Loans perhaps could be applied in respect to working capital. Grants usually are only for fixed capital. I should have added that those special loans which will be made available will not only bear interest after the seventh year but will also qualify for the payment to the Government of one-half the rate of the dividend payable by the company above 7½ per cent. That means that if there is a dividend of more than 7½ per cent. the interest payable on the loan will be increased by half that amount—that is, by half the rate of dividend above 7½ per cent. For example, if the dividend is 9½ per cent. the rate of interest fixed on the special loans, plus one per cent. will be payable after the seventh year and this will be a means of profit for the Government if the investment continues and at the same time will act as an inducement to the promoter to pay back the loan.
A number of questions were asked about retraining of workers and Deputy Corish wisely said there would not be much point now in embarking on such retraining unless we knew clearly for what purpose and what industries might become redundant. Nevertheless, as the House has been informed, the CIO have this retraining and resettlement question under consideration and the Government as well have set up an inter-Departmental committee whose function is to examine primarily the Common Market provisions for the retraining and resettlement, but they will naturally have regard to whatever changing circumstances will be brought about if the Common Market application is not proceeded with.
That brings me now to another type of grant that will be made available, even though not specifically under this legislation. I refer to the conversion grant which was dealt with in the recent CIO report. If one can envisage an industry in a particular small town, employing the majority of the working population of that town, operating a type of industry which cannot survive in free trading conditions, then there would be an obvious necessity for a complete switch-over of the production of that firm. That firm would naturally be entitled to receive special consideration. This will be available by way of conversion grant, even though it is not referred to as such in the measures before the House. These grants would inevitably take into account the cost of retraining the workers for any new process that industry would undertake.
Having referred to this conversion grant proposal of the CIO, I should like to take this opportunity to pay tribute to the members of that Committee. As the House knows, the Committee is composed of members of the Civil Service, representatives of the Irish Congress of Trade Unions and representatives of the Federation of Irish Industries. They have produced their report expeditiously, very concisely and very clearly. They have been most objective and certainly should prove most helpful to any industries that have been reviewed.
The most recent report—the one published a couple of days ago, the Interim Report on State Aid to be granted to Industry to adapt itself to meet Common Market Conditions— puts forward a number of very useful suggestions. I should like to say here that An Foras Tionscal has been considering for a long time some of the suggestions that have been put forward in this report. For example, there is the suggestion of development centres. That is not new and I do not think the CIO represented it is portraying any novel thinking on their part. It is something that has been talked about for a number of years, and specifically, by An Foras Tionscal. I am sure Deputies will remember an address given some months ago, long before this report came out, by Dr. Beddy in a paper to the Irish Management Institute, on the possibility of developing such a centre.
As I said in my opening statement, the Government have not immediately accepted the recommendation of the CIO in that respect but have referred it for examination in connection with the publication of the next five-year economic development programme. I do not want to comment on it at this stage. Incidentally, Deputy Cosgrave mentioned that a suggestion along these lines was contained also in the Grey Book, Economic Development. I do not know if Deputy Cosgrave favours the immediate setting up of these development centres, but I am sure he will appreciate that there are a great many difficulties connected with such a decision. For example, the obvious place to set up a development centre would be where all the services are available, where fuel is in abundance, and power likewise, and where there are good port and other facilities.
I do not think any Deputies, no matter what constituency they represent, would suggest the setting up of a number of huge colossi of industrial centres to the exclusion of the rest of the country, even if that had certain economic advantages. We have social problems as well, and I do not think any part of the country, even Dublin, could be held to be over-industrialised. The selection, therefore, of these development centres would be a matter of some difficulty for whatever group would have to decide on them. Nevertheless, as I have said, it is something that is being considered in connection with the economic development expansion programme.
Deputy Esmonde asked about the membership of An Foras Tionscal. I told him there were three civil servants and two non-civil servants. Again, I should like to take this opportunity to pay tribute to the members of that body. They have discharged very onerous functions in making substantial grants from State resources available for new industrial development. I can assure the House that none of these men is being paid very highly for his services. The annual fee is a very small one and, in some cases, taking income tax into account, it may perhaps be a negligible one. They have, however, applied themselves not only to the problem of making grants available but also to a general review from time to time, as conditions change, of our industrial grants legislation. They have made a number of recommendations to me from time to time. Again, many of these recommendations coincide with matters that were considered by the CIO.
I have stated that the specific recommendations on grants for industry made by that committee have been accepted, with two exceptions, by the Government, and are already embodied in legislation or are capable of being implemented either under existing legislation or by administrative action. The first exception is the recommendation for the complete abolition of the differential in maximum grants between the undeveloped areas and the rest of the country. The Government decided that the time was not yet ripe for that abolition. The second exception is the reference of the development centre idea to review for the purposes of the economic expansion programme. Other than those, all the recommendations have been adopted, as in the case of the previous reports, and are either being implemented or are capable of implementation.
I should have mentioned in respect of Foras Tionscal that the grants cum loan scheme, which I think was envisaged in the CIO report, was previously being considered over a long period. Eventually, the scheme which has now emerged was adopted, mainly on the advice of Dr. Beddy, the Chairman of Foras Tionscal and the Industrial Credit Company.
I think, with the experience of a man like Dr. Beddy at the disposal of the Government, it was obvious that the suggestions he would make in this respect would receive close attention and, in so far as possible, be implemented. I am glad it was possible to implement the suggestions made by Dr. Beddy in respect of this grants cum loans scheme for capital intensive projects. Incidentally, these would not operate in the case of smaller grants nor would the loans of the special finance company apply.
