Select Committee on Enterprise and Economic Strategy debate -
Friday, 25 Jun 1993

Procedure

Chairman

I have in front of me a suggested timetable. Subject to agreement, it is proposed that we work from now until 1 p.m. when we will take a thirty minute sos, resume at 1.30 p.m. and then proceed until 3 p.m. I do not know if members are in favour of going beyond 3 p.m. or whether we should reconvene on another date. That is a matter for the committee but, if at all possible, we should complete the programme today given that we are in the run-up to the recess and do not have many options open to us at this stage. Therefore I ask members for their cooperation.

The format we have employed to date is to proceed subhead by subhead but Vote 34 is somewhat different in that some programmes cover two subheads, for instance, subheads C.1 and C.2, subheads E.1 and E.2 and subheads F.1 and F.2. I suggest therefore that we take administration as one programme and then proceed to subhead B. We should not take them seriatim as if we were to proceed along those lines we would be here for a considerable length of time which would not be the most efficient way to do our business.

We will commence with the opening statement of the Minister, to be followed by the opening statements of Fine Gael, the Progressive Democrats and the Technical Group. We will then have a question and answer session.

Vote 34—Enterprise and Employment.

Minister for Enterprise and Employment (Mr. Quinn)

This is the first occasion on which the Dáil, through its Select Committee on Enterprise and Economic Strategy, has had an opportunity to consider the Estimates for the new Department of Enterprise and Employment. At the outset, I would like to pay tribute to all the party Whips who have put such considerable effort into establishing the committee system. I wish the committee well in its deliberations. I personally welcome the opportunity to participate in a more detailed discussion on my Department's Estimates and I am sure that this committee will make a valuable contribution to more openness and transparency in Government spending.

Before dealing with the Estimate provisions I would like to refer to the Government's broad strategy for economic development and the creation of an enterprise culture.

The formulation and implementation of industrial policy will, in future, encompass all areas of public policy which have a significant impact on the creation and maintenance of competitive enterprises in the industrial sector, including internationally traded services in Ireland. These include not only the traditional instruments of policy in the form of direct incentives and advice from State agencies, but the important areas of taxation; infrastructure provision and costs, e.g. ports, roads and transportation, telecommunications and postal services, environmental services; education and training; competition policy; monetary, fiscal and Government budgetary policies generally which affect the taxation of business enterprises and their employees, inflation, interest rates and exchange rate stability.

The support of enterprise and employment will be the business of all Government Departments, with particular responsibilities for the new Department of Enterprise and Employment and for the other economic Departments.

In setting up the new agency structures for industrial development, I have also taken steps to ensure that important issues such as linkages and cluster development are adequately catered for. In addition, I am committed to stimulating the growth of our expertise in the industrial policy area, using a sound base of industrial experience, evaluation and hard factual data. All of these issues will be addressed by Forfás, which will be the co-ordinating body for industrial development in Ireland. Forfás will have its own board and chief executive, and will play a key role in linking the actions of the developing agencies — IDA Ireland, Forbairt and An Bord Tráchtála.

IDA Ireland will be empowered to attract internationally mobile investment to Ireland. Inward investment will be strongly promoted in a more cost-effective and specialised manner with the objective of achieving increased employment in Ireland from such investment, both directly and indirectly, through greater linkages within the Irish economy.

Forbairt will have a key role in bringing together the IDA's indigenous industry functions and the technology development responsibilities of EOLAS. More and more, business analysts are focusing on the internal capabilities of firms as the key to growth. Intervention at this strategic level demands that firms should be stimulated into thinking about product development, about competitors and about a more creative and long term approach to business generally. Forbairt will bring this changed emphasis to industrial development and will work closely with An Bord Tráchtála in this task.

As part of the industrial development agency re-structuring, the functions and staff of EOLAS will be absorbed into Forbairt. EOLAS is responsible for the co-ordination and implementation of national science and technology policy; its services are funded by the State and client fee income. The grant-in-aid funding for 1993 is being provided to EOLAS for the provision of a wide range of technical services to industry and the State, and for research.

The EOLAS grant-in-aid for administration in 1993 is £11.152 million — a reduction of 2.4 per cent on 1992, £11.430 million — which reflects existing budgetary constraints and the need to generate additional fee income. The EOLAS grant-in-aid for capital expenditure of £3 million i.e. 20 per cent increase over 1992, is being provided mainly to upgrade and/or expand laboratory and certification facilities, primarily for industry. The major area of capital expenditure is for the building of a modern National Metrology Laboratory in Glasnevin. The new NML should enhance both the scope and quality of metrology-calibration services to industry and other sectors.

In relation to the implementation of the agency restructuring, I should mention that the legislation covering SFADCo will, of course, remain in force and this body will continue to exercise its regional development remit within the context of the new structures. In recent years, attention has focused on Shannon as an international centre or "cluster" for the aviation industry. The Shannon Free Zone was enlarged in 1992, with the approval of the European Commission, to create a World Aviation Park. It is the first dedicated aviation park in Europe and will be the focus of aviation development in the mid-west region in the years ahead. The aim of the aerospace industry in Ireland is to increase employment in the sector from 5,000 today to 11,500 by the year 2,000. Of this figure, 5,000 will be located at Shannon.

The application of science and technology to industry is an essential element in any successful industrial development strategy. The Science and Technology Development Programme was initiated in 1987 to promote science and technology activities and to improve the abilities of Irish industry to compete successfully in the international marketplace. It reflects a business fact of life that if industry is not constantly upgrading its products and processes, it is falling behind and will eventually die. The science and technology programme has expanded considerably since 1987 and receives assistance from the European Community via the European Regional Development Fund at rates of 75 per cent and 100 per cent.

In 1992, expenditure in respect of the science and technology development programme amounted to £27.843 million. For 1993, I am making available a figure of £43.881 million, £20.465 million of which is included in Vote 34. The other £23.416 million is in respect of a new industry research and development scheme introduced in 1992, which is separately funded by the European Regional Development Fund.

Under the next round of the Structural Funds, commencing in 1994, we plan to further increase the resources devoted to research and development. However, this will be done within a framework which rewards those people who can use technology to create new products and new jobs. I want to stress that there will be no automatic subsidies for anyone whether in industry or academia who cannot deliver on this objective.

Under the Programme for Government, it was agreed that arrangements would proceed for the establishment of county enterprise boards which will be empowered to seek funding to assist local development and the start-up of small enterprises in all sectors of the economy. The objective of the county enterprise boards will be strategic and the funding available to them should provide a new source of much needed support for local enterprise initiatives not already covered by the State industrial development agencies. The new boards will complement the work of those agencies and will not displace or duplicate local enterprise initiatives.

Each board will establish an evaluation committee for project appraisal purposes. The evaluation committee will include a nominee of Forbairt and persons with banking and accountancy experience. It will have a critical role to play in making recommendations to the board on the most appropriate level and form of assistance for projects, and in exploring the prospects for maximising the resources available for particular enterprise projects by attracting other sources of funding such as those pledged by the banks and other financial institutions in support of the Government's plans for local economic development.

There is further work to be undertaken in relation to the establishment of the enterprise boards, in particular, the development of harmonised procedures governing the boards status, organisation and conduct of business, including the need for a clear framework of management and financial controls. The new boards will carry important responsibilities for the management of public funds and will, in due course, be incorporated with a separate legal identity, independent of both local and central Government. They will be required to account to their local areas for their performance and to publish an annual report. I hope the membership of the new boards will succeed in harnessing the vital ingredients for local development: leadership, partnership, vision and organisation.

Work on a major programme of computerisation — modernisation of the Patents Office was outlined during the year. The main objectives of the programme are to adopt the most suitable advanced electronic processing technology to increase internal efficiency and improve administrative procedures and to help cope with the greatly increased activity in intellectual property matters dealt with by the office. A telephone dial-in service to the office is now in operation allowing on-line access by the public to search and register information. There has been a considerable improvement in internal productivity.

Electronic linkage with the European Patent Office, arising as a result of Ireland's accession to the European Patent Convention in 1992, are being developed. This computerisation programme remains on target to be fully implemented in 1993. These developments will enable the office to play a more significant role in facilitating technology transfer to Irish industry, particularly to small and medium enterprises.

One of the critical deficiencies identified in the Culliton report was the existence of a "skills gap" in Ireland compared to best practice in other competitor countries. One initiative which it is hoped will have an impact on the problem is the national training scheme, for which the Minister of State, Deputy O'Rourke, has responsibility. It is proposed that the National training scheme will provide structured training both off and on-the-job for those students leaving school who do not wish to enter third level education. The aim of the scheme is to integrate young people into the workplace, and-ultimately into viable employment, with independent validation and certification at the end of the training period.

The respective roles of the Departments of Enteprise and Employment and Education in relation to the provision of training and vocational education have become blurred. The Programme for Government acknowledged that the time has come to define more clearly the respectives roles of the two Departments. A better service can be provided by bringing more coherence into the provision of vocational training and education.

A key institutional change to underpin the rationalisation of training will be the establishment of a single national education and training certification board which will provide one nationally and internationally recognised certification system. It will be charged with the task of ensuring that courses or modules are not unnecessarily duplicated. It will also oversee a system which will allow progression, throught different providers of training, from one level of competence to the next.

The Government is very conscious of the need to provide opportunities for the long term unemployed. The social employment scheme is the main programme through which such opportunities are provided. It is generally recognised that it is difficult to persuade older long term unemployed people to take up training opportunities which they equate with going back to school. The social employment scheme, providing part-time opportunities in a normal work environment, is the preferred option.

I have secured Government approval for expenditure of £97.311 million on the scheme in 1993 compared with approximately £73 million in 1992. The 1993 funding will allow 15,500 persons to participate in the scheme throughout the year, including those who are participating in the community employment development programme in the 12 areas designated under the area-based strategy to combat long term unemployment. The programme, which is operating on a pilot basis, provides conditions for participants through the retention of secondary social welfare benefits and the provision of a training element. I am hopeful that the enhanced conditions may become available nationwide if the social employment scheme is deemed to be eligible for assistance from the European Social Fund under the next round of Structural Funds. The indications from Brussels on this front are very positive, although the regulations have obviously not yet been completed.

I am pleased to say that the basic allowance payable to participants on the social employment scheme and community employment development programme will be increased from 28 July this year. A person without dependants will get £77 per week while the adult dependant allowance will be £33.70 per week and the child allowance will be £12.80 per child per week, the full rate. This means that a participant with one adult and three child dependants will be paid £149.10 per week.

Apprenticeships is an an emotive word for many people. Recent newspaper reports on very high numbers of applicants for a limited number of apprenticeships in some commercial State companies and criticism of delays in revising the apprenticeship system highlight the need for progress in revising apprenticeship arrangements. Deputies may be aware that the new apprenticeship system was officially launched on the last day of April by the Minister of State, Deputy O'Rourke, who has responsibility for Labour Affairs. This followed the development of proposals by FÁS consequent to the agreement reached in the Programme for Economic and Social Progress for a revised system. Pilot schemes for motor mechanics and bricklaying have now commenced and other trades will be added as circumstances permit.

Chairman

I am sorry to interrupt the Minister but he is running out of time.

Mr. Quinn

Thank you. I wish to refer briefly to industrial relations, occupational safety and health and worker protection legislation. The Estimates for my Department provide funding for the Labour Relations Commission and the Labour Court, which are responsible for the promotion and maintenance of good industrial relations. I have statistics which I can give to the Committee if Deputies wish to have them — all the Deputies have copies of my speech. In order to facilitate the Select Committee, I do not propose to go through these statistics in detail. The Health and Safety Authority, which was established in 1989, has successfully undertaken very influential work and has now completed its third year of operation.

My Department is responsible for the administration and enforcement of a broad range of protective labour legislation. The legislation covers such areas as holidays, unfair dismissal, minimum notice and terms of employment, protection of young persons, payment of wages and shift work. The Minister of State, Deputy O'Rourke, will be able to answer any queries on the implementation of this comprehensive programme of work.

Work is ongoing in the reorganisation and restructuring of the Department. This is the first year that the Estimates for the work that was previously carried out by the Department of Labour and the Department of Industry and Commerce, minus the commerce and trade element, have been brought together. We are reasonably happy that the format in which the Estimates are presented is effective but we have no illusions about their overall composition. Next year we hope the Department will be more integrated and consequently have a better integrated set of Estimates.

Mr. R. Bruton

I came into this Chamber this morning quite angry at the way we are being treated. I was naive enough to believe that the so called partnership Government heralded a period of real change. Instead the Government has made a hames of employment policy. Now they are treating the Opposition like small children. During the week it tolled the bell and expected the children to go dutifully to their seats and not question anything that was proposed by it: it was a case of drink up your medicine. It was a disgrace that the Minister jackbooted measures through without allowing time to debate them. In the Industrial Development Bill, 1993, only one of the 38 amendments was debated and we did not get an opportunity to make a decision on any of them. That is not acceptable. That is not democracy.

The formation of a new Department of Enterprise and Employment was expected to herald a period of major reform in economic policy. Instead of giving the decisive lead, the Minister is still tangled up in the starting tapes — he referred to his difficulties with the agencies and his own staff. It is worse than Aintree, but the consequences are far greater. It is in the area of employment policy that the disillusionment with the Labour Party is most acute. It was that party which said that the starting point for approaching employment is the failure of existing policy but instead of change we have seen the dismal continuity of what has gone before. In spite of the fact that this is now in his control he seems to have no grasp of what changes are necessary or an understanding of the issues. Several opportunities for major initiatives have slipped by. The Government has not charted a new direction. The Government's reaction to the Moriarty Task Force report on the implementation of the Culliton recommendation was worse. This is the Minister who handled it and he must shoulder the reponsibility for the Government's total loss of courage on the decisive recommendations put before it by Culliton. It failed to act decisively on many recommendations, most notably on taxation, but equally on the shift of resources from support for foreign industry and from the grant culture to equity. None of this is happening, in fact it is the reverse: we are becoming more reliant on foreign industry, as we will see from the Estimates today, and less money is going in equity than in the past.

All our employment problems have worsened since this Government took office. The unemployment figure has hit 302,000 and continues to rise on a seasonally adjusted basis, which is the decisive indicator of where we are heading in the winter. The number of persons working in the building industry has fallen by 8,000, 10 per cent of the total building work force, since the currency crisis, which the Government totally mishandled. In addition, the Government has been notified of 10,500 redundancies in other sectors since the beginning of the currency crisis. There has been a jump of 25 per cent in the number of notifiable reduncancies in the months since they bungled the exchange rate policy, but that excludes redundancies that are not notifiable to Government. Emigration, as the Minister of State at the Department of the Taoiseach had to admit, has resumed on a very substantial scale and if we compare the employment and unemployment figures we know for certain that the 25,000 young people who finished their education last autumn either had to leave the country or are not in employment.

This was a silent attrition. There were no rescue plans, no task forces or no special redundancy for the 20,000 who lost their jobs in the past few months. The gross mismanagement of the currency crisis was responsible for this. The Government had the audacity to heap accusations of sabotage on Fine Gael when we questioned its policy and even now the Government has not had the good grace to admit its failure. This was the Government that promised a multimillion jobs fund, a jobs protection unit. It should be before the courts today for fraudulent claims. The Minister did not even advert to them because it would have made him go red with shame to talk about those so called promises. The Government, and this Minister in particular, has adopted the rhetoric of reform, but he uses it for at best doing nothing. When asked to simplify the personal tax code, the Government introduced two entirely new taxes: a levy on income bearing no relationship to ability to pay and a tax on death. The income levy will raise £130 million this year, which is enough to provide an income for 11,000 workers. That is the type of tax policy we have had.

The tax take from the services sectors is 140 per cent of the money that goes either to workers or to people who own those service businesses when one adds up the PRSI, the PAYE, the extra profits tax and the various levies that have to be collected. That is the situation people face and let us remember that we all look to this sector to be the engine of employment growth.

When asked to simplify the State aids to business and take a firm hold of policy at departmental level, what does the Government do? It splits responsibility between two Ministers and provides for six industrial support agencies when Culliton recommended two. The Minister seems to be convinced that job creation is about spawning new publicly-funded bodies. In just six months it has spawned two new industrial agencies, 37 new agencies for county development and it has left intact all but one of the ten existing statutory agencies, the 12 partnership companies. Soon we will have 55 agencies doling out State monies under the aegis of the Minister's Department. Even on his own admission in the House, most of these proposed agencies are what he called "political compromises". Their establishment has not been guided by any assessment of how successful business development can be achieved either at local or national level. This is not the end of it. We will have the establishment of regional authorities and the regional boards of Forbairt about which we have not yet heard. I am a firm believer in bottom up development, but this is chaos.

Something had to give while this Minister was industriously engaged in producing these new agencies and what gave way were the crumbs that were coming across the Minister's table to assist those who were unemployed. On the eve of the budget he abolished by stealth the jobs subsidy which had helped 7,000 people find employment. This was not replaced in spite of an explicit promise in the Programme for Government that there would be a much improved employment scheme. The brakes were put immediately on the social employment scheme and, as Members will see from the budget allocation, the budget was not sufficient to provide for its continuity.

FÁS was given an instruction to reduce the number of participants in the social employment scheme by 30 per cent; 5,000 were to be forced off those schemes and recruitment was stopped. Only the protest of the trade union movement prevented that happening. The Minister had pushed through Government a reduced Estimate and even today has announced that £97 million would be provided but did not tell us how that came to differ from the £83 million which he published and which is before us today — he has not admitted even under pressure that he had to recognise the folly of his policies.

Another major casualty was the Government's support for research and development. At a time when President Delors is urging the need for member states to step up investment in research and development we are cutting our estimate by 27 per cent. This Estimate is providing for a 27 per cent reduction in the allocation for research and development and science and technology. The presence of EC money has led to the Government not promoting the notion of additionality. This was the great opportunity to make a surge forward in research and development but instead it is the opportunity to grab back the money and prevent this area making the necessary breakthrough.

We are alone in making such a dismal attempt to produce research. International figures indicate that per head of population we are spending a quarter of the EC average on science and technology and research and development, Government funding for which is continuing to decline. This is a disgrace. The major victims have been programmes such as the higher education-industry linkage innovation projects which are to be dramatically reduced this year. It is ironic also that in a year in which the NESC reported that the fatal weakness in Ireland was the lack of national systems of innovation this Government has done its part to savage what we already had.

As I said earlier this week, the Minister for Enterprise and Employment, Deputy Quinn, is more concerned about giving the appearance of change than with the substance. The critical issue we face today is how to move away from reliance on foreign industry. How do we make the decisive shift to equity? How do we make the change from having sole reliance on manufacturing as the area for employment growth and go to a more sensible employment strategy that sees the potential of services? We have also to achieve genuine subsidiarity in our approach to business development. What we have seen from this Minister is not a strategic approach to how these issues are to be tackled, but instead a Minister flying by the seat of his pants, announcing decisions, ramming them through the House and groping around for the rationale to justify them. The Minister's performance this week was not adequate to the brief he holds.

Before we have a dedicated agency for supporting foreign industry we must have much greater clarity on what policy the Government intends to pursue. As I said earlier this week, we are paying 66 per cent more in grant aid to create a job in an overseas firm than we pay to an Irish firm to produce the same job. I see no reason for this. The only reason the Minister offered was competitive bidding. That is not a reason. It is not acceptable that we are supporting foreign industry to a greater extent than our own domestic industry. I fear that the split up between IDA and Forbairt will mean that the quick fix will remain dominant. The Minister refuses to give the commitment, requested by Culliton, that his policy is to squeeze the budget to foreign industry so that room can be made for indigenous industry. What will happen over time is that as the election draws near he will want to make announcements in Donegal, Leitrim, Sligo and in west Cork about major new jobs and the temptation will be to shift all our eggs into the foreign industry basket. There is not a great opportunity for a press release if ten jobs are created in a small firm in some back street. The glossy opening of industrial factories gives Government a sense of creating employment. We have been told by Culliton we must get away from all that and that we need self-reliance, which we are not getting from this Government.

Foreign companies are devoting a much smaller proportion of their spending to Irish materials, services or wages than are Irish companies. They are much more profitable but they are repatriating their profits and generally they are not bringing up the product development capacity and as a result are particularly vulnerable. We have to face that issue.

In regard to the area of finance for industry it was news to the Minister this week to discover that the equity participation by the IDA was actually falling. The Minister had accepted the 50 per cent target when in fact the real figure was 6 per cent. Culliton envisaged the IDA becoming an aggressive venture capitalist. He said it should take large substantial shares in companies if necessary and he wanted the IDA represented on the board and a separate division for seed capital. These are genuine proposals and we have heard nothing about them from the Minister. We have been asked to nod through in a couple of hours the Industrial Development Bill, 1993, published only a few days ago, and we do not know anything of this strategy.

the Minister must think again about the approach being taken. It seems to me that we will persist in spenting £600 million per year on industrial development in the traditional sense, in manufacturing industry. The policy is to continue down that road, spending £600 million per year. As FÁS has pointed out to us, at the end of five years we are likely to have 12,000 more jobs and we will have spent, in effect £250,000 for each net new job created. I know that comparison is not a fair one; you cannot say that the cost of each job is £250,000, but it illustrates the folly of continuing as we have always done. These figures should stop us in our trcks. The service industry, even heaped with the burdens I described earlier, is projected to create 63,000 jobs, five times the number of jobs over the same period and we are putting virtually nothing in to support that employment. There are some crumbs going to the tourism sector but outside of that there is virtually nothing. Only 10 per cent of the IDA budget — a drop in the ocean — goes to internationally traded services, and those are the areas in which we have opportunities. What we should have seen was a decisive shift to support services and a commitment from the Government to reform the tax code so that traded services are treated like traded goods. The distinction is old-fashioned and is damaging to this country.

In conclusion, the failure of vision by this Government is all the more surprising when one recalls that the Labour Party manifesto in 1992 claimed it was no longer enough for a monthly Government statement to accompany the live register figures or for occasional announcements of packages of cosmetic measures to substitute for Government action. We have heard little else from the Minister. Worse still, in his desire to notch up a cheap political score, he breached what I believe is a critical principle of confidentiality in the negotiations with foreign industrialists. By the end of this year, Ireland will have the most bewildering range of agencies disbursing State funds but the strategy on the most critical issues facing us today will not have changed. There is depressing continuity with the policies which have gone before, policies that have failed us in the past. Policy measures are being adopted without adequate regard to consistency and without a clear, unified policy agenda. Against a background of 300,000 unemployed this is unforgiveable.

Mr. Cullen

I should say at the outset that I believe the Minister is at a crossroads. It is an indictment of this Government that such a position has been arrived at so early in the term of this Government. As one who always supported a Department dedicated to employment, the day I heard the announcement of a Department of Enterprise and Employment I was very pleased, optimistic and hopeful about what would happen. In the context of that announcement we also heard the announcement of a Department of Tourism and Trade and immediately the alarm bells began to ring and, unfortunately, they have not ceased to ring since. What we have seen is a continuing emasculation of the Department of Enterprise and Employment. Its direct control and authority in the area of employment creation has been dispersed to a number of agencies, its control over enterprise has gone off the rails and we do not have a central controlling force in that area. At the outset I stated that the Minister was at a crossroads. The time has come for him to decide who should control industrial policy and the agencies responsible for such policy. Will it be the Minister or a plethora of Government Departments that, individually, will be responsible for a number of State agencies over which the Minister should have direct control and which, in view of Culliton and others, should be centralised under one Department?

The immediate test facing the Minister relates to who will control An Bord Bia. The Minister would agree that the body should be under the auspices of the Department of Enterprise and Employment. If the Minister's Department is to have any meaning and redress the imbalance as a result of An Bord Tráchtála being foisted off to the Department of Tourism and Trade and the splitting up of other organisations for political compromise, and if confidence is to be restored in the Minister and his Department, we must start with the control and organisation of An Bord Bia. It makes no sense for this organisation to be part of the Department of Agriculture, Food and Forestry. The Departments of Agriculture, Food and Forestry, Tourism and Trade and Enterprise and Employment will have individual responsibility for State agencies which should be within the remit of the Department of Enterprise and Employment. That is a tragedy, particularly for the 300,000 unemployed people who hoped that this Minister, because of what he stated from the Opposition benches over many years, would have the vision, knowledge and determination to deal with matters head on. It is clear from the Minister's handling of the Industrial Development Bill in the Dáil this week that his heart and soul are not in the changes he is implementing. He has been forced to do this for political compromise because the dead hand of the Taoiseach is hanging over him. Those are the main reasons the Minister did what he did as opposed to doing what policy demanded he should do. What the Minister believes to be the correct measures have been sacrificed on the altar of political expediency. That is tragic so early in the lifetime of this Government. It is the Minister who is faced with the immediate choices in regard to the role of his Department in the months ahead. He should regain control in this area and stop the nonsense of establishing enterprise boards and various bodies where nobody knows who is in charge and for whom nobody will have a mandate to do what should be done.

For many years I have subscribed to the view that the setting up of regional authorities is the way forward and Culliton and many others share that view. SFADCo has created a model by its achievements and much could be learned from that organisation in regard to reforming regional structures. A maximum of four or five regional structures should be set up based on the model of SFADCo. Such structures would provide the necessary local democracy and a decision-making process which would reflect the reality of what is happening in those regions. The Minister should have examined that possibility when he took up office. The way forward is to set up regional authorities and it is not too late yet for the Minister to do that. Discussions are still taking place in regard to the formation of regional structures over which Forbairt will have control and therein lies an opportunity for the Minister and his Department to take control of the mishmash in regard to county enterprise boards.

The structures we have been discussing in the past week will be a fiasco and a waste of people's time and energy because they are unfocused, unplanned and will not deliver. The Minister is well aware of that and he can still change his mind. He could tell the Taoiseach that he will not go ahead with the establishment of those boards because he believes they will not work. There is an opportunity to do this prior to the establishment of Forbairt. I have not met anybody, either in public life or in the employment or trade union sectors, who believes that those enterprise boards will be successful. Most people hold a completely opposing view. The Minister must make a decision in this regard and nobody will fault him for changing his mind. I would be the first to applaud him for doing so because it would be a definitive move by him to lay down his criteria and exert his control in this area. He is subject to so many whims in the Cabinet that he is going nowhere.

The Minister stated that the financial institutions should provide funding to the county enterprise boards. This is another weakness and shows how unconvincing the county enterprise boards will be. At no stage have the criteria been spelt out for accessing such funding. We have been told that the lending criteria will be different for those which apply to the normal lending criteria operated by those institutions. If they are different the Minister should tell us what those differences are. The Minister has not stated clearly how such funding will be accessed. Figures of £100 million to £150 million have been talked about. I suspect that when the banks audit their accounts at the end of the year they will allocate £100 million between them for the county enterprise boards for the development of small industries but that is no different from what was the case in the past number of years. The Minister is well aware of that. How much of the £23 million, approximately, provided in the Estimate has been spent to date and what costs have been incurred in setting up the county enterprise boards? The Minister should move in a different direction.

In comparison to Germany and other major economies in Europe, people here between the ages of 16 and 19 years are not becoming involved in education and training and this is something to which the Minister of State frequently referred as Minister for Education. Our take-up in that area is approximately 70 per cent, whereas, in Germany 96 per cent of people between the ages of 16 and 19 are involved in some type of formal education and training. Surely that provides a key message in terms of getting people into the employment market. There is no doubt that the more education and training people get the better the opportunities for employment. I am not satisfied that there is liaison between the Department of Enterprise and Employment and the Department of Education on this issue. Some changes which the Minister outlined this morning have been made but they are not sufficent. This has to be tackled. The greater amount of training and education targeted at 16 to 19 year olds the greater their opportunities later. We are lagging way behind other countries and the existing gap will have to be closed.

I do not want to target any particular industry, but there is a worrying undercurrent in industrial relations. It would behove all of us to stop in our tracks and look again at the whole question of industrial relations. We know from experience that the solid foundation of trust between trade unions and employers gives us the stability we need. With 300,000 people unemployed, it would be devasting not just for those at work but for the unemployed if that trust were undermined. I want the message to go out from this House, and particularly from the Progressive Democrats, that there must be a trusting relationship between the social partners.

Interest rates are coming down and there is a general feeling that there is improvement. However, this is not the time to try substantially to increase our standard of living and enhance our way of life. To do that would be disastrous. Nobody should be tempted to go down that road. The Minister has a role to play here. Formal and informal discussions between the Department and other Departments before this undercurrent builds up would go a long way towards preventing a disimprovement in industrial relations.

Another matter of interest to me and, I am sure, to the unemployed is the amount of coverage of job creation since the Copenhagen Summit I am glad to see that we are forcing the subject of jobs to the top of the European agenda. For far too long this has been off the agenda. I would like to know in greater detail what the Government is proposing. What funding will be available, what schemes will be implemented? Is there to be a more advanced and dynamic social employemnt scheme, a community development scheme? Will there be an expansion of the Programme for Economic and Social Progress programmes throughout the country? It is crucial that there be no delay. Speculation is not helpful. What we need to know are the facts. It is a fact that information has to be dug out of the Government bit by bit before we can get the whole picture. Aer Lingus is a case in point. It was not until such time as the digging was done by the Opposition that the facts became available, and when the facts are available more reasoned debate can take place. What I, the trade unions and the umemployed want to know is what precisely was discussed at the Copenhagen Summit and what we can expect in terms of job creation, funding programmes and structures.

Mr. Rabbitte

The conjunction of a new Government and the publication of the Culliton report, although originally produced one year earlier, provided an historic opportunity to revamp industrial policy. The Government has already fluffed that opportunity. The Minister's Industrial Development Bill, 1993, is a shallow piece of enabling legislation which addresses the wrong problem and gives no indication of where the Government stands on a range of issues in industrial policy which require urgent attention.

The long awaited Government response to the Culliton recommendations constitutes an a l� carteapproach which ignores some of the key proposals, runs directly counter to Culliton in some significant respects, is too vague on others and is too often lacking is specific decisions. In addition to what Deputy Bruton has said about the performance of the Government and the Minister in this area, I regret that the media withdrew from the debates we had during the week on industrial policy. Perhaps I should say the print media, as I have not seen the broadcasting media. Other matters, to do with the liberal agenda, which in the context are very important, are the only matters that concerned them during the week. The debate on the Industrial Development Bill and on the Unfair Dismissals Bill, which is not unrelated to this issue, have not been covered at all. The Minister is probably quite relieved that that is the case, given the complacency with which he approached the House on these issues. It is regrettable, particularly in the wider context of Dáil reform, that the media have taken pot shots at this House for a very long time about the industry of this House, yet when an attempt is made, however imperfect in the short term, to put in place a series of committees the media picks up, in the bar or elsewhere, information to the effect that it took 20 minutes to assemble a quorum. They really have not been around to look at it. I do not know what the prospects for Dáil reform are or how successful we will be in converting into legislators people who have not had a tradition of being legislators. I do not know what the future holds, but politics being what it is, unless the media reorganises itself and decides to treat these questions seriously, especially a matter as critical and central as industrial policy on trying to tackle the jobs crisis, I do not think we will make great progress.

The media have failed to grasp the essential part of Culliton, the need to build industrial clusters, and have focussed instead on old chestnuts in the Culliton report — tax reform, grants, infrastructure. Several media pieces have appeared with headlines about the need for radical new approaches to industrial development but then they simply regurgitate the old chestnuts. Successful industrial policy of the type likely to lead to a new order of magnitude in job creation cannot be based on creating enabling conditions such as tax reform, financial incentives and infrastructural improvement. A much more pro-active approach to building up specific targeted sectors is required, involving a planning partnership between the State, trade unions and the public and private business sectors.

Culliton fails to address the key issue of how to get the recommended strategy implemented, particularly creating the political conditions for radical change. Perhaps, it is the task of Government to tackle this deficiency, but to date it has failed in that regard.

We need to define Irish industry as meaning indigenous industry. Irish-based multinationals have little trouble competing in the EC market. While there are some exceptions, indigenous industry is characterised by small size, low technology and traditional products. Not only can it not develop export markets, it cannot even compete against EC competition in the home market; hence the gradual contraction in employment in this sector.

The most successful indigenous industrial concerns have been involved in cheap bulky products such as concrete, packaging and so on which can use high transport costs as a means of protection. Those firms have expanded by investing in the same product lines abroad, rather than diversifying at home and, therefore, they have made little contribution to employment in Ireland. Indigenous industry can compete in Europe provided the right policies are pursued. This requires the selective development of clusters of core firms and linked support firms, providing specialised material and service inputs, in targeted high tech segments or in sectors where Ireland has resource advantages. Irish owenrship or at least a sound Irish base is essential in order that linkages are developed locally and revenues, including profits, are spent in Ireland to a greater extent than is the case at present. That would generate spin-off multiplier effects.

Aerospace is obviously a high tech sector where Ireland is developing an important international reputation. The Minister referred to this in the context of his remarks of SFADCo. Recently in Adjournment Debates and at Question Time I have been attempting to question the Minister about the Government position on the proposed State investment in GPA and the implications of the difficulties confronting GPA for Shannon Aerospace as a stand alone operation. I am grateful to the Minister of State for providing some information in this regard but such information is not conclusive and I would like the Minister to address this matter today. I would like to be assured that discussions and analysis are taking place in regard to the ability of Shannon Aerospace to stand alone irrespective of the future of GPA. We all hope GPA will have a bright future.

Biotechnology is a rapidly emerging sector where matters are being dealt with in a proper manner and there is a coordinated development effort under the aegis of Bio Research Ireland. If the beef tribunal can sort matters out we could have one of Europe's premier food industries. The possibility of developing a metallurgical industry should be examined again, now that Ivernia's Lisheen deposit in Tipperary is clearly of major international significance and Conroy's nearby Galmoy find is also a commercial proposition.

Ireland already has low and declining unit labour costs compared with core EC countries. Surveys of US multinationals operating in Europe show that transport costs, which are much higher than Ireland's European transport costs, are not an inhibiting factor preventing US exports to Europe. The high quality of both products and after sales service is of much greater importance in market presentation. We cannot hope to develop on the base of established mass produced products for which labour and transport costs may be significant. Our only hope is in niche areas or areas of natural advantage.

Nobody referred in the recent Maastricht debate to the major study carried out in 1989 by the NESC in regard to the implications for Ireland of the movement towards economic union. I am referring to report No. 88. This study states that Ireland is likely to suffer from increased free trade because of the imperfect nature of the market made up of firms of greatly unequal size and the small size of Irish industry. The study argues that the Structural Funds are grossly inadequate to provide the type of assistance Ireland needs to develop to a position where it can compete on equal terms. Page 525 that report states:

Economic integration does not, of itself, bring about regional convergence. Indeed, it tends to reflect and reinforce existing regional advantages and disadvantages. The fact (is) not adequately understood in the Community — as shown by the underdeveloped state of the Community's structural and redistributive policies.

In relation to industrial policy the NESC points to the need for a genuine EC-level regional policy, including controls on the level of support to industry in wealthier member states and to the need to enhance the scale and technological capabilities of Irish industry. This is the kind of fundamental argument that was completely side-tracked in the Maastricht debate.

We need an industrial policy which targets particular segments and concentrates on developing the key competitive elements required for success in modern markets, for example, a high level of ability in research and development, management and marketing. Our policy must be firm and product oriented, not oriented simply to macro-economic variables such as interest rates, the taxes structure and so on.

An industrial policy capable of realising full employment in Ireland must be based on a core of exporting industries whose revenues are spent within the Irish economy, thereby supporting a comprehensive range of sub supply industries and support services in addition to consumer oriented industries and services. Foreign firms with limited material or service linkage with the Irish economy locate very few high level technological or management functions here and export most of their profits from Ireland. The potential for improving this position is somewhat limited. Native firms lack the organisational scale and technological base successfully to penetrate export markets on a sustained basis. Government policies which emphasise cost reductions fail to address these fundamental deficiencies. A much more interventionist policy is required which would focus on industrial sectors with export growth potential and concentrate on developing strong Irish-based firms in these sectors along with essential support firms producing material and service inputs

I have explained my views in regard to the county enterprise boards to the House on a number of occasions. I accept the Minister has made some changes for the better in this regard. This country requires a genuine regional structure. The capacity for abuse of the country enterprise boards is almost unlimited. It is unfortunate that they will allow the phenomenon of displacement to happen on a widespread basis. The IDA learned that lesson the hard way when it had responsibility for small enterprises. It did not want to learn about this; it was concerned with bigger fish to fry. There is little point in handling out grants to would-be entrepreneurs to do work that is already being done down the road or in the next county. Such grants will have the effect of putting firms out of business. Unless this area is successfully evaluated and monitored, the concept — revamped as it is — is still at risk.

I wish to refer briefly to the Stock Exchange, its role in the economy and the role the Minister has in monitoring its operations. I do not want to go over the recent controversies that have made this subject topical but I would like to refer to the comments of the president of the Stock Exchange. I raise this in the context of whether our legislation is adequate to supervise the affairs of the Stock Exchange.

Mr. Liam Jones told the political correspondent of The Irish Times on a date which I do not have at the moment that:

. . . although you suspect it, you cannot prove insider dealing . . . An eejit might be caught but a cutie will buy through a foreign company.

Whatever our views might be of the people who work the Stock Exchange, not too many of them are eejits. If the president of the Stock Exchange believes that only an eejit would be caught, it is time that we examined it. Mr. Jones went on to explain the difficulties of such investigations. He said:

You are up blind alleys, with an account in Cyprus or wherever. You might be suspicious but at the end of the day you cannot prove insider dealing.

On the question of industrial relations, to which the Minister referred, does he intend at any stage to consider the dispute at Dublin Bus? Almost 50 per cent of the service is not operating and many routes have not had a bus service for a month. Rather than washing his hands of the problem the Minister should try and knock heads together and get some kind of a bus service back to the ordinary people of Dublin.

Chairman

I would ask the Deputy to conclude as he has exceeded his time.

Mr. Rabbitte

I will do that. May I ask the Minister if he will respond to the position articulated by IBEC in respect of the 48-hour week and attendant conditions in the Social Charter where it has expressed its view very clearly. I await the Minister's response to that.

Chairman

We will now move on to the programme under the heading Administration which will be subheads A.1 to A.8. Is everyone in agreement with that? Agreed.

Mr. R. Bruton

The Minister indicates that there is a three-year agreement to cut the cost of administration by 2 per cent in 1992 and 1993. Despite that, the figures seem to show an increase of 4 per cent and an increase in staff numbers. The only item where there seems to be a saving is consultancy. Has the agreement which appears to have been made with the Department of Finance been breached? Why does this growth in administration costs within the Department contrast very significantly with the grants that the Minister is offering to the various agencies? The grant-in-aid for administration is to reduce by 14 per cent in the case of SFADCo, 2 per cent in the Case of Eolas, 2 per cent in the case of the IDA and 54 per cent in the Irish Productivity Centre? The only one showing an increase of 1 per cent is FÁS.

The Minister has said he will develop a stronger policy capability. Will that be achieved without adding to administration costs under the agreement with the Department of Finance or how will he propose to do that?

Mr. Rabbitte

In addition to what Deputy Bruton has said, one area of major cost increase is office premises expenses. Those of us who have not been fortunate enough to serve in Government yet had an interesting exchange yesterday on what seemed to me to be a related question. I would like to hear the Minister's view on the 45 per cent additional provision.

On the question of advertising and publicity there is an 18 per cent hike in that budget and I would like to hear the Minister's comment on that.

Mr. Quinn

This procedure is new to all of us and if I do not have the requested information immediately or directly available to me I undertake to make it available to the Deputies in due course.

I wish to describe the process of how these Estimates came together so that Deputies will understand some of the complexities in relation to the figures. Provisional Estimates were prepared prior to the formation of the new Government which reflected the Estimates for the former Departments of Labour and Industry and Commerce. In the new Book of Estimates that Deputies have before them we had to remove, and add in transfer subheads and portions of subheads from the two Departments. Comparison with previous years is possible but difficult. We will facilitate Deputies in relation to that matter. As I said, this procedure is new not just for Deputies but also for myself and my colleague, the Minister of State, Deputy O'Rourke and, indeed, for the officials. I make that comment at the outset lest anybody feels that we are trying to conceal information. If we do not have information immediately we will obtain it and in the course of today convey it to the House.

In response to Deputy Bruton's specific question concerning the administrative agreement with the Department of Finance, I understand that reductions have been achieved and I will determine precisely how this was done. The matter will be coming up for review in the next two years when we will consider it again. Reductions overall have been achieved on the level that the Deputy suggested. Perhaps Deputy Rabbitte would remind me of his question.

Mr. Rabbitte

One concerns the 45 per cent hike for premises and the other concerns the 18 per cent rise in the cost of publicity.

Mr. Quinn

I will have to obtain that information for the Deputy.

Chairman

The heading "Other Services" would normally be discussed as one programme but due to the extent of this particular programme I suggest se group together a series of subheads, namely, B.1, C.1, C.2 and D. We will take questions under those subheads and move on to the remaining subheads.

Mr. R. Bruton

Would it be more sensible to link subheads C. and F. which deal with the IDA and SFADCo, since they are somewhat similar?

Chairman

That would create a certain amount of confusion. I have no doubt everybody is experienced in the procedure and I believe we will get through the subheads in an eficient manner.

Mr. Rabbitte

If that prevents us comparing the respective budgets for the IDA and SFADCo, as it would seem to do, it would be unfortunate and would not make the discussion very meaningful.

Chairman

As an alternative I would suggest taking subheads B. to F.2. Is everybody in agreement with that?

Mr. Cullen

To F.3.

Chairman

From subhead B. to F.3. We will now take questions on those subheads.

Mr. R. Bruton

There is a wide range of issues arising from these subheads. The obvious question in subhead B. is why the Government is not paying its subscription to the Eurospace Agency? A total of £4.5 million has been cut and this saving has not gone into research and development or science and technology, which would have been appropriate. Those areas have also been savagely cut. Can we get away with this? Are we jeopardising the EC's good-will by not paying funds that appear to be due? Is there a down-side to this?

In respect of the OECD Steel Committee, can the Minister give us some indication of his plans in relation to Irish Steel? The capital budget for his Department, which I do not see listed, shows a dramatic 59 per cent cut in the capital allocation to Irish Steel. This company is heading for a £12 million loss this year. That works out at £16,000 per employee, which leaves it in a very insecure position. During the week the Minister was unwilling to be drawn on the possible strategy. The Taoiseach says they are seeking a partner. It is not clear whether this is a sell off, whether it will mean rationalisation of jobs or what the Government forsees for this industry. At a time when we are concentrating on Aer Lingus where serious job losses are proposed, there seems to be a similar threat hanging over another State company, Irish Steel, and we have heard nothing about rescue plans or task forces in that regard. I would like to hear the Minister's comments on that matter.

I would ask the Minister about job creation. I have already adverted to my dissatisfaction at the contrast between the money for foreign industry and that for domestic industry. Looking at the IDA's budget for the year and employment creation targets, if we achieve what is set out in this Estimate at most just over 13,000 gross jobs will be created in the manufacturing and industrial sector, which is way short of the Programme for Economic and Social Progress commitment of 20,000 jobs. I suspect this means that once again, as was the case last year, there will be more jobs lost in manufacturing than new jobs created. Last year the IDA’s foreign industry segment showed greater job losses than jobs created. Even in the foreign industry sector, the shake out is greater than new jobs created. This raises the question of whether we are running hard just to stand still. Despite an increase of 12.5 per cent in IDA grants this year, there is a projected cut in the number of jobs that will be created. Are we running into what is described as jobless growth in the manufacturing sector, and what consequences will follow?

Mr. Rabbitte

Will the Minister explain the provision under subhead F.3, grant-in-aid for building operations, which amounts to £4,250,000? I cannot find a comparable figure for SFADCo in that section of the accounts. If one looks at the provisions for SFADCo in terms of building operations it is £4,763,000 which is about 40 per cent of the grant-in-aid to industry. Why is a larger buildings operations budget provided to SFADCo than to the IDA which covers the entire country?

I would like to refer to the point raised by Deputy Bruton about Irish Steel There are difficulties there and the House ought to be told whether these difficulties will be dealt with one at a time on the Government agenda. The only information I have on this matter is that the Minister of State, who is not in the House at present, has lined up a candidate for chairmanship of that company. I would like to know if the Minister intends to give that matter his seal of approval. The person involved is a great favourite of the Minister concerned who has been successful in the past in appointing him to other chairmanships. Unfortunately, he had a brief stay on one of them due to the internal turmoil in Fianna Fáil. Is this person to be sent into Irish Steel as a Bernie Cahill to sort out the problems there?

On the question of the apparent increase in grant-aid to the IDA, does the Minister know what proportion of that money will go towards equity investment as distinct from grant aid in the traditional sense, having regard to the discussion that took place yesterday and the previous day on this matter?

Mr. Cullen

I too wish to raise the question of Irish Steel. One of the first tasks undertaken when the Department of Enterprise and Employment was formed under the new Government was the question of NET. I was most dissatisfied with the approach to that problem by the Minister and the Department. There was no policy to back up the decision taken in regard to NET. A finger-in-the-dyke approach was taken and no long term questions were asked. It is in that light that I am concerned about the position of Irish Steel. Will enabling legislation of a financial nature be rushed in to shore up the position while offering no long-term policy? What is the future of Irish Steel? It is clear there must be some involvement with an international company. In present circumstances the company's future is not sustainable. There are serious but reasonable questions to be asked of the Minister and the Department. It is right to suggest that the overpowering focus on Aer Lingus is obscuring our ability to deal with other major questions in terms of jobs, funding, equity, development, part-privatisation, joint venture or whatever, particularly in the context of Irish Steel. A large question mark has been posed in that regard.

What are the most recent contacts with companies who may be interested in either purchasing Irish Steel outright or forming a joint venture with it? Are discussions ongoing between the Department and Irish Steel? Is the Minister optimistic that a satisfactory solution can be found to secure the maximum number of jobs in Irish Steel? Will it receive a sufficient capital injection to secure its future and its continued involvement in the steel industry? That is a fundamental question which should not be dealt with in the same way as the case of NET. Will the Minister give the projected losses in manufacturing this year? What will be the net gain in employment as opposed to the global figure of 13,000-15,000 jobs to be created? Has the Minister any indication of what the net figure will be?

I regret our lack of involvement in the European Space Agency. Our involvement as a country in that operation created a positive image of Ireland as dynamic, economically mature and wanting to be involved in the forefront of modern technology. I would like to see continued involvement in this operation because there are many spin-off opportunities for Irish industry. I would like to know what the future holds for us in that context.

Mr. Quinn

On the question raised by Deputy Rabbitte in relation to maintenance under subhead A, this provision relates to moneys contained originally in the Office of Public Works Vote which were transferred to the departmental Vote. The Department is now responsible for maintenance of buildings under its jurisdiction, some of which are old and require a high level of ongoing maintenance, particularly the Department building in Kildare Street.

The increase in the allocation for advertising moneys was due largely to the high level of expenditure projected for publicity and advertising in 1983 by the competition authority and the Companies Registration Offices. I can get further details for the Deputies on that at a later stage.

I will refer now to Irish Steel, the European Space Agency and NET. For budgetary reasons we have deferred the contribution we make to the European Space Agency. The Government faced a difficult budgetary situation in January. We took advice on the deferral of the payment so as to ensure that domestic industry and contracts in relation to our participation in the European Space Programme could not be adversely affected. I can confirm that no such adverse effects have occurred. We have had ongoing discussions with the agency about maintaining our membership and resuming our payments in due course.

The position with Irish Steel is critical. It is an issue high on the European crises agenda because of the massive surplus of capacity in the European Community. The good news is that we are not obliged to reduce our capacity as are most steel producers in the Community because we only have one plant which was recently modernised at considerable cost. The steel problem in the European Community is a difficult one. The ideal future for Irish Steel is to get a strategic partner. We are prohibited by EC regulations from increasing equity in the company. As Deputies will be aware, there has been massive investment by the State in a very modern plant. There are ongoing discussions with possible strategic partners. I am not in a position to give much more detail that that. The policy intention of the Government is to maintain and consolidate Irish Steel and its employment content on an economically viable basis. We are exploring options to that end.

Mr. Cullen

Does the Minister think it might happen this year?

Mr. Quinn

I would love to be able to say that it will happen this year, but I cannot give an indication. Part of the problem is the uncertainty in the international steel market and the fact that there is now low cost competition from central and eastern European countries.

What I have said in relation to Irish steel is applicable in a slightly different way to NET. The technology for the production of fertilizer enables very competitive terms. We think there is some dumping of fertilizer on the European market from central and eastern European countries because they have access to hard currency markets which they did not have before.

At the Magill summer school in Glenties last August at which Deputy Rabbitte was present I suggested that the future for most Irish semi-State companies within the context of the Single Market is through strategic alliances. I recently appointed two new members to the board of IFI. IFI was formed through a joint venture between ICI and NET with NET holding a 51 per cent shareholding and ICI holding 49 per cent. We have been less than happy with the experience and we are looking at ways in which to improve performance. The impact of ICI expertise in the fertilizer business has been considerably reduced because of the massive restructuring of that company. The expected technological and research and development input of ICI is not as obvious as it was three or four years ago. As far as I can remember the details were put together in 1987 and 1988.

Mr. Cullen

How tenable under European law is the contract between Bord Gais and NET? Is it in difficulty?

Mr. Quinn

Not that I am aware, but I will have to get advice on that and will be in touch with the Deputy. On the question of manufacturing gain and loss, I will have to get advice on those figures as I do not have them to hand.

Mr. Rabbitte

In respect of building grants to SFADCo and the IDA, is the Minister in a position to enlighten us?

Mr. Quinn

I will get that information for the Deputy.

Mr. Lowry

It appears from the Estimate that it is the Government's and the Minister's intention to overfly the Shannon region in terms of industrial development. The Estimate indicates that the IDA budget is up by 12½ per cent while the SFADCo budget is down by 4 per cent. There is a general feeling in the mid-west that SFADCo has been undermined and its role has been diminished in recent years. What is the Minister's view on his predecessor's decision to split the role of SFADCo by putting it in charge of indigenous and small industry while the IDA was given the task of promoting the region for mobile and foreign industry? The outturn in jobs indicates that the region is faring badly compared to other parts of the country. It is strongly believed in the region, particularly in my constituency in Tipperary, that the IDA is not promoting the region for large industry as progressively as it should. The policy here is not working to the benefit of the region. What is the Minister's view and does he intend to restore full authority to SFADCo.?

Mr. Killeen

I have been trying to find a diplomatic way to ask difficult questions. I had hoped that Deputy Lowry would have asked them for me. The Deputy has raised an element of one of the questions. There are serious implications for industry and the Minister's Department in the mid-west region if the Cahill plan is implemented. That element has been overlooked and it is no wonder in view of the fact that those who are promoting the fly Dublin direct policy and the anti-Shannon campaign apparently have had their promotional work financed from the Aer Lingus budget. What provision will the Minister's Department make to replace the industrial jobs which will undoubtedly be lost in the dismantling of one element of a regional policy that successive Governments have pursued?

Chairman

I have to interrupt the Deputy. The Deputy is making an assumption. Until such time as there is evidence it would be inappropriate for the Minister to respond. I would ask the Deputy to refrain from that course.

Mr. Killeen

Would the Chair have time to allow me to prove it?

There are implications for SFADCo's job creation and job maintenance figures in the mid-west region arising from that. Has the Minister's Department made any provision for that?

In relation to SFADCo's continued responsibility in Shannon town for housing and other local authority functions, I understand it is intended to hand them over to a local authority. Many of the services are substandard and major capital investment is required to bring them up to standard. Is any provision being made with a view to handing the services over from SFADCo which is an entirely inappropriate body? I consider it would be beneficial if that function were handed over to a local authority.

Mr. Crawford

While welcoming the increased budget of the IDA it is difficult to understand the projections of fewer jobs being created this year than last year. In that context I note that expected refunds to the IDA, apparently emanating from factories that have been closed down, amount to approximately £3.2 million in respect of the year 1992 and a projected refund of £5.5 million in respect of the year 1993. Does that mean that more factories are expected to close? In this context I am thinking of CPV in my area which is under threat. For example, does the IDA expect refunds from the likely closure of CPV? In that respect it would be my hope that the extra funds becoming available to the IDA would be used to prevent the closure of CPV or, alternatively, to inject necessary capital into the company so that, if present management does not continue there, some other management would do so.

Also, I am thinking of the Ballybay Meat Company into which the IDA injected a sizeable amount of cash which, unfortunately for all of us, did not help that much. The new company controlling the plant there does appear to be giving very little employment for the amount of capital injected by the IDA. Is there any way the Minister, or his Department, can exert any influence on plants like the Ballybay Meat Company to give longer term, guaranteed employment? It seems extraordinary that such an enormous amount of State funds should be invested in a very modern plant, yet workers there can be assured of only a few days work a week. That was not the purpose for which the plant was originally built. I want as much work as possible provided by indigenous industry. The figures show clearly that it is much cheaper to support local firms that provide good, long-term employment.

Why was the figure of £5.5 million included in respect of refunds to the IDA? Does that mean that more firms will close, or more grants will be repaid? I am directly involved in the co-operative movement and enormous pressures are exerted on us to ensure that our funding is correct, that the money is kept in a special fund so that, if anything untoward happens to a grant-aided project under our control, there will be a guarantee that the money will be paid. I am not so certain that that would always take place in private industry.

Mr. Quinn

In respect of refunds I will have comprehensive information for Deputy Crawford later. The IDA, on a continuous basis, budget for repayable grants and loans. I assume this would relate to moneys they would receive in that way and also from the disposal of properties, including the sale of factories, in that they constantly engage in transactions of that kind. That is the reason for that type of refund. I do not think there is necessarily any policy implication to be drawn from the fact that a certain amount of money is being provided for refunds. That does not automatically mean it is comprised of grants returned from factories that have gone into liquidation or that have failed to meet their objectives.

On the points raised by Deputies Lowry and Killeen in regard to Shannon, we have had to effect a reduction across Government Estimates, in the broader sense, because of the overall budgetary position. Therefore, in some marginal cases, based on the advice we have received and our own judgment, we have affected certain savings. However, we do not believe this will result in a negative performance on the part of the companies in question. I want to make this point clearly — I have said this to the IDA and SFADCo — if there is the possibility of job creation and industrial development, then, in general, we will ensure that the requisite funds will be made available.

Mr. Lowry

What about the IDA and Shannon Development?

Mr. Quinn

They are treated equally. I know that Deputies representing the mid-west region feel particularly sensitive at present. Nonetheless, I might make the point that if any other region had the benefit of SFADCo activities and or the type of funding made available to assist not merely traditional IDA-type activities but others, they would be very grateful. I should stress that there is no discrimination against SFADCo; on the contrary, the mid-west region is getting a very good deal at present.

Mr. Creed

On Irish Steel, I am not altogether satisfied with the Minister's response. It appears to carry all the hallmarks of the Aer Lingus crisis, when two former Ministers kicked to touch on the issue, resulting in the crisis going from bad to worse. Irish Steel, to the economy of Cork, is of similar significance as is Aer Lingus to our national economy. Looking at the figures, £12 million of losses spread across 650 workers, is a crisis more grave than £116 million of losses in Aer Lingus spread across 7,500 workers. In an industry that is in serious oversupply, would the Minister say what advantage he perceives in having a strategic partner? In addition, can he give a commitment that management and workforce will be kept informed of developments rather than, as happened in the case of Aer Lingus, being left in the dark and a plan foisted on them without any consultation?

Mr. Doherty

The Minister's Department is responsible for creating job opportunities and generating enterprise and employment. It strikes me that the public is very concerned about the perception that there is enormous growth in job opportunity particularly within the public service and within a number of boards being established. Therefore, it is important that we throw some light on the significance of these boards or whether it may be felt there should be some pruning of them, or co-ordinating and/or cohesiion between them. For example, we have now the IDA, Forfás, Forbairt, the county enterprise boards, the Leader programme and its boards, the regional tourism boards; INTERREG in Border counties, the International Fund for Ireland, the operational programme for rural development, the various local authorities, the Western Development Board, Údaras na Gaeltachta and others. It is vital that there be no duplication, triplication or quadruplication of functions between them. Sometimes it is difficult to ascertain in what direction one should proceed in pursuit of support, assistance or grant opportunity. Within the context of the west and north west there is Údaras na Gaeltachta which appears to be well advantaged in the sense that it can give greater support greater even than the IDA. It appears somewhat unfair that western counties should have that type of exceptional opportunity in one region over and above another. Is the operational cost of these boards becoming a really serious factor? Are we reaping the best results from the many in existence? In addition should we now be considering priming the functions of some of these boards so that we get at the meat of the matter in a more direct way rather than through what appears to be a rather confused plethora of boards daily increasing?

Dr. McDaid

I was disappointed with Deputy Richard Bruton. It is a case of dé j� vu, in the sense of our having heard it all before. Far be it for me to compliment a Labour Party Minister but two of the most capable people share this portfolio and I am prepared to give the Minister a chance at this early stage.

On Sunday next probably the greatest race in Europe, the Irish Derby, is to be run. This race is sponsored by Anheuser Busch, an American company. We are concentrating far too much on the east coast of America. Our greatest sponsors are now located in the mid-west. The third greatest St. Patrick's Day parade is held in St. Louis Missouri. The Irish Chamber of Commerce of the United States has huge tentacles stretching into this region which has enormous potential from an Irish point of view. Does the Minister think that we are concentrating far too much on the east coast of America and should concentrate more on the mid-west where new ideas are being expressed? The Minister has an ideal opportunity to recognise the group I have mentioned.

Mr. Quinn

Perhaps Deputy McDaid would prefer the Minister of State, Deputy O'Rourke, to reply. I am happy to say that within the Department of Enterprise and Employment my colleague and I have a positive relationship and are consciously trying to make it work.

To respond to Deputy Creed, the reason Irish Steel is in difficulty is that there has been a reduction in the price of steel in international markets. As the Deputy rightly said, the losses are not sustainable. I visited Cobh on 28 May where I met the chairman of the board, the management and the workforce who are aware of the difficulty. I am of the view that they should be made aware of the reality and the best response is to give them all the facts, even those which might be considered sensitive. In that context, management, the workforce and the unions are considering how they can reduce some of the costs over which they have direct control. That will not be an easy task.

The advantages to be gained by having a strategic partner include marketing, technical assistance and, possibly, financial assistance. In addition a company located outside the European Community would gain access to the European market. As members are probably aware, Irish Steel is trying to simplify its product lines into one or two basic products. Given that the demand for steel varies, the intention is to seek a match with another company with a complementary range of products and which would have a strategic interest in gaining access to the European market.

To respond to the points raised by Depty Doherty, I have referred briefly to my response in relation to the county enterprise partnership boards. The concerns which I expressed when in Opposition were shared by many people. We are trying to allay concern that these boards will be political footballs and lead to displacement. Let me deal with the first of those concerns.

Those Deputies who are also members of local authorities will be aware of what was contained in the communication sent to county managers. We have unashamedly allowed the county enterprise boards to focus on their counties rather than the regions. Let me explain the reason. I have come through the local authority system and I believe in it. Indeed, I served my political apprenticeship in a local authority and previously worked for a local authority as a design architect for two and a half years. It was proposed originally that only the county manager and the ex officio county council chairperson should be members of the board. I believe that was a mistake and we have now rectified this. Four members out of 12 will come from the local authority. We have also requested the manager to ensure that the membership of the board reflects the political balance within a county in so far as it is possible to do so. This is happening in most counties but not in all and it is my intention to refer the matter back to a manager where we are not satisfied with the composition of a board. We are not dictating in advance who should be on the board but we are hoping that people will take guidance from the letter which was sent to county managers. We are retaining the power to refuse to sanction the composition of a board and its membership to the National Enterprise Council to ensure that a balance is struck.

A second reason I would like four members out of 12 to be members of local authorities is that I want local politicians to share the responsibility for employment creation. Politicians at local level can contribute to direct and indirect employment creation. Let me give a specific example. Many local authorities do not make a correlation between applications for planning permission, which is a clear function of a local authority, and the need to comment on those applications. Local councillors must recognise that they have a contribution to make in helping to solve the unemployment problem at local level. Having said that, politicians at national level will not be involved in making decisions about one project or another. For this reason, separate from the 12 member county enterprise board, there will be an evaluation committee to evaluate individual applications for financial support.

We envisage the county enterprise boards working in the following way. They will be constituted to reflect the interests of a particular county. They will advertise for a county enterprise officer and prepare a county development plan. I hope, in conjunction with the regional tourism organisations, they will identify projects with potential for job creation and economic activity which are not currently being pursued. In other words, they will prepare a development plan and consider the options in say, County Roscommon, which are currently not being exploited. This plan will be published. I hope the process can be speeded up given the large number of people unemployed.

It will be up to people themselves to indicate to the county enterprise officer that they have an idea in response to the economic activities identified in the plan. The person concerned will go through the project with the county enterprise officer in the same way they would with a corporate finance officer. If the county enterprise officer considers that the project, because of its scale and size, would qualify for support from Forbairt, the person concerned will be referred to that agency. As members are aware, the IDA can only provide assistance in the case of specified economic activities of a certain scale. On the other hand, county enterprise boards will be able to provide economic assistance in respect of any kind of tradeable service, to use Deputy Bruton's phrase, bearing in mind the need to avoid displacement.

If the county enterprise officer is satisfied, having spoken to the promoter or entrepreneur concerned, that the project is worthy of financial support, he will refer the project to an evaluation committee which will be appointed in the manner about which county managers have been informed. The evaluation committee will be made up of five members — a nominee from Forbairt familiar with the grant structures and the process of assessment so that there will be no duplication or overlap in regard to grants; a nominee from the banks; a nominee from the accountancy profession, a nominee from the business community and one other person. The other person may be a second bank nominee or an accountant. There will be a certain degree of flexibiilty in regard to this appointment.

The members of the evaluation committee will carry out a dispassionate and supportive assessment in confidence — obviously confidentiality is of critical importance — of the project and then recommend it for grant assistance or equity participation. Therefore, the county enterprise board, including the four councillors and the other representatives of the social partners, will not be involved in the evaluation of individual projects for grant assistance. If the amount required is above a certain figure a proposal will be made by the evaluation committee and the county enterprise board will have the role of saying "yea" of "nay" at that stage within the context of the overall budget.

The reason this is being done is that a person who wants to promote an employment project which is not being exploited by his employer or which has been turned down by their employer will be very circumspect about the way in which he promotes that idea. He must be assured that the evaluation committee will operate on the basis of confidentiality. During August, September and October last year, prior to the formation of the Government — I have confirmed this with the representatives of the associated banks — the financial commitments made to the banks were on the basis that the banks had to be satisfied that certain financial criteria would be attached to projects which came under the county enterprise board funding mechanism. To ensure that the banks are satisfied, we are proposing that bank and the accounting personnel should have an involvement in the evaluation committee. We will have to wait and see how this involvement develops.

The banks have said to us in private-members of the Oireachtas Joint Committee on Employment may recall this — that there was not a shortage of capital for investment but a shortage of projects suitable for investment. One can argue the point different ways and this claim will have to be tested and monitored very carefully.

There is a problem with displacement. The Department of Finance and the old Department of Labour consistently complained about the effect of displacement, its dead weight, etc. One can argue in theory that there is displacement but it is very hard in practice to identify it. If somebody provides a new service in the marketplace which is already being provided by another company which subsequently goes into liquidation, is that company regarded as having gone into liquidation because of the advent of the new competitor into the marketplace or because it has come to the end of its economic viability? I am not a professional economist but I have asked economists this question and none of them has told me whether one can be directly linked with the other. The question is so complex that it can be a contributing factor.

There is no doubt that the banks — they do this every day of the week — are making moneys available to new entrants unto the marketplace which has the effect of displacing other participants who are also customers of the banks. An element of displacement seems to be an inevitable ongoing process in a competitive market economy.

Mr. Rabbitte

We should not encourage it.

Mr. Quinn

We will have to minimise it. If I have to make a choice in the short term between being over cautious or over-expansive in the provision of money to engender new jobs then I will be over-expansive — I will take the risk of creating new employment rather than take the restricted view of not expanding or investing in case it might cause displacement. This is new territory for all of us and we will have to see how it works.

Deputy McDaid referred to the mid-west and the traditional east coast regions of the United States. I agree with the points made by the Deputy in this regard. I visited the west coast of the United States last March with the IDA mission, I was accompanied by the Secretary of my Department. It is clear that there is untapped investment potential in traditional terms in California and Seattle where we visited a Microsoft plant. The jobs we are attracting come from Sunrise electronic industries in the United States which have tended to migrate to the mid-west or far west regions. The Deputy's comments about Anheuser Busch, St. Louis and the Saint Patrick's Parade are simply a reflection of this. The New England east coast part of the United States is in decline, comparatively speaking. The kind of investment available there is not necessarily any longer the kind we would want to attract to Ireland.

The United States is a very big country and it is hard, with very limited resources, to spread our network of people in such a way that they cover it all. The IDA has a limited number of people and SFADCo and An Bord Tráchtála have one or two people working in the United States. The number of Irish personnel working in the United States is a drop in the ocean. To give an example of what I am talking about, there are more diplomats working in the British Embassy in Washington than in the entire Department of Foreign Affairs.

Mr. S. Ryan

In regard to the county enterprise boards——

Mr. Creed

On a point of order, I seek clarification on which subheads we are dealing with. I thought we were dealing with all subheads up to Subhead F.3. The county enterprise boards come under Subhead N.

Chairman

I do not want to be too strict in my ruling as there are only a small number of Deputies present I decided to give some latitude. Unfortuntely, some Deputies are straying off course.

Mr. Rabbitte

We would all have raised interesting questions on that topic if we knew it was being dealt with.

Chairman

Any Deputy who has a interesting question to ask will be allowed to raise it.

Mr. S. Ryan

I did not intend to refer to this issue, but as it has been referred to I want to bring one element to the Minister's attention.

Chairman

It has already been discussed.

Mr. S. Ryan

Can I refer to it?

Chairman

I would prefer if the Deputy did not as it will be discussed later under Subhead N.

Mr. S. Ryan

I am sure Deputies know people wishing to set up small businesses who have had difficulty in obtaining information from the IDA. These people have to run round to various Departments and organisations, for example, the IDA, An Bord Tráchtála, the Department of Finance, the Department of Social Welfare, etc., to get the relevant information. A case can be made for co-ordinating all this information in a booklet which could be made available to people interested in setting up small businesses. There is a perception that this lack of information is a deliberate ploy to try to separate the men and women from the boys and girls, so to speak, before they set up in industry. I ask the Minister and his officials to consider whether this information will be co-ordinated in a booklet which could be made available to these people.

I had certain reservations about involving politicians at local level in the enterprise boards, but given that the Government has decided that there will be four county councillors on the board it would be a pity if one political party had the major representation. I believe the general public would perceive it as wrong. Will the Minister ensure there is a spread right across the board that takes cognisance of the representation at county level? I appeal to the politicians and the parties to ensure that happens.

Mr. J. Mitchell

I want to take up a point made by Deputy Doherty and alluded to by Deputy Ryan on the multiplicity of bodies and boards. The Minister has created a maze: we now have Forbairt, Forfás, IDA Ireland, county enterprise boards, SFADCo, regional tourism councils and people will not know to which body they should go. If, as Deputy Ryan said, we are confused what chance have people who are trying to set up a small business?

The Department of Enterprise and Employment should have its principal focus on jobs. The Minister mentioned jobs twice and employment three times but only made a passing reference. The amalgamation of the Departments of Labour and Industry and Commerce into the Department of Enterprise and Employment should be more than a name change.

An Irish entrepreneur has developed a language translation service — the Minister may be aware of this case — which she proposes to expand, but there is nowhere she can go for help. I have been in contact with the Minister's Department and I have been treated courteously by his officials, I have also been in contact with different sections of the IDA but to no avail. This project would provide quite a number of well paying jobs in this country, entail foreign currency earnings and replace services imported at present but because it does not qualify under the present definition of internationally traded services, this lady cannot avail of funding under the business expansion scheme and she cannot get the project off the ground.

I was one of the advocates for creating a Department to deal essentially with employment issues. However, so far nothing has happened apart from the merger of two Departments and the creation of a myriad bodies, local and national, which will only serve to confuse rather than simplify matters. I hope I am wrong, but I would like the Minister to reassure me on that point.

Because of the interaction of a series of policy decisions in different Government Departments we have created, unintentionally, a poverty trap that prevents people from offering employment or taking jobs. Over the past few months Secretaries from various Departments have come before the Committee of Public Accounts and we have established the circumstances in which a person earning £8,000 per annum is better off than a person earning £15,000 per annum. I cannot come into this House and ask the Minister a question on all the factors that lead to this situation, as only part of the question will be answered by the Minister and it will be referred to various Ministers. I hope in future we can ask the Minister for Enterprise and Employment any question that relates to employment even though the distortions arise as a result of the policies of Departments of Environment, Justice, Education and Health. I hope the Minister will then do something about having the Government policy changed. In the past six weeks the Minister for Finance outlined the ludicrous situation in which a person earning £8,000 is better off than someone on £15,000, but people all over the country are caught in that poverty trap. Also anyone on unemployment assistance who is married with two children — even though he or she is badly off, is better off than earning the average industrial wage or less. I have figures to support that. I put this point to the Secretary of the Department of Social Welfare at the Committee of Public Accounts, he quibbled with one or two figures but agreed that you may get £10 extra for working for the week but you will not be able to do any nixers. The factors leading to that are differential rent — and the Department of Environment rules apply much more severly to those at work than to those out of work — medical cards, eligibility is decided on gross income and not take home pay, and similarly the higher education grants, assistance with civil legal aid and so on. Will the creation of the Department of Enterprise and Employment, of which I was an enthusiastic supporter, make any difference? Will we have progressive change in the coming months to ensure that anyone who takes a job will automatically, by some adjustments under the family income supplement scheme by taxation or other method, be better off and have higher disposable income? The principle that should guide all policy is that a person who comes off the dole and takes up a job should be better off and we must ensure at a minimum that there is a difference and that they are better off. Second we cannot have a situation where somebody who gets a pay rise or promotion finds that he or she is worse off. Will the Minister accept questions dealing with the overall issues that affect the workplace prevent jobs being created and which have this economy in a gridlock.

Mr. R. Bruton

The IDA proposes to earn £9 million in rent from factory premises. How much vacant factory space is there at present and how do the rents the IDA charge compare with commercial rents? I have a strong suspicion that the IDA is charging over the top for rental accommodation and that its changes are not competitive. We heard earlier about the regional aspects of the IDA and SFADCo. Will the Minister bear in mind the situation in Dublin? Dublin Deputies seldom see themselves as having to defend their region but the decline in Dublin over the past number of years has been extraordinary. In the past ten years the industrial base in Dublin declined by 22 per cent, and 18,000 jobs were lost. The building industry declined by 31 per cent with the loss of 9,500 jobs; employment in the public sector declined by 13 per cent with the loss of 4,000 jobs and employment in the transport and communications sector declined by 6 per cent with a loss of 2,000 jobs. By contrast, other countries improved their employment prospects. Overall, while Dublin lost 15,000 jobs the rest of the country gained 36,500 jobs. That did not happen by accident, it is a conscious IDA policy which has provided the remainder of the country with 48 per cent more grants per head than Dublin and a conscious policy by the Government to relocate public servants. Already there has been a decline of 4,000 in the public service in Dublin and a 3,000 increase in the rest of the country. That is part of an ongoing programme under which another 2,500 jobs will be taken out of Dublin through decentralisation. A halt must be called at some point. The Minister is in a strategic position to look seriously at Dublin. I am not seeking to get one up on Shannon, the mid-west or any other region but Dublin needs an effective regional strategy. That will not be produced by five county enterprise boards dealing in the non-industrial area, confined largely to small scale initiatives, at a time when the overall strategy for Dublin is not being seriously looked at. There is a need to look again at the approach to Dublin. When the Minister recently announced a task force for North County Dublin, a response to the Aer Lingus situation, I was disappointed that he ignored the fact that North County Dublin has lost 9,000 industrial jobs, apart from those in Aer Lingus.

I am disappointed to see Labour Deputies scrambling over one and other to increase the offer to buy off jobs in Aer Lingus when the Labour Party's manifesto said it was proposing a work reorganisation scheme to reduce voluntary redundancies and counter the cash incentive to people to sell off their jobs when cost rationalisations are on the cards. There are contradictions in what appears to be a Government statement of policy and what comes out in the wash.

Mr. S. Ryan

There are no contradictions.

Mr. R. Bruton

There are contradictions. Following its examination of industrial strategy the ESRI report clearly states that the designers of industrial policy should consider the adoption of a net job creation as the central target. It points out that a job gained through retaining one which might otherwise be lost by attrition is just as valuable as a job in a new start-up. We will pay out huge sums of money in redundancy to buy out jobs and pay £20,000 for start-up jobs in foreign industry although only 40 per cent of such jobs survive to the seventh year.

Chairman

Will the Deputy put a question?

Mr. R. Bruton

My question is about the Minister's strategy. I am seriously worried that manufacturing is not creating jobs. It is essential to take the route indicated by the ESRI.

Mr. Cullen

Who controls the allocation to the county enterprise boards? If some county enterprise boards are very active and soak up much of the funds, who calls a halt or ensures equal distribution of funds? Has the Minister put a ceiling on the size of project that may be funded? I realise the IDA comes into play at a certain level but does the Minister have a ball-park figure in mind? The third banking force about which there was much hype earlier seems to have receded in the mists of time. What is the Minister's view on it and does he wish to see it pursued? In his original thinking was the third banking force an element in the county enterprise structure in its approach to private sector funding?

Chairman

As it is unlikely that the Minister will be able to respond in five minutes to the number of questions put to him I suggest we adjourn. It was agreed to take a half hour break from 1 p.m. to 1.30 p.m. but I suggest, with the agreement of the committee that we adjourn for 45 minutes until 1.45 p.m.

Mr. Cullen

With no disrespect to the Minister and the Minister of State I cannot come back this afternoon as I am involved with my party at a function.

Chairman

The response will be in the record of the House.

Mr. Quinn

Since we have five minutes I can give a very brief reply.

Chairman

If everybody is in agreement we can extend the time beyond 1 p.m.

Mr. Creed

Perhaps the Minister could reply to the points raised by Deputy Cullen.

Chairman

If the Minister replies he will have to reply to everyone. In fairness to people who have to leave for other reasons I cannot give preferential treatment to any Member and I am sure the Deputy will appreciate that. If you wish to extend the time until such the Minister completes the reply I would find that acceptable.

Mr. Quinn

I will try to be succinct and to the point. I do not have the exact information about rents, market-related rent costs and how much the IDA charges but I promise to get it from the IDA.

Mr. R. Bruton

What about the rent costs on vacant factory premises?

Mr. Quinn

We will get that information for the Deputy. In regard to any other question raised to which I cannot give an adequate or complete answer, I will write to the Deputies concerned with the specific information. The process is new for all concerned, including Ministers and back-up service from the civil servants. In regard to the bias against Dublin I am conscious of saying this in the midst of provincial nationalists, who are not necessarily elected, from all corners of the country. I might add there are many of them in the Civil Service.

Chairman

The Minister should refrain from referring to civil servants as they cannot reply verbally.

Mr. Creed

I hope a few of them are seated behind the Minister.

Mr. Quinn

By way of explanation and without wishing to be discourteous to anybody, including the civil servants for whom I have much regard, there is a bias, it is reflected even in Dublin City Council and Deputy Broughan will respond to it. Deputy Richard Bruton will recall that when we discussed the Shannon stop-over there were as many arguing for its retention in Dublin City Council as for a bias in favour of Dublin. There would be nothing comparable in Limerick Corporation where nobody would argue in favour of Dublin. While most of us live in Dublin, for historic or family reasons we have attachments, either of first or second generation, to other parts of the country. There was a perception in the past that Dublin was doing well and that other parts of the country needed a fillip. In fact the IDA gave a considerably higher grant to industries locating outside the Dublin region because of this perception. I share the Deputy's concern and his analysis of the position. Even during the time in Dublin's apparent population growth it had a very high level of internal migration from 1946 to 1966 which was masked by inward migration from other parts of the country. Outward migration within the Dublin population was extensive.

One of the task of the Department of Enterprise and Employment is to reset policy in terms of the clear need for jobs in the greater Dublin region. This is something we will examine closely. Recent analysis of inward investment intentions from IDA attracted companies is that they are increasingly intelligence based and attracted to centres with third level institutions; obviously Dublin has a considerable advantage in that respect. Cork, Limerick and Dublin have an advantage for some types of inward investment which the IDA is attracting.

In regard to the two questions raised by Deputy Cullen the intention is that each county enterprise board will be allocated a specific sum of money for the year, which will be notified to the county enterprise board in bloc form. The board will decide the division and allocation of that money and draw down the money accordingly. Given the prevailing tradition, and I have no reason to doubt this, if a county enterprise board is given an allocation of, say, £500,000 and it does not spend the entire allocation — it is not carried over into future years — that money would either be spent elsewhere or, if we are not quick enough in the Department of Enterprise and Employment, it will be retained by the Department of Finance. If those boards do not spend the money we will. I am sure some local authorities and county enterprise boards will want to spend more than they have been allocated and others will not spend it.

As far as a third banking force and the Programme for Government are concerned, we have been in office for just over six months and that programme is designed to be implemented over a period of four or five years. The third banking force is very much a part of that programme. My colleague the Minister for Education, Deputy Bhreathnach — on behalf of the Minister for Finance — at the opening of an ACC office in Dún Laoghaire constituency referred extensively to the position in relation to a third banking force, to which I would refer the Deputy. I do not have a third banking force in mind vis-�-vis the county enterprise boards.

Sitting suspended at 1.33 p.m. and resumed at 1.45 p.m.

Chairman

We have dealt with the subheads up to F.3. We will now deal with subheads G to X.

Mr. Creed

We debated the Industrial Development Bill in the Dáil this week. I would like to familiarise the Minister with the myriad agencies that will now operate in my constituency in assisting individuals wishing to set up an enterprise which will provide employment. There are three Leader projects operational there which will now have to compete with a county enterprise board in assisting new enterprises. No thought has been given to the link between Leader programmes and the county enterprise boards who will have practically the same remit although they will be financed from separate Government Departments. A part of my constituency is in the Gaeltacht area and, therefore, Údarás na Gaeltachta will have to compete with Forbairt. There are a total of six agencies operating in my constituency at present. In dealing with the Industrial Development Bill, the Minister stated that it may appear cumbersome from this side of the counter, so to speak, but not to a potential employer. In regard to Deputy Sean Ryan's point about the county enterprise boards, if we persist with this crazy bureaucracy and red tape we must provide a simple — almost encyclopaedic — explanatory document for the punter who wishes to invest in this area. We must differentiate between the small operator establishing a new enterprise who will employ one or two people as opposed to a large company with myriad executive staff who are able to plough through the reams of bureaucracy with which they will be faced.

In regard to the thrust of the Industrial Development Bill and the Culliton Report which proposed a shift of significant investment to indigenous industry, the myriad bureaucracy will intimidate people. If the Minister insists on proceeding with this maze of bureaucracy people must be provided with an explanatory document outlining the role of each agency so that people can exact the best possible assistance for their enterprise. I will reiterate the point made forcefully from the Opposition benches in the past week that such restructuring is a crazy compromise in Cabinet and ill serves enterprise and employment.

Mr. B. Fitzgerald

We had a lengthy debate on the county enterprise boards this morning and I do not intend to dwell on that matter now, but I welcome the proposed changes. Effectively, we will have an extension of the county development teams which is what most local authorities sought. In most cases, the county development teams could come up with the ideas but not the money. Therefore, I hope funds will be provided as soon as possible to get the new structures up and running as they will encourage people genuinely interested in creating employment. We must welcome the fact that the Minister insisted that no expenses would be paid. That was a positive move on his part as only people who are genuinely interested will become involved.

I note from the Minister's speech that he is endeavouring to expand the numbers on the various employment schemes. The unemployment problem is critical in urban areas and it is frustrating to try to reduce figures in regard to an 80 per cent unemployment rate. Every effort must be made to resolve the problem. At the same time, we must be careful not to undermine existing jobs. During the past few years such schemes tended to employ people in manual type work. Perhaps this could be expanded to the administrative area as not all people are suited to manual work. The Minister should consider that matter.

In examining areas for potential employment the Minister should consider the various public bodies who might not have the potential to employ people for 52 weeks of the year. However, by amalgamating some of those bodies, employment could be created for 52 weeks of the year. This would apply particularly to the forestry and health areas where, at certain times of the year, there is a requirement to employ additional people who would not be needed for a full year. I have done some research in this area in the past as a trade union official.

People should be educated in the area of industrial relations from an early age and more funding should be provided in this regard. I accept that this would require discussions with the Department of Education, but people should be encouraged to become accustomed to industrial relations matters at an early age. It certainly should be part of the second level curriculum. In the past four or five years the trend has been to merge the major trade unions and that is a welcome development. I hope that in the next few years some of the smaller unions will amalgamate and that we will have fewer trade unions as is the case in Germany. A total of 90 trade unions — which was the case a short time ago — in a country with a population of approximately 3.5 million is ridiculous, I frequently attended meetings with 20 union representatives when two would have been sufficient. I hope the Minister will continue the endeavours of the previous Ministers to amalgamate as many trade unions as possible.

We must provide companies with as many opportunities as possible to get involved in research and development. If we do not research and develop our products we can forget about creating jobs for the future. There is great potential in this area. We have a large number of well educated people coming out of our colleges and we must give them the opportunity to use their skills in researching and developing products for the future of this country. I hope the Minister will be in a position to allocate more funding to that area in the future.

Mr. R. Bruton

We are now spanning quite a number of Estimates and I would like to raise a number of different points. There is one technical point I would like clarification on before we go any further. How will the Minister shift money between subheads without getting approval from us? He announced this morning that he will have £97 million under the SES, although the figure here is £83 million. We have a figure of £24 million here for the county enterprise boards, but my impression was that we would have much less than that. Will the Minister come back with a supplementary Estimate at some stage? What are we approving at this stage?

Chairman

I ask the Minister not to respond to that until he is delivering his concluding statement.

Mr. R. Bruton

It arises under subhead M.

Mr. Quinn

I can give an explicit and precise response to that question later.

Mr. R. Bruton

I am disturbed about the gestation period of the county enterprise boards. However, the Minister achieved something by trimming down the ambitions of the previous Government. We learned about that during the week by way of a press release circulated to Cabinet. It was not even a properly thought out programme.

Mrs. O'Rourke

That is a jaundiced view.

Mr. Quinn

It is not exactly an objective view.

Mr. R. Bruton

Perhaps not, but it was not denied by anyone at the time or on Committee Stage when there was plenty of opportunity for people to do so.

Mr. Quinn

The Deputy may recall that I was not at the same Cabinet table.

Mr. R. Bruton

I am not pointing the finger at the Minister. It emanted from the word processor of the Taoiseach's Office, and was adopted very rapidly to cover the defects in employment policy coming up to an election. What disturbs me about it is that there has never been any serious investigation into how regional and local development can occur. There has not been a regional policy for many years. Culliton did not address this issue. He said it was a good idea to have regional and initiatives at ground level. A proper level of thought should have been put into whether this county enterprise concept was the right one. To my knowledge, there has been no consultation with the sort of groups we hoped would come forward through this process. We have in place the partnership companies which are focused on disadvantage and have a very clear and specific role. Overnight we are making a decision to adopt 36 of these. We will be following up first with the regioanal boards of Forbairt and again with the regional authorities. I can understand why the Minister is trying to trim the brief in relation to these county enterprise boards. However, I honestly think he is trying to deal with a very messy situation, and we still do not have a strategy in place as to how the separate pieces fit together. The Industrial Development Bill did not help in that regard. It did not connect SFADCo and Údarás na Gaeltachta with the wider Forbairt effort and it did not mention the county enterprise boards, the partnership companies, the Leader programmes etc., to see exactly what we have.

At one point Culliton made a very telling criticism of what we were doing with EC funds. He said we were setting up lots of structures to administer very different things and, in that process, dissipating the value of some of these funds. It looks as it we are going down that road again.

Before we go too far down it the Minsiter and the Government should make a clear statement on the litmus test of success for these agencies. We must be able to look back after one to three years, whatever the Minister feels is appropriate, and be able to say they have achieved their stated objectives. That is very important and it has not been mentioned by the Minister to date. It is very much on a wing and a prayer that we are travelling with these boards. It may be experimental and non-specific but there should be some yardstick by which we can know, after a number of years, if we have achieved something.

I welcome the emphasis on facilitators. The rural development programme was very successful and no State money was expended; it simply involved facilitators. All the people assessing it passed it with flying colours and not a penny was spent. It is important to develop the notion of skilled facilitators. I worry because the structures the Minister mentioned are bureaucratic. He is talking about the publishing of plans which sounds like getting consultants to put together a plan of the old sort to identify all sorts of gaps, pulling together a whole lot of "wish lists" from all over the place and putting them into this document. The emphasis should be on facilitators, going after opportunities. I have no problem with the evaluation committee.

If we are spending State money there should be accountability, which does not seem to be the case at present. There are four democratically elected people but they do not have a brief in regard to accountability on the part of this body. I would have preferred to have seen a sharp executive agency as a county enterprise board, and the elected local authority the scrutinising body in this regard. It would achieve the same and would have resulted in a more focused and driven body.

On this subhead we also deal with the issue of research and development and science and technology. I made my point clear this morning. It is a shame that in a week when Delors told us we must move to 3 per cent of GNP in the area of technology we have taken £4.5 million from the Eurospace budget and did not put it into science and technology and £7 million from the State's research and development budget. That is £11 million of State money that would have been aimed at research and development, the seeds of tomorrow's industry. During the week at Dáil Question Time the Minister tried to bamboozle us and shout us down by saying that funding for research and development was up by 58 per cent. It may be up but that is due to the efforts of the EC. The Government's contribution is down by £11 million, from £31 million to £20 million. In percentage terms that is dramatic, a 33 per cent cut. It is wrong to take EC money meant to support research and development, to defy its principle of additionality and desire to see additional effort in this area. We spend under 1 per cent nationally in research and development when the EC is asking for 3 per cent. This Government's contribution to spending on research and development is one quarter of the EC average. If this is being done for the sake of the economy, it is a mistaken policy. Certainly we want a more focused research and development programme, relevant to the needs of the industry, but cutting budgets like the higher education budget and so on is not the way to proceed.

The other item that arises here relates to the Labour Relations Commission. I have to raise once again my concern that we are still no closer to having a code of practice to deal with industrial disputes in essential services. I know the Minister of State has been writing letters to different agencies in an effort to make progress on this. However, the Minister must decide at a certain point what we will do to ensure progress. Recently there have been three disputes which resulted in the public being denied a bus service. Judging from reports of the Labour Relations Commission, every week there appears to be fire brigade action to deal with a potential dispute in the transport network and some of those disputes are being headed off. There must be more decisive action in this area. When the Minister for Transport, Energy and Communications, Deputy Cowen, was in the Minister's Department, he threatened some type of legal enforceability in regard to disputes if voluntary procedures did not work. I do not consider that a good procedure but there must be some direct initiative by the Minister to engage in consultation in this area to produce a sensible solution. Such a procedure should be formulated for the many disputes that will have to be dealt with in the future.

Mr. Quinn

The Deputy has raised a number of points. I will deal later with how moneys are transferred in regard to social employment schemes. The system in regard to the county enterpise boards is probably the best possible in present circumstances. There is a need for initiatives in regard to county enterprise boards. I stand over what I said in regard to those boards in yesterday's truncated debate. It is regrettable that time was not available in this House to have the type of debate that took place in the Seanad in relation to those boards. I make no apology for wanting to have the legislation enacted. If more time had been available, I would have been able to deal with those boards in greater detail.

Regarding Deputy Creed's point, Forfás, Forbairt and the IDA will provide greater clarity. Regarding what is happening on the ground, there is a need to communicate the thresholds, relationships and the locations of various supports, to all those involved. There is potential for confusion, particularly among public representatives in an area like the Deputy's where Leader programmes are operating and part of the constituency is in the Gaeltacht where Údarás na Gaeltachta operates. I recognise that point. When Forbairt is established it is my intention to provide clarity and effective communication as there was a good deal of confusion in that area in the past, particularly in regard to the role of the IDA in relation to certain activities.

Deputy Mitchell raised constituency matter in which I am familiar. His point related to a person providing a translation service. That person did not create additional jobs and did not propose to hire anybody on a permanent basis, he was merely entering the market as another agent offering a translation service. I have written to the Deputy about this matter. He was not accurate in his representations and this led to Deputy Rabbitte making the point that three or four people may be supplying a service without the assistance of a grant. The person in this case sought a grant to enter the market to provide a service already being provided. That person wanted taxpayer's money and this is the dilemma involved in making a grant available to a person to supply a service already being provided.

Regarding Deputy Creed's other point, the type of county enterprise board now in place will provide much needed level of grant or equity assistance which is not available at present.

Deputy Fitzgerald's point the provision of employment by public bodies is useful. In relation to Deputy Fitzgerald's research as a trade union official we must look for flexibility in the labour market and for the provision of employment in the public sector areas. From experience I know that the reflex action of the Department of Finance to requests to provide employment in public bodies is that when a person is employed in a temporary capacity in a public authority a claim is submitted by the relevant trade union to turn the job into a permanent one. The practice across Europe is similar. I do not see labour market flexibility in Thatcherite terms. There is a type of reflex action from people on the Left that flexibility means a diminution in standards or yellow pack jobs. The proposal to provide such employment introduces flexibility. The infrastructure and accountability of public service in local authorities, vocational education committees, health boards and semi-State bodies is in place to provide for the recruitment of staff. However, we cannot afford to make the mistake, made by a former Member of the House, Dr. O'Donoghue, however good his intentions were in using the public service to increase employment without bearing in mind the attendant costs. There is enormous potential for employment if it can be created without incurring permanent costs. Having regard to how the social employment schemes operated in the past with voluntary organisations, it is much more difficult for a voluntary organisation as opposed to a local authority to run a social employment scheme.

Regarding education and trade union rationalisation, the Minister for Education, in consultation with all political parties, must introduce a comprehensive programme of civics and political education to the education system at second level. Such a programme should include an understanding of social partnership and problems relating to society. If such a programme was introduced, people who joined the trade union movement or become trade unionists would have a better understanding of the relationship between their job, economic employment and the wider economic and political forces.

There is a provision in the Estimates for trade union rationalisation but such rationalisation is not being encouraged. However, there should be more trade union rationalisation. There have been significant developments in that area. There has been a welcome, if belated, improvement in the craft union side and this is probably the area fraught with difficulty in the industrial relations field. The recent announcement of the amalgamation of NITU and the INTO into the TWU is welcome. There is provision in the Estimates for residual costs associated with a previous employer which have yet to be fully drawn down. If there were other rationalisations, I would make extra moneys available. In other words, the provision in the Estimates is an estimate of what is needed. However, if additional trade union amalgamations come into effect during 1993 I would ensure that lack of money does not prevent rationalisation. It takes about a year for costs associated with rationalisation to be formulated as was the case in regard to the 1975 Act and the amendments thereto dealt with in the Industrial Relations Act, 1990. The most recent union rationalisation of which I am aware is that of BATU, the Building and Allied Trades Union with that of SIPTU in respect of which discussions are ongoing. I understand from my contacts in both unions that that amalgamation is likely to proceed.

Deputy Bruton referred to the question of research and development and it would be appropriate for the Minister of State, Deputy Brennan, to respond to the Deputy's points.

Minister of State at the Department of Enterprise and Employment (Mr. S. Brennan)

I agree with Deputy Bruton that the importance of research and development is becoming more obvious, particularly as a result of the announcement by Mr. Delors in the past few days. Two of his eight point plans for economic growth stress the importance and centrality of the development of technology. It is also now becoming clear to the European community that research and development has led the growth in the United States and Japan. The Community is beginning to wake up to the fact that innovation in products — and I am not talking about scientists in white coats with test tubes — I am talking about technology being applied and developed, new products coming on stream, innovation in services as well as in manufactured products and generally updating products. Products disappear from the market and new products take over. That lesson is being learned, perhaps not too late, by the European Community and it is now beginning to focus on that.

I am conscious of the fact that we must have an overall strategy in the whole area of technology, which I am examining at present, as opposed to a whole series of pockets of science and technology in various areas. In fact, within the State a number of Departments cover the area of science and technology. Recently the UK published a White Paper on this area. I am studying that to see what lessons can be learned but I am conscious of the need for the Community to catch up with Japan and the United States. I am conscious also of the need for an integrated strategy and I have been examining the possibility of whether I can publish a coherent policy document.

On the question of funding the State budget was £27 million last year, it is £20 million this year, a reduction of £7 million. I am not trying to deny that fact. However, in fairness an additional £23 million has come from the Community which means that, regardless of where the money comes from, spending in 1993 on science and technology from this Department will be £46 million. Other Departments also spend a fortune. For example in the Department of Health there is substantial funding in that area. The figure of £46 million compares with £27 million last year. That represents real money. I take the legalistic and procedural point the Deputy makes that we should automatically increase our spending in line with the Community spending. That is not my understanding of the principle of additionality. I understand that to be a global principle spread across large programmes and indeed across the Government.

Mr. R. Bruton

Delors set a specific target of 3 per cent for the EC but we are on 1 per cent.

Mr. S. Brennan

The Deputy is well aware that many percentage targets are emanating from the European Community, some of which we beat. For example, our public sector borrowing requirement is substantially ahead of a number of European countries. We beat some of the targets set by the European Community and fall behind on others. If one includes the EC spending on research and development we are heading towards meeting the European target. I am confident that in the operational programme starting in January next year, as two of Mr. Delor's eight points specifically committed the Community to policy in that area, additional funds will be available. Therefore, spending is up.

Incidentially, the demand for funding is quite substantial because we have £23 million available this year for what is called "Measure Six", direct grant aid to companies who wish to develop products. The expressions of interest from firms here for that money came to £300 million for which we have £23 million available. We can make a very strong case to the Community to develop that fund and it is important to do so. I hope those points answer the Deputy's questions in regard to funding.

Mr. Lawlor

I will go against the general criticisms under subhead N1 on the local enterprise development fund and N.2 dealing with grants for county development work. I hope that some localised focus will be provided in the greater Dublin area. Much of the criticism of the IDA is in regard to its attracting large industries to this country without sufficient planning particularly in the greater Dublin area. I can well understand how progressive county development teams in other counties would be a little concerned about this new body. I represent Dublin south and what is called a new satellite town, part of which has the unfortunate distinction of necessitating the first ever task force on urban crime rather than a task force for local enterprise and job creation. I hope that with the focus that will arise from the county development teams there will be an input in a local way. In the larger urban areas there is a real possibility of tapping much of the potential at a lower level through the county development teams as well as through the involvement of the IDA. I would like to believe that with the break-up of the greater Dublin area into new local authorities these county development teams will have a real focus.

In regard to subhead J, to the best of my knowledge we do not have a major science and technology park on the lines of the European model. If one looks at the map one can see that under the Sprint programme these facilities are provided, which is probably similar to the Culliton "cluster" idea. As the Minister said, if one has £30 million worth of applications for this funding the potential exists for a tremendous amount of progressive investment.

We have been critical also of some of the very large projects attracted here through international mobile investment and of the insufficient research and development aspects of those international companies. We should provide that type of hub facility. At present in the Dublin Chamber of Commerce such a package is being negotiated through the private sector and the IDA. We must focus on our universities and encourage them to participate in the development of such a facility. This type of facility was discussed in relation to the dockland area where I believe Trinity College and various private sector interests were contemplating locating such a facility. There is a real need for action in this area. Is that envisaged under subhead 5 relating to regional infrastructural development? There is potential for the private sector, the IDA and the universities to lay the framework or the infrastructural development to provide that type of facility. This would represent a further progression of the small experiment in the Leopardstown business park in which the IDA invested.

Many of the applications for funding from the universities, especially in the greater Dublin area, could benefit substantially, if one of two large science and technology high quality industrial investment parks were provided. I would like to see the county development teams provide encouragement, particularly in the urban areas, and I hope they will be successful.

Mr. Doherty

In regard to research and development I subscribe to the views of Deputy Lawlor. It seems unwise, to say the least, that enormous sums of money should be spent putting our students through universities only to lose them to other developed counties. We find at the end of the day that much of what we have invested in is lost to us forever. In the context of research and development, and the type of research and development park that has been referred to, I subscribe to the view that a real effort should be made to designate an area for such a park. I differ with Deputy Lawlor only on the location of the park in that I recommend Galway as an ideal city, a university city of ideal size——

Mr. Lawlor

It is in the European constituency.

Mr. Doherty

It is the centre of an area in which regional technical colleges are situated, with one in Athlone, one proposed for Castlebar, and it is also close to Limerick. If a park was located there it would afford an opportunity to the State to exploit possibilities that could be developed. I hope consideration will be given to that matter and, perhaps, the Minister will comment on it.

This morning the Minister said that banks would be represented on enterprise boards.

Mr. Quinn

On the evaluation committees.

Mr. Doherty

That may be worse in terms of the point I am going to make. Enterprise boards, if they are to be as effective as we wish them to be, must be in a position to acquire venture and risk capital. One of the shortcomings in many of the industrial projects it is hoped will be set up under these boards will experience a lack of such capital. These boards will deal with small projects which will experience difficulty through lack of prime capital and at the end of the day they will have to fall back on somebody for it. Inability to get access to money will be a continuing problem.

As the banks will be represented on the evaluation committees I would not like to think they will carry through their commercial interpretation of what is a worthwhile project. Failure is not necessarily the worst thing that can happen in business. In Ireland we have come to the conclusion that failure is the end of prospects for a project. We must change our way of thinking and get rid of that psychological barrier. We must grow up in a sense and realise that, as is the case in other countries, not least the United States and Eastern countries such as Taiwan, Malaysia and Japan, people who fail may return and ultimately achieve success.

If banks do not provide a certain percentage of funding under the heading of venture capital or risk capital difficulties will arise. This matter must be carefully monitored. It must be brought home to the representatives of the banks that elements of reasonable risk must be allowed. If that does not happen the best intentions for the boards will be seriously diminished. Will the Minister indicate the thinking behind including a representative of the banks on the evaluation committees?

The Minister of State, Deputy O'Rourke, has been anxious to ensure that employment and training are inextricably linked. One difficulty I continually encounter at constituency level is the lack of opportunities for apprenticeships for young men and women. I do not know what approach can be adopted to find a solution to this problem. It is frustrating and disillusioning for individuals who have gone so far to break this barrier which, if not overcome quickly, will force people to seek other options such as emigration. We need to follow through on this matter. How does the Minister propose to tackle the problem? I am sure she is very conscious of this difficulty because in some of her public interviews on the matter she referred in an accurate and informed way to the difficulty.

Mr. Crawford

I agree with my colleagues on the problem experienced by students in getting work. In most cases when people apply for jobs the first question they are asked is how much experience they have. How can people gain experience unless they first get employment? This is a matter that must be seriously considered. Research and development is important in all aspects of life and funds must be provided for that purpose.

I thank the Minister for the change he made to make enterprise boards more acceptable to elected representatives. I hope that change will be of some benefit. However, that is where my congratulations on enterprise boards stop. Regardless of the Minister's explanations on these matters, one must be concerned about the litany of groups whose task it is to help create jobs. There are about 68 statutory bodies in this area such as partnership companies, county enterprise boards, IDA regional boards and statutory agencies not to mention the Leader programmes and proposed sub-regional groups. Many meetings will take place, but how much time will be spent on job creation? How much conflict will there be between the various groups, even between neighbouring counties? In terms of tourism and so on, it will be very difficult to ensure an organised approach so that one group does not compete with another. There is an onus on the Minister to ensure that the best people are involved.

I wish to refer to the employment schemes.

Chairman

I must ask the Deputy to restrict himself to a question at this stage.

Mr. Crawford

What will be done to ensure an even policy in regard to social employment schemes? It is acknowledged that Cavan-Monaghan has the worst roads in Ireland. Some years ago we used social employment schemes to enable us to work on the roads. We can no longer do that. The problem with unions was mentioned. It is difficult to understand how somebody in County Meath could use his union to block Cavan County Council and the county councils in other Border areas.

Chairman

Will the Deputy please ask a question?

Mr. Crawford

The Minister has a major role to play in ensuring that there is an even handed approach with the SES schemes.

The issue of labour relations was raised by Deputy Bruton. There is a major problem in settling the bus dispute and there is a major problem with labour relations in Clones. At a time of economic difficulty can we justify spending £43 million to encourage people to give up their jobs in Aer Lingus? I understand that a person with 20 years' service will get six weeks redundancy pay for every year of service. In County Monaghan workers with up to 20 years' service are only getting half a week's redundancy pay for each year of service. I understand that Aer Lingus is a public company and that the companies to which I refer are private. However, it is hard to tell a family that the breadwinner will come home with a half week's redundancy pay per year of service while £43 million is being provided for six weeks' redundancy per year of service in Aer Lingus. Deputy Bruton might consider that the people in Dublin are getting a raw deal but the people in Clones to whom I referred would think otherwise. It is dangerous to give too much money——

Chairman

The point has been made. I ask the Deputy to conclude now.

Mr. Crawford

——to people to get out of work.

Miss Coughlan

Tá cúpla ceist agam don Aire. At dtús, faoi na County Enterprise Boards, an mbeidh an tAire ábalta smaoineamh arís cén duine as Údarás na Gaeltachta a bheidh ar na coistí sin, mar sílim féin go bhfuil sé an-tábhachtach do na ceantair ina bhfuil Gaeltacht ann go mbeidh Údarás ann. I agree with what was said about lending institutions being on evaluation committees. I am delighted that politicians will be on these committees as there is not enough public accountability.

Mr. R. Bruton

There should be evaluating committees on the lending agencies.

Miss Coughlan

The Deputy hit the nail on the head. If politicians were on the committees of certain other boards we might not have as much hassle in this House.

I realise that these committees could be undermined but there should be flexibility. Many people are frustrated with the IDA and with red tape and are giving up before they start. A small project which could create only one job is as important as a multinational which will be here for a couple of years. Will the Minister ensure flexibility in relation to evaluating applications and reply to the other question in relation to Údarás na Gaeltachta?

Mr. Rabbitte

What is the status of the Irish Productivity Centre? I understand that it is serving as a secretariat for the National Economic and Social Forum. Is that a temporary allocation of function? Is the reduction in the provision because it has been trimmed back in recent times or is there some other reason? The Minister said that because of the creation of a new Department we are not necessarily always comparing like with like, part headings and some functions being taken away and so on. Do I understand that in future heading A.1 — the local enterprise development fund — will be taken over by the county enterprise boards heading? Where is the £17 million allocated for 1993 for county enterprise boards? On trade union amalgamations, there is provision for an increase of 48 per cent. Are amalgamations being encouraged at the moment? Are some mergers in prospect and are they under way? In terms of that subheading, what are the lines of accountability in place for moneys disbursed under that heading? On the question of building operations can the Minister give an answer in relation to the apparent proportion proposed in the case of SFADCo as compared to the proportion in the case of the IDA?

Mr. Quinn

Deputy Lawlor made some points with which I agree about the Dublin area. Deputy Brennan may wish to respond to the point about the science and technology park. It will obviously stay in Dublin. The attempt by the Deputy from Roscommon to subvert the Deputy from south County Dublin who has a certain loyalty to Galway was an undisguised attempt at seduction, but it will not work.

On a more serious note, Deputy Doherty raised a valid point about the criteria of the evaluation committee. Deputy Coughlan raised the same question. The reason they are on the evaluation committee is to enable us to tap into the commitments the banks made to the previous Government in respect of their contribution towards employment creation and the jobs fund. The presence of a person from the banking institution will ensure that if somebody gets an equity injection from the county enterprise partnership board for a project, that project will be enhanced in relation to the possibility of getting commercial money as well from the banks. In other words, the project will have gone through a banking sieve. Will the mesh of that sieve be as tight as if it were a conventional banking evaluation? It will not. The intention is to ensure co-ordination between the thinking processes so that if somebody needed total capital of £50,000 or £60,000, was looking for a grant and hoping to borrow money, he would be more likely to get the help needed.

Deputy Coughlan also raised the question of the relationship between the county enterprise partnership boards and the Údarás. That is currently being discussed. The intention is to harmonise rather than to duplicate. We have to wait and see what the board in Donegal want to do in the Údarás rather than us trying to dictate from Dublin what should be done; we are waiting to see what they come up with. That is not an abdication of responsibility; it is a deliberate attempt to endeavour to get a response that has some degree of accountability. I share the Deputy's comments about accountability and politicians being involved in a constructive manner. If politicians at local level saw a greater correlation between what they do as councillors and the economy generally, that would be healthy and would be moving in a more positive direction. Unfortunately, in my former capacity as a member of Dublin City Council there was never a connection drawn between the employment content or effect of local authority decisions and decisions councillors took on a variety of issues.

Deputy Crawford raised the question of the social employment scheme the monitoring group and trade union and industrial relations. The monitoring group was established before the Central Review Committee came into being. As the Deputy may recall, I was responsible for the introduction of the social employment scheme. At that time there was clear trade union resistence to those type of public works schemes, as they were perceived to be. Indeed, some fears were well founded. The purpose of establishing the monitoring group was to ensure there would be no displacement of existing work, that one would not be undermining existing jobs by, in effect, part-time wages. It is fair to say that the trade union leadership, at national level, has not always exercised the type of leadership on the monitoring group often required and have allowed certain opinions to be expressed from time to time. We are in the process of examining the administration of the social employment scheme and I will be answering a question later about the movement of moneys in respect of that scheme. I am not satisfied with the way the social employment scheme is operating on a number of fronts, one being the monitoring committee, which we shall be examining. In some cases legitimate rights appear to have been exceeded for other reasons related to linkage and bargaining on behalf of trade unions with individual local authorities that have nothing to do per se with a particular social employment scheme.

Fortunately the buy-out of Aer Lingus is not an issue for this Estimate. Therefore, I propose to duck it.

Mr. Crawford

But we are concerned at local level.

Mr. Quinn

It is a separate matter. No doubt Deputy Crawford will raise it in due course on the relevant Estimate.

Deputy Rabbitte asked what is the role of the Irish Productivity Centre? The moneys involved are set out in the Estimate. The Irish Productivity Centre is now earning a certain amount of money. The primry objective of the centre is to help raise productivity within Irish industry through the provision of specialist advice. It is fair to say that there is a question mark over the mid-term future of the centre. I have not yet met the board formally. It is my intention to discuss with them how they perceive their future development, but they are earning more from fees than was the case in the past.

Without wishing to be repetitious I should say I did raise the question about rationalisation of trade unions. For example, one is at present being discussed between BATU and SIPTU. The provision in the Estimates is in respect of commitments given in the past and anticipated to fall due in the future.

Deputy Rabbitte asked what criteria were used or what scrutinisation there is of moneys donated to unions on foot of rationalisation. Under the 1975 and 1990 Acts very strict criteria are laid down. There are very transparent requirements that must be documented, expenses to be invoiced and submitted by the unions and checked in the Department, formerly the Department of Labour, and will be the subject of scrutiny ultimately by the Comptroller and Auditor General. Therefore, the Deputy will see it is not a blank cheque by any manner or means.

Mr. Rabbitte

Why is there such a drastic reduction in the provision for the Irish Productivity Centre? Is that because their earnings have risen proportionately or because there has been a reduction in staffing levels?

Mr. Quinn

There has been a reduction in staffing and a certain change in the revenue received. In relation to the building, we accept that the figures appear to be disproportionate but they are struck on the basis of departmental assessment. Each agency has made a different case. These figures were furnished by SFADCo and the IDA and are based on their requirements which can vary. I know that is not a very comprehensive reply; I shall let the Deputy have a more detailed one.

Mr. Rabbitte

The provision for building operations in the case of SFADCo amounts to almost 40 per cent of the budget for grants, and it is a tiny fraction only in the case of the IDA covering the entire country. There may be a perfectly logical, coherent explanation but it seems, to put it mildly, somewhat disproportionate.

Mr. Quinn

I have taken note of the Deputy's point and I will reply in a more comprehensive way. I do not have a ready explanation.

Minister of State at the Department of Enterprise and Employment (Mrs. O'Rourke)

I wish to take up the points raised by Deputies Doherty and Cullen with regard to apprenticeship and training in general. I noticed that Jacques Delors was the favourite this morning with emphasis being placed on technology. According to one's point of view, he appears to be either a demon or an angel, in accordance with what he may have said at any given time. Certainly in the document he issued around the time of the Copenhagen Summit he laid enormous emphasis on training. In fact enormous emphasis is being placed worldwide on the need to have everybody, workers, management and others, avail of continuous training.

I admit there was great difficulty experienced in getting the apprenticeship scheme off the ground. All of us in our respective constituencies will have come across young people anxious to participate in an apprenticeship scheme, who have a clear idea of what they want to do in a very valued craft and yet experience difficulty in finding a place on such schemes. As Members will be aware, we have begun a new pilot scheme in two areas, in bricklaying and motor mechanics. For example, between September next and September 1994 we shall have the 30 established trades incorporated in that new scheme. I admit it did take a long time, many years, to get going. I am satisfied that what we have set in train will allow young people greater access to apprenticeships, women also, for whom there has been a great dearth of opportunity. In addition to the established 30 trades we are assessing the possibility of opening up other types of activity/training which would have been described before as apprenticeships but which I would prefer to describe as progressive training.

Chairman

I ask the Minister of State not to drift into the overall matter of training and employment. We will be dealing with them under the next programme.

Mr. R. Bruton

Including apprenticeship.

Chairman

Will the Minister of State respond directly to Deputy Doherty?

Mrs. O'Rourke

Deputy Doherty's fears are well founded in that the apprenticeship area is undergoing radical transformation, leading to more enhanced opportunities for young people, an extension of what are now called apprenticeships out of traditional areas into non-traditional areas. That will mean that more women will be able to participate in apprenticeship schemes. However, I appeal particularly to employers who have not been pulling their weight in taking on apprentices. While we hear much well-meaning talk on the part of their executives in Dublin, yet when one travels to, say, County Roscommon, County Westmeath, County Meath or even Donegal, one discovers they are not taking on apprentices. Indeed, it is very much to the good of industry and trade generally that they should do so. The amount of effort employers are putting into taking on apprenticeships is just not good enough. I assure Members that in our forthcoming reviews we shall continue to emphasise that point.

Mr. S. Brennan

The idea of a science park has been mooted for many years. There are no positive proposals to undertake any such initiative at this stage, a question raised by Deputies Lawlor and Doherty. I have requested an assessment of the options in that area. Are we talking about a tourism-type science park, of interest on the educational/tourism side, or about a different type of office park or industrial estate? Of course, we have a very fine technology park at Plassey in Limerick. A number of very difficult issues in regard to this warrant consideration. As soon as I receive an assessment, I will let the Deputy know. Of course, there is also the question of whether the private or public sector would be more suited to the development of such a park.

Chairman

There are several subheads remaining to be dealt with which are extremely important and on which no doubt many questions will be posed. I ask Members to confine themselves to two questions each if we are to conclude on time. We must allow the Minister ten minutes to conclude. I suggest that the Minister incorporate his concluding comments when responding to questions. Since all Members had ample opportunity to contribute today I ask them to please confine themselves to two questions.

Mr. R. Bruton

I would like to ask a number of questions about FÁS programmes. First, I understand that a substantial number of evaluations have been carried out at public expense, none of which has been published or made available to us. That is a mistake and I ask the Minister to change this policy.

In relation to the social employment scheme, what is the position in regard to schemes with an educational element? It is my understanding — the Minister of State will be familiar with this — that there is a threat that these will be blocked. There seems to be no urgency on the part of the Department of Education to clear this blockage. Essentially, the monitoring committee has decided to black them. That is a serious matter.

I would like to ask the Minister a question about the work re-organisation scheme as envisaged by the Labour Party to deal with redundancy. This is still a live issue whereby people are selling their jobs. I would like to know if a policy is being prepared on this issue.

Is the Minister of State aware of the grim figures contained in the FÁS report in relation to the prospects of gaining employment in the unskilled sector? The number of jobs available in the male unskilled sector is declining rapidly. This poses a major problem for those who leave school with insufficient skills. There is a need for the Minister of State to introduce programmes which will be more successful. Given her past experience in the Department of Education, the Government should give her authority to clear up the confusion in regard to training schemes with an education element.

As the report points out, the placement rate of 66 per cent is marginally better than the FAS target of 65 per cent. Is the Minister of State aware, however, that if one remains on the live register for six to 12 months the placement rate is 77 per cent? The placement rate of 66 per cent is, therefore, not a great figure and those on courses are worse off. I know that is simplistic but a realistic evaluation of the training schemes has to be carried out.

Miss Coughlan

I share the frustration of the local authorities in relation to the social employment scheme. This is a fabulous asset and it works better in many rural constituencies than urban constituencies given that many semi or unskilled workers find it very difficult to secure a placement in employment having regard to the fact that the building trade has been depleted while the number of jobs in agriculture has declined. I ask that further negotiations be held to ensure that local authorities are allowed to offer these schemes.

Because placements on a scheme will not necessarily lead to full-time employment it does not mean they should not be offered by local authorities. Indeed, schemes are often used as a means to offer an apprenticeship so that if a permanent position becomes available a person on a social employment scheme could almost walk into it. Positions are more or less tailor made to suit someone who has gained experience working with a local authority.

While I welcome the basic allowances announced by the Minister there is one problem, that it may be of more benefit to take part in a social employment scheme than to work. For instance, a married man with five children in receipt of, say, £150 a week may find himself working with another man also with five children on a social employment scheme who is bringing home more money. Perhaps it is not the social employment scheme that we should be looking at but the question of low pay.

Will there be additional NOW programmes, which are fantastic? Many people are only hearing about them now and would like to become involved. I sincerely hope that additional programmes will be provided. Will the Minister of State outline what will happen during the next few years in regard to these programmes?

Mr. Crawford

Many development groups, particularly those involved in the tourism area, would like to employ FÁS workers in early spring. It is important that they be allowed to employ young people in time so that work on old graveyards, for instance, can be carried out. It is no use telling them in September that they can employ somebody, they need to know in the spring.

I understand that the Minister has received complaints from Deputies on all sides of the House. I hope, therefore, that this matter will be reviewed. As these development groups are doing an important job in cleaning up the countryside, we should help them in every way we can.

Mr. Rabbitte

I would like to ask the Minister of State a general question about FÁS. Deputy Bruton referred to unpublished work on the performance of FÁS and so on. I do not know to which reports he is referring but I have read the back-up documents prepared for the Culliton review group by the consultants — I do not know if these have been published——

Mrs. O'Rourke

The ESRI evaluation?

Mr. Rabbitte

Therefore, I am allowed to admit I have read them?

Mr. R. Bruton

Tansey and Roche.

Mr. Rabbitte

FÁS has an enormous budget. The fundamental question posed was whether the best use was being made of this budget and whether sufficient resources were being diverted to those at work, in terms of the enhancement of skills. Some major questions were asked in that regard. I do not know what steps the Minister of State might be taking to assess whether we are getting value for money. It is an extraordinary budget. When one considers that so much of this budget comes from non-Exchequer sources, the European Social Fund in particular, there is some basis for the argument that it is funds driven and that, because of this, we are spending the money with less care.

In regard to the huge contribution from the European Social Fund, one of the two items listed under that heading is the levy grants scheme. What does this scheme entail? One of the problems is that industry does not admit that there is a necessity to invest in this area; it regards it as an expense rather than an investment. I do not know if European Social Fund funding will continue to roll at the same rate but it seems that we should require managements to invest in this area.

Mr. Quinn

I understand that most of the evaluation reports prepared by FÁS are published. It is my intention to ensure that all these reports are published. We should all share the knowledge contained in the reports and learn from it. There is no Departmental policy on the publication of clear objective evaluation studies.

With regard to the deployment of school caretakers under the social employment scheme, this is a very good example of a link between members of IMPACT, the teacher unions and the Department of Education to block their deployment. I am concerned about this unfair and damaging blockage and am trying to remove it.

I am also concerned about the employment prospects for unskilled males. Questions wre raised as to whether a 65 per cent placement rate is reasonable. I am not sure that the Deputy was comparing like with like when he referred to people being taken off and put on the live register. There are enormous inflows to and outflows from the live register and if all the outflows were taken to represent placements it could be very misleading. I will look at the placement figure of 65 per cent.

Deputy Coughlan referred to the operation of the social employment scheme by local authorities. I am concerned about this matter and I hope to consider it in the context of changing its administration. A total of £25 million was provided in the 1992 Estimates for the county enterprise partnership boards. On 20 April last, I moved £6.5 million of that amount to another subhead — I had to get the agreement of the Department of Finance to do this. The reason was that the 1992 Estimates had provided for a certain number of participants on the social employment scheme — I think the figure was 13,000-14000 — and during the latter two months of 1992 the previous administration had, for reasons which I simply cannot understand, put a large number of people on the scheme. I was not aware of this at the time of the formulation of the Estimates for this year. This increase in 1992 meant we would have had to reduce the number of participants during 1993——

Mr. Rabbitte

That will not happen for another four years.

Mr. Quinn

The administration of the social employment scheme on that basis is unsatisfactory. I am trying to operate this scheme on an annual or quarterly basis so that we will know the budget available. In this way a person who wants to apply for assistance under the social employment scheme will have to do so within a certain time frame, will be told whether the project has qualified for two, three or four people, that the start up point will be from, say, 1 May and that they have 12 months' participation from that date. This will give us some degree of control and management of the scheme. Qualification for the scheme is something of a lottery at present. In fairness to the people in FÁS who run it, the stop-go, changing, slowing-down and speeding-up nature of placements on the social employment scheme, which were driven by political considerations at different times, did not help the operation of the scheme.

I intend to rationalise the scheme. It is my intention in doing this to deal with local authorities who want to use the social employment scheme so that, as Deputy Coughlan correctly said, they will have an idea of who is capable of being employed on a full-time basis. During his statement on the Copenhagen Summit yesterday the Taoiseach referred to the temporary jobs programme — this relates to the 30,000 community employment jobs proposed in the Programme for Government. This programme is dependent on Ireland getting matching funds from the ESF, funds which we originally got for the social employment scheme and which is subsequently lost because the training element was perceived to be unsatisfactory, indeed, non-existent in some cases. I am convinced that there is a need for two, three and four years placements of that kind in many rural areas. Many voluntary organisations complain that the system is only up and running when the 12 months are up. I will be looking at this and other matters in my efforts to improve the scheme.

Mrs. O'Rourke

Deputy Coughlan referred to the NOW initiative, the new opportunities for women. This is one of the more successful initiatives in a group for four which have received EC and local funding. As the Deputy correctly said, it is only now that Irish women are becoming aware of this programme and the opportunities open to them under it. The Council for the Status of Women has become the agency through which help is given under this programme. I have attended some of the launches of this initiatives and spoken to the people involved. Under this initiative urban and rural women will be able to pursue training and education programmes. This will have a widespread effect on their communities. The funding available under this initiative for this year has been fully taken up and we will be looking at the applications which have been submitted for funding next year. I hope this initiative will continue for a long time. When I met Commissioner Flynn at a recent social meeting in Europe I availed of the opportunity to tell him that the women of Ireland are looking to him to ensure that the NOW initiative is kept in place.

I do not think that we have placed enough emphasis on training. I agree with Deputy Rabbitte that management somehow seem to think that training is a cost albatross around their necks — they do not regard it as an essential part of their business plan. I intend to raise this matter further during the autumn and point out that training should not be looked at in the short term. More training is needed at all levels within firms. We have been very shortsighted in this area.

Mr. Quinn

I am conscious that we gave less than adequate responses to some queries which were raised. We will come back to the Deputies about their queries by way of letter.

I thank the Chairman of the Committee. This debate has been a learning experience for all of us. I thank the Deputies for their contributions. In contrast with other Departments, particularly the Department of Justice, with which I have had a most frustrating relationship both in and out of office, the Department of Enterprise is open to all Deputies. On behalf of my two colleagues and the Secretary of the Department, I assure Deputies that they will have access to information if they want it. This will be made clear to all of the officials directly involved.

Chairman

That concludes our consideration of the Estimates for the Department of Enterprise and Employment. I thank the Minister, the Minister of State, their officials, the staff of the House and the Members of the Committee. The Committee will meet next Tuesday to resume its discussion on the Estimates for the Department of Transport, Energy and Communications.

The Select Committee adjourned at 3.20 p.m.