Deputy M. O'Leary had three minutes remaining. He would appear to have forfeited his three minutes. Deputy Liam Lawlor.
Private Members' Business. - Employment Creation: Motion.
The following motion was moved on 23 March 1982 by Deputy E. Collins:
That in view of the current unemployment situation Dáil Éireann calls on the Governmenr to establish without delay the National Development Corporation and to provide it with £20 million capital resources for investment in employment creating activities in 1982.
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"supports the Government establishing the National Enterprise Agency and providing it with necessary finance for its operations."
—(Minister for Industry and Energy, Mr. Reynolds.)
I should like to compliment you, a Leas-Cheann Comhairle, on your election and wish you well. This is the first opportunity I have had of speaking in the House since my return. I should like to congratulate the Minister also and to wish him well.
Dealing with the motion put down by Deputy E. Collins and his colleague, Deputy John Kelly, I find it somewhat confusing and I listened very attentively last evening to Deputy Collins when he spoke. The record of the House will show that Deputy Collins ran through some of our major economic ills but did not really develop the potential of the National Development Corporation. In my opinion it is unacceptable that such an important subject should have been put down as an in-fill motion, if you like. The outgoing Tánaiste and leader of the Labour Party was the person responsible and there is no reference in the motion to the Labour Party's commitment. Deputy O'Leary, speaking on the motion last evening, more or less confined himself to suggesting to the Minister how various economic matters should be thrashed out rather than elaborating on the detailed workings of the proposed National Development Corporation.
Having spent four years, from 1977 to 1981, as a member of the Joint Committee examining the workings of the semi-State companies, of which Deputy Collins's colleague, Deputy Cooney, and the deputy leader of the Labour Party, Deputy Barry Desmond, were also members, I should point out that we investigated over 20 semi-State companies in that period. The reports laid before both Houses of the Oireachtas will show that the contributions of those Deputies from the present Opposition parties were very much against the concept of this National Development Corporation.
That was the first committee set up since the foundation of the State to have direct access to the workings of those semi-State bodies. Over the years this House voted vast sums of money to the various semi-State bodies whose accountability was through a board of directors. Therefore Ministers did not answer specific questions in relation to those bodies. During the period of the 21st Dáil, for the first time, an all-party committee was afforded the opportunity of meeting face to face with the directors and management of those bodies and of assessing how taxpayers' money was being used by them. In regard to those 20 companies in respect of which comprehensive and detailed reports were produced one finds continuously major financial difficulties among the major ones. As a committee we were at all times in agreement as to how this should be dealt with. We were in the position of being able to assess how in some cases taxpayers' money was not being wisely utilised or invested.
On that basis I am somewhat confused about the intentions of the National Development Corporation. Consequently, I feel this body was perhaps ill-conceived and ill-timed in its launching by the former Tánaiste on 10 February, when in the heat of an election campaign he hurried together a press conference for its launching. At that launching we were told how crucial and important the outgoing Government, now the Opposition parties, felt the National Development Corporation to be. One is somewhat mystified about why it took approximately eight months before an announcement was made for its implementation. One could genuinely suggest therefore that there was a difference of opinion among the Coalition parties as to its concept.
I have no ideological hang-up about whether the National Development Corporation constitutes the way forward or whether it should be through the National Enterprise Agency; whichever vehicle brings about the desired effect of job creation is what should meet with the approval of this House. I could not understand how another layer of bureaucratic procedure, under the umbrella of the National Development Corporation, would do anything other than find itself with a basketful of major semi-State companies, the bulk of which are in serious financial difficulties. When one examines the list of companies the outgoing Government produced to be brought under the umbrella of the National Development Corporation one is even more horrified by any endeavour to assess how it would function in regard to job creation, inheriting some of the very serious difficulties obtaining in some of them and in respect of which the corporation was intended to be responsible.
Among the companies listed at the former Tánaiste's press statement of 10 February one finds the Irish Sugar Company, who I believe are seeking something in the region of £66 million, or are in need of that amount of capital injection.
Whether or not they have a specific request to the Minister for Finance I am not in a position to say, but a recent article in a commercial journal suggested that they were in need of that amount. Irish Steel Holdings, it would appear, have overspent something like £25 million to £30 million on their project at Haulbowline. Therefore they are in need of a major capital injection also. Nitrigin Éireann Teoranta are on that list also and I see in this evening's Evening Herald that that company are experiencing further difficulties involving potential job losses of 200. On leaving office in June last one of the last functions of our Government was to allocate an additional £50 million to NET which was half of what they sought from the Minister for Industry and Commerce. We then had the National Petroleum Corporation, the ESB, the Gas Board and Bord na Móna. I do not understand how one could say the National Development Corporation were going to get immediately into the job creation area if first of all they had to assess the present state of these companies and then decide from the financial point of view what was going to happen. The companies I have listed are a matter and a problem for the Ministers for Industry and Energy and Finance and there should not be an intermediary vehicle such as the NDC.
I do not propose to deal at length with the concept of the NDC other than to put in perspective for the House the intended launch and the comments of some independent journalists following the press conference when they questioned the then Minister for Industry and Energy, Deputy O'Leary. I wish to quote from The Irish Times of 11 February:
Slowly it came unstuck, steadily the questions layered over the grand plans until after an hour the infant NDC was almost buried under a mass of sceptical queries and vague replies. And the Inevitable Question hung like a guillotine over the afternoon's proceedings, eventually to fall with a sad inevitability.
A few paragraphs later there was the following comment:
As the NDC's grand launching stuttered and stammered along came the inevitable. If the corporation's gestation had come to a natural conclusion entirely by accident eight days before the general election, how was it that departmental officials had known nothing about its imminence on Monday and Tuesday of this week?
Confusion among the officials. A stoical Minister averred that his senior men knew nothing of such journalistic queries. Did the Minister seriously expect us to believe that the unveiling of the NDC had just happened a week before February 18th?
On 14 February 1982Magill dealt with the same press conference. A number of questions were posed and I shall refer to a few paragraphs in connection with the intended £200 million the then Tánaiste announced as the so-called working capital of the NDC. Magill reported as follows:
... £200m to throw into the employment kitty.
Honest, no kidding. We've been discussing this for months. The five civil servants flanking Mick nodded wisely. "This is not a Labour Party press conference," said Mick, "it's a Departmental press conference". He said that seven times. "The unveiling of this ... it is quite fortuituous!"
That could have been okay, par for the course, and the first half hour of the conference went by with easy questions while the journalists digested the six pages. Then the hard questions began, and Mick came apart like someone had unscrewed his navel.
It was the bit about taking nine semi-state companies under the umbrella of the NDC that got Mick in trouble. What happens if, say, Irish Steel loses more money than has been allocated for it, where does it go for more? The NDC, says Mick.
"And suppose the NDC hasn't got the money?"
Mick tapped his biro on the table, squared his jaw and said... "Suppose NDC hasn't got the money, Mmmmm.
That is the question I pose. I hope that Deputy Kelly will come into the House as his name is down to the motion. I should like to quote from a radio interview Deputy Kelly gave on the National Development Corporation. This matter came up for questioning on a radio programme on 7 February when the interviewer asked the Deputy the following question:
Well, are you a firm supporter of the National Development Corporation which Fine Gael is embracing now? Surely that might well be used to produce those kinds of jobs which you don't want?
The then Minister, Deputy Kelly, stated he would not support job creation for the sake of job creation, that it should be for productive employment. He made the following reply to the interviewer:
No, not if I have anything to do with it. I certainly would oppose that. The actual working dimensions and structures of the National Development Corporation hasn't yet emerged. When it does, I certainly, and I believe everyone else in the Government, will be anxious to ensure that the jobs which it creates are productive jobs which justifies itself economically. Any other kind of jobs may in the short term take figures off the unemployment list but in the long term it would be a millstone around people's necks.
Deputy Kelly stated at that time that the actual working dimensions and structures of the NDC had not emerged but they came rather quickly, possibly because of the pending general election.
I cannot see how the NDC could create jobs while taking on the difficult problems of the semi-State companies listed in page 5 of the press release of 10 February. Possibly the outgoing government should have taken the National Enterprise Agency and should have implemented what we intended to do. The agency were established prior to our leaving office in June 1981. We had listed the board members of the NEA: it was a broad cross-section of people from industry, the trade union movement and with representation from the IFA and the Department of Finance. It would have been practical and progressive if the then Government had allowed the NEA to commence their operations with a working capital of £5 million. If it was obvious from experience that legislation and additional capital were necessary, the Government could have come to the House and convinced it that further investment was worthwhile, that the initial working of the agency justified further investment and they could have expanded the role into the concept of the NDC if that was the case. However, the then Government did nothing about the matter for seven or eight months until they rushed into a press conference announcing the establishment of the NDC without considering the workings of the corporation and their functions.
I come back to the experience of the Joint Oireachtas Committee dealing with semi-State bodies. In four years we found that many semi-State companies had been making comprehensive recommendations to various Departments but that answerability was not there. In my opinion it was irresponsible to create the National Development Corporation to act as a further in-between body with the Minister responsible. I suggest that when the Minister is considering the workings of the semi-State sector and the NEA he should look at at the possibility of employing under his Department a hardcore of full-time directors for semi-State companies. Many of the people I questioned when a member of that Joint Committee were competent and had been selected because of their experience but by virtue of their part-time involvement in some of the country's largest industries it was clear that it was impossible for part-time directors to devote the time and detail to some of the more complex semi-State companies. In most of the 20 reports on semi-State companies presented to the House one finds that communications between the Minister, his Department and those companies were not the best and resulted in some major problems.
I should now like to deal with the Minister's intentions for the NEA. They have a crucial role to play and that role can be expanded in due course but the fact that the Minister is speedily setting about getting them operational is an indication of his determination to tackle the unemployment situation. It is an indication of his anxiety to do everything possible to make an impact on the job creation programme. The policy being pursued by the Minister is correct. It is correct that the funds for the NEA should be raised from sources other than from the Minister for Finance. The potential of the agency is immense. There is a need for involvement by the NEA with semi-State companies in joint ventures or in taking on some of their R and D work. Some of those companies, because of their financial situation, are not in a position to diversify, but a lot of expertise in relation to job-creation programmes exists in them. I recall that Bord na Móna carried out a number of studies on energy saving mechanisms and I feel that the NEA could make progress in that field if discussions were held with that company.
There is a real distinction between the NEA and the NDC. The NEA should be allowed to proceed on their own or in conjunction with private or semi-State companies and not as intended under the proposed NDC to pass the responsibility to the various boards of the semi-State companies. The NEA could have a major role to play in my constituency. It is my intention to approach the Minister about a number of projects in my area to see if there is job creation potential in them. The new agency would also benefit from the work of the research and development section of the IDA. Very often the biggest problem of that section was to get private enterprise to recognise the necessity for research and development in bringing new products on the market. The NEA can act as a catalyst between private companies that possess the necessary expertise but do not have the working capital and semi-State companies that are already heavily committed but have new ideas. I should like the Minister, when replying, to tell me if he accepts my point about board representation of semi-State companies. Full-time directors should be appointed to the boards of those companies with the responsibility of reporting directly to the Minister. The reports of the Joint Committee on State-Sponsored Bodies would justify that change.
I am sure the job creation proposals will receive the support of all sides. I suggest to the Opposition that their motion is not the correct way to deal with this matter now. The intention of the Minister to make £5 million available, compared to the £20 million suggested for a national development corporation, at a time of limited resources is correct. That will give the new agency adequate funds in 1982 to create additional jobs. The figure of £20 million is excessive. I do not see how the NDC would not get involved in the difficulties of the semi-State companies it was suggested would be under their control. The Minister is to be complimented on his speedy action in introducing this proposal. If the motion by the Opposition helped to speed that along then it has done some good, but in my view it amounts to a double think. I do not think Fine Gael were committed to a National Development Corporation because yesterday Deputy Collins did not spell out in any detail how the corporation would function in 1982. I look forward to the NEA operating. I will keep a close watch on their workings and I will be putting forward some progressive and positive recommendations.
It is extraordinary that a member of the Government party should regard as acceptable an allocation of £20 million to help meet our unemployment problem. It is extraordinary that he even went further and stated that he regarded £5 million for the NEA as being the right amount in present circumstances. If we are to assess the merits of the NDC and the NEA on the amount of money the Government intend putting into them there is no doubt that the NDC would win hands down. However, other factors have to be taken into consideration. If the Government are to take non-economic considerations into their reasoning behind an input of a meagre £5 million, then it is indicative of niggardliness in regard to expenditure and a lack of commitment on the part of the Government that this enterprise agency will really do the job that needs to be done. Let the House not doubt that special measures are needed at present to meet a deplorable situation which is becoming dramatically worse week by week. If anybody were told in mid-1977 that the number of unemployed by mid-1982 — only five years later — would have escalated from the then figure of 85,000 to approximately 140,000 in all probability it would not be believed but such is the deplorable state now reached. It is more remarkable that young people feature at an increasing rate in the unemployment figures. That is where the sadness is involved.
In 1981 the Department of Labour were notified of redundancy at a figure which showed an increase of 20 per cent on that notified in 1980. So, special measures are needed quickly because time is of the essence in this matter. In more normal times which we had in the past couple of decades we could look at the structural effects existing in our industrial make-up, at the effects that perhaps a rate of inflation which was getting a little out of hand was having, at the effects which a recession in the terms of the sixties or even up to the mid-seventies which was limited in terms and theories would have on employment and the number being made redundant. We have not now the leisure of normal times to go into this matter. If we were to attempt to do so it would involve a study of the nature of these structural defects, what is needed to be done with many of our present manufacturing enterprises which have obsolete equipment as well as in many cases, obsolete ideas: one would need time to study and to plan adaptation in all those industries to ensure that everything was brought up to date.
An example of an industry which a couple of years ago was hailed with great expectations is the electronics industry. We can now read between the lines of various reports emanating from that industry in this country that alarm signals are being sent up. I had a case in my own constituency of an electronics firm not being in a position to carry out the necessary research and development to update their ideas and bring out more advanced equipment. Particularly in the electronics field we find products becoming obsolete and out of date after six months in existence. That means that a considerable input of money is needed to enable these factories to update equipment and products and carry out the necessary research. Time is not on our side in this matter. We know from experience how long it has taken us to investigate structural defects, to plan and implement what has to be done and provide the necessary money. If the structural defects situation cannot be examined in the times we have and in the circumstances surrounding 140,000 unemployed — a number which is increasing by approximately 20,000 per annum — we find there is something else we must consider. I refer to a report by the Northern Ireland Economic Council recently issued. While it is in the context of Northern Ireland and the UK it has a certain relevance here. Although we have been able to congratulate ourselves over past decades that our rate of unemployment in this part of the country is not as high as in the Six Counties, we know from our experience over the past five years since 1977 with our escalated figures that we cannot be complacent any longer. The Northern Ireland Economic Council report said that without special measures youth unemployment would rise to 60 per cent in the UK by the end of 1983 and that the outlook for Northern Ireland was even more serious. Youth unemployment at 60 per cent of the total unemployment figure — here we are talking about school leavers who go out from their studies with expectations and anticipations and the hope of finding jobs and so fulfilling their first dream in adult life. We find that a figure of 60 per cent of the unemployment would be represented by school leavers.
The report was quite modest where it said that unfulfilled expectations led to apathy and alienation. I believe we have seen here evidence of apathy. In the 1981 general election, after the four-year period in which the unemployment figure escalated from 85,000 to about 125,000 in the middle of last year, on the doorsteps we found apathy creeping into the minds and attitudes of young people and their parents regarding success in finding positions. In the 1982 general election I found it extraordinary that not only was there apathy but it was practically accepted that a high level of unemployment could be the norm for years to come. That has social implications and consequences of such a massive nature that it needs to be tackled urgently.
The other factor of alienation to which the Northern Ireland report referred has even more horrifying prospects if unemployment is not brought down. Alienation means that young people and the unemployed withdraw mentally from the society in which they live, become almost hostile to it. That breeds violence and civil disturbance, things we cannot be complacent about. As we have seen, the horrifying increase in unemployment in Northern Ireland can now be repeated in this part of the country to the same extent unless the problem is tackled.
The EEC issued a report in the past month in reference to the poverty situation within the EEC. How sad it is to read that in the matter of household poverty Ireland has only Greece below it in the table. I have no doubt that there is now acceptance that unemployment could be expected to be the norm for all those leaving school and all who try to obtain entry to the work force. We had better face up to the social implications involved. That is why special measures are needed. That is what this debate is all about and not whether the development corporation would do a better job than the National Enterprise Agency or whether £20 million would do a better job than £5 million. These are meagre amounts to meet a horrifying situation.
In normal times we could accept as reasons for increasing unemployment international recessions. These could be regarded as a contributory factor just as the worldwide recession can be regarded as contributing to the present sad situation but the problems recessions present for this country are aggravated by the fact that recessions now seem to run into each other much quicker than ever before in the history of capitalism. One recession is only interrupted by a short interval of prosperity — if one could call it that, not to mention a boom period — when another arrives. A boom period is something that is almost gone out of our economic terminology. I know it has been verbalised lately but we should not pay too much attention to mere verbalising about a boom. If a recession is followed very quickly by another recession, in an interval too short for an economy to prosper and save up reserves by putting sufficient money aside for the wet day when it comes the difficulties then confronting this small country will be more numerous and worse than those presented to the stronger democracies. We are not able to cushion the effects of the subsequent recession. In the seventies it was very difficult to find any period of more than 12, or 18 months at the most, which showed any sign of affluence or upswing sufficient to enable us to put by sufficient for the bad times which were always nearer than hitherto.
Regarding the rate of inflation, if we were talking about an inflation rate akin to other countries or slightly in excess of them, we could say that we had factors to compensate for our high rate of inflation so that foreign industrialists would still find this country attractive for investment. When we had a rate of inflation approximating to Britain's, as most of our trade is still with Britain, we could cope. We are, however, moving into an area where our rate of inflation, at about 20 per cent, compares very unfavourably with the 6 or 8 per cent in EEC countries and in the UK of only 12 per cent. How stands our excessive reliance for trade on the UK, with our almost double rate of inflation? The gulf is so big that the consequences in competitiveness are not hard to envisage.
We cannot act as if times were normal. We are suffering from the temporary effects of recession. We cannot deal with the structural defects of our industrial make-up because the times are not appropriate to give sufficient thought, study, preparation and planning to bring about structural improvements. If our rate of inflation has gone berserk vis-à-vis that of our competitors, then there is need for special measures — and that is what this debate is all about, whether under the aegis of the development corporation or any other body.
That is not to say that the State and semi-State authorities have not been doing their work; they have been working very hard since their establishment 30 or 40 years ago, or even in the last five years. The Industrial Development Authority have done tremendous work in attracting foreign investors and encouraging our own people to set up small enterprises. The authority have been very cautious in regard to risk ventures and we have ample experience of one which failed in Northern Ireland. We can thank the authority for not hanging that millstone around our necks.
The Industrial Credit Corporation have, to the extent of their ability, provided funds necessary for investment purposes. Fóir Teoranta have stood by as a rescue agency when the need arose. Our State and semi-State concerns which employ considerable manpower have now developed such skills and expertise that they can go outside the confines of this country and earn money by professional advice and consultancy services abroad.
Private companies are to be congratulated for their work, particularly those which have expanded in difficult times in the past. Special tribute must be paid to large private companies which have engaged in joint ventures at considerable risk and for whom, perhaps, the outcome may not be all that satisfactory. We have had the example of Fieldcrest recently. We have had the Buy Irish Campaign, the import substitution programme by the Industrial Development Authority, some local development companies set up on the initiative of, and at the risk of, many local people in many parts of the country to try to attract small and large industry to their areas, to use the development companies as a pressure group, if nothing else, to try to attract industry under the aegis of the IDA. We have had various Governments either initially establishing considerable taxation incentives or providing very considerable adaptation grants.
The figures are proof that while commendable efforts have been made — and tribute must be paid to all these bodies — not enough, unfortunately, has been done to keep pace with job losses. That is what we are talking about tonight, about what extra needs to be done and what is the best way of tackling these increasing job losses. A new growth incentive is obviously needed in the Irish economy. It was that need which made the Coalition Government in their short time in office introduce two measures, firstly, the National Development Corporation and, secondly, the Youth Employment Agency, the Development Corporation, through an initial capital allocation of £20 million to enable the State on its own or through a joint venture to directly create productive jobs. It is in these productive jobs that our salvation lies.
The Youth Employment Agency were established on the experience of the last five years where young people were given work experience tasks and found them so satisfactory that in many instances they moved on to other jobs in three or six months, or else moved into a permanent position which their employer decided at the time was warranted.
My only reservation regarding the Youth Employment Agency is that greater emphasis should be placed on youth training, particularly in the sense of acquiring skills and crafts. We have had experience where three or four weeks' or two months' work was given to young people levelling, cutting grass and so on on the roadside. That is no good to those people. It only curbs their initiative and creates disillusionment in young minds. A greater emphasis should be given to their training in skills and crafts rather than employing them for employment's sake.
In re-activating the National Enterprise Agency and killing off the National Development Corporation the present Government have taken a step and, going on what the previous speaker said, I am not so sure that sufficient thought has been given as to why the National Development Corporation are inadequate and the National Enterprise Agency will do a better job. The outgoing Minister for Industry, Commerce and Tourism last night said that there was sufficient documentary evidence to show that the National Enterprise Agency, when it existed a year or so ago, was not adequate for the task in mind. Why, therefore, are the present Government killing off the National Development Corporation? There have to be good reasons for this. Last week the Taoiseach referred to developing a national plan. If a national plan were to solve the problem, they would have been solved long ago. The national plan is a waste of time. It is necessary that a plan should be produced quickly and the Government of the day should have the courage to implement it. If we are going to indulge, for the term of this Government, in talking about £5 million being an adequate amount in present circumstances to get such an agency off the ground and to have some effect on unemployment figures, we may be talking about such things too late in the day.
It all comes down in the end to what the Government's economic strategy is. Economic strategy is also the key to this problem. Is that strategy one of tackling inflation to make our goods more competitive in other EEC countries, especially Britain? Is it a strategy of pumping in more borrowed money to create jobs? If you tackle inflation on its own you will be more competitive, there may be a short-term price to pay but the long-term benefit will be that inflation will be reduced. We cannot afford the situation to continue where our inflation stays high while inflation in other countries is falling. If the strategy is to pump in more borrowed money, you can fuel inflation and create jobs but the temptation is always to create jobs at a quick rate to justify excessive borrowing in the short term. Jobs which are created on borrowed money are always at grave risk of dying off very quickly once the products come on the market at an uncompetitive rate.
The outgoing Government have left two matters for the present Government to act on. Perhaps it was for spiteful or for other reasons that they killed off the National Development Corporation. I hope the Youth Employment Agency is allowed to survive. I would be horrified if either of those planks was thrown out for other than economic reasons because economics will solve our unemployment problem. I ask Fianna Fáil to think again about the National Enterprise Agency because the amount of money they are devoting to it is not indicative of a full commitment on their part. Money is crucial in the whole matter of solving unemployment. We should remember America in the thirties and what the American Government had to do at that stage. People should be engaged on productive work, that is the important thing. We should not kill the incentive which is in the minds of young people.
There is a considerable reservoir of talent in skills and crafts at local level which the Government can tap. There is always a greater pride in a community being able to develop and create some small manufacturing unit rather than depending on the IDA to provide it. It is a confidence which emanates from fulfilling something oneself, which can be contagious and have beneficial side effects. The Government should encourage the establishment of small community development companies, either private or limited. They could be made non-profit making under their articles of association. If they need some form of assistance to purchase a site or epuipment, and if the Government are assured that that local development company are acting with skill and talent and are interested only in creating jobs, then they should contribute some financial aid to such development companies, private or limited, as long as the community feels an involvement in them and that they can see at first hand the work which is being undertaken.
I urge the Government to reconsider their decision to axe the National Development Corporation. It has been plainly obvious over the last decade that all the outstanding work which has been done by the IDA and the other promotion agencies is not enough in the present difficult times. The NDA was established by the Coalition Government as embracing the special measures which could be provided to meet unemployment which has such difficult social implications for us, even terrifying in aspects unless it is curbed very quickly. We can see increasingly the social effects of unemployment. Responsible persons have admitted that unemployment is adding to violence and creating difficulties which were not seen before. The Government should provide more money to solve unemployment and to treat it as an urgent priority and not as something which £5 million can be allocated to for 1982. It is plainly an inadequate amount.
I want to get to the heart of the matter by pointing out the reason why the Government wish to have the National Enterprise Agency as opposed to the National Development Corporation. It is not simply a matter of the name of this body. We are not quibbling about what it is called. Our aim is to provide work for young people and to do it in a dynamic way. What is the difference between the National Development Corporation and the agency which the Government are going to set up? The National Development Corporation which was proposed by the outgoing Government was intended to be a supervisory body, a stewarding body, another layer on top of the plethora of layers which we already have supervising people who work. It was quite clearly envisaged by the outgoing Government that this would supervise the nine State companies which are mentioned. It was said it would invest funds through the Minister for Industry and Energy in existing State enterprise. It would hold the shares of existing State companies, it would develop the strategies of State-sponsored bodies and exercise a supervisory role over the activities of the State enterprises involved. The last thing we need at present is to delude ourselves into thinking that we can set up another supervisory body. We already have State boards looking after these State organisations. Why do we need another layer, another Government appointed board suddenly to supervise all the State-sponsored bodies? We would have the Government supervising the National Development Corporation which the Coalition wish to set up, that body supervising the boards of the State companies, the boards of the State companies supervising the management and the management supervising the workers. It is a magnificent structure but it takes away totally from what we are trying to do for our people. Our objective is to provide jobs and not just jobs for the boys on State boards: we must provide jobs for the people.
Therefore, I had no time for the National Development Corporation which sought simply, as stated in the handout of the previous Government, to supervise the activities of State enterprises. The last thing we need is another supervisory body. Our choice is between a supervisory, bureaucratic type of organisation and the agency which this Government propose, which is a more commercial, more flexible venture-capital type of organisation which unashamedly would pick up areas that might have been overlooked by the State companies, to try to get a better commercial return out of them. When we talk about commercial returns, profits, we do not talk about them for their own sake. We are talking about profits for the benefit of the people. For too long making a profit here was something to be looked down on.
I take the view that we should encourage our State companies to make surpluses. It is then a matter for the Government to decide how the surpluses will be utilised, but before we start distributing all those profits let us get down to making some. We can then help the people of the country. The simple alternative to surpluses is deficits and that means that taxpayers' money must be paid out continuously. That is what would have happened if the National Development Corporation had been imposed on us — more bureaucracy, more deficits and more money extracted from the State purse.
Although the National Development Corporation had a nice aim, to make State companies more commercial, I do not believe that it would do that by itself. If you want to make State enterprises commercial you must talk to the boards of those companies and tell them to get their companies properly organised, but do not set up another body to do it. It is in that area that the agency proposed by the Government would get to work.
The proposed National Development Corporation among other things would have had to take up some of the losses of State companies. They would have to take on board responsibility for all the borrowing of those companies. In such circumstances how could such a corporation provide new jobs? Most of its time would be taken up sorting out the difficulties of State boards and attracting new capital to provide jobs for the people? It was bad thinking even to suggest for a moment that such a corporation could do that. The corporation, as proposed, would have been tied down completely with the job of sorting out State companies, dealing with the banks and generally trying to bail the State companies out instead of concentrating on what the Government are now trying to do through the National Enterprise Agency.
The purpose of this agency is to try to create some jobs. Our preference for such an agency is not because we think its name sounds better. The agency will start afresh, it will attract some capital from the financial institutions because of the return it will offer and in that way it will provide the capital to create the badly needed jobs throughout the country.
I should like to make some suggestions to the Minister. It is important that we consider what the new body could do by way of planning. There are many companies throughout the country who would like to see a plan for each sector so that each company can decide where its future lies. The agency must also consider specially our marketing structures because at the end of the day, we can cod ourselves all we like, if companies do not sell abroad then the companies cannot survive and the jobs must go. Although CTT do a good job, there is still a huge job to be undertaken in the marketing area. The agency must also participate in the youth programme.
Put youth, enterprise and capital together and see what it will give us. I cannot foresee any conflict of interests between the IDA and the new agency. The IDA are a grant giving promotional body whereas the agency will be a development and venture capital body. To some extent its role would be that of the merchant bank except, of course, that it would have a far more social conscience, nevertheless determined to enter the marketplace with a commercial outlook, having attracted the capital from the financial institutions and ultimately sponsoring projects which will be profitable for the people. I am not speaking about projects which will take a few people off the unemployment list, because they are not real jobs.
The spirit behind the agency will be to rekindle the element of venture enterprise which we so desperately need. People can talk all they like about redistributing wealth and looking after the less well-off, but we must first of all create the wealth. It is only in that way that we can fulfill our social obligations. As I have said, we have a million young people in education, there are 700,000 people on social welfare, there is a State sector which is growing daily, and at the end when you look at the Irish economy, you must come to the inescapable conclusion that the country needs a dose of venture enterprise, and I am not worried about whether that comes from the State, semi-State or private sector. If we do not get that venture enterprise we all go down together. The aim of the agency must be to foster that enterprise and to attract private funds for that purpose.
The agency proposed by Deputy Reynolds will get its funds mainly from the private sector, whereas my understanding of the proposal in regard to the development corporation was that they would begin with a golden handshake from the State. That has the implication that when they had spent the first £20 million they would come back looking for more. Could one expect the big financial institutions to invest in any kind of operation which had around its neck a number of State enterprises with very heavy borrowings, heavy losses? The body proposed by the previous Government could not attract private funds because commercial institutions would not invest in such a body.
There is one other place that that money could be got. It would have to come from the Government, from the pockets of the taxpayers. That is a nice cosy operation and it bows the knee to the various philosophies but it does not provide the jobs we need. More dangerously, it does not provide the kind of investment opportunities which our financial institutions need. The major financial institutions, the merchant banks, are tending to let the venture capital of this country flow out of it not because they want to do it but because the opportunities for investing here have been getting smaller by the day.
What we are trying to do in this agency is to give the major financial institutions and the merchant banks and all the people who today hold the capital in this country a real opportunity of investing Irish money in Irish organisations to provide jobs for Irish people. If an agency like this does not provide that investment opportunity, how can one blame the financial institutions with the heavy funds to invest putting them into property or into foreign funds? Of course they do that because that is where they get the return.
This is not just a semantic argument about names for an organisation. It is a fundamental difference of opinion between the kind of corporation proposed by the outgoing Government and the one which we are now proposing. To illustrate that, it is proposed that the development corporation or association would get £20 million from the State. Our proposal is to give them £5 million to start and send them out into the market place to pick up these private funds and in doing so to get moving in this country a very strong enterprise agency which, as it makes surpluses and opens up job opportunities, will surely attract more and more private funds. If it is not attracting private funds we have to question whether it is worth having because the day it stops attracting private funds is the day it will become a white elephant.
It is clear that the enterprise agency is the way forward because of the openings which it gives financial institutions, because of its potential to create jobs, because it is a genuine commercial organisation and not just another super layer of Government organisation through which files will pass up and down from the Government to the development corporation, to the semi-State companies, to the board of directors until we are all blue in the face. That sort of thing will not provide the new jobs and I want to stress that because that point has not come out as strongly in this debate as it should have.
I want to ask our financial institutions and our banks to reconsider their policy in regard to lending. It is all very nice and safe for the commercial banks to lend money for nice cosy commercial enterprises in accordance with the old definition of a bank: "I will lend you money if you can prove you do not need it". That is what the banks are inclined to do. If a company has already made huge surpluses on a previous investment they are ready to lend money. But they must follow the United States example in this regard and put aside more and more funds to put into Irish venture capital, Irish enterprise capital. If the State puts in some initial amount and the banks can leave aside some of their funds from the cosy lending for the venture lending and we can get our young people mobilised, then we will have a real opportunity to provide jobs for our young people.
I want to conclude by restating what I said at the beginning. The difference between these two bodies is not just simply in the name it is called or that because we did it it is better than what the Coalition Government did. I am not interested in that kind of politics. I am interested in providing jobs for 45,000 young people who are outside this door today in the streets, who have not got work. We can do that in two ways. We can do it by providing the enterprise and the initiative, by providing private funds with a State lead, or we can do it by adding in another layer of superstructure on top of the creaking State machine which is already over-burdened and cannot take much more. I suggest that the enterprise agency as proposed by the Minister, Deputy Albert Reynolds, is the way to do it. It is the only sensible thing to do and we should get on with it.
Last evening I spoke about the development within the Irish economy since the foundation of the State and how this party supported the development of a mixed economy where private enterprise was allowed to succeed, to prosper and to develop and given every encouragement to do so. At the same time this party supported State investment in enterprises which were needed. I instanced some of them, such as the ESB. So, we are firmly committed to the concept of a mixed economy in which we have private enterprise and in which the State plays an active part.
Obviously that intervention is important not only from the point of view of ensuring infrastructural development and establishing essential supplies but also in the context of attaining full employment to which everyone in this House aspires. I indicated the recent developments within the economy and indeed outside the economy which have given rise to the increasing and unacceptable level of unemployment which began with the first oil crisis of 1973-74 and has continued since and has done great damage to the fabric of industry and to the base of taxation and public finance.
We are now facing a crisis in Government. There is also a crisis outside this House in industry, and that includes agriculture. There can be no doubt that the international recession which has become very evident in the past two or three years has been the main cause of many companies failing and has been the main cause of loss of markets with the consequent rise in unemployment.
I also instanced the domestic pressures on the monetary system which has caused our inflation rate to be substantially in excess of the inflation rates of the other member states of the EEC, and that our own inflation rate has been primarily induced by excessive Government expenditure which has caused pressures within the monetary system and has led to a very high rate of inflation within the economy, and that this is very serious especially for private enterprise. This has also brought great strain on the Government themselves in so far as it has become difficult for them to finance their services both within the Departments and in the semi-State bodies. We have seen an unfortunate development from the point of view of the long-term development of this nation and I am sure that the Minister for Industry and Energy who has recently taken up office is by now only too well aware of the crisis facing industry as I was in my short term in that Department.
It is because we have a crisis and because the efforts of the IDA and other State agencies to attract new industry here have not been very successful in achieving the level of job creation necessary to meet the requirements of a rapidly growing population that a new initiative is required. It is because of the crisis of unemployment and the crisis within industry that a new initiative is needed. The National Development Corporation are being put forward by us as a measure of confidence in the economy to prosper and in an effort to harness the vast resevoir of expertise which is available within the public service. By the public service I mean not only State Departments but also State bodies which are effective in the trading and commercial sectors.
Last night I mentioned the consultancy activities of the ESB. That is a very small instance but it is important because it mirrors the ability of State companies to expand and create new services and employment. It is possible that State trading bodies could play a greater role in the development of our economy. I reject the comments made in the House yesterday afternoon by the Taoiseach when he said in relation to his visit to America that the occasion was "to endeavour to repair the economic and social damage done by Deputy FitzGerald, Deputy Michael O'Leary and Deputy Kelly". He went on to say that the Coalition Government, as far as the United States was concerned, could only be described as national sabotage.
That is what it was.
The Minister should allow the Deputy to conclude.
That coming from the Taoiseach is most unwelcome and irresponsible.
The Deputy knows it is the activities of one——
As the Minister now knows, every Minister or Taoiseach who went to the US went there in the best interests of the nation.
Where is Deputy Kelly? Why is he not here? What did the Tánaiste do in America?
(Interruptions.)
I appeal to the Minister to allow the Deputy to conclude.
I do not like the Deputy making wrong statements.
The comments made by the Taoiseach yesterday regarding visits to the US by the former Taoiseach and other Ministers were grossly irresponsible and unfounded in fact.
They are based on fact.
You know very well that everything they did abroad was in the best interests of the nation and in the best interest of attracting industry to the country.
The first opportunity I get I will give the Deputy plenty of evidence from my own Department.
The speech made yesterday by the Minister showed the lack of commitment by Fianna Fáil to a new initiative regarding employment creation. In his speech the Minister said the Government did not propose to go ahead with the proposal of the former Government to establish the National Development Corporation and considered that a large part of the £20 million earmarked for the corporation for new projects in 1982 could yield more immediate job creation if applied in other areas of the economy. That shows a distinct lack of commitment by your party to the concept of a new initiative on the job creation front.
Wait until tomorrow.
It also indicates clearly that you do not have a commitment.
If Deputy Collins would address the Chair he would not encourage the interruption he is getting.
It is indicative of the fact that the National Enterprise Agency which is being proposed by the Government is nothing but a window-dressing exercise. The £5 million being allocated to it will be completely inadequate to tackle any of the major problems facing industry.
This year.
It is most inadequate as a source of funds for any new major industrial initiative. I listened with interest to Deputy Brennan. His contribution was, by and large, constructive. He mentioned the fact that the funds for the NDC were initially to be from the State side whereas the NEA funds were to come from private sources. There would be nothing to prohibit the NDC from seeking funds in the private sector on any future occasion. The initial capital input would be from the Government. It would be immediate and would be very useful in giving it a start. There would be no prohibition on the NDC seeking funds in the private sector.
The Deputy also mentioned the question of a supervisory layer which he was not able to support. Yesterday the Minister said that the Government were committed to reviewing the operation of the commercial State-sponsored bodies and in particular would be seeking and supporting viable diversification proposals by these bodies in the growth areas of the economy. The best and most efficient way of carrying out this review and ensuring viable diversification would be through the NDC, which would have statutory powers to carry out such a review. That can only be an on-going function if a supervisory role is given to the NDC. The Deputy missed this on-going aspect of the corporation's work. It is a pity he omitted to deal with it. The NDC will not lead to more deficits in State bodies. Neither will it be the function of the corporation to take on lame ducks ad lib.
They are listed.
An Leas-Chean Comhairle
Lame ducks or no, the Deputy has only two minutes to conclude and should be allowed to do so.
The existing State bodies are there to be taken over by the corporation. It is intended that they be given every opportunity to diversify, expand and become prosperous. It is not the intention to prop them up in the long term.
Deputy Lawlor was present last night when I said that the Government had a deep responsibility to review the activities of State bodies to ensure that they are efficient and not loss-making and that where there is a social content in their activities this should be identified and separated from their commercial activities.
I am putting forward the National Development Corporation on behalf of my party as a major initiative in securing the expertise that is available within the public service in bringing about new initiatives within the industrial sector. It is needed because we have not been able to create sufficient jobs for our young population. It is also evident that the efforts of the IDA are falling short in their job creation function. It is for this reason that we need a new initiative. The suggestions put forward by the Minister yesterday are not sufficient. They are lacking in commitment to an initiative. It is only a window-dressing exercise on behalf of Fianna Fáil.
The Deputy will soon find out.
The directors of the agency which was stopped in the middle of last year——
Where is Deputy Kelly? He never believed in it. He put down a motion but never spoke on it.
(Interruptions.)
Amendment put.
The Dáil divided: Tá, 84; Níl, 76.
Tá
- Ahern, Bertie.
- Ahern, Michael.
- Allen, Lorcan.
- Andrews, David.
- Andrews, Niall.
- Barrett, Michael.
- Barrett, Sylvester.
- Bellew, Tom.
- Blaney, Neil T.
- Brady, Gerard.
- (Dublin South-East)
- Callanan, John.
- Calleary, Seán.
- Colley, George.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Ger.
- Coughlan, Clement.
- Cowen, Bernard.
- Daly, Brendan.
- De Rossa, Proinsias.
- Doherty, Seán.
- Ellis, John.
- Fahey, Francis.
- Faulkner, Pádraig.
- Filgate, Eddie.
- Fitzgerald, Gene.
- Fitzpatrick, Tom. (Dublin South-Central).
- Fitzsimons, Jim.
- Flynn, Pádraig.
- Foley, Denis.
- French, Seán.
- Gallagher, Denis.
- Gallagher, Paddy.
- Gallagher, Pat Cope.
- Geoghegan-Quinn, Máire.
- Gibbons, Jim.
- Gregory—Independent, Tony.
- Harney, Mary.
- Haughey, Charles J.
- Hilliard, Colm.
- Hyland, Liam.
- Keegan, Seán.
- Brady, Gerry.
- (Kildare)
- Brady, Vincent.
- Brennan, Matty.
- Brennan, Ned.
- Brennan, Seamus.
- Briscoe, Ben.
- Browne, Sean.
- Burke, Raphael P.
- Byrne, Hugh.
- Byrne, Seán.
- Kitt, Michael P.
- Lawlor, Liam.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leyden, Terry.
- Loughnane, Bill.
- Lynch, Michael.
- Lyons, Denis.
- McCarthy, Seán.
- McCreevy, Charlie.
- McEllistrim, Tom.
- MacSharry, Ray.
- Meaney, Tom.
- Molloy, Robert.
- Morley, P.J.
- Murphy, Ciarán P.
- Noonan, Michael J. (Limerick West).
- O'Dea, William G.
- O'Donoghue, Martin.
- O'Hanlon, Rory.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond.
- Power, Paddy.
- Reynolds, Albert.
- Sherlock, Joe.
- Tunney, Jim.
- Walsh, Joe.
- Walsh, Seán.
- Wilson, John P.
- Woods, Michael.
- Wyse, Pearse.
Níl
- Allen, Bernard.
- Barrett, Seán.
- Barry, Myra.
- Barry, Peter.
- Begley, Michael.
- Bermingham, Joe.
- Birmingham, George.
- Boland, John.
- Bruton, John.
- Bruton, Richard.
- Burke, Dick.
- Burke, Liam.
- Carey, Donal.
- Cluskey, Frank.
- Collins, Edward.
- Conlon, John F.
- Connaughton, Paul.
- Cooney, Patrick M.
- Corr, James.
- Cosgrave, Liam T.
- Cosgrave, Michael J.
- Creed, Donal.
- Crotty, Kieran.
- Crowley, Frank.
- D'Arcy Michael.
- Deasy, Martin A.
- Desmond, Barry.
- Desmond, Eileen.
- Naughten, Liam.
- Nealon, Ted.
- Noonan, Michael. (Limerick East).
- O'Brien, William.
- O'Donnell, Tom.
- O'Keeffe. Jim.
- O'Leary, Michael.
- O'Sullivan, Toddy.
- O'Toole, Paddy.
- Owen, Nora.
- Donnellan, John.
- Dukes, Alan.
- Enright, Thomas W.
- Farrelly, John V.
- Fennell, Nuala.
- FitzGerald, Alexis.
- FitzGerald, Garret.
- Fitzpatrick, Tom. (Cavan-Monaghan).
- Flaherty, Mary.
- Flanagan, Oliver J.
- Fleming, Brian.
- Governey, Des.
- Griffin, Brendan.
- Harte, Patrick D.
- Higgins, Michael D.
- Hussey, Gemma.
- Keating, Michael.
- Kelly, John.
- Kemmy, Jim.
- Kenny, Enda.
- McGinley, Denis.
- McMahon, Larry.
- Manning, Maurice.
- Markey, Bernard.
- Mitchell, Gay.
- Mitchell, Jim.
- Molony, David.
- Moynihan, Michael.
- Pattison, Séamus.
- Quinn, Ruairí.
- Ryan, John.
- Shatter, Alan.
- Sheehan, Patrick J.
- Spring, Dick.
- Taylor, Mervyn.
- Timmins, Godfrey.
- Treacy, Seán.
- Yates, Ivan.
Tellers: Tá, Deputies B. Ahern and Briscoe; Níl, Deputies Barrett(Dun Laoghaire) and Taylor.
Amendment declared carried.
Motion, as amended, agreed to.
The Dáil adjourned at 8.50 p.m. until 10.30 a.m. on Thursday, 25 March 1982.