I move:
That a supplementary sum not exceeding £2,822,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1969, for the Salaries and Expenses of the Office of the Minister for Industry and Commerce including certain Services administered by that Office, and for payment of sundry Grants-in-Aid.
This Supplementary Estimate is necessary to meet excess expenditure on certain subheads of the Vote which could not be foreseen when the original estimates were framed.
The total amount provided under the subhead for An Foras Tionscal in the Vote for my Department for the year 1968-69 was £8 million. Up to 31st January, 1969, a total of £7,630,000 had been expended under this subhead. A recent review by An Foras Tionscal indicates that a further expenditure of £2,600,000 on approved projects must be anticipated during the remainder of this financial year, which will involve an excess of about £2.25 million in expenditure during the full financial year over the current provision in the subhead.
The anticipated increase in expenditure under the subhead is attributable in the first place to the inherent difficulties in the framing of estimates of annual expenditure by An Foras Tionscal, to which attention has frequently been drawn. These difficulties derive from various circumstances, including the uncertainty in the timing of claims for payment of grants, and the number and size of projects which may be approved for grants in any particular period. In the present year, progress with the establishment of a number of large new industries has proceeded at an accelerated rate, resulting in an increase in the financial commitments which must now be discharged. This has added to the difficulties facing An Foras Tionscal in keeping within the provision made in the Budget for this year.
I am in agreement with the Board of An Foras Tionscal that the further sum of £2.25 million will be required by them to perform their functions during the current financial year.
The proposed supplementary provision of £460,000 for Córas Tráchtála is required partly to cover expenditure in excess of the board's grant-in-aid incurred in 1967-68 and partly to cover the additional requirements of the board in the current financial year.
The accounts of Córas Tráchtála for 1967-68 show that at 31st March, 1968, there was an excess of expenditure over income. The excess by Córas Tráchtála, on a purely cash accounting basis, was £87,000 and in the case of Kilkenny Design Workshops £30,000. The extra expenditure was in the main due to greatly increased export activity resulting in greater demand for the services and facilities provided by Córas Tráchtála and to greater capital expenditure on building and reconstruction at the workshops in Kilkenny. A total of £117,000 is, therefore, included in the Supplementary Estimate to cover this extra expenditure by Córas Tráchtála and its subsidiary Kilkenny Design Workshops Ltd.
It has been made clear to Córas Tráchtála that bodies financed from voted moneys must ensure that their net expenditure in each year does not exceed the amount voted by Dáil Éireann. A new system of budgetary control has been instituted both in Córas Tráchtála and in Kilkenny Design Workshops, so that expenditure may be kept under regular review and spending above the amount voted should not occur again.
The Grant-in-Aid provision for Córas Tráchtála for the current financial year was fixed at £800,000 on the basis of estimates, which were, of course, prepared about 15 months ago. The increased activity in 1967-68 has continued into this year and, as a result, the board's requirements for the current year are now estimated at £1,143,000, representing an increase of £343,000.
Córas Tráchtála provides a wide range of aids and services to exporters. It is estimated that 80 per cent of exporting firms call regularly on Córas Tráchtála for services of one kind or another. The number of exporting firms has grown from 600 in 1965 to 900 in the present year, and the growth in industrial exports in recent years has been equally remarkable. These increased from about £128 million in 1966 to £148 million in 1967 and to an estimated £177 million in 1968. The increased activity by exporters reflected in these figures has necessarily been accompanied by an increased demand for the services of Córas Tráchtála and hence the increased expenditure which has made it necessary to bring this Supplementary Estimate before the Dáil.
There is also provision for the additional measures recently announced to encourage market diversification. The policy of market diversification which has been pursued during the past decade has already resulted in the development of substantial exports to markets other than Britain. The measure of the progress achieved in building up our trade with Continental Europe, North America and more distant markets is that total exports to these areas reached an estimated £125 million in 1968 as compared with less than a quarter of that amount ten years ago. The object of the new measures is to accelerate this rate of expansion in third markets and to counter the possibility of over-dependence on the British market.
The proposed supplementary provision of £460,000 will put the board's finances in order and will provide the board with the necessary resources to meet its current requirements.
Under the export promotion legislation, under which Córas Tráchtála was established, there is a limit on the total amount of non-repayable grants which may be made to Córas Tráchtála. The existing statutory limit of £4.5 million will require to be raised. The balance at present uncommitted from the statutory limit is £312,115 which is not sufficient to cover the proposed suppletary provision. A Bill to raise the statutory limit was passed by the Dáil on the 20th February last.
An additional £38,200 is required by the Institute for Industrial Research and Standards to enable it to meet its commitments in the current financial year. The excess is composed of £28,300 to cover increases in salaries and wages arising from the 11th round of wage increases and a loan of £9,900 which was made by the Institute, with my approval, under section 43 of the Industrial Research and Standards Act, 1961, to enable a company to engage in the development of a promising new product for use primarily in the food processing field. These additional requirements could not have been foreseen by the Institute when their original estimate was being drawn up.
The excess of £60,000 on technical assistance is due to grants for two projects for which no provision was made in the original estimate. Grants of £102,000 were paid during the year in respect of development in the coal industry and a further sum of £3,000 will mature for payment before the close of the financial year bringing total payments to £105,000 as compared with a provision of £33,000 in the original estimate — an excess of £72,000. During the year I received a request from the Federation of Irish Industries for funds to enable its services to industry in 1968 to be maintained and the benefits of the services provided for the past three years to be realised and I approved of a grant of £17,740. These two projects account for an excess of approximately £90,000. Taking into account anticipated savings on other technical assistance projects an excess of £60,000 on subhead L will arise.
The provision of £80,000 for the Irish National Productivity Committee did not take into account any major adjustment in salaries and wages. The sum of £4,500 included in the Supplementary Estimate is to provide for the application of the nine per cent increase to the staff of the committee.
The British Temporary Charge on Imports which was imposed in October, 1964, terminated on 30th November, 1966. It will be recalled that a grant scheme was introduced to offset the effect of the levy on exporters. It has been necessary to make some payments under the scheme during the current financial year because some exporters experienced exceptional difficulty in obtaining the necessary customs and other documentation to support their application for grants.
Because it was not possible to forecast with any degree of reasonable accuracy what expenditure would be necessary during the year a token provision of £10 was made in the 1968-69 Estimate under the subhead. It has proved necessary to make grant payments amounting to £66,000 so far this year and it is estimated that a total sum of £90,000 will be necessary to clear all outstanding claims and to wind up the scheme by the end of March 1969. Accordingly, supplementary provision amounting to £89,990 is necessary in the current financial year.
As Deputies will recall I announced on 3rd May, 1968, that it had been decided that the Industrial Development Authority should establish regional offices in different parts of the country. I explained that the number and location of these offices and the form of relationship between them and local organisations would await consideration of the report of Colin Buchanan and Partners on Regional Development but that it would be practicable to advance somewhat faster in relation to the Limerick/Clare/North Tipperary region. That region had already been the subject of a report by Nathaniel Lichfield and Partners and an interim regional organisation had been established representing local bodies including the Shannon Free Airport Development Company and the IDA. It was the Government's view that it would be clearly beneficial to make use of the successful experience of the Shannon Free Airport Development Company within this region as a whole. Accordingly, it has been decided that the company would function as an organ of industrial development within this region and would be responsible to me as Minister for Industry and Commerce for industrial estate development and possibly the building of advance factories within the region.
The company's functions were accordingly extended to include the local activities of industrial promotion and development in the Limerick/Clare/ North Tipperary region in association with the IDA. This decision was taken in the light of several considerations. First, the Limerick/Clare/North Tipperary region is in a key position in the West of Ireland. Growth centred here would make a wide area in the west and south more attractive to industry and would ease the pressing problems of unemployment and emigration there. Secondly, the region is a homogeneous one which, as I have said, has already been clearly studied for the Government in the Lichfield Report. Outline planning proposals are available which will ensure that action taken in any part of the region will fit properly into a plan for overall growth. It has, therefore, been possible to commence work immediately Thirdly, there is a good industrial base, particularly at Shannon, from which to build. In the Shannon Free Airport Development Company there is the available experience which has already proved its effectiveness. We are thus working on the sound business principles of building on strength.
The decisions I have referred to required the transfer to me of the Ministerial functions under the Shannon Free Airport Development Company Acts except those relating to tourism and aviation. This transfer was effected by the Shannon Free Airport Development Company (Transfer of Departmental Administration and Ministerial Functions) Order, 1968.
Provision was made to the extent of £300,000 in subhead K.1. of the Transport and Power Vote for 1968-69 in respect of grant-in-aid for the Shannon Free Airport Development Company to meet its running expenses. This provision is in respect only of the company's operations prior to the extension of its functions and it is now necessary to make provision for the additional expenditure on running expenses which the company has to incur in respect of its new functions in the Limerick/Clare/North Tipperary region in 1968-69. The additional amount required is estimated at £23,000.
As the House will now be aware, mining activities at Castlecomer Collieries ceased on 31st January, 1969. This was an unfortunate and disappointing development, but the decision to close the mine was taken by the mining company when informed of the Government's decision that further State financial assistance for mining operations would not be forthcoming. I can assure the House that this decision by the Government was taken only after the most careful consideration of the report of an inter-Departmental Committee which had been set up to examine the future prospects for the collieries.
The State had been subsidising the operation at the collieries since 1963, and even at this stage, I would have had no hesitation in asking the House for more money if there was any hope or indication that the mining work would become self-supporting at any point. Not alone was there no indication of viable working, but in fact the position was steadily worsening and losses on the mine were of the order of £1,500/2,000 each week. The quantities of coal being extracted weekly and the percentage of good quality coal were also declining. The board of the company had expressed the opinion as far back as in 1965, that the mine had no economic future, and in fact operations ceased for some time that year. Because, however, of the social implications involved, the Government decided to accept the recommendations in a technical report which had been commissioned by the Irish Transport and General Workers Union, and mining operations were resumed later that year with State assistance. This decision by the Government was evidence of the wish on their part that the work should not be abandoned until every possible opportunity had been given to make the mine pay.
There has naturally been considerable publicity about the closure of the mine in the Press and on television, and I would like to guard against any misunderstanding about the Government's aid and about the position that had been reached. The trial work that was recommended to be done by the consultant commissioned by the trade union was, in fact, done with State financial assistance. The main recommendation of the union's consultant was for the company to undertake an exploratory new drivage, for a limited period of time and at a limited cost. Both the time and the cost were substantially exceeded, but State assistance was continued up to last January; this assistance covered the cost of the drivage work and the losses sustained while it was being done. The board of the company themselves have repeatedly said that they could see no economic future for the mine, and there can be no doubt that the State assistance provided gave every reasonable opportunity of testing the prospect of viability.
There are two points on which I would specially like to comment as they have been given prominence in the Press and were mentioned by Deputies last month in the House during question time. These are, that a very high quality coal is being lost through the closure of the mine and that financial aid was not given for better equipment to work it.
It needs to be brought home, because this is the governing factor which led to the mine's closure, that the bulk of its produce was no longer marketable. The percentage of the mine's produce that came in the form of readily saleable nuts and the like, was, by weight, a small one. More than half of the produce, by weight, came in the form of duff, and for a long time this had been of such low quality that it was purchased by the sole user only on exhortation from my Department. The market for this duff eventually ceased so that more than half of the future produce of the mine would have had to be discarded and as a result, financial losses on operations would have increased substantially. These facts are well known to those connected with the mine.
With regard to suggestions that the State money that had been provided was not properly allocated to the company to enable them to buy better equipment, I have already said that when the mine was reopened in 1965, money was provided to do the job that the trade union's consultant recommended. This was essentially a job of excavation, and the main costs which the consultant foresaw were the wages of the workers doing this job, as well as the general losses being incurred while this was taking place. There was not, to my knowledge, any specific request from the company for the advance of money, outside of what was being provided to meet the company's losses, for essential plant or machinery to carry through this trial of making the mine viable.
Subsequent to the closure of the mine in 1965, it was decided to increase the rate of new industry grants for the Castlecomer area from 50 per cent to 66? per cent in an effort to provide alternative employment for the mine workers. In other words, Castlecomer was put on the same footing as the undeveloped areas for industrial grants purposes, and this position still obtains. I am happy to say that as a result of this special concession for grants, and of the promotional activities of the Industrial Development Authority, five new industrial projects are scheduled for the Castlecomer area which will provide employment for about 200 men and 40 women. Apart from these industrial projects, I understand that another colliery in the area is seeking a substantial number of experienced mine workers and that housing accommodation is available at this colliery if required. The Department of Labour Resettlement Allowance Scheme could be of assistance to Castlecomer miners who would transfer to this colliery.
The total Exchequer advances made to Castlecomer Collieries in the current financial year amount to £70,000. In addition, provision will require to be made for a payment of a sum of £10,000 which was advanced by the National Bank to the company some time ago to meet a wage bill, on the understanding of recoupment from the State. This brings the total of State assistance for the collieries to £260,480.
The implementation of the programme for the expansion and modernisation of the Geological Survey is proceeding. Some additional staff has already been recruited and further staff is expected to be recruited in the near future. This recruitment is the first phase of the expansion which includes the provision of alternative office and laboratory accommodation and modern equipment. While a decision as to a final location for the reorganised survey has not yet been taken, the recruitment of the additional staff has made it necessary to order urgently laboratory and field equipment to the value of £15,400 for which provision was not made in the original Estimate for this Department for 1968-69.
The provision for travelling and incidental expenses in the original estimate was £21,000. The excess mainly arises from the continued intensification of the campaign for industrial promotion at home and abroad by officers of my Department and the Industrial Development Authority. Further, the increase in the grant approvals by An Foras Tionscal already referred to has involved a considerable increase in travelling by the board's technical advisers both architects and engineers. Provision has also to be made under this subhead for the proposed changeover to the metric system, which involves expenditure on the provision of new standards of length, weight and volume.
The total of the increased expenditure involved under all these heads amounts to £3,031,000 but this will be offset by savings of £209,000. These savings were made up of £29,000 on subhead M2 — National Productivity Year — due to the decision not to launch the campaign until November, 1968 and £180,000 on subhead P — Shipbuilding Subsidy. Accordingly, the net amount required is £2,822,000.
I recommend the Supplementary Estimate to the House.