I move:
That a sum not exceeding £218,475,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1980, for the salaries and expenses of the Office of the Minister for Industry, Commerce and Tourism, including certain services administered by that Office, and for payment of certain subsidies, grants and grants-in-aid.
Deputies are aware that this revised Estimate for my Department takes account of the transfer of certain functions to the Minister for Energy with effect from 22 January 1980 and the transfer to me, with effect from 24 January 1980, of the tourism function from the Minister for Tourism and Transport. The Estimate provides for a total of £218,475,000 for 1980 as compared with a total of £183,938,040 in respect of 1979 had similar periods in that year. This is an overall increase of £34,536,960 on the 1979 figure.
As, in the present year, the provision for expenditure on energy and mining matters is almost completely provided for in the Estimate for the Department of Energy, this will fall to be dealt with by the Minister for Energy. I do not propose to dwell on the limited expenditure incurred for the very short period during which some payments fell to be charged to my Department other than to say that they became due and had to be met in that period.
The principal increases arising in the current year include, in round figures, £26,000,000 extra for capital expenditure by the Industrial Development Authority and an additional £1,250,000 for the administration and general expenses of that organisation. Shannon Free Airport Development Company Limited have an additional £2,000,000 for grants to industrialists; for Bord Fáilte there is an increase of £2,000,000 for development of holiday accommodation, £200,000 more for administration and £100,000 additional for development of supplementary holiday accommodation; Córas Tráchtála have been provided with an additional £1,885,000 for administration and general expenses. The provision for the Institute for Industrial Research and Standards—administration and general expenditure—is up by £820,000; the Industrial Development Authority's grant for industrial housing is up by £300,000; the interest subsidy to Shipping Finance Corporation is increased by £300,000 while the provision for credit financing of capital goods exports is up by £170,000. For the salaries and wages of the staff of my Department there is an extra provision of £950,000.
There are decreases in a few subheads mainly £750,000 in the provision for tourism development works, £370,000 in the grant to the National Film Studios of Ireland Limited and £200,000 in the ship building subsidy.
Taking all the variations mentioned into account, and smaller variations in a few other subheads, and with an anticipated increase in Appropriations-in-Aid of £420,000, the result is a net increase of £34,536,960.
I should perhaps interject here for the purpose of showing the full extent of the additional financial support for tourism this year that, apart from the increases provided in my Department's Estimate, Bord Fáilte also benefit from an additional £450,000 for administration and general expenses under the Transport Estimate which means an overall increase for the year of £650,000 for that particular purpose.
Many opportunities arise in the House for Deputies to discuss various aspects of the business of my Department whether by way of motions or legislation coming before it or through questions on particular matters. I propose, therefore, to avail of this occasion to concentrate on topics of major importance which I regard as needing special mention at this time.
I will deal first with the very important subject of industry and industrial development. The impressive performance of the Industrial Development Authority in 1979 confirms the underlying potential which this country possesses as an attractive and profitable location for manufacturing investment. During the year projects were negotiated which, at full production, are expected to provide more than 34,000 jobs. The fact that nearly 20,000 of these new job commitments are in projects promoted by Irish entrepreneurs or by overseas companies already established here demonstrates the extent to which our industrial base has developed in recent years. It is also encouraging that all the nine regions stand to benefit significantly from the IDA's activities in 1979.
The balanced dispersal of industrial jobs throughout the region is a fundamental part of Government policy. The IDA's small industries and enterprise development programmes have played, and will continue to play, a vital role in this regional development strategy. The enormous impact of these programmes on our smaller towns and villages can best be judged by the fact that small industry projects are now based in over 400 locations in the country. The increasing efforts being made by the IDA in promoting small industries in recent years have brought about results which once again reflect the potential of this sector. Last year more than 8,000 jobs were approved by the IDA in small industrial projects, as compared with about 3,000 in 1976.
The Shannon Free Airport Company are also concerned with the promotion of small industries. The House will be aware of the special mandate which I gave to SFADCo in 1978 to devise and test new ideas, strategies and systems to stimulate the establishment and growth of small indigenous industry in the midwest region. The performance of the company during the period of this experiment has been encouraging. I set the company the ambitious target of 1,000 small industry job approvals last year. This target was exceeded by 100 per cent. The 2,000 job approvals secured by SFADCo was not their only achievement. The company have also developed a wide array of programmes and systems aimed at nurturing and launching native entrepreneurial talent.
I am at present considering the company's report on the pilot project, and hope to inform the House during the Second Stage of the Shannon Free Airport Development Company Limited (Amendment) Bill 1980 of my plans to build further on this promising experiment. The results of both the IDA and SFADCo's efforts last year are firm evidence that qualities of initiative and enterprise are to be found in Ireland which, with suitable encouragement, can be channelled in directions which can greatly benefit the country and the local community.
The primary target in the IDA's industrial plan for the five-year period 1978-1982 is the creation of a total of 75,000 new grant-aided manufacturing jobs or an average of 15,000 jobs per annum. The conversion of job approvals into actual jobs is what our industrial development efforts are all about. Therefore I was more than heartened by the rise of over 8,700 which took place in total manufacturing employment during 1979, according to the results of the IDA's most recent employment survey. This was the biggest advance in ten years and was brought about largely by the creation of 16,000 first-time new jobs in grant-aided companies. Manufacturing employment increased last year in all the nine planning regions. Exceptionally high increases were recorded in the midlands, north-west and south-east regions, and for the first time since 1973, Dublin city and county experienced a net gain in manufacturing employment.
The overall increase in employment would have been very much higher were it not for the continuing incidence of job losses. While it is inevitable that in an evolving industrial sector which is responding to changing market conditions and technologies a number of jobs will be lost each year, it is probable that more jobs could be saved if contact were made with the IDA or Fóir Teoranta at the first sign of difficulties approaching. The IDA operate a rescue unit to help companies which are encountering trading difficulties, and in conjunction with Fóir Teoranta and the commercial banks they attempt to put together a package designed to achieve adaptation and survival. Where this may not be possible the IDA will endeavour to find a suitable promoter to take over the company in trouble in order to preserve as many jobs as possible. This aspect of the IDA's work is perhaps not fully appreciated or recognised. Its value is, however, illustrated by the fact that 23 rescue packages and 24 takeover deals were arranged by the IDA during 1979. Between them these entailed the maintenance of over 2,700 jobs and the approval of 800 new jobs.
In the present Estimates capital resources for the Industrial Development Authority have been increased from £119 million to £145 million, an increase of 22 per cent, and administration resources from £9.315 million to £10.569 million. The commitment of these increased resources and the enthusiasm with which both the IDA and SFADCo tackle their challenging mandates are of course only part of the picture. Much of these resources and the good work of these agencies could be lost and undone if selfish and unpatriotic minorities continue to disrupt either the production in, or construction of our factories. Petty disputes in the public service can also have damaging effects throughout the entire economy. On the other hand, if we can overcome these problems and arrange our affairs in accordance with the realities of the world in which we find ourselves, all the evidence is there to show that employment targets and other additional goals in economic and social development which we have set ourselves can be methodically achieved.
I should now like to refer briefly to the operations of the State companies in the manufacturing sector. These are Nitrigin Éireann Teoranta, Irish Steel Limited, Ceimicí Teoranta, National Film Studios of Ireland Limited and Min Fhéir (1959) Teoranta.
NET's new ammonia/urea project at Marino Point, Cork, was formally opened on 5 October 1979. This plant—one of the largest and most complex ever completed in the State—will produce 435,000 tonnes of ammonia and 310,000 tonnes of urea annually. It will provide direct employment for 390 people in the Cork area.
Since the ammonia and urea came on stream, the value of production has amounted to £28.5 million, of which exports have constituted £12 million. The balance of output is sold directly on the Irish market either as urea fertiliser or as ammonia, which is a raw material used in the manufacture of nitrogenous fertiliser at NET's Arklow plant currently employing 1,200 people. Therefore both in terms of employment and exports the company's contribution to the economy is a very significant one.
There has been considerable public comment about the cost escalation associated with the Marino Point project. The final cost is now estimated at £137 million compared with the company's first detailed estimate of £63.5 million in 1975. Naturally I am most concerned about this substantial cost over-run and I am having an in-depth assessment carried out to ascertain the reasons for it. It will also be important to determine what implications the development at Marino Point will have in relation to NET's future financing. Finally, after all the disruptions which were created during the construction period of the project it was, to say the least of it, dismaying to see a further strike taking place so soon after the commencement of production. That recent strike cost NET £5 million and further disimproved its already serious financial position.
Irish Steel Limited are making satisfactory progress on the implementation of their development programme, work on which commenced at the end of 1978. Under this programme the company are installing a 90-ton electric arc furnace, a new rolling mill and a continuous caster, and are improving storage and transport facilities. It is expected that the new plant will be commissioned by the end of 1980. Full production of 282,000 tonnes per annum will be achieved from 1985. This will be more than double present output and will represent a considerable extension of the company's product range. A major portion of the increased annual production of the company will be for export to the UK and continental markets.
The estimated cost of the development project, based on the most recent figures available, is approximately £48 million which will be financed by way of Government equity, IDA grants, ECSC loan and other commercial borrowings. This is a major investment by any standard and it is a sobering thought that it will not lead to any additional employment by Irish Steel Limited. It will merely endeavour to safeguard the existing employment, but the effectiveness of that safeguard will, of course, depend entirely on the efficiency of the plant and the productivity of those employed in it.
In April 1979 I agreed that Ceimicí Teoranta's glucose factory at Corroy, County Mayo, should be re-equipped to ensure the security of supply of glucose to the Irish market. The estimated cost of the project is £1.3 million. It is expected that the re-equipment will be completed by the end of this year.
I have under consideration outline proposals recently submitted to me by Ceimicí Teoranta for the refurbishing of their alcohol factories. These proposals involve both potable alcohol and industrial alcohol for sale to the petrol companies. In regard to the latter the question of economic cost will have to be carefully examined; there is no doubt that the industrial alcohol activities of this company have for decades past imposed a burden on the national economy quite disproportionate to the employment afforded.
The company are also actively investigating other opportunities for diversification, particularly in the fine chemicals field.
As Deputies are aware, I have recently introduced two Bills in the House, one to give legislative status to the National Film Studios of Ireland Limited, and the second to provide for the establishment of a Film Board which will have overall responsibility for the promotion and development of film-making in Ireland and for the operation of financial aid schemes designed to further those ends.
Grants of £50,000 and £157,000, respectively, are being provided in the current year's Estimates to cover the administration costs of the proposed film board and to help defray the administration costs of the National Film Studios of Ireland Limited. The national film studios have been in receipt of grants since the company's establishment in 1975. The need for further State support can be attributed to two major factors: (i) the heavy interest payments on the borrowings which were necessary to rehabilitate the studios following their purchase. On the enactment of the National Film Studios of Ireland Bill at present before the House, attention can be given to more appropriate financing arrangements; (ii) the Company's inability to attract a sufficient level of film business to keep the studios fully operational and to cover fixed overhead costs. The company have attributed this to the lack of a scheme of financial inducements in Ireland to attract film-makers here.
I hope that the proposed film legislation which is now before the House will go some way towards rectifying the financial position of the studios in the immediate years ahead and will also provide the necessary support for the development of a film industry in Ireland. But I will have more to say on that subject in our debate on the relevant legislation.
Mín Fhéir have been incurring continuous losses on their grass meal production operations at Geesala, County Mayo. One of the major reasons for the company's continuing losses is high energy costs for grass drying.
The Government decided last January that a capital grant of £90,000 should be provided in the 1980 Estimates to cover the cost of converting the two oil-fired burners at the company's plant to turf-burning furnaces. Both turf-burning furnaces are expected to be fully installed in time for the 1980 grass production season. This expenditure should result in more economic production and, therefore, in a healthier future for the company.
The House will already be aware that at the request of the Government, the National Economic and Social Council have commenced a thorough review of the existing policies for industrial development. In discharging this task the NESC will have available to it the full support and assistance of all the relevant Government Departments and agencies and special arrangements have been made to ensure maximum co-operation with the experts who are to carry out the study.
A fundamental and wide-ranging review of our industrial development strategies, which may have served us well enough over the years, is timely because of the changing and daunting economic circumstances in which we now find ourselves. The 1980s will be a decade in which there will be increasing energy price and supply constraints, growing competition in manufactured products on the European and world markets from the newly industrialising countries, continuing rundown of many traditional sectors such as steel, shipbuilding, footwear and textiles and increasing competition for new investment projects and very significant technological developments, with the increasing and all-pervading application of the micro processor.
During the present decade also increasing numbers of our intelligent and well-educated young people will be coming on to the labour market for the first time. We must not disappoint their hopes or frustrate their aspirations. It is against this challenging background that the industrial politics and strategies for the future will have to be framed.
Before leaving the subject of industry I should like to advert to the role of the Institute for Industrial Research and Standards and the Irish Productivity Centre. The Institute for Industrial Research and Standards continue to play an important role in our industrial development drive. The principal objective of the institute is to encourage and assist the improved use of science and technology in Irish industry through research and development. The IIRS also undertake consultancy and advisory work, product investigation and testing, the preparation of standards and the provision of a national technical information service.
The benefits to be derived by industry from the use of these specialised services of the institute can be both immediate and enduring. These benefits include higher production and exports, the maintenance of jobs which otherwise would be lost, the creation of new jobs and a reduction in operating costs which helps to make firms more competitive.
The institute's grant-in-aid for 1980 is £6.4 million which represents an increase of 13 per cent on the total grant for 1979. Over £5 million of this sum will be expended on the day-to-day running costs of the institute which include the purchase of capital equipment of the most advanced kind. What is encouraging to me is that over one-third of the operating costs of the institute this year will be financed by fee income, which is a good measure of the value of the services which it provides.
The institute's building and rehousing programme is continuing at their Ballymun headquarters. They also plan to commence this year the construction of new and much needed accommodation at Cork city.
I am very pleased at the enthusiastic and positive manner in which the IIRS have tackled the special mandate given to them last year for energy conservation. The results of this assignment are bearing fruit as a number of companies assisted by the institute have already achieved worthwhile savings in their energy consumption.
Arising from the National Understanding for Economic and Social Development the Government-ICTU Working Party, in relation to the subject of industrial democracy, concluded that an additional Exchequer contribution should be made available to the Irish Productivity Centre in respect of their activities relating to promotion of systems of worker-participation.
In fulfilment of this recommendation a sum of £33,000, in addition to their original grant-in-aid, is being made available to that body by means of a Supplementary Estimate which, as Deputies are aware, has been introduced and which I shall be moving when the main Estimate is concluded. I should like to mention here that most of the additional provision will go to meet the cost of two additional advisers for the labour-management service of the centre. This particular service of the IPC has the difficult but worthwhile long-term objective of improving labour-management relations in Irish firms and I feel confident this extra provision will have the approval of the House generally.
I now turn to the significant topic of exports and trade. In the context of Ireland's economic development, export growth plays a vital role. At present, some 50 per cent of our factories' total production is sold abroad. Two out of three jobs in manufacturing industry are export-related. Exports overall amount to almost 48 per cent of gross national product as compared with an average of about 24 per cent for the European Economic Community. We are, therefore, very much dependent on export growth to sustain the economy and to achieve increased employment and higher living standards. And within the limits of our financial resources, we must do everything possible to support and encourage export expansion.
During the 1960s and 1970s we attained an impressive growth in export performance. The main contribution in this connection came from manufactured goods, excluding food, drink and tobacco, which in value terms increased almost 15 times in the decade 1969 to 1979. While this is an excellent achievement by any standards, the economic realities are that our past efforts need not only to be sustained but, indeed, improved upon if we are to reach our basic economic targets.
Our present balance of payments deficit is a serious obstacle to further economic expansion and this gap must be closed as quickly as possible. Obviously it is far better to do this by increasing exports than by allowing a stagnant economy to manifest itself in declining imports of goods and services. To achieve the necessary rate of expansion, however, requires the provision of even greater export support services than ever before and the Government's recognition of this fact is reflected in the additional grant-in-aid which is being made available to Córas Tráchtála in the current year. The substantial increase involved, namely £1,885,000, or about 31 per cent over the allocation for 1979, underlines the Government's determination to provide maximum impetus to better export achievement. A good deal of the extra funds will be devoted to the provision of special assistance to smaller enterprises.
International trading conditions for 1980 will not be easy. Exporters themselves must therefore continue to increase their efforts to match the initiatives being undertaken by the relevant State promotional agencies. To meet the needs of exporters as far as possible, Córas Tráchtála have drawn up a comprehensive export promotional programme for 1980, details of which were announced on 6 March last. The key objective of this programme is not only to assist existing exporters in their endeavours to broaden their base and increase their overseas sales but also to encourage as many non-exporters as possible to get into export markets now.
An important factor in the exports drive is the availability of suitable export credit insurance arrangements. In accordance with the provisions of the Insurance Acts 1953-1978, arrangements have been continued with the Insurance Corporation of Ireland under which that company will issue export credit insurance policies on my behalf and account to me for premiums collected and claims paid.
Moneys advanced out of the Central Fund to meet export credit insurance claims incurred by me under the Insurance Act, 1953 are repaid to that fund out of the vote. The entire scheme is, in effect, self-financing, but at the same time it provides a vital service for exporters who could not otherwise undertake business in many difficult markets.
Another mechanism introduced to assist the export drive is the special credit financing for certain capital goods exports and for which £805,000 is made available under Subhead K.2. This relates to the scheme which provides export credit finance at concessionary interest rates, ranging from 7½ per cent to 8 per cent, for export of goods of a capital nature manufactured in Ireland and which would normally attract from one to five years' credit. This scheme is operated by the associated banks in conjunction with the export credit insurance scheme and with the aid of an interest subsidy which is provided out of voted moneys. The amount of this subsidy or interest rate compensation, depends (i) on the amount of export credit finance drawn down and (ii) on the gap to be bridged between the concessionary interest rates charged to exporters—7½ per cent-8 per cent—and the cost of funds to the banks. Due to the worldwide increase in interest rates the gap to be bridged by way of subsidy has, unfortunately, increased substantially in recent months.
On the trade scene generally the position is that as the world economic outlook disimproves, the trend towards protectionism becomes more noticeable. This was the experience following on the 1974 oil crisis and it is being repeated now. Nevertheless, there is evidence of a will on the part of governments to resist this trend and of the recognition that increasing recourse to protectionist measures is not the remedy for economic ills.
One of the most important recent developments in this respect has been the formal conclusion of the Tokyo Round of Multilateral Trade Negotiations in the GATT framework. This took place in December 1979 during the Irish Presidency of the Council of the European Communities. The outcome of these negotiations fully justifies the considerable efforts made to ensure their success since they were launched in September 1973. The results are all the more remarkable when viewed in the light of current economic difficulties and uncertain future prospects.
The package comprises tariff reductions on a wide range of products, a whole series of new agreements or codes in the non-tariff area and a settlement in agriculture. We succeeded in getting either entire or partial exclusion from the tariff cutting formula of a number of our own most sensitive products.
Overall, the outcome is seen as a major updating of the rules governing international trade, a strengthening of the role of GATT thus enabling them to play a more important part in reducing uncertainty in this area, and as an important instrument in counteracting protectionist pressures in the critical period ahead.
As a country depending to an increasing extent on exports we have reason to be pleased with the successful conclusion of these negotiations. In common with other members of the European Community we stand to gain from the concessions negotiated. Equally important, however, are the indirect long-term benefits which should result from the increased stability in world trading conditions stemming from the successful conclusion of the "Tokyo" Round.
I will now turn to the subject of prices and price control. On assuming office, one of my primary concerns was to review the operation of price control in this country. I wanted to ensure that our price control system was operated in a way which was best suited to our economic needs and which was as effective as possible in ensuring that only those price increases which are unavoidable are passed on to the consumer.
The result of my actions over the last three years means that we have now in operation in this country one of the strictest and most vigorously enforced forms of price control in the EEC and one of the most searching in its requirements for those who come within its ambit. We have a rigorous and careful scrutiny of price applications and allied to it, we have expanded the operations of the prices inspectorate. During 1979 the inspectorate investigated 6,342 complaints received at the Priceline centres and found that 3,798 or 60 per cent were well-founded. Evidence of the contravention of price control orders, for legal proceedings, was obtained in 4,509 instances.
All of this strengthening of the procedures under our price control legislation has taken place against the background of adverse external economic pressures outside the control of the Government.
The movements in crude oil prices in the last two years have been staggering to say the least. The price of a barrel of Saudi Arabian light crude in January 1978 was 12.95 US dollars. By January 1979 it had increased to 13.34 US dollars; in July 1979 it was 18.00 US dollars a barrel, December 1979 24 US dollars a barrel and a present price of 28 US dollars a barrel effective from April 1 last.
These are absolutely crippling increases having a serious effect on the economy of this country and our balance of payments position in particular. Increases in the price of fuel oils have a spill-over effect on to the prices of numerous other commodities.
The plain fact of the matter is that we have to reduce our dependence on imported fuel. The way in which we use oil is more appropriate to an era when the financial consequences were of little concern. The Government's actions, both in the budget, and in our efforts to promote energy conservation and to develop our own fuel resources are designed to meet this end.
A Government's price control policies must be geared to fit the existing economic circumstances. The way in which we have exercised price control over the past three years has been successful in this regard.
Increases in the price of imported raw material are not the only "input" increases which our manufacturing industry has had to bear in recent years. A lot of them are of our own making. Wages in particular, have shown a considerable increase in recent years. Over the past two years alone, wage increases awarded under the terms of the relevant national wages agreements have added over 30 per cent to wage bills, and this at a time when real GNP corrected for changes in the terms of trade, may actually have been declining.
It is clear that with cost increases of this magnitude, price control must be operated in such a way as to allow firms to remain viable and competitive. We cannot get away from the economic facts. If we need oil to fuel the economy, we must pay the higher prices being charged for it. If we continue to pay ourselves higher wages and salaries, we must pay the resultant higher prices for our goods and services.
It is necessary in the operation of an effective price control system to hold a balance between the competing needs and demands and pressures of the consumer and those of the industrialist who is trying to produce goods at a reasonable price, trying to keep his workers in employment and in many cases trying to expand employment at times of considerable economic difficulty. As I have said, it appears that our price control system, as it has been strengthened in recent years, is the most stringent of all the price control systems operated in the EEC. This is a source of some concern from the industrial point of view, because of the pressures which are put on firms here more than in other countries. This pressure is evidenced by the number of complaints the Department receives from industrialists. A number of complaints about prices being too high or price control not being operated strictly enough are received. The complaints we get in that regard are, however, a mere fraction of the complaints from people who are trying to stay in business. I continually meet deputations from the business community who come to talk to me about the difficulties which they experience in complying with our stringent price control procedures; about how unfair they think it is and how strenuously it has been applied in recent years.
The task of balancing the interests of the consumer with those of the industrialist and employer is a delicate one and one which requires the constant attention of the Government. The fact that this Government has a Cabinet Minister who has the active responsibility for price control, means that the competing needs of the various sections of the community are given the fullest possible recognition.
Apart from price control I am also responsible for other aspects of consumer protection. A number of measures intended to afford better protection to consumers have recently been implemented or are under way. The Sale of Goods and Supply of Services Bill, 1978, which has passed all stages in the Seanad will go a long way towards redressing the present imbalance between sellers of goods and services and those who buy them and will also curb undesirable practices such as unsolicited goods and directory entries and the passing on of worthless guarantees.
The Trading Stamps Bill, 1979, which is on Committee Stage in the Dáil will regulate the issue, use and redemption of trading stamps and other related matters.
I feel that the enactment of the Packaged Goods (Quantity Control) Bill, 1980 which has now passed all stages in the Dáil and Seanad and the adoption in Brussels of EEC Directives on food labelling and range of sizes should act as a major impetus towards metrication in the packaging industry in that their finalisation clarifies future requirements in statistical quantity control, labelling and approved sizes and enables packers to adapt their processes to these requirements and simultaneously to adopt metric ranges of sizes thereby keeping internal disruption of packing procedures to a minimum.
I should mention also that at relatively little cost to the Exchequer this legislation will enable the establishment of a comprehensive system of control of filling processes of most pre-packed products thus significantly increasing the protection afforded the consumer from short weight while at the same time increasing the acceptability of our exports by bringing our control procedures into line with practices elsewhere in the European Community.
At EEC level, three important directives from the point of view of consumers were adopted in the recent past, two of which I have already referred to in relation to the packaging aspect. These are commonly known as the food labelling, ranges of sizes and unit pricing directives. When these are given effect in Ireland hopefully within the next months, they will ensure that all necessary information relating to ingredients, quantity and price will be provided to consumers in order to enable them to evaluate the quality of the products they buy.
The programme for the introduction of the widespread use of the metric system into the economy continues to progress at a satisfactory pace although some sections of industry seem to be less aware of the need to co-ordinate action within their groups than we would wish. My Department will continue to liaise with interested parties and there is no reason to believe that the completion of the change-over will not be accomplished smoothly and without difficulty.
On the general subject of metrology I should mention that work is progressing on the preparation of a Weights and Measures Bill aimed at completely overhauling the National Metrology Service.
Later in the year I hope to introduce a Hallmarking Bill which will provide the necessary legislative changes to existing law so as to enable Ireland to accede to the international convention on the control and hallmarking of precious metals. The necessary changes will be as flexible as possible so that they can be applied to any other convention or treaty to which Ireland might be a party. This measure will be of benefit to the trade, to Irish exporters of articles of precious metals and will also retain certain existing controls which provide protection to the consumer.
In the area of rules of competition there has been and continues to be, substantial activity. In accordance with the Mergers, Take-overs and Monopolies (Control) Act, 1978, proposed mergers and take-overs in the sense of the Act which satisfy certain size criteria must be notified to me and my decision on them must be communicated to the enterprises concerned before the proposals may proceed. The volume of notifications continues at a reasonable level and I am pleased to be able to say that proposals notified continue to be dealt with promptly so as to cause the least amount of disruption.
I am expecting to receive in the near future reports from the Restrictive Practices Commission of their recent inquiries into the supply and distribution of motor spirit and the retail sale of grocery goods below cost. In the case of the inquiry into the supply and distribution of motor spirit, the commission resumed public hearings in March to receive evidence on a proposal by one supplier to discontinue supplies to persons who were unable to accept delivery of a certain minimum drop. These resumed hearings were concluded after two days and the commission are now finalising their report to me on this and other matters covered in the course of the full inquiry.
The second inquiry is concerned with a subject which is but a part of an area of more general concern, namely the supply and distribution of groceries. As I have indicated to the House on previous occasions, consultations are taking place between my Department and interests involved in the groceries trade about the present difficulties facing that sector. Decisions on these matters will be taken as quickly as possible after receipt of the commission's report of their inquiry into the retail sale of grocery goods below cost.
Legislation concerning occasional trading has now been enacted. Briefly the Occosional Trading Act, 1979 is designed to regulate and control the practice of retail selling for short periods from privately-owned premises which are not the permanent place of business of the person engaged in such trading. With some specified exceptions, a person who proposes to engage in occasional trading is required to hold an occasional trading permit, application for which must be made at least 30 days before the proposed date of trading. On the basis of experience to date of the operation of the Act, it would seem reasonable to suggest that the legislation has been achieving its aim of controlling occasional trading.
This measure represents the first element of a two-part programme to control what might be described generally as casual trading. The second element, to be entitled the Casual Trading Bill, will be aimed at roadside and street trading. The drafting of this measure has been complicated by the existence of certain constitutional problem but I am now glad to be able to say that a draft satisfying the various concerns which have arisen is now nearing completion and I am confident that a Bill will be circulated in the near future.
On the insurance side, I am concerned to improve still further the Department's supervisory capability, in line with the needs of the more sophisticated insurance industry which we and other countries now have, and to strengthen the legislative framework in this area with a view to safeguarding the interest of the policy holder. The protection which insurance companies had provided for them in the Irish market by the Insurance Act of 1936 is gradually being phased out in accordance with the requirements of Community law and, in consequence, several foreign insurers have established in the Irish non-life market; when full effect is given to the provisions dealing with life assurance, it may be expected that there will be further instances of foreign life companies setting up in our market. While these developments will heighten competition, and thus enhance the situation of the insurance-buying public, they will also create a situation in which more intensive supervision is called for and, in addition, closer liaison with the authorities in other member states.
While there has been notable improvement in the availability of motor insurance, the level of premium, reflecting mainly the high cost of claims, continues to give cause for concern. During the year, we have had discussions with the companies with a view to bringing about further improvements in the market for motor insurance.
I have recently received an interesting report from the Motor Premiums Advisory Committee. This committee are endeavouring to establish the facts and figures underlying the loading structures for motorists premiums, and from it I would hope to be able to ensure that loading structures and ultimately ratings for motor premiums are on a rational basis reflecting the true cost of the rating and of the insurance risk in question. The committee are continuing with their work and I will have from them a further report in the coming 12 months.
Members of the House will be aware of another development in which Ireland is inevitably concerned, also by virtue of our membership of EEC. I refer to the draft directive on product liability, which envisages a responsibility to be imposed on manufacturers on a no-fault basis in respect of injury to persons or damage to personal property caused by defects in products manufactured and put on the market by them, whether or not the defect was due to fault or negligence on the part of the manufacturer. Under the proposal, it would be necessary for the injured party to prove only the injury, the defect, and the causal connection between the two. The origin of this proposal is the recognition that, while contract and tort law provides remedies, a claim in tort may be extremely complicated by the fact that it is not always possible to prove negligence on the part of the manufacturer making and marketing a defective product.
It is not necessary that I should here go into the provisions of this major proposal; there are undoubtedly significant advances in thought and in jurisprudence in it for the consumer or claimant, but this has to be viewed also in the sober light that it may impose a burden on manufacturers which will have to be insured against, for the cost of which the consumer must ultimately pay. It is an issue which I am continuing to watch closely and to weigh the case for and against. Several of the points in the proposal will need considerable clarification, definition or amplification before it would be appropriate for us to take a policy stance. I mention the subject now for the information of the House and to assure the House, in the light of public references made to this subject from time to time, that the matter is receiving very careful consideration by me.
It will be necessary to amend the provisions of the Companies Acts, 1963-1977 to give effect to the provisions of EEC directives dealing with the harmonisation of company law in the member states. Six directives have already been adopted and, in addition, there are other directives under consideration by either the Council of Ministers or at Commission level and the indications are that there might be up to a total of 12 directives to contend with over the next few years. In addition, other amendments arise from the needs of our changing economy. Therefore, the total programme represents a considerable volume of legislation which, because of its scope, must be taken in stages. I hope to introduce in the near future a relatively short Bill which is necessary for domestic reasons.
In the same general area I should like to refer to the appointment earlier this year of a full-time Registrar of Friendly Societies. This office, the origin of which pre-dates the founding of the State, has until now been filled on a part-time basis. In recent years many important additional supervisory functions, particularly in relation to building societies, credit unions and deposit-taking societies, have been conferred on the office and it was therefore necessary to convert to full-time status the post of registrar.
As it is the latest addition to the functions assigned to me I have left tourism as the final topic of my speech. The Government have always regarded the tourist industry as a vital part of the economic life of the country and the renaming of my Department to that of Industry, Commerce and Tourism reflects the continuing high importance the Government attach to the industry. It also recognises the considerable contribution tourism is making to our balance of payments, to the creation of employment opportunities and to regional development generally.
I do not have to tell Deputies that the industry has not been without its share of difficulties during the past decade. It is fair to say that tourism staged a good recovery in 1977 and 1978 registering a 52 per cent increase in revenue during the period. Indeed, 1978 created all-time records, surpassing our previous best year which was 1969 and the industry was poised to create further records in 1979 but for changing circumstances at home and abroad which combined to arrest growth last year. Given that some commentators were forecasting a 25 per cent drop in business at the height of last summer, the actual outturn—a 3 per cent drop on the 1978 all-time high figure for out-of-State visitors and 9 per cent increase to £300 million in out-of-State tourism revenue—was quite creditable.
When we look back on it we can recognise that while a problem existed it was not of such serious dimensions as a number of commentators forecast. I pay special tribute to those in the industry who did not lose their heads and to Bord Fáilte which with full governmental support immediately tackled the problems.
As regards the future, we are entering a new phase for the tourist industry in the eighties. I believe that the manner in which we have tackled the problems of the last few years and the strong recovery we have initiated have laid the foundation on which the industry can in the eighties progress even more in its contribution to the development of our country. This year the Government have, despite the very tight Exchequer position generally, made more money than ever before available for the development of tourism and Bord Fáilte are, at my direction, diverting as much of their funds as possible into direct overseas marketing so as to attract as much extra business as possible.
However, the world economic outlook for the immediate future is not encouraging. GNP-GDP for the OECD area as a whole are not expected to show much of an increase in real terms this year, real disposable income is unlikely to grow by more than 1 per cent while consumer prices are expected to rise by 10 per cent. In addition, general uncertainty about energy price and availability, the weakness of the dollar vis-à-vis European currencies, the introduction of credit restrictions in the US and the general political climate world-wide all combine to dampen the propensity for world travel this year. Despite these unfavourable indicators Bord Fáilte are hopeful that it will be possible to generate positive growth this year. It is far too early in the season to make a prognosis or to begin to interpret trends. I believe, however, that if Bord Fáilte get the full support of every sector of the industry then the possibilities which are there can be realised.
The Government for their part will be striving to ensure that the general business environment is conducive to expansion of the tourist industry. The House will recall that very soon after returning to office the Government introduced duty free facilities on cross-Channel services which gave a strong boost to cross-Channel tourism; a 100 per cent capital depreciation allowance was announced in the 1978 budget which enabled hoteliers to write-off the full capital cost of hotel buildings in a single year. And last year, of course, tourist traffic legislation raised the limits on the aggregate amount of funds which may be made available to Bord Fáilte for capital development.
Like so many participants in the tourism industry, the Government and Bord Fáilte have to plan ahead to ensure that the basic infrastructure will be sufficiently developed to handle the expected growth in future years. It is necessary for the Government to be constantly looking, not just to next year's tourism returns, but to the longer term underlying trends and influences which will determine the future shape and direction of tourism. To this end the Government approved a selective hotel bedroom scheme designed to meet estimated bedroom requirements as to number and location over the next few years and approvals have recently begun to issue under this scheme. The cost of this in 1980 is estimated at £2 million and the Government have provided for this in the Bord Fáilte allocation. In line with the general concern to ensure that a shortage of capacity will not act as a constraint to growth and negative the promotional efforts of Bord Fáilte and the industry, the existing Bord Fáilte improvements scheme is also being concentrated on the upgrading of the accommodation stock through the addition of private bathroom facilities in each room. Additionally, the supplementary holiday accommodation scheme which provides for improvements to farmhouses, town and country homes, has been extended to the country at large, the size of the fund doubled and grant levels increased.
As to the longer term, the Government requested the National Economic and Social Council to do a study of the implications of tourism for economic development at national, regional and sectoral levels. In a general way the obvious benefits of tourism are know to everybody—inflow of foreign revenue, job opportunities, increase in GNP, regional development and so on, but there are quite a number of difficult questions to be answered about the optimum allocation of available funds and the best development strategies to be pursued. I am hopeful that the results of the NESC study which are due out within the next couple of months will be of assistance in our search for an answer to these basic questions and will provide a basis for a proper review of policy with a view to ensuring that the full potential which tourism undoubtedly has for contributing to national progress and prosperity will be fully realised. At this stage I cannot anticipate what the NESC study will come up with or what the Government's response will be. I can, however, assure the House and, indeed, the whole tourist industry that any constructive suggestions will be welcomed and will receive serious consideration.
Before I conclude my remarks on tourism there is one other facet which I would like to touch on. In recent years tourism has been identified as one of the few subjects that are ideal for consideration in the context of cross-Border co-operation. Much of the countryside on both sides of the Border are areas of high tourist amenity, are relatively underdeveloped and are economically disadvantaged. A number of studies have been completed or are in course of completion straddling the entire length of the Border practically. A joint study of the Irish and UK Governments, with EEC assistance, was carried out into communications in the Derry-Donegal region. One of the recommendations in this was the establishment of a tourism co-operation group for the area and this recommendation has now been implemented. Another study of the tourism and drainage potential of the Erne catchment area will be published next week and the results of this study will be examined with interest in my Department. A report of infrastructure needs in the Newry-Dundalk area was recently published and this proposes a joint investigation by the two tourist boards, north and south, of the tourist needs of the area. I am told that this investigation will get under way very shortly.
Finally, a cross-Border tourism package to be assisted out of the non-quota section of the European Regional Development Fund, is now before the EEC Council and is expected to get approval shortly. This package envisages assistance for the development of accommodation, amenities, promotion, roads, communications, crafts and so on, and my Department will be drawing up a programme of proposals as soon as the EEC package has been approved.
I have no doubt that all of these developments will give a very substantial boost to tourism in Border areas and will help them to overcome some of the infrastructural and other deficiencies of the type which are broadly recognised to exist in areas contiguous to borders throughout the EEC Community. I hope that these developments will encourage more and more people from both sides of the Border to take holidays in these areas thereby helping to develop a better regional spread of the benefits of tourism while also helping in the very important task of breaking down antipathies and fostering cross-Border relations at the interpersonal level.
I shall, of course, endeavour in my reply to deal with any other matters which may be raised in the course of the debate. I commend this Estimate to the House.
