Supplementary Estimates, 1982: Vote 50: Industry and Energy.

Thursday, 13 May 1982

Dáil Eireann Debate
Vol. 334 No. 6

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Minister for Posts and Telegraphs (Mr. Wilson): Information on John P. Wilson  Zoom on John P. Wilson  I move:

[1098] That a supplementary sum not exceeding £30,250,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1982, for the salaries and expenses of the Office of the Minister for Industry and Energy, including certain services administered by that Office, and for payment of certain loans, subsidies, grants and grants-in-aid.

Minister of State at the Department of Finance (Mr. Barrett,: Information on Sylvester Barrett  Zoom on Sylvester Barrett  Clare): As Deputties are aware, the purpose of this Supplementary Estimate is to provide funds for two bodies — £25 million for Irish Steel Limited and £5¼ million for the National Enterprise Agency.

Irish Steel Limited have been producing steel at Haulbowline, County Cork, since 1939. They went into liquidation in 1947, when the State bought it from the liquidator because of the strategic importance of steel and the need to preserve employment in heavy industry.

The company produce steel for use in the construction industry. Their products are in the light to medium size range. Up to 1978 their production capacity was about 150,000 tonnes per year, but by that stage the free trade conditions resulting from accession to the EEC had led to serious losses. It had become abundantly clear that the old-fashioned systems then in use could never lead to real viability within the European Community.

The company were aware of the need for a total restructuring of their factory, and had drawn up a plan with the help of a Canadian engineering firm. Work on implementing this plan began in 1978.

The old plant was replaced by a modern electric furnace, melting a load of 114 tonnes of scrap in between two and three hours to make 90 tonnes of molten steel. This is then poured into a new casting machine which produces three continuous steel beams. These are rolled on a unique rolling mill to produce bars which can be round, angular or flanged in cross-section, and can be up to 70 metres long.

The project is now essentially complete, [1099] and its final cost is estimated to be £80 million. Of this, £64 million is the cost of fixed assets and preproduction expenses, and £16 million is the additional working capital requirement.

The cost of the development itself is only one of the costs incurred by Irish Steel. They also incurred losses from 1974 to 1980 due to the obsolescence of the old plant; they had to suspend production for 18 months while major items of plant were installed; and losses have been incurred since July 1981 in running-in the new plant and attempting to break into international markets. These factors together have now resulted in borrowings of £84 million. This level of borrowing is far too high for the company to bear, and corrective measures are therefore necessary.

The current situation in the world steel market is very poor. The oil crisis of 1974 severely depressed the steel market, and it has not yet recovered. At present, the level of overcapacity in steel production in Europe is estimated at 30 million tonnes.

The traditional European steelmakers are now finding that many of their large, integrated steel plants, built on the assumption of a continuous supply of cheap energy, are no longer competitive. Japanese, Korean and Brazilian plants, for example, of more modern design and maximum efficiency, are now producing steel as cheaply as all but the best European plants. For this reason, European steel is now striving to stay competitive in the market for heavy products.

In the lighter range of steel products, such as construction steel, there is also a general shift in favour of Third World countries. These countries have the natural advantages of a growing domestic market, cheap labour, and cheap energy in many cases. In Europe, by comparison, the domestic market is fairly static as infrastructure is already developed, labour is extremely expensive, and there is no need for me to comment on energy prices.

The long-term result of this situation is likely to be that some European steel producers will always be needed, but [1100] these will be only the most efficient and technologically advanced of the present producers.

It is in this context that one must view the fact that Irish Steel intend to export over 70 per cent of their products to other European countries. The difficulties involved should not be underestimated but I must, however, place their prospects in the proper perspective.

Regardless of how objective one tries to be in assessing future prospects, it is inevitable that one's view is coloured by the current situation. In steel, this situation is now very poor. But significant improvements in demand are forecast when the present recession ends. At that point, a far more optimistic view may be possible. In addition to this general reservation on the pessimistic outlook I have spoken of, there are also, of course, the competitive advantages of the company itself.

Irish Steel now have one of the most modern plants of its kind in the world. It has the advantage of being able to produce a far wider range of products, 84 in all, then any other mill of its size in Europe. This gives it a competitive advantage in dealing with merchants. In addition, it is fair to say that a small, efficient and flexible producer can always find space in the market however depressed it may be. Finally, the plant being used by Irish Steel is the only type of steel plant which is now profitable in Europe. Taking these factors into account, Irish Steel's prospects, though difficult, are reasonably good with the proper approach to sales management and cost control.

In this regard, the company has taken steps to build up a management team of the highest calibre, both by selective internal promotion and outside recruitment. A total of 20 new management personnel have been recruited since 1978, including a new chief executive and a new sales manager who has considerable experience selling in international markets for the British Steel Corporation. Other important appointments were those of an energy manager and a purchasing manager.

These appointments reflect the recognition [1101] by the company of the difficulty of the task facing them. The difficulties of the market, where a general improvement in demand may improve the picture over the next few years, are compounded by two additional difficulties, namely technical delays in reaching full production and the crippling burden of interest charges on the company.

Irish Steel's current level of debt is £84 million and, in the absence of support, this will rise to over £100 million by mid-1983. Borrowing of this level, taken together with depreciation, would require a trading profit of the order of £20 million a year before the company could show a net profit. Given that Irish Steel's sales at full production would not exceed £60 million at 1982 prices, this is clearly an unrealistic goal. In any case, no company could hope to continue with share capital of £25 million, accumulated losses at 30 June 1981 of £26.3 million and borrowings of the size I have mentioned. Inevitably, losses will result from the delay in reaching full production which I have already discussed and these will further worsen the picture.

The company is faced with the prospect of borrowing to pay interest on borrowings which, without State intervention, will result in a steep spiral of borrowings leading rapidly to bankruptcy.

The Minister for Industry and Energy and the Government, have given long and careful consideration to the financial problems of Irish Steel. The present severe budgetary problems and the uncertain future of the steel market in general make it necessary to hold to an absolute minimum the amount of money paid to Irish Steel. For this reason, the Government have decided only to provide the company with sufficient funds to enable it to continue for the next year. Within that time, it is the Government's intention to study further the prospects of the company in order to determine whether it can be viable in the long term.

As of now, the company's most pressing need is to repay £25 million in short-term borrowings falling due at the end of May. This must be provided to allow the [1102] company to survive even in the short term.

The Minister for Industry and Energy intends to discuss in greater detail both the present position of Irish Steel and the measures he proposes for its future when he introduces, at a later date, legislation to increase the authorised share capital of the company from £25 million to £50 million and to increase the limit on loans which he may guarantee from £60 million to £75 million.

The preparation of legislation takes some time, however, and the company's need to repay their short-term borrowings is most urgent. I must, therefore, ask the House to approve the immediate provision of a grant of £25 million by way of a Supplementary Estimate to enable Irish Steel to meet their immediate obligations.

The provisions in the Supplementary Estimate for the National Enterprise Agency of £250,000 for administration expenditure under subhead F.F.1 and £5 million for job creating projects under subhead F.F.2 are in respect of a new initiative in the industrial development area. The House had ample opportunity on 23 and 24 March last of debating the need for the agency in the context of an employment creation motion under Private Members' Business, which was put down by the Opposition and amended by the Government. In these circumstances, I do not propose to deal again in any significant way with the background surrounding the present Government's decision to reactivate the agency and not to proceed with the proposal of the last Government to establish a National Development Corporation in its place. The reactivated agency has commenced operations again and is in the process of recruiting staff. Ministerial responsibility for the agency will rest with the Minister for Industry and Energy rather than, as heretofore, with the Minister for Finance. This should facilitate more effective co-ordination of the work of the various State agencies involved in industrial promotion and development.

The National Enterprise Agency was established in June 1981 as a private limited liability company with a memorandum [1103] and articles of association reporting to the Minister for Finance. Its establishment arose from a commitment to the social partners in the 1979 national understanding and its structure embodies the results of extensive consultation between Government, employers and trade unions, all of which are represented on the board of the agency. However, the change of Government in mid-1981 and their commitment to establish a National Development Corporation in place of the agency meant, in effect, that the agency was largely kept in cold storage until its recent reactivation by the present Government.

The agency is a venture capital development body with the broad task of providing sustainable employment through the successful commercial exploitation of new business opportunities. In order to achieve their objective, the agency's functions will focus on the commercial exploitation of projects deriving from the work of organisations such as the state research agencies; the development of projects involving the use of natural resources, e.g. downstream value added projects based on agricultural, timber or marine based resources; and projects having a substantial import substitution effect. They will also have the function of establishing organisational responsibility for commercial exploitation by the public sector of new development opportunities not being exploited by the private sector.

In carrying out their functions, the agency will have considerable flexibility and may establish ventures on their own or in partnership with other public and/or private sector interests. The main focus will be on the industrial sector, but will not necessarily be confined to this area. The international services sector is an expanding area for employment as well as generating valuable income on the balance of payments side. The agency may set up subsidiary companies to run particular ventures and may sell them off when they become commercially viable, and similarly they may wind up unsuccessful projects. Unlike their proposed [1104] successor, the National Development Corporation, which never got off the ground despite numerous assurances by the then Minister for Industry and Energy in the last Government, the National Enterprise Agency have been relaunched with all possible speed. Recently, the Minister for Industry and Energy addressed their inaugural meeting. Such action demonstrates the commitment of the present Government to taking effective action to tackle our serious unemployment problems.

The Minister is anxious that lack of resources should not impede the valuable contribution which the agency can make to job creation and industrial development generally. Hence, his decision to seek early Dáil approval to provide funds for the agency. The grant-in-aid of £250,000 sought for 1982 in respect of their administration and general expenses will cover primarily (i) the recruitment of a chief executive and a small core of professional and secretarial support staff and directors' fees, and (ii) expenditure on travel/subsistence, consultancy, promotion and advertising, legal formation expenses and miscellaneous support services.

The capital grant-in-aid of £5 million for 1982 being sought for the agency will be used for investment in agency-promoted employment-creating projects, particularly in areas of advanced technology, indigenous natural resources and import substitution. Detailed project investment criteria are being drawn up by the agency and sectors and activities for priority attention will be identified. The agency will assist in developing a stronger indigenous technological based industrial sector, which is essential for our long-term growth. In their investment policy the agency will apply commercial criteria and the emphasis will be on quality and profitable investments. They will not be a home for lame-duck industries or a vehicle for further recourse by promoters who have exhausted possibilities for State aid elsewhere. The direct employment content, associated with agency investment of £5 million in 1982 and the timing of their actual creation, will depend on such factors [1105] as the mix of projects — for example, labour and capital intensity — and the speed at which project proposals can be brought to fruition and implemented. The Minister does not underestimate the formidable task facing the agency in this area.

The agency will not be involved in areas already adequately served by the private sector. However, they will actively seek private sector participation in their projects, thus maximising public and private sector interaction and reducing the demands on scarce State financial resources. They would expect to use joint ventures and licensing with overseas firms as a mechanism to effect the transfer to this country of some advanced technologies and to strengthen linkages between indigenous and foreign-owned firms, where considerable potential for development already exists.

Having regard to the normal time lag between the assessment, development and implementation of new projects and the fact that the agency are only now getting under way again, the Minister expects that their proposed current and capital allocations will be adequate to meet their running expenses and project investments for 1982. We recognise that the State will probably have to provide a substantial proportion of the agency's funding requirements in the early stages, but the objective is that they should, in due course when fully operational, derive a large part of their finances from normal commercial sources. They will, of course, have discretion to realise their investments in profitable undertakings, thereby creating additional funds for re-investment, but it will take quite some time to reach such a position.

Agency-promoted projects will provide a suitable opportunity for the main financial institutions to participate by way of equity or loan finance in the funding of such projects, and discussions will be initiated with the banks and other major financial interests involved to secure their backing and co-operation. The agency will work closely with other commercial State enterprises and will have access to the full range of State incentives and advisory services as are available to [1106] industry generally. There will be close consultative arrangements between themselves and the IDA, which will facilitate the agency's participation and IDA-promoted projects in the private sector and mutually beneficial working relationships.

The Minister does not foresee any conflict of role arising between these two bodies, particularly as the IDA are a promotional and grant-giving body in contrast to the venture capital / development function of the National Enterprise Agency. A representative of the Department of Industry and Energy is on the board of both bodies and this should reinforce liaison arrangements between them.

As currently constituted, the agency are a non-statutory private limited company, with a share capital of £100. Their objectives and functions and relationship with the responsible Minister are set out in their memorandum and articles of association. This mechanism was used as an interim one pending enactment of legislation. We propose to put the agency on a statutory basis and the Minister would hope to submit to the Government at an early date the draft heads of a Bill for this purpose. There are a number of practical reasons why this should be done and, in particular, the fact that state equity may be made available to the agency only under specific enabling legislation. It is also desirable that the Oireachtas should have an opportunity of examining and approving the charter of State-sponsored bodies. The existing financial arrangements for the agency effectively preclude the development of a realistic equity basis for their operations. At present they are totally dependent on voted Exchequer funds for their capital and non-capital requirements.

It should be pointed out that the functions of the agency, that is, the development of new business activities, are very close to those which were envisaged for the corporation. The fundamental difference arises in so far as the corporation were to have, in addition, an advisory and supervisory role over commercial State manufacturing and energy enterprises. We felt that it would be unwise to [1107] saddle the agency, or corporation, with this additional role in view of the serious financial and trading problems of many of the enterprises involved. Given the magnitude and nature of the problems confronting some of these enterprises, the energies of the agency would be largely dissipated in coping with their problems and their major job creation role would be considerably restricted, especially in the short to medium term. However, the Government recognise that existing arrangements for the supervision of these commercial State-sponsored bodies need to be considerably strengthened, especially at Government level, and we will be giving particular attention to this important area.

The Minister is confident that the agency will stimulate enterprise and innovation and contribute in due course in no small way to the expansion of our industrial base, especially in technological and natural resource based industries and related fields. Venture capital and entrepreneurship are recognised as essential ingredients for economic development and have been a major driving force behind the rapid growth of advanced high technology industries in the USA.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  The previous Government were criticised by the then Opposition for taking a pessimistic attitude to life. We were accused by the present Minister for Finance of preaching gloom and doom and the same Minister said we would now enter into a new phase of “boom and bloom”— a wonderful phrase. He was, of course, referring to our economic well-being or lack of it.

I could not perceive a more pessimistic contribution than that made this morning by the Minister of State. In the course of his speech he stated:

The Minister for Industry and Energy and the Government have given long and careful consideration to the financial problems of Irish Steel. The present severe budgetary problems and the uncertain future of the steel market in general make it necessary to hold to an absolute minimum [1108] the amount of money paid to Irish Steel. For this reason, the Government have decided only to provide the company with sufficient funds to enable them to continue for the next year. Within that time, it is the Government's intention to study further the prospects of the company in order to determine whether it can be viable in the long term.

I could not imagine a speech better designed to depress the chairman, directors and personnel of that company and the Minister's contribution must be seen as a warning by the Government that they intend within the next year to decide to close Irish Steel.

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): I did not say that.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  The whole tone of the Minister's contribution was pessimistic and he has certainly sounded a warning note to that effect. It is in stark contrast to the comments in the annual report of Irish Steel for the year ended 30 June 1981 where it was stated that the new plant was finally installed at a capital cost of approximately £60 million. The Minister refers to a figure of £80 million, which relates not only to the fixed capital cost of installing the new rolling plant but also to working capital. However, the figure of £60 million is quoted in the report, including the cost of construction, site adaptation and acquisition and installation of all new fixed assets. We should distinguish between the fixed cost and the working capital required.

Irish Steel are to be congratulated on the manner in which they went about modernising their plant. They did so on foot of a decision by the then Minister for Industry and Commerce, Deputy Keating, and the Coalition Government approved their development programme. This programme can only be seen to come to fruition over a long period and it will be the middle or late eighties before full production is reached. This is the nature of the development.

I wish to make a number of comments regarding various aspects of the plant and its workings, the relationship between [1109] Irish Steel and the Government and between the Government and the European Commission. It is refreshing to see that the annual reports of Irish Steel are published so speedily and other State bodies could well imitate Irish Steel in this respect. In the annual report for the year ended 30 June 1981 the chairman mentions the serious delays caused by suppliers. I wish to know whether any legal action has been taken by Irish Steel to recoup the losses caused by breaches of contract. Obviously delays would not be important if large capital investment were not involved but we are talking about a new rolling mill costing approximately £60 million. A delay of eight months is mentioned and there is no doubt that Irish Steel should take legal action against the suppliers. The public are entitled to a full explanation of the action taken by Irish Steel in this regard. The new plant was finally installed in 1981 and will take four years to reach optimum production.

I am pleased to note from the report that there have been good industrial relations within Irish Steel. This is important because there can be no doubt that the company are operating in a very competitive industry. Together with Denmark, we are unique in having only one steel manufacturing plant. There is no latitude for bad industrial relations and it is vital for the survival of the firm that industrial relations should remain excellent and that the workforce and management should co-operate in the introduction of new techniques.

It is a fact that the profit and loss history of the company is not good and during the past three years there have been increasing losses. For the year ending June 1979 the net loss was £2.926 million. That increased in 1980 to £6.614 million and in 1981 to £12.946 million. The loss in 1981 is understandable because of the installation of the unique rolling mill and it should not be taken by anyone as a loss arising from trading. It arose because of the installation of new plant.

There are a number of serious problems I want to discuss, such as price levels, weak markets, foreign competition [1110] and the question of reducing dealers quotas. I am referring to dealers who come under price level arrangements organised at European level. A vital matter for companies is energy costs. The Minister neatly side-stepped the issue by saying there was no need for him to discuss that topic. That was a nice way of pushing aside the issue, but we cannot do so for much longer. Irish energy costs are the highest in Europe. In my contacts with industrialists the one item that is constantly mentioned and which is a source of criticism is the level of energy costs to industry. Something must be done to alleviate this problem.

I should like to mention one company in particular where the energy costs are damaging its viability. I have a parliamentary question tabled regarding the firm of Premier Periglase. This company is a specialised, export-orientated firm but it is only one company among many who are handicapped because of our energy costs. The Minister will have to introduce some scheme to help in this matter. A special effort will have to be made to bring a supply of natural gas to industry. From my experience in the Department I know that the pricing policy for natural gas is not settled fully yet. I consider Irish Steel to be a particularly suitable industry for the supply of natural gas. It is relatively near the natural gas centre in Cork and there should be no difficulty in laying on a supply. Indeed, it might be more profitable to supply that company than to supply another large State body, but I will not go into that matter here.

The advantage of natural gas is that it is available here, the reserves are good and I think they will be proved to be in excess of the present estimate of 1.35 trillion cubic feet. It should be a key supply element to our major industries and the Minister will have to make a greater effort to ensure that they get a supply of natural gas. It is a guaranteed supply and the State can control the price. While I accept the doctrine that the cost of natural gas to users must be in line with comparable energy sources, at least we can control the cost over a period, and that is important.

[1111] Production of steel in Ireland is minuscule; it is less than .2 per cent of total EEC production. With Denmark we are unique in that we have only one mini-mill. In negotiating with our partners in the EEC, in the Coal and Steel Community and at commission level, we should align ourselves with Denmark in our negotiating stance to ensure that we have a special arrangement with our EEC partners. This is important for a number of technical reasons. When the mini-mill is in full production it will need a minimum production in excess of 250,000 million tons. This is the minimum level of production that will ensure viability.

I was very distressed by the pessimism shown by the Minister. I understand that the present level of prices are 15 per cent cheaper than comparable Japanese and American output, but the steps taken by the Commission to control and to raise prices in the next few years may ensure that the Irish mill will become competitive. To think that the Government are going to decide within the next year to close the mill——

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): I never said that.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  In his speech the Minister said that within one year it is the intention of the Government to study further the prospects of the company in order to determine if it can be viable in the long-term. Obviously the Minister is sounding a warning note that a decision will be taken within the next year. That is not the time scale in which to take a decision. The mill will not be at optimum production until possibly 1986. How can the Minister make a decision on an investment that is costing the State £80 million, according to the Minister, in such a short time? We have a modern, potentially viable mini-mill, one that is giving good employment and that will secure our strategic supply of steel, which is vital to our industrial progress and in times of strife such as war will protect the economy from lack of supplies of steel. Accepting that optimum production will be reached in 1986, the Government are being irresponsible in saying they will take a decision on its long-term viability [1112] in 1982 or 1983. I think that is a wrong attitude. It is potentially damaging to the spirit of the workforce and to the confidence of the directors.

It is not that easy to foretell the future for this industry. The European economies are in depression. The growth rates are negative: in some cases they are zero and in a few cases they are positive. What will happen if European economies achieve growth rates of 4 per cent, 8 per cent or even 10 per cent? The demand for steel will jump substantially. An economic growth rate of, say, 10 per cent would not result in an increased demand for steel of 10 per cent; it would be very much in excess of that level. It is not very easy to see what will happen in the mid-eighties.

It is possible that the steps taken by the Commission to control and increase the price level of steel will succeed and we will have a profitable steel sector in the eighties. That should be aligned to the fact that there is a rationalisation of steel production within the EEC where there is a conscious decision by some Governments to close down some of their older and inefficient mills. That could result in a shortage of steel in certain circumstances if there was a sudden surge in demand for steel. We would then be left out in the cold if we did not have our own steel mill. This is a complex issue.

We cannot examine the mill by itself; we must have reference to the European and world situation, that is, the economic climate in the Americas, the position of steel supplies from the eastern countries and the situation in Japan, which is a major steel supplier. One cannot look at the Irish steel plant in isolation and if we decide to close the mill on the basis of an isolated decision, it will be a wrong national and economic decision and could have adverse consequences for our economy in the next few years.

The question of quotas has arisen at Commission level. The present quota system is the result of a decision of the Commission made in June 1980 when a declaration that a state of manifest crisis under article 58 of the European Coal and Steel Community Treaty was made. This declaration has resulted in the introduction [1113] of mandatory production quotas for individual producers. The June 1980 decision has been extended to June 1982. These quotas are implemented on a historic basis. That raises an interesting problem for Irish Steel because I understand the opinion in the Commission is that these quotas should also apply to Irish steel production. I submit that since we have a new mini-mill, we do not have a history of sales or production. We are in a unique position and we must seek to ensure that we will not have to curtail our production because of the quota system. The only way our mill can be successful is if it is allowed to reach its optimum or maximum — whichever word suits — production cycle which should be reached by 1985. We must not be constrained by quotas, although I submit our European competitors should because over-capacity exists on the European mainland, not here. We should be seen to be in a unique position.

The second subject I wish to deal with refers to price control. This is another prong of the Commission's assault on the present ruinous state of competition which has arisen in Europe, primarily because of the 1973 energy crisis which so adversely affected economic progress. We can trace many of our economic ills back to that terrible time when the energy crisis did irreparable damage to European economies from which they have not yet recovered. In 1980 there was fierce price competition in Europe for steel production. I understand that in 1981 EEC prices were between 15 per cent and 20 per cent lower than the United States or Japanese prices. The Commission set out to try to establish a controlled price for steel which would match production to demand. That is an important criterion in economic matters. They also set out to establish minimum prices. I understand the Commission's decision applied only to dealers who handle over 12,000 tons of steel per annum. We would seek to have that level lowered to bring smaller dealers under the umbrella of the price control mechanism. It is all very well saying there should be competition, let the cheapest man win, [1114] and competition is good for industry, but we are a special case.

The amount of resources reserved to the steel industry by all the European countries since the last World War has been enormous and has resulted in over-supply. It is in the Irish interest to ensure the viability of our own mini-mill — this is the technical term used — and its survival. This is the objective of this House today and should be national policy as well. We have not succeeded in ensuring a price level that is economically justified, although I understand that at the beginning of this year we saw a price rise of approximately 12 per cent become effective within the Community. That is a step in the right direction.

I think we may see an end of the recession this year. If there is an upturn — there are some indications that there may be an upturn, particularly in Britain — we may see greater demand for steel products before the end of this year and early 1983. That will help to raise demand for steel and will have a beneficial effect on the price of steel. It should be understood by producers that the end justifies the means.

Another question which deserves to be commented upon in this House is the question of the social aspects of steel restructuring. It does not affect Ireland directly, apart from the fact that we contribute towards the payments under this heading. We should oppose the financing of the social restructuring aspects by direct contributions, rather than allowing a transfer from the Social Fund to the special social aspects fund, so to speak. We get a direct benefit from the Social Fund and we should protect it in its entirety to ensure that we get our full share of it. If we see a special case for the social aspects of steel restructuring it should be under a separate heading and it should be dealt with as such.

Another aspect which has serious financial repercussions for the Irish Steel Company has reference to the loans under Article 56 of the European Coal and Steel Community. It is possible to get cheap loans for industries which reemploy redundant steel workers. While it does not affect us directly to any great [1115] extent, there have been external effects which directly affect the Irish economy with regard to our inwards investment policy and the policy of the Japanese investing in Ireland. I am aware of the Sony case in England. Loans were provided for the plant in Bridgend in Wales which manufactures television tubes. The level of State aids exceeded the State aids criteria.

This caused us a problem. We did not object to it. I mention it because it is important for us to ensure that this does not become a common practice in the EEC. If it becomes a common practice that the level of State aids is higher than that allowed in other countries, that will create a problem for our Industrial Development Authority in attracting investment here. It is an important aspect of this whole affair which should not be ignored by the Minister or the Department.

While I was in the Department of Industry and Energy I noticed a tendency growing in Europe to flout the level of State aids in European countries. The relatively recent decision by the French Government to reconquer their home market demonstrates an attitude in Europe which is protective in effect and which is anti-free trade, anti-the spirit of the Rome Treaty and the spirit of the competitive atmosphere within the European Community. That is something we must resist. We depend on foreign investment to such an extent that we cannot allow other countries to out-compete us in the race for foreign investment.

While I may appear to be digressing, a Leas-Cheann Comhairle, I can assure you that I am not. I am dealing with the problem in the context of the steel policy of the European Coal and Steel Community and the European Commission. It is vitally important that we should protect our market for foreign investment by ensuring that other countries within the EEC do not circumvent or flout the State aids policy of the Community. I make that point because it is proper to make it here under this heading. We have a case stated.

The State aids are also important in so [1116] far as the equity of Irish Steel is concerned. The effectiveness of the aids code must be seen in its generality. In the Irish case we must be seen to be an exception to the code. We must not be subject to its full rigours. It is important that this is realised and that a strong case is made to the Commission in this regard. I do not wish to discuss that any further. I am aware of its implications and I will earmark it for discussion at some future date.

I readily admit that the position at market level is not good. The state of the European and American market is depressed. The Minister would be quite wrong to make a decision on the long-term future of Irish Steel within the next year. The market profile for the eighties will not be established next year. We will have to await the optimum production from Irish Steel before making a final decision on their viability. From a strategic point of view we must argue in favour of keeping Irish Steel open. In saying that I readily admit that commercial criteria should be adopted in all our State companies. Where the strategic element comes into it, it should be stated quite clearly that it is separate from the commercial criteria and is seen as such by the Government.

If we could see in Europe the success of a prices control regime and the success of the quota system, we could see rationality returning to the steel market which would be a good omen for Irish Steel. I must put in the caveat that I am extremely disappointed about the Minister's references to Irish Steel and their future. His attitude here today was short-sighted and not justified. It was not proven on any economic or commercial grounds, especially when one considers the complex market situation in the steel industry. The Minister's contribution will have an adverse and depressing effect on the workers in Irish Steel and on the board of Irish Steel. His speech today was not justified in its pessimism about the future of the company.

I am very annoyed that he should have come in here today and more or less announced that a final decision will be made within a year on the viability or [1117] otherwise of Irish Steel. That decision cannot be made this year or next year, because the economic statistics will not be available in full within that time span. His statement was extremely disappointing for a company who are in the process of re-establishing their own market at home and abroad. It is very disappointing that the Minister should come into this House with such an attitude. I suppose the boom and bloom policy of the Government is coming to a halt, perhaps because they realise their own economic and budgetary shortcomings. In this case there are special considerations to be taken into account. I am extremely disappointed that the Minister has not realised that there are those special considerations to be taken into account when discussing Irish Steel.

The Minister's speech had many shortcomings. If I may say so, my own contribution is far superior but then I am aware of the situation because of my experience in the Department of the complex situation involved. I am not blaming the Minister present who delivered the speech because I am aware he is not the Minister responsible. But the Minister responsible should not have had this script here today and should have been aware of the other complex issues involved. It was a very narrow speech, in its nature uncomprehending of the affairs of Irish Steel and a bad speech from the point of view of creating optimism within the Irish Steel complex, their board of management, workers and others. I regard it as a sad speech because it was unjustified in the light of the facts of the case as I know them. The European situation was more or less ignored in the speech. The European situation is of a complex nature but yet one which might be beneficial to the survival of Irish Steel and their prosperity.

I shall say no more than that I am extremely annoyed and saddened by the narrowness of the Minister's speech, by the narrow attitude of the Minister and that his speech is in conflict with the developing situation, with particular reference to the European scene and also to the fact that the steel mill may not be in full production until 1986. Yet the Minister [1118] is saying now that a final decision will be taken on the viability of Irish Steel within the next 12 months. That cannot be done. It is like saying that a horse should be put down even though it is not fully trained; it might not even have run a race.

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): Or be partially sick.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  The Minister says it could be partially sick but if the horse has never run a race one does not know whether he is good or bad and Irish Steel have not run their race yet, they are going into training only. The Minister's speech was a very bad one, not justified in the circumstances of Irish Steel and certainly one that should not have been made in this House at present. The Irish Steel case is only beginning but the Minister seems to be bringing it to an abrupt end without allowing it to prove itself or allowing the action at present taking place within the European Commission to take effect. Nor is the Minister prepared to await a change in the economic environment in Europe before taking a decision in regard to Irish Steel. On behalf of my party I deride that attitude and condemn it as being negative. I condemn the attitude of the Minister as not being founded on the economic facts available to him, perhaps the most serious allegation I can make against him in this House. I condemn the speech and I refuse to support the Minister along the route he is taking with regard to Irish Steel. I could not perceive of a speech more ill-timed or calculated to do damage to the environment within Irish Steel at present — at a time when they are looking forward, beyond themselves, to more prosperous times. It was a disgraceful speech to deliver in this House at this time and no doubt I shall have reason to return to it at a future date.

I should like now to refer to the other element of the Supplementary Estimate, that which refers to the National Enterprise Agency Limited, their administration and general expenses and indeed also their capital expenditure. The Minister in the course of his speech said we had debated this on 23 and 24 March in [1119] detail, which we had done. The attitude of the Government to job creation can be seen from this Supplementary Estimate as being one of a half-hearted effort, or as providing a sop to State involvement in job creation. That is said and is reflective of Fianna Fáil's attitude to State participation in employment policies. Our party always have supported the concept of a mixed economy and have always been supportive of private enterprise. Indeed on many occasions we have been called the party of free enterprise. Certainly we support the role of free enterprise in this country and have always done so whether in Government or Opposition since the foundation of the State. The role of any Government in supporting free enterprise must be to ensure a healthy environment for both industry and enterprise. In my opinion, sadly, that environment is now lacking in this country. It is reflected in the fact that the number of unemployed has gone up from the December 1979 level of 84,900 to the present level of 148,000, over one-quarter of whom are young people. That is a direct reflection of the lack of a healthy environment for industry and, when I say industry, I mean in its broad spectrum, whether it be agriculturally-based, in the service industries or whatever.

The consequences of that unhealthy environment for industrial progress are to be seen all round us. As a politician I have had the experience of contesting two general elections in the past year and we are now in the middle of a by-election in Dublin West. It is very sad for me, as a politician, to witness the sense of deprivation, of defeat, of sadness I have witnessed amongst married couples neither of whom can get employment but perhaps more especially amongst young people, not long left school, who cannot find employment. It is extremely upsetting and must be for any person in public life to witness this sad plight of people who have lost confidence in us as politicians. They have lost confidence in political parties and, perhaps worst and saddest of all, in the parliament, in Dáil Éireann and Seanad Éireann. There is a [1120] sense of cynicism about the whole country and we politicians must take the blame for that. We have failed, as a parliament, to ensure that we bring about a situation in which there is full employment in our country, or a situation in which we can even approach a level of full employment.

I blame directly successive Governments for failing to face up to the real problems confronting the country, to face the fact that our domestic inflation rate is twice as high or more than our European partners, or that our inflation rate is substantially higher than those countries to which we export our produce. We are not succeeding because of the failure of successive Governments to control the level of inflation. We are failing our own people. We are also failing them because a major part of the causes of inflation has been excessive expenditure on the budget by successive Governments. I have condemned that level of expenditure since 1972, when it first began as a conscious policy decision by Fianna Fail when Deputy Colley was Minister for Finance. I want to make it quite clear that I blame not only Fianna Fáil but Fine Gael and Labour in Government also. We have failed to face the fact that our national finances are seriously out of order and until the Government decide to take the hard decision to bring the budget into balance and rectify the balance of payments situation we shall continue to have a very high level of unemployment. One might think it is a simple problem but it is not. I doubt very much if the present Government with Deputy Haughey as Taoiseach will have the gumption or the courage to tackle the real problems in our economy. The young people could very well rise up against us. I can now foresee a social revolution which would have damaging effects on society as I would like to see it. I do not mind sounding that word of warning. I can base it on my experience in the Department.

The Government's decision to set up a National Enterprise Agency has not really great meaning: it is only a sop. The moneys provided are small — £250,000 for administration and £5 million for [1121] activities. It is insufficient, too paltry to have any effect. The money provided for industrial ventures should be at least £20 million, as we proposed in Government and as I proposed here in Private Members' Time not so long ago. That was rejected by Fianna Fáil. People should realise that Fianna Fáil have rejected the idea of earmarking £20 million for industrial development. That was a conscious decision, a bad decision, a negative decision. It was a political decision because the proposal came from the Opposition. That £20 million would be well spent on industrial ventures.

The economy has grown as a mixed economy where private enterprise and State involvement have been traditional. We have seen some excellent State involvement, the ESB, the VHI, and Bord na Móna. Some of them have not worked too well. At the moment CIE and NET are two State bodies in crisis and hard decisions will have to be made about their future. We cannot ensure the prosperity of the State without taking some risks and without some failures. We should not be too upset if we have a failure. If we have to take hard decisions, well and good; but I think we were right in trying to develop our economy in our own way and to take the risks of that policy. We must — and the Minister acknowledges this here — always adopt financial and commercial criteria for State involvement. I am not talking about agencies that are social in nature, which provide services on a social basis. I am talking of State trading companies, whether trading themselves or trading in commodities. As a central theme of State involvement we must always adopt commercial criteria and we should not be afraid to make harsh decisions where necessary. I feel that in relation to some State bodies harsh decisions will have to be taken, and the sooner the better for the economy and the nation. If you run away from them you only create malaise in society with false affluence. That would be to the detriment of the long term development of our economy.

There has been a good partnership between the State and the private sector. [1122] This manifests itself primarily with the IDA involvement since 1947 or 1948 when An Bord Tionscail were established. The IDA have performed well as an industrial instigator. The Telesis report, I suppose, has already been published in some fashion but not in full and I think the publications that leaked were not justified and did damage to the IDA which was not justified. The sooner the full report is published the better for all, including the IDA.

It may be that our industrial promotion policy may have to change. I am concerned at this time about the attitude prevailing in the European Commission regarding industrial promotion policy. We may be losing out at that level in ensuring that we can take every reasonable step open to us to promote industry within the country and seek investment abroad. We must take greater care at European level to protect our industrial promotion policy than is at present being taken. The role of the National Enterprise Agency in becoming involved in venture capital is not too dissimilar from that proposed on this side of the House by myself on 23 March. It lacks teeth because it lacks money, which is the prime mover in industrial promotion. Not enough emphasis is being put by the Minister or the Government on the development of partnership between State bodies and the private sector. I am convinced that there is a wealth of technical and commercial experience available in the State sector, in State trading companies like Bord na Móna and the ESB. The ESB have been extremely successful abroad, particularly in the Middle East with their consultancy programme, which is earning revenue for them, giving experience to their staff and enabling them to become involved in developing countries. The ESB are earning revenue for themselves in this way at times when there is not a great increase in demand for electricity at home. That is the type of activity I should like to see, but the Government do not seem intent on using the National Enterprise Agency to encourage State bodies such as Bord na Móna and the ESB to become involved [1123] with private enterprise at joint venture level or at consultation level. I am somewhat worried that our State bodies are not allowed more initiative in the areas in which they can become involved. The engineering and technical staffs in State bodies who have technical and commercial expertise could be used to a greater extent when the opportunity arises. I appreciate that they were within the confines of a statute. Perhaps the National Enterprise Agency provides the mechanism whereby a State body who have a good idea and have the manpower to back this idea up should be allowed to go into partnership in regard to introducing new commercial enterprises into the country or to become involved in the exportation of that enterprise. Bord na Móna and the ESB are two cases which come to mind.

I am not satisfied that the commitment of the Government about the operation of the agency or about the extent of their responsibility is genuine. The emphasis seems to be placed on research and technical improvements but that will take a lot of money. A sum of £5 million is paltry in that area. The National Development Corporation proposed by Fine Gael, supported by the Labour Party, had a far wider vision. It is very disappointing that it was knocked down by Fianna Fáil. This decision is detrimental to industrial development. The National Development Corporation would have had a supervisory role with regard to the activities of State bodies and would have moved them along into new areas of development in which they had the expertise. The National Development Corporation would have had a co-ordinating role which would have been important in relation to the development strategy which could he used by a number of State bodies. The venture capital would have been positive and would have been of benefit to the private sector and the State sector.

I look forward to the Bill dealing with the agency. I will wait until I see the Bill before I make a final judgment on the agency as an economic force in our society. It is unfortunate that industrial promotion [1124] policies have not resulted in full employment. It is recognised by this side of the House that new initiatives must be taken to encourage industrial progress. We accept this Supplementary Estimate but I reserve judgment on the National Enterprise Agency until I see the Bill. I am very disappointed with the attitude of the Minister with regard to Irish Steel Limited. With regard to the National Enterprise Agency I consider that the money allocated is merely a fobbing off of some commitment the former Taoiseach gave.

Mr. J. Bermingham: Information on Joseph Bermingham  Zoom on Joseph Bermingham  This Supplementary Estimate is for £25 million for Irish Steel and £5 million for the National Enterprise Agency, with £250,000 for administration. We must have a look at the background to Irish Steel before we discuss what the problems are. In May 1978 the Government approved a new plant there at a cost of £30.8 million. We realise that the cost has now more than doubled if we take the plant only into account. The reasons for that have a lot to do with direct Government policies in the budget. Our rate of inflation is twice that in other European countries and, therfore, costs have escalated during the period from 1978 to 1982.

The chairman of Irish Steel in his review estimated the cost to be £60 million. The Minister said today that it would be approximately £80 million taking everything into account. I am not satisfied that something which was projected four years ago to cost £30 million today costs £60 million. Is the Minister satisfied with those figures? The new plant will take a number of years to reach full capacity because of the wide range of products which will be developed. It is impossible to judge the plant on its performance to date. There has been restricted production during the development of the new plant. We can hardly judge it on its performance to date.

Irish Steel made a modest profit during the early seventies. That was during the period of the old plant. Losses have been recorded since 1975 and they have escalated over the last three years. The losses in 1976 were just over £2 million, in 1977 [1125] they were a little less than that and in 1978 they were down to £1 million. The loss incurred up to mid-1981 was £12 million. It is fair to say that the large jump in losses was because of the commissioning of the new plant and because of the lack of commercial activity during that period. The Government injected over £19 million in additional share capital between 1978 and 1981. In addition the IDA gave grants of £4.8 million. Due to the heavy losses in 1980 and 1981 the total amount of loans outstanding has risen from just over £21 million in 1980 to £50 million in 1981. This is a very serious situation and I do not believe anybody would try to minimise it. All this money is guaranteed by the Minister for Industry and Energy. If the Government were to decide tomorrow to wind down and close Irish Steel if would cost them about £50 million.

Any review of the company and of their activities in the coming year must take into account the changing factors in the European steel market and also the potential of the plant. I am convinced that it has very great potential. It is one of the most modern plants in Europe and we must consider it in the longer term rather than in the shorter term of merely determining whether it will be viable within the next year. There is a general expectancy throughout Europe of an increased demand for steel and of the fixing of a minimum price for it. That would put our people in the position of being able to produce steel in the knowledge that the price would be realistic and would not be brought to an unrealistic level as a result of imports from third countries. In these circumstances Irish Steel have a place within the Community. I agree that the figures at the moment are not very convincing and I expect that any hard-headed businessman looking at them would be making a judgment without knowing the full facts and without knowing what is the full potential of the plant and might ask why we should throw good money after bad.

But we must realise that the steel industry in Europe has been through a recessionary period. The European Coal and Steel Community have made loans [1126] available in that respect. There has been a deliberate reduction in employment in steel plants in Europe during the modernisation period. The plan that is being drawn up by the coal and steel industry in Europe is for the purpose of rationalising the structures for the economic production of steel. There has been a cutback situation in so far as the production of steel is concerned, but then the whole attitude in Europe seems to be to cut back in terms of everything that is produced, whether in the agriculture sphere or otherwise. I am beginning to wonder whether it is good to be part of such a big conglomeration so far as industry is concerned.

Competition from such countries as Japan and South Korea have forced closures in the steel industry as well as in other industries in Europe. In addition, there has been under-utilisation of the capacity in the remaining plants due to the depressed demand for all steel products. Because we have one of the most modern plants in Europe and having regard to the fact that the EEC are attempting to stabilise steel prices, the industry here should be in a position to make some profit. I see no reason for our not producing at least whatever steel we need for ourselves. The chairman of the company has said that great credit is due to everybody working for Irish Steel. There have been excellent industrial relations in the company down through the years. With that situation, and given the favourable factors I have outlined for the industry generally, we should have no fears in regard to its future. Until such time as Irish Steel are in a position to operate at maximum production we must give them every encouragement and not merely say that they are in a loss-making situation. In saying that the company's operations will be reviewed the Minister seemed to give the impression that this might be something final. I hope that is not so because to take that attitude would be to make a serious mistake at this time. Therefore, I should like the Minister to clarify the position when he is replying.

There are a few other questions to which I should like to hear the Minister reply also. Is the Minister satisfied that [1127] the cost is justified? The estimated cost of £30 million on the date of approval in 1978 has escalated to £64 million in terms of the comparative figure today. Can he tell us, too, what is the projected date by which the company will be at full production consequent on this legislation? May we have a firm commitment that the matter will not be allowed to drag on while the company continue to operate at only half their capacity until finally they would be wound down without ever reaching full capacity? It is not possible to assess the full potential of the industry unless it is working at full capacity.

I know that it is very difficult to arrive at accurate estimations but the Minister should be able to give us some idea of when the company can expect to be in a break-even situation. Would the Minister agree also that a body such as the National Development Corporation should have a role in the steel industry? I ask the question because, as has been said by the previous speaker, the National Development Corporation were meant to have a supervisory role. Would it be helpful if the agency had a supervisory role to ensure that the maximum output was brought about as soon as possible and that a break-even situation was achieved by the company in the shortest possible time? I do not wish to go on about Irish Steel but it is apparent that there is some lack of cohesion if it is not possible to project now when that plant will be in full production or if it is not possible to say it will break even or how long it will take before we can say we have a viable national steel industry capable of expansion in the years ahead.

The other part of the Estimate is a token as far as tackling unemployment is concerned. The National Enterprise Agency were set up as an alternative to the National Development Corporation as proposed by the National Coalition. The objectives of the National Enterprise agency were set out by the Minister, when replying to a Fine Gael motion on 23 March last, as follows:

to provide commercially viable productive employment by promoting and developing new business opportunities, [1128] specifically through the commercial exploitation of projects deriving from the work of research agencies such as the National Board for Science and Technology, An Foras Talúntais, An Foras Forbartha and the Institute for Industrial Research and Standards...

the agency will act on its own or in joint ventures with other private or public sector agencies...

the agency will have responsibility for commercial exploitation by the public sector of new development opportunities not being taken up by the private sector.

The National Coalition proposed to allocate £20 million to the National Development Corporation and the Minister, when he spoke on the Fine Gaael motion in March, outlined a very ambitious programme for his agency; but I do not know how that will be implemented with an allocation of £5 million. I do not think the Government are serious about those objectives. I accept that the Minister said that more money will be provided if needed. I do not think anybody could seriously tackle the programme outlined by the Minister with £5 million, a figure which would hardly cover one project. The £20 million suggested for the National Development Corporation was insufficient. It may not have been possible to spend that amount in one year, but it was a start.

I do not think the agency will do very much if they are only given £5 million for grants to industry. The decision of the Government to cut back in this area is an indication of their commitment towards employment. They should be ashamed to provide only £5 million for creating employment for our young people. Like many others, I believe unemployment is the most serious problem we have to face. It will not go away and there is no safety valve such as emigration as we had some years ago. Our young people will not put up with the messing about that the Government have gone on with. The amount proposed in the Estimate is an insult to those young people who cannot find work. The Government should not be pretending that £5 million will find [1129] employment. The Minister must face up to this problem and he is responsible for the consequences of the lack of jobs. He cannot wriggle out from that.

When the Minister for Education was in charge of the Department of Economic Planning and Development he told me in this House that if his Government did not produce full employment in the time span of that Dáil — that Government were in power for four years — he would adopt my suggestion. Full employment was not produced and, in fact, it was nearer to full unemployment. Unemployment figures doubled and at that time we heard talk about the expansion of a private sector, relieving that sector of taxation so that jobs could be provided. Fianna Fáil relieved the taxation but put the country in debt by borrowing since then in order to pay for the tax-free concessions they gave to private enterprise. However, jobs were not produced. In fact, jobs were lost left right and centre under that system.

An attempt is being made to produce something which would even help private enterprise to create jobs, but it is taken out of the budget and one quarter of the amount substituted. If that is the Fianna Fáil attitude to unemployment, our most serious problem, they have every reason to be ashamed of themselves. If we do not seriously tackle this problem of unemployment, if we continue offering Mickey Mouse solutions like this, setting up a laughing stock of an agency with capital input of £5 million, let us be honest and say that we can do nothing about that unemployment. I have not heard a single idea from the Government on the creation of employment. If we do not create jobs and do something about increased redundancies and rising unemployment, we are reducing our tax base, as well as everything else. If we continue along this path, our young people will not put up with it—and I will say no more than that.

It is fair to ask the Minister if he seriously believes that this will do anything at all, or is it simply a pious exercise of telling the people that £5 million is available? How many jobs does he hope to create under this National Enterprise [1130] Agency. How many enterprises has he processed, and will he spend the £5 million at all? Will any job be created under this agency? Will one person be taken off the live register, or one redundancy prevented because of this £5 million? I do not believe so. On the heads of this Government be the results of the serious consequences of not making an attempt to provide employment for our young people and, indeed, for our older people too.

Mr. Kelly: Information on John M. Kelly  Zoom on John M. Kelly  This debate was preceded six weeks ago by a debate on a Private Member's motion put down by my party to which, for reasons of form, Deputy Collins's and my name were signed. In the course of that debate, two Fianna Fáil speakers, the Minister, Deputy Reynolds and another Deputy whom I have forgotten, hauled out of the ashes of the general election either an interview or a discussion — I cannot remember which — in which I had taken part in February, and in which I had expressed reserves about the concept of a National Development Corporation. They thought this was a useful stick with which to beat Deputy Collins, who was in charge of the debate on behalf of our party.

I had said then that if the National Development Corporation which we originally had proposed was not going to provide productive employment, or be engaged in productive enterprise, in the long run it would be a very expensive millstone and one which we would be far better without. That is still what I believe. What I have to say, in hypothesis, about the National Development Corporation I am now going to say in the concrete about the employment agency which the Minister of State has produced here this morning. If the thing produces sensible work which could be understood, on commercial criteria, from which, at the end of the process, a product would emerge for which people would pay real money, then one could defend either an enterprise agency like this, or the National Development Corporation, but not otherwise.

Having heard Deputy Barrett, Minister of State, this morning and listened to [1131] that part of his speech which dealt with the National Enterprise Agency, I am completely in the dark. As Deputy Bermingham asked a few moments ago, has the Minister one single idea in his head about what this agency will actually do on the ground? That is what I want to know. It is easy to create a limited, non-statutory company, an ad hoc agency like this and it is easy — though, of course, it costs money because everything like this costs money — to give it a statutory basis. That is no problem. However, what I am still waiting to hear from the Government — and let me say with due respect to Deputy Bermingham, what I am still waiting to hear from his party, even when they shared government with us — was, what kind of actual, concrete, economic operation this agency, or the development corporation were going to engage in. I am glad to hear Deputy Bermingham express puzzlement, because I do not think that the obscurity in which this agency is shrouded was any less when we were in government, or any less before that when the Labour Party in opposition were recommending the institution of a development corporation.

If we can find finances from which the private sector have no good reason to stay away, in which the private sector might have made money, from which a product, or a process, or a service would have resulted for which ordinary people in ordinary commerce, not constrained by scrounging for votes, would have paid money, then by all means let us have a State corporation to carry out that function. I am not an ideologue against State intervention at all. I quite accept that there is such a thing as a stick-in-the-mud private sector, that there are parts of the private sector and of private industry which are stick-in-the-mud. Perhaps there are and perhaps it is up to the State to try to identify these areas and supplement private initiative in the way that Article 45 of the Constitution envisages in its Declaration of General Principles of Social Policy. Supplement private initiative, if we have stick-in-the-mud industrials and namby-pambies who are afraid to venture 6p, but I am still waiting to [1132] hear which these sectors are. I am perfectly open to conviction about that, and have no ideological objection in the wide world to an enterprise agency, development corporation, or ten of them. I want to know what are their functions in terms of what procucts will be turned out, what economic operations will be engaged in which will justify this House in taking £5 million out of the pockets of our people.

Deputy Bermingham described the £5 million as an insult. I hope I do not do his argument an injustice when I say that if £5 million is an insult and £20 million more respectable, I would like to stand that on its head. If money is going to be thrown away through this agency or corporation, I would far sooner the Minister threw away £5 million than £20 million. If we are in doubt as to what the agency is going to do, I would far sooner that the £5 million went down the drain while they were making up their minds about that, than that £20 million went down the drain.

All I hoped was that the Minister this morning, having signalled this enterprise agency, would tell us what it is going to do. Having listened to his speech and re-read it, I find that there is not a single clue in it. No businessman in the wide world would lend him 6p on the intentions and waffle and flummery — I say that with respect to his Department, whose officials have no option but to follow political directions which are given, even though they may not believe in them — there is not a businessman or private concern in the world unless constrained politically — and that is what is bringing us down — by the necessity to keep alive by scrounging votes off people and swindling them out of them, who would advance 6p on the security of the promises and proposals made by the Minister this morning. They would not know what they were. It is not simply a pig in a poke, because at least while you cannot see the pig, you can see there is something wiggling in there. This is a poke with nothing in it but air, so far as one can judge. There is no sign of life at all in it.

I suppose I have long enough experienced this sort of thing from both [1133] sides of the House to say that I very nearly could have written this speech of the Minister myself. I very nearly could have predicted what he was going to produce this morning and certainly would have predicted that the speech here this morning would include the fact that this would be the only concrete operation to be funded out of the £5 million — the recruitment of a chief executive and of staff. He might have added premises, auditors and cute little graphic designers to do the annual report cover. I have no doubt at all about the State's capacity to throw money away on these things. First get your chief executive, set him up with a suite, wall to wall bureaucracy, a stainless steel plate on the front with cute little logograms of the National Enterprise Agency and someone to translate it into Irish. That is the primrose path down which hundreds of millions of hard-earned Irish pounds have marched over the last decades. That is the only concrete project so far that we are getting for the £5 million which the Minister mentioned here this morning — to recruit a chief executive. I have no doubt the headhunters are doing it at this minute; they will also want their pound of flesh. When they have the stock and the premises it is only then they will think of something to do.

The chief executive's first idea will be to hire a firm of outside consultants for them to tell him what to do. They will also want their pound of flesh. If I am doing the Minister an injustice, he will be able to reply here today — although I hope he will not take it as a discourtesy if I am not there to hear him as I have to go very shortly when I conclude my speech. I will be reading, with great interest, what he says in reply. If I am doing the Minister an injustice and if he has got up his sleeve some details of the concrete projects that this agency will be either itself initiating, collaborating in or supporting, please let us have the details, not just to satisfy the Opposition but to discharge our duty as that House of the Oireachtas which controls the disbursement of public funds. Our duty to the people is not to spend their money and put it into the hands of a Minister who [1134] can do what he likes with it without knowing what it is going to be spent on.

Deputy Power, Minister for Defence, seemed to be reading over the speech for his own Estimate, which now looks as though it will not be reached for a while. I have no doubt that Deputy Power's Estimate for the Department of Defence will contain details of engines of destruction and warlike stores of all kinds which he wants us to invest in. I have no doubt there will be details in it of salaries, renewal of barracks and grandiose infernal machines of all kinds which he wants us to lay in a stock of. Whether one disagrees with that or whatever one's view of neutrality, whether it is of the old kind or of the kind we have heard enunciated for the first time in the history of the civilized world the other day, does not really matter. At least one would be able to see in one's mind's eye the range of hardware, extra salaries or extra barrack accommodation which this money is going to be spent on. It may perhaps be a fishery protection vessel, I do not know. Perhaps I should have read the Estimate. But we have no idea what this £5 million will be spent on or — I will stake my solemn oath on it — the Minister opposite has not got a clue either. I also say with the greatest respect to the officials who serve him, and I know they do it loyally and well, that not one of them has an idea either. They are going through the motions because they have to, under political orders of producing a speech and an ostensible excuse for spending £5 million. I do not blame them for that, but we already have a very complete apparatus of State bodies for doing all kinds of functions with an economic purpose, many of which are commercial enterprises of a sort in which there is a saleable end product. I can well see that a man might be put to the pin of his collar to see what else was left for an agency of this kind to do, if there was some serious project that it could undertake I do not want it defined in terms of “co-ordinating” this and “liaising with” that. I want to know if it is going to turn out bricks or mortar or both? Is it going to turn out tin cans or the labels for tin cans? The Minister will have a chance to tell us that. I [1135] hope we will not be told that he is afraid of having his thunder stolen by the private sector. I hope we will not be told that there is up the sleeves of the IIRS, the NBST or An Foras Talúntais some project for extracting wealth from some new process or exploiting some new form of natural resource which the private sector does not yet know about and which, if it did, would be falling over itself to get into. That is the duty and the job of the IIRS or the NBST or An Foras Talúntais, not to be keeping secrets up their sleeves because they too are funded by public money and subscribed for by the taxpayer. If they have suddenly thought up some process or some possible product which is worth something or which somebody not constrained by public necessity would pay good money for, they have a duty to let it out to the world and let the private sector get into it if need be. Let the people of Ireland avoid the millstone of risk which the super-imposition on this process of a bureaucratic machine inevitably will bring with it.

I hope the Minister will not make himself ludicrous by telling us that he has commercial secrets up his sleeve which he did not want to tell the House about for fear they would be stolen by somebody else. I do not know Deputy Barrett all that well but I always felt he was a serious man and I do not believe he would do himself the discredit of advancing an argument like that to the House. It cannot be that I am asking him to divulge any commercial or trade secrets or of trying to prevent the private sector from stealing something. I repeat that I would like to know what he or his Department envisage this thing doing on the ground. I make the House a free gift of this fact: I was not able to understand and not able to find out, during the eight months I was a member of the Government, what was proposed by the National Development Corporation either.

I started out without any ideological prejudice against the agency, had the Minister been able to point to some process, product or function which it could usefully do. But, since he has not done so, I am within my rights in regarding it [1136] as the twenty-fifth wheel of the State coach. It is superfluous, redundant, expensive and was thrown out as an idea in the middle of an election campaign to scoop in a few votes, and that is all. This country has a very complete battery, as complete as all the hardware that Deputy Power will be looking for money for, of State agencies with all kinds of functions. What is there in the powers of the Industrial Development Authority which disables it from engaging in the kind of thing which was foreseen for this agency? Can it be that its statutory powers, the lengthy legislation on the Industrial Development Authority, are missing a couple of clauses which would enable it to engage in the functions, vague though they are, which the Minister outlined here this morning? If so, why not amend that legislation? If the IDA are bursting to be let loose, except for the fact that subsection 3 (g) of section 14 of the Act inhibits them from doing so because of the Attorney General's reading of the clause, if they are bursting to get involved along with the private sector in something or other, why not bring a simple Bill in here to give them that power? Are we to go through the entire pantomime of setting up a special State body with a budget and a chief executive and a chief executive's car, rather than simply amending and extending the existing legislation under which the IDA function? Might the same not be said of the Industrial Credit Company on a more moderate or a less high profile level?

At page 9 of his script the Minister referred to the development of projects “involving the use of natural resources, for example, downstream value added projects based on agricultural, timber or marine based resources”. Where is the lack in our battery of semi-State agencies which prompts us to suppose that we need this agency merely to develop natural resources in downstream value-added industrial production? Suppose that some new saleable product becomes identified as being capable of being produced from turf. Have not Bord na Móna already got adequate statutory power to engage in that process? It does not [1137] involve milled peat for electricity production, or anything like that. They already turn out stuff for gardening, and God knows what else, and why cannot they keep on doing that? What is to stop us from further developing that natural resource by the statutory agency that already exists?

Was the Minister thinking of something in the food processing line? Have not the Sugar Company got all the powers they need to engage in that, although not with very notable success to date? Have not An Bord Bainne got powers of that kind? Does the Minister want the agency to get into biomass production, for example? That can be a very valuable crop, I am told, on marginal land. Have not Bord na Móna already got power to do that? Not much longer than a year ago I saw the only biomass experiment of any size in the country being conducted on Bord na Móna land by Bord na Móna workers.

Does the Minister want to get into early flowers for competition with the Scilly Islands, or orchids or other exotic blooms? The ESB have already done that: They have been doing it on an experimental basis for years but I do not know if they have ever got beyond that point. They have done it, very sensibly using the waste heat from their generating stations.

Is it fish farming he wants to get into? The ESB do that too and have the power to do more of it, again using the surplus heat which, though it sounds very unappetising, is said to encourage the growth of fat fish. It is a form of exploitation of peat and fish biology which is economically interesting. Is it something to do with sea fish? We have An Bord Iascaigh Mhara to do it. Does he want to get alcohol from potatoes, as has been frequently suggested, or out of some other easily grown root crop, perhaps to produce some sort of fuel on which cars or other machinery might be driven? We have Ceimicí Teoranta to do that for us. They were set up originally to do nothing else but that.

I want to know what kind of projects involving natural resources the Minister [1138] has got in mind and why is the apparatus of this agency necessary to exploit them?

On page 9 the Minister referred to “projects having a substantial import substitution effect”. We have all been into import substitution for years. Ever since I became an Opposition spokesman I have been asking questions about it, hearing about it, reading and writing scripts about it. The IDA have been concentrating highly on this. They circularise on it. They have programmes in which they try to identify products now imported which could be manufactured here. They may not have a whole section of their operations devoted to that but they have an element of their operations specifically oriented to encouraging industrual development based on import substitution. What more can this agency do?

The Minister does not need me to emphasise further what I have been saying. Having listened to his speech, I am sceptical. I had hoped I would get an answer which I did not get when we were in Government. I have not got an answer. I am sceptical about this thing, about pouring money down the drain, putting a sum of money which, contemptible though it may seem to Deputy Bermingham, I regard as a large sum of money, at the disposal of an agency which, to use a trendy word, will have no “remit” that I have been able to see in terms which would enable me to assess what the end product the agency are to take an interest in will be.

On page 8 of the Minister's speech he paints on a broad canvass the object of the agency. He told us this should facilitate more effective “co-ordination” of the work of the various State agencies involved in industrial promotion and development. I would associate with that a reference from page 13 in which the Minister mentioned the IDA in connection with the National Enterprise Agency. He said a representative of the Department of Industry and Energy is on the board of both bodies and this should reinforce “liaison” arrangements between them.

Could we lay aside our party uniforms for a moment and would the Minister [1139] imagine that he and I are in the bar having a drink or out having a walk in the country, and could the two of us just sit back and have a good laugh at the idea of a country of this size, barely three million people, having so many barriers and distances between the various elements of the State aparatus that their activities have to be “co-ordinated”, that there has to be “liaison” between them, if you please?

The word “liaison” in modern usage — I am only saying this from the top of my head — goes back to the First World War when, because of ethnic and cultural differences, the Serbian Army had to have a liaison officer with the Belgians, or the Germans with the Bulgarians, or something of that sort. There is every excuse for liaison there because people might have come to blows otherwise. Here we are talking about a limited number of officials, the important ones of whom all know each other by their first names. They are well able to lift a phone and talk to one another. They read the newspapers. They all know what the others are doing and they are not so prodigal of the State's resources or so neglectful of their duties as to be deliberately going in for something that would wastefully duplicate what other agencies are doing.

These scripts I see every other day from Ministers — the same was true of us — includes such things as “to co-ordinate this” or “to identify that”, to “monitor”, to “evaluate”, or “to promote”. This is all aimed at stringing out inordinately a series of simple intellectual functions which are natural to anybody engaged in ordinary business. For instance, a shoemaker naturally co-ordinates this and that: he actually liaises with this and that, naturally identifies opportunities. It would never occur to him to put big words on them because they are natural, instinctive, an intuitive part of every business project and of every administrative project if it is being conducted properly. It is ridiculous that we are to have a special agency of this kind to co-ordinate and set up a liaison, if you please, between Pat this and Tom that, both of whom were at school together [1140] and have known each other for 30 or 40 years, live in the same suburb, play golf with one another and, if they are not on friendly terms, they are well able to phone one another. They are not at the same distance as the Bulgarians or the Serbians in 1914 or 1915. We do not need an agency for liaison. We are all in the same boat together and it has been springing many a leak, and if the boat sinks we will all go down. We are all keen not to waste the State's money. We are all keen to get value for what we put into projects. That goes just as much, if not more in my experience, for public officials as it does for the rest of us, and they do not need a special agency to co-ordinate or liaise them. If they are doing their job properly that would happen automatically.

I want to end by putting to the Minister my suggestions for spending the £5 million, since he seems to have it to spend. I do not know where it is coming from. This is a Supplementary Estimate so I can only take it that we are going to be borrowing this £5 million. It is not envisaged in the original Estimate; it is not envisaged in the budget arithmetic. Therefore it must be taken as topping up our deficit and must be coming from abroad.

If we are going to borrow £5 million and we want to spend it productively I have a few ideas that do not involve any shiny new stainless steel authority or anything of that type. I would put more money than I was able to put into the marketing effort of Coras Tráchtála. I would enlarge the scheme, which I do not take personal credit for because it was not my idea but was given to me by somebody else and I was lucky enough to be able to pick up the ball and run with it, of temporary subsidisation of Irish firms that are not yet in the export marketing business, to enable them to recruit executives who are based abroad permanently or most of the time. This time last year only about 30 Irish firms had full-time marketing executives abroad. Coras Tráchtála believe, and I believe with them, that that figure is disgracefully small. If it were multiplied we would see [1141] a multipyling of Irish exports and consequently an increase in the employment dimension of Irish industrial production.

I would use some of that £5 million to subsidise technical training in the directions here in which there are still many vacancies because people cannot be got to do the jobs as there are not enough people with the necessary training. To go back to marketing for a moment, I would use it also to subsidise language training because we simply cannot expect to be able to sell products in countries through the medium of the language which we ourselves speak, a form of English. It is true that it is foolishly said that in Germany or in Holland they all speak English. Most of the people engaged in business there do speak it, after a fashion. But anyone speaking a foreign language, no matter how well he speaks it, is operating under a certain mental constraint in that he has to concentrate on the form of what he is saying as well as on the content. He is not as accessible to persuasion or taking an interest in something as he would be if the thing were made easy for him. For an Irish firm to sell something abroad when it has not got a single member of the firm who is able to put ten words together in the language of the customer is crazy. The Japanese do not behave like that; the Germans do not behave like that; the Dutch do not behave like that. We are very backward in that regard for historical reasons. It is not the Minister's fault or his party's fault, and it is not our fault. The reasons lie back in the development of the patterns of middle class convent secondary schools, religious-run education in the nineteenth century. I have no doubt that there are other factors as well. But we are very backward here and I believe that money put into this — and it would not need to be a lot of money — would produce enormous dividends in terms of the force of the Irish marketing effort which is very much under-estimated.

My other suggestion — and this is a pet theme of mine which I have mentioned before in the House — is to put some of that £5 million into trying to develop in an arbitrarily selected small number of pilot communities a total economic cooperative. [1142] Again it would not need to be a lot of money. This is my own idea in which I have never been able to get anyone else to take much interest. Although I tried very hard during the months we were in Government to do so I could never get a serious response quite along the lines I had in mind. It is to try to find some way of selecting a very small number of pilot communities and provide a staff of advisers picked from the various specialised agencies we have, a tourist authority, an industrial development authority, a fishing authority and so forth, to go and live in these communities for a year or two and try to examine every aspect and dimension of the community's resources and try to bring it, by a combination of very small sums of subsidy and of ordinary human leadership, to the optimum condition that the few hundred or thousand people inhabiting that little bit of land are capable of bringing it. That would operate as a kind of a flagship or beacon or token to the rest of the country of what could be done. I do not disparage or decry the efforts and all the valuable and very important things that have been done by State agencies, but they are too widespread. The little we have is too thinly spread and they are undermined even further by the Irish psychology which is poisoned by the atmosphere of competitive politics here whereby people are encouraged to look to the State to do everything and to themselves to do the minimum.

That is what I would do if I had £5 million to spend. There were things I could have done during the time we were in Government with a very small fraction of that money and I was not able to get it. The Minister now has £5 million to play with and I would strongly advise him to put the money into modest unpretentious schemes of the kind I have been outlining and forget about an agency for which he has no concrete plans. I want to give him a friendly warning, from man to man, that if he does not do that and if he presses ahead with his empty, vacuous agency, it is going to join the list of State-sponsored spooks of which we saw a few in the 1977-81 period. It is going to belong to the same select, ignoble little [1143] group of which the founder members were the “Employment Action Team” which was disbanded within a matter of months, and the “Sean Lemass-style Industrial Development Consortium”, which we were promised in the 1977 manifesto but which, as I often said before, never had an address, never had premises, never had staff, never had a budget, never had even an office cat. It did not even have a telephone number although there were conditions in the country then that might have explained that. It existed only as a wraith in the building across in Kildare Street. I called it the spook of Schoolhouse Lane. That is what it was, the “Seán Lemass-type Industrial Development Consortium”.

I do not do this with any pleasure because we are all in this together and I feel we have had enough competitive politics where no serious ideology divides the sides, but I want to warn the Minister in a friendly sense and advise him that if he does not want to find himself with his tail between his legs in a years' time defending the waste of £5 million, he should remember those examples that have gone before, the “Employment Action Team” and the “Sean Lemass-type Industrial Development Consortium”. Slán beó leis an Industrial Development Consortium agus leis an Employment Action Team. Why did they fail? Why did they amount to nothing? They amounted to nothing because there were no plans for them and there was nothing serious they could do. There was no product or project which was ever envisaged for them for which anybody would have paid a penny. So too will this £5 million be wasted unless the Minister can think up a useful, concrete project for this agency or unless he devotes the money to humbler, more modest projects of the kind I have suggested.

Mr. B. Allen: Information on Bernard Allen  Zoom on Bernard Allen  I did not intend to be here today speaking on this Estimate but having read the Minister's speech I felt I had to forego my canvassing in Ballyfermot to come in here to make some comments. I referred in previous contributions to the unemployment problems in [1144] the greater Cork area. There are serious doubts as to the future of one of the biggest employers in the Cork region. I have studied with interest the activities of Irish Steel over the last number of years. I looked with admiration at their efforts to become more competitive, particularly the modernisation programme they undertook. This was initiated by the Coalition Government of 1973-77 when they committed themselves to a modernisation programme which would ensure continued production in Irish Steel. That modernisation programme took place at great inconvenience to the staff. Some of them were laid off. We had been looking forward to their being re-employed in the near future. Some have already gone back and others are poised for re-employment. It was hoped that production in the company would improve the unemployment situation in the Cork area.

Unemployment in Cork has got out of control over the last few months. The latest figure given by the Minister yesterday shows that 7,900 people are unemployed. In January the figure was 7,000 which means there has been a 13 per cent increase in unemployment in the first five months of this year. That is a serious matter. There is no point in stating the obvious if we do not have any solutions. The programmes embarked upon by the Government have done nothing to improve the situation in Cork.

On the Order of Business this morning, I asked the Taoiseach if funds would be provided for Cork which are badly needed to provide infrastructure and attract new industry to Cork. If we do not get these funds we in Cork will be doomed to further years of unemployment. I was shocked by the Minister's speech which put a major question mark over the future of Irish Steel. No matter how one reads it, it is obvious that the Government are providing an interim payment of £25 million to offset interest on loan charges. This is a major drawback to the policies pursued by the Coalition in 1973-77. It is contrary to statements made by spokesmen for the present administration during the last general election campaign in February. We [1145] endured a vicious smear campaign regarding our unemployment record then and the present administration committed themselves to tackling this problem in Cork. However, their record in office has not so far lived up to their promises.

Acting Chairman (Miss M. Barry): Information on Myra Barry  Zoom on Myra Barry  The Deputy should keep to the point.

Mr. B. Allen: Information on Bernard Allen  Zoom on Bernard Allen  The activities of Irish Steel are just as important to the country as is Whitegate. Doubts about the future of Irish Steel will have to be fought in the House. I will watch the Minister very closely over the next few months on this issue.

The Minister's speech will have a demoralising effect on the staff involved who have endured uncertainty over the years. The chairman's report for the year ended June 1981 praised the staff for their labour relations. The company have undertaken a re-training programme. Now a new question mark hangs over their future. I admit that output from the plant will not reach its maximum until four years after it has started. However, this is an inopportune time to cast doubts on the future of the company. I should like clarification from the Minister regarding the future of the company.

Minister of State at the Department of Finance (Mr. Barrett,: Information on Sylvester Barrett  Zoom on Sylvester Barrett  Clare): I thank Deputies who made contributions and showed concern for the company. I was accused of spreading pessimism and creating a lack of confidence. Is it not better to spell out the facts in the House as they exist regarding the concern of the board in Irish Steel and the employees about their future? It would be dishonest to cover that up.

A commitment was given in the early seventies regarding the setting up of a new plant but that did not get under way until 1978. We are now in a situation in which we have a modern plant which compares favourably with the best in western Europe. Had this not been done, no option would have been open to any Government but to close down the plant. Irish Steel would not have been able to compete in the market. The new plant is [1146] capable of producing 84 different products if required and if the market is there for them. This will give some idea of the scale and scope of the plant.

The £25 million will be used to meet the company's immediate obligations and pay bills which must be paid before the end of May. Marketing is the key to all the trouble. The company's have difficulty in competing. We hope that with the new executives and marketing personnel, one of whom has been marketing abroad for some time for British Steel, we will get a greater share of the market. We depend on the export market. Apart from our European colleagues who have modern type plants we must compete abroad with the Japanese, Koreans and Brazilians whose plants are not obsolete but are quite modern. That is a measure of the competition we will face.

The people who are putting up the £25 million, the taxpayers, should know exactly what they are paying for. The same applies to people in the surrounding area, whether they are employees or executives. They already know they are facing a tough fight. That does not rule out the possibility of succeeding, equipped as they are now, and with the possibility of an improving market as the recession recedes, or as we begin to see the light at the end of the tunnel. There is a distinct possibility that the company will become viable, and that is why they will be reviewed again at the end of the year with a view to assessing viability.

I said I hoped legislation will be introduced during this session which will give Irish Steel the capacity to increase their borrowing and equity. By no means are we awaiting the fateful day. We are taking steps to give the company a chance to become viable and build themselves into a proper position, and take back some of the people mentioned by Deputy Allen who were laid off and are hoping to get back again. They are getting assistance and, in assisting them, surely we are giving them encouragement. They now have more qualified people in the marketing field than they had in the past perhaps. I do not know who they were. Marketing is the key to success.

A number of points were raised during [1147] the debate. I have dealt with the depressing approach in my speech mentioned by Deputy Collins. My speech was a factual statement. The people of this nation are entitled to have the facts spelled out for them when we are spending £25 million as we are here. On the question of the delays which led to increased costs of £8 million or thereabouts, in one firm there was an industrial dispute which lasted for eight months. Irish Steel sought legal advice on suing or getting compensation for the delay. The end result was that the firm invoked force majeure in their contract and there was no question of the company getting compensation.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  That is not good commercial practice on the part of Irish Steel.

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): It was in the contract.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  It should not have been in the contract.

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): It was there. Perhaps it would not have been as easy to get supplies if it was not in the contract. Perhaps that had a bearing on the other side. Energy costs became a major problem in 1973-74 because of the rapidly increasing price of fuel. Deputy Collins said it seemed to cost industry more here than in other countries. We were over 80 per cent dependent on oil when the energy crisis came. Many of our colleagues in the EEC were not as dependent as we were on it. Some of them in north-western Europe already had natural gas, and other ways of providing energy. We were forced into a corner. In the past many of us spoke about the energy crisis between 1973 and 1977 so I need not go into that again. Everyone is aware of it, including Deputy Collins, who was responsible for energy in the previous Government.

Deputy Collins talked about using natural gas. Already Irish Steel are using natural gas. They are having consultations and discussion with An Bord Gáis about better terms. On the question of aligning ourselves with Denmark, we have done this in the past when it was to [1148] our advantage. As I said already, there is no question of the Government having said or implied that we were closing Irish Steel in a year. The position will be reviewed and assessed properly in the light of prevailing conditions. With regard to the other item in this Supplementary Estimate——

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  Before the Minister leaves Irish Steel, has he any comment to make on the position vis-à-vis the European Commission with regard to a number of items I raised?

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): EEC production and delivery quotas were raised by Deputy Collins. There is a mechanism for taking into account newly-created capacity. The company and the Department are continuing to seek special recognition of Ireland's position. We believe the Commission understands Ireland's position. It will apply most likely to those with annual turnovers of 6,000 tons of steel as against 12,000 tons.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  Has that been accepted?

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): It is most likely that it will apply.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  From when?

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): I have not got the date. In the near future.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  The Minister might like to contact me later on that matter. The other aspect is the position of the aids code. The Minister might also like to contact me about that matter.

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): Yes. The Deputy also raised a point about dealers. The aim of the Minister is to have price controls applied to the maximum number of dealers. I will correspond with the Deputy about that as well.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  The Minister mentioned dealers with turnovers of 6,000 tons as against 12,000 tons. A minimum [1149] figure of 3,000 tons was mentioned as being suitable for the Irish economy.

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): It seems that the figure will be 6,000 tons.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  That may not suit the Irish situation.

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): We are coming down halfway from 12,000 tons. It looks as if the figure will be 6,000 tons in the near future. The National Enterprise Agency is the other item for which we are seeking £250,000. This was the cost of setting it up and recruiting certain people. We are also seeking £5 million for capital investment in this enterprise agency. For the development corporation, which was the proposed predecessor, a figure of £20 million was included in the previous Government's estimates. That £20 million could not have been spent by this corporation because it could not have got under way before mid-summer. The £5 million we are now providing to get the National Enterprise Agency on its feet, we believe, will be adequate for this year. I said in my introductory remarks that if this amount was found to be inadequate we would give immediate consideration to the provision of more money for the agency. Therefore, the question of skimping in the amount of £5 million does not arise if the other remarks I made about the agency are noted.

If I have not covered all of the points raised by Deputies I shall correspond with them. The functions of the National Enterprise Agency were dwelt on by Deputy Kelly. Those functions were spelled out in my speech this morning. I might add that details of specific projects in which the agency will be involved are at present being worked out. Of course I should say that the agency was left in cold storage during the period of office of the previous Government. It is now being revived with all haste to endeavour to have the function for which it was intended originally fulfilled — mainly job creation. The emphasis is on job creation with regard to this agency rather than [1150] them becoming involved in a supervisory role which would be much too time-consuming and might well affect the real possibilities of job creation. There are already sufficient bodies in this country with a supervisory capacity. Neither is there any question of a clash between their functions and those of the Industrial Development Authority because the IDA are a grant-giving development agency for new industry.

I said specifically this morning that this new agency would involve themselves in joint ventures. I might reiterate that, apart from the £5 million now being provided for the National Enterprise Agency and the promise of additional moneys being made available by the Government, if required, it is possible that funds will accrue to them by way of investment or from commercial profits in the course of their existence. Deputy Kelly seemed to think it was a laugh to think that any private investor would invest in any project being undertaken or assisted by this agency. I disagree with him there because I know of some of the most conservative people, farmers and others who have money to invest and who are seeking openings for such investment in the industrial area. I would say that farmers are probably more conservative than are most industrialists. Therefore there are people who will invest in such projects when they realise their potential. I would not be as pessimistic as is Deputy Kelly.

I thank all Deputies who contributed to the debate on this Supplementary Estimate. It was introduced under two headings, Irish Steel and the National Enterprise Agency, which is being established in an additional effort to tackle the unemployment situation with which we are confronted and which it is the wish of all Members of this House should be tackled successfully.

An Leas-Cheann Comhairle: Information on James C. Tunney  Zoom on James C. Tunney  Deputy Collins to ask a question.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  I reserve judgment more or less on the National Enterprise Agency pending the introduction of legislation. Can the Minister give me some [1151] indication when the Bill will be ready for debate in this House?

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): In the autumn session.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  That is some time away: could it not be done in the course of this session?

Mr. Barrett: Information on Sylvester Barrett  Zoom on Sylvester Barrett  (Clare): It is possible that it will have been introduced but will not have gone through the Houses.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  Well, if it is introduced, that will give us an opportunity to consider it.

Question put and agreed to.


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