Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Tuesday, 25 Mar 1969

Vol. 239 No. 6

Committee on Finance. - Shipping Investment Grants Bill, 1968: Second Stage.

I move: "That the Bill be now read a Second Time".

The purpose of this Bill is to provide a statutory basis for the scheme of investment grants for ships which was announced some time ago. The Bill will enable grants to be paid to Irish shipowners in respect of approved capital expenditure incurred on either the provision of new ships or the conversion of existing ships. The level of grant will be up to 25 per cent of the expenditure eligible for grant purposes.

The Bill is designed to help Irish shipowners in the present highly-competitive conditions in the shipping industry. Their main foreign competitors enjoy State aid either by way of outright grants or favourable financing terms for capital investment. For example, Irish shipowners are in direct competition with British shipowners, both on the cross-Channel and deep sea trades and here the lack of State assistance for Irish shipowners assumed more immediate importance with the operation from January, 1966, of a British scheme of investment grants which provides grants for new ships or the conversion of existing ships. Accordingly Irish shipowners sought the introduction of a corresponding scheme of State assistance. The present measure provides for assistance to Irish shipowners on a similar scale to that available to British shipowners.

The Bill covers Irish-owned ships above a certain size operating in the coastal, cross-Channel and foreign trades in competition with foreign ships and engaged on normal shipping operations. Fishing vessels, for which special grants and other financing facilities are available through An Bord Iascaigh Mhara, and tugs, dredgers and other vessels not employed in normal shipping operations, are excluded from the scope of the Bill.

As an island nation we are almost totally dependent on sea transport both for imports and exports and the importance to the general economy of an up-to-date and expanding Irish-owned merchant fleet is obvious. Our economic well-being depends in large measure on the shipping facilities available to us and the national interest demands that as much as possible of the trade to and from this country should be carried in Irish-owned vessels. If some action were not taken now to put Irish shipowners in a comparable position as regards State aid to that of their main competitors, the inevitable result would be that the Irish fleet would contract.

At the very time when tremendous technological advances in the design and construction of vessels are taking place there would be no encouragement to Irish shipowners to take advantage of these various developments which are geared to achieve lower operating costs. The shipping industry also provides an essential service in its own right. While earning considerable amounts of foreign exchange it preserves within the economy a very large part of our shipping transport costs. Again, a healthy, thriving shipping industry has a high strategic value in the event of an interruption of international shipping in periods of world crisis.

Sea transport in all its aspects is undergoing a revolution directed at modernising and rationalising the shipping industry and thereby reducing costs. This whole process of modernisation, aimed as it is at reducing unit costs, will, of course, help our export industries and enhance their competitiveness. Modernisation inevitably demands increased investment in new and more efficient ships and equipment. The low level of profitability experienced by shipping companies here and throughout the world for some years past has reduced the resources available for re-investment. Because of the absence of adequate profits, replacement of ageing vessels has had to be deferred. Unfortunately, this deferment undermined the competitive position of the companies concerned because the more modern replacement vessels are much more economic in operation.

The need for modernisation is exemplified by the case of the B and I company which is replacing its uneconomic passenger vessels by new car-ferry vessels and converting its conventional cargo services to unit load operation. The increasing trend towards bulk carriers and container ships in the deepsea trade has obliged Irish Shipping Ltd. to consider the re-organisation of its fleet. The company is disposing of a number of its older and less economic vessels and they recently brought into service a 34,000-ton deadweight bulk carrier. In addition, they have on order two 29,000-ton deadweight bulk carriers one of which will be built at Verolme Cork Dockyard.

The technological and other developments referred to are pressing even more heavily on the resources of the smaller companies. It is most important that these smaller companies should be in a position to modernise their fleets and compete more effectively in an industry so largely regulated by the economies of scale. I feel sure that the assistance provided for in this Bill will be particularly advantageous to the smaller Irish shipping companies as a supplement to their investment resources. Because of their inability to finance new tonnage some Irish owners in recent years have sold ships without buying replacements and have been forced to charter foreign vessels. The availability of a grant of 25 per cent of the capital cost should be a very real incentive to replace worn-out vessels and to modernise and re-equip existing vessels where this is practicable.

Depreciation is a heavy item in the operating cost of a vessel and the payment of a grant would reduce the annual depreciation charge by one quarter. Technological advances in ship construction are such that it is now necessary to provide for the full write-off of the capital cost of a vessel over a much shorter period than heretofore and the relief afforded by a grant should go a long way towards offsetting the shorter economic life of a new vessel. At present the only concession enjoyed by shipowners which might assist them in financing fleet investment is the shipping investment allowance of 40 per cent of the capital cost of a new ship which is available under the income tax code. This allowance is available for offset against profits and is in addition to the normal wear and tear allowance so that over the full life of a ship allowances of 140 per cent of the ship's cost can be offset against profits. In practice, however, this concession has been of little practical value to shipowners because the pre-tax profits earned by them have been too low.

With the introduction of the scheme of investment grants for ships it is proposed to discontinue the special shipping investment allowance of 40 per cent in a case where a grant is paid. This change involves legislative action which will be taken by the Minister for Finance at the next suitable opportunity. Payment of a grant will provide a direct financial benefit for the shipowner and in planning the purchase of a new vessel or the conversion of an existing one he will be able to take account of the grant and to assess precisely the effect of the grant in reducing the operating costs of the vessel and in improving the return on his own investment. Up to this Irish shipowners, unlike their counterparts in other sectors of industry, have not had available to them any direct State assistance. This has been a severe handicap in such a capital-intensive industry.

It will be noted that grants will not be payable in respect of the acquisition of second-hand ships. The object of the scheme is to achieve modernisation of the fleet and this can be done only by the introduction of new ships incorporating the latest methods and equipment. The whole object would be defeated by the purchase of second-hand out-dated vessels. I should mention that with the technological developments now taking place in ship construction existing vessels are becoming obsolete more rapidly than heretofore.

The terms of the Bill are largely self-explanatory and call for little comment by way of explanation. The main provision is that a grant of up to 25 per cent of the capital expenditure involved may, under certain conditions, be paid in respect of the acquisition of a new ship or the conversion of an existing ship. Conversion might take the form of, for example, adaptation for carrying containers or change-over from dry cargo to tanker. Significant additions of a capital nature will also be eligible for a grant, for example, replacement of the main propelling machinery or main boilers. Capital expenditure on containers will also, subject to certain conditions, be eligible for grant payment, provided that the containers are related to the purchase or conversion of a ship in respect of which a grant has been approved.

In accordance with section 5 the scheme will be retrospective to 1st April, 1967. This retrospection is designed to offset to some degree the disadvantageous position of Irish shipowners vis-á-vis their British competitors who have benefited from a similar scheme since January, 1966. There is also provision for appropriate penalties for offences under the Bill. These provisions are normal in a Bill of this type. Section 12 (2) provides for the making of an Order to bring the Bill into operation. This provision is necessary because some time will be required following the enactment of this Bill to enable arrangements for the administration of the scheme of grants to be settled.

The cost of the scheme will depend on the response received from the shipowners. In the current year a sum of £440,000 has been provided in the Vote for my Department but it is expected that expenditure on the scheme in subsequent years will run at a much higher level.

The Bill does not confine the payment of grant to cases where the vessel is built or the work is done in this country. Such a restriction would be impracticable because, by reason of the delivery dates required or inability to handle the work, it might not be possible for Irish shipyards to undertake a particular contract. However, I am most anxious that the scheme should benefit the ship-building industry here and before approval for the payment of a grant for a ship to be built abroad is given I will require to be satisfied that there are good and sufficient reasons why the work cannot be done here.

I am confident that the scheme will result in an increase in the total tonnage on the Irish Register, and will provide a valuable incentive to Irish shipowners to expand and modernise their fleets. Inquiries made by them of my Department indicate that they are eager to avail of the opportunity which is now being presented to them. The scheme should also result in a more efficient shipping service, with lower unit costs, being available. This should prove particularly beneficial to our export trade on which our economy so heavily depends. Another valuable effect of the new scheme is that it should lead to additional work for the Irish shipbuilding industry. In fact, a car-ferry for the B and I company which will be eligible for a grant is now nearing completion at Verolme Cork Dockyard and work has commenced at that yard on a bulk carrier for Irish Shipping Ltd.

I recommend the Bill to the House.

The main purpose of this Bill appears to be to give to any resident of the State or any body corporate of the State a grant of 25 per cent of the capital cost of a ship with not less than 100 tons gross tonnage. This is given to shipowners who propose to carry on a business. We have no definition whatsoever of what "business" means. It could be that some enterprising person in the city of Dublin might wish to procure a pleasure boat for tours of Dublin Bay and we are going to make him a present of 25 per cent of the capital cost of such a ship.

I would like to know why the Minister has inserted section 5 into the Bill. He says a grant might be made towards approved capital expenditure incurred on or after the 1st day of April, 1967. Has the Minister some specific project in mind? Is there some shipowner who has acquired a ship and who now seeks capital by way of a grant to complete the purchase of it? Why is it retrospective to the 1st April, 1967? The Minister has not told us the number of companies carrying on business here. We know there is Irish Shipping, the Limerick Steamship Company and the Wexford Steamship Company. I do not know of any other companies carrying on business in the State. There may be others but I do not know of them. If these companies have been carrying on business here—and I presume they carried on business for the purpose of making a profit—they should be able to look after their own affairs.

Could the Minister give us some information or tell us whether new companies are proposed to be set up here for the purpose of carrying on shipping business or trade with either Great Britain or the continent? We would like to know something about it. Here we are asked in this Bill merely to approve of a grant of 25 per cent of the capital cost of any ship whose gross tonnage exceeds 100 tons, which ship will be used for a business which is undefined. We are all aware that many ships owned by Irish Shipping are on charter throughout the world because there is no business for them here. Many of them are on charter for over two years. Perhaps we wish to build up—and we should as a maritime country build up—our own shipping industry in the State. We have acquired the B and I. I take it that the B and I will not qualify for a grant under this particular Bill?

They do, yes.

I thought we were only part owners of the B and I. This is, perhaps, the real reason for the Bill. We are now going to subsidise the B and I to the extent of 25 per cent of the capital of any ship which they wish to purchase.

One of the main competitors of the B and I is the British Railways and they get 25 per cent for the car ferry ships. In order for the B and I to be competitive we have to give a similar grant.

We were told that the B and I was going to be a profit-making concern and that there would not be the necessity to subsidise it. That was one of the reasons given why we should purchase this particular shipping company.

I certainly would like to see more shipping companies in the State. So far as we are concerned north of the River Boyne and north of Limerick, we have not an Irish ship trading into one of our ports. If we have charter reversal we have to depend on a Dutch tramp to do it or some other ship which we have to charter from Britain. It may be for the benefit of ports like Dublin, Limerick and Cork that this Bill is being enacted. If that is so and if it will improve cross-Channel transport we welcome it, but we hope that other ports throughout the State are not going to suffer and that some provision will be made by these shipping companies to ensure that business is carried on not only in the major southern and eastern ports but at the western and north-western ports as well.

Section 6 of the Bill attaches certain conditions to the grants. It prohibits the charter of a ship in some circumstances. We all know that Irish Shipping have to charter to make their ships pay. Is this to prohibit the B and I from chartering their ships also? It is something that should be looked into. Is this going to prohibit any shipping companies who may require 25 per cent under this particular Bill from chartering their ships? While Bord Fáilte do not subsidise ships to the extent of 100 tons gross tonnage they do subsidise them for the carriage of passengers to the extent of 50 per cent. Many hoteliers throughout the country are now having passenger boats built, admittedly under 100 tons gross tonnage, and acquiring 50 per cent of a free grant for these ships. These boats are competing against privately-owned vessels for which there was no subsidy whatever provided by the State. That is something we might mention on the Minister's Estimate later on but I do not think it is appropriate to the present Bill.

I am puzzled about the whole thing. I do not know near as much about shipping as Deputy P. O'Donnell but, so far as I am aware, most of the Irish vessels appear to be unable to find employment on the Irish coast. Many of them are chartered abroad and some of them are tramp steamers around the coast of America or even as far away as Australia. I wonder if this is simply and solely a Bill for the purpose of assisting, by way of another subsidy, the B and I company? If so, the Minister should say so straight out and then we will know where we stand. Not alone does the Minister go back to 1st April, 1967, but, in fact, under this Bill a grant may be given for approved capital expenditure incurred on or after 1st April, 1967, and a grant may be given towards approved capital expenditure incurred before that date in so far as it consists of any sum paid after that date. The expenditure could be brought over a number of years, for one reason or another, and the subsidy would still be apparently available.

I agree that it would be very nice if we had a shipping fleet of our own operating here and giving good service. However, I live beside the port of Drogheda and I must say that of all the tramp steamers that come and go there from time to time, only a small percentage are Irish vessels. If this was intended, as I at first thought it might have been, for the purpose of giving employment in Irish ship-building ports and if it was laid down as a condition for the grant that the ship must be constructed in Ireland, then I could see great merit in it. The Minister should make sure that where it is possible to do so, a ship should be constructed in Ireland.

I am all in favour of helping people who are trying to improve facilities here and, while the modernisation of all methods of transport should be encouraged, there is something in this Bill which is not being disclosed and I think it would be just as well if we were told what this hidden thing is. I am not accusing the Minister of being devious but it does appear as if the statement he has given us omits far more than it reveals.

I would suggest to the Minister that he tie up the loose ends of this Bill before it becomes legislation. He knows what happened with the B and I, for instance, when the State bought it over. The first thing they did was to get rid of a number of the vessels because, they said, they were too old and they then employed German vessels with German crews while a number of Irish crews were walking around the streets, some of them in the village of Mornington near me. There is no point in putting down something here and saving that it is for the purpose of being able to buy Irish ships which will operate in Irish waters if this is not the intention. I am not happy that the whole thing is as open as it should be.

If the intention in introducing this Bill is to give substantially more to the B and I—a company which, in fact, changed its ships and procured new ones—the Minister would get far more sympathy from the House in introducing this Bill which appears to me to be a little clouded.

As I see it, there are two kinds of shipping in the world— the free shipping that exists for profit and which goes anywhere and the shipping that is orientated towards the needs of a particular country.

I was very impressed about a month ago when the Indian Minister for Industry and Commerce addressed the economic committee there and, when questioned by people from Holland, Germany and other places who said that India was now taking away the business that it had been giving to their ships, he said that it was necessary that there should be some discipline in shipping towards the benefit of the country concerned, the point being that while it might not be the most profitable operation to run certain services, at the same time, these services might be very much more important for the country than the actual profit involved. He said that for that reason one might need to have discipline in the shipping services provided. The only way in which that could be done in a free profit situation is by having ships of one's own.

We must look at the whole position in the light of the fact that the largest shipping fleet in the world is neither Great Britain's nor America's but Liberia's. This is a flag of convenience just to pay little or no income tax or other taxes meaning that a ship is free to go in or out of any port in any place in the world. That is a private enterprise situation—a situation where the profit of the ship is the be-all and the end-all and the only consideration, but in an island country it is necessary to provide shipping services, whether they be passenger services, car ferry services, goods transport services or anything else. It is necessary that the services be orientated towards the advancement of the country itself. It is absolutely necessary that we in this country develop some sort of merchant fleet of our own.

I charge the Governments of the past 20 years, and this may include a year or two of our own Government, with not orientating our shipping towards the good of our people and that the ships which we bought with good Irish money for Irish Shipping Limited are operating all over the world for profit as tramp steamers. This was not what the ordinary branch member of my political organisation or what the ordinary member of Deputy Corish's organisation or of the Minister's organisation understood about what we were trying to do in Irish shipping.

I agree that there was an outside factor and that it was necessary during the war that we should have shipping services that could bring the necessaries of life to us but when that need was filled we failed abysmally to produce coaster fleets that would provide the services that we required even, if necessary, at a loss because the loss incurred could have meant a colossal benefit to our people who were producing the goods.

It is only now that we are providing a car ferry service which enables the industrial workers of England to drive their small cars on to a ferry and arrive here as they would drive on to a ferry in England and arrive on the Continent. We orientated ourselves towards larger tramp vessels—I am not using the word "tramp" in any derogatory way. Anyone interested in shipping knows that a tramp steamer is a boat with no set route, a boat available for charter to go anywhere it is fit to go. I mean nothing derogatory when I use the term "tramp steamer".

When that necessity of providing the tea and the various commodities we needed during the war was fulfilled, these boats sailed around the world, 90 per cent of their time taking no goods to Ireland and taking no goods from Ireland but acting merely in a private enterprise way just as if they had been flying the Liberian flag of convenience instead of the Tricolour. Flying the flag is a bit like wrapping the green flag round you on an industrial or commercial job. Over the years, we should have organised our shipping towards the export of our goods, towards the service that would be available for that export. We should have organised it, further, towards making it easier to bring tourists here during the summer months. This is what we should have been doing. I admit we are starting on it now but we are years late and the blame should fall on the Government for that reason. Therefore, I would regard this Bill as an instrument that can be used for good. It is also an instrument with which we can muff the job, just as we did in the past when we had these huge tramp steamers plying all over the world but not to and from Ireland.

I welcome certain restrictive sections of this Bill. I welcome the fact that the grant is available only to State recipients and to bodies corporate. I feel that this is a Bill which would require some considerable work on Committee Stage. I should be glad if the Minister would tell me how a body corporate can be designated entirely Irish, or not so. As I see it, a company that has been formed is a company. I just do not understand how one can identify and designate the capital therein of a body corporate. If one names the people, one finds oneself in the same position as was described by Deputy Sweetman and myself here when Fine Gael moved a Bill quite recently in relation to a company law where you had the system of alternate directors. In the body corporate, it appears to me as if the money therein might not be Irish money. There is, again, indeed, the consideration that perhaps it is a good thing to get money from outside so long as we can control the activities of the ships in which we are really investing, in an irrecoverable way, 25 per cent of the cost. That is the clear situation, namely, that we are investing 25 per cent of the cost with no hope of interest and no hope of recovery. We are giving a grant. We are being far more restrictive in this Bill than if we gave a re-equipment grant to an industry on dry land.

In section 6, we insist that we can impose any condition we like. If there is a place on the east coast or on the coast of another part of Ireland where we could have another car ferry to bring industrial workers from Britain here for a fortnight's holidays at a reasonable rate and if I saw 25 per cent going into a ship to do that job, I should say "Hurrah. Make it 50 per cent if you can". I want to see the condition that we do not put up 25 per cent of the cost of a ship and then find, while it is flying the Tricolour, that it has become a tramp steamer plying for profit from here to the end of the globe. That would be money lost because, in relation to the cost, the employment therein is negligible. Let me use an adjective in that respect that was used on one occasion by the Minister in relation to the temporary car ferry: he said it is "nugatory" which, I understand, is "small beer".

It is quite clear that if we can discipline this, if we can produce a situation whereby these boats will serve the Irish nation, then it is right to give the 25 per cent grant. If we are going to proceed in any other way and if this is just a way, for instance, of giving a 25 per cent subsidy towards the work, then let us say so. If shipping is as described — if British Railways can get 25 per cent of the cost of a vessel if they invest therein in Britain and the B and I are in an unenviable position because of this — then it is right that we should make the change. At the same time, if all the shipbuilders on the Clyde are getting a subsidy then we must defend the position of the workers of Verolme.

We are told that this is something designed to make the Irish merchant fleet serve the Irish nation. I want this done. I agree with the Minister that one of the main charges on shipping is depreciation. Whether or not they would have made something if the owners had had to pay 100 per cent of the cost, so long as they make money when they have to pay only 75 per cent of the cost then let them be bound to the service which they produce as a reason for the ships. Let us have these ships serving the Irish nation just as we had not these ships serving the Irish nation heretofore.

On the Committee Stage, we must look at this Bill on the basis of whether or not it is right that the conditions imposed are entirely conditions that shall be imposed by the Minister. Section 6 sets out that almost any condition shall be imposed — that a grant shall be available and that security shall be taken in the ship so that if conditions are not carried out the Minister would recover entire interest in the ship. There are 64 shares in every ship and you can sell them just as in the case of any company and get a bill of sale just as if a stockbroker were instructed to sell five shares or 500 shares. Therefore, there is no reason why we could not, under section 6, decide that we would take, out of 64 shares in the ship for which we provided the grant, 16 shares. That is something that shipowners might not bite on: it might be too tough. But, in normal maritime law, there is the machinery to create the situation whereby we can insist on the conditions under which we gave the grant being carried out. I think that that condition does not exist at all as far as grants for industry on dry land are concerned but it certainly does exist here and the power can be taken on the Committee Stage, if such is desirable.

I observe also in section 6 that it is desired that, if it is a partnership, it be an Irish partnership or, if it is a partnership between persons and a body corporate, that, again, it be an Irish partnership. I want to know how we can define the nationality of a body corporate and, if we do define it in relation to partnership, I would question how we can define the money and the power behind it and how we can approach it on the basis of control by our very selves.

I am attracted by a scheme whereby, if shares in a ship are not taken, a mortgage on such shares can be taken. There is no reason why such a marine mortgage cannot be got. I would be very thankful if the Minister would indicate whether or not it is the intention, if a grant of 25 per cent is given, that a mortgage will be taken and that if the conditions are not carried out such mortgage shall be recoverable. There was a day in this Dáil not so long ago when we voted a sum of £180,000 for a subsidy for building six ships in the Verolme Dockyard, at £30,000 per ship — and let us be clear about this, it was backed up by the Fine Gael Party and I supported it and would do so again. The Minister may be able to tell me whether I am right or wrong but I think that was about four years ago. Now we are going to do it in a different way.

Again, I have no criticism of that but I do not go as far as Deputy Tully when he demands that we should get the exact situation behind this Bill. That is not possible. In the business way the Minister must make the decisions. There is a difference, as far as I see, in the Bill between the operations of the Minister in regard to these grants and grants on dry land, because the eventual decisions, as far as grants on dry land are concerned, are made by An Foras Tionscal, on the advice of the Industrial Development Authority. These two bodies are to be merged but have not yet been, due to the slowness that seems to characterise the Minister for Industry and Commerce. In this Bill, it appears to me that, after consultation with the Minister for Finance, the Minister for Transport and Power shall make the decision himself.

We are not in a very big way in shipping and the number of decisions will not be great. If the Minister or his successor — whoever he may be — is prepared to take the odium if there is failure and the praise if there is success, I do not see much wrong with that as long as the position is open to criticism both inside and outside the House. I should like to have clarification on how it is intended to proceed under section 6 in relation to security and how we will approach the very serious question of how our money is to be safeguarded, not as money to be repaid. This Bill is giving grants but it is money that is being used for a certain purpose and the purpose I wish to define as money to be used in the service of the nation towards the employment of more workers on the land by providing better services orientated towards the people's advancement at sea.

I observe with interest that there shall be no grant for a fishing vessel and the reason, which is given in the Minister's speech, is that this is looked after by An Bord Iascaigh Mhara. There is no grant either for a tug or a dredger or a vessel of less than 100 tons gross tonnage. This brings to my mind the fact that some newspapers at the weekend indicated that the Minister must have had a rather nostalgic time when he saw the Asgard afloat again. I see that it is to go to Cowes in the summer with trainees and then to Kinsale on the 14th July and to many other places. As a sailing man myself I want to salute the re-launching of the Asgard. The Minister's family has been involved in a page of history in which this boat was also involved. For that reason, I suppose, the Minister's family and the Asgard are inextricably linked together. We needed some sort of boat to give our young sailors something to live up to, something to reach for.

There are many young men in this city who are going on the boat to take a fairly uncomfortable trip, under cramped conditions, I would say, judging from the numbers going on the various cruises being arranged. I take a little credit myself for having over the last ten years repeatedly asked questions at the start of summer and during the summer about what was happening the Asgard when it was under the control of the Minister for Defence. Some Ministers for Defence found me a little bit persistent but, now that the Asgard has been virtually re-built, we are going to get some advancement for our young men— after all we are a maritime nation— I am delighted to see that the Government have spent a little money on this.

I do not think they needed this Bill for that.

They did not. She does not qualify. However, I have abused the Minister so often that perhaps I could be allowed a few minutes to be nice to him for a change. The need for modernisation is mentioned in this Bill. This need is quite apparent if you consider the container service and all the great changes that have taken place, the different ways for unloading grain, for instance, and so on, and also the fact that nowadays it is possible to operate greater tonnage, greater length and shallower draught.

The Minister in his speech said that there is no hope for anybody who is not prepared to modernise and produce a vessel to give the best possible service. I agree with this. This is a Bill which on the Committee Stage should certainly be discussed section by section in great detail, particularly section 6.

First of all, I should like to thank Deputy Donegan for his kind comment in relation to my family and the Asgard and I join with him in expressing real joy that the Asgard is now being used in the way in which it was my mother's last wish it should be used. In relation to the Bill, there is no secret reason for the Bill as suggested by Deputy Tully who, I must say, is generally constructive in his remarks. There are a number of shipping companies, Irish Shipping Ltd., the B and I, the Greenore Steamship Company, Celtic Coasters and the Limerick Steamship Company and some 14 very small companies who each have very few vessels, or only one vessel of over 100 tons gross registration, all of whom can obtain grants provided they fulfil the conditions to be laid down in section 6. The purpose of the grant is to enable Irish shipping companies to compete with British shipping companies and foreign shipping companies.

It would take me too long to give a list of the grants and loans made available by practically every country in Europe for the building of ships or the purchase of ships by shipping companies. They vary from one country to another. In some cases they consist of loans at extremely low rates of interest, the repayment of which is constantly postponed from year to year and they become the equivalent of grants. The main purpose of the Bill is to enable us to deal with the situation which has spread all over Europe and has obtained in the United States for a number of years where there are enormous subsidies for shipping in that very rich country. It would have been better if everybody had agreed from the beginning that there would be no subsidies. Then we would not have to have this Bill. But, as the British are doing this and as we compete with them to a very considerable extent, it is essential to put forward this scheme of grants. I do not think the grants will apply to purely Dublin Bay cruising unless there was some competition and I cannot foresee that. It would not apply in the ordinary way——

The present cruisers are advertised today for sale and I thought they were going to be replaced.

I do not think we would include that type of boat in the grant scheme. That would come up for final consideration later. The shipping business we have is a good business for the country even if Irish Shipping vessels do tramp around the seven seas. The Irish Shipping business earned £5 million in foreign currency and employed some 4,000 people in 1968. That is good business. An Irish ship with an Irish crew, Irish engineers and the Irish flag, eventually home-based, is, in some ways, rather like an Irish industry that does not reside on Irish shores. It can be compared to that.

One of the main difficulties we have always had to face in relation to shipping is that we cannot have protection for the Irish shipping industry because it would never pay us to do so. One has only to look at the list of exports and imports, whence they come and where they go, to see that it would not pay us to insist that certain kinds of Irish goods whether exports or certain kinds of imported raw materials must come in Irish bottoms. We and a great number of small countries, and Great Britain in the Northern European area have always subscribed to the principle that people are entitled to bring in and export goods in any kind of vessel they select. That inevitably means that the shipping business is intensely competitive for our own companies. Irish Shipping does in fact do business for Gouldings Fertilisers and in company with the Manchester liners undertakes part of the transatlantic trade.

There have always been difficulties for Irish Shipping in getting into certain parts of the transatlantic trade because of the cartel system of the liner trade which they have not been able to enter. In any event, Irish Shipping does the maximum amount of business possible for it in connection with Irish trade and for the rest, it tramps. I am glad to say the company has made financial progress recently and it will make a surplus, I hope, something in the region of £300,000, in the current financial year which will be re-invested in new ships or in the development of the company generally.

I was asked why the Bill is retrospective. It is because grants are due to the B and I for some of its car ferry vessels, for part of an Irish shipping vessel that has been ordered and for the conversion of a Greenore Shipping Company vessel. There is nothing strange or unusual in the Bill's retrospective character. As Deputy Donegan and others have said, there has been a literal revolution in the whole of the shipping business because of the coming of container unitised trade. I hope these grants will apply in the main in future to ships built in Ireland. For example, take the case of the B and I which was purchased in July, 1965, on the basis of two independent valuations made by two of the greatest firms of ships valuers in the world, one acting on behalf of Coast Lines and the other acting on behalf of the Government. The difference in the valuations made of the assets of that company was very small, in the neighbourhood, I think, of a mere £200,000 out of a total of £3 million. The bargain was struck. We know that we got the B and I company for the lowest possible price under the circumstances.

The new B and I board, first of all, had to learn their business. They had to assess what would be required in the way of replacement vessels. They were doing this in the middle of a revolution which was taking place in which there was an enormous increase in container traffic and in car ferry traffic and when general vessels carrying cargoes, cattle, passengers and cars were absolutely "out" from the economic point of view. For that reason it was essential for them to enter the car ferry business as quickly as possible. As a result, two out of three vessels had to be built out of this country: the third is being completed in Cork.

Irish Shipping Limited has given good business at all times to the Verolme Dockyard. The Minister for Industry and Commerce is, in fact, in charge of the shipbuilding industry; he has general supervision over it. I would consult him before giving a grant to a vessel that was not to be built in Ireland. I want to make quite clear that this revolution is taking place and that is why the B and I had to act as quickly as possible and why, for example, they had to hire German boats to begin with in order to carry containers while they were making up their minds as to what kind of container ships they would need.

Deputy Donegan asked about section 6. This gives me power to impose conditions to ensure that an asset for which a grant has been made continues to be used as visualised by the conditions of the grant and that if it is not the grant will be repaid in whole or in part. When the Deputy asks how one defines an Irish company I should say that for the purpose of this Bill it is a company which is resident and registered in Ireland. We shall have to take particular care if a foreign company is to have a company established here which would wish to go into the shipping business. It would be my particular care to ensure that in so doing the assets would be preserved here and that the shipping company would at no time hive off the ship to the major company of which it was a subsidiary and that the assets would be used for this country. That would be one of my responsibilities in providing conditions for the payment of the grant.

I see no objection to providing a grant for a ship that may be chartered provided I can be sure that the contract in relation to the charter includes the retention of the ship on the Irish register, flying the Irish flag, employing an Irish crew and that the financial arrangements for the charter are such that good money will come to this country continuously over the period, so that in effect it is rather like an industry doing an export trade with Irishmen employed but on the basis of the ship possibly being chartered to another company for a period of years. So long as we can find enough capital in connection with the total capital budget, with which there are always great difficulties, that kind of business could be very profitable to us. There is no reason why a grant should not be given under section 6 to a company that wanted to charter on that basis.

I agree with Deputy Donegan and other Deputies that while our capital needs are always going to be in excess of supply whoever is Minister for Transport and Power at any time will have to make sure that whatever grants are made available will have the most beneficial effect. We would naturally have to make comparisons between the various demands made on us to ensure that the result would be the best kind of employment for our people and the maximum income for the country in the way of earning foreign exchange or bringing tourists here. I agree with the Deputies who said that care should be exercised in that respect.

Deputy Donegan made some references to the whole history of our shipping policy. It would take too long to go into that here today. That is all in the past. I would remind the Deputy that after the Suez boom in rates there was a great collapse in the freight rates for shipping all over the world, as a result of which Irish shipping suffered. At no time did it require a subsidy from the Government but the position was made very difficult for a period of years. If anybody chooses to make a study of the accounts of British shipping companies, for example, who engage in cargo trade they will find in a very large number of instances if they pay dividends the dividends are paid on something other than the running of the ship, on wharfage, on running a transport business or on property development on shore. That is the result of prolonged very low freight rates over a period. The freight rates rose recently but they declined again for a period. Irish Shipping have been thoroughly re-organised by the present board. Many economies have been made and I think they are at the moment in a very good financial position.

Deputy Donegan asked whether we intended to ask for a shipping mortgage as a condition of giving the grant. I think the answer to that is we intend to provide conditions in connection with the giving of the grant which would make a mortgage unnecessary. Mortgages are not required in the case of grants given for new Irish industry and I do not think there will be any need in the case of ships. Deputies will also notice there is a provision for very heavy fines for people who are found breaking the agreement made with me as Minister in connection with the use of the asset for which the grant is given. I think I should be able to take responsibility direct for giving those grants. It is true, An Foras Tionscal are an independent organisation who provide the grants for industry, but I do not think there will be a large number of applications. In reply to Deputy Donegan, I will always be willing to face the House and to answer Parliamentary Questions on this and I hope I will give a very good account of myself in the manner in which I make those grants available.

Question put and agreed to.
Committee Stage ordered for first sitting day after the Recess.