Seanad Éireann díospóireacht -
Wednesday, 12 Jun 1968

Vol. 65 No. 4

Industrial Grants (Amendment) Bill, 1968 (Certified Money Bill): Second Stage (Resumed) and Subsequent Stages.

Professor Quinlan

In conclusion, I wish to appeal to the Minister now that he is about to break new ground in setting the pattern of industrial grant utilisation in the coming decade to break new ground also in his approach to this matter. Let us see a frank committee approach and I appeal to him above all to use this House. This House, if it has any existence or any right to exist it is only in the framework of an adequate committee system. I ask the Minister to give it a trial on this occasion. I also ask the Minister when introducing this measure that he might consider introducing it in the Seanad first where we could calmly and dispassionately over quite a period of time go through its procedures and contribute what we could to its evolvement. Above all, I would ask him to see that the new approach strikes out in a radical approach to labour relations with new labour involvement in creating and putting up part of the capital structure of the industries and also that he harness to the full the local spirit of pride and self-reliance in developing the regional centres. If he does that, I think we can look forward with hope and confidence to the next phase of our industrial development. Above all, I appeal to him to utilise the co-operative movement in the work ahead, because let us learn from the lessons from Denmark, Nova Scotia and elsewhere, see that it is self-reliance rather than central direction that gets most results.

I put these points to the Minister because I know that he has an open mind and I am looking forward to his making a characteristic fresh approach to this very difficult and important Bill.

Mr. O'Quigley

There is very little difficulty in recommending the House to accept this Bill, and I do not think that I would rise at all to support it, because Senator Garret FitzGerald has supported it very ably and eloquently, but for some observations which fell from Senator Dolan on the Front Bench of the Fianna Fáil Party. I suppose that if there were a top twenty of purveyors of false propaganda against Fine Gael in the Fianna Fáil Party Senator Dolan would find a very high place in the top twenty. He never misses an opportunity of inveighing against Fine Gael policy, which he neither knows nor understands, and criticising the activities of the Fine Gael Party in the Coalition governments or the inter-Party governments in the past, about which he has never taken the trouble to acquaint himself.

I want to point out that it is well to place on record now in 1968 what Senator Vincent McHugh did last week in relation to the Shannon Free Airport Development Bill about the Industrial Development Authority Act, 1949. I am sure that it was a shock to some members of the Fianna Fáil Party, as, indeed, it would be to most members of the public, to realise that Deputy Lemass, then Minister for Industry and Commerce and later Taoiseach, said in 1949, when the Industrial Development Authority was established, that he would disband that Authority and repeal the Act if and when Fianna Fáil came back into government. Of course, he did not. We all know that the reason for the great increase in industrial production in this country and for the consequent increase in employment and industrial exports was the establishment of the Industrial Development Authority in the first place.

Seán Ó Donnabháin

The Shannon Free Airport was another thing altogether.

Mr. O'Quigley

I am merely recounting what Senator Vincent McHugh said last week, though I do not want to delay too long. The second measure which was responsible for the increase in industrial production and employment in this country was the Industrial Grants Act, 1956, and, together with the Industrial Grants Act, 1956, was the Finance (Miscellaneous Provisions) Act, 1956, which for the first time granted relief from income tax for profits made on exports. That measure was vigorously opposed by Deputy Lemass, and the Industrial Grants Act was equally vigorously opposed by Deputy Lemass. We all know that since those two Acts were passed no new principle of any worth, no new scheme, has been devised by the Fianna Fáil Government to expand our industrial production and to provide incentives to foreign capital to come into this country.

On this particular Bill, it may not be very palatable history for Senator Ó Donnabháin, but on this Bill it is apposite to recall what Deputy Lemass had to say about the Industrial Grants Act, 1956. I propose, subject to the ruling of order of the House, to quote some extracts from Deputy Lemass's Second Stage speech on the Industrial Grants Bill as it then was, 1956. He was completely opposed, as he indicated throughout the Second Stage speech, to the granting of any money to anybody to establish undertakings outside the undeveloped areas. He made that perfectly clear in his speech at column 1948, Volume 160, of the Official Report where he had this to say:

The Minister is taking power for the Industrial Development Authority to give grants to any new industrial enterprise anywhere.

We had talk this evening about the Verolme Dockyards, but they would never have been established but for the Industrial Grants Acts, 1956 because the Undeveloped Areas Act was confined to undeveloped areas in western areas.

Mr. Dolan

You could not even pay a housing grant in 1956: you ran away.

Mr. O'Quigley

That is a lie, a complete misstatement of fact. There never was the shortage of money for housing and there never was the shortage of houses in this country since 1957 that there has been for the past three or four years under Fianna Fáil Government——

Mr. Dolan

Fianna Fáil never ran out of office.

Mr. O'Quigley

——because in their First and Second Programmes for Economic Expansion, they decided that the housing needs had been met.

A Senator

You had to sell the Constellations.

Mr. O'Quigley

We did, and as a result we did not have a shortage of beds in sanatoria for people dying of TB. We put people dying from TB in beds in preference to having Constellations which at the time would have resulted in a loss. That was the proper order of priorities. At any time I as a member of the Fine Gael Party am quite prepared to place my case before the people and ask them: which would you have preferred, Constellations flying the Atlantic, perhaps at no profit, or sufficient beds and sufficient sanatoria for people dying of tuberculosis? If Senators do not know that, they have very short memories. Now to return to the Bill.

Seán Ó Donnabháin

Keep to it.

Mr. O'Quigley

The Senator will not put me off it. I want to point out what the then so-called—to borrow a phrase from the Minister for Local Government—architect of the industrial revolution had to say about the Industrial Grants Act, which this Bill is perpetuating, in 1956.

Seán Ó Donnabháin

Read about the rabbits in Shannon.

Mr. O'Quigley

The Senator is like a magician. If he is not always producing rabbits out of a hat, he is producing them out of Shannon. To return to what Deputy Lemass had to say in 1956: he said:

The danger is that no industrial enterprise will ever start again without getting this free grant from public funds. We have a provision in this Bill which obliges the Industrial Development Authority to take certain things into account and a section which also gives them power to impose conditions.

I will be returning to the business of imposing conditions at a later stage in my speech, notwithstanding the interruptions.

He went on to say:

These are provisions which I think are likely to be far more effective in retarding industrial development than helping it. I believe that over the main part of the industrial field, private enterprise is the best force on which to rely.

——a sentiment which will not appeal to Senator Sheehy Skeffington.

Dr. Sheehy Skeffington

No.

Mr. O'Quigley

Then at column 1949, he delivered himself of this confession:

I must confess that I have a very considerable dislike of most of these proposals for money for nothing——

——what we were trying to do was to provide money for employment and an increase in the industrial expansion——

——and, in the past, whenever I had as Minister to bring propositions here involving Government grants of any kind, for any purpose, I felt obliged to defend the proposal in full, and the absence of any attempt to defend this Bill——

——mark you, we were to defend the kind of thing the Minister for Industry and Commerce is perpetuating today——

——by the Minister in introducing it, the unwarranted assumption upon which he based his remarks, indicate to me that no very great thought has been given to this proposition at all.

Time belied, and will continue to belie, the prognostications of Deputy Lemass, because, as the Minister said, this is only a temporary measure to meet further requirements in the field of industry.

At column 1950 Deputy Lemass went on to say:

I believe that this Bill introduces an undesirable principle in the operation of industrial policy, that it is unnecessary, that the aid which industry requires is not this type of aid and that the whole origin of the Bill is the inability of the Government to think beyond the surface of things, to get down to an understanding of the real causes which are holding up national development, their desire to appear to be doing something, whether they get results or not, in order to safeguard their political position for the time being.

Again, time and the statistics produced by the Department of Industry and Commerce and the Central Statistics Office show how valuable this measure was and how right and proper it is that in 1968 we should increase the moneys available to the Industrial Development Authority, as suggested in this Bill.

Then Deputy Lemass at column 1950 said:

The Minister can have his Bill as far as I am concerned, but I want to make it clear that, in my view—and I may at some time in the future be empowered to influence Government policy—I think it has no importance whatever in relation to our industrial development and it represents a completely wrong approach to the problems of Irish industry as they exist today.

That was Deputy Lemass in 1956, and now in 1968 we have a sum of £30 million being provided for grants under the Act. Deputy Lemass took the trouble some time after his Party had been returned to office, after 1957, to repeal that Act. He did of course, but the principle contained in the new Act was the same, and we merely got rid of the body that was administering the Undeveloped Areas Act and amalgamated it with the Industrial Development Authority. Of course, the idea was that the Industrial Grants Act would continue to be in operation but it would have been enacted during Fianna Fáil's terms of office.

It is right and proper to point out that it was the late Deputy Norton, as Minister for Industry and Commerce in the inter-Party Government, who introduced that Bill and on the same day, the Finance (Miscellaneous Provisions) Act, another stimulus to industrialists and exporters, was introduced by Deputy Sweetman, then Minister for Finance. Now, that is dealing with some of the malicious——

Mr. Dolan

Minister for Auctions?

Mr. O'Quigley

Minister for Finance. That is merely by way of dealing with some of the false, and to his knowledge false, propaganda about Fine Gael and the inter-Party Government. In this Industrial Grants Act, 1956, there was power, and I rather think there still is power, for the Industrial Development Authority to impose conditions. One can see a variety of conditions related to industry which are desirable and necessary to impose, but I regret, and I think the Minister will share this regret, as well as the people at large, that an obligation was not imposed on all persons getting these grants to employ trade union labour and trade union labour only.

Some people might think that this would frighten foreign capital away. If it frightens foreign capital away, if they do not want to live in Ireland in Irish conditions, they are not wanted here. Most foreign industrialists would undoubtedly have accepted that in the mid-1950s and in the 1960s, in a world in which labour is having its say, in the age of the common man, it was only right that trade unions should exist and that foreign investors who are going to make a profit out of their investigations here should be required to employ trade union labour.

There does not seem to me to be any reason why that condition should not have been imposed. It appears in all Government contracts, whether they be for the building of a school, the building of a Department of State or the building of an office block under the aegis of the Government: the labour to be employed under the contract must be trade union labour. I see no reason why we should differentiate between foreign industrialists, who are getting grants, and native industrialists or native entrepreneurs obtaining Government grants. If that stipulation had been incorporated, the unholy and unwholesome development with the EI at Shannon would never have occurred, because, from the beginning, they would have employed trade union labour and, had that been done, there would now be no need for Government commissions or inquiries, and we would never have had the position in which a member of the Garda Síochána nearly lost his life because foreign industrialists refused to employ trade union labour.

In order to ensure for the future that we shall not have a repetition of this type of dispute, it should be a condition imposed by the Industrial Development Authority, when making the grant, that only trade union labour will be employed and, if a foreign industrialist is not prepared to accept that condition, then the industry or service he proposes to establish or give is doomed from the beginning to disharmony and disruption and will never be a success. In this country trade union labour is so strongly organised that in the end—let there be no doubt about it—it will prevail. There may sometimes be disastrous consequences on one side or the other but—let there be no doubt about it—organised trade union labour will always prevail and, therefore, anybody coming in here ought to be brought face to face with the realities of Irish industry and Irish life. I urge on the Minister the amendment, if it is necessary, of the Industrial Grants Act so that the Industrial Development Authority will have power to prevent a repetition of the kind of situation we have at the moment at Shannon.

Mr. Colley

As I said, when introducing this Bill, it is a very limited measure. It has only two purposes— one, to raise to the sum of £40 million, the total amount which may be paid out by An Foras Tionscal by way of grants or on the development of industrial estates and, secondly, to raise to the same amount the total sum which may be paid by the Minister for Industry and Commerce to An Foras Tionscal to enable them to do that. Despite that, the debate has ranged somewhat wider than these limited purposes might suggest and I do not propose now to follow the whole range of that debate. There are, however, a few points upon which I should comment.

Reference was made to a survey of grant-aided industry which was carried out some little time ago and from the report on which the Taoiseach quoted recently in Killarney. There seemed to be some suggestion by Senator Garret FitzGerald that there was a reluctance to publish this report. I want to assure the Seanad that there is no such reluctance. The report is being printed at the moment and will be published as soon as it is available.

Secondly, there was criticism, also by Senator FitzGerald, of the fact that the proposals for the changes in our industrialisation programme have not been brought forward sooner, having regard to the length of time during which the report of the consultants, A.D. Little, Incorporated, has been available. I want to make it clear to the House that the review carried out of our whole industrial programme is considerably wider than the scope of the consultants' report and did necessitate a good deal of thought, research and consultation. Some of the effects of that have already been announced. I expect a great many more of the effects will be announced within a matter of weeks. It is true, of course, that the preparation and enactment of the necessary legislation in this regard will take time. It would be quite unrealistic to expect it before the Summer Recess. However, the announcement of the Government's decisions in these various fields should be of considerable assistance in enabling those concerned with industrial development to know where they are likely to stand.

I also want to assure the Seanad that, in arriving at these decisions, I and the Government had available to us the views of the NIEC on the Little Report and they were taken into consideration in arriving at decisions. I want to make it clear that they are the views of the NIEC. The ultimate responsibility in this matter rests on the Government. While we are very glad to have these views available and to take them fully into account, nevertheless the proposals will be the proposals of the Government and of nobody else.

I deny the suggestion that there has been in the past—certainly in the recent past—and that there continues to be a prejudice against capital intensive projects. I understood Senator FitzGerald to say that this prejudice is enshrined in existing legislation. I cannot think of any basis for that statement unless he means that where the level of grant in a project is particularly high, the project must be approved by the Government. If that is what he is referring to, this is merely an administrative precaution and does not represent a prejudice against capital intensive industry. Neither does it operate as a brake on the establishment of projects. There are, in fact, in the pipeline at the moment some projects which are particularly capital intensive and, under our existing legislation, there is no reason whatever why they cannot be dealt with.

Decisions have been announced by me in regard to the setting up of regional offices of the Industrial Development Authority in different parts of the country and the conferring on the Shannon Free Airport Development Company of the responsibility for the promotion of industry in the Limerick/Clare/North Tipperary region; I want to make it clear now that the regions for industrialisation purposes may not necessarily correspond with the physical planning regions dealt with in the Buchanan Report. Indeed, I did make it clear that it seemed possible, and likely, that the number of regions for industrialisation purposes would be smaller than the number of regions dealt with for the purposes of physical planning.

Senator Quinlan had some interesting observations to make. I do not propose to follow them as I do not think it would be appropriate for me to do so on this Bill, but he did talk about the necessity for the devolution of authority. This is a principle with which I agree, a principle which is being put into practice in the conferring of power on the Shannon Free Airport Development Company in regard to the region I have mentioned and in the proposed setting-up of regional offices of the Industrial Development Authority. I believe that we can probably do a great deal more effective work if we can combine and co-ordinate the enthusiasm and the knowledge in particular localities which could not be available to a central office in Dublin and, indeed, that a certain amount of competition between the regions will be a healthy thing. On the other hand, it should be quite clear that there are some things which cannot be left to each region, that if you had a situation where each region was competing abroad in its publicity and at home for foreign industrialists arriving in this country, you could end up with a chaotic situation which would ultimately do us a great deal more harm than good. So that the proposals we have in mind are designed as far as possible to utilise local enthusiasm, local knowledge, local expertise, but at the same time, to exercise sufficient central control to prevent the development of the kind of chaotic situation I have indicated.

There was a suggestion also that there is overlapping of the functions of Government Departments and that this is a matter that could easily be overcome. There is, of course, an overlapping of functions of Government Departments in various fields. This is quite true. What is not true is that it is easy to overcome and this is not because of empire building on the part of either Ministers or civil servants. Somebody—it may have been Senator FitzGerald—referred to the situation in regard to the Shannon Company and the fact that it will be answerable in portion of its activities to the Minister for Transport and Power and in other of its activities, to the Minister for Industry and Commerce. I am not sure if it was Senator FitzGerald who said this—it might have been Senator Quinlan.

Mr. Garret FitzGerald

I said it last week, anyway.

Mr. Colley

The mere fact that this happens is not of itself evidence of an overlapping that could easily be dealt with and is not dealt with. Of course, it is quite simple to deal with it by dividing the Shannon Company into two companies and saying that one will be answerable to the Minister for Transport and Power and one will be answerable to the Minister for Industry and Commerce, but this would be an impractical solution, as anybody who knows the situation in Shannon will understand. There is another question, especially in the context of giving the Shannon Company much wider responsibility for the development of the whole region, namely, whether it is not more desirable to have it dealing with the Minister for Industry and Commerce. I think, on balance, this is a better situation, that it should be dealing with the Department of Industry and Commerce in this regard. The fact that it will be dealing with and responsible to the Minister for Industry and Commerce in that regard is, as I say, on balance, the better solution.

It is not, perhaps, the tidiest solution on paper but I think it is the best solution we can get, and the fact that it will be answerable to two Ministers is not of itself evidence of failure to cut the red tape or evidence of empire building on the part of one Department or another or one Minister or another. It is simply that, when you get down to brass tacks, there are functions which necessarily overlap and, indeed, Senator FitzGerald, in a slightly different context, referred to the same thing when he referred to the necessity to have co-ordination of efforts in regard to, say, housing, sewerage, the building of factories, the attraction of industry, and so on. This is quite true. Of course, it is necessary to co-ordinate these and this is one of the advantages of a regional approach, that it should be possible to get better co-ordination in that regard. But, no matter how far you co-ordinate in this way, if you keep on co-ordinating and keep on avoiding this overlapping of functions, you can end up with a beautiful structure with one man on the top of it but everything else is under him.

Mr. O'Quigley

Mr. Blaney's idea. The Minister was not here for that debate.

Mr. Colley

There are certain areas in which the Department of Agriculture overlaps with other Departments also.

Mr. O'Quigley

That is getting away from Mr. Blaney's idea.

Mr. Garret FitzGerald

Hard luck on the other Departments.

Mr. Colley

If one thinks this out to its logical conclusion, what one would end up with is simply—there may be precedents for this in certain other countries but I do not think we want it in this country—a one-man government and the whole government administered by the Civil Service under this one man. Logically, this is the follow-up to the criticism that was made and I do not think any of us wants that situation. With regard to Senator O'Quigley's intervention, I think, perhaps, the less said the better.

Mr. O'Quigley

It is embarrassing. It is a good point of propaganda not to repeat what is embarrassing.

Mr. Colley

Except this much—I feel that Senator O'Quigley, if he must quote what the then Deputy Lemass said at the introduction of these Bills, really ought to give the whole story and explain that when Deputy Lemass again became Minister for Industry and Commerce and dealt with this matter, he did not repeal the Act——

Mr. O'Quigley

The 1956 Act in toto.

Mr. Colley

——but what he did was that he changed the structure so that it became acceptable. If Senator O'Quigley would have us believe that all the industrial growth in this country has been due to the efforts of the inter-Party Governments——

Mr. O'Quigley

Just some of it.

Mr. Colley

——I wonder how on earth does he reconcile that contention with all the repeated attacks by the Leaders of his Party over the years, including during the term of the inter-Party Government, on Irish industry. I do not want to go back over the past. I do not think it is a useful exercise for any of us.

Mr. O'Quigley

The Minister is very tendentious.

Mr. Colley

I do not claim that all the progress in this country came from Fianna Fáil——

Tomás Ó Maoláin

Most of it did.

Mr. Colley

——but I do say that the reference to Deputy Lemass as the architect of Irish industry——

Mr. O'Quigley

So-called.

Mr. Colley

——is a well-deserved tribute to Seán Lemass.

Mr. O'Quigley

I said "so-called".

Mr. Colley

But I said "well-deserved".

Seán Ó Donnabháin

You could not get a pair of shoes made in Ireland.

Mr. O'Quigley

You could not get a pair of shoes that would keep out water for a good while.

Mr. Dolan

That is the propaganda.

Mr. Colley

To get back to what seemed to me, perhaps, the only point of relevance to our situation today made by Senator O'Quigley, he spoke about what I think is a very serious and important matter. He advocated that we ought to make it a condition of any grant from An Foras Tionscal that the firm concerned should employ trade union labour. As I say, this is a very serious matter, especially in the context of the dispute of which we are all aware, but I think we ought to hesitate before we rush headlong into this. I do not think there is much doubt that most people in this House and in Dáil Éireann would sympathise with this view. Lest there be any doubt, let me make it quite clear that any foreign industrialist coming to set up here in Ireland is very strongly advised by the Industrial Development Authority— very strongly advised—that he should enter into negotiations with a trade union for the organisation of the workers in his factory. Indeed, the vast majority of them accept this advice. But to go the whole hog and make this a condition of the giving of a grant is another matter.

I would remind the House that when the late Deputy Norton, who was then Leader of the Labour Party, was Minister for Industry and Commerce, he must have considered this matter very seriously and he obviously decided against it. I should imagine his colleagues in the Coalition Government decided against it also, for what I think is a fairly good reason. If you want to do this, you must also provide that every industry in Ireland, home or foreign, should employ only trade union labour.

Mr. O'Quigley

If they get Government grants: that is the point.

Mr. Colley

No. In fact, I would have grave doubts whether this would be in conformity with the Constitution.

Mr. O'Quigley

Have no doubt about that.

Mr. Garret FitzGerald

There is nothing in the Constitution to prevent the making of conditions for the giving of grants.

Mr. Colley

This is true, but it is not just like that. Senators will realise that any competent lawyer could argue there is a great deal more to it than merely applying a condition and saying that is the end of the matter.

Mr. O'Quigley

When granting a favour, you can always impose a condition.

Mr. Colley

I have doubts about it from that point of view. I also have grave doubts about it from the point of view of the effectiveness of what we are doing. However strongly we may feel about this, we must not forget the ultimate objective of what we are trying to do, that is to create more employment for Irish people and to create employment in what I have described in other circumstances as reasonable conditions.

Mr. O'Quigley

Normally those are agreed between management and trade unions.

Mr. Colley

Where we have the situation in which foreign industrialists come in and do not recognise a trade union or employ trade union labour but are applying in their factories conditions which are at least equal to and, in some cases, superior to the conditions negotiated by trade unions in the same area for comparable employment, are we to say to those people that they are not to be allowed in, that the employment they give is to be stopped because they do not recognise the trade union?

Mr. O'Quigley

No, we want to say we dislike the attitude of the paternalistic imperialists.

Mr. O'Kennedy

I suggest that Senator O'Quigley and Senator Garret FitzGerald be allowed reply to the debate on behalf of the Fine Gael Party.

An Leas-Chathaoirleach

The Chair is concerned that the Minister be allowed to conclude.

Mr. O'Quigley

Senator O'Kennedy was not here when I was subjected to a barrage.

Tomás Ó Maoláin

It is amusing to see how authoritative they are on the Constitution they tried to destroy.

Mr. O'Quigley

Oh, no.

Mr. Dolan

It got rid of the King.

An Leas-Chathaoirleach

Before we bring in more of the Royal family, we might return to the Industrial Grants Bill.

Mr. Colley

The point raised by Senator O'Quigley is an important one. I do not think we ought to rush headlong into the kind of solution that might appeal to most of us. We ought to weigh very carefully what the consequences would be. We ought to realise that by adopting the solution suggested, we might well be jeopardising the creation of employment in this country in what I have described as reasonable conditions. I do not go along with anybody who suggests that we or our workers ought in any way to be submissive—I use that word for want of a better one—to industrialists, be they Irish or foreign, but I do say that one can be carried away by a dogma, so carried away as to lose sight of the really important thing for us in this country. There may be other ways of achieving what we would all like to see than the head-on collision which I think would be better avoided. I think there are other ways of doing this.

Mr. Garret FitzGerald

Strikes.

An Leas-Chathaoirleach

The Minister should be allowed to conclude.

Mr. Colley

I also think that Senators will be aware that in the particular case to which reference was made negotiations are going on at the moment. I do not know what is going to emerge from them but there are some indications that a satisfactory solution may emerge. I am quite confident in these cases a solution can be found ultimately with patience. That we may tend to lose patience does not justify losing sight of the objective of providing more employment for our people in reasonable conditions. As Minister for Industry and Commerce, this is my objective. This is the one I have to keep my sights trained on. There are certain things I am not prepared to sacrifice in order to achieve that objective, but neither am I prepared to sacrifice that objective for something that would perhaps be achieved more easily than by sacrificing that objective. For that reason I am concerned very strongly that we ought to think and think again before we would introduce the kind of condition that has been suggested in this regard.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without recommendation, received for final consideration and ordered to be returned to the Dáil.