Industrial Development Bill, 1985: Second Stage.

Thursday, 5 December 1985

Dáil Eireann Debate
Vol. 362 No. 7

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Minister for Industry, Trade, Commerce and Tourism (Mr. J. Bruton): Information on John Bruton  Zoom on John Bruton  I [1315] move: “That the Bill be now read a Second Time.”

Industrial development is critically important to our future well-being. Our industrial policies must be such that the proven flair and entrepreneurial talents of our people are used to the full. There is no point in making excuses about excessive energy prices, declining markets, competition from low wage-cost countries, protectionism and so on. We are a small open economy and we must regard these problems as given realities and devise methods of exploiting these realities to our own benefits.

We have proven in the past that we have the capability to take on and beat the best in the world. Over a 30 year period our economy has been transformed from being predominantly agricultural to the industrial society we have today. Over the next 30 years we must absorb the latest technological developments, improve our competitiveness on world markets and provide employment and a good standard of living for our people.

Over 90 per cent of total world scientific knowledge has been developed in the past 30 years. This will double again in the next 15. This is the pace of change that we have to contend with.

The primary function of Government in this scenario is the generation of an environment that is conductive to risk-taking. The Government's achievements over the last two and a half years in this area have been many: inflation, a key influence on risk and the probability of success has been reduced from 18 per cent in 1982 to 5.5 per cent in 1985; steps are afoot to rationalise our cumbersome industrial relations procedures; the development of our telecommunications services has been continued at full pace; major road bottlenecks have been alleviated and further substantial developments are planned; the expansion of key elements of our third level educational system designed to provide the appropriate skills and business acumen to industry has been escalated; systems have been put in place through the industrial costs [1316] monitoring group to monitor and advise the Government on the implications of Government actions for industrial costs.

During the latter part of the seventies and into the eighties there was a major debate on industrial policy. This debate included the publication of the Telesis report and the National Economic and Social Councils' comments on the report. In July 1984 the Government published their White Paper on Industrial Policy, responding to the NESC reports and the IDA's strategic plan, and outlining the Government's policy for the decade ahead.

The primary objectives of this industrial policy are: (i) to create and maintain the maximum number of sustainable jobs in manufacturing and international services; (ii) to maximise value-added in industry and retain the wealth created for further employment-creating investment; (iii) to develop a strong internationally-competitive industrial sector in Ireland made up of both Irish and foreign industry; (iv) to promote the rapid development of our natural resource-based industries; (v) to integrate foreign industry into the Irish economy through greater linkage with Irish industry and the educational institutions; and (vi) to improve the rate of return in the commercial State companies.

The creation and maintenance of employment is the most important of these objectives. The overall target set for job creation in the White Paper is for the growth in manufacturing employment of between 3,000 and 6,000 jobs per year. This is a very ambitious target in the light of past trends here and in other countries. All Government agencies concerned with manufacturing, whether in the investment, export or technical support areas, are being required to use their resources in such a way that together they will assure the achievement of these targets over the ten year period of application of the White Paper.

The national linkage programme is one of the most important of the job-creating initiatives. The objective of the programme is to develop a successful subsupply [1317] industrial base in Ireland. This will correct the current unsatisfactory position where only 33 per cent of industry inputs are manufactured locally and will ensure that the spin-off benefits from the purchases of the important firms attracted to Ireland are retained in Ireland. In pursuing these objectives the programme is, of course, addressing itself to the recent OECD comment concerning “the dualism of the Irish manufacturing sector” whereby strong growth by export-oriented foreign firms was not creating significant linkages to indigenous firms.

This programme will be a key source of new manufacturing employment and the IDA, who have responsibility for the programme, have appointed a former managing director from the electronics industry of an international company to spearhead the programme and to initiate linkage development in the electronics industry initially. Specifically, a linkage team have been established consisting of representatives of the IDA, the IIRS, SFADCo, AnCO and Údarás na Gaeltachta. Within the next six months 50 multinationals will be involved and 25 suppliers will be in the developmental phase.

In addition, the programme has already begun to expand to include multinationals outside the electronics sector by virtue of the fact that different sectors have similar requirements and because suppliers have customers in different sectors. While the initial focus will be on information technology, companies in telecommunications, consumer products and engineering are now also participating as a result of the recent decision.

I am anxious to see the programme extended to other sectors and I expect proposals to that end to be approved shortly. The linkage programme, while initially focused on developing small Irish companies to service multinationals here, should not be seen solely in that light. We have a fairly diverse multinational sector here and if a company can be developed who are capable of meeting the quality standards and demands of the multinationals in Ireland, it is a very small [1318] step indeed for them to start servicing similar multinationals in, say, Britain or continental Europe. What we are really doing is using sales to the multinational sector here as a jumping off ground, so to speak, for the development ultimately of export-oriented companies. It is not a simple case of import substitution in the limited sense of that term.

The major aim of Government policy is to build up strong indigenous companies capable of taking strategic decisions, developing their own R & D programmes within Ireland and of achieving strong market positions. The company development approach is one of the main planks in achieving this aim, encouraging overall planning by companies and putting the financial and non-financial services of all State agencies behind companies which adopt the approach. The IDA are working closely with CTT, the IIRS and other agencies as appropriate and to date 101 companies have participated. Of these, 55 have had development plans approved.

This emphasis on assisting indigenous industry is the motivation behind the regionalisation of the small industries programme. This has been completed since June, and the first Regional Small Industry Advisory Council meetings were held in May. In addition, small industry boards in all regions are now meeting on a monthly basis and work processed during the year to date gives confidence for believing that the target of increasing small industry project approvals by 25 per cent over the 1984 level can be achieved. Indeed, the fact that some 4,000 jobs in 300 projects were approved by IDA in the first half of 1985 is an indication of the potential of the small industry sector.

The one-stop-shop initiative is an equally important initiative in this context. I am pleased to be able to respond to criticisms that they are nothing more than shelves of information booklets in the State agencies by pointing out that IDA and SFADCo offices in all the regions, except the south-west, will soon be able to accommodate to the extent required the representatives of the IIRS, CTT and [1319] also other agencies. Some of the agencies' services will be provided on a visiting or clinic basis. For logistical reasons, the necessary changes cannot take place as quickly in Cork, but I am satisfied that all parties are co-operating to bring the IDA, the IIRS, CTT and other agencies under one roof in Cork as well, at an early date.

It is critically important in the case of small industry that people be able to get quick decisions and have a good personal interaction with individuals in the agencies with which they are dealing, rather than have to deal with faceless bureaucracies in Dublin where files are constantly referred from one officer to another before a decision is taken. The decentralisation of the small industry function is crucially important in this regard.

Ireland's very good export performance in recent years is familiar to the House. While it is reassuring to note that this is continuing, with real growth of up to 10 per cent expected in 1985 and in 1986, nonetheless the White Paper identified shortcomings in the marketing capabilities of Irish firms. I have been attempting to redress this situation by arranging for CTT to introduce specific marketing initiatives to assist exporters to develop the necessary expertise.

The most innovative of these schemes is the market entry and development scheme which is designed specifically to help exporters with the various expenses incurred in breaking into new markets or undertaking major developments of existing markets. The other schemes deal with:

—building marketing strengths in firms,

—market research proposals, and

—design and product development proposals.

In implementing these schemes CTT are focusing on the need to develop a market-led approach by our manufacturers which implies precise identification of customer needs and setting out to meet them as regards design, quality, pricing, [1320] after-sales service etc. To assist in this, CTT grants cover marketing managers, sales personnel recruitment, specialised management training programmes and marketing training seminars.

All of these initiatives are well under way and are beginning to show encouraging results. However, I would stress that the basic emphasis here is the long term development of marketing strengths in indigenous firms so that they may compete successfully on international markets.

One of the major contributory factors to the industrial strength of the United States is the thriving venture capital market in existence there. Most European countries have in recent years been trying to emulate the American experience. In Ireland we have the business expansion scheme, which provides income tax relief to eligible individual investors.

The scheme provides that individuals who purchase shares in unquoted manufacturing companies or companies providing internationally traded services should be able to write-off up to £25,000 per annum against their taxable income. An individual paying 60 per cent tax who makes a qualifying investment of £25,000 will find that the net cost of that investment is only £10,000. The business expansion scheme resulted in more than £3.5 million of new investment in industry during the 1984-85 tax year, in its introductory phase.

The Second Stage of the National Development Corporation Bill was completed in the House last week. This Corporation is a further vehicle for State involvement in, and promotion of, industrial development. The principal objective of the NDC will be to assist, by means of investment in industry, in the creation of the maximum amount of viable employment in the State.

I know that some Deputies are concerned that there may be an overlap of functions between the NDC and IDA. I want to repeat what I said in the House last week to allay any fears that there may be about an overlap or duplication of functions between the NDC and the [1321] IDA. It is my intention that there should be an operating agreement drawn up between the two bodies which will be subject to my approval. This will allow the NDC and the IDA to co-ordinate their respective functions and to act in complete harmony, thus ensuring the creation of the maximum number of viable jobs.

The principal function of the NDC will be to take an equity stake in industry by investing in suitable projects with a capability of providing sustainable and viable employment opportunities. They will not be empowered to make grants available to industry as the IDA are, and their power to give loans will be limited to the extent necessary to complement their overall effort and may be exercised only in the specific circumstances set out in the Bill.

The IDA have of course taken minority equity stakes in industry in small number of cases where this was necessary to formulate an overall package of aid to a particular project. We should not forget, however, that the IDA's principal statutory function is to contribute to the industrial promotion effort by means of providing grant-aid to industry.

The Management Committee on Industrial Policy was established to ensure the prompt implementation of the policies outlined in the White Paper. The committee, under the chairmanship of my Department, is comprised of representatives of the principal industrial development agencies and the Department of Finance. In its regular meetings to date it has reviewed submissions from the agencies on many of the White Paper initiatives. By doing so it has ensured, and will continue to ensure, that there is no slackening in efforts to put the new policies speedily in place.

The Bill now before the House is a further stage in the implementation of the White Paper policies. The opportunity is also being availed of to consolidate all existing industrial development legislation into one single comprehensive code. The Bill will, therefore, repeal and re-enact with amendments the Industrial Development Authority Act, 1950, the [1322] Industrial Development Acts, 1969 to 1981, the Undeveloped Areas Acts 1952 to 1969, and the Industrial Grants Acts, 1959 to 1969, omitting provisions which are obsolete or no longer necessary.

Following detailed reviews of the structure and administration of incentives for industry in Ireland, the Industrial Development Act, 1969, resulted in the formation of the Industrial Development Authority in their present form.

Established in 1970, the new Authority were given power to offer a wider range of incentives to indigenous and overseas industry. Their new package of incentives and services to industry incorporated grants towards the capital costs of new industrial projects, reequipment grants to assist industry to adapt to free trade conditions, special grant assistance geared towards the development of small industries, training grants, interest subsidies, loan guarantees, equity shareholding, R & D grants, the development of industrial estates and the construction of advance factories.

The Industrial Development Authority have served us exceptionally well since their formation. Their flexibility and efficiency in encouraging industrial development are the envy of other countries. The re-definition of IDA's role in section 11 of the Industrial Development Bill will ensure that the IDA will be enabled to continue their good work into the future.

The primary role of the Industrial Development Authority is to act under the Minister as a body having national responsibility for the implementation of industrial development policies and in the exercise of their functions to act in accordance with policies set out for them from time to time by the Minister. The Industrial Development Authority, together with the other agencies involved in industrial development, such as the IIRS and Coras Tráchtála will have executive responsibility for the implementation of industrial policies.

To ensure that industrial policy evolves in an ordered and planned manner, and that Deputies are made aware of the costs [1323] and benefits of industrial policy at regular intervals, the Bill includes in section 6 a new provision for a review of national industrial performance every three years. These triennial reviews and the conclusions arising from such reviews will be laid before each House of the Oireachtas.

The Bill for the first time will provide in section 13 for the issue of directives of a general policy nature to the Authority, subject to a number of safeguards. Such directives should not apply to any individual industrial undertaking or to the location of an industry other than as part of a general review of industrial policy for the country as a whole. Copies of all directives given by the Minister under this section must be laid before each House of the Oireachtas within 21 days.

Section 21 of the Bill sets out the new selectivity criteria under which the Authority will provide grant assistance to industry in respect of fixed assets. These criteria will also apply to leasing grants, rent subsidy grants, loan guarantees, interest subsidies in relation to fixed assets; training grants, the new technology acquisition grants, the incentives for enterprise development and equity participation. Other grant programmes such as research and development, international services and the incentives in respect of restructuring of industry will remain subject to their existing criteria.

The new grant criteria were outlined at paragraphs 5.2 to 5.4 of the White Paper and have been substituted for the criteria set out in the two-tier grant system in sections 33 and 34 of the Industrial Development Act, 1969. The new criteria overlap with the old in respect of the necessity for financial assistance, the permanence and viability of the firm, the provision of employment, use of natural resources and technological content. There will be no change in the maximum rate of grant which may be made, which will remain at 60 per cent in the designated areas and 45 per cent in the non-designated areas. However, the average level of fixed asset grants will be gradually [1324] reduced so that savings may be applied to technology acquisition grants and the new marketing initiatives.

This is quite important because the industrial White Paper clearly envisages a shift in resources from fixed assets to technology acquisition marketing and this reduction must be made to effect that shift. In addition, the new selectivity criteria will focus on the need to develop and increase linkages between overseas and indigenous industry and in particular the development of import substitution projects and export markets. Employment creation and maintenance, in addition to the new emphasis on output growth and generation of value added within the economy, will continue to be the main focus of State assistance to industry.

The conclusion in the White Paper on Industrial Policy was that grant assistance should be directed to remedying perceived weaknesses in Irish industry in the areas of marketing, management, research and development and innovation. Companies approved for grant assistance will, therefore, have to demonstrate that they will comply with the new criteria, have suitable company development plans and also that the equity base-financial structure of the company is adequate.

It is now generally accepted that we can no longer rely exclusively on overseas investment as a means of improving the level of technology in Irish industry. The White Paper on Industrial Policy stated that the IDA would be empowered to give grants not exceeding 50 per cent towards the costs of acquiring new product or process technology. Section 30 of this Bill will enable the IDA to give such grants and sets out the costs which will be eligible for grant assistance. Product or process technology for the purpose of grant assistance will include patents, designs, trade marks, trade secrets, copyrights and proprietary and non-proprietary know-how.

There is a wealth of invaluable technical expertise available in the Institute for Industrial Research and Standards. It is [1325] my belief that this expertise will prove a major asset in identifying suitable projects for assistance under the technology acquisition grants scheme as well as for research and development grants generally. Accordingly, I intend that the Institute for Industrial Research and Standards will be consulted by the Authority on all such projects.

The Bill also makes a number of significant changes in the IDA's R & D grant programme. Under section 24, costs eligible for assistance in future will include the salaries and wages and travel and subsistence expenses of those engaged on the project or in identifying product or process development opportunities within the company. Secondly, in order to encourage the smaller industrial undertaking to make greater use of the R & D grants, it is proposed to allow the Authority to make advance payments of up to one-third of an R & D grant to small industry.

It is intended that this provision would apply to small companies employing up to 50 people and with fixed assets of less than £0.5 million. It is now recognised that small companies are often more innovative than the larger companies, yet at the same time do not have the financial resources available to devote to a concerted and systematic research and development effort. This new provision will assist the smaller undertaking involved in research and development and considerably ease their cashflow and working capital requirements.

It may surprise the House to know that we are already spending about £40 million a year on research and development grants to Irish industry and we are getting about £30 million for the same purpose from the EC. Yet, relatively speaking, we have a very low level of research and development activity in industry by comparison with other countries. There are notable exceptions to this and I recently visited one in Deputy Daly's constituency, a company which would not exist but for the enormous research and development efforts they made to develop new products. Considering the amount of money we are spending [1326] on research and development we do not seem to be getting the results that we should and it is my intention to look a lot more closely at our total research and development efforts in industry in future. I hope that the new freedom conferred by the amendments contained in the Bill will be of assistance.

In recognition of the important role which AnCO play in industrial training, section 28 of the Bill provides that in future all training grant expenditure by the Authority shall take place only following consultation with AnCO. This will help ensure that training grant expenditure will become more cost effective and that the maximum value is obtained from State resources in this area. In addition training grant expenditure must contribute to the attainment of the objectives set out in the new selectivity criteria.

Provision is being made in section 4 of the Bill to allow the Minister to make a more flexible use of the designation instrument. I have been concerned that no objective or systematic review of designation has taken place since it was first introduced in 1952. I believe that a detailed and objective analysis of the relative strengths and weaknesses of the designated and non-designated areas is essential if designation is to be used as a flexible policy instrument for the future.

At my request the National Economic and Social Council have just issued a report recommending objective criteria, based on labour market imbalances, to determine designated status. They have further recommended that designation status should be of limited duration and coverage and subject to regular reviews. I have accepted in principle the broad thrust of the NESC recommendations and I have asked the Economic and Social Research Institute to advise me on what changes would be appropriate in relation to designation employing the critiera specified in the NESC report.

A number of other minor, technical or general amendments have been made in regard to grant schemes, incentives and equity participation powers of the Authority, the Government's powers in regard to grants, the period of appointment of, [1327] disqualification of and declaration of interest by Authority members, and the delegation of functions to boards and committees. It is also proposed that a new limit of £700 million be set on the total expenditure by the Industrial Development Authority as from the coming into force of the legislation. This will enable the Authority to carry out their functions for a further three to four years, and will allow the Oireachtas to review the operations of the IDA, in accordance with standard practice, in about three or four years' time which will coincide reasonably well with the completion of the first triennial review of industrial policy. I will be happy to elaborate further on Committee Stage on these provisions, which are primarily of a regulatory or controlling nature or are designed to make explicit, provisions which are already implicit in the existing industrial development legislation.

A number of provisions in the old legislation are not being re-enacted including the IDA's re-equipment grant scheme which was of special significance during the seventies in the modernisation of industry to assist it to operate in free market conditions. During the decade over £450 million was approved for Irish industries under the programme. The programme helped Irish firms to adapt to the free trade conditions brought about by the Anglo-Irish Free Trade Area Agreement and Ireland's subsequent entry to the EC.

The programme was phased out in the early eighties and ceased in 1982. The Industrial Development Bill repeals these provisions permanently on the basis that they have served their purpose and continuation of the measure could no longer be justified.

Similar considerations apply in regard to the IDA's powers to provide and arrange housing for employees in industry. I am satisfied that it is no longer appropriate that the IDA should retain this power which is more appropriate to the local authorities, the National Building Agency and the private sector.

The remainder of the eighties and the [1328] early nineties will be characterised by:

—rapid technological change,

—relatively high unemployment levels throughout the EC,

—slow rates of growth in economic and world trade, and

—more intensive competition for international mobile investment.

This Bill, and the other policy measures in the White Paper on Industrial Policy, will help us to face these daunting challenges with confidence. The greatest challenge facing us is unemployment. Manufacturing employment has been declining sharply in recent years, not only in Ireland, but throughout the developed world.

The policy initiatives introduced since the publication of the White Paper in July 1984 have contributed to moderating the rate of decline in manufacturing industry. I am confident that in 1986 we will see for the first time in many years some growth in manufacturing employment. This Bill provides the framework for further improvements in manufacturing industry in the years ahead. I commend the Bill to the House.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  There has been an annual net loss of approximately 7,000 jobs and the registered number of unemployed stands at 250,000. This does not take account of the unemployed people who are not registered and those who have emigrated. While the value of our exports is increasing due to success in the high-tech and pharmaceutical side of industry, the volume of our exports has been significantly reduced. In the light of those few details one would reasonably expect an industrial Bill of innovation and substance with clearly defined sections to redress the present unacceptable position. Instead, the Minister has introduced a Bill that is a major disappointment. It is a bookkeeping exercise and the problem of unemployment has not been attended to sufficiently.

Are the Minister and the Government bereft of ideas or suggestions to deal with the problem? Is he satisfied to continue to preside, as he has done for the past [1329] two and half years, over the demise of all sectors of industry? Is he satisfied to see the structures of industry toppling while he is Minister? He is depressing morale and he is not giving hope to anyone. He is dismantling and destroying industrial development with the assistance of the Government. I am talking of industry that was painstakingly built up during the years by capable, competent and committed leadership following the example set and the foundation laid for industrial development by the late Seán Lemass. Yet, this Minister had the gall and temerity to refer last week in a most inappropriate way to the integrity of Seán Lemass at the conclusion of the debate on the NDC.

Mr. J. Bruton;: Information on John Bruton  Zoom on John Bruton  I did no such thing.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  When this Minister has served the nation as well as the late Seán Lemass, then he can start making remarks.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  I merely quoted what the man said.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  I hope the Minister's record on industrial development will be judged in the near future. No amount of Government or ministerial propaganda will distort the position regarding the lack of development of industry at present. The Minister is chasing around the country, announcing a few jobs here and there but, at the same time, closures are abounding. That is not a good record. The propaganda exercise will not succeed. Putting literature on the windscreens of cars outside churches, television advertisements telling people to phone in looking for jobs and enclosing leaflets in The Cork Examiner will not be sufficient to arrest the declining electoral support of this Minister and this Government. Almost daily we have requested here on the Order of Business appealing to the Government and to Ministers to save jobs. Yesterday and the day before it was Mallow. I am pleased to see the Minister of State, Deputy Collins, present in the House because it was the turn [1330] of Waterford this morning where more closures are threatened.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  We will take care of Waterford.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  If the Government take care of Waterford as well as they have taken care of Cork they will do mighty well. Their record is an indictment of their lack of action.

Mr. J. Bruton: Information on John Bruton  Zoom on John Bruton  There was an opinion poll published in The Cork Examiner in which the Deputy did not make much progress.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  The primary purpose of the Bill is to give effect to the new policy directions and incentives for industry set out in the White Paper on industrial policy published in July 1984. That White Paper was a major disappointment, as is this Bill. When the White Paper was introduced it failed to meet the challenge posed by an unemployment figure of 211,000. Now, some 18 months later unemployment is in excess of 230,000. The White Paper did not contain any new important decisions and little new thinking and the same applies to the Bill. There is no indication of a commitment to recreate the dynamic industrial growth that took place in the sixties and seventies, a growth that is essential if we are to solve the social evil of unemployment.

The objective set out in the document The Way Forward published by Fianna Fáil was to provide employment for our young people, with a labour force growing by some 17,000 a year, and to create at least half the employment needed in manufacturing industry. I shall refer to that document very often because it is the only document that takes account of the facts. The same cannot be said for the Government document Building on Reality which was discredited within a month of publication. The targets set in that document cannot be attained. The Way Forward accorded key importance to manufacturing industry and it said that the development of that sector will continue to be the critical element for the [1331] development of the economy and the expansion of employment opportunities.

Between 1977 and 1979 employment in manufacturing industry increased by more than 20,000. The White Paper was wrong when it said that during these years there was a strong rise in domestic demand largely financed by foreign borrowings. In fact, our foreign debt increased by more than £500 million in those three years, the same amount that the Coalition borrowed abroad in 1976. After telling the electorate before the general election that they would discontinue foreign borrowing and reduce deficit budgeting, there is higher foreign borrowing, higher deficit budgeting and higher unemployment.

The collapse in foreign investment in 1983-84 has been notable. IDA jobs were halved in 1983. Manufacturing employment fell by more than 13,000, twice the level of the previous two years, a figure last recorded as far back as 1975. Investment in the economy as a whole has been set at its lowest level for many years.

The White Paper passes over the absence of foreign investors, and this Bill does not address itself to means of providing investment in manufacturing industry. The White Paper fudges the disastrous performance of the Government in respect of new industrial investment since the Government came to office. As a Government economic policy document, the White Paper is totally deficient in basic information about what has been happening recently. It tries to obscure the significant failure to achieve industrial job creation. Nothing can hide the fact that mobile international investment is not being attracted to Ireland in the way it used to be. Part of the reason is the exceptionally high level of personal taxation and service charges.

We will not be able to sustain our high rate of exports and industrial production without new investment. The White Paper states bluntly in the second paragraph that the state of Government finances does not allow for a real expansion of expenditure on job creation. That [1332] sums it up: in that statement lies the true position. It is a reflection of the lack of performance by the Government.

The present level of spending on industry has been reduced drastically over levels obtaining between 1979 and 1982. This represents a radical change of policy and a lowering of the priority given to job creation by successive Coalition Governments. The Bill is designed to give effect to the first paragraph of the White Paper which is confined exclusively to bookkeeping. The Bill is purely a bookkeeping exercise, a moving of the goal posts. The object of the White Paper, according to itself, is to maximise the benefits from existing industrial incentives and thus ensure that the benefits from them will exceed their costs significantly.

Employment is not mentioned. Fianna Fáil want the best value for money from any given level of expenditure, but to define industrial policy purely in those terms rather than the potential contribution to employment creation is to refuse to acknowledge the real challenge to our social structures that unemployment represents.

The White Paper projects a doubling of manufacturing output during the next decade. The basis for this projection is not clear: we have not been told whether it is based on a detailed analysis of the likely performance of the different manufacturing sectors. Therefore, it is difficult to judge whether the objective is realistic. As indicated in The Way Forward, our objective was to increase industrial production by 9.25 per cent annually, accompanied by employment growth of 9,500 jobs per year in the manufacturing sector up to 1987. Partly, no doubt, because of failure to attract new industrial investment, this target has been lowered in the Coalition White Paper to 7.2 per cent in the next ten years. The White Paper is one year and a half old and the projection then, in 1984, has been confirmed by the position we find ourselves in now.

Net employment in manufacturing industry could be increased, according to the Government, by between 3,000 and [1333] 6,000 a year, depending on productivity. The Minister made that assumption in his speech today. He said that the increase in productivity through, for example, the use of new technology and the lower rate of employment, may well be higher rather than lower in the next decade, which suggests that job creation is likely to be closer to the lower figure. It is understood that in an earlier draft of the White Paper only 1,000 new jobs were projected. Of course that was politically unacceptable, and now it is the reality that what was projected initially has been realised in the intervening period.

The Government state that it is difficult to predict growth in manufacturing and that few countries are making such predictions. It is not clear on what factors, if any, the Government objectives are based because there is no proper breakdown of targets between indigenous and foreign industries. The White Paper does not contain any of the detailed targets which had previously been set, and that means there is very little by which to measure performance.

We agree with the White Paper when it rejects the Telesis recommendation that the level of grants should be reduced drastically. However, it should be pointed out that this is contrary to a statement in the Joint Programme for Government, which stated:

In the provision of grants to foreign firms account will be taken of the Telesis recommendations with regard to the scale of grants.

In any language, that is a contradiction. I will deal briefly with re-equipment grants. In 1981 we decided to retain these on a restricted and selective basis. The White Paper proposes to terminate them, but it states that much of Irish industry needs additional investment in new technology to survive. The White Paper suggests that it is clearly unwise to terminate re-equipment grants completely.

We must consider selectively in this matter, but despite some advance media publicity about backing winners, there is little evidence of any such approach in the White Paper. Concentration on specific [1334] high technology factors is not highlighted, and in general the role of new high technology in industry is played down. Basing grants on a company development plan was already a feature of our industrial practice.

There is nothing new in the White Paper. This morning we received the NESC report concerning the designation of areas for industrial policy. obviously I have not had the opportunity of reading the report in any detail, but I shall comment briefly on it. At first glance it appears that the former regional emphasis of the IDA's activity appears to be more or less abandoned. Job targets for individual towns seem to be dropped. That will be a grave disappointment to scores of towns and larger villages.

There is no clarity in the White Paper on the future of designated areas but the Bill introduces a section dealing with such designations. In the NESC report there is the comment that the practice whereby large sections of the country are designated virtually for ever without review should be ended. In our present circumstances up to 99 per cent of the country should be designated. Therefore, I trust there will be no question of restricting or reducing designation. The Minister of State tended to be parochial. He said he would look after Waterford so it is only right that I should try, against all the odds, to look after Cork.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  The Deputy is getting plenty of help.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  The designation in respect of Cork city was not designation in the usual sense. Grant levels were set between the designated and non-designated regions and applied only to specific locations within the city. As mentioned in the report, even with such limited designation, the effect has not been shown to be of any advantage in that area so far.

Many of the proposals outlined in earlier drafts of the White Paper, for instance, the reduction in employers' PRSI contributions and the abolition of tax on oil for industry, are omitted now. We must acknowledge the hurried face [1335] saving effort recently in the form of some concessions to employers and industrialists on the PRSI aspect of development in employment. We always acknowledge any little conversion on the part of the Government especially when the concessions concerned result from our promptings and encouragement. The issue of reduced electricity prices to industry is fudged in the White Paper leaving the Government's intentions in this regard totally unclear and presumably reflecting disagreement within the Coalition. That would be nothing new. A recent study indicated that Ireland's communications costs are the highest in the EC. This whole area of industrial costs is of paramount importance to our competitors. Many of these costs are within the control of the Government but they have failed to take any decision on the matter of the reduction of some of these costs, a move that would improve our poor business environment.

The limited reference to natural resources as part of our industrial policy is an indication of the inadequacy of the Government's attention to this area. Our marine resources are not even referred to in the White Paper and neither is there any elaboration of policy on hydrocarbon development. Only one sentence is devoted to that aspect and this again reflects the ideological impasse that has been reached regarding the development of offshore oil.

Recently we discussed the National Development Corporation. We read in the White Paper that part of the rationale for the NDC was that they would become involved in areas which the private sector are not willing to become involved in. The corporation will be able to operate only as a source of risk equity in conjunction with the private sector. Successful operations will be sold off or privatised after a relatively short time. There is no intention on the part of the Minister to allow any permanent expansion of the State sector.

All of the functions proposed for the NDC could be carried out by the NEA. As was said by other speakers subsequent [1336] to my contribution to the debate on the NDC, if it were established that there were elements of the NEA's operations that they are incapable of fulfilling but which the NDC could fulfil, there would be some point in the new development. But if that is the case could the matter not have been rectified by other legislation or by a ministerial order to give to the NEA whatever powers or capital might be required to enable them to fulfil all their functions? Have we not all said that the NDC is no more than a piece of political nonsense?

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  I will never understand Fianna Fáil's opposition to the NDC. Perhaps the Deputy will read the Minister's speech on the corporation sometime.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  The corporation idea is ideological nonsense. If it were a question of the NEA needing more powers, they could have been accommodated but that would not have suited the ideological differences within the Coalition.

Mr. E. Collins: Information on Edward Collins  Zoom on Edward Collins  Deputy Lyons in his spare time should read the NDC Bill.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  This Bill and the White Paper are other indications of the poor quality of the government of this Coalition. What has finally emerged once again is the lowest common denominator between the parties.

I suggest that high productive investment is the key to more jobs and improved living standards. Investment in the economy at present is stagnant. In part, this stems from a general reluctance on the part of individuals and groups to risk capital. This reluctance stems from the complexity of legislation, the locked in nature of any investment. We have dealt with that aspect in the debate on the designated trust funds Bill. I said at that time that I welcomed the removal of some of the barbed wire from the 1984 proposals, but we have not gone far enough. Investment to date of something over £5 million is an indication that the position is not encouraging for individuals and groups to risk capital.

[1337] Investment is the life blood of industry and there is a need for an annual investment of about £1,000 million to sustain an 8 per cent to 10 per cent manufacturing growth rate. At present little more than 50 per cent of that amount is being invested. While much of this investment could be funded by retained earnings, loans and Government grants, there is a requirement for new industrial equity of £300 million per annum.

Personal taxation is exceptionally high and is a disincentive to initiative and effort. It is causing major difficulties in recruiting, retaining and motivating staff. It is impacting on pay negotiations, absenteeism, willingness to accept promotion or to work overtime, it is increasing the attraction of the black economy, and the cost of essential industrial services such as energy, transport, communications.

The most serious element of industry and services today is the insurance problem. Firms, large and small, are unable to get insurance coverage. First they get quotations but they are so high that they are out of bounds. The problem of public liability insurance in industry is not being addressed. This is a massive problem and I appeal to the Minister of State with responsibility in this area to address himself to this problem and to examine the situation because it is at a critical stage. Employers and industrialists seeking insurance have lost all hope of ever getting any.

The primary aim must be to improve the climate for enterprise at individual and company level and the creation of conditions which will stimulate a much higher rate of investment in job creation in the economy. It is desirable that new projects which have employment creating potential are supported. The high cost of borrowing is a major deterrent to new investment, particularly by small firms. We are all aware that the hopes and possibilities of turning our economy around lies with the development and success of small firms.

We must address ourselves to making [1338] investment available to them, to encourage them to save what is left of our economy and to set it on the road to reach a status we all wish for it and so create a viable economy which will provide the hundreds and thousands of jobs which are required. I recommend that a 5 per cent interest incentive be made available to small manufacturing firms for additional investment in fixed assets or working capital. Let us show faith — what a word to use emanating from other areas — in the small firms by giving them that incentive.

This morning the Minister dealt with many areas except, sad to say, tourism, which is a major earner of foreign exchange and has major links with all strata of industry — food, hotels, restaurants, clothing and fashion, jewellery and craft; the list is endless. This industry should be treated in the same way as manufacturing and internationally traded service industries.

Investment in brain power remains low by international standards and the OECD report on innovation Ireland commented adversely on our position in that regard. Yet many of our graduates and highly qualified and skilled personnel are emigrating due to a shortage of opportunity at home. There is, therefore, an urgent need to create job opportunities by imaginative policies with emphasis on correcting the downward trend in recent years of job losses in manufacturing industry which, as I said at the outset, are averaging 7,000 per annum. In the construction industry there has been a loss of 25,000 jobs since that industry went into decline in recent years and, in addition, there have been innumerable losses in service and supporting firms who ceased trading or reduced the number of employees, numbers which have not been calculated with any degree of accuracy.

I began this discussion on a critical note but I have spent the last few minutes making positive comments and I will continue in that vein. We must tackle the difficult and necessarily long term educational task of raising the general level of economic literacy in our community. By all means let us debate fundamental [1339] political philosophies but let us do it on the basis of understanding the economic issues involved and the beginning must surely be an understanding of economic reality. We must clearly distinguish between economic growth and the distribution of economic goods and services.

In the long run it is a truism to say that a community can only divide among its members the aggregate added value earned by the community on the home and export markets. The position can be clouded in the short term because of foreign grants or foreign borrowing, but any rational assessment of the situation will show that neither of these sources can continue indefinitely. What is needed now to develop the economy is a clear focus on economic activity. We must focus on our development objectives and identify the resources we can use to create jobs and enhance living standards.

I am disappointed with this Bill considering the situation we are in. We must take action to turn our aspirations into economic reality. Any impartial assessment of our position will show that we have the human and material resources to be an economic success. From our history we can see that we doubled our real standards of living in terms of output per capita during the sixties and seventies. We must repeat that performance. We must all meet the challenge. The sectors which can operate to our advantage must be identified and consistent and vigorous action taken. It would be easy but wrong for us to wait for an improvement in international economic conditions and I hope we will not hear more of that kind of contribution from the Government side who are prone to say that our economic ills are caused by outside influences.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  They are the legacy we got from Fianna Fáil.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  I am not so naive as to suggest that outside factors do not affect our economy, but we should not always adopt a negative attitude and say we cannot do something for ourselves. It is [1340] unacceptable to say that the problems of a very small country which is rich in resources, which currently accounts for not more than .05 per cent of world trade, are greatly affected by international economic trends. Most of our economic problems are to a greater or lesser extent self imposed and they can be solved by us. We achieved considerable success in the fight against inflation in recent years——

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  Thanks to a good Government.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  ——when we realised that raising our prices lead inevitably to losses in the home and export markets, job losses and a reduction in living standards for those fortunate enough still to have jobs. A major part of the required solution is a change in attitude. We should administer our affairs in a more businesslike fashion. I have no doubt that we can overcome our difficulties if we focus on solutions.

There are no solutions indicated in this Bill and I regret that. If we co-operate in a spirit of confidence and reliance, we can approach our problems with thoroughness and consistency in every area of economic activity. This concerns every citizen. We should say that Ireland is a body corporate of which we are all shareholders. The size of our dividend will depend on how much we invest in terms of skills, other resources and the quality and effectiveness of management. We will get out of it what we put into it. That is why I ask the Minister and the Government to give leadership and bring the will of the people with them. We will play our part in salvaging the remains of our economy and will do what is needed in order to get one quarter of a million people back to work.

Neither the White Paper nor the Bill convinces me that the necessary requirements are being fulfilled and I appeal to the Minister and the Government to address the situation. This Bill is a bookkeeping exercise, a major disappointment and one would consider opposing it because of its inadequacies. However, [1341] I am hopeful that our promptings and encouragement to the Government will enable them to see the rationale of our contribution towards this Bill and will encourage them to give leadership and a commitment to reverse the trend in our economy and restore confidence and get the unemployed back to work. They should set a headline for those still at school who feel hopeless about ever getting employment.

This debate must address itself to the situation and encourage the Government to reverse the economic trend. The Government should use the opportunity given by this Bill to create a new atmosphere and a dynamism which has been lacking in the Government.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  I welcome this Bill. The invigorating policies contained therein have not been heard in this country for quite some time. Industrial policy pursued by successive Irish Governments over the past 20 years has been remarkably successful. Despite the removal of tariff barriers, the performance of Ireland in terms of industrial output and employment has been better than any other European country.

I am amazed at the gloom and doom that I have heard for the past 20 minutes from across the House. If that Deputy realised the position of Irish industrial development in comparison with that of its EC neighbours he would not be making the wild statements he has been making here in the past half hour. Throughout the recession of the last decade total employment in the economy has held up better here than elsewhere. The growth in unemployment is due mainly, I emphasise to my learned friend across the way——

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  Learned friend.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  ——to the rapid growth of the labour force and the decline of emigration in that decade. The emigration ship solved the problems of Fianna Fáil in the sixties.

[1342]Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  How many went from Listowel?

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  The primary contribution to the maintenance of manufacturing employment has been made by new overseas industries. In 1975 foreign owned manufacturing firms accounted for 50,000 manufacturing jobs. Today foreign owned firms account for approximately 85,000 jobs. In three years that is an outstanding success. If Deputy Lyons has any doubts about that he can get the facts and figures in official records to prove it. I can only describe Deputy Lyons as a doubting Thomas when he has no faith in this country, in this Government who were democratically elected and in our superb workforce which is second to none in Europe.

The Deputy referred to inflation as a keynote to the success of industrial development. It is a pity this Government did not think of that in the 1977-81 period and again in 1982 when they were returned to office. When we took over the reins of office at Christmas 1982 inflation was 27 per cent. Today it is under 5 per cent, thanks to three years of very good, sound, effective government from the Coalition parties. What have Deputy Lyons and his party to offer against that creditable performance of only three years? They had the monopoly of power for the 60 years since the State was formed. They were in power for 45 of the 60 years. What did they do? They borrowed rampantly and ad lib to set up phoney industries in the sixties that toppled and disintegrated a few years after they had been built up. The truth is bitter at times.

If we are experiencing certain difficulties here in this period of Government we have faced up to our responsibilities. We have given the people a lead as regards government. Every new factory creates additional demand for local services, such as subcontracting, component supply, electricity, telecommunications, transport and computer facilities, banking, insurance, maintenance and construction facilities. I could go on for another ten minutes outlining all the ancilliary matters that stem from a very [1343] sound industrial policy. Thank God this country at long last has that sound industrial policy through our able Minister, Deputy John Bruton, and his Minister of State, Deputy Eddie Collins. We are proud of their achievements today and they can stand over them with pride when they are taken into consideration against the haphazard achievements of the Fianna Fáil administration. Irish success in attracting new overseas industries is the envy of many countries throughout the world and of some EC countries. Our achievement against intensive international competition is remarkable.

New foreign owned industries spend more on research and development than established industries and they recruit more highly qualified staff. I believe that this Government should continue to encourage, foster and attract the foreign industrialist, the man of stability, whom our IDA managers are well able to assist. We should go overboard to attract such people because they are an asset to our economy. The future of industrial development here will lie on their shoulders.

Irish manufacturing output must be doubled in the next few years if the employment needs of this economy are to be met and the gap in living standards between Ireland and other EC countries is to be reduced. In other words, we must streamline our industrial output and gear it to such an extent that it will be able to meet and beat the best of competition from our European and world partners. I have the greatest faith in our industrial development directors, their excellent Irish workforce and their ability to achieve this goal. Conditions must prevail which will encourage the expansion of existing industry and the attraction of further new industries from abroad.

The progress of recent decades should instil confidence in our ability to achieve the more rapid rate of industrialisation which is necessary to eliminate the scourge of unemployment. The more industries we can establish the more employment will accrue to our young population. Controversy about the interpretation and co-ordination of statistics [1344] should not be allowed to detract in any way from the remarkable contribution which over 800 foreign owned firms are making to the economy. Those foreign industrialists deserve praise for setting up industries here and giving very valuable employment. I should like to warn those who embark on a course of criticism that continued controversy here only damages the attractiveness of Ireland as a location for investment by foreign industrialists. Those who pursue that controversial course will find that their comments are used by our competitors to sow the seeds of uncertainty abroad.

The primary objective of our industrial policy must be to create the type of economy that will promote rapid growth in industry and attract a continuing flow of overseas investment. I accept that we are a long way from that desirable objective, although it is good that we are able to report progress in some areas. The lead given by the Government in eliminating the controversial aspects of industrial development here has been outstanding. Employment creation, not the protection of living standards for those of us who are at work, should be our national priority. We should discard the “I am all right Jack” attitude and try to create industrial development. Without vision and drive by our people our rate of progress in industrial development will slow up significantly and that would prove detrimental to our economy.

We have an opportunity in this period of change to adopt an effective overall approach to industrial development. We must adopt a proper approach to stimulate growth in industry so that we can show the world that, although we are a small nation, we can stand side by side with the best. We need policies in regard to income, taxation, credit, investment and social services. They must be integrated into one policy. We must give priority to higher added value in the production of goods and services thereby creating more employment opportunities. There is little point in approaching this matter in a half hearted way. It deserves the attention, drive and direction [1345] it is getting from the Ministers responsible. I urge those Ministers to intensify their efforts and endeavour to achieve the highest standard of industrial production possible. To date they have travelled a considerable distance along that path and they have a long journey to go before they reach their final goal, but work begun is work half done. At last we have the necessary leadership and determination from our Ministers that we lacked in the past two decades.

I do not want to see the smart-alec foreigners from Amsterdam, Düsseldorf or Cologne or even smart-alec native entrepreneurs availing of generous IDA grants — money that is collected from the hardworking PAYE sector — and after a few years closing their plants and taking the first plane out of the country. We must ensure that that practice stops and that the indiscriminate waste of public money down the years does not occur again. I note that the Minister has omitted IDA's powers to investigate the effects of protective measures and to examine proposals in relation to the imposition or revision of tariff or quotas. I note he proposes to make those who avail of IDA grants subject to triennial reviews of industrial performance. That deals with the fly-by-night operators and discourages them from collecting money from our taxpayers and bailing out when their pockets are well lined.

We want industrialists, foreign and native to come forward, but we do not want men with feet of clay. We need people of courage and determination to get involved in industrial development. We need reliable people to play a role in the future development of industries here. The Minister should ensure that applicants for grants are investigated before any money is paid to them because for too long there has been an exploitation of the grant system. That must stop. I wonder how much of Irish taxpayers' money has vanished in that fashion in the past two decades.

Future industrial policy becomes very important in the context of high unemployment, a problem which is not unique to us. Other industrialised countries have [1346] similar unemployment problems. The policies which serve our industrial development in the sixties and seventies are no longer adequate for the harsher climate of the eighties. In an open trading economy we have little choice but to respond to the changes forced on us. We can and must develop a deeper understanding of what is involved if we are to respond effectively to that challenge. The cure is in our own hands. We must remember that nobody else can give it to us. We must be competitive on world markets and I emphasise that word “competitive”.

I have no doubt that our very well trained Irish workforce are fit and organised to meet any challenge in industry. Thanks to our very good AnCO training schemes and to all the educational facilities that have been made available to our young population, they are on a sound footing to face the future with confidence in industrial development. Our workers are as good as, if not better than, their European counterparts, if given a fair deal and the incentive to increase production. That incentive must be there is we are to top the scale in industrial production in Europe. Under the capable responsibility of our Minister for Industry, Trade, Commerce and Tourism, Deputy Bruton, and his Minister of State, Deputy Collins, that goal will be achieved.

It is also necessary that the State should not milk the coffers dry as far as industrialist entrepreneurs are concerned. They, too, must get an incentive to invest their money here and have faith in our industry. There is no gain from over-taxing or over-burdening the industralists who are willing to come here in good faith to give the necessary employment that we so badly need. There must be an incentive for the factory owner, the managing director and assistant directors down along the line to the workforce. All must work in harmony to ensure that industrial development will continue to prosper in the years that lie ahead.

For the first time in the six years since we joined the European Monetary System our inflation rate is moving into [1347] line with that of our partners, a remarkable achievement of the Coalition Government. It is amazing that such a change has been brought about by their good housekeeping.

Mr. Carey: Information on Donal Carey  Zoom on Donal Carey  Hear, hear.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  I stand here proud of their achievements in the past three years and challenge any Opposition speaker to deny what I have just said.

Mr. Carey: Information on Donal Carey  Zoom on Donal Carey  Hear, hear.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  Facts speak louder than words and this Government certainly have shown the way. We are not issuing rosy promises and statements; we are tackling problems where they exist. Barriers have been placed in our way which impede our rate of progress as far as that recovery is concerned but, thank God, the tide has turned for industrial development. I can see us in the not too distant future being a country more attractive for industrialists from all over the world than elsewhere in Europe and the world.

Mr. Carey: Information on Donal Carey  Zoom on Donal Carey  Hear, hear.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  We have a sound, solid Government democratically elected, able to meet the people and discuss their problems with them. They are a Government that have faced a very huge challenge, a Government not sitting idly by and borrowing ad lib like the previous administration. We saw the boom of the sixties which was built on sandy foundations and the depressions of the late seventies and early eighties. We have weathered the storm remarkably well over the past three years. With the turn of the tide let us hope that a bright future is dawning for industrial development.

Mr. Carey: Information on Donal Carey  Zoom on Donal Carey  Hear, hear.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  It should be realised that in three short years we reduced inflation from 27 per cent down to 5 per cent. No other Government in the world has made [1348] such progress in such a short time. That is why the Americans, Japanese and people of all nationalities are today turning their attention to the miracle in the Irish economy under sound leadership from the Coalition Government. No longer have we the haphazard policies followed in the past two decades by an Opposition party that did not know which way to trun with regard to industrial development. They brought out a manifesto in 1977 which badly affected the country's industrial and financial position, bringing it to the lowest level as far as credibility in Europe and the world was concerned.

We should not, however, rest on our oars as far as reducing inflation is concerned. I appeal to our Taoiseach and his Cabinet to continue the good work which they have started and to aim at conducting their affairs in such a way that will reduce the inflation rate down to 3 per cent, a rate which prevails in more disciplined countries in the EMS. The Opposition, when in power, did not understand the word “discipline”, I doubt if they understand it today. An inflation rate of 3 per cent will play a major role in the success of our industrial expansion. Since 1975 the output of the Irish economy has expanded by approximately 40 per cent, compared with a growth of 27 per cent in the European economy as a whole. Employment in the Irish economy is now over 60,000 greater than in 1975, despite the impact of two major international recessions and our rate of population growth, which is greater than in any other EC country. This is a remarkable achievement in three years.

Emigration was filling the bill when the Opposition were in Government over many years. Today, although there is a certain amount of emigration, Irish youth are full of hope and courage, believing that this country in a very short time will be able to offer them ample employment when we take our place as an industrial nation amongst the greatest in Europe.

I stress the necessity for good planning in relation to industrial development. For years the policy of successive Fianna Fáil administrations was to build up and [1349] expand the capital city, Dublin. It has now reached the point where over one-third of the total population of the State are living in Dublin. Surely this showed a lack of forward planning for industrial development. Regions throughout the west from Mizen Head to Malin Head were bereft of industries and Irish boys and girls, if not lured to the emigration ships, were lured to the bright lights of Dublin. The city has grown at such a rate that a monster has been created. Rural Ireland has been neglected.

Bantry Bay in south-west Cork is one of the finest natural harbours in the world but is devoid of any industrial development, barring a venture in the past two years in the mariculture sphere. It is the finest bay in western Europe, if not in the world, in which at one time Her Majesty's Government boasted they could hold the entire British fleet. They are gone now and only the seagulls and gannets are left. This is due to the inadequate industrial policy pursued by successive Fianna Fáil administrations. The giant tankers of the world were able to turn within the bay with little difficulty. The natural advantages of this bay should be recognised by any Government. There is no need to dredge the bay because there are no difficulties regarding the waters there. However, we have the major difficulty of lack of industry. I urge the Minister to ensure that Bantry Bay is regarded as a priority area for industrial development suitable to its magnificent harbour. The area has been badly neglected since the foundation of the State.

I listened to Deputy Lyons talking about infrastructure and transportation in regard to industrial development. In the early fifties his party pulled up our railway system which ran from Bantry to Cork and on to Dublin. They sold it to some black state in Africa.

Mr. J. Leonard: Information on James Leonard  Zoom on James Leonard  We are a national party.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  They are a national disgrace in the way they have treated the people of south-west Cork. They are a very tolerant people who endure that [1350] kind of treatment from native Governments. A certain party has had a virtual monopoly on power since the foundation of the State, but they forgot about the people of south-west Cork and cut the only life line they had by taking away the railway system. They added insult to injury by not allowing us even one mile of national primary road. Was that progress?

The south-west and west of Ireland cannot and should not be forgotten as far as industry is concerned. By all means let there be a free port in Cork but special concessions should also be given to industrialists attracted to Bantry Bay. The people in that area cannot live on fresh air and cold water and those responsible must realise the importance of locating new industries there. Bantry and west Cork are job starved. The only new development has been in relation to mariculture and fish farming, for which I believe there is a good future.

I would point out that there are two other bays in that area of south-west Cork which would be equally suitable for mariculture, namely, Dunmanus Bay and Goleen Bay. Both of them could easily absorb to good effect an injection of funds for mariculture and fish farming. If fish farming and mariculture were developed here to the extent that they should it would create a vast potential for employment because the market is unlimited for these products. The Japanese are light years ahead of us as far as fish farming and mariculture are concerned. We should take a lesson from them in regard to investment in that sphere and make sure it is given a fair share of attention.

I should also like to remind the Minister that Bantry Bay and Whiddy Island are the only areas in the country with ready-made facilities for the storage of crude oil. There are mammoth storage tanks, owned by Gulf, on Whiddy Island and if and when there is a major discovery of “black gold” I would expect that the storage capacity on Whiddy Island will be utilised to the full, as a result of the discovery of oil wells, for redistribution of oil to other refineries in Europe. We [1351] have no shipping problems in Bantry Bay. It can cater for the biggest tanker in the world but we need industry there and I spelled out in no uncertain fashion to both Ministers this morning that I will be looking at their Departments with an eagle eye to see that development is brought to that part of the country when the time is ripe.

The sooner this oil is brought ashore the better. I urge the Minister not to be dilly-dallying in regard to oil. We either have it or we do not. The companies drilling for oil off our shores should ensure that proper information is given to the Government. Delays are dangerous and many of the oil companies concerned could be sitting on this black gold until such time as it would suit them financially to bring it ashore. The Minister must be vigilant in that respect and make sure that no delays will be allowed in bringing this benefit to the economy.

I have already mentioned aid for industrialists. We should ensure that all industrialists are well vetted when they apply for IDA grants because for far too long many of them received assistance which would not have been granted if there has been a through investigation into their background. Perhaps the Minister should consider the possibility of giving them a 50 per cent and a 50 per cent interest free loan instead of giving them carte blanche for development that may not yield dividends. This is a very serious matter and must be corrected.

I agree for once with Deputy Lyons when he said that tourism should get the fillip it needs.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  There must be something wrong with the Deputy.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  I agree that tourism has been treated as a Cinderella industry by successive Governments, including Fianna Fáil, over the years. I am amazed that an industry which has such potential for employment is not geared to meet the demands which should be made on it, for instance, in relation to continental visitors coming here. I congratulate the [1352] Minister and the Government for giving us the green light in relation to a financial contribution to the Swansea-Cork ferry. I hope it will be in operation soon. I cannot see any difficulties in that regard as the financial side is secure. If the ferry service is restored it would benefit our economy as far as tourism is concerned.

I was listening to the charade which went on last night in the House regarding the closure of a factory in Mallow but, against that background, I believe that there should be a future for proper vegetable production in this country. Everybody knows that all our vegetable factories were geared to dehydration instead of deep freezing. It is important to realise that the market for dehydrated products has dropped practically to nil all over the world and that the market for frozen vegetables has accelerated at such a pace that it now accounts for 85 per cent of our total imports of vegetables. We must correct this in the years to come and I ask the Minister to make sure that all avenues are explored in an effort to re-open our vegetable plants in a different capacity so that maximum employment is given.

The Fastnet factory in Skibbereen closed under a Fianna Fáil Government. The briars and the bushes are growing around its doors but if the necessary machinery and plant had been installed for the deep freezing of vegetables it could still be a buoyant success in south-west Cork. We must devote our energies, time and responsibilities to creating that kind of climate for industrial development. I should also like to point out that co-operation is the key note to success. I appeal to the Opposition not to criticise the viable policies of the Government. Instead, they should row in and play their part as a constructive Opposition. Playing party politics will not be an asset when pursuing industrial development. Neither should party affiliation mean that a person is deprived of IDA assistance. We had years of that. If a person did not have strong party affiliations his chance of getting an IDA grant was nil. I am glad that under our able leadership that say was gone forever. A man is judged on his [1353] ability and on the plan he puts forward to the IDA when there is a question of receiving grant aid. Nowadays class, creed or party affiliations do not dictate whether he obtains such aid. Both Ministers concerned must be thanked for the clearcut policies they have set out for their Department.

IDA regional directors must be given every encouragement and support to solve our industrial problems in these difficult times. I should like to take the opportunity to congratulate the Cork regional manager, Mr. Denis McCarthy, on the magnificent work he has done.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  The Deputy should not mention names of officials.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  It is only human nature. When I see what the man is doing for our area I think he should be praised.

An Ceann Comhairle: Information on Thomas J. Fitzpatrick  Zoom on Thomas J. Fitzpatrick  What would happen if somebody in a later speech did not see eye to eye with what the Deputy has said?

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  I am sorry. I thought the man deserved some praise.

Mr. Lyons: Information on Denis Lyons  Zoom on Denis Lyons  In this case we will not disagree.

Mr. Sheehan: Information on P. J. Sheehan  Zoom on P. J. Sheehan  He has done magnificent work for the people in the south west. It is up to us to forget our past differences and to work as a team to attain the targets we have set. The two Minister responsible for the industrial revitalisation of our country have set a headline and I am proud to be associated with what they have done. They have overcome difficulties in very difficult circumstances and on many occasions the circumstances were outside their control. They have listened to appeals by entrepreneurs and workers and have been sympathetic in their approach. I have no doubt they will continue with their good work.

There are vast opportunities in respect of the further development of our fisheries. We should employ eight people for every fisherman but instead the ratio [1354] is only three to one. We have a long way to go if we are to realise the full potential of this industry. In supermarkets there are shelves full of brands of imported fish. There are herrings in wine, herrings in olives and herrings in cider, all imported from Germany and other European countries. In many case the raw product was caught off our shores, probably landed in Castletownbere, Killybegs, Burtonport or at landing centres along the western and eastern coasts, put into articulated lorries and exported to the Federal Republic of Germany where it was processed and reimported here. It is a downright shame that our authorities and successive Fianna Fáil administrations allowed this to happen. It was because they did not build one decent canning or smoking factory from Killybegs to Castletownbere. They failed to capitalise on the raw materials we had and they will be indicted for generations to come for their lack of interest in the matter.

In the year I was born my father exported cured mackerel to America. He gave seasonal employment to 138 people in the little village of Goleen in the south Cork area and did that without getting one penny of State aid. However, he worked hard; he had enthusiasm for his job and love for his country and his fellow countrymen. There was no unemployment benefit or unemployment assistance at that time. He had the will to survive and, if that same will had not been shared by his fellow countrymen, this State would not have been founded. The patriots who died for the freedom of Ireland did not do so to earn the treatment that native industries have got from successive Fianna Fáil Governments.

Debate adjourned.

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