Deputy B. Desmond to move the motion and I understand that we finish at 10.20 p.m.
Private Members' Business. - Industrial Development: Motion.
I move:
That Dáil Éireann, concerned about the substantial and increasing dependence of Irish industrial development, employment and economic growth on foreign and multi-national capital, and about the implications of such trends for the future:
calls on the Government immediately to ascertain and publish details of the extent to which our industrial base and employment is dependent on foreign and multi-national capital;
—asks the Government now to review the policies of the Industrial Development Authority in relation to over reliance on foreign and multi-national capital; and
—agrees on the need for the establishment of a National Development Corporation with legislative and financial bases adequate to enable it to launch an industrial development programme based on Irish resources and utilising the most advanced technologies under Irish control.
The Parliamentary Labour Party have tabled this motion because we clearly wish to see our rate of growth in industrial development accelerate in the coming decade. There are now some 130,000 adults unemployed including those who are on short time and school-leavers not on the live register. Indeed, when one considers this motion one must bear in mind that there are some 90,000 persons unemployed in Northern Ireland. That means there are close on a quarter of a million adults now without work on this island as a whole.
The challenge facing those responsible for the development of enterprises in Ireland therefore is immense. The Labour Party believe in a mixed economy based on strong and efficient public and private sectors supplemented by a dynamic cooperative sector. I believe these sectors are complementary to one another in the process of economic growth. All of these sectors must contribute to economic growth to a far greater degree than they do at present if we are to have any prospect of full employment and stopping the resumption of emigration. A growth rate of 1 per cent for 1980 and 1½ per cent for 1981 is a policy no politician can endorse. We must act now to reverse this prospect. I would point out that we are now in the legislative process of spending an additional £464 million of borrowed Supplementary Estimates just to keep the ship of State afloat this year alone. The prospect of increases in employment arising from these Supplementary Estimates looks very bleak. Moneys which should have gone towards industrial development have been frittered away in popular political consumption.
There is a reference to employment in this motion. I wish to deal with that very briefly because I want to get on to the issue contained in the motion itself. Some years ago the then NIEC estimated that a national growth rate of at least 5½ per cent would be required in the seventies. There is no doubt now that, with our much increased population, a growth rate of 6½ per cent at least will be required for the eighties. This would involve a massive expansion of our industrial sector. Clearly this is the area to which we must look for any prospect of significant increases in employment. Therefore every possible structural and innovative policy measure must be tried and adopted, if it is proved successful, to ensure this increase in employment. Even now all the indications are that, despite the relatively optimistic assumptions contained in the national understanding for the manufacturing sector, there will be net job losses of some 2,000 this year instead of the projected 7,000 job increases. Indeed I would point out that in the recent Report of the NESC, Report No. 53, they state that the prospects are that total employment will decline between mid-April 1980 and mid-April 1981 by approximately 4,000. Coupled with a projected increase in the labour force of approximately 10,000 that would imply an increase of 14,000 in unemployment. Therefore the prospect could not be more grim. I would make the point that those who were quite hysterical about the situation in 1976-77 seem to be as mute as mice today. One might even ask: whatever has happened to the Construction Industry Federation? For example, whatever has happened to the former Brother Vivian Cassels who spoke about unemployment so frequently amongst young people?
Hear, hear.
There is not a peep to be heard today. If I may deal with the issue of reliance on foreign investment, there appears to be a growing volume of evidence in support of the contention that there is an over-reliance on the decisions of foreign multinationals to advance our industrial development. Of course foreign investment is a key ingredient in the mix of any development strategy. There is no way I would deny that. But, like any cake, if one ingredient unduly dominates the mix, then the cake is no longer edible. Therefore exclusive reliance on the market and investment strategies of the major multinationals creates a dangerous imbalance in our national programme of industrial development. One must question if it is in our long-term interest that the growth sectors of our economy should be so dependent on decisions made abroad. One must stress that the investment policies of such companies, based as they largely are on export tax concessions and the benefits of the system of transfer pricing arrangements of their Irish subsidiaries, are extremely volatile. In the words of an ICTU discussion document way back in 1972, there is a danger of excessive dependence on foreign enterprise in the development of new industries, and external control of large sections of industry yields too many Irish hostages to foreign fortunes. I make these comments in fairly strong terms because I do not have any blinkered ideological hostility towards the many foreign entrepreneurs who have contributed towards Irish industrial development.
I have always been restrained and, I hope, constructive in my approach to this issue. There is a clear role for enterprise in Ireland. I have always been extremely sensitive to the promotional role of the IDA. There is far too little discussion on the overall strategy to be followed which is the responsibility of the Government. I would submit there must be a countervailing industrial force under Irish control. It is the function of the State and its principal agency in this area, the IDA, to use a substantial proportion of our resources to redress the balance.
Of particular concern has been the substantial relative decline in the domestic industrial sector in the past two decades. In his paper to the Dublin Economics Workshop last October, Eoin O'Malley, of the Institute of Development Studies at the University of Sussex, summarised the present position rather well. He said:
The most striking feature of the performance of these industries over the past two decades, taking the period as a whole, is the failure to make any contribution to employment growth. By 1976 they actually employed 3,000 fewer people than in 1960. Although their employment probably increased by about 4,000 from 1976 to 1979, presumably some, if not all, of this gain has been wiped out in the present recession. Consequently we can be reasonably sure that Irish domestic industry today employs very few more, and possibly less workers than it did twenty years ago.
A major goal of the policies introduced in the late 1950's and sustained ever since was to increase the export orientation of industry. As the table shows, the proportion of domestic industry's output going for export did increase, but the increase has been small — from 19 per cent in 1960 to 25 per cent in 1976. Furthermore, virtually the whole of this increase was accounted for by only two sectors, Food and Textiles, while the rest showed scarcely any change in their export orientation. These were strong words. His comments are quite perceptive.
Mr. O'Malley went on to say:
At any rate, the overall increase must be regarded as a disappointing response to the opportunities afforded by the introduction of export profits tax relief and the free access gained to much larger markets by EEC membership and (to a lesser extent) the Anglo Irish Free Trade Agreement. This point is underlined by the fact that the exports of domestic industry actually grew more slowly than the manufactured imports of our main trading partners, so that this export performance represents, in fact, a declining share of growing markets.
That analysis is of great importance to the future of Irish Industry and it has to be compared with the role of foreign companies established here.
It must be pointed out that many foreign companies have benefited enormously over the years from our system of incentives. Our corporate tax system over the years has become increasingly incentive-oriented, and ranges from complete exemption of export profits to 100 per cent first year write-off of the main costs of any industrial investment. Our most recent change has been the introduction of a new, specially low, 10 per cent rate of corporation tax to apply to all manufacturing industry as form 1 January 1981. Needless to say, firms that already enjoy tax exemption on export profits will continue to do so until 1990. The new 10 per cent manufacturing tax regime will continue until the end of this century, this assuring that stable fiscal environment which is so crucial for the growth of investment.
The Labour Party would certainly favour the continuation of these incentives but, side by side, we would endeavour to build up, with a parallel system of incentives, the influence of native Irish industrial output. This is not a crude chauvinistic or nationalistic aspiration but rather an essential safeguard in the national interest. There must be a domestic counter influence to the situation described in page 6 of the major IDA document for foreign investors. It is headed "The Irish Miracle" and says:
Ireland maintains a completely open approach to foreign investment. There is no obligation on foreign subsidiaries to take an Irish partner; profits and capital can be freely transferred abroad, and there are no withholding taxes.
There should be a counter-balancing approach to that open-ended approach.
Since 1960 more than 700 new manufacturing operations owned by companies abroad have located in the Republic mainly to obtain tariff free access to EEC markets. The value of their exports is the equivalent of some 50 per cent of GNP, one of the highest such ratios in the world. Therefore there is a need for a critical but constructive examination on our part of the implications of the situation.
I now come to the dominant role of American investment in this development. The United States has been the most important source of overseas investment in Irish manufacturing industry. US firms approved for grant-aid by the IDA up to the end of June 1980 represent a total investment in fixed assets of £1,124.9 million, which is over half of all overseas investment. New US projects, including expansions by American plants already in production in Ireland, were at one stage this year being approved by the IDA at the rate of almost one per week. The reasons for this success, as stated by the Minister for Finance, includes our proximity and free access to the EEC market; an environment here that encourages and favours private investment, a consistent Government policy of encouraging investment from abroad; availability of English-speaking labour and so far we have maintained competitive production costs and financial incentives.
It is important to point out that the former Minister for Finance, Deputy Michael O'Kennedy, told the US Chamber of Commerce in Ireland that:
It is particularly important and encouraging to note that US plants in Ireland are the most profitable American subsidiaries abroad. Your Department of Commerce data show that US affiliates in Ireland earned a 29.9 per cent average annual return on investment between 1974 and 1978, the highest in the world. The average for the EEC was 14.2 per cent, while world-wide it was 12.9 per cent. Over the same period the stock of US investment increased by 33 per cent annually in Ireland, compared with 11.7 per cent in the EEC and 10.8 per cent throughout the world.
This brings me to my main point of concern in relation to US investment, namely, that any shift in US Government policy relative to US investment abroad should give these companies concerned a bad cold but could give Ireland a fatal bout of pneumonia. Mr. Ronald Reagan may be an apostle of free enterprise but anything I have seen or read of the incoming President does not give me much optimism about his concern for US overseas investment. Rather does the thrust of his pronouncements to date seem to favour a regression towards internal expansion of the US domestic industrial base. This issue is of considerable concern because 90 per cent of approved US investment in Ireland by the IDA has come since 1973. Hence there is a serious need again to ensure that our industrial development strategy does not confine all its eggs to the one basket. The Labour Party favour a balanced strategy rather than a Fianna Fáil policy of any plant, any jobs, put them anywhere and get them from anywhere, it is employment.
I should like to stress our approach to public sector enterprise because in a fair, reasonable and democratic way it would be a countervailing influence against domination by foreign industrialists in the Irish economy. Our party have for long advocated a substantially enlarged role for public sector enterprise in the achievement of full employment here. This policy is not based on an uncritical attachment to abstract political ideas and ideals. Its relevance to present circumstances derives from a realisation that an excessive preoccupation with the development of private sector enterprise in the past has utterly failed to meet the employment requirements of our people. If out of conservatism or as a result of pressure from vested interests we adhere exclusively to such an approach in the future, full employment will cease to be a realisable target and will continue to be a pipe dream.
I regret to record that successive Irish Governments have constrained public sector enterprises and have rarely allowed them to make their full potential contribution to Irish economic life. In spite of the constraints imposed, many of our State companies have shown imagination and initiative in discharging their statutory role. Public debate on State enterprises, and their performance, almost invariably converges on those State enterprises which operate or have operated in deficit situations. The reality is that many of the companies in this position are by statute required, and rightly required, to be responsive to social as well as commercial considerations to which, in most cases, the deficit can be attributed. I make this point because, in particular, as a member of the Joint Committee on State-Sponsored Bodies. I have demanded of the State sector the highest level of operational performance from such companies in the national interest and to prove that public enterprise can and does work. A selective pre-occupation with companies in this situation ignores the important contribution which public sector enterprises have made and can make in the development of our economy.
I should like to point out that about 100,000 persons are now employed in the 20 main trading public enterprises in the Republic and many of these are making major contributions to employment and to the development of the economy. Such enterprises as Aer Lingus, Irish Shipping, Bord na Móna, and the Electricity Supply Board have outstanding records not just in satisfying their mimimum statutory obligations, but in extending their activities and employment into wider fields of enterprise. When it is recognised that the six public enterprises in the manufacturing sector employ only 6,000 persons or 3 per cent of all employment in manufacturing industry, the scope for the development of this sector can be seen to be immense. Therefore, there is a strong case for the development of public sector enterprise here. We have only started slowly on the road and we have a long way to go.
In this motion the Labour Party reiterate the concept of a National Development Corporation. Since the early sixties there have been many versions of this approach floating around the body politic. We now have the Enterprise Agency of the national understanding and the mark III version of the consortium launched three years ago by Fianna Fáil now has a new coat and is called an investment plan for the eighties. It looks like a general election gimmick by the Fianna Fáil Party and will probably be unveiled at the time of the Ard-Fheis. I am not cynical about this concept although I have seen it become such a political football that I could be excused if I was.
I submit that it is high time that a NDC was established which would adopt, supervise and stimulate investment programmes for the State-sponsored sector. The current work of the Joint Committee on State-Sponsored Bodies has underlined this great need. The NDC would have a clear role in proposing measures to rationalise the State manufacturing and services sectors which are not domestic monoplies, for example, the role of An Bord Gáis versus the ESB. That kind of involvement in policy decisions could be a useful innovation. The NDC could plan for the establishment of new State industries and insure that we avoid such major disasters as Arklow Gypsum, £10 million irrecoverable or NET, £80 million plus losses. The NDC could supervise the State shareholdings in the private sector, whether in companies such as Asahi or in other major private sector investments. It would also supervise State shareholdings in the natural resources sector, such as mining. It appears that there is 40 per cent more gas off Kinsale Head than first estimated and it seems likely from available information that by the mid-eighties we should find oil. I have no doubt that there are additional mineral resources within the confines of our national boundaries or off our Continental Shelf.
The State has a clear obligation to ensure that the development of these resources does not enrich just a few persons, whether they be Irish or from abroad. There is a role for private sector development, both native and foreign, in the exploitation of these resources but our State agencies such as the NDC, as we have advocated, should have the determining role and influence in the strategy relating to that kind of development.
There is a strong case to be made in this country for State participation in the new technological industries, particularly in the area of micro-technology. They are the growth areas of the future. It is all very well to say that 14,000 persons in Ireland are now in employment in these companies. We know the volatile, explosive rate of decelleration of that technology and overnight these companies, having different markets and different prospects, could transfer their plant out of this country, leaving behind 5,000, 6,000, 8,000 or 14,000 Irish workers unemployed. We must do what the Japanese do. When the technology comes in we must adapt it, innovate on it, purchase it, develop our own native base out of it and we will have a secure hold on technology rather than being very dependent on imported technology for these industries and having no real influence or control over it.
The role of the NDC also should be quite clear in the exploitation of our mineral resources. It is a national scandal that for several years now we have been one of the largest suppliers of mineral ore to Europe. We have been exporting a finite asset to Europe and we have been using none of it in the context of local industry. I recall that prior to the last general election very many assurances were given by this Government party that that situation would be terminated and we would have a more positive and definite use of our mineral resources, yet it has not happened.
Many people in the IDA would be rather concerned about the role of the NDC vis-à-vis the IDA. It might be that they are being subsumed or taken over or that some new bureaucratic industrial monolith in the Irish scene is going to emerge in yet another office block in Merrion Square and they will all be out of employment. This need not happen. The IDA are established. I pointed out in this House that my own party, the Labour Party, were largely instrumental in ensuring that the IDA were set up. There was terrible opposition at the time but the late Deputy Norton, the late Liam Duffy and a few others, to their credit, did establish the IDA. Therefore, the IDA have nothing at all to fear from us. It is of vital importance that there be no duplication in that area. I have met many of the staff involved in the State sectors, many of them of outstanding expertise, but the resource is spread farely thinly. Therefore, I would not favour any multiplicity of organisations in that area.
There are some other areas where the NDC could become involved. I was listening earlier today to the Minister for Agriculture and we have a situation regarding the promotion of Irish food products to Europe. It is outrageous, disgraceful that now we are exporting massive amounts of food products at little or no added value. The Minister for Industry, Commerce and Tourism has stated recently:
It is disappointing to note that the food sector, which is one of the largest providers of employment in the Irish economy, takes up less than 5 per cent of the IDA's total research and development fund.
The Minister referred to one commodity alone, cheese production. He said, "Between 1975 and 1978 our cheese production fell from 57,000 tonnes to 50,000 tonnes. This decrease must be seen in the context of the EEC where total cheese production increased by 11 per cent in the same period." That is the kind of area where we have failed manifestly to develop our own natural Irish-based native, domestic, entrepreneurial skill. There is reason for a review in that regard.
I conclude by quoting once again from the paper which I commend Members to read, that by Eoin O'Malley on that workshop in Dublin last October when he stated in respect of the policy conclusions—and I do not think that anybody can put it better than he did in this regard—"Present policy relies mainly on private enterprise, the short-term profit motive and free market forces assisted by State efforts which, although quite substantial, concentrate mainly on servicing the needs of industry through grants, tax concessions, advice and the provision of infrastructural facilities, but the task of long-term domestic industrial development in a late-industrialising economy requires primarily that free market forces should be resisted and that the profit motive should not be trusted as a guide. If protection is no longer a realistic option for us, which is probably the case, then the need for a much more active interventionist policy is all the greater".
He went on to say:
The main elements of such interventionist policies, especially in a small economy such as Ireland's, would be to tackle the problems of economies of scale and the external economies by promoting strongly the formation of larger enterprises in a more highly specialised and more highly integrated industrial structure. These bodies would tackle the marketing problems through more intensive and centralised use of State marketing organisations and they would tackle the problems of finance by exerting greater State control on Irish financial institutions.
I share his views in that regard.
It would be easy to criticise our motion because one will always be accused of being opposed to investment and foreign companies coming in here. I have no doubt that we will be classified as idealogical gurus with nothing to do but yell about foreign enterprise in Ireland. I hope that the debate will be a little more constructive than that. It is time to have a balanced industrial strategy in this country which we do not have at present and the lack of which could cause grave concern for the future of our economy. In that context I urge our motion.
I have already explained to the Minister and my colleague, Deputy O'Toole, that I have another commitment with Deputy O'Kennedy in RTE at 10.00 p.m. and I am not in a position to stay. I regret it very much and I appeal to you, Sir, to excuse my absence.
I move amendment No. 1:
To delete all words after "That" and add:
"Dáil Éireann endorses the industrial development strategy being pursued by the Government and its Agencies and notes with approval that the Government has already announced the carrying out of a fundamental review of industrial development policy by the National Economic and Social Council which review commenced early in 1980."
The Government are justly proud of the achievements over the years of the IDA. Their approach to job creation and securing of new industries is most professional. They discharged their tasks within a planning framework which takes account firstly of our manufacturing job needs on both a national and regional basis, and secondly of what can realistically be achieved to harden endeavour and intensify promotion.
The central target in the IDA's Industrial Plan 1978-1982 is the creation of 75,000 new grant-aided manufacturing jobs during the plan period. This will require the negotiation of projects with an ultimate job potential of nearly 150,000. The Authority plan to secure more than half of these jobs from industry within Ireland, principally by established Irish industry and including the expansion of existing overseas firms here. The IDA's strategy envisages that the balance of the jobs will have to be provided by foreign industry. Because of the size of the target, there is no realistic alternative, in the medium-term at least.
Without mobile overseas investment there would be no prospect of achieving the industrial development targets in the regions, particularly the less-developed regions. The native industrial base is weak in these regions and Irish firms generally expand at, or near to, their existing locations. Accordingly, the overseas promotion campaign has to be integrated closely with the ambitious regional targets set in the plan. The rapid expansion in manufacturing employment in the less developed regions is largely attributable to the introduction of new overseas industry. This will in turn lead to spin-off in small and medium-sized domestic firms to supply materials, components and services.
The job potential of natural resource based industries is fully examined in the plan. However, natural resource based industries tend to have very high capital intensity, long lead times and difficulties in marketing products. The plan aims to maximise the job potential of natural resource based industries but recognises that the contribution will be small in relation to overall job needs.
Small indigenous industry is one of the main focusses of the IDA plan and there is now an intensive nationwide campaign in progress which includes the participation of Shannon Development in the mid-west region and the areas of west and south-west Offaly. These agencies operate a generous and flexible scheme of incentives for small industries and first-time entrepreneurs because of the national importance of fostering native enterprise.
Complementary to the special mandate given to the Shannon Development Company in 1978 the IDA in November 1979 launched a promotional campaign to encourage new small industry investment on a trial basis in County Galway under the small industries programme. The results were very encouraging. Fifteen new firms are expected to come into existence as a result of contacts initiated. The campaign was extended to the rest of the country in 1980. In 22 more counties IDA personnel visited towns and held day long clinics and evening discussions where people interested in setting up their own businesses discussed their ideas and learned about the incentives and advisory services available to them. The campaign met with an overwhelming response from nearly 4,000 callers, over 1,400 at the day clinics and more than 2,500 at the evening presentations held in 104 towns. Over 300 possible new projects were identified as a result and preliminary indications are that these could at minimum translate into 2,000 new jobs.
Trade promotions were also held in Dublin to give information on the opportunities for new industry. These have resulted in contact being made with over 100 likely new ventures which are now expected to commence business within one year and create over 500 jobs when they are fully operational. This represents another initiative by the IDA to promote and encourage potential Irish entrepreneurs to go ahead with their projects.
Spin-off benefit from new overseas industry is an encouraging and growing feature of industrial development in Ireland, and small industry has undoubtedly been a substantial beneficiary. Over the first four months of 1980 the IDA's project identification unit carried out a study which identified market opportunities valued at £38 million per annum arising from the needs of manufacturing companies which had set up in Ireland. Of this total it is estimated that about £16 million worth of products could be manufactured by small industries. In 1979, a total 110 projects were approved in the metals and engineering sector as a result of opportunities arising from the establishment of large manufacturing industries in Ireland
I would like to take this opportunity to reiterate that the full range of IDA incentives is equally available to Irish and overseas companies. There is a popular misconception that the IDA in some way favours the foreign investor. This most emphatically is not the case. The incentives and services of the State agencies are fully available to Irish industry and, indeed, the facilities for small industries — which are almost invariably Irish-aimed — are far more generous than those offered to any large multinational.
The new 10 per cent scheme operative for 20 years from 1 January 1981 which will apply to earnings from both home and export sales, will represent a tremendous boost to the Irish sector and represents a unique opportunity to expand and develop our indigenous industrial base. The IDA's and SFADCo's advance factory programmes are designed to cater specifically for the needs of the small indigenous entrepreneur through the provided cluster units.
In their efforts to encourage medium and large Irish firms to expand, the IDA provide grants of one-third towards the cost of work within the firm on investigation and refining proposals which lead to new product ideas, new investments or research and development.
It is fashionable in certain quarters to be critical of multinational corporations without at the same time presenting any firm evidence of grounds for criticism. Ireland has benefited greatly from investment by multinationals in this country. This investment has been a vital factor in attaining national and regional job creation targets. Apart from direct employment in the industries concerned, the establishment of multinational companies in Ireland has generated a continuous high level of activity in the construction and allied industries and has equally benefited many other commercial activities in the country. The industries have brought a wide range of completely new technologies to Ireland and have created a substantial demand for technical and professional staff, thereby providing highly-paid work opportunities for graduates from our universities and technical institutions.
New technology is crucially important to the development of the Irish economy. The advanced types of computers and computer systems now coming on sale will result in substantial time saving and increases in productivity. The utilisation of the new technology will enable Irish industry to become more competitive and the manufacture of advanced technology products here will provide the potential for future expansion in employment.
Some of the world's leading electronics firms have decided to manufactgure here: Digital, Mostek, Fujitsu, Wang, Varian, Amdahl, Beehive, Prime, Apple — the list is now very long. Each of these firms offer high quality employment to a wide range of technicians, engineers and so on. In the electronics sector alone employment has almost trebled since 1973.
New technologies introduced to Ireland by overseas companies include those in the fields of electronics, healthcare/pharmaceuticals and mechanical engineering.
Without the introduction of these technologies by overseas companies, Irish firms could not hope to develop these processes in the same time period on their own. Multinational companies tend to be totally export orientated and have good access to such markets. Export growth is essential if the desired level of job creation is to be obtained and access to export markets is vital. These companies have well developed marketing strategies and expertise which is vital if their subsidiaries in Ireland are to succeed. There is very clear evidence to show that foreign-owned companies have not only contributed to growth in exports but have been a major factor in obtaining market diversification.
This is a good time to refer to matters that are under our own control. Much has happened that has not been conducive to the setting up of industries. The world does not owe us a living. We must provide job opportunities for our young population. We are unique in Europe in that 50 per cent of the population are less than 25 years and approximately 1.1 million of the population are less than 16 years. It is our duty to ensure that as many jobs as possible are created for those young people. Constraints on our industrial development are, to a large extent, the result of our own actions. We have many clean industries that are vitally needed in rural areas but many of the industrialists are frustrated by frivolous or vexatious objections. The IDA are committed to providing industries in urban and rural areas. I do not agree that our environment should be ruined by pollution or that we should encourage "dirty" industries here, but in my political life I have noted that many people do not seem to care about jobs for others so long as they are employed themselves. Politicians should condemn such an attitude. Some wellheeled citizens approach their public representatives and try to twist their arm to ensure that industry is not brought into their locality.
Most local authorities prepare county development plans and they earmark areas for development of industry, housing, agriculture and so on. However, these plans are not sacrosanct. Often it transpires that the areas set aside for industrial development are not suitable for that purpose. Local authorities should discuss all matters with the IDA before they draw up their county development plans. For instance, the area set aside for industrial development may be near a hospital and naturally objections will be raised.
Local authorities spend a considerable amount of money on providing water and sewerage services and on other development work but in some cases they impose what is known as a development charge per acre and this means the land is very expensive. Sometimes the charge may be as much as £2,000 or £3,000 per acre. We must remain competitive in our efforts to attract foreign industrialists to set up industries.
Deputy Desmond in his speech referred to employment. In the United Kingdom there are one million fewer people employed in industry now than was the case ten years ago. They have a rather different population structure in that they have not the young population we have——
The situation is not comparable.
We have more young people and this makes the situation more difficult to some extent. Our population is scattered throughout the country but in the United Kingdom their population is concentrated in large centres and this makes it easier to pay for services and so on.
The Taoiseach said the young people were a challenge, not a problem.
I did not say they were a problem. The IDA are willing to discuss matters with local authorities. I should not like Deputy Desmond to think that the public sector will be excluded in any job creation plans. When the IDA go to a rural area to investigate the possibility of setting up an industry, some local people increase the price of land quite considerably. The IDA are trying to level out the price of land. It must be realised that the cost of servicing land varies considerably. I should like local authorities to take steps not to charge the IDA the full development costs at once. Areas should be developed as industries move in. It is only right that industries should pay development charges when they move into an area.
I should like to refer to a practice that has existed during the tenure of successive Governments, that is, the announcing in advance by some public representatives as well as by some private individuals, of the establishment of factories in their areas. A great deal of damage can be done in this way. Consequently, everything should be signed, sealed and delivered before anyone announces the establishment of a factory. Any foreign or native industrialist establishing a factory here will not want to hear the announcement from a local person. This responsibility should be left to the people who are putting up the money — the industrialists concerned and the IDA.
Who are making the announcements now? In our constituency, five different Ministers have made the same announcement.
It is a question of people jumping the gun in their own areas.
That is the problem.
It is a practice that has developed down through the years.
It is happening in earnest now.
We could talk about many different ways of improving the employment situation. It is very sad, for instance, that we import so much agricultural produce. At this Christmas time I appeal to our people to buy Irish. Perhaps if they once began buying Irish they would continue to do so. They should think of the fine Irish produce that is available. We must encourage our people also to eat Irish, to buy more of our own agricultural produce and, finally, we should encourage them to spend their holidays at home. All of these appeals relate to employment because if they are heeded the extra money spent at home will create more employment. It is sad that many of our people are able to discuss the far-away places they have visited though they have not been to many places in Ireland. It is reasonable to expect that our young people would want to travel abroad but they should be encouraged to see Ireland first.
The Minister for Industry, Commerce and Tourism will contribute to the debate tomorrow evening and I am sure that he will expand on the many points raised by Deputy Desmond.
I do not think that anybody would disagree with me when I say that the IDA are bending over backwards to help indigenous industries to develop and to help anyone who has any plan that might lead to the provision of jobs.
At the request of the Government, the NESC have retained consultants to undertake a detailed investigation of our industrial development policies. I am confident that this timely review will signpost the way for the Government in forming appropriate policies for the challenging years ahead. In addition the Government have a commitment within the terms of the national understanding to bring into being a national enterprise agency in the very near future. While there may be disagreement among us in many respects, there is an onus on each and every one of us to play his part in ensuring that as many jobs as possible are created at home.
Deputy O'Toole.
The semi-State bodies should give a lead in regard to buying Irish.
I did not call Deputy L'Estrange.
You do not have to call me, Sir.
That is one of the problems.
When my colleague, Deputy L'Estrange, came into the House he inquired if there was a wake in progress, having regard to the low key of the Minister's contribution. Indeed, the Minister's contribution was very low key and he might be regarded as having presided over the obsequies of 115,000 jobs. He gave us a long detailed dissertation on the work of the IDA. The motion to which the Minister was speaking reads that:
"Dáil Éireann endorses the industrial development strategy being pursued by the Government and its Agencies and notes with approval that the Government has already announced the carrying out of a fundamental review of industrial development policy by the National Economic and Social Council which review commenced early in 1980."
I welcome the second section of that amendment regarding the review that the NESC have been asked to commence but I object to the fact that the Minister of State should have seen fit to give us the long dissertation on the activities of the IDA while speaking to a motion dealing with the industrial strategy being undertaken by the Government.
Regarding the IDA I must put my views briefly on the record. I am privileged to belong to the party that established the IDA 30 years ago. At that time, despite the fact that the functions of the authority were outlined, Fianna Fáil described the establishment of the IDA as a typical Fine Gael idea.
Fianna Fáil were in power 40 years ago.
Their comment was not intended to be in the sense that one might expect. It was intended to be in the most cynical and destructive sense. However, not long afterwards, that same party on realising how well the authority were working and realising how indispensable they had become, admitted that there had been very good sense in setting up the IDA. Nobody on this side of the House has ever criticised the IDA and I hope that they never will criticise them. The IDA are doing a first-class job. They have done a first-class job down through the years regardless of which party were in power. The authority continue to carry out their functions as a promotional agency for the encouragement and establishment of industry, both for the inducement of mobile investment from abroad and for native industrial projects. Therefore, the Minister could have spared us that long dissertation on the IDA. Instead, we might have expected from him some positive, imaginative and innovative thinking on how to come to grips with the enormous problem with which we must deal. I refer to the 50,000 jobs that are being lost now.
The IDA have done their work in fulfilling their job creation target for this year and yet 28,000 jobs have been lost. On top of that, we have a situation where over 8,000 people are on systematic short time. Yet the Minister did not advert to the fact that this was so and did not give any positive suggestions as to how this enormous problem could be tackled. The most damaging aspect of all this is that with the enormous job losses that have occurred this year there is an inbuilt figure which indicates that the increase in unemployment in the case of people under 25 is 45 per cent. This is the sector over which crocodile tears are shed. The Taoiseach said at his first Ard Fheis as Taoiseach, that he did not regard the increased youth population as a problem but as a challenge. A year later that challenge is becoming a problem of major dimensions which the Government seem unable or unwilling to tackle.
Before this debate commenced the Minister for Agriculture, Deputy MacSharry, gave us the benefit of his wisdom in relation to an industry which is on the floor at the moment. At the end of his speech the average farmer could have hope of no great improvement. The Minister was right in saying that we have a very young and increasing population. To add further to our problems in relation to providing jobs for them we will note the breakdown of the incidence of those engaged in agricultural pursuits. In 1960 413,000 people, or 37 per cent of the labour force were engaged in agriculture but in 1978 there were only 220,000 or 20.6 per cent of the labour force engaged in agriculture. The people who would have been engaged in agriculture had it expanded sufficiently, have gone to Leeds, Liverpool, Birmingham, Manchester and so on. About 20.6 per cent of our workforce are engaged in agriculture as compared with 2.7 per cent in the UK, 6.8 per cent in West Germany, 15.9 per cent in Italy, and 9.4 per cent in France. We have the task of providing work for those people in the industrial sector and in the services sector. The enormity of this task did not seem to cause any problems three years ago when the present Government were seeking votes and the people were told that tens of thousands of jobs could be created through the development of our natural resources. The manifesto now makes sad reading particularly for those on the dole queues.
I will give Fianna Fáil credit for putting their promises on paper but regrettably they stayed on paper. A target of 5,000 jobs in 1977 was reached because of the economic climate and the state of the economy when Fianna Fáil came to office. In 1978 a job target of 2,000 was almost achieved. In 1979 a job target of 25,000 showed where the slippage started, when the payment for votes began to work its way down through the economy. In 1980 a job target of 30,000 was achieved by the IDA in their job creation programme but since this time last year there has been a reduction of 28,000 people in employment.
The Minister gave a list of factories that are in operation. Last week I asked the Minister's colleague through a parliamentary question the number of manufacturing businesses which have closed since 1 January 1980 and I have here three foolscap pages of them. In excess of 68 factories closed and that is apart from the number of factories operating on a two-and three-day week. Yet there is not a word from the Minister who is endorsing Government policy in relation to industrial development. One would have expected some positive views, an admission that the problem exists and something to relieve the human tragedy which is now around us in the form of an intolerable level of unemployment.
The Minister spoke of import substitution. We had in the manifesto the now infamous transfer of purchases of 3p in the £ which to Irish products was supposed to provide 10,000 jobs. The Government seem to have thrown discretion to the winds. They seem to have lost control of prices and production costs, which causes loss of competitiveness in the export market and they have closed their eyes to the problem of imports. They are giving it lip service but are doing nothing. At the moment we have the ludicrous situation where we are importing £5,500 million of goods, which comes to £5,000 per person.
The position here in relation to the multinationals bears examination. Indeed, the Minister for Industry, Commerce and Tourism some months ago in the House during a debate on SFADCo said that it was something to which he was at present giving some attention. We cannot reach a stage where there will be over-dependence on overseas investment. Let me state categorically, on the subject, and not for any ideological reasons, as it is a question of practical application in relation to what is happening at the moment, that if we find ourselves very dependent on foreign investment, we shall be subject to the vicissitudes of economic pressures thousands of miles away. There was a time when a conflict in Iran, Iraq, the Far East, Latin America or the United States was something about which we read now and again in the newspaper and the effects of which never reached our shore. That day is gone. The world is now a small place where we are interdependent and where any kind of upset in the balances which keep things going causes ripples right around the globe. We are subject to the effect of these ripples.
The reason why I suggest that we should, in so far as we can, look to a more concentrated development of indigenous industry is simply that they would not, to the same extent, be subject to the effect of these ripples. In 1975, for example, overseas job new approvals comprised 44 per cent of the total; in 1977, 49 per cent; in 1978, 45 per cent, and we are now hovering around 45 to 50 per cent. This is not too high provided that, parallel with this input through mobile investments from abroad, we develop our own native industries, using imported raw materials or, better still, our own materials. I am in full agreement with the Minister that there is room here for development. There are problems.
At present, we have four different Departments involved in industrial promotion. We have the Minister's Department of Industry, Commerce and Tourism to which the IDA are responsible, the Department of Finance which presides over the activities of the county development team who normally engage in the promotion of small industries, the Department of the Environment in relation to the promotional functions of the local authorities, both through the planning aspect and the forward purchasing of industrial sites and so on to hand over to other agenices when the time comes. We have a further Department, the Department of the Gaeltacht, to which Údarás na Gaeltachta is now responsible. There we have four agencies and in view of the traditional rivalries that can exist between Departments, there could be a dissipation of effort and, indeed, duplication in some cases. It is time something was done in relation to this. Could I make a solemn proposal to the Minister? He is at present one of three Ministers in the Department of Industry, Commerce and Tourism with his colleague, Minister of State Deputy Gallagher and his Minister, Deputy O'Malley. Would it not be possible to have one Minister of State, either himself or his colleague Deputy Gallagher, solely responsible for the development of our small firm sector? In addition, a national small business agency should be set up for the administration of all grants and incentives for small industries. Responsibility could be given to the Minister's Department to co-ordinate the efforts of the agencies now travelling in the same direction but on different tracks. Many of these tracks never meet, being parallel lines. The future of our economy and the solution of our enormous unemployment problem lie in that sector.
The Minister is asking the House to endorse the industrial development strategy. How can we be expected to do that?
Debate adjourned.