asked the Minister for Industry, Trade, Commerce and Tourism if he will request the NESC to examine and report on the impact of the recession on traditional industries.
Ceisteanna — Questions. Oral Answers. - Traditional Industries.
3.
As the Deputy is aware, the Sectoral Development Committee, representative of industry, trade unions and Government, were set up under the aegis of the Department of the Taoiseach in 1981. The main objective of the committee is to evaluate and report on how to overcome the current problems and achieve the optimum employment and output potential of our economic sectors.
The evaluations which have been undertaken by the SDC to date cover a wide range of sectors namely the beef, electronics, construction, fishing, clothing and textiles, mechanical engineering, chemicals and pharmaceuticals, dairy and plastic industries together with a number of cross-sectoral issues such as marketing, information technology, the cost environment for industry, the technological environment for industry and linkages. Reports have been published in respect of five evaluations including those relating to the clothing and textile and mechanical engineering sectors.
I have also arranged that the Management Committee on Industrial Policy will have regular reports on the performance of industry vis-à-vis the objectives laid out in the White Paper on Industrial Policy. These reports will provide a useful framework for the comprehensive review of industrial development which will be carried out in the Autumn of 1986. In addition, the Industrial Costs Monitoring Group will continue to monitor and assess the implications for industry of underlying changes in costs and prices, including those arising from changes in Government policy.
In the circumstances, I see no useful purpose in asking the National Economic and Social Council to undertake a study of the impact of the recession on traditional industries as such an assessment is part of the ongoing work programme of the committees and groups referred to above.
Is the Minister aware that the Taoiseach told me in this House on Tuesday that unemployment in the manufacturing sector was now almost 22 per cent, which is a full 5 per cent above unemployment generally? Is the Minister further aware that successive studies have pointed out that increasingly this unemployment has taken place in the traditional industries? Will the Minister bring forward an overall report from that committee as a matter of urgency considering the fact that while we welcome the advance of new industry and technology it is quite clear from the years 1973 to 1983 that the growth in new industries has been more than offset by losses in traditional industries and that we should now focus more assistance on the traditional industries while we pursue high technology.
What the Deputy says is correct in relation to the trend in job losses. Until the publication of the White Paper on Industrial Policy we put greater emphasis than perhaps we should on the attraction of new foreign investment to the detriment of giving attention to existing industry. What the White Paper has done is to change this. We have introduced provisions for technology acquisition grants which will allow existing industry to buy technology from abroad to help them reduce their costs. We are introducing also this year new marketing grants, market entry schemes and market research schemes specifically to help native Irish industry which unlike foreign industry does not have a ready made marketing structure to break into the export market because the market is not buoyant enough or large enough to achieve the economies of scale that should be achieved by these industries if they are to survive. We have also introduced measures in the tax code to encourage venture capital in investment in manufacturing. One of the problems that domestic industry faces, and it is critical at the moment, is the burden of high interest rates. To the extent that we can replace borrowed capital by equity or venture funds we will reduce dependence on borrowed capital and hence vulnerability to interest rates. I hope that the venture capital measures and the other measures to promote equity of investment in industry by employees and the NDC will help to improve the equity situation of native industry. I agree with Deputy Brennan but since July last it is very much Government policy to do more for domestic industry.
The Minister has dealt more or less exclusively with new industry but what Deputy Brennan had in mind and what we have in mind is the protection of existing industry.
Doubtless the Deputy misunderstood what I was saying.
I will give the Minister an opportunity to correct my misinterpretation. So far as domestic industry is concerned I am sure the Minister would agree that one of the big problems is the protection of existing firms. Could the Minister tell me if an early warning system which was in operation under our Government whereby the Minister and his Department were notified as early as possible of firms which appeared to be getting into difficulties is still in operation? Or is it the situation that the Minister and his Government are not prepared to intervene in cases of firms getting into difficulties but that they are adopting a stand-off position? I am asking that in all seriousness because that seems to many people to be the philosophy of the Government. Will the Minister say whether this system is in operation as it can be a very valuable weapon in the protection of the existing domestic industry?
My previous response indicating the measures in technology acquisition and marketing equity were all related to strengthening the domestic industry. I was not talking about new projects.
An early warning system is in operation. We have a list of companies that are potentially in difficulties. It is obviously a highly confidential list containing information from all the agencies that would have contact with such companies, Fóir Teoranta, the ICC, the IDA, CTT and so on. That list is examined and discussed every week by the Minister of State, Deputy Collins, who is responsible for the private sector. There have been many rescue operations mounted in good time by Fóir Teoranta, the ICC and the IDA before companies got into severe difficulty as a result of the operation of the early warning system. Deputy Collins could give evidence of many cases where firms which could not be saved before they went out of business were restarted as a result of this work. Unprecedented sums are now being spent by An Fóir Teoranta on the rescue and restructuring of existing companies. I am glad to be able to set the Deputy's mind at rest on this.
I am supposed to have a discretion as to the number——
It is very orderly.
Yes, it is very orderly, but one could have an orderly debate that could go on for hours.
Would the Minister agree that the prognosis for many of the traditional domestic industries is pretty gloomy at the moment and that in fact many of the job losses in the manufacturing industry last year were attributed to this very sector? One of the critical areas has been that the basic essential costs such as, as the Minister says, energy, telecommunications and, in particular, interest rates are so high. Would the Minister agree that it is futile to ask this sector to try to stay alive when the Government, with their own control, could make much lighter their essential basic costs? Has the Minister anything in mind to relieve that situation?
I would agree with the Deputy that older industry is the area in which there are the greatest problems. I would also agree with him that the cost environment is a big difficulty for them. However, I would point out that inflation rates here are coming down and also our inflation rate vis-à-vis our trading partners is also improving, which indicates that this cost problem is being gradually brought under control. However, I do not think that we should under-estimate the extent to which the native industry can help itself by, for instance, better management, more attention to marketing, controls of absenteeism and better quality controls. On the two latter items, I have instructed the IDA to look for information, before giving grants to any company, on control and quality and absenteeism.
4.
asked the Minister for Industry, Trade, Commerce and Tourism if the proposed new technology acquisition grant scheme referred to in the White Paper on Industrial Policy has yet been implemented; and, if not, if he will specify details of this proposed new scheme and indicate how it is intended to operate it.
The legislation necessary to give effect to the initiatives and new policy directions contained in the White Paper on Industrial Policy is being prepared in my Department. This legislation will contain provision for the payment by IDA of technology acquisition grants not exceeding 50 per cent of the cost of acquiring new product or process technology. The eligibility criteria for technology acquisition grants will be set out in the legislation.
What is the reason for the delay of some six months since the industrial policy document was prepared in bringing this legislation before the House? Also, how much has been provided for these grants in 1985? Have the IIRS staff as yet been assigned to any of the major IDA offices to assist in technology transfer, as was promised in the White Paper?
There has not really been any undue delay with regard to the preparation of this legislation. It was anticipated that legislation of this kind would not be introduced immediately after the White Paper. It will be introduced in the House, I would expect, around the month of June. I cannot tell the Deputy exactly what the financial provisions of 1985 concern but, in practice, what happens is that the IDA are given a block grant for all their activities and they make provision for individual grant schemes according to demand. Therefore, we do not have to set for them a particular sum of money separately for technology acquisition grants.
The location of IIRS staff in overseas offices is proceeding. I do not think that any are actually in posts at this time but they will be, I expect, during this year. The progress of all these measures is the responsibility of a management committee on industrial policy which has been established under the chairmanship of my Department and on which all these agencies are represented. This body will shortly be meeting on a six weekly basis to make sure that we achieve these objectives as speedily as possible.
Would the Minister not agree that the thrust of the industrial White Paper is, to a very substantial extent, on the question of technology acquisition? That being so, would he not agree that it would be disappointing that a relatively simple and non-complex measure would have to take a year or thereabouts from date of publication of the White Paper before these arrangements for grants for technology acquisition could be actually made available to firms that would and could use them to great advantage?
I would have preferred if the legislation could have been ready more quickly, but the legislation is not solely dealing with technology acquisition. It is dealing with many other matters as well. If we had taken the technology acquisition grant scheme on its own we could probably have brought that in by now. We are including it in the overall legislation. While this scheme is not in place, it is possible for firms acquiring technology abroad to be assisted by the IDA under existing schemes to some extent, but not in the manner that we would wish. I agree with the Deputy that the acquisition of technology is a key part of the White Paper and I can assure him that it will be pressed forward with the maximum speed.
I am just a little confused. Would the Minister make it absolutely clear to the House that the phrase "acquisition of technology" which he uses in the White Paper means the acquisition of licences and patents by those who would develop new technology in the State, as opposed to a proposal to assist individual firms who would be the end users of new technology — for example, in the acquisition of word processing equipment and that type of thing?
It is not exclusively licences and patents. As the White Paper outlines in paragraph 5.17, one of the things that may be aided will be technology licensing and know-how agreements. But also grants may be paid towards acquiring skill and expertise abroad by being trained overseas and towards the cost of arranging joint ventures where that is the most suitable route of bringing the technology into the country. It is not solely a question of patents and licences, although that will be an important part.
May I ask the Minister——
May I say at this stage before we go any further that I do not think that Question Time ever meant that, because a question is down as to whether a certain scheme has come into operation, there should be a forum for a discussion on the ins and outs of the scheme? That could go on indefinitely. May I just, before leaving the subject, refer to Standing Order No. 37, because it is generally accepted that Question Time has got a little out of hand? To me, this is one of the cardinal reasons why it has got out of hand.
Standing Order 37 says:
Supplementary Questions may be put only for the further elucidation of the information requested, and shall be subject to the ruling of the Ceann Comhairle, both as to relevance and as to number.
Now, that Standing Order might as well not be there.
It is a highly technical arena that we are in and the people want to know. We are being very orderly.
I shall just give you your heads today and see where you get.
That is grand. The Minister is obviously in very good form because he has been in fighting form recently. We are getting a rare opportunity and we would like to presume on this.
Just how you do may affect Question Time here.
The question is about the acquisition of new technology and is very fundamental to the Minister's thinking on the question of industrial development. This scheme has not really got off the ground. Could he indicate what protection he proposes affording to the new technology when it comes here? Is it that, in fact, the reason why this technology is not being freely made available is because of the proposed Copyright (Amendment) Bill which will remove the protection of design from some of this technology? This is causing quite a bit of a stir among the innovators of that technology within their home jurisdictions.
There have been some complaints about this. I am meeting the Federation of Electronic Industries, the main complainant, to discuss this further. I have not made up my mind what is the right thing to do until I talk to them.
Is it stalling the acquisition of the technology?
I do not think so but there are fears being expressed about it and I want to ascertain whether they are genuine. I do not think there is really a problem but I want to establish that for myself by talking to the people concerned.
I suggest it is one of the reasons the acquisition of technology has been so slow.
I do not think so but let me see. I will talk to the people anyway.