill and for the Government, even while examining the legislation from the point of view of job promotion rather than job creation agencies.

It is worth pointing out that there are special challenges and problems facing us. Our labour force is growing each year at three times the EC average. There has been a huge movement of people from the land and into urban areas in the search for jobs. There has been a prolonged and deep recession and there are obvious disadvantages in being a peripheral country within the EC. It is one thing to list the particular difficulties we have but, given the sheer scale of the job creation problem, no aspect of organisational structure can remain unexamined or unchanged if change is necessary. That philosophy is evident in this Bill. We have many urgent problems and we are not changing for the sake of it but changing in the best possible way to put structures in place to meet those altering circumstances.

It is important to acknowledge that the IDA, Eolas and An Bord Tráchtála have done valuable work over the years. In the case of the IDA, the Minister specifically said that despite the fact that the net increase in job creation between 1987 and 1992 was modest, that was against the background of an excellent job creation record as opposed to a job loss record.

Multinationals come in for criticism from time to time. This is sometimes justifiable but it is worth reminding ourselves that two out of every five industrial jobs in this country are provided by multinationals. Furthermore they constitute a very major part of our booming level of exports and are very valuable in that sense. It is also true that successive Governments have relied rather heavily on multinationals for job creation. This strategy has not met our expectations and the figures show the net benefit of that kind of investment between 1987 and 1992 was a mere 10,000 jobs.

This brings us to the more difficult sector of indigenous industry. There is cause for deep concern. Whatever about the modest net increase in the case of overseas investment, there has been a decline between 1987 and 1992 in the number of jobs in indigenous industry. This sector needs to do a number of things and I intend to refer to these during my contribution. Quite obviously in the area of exports we have to be able to sell more goods competitively.

Forfás has come in for some criticism already, both inside and outside the House. I was encouraged to hear the Minister highlight the point that Forfás will provide objective policy advice on the performance of the two main agencies, Forbairt and IDA Ireland. It will not be part of the implementation process and will therefore be able to assess, guide and advise the Minister and his Department in a more objective manner. Forfás will have a very important co-ordination role, the importance of which could not be over-emphasised. It needs to be monitored because we do not want additional bureaucracy arising out of the establishment of these bodies. With Forfás as the umbrella organisation and Forbairt and IDA Ireland as the main engine of promotion my hope is that the necessary synergy will come about to provide a more effective promotion service for Irish industry.

The Bill, as the Minister correctly stressed, is only one part of overall Government strategy in relation to industrial development. It is important to remind ourselves of that. The Finance Bill, which was enacted last week, is directly linked. The Minister and I served on the Oireachtas Joint Committee on Employment last year and the first and most pressing issue it identified in relation to indigenous industry, and particularly small indigenous industry, was the shortage of seed or development capital. In that context the Finance Act, 1993, is highly complementary to what we are attempting to do today as part of an overall strategy. The tax refund of up to £75,000 for new enterprises is a particularly enlightened step. When business people and small entrepreneurs go to financial institutions the first question they are asked is how much money they are putting in. That is a real problem. A number of operations never get off the ground because people are unable to produce evidence of the wherewithal that the financial institutions seek.

Here is an opportunity whereby employees through tax refunds can produce thousands or tens of thousands of pounds which will clearly facilitate obtaining more capital from financial institutions because money has been put up front already. It is also open to those in safe employment who may wish to start enterprises and hopefully they will do so. A further attraction in the Finance Act relates to taxable redundancy sums. Clearly there are quite a number of people capable of starting their own enterprises who are among the unemployed. There is a further incentive here in relation to their redudnancy sums which could be utilised for start up situations.

I have referred in the past to the employee culture. I feel strongly about it and I wish to link it again to the question of individual enterprise and risk-taking. From observing third level institutions in this country and from first hand experience in my own university, I feel that many of our best and brightest and most highly qualified people aspire to becoming employees in large enterprises as opposed to starting their own enterprises. The tax incentives in the Finance Act will hopefully encourage them to start their own businesses. As far as the education system is concerned, more needs to be done in terms of the body of knowledge and the skills that can be imported to encourage a move away from an employee culture and towards preparing people to start up a business.

The development of Irish enterprise has always been at the heart of Fianna Fáil policy from the time it took office in 1932. The Programme for a Partnership Government is a joint effort along the the same lines in terms of the response to the Culliton report. It is a systematic reform of enterprise support and development agencies. I again stress the overall nature of the strategy of which today's Bill is only a part. There is now action on education and training and on infrastructure. There is a certain amount of action on taxation in the Finance Act, with more to come, and in budgetary policy generally. This Bill is just one important building block in the overall process of economic and industrial development. I mentioned changing technology as providing valuable opportunities in terms of job creation but there is another side to the picture, especially in indigenous industry. Technology has helped industry to be more viable but the same technology has led to job losses. There is this double-edged benefit from technology, but one thing is certain — it is here to stay.

We need to give indigenous industry more assistance. In the years 1987 to 1992 there has been a decline in the net number employed in indigenous industry, notwithstanding hundreds of millions of pounds in grants and so forth. We must look at the capacity of Irish companies to improve their performance, to compete and sell at home and abroad. We often say it is a pity that we do not have a larger home market. We have a small home market but in the context of linkages, there is considerable potential for indigenous companies to act as suppliers to multinationals and increase the size of the home market. One of the more disappointing features of the experience of multinational investment has been that we have not had enough indigenous suppliers. There is much scope for improving technology, management skills and marketing skills.

We must give credit where it is due to the multinational companies. We know of many disturbing closures, the moving of investment to other locations and the impact of the recession on the multinationals, but two out of five industrial jobs are provided by multinationals. They also provide the lion's share of our exports. They continue to play a significant role. I would like to see more of their profits invested here. In the year 1990, it is estimated that multinationals repatriated £2.5 billion. We may need to do more about our economic environment to get them to invest here, especially in job creation activities. There is much that can be done in relation to linkages. It is estimated that £1,000 million worth of components are imported by multinationals that could be supplied locally. Some action has been taken there, but more needs to be done.

Tremendous work is done by the IDA people abroad. I have met some of them working under difficult conditions. They do their best for industrial development here and this should be put on the record. Having won the investment, I wish to ask, in the presence of the Minister of State, whether we do enough to keep our linkages with the parent companies and to nurture that relationship to ensure not only that the jobs already in these enterprises are maintained but that further opportunities for expansion may be developed. We need the closest relionship with parent companies after the investment comes in, as well as making intensive contacts beforehand.

Looking at the economy as a whole, the success of these changes and of job creation generally will depend, to an extent, on the state of the economy. Economic commentators — not the cheeriest of people even at the best of times — are now more optimistic than for some time. Some of them envisage that GNP will grow by as much as 4 per cent in 1994. Our growth expectations for the economy are ahead of many other EC countries, but we should not clap ourselves on the back. It is great to have growth but the rate needs to be better than that of our EC partners because the number of jobs we need to create is much greater than their requirements. Our labour force continues to grow at three times the EC average, so the challenge is greater.

My hope is that the Bill will make these organisations more enterprise-friendly but I would like to see this friendliness extended to the whole State apparatus. The Minister underlined that his Department is taking specific responsibility for employment and enterprise and for a monitoring and review role as well. I accept that. However, there is an obligation on all Departments and their agencies seriously to look at the promotion of enterprise as part of their job, or at the least, not to put obstacles in the way of those who are engaged in enterprise.

I am glad the Minister of State at the Department of Enterprise and Employment, Deputy Brennan, is here. I welcome the small businesses charter, which is designed to provide guidelines on how to meet and aid the special needs of small indigenous industry. That area requires that type of focus and attention at Government level and beyond.

I view this Industrial Development Bill as an important building block in an overall strategy for industrial development, with the objective of holding the jobs already in place while adding more to them. I welcome the Finance Bill and other related measures. We must look at the context in which Irish enterprise is asked to operate and prosper. We must especially watch the performance of bureaucracy. When it goes over the top, it can stifle initiative and it devours valuable time and effort.

The public service and its agencies must have transparent standards of accountability, but there is an unacceptable amount of energy and time put into form filling for a small entrepreneur. If one considers the range of bodies we have for enterprise promotion, the area-based partnerships and the county enterprise boards, there is a need for great vigilance in keeping the structures under review to ensure that we are getting value for money and they are streamlined and effective instead of getting in the way of each other or putting unnecessary bureaucracy in the way of action.

It is of the utmost importance that all branches of the State apparatus be as enterprise-friendly as possible. We must avoid giving incentives on one hand, while frustrating people on the other. The unemployment problem is of such a scale that across party lines —independent opinion included — we must keep our eye specifically on the biggest problem facing the country. We all have obligations to deploy our talents as best we can. I hope we are looking at a new urgency in the State apparatus in terms of awareness of employment. I am encouraged by the timely response of this Bill, which refreshingly fits into the timetable set out by the Government for the implementation of the Culliton report. I would like to see the relevant bodies in the Bill up and running as rapidly as possible.

The House and the Minister of State, whom I welcome, will know that my approach as a Senator is to be positive and attempt to be constructive in all that I do. I do not oppose for the sake of opposing nor do I criticise for the pleasure of doing so. I see my role in this House as one of helping the process of Government. For example, when we discussed the Government's response to the Culliton report, I was in favour of two of the points and in disagreement with the other two.

I compliment the Minister for Enterprise and Employment, Deputy Quinn and the Minister of State, Deputy Brennan, on the speed with which this legislation has been brought to this House and for introducing it in this House. I hope my constructive approach will be taken seriously when I must be critical, and this is one of those occasions because I cannot support this Bill. I cannot go along with the pretence that it is other than a shambles, and I do not use that word lightly.

This Bill will be seen as one step forward two steps back in the history of Irish industrial development. My response to this Bill can be summed up in three words — fragmentation and duplication. This Bill does not attack the fragmentation of State agencies referred to in the Culliton report, and that is failure by omission. Furthermore, it creates a new level of duplication of State agencies involved in industrial development and that is a failure by commission.

The thrust of the Culliton report was simple. In addressing the issue of State support for indigenous industry, the report highlighted the plethora of agencies duplicating their efforts, wasting their resources and confusing the companies they were meant to be helping. The Culliton report pointed out the folly of different agencies, such as the IDA, An Bord Tráchtála, SFADCo, FÁS and Údarás na Gaeltachta, doing the same job. The report failed to mention the county enterprise partnership boards because they were not established at that time.

The Culliton report states that if we want to focus on indigenous industry the different agencies must be brought together. The report also recommended the establishment of one agency to service the needs of indigenous companies, a body with a co-ordinated and logical development policy which takes into account the overall picture. That was the fragmentation to which the Culliton report referred and which it sought to remove. These agencies are vying with each other for the same clients, but nobody is looking at the big picture.

If this Bill is to implement the strategy outlined in the Culliton report it should deal with fragmentation, yet, it fails to do this. All it does is combine the divisions of the IDA with Eolas and deals with only a portion of the fragmentation policy. An Bord Tráchtála is excluded. This is a crucial omission because An Bord Tráchtála is not just a promotional agency, it is involved in developing business for the IDA. The Minister explained how this came about, but he does not explain why it is there.

The Bill claims that the super agency Forfás will have a co-ordinating role involving An Bord Tráchtála. An Bord Tráchtála is a separate agency and it will continue as such. However, now it will be a separate agency responsible to a different Department and a different Minister. The situation is worse than it originally was in terms of the co-ordination of both agencies.

This bizarre arrangement may be an unintentioned side-effect of the reorganisation involved in setting up this Government. I am sure this Solomon-like separation of the functions of the IDA and An Bord Tráchtála is not what the Minister would have wished. I suspect he is as embarrassed about it as I am appalled by it. This is not the Bill's only failure to address fragmentation.

The Culliton report mentioned FÁS. No attempt has been made to address that problem. The report referred to SFADCo and Údarás na Gaeltachta and urged that they be reconstructed as regional boards of the new agency. However, SFADCo, Údarás na Gaeltachta and the regional boards are not mentioned in this Bill. The Culliton report did not refer to the county enterprise partnership boards because they were not established at that time. All these entities must be included in this new structure if they are not to cause further fragmentation in the future but the Bill does not address this.

Even the small proportion of the fragmentation problem which this Bill addresses has a question mark over it. By incorporating the functions of the IDA and Eolas we are eliminating the agency with responsibility for technology and science. Is that wise? I suggest it is not wise given that some of our greatest challenges in the years ahead will be in the area of technology. We must be more aware of the potential of technology. Does it make sense to destroy the agency with responsibility for science and technology? I doubt it, and these measures will downgrade technology.

There will be winners and losers in these mergers. Some agencies will be taken over whether we like it or not. When Eolas was established, the IIRS absorbed An Foras Forbartha and the National Board for Science and Technology. Now the IDA will absorb Eolas, and this is not the way to approach technology.

The Minister spoke about duplication; he anticipated criticism by defending it. This Bill creates a new level in the industrial structure, the super agency Forfás. The main function of this agency will be to advise the Government on overall industrial policy. I do not dispute this solution. However, the Culliton report proposed a stronger policy making role for the Department and suggested setting up an advisory group which would include people from industry to advise on industrial strategy and policy formulation.

It would have been understandable if the Minister had said that he wanted to do it a different way and to set up Forfás instead to give him that advice. I do not think it matters whether it is an advisory group reporting directly to the Minister or an outside agency doing the same job. What does matter is that the people involved, whether they are members of an advisory group or the board of Forfás, should be basically the same kind of people. What is the Minister proposing? He is not adopting one or the other of these approaches but he is proposing to do both. He will have the advisory group within the Department — we know that from the decisions reported in the Government document, Employment through Enterprise, which Senator Hillery spoke about — and now through this Bill, Forfás will carry out precisely the same kind of job.

I believe that is exactly the meaning of the word duplication. Duplication, I need hardly say, is totally against the spirit of the Culliton approach. The Culliton group wanted to see a focusing and streamlining of Government policy-making, and of the services and supports which flowed from it. This is a classic case of duplication which will not only be wasteful of resources but, I suggest, will also reduce the effectiveness of both those bodies. Either the advisory group and Forfás will duplicate each other, in which case one is clearly unnecessary, or, even worse, they will disagree with one another which will lead to delay, indecision and further confusion of the picture presented to the outside world and to indigenous industry.

I would urge the Minister, if he does nothing else, to realise that the proposal to set up an advisory group is now superseded by the decision to set up Forfás. He no longer needs the advisory group. Having it will not do any good and, on the contrary, it is likely to get in the way and do harm. That sounds very critical and I am sure the Minister will say it seems to be a long stream of criticisms. Do I see anything positive in the Bill? Yes I do. All is not quite lost amid that shambles. I see four positive aspects.

It is good that the restructuring separates into two distinct agencies the different jobs of attracting foreign industry into the country on one hand, and developing Irish industry on the other. While both tasks in the past were the responsibility of one agency, it was inevitable that one would get priority and contribute more to forming the culture of that organisation, which is what happened. The fact that the IDA's culture was formed very much by its original task of attracting foreign industry meant that it became their lead role. To a large extent, as Culliton recognised, indigenous industry ended up playing second fiddle to foreign industry.

The second positive point I see in this Bill is the other side of that coin. Having separated these two tasks in Forbairt and the new IDA, it also provides a structure through Forfás to ensure that at a national level, we approach the two tasks in a complementary way rather than a competitive one. Senator Hillery referred to synergy and there is an immense amount of synergy in this Bill. There is an immense amount of synergy between the foreign and Irish industry and it would have been tragic if we had let it fall between the two tracks. Forfás will be able to look at the whole picture and make decisions about which industrial sectors we should try to focus on. Such decisions cannot properly be made solely from the perspective of either foreign or Irish industry.

The third positive aspect is the greater emphasis which the Bill puts on developing industrial policy and strategy. If we can remove the duplication to which I referred a few months ago, I think it is a move forward to have an agency which will have as part of its role advising the Government on industrial strategy. In the past there has been too little strategy, and too much retrospective strategy which was devised to put a good shine on something which had happened in the past.

The fourth and final positive point I see in the Bill is its potential to become the basis of a suitable structure for industrial development at some stage in the future. I listened carefully to the Minister when he spoke about An Bord Tráchtála and I was interested to hear that the chief executive of An Bord Tráchtála will be on the board of Forfás. I cannot see the absurd situation which pertains to An Bord Tráchtála surviving for long.

When common sense does eventually prevail, although I am not sure how soon that will be, it will be a relatively easy job to transform An Bord Tráchtála into another agency of Forfás alongside Forbairt and the IDA and perhaps eventually to make it part of Forbairt. Since the need to co-ordinate and streamline services will continue, the pressure to incorporate parts of FÁS and the whole of SFADCo, Údarás na Gaeltachta and the county enterprise boards, if they survive, will be more easily responded to within the enabling structure which is being created than if we had to start from scratch.

In short, I believe that the present waltz of the agencies, because they do seem to be moving around, is far from being the last dance. Due to the serious defects of this Bill, we will have to return to it at some time if we are to solve the problem. As far as I am concerned, it cannot be soo soon before we return to it. As long as we postpone a proper rationalisation of the State agencies, we are nobbling our efforts at stimulating enterprise and job creation. On that basis, I urge the Minister to rethink the whole basis of this Bill.

I welcome the fact that this important Bill is being initiated in the Seanad. I take issue with the last speaker, in that I would see this overall strategy for future development as comprising an interrelated series of structural levels, from the Department of Employment and Enterpise down to local level through the county enterprise boards, rather than a duplication. I know "subsidiarity" is a buzzword but it is used properly here, in that where an issue should be a national decision it is dealt with at national level and where it should be dealt with at a lower level there are suitable structures, such as the county enterprise boards. That is a good thing.

I see the primary role of Forfás as being the co-ordinating body which brings these various elements together. Rather than being a fig leaf, which has negative connotations and is seen as a cover-up job, Forfás is an umbrella body which makes contact with the various levels of industrial development. In so far as it does that, it will be a crucial structure in the whole system.

I welcome the overall thrust of the Bill which is to plan a strategy for industrial development which has been needed for a long time. Previous speakers have acknowledged the failures of the past, particularly in relation to the development of indigenous based industries. The Minister and previous speakers pointed out that the foreign owned firms have had an overall increase in job creation whereas the domestically owned and managed firms have not produced extra jobs over the period the Minister identified.

Clearly we must, as Senator Quinn said, separate the roles of the IDA, which formerly had responsibility for both foreign and indigenous firms. That is what this Bill achieves by establishing IDA Ireland and Forbairt under the umbrella body, Forfás. They are complementary to other current aspects of planning and development, specifically the Finance Act. They are also relevant in the planned allocation of Structural Funds.

We have previously discussed the crucial role of Structural Funds in the creation of employment. During those discussions clear priority was given to the blackspot areas of high unemployment in urban and certain rural areas. All of these elements combine to form an overall strategy for development. Obviously there is a need for liaison between the Departments so that Ministers will have a continuous role in monitoring development.

Senator Farrelly talked about the need to appoint somebody to advise the local entrepreneur on the feasibility of an idea or plan and its future development. If I interpret the Minister correctly, I believe that would be the role of the county enterprise officer. The Minister referred to the county enterprise officer as the person who would deal directly with the individual who suggests a plan and direct them to the revelant structure. That specific role is assigned to an officer within the system. That is very important because, previously, people were not sure how they could bring their ideas to the attention of a suitable agency where they would receive the attention and support structures they required. That system will be established through this legislation.

Irish-owned firms have been weak in industrial development. The Minister pointed out that three quarters of industrial exports are from foreign-based companies. That is the central problem we must address. Irish-owned firms have had a relatively bad record in creating and maintaining employment. The labour force has increased considerably in recent years. Since 1990 it has increased by 60,000, roughly the same figure for the entire decade of the 1980s. More people are coming onto the jobs market than in previous years. A smaller number of our people emigrate, largely because of the difficulties experienced by other countries in creating employment. We must cater for these factors and create not just sufficient jobs for the present workforce but for the increased workforce in the future.

One of our basic difficulties is our small domestic market. As we are only about 1 per cent of the EC population we are dependent on exports. We are also dependent on our domestic market, hence it is important to encourage people to buy Irish products. Last week it was highlighted in the Seanad that 80 per cent of clothing and footwear bought in this country is made abroad. The same problem is seen in many other sectors. We must buy our own products but we must also sell our products on foreign markets. To achieve that we must face up to our problems and build on our strengths. Our problems are the small size of the market, the fact that we are peripheral to the EC market and the lack of adequate structures to build indigenous industry. Our major strength is probably our well educated and strong workforce. We have not used that strength to its full potential.

Education is the central issue in the ESRI report on the Structural Funds published today. We must have stronger liaison between the education system and the employment sector. I would like to see particular concentration on young school leavers. It is important that they are directed towards employment rather than towards unemployment, otherwise we will continue to have these unemployment blackspot areas. I agree with Senator Hillery's reference to an employee culture. There are many measures in the Finance Act that will help employees to consider becoming employers or playing a more positive role in the industry where they work. I welcome those measures because people do not always have the opportunity to make the transition from being an employee to setting up an industry.

There is greatest potential in the food industry for increasing employment. One of the strengths is our image as a producer of good clean food. That is an image we must enhance, particularly in the marketing of our food products abroad. Bord Tráchtála and the marketing of our products on foreign markets is crucial. The role of Forfás, as the umbrella body that connects with the other agencies, will also be crucial because there must be that link between production and marketing on foreign markets.

I stress the importance of that positive connection because of the problems experienced by firms, particularly small firms, in marketing their products. The vast majority of Irish firms are small industries with fewer than 50 employees. Their problems, particularly in marketing and management must be confronted and solved. Clustering is of crucial importance. Through clustering industries can be helped as a group to get into the market structures abroad. It is difficult to get into the major marketing networks in the EC and the other parts of the world. If we cluster our industries and deal with them as a group, a small firm which could not afford to send somebody to market their product in the EC will be in a stronger position to get its products on the shelves of shops in Europe and elsewhere.

Training, management and support for small firms are vital. It is important to avoid throwing money at firms. People should visit and find out about its problems by discussing the difficulties with the people on the factory floor. It is important not only to talk about establishing industries and intervening when an industry is in trouble but also to be with the industry as it develops so that problems are identified at an early stage. That role must be included in this legislation, whether it is given to the county enterpise boards or to Forbairt. This kind of support is crucial to small firms, as very often their problems can be solved if they are tackled on time. Continuous monitoring and support is essential for small industries.

I would welcome some information on the future role of SFADCo. Senator Quinn referred to Údarás na Gaeltachta and SFADCo, which are not specifically mentioned in this Bill. I support the concept of regional bodies, as well as local and national bodies. This is part of the whole structure of subsidiarity, where decisions are made at the appropriate level. SFADCo. has played a positive role in the development of the mid-west region. I would like to know what its role will be within the new framework.

Senator Farrelly missed the point of what Forfás is all about when he spoke of the split between foreign and locally-based companies. He implied that this area was not adequately dealt with in the legislation. I suggest that it is adequately dealt with by the setting up of Forfás, which has the specific role of co-ordinating the other bodies. He was inaccurate when he said then the roles of the various agencies overlap. All the agencies have an interlocking role, but each role is nonetheless clear and definitive. This legislation gets rid of a lot of the overlapping that existed previously, greatly clarifying the planning of the structure of industrial development. Senator Farrelly's objections to the Bill, and his objections to having separate bodies, such as Forbairt, IDA Ireland, Forfás and the county enterprise boards, show a centralist approach which is not appropriate to this area. This locally-based approach is more positive and will be more encouraging of enterprise and of initiative in Ireland.

We want to encourage a spirit of enterprise. We want to encourage people who have ideas but not necessarily the funding, who may not have all of the answers or the training but who are willing to go out and learn and willing to take on people with the kind of expertise they themselves lack. This legislation will facilitate that kind of person, so they will not be sitting on the sidelines, telling us about their ideas without being able to implement them. If we are to tackle unemployment we must facilitate people, who have the ideas and the initiative, and who are willing to work to create employment and to build small industries into larger industries. A centralist approach would not allow this to happen, because the central body would be too big and would lack the necessary contacts on the ground. Because we have this kind of structure, which starts at the top and works its way down, we have the contacts where they are needed, and those who have the ideas will be able to propose a plan, and get help in further developing that plan. The structures being set up will facilitiate that.

I welcome the legislation. It sets up the structures, framework and planning needed for the future development of industrial policy. These structures do not of themselves create jobs, but they must facilitate the creation of jobs. They must be streamlined so they are not wasteful, but are focused on an increase in industrial development. This legislation will achieve that. It should be consistently under review. The Minister has said in this House that there will be a continuous monitoring of progress in this vital area of national interest. This is essential, because it is important that we have targets and time frames within which to achieve certain goals. We will debate this issue many times in the near future.

We are speaking here about the Industrial Development Authority and about jobs, a very important topic. One of the essential criteria in dealing with the IDA is absolute confidentiality. Without total confidentiality in business, particularly when dealing with multinational firms, it will become more difficult to attract jobs. On 10 May last, a press release was issued by a Member of Dáil Éireann, in which he spoke about 1,200 jobs being created in Clonmel. These jobs were also referred to in a radio interview that day. The information, contained in the radio interview by Deputy Ferris, was such that the only——

I do not think the Senator should refer to a person by name if he is not present.

It is referred to in the national media, and I am not doing anything wrong in naming him. The only people with access to this information would have been those attached to the IDA, the Department of Enterprise and Employment, or the Minister concerned.

Senator, please return to the Bill.

I am speaking about the Bill. I do not wish to dispute with you, Chairman, but the matter I am speaking of is relevant to the co-ordination of industrial policy and has been discussed in the other House. It is relevant here also.

Acting Chairman

This is the Upper House and is separate from the Lower House. Please refrain from naming people who are not present.

This matter has been referred to in the national media. It makes a mockery of this House to prevent the naming of a person if this is required, and also if the House is not allowed to discuss a matter which may——

Acting Chairman

We are dealing with the Industrial Development Bill, 1993. I would ask you to confine your remarks to that Bill; I have to insist.

If I am to speak to this particular Bill without referring to the fact that a breach of confidentiality in the Industrial Development Authority may have led to the loss of 1,200 jobs, then I think it is a serious matter.

Acting Chairman

That has nothing to do with the Bill before the House.

It has a lot to do with it.

Acting Chairman

Please stay with the Bill.

The point I want to make is that if we are not allowed to discuss a breach of confidentiality in the Industrial Development Authority, or somewhere, then I believe we are wasting our time discussing anything in regard to it. This is a serious matter.

The Senator is making allegations. I do not think he should do so.

I am referring to a radio interview and a press release——

Acting Chairman

It has nothing to do with the Bill. We have to deal with the Bill, Senator.

I believe that I am correct but I will graciously accede to your request.

Acting Chairman

I am glad that you are abiding by my ruling.

I believe that I was dealing with the Bill all the time but I want it to be known that this is an issue I intend raising in this House at a later date.

This Bill will be setting up more structures — Forfás, the umbrella authority; IDA Ireland which will deal with foreign industry; and Forbairt which will deal with indigenous industry. Each board will have approximately 12 directors. This means we will have approximately 36 new directorships when this Bill is passed. This is a clear example of bureaucracy expanding under this Government. All this bureaucracy has to be paid for and, in the final analysis, the taxpayer picks up the tab. In Ireland today we have an over-abundance of administrative structures. We have boards and authorities all charged with the responsibility of creating jobs but to date their success rate has not been what it should. Each Minister adds his own personal stamp to these structures, abolishing some boards, expanding others, and in some instances creating more administrative bodies.

According to figures supplied by the Minister, between 1987 and 1992, 118,500 jobs were created but 108,600 were lost. This means there was a net gain of only 10,000 jobs. In his speech, the Minister says that approximately 600 jobs were lost during the period in question, but if one examines the real statistics a different picture emerges. On 30 November 1987 there were 240,982 people out of work, and on the same day in 1992 there were 286,047 out of work. In other words, during that time over 46,000 additional jobs were lost. We have to examine why these jobs were lost and how we can prevent the loss of jobs in future. In the past, insufficient attention was paid to many people whose businesses were in trouble or had to close. Those people were never asked how they got into difficulties in the first place or why their firms went into receivership or liquidation.

The IDA has a relatively good record, It has helped to increase job levels and has attracted many good industries to Ireland. However, a close examination of our native industries and small businesses is required. Insufficient attention has been paid not only to the expansion of these firms but also to the retention of existing jobs.

This Bill focuses on co-ordinating industrial policy. It is essential that such co-ordination takes place but we cannot look at industrial policy without examining tax policy. The climate of domestic employers is difficult. Our taxation policy hits people who are providing employment. Because initiative is being stifled, growth is being curtailed and people with ideas are not being allowed develop them, many long established businesses have closed. In the majority of cases our established businesses could not and did not qualify for any kind of grant aid. They were refused rates allowances and all types of tax breaks. Instead, they were subjected to a rigorous and aggressive tax system which caused many job losses.

We must see how many of our native industries can be retained. The Finance Bill increased taxation on clothes, shoes and many services and that is part and parcel of the reason for job losses. If the Government reduced the cost of PRSI on employers and employees the Bill before us would have real relevance. Instead, the Finance Bill took the wrong turn and consequently the Government will have to change direction.

I would like to make one further point in regard to FÁS which has been doing good work. The training area requires close examination and this Bill will not improve the situation. The level of training currently undertaken by FÁS has insufficient relevance to firms wishing to train their staff. It is not fully or properly geared to meet the necessary criteria to provide training. The Bill fails to take account of how we can train apprentices in different areas. It is essential to examine how we can update and improve training facilities. The criteria necessary before a person can become an apprentice is that he or she must find a person who will act in the capacity of an employer in other words, the apprentice will need someone with whom to serve his or her time. That causes problems for people who wish to train as electricians or mechanics. This Bill may not be geared for this purpose. Many people wish to follow certain careers where there are prospects for employment when they are qualified. It will be of benefit to all to see what can be achieved in this area. In our capacity as public representatives we have all been approached by young people wishing to become electricians, plumbers or mechanics but who are unable to find anyone to employ them. There is an area where there is considerable scope for taking people off the dole, the unemployment register, etc, and it should be examined. The Minister gave figures about job creation and job losses in industry. This is of importance but we must also look at ways of maintaining existing employment.

The Bill adds unnecessary new structures. This country has an over-abundance of bodies and is over-burdened with bureaucracy. Rather than increasing ideas, initiative and enterprise, bureaucracy is stifling growth.

I wish to share my time with Senator Mooney.

Acting Chairman

Is that agreed? Agreed.

I welcome the Minister of State to the House and put on record here achievements when she had responsibility for trade and marketing. She made a big impact in that area. I had the privilege of representing her at a seminar in Brussels. I saw the contacts made by her Department and the work done by the representatives of Departments and State agencies in a massive promotion on the Belgian market.

Everyone appreciates the outstanding work done over the years by the Industrial Development Authority. People criticise the IDA for occasional mishaps but largely it can hold its own against any development agency in the world. It is in competition with agencies from more developed and better off economies than ours and has succeeded in attracting many worthwhile industries to Ireland. As changes are now being proposed, it is important to record our appreciation of work done in the past.

I also praise the work done by our local development agency, the Shannon Free Airport Development Company. SFADCo has done outstanding work developing large and small firms, indigenous and foreign. Its success can be seen in the financial services centre set up in Shannon which led to the establishment of the centre in Dublin. The promotion of Dublin and Shannon has led to many outstanding companies coming to Ireland and establishing financial services and other industries.

The importance of this can be seen in the early success of GPA, which we should not now ignore. GPA was the motivating force behind the aviation park in Shannon. It was also the impetus behind the aerospace project which employs hundreds of young people and another project which has not opened yet in turbine technology. I compliment the Shannon development company on establishing financial services and high technology industries in the Shannon aviation park. It was a novel proposition and has made an impact on employment in the mid-west.

That is why it is important to put on record the vital importance of maintaining the transatlantic stopover at Shannon. Shannon has been a success story for many years. In 1958-59 when SFADCo was established it was thought that the decline in the aviation business meant Shannon as an aviation location would fall from fashion in future years. That has all been turned around. The development of the aviation park and the initiative, drive and incentives in the region mean Shannon is thriving. While jobs have unfortunately been lost in some industries there, businesses in the industrial estate and in the mid-west are strong, largely due to the efforts of SFADCo, battling against the decline of the transatlantic business, shrinking markets and changes in transport patterns. When one system became outmoded, SFADCo quickly introduced new areas and developed new ideas and trends. The aviation park is a unique development which will be of great importance in the future.

There is no quick fix for the structures dealing with industrial development. Everyone in this House will have ideas how the operation should be mounted and the work undertaken. It is not fair to compare what is now proposed by the Minister and the Government with what existed. That is a wasteful exercise. We face a new set of circumstances and it would be unfortunate if rivalry were to develop between organisations as they were being established. That would delay matters and divert attention from the pressing need to create employment opportunities. It has already been said that a new impetus exists in industrial promotion and development. There are signs of an upturn in the British economy, that the depression may be lifting and that European business may expand in the next two to three years. When there is a prospect of increased activity in the world economy, and especially in the UK, it would be a pity if time and effort were wasted in disputes between organisations and administrations. What is needed is a more responsive and less bureaucratic system to deliver a quality service and go out and find new ways to create opportunities.

Each organisation will have its own responsibilities and mandate and no doubt each will have its hands full carrying out its tasks. However, warnings should be given about overlapping and duplication in structures and scarce human and financial resources when working out the arrangements to be put in place between SFADCo, Forbairt, Forfás, the IDA, the county enterprise partnership boards, the Leader Programme and the various agencies.

It is difficult to restructure the State agencies without restructuring the relevant Government Departments. It would be more fitting to have the trade and marketing division attached to the Department of Enterprise and Employment. In order to co-ordinate activities and eliminate duplication and the waste of financial and human resources, it is necessary to begin with an examination of the Government Departments. This is especially the case in respect of the Departments of Enterprise and Employment, Agriculture and Food and Forestry, and Tourism and Trade to ascertain the kind of restructuring required to match the proposals contained in this Bill.

A new era in industry is commencing where it is necessary for us to be highly motivated and organised to match our competitors. Unless an efficient and effective operation is established, with the necessary Government direction and guidance, the country could miss the opportunity which is opening up in Europe and especially in the UK.

It is therefore important that this legislation be enacted speedily, with time limits set on the necessary reorganisation to ensure there is not procrastination, as was the case with previous reorganisations. I generally do not agree with the Minister's view that people should be free to transfer from one agency to another. Once initial responsibilities are established such transfers would be unwise.

Overall, any measures that will help to motivate our industrial efforts must be welcomed and I wish the Minister well with the proposed legislation.

Like my colleague, Senator Daly, I welcome this initiative. It is long overdue and I compliment all those who have implemented a main recommendation of the Culliton report in such an expeditious manner. The perception of the public is that recommendations of committees of inquiry gather dust on the shelves of bureaucrats.

I welcome the concept of the county enterprise boards. I am especially pleased that the Minister of State at the Department of Enterprise and Employment, Deputy O'Rourke, has responded positively to representations made to her from the Fianna Fáil group regarding wider representation of locally elected representatives on these boards.

The County Leitrim Enterprise Board is one of only two in the country and was set up under the aegis of the International Fund for Ireland. These bodies are structured along similar lines to those of the proposed county enterprise boards. They have a chief executive, a working board, representatives of the county development team and the local authorities etc. They operate with a budget which matches funds from private enterprise, local authorities, and the International Fund for Ireland. Perhaps the Minister would clarify the status of the County Leitrim Enterprise Board and similar bodies in the context of the new county enterprise boards being introduced by this legislation.

There is a need for an energy policy allied to industrial policy. In my part of the country we are facing at the end of this month the closure of an ESB power station at Arigna, with an immediate loss of 60 jobs and a further loss of 40 to 50 jobs in mining. This is a severely disadvantaged part of the country with poor industrial infrastructure. It is competing with neighbouring areas, as distinct from other regions, to attract industry.

The closure of this power station is not only of immediate concern to the families who will suffer from job losses but also to those working for industrial development in the area. I welcome the iniative of the Taoiseach and others who have arranged for a private company to explore at the Lough Allen power station, under a research and development grant from the EC, the possibility of producing clean steel over a three-year period. If the research and development is successful it may lead to a stabilisation of employment and the use of natural resources in the area such as iron ore and timber.

While the IDA, both in its old and new formats, cannot force potential entrepreneurs to locate in any specific part of the country, I note in recent weeks with the debate on the EC Structural Funds that the "Doheny and Nesbitt School of Economics" is alive and well. Their chief guru, Mr. Conor McCarthy, has resurrected the unacceptable Dublin 4 view that a regional policy should be forfeited in the interests of a further expansion of Dublin and its conurbation. Mr. McCarthy made the extraordinary claim in the Sunday Independent of 13 June 1993 that there was greater economic development in the west of Ireland than there was in certain parts of Dublin, Cork and Limerick. This fallacious argument can be refuted by suggesting to Mr. McCarthy and his colleagues that they visit any of the western counties and examine the census figures over the last five years. These illustrate the alarming population decline which is not mirrored in Dublin, Cork or Limerick, areas which admittedly have problems.

I endorse the suggestion made by various parties, including Deputy Doherty and the chief executive of the County Leitrim Enterprise Board, Mr. Philip Fee, who made the original suggestion, for the provision of a tax free zone along the Shannon waterway. This would fall within the brief of the Minister of State at the Department of Employment and Enterprise, Deputy O'Rourke. I know the Minister is aware of this suggestion and I hope she will continue to use her good offices to ensure that this will become the balance to the urban renewal schemes which have operated so well to regenerate the inner cities. This tax-free corridor along the Shannon would be of immense benefit. I welcome the legislation.

I welcome the Minister but I must tell her that the Progressive Democrats oppose this legislation. Senator Mooney said he welcomed it because it implements one of the main recommendations of the Culliton report. I submit that it does no such thing. There is nothing in the report which suggests that legislation of this nature should be presented to the House. Section 9 of the Bill states:

the powers and functions of the Industrial Development Authority... shall be vested in Forfás and may, to such an extent and in accordance with such directions as the Minister may from time to time determine, be assigned to and exercised by Forbairt or IDA as the case may be.

Nothing in the Culliton report suggested that should be the case. The report suggested two agencies, not another layer of bureaucracy, not a holding company, not a consultative company, not a co-ordinating company but two separate entities. The report recommends that all grant-giving and advisory supports of a functional nature provided by IDA, ABT and EOLAS be brought together within one agency. The report goes on to state:

We also recommend the establishment of a new agency for the development of indigenous industry to bring together, in a more integrated way, the developmental and support services provided at present on a separate basis by IDA, ABT and EOLAS in particular.

The report proposes that the two industrial promotion agencies should have inter-locking board membership. This does not say that we should have Forfás, that we should have another layer of bureaucracy imposed on existing layers.

The Minister said: "In the Programme for a Partnership Government, my ministerial colleagues and I indicated our clear agreement with this approach and stated that we would ... encourage a dynamic spirit of enterprise". This Government which encourages a dynamic spirit of enterprise imposes a 1 per cent income levy on us, tells people who have salted money outside the country that they may, without penalty and subject to 15 per cent of ther liability, repatriate their funds and then tell us that somebody who is trying to establish an indigenous industry in a rural area will be subject to phone charges which may in certain circumstances amount to an increase of 400 per cent. This is part of the enterprise culture which this Government is trying to promote.

The Culliton report has become a mantra, everybody quotes from it, even those who have never read it and who know only that there was a report prepared by Mr. Culliton. This report has become the most quoted and misquoted document in the State's modern history, always without reference to what is contained in it, even to the degree that when the phone charge increases were foisted on us Mr. Culliton himself had to disclaim publicly that it was any part of his proposals that this lunacy should be imposed on us. I hope that Mr. Culliton will not be forced continually to keep coming forward to refute claims that particular proposals were originally recommended by him and his committee.

Some proposals are unpopular and have to be stood over.

The Culliton report, when it was brought before this House and debated, was welcomed universally.

Until it is implemented.

I am trying to convince the Minister that we should implement it but this legislation is not doing that. The word "co-ordination" has become like the word "consultation". We are meant to be convinced of the merit of stuctures which will facilitate the development of enterprise, creation of jobs and so on. What does "co-ordination" mean? We have got to the stage where we consult everybody. We consult people about the Structural Funds, about planning and county enterprise boards, then we ignore them. In my county we invited all the voluntary agencies to a meeting about the Structural Funds and told them of the consultation process. This process amounted to those at the top table talking for two hours to the people who were about to be consulted. With hand on heart somebody will say that of course the people on the ground were consulted, the "bottom up" approach is working. This is nonsense. People are not being consulted, they are not being asked to participate, they are being told what to think.

It surprises me that we can send people to the four corners of the earth who can be so successful and so enterprising and can transform countries like America but that energy, enterprise and creativity cannot be harnessed at home. What is it within us that prevents this force from releasing itself? We cannot question the fact that we have a good country and some of the best people in the world. What is it that is stopping this potential from developing to the extent that it should? We are stifling this enterprise and are creating another layer of bureaucracy on top of existing layers.

There is nothing in the Culliton report which suggests a body of the nature of Forfás. I would even be prepared to go as far as to accept that we should have Forbairt and the Industrial Development Agency as separate entities, but why do we need this co-ordinating body which is to be imposed on top of them? We would not confuse Senator Quinn with the Minister, Deputy Quinn, on the basis of what Senator Quinn had to say about this Bill. The Minister said that the object in creating Forbairt is not to achieve a quick fix solution, it is rather to create a clear focus on the problem. Instead the focus is being obscured by mists and fog.

Reference has been made to the county enterprise boards. I welcome the fact that local participation will be a feature of these boards, that voluntary bodies and other groups within a county will participate in the exercise. This is an example of "bottom up" decision-making. How could the Taoiseach say on 6 October that £150 million was to be devoted to this activity when the budget allocated £25 million for it? Before anybody interrupts me, I realise there is an explanation as to where another £150 million is to be found. It is to come from the banks. If all these proposals were so good we would not need county enterprise boards in the first place. The banks should be there to lend the money one way or the other. With respect to the Taoiseach, I cannot see how he can include £100 million from the banks as part of the money to be devoted to the boards.

The Government itself has added layer upon layer of bureaucracy. One of its first acts was to create the Department of Tourism and Trade. Mr. Culliton would regard this as a retrograde step. He does not say this in his report, but if he knew this Department was going to be created he would have described it as such. By establishing this extra Department the Government, from its first day, has gone in the opposite direction from that advocated by the Culliton report. I could even understand if the Department of Foreign Affairs had been given responsibility for foreign trade. Such trade could have been developed by means of commercial attachés in our embassies around the world. I can understand giving the Department of Enterprise and Employment responsibility for labour affairs to enable it to take both sides of the equation into account, but I cannot understand how we can hive off the responsibilities for trade and put them with tourism. This is more obfuscation and it represents another layer of mist covering this argument. Where does FÁS fit into this jigsaw and how does it relate to this legislation?

Food was referred to by Senator Daly. Having disagreed with him about the Mullaghmore issue, I agree with his comments on food. In the course of his speech the Minister said that he had discussed the new agency arrangements with the Minister for Agriculture, Food and Forestry, Deputy Walsh, and that the current situation, where the Irish industry division of the IDA is responsible for all food companies, regardless of ownership, will continue in the new structures. In other words, Forbairt will have sole responsibility for the development of the food industry. I do not object to this statement, but is the IDA or the Department of Agriculture responsible for the food industry?

The Culliton report states:

For instance is there not duplication between CBF and ABT, between the IMI and the IPA, and between the CII and the FIE? In the case of the latter two organisations the Group would also take the opportunity of pointing out that public entities in Ireland provide many of the services which, in other countries, are performed by industry associations.

Will An Bord Bia have responsibility for food under this legislation? It is unquestionable that the potential for indigenous growth, which is repeatedly spoken about by the Government, lies in the area. The wealth of our fields, farms and food processing industries allows the Irish economy to grow and development as we would like it to. Perhaps someone could explain how we will achieve this. Neither this legislation nor the Minister's speech clarifies this matter.

Section 12 was not referred to by the Minister in his speech. I understand why he did not refer to this section, which provides:

Without the prior permission of the Government, the total amount of money granted to a particular industrial undertaking under section 34 of the Act of 1986 shall not exceed in the aggregate the higher of—

(a) £2,500,000 or

(b) £2,500,000 in excess of the aggregate amount of grants for which the prior permission of the Government has previously been obtained.

It could be argued that this amount might be higher. I do not know how long the figure of £2,500,000 has been set.

Regarding AST Europe's proposal to move to Scotland and the Government's policy in relation to industries, can the IDA, when it has completed its work to the best of its ability, trust the Government of the day to uphold its position? Will it be able to tell the people whom it is trying to entice to this country that the Government is not interfering with its activities, that the Government is supporting its activities and that neither the IDA nor the Government will do anything to prejudice a decision to locate their enterprise in Ireland?

Why did the Minister not refer to section 12 when he referred in detail to several other sections? As far as I can remember, this is the only section he ignored.

The Culliton report chartered a course for us which almost all parties welcomed and supported. It is now being quoted and misquoted in support of issues which have little or nothing to do with the Culliton report. Will we have to write another report, chart another course and follow each report by a layer of bureaucracy?

In the final analysis, the people who will suffer are those who are trying to get jobs and those who want to invest in this country. Everything which has happened since I was returned to this House, including the 1 per cent levy, the Government's decision to create "sub-Departments" and the phone bills issue, suggests that we are not encouraging the entrepreneur.

I wish I was able to give an unreserved welcome to the Bill which purports to give effect to the Culliton report. The Minister said, "the real breakthrough in Culliton was the realisation and the acknowledgment that industrial development comes about through the harmonisation of a broad range of factors". I will support any proposal which will harmonise a broad range of factors in a small integrated economy such as ours. We must have a composite programme and give a composite picture to the world. I welcome the Bill for its movement in this direction. However, my welcome has reservations.

We are replacing two agencies, Eolas and the IDA, with three agencies, Forfás, Forbairt and IDA Ireland. The role of Government is to create a climate for investment which must be seen to have an impact, not only at home, but also abroad. People must understand the transparency of the agencies, which must have a visible role. The tax climate, the industrial relations climate and the general thrust of the economy are the engines of economic growth and employment. I believed in this principle when I was in Government and the longer I remained in Government the more convinced I became that this is the most effective, if not the only, way to create a climate for investment.

I welcome the fact that we are using the Culliton report as the base for this debate. However, there have been significant developments since the Culliton report. As a member of the Government which set-up the Industrial Policy Review Group, I believe that stage one was significant and important but it was not complete. This stage related only to manufacturing industry. For the purposes of generating employment, one cannot divorce the manufacturing sector from the service and tourism sectors, as if they existed in isolated tunnels. If Culliton had examined the next stage, he would have looked at the service sector, which is the real engine of employment growth in many economies.

There is a limit to what can be generated through the application of technology in the manufacturing sector. In many ways, one must run fast to stand still. This is evident from some of the figures which the Minister mentioned, particularly in relation to indigenous industry. This is an area which Senator Dardis is familiar with.

I am happy to have been associated with the rationalisation programme in the food industry. One example was the launch of the new programme in the pig meat sector which allowed us to meet the most stringent international standards so that we could penetrate world markets, for example, Japan, to which we never had access. We had to recognise that, in doing that, we had to forfeit jobs, many jobs, in old established plants. However, that is part of the reality of modern industrial development and technology. We should not overburden manufacturing industry with the role of creating new jobs at all times since that may be asking something that is not asked in any other economy, particularly the developed economies.

There should be an engine of growth and for that reason I welcome the intention to co-ordinate. However, I must say in the presence of the Minister of State at the Department of Enterprise and Employment, Deputy O'Rourke, who is here this evening, albeit with a different portfolio from the one she had when we shared Government, that I do not see in this Bill any reference to education in international trade promotion. I wish I could identify a Minister who has that specific responsibility. The role of Government is to co-ordinate and it worries me that we have two different Ministers with responsibility for trade and promotion — the Minister for Enterprise and Employment who introduced this Bill today, and the Minister for Tourism and Trade, Deputy McCreevy. I am not sure that is the way to proceed. It is possible to have agencies, no matter how clearly defined their role, that co-ordinate through a body like Forfás, but I am old fashioned and I think the role of Government should be simple and straightforward. The Minister should be able to define the responsibility and then departmental and agency responsibility will relate to the Minister who answers at Government, and through Government, to the public generally. It is my experience that those Governments who succeeded best in promoting industrial development and activity do so on the simplest basis.

May I refer to the greatest era for industrial development in the late 1950s and 1960s. We can associate it simply with three people — Mr. Seán Lemass, Mr. J. V. McCarthy and Mr. Brendan O'Regan. We knew who were the dynamic people and people responded to that dynamism. They had a role through the Department of Industry and Commerce, the IDA or Bord Fáilte, and the response from the public was real and visible because they saw leadership. When I see a range of administrative structures being set up I wonder how that will impact on the public.

Shannon Development operates in the region I live — incidentally, it is not mentioned in this legislation. Traditionally, Shannon Development dealt with small industry and the IDA dealt with larger industry. Certain adjustments to that arrangement occurred later and Shannon Development then dealt with a certain amount of activity for foreign industry and the IDA dealt with the remainder. By and large, we always knew exactly who to approach. Now I am confused because we also have the enterprise boards. If a businessman came to me — although businessmen do not need to approach a public representative to become successful, from time to time they do approach us — saying he was working on a project and wanted to know where to get essential information, I would honestly have to reply at this stage that I do not know. That should not be the case.

We should look at ourselves as others see us, as the Scottish poet said:

O wad some Pow'r the giftie gie us To see oursels as others see us!

He was trying to take the Scots down a peg when he said that, but we need to reverse that. Let us look at Ireland from the outside. The first thing the potential investor is going to see, hopefully, is a good climate in terms of inflation, tax — which may not be as healthy as it should but is improving — and a well motivated and well educated workforce.

In this era of technology we are dealing with the application of knowledge, the added value of knowledge. There have been some great success stories, notably at the University of Limerick which feeds into the industries in the region, and, in turn, feeds off the joint research programmes which have created a great new dynamic in that region. That is what I would like to see happening. I am not sure they will find their role more effective through co-ordinating with Shannon Development in the first instance, then perhaps with Forbairt and finally with Forfás. I am also concerned that when they start to get out to the markets they will have to deal with another body, An Bord Tráchtála, about which I have no reservations but is the responsibility of another Department.

All these bodies should come under the aegis of one Department. This could lead to better co-ordination and harmonisation; the Culliton report proposed a stronger role for the Department when it came to policy making. That is the direction I would like to see the Minister and the Department going. I am not sure that this Bill is about co-ordination of roles or distribution of ministerial responsibilities; but if it is the latter, that would be regrettable.

I went to Taiwan recently. For years Governments could not formally recognise the Administration in Taiwan, known as the Republic of China. Nonetheless we all recognise the dynamic in that economy and the scope for us to export to and attract investment from Taiwan. There is a new climate of understanding between Taiwan and mainland China with which we, simple westerners, cannot easily come to terms. However there are joint promotions and investment and an avenue into one is an avenue into the other.

Since we were constrained in recognising the administration of Taiwan we do not have an ambassador there. However, we have representatives of the IDA in the form of the ITI — the Institute for Trade and Investment of Ireland. They fulfil a multifaceted role exceptionally well. In attracting industry from Taiwan to Ireland, which is a tough task, they are beavering away, but their work is not confined to that. They are acting as promoters of trade from Ireland throughout the Republic of China. In other words, they represent the IDA and CTT. They are doing both jobs. The Japanese have been successful in inter-linking their import control body with export promotion. I see an important role for Bord Fáilte in linking in with that. Ideally I would like to see an Ireland House attached to all our embassies which would have representatives of trade promotion and industrial incentive agencies and tourism. It is simple but effective, as the Danes have proved for many years, and what has been successful for others would be equally successful for us.

I will conclude on the point Senator Dardis mentioned, that is, the agri-food sector. One cannot look at Ireland from the outside without thinking of the agri-food sector and one cannot divorce the image of that sector from tourism. People abroad have formed an image of Ireland as a country with clean air, wholesome produce and an economy — as they see it, though it is not the full picture — that has deep roots in rural activity. That is my point. The more simple, visible and transparent the agencies the better because this will enable us to get our message across to the outside world. I am not sure that this Bill will achieve that but I will support its endeavours to do so.

Sitting suspended at 6 p.m. and resumed at 6.30 p.m.

I welcome the Minister's decision to present this Bill in this House, but my welcome extends no further for reasons I will outline.

I listened to the Minister's speech and read it with great care and I hope the enthusiasm he exuded, which came through strongly in his presentation, is soundly based because there is a vital need for success and achievement in job creation and industrial promotion which go hand in hand. I do not share the Minister's enthusiasm because I am not satisfied that the structures that will be put in place under this legislation are going to be effective for the job that needs to be done. I strongly share the sentiments expressed by Senator O'Kennedy. I want to re-echo a point made by Senator Dardis; like him I am intrigued at the way Culliton is quoted as the source and inspiration of many ideals, which were not in that report.

On page 78, the Culliton report was specific in its recommendations for the change required in industrial promotion. It stated that the functions of the IDA relating to industrial promotion and development should be discharged by two bodies, both responsible to the then Department of Industry and Commerce. One would attract overseas industry while the second would be responsible for promoting development of native industry, and would bring together the development and support services being provided on a separate basis by the IDA, An Bord Tráchtála and Eolas.

The structures proposed in this legislation are more cumbersome than Culliton recommended and for that reason, they will be less effective. They involve two separate development agencies reporting to an umbrella authority which, in turn, reports to the Department. The firm linkage Culliton proposed for An Bord Tráchtála and Eolas to the indigenous agency is more tenuous than the report recommended. What is being achieved by creating this unwieldy structure?

One line that ran consistently through the report was that there was a need to identify and measure the results and performance of agencies, involved not only in industrial promotion but in general. I am concerned that the new structures proposed here will make the exercise of examining and measuring performance by these agencies more difficult than it has been up to now. An Bord Tráchtála remains under the control of another Department. It will have some sort of a policy relationship and the Minister indicated today that it would consist of its chief executive being a board member of Forfás. That is a long way from the linkage proposed in the Culliton report.

I also want to ask about the situation regarding regional bodies, such as SFADCo and Udarás na Gaeltachta. The Minister was silent on their position and the Bill is also silent, unless they are covered by section 10. I would be glad to get clarification where the relationship of such bodies with the proposed new structure is mentioned in the Bill.

I also wish to raise the question of the relationship of the 36 county enterprise boards and I want clarification as to the position of the existing Leader boards. In what way will they be connected with the proposed structure? How will the performance of the county enterprise and the Leader boards be related and measured in the new structure?

The Culliton report also stated in page 79 that the Irish administrative systems, is generally weak in policy formulation. I suggest that that system will not be improved by this Bill. I want the Minister to tell me how the performance of these agencies will be measured. The multiplicity of organisations involved in industrial promotion and job creation will become a greater administrative nightmare than they are at present — and this was referred to by Senator O'Kennedy in what was a considered and forthright contribution.

It has always been my belief that the administration of all businesses, large or small, should be direct, simple and straightforward and that that will lead to better results. Equally, where administration is indirect, confused or dispersed, performance inevitably suffers.

I want to address a few questions to the Minister. I want to mention the organisations I would like to see linked into this system. I ask the Minister to outline the functions, relationships and reporting mechanism of Forfás, IDA Ireland, Forbairt, An Bord Tráchtála, Eolas, SFADCo, Údarás na Gaeltachta, the county enterprise boards and the leadership boards. Nine organisations will have ill-defined roles in industrial development and job promotion. If this new concept is to take us into the 21st century, where will this multiplicity of organisations fit in? What functions will they perform and what role will they play? Will they have a defined area of responsibility? What will their relationship be to one another and how will their performance be measured?

I refer to a report in The Irish Times of 12 June 1993. A graph depicts the structures which will be in place. It includes IDA Ireland, Forbairt and An Bord Tráchtála. A series of lines link the different agencies and two separate lines link them with the Minister for Enterprise and Employment, Deputy Quinn, and the Minister for Tourism and Trade, Deputy McCreevy. I attempted to link up the other agencies with those on the graph. I gave up because I produced a spider's web. That is a fair description of this multiplicity of organisations. The Minister will appoint 36 people to three boards.

Although I have often spoken disparagingly about bureaucracy, I will not do so this evening. Professor T. J. Barrington, a former director of the Institute of Public Administration, recently addressed a SIPTU conference. He said: "We have an intensely centralised political system that relies on bureaucracy rather than democracy, a reliance that has borne bitter fruits". He proceeded to outline the ratio of elected councillors in Ireland to those in France. He then said:

Ireland has 112 local authority and 1,633 elected councillors, substantially fewer than the appointed representatives on the boards of State agencies, but it had long been held that the progress of democracy involved a move from appointed representatives to elected ones [and that there is] a glaring deficit of decisions and too little progress.

Professor Barrington concluded by saying: "Ireland ranked among the last six in a 19 country OECD table of economic performance, the other five of which were dictatorships up to relatively recently". I regard Professor Barrington as an authority on such matters. His words are thought provoking, They highlight the democratic deficit in decision-making in the State and they must be taken seriously.

I refer to the First Schedule of this Bill which disqualifies elected representatives from appointment to these boards. I have protested at the inclusion of this section in every Bill which has come before the Oireachtas, yet it continues to be included by all Governments. I reject the slavish adherence to this concept because it is an unacceptable reflection on the integrity of elected representatives. It implies that public representatives are unfit because of lack of competence or that we are more likely to be corrupted in the performance of our duties than non-elected people. I reject this. It is a practice which does not prevail in other EC countries.

If we are not prepared to defend ourselves, who will defend us? We should not continue to brand ourselves and our colleagues as unfit and incapable of serving on the boards of State bodies. I do not know why this section is continually included in legislation dealing with State boards and why it is ignored by Ministers and Members of the Oireachtas. I will table an amendment to delete that section.

I welcome this Bill, Although I have reservations. If this Bill creates jobs as it purports to do, it will be successful. This legislation is essential because experts must come together to provide job opportunities for our well-educated young people. Five members of my family received a college education. The most qualified of them has had to go to England and has been unable to obtain a job interview in the past seven months. I welcome this Bill if it provides employment. What is the purpose of education? Is it to provide for a lifestyle which can be sustained in this country or is it to educate people so that they can find employment outside the country? Will the State provide well-educated people with the means to enjoy leisure time without employment?

My son received an honours MBS degree from Carysfort and is now working in a public house in London because he cannot get an interview for a job in Ireland. The only graduates from Carysfort who have obtained employment are those who were sponsored by companies. Perhaps these people are not looking for the right jobs. They are told that if they are educated they will find employment. They cannot get jobs for which they have been educated and they cannot get other jobs because they are too highly qualified.

I welcome what this Bill purports to, but I have difficulty accepting its efficacy. I started working at 11 years of age in the family business and I have been in business ever since. That business was an indigenous one which had never received a State grant. It was successful but is not as successful now, possibly because I am here speaking about the technicalities and theories and business rather than in Kilkenny devoting my energy to it. Anybody who believes that politicians or civil servants will create jobs is living in cloud cuckoo land. They will not produce the jobs necessary for long term enterprise and employment; they will only create non-productive jobs.

I see myself as one of a large number of people who have had the guts to stay in business despite all the obstacles created by the State. I would like the Minister to bring a Bill before this House to protect existing jobs. There would then be no need for the moneys that are provided for job creation. The Minister said in his speech that in the period in question Irish-owned firms actually managed to lose 600 jobs net. That is an insult to those in indigenous businesses. Many of them were forced out of business because of Government policy and many who had not the money to continue in their business had never received a penny from the State.

Under the IDA and other organisations an impressive total of 118,500 jobs were created but in total 108,600 jobs have been lost. The net change was just under 10,000 jobs. The cost of an IDA-created job is 150 times more than the cost of somebody starting to work alone with his tools.

We have to give the Bill a chance. Perhaps Forfás will be able to co-ordinate the work of Forbairt and IDA Ireland. The IDA will be involved in attracting overseas firms to Ireland. If people from the IDA went to certain countries they would not bring back jobs because they cannot speak the languages of those countries. They employ people who they believe will produce jobs and in many cases pay them high fees, simply because they do not know the local language. I have seen people from aid organisations and job creation organisations go to a country where they have no knowledge of the language and immediately be given the name of a translator who, it emerges, is involved with a certain company. It happens all the time. Anybody on such missions, in particular those working for the IDA, should be obliged to know the language of the country, because if they do not they and the taxpayer will be ripped off.

Another Senator mentioned that politicians are debarred from membership of State boards. In some countries people do not want civil servants on such boards; they want politicians on the ground working for their country, bringing jobs from abroad. Civil servants do not create jobs; we must have an enterprise-related Civil Service. Our embassies have to become enterprise centres. The era of ambassadors is long gone. There is now instant communication 24 hours a day with everywhere in the world. This communication should be availed of and our embassies should be used as enterprise centres specifically. Forget about walking around on red carpets.

Research and development is an area in which Ireland is extremely weak, although we could create thousands of jobs in it. The Bill sets out parameters to create jobs, yet research and development is not addressed. There are young companies in Ireland in the medical and scientific fields with technically educated and highly motivated people. Yet only 1 per cent of the chemical and technical companies in Ireland carry out any research and development. That is not acceptable. Many of these companies could, with help from the Department, create jobs in research and development. By help I do not mean grants, but direction as to what is needed.

We are also lacking in PR. I was talking to two people today interested in investing in Ireland. They went to the British Board of Trade to discuss where to locate and were told that because of instability in the Irish market — and political instability in particular — they should not locate here. I had to contact those people and prove to them that politically Ireland is exceptionally stable.

The beef tribunal is probably the biggest farce this country has ever visited upon itself. There is need for a tribunal to investigate the problems of the beef industry, but because it is a public tribunal we are showing our linen primarily to our competitors. We want to find out from the tribunal where the beef industry has gone wrong and that should be done internally. I can guarantee that all of our competitors get a full transcript of the proceedings of the beef tribunal daily. Mistakes made ten years ago will be made public and nothing will happen as a result. If the officials in the Department of Agriculture are doing their job the errors of the past have been eliminated.

There is an unbelievable amount of money available for investment but where to invest it is a problem. An industry which has been in Kilkenny for the past 35 years will fold and 40 people will be put out of jobs because of EC regulations and because for VAT purposes in the UK mobile homes are classed as houses while in Ireland they are caravans. If one buys a mobile home in Britain which can be used as an office, it is VAT free. If the same mobile home is bought south of the Border it is subject to 12.5 per cent VAT. As a result, the only manufacturer of mobile homes in Ireland is about to close down and 40 people will lose their jobs. A mobile home sold across the Border from Donegal comes into this country VAT free. Our indigenous industry is charged 12.5 per cent VAT. The purchaser of a caravan or mobile home made here cannot claim the VAT back, so it is a definite 12.5 per cent increase over the UK price.

Professor Michael Porter points out that the size and nature of the home market demand is a major determinant of the rate at which a nation's firms can develop. This is absolutely untrue in Ireland's case. Irish firms can improve their position in the marketplace and avoid tax by pretending that they are exporting or manufacturing. At the end of the year one will find that where tax is not collected and is uncollectable, firms disappear off the face of the earth. An indigenous firm in the motor or pub trade or any other trade cannot disappear and they do not create the problems that many people suggest.

I wish the Bill success, but it fails to address our problems. The problem is not the creation of new jobs, it is the preservation of existing jobs. We must ensure that the jobs we create are preserved. The IDA gives grants to foreign companies regardless of whether they need them. Once they get the grants, the IDA leaves them to it but indigenous firms are not getting the necessary help. I wish the Bill well but I doubt its effectiveness.

It sounds as if a couple of Members on the Government side could vote against this Bill. I am sure they will get their act together before the bell goes. There has been a huge debate was to whether replacing two agencies with three is a good or bad thing. We have heard the arguments from both sides and there is a great strength of feeling. I would not purport to give the answer. The Minister has not given the answer either. The idea of saying that it is easier to deal with the statistics when the national is separated from the international is merely a matter of the presentation of statistics.

In terms of gender proofing, this is one of the better Bills to come before this House. It is nice to see the word chairperson mentioned without having to propose amendments. There are a few minor problems where the phrases "his consent" and "information obtained by him" are used. I hope the Minister will be prepared to accept minor drafting amendments to cover those points. It is worth while to recognise the effort made by those who draft Bills to produce legislation which meets such requirements. This Bill is very good from that point of view.

The Minister talked about net job creation from 1987 to 1992. It is predictable that this period would be taken because it represents the periods of national agreements between the social partners and the Government. There are two ways of looking at it. One can say that only 10,000 jobs were created over that period or one can look at the situation since 1982. The saddest thing is that there were close to 1.2 million people working at the beginning of the last decade and there are now just over 1.1 million people working, despite various job creation projects and proposals. There is a net loss of jobs.

Many people would agree with many of the points Senator Lanigan made. They need to be examined closely. The phrase "highly educated" is what has destroyed this country. I represent an education union and I am one of the people responsible for the delivery of an education service. Today is an historic day in the Irish approach to investment in job creation inasmuch as that it is the first time that any group — I am talking about ESRI report published this morning — referred to the need for investment in primary education in order to ensure a long term approach to job creation. Senators will know that I have been making that point consistently over the last six months and irregularly for periods long before that.

Senator Lanigan addresses the current system of education. A child enters the system at four years of age. He or she does the best they can right through the primary sector. Their promotion to post primary level can often be determined by the level of academic achievement at the end of first level. One can look at what is happening in Limerick. Entrance to third level is definitely determined by the level of academic achievement at the end of second level. They then go through third level and they come out the end, in the words of Senator Lanigan, highly educated. What are we missing out on? What goes wrong? It is very clear what is going wrong.

The people who would tend to make jobs are people who are flexible, who can think on their feet, work with teams, show leadership, take risks, and be creative. Those are the areas in the education system which are being ignored. The child, who might not be good academically might prove to be extraordinarily gifted in organising a team for a game or any other team activity and will learn success, authority and leadership from that. This will not happen in a primary school system where more than two out of every three primary schools do not have access to proper physical education facilities. The people who are going to be creative have to have confidence in their creativity but where do they learn it? They will not learn it by narrowing the focus of education into the three Rs where we develop a nation of clones, of safe, qualified people. They are not going to get anywhere. The person who is prepared to take a blank sheet of paper and splash paint on it and is able to deal with the praise or the criticism is the person who will learn to take risks. It is in the areas of the curriculum which are far removed from the three Rs that we learn the talents which are important in an entrepreneurial approach to life and also in achieving a balance between the need to create profit and the need to look after people who are less well off in society.

What Senator Lanigan has said is quite true — the civil servants and politicians will not create jobs. The saddest part of that equation is that the private sector has completely and utterly failed to find us jobs. All they can do is blame the politicians and the civil servants. There is something wrong about that and that is where the approach has to be made. I am quite clear where the problem lies. I said it last week when discussing the Finance Bill. There is a problem in the Department of Finance. We have a Department of Finance whose only business in life is looking at the bottom line of account sheets and making them balance. Where is the sense of mission and the vision which gave us Ardnacrusha power station, Bord na Móna and the food processing industry? It is not there; nobody takes risks in that business any more.

I will explain how education works in this regard. The Department of Finance has more impact and control over education policy than the Minister or Department of Education. We have had a presidential-style Government for the last eight or nine years, where the Department of Finance clears every payment in every Department. The appointment of teachers, investment in any pilot project or any development, etc., are subject to the agreement of the Department of Finance. That is what is happening with education in this country.

We need patriotic entrepreneurs in the private sector. We need a recognition from the trade union movement that change must take place. With respect to Senator Lanigan, in regard to the private sector it is not a question of the protection of the jobs that are there because the jobs that are there will not last more than ten years. Technology eats jobs. Anybody who does not recognise that and adapt to it will die. In The Irish Times, a fortnight ago, there was an article on the Ordnance Survey. It said that if a person working there presses the button on the map making machine before they go to lunch, on their return more work will have been produced than would have been done by one person in one year up to now.

We cannot protect jobs. We must create new jobs and move with the times. That demands from the trade union movement a recognition that progress will take place. This creates huge problems in many places but there must be a consensus. Management must learn to invite workers, at whatever level, to take their brains to work. There must be a consultation process, because the day is long gone when it was simply a matter of telling a person to do something without explaining why. Workers, and senior management, must be committed to the service package or whatever is being offered.

While I fully agree that languages should be taught in schools, there is a view — which is being led by politicians and has been grasped by the media and supported by the private sector — that if everybody in Ireland could speak English, French, Spanish and Italian, everything would be fine. If any group of 20 people who go abroad looking for work, three people can speak the language, that should be satisfactory.

I agree with Senator Lanigan it is important that somebody speaks the language but it is not necessary for everybody to do so. Language is needed for communication. Anyone who thinks that the introduction of languages at all levels will solve our job creation and export problems is wrong. Our exports trade is growing faster than ever. Last year it increased by 7 per cent and the previous year by 14 per cent.

I urge the draftsperson of this Bill to examine the point made by Senator Howard and which I have discussed with him on numerous occasions. It concerns this extraordinary attempt to reinforce the cynicism which is felt about politicians. It consolidates this sense that politicians are useless and it reinforces a lack of trust in our democratic leaders. I want to know why any Member of the Oireachtas should be barred from serving on the boards of any of these companies? I do not want to hear what happened in the last 50 years. We have had enough of that. This is supposed to be forward looking legislation.

My colleague, Senator Quinn, heads a large company — I am not aware of his skills but he is successful in job creation in his own field — and we are now saying he might have a skill which would be useful on this board, but because he has been elected to this House he is not eligible to serve on the board of this agency, although he can serve on the board of any of the companies which will be set up by these agencies. It is daft; it does not make sense and I believe it is unconstitutional.

It reinforces this idea that politicians are not to be trusted or that it is jobs for the boys. There are now more people appointed to State boards or agencies than there are elected to local authorities. When I say the Oireachtas, I am also referring to members of local authorities. Under this Bill leaders in industry who wish to serve the democratic process are suddenly debarred from doing so.

I would like to raise an associated issue, under the Second Schedule about members and staff of the boards — and I know that Senator Sherlock will welcome this. It states, that where a member of the staff of Forfás is nominated as a Member of Seanad Éireann or elected, he is immediately seconded from the job in the State agency. I approved of that. That was the essence of an amendment put forward by Senator Sherlock on the Unfair Dismissals Bill. However, I am worried about one aspect. In the Second Schedule, it states that such a person having been seconded after being elected to the Seanad, Dáil or European Parliament: "Shall not... be entitled to receive from Forfás, any remuneration or allowances in respect of the period commencing on such nomination or election". That is fair as regards salary, but I think the words "remuneration or allowances" might overlap in the area of pension. I see no reason a person on secondment could not continue at his or her own expense to pay into the insurance cover which would be appropriate to that employment. That would be part of the general policy of the Pensions Board, supported by the State, in terms of the affordable nature of pensions and so on.

I will be amending paragraph 4 (2) of the Second Schedule to delete "his consent" and to substitute "to consent", which means the same thing. On line 15 page 8, it states that: "Each Board may act by any three of its members". Is that simply a quorum or what does it mean? It is an unusual use of words and I would like it clarified. The Minister went to great lengths to talk about research and development, but I believe the functions of the board of Forfás should include the promotion of research and development.

I have a serious drafting problem with section 7 which states; "The functions of Forbairt shall be, as an agency of Forfás, to develop industry and technology in the State...". To develop industry and technology is only one function. That is not the impression which should have been given. I think the section should be amended to read, that the functions should be to strengthen the technological base, to provide services to support it, to make investments and so on. I believe that is what is meant because at the moment there is only one function.

I wish the Bill well. None of us can afford to be critical of its approval. Everybody must give it the support for at least trying to make it work. Time will tell whether it does.

I give a guarded welcome to this Bill and I welcome the Minister to the House. I saw him on television proposing a good initiative, which is to be welcomed. I give this Bill a guarded welcome because I am satisfied that the IDA has worked well within existing constraints. Only time will tell whether dividing the IDA into three different sectors and adding other areas of responsibility will make it more effective. I accept that it will be more effective. The Minister said: "It means that we must change the structures to get the clarity we require." I hope this Bill, by dividing the IDA and integrating Eolas and other bodies into Forfás, Forbairt and IDA Ireland, will give us the necessary clarity in the challenge to create jobs.

The most significant point in the Minister's speech is the fact that between 1987 and 1992 we created 118,500 jobs and lost 108,600 jobs. The lesson to be learned from those statistics is that, while job creation is important, job preservation is more important. We have lacked the ability to preserve jobs. We have accepted job losses too easily and the State has paid considerable amounts of money to keep people idle rather than working.

The forthcoming talks on Aer Lingus will give us an opportunity to save jobs rather than simply put people on the dole queue. We are told that many Aer Lingus workers will be made redundant. Many of them are highly qualified marketing personnel. Bord Fáilte is at present not permitted to recruit one extra marketing person for the European and American markets because of the embargo on employment, yet we will pay Aer Lingus personnel — between 500 and 1,000 people if newspaper reports are correct — two-thirds of their wages to stay at home. Marketing Ireland abroad will inevitably create extra revenue, attract more tourists and create extra employment. We must preserve jobs before we try to create jobs.

I wish to identify some areas where jobs can be created immediately and where policy up to now has been wrong. I emphasise policy because the IDA has done a very good job tackling the task they were given. We have excellent people in the IDA. There is no doubt that the IDA has access to the boardrooms of the world and its personnel are most effective in conveying the attractiveness of Ireland and thus attracting jobs to this country. IDA personnel have been equally impressive in their efforts to create indigenous employment.

I am not sure that breaking up the IDA into these constituent bodies will necessarily have the desired effect. We need more than that. We need to broaden the base of the IDA. There are four areas where the IDA and general policy are ineffective at present and they are areas where we can create many jobs, jobs which have not been created previously because we have not put sufficient emphasis on them. The first area is the food sector, the second is the international service sector, the third is the telecommunications and data sector and the fourth — which is part of the service area — is tourism.

The IDA has no role in tourism development. When I was Minister of State at the Department of Education and the Department of Transport and Tourism with responsibility for sports and tourism, a company, Center Parcs, attempted to locate in this country. Center Parcs is involved in the development of tropical water facilities and is the largest such company in Europe. There are several tropical water facilities in Holland and throughout Europe, including Great Britain. We have a small facility in Trabolgan. The company proposed to create 200 jobs and to invest £50 million but we did not have a competent agency to negotiate with it as the IDA can only enter into discussions relevant to manufacturing industry.

The IDA's base must be broadened so that it can negotiate with whoever wishes to locate in this country and create jobs. If that means in the leisure or tourism sector, then allow the agency to do so. There is a glaring omission in that respect and I urge the Minister to correct it and permit the IDA, in co-operation with Bord Fáilte, to negotiate with the many firms which have significant mobile investment and want to invest in leisure and tourism facilities in countries like Ireland. The company I mentioned would have invested £50 million and created 200 jobs. Instead, this company located a facility in Sherwood Forest, outside Nottingham, in England. The facility employs about 250 people and is so popular that there is a four month waiting list to take a short break there. Why did we not encourage these people to come here?

I wish to refer to the international service sector. One of the growth areas for investment by US companies in Europe in recent years has been the health care area. As we are aware, it costs an enormous amount to have hospital care, medical or surgical attention in the US. This country has never properly focused on the potential that exists for American companies to establish private clinics or hospitals here to bring their patients.

I wish to recount one incident and I want a response before this debate concludes. About three years ago, an American company proposed to establish a significant health clinic here with an investment of between £150 million and £200 million. We let that company go and I want to know why. Today that medical facility is being built in Scotland, creating 1,500 jobs. Why is that facility not being built in Ireland? Why is Ireland, with probably the best medical personnel in Europe, unable to attract such American investment? The Blackrock Clinic can provide the best surgical or medical treatment in the world for about one-tenth the cost in the United States. I am convinced that if the IDA focused on this sector many thousands of jobs could be created immediately.

I wish to refer to the telecommunications and data sector. In the past we had a good excuse for not being able to compete in the development of our economy. We said that because of our peripheral location we could not compete with centres of commerce such as London or Paris. Today, because of developments in the telecommunications and data sector, we can compete, particularly for service industry. Why is it that an international service or manufacturing company located here cannot get a telecommunications network at a price comparable to that available elsewhere? Why is Ireland one of the few countries that does not have a proper telecommunications centre? Dell Computers almost left because we could not give them dedicated phone lines for 1800 freephone numbers. We are losing industries because we cannot give companies dedicated phone lines which can cost a fraction of the normal cost.

Dell is a computer company based in Bray. I understand that this company has a dedicated phone line with 150 voices for its direct sales to Britain. The 1800 freephone number for Dell Computers is connected to Bray. All Dell's sales to Great Britain are made from Bray. It would be in this Government's interest to give free dedicated telephone lines to foreign companies who set up here. The communications industry has developed to the point where an American service company could be based here. People who call their local number from California could be answered in Ireland. We are not in a position at present, however to provide those telephone lines at an attractive cost.

We need a telecommunications centre located in this country as a matter of urgency, so that companies can hire dedicated telephone lines at the right price. If we can do that, we can attract a significant number of companies. This is a matter for discussion between Telecom Éireann and the Government. Europe is about to expand in the area of telecommunications, as the United States has in recent years. Ireland is not ready for that expansion. In the case of Dell, I am aware that the negotiations which took place to attract that company to Ireland were made much more difficult because we would not reduce the cost of their telecommunications.

This Bill may have its most significant effect in the food sector. At the moment several agencies are involved in the promotion of food. The development of Forbairt to look after indigenous industry should improve marketing in the food sector.

I am convinced that our economic future is based on our ability to make Ireland the most prestigious destination in Europe as a visitor or tourist centre. Yet the IDA, our main agency for the promotion of jobs and economic development, cannot touch tourism. We must extend our tourism season from the present three months to eight or nine months. This can be done through proper investment, much of which would come from overseas, but until such time as IDA — that is, Forfás with Forbairt and IDA Ireland — in a joint venture with Bord Fáilte, are allowed to get involved in grant aiding leisure and tourism developments, that kind of development will not come about. I appeal to the Government to make the necessary structural changes to enable Bord Fáilte and the IDA to embark on this joint venture as a matter of urgency so as to put in place the infrastructural developments in tourism which are needed to extend the tourist season. When we do that, the jobs will come onstream. Jobs in the service and tourism sectors will far outweight jobs in the international manufacturing sector. The IDA are visiting broadrooms around the world, but unfortunately the jobs are going to places where the cost of labour is lower than in Europe.

I give this Bill a guarded welcome. More fundamental changes must be made. The people in Forbairt and IDA Ireland have the ability to do their job. We must extend their field of activity and allow them to get on with the job.

It is interesting that Senator Fahey concluded by giving this Bill a guarded welcome. He has repeated a series of guarded welcomes for this Bill from the Government side of the House. This Bill is a total disappointment. I had hoped it would be a major stimulus to industrial development. Instead it is a bureaucratic Bill, dealing specifically with a reorganisation of semi-State agencies. It is extremely narrow and does not give the vision, the stimulus or the incentives to development. It does not deal with training, education, transportation or communication, matters that are fundamental to industrial development.

The Bill puts a new bureaucratic structure in place. It combines Labour's instinctive, unthinking attachment to bureaucracy and Fianna Fáil's inability to think straight. Fortunately, Fianna Fáil Senators are beginning to think in the various contributions that they have made this evening. I hope by the time this Bill leaves this House, it will be an amended Bill which will do something for industrial development.

The IDA is to be split in two, and a new bureaucratic monster called Forfás is to be set up to co-ordinate the other agencies, to assume the functions of Eolas, and to distribute them to the other agencies. Forfás is to give policy advice in the industrial development area, and to co-ordinate Forbairt, IDA Ireland, An Bord Tráchtála and, very ominously, any other bodies which the Minister may intend to create. What will this new monster do that cannot be done by the IDA or the Department of Enterprise and Employment.

We are about to see the emergence of a new and superflous parallel administration, which will be a waste of time, money and effort. One piece of the split-up IDA will become Forbairt, which will focus on the development of indigenous industry. In doing so, it will exercise the indigenous industry functions currently held by the IDA, and the technology development functions of Eolas. This is a very insensitive combination. The technology development functions of Eolas cannot be properly divided in this way. It would be more useful to keep Eolas in place along with the IDA. I am amazed that this legislation has come before the House in this form.

There is nothing to indicate that there is any difference in principle between the technology development requirements of indigenous industries and those of overseas firms. Neither is there anything to show that these requirements can be better met by a unit attached to an indigenous industry-promotion agency than if they are handled by an agency involved with overseas firms. There is no case whatsoever for the merging of Eolas with any other agency. It should be recognised that it has had a different mission from the others. It might be said that there would be a case for merging Eolas with a single industrial development agency, dealing with both indigenous and overseas firms.

The new IDA Ireland will deal specifically with attracting overseas firms to Ireland and facilitate further expansion of overseas firms currently in Ireland. A mistake has been made in that there is a clear difference between overseas firms and multinationals. All overseas firms should not be treated automatically as multinationals. There is a very distinct difference between these two, and there may be a case for dealing with them in a different way. The Minister should examine that possibility.

Section 9 deals with the allocation of powers and functions to the agencies and is a masterpiece of vagueness. It is not clear how these powers will be allocated. This bureaucratic structure will become a monster, inhibiting development by any entrepreneur who wants to create jobs.

Section 12 requires Government approval for any development involving a grant of more than £2.5 million. If a staged development is taking place and, let us say, a grant of £2.1 million is sought in 1993 and £2.2 million in 1994, then Government approval will not be required. It is extremely unfair that one business attracting a once-off grant of between £2.5 and £2.7 million will need Government approval, whereas another industry which could be developing on a staged basis year after year, and which may get a lot more money, will not require Government approval. That is quite ridiculous and unfair, and should be seriously examined.

Paragraph 2(5) of the Second Schedule is a curious part of the Bill specifying who may or may not serve on the new agencies' boards, and it has already been referred to by Senators O'Toole and Howard. It is curious that the Government has chosen to provide that no member of a local authority, Seanad Éireann, Dáil Éireann, nor any MEP shall be entitled to serve on the boards of any of these agencies. This legislation discriminates against elected members of local authorities, the Oireachtas and the European Parliament. The Minister and the Department are playing to the media hype and cynicism in relation to politicians. This is totally unacceptable and I believe it to be unconstitutional. Members of local authorities and of the Oireachtas should not be discriminated against by legislation passed by this House. If this legislation was challenged in a constitutional case before the Supreme Court it would not stand. The Government must be condemned for including this provision in the Bill.

Paragraph 4 deals with the disclosure of documents. The Minister is taking power unto himself to ensure that if he so chooses, documents will not be submitted to the courts, and that none of these agencies will be entitled to submit documents to the courts. This is a deliberate and unacceptable attempt to obstruct the cause of justice. The chief executive, chairman and board members of any agency should have the right and authority to do what they deem fit with documents. Who are we to legislate against the courts? This matter is extraordinary, unprecedented and unacceptable.

Paragraph 5 deals with the disclosure of information. It is opportune that the Seanad should discuss this issue because we heard only this morning on "Morning Ireland" an interview about disclosure of information pertinent to a proposed development on Clonmel, County Tipperary, which has been diverted to Scotland. Can the Minister tell us how certain information got into the hands of a Government Deputy and how that Deputy was allowed to go public with that information, which it appears has deprived us of this industry? It would be interesting to know if the part of the Bill dealing with disclosure of information will apply to the Minister. It appears to apply only to those working for, or associated with, the agencies. It does not specifically refer to the Minister, his staff, or anyone associated with the Minister. We read about a summary conviction and a fine of £1,000 but why should this not also apply to the Minister, his departmental staff, or anyone from his party who discloses information that causes the loss of jobs? These are important questions that must be answered before this debate ends.

This Bill is a complete wash-out and a stumbling block to industrial development rather than a step forward. It is unfortunate that after the Culliton, Moriarty and other reports, all the Minister brings before us is a bureaucratic Bill which calls the players by different names, puts them into different places and creates layers of bureaucracy that will mean more confusion and stumbling blocks for entrepreneurs who want to create jobs. There is nothing whatsoever to commend it.

Repeated speeches were made by various members of the Minister of State's party who gave the Bill a very guarded welcome. This Bill has not received a genuine welcome from either side of this House. This leaves the Minister with no option but to withdraw the Bill and return to this House at a future date with a proper Industrial Development Bill.

I welcome the introduction of a Bill which tries to deal with the issues. I do not know whether this will turn out to be a good Bill. If it does it will be despite some flaws in it, but it is an extremely difficult subject and I am not going to criticise it for the sake of criticising it.

It is ironic that the IDA is being split up at a time when it had significantly improved its contribution in the area of indigenous industries over the last five or six years, if we are to believe the excellent report by the ESRI — one of the best consultancy back-up reports to Culliton — under the authority of Professor Kieran Kennedy. It may be that this will help it to improve further but I find the timing peculiar from that point of view. It would have been much more intelligible in the light of the Telesis report rather than in the light of more recent experience. There is an element of "leap in the dark" involved, and I can only wish the decision-making process well in hoping that it gets it right and lands on firm ground.

Irrespective of the organisational structure, we have to keep in mind that the main problem confronting us is dearth of ideas in terms of industrial initiatives. That emerges clearly from the Culliton report itself, which contains many worthwhile recommendations and serious comments on inadequacies in aspects of industrial performance. What an academic like myself looks for in a report by a committee made up primarily of businessmen is specific recommendations about industrial development, not the level of theory or even waffle sometimes ungenerously attributed to non-business people. When one looks at specific recommendations about industry as distinct from those on getting the climate right and the various meteorological approaches, one finds a single page of the report devoted to specifics, apart from the appendix on the food industry which is worthwhile but says nothing not already known.

There is one page about fostering clusters and what it says can be summarised even more briefly. It criticises the IDA for having focussed on the high technology and pharmaceutical sectors 20 years ago but it does not say what it ought to have focussed on instead. The report mentions the food industry and aeronautics as possible bases for "clusters", the magic word. Clusters is an old concept in economic history which has been made fashionable recently in Michael Porter's work on which the Culliton report drew.

The problem with clusters is that in the first place one must have firms and ideas which are going to work in order to begin clustering them. I mention this because the Minister referred to clusters in his contribution. The examples cited in the report are interesting ones for an economic historian. They concern German, Swiss, Italian, Japanese and Danish clusters. None of them was established since the Second World War and several were begun prior to the First World War. There is little we can learn from this contribution as to how we can foster clusters in our circumstances.

I am sympathetic to all the new agencies because if they go to the Culliton report to find ideas they will find nothing specific, despite such attractive headlines as "Choosing Niches and Segments". The agencies are on their own as far as the report is concerned and that should impress on us the difficulty of formulating effective industrial policy when this high powered business committee was either unable to or did not devise a more impressive list of specific recommendations.

Irrespective of organisational structures, there is a dearth of ideas about what to do. That will continue unless a more effective means of policy formulation is found. The Minister refers to strengthening the policy orientation and policy-making sector of his Department and using this as the strategic head of the agencies. That will certainly be needed.

It is unfair that the IDA has been blamed over the years for failing to do a job which it ought not have had to do. That was to formulate industrial strategy. That task was subcontracted 25 years ago to the IDA and marks a failure of central Government. I hope the structure envisaged by the Minister will contribute to rectifying that deficiency. If not, the criticisms about layers of bureaucracy will be justified.

It is crucial to devise mechanisms for evaluating rapidly the performance of the new structures. I am prepared to take them on trust and hope the Minister will find his optimism about their potential justified. He has given a number of hostages to fortune in his contribution and one hopes they will not turn out to be unguarded hostages. How will we evaluate the performance of these structures over the next two to three years? We are told there will be annual reports. All of us know how to prepare those. How will we get helpful annual reports from these agencies, none of which will be willing to concede another is doing better? All of them will be rivals in terms of annual reportage. Will Forfás pass judgment on the relative merits of its two offspring in any annual report it will submit? Writing annual reports is an intriguing challenge. In this case it will require even more delicacy of judgment than normal.

There is to be a three-yearly review not only of performance but of policy by the Department. A three yearly review is due in December of this year. The last review was in December 1990 and was extremely good because it cut through the previous three annual reports of the IDA. Will the three-yearly review due this year not be presented and will there be no commentary on the performance of the past three years? That would be most unfortunate. If we have to wait three years for a detached or semidetached review of performance we are taking a leap into the dark at a difficult and awkward point. We will have no criteria for effective evaluation. If it comes to that, how can the Department in three years' time pass a detached, clinical, cerebral comment on the performance of these agencies over that period, given they have been brought in by the ministerial team which will presumably still be in place?

We hope to be, yes.

I refrained from saying that in case it would be a partisan statement.

It might not be the same team.

In those circumstances, how will such a report enlighten us about performance? It was one matter for a Department in 1990 to produce a relatively critical report on an agency the then Minister was anxious to review. How will a Department be able to pass a credible, critical comment on, in effect, this Bill? If it is not working, how can those responsible for it be expected to condemn the consequences of their own handiwork? I hope it does work, for all of us, but the Minister and his team may be digging themselves into a potentially awkward position. They should approach this Bill in the spirit of being prepared to review its working and revise it on an ongoing basis. They should accept it is an experiment, in some respects a gamble, and should not find themselves defending what may turn out to be, if not the indefensible, perhaps inadequately throught through proposals.

The Minister and the Department should regard this as a continuing challenge and be prepared to modify some of the recommendations administratively and, if necessary, legislatively, if they turn out to be unjustified on the basis of ongoing experience. That could be done before the three-year period is up so confrontation does not develop on policies central to national development.

The long awaited response to the Culliton recommendations constitutes an ala carte approach which ignores some of the key proposals. It runs directly counter to the report in some significant respects, is too vague in others and is too often lacking in specific decisions. I have experience in my area of the various sorts of bodies the Minister proposes to establish to create jobs. The time-consuming wrangle about the agencies seems to have produced a structure which is contrary to the thrust of the Culliton report.

In addition the Government seems likely to proceed with a daft network of county enterprise partnership boards instead of genuine regional planning. The proposed An Bord Bia will be no more than a downtown office of the IFA.

The range of agencies being established, including Forfás, Forbairt, IDA Ireland together with the functions of the old IDA, must pose the question as to the necessity for so many bodies. Will this go to make an impact on the major employment crisis in the country?

The Culliton report argued for urgent reform of the taxation system and for an end to the multiplicity of reliefs and exemptions and tax shelters which have no logic, encourage tax avoidance and retard industrial progress. The section 84 back tax based lending has implemented to some degree, but not sufficiently, the recommendation to broaden the tax base, a measure I proposed in 1982 in the Dáil.

The Government proposal to incorporate State companies as limited companies will ultimately facilitate privatisation. These companies, burdened by historic debt, will, where feasible, be reorganised into holding companies and PLCs, the latter being organised as operating companies. Rather than implementing the radical reorganisation and simplification of industrial promotions that is required, a new bureaucratic network of agencies will be created. This contravenes the recommendations not only of the Culliton report but also of the Telesis report which, as long ago as 1982, argued against the strong agencies/weak companies malaise we have in the country.

Unemployment must be our first priority. I put it to the Minister that in the period 1987-88 the State instructed the IDA to sell off land and buildings it had purchased. At present, however, experience has shown that where there are advanced buildings, industrial development takes place. Experience in my area has shown that this is a real incentive.

It has taken 18 months since the publication of the Culliton report to introduce this legislation. This is an unacceptable delay given the unemployment crisis. Why have the recommendations of the Culliton report become immersed in disputes about agencies when the Telesis report had identified Ireland as a country with strong agencies and weak indigenous companies?

There should be a concentration on building strong indigenous companies. For example, the food industry is in urgent need of development despite the policy adopted some years ago to give the IDA the authority and the power to get involved in this industry. It is what we can produce, manufacture and sell that will form the basis of our economic strength. Any outside investment should be considered the icing on the cake.

There are too many agencies and too much bureaucracy. The IDA should be directed by the Government to create its own structures. Has the IDA failed? I do not believe so, it has been successful. However, it has not been allowed to develop indigenous industries to the extent needed and for the reasons I have outlined. The IDA should be reorganised into a dual structure as recommended in the Culliton report, namely, one side concentrating on indigenous industry and the other on foreign industry. Instead there is now the Department of Enterprise and Employment, Forfás, IDA Ireland and Forbairt on the one side and on the other, the Department of Tourism and Trade and An Bord Tráchtála.

I put it to the Minister that the Culliton report is already out of date. Its authors never claimed it would be a solution, rather a set of sensible and necessary recommendations. The agencies have been abused and exploited by successive Governments with Ministers taking the credit when jobs were announced and the agencies taking the blame when jobs were lost.

Industrial strategy is about a great deal more than agencies. What is the relationship between Forbairt and An Bord Tráchtála? It has been generally understood that our failure was in marketing. There was great development of the food industry by, among others, the late Lieutenant General Michael J. Costelloe when, in the 1970s, he was general manager of the Sugar Company, but there was the failure to market. Does it make sense to have An Bord Tráchtála reporting to a different Minister from Forbairt? How do the county enterprise partnership boards relate to Forbairt? These are the questions that must be addressed.

I am pleased to be here at the conclusion of this debate; I listened to most of the debate on the monitor. I thank the Senators for their spirited and wide ranging contributions. I know the Minister for Employment and Enterprise Deputy Quinn, has taken a thorough interest in the debate.

The economic development of the country affects us all and this was reflected in the contributions made to this debate. There is usually a wide diversity of views here arising from the vocational nature of the Seanad itself. In this respect, the views expressed in this House often reflect more keenly those in the country.

Economic development and the need to expand employment are our greatest concerns as many Senators said. Senator Hillery mentioned that the industrial development agencies are only one part of a wider picture which incorporates all of the issues considered in the Culliton report and which the Government is pursuing in its response to the Moriarty Task Force report.

Agency restructuring must be implemented by legislation, hence the introduction of this Bill today. The alacrity with which the Department has pursued agency restructuring is a mark of how seriously the Government takes its responsibilities in the area of industrial development. In this respect, while it appears a considerable time since the Culliton report was issued, this is not the case when one considers that immediately after its issue the Moriarty Task Force was established and there has been little delay in the chain of events which led to the introduction of this Bill.

The make up the new bodies received a great deal of attention in today's debate. There are not three separate bodies undertaking three separate remits. There are two bodies, Forbairt and IDA Ireland, both with a clear purpose.

A great deal of consideration has been given to the need to develop indigenous industries and to weaken our reliance on multinationals. The Government has struck a clear balance here. We have recognised the importance of the indigenous sector by establishing an agency to be responsible for strengthening it, building on its good points, remedying its perceived weaknesses, making it more forward looking and helping it achieve its potential. IDA Ireland will continue to attract multinationals to this country. We are not going to concentrate exclusively on either multinationals or indigenous industries but we will achieve a balance. I decry attempts to advance only one of these options. There was a balanced debate in this House on the need for agency structures.

The Department and I argue strongly that we can have a proper balance but we need to have a focused clarity of mission. This will be a feature of both Forbairt and IDA Ireland. The latter will attract multinationals not just by offering attractive terms but by pointing to our skilled labour force, education system and pollution-free environment and atmosphere, all of which enhance the attraction of Ireland as a location. This agency will also point very strongly to the advantage of Ireland as a bridgehead into Europe.

The impression has gone out from here that there will be a large number of bodies throughout the country. That is not so. Forfás will exercise a co-ordinating function in relation to the two agencies because there are strands which are common to both. It is the umbrella body. Senator Quinn expressed regret that the reorganisation is not more allembracing and that Eolas is to be included in Forbairt. However, when deciding on structures there will always be a balance to be struck between bringing together related functions and creating a bureaucratic monolith, which nobody wants. It has been proposed that there should be one very large structure. Such a structure would beaver away but no one would know in what direction it is going. It would be very unwieldy and not suited to the economic direction we have decided to take. Forbairt achieves the right balance but it needs to be backed with technical know-how so that it can assist the development of internationally saleable products. Senator Dardis was concerned about the proposed creation of Forfás and the role being assigned to it. Senator Quinn spoke of the need for co-ordination; as I already mentioned, this is what Forfás will be doing.

Senator Farrelly and others referred to the need to meet a lack in the current support systems available to individuals and local community groups seeking support in establishing small businesses. This is precisely the role it is intended that the county enterprise partnership boards will fulfil. These boards are an example of the principle of subsidiary at work. They will be charged with responsibility for forging and strengthening networks between local people and community bodies on the one hand and State agencies on the other.

Senator Mooney and others expressed fears about the position of burgeoning county enterprise partnership boards in their localities which have very good ideas and have made good progress. Let me assure them that there will be no takeover of any enterprise culture or any enterprising body which is already in being and has proved itself. Rather the county enterprise partnership boards will act as conduits and catalysts for very fine developmental work. Senators Farrelly, Mooney, Dardis and O'Sullivan acknowledged the element of "bottom up" participation which is a specific objective of the boards.

Senator O'Kennedy expressed concern that the Culliton report may have been unduly restrictive in focus and may have neglected the potential in services. Many of us now realise that there is as much fruitful potential in services as there is in manufacturing. Luckily, and with great foresight, both my Department and the Department of the Taoiseach are looking at this area in different ways and we hope that by the autumn there will be a defined policy with regard to the furtherance of services, particularly house services, which can be helped in the same way as manufacturing business. Ireland is suitable for services industries because of the range and nature of its people and its education and training systems which we hope to develop further. I thank Senators for their contributions on the services industries, an area on which we will focus.

Senator Lee and others suggested that the Bill provided a structure which would be capable of accommodating future change. The modern environment for industry is in a state of constant flux and if our industry is to succeed in the international arena it must be supported by structures which are themselves dynamic, responsive and open to change. Clearly nothing stands still; to stand still is to fossilise and we cannot allow that to happen. We should not fear that the evaluation of the operation of the two boards will result is us having to accept blame. If we have to admit mistakes we will do so and if change is needed we will change. Any legislation can come under scrutiny and its operation evaluated and monitored. No person, agency or Department should be afraid of that.

The Culliton report recommended a dramatic change of policy in the way the work of my Department is carried out and I am glad to say this has already been undertaken with much vigour in the Department. Already there has been a very great flurry of activity in reorganising the way we do our work. The Department operates in an open and democratic way. The way the management of the Department and the Minister do their business is a model other Departments could copy.

Senator Taylor-Quinn argued that the provisions of the First Schedule to the Bill on the membership of the boards of Forfás and the two agencies were very restrictive and unprecedented. However, such provisions usually apply to the membership of State boards; indeed similar provisions were introduced by Deputy Noonan when he was Minister for Industry and Commerce in 1986. This Schedule is anything but unprecedented, undemocratic and unconditional. However, I thank Senator Taylor-Quinn for her usual spirited contribution.

On behalf of the Minister, the Minister of State, Deputy Brennan, and myself I thank all the Senators who contributed to what was clearly a very lively debate. I trust that, when we again debate industrial strategy, the thrust of the two new agencies and the co-ordinating body, we will have a lot of progress to report, and I have no doubt that this will be the case.

Question put.
The Seanad divided: Tá, 21; Níl, 11.

  • Bohan, Eddie.
  • Byrne, Seán.
  • Calnan, Michael.
  • Cashin, Bill.
  • Cassidy, Donie.
  • Crowley, Brian.
  • Daly, Brendan.
  • Fahey, Frank.
  • Fitzgerald, Tom.
  • Kelleher, Billy.
  • Lee, Joe.
  • McGennis, Marian.
  • Magner, Pat.
  • Mooney, Paschal.
  • Mullooly, Brian.
  • O'Brien, Francis.
  • O'Kennedy, Michael.
  • O'Sullivan, Jan.
  • Ormonde, Ann.
  • Roche, Dick.
  • Wright, G.V.

Níl

  • Belton, Louis J.
  • Burke, Paddy.
  • Farrelly, John V.
  • Howard, Michael.
  • Manning, Maurice.
  • Naughten, Liam.
  • Neville, Daniel.
  • O'Toole, Joe.
  • Quinn, Feargal.
  • Sherlock, Joe.
  • Taylor-Quinn, Madeleine.
Tellers: Tá, Senators Mullooly and Magner; Níl, Senators Neville and Belton.
Question declared carried.

When is it proposed to take the next Stage?

Committee Stage ordered for Wednesday, 16 June 1993.

When is it proposed to sit again?

It is proposed to sit again at 10.30 a.m. tomorrow.