I would like to thank Senators for the gracious welcome they have given to this legislation. Basically it involves a delegation of responsibility to the Industrial Development Authority in deciding on grants on their own without recourse to Cabinet decision up to a limit of a grant of £850,000. The Seanad can have confidence that it will give this delegated responsibility to a body well fit to exercise it in a manner which is careful of public funds. I should point out that in relation to every major grant that is given by the IDA they go in to considerable detail in regard to the credit-worthiness of the firm in question. They study their annual reports if they are a public company. In some cases they have specialist international consultants to advise them, both on the prospects of the particular company in question and the general prospects in the market for the products which it is intended they should produce.
In any grant-aid decision there will be an irreducible minimum of commercial risk. There will always be the danger that the company will not do as well as is projected. We can be confident that the IDA have been very careful indeed in the grants they have given out. In fact, it has been recognised internationally that they have a very good record in relation to this matter. The First National City Bank produced a report on investment in Ireland and one of the sentences in that report was as follows:
One of the impressive features of investment in Ireland is the low failure rate amongst new grant-aided industry.
It can also be said that less than 7 per cent of the grants paid in the period 1960 to 1973 went to companies which subsequently failed. This is a very low percentage, I understand, on an international comparison basis.
The Government have substantially increased the amount of capital available to the Industrial Development Authority to create new jobs and assist in expansion of existing industry. In the nine-month period April to December, 1974, £19 million was available to the IDA. This, on an annual basis, would represent £26 million. This year, in 1975, the following 12-month year, £42.5 million is being made available, that is against the previous annual equivalent of £26 million. Even allowing for an intervening inflation rate of 20 per cent we can show that in real terms the extra grants made available to the IDA in 1975 represent a real increase of 40 per cent on that made available in the immediately preceding year and that is making an adjustment for inflation. The Government are putting money, which is what really counts, into industrial development in this country.
It is obvious that we are facing a difficult economic situation at the moment. A Government in this context can be measured in their effectiveness on the basis, not on the problems they confront, but on their relative success in meeting those problems vis-à-vis the success of other Governments facing similar problems. Obviously the most severe and relevant problem in terms of industrial development is the problem of unemployment. I should like to draw the attention of the Seanad to the fact that in the period 1974-75 there was an increase in unemployment in Denmark of 340 per cent, in West Germany of 110 per cent; in France, 72 per cent; in Belgium, 70 per cent; in the Netherlands, 55 per cent. These are all higher than the increase in unemployment, unduly high as it is, of 41 per cent which we have had in the most recent 12-month period. The fact that we have been able to keep the increase in unemployment down to this level represents two factors. One is the increasing activities by the Industrial Development Authority, and the other employment-creative initiatives of the Government and also, in fairness, the fact that we were starting from a higher base in terms of unemployment in this country. We have had traditionally a greater problem. As I have said, the effectiveness of a Government can be measured in their relative performance vis-à-vis other Governments and previous situations rather than in absolute terms. On that basis, the IDA and the Government have been doing reasonably well.
A number of Senators expressed concern about the need to provide aid in particular for small industries. This is a point of view which finds considerable sympathy with me. It is represented in thinking expressed by such people as Professor Schumacher when he speaks of intermediate technology, that is forms of technology which are suitable to small industry. Many economists would agree that the best proof against inflation is competition. To have competition you must have a number of competing units. This means encouraging diversity, encouraging small units in many cases rather than allowing one monopolistic concern to dominate any particular market. Therefore, I concur with the spirit of the remarks of many Senators in seeking a strong emphasis on the development of small industry. Our attitude in this country must not be one of solely seeking to control multinationals and trying to seek some punitive approach towards them but rather to compete with them. I believe small industrialists can, if they get the technology and show the enterprise which they should be able to show, compete in many fields with the multinationals.
Senator McCartin made a characteristically good speech and referred to the need for an advisory service for small industrialists seeking to set up in this country. While I do not go all the way with his suggestions that there should be some new institution or advisory body I agree with him that small industrialists need more help. They should be aware of the help that is available already. There exists not only the IDA but also the Institute of Industrial Research and Standards which such small enterprises can approach. The Institute produces a magazine, Technology in Ireland, with many ideas of new forms of processes in industrial production. The Patents Office produces, on a regular basis, information on new inventions and new industrial processes which have been deposited with them. We need more entrepreneurs in this country who are prepared to seek out such new ideas from the sources already available. If, having sought out these new ideas, they want further to develop them, the IDA are prepared to make available research and development grants to enable small industries to develop the technology which can compete with the technology and the strong R. and D. arm which exists in so many multinational companies.
I intend, so far as my responsibility extends to the Patents Office and others, to ensure that the maximum help is made available in the dissemination of new innovative ideas for small entrepreneurs to get going in this country on a competitive basis.
In relation to small industries, we should also bear in mind that the IDA are prepared to make available a substantially larger proportion of grant to small industries than they are to large industries. They are prepared to go up to a proportion of 60 per cent of the fixed asset investment in the case of small industries. This is far more proportionally than they will make available in the case of larger industries. It can be borne out by some figures. In the context of the small industries programme grant commitments in the nine-month year, April to December, 1974, to small industries represented £1.5 million. This was as against a total investment of £3.5 million; in other words, almost half the cost was going to be put up by the IDA.
On the other hand, in the case of fixed asset investment by domestic Irish industry which was not within the small industry category the IDA were putting up £14.8 million towards a total fixed asset investment of £77 million. Again, the figure is more striking still in the case of new overseas industry in that period. The grant commitment by the IDA represented £34.3 million as against a total fixed asset investment of £153 million by the companies themselves inclusive of the grant aid they are receiving. While the total amount being invested in small industries is relatively small we can thus clearly demonstrate that the proportion of that being made available by the IDA themselves is proportionately highest in the case of small industries and relatively higher in the case of domestic new industry, which is not small industry, than in the case of industry coming in from overseas.
Senators expressed concern also about what some considered to be an insufficient attention to the regions outside the eastern region in the matter of industrial jobs creation. Here again there is a need to place on the record some statistics which will indicate the real situation. In 1972, the Industrial Development Authority drew up a five-year industrial plan covering the period 1973 to 1977 and they set for each region and, indeed, for sub-groups within such regions, specific job creation targets. It is important, before I give the figures, to bear in mind that these were targets to be achieved by 1977, that is within the 1973-1977 period. In the Donegal region, which is perhaps the most remote of all, 137 per cent of the target had been reached in terms of job approvals by the end of 1974. Job approvals represent grants which have been firmly committed. They may not all have been paid out but the money is firmly committed. In taking job approvals along with money already paid out, 137 per cent of the regional target had been reached by the end of 1974 in the Donegal region and that was for a target set, as I say, up to 1977.
In the north western region by the end of 1974, 95 per cent had been reached. In the western region, 148.7 per cent had been reached; the target has been exceeded by almost one-half again; in the mid-western region, 98.7 per cent; in the south western region, 100 per cent; in the south eastern region, 264 per cent; in the north eastern region, 99.4 per cent; in the midland region, 127 per cent and, in the area where everybody was saying that there was too much industrial development, the eastern region, which comprises Dublin, Meath, Kildare and Wicklow, only 64 per cent of the target had been reached. Therefore, relatively speaking, in terms of the target set for the period the eastern region has been doing least well.
I have been talking in terms of job approvals and grant commitments. I am sure Senators and, in particular, Senator West will be anxious that I should talk in terms of firm actual money spent. In this context I can tell the Seanad that in the period April, 1972, to December, 1974, out of a total overall expenditure by the IDA of £176 million only £30 million was spent in the eastern region. That represents approximately 17 per cent of the total expenditure, although approximately 34 per cent of the total population are resident in the eastern region. A statistic was given to me recently which stated that within 15 miles of the GPO there are one-third of the total population and, perhaps this is more important still, half of the children in the State. While I fully agree with the sentiments expressed by Senators in their anxiety to see decentralisation, we must also bear in mind that unemployment exists in Dublin too, that real needs are there and there are people whose talents are not being fully utilised in the Dublin region. It is important to set one against the other.