Dáil Éireann - Volume 256 - 11 November, 1971
Committee on Finance. - Vote 40: Industry and Commerce.
Minister for Industry and Commerce (Mr. Lalor) Patrick J. Lalor
Minister for Industry and Commerce (Mr. Lalor): I move:
That a sum not exceeding £28,823,000 (Twenty-eight million, eight hundred and twenty-three thousand pounds) be granted to defray the charge which will come in course of payment during the year ending on 31st March, 1972 for the salaries and expenses of the Office of the Minister for Industry and Commerce, including certain services administered by that Office, and for payment of sundry grants-in-aid.
In the Book of Estimates the net Estimate of £28,823,000 for the year 1971-72 compares with a sum of £23,805,000 granted in 1970-71 (including a Supplementary Estimate of £250,000). The principal increase arising in the financial year 1971-72 is the increase of £4.5 million in the provision for capital expenditure for the Industrial Development Authority. Other increased provisions are: £174,000 for Córas Tráchtála; £106,000 for the Institute for Industrial Research and Standards; £101,000 for the salaries and wages of the staff of my Department; £83,000 for Shannon Free Airport Development Company, Ltd. to cover administration, etc. (£49,000), housing subsidies (£21,000) and housing grants (£13,000). There is an increase of £75,000 in the provision for administration and general expenses of the Industrial Development Authority and £54,000 for technical assistance. The provision for the payment of interest subsidy to Shipping Finance Corporation Limited shows an increase of £39,000. Increases in other subheads, after taking into account savings used in the Supplementary Estimate for £250,000 passed by this House in March last, amount to £42,655.
There is a decrease of £64,000 in the provision for shipbuilding subsidy after  taking into account £36,000 included in the Supplementary Estimate to which I have already referred. There is no provision this year for Castlecomer Collieries Ltd. for which £57,000 was voted last year bringing decreases to £121,000 to which must be added greater appropriations-in-aid of £35,745. The total decrease is therefore £156,655. The net increase in the Estimate is £5,018,000.
The performance of the industrial sector was the main determinant of overall economic growth in 1970. The low increase of 3 per cent in industrial output resulted in the slow growth of total national output in 1970. Employment in transportable goods industries in 1970 rose at a slower rate than in the previous year. The total number employed increased by 3,600—1¾ per cent—in the full year. This pattern has continued for the first six months of 1971 when the increase in employment in the transportable goods industries has been 1,900.
Industrial exports have continued to grow in 1970—the increase over 1969 being of the order of 18 per cent and at the same time constituting 53 per cent of total exports. The Government recognise that our economic growth for 1971 will be below the potential growth rate of the economy and are particularly conscious of the problem of redundancy to which I shall refer later. In order to provide a stimulus to economic activity and to encourage business confidence the Government have announced a reduction in the level of company taxation and have also made available an additional £6 million to the Industrial Development Authority and £500,000 to the Shannon Free Airport Development Co.
The Government propose to publish a White Paper shortly setting out the terms negotiated for our accession to the European Communities and the whole matter will be fully debated in this House. I feel that it would be inopportune for me here today to go into detail on this question but, on the other hand, it would be unrealistic to talk about my Department without at least referring briefly to the impact accession to the Communities will have.  Our negotiations for membership have reached the final stages and we are, therefore, on the threshold of an historic era, which will have wide-ranging implications for all spheres of our industrial and commercial life. The overall benefits of membership of the European Communities will be both short-time and long-term, but a point to remember is that much will depend on our own ability to turn opportunities into achievements. Our industrial base has widened considerably over the past decade; an indication of the progress made is that export industries now account for about one-third of total industrial output. We have every reason to feel confident, therefore, that our accession to the Communities will help to accelerate further the widening of our industrial base.
Some people have the idea that Ireland will be “out of her depth” in the European “Big League”. To this I would argue that it is the small member States which have gained most from membership of the Communities. The benefits have not been limited to any one member of the Six; they have affected the entire Community, bringing about a great increase in economic and trading activity. I can see no good reason why Ireland should not repeat the success of these smaller countries. It is natural, I suppose, that there should be some apprehension about our joining. Human nature being what it is, there is always nervousness about change and a fear of what is new. It must be remembered, however, that there were similar apprehensions in the present member States of the Communities. These fears, as we know, have been proved to have been groundless and the people of these countries are now glad that they did not heed the prophets of doom.
The stage now reached in our negotiations for entry to the EEC brings into sharp relief the question of adaptation of Irish industry to conditions of free trade. As Deputies are aware, adaptation is a process which has been proceeding for some years now. The pace of adaptation is something that is sensitive to various factors, such as the conditions of trade,  technological changes and finance. It is not a matter of achieving a certain degree of fitness for a single big occasion. Rather is it a matter, through continuous endeavour, of striving to reach at least the same degree of fitness as our competitors are likely to have and from there on, matching every improvement that they make. For that reason, it is difficult at any given time to be specific about the adequacy of our efforts at adaptation. True, a great deal of progress has been made over the past ten years in improving the productive efficiency of our manufacturing industry. One has only to compare the figures for our industrial exports for 1970 with those for 1960 to realise this.
But our industry will not be able to get by in the future on its past efforts at adaptation. Indeed, these efforts will, if anything, have to be intensified. In so far as this may not already be apparent, we have been reminded of it by the reports which have been published in the course of the past year-and-a-half by the Committee on Industrial Progress. The industrial sectors covered by these reports, including clothing, leather, paper and printing, fruit and vegetable processing and the metal trades, and by further reports which are in course of preparation can be said to cover a representative area of Irish industry and particularly its older and more traditional elements.
The work of the Committee on Industrial Progress must be regarded as a further increment in the guidance and assistance which the State has provided for the adaptation of industry. In its case, the emphasis is on getting firms to think in terms of the products and markets that are likely to be most advantageous in the changing conditions of the 1970s.
These reports contain a number of recommendations which are addressed to Government Departments and State agencies but, primarily, the message in the reports is one for industry itself and for organisations catering for industry. I hope the message will be taken seriously.  There are many facets to adaptation, namely, re-equipment and modernisation; better management; improved technology and training; and greater attention to and sophistication in product policy and marketing. In all of these areas the State can by various services and incentives do a certain amount to spur industry on but, in the last analysis, adaptation, or the progress of adaptation, can only be as effective as the people in industry are prepared to make it.
Eight years ago when the Committee on Industrial Organisation was concluding its examination of Irish industry it saw the need for what it called “a revolution in existing attitudes”, if adaptation was to be fully effective. I have already said that there have been considerable changes for the better since that time but the improvements can best be described as uneven and capable of being improved on. That this should be the case is, in my view, due primarily to our being insufficiently attuned mentally to pressing on with the necessary changes. To some extent, this is attributable to a reluctance to face the fact that free trade has become a reality. Fear of the unknown is something many people have and it cannot be denied that, as I have said earlier, there is an element of the unknown in moving into a larger trading area. But fear of the unknown should be a spur to action rather than the reverse.
Our attitude towards the approaching free trade should be neither defeatist nor complacent. Membership of an enlarged EEC will certainly provide us with far greater opportunities than we would have if we were to remain outside the Community. As I have said already the use we make of these opportunities depends on ourselves. We must face the future with a determination to prove that what other people have done successfully we also can do.
The fact that the redundancies which have arisen during the past year are at a rate double that of 1970 and earlier years is a matter of the utmost concern to me and to the other members of the Government just as it is to the trade unions. As Deputies may be aware, the  Taoiseach, the Ministers for Finance and Labour and myself have had discussions on this very serious problem with representatives of the Irish Congress of Trade Unions recently and further talks are to be held. There are, however, a number of points in relation to redundancies which I think I should highlight at this stage. Firstly, there tends to be an impression that redundancies arise largely, if not entirely, through the close down or curtailment of activity in manufacturing industry. True, this is a major factor but almost half of the redundancies which have taken place in the past year have arisen in areas other than manufacture, that is agriculture, distribution, services, et cetera. I say this, not in any attempt to minimise the seriousness of the problem, but to put it in its proper perspective.
Secondly, the impression seems to be widespread that the redundancies arising through closures in manufacturing industry were due primarily if not entirely to the removal of protection under the Anglo-Irish Free Trade Area Agreement. I will not deny that the freeing of trade has been a factor in some of these closures but it is only one of the factors involved. Indeed, in some cases it has not been a factor at all. For example, one of the sectors of manufacturing industry where the incidence of redundancy has been greatest this year has been the food industry which, as Deputies are aware, is exempt from the provisions of the Free Trade Area Agreement.
Other factors leading to redundancies have been product obsolescence; difficulties in external markets (a number of well publicised cases of closure earlier this year involved firms which were selling entirely in export markets); market depression externally and at home (this has affected the textile industry in particular); cost inflation; and management difficulties highlighted by more demanding trading conditions and by the incidence of free trade.
In addition to the problems caused by redundancies I am seriously concerned at the incidence of short-time working which has seriously affected the textiles industry, particularly wool  textiles, in the course of the past 12 months. Wool textiles as an industry is notoriously subject to cyclical depressions and short-time working but, up to 1970, the industry in Ireland had, for more than a decade, been largely free of this difficulty. However, the industry, world-wide, has recently been subjected to what is stated to be the worst depression for 40 years and this has affected most of the Irish mills in varying degrees. The continuously growing competition from materials made from synthetic fibres and from materials made from processes other than weaving, does not help the situation.
On top of this, there is the fact that excess capacity exists in this industry and, so far, efforts to induce the industry to rationalise its production have not succeeded. One obstacle is the likelihood that no such rationalisation could be achieved without the closure of some mills. Unpalatable though this may be in particular cases. I am afraid that it must be faced. If not, there is a danger that mills, which might otherwise be viable, would be forced out of business along with weaker and less efficient units.
The argument has been put to me that the answer to the problems of redundancy, short-time working and increasing competition from imports which are at present besetting the textile and other industries, should be dealt with by recourse to some form of protective measures. People who advocate this course seem to me to want to have a type of arrangement in which we have complete freedom as regards the outward movement of our exports but can restrict readily the inward flow of imports from the very countries to which we export. This, of course, is not realistic.
Regardless of free trade, however, we cannot expect Irish industry to remain immune from the factors I have already mentioned such as changes in technology, the obsolescence of existing products, and the development of new ones; changes in fashions; and the general tendency for industry to become more capital-intensive. The recently-published reorganisation plans  of one of our largest manufacturing enterprises is a very striking illustration of this.
Last year I mentioned the reorganisation of the Industrial Development Authority and the new functions which had been assigned to it under the Industrial Development Act, 1969. The Authority have completed their reorganisation and are now a most sophisticated body, geared to tackle the very difficult task of the development of the industrial sector of our economy. They have set up a new Regions Division which is in the process of completing draft regional plans that will be used as a guide for the regional development of industry over the next five years. Their Research and Planning Division has prepared the framework for assessing future patterns of industrial development and, through their overseas offices and their New Industries, Promotions and Research Planning Divisions, it has been enabled to adopt a more selective approach to the attraction of industries from abroad. The new IDA, with their special brand of expertise, can be expected to operate on equal terms with our competitors abroad for the attraction of industries to our country.
This is not an easy matter but with our attractive package of incentives we should be able to match the success of previous years. I should perhaps mention, as an instance of the pace of development, that last year the IDA operated with a capital allocation of £18½ million, and during the current year the initial allocation of £23 million is, as already mentioned, being increased to bring the figure up to £29 million.
In the year ended 31st March, 1971, grants amounting to about £24 million were approved in respect of 78 projects. These figures include grants totalling £7½ million for projects in the designated areas and grants totalling £16½ million for the non-designated areas. Grants amounting to about £94 million for a total of 847 projects have been approved since the grants scheme was started. The total investment  involved in these 847 projects is estimated at over £300 million and the estimated employment potential is 75,800 workers. Of the total of £94 million £32½ million was for designated areas. The total amount actually paid out to date for designated and non-designated areas is £44 million.
The small industries programme, which now covers the country as a whole, continues to make satisfactory progress. During the year ended March, 1971, grants approved amounted to £1.2 million and involved an additional employment potential of 1,140 workers. Since the commencement of the scheme in 1967, the number of grants approved was 593 totalling about £4 million up to March 31st, 1971 and involving additional employment for 7,400 workers.
The re-equipment grants scheme which was introduced with effect from the 1st March, 1968, provided for grants of 35 per cent in the designated areas and 25 per cent in the remainder of the country towards the cost of fixed assets involved in plans for re-equipment, expansion or modernisation. Up to the 31st March, 1971, a total of 1,018 projects had been approved for grants, aggregating £10.9 million of which £3.7 million has been paid. The total capital investment involved is estimated at £46 million. In the year ended 31st March, 1971, 81 grants were approved for the designated areas at a total of £900,000 and in the non-designated areas 363 at a cost of £4.2 million.
Work on the industrial estates at Galway and Waterford continued successfully during the past year. Since this scheme commenced, a total of 916,000 square feet of factory space has been constructed and at 31st March, 1971, 131,000 square feet of factory space was under construction. At the 31st March, 1971, there were 30 firms operating on the estates with a total of 1,123 workers employed. At that date, a further three projects had been arranged for siting on the estates giving employment at full production to 283 workers.
A panel of consultants was set up to advise on the implementation of the advance factory programme of the  IDA and a team was appointed to prepare factory plans. The Authority are in the course of finalising a comprehensive programme of advance factories for various areas throughout the country and meantime they have announced an interim programme for the provision of advance factories in about 30 different locations. This programme of advance factories is intended to form part of the overall regional plans for industrial development of the IDA.
Under section 17 (3) of the Industrial Development Act, 1969, an aggregate amount not exceeding £100 million may be provided from the Exchequer to enable the Industrial Development Authority to perform their functions, including those taken over from An Foras Tionscal. At the 31st March, 1971 the aggregate amount so provided was £70,225,446.
Total capital expenditure to 31st March, 1971, on the development of the industrial estates was £4.58 million. The Shannon Free Airport Development Company Ltd., under its new mandate, continues to administer the affairs of the mid-west region, which involves Clare/Limerick/North Tipperary, as well as the affairs of the industrial estate. They are going ahead with the provision of advance factories in preparation for what it is hoped is a continued development of the operations in the area. Admittedly there have been some closures and redundancies in the estate but the company are confident that this was due to a temporary recession—which is world-wide—and that, taking account of projects in the pipeline and others which they hope to attract to the estate, an improvement in the situation will come about within the next year or so.
One of the State aids available to both manufacturing industry and the distributive trades is the technical assistance scheme. It has, as its objective, the promotion of productive efficiency in industry and the increasing of efficiency in the distributive sector. The need to review and adapt the systems and practices of these sectors continued over the past year with the progressive removal of tariff protection under the Anglo-Irish Free Trade Area Agreement  and in the light of our expected membership of the European Economic Community.
The technical assistance grants scheme is specifically designed to provide incentives to our industry to cope with present and future pressures. Groups in the distributive trades may also avail themselves of certain services where such services are sought on a collective basis. In addition, grants are available under certain conditions towards the costs of visits abroad by representatives of management and of management and labour jointly.
The Government have, under this scheme, endeavoured to meet their commitment to assist industry in its efforts to prepare for free trading conditions. Those firms in the sectors concerned which have faced up to their responsibilities in up-dating their business methods have had substantial financial assistance from my Department towards the cost of the productivity improvement schemes undertaken. This is evident from the fact that since the scheme commenced in 1957 the total amount of grants paid was approximately £2 million. I am fully satisfied that the expenditure incurred both by the firms and the Government has proved to be a sound investment in helping energetic and forward looking companies to prepare to meet the challenge of the 70s.
The Irish National Productivity Committee was initiated in 1959 by agreement between its constituent bodies and with the full support of the Government. It has the special value of bringing together, at industry level, representatives of labour, management and education. The active involvement of labour is important in encouraging industrial productivity.
In the course of the past year, the Committee have achieved an expansion of the activities of its regional joint committees in their efforts at local level to stimulate firms' interest in the concept of productivity and in developing a climate designed to increase labour/management co-operation. The Distributive Trade Productivity Committee, which is involved extensively in education, training and research was  substantially assisted in its work by the INPC advisory service. The Committee engaged in a number of projects, for example, the promotion of productivity ideas amongst students, and these efforts are expected to result in a wider knowledge of the concept and desirability of productivity.
Certain differences of opinion arose in regard to the role of the committee over the past few years and, as a result, a firm of international consultants, versed in productivity matters was commissioned to carry out a survey of the operations of the INPC. The consultants duly reported to the INPC with certain recommendations. Only recently, the INPC submitted to me their views on the recommendations of the consultants and these matters are now under consideration in my Department.
As I have pointed out earlier one of the ways in which industry should prepare itself for the new conditions which lie ahead of it is by improving its technical efficiency. In this technological age, it goes without saying that an industrial concern that is not technologically up-to-date cannot hope to survive. While the main effort in this regard must come from industry itself, a vital role is played by the Institute for Industrial Research and Standards. The Institute's annual report for 1970 shows that recourse by industry to its services is continuing to increase.
In the current year, I am providing £948,000 by way of grant, an increase of £106,500 on the previous year's figure. I am satisfied that the time has now come when substantial capital investment will be necessary to enable the expansion of the Institute to continue at the rate provided for in its first five year plan which was approved some years ago, and as envisaged by the Institute in the second five year plan which was put before me during the summer. I have asked the National Science Council for its views on the plan, but, while I do not wish to anticipate their conclusions, I am aware that the Council agrees in general with the proposition that substantial further growth will be  necessary. I will have the whole question examined when I receive the National Science Council's report.
In 1970, following the pattern established over the previous decade, total exports and exports of industrial goods continued their upward trend, reaching record figures. Total exports amounted to almost £468 million. While exports as a whole increased by some 16 per cent, industrial exports showed an increase of 23 per cent over 1969.
The rate of increase in industrial exports reflects further progress towards industrialisation, which is important because it is industrial goods which sell in more distant markets and which will help in attaining a more diversified export trade. Over the decade, total exports showed a value increase of 207 per cent while industrial exports rose by almost 500 per cent. As I mentioned earlier they now represent 53 per cent of total exports.
Export growth in 1970 fell somewhat short of expectation, partly because conditions in the British market did not improve as much as had been hoped and also because of a decline in buoyancy or depressed trading conditions in other markets. Nevertheless, there were increases in all sectors, and manufactured goods showed an increase of just over 20 per cent. These goods are still the fastest growing category. They amounted to £199.1 million, as against £165 million in 1969. There were increases, also, in exports to all the main markets, including USA, and the EEC countries. Diversification of markets continued and, in 1970, about 37 per cent of all exports went to markets other than Britain.
In the first half of 1971 all classes of manufactured exports continued to grow, showing an overall increase of about 25 per cent. Exports to Britain in particular showed an upward movement, increasing by some 28 per cent. Provided that we can maintain competitiveness in cost, there is every reason to feel optimistic about the future, in Europe and in other export markets.
Total domestic exports to Britain and Northern Ireland continued to increase  in 1970 and a more favourable balance of trade is now evident. Developments in both imports and exports are being kept under review. In the context of free trade, of course, the effective answer to rising imports is an increase in exports, and this applies to trade with Britain as well as trade in general.
Provisions exist within the Anglo-Irish Agreement for seeking remedial action in the case of any particular sector of industry which may be seriously threatened by increased imports resulting from the operation of the Agreement. During the year ended in June last the review provided for in Article 1 of the Agreement to identify sectors of industry where particular difficulties may have been caused by the operation of the Agreement, was carried out. Following discussions with the UK authorities interim arrangements for the modification of the rhythm of tariff reductions in the case of a number of products were put into effect. Details have already been published and I need not repeat them here. Discussions with the UK authorities aimed at reaching agreement on more long term measures to deal with the difficulties should be completed shortly.
In 1970 Irish exports to the USA were valued at £60 million. This was equivalent to 13 per cent of our total exports to all areas, with the result that the USA is now, after the UK, our next most important market. In the circumstances the pressure by US industry for further restrictions on imports has continued to be a matter of concern for Irish exporters.
In 1970 legislation restricting the importation of textiles, clothing and footwear into the USA was a serious possibility, which fortunately did not materialise. However, so far this year quota restrictions have been imposed on the importation of stainless steel flatware and certain sugar and chocolate confectionery products. The most serious development, however, for exporters to the USA has been the series of economic measures announced by President Nixon in August. These include a 10 per cent import surcharge on all dutiable items not subject to US  quantitative limitations. The surcharge applies to about two-thirds of our exports to the USA and could seriously affect some at least of these. In the circumstances it was decided to introduce more liberal conditions for the provision by Córas Tráchtála of travel incentive grants for the US market for exporters affected by the surcharge.
In addition, Córas Tráchtála will keep in touch with exporters to the USA with a view to assisting them to overcome any problems they may meet with. I understand that following the introduction of voluntary export controls by Japan and other suppliers to the US markets the US Government proposes to remove the surcharge on textiles; this is a welcome development. We are maintaining close contact with the US authorities in an effort to secure the most favourable possible arrangements for our sugar confectionery products under the new regime being introduced by the US.
Trade agreements were concluded with Bulgaria and Rumania in 1970 and 1971 respectively and talks to review the operation of the trade agreement with Bulgaria are to take place shortly. Talks about the development of trade have taken place between Ireland and the USSR, Poland and Czechoslovakia. Further discussions regarding trade with these countries, including the question of possible trade agreements, will be arranged.
During the past year Córas Tráchtála have continued to assist, financially and otherwise, an increasing number of exporters. The operation of the special diversification measures which I have already mentioned has brought about a noticeable increase in overseas promotions. In 1970, Córas Tráchtála dealt with well over 1,000 firms, a quarter of which participated in 25 co-operative promotional activities such as national pavilions, group showings, and so forth, some of which were held in Britain, North America and throughout Europe. The business placed at these amounted to £2 million with a potential follow-up value of £6 million. Comparable figures for 1969 show that almost 200 firms participated in 20 co-operative activities  realising £1.5 million with a potential follow-up value of £4 million.
Córas Tráchtála are the Government agency responsible for development of industrial design and the promotion of design standards in Irish industry. Their design section provides a wide range of design services for industry, including incentive grants covering design consultancy and package design and design training, as well as consultancy, advisory and information services—such as the maintenance of a register of design consultants and a technical reference library.
One of Córas Tráchtála's early steps in design development was the setting up of Kilkenny Design Workshops Ltd., as their subsidiary, to provide design and prototyping services chiefly for craft-based industries. The Design Advisory Committee, which was set up on the initiative of Córas Tráchtála, has resulted in a further strengthening of liaison with industrialists and other bodies concerned in design development. It is most advisable that exporters should make the utmost use of both these services. Many exporters, in this country particularly, must depend to a great extent for continued export success on the attraction of high-quality goods which can retain their place in world markets against competition from cheaper mass-produced articles.
The Export Award Scheme was introduced in 1968 and has been continued on an annual basis since then. The scheme is intended to give State recognition to successful effort in exporting. The stress laid in the criteria on design, product development and adaptation, modern marketing methods and general enterprise further emphasises the importance of these factors from the point of view of export development.
The Government have extended, for a further period until April, 1972, the operation of the Prices Stabilisation Order, 1965 under which I am empowered to investigate and control prices and charges. Deputies will be aware that, last month, I established the National Prices Commission to  keep under review prices and charges and to advise me in relation to all prices and charges. The commission has, as its members, representatives of employers, traders, workers and consumers with an independent chairman. All proposals to increase prices will be submitted to the commission for consideration and the commission will furnish me with a recommendation on each such proposal. In addition, the commission will furnish me with monthly reports on the cases and other matters dealt with by it, and I will publish these reports.
As Deputies are aware, I introduced, in July last, a Bill to extend the scope of the Prices Acts. I hope to have the Bill circulated to Deputies in the near future. This Bill will, in the main, extend the Prices Acts on the lines envisaged in the Prices and Incomes (Temporary Provisions) Bill, 1970, and will cover such areas as new houses, professional services and insurance charges.
Deputies may be interested to know that in the 12 months from October, 1970 to September, 1971, I indicated in a total of 339 cases that I would raise no objection to certain price increases to compensate for unavoidable cost increases. The total of the cost increases claimed by all the applicants in these cases was roughly £49 million. The total of allowable cost increases in these cases as computed by my Department, was about £33 million and the total of compensation given to the applicants by way of price increases was £32 million. In this period of 12 months, therefore, the price increases conceded by me represented, on average, only 65 per cent of the cost increases claimed by applicants.
With the advent of free trade I cannot over-emphasise the urgent necessity for management in all concerns to explore every possible prospect of increasing productivity, and to keep existing procedures under continuous review with a view to effecting progressive improvements towards this end. I must also ask workers to lend their wholehearted co-operation to management's efforts in this regard, so as to enable the maximum amount of unavoidable cost  increases to be absorbed and thus mitigate the effects of these cost increases on prices and on the cost of living.
It is generally recognised nowadays that the law must provide the consumer with certain additional forms of protection which, in modern conditions, he is no longer able to provide for himself. There is, of course, already in existence a large body of law aimed at giving protection to the consumer—I may mention the Weights and Measures Acts, the Merchandise Marks Acts, the Sale of Goods Act, the Food and Drugs Acts, the Hire Purchase Acts and the Prices Acts amongst others. New conditions require new measures, however, and my predecessor announced some time ago a programme of consumer protection which would be undertaken. Progress has been made through the reactivation of the Merchandise Marks Commission and, in particular, with the passage last year of the Merchandise Marks Act, 1970, which provides for the marking of quantities on prepacked goods, a most necessary requirement today. It is my intention to make a very comprehensive order under this Act, and consultations have taken place with a wide range of manufacturer, distributor and consumer interests on the details to be included. I expect to be able to make the order shortly. I have also made arrangements which should enable good progress to be made with other aspects of the programme in the time ahead.
Last year I indicated that legislation to amend and consolidate the Restrictive Trade Practices Acts was in course of preparation. The amending Bill was introduced in the Dáil by long and short Titles in July and I expect that the Second Stage will be taken during the current Dáil session. The Bill has two main features— extension of the scope of the legislation to services, including professional services, and the introduction of institutional changes, chiefly the creation of a special post, the holder of which will be given statutory powers to exercise the investigatory functions hitherto discharged by the Fair Trade  Commission. These changes will mean that the whole range of commercial activity, with a few exceptions for services already subject to separate legislation, will come within the purview of the commission. In addition they will provide for more speed in the operation of the legislation and ensure that the commission can undertake inquiries with the appearance, as well as the reality, of complete detachment.
I am preparing legislation to provide for the investigation and control of monopolies, take-overs and mergers. I feel that these powers should now be made available in present circumstances of ever increasing concentration through mergers and take-overs in manufacturing industry and distribution. I recognise, of course, that the circumstances of Irish industry are such that some re-grouping of firms is necessary, and it is not my intention that the proposed legislation should inhibit such necessary restructuring of industry.
The proposals I have in mind would enable me to make orders providing for the prohibition of a merger or take-over or, in the case of monopoly, completed take-over or merger, for the breaking-up of a business by a sale of assets or otherwise. The criterion to be applied would be whether a monopoly, take-over or merger restricted competition in a manner contrary to the public interest.
The distributive trades form a highly complex and fast changing sector of the economy. The rapid growth of supermarkets and multiples in recent years has given rise to fears that the days of the small independent trader are numbered. However, all the evidence points to the fact that efficiency is the key to survival and that the efficient trader has nothing to fear. It will continue to be my policy to ensure that there will always be a place in the distributive sector for the efficient and competitive small and medium sized business.
There has been an amount of discontent in the distributive sector, and particularly in the grocery trade, about a number of practices which have become common in recent years and  which some traders consider are unfair or even anti-social. The Fair Trade Commission has carried out a very painstaking inquiry during the year into conditions in the grocery trade, and I am awaiting its report, which, I feel, will be one of more than usual significance for Irish distribution. While I cannot, of course, come to any specific conclusions in advance of the commission's report, I may say in general that, where the report indicates that action needs to be taken, I shall be very ready to take such action as is open to me, specifically, of course, the making of an order.
I have had the opportunity on a number of occasions during the year of meeting representatives of various branches of the distributive trades, and of the Federation of Trade Associations with its overall coverage. I have made it my practice to try to keep before their minds that it is not only their national duty but their personal interest to “Sell Irish” wherever there is a suitable Irish made product available. I am glad to say that the majority of traders seem to appreciate the force of this truth but there are still some who do not or will not recognise it. The message is one which I must keep hammering home.
The change-over to the metric system of measurement is making satisfactory progress in a number of sectors. Quite a few of the main industries have done most of the work of changing over; for instance building, pharmaceuticals, flour milling and paper making. Many others are well ahead with their arrangements. There are still, however, a number of areas where there does not seem to have been much progress. I am aware that some industries feel that the change-over can be effected with very little preparation as soon as trading conditions make it desirable and it is not at present my policy to dictate to industries how or when they should effect this change. Accession to the EEC may, however, render it necessary to accelerate the change; meanwhile, industries should in their own interests, re-examine their position. The prospects are that the metric system will be in general use in Britain within a few  years. The existing members of the EEC already use it. A very high proportion of our trade will, therefore, be with countries that use metric measurements and it would be foolish for us not to follow suit.
Problems may exist because of the close inter-relation between industries, and one sector may be held up because of lack of progress in another. For this reason, a committee was set up under the Minister for Local Government and An Foras Forbartha to facilitate the introduction of metric measurements in the building and building supplies industries. I have set up a committee to help with the problems of distributors and consumers and the officers of my Department help to smooth out liaison problems which may arise in other sectors. I propose in the near future to introduce legislation to give legal validity to the national prototype standards for metric measurements.
The volume of insurance business has continued to expand. Total premium income increased from £40 million in 1965 to well over £60 million in 1970. The increasing cost of claims in fire insurance and motor insurance and the high level of premiums in these sectors has been causing me considerable concern. The Committee of Inquiry into the Insurance Industry, which was set up a little over a year ago, is pressing on urgently with its examination of motor insurance and has made considerable progress. I understand that the report on motor insurance should be available within a matter of a few months.
There is no slackening in interest in minerals exploration and development. Some 633 prospecting licences were current in mid-October, 1971, compared to about 650 at 31st December, 1970. Exploration activity is now becoming intensive with companies concentrating on the detailed investigation of small areas rather than general surveying of larger areas. Some 383 applications for prospecting licences were received up to mid-October, 1971, compared to 367 in the whole of 1970.
Total production of concentrates in  1970 at the lead/zinc/silver mines at Tynagh, County Galway and Silver-mines, County Tipperary and the copper/silver/mercury mine at Gortdrum, County Tipperary amounted to 374,540 tons and exceeded that of 1969. Due mainly to a sharp decline in metal prices and to marketing difficulties experienced by one mine, the financial return was less than expected. Nevertheless, the value of exports of metal ores and concentrates in 1970 was £18.5 million compared to £17.3 million in 1969. Production commenced in mid-November, 1970, at the re-opened copper/pyrites mine at Avoca, County Wicklow and the mine has commenced trading. To supplement the underground source of ore, the operators have proposals to mine open-pit material from one area of the deposit. Other discoveries, including a promising lead/zinc deposit at Nevinstown, County Meath, are still under detailed investigation. The value of exports of barytes rose from £929,710 in 1969 to £1,122,000 in 1970.
There is considerable interest in petroleum exploration and development in the country's area of continental shelf. Under the terms of the 1959 Oil Agreement, as amended, Marathon Petroleum Ireland Ltd. hold exclusive petroleum exploration and development rights in three offshore areas. Following completion of detailed seismic surveys, the company were granted petroleum leases in 1970 in respect of areas off the coasts of Cork and Waterford. The company has drilled three test wells in these areas. As the Deputies are aware, Marathon has announced that the latest drilling about 28 miles from the Old Head of Kinsale has revealed apparently significant results from an initial test of a gas zone and that further testing will be required to properly evaluate the well's potential. While considerable further exploration will be necessary before it can be established that there is in this area a gas field capable of commercial exploitation, this is encouraging news and if a commercial gas field is proved it should be of great benefit to our economy.
Non-exclusive petroleum prospecting  licences for general surveying of the balance of our designated shelf area are about to be granted to 16 companies. Re-organisation and expansion of the Geological Survey to meet the present and future needs of mineral development in this country are proceeding.
The sum provided in the Estimates under the head of shipbuilding subsidies for the year 1971-72 is £150,000. This is a continuation of policy which has existed since the establishment of Verolme Cork Dockyard. The total subsidy payments which have been made since the inception of this scheme up to 31st March, 1971, is £1.5 million. The subsidisation of shipbuilding is a general practice throughout the world and the present level of subsidy here is less than that obtaining in many countries where shipbuilding is a major and long-established industry. The employment given at Verolme Cork Dockyard is substantial and the building of new ships is the main factor in maintaining this. The shipbuilding facilities at Cork are at present fully employed.
Shipping Finance Corporation, a subsidiary of the Industrial Credit Company, has for a number of years been making loans at low interest rates to shipping companies to finance the purchase of new vessels from Irish shipyards. It is necessary to recoup the Shipping Finance Corporation to the extent of the difference between the rate charged on these loans and their borrowing rate plus something for out-of-pocket expenses and to build up a reserve. A provision of £100,000 for interest subsidy is made in this year's estimate.
The past year has been one of mixed fortunes for Irish industry. On the one hand, our rate of growth has slowed up in line with what has been happening in other countries around the globe and redundancies have increased in number. On the other hand, if the rate of growth is not quite as fast as before, industry is continuing to grow and there are signs that the rate is accelerating once more. A particularly bright spot has been the growth in industrial exports. There can be no  doubt that the end of the year will show a substantial net increase in the numbers employed in industry and distribution.
In this speech I have outlined the principal ways in which I am helping, through my Department and the various bodies under its aegis, to speed up development. I have already indicated that it is intended to make additional money available during the year for industrial development. I shall be presenting a Supplementary Estimate in due course for this purpose, but meanwhile I commend this Estimate to the House.
Mr. Donegan Mr. Donegan
Mr. Donegan: I move:
That the Estimate be referred back for reconsideration.
I do this not by way of complaint about the amount of money provided for the expansion and encouragement of industry but because the Government have not succeeded in providing the number of new jobs necessary if we are to halt emigration and proceed along the lines indicated in the Third Programme for Economic Expansion. Failure by the Government must be referred to on these benches. I shall give evidence now of failure but, before I do so, I should like to say that there is something else which is militating against progress. People's faith in this country as a base for future new industry has been badly shaken by the behaviour of this Cabinet, certain members of it, in the last two years. We do not know the number of decisions taken by boards or by individual industrialists all over the world not to come to Ireland, and that at a time when there was the prospect of membership of the Common Market ahead, the progression of the Anglo-Irish Free Trade Area Agreement and, concomitant with that, the opportunity to manufacture goods here and get them into larger export markets.
These decisions have been made that these people will not come here for the very good reason that they do not regard it as a very safe bet. That is something that has little to do with the day-to-day work of the Minister,  but it is entirely relevant to the expansion and development of new industries and something that must be mentioned at the very outset by anybody speaking here on these benches. It is a sad business and its full effects will not be felt this year but over the next decade.
The industrialist who now sees the Common Market countries—now moving towards a membership of ten—as a very big market must decide where to make his products within that market so as to avoid the common external tariff. The behaviour of the Government, or some of its members, in the last two years has meant that Ireland has not been made very attractive as a place to operate. It is sad, but that is so. It is one of the horrible things we must face. People will not come to a place where there is danger of government instability. If one were to think of a place in Europe where, to the outside observer, there is every evidence of government and national instability, I am sorry to say this is the country. Boards of companies have responsibility to their shareholders and the worthwhile companies are largely publicly owned and have responsibilities also to their own reputations. They will not come here as things are at present.
That is a general statement on the expansion of industry and it was not mentioned by the Minister. I would not blame him for not mentioning it but it is a major factor in the slowing down that is taking place and which the Minister mentioned in the concluding part of his speech—he spoke of it as a slowing down in line with other countries. The factor I have mentioned and the cost factor are the two major factors in this slowing down. These are the things that make people decide not to come here. In my view, the grants offered are most attractive and the work done by the IDA, the Industrial Credit Company and the work now being done by various regional development organisations is good work which should bear fruit. It is, at least, inhibited by the cost factor and the sad factor of political instability which is directly related, in this part of the country I am sorry to  say, to the behaviour of members of the Cabinet.
We must accept, first, that the new jobs needed to replace jobs being wiped out in agriculture by modernisation must come largely from new industry. I quote from the first paragraph of the IDA report:
The principal generator of economic growth in Ireland in future years will be investment in new and expanding export-based manufacturing industry.
They believe that and they are quite right. On Page 13 of that report you find:
The gross number of new jobs created in manufacturing industry in 1970 was approximately 5,350 of which 5,237 derived from start-ups of IDA grant-aided industries. Redundancies in industry amounted to an estimated 1,800 so that the net increase in manufacturing employment was 3,500 or 1.8 per cent on the record level of manufacturing employment of 193,200 in 1969.
The position is that we provided only that number of new jobs last year. We had 1,800 redundancies and the expected redundancies this year, which is also included in this report, is 3,500.
The Minister says that there is a slowing down to the same level as other nations. I have mentioned the first reason for that; I now come to the second. I refer the Minister to something he did not mention. On page 12 of the IDA report are shown the wage cost trends in manufacturing industry from 1963 to 1970. Ireland is at the top of the league table. Our unit wage cost increased from base 100 in 1963 to 144 as compared with Italy, 116; France, 108—they have corrected themselves considerably—USA, 112; the United Kingdom, 129. We are at the top of the league table not as regards paying wages but as regards unit wage costs. The article we exported in 1963 is costing 44 per cent more now than it did then. These are the things that industrialists considering coming here will look at.
I do not want to be a “Weary Willie” and spend the time this morning  repeating that things are bad but these are facts we must face and facts, in my view, entirely within the control of the Government. First, the Government failed absolutely during that period to achieve any agreement between trade unions and employers on a fair wage rate and a proper prices and incomes policy. I am aware that there is an agreement on the £2 increase and that some degree of stability has been attained, but it was the Government's job to sell to both sides the idea that, if on the one side the employees could live a little better individually, and, if at the same time we had goods to export that cost a little less, that was the best situation possible for this country.
Decades of Fianna Fáil rule have seen to it that we are perhaps a decade away from that desirable position no matter how hard we now try. The best possible position would be if a man in industrial employment rearing his family here was earning for the same work a few pounds less per week than his counterpart in Europe or in Britain but, on that few pounds less, could live a little better, be a little happier and have a little more real money to spend.
I have said something there which is perhaps politically quite dangerous, something that could be taken out of context at election time, but that is the situation that should exist and which would exist if the Government, over the years, apart from other activities to which I have referred and which have real relevance to our industrial problems today, had not been prepared at all times to settle things to suit themselves politically.
Elections, by-elections and crises will come. Modern life just happens to be that way. Fianna Fáil's answer during that entire period from 1963 to 1970 and before it, was that politics came before people, that, if it was necessary for them to remain in office, there was an inordinate wage increase. Then a few prods were given here and a few prods were given there. The salaries in semi-State companies and various other places went up. Naturally in line with those increases the trade union organisation demanded, quite properly so,  that in ordinary manufacturing industry there would be a parallel and there was a parallel. This was not the prices and incomes policy that Britain, for instance, had been talking about for so many years.
If we go back to the time of the Right Hon. Barbara Castle, who was the great speaker there on a prices and incomes policy, and while they are second in the league of unit costs over the period 1963-1970, it is true that her particular words on the matter are still correct, that, to be beneficial, a proper prices and incomes policy does not have to be 100 per cent successful. In other words, if you can get even a part of the way towards a realisation by workers, by management and by government that there is a wage that can be paid, that there is a comfortable living that can be enjoyed, and that any excess over and above that will result, probably in the short run but most certainly in the long run, in a falling off in industrial production in a situation whereby exports will become more difficult, a situation whereby a Minister for Industry and Commerce may have to stand up and say that it was a year of mixed fortunes, and that there is no way of getting away from that except by becoming more efficient.
The work of the IDA and various other bodies in that effort to become more efficient has been commendable, but it has been negatived by the two main items which I have mentioned, namely, the preparedness of the Government to prostitute anything for power and politics and the fact that the actions of the Government here or some of its members have been a grave disincentive and inhibiting factor in establishment of new industry.
One thing about this is that the decisions made in Birmingham, Chicago or anywhere in the world not to come to Ireland but to go to another country to set up their new manufacturing bases will never be heard of, because the decisions taken inside a room are not advertised to us here or through any government publication. I do not want to labour that point any more except to say that those  two factors are most important. The most important thing that could be done here would be that first of all there would be a coming together of people to see to it that a proper prices and incomes policy is developed and sold to everybody involved and, secondly, that there would be every sign of political stability in a Cabinet. These are two things that are paramount in our future industrial expansion and any delay in providing those two things will result in non-expansion.
I want to deal with the question of the designated and non-designated areas in a rather broad and general way. I made a point last year on this debate which was not taken up by anybody but which I believe I can prove to be true. It is that there is a minimum infrastructure of Garda, hospitals, roads and all the other things that a modern state must provide for its every citizen. That minimum infrastructure must be provided in Leitrim, in parts of Donegal, in the far western areas of Kerry, west Cork and places where there is little industrial employment. The cost of such infrastructure, at its minimum, will produce for the inhabitants of Grafton Street, of Foxrock, of Rathgar and of Castleknock, if one wants to go to the ultimate, such a tax situation that this country cannot go on. The crushing burden of tax on industry and on people cannot be relieved by anything, except by the development of the designated areas, for the simple reason that, if one adds up all that has to go into those areas to enable them to survive at a minimum level, one reaches a figure of millions of pounds that cannot be afforded by the industrial base that we have along the east coast.
We could go even further than that and say that areas of the Minister's own constituency would be in the position of receiving far more from central funds than they are sending by taxes, rates and other payments direct and indirect towards those funds. The people who are enjoying the lowest standard of living—they are not the people with the big cars, the people who can go out at weekends and spend £10 or £20 and forget about it—people who are living very modestly indeed,  are the same people who are the burden upon the State. That is no insult to them, no criticism of them whatever. It is a criticism of the Government over the past decades, of course. The fact is that unless we can develop those areas the burden of tax that will have to be imposed on existing industry and people in the non-designated areas will prove so heavy that our exports will fall, our manufacturing industry and the opportunity to live in this country in comfort will fall, as well.
We, in Fine Gael, produced a document last year called “A Policy for People”. This policy was worked out in extreme detail. It is a more detailed policy than that which has since been done by the IDA in the production of the regional development organisations and is, I would say, more sophisticated and more likely to succeed. It provides for growth centres in the various places and it also provides for a local initiative. If there is not a growth centre in a town and local initiative and local capital wish to come together to try to get an industry, provide money, provide effort and perhaps, if they can contact that industry, even provide the entre-preneur, they will be provided with advance factories just as the growth centres the Government have set up after considerable prodding from this side of the House are.
For the first time there is some evidence that the IDA and the Minister are making sure that when factories are built they are filled. There is some evidence that industries which might have gone elsewhere are now going to growth centres. Our policy, which is far more detailed, is a wise one. It gives smaller towns and towns which have not got growth centres an opportunity to have advanced factories and develop along the lines themselves which the Government is developing in the obvious places—which were pointed out to them from this side of the House for years before they did it. It does mean we are not going to have a situation where every piece of land around Galway becomes worth ten times more because the Minister and the IDA are going to prod everyone  towards Galway and away from Westport and Castlebar.
It is necessary that all designated areas should be developed on a planned basis and the people should be brought in on this plan. There used to be an old theme with regard to farming that one cannot inspire farming from Merrion Street; likewise one cannot inspire local industry from Kildare Street but I think we get people involved working for their own town, even though they know that the sensible thing is to have growth centres in larger centres of population or in places where there are natural advantages such as a harbour.
From 1962 on this party has spent its time prodding the Government into having growth centres and although I do not delight in the sad years that have been lost I delight in the fact that after standing here and making speeches on the necessity to develop Sligo as a growth centre for so many years my efforts have at last borne some considerable fruit.
We on this side of the House have checked with the Common Market authorities in Brussels about the movement of goods from designated areas either to areas of consumption or export if there are not export facilities available near the designated area concerned, to see whether or not, under the Rome Treaty, one can have a transport subsidy from these designated areas to the east coast. If one takes the Rome Treaty as it is the answer is “No” but there have been many exceptions along the line and we can obtain such an exception if we ask for it. The Minister made no reference in his speech this morning to such an exception.
It is of the utmost importance to locate heavy industries in designated areas. They can only be located there if there is either a good export facility nearby on the west coast or if there is a good employment force ready and waiting. But then there is the necessity of moving the goods across the country to either the east coast or the south coast for export. This exception can be arranged; it is in our policy, but it is not in the Government's policy. It  is important to know that the CIE wagons which convey goods to either the south or east coast for export can be the subject of a transport subsidy. In relation to the Common Market this transport subsidy is what one might call one of the bargains, just as the whole problem of the Anglo-Irish Free Trade Area Agreement was not the agreement itself but the bargains which were not entered into by the Minister as a result of which we are now suffering.
I want to talk now about the Common Market and the Anglo-Irish Free Trade Agreement. The year of review ended on 1st July, 1971, and in April or May, 1971, the Minister, on the Control of Exports Bill, indicated to me that he had not made any representations to the British under the year of review. This statement naturally sparked off Parliamentary Questions from me. The Minister then indicated that he was making representations to Britain in respect of certain industries that were in trouble, and that it was not in the interests of either those industries or the country that he should tell me which they were. I accepted that completely and I do not ask the Minister even at this stage to tell me under which particular sections he is making representations. At least nine months of the year of review had elapsed before we, on this side of the House, were able to kick the Minister into doing something about it. Having got him to move he then informed us that any negotiation opened before 1st July, 1971, can be proceeded with. Last week he informed me that negotiations are proceeding. I would suggest that the industries, whatever they are, which are in trouble as a result of the Anglo-Irish Free Trade Agreement or any of the features of it, should have been the subject of representations to the British in the first month of the year of review and that whatever alleviation necessary should have come long before now.
We meet again the situation where for more than two years the Government have been so tied up in their own political tangles that they have not been able to do the day to day work of the Government. Neither the time nor the opportunity was there to give every  moment of every working day towards the advancement of industry which is the concern of the Minister for Industry and Commerce.
While the Minister for Foreign Affairs is concerned with every detail of our proposed entry to the EEC I am sure the Minister for Industry and Commerce and his Department have to have a detailed and clinical approach to our advent into the EEC. The Minister said in his speech that there were fears that these fears were groundless, and that it was the smaller countries which had benefited most. I suggest the Minister take into account the fact that it was the smaller countries which bargained most.
Small countries have this great advantage when entering trading blocs: their entry will not be as important or destructive to economies elsewhere as the entry of a large trading country. My worry regarding the Common Market is that we will go in—as happened in the Anglo-Irish Free Trade Area Agreement—without making detailed bargains in relation to important matters and that we will not avail of our opportunity to be different from Britain.
I said in this House at one stage that it appeared we were going into the Common Market like a child in arms. Subsequently, there appeared a Warner cartoon with my name on it depicting the Minister's leader being taken like a child in arms by Mr. Ted Heath through a door labelled “The Common Market”. It is important that we bargain hard and I have repeated this many times.
Our entry into the Common Market is a must and, with respect, this affects the Labour Party and their attitude to the EEC. We must go in——
Mr. Coughlan Mr. Coughlan
Mr. Coughlan: On conditions.
Mr. Donegan Mr. Donegan
Mr. Donegan: This is the kernel of the matter and I am glad to hear that intervention. In the British House of Commons there was a Government majority of 112 in favour of entry. There is no question of a referendum in Britain; it is obvious that the Conservative Government will not go to  the country, that they will not get flapped. They will go into the Common Market, but they will be subject to the most severe examination and criticism by the Labour Party in Britain and all their actions in this matter will be questioned.
It must be clearly understood we could not pay the common external tariff on 80 per cent of the goods we export to Britain, including agricultural goods, and remain outside the Common Market. The Labour Party here are against entry, Fine Gael are in favour “with conditions”—and this is the important point—and Fianna Fáil in the last few weeks evidently have decided there was a chance of having some bargaining power. I admit they achieved some success in relation to grants under the Industrial Development Authority.
It is essential that we enter the Common Market if we are to ensure that employment and industry are kept at a high level. Fine Gael will examine in detail everything that is done by the Government for as long as they are in power—which I hope will not be for long—in relation to our entry into the EEC. Not only will we defend 100 jobs; we shall try to defend every single job if that is possible. In view of the overwhelming majority in the British House of Commons and the fact that Britain will enter the EEC, the Labour Party here have a duty to carry out a minute examination of all the Government's proposals. We must ensure that there will be the minimum disturbance in industry and that we get every benefit it is possible to wrest by way of bargaining. It must be stated that the Government have not shown any great aptitude for bargaining and, in fact, they have been selling the Common Market to the country rather like one would sell a penny bun.
With regard to the sensitive areas of industry, the manufacture of shoes and the entire textile sector fall into this category. In the spring of this year the Mills Bill was put down in the United States Senate and there was the rumour—which was corroborated in the Minister's speech today—that President Nixon was considering measures to discourage imports into  America and to encourage exports. The vulnerable textile industry of America was being affected by Japanese imports and it was thought a tariff wall should be raised—in fact this was done if one considers that a 10 per cent surcharge was raised against imports. There was also restriction on money from the United States and, in fact, the only way one can get money in the United States now for exports seems to be on the basis that a certificate from a commercial bank here will indicate there can be repatriation of that money if purchases are made here.
I was in Brussels in the spring of this year and at that time senior officers from Brussels were in America arranging that the textiles from Japan which might be excluded from America might be taken into the Common Market without the common external tariff or with a reduced tariff or without quota restrictions. The idea was that they did not wish to push Japan nearer to the Chinese Communist bloc; they wanted to keep Western Europe, America and Japan in the one kitty. To some degree this has succeeded but it has left us in the situation that our developing textile industry is in a vulnerable position because of the world situation.
If one reads the IDA report one sees that a considerable amount of money by way of grants is in respect of the textile industry or the garment and associated industries. In the trade review contained in the Córas Tráchtála report of 1970 it is stated that exports of apparel in 1970 were £22 million; in 1969 they were £19,732,000. That showed some small increase. Our exports of women's and girls' clothing amounted to £7,475,000 in 1970 while the figure for 1969 was £6,944,000— very little change. Of course, 1971 has been a more troublesome year. Exports of men's and boys' clothing for 1970 amounted to £4,545,000 against £4,674,000 for 1969. This shows the first drop in our exports. This is a sensitive line and the grants given towards the industry by the IDA are probably more necessary now than ever before, especially since so many people are employed in the textile industry. Our exports of other clothing in 1970  amounted to £6,098,000 as against £4,380,000 for 1969. That was all right. Exports of footwear for 1970 amounted to £3,977,000 as against £3,764,000 for 1969. It will be seen, therefore, that we are merely holding our own in 1970 but there has been a drop in 1971.
Because of the amount of money invested in textiles I would have expected an increase in exports of about £10 million, but what I am reading here is an even-Stephen situation. There was an increase in exports of general textiles for the year 1970 of about £5 million. Without going into detail, or referring to the grants given to various industries, if one considers the total amount of money invested in the industry, plus the grants, one will see that the improvements have not been as great as one would have expected. The Minister referred rightly to this particular industry. Again, it is a sensitive industry and I am not dealing with it in a critical way but merely pointing out that although there have been increases, these increases have not been spectacular.
Exports of wool textiles for 1970 amounted to £10,246,000 as against £7,456,000 in 1969. That was not bad. Cotton and linen exports amounted to £2,888,00 in 1970 as against £2,857,000 in 1969. The figure for artificial and synthetic textiles amounted to £5,112,000 in 1970 as against £3,351,000 in 1969. Exports of other fibre products totalled £3,231,000 for 1970 as against £2,730,000 for the previous year. There was an increase in our exports of leather and leather goods from £5,644,000 for 1969 to £6,629,000 for 1970. In engineering and metal products there was an increase from £29,927,000 for 1969 to £38,457,00 for 1970. There was an increase of only £1 million in exports of electrical machinery while in non-electrical machinery there was an increase of about £3 million. We just held our own in metals and in metal manufactures there was an increase from £5,998,000 in 1969 to £6,172,000 in 1970.
Transport equipment increased from £1,201,000 in 1969 to £4,933,000 in 1970. This covers ships and boats to  which the Minister referred. I agree with subsidising this industry. We have no alternative if we want to remain in the boat building industry and Verholme give quite an amount of employment. All countries are waiting for the time when such subsidisation will not be necessary but if Ireland were to opt out now, we might be very sorry in the years ahead. I do not consider the figures given by the Minister in relation to grants to be excessive. The increases in exports of transport equipment was spectacular.
Exports of medical and scientific equipment increased to £10,338,000 in 1970 from £8,054,000 for the previous year. I expect that most of this increase would have been generated in my constituency because of the efforts there of a certain very successful firm.
Exports of paper and printing materials showed a marginal increase. The same applied in respect of building materials, furnishings, chemicals and pharmaceuticals. There was quite a good increase in exports of plastic products and there was an increase of about £1 million in exports of petroleum and petroleum products. We did very well in rubber exports, having increased the figure from £1,261,000 in 1969 to £4,362,000 in 1970.
There was quite a good increase too in exports of tobacco and there was an increase in exports of food and drink from £125,527,000 in 1969 to £145,984,000 in 1970. In meat and meat products there was an increase from £66 million to £74 million. The overall increase in exports was £64.07 million. Dairy products showed an increase for the year 1970 of about £5 million and there was an increase of about £2 million in chocolate products. If we are to be hit by the grave problem that is effecting the textile industry, we could be in for serious trouble so far as employment in concerned.
In relation to Córas Tráchtála there is the question as to whether we are doing enough towards getting a foothold in Europe. Yesterday I had a question down for the Taoiseach to ask him:
What improvements in the balance of trade have been effected with  Common Market countries in this country's efforts to gain a foothold in their home markets before accession to the Treaty of Rome; and what increase in exports they have effected to this country over the last five years for which figures are available.
The Taoiseach replied that the information was being circulated with the Official Report. This information was that our import excess with Common Market countries has increased between 1966 and August of this year from £19.7 million to £51 million. That would seem to indicate to me that our market here has been the subject of some considerable effort by Europeans. Although there has been a special arrangement in respect of motorcars of which, incidentally, I approve, the position is that the Europeans have been concentrating very much on getting into our market. I would pose the question as to whether we have been doing enough to get into their markets, and whether or not our technological grants and the activities of Córas Tráchtála should have been more aligned towards the Common Market.
I read in the Córas Tráchtála report that they are opening two new offices, one in Milan, as far as I remember, and one in Brussels. I understand that they have an office in Frankfurt and another in Paris. It seems to me that the Minister may have been lax in not seeing to it that this was done long ago. It must be at least 15 months since it was clear that, unless there was an upheaval in matters on the Common Market front, or an upheaval in political matters in Britain, Britain was going into the Common Market. Therefore, the opening now of two new offices is too little, and too late. We need a quickly set-up promotional drive in Common Market areas for our industrial goods. Four offices are not adequate. We are spending a lot of money on Embassies in various places that are unlikely to get us any industrial achievement. Why did we not open at least one office in every Common Market country? I criticise the Government and the Minister for that.  We should also have had a dual approach: the approach of giving the services of Córas Tráchtála, without the manufacturers looking for it, to work out what the markets are for the various products and what changes in manufacture or in general production here would be necessary to provide a product that would be acceptable by the people in the various countries. We should also have speeded things up so that we would have a foot in. We could give grants before we go into the Common Market to pay for the common external tariff. This should have been done. When Britain was in trouble the Government imposed a 50 per cent deposit scheme on our industrial exports to them. That was not so very long ago. They exacted every penny of it and had it locked up for six months. Before we accede to the Treaty of Rome, why should we not take this step of paying, from the Capital Budget if necessary—which is the Government's right if they wish to do it—for the common external tariff on products which we could export from here when we get into the Common Market.
I will mention one such product. The Minister said there are difficulties in relation to confectionery and chocolate products. As the Minister is well aware, and as everybody who has been there is aware, in the Common Market countries the price of chocolate products and confectionery is extremely high. We have the raw materials: we have the sugar; we have the eggs; we have them in quantity and their quality is probably the best in the world. We also have the milk and the cream, the natural agricultural products of our country. In respect of selected commodities surely the Government should have paid the common external tariff.
I did a study tour in Brussels last March or April. I stayed on for two days to get as much information as I possibly could for industries here and for certain specified industries, some of them in my own constituency, who were worried about the advent of the Common Market. Part of the information I got was about an advantage which Ireland might have at that moment, and that moment is disappearing  very fast. I brought this message home and, in one instance, it was acted upon. The advantage that Ireland has is that countries with a made product, a product internationally known and accepted, and who wished to be within the Common Market and needed a labour force, would desire to come to Ireland now so that when we accede to the Common Market they will be ready to export.
The point was made that, under the Anglo-Irish Free Trade Area Agreement, an industrial export could go to a market of 60 million in Britain. An American company or a South American company, or a company from anywhere else in the world, or a company within the Common Market, which wanted to expand and had not got the labour force could come here and enjoy the British market until such time as we all went into the Common Market and, at that stage, produce here for the Common Market and Britain. The Minister did not mention that. It would be of great benefit to this country.
When I was in Brussels on this industrial tour it was pointed out to me that, in relation to textiles and shoes, the people who were in trouble were the large producers of normally priced articles. The fashion textile trade, with relatively small producers, was not only surviving but expanding, and there seemed to be a constantly increasing market for these goods amongst people who were prepared to pay double or treble the price for a garment, or a piece of textile, or a pair of shoes. It was pointed out to me that we in Ireland should be orientating ourselves towards that. I do not see much evidence of it, I am sorry to say, in the grants mentioned in this year's report of the Industrial Development Authority. I do not see much evidence of it in the grants extended to small industries. We may be falling down on this and we may rue the day that we did fall down on it because of this non-approach.
There is no choice now. We must go in. Both Opposition parties must make sure of the conditions. As Deputy Coughlan said this is the  important factor. It is true—and no mention has been made of this—that quotas can be arranged under the Treaty of Rome. This has been done. If one studies the Treaty of Rome and all that happened since, one finds out facts such as the fact that Western Germany has the right to trade in certain items with Eastern Germany of all places, and the fact that France can still trade with her dominions overseas.
If you read the British White Paper you will find that until 1977 New Zealand will have the right to send—I forget the exact amount—tens of millions of pounds of butter to the Common Market and that, after that, with the alignment in prices the probability will be that New Zealand will continue to have that arrangement and will be unaffected. Instead of thinking that everything will close down, the job that has to be done now is to bargain to ensure that we will not lose one job and to bargain in extreme detail. I do not believe that this Government are in a position to do that because of the happenings of the past couple of years and because of their behaviour in making the Anglo-Irish Free Trade Area Agreement when they did not bargain at all.
I want to instance another situation that is of great importance, that is, the crisis in the French light electrical goods industry within the Common Market. We have an excellent light industrial goods industry here, most of it about four miles down the road from me.
When I was in Brussels I discovered that when the French refrigerator and light electrical goods industry got into serious trouble they asked to have a quota applied against Italian imports. They wanted three years. They got 18 months. They succeeded in stopping the influx of large quantities of Italian cheap refrigerators into their area. It was just like the year of review, that the Government did not act under the Anglo-Irish Free Trade Area Agreement or acted when it was too late. They got 18 months within the Common Market. It is absolutely clear that what has to be done is to bargain—for instance, in regard to sugar. There are items that must be  dealt with and that should be considered in detail but which were not mentioned in the Minister's speech which is just a general lengthy diatribe produced not by himself.
According to the White Paper, Britain has succeeded in defending her dominions' exports of sugar to Britain. I would advise the Minister to read the White Paper. Therefore, a small country such as we are should now be negotiating in detail. That is the job that has to be done by the two Opposition parties here, to make the Government negotiate in detail so as to avail of the opportunities existing in relation to the Common Market.
In July a document was issued, referred to now as the Blue Book, containing a description of our position in regard to industrial tariffs in the Common Market. I quote from page 13, on which the following figures are given in regard to a reduction between our duties and the duties in the EEC: 1st January, 1974, 40 per cent; 1st January, 1975, 20 per cent; 1st January, 1976, 20 per cent; 1st January, 1977, 20 per cent. On page 16, on the alignment of prices and the harmonisation of prices, there is again a time schedule ending in 1977.
On page 70 of Deputy Dr. Hillery's Blue Book on the elimination of customs duties between member states and alignment of common customs tariffs there is a table again setting out 20 per cent reductions ending in 1977.
The Minister for Foreign Affairs has succeeded in getting for us the right to give our grants up to 1990, approximately. I compliment him on that. It is the one good thing that has been done. We are a small nation and it would appear to me from the Blue Book issued in July that the Minister has swallowed, hook, line and sinker, in relation to our industrial goods, the arrangements made by Britain. The tables applicable to Britain are a little different from the tables circulated by the Minister for Foreign Affairs but I quote from the British White Paper, United Kingdom and European Communities, of July, 1971 and refer to Table I, where they refer to the adoption of the common external tariff and the changes that are being made. That  table is exactly similar to the first table that I read out from the Blue Book. What you have is 40 per cent, meaning 40 per cent of the common external tariff, applied at this stage, and then 20 per cent, 20 per cent and 20 per cent, which means 100 per cent of common external tariff. At paragraph 82 of this British White Paper it is stated:
We shall adopt this Community system of support though not Community prices in the first year of membership. We shall introduce threshold and intervention prices of our own. These will be lower than the full Community threshold and intervention prices, the difference corresponding to the difference between our market price levels and those of the present Members. We shall then increase our threshold and intervention prices gradually to full Community levels by six steps over the five years of the transitional period.
We have swallowed that, hook, line and sinker, as far as our industrial goods are concerned. The Minister for Industry and Commerce has not been conspicuous by his trips to Brussels. We got exactly the same terms. Our strength in regard to industrial exports to the Common Market lies in our weakness in the volume of industrial goods from any one sector that we could deliver to Common Market countries. The gross national product of the Community of Ten will be nine-fourteenths the size of the United States of America. On that I quote Mr. Carl Beker who is the head of the Department for Information of Applicant Nations. We would be exporting industrial goods in relatively tiny amounts to a group of states whose gross national product is of the dimension I have mentioned. As far as the transition is concerned, we have accepted the same terms as would apply to a nation that has been famous as an industrial nation for decades and centuries and whose population is 60 million. Does the Minister see what I mean when I say that the duty of the two Opposition parties is not to talk about the Common Market now, because the decision has been made and we have  to send 80 per cent of our industrial and agricultural goods to Britain, but to steer a lazy or uninformed Government into making bargains from our position of weakness which will allow us to get far better bargains than the British can ever hope for? May I again quote Mr. Carl Beker from a note in my diary? He said: “Anything is negotiable during the transitional period.” The position is that, even if this Government have made a mess of things to date, if they wanted to change their step and seek a longer transitional period and special terms for special industrial goods they could do it but I do not think there is much chance of their doing it. It would be far better if somebody else did it for them.
The figure for industrial exports to Europe is 14 per cent of our total. We have moved from an import excess from Common Market countries, of £19.7 million in 1966 to an import excess of £51 million in the period January-August of this year. We have accepted hook, line and sinker, with the exception—and I praise the Minister for Foreign Affairs and, if the Minister sitting opposite had anything to do with it, I praise him too—that we can give our grants and incentives to our designated and non-designated areas for some considerable time to come; but, with that exception, we have swallowed, hook, line and sinker, the British conditions.
I have described our economic and industrial strength relative to that of Britain. I intend to move now from that sad situation and I am glad to have this opportunity today to put the House on notice of its responsibility, by every means in its power, to see to it that this Government, which has not adverted to the situation, will now mend its ways or see to it that another government will accept the truth, namely, that there is no way out and we cannot afford the common external tariff on our goods. We could not afford to pay the extra industrial tariff on our agricultural goods. Since sufficient bargaining has not been done and since sufficient use has not been made of the provisions of the Anglo-Irish Free Trade Area Agreement in  relation to the Common Market exercise to date, a heavy responsibility rests on the two Opposition parties here to join together and ensure that everything is examined out and that every opportunity is taken to get the best bargain possible for us until such time as those who are bad bargainers are replaced.
I want to move on now to an excellent exercise in which I am sure the Minister and his colleague, the Minister for Finance, played a part. I refer to the GEC in Dunleer. Some time ago a very large factory was built in the town of Dundalk, the idea being that in the country areas it was impossible to get a mixture of male and female labour and some of this light electrical work required female labour. There was an international recession and British GEC decided that GEC of Ireland should not go forward with their project. The new factory was left empty. It cost between £400,000 and £500,000. Happily, Ecko, associated with EI of Shannon, occupied the factory. In the forefront of people's minds was the thought that someone in London could make a decision of this magnitude and, if such a decision could be made in relation to a new factory in Dundalk, then a similar decision, inimical to the welfare of workers, could be made up the road in Dunleer as well. Fortunately, the American director of GEC floated another company and is now in process of selling electrical goods in practically every town in the country while, at the same time, getting ready to defend our home market against free trade competition. He is also, of course, looking after the export opportunities.
As a result of the excellent work of Mr. Martin McCourt and the way in which both the Minister for Finance and the Minister for Industry and Commerce dealt with the matter there will now be Irish control. That is how I interpret the situation and that is what I said to Mr. McCourt when I rang him up to congratulate him. Like every other businessman he is naturally at risk, but it is heartening to see such courage and to find someone willing to take a risk in the knowledge that what one is backing is one's own judgment  which, in the past incidentally, has always proved right. I shall say no more about that. It is only fair to advert to it knowing that something has been done which is good from the point of view of employment. I have no objection to praising the Minister when the right thing is done.
With regard to grants for existing industries, no matter how much capital is involved in expansion, no matter how new the development is, existing industry is restricted to a maximum grant of 25 per cent. Where expansion is as large as the original industry, and where the capital expenditure relative to that already employed is extremely large, the policy of my party is to give grants at the same level as those given to entirely new projects. I think that is only fair. There is, for some reason, more joy over a new industry employing 20 people than there is in extending an existing industry employing 200. In my constituency the Minister has taken action in defence of 128 jobs. I hope his cash injection will be successful. As I say, there is more political joy over a small new factory creating 20 new jobs than there is in injecting capital in defence of 128 existing jobs. Admittedly, we are all political animals, but this is a trend that should be corrected. Publicly the main Opposition party has laid it down that, if returned to power, they will provide grants at the highest level where there is major expansion.
The Government have been great sinners where prices are concerned. There was the classic example of delay in sanctioning an increase in the price of flour and bread. Early last January the millers indicated they were going to increase the price, irrespective of whether or not the Minister liked it. There was a legal question as to whether or not flour and bread were in a different category from everything else. It was covered by the 1958 Prices Act. The millers succeeded in convincing the Minister and the Minister gave them a temporary increase of 8s per sack of 20 stones. None of us carry these now. An inquiry was set up. A situation then obtained which, in my view, should never have existed. If one were to take the millers' figures —and a large proportion of their  figures were substantiated and increases were given as a result—at that stage the industry was losing £26,000 per week. Again, if I am not mistaken, by the time an award was made, back money to the extent of £7,000 or £8,000 had to be and has been accounted for by giving a greater increase over a future period, which we are all paying now when we eat bread.
Referring questions like this to committees is just a political exercise by the Government. What went wrong at that time was that the Government wanted to keep their options open. They did not know if they were going to the country or not and they did not want to go with a big increase in the price of bread. They referred the matter to a committee. It was an excellent committee which did an excellent job. I was a witness before it myself. Is it not true that there is an excellent prices section in the Department and that a report could have been made to the Minister and all the Minister had to do was to go to a Cabinet prepared to look sensibly at the matter and give the increase?
As things were, the result is that all the poor people now must pay more for bread over a period to recoup the back money accrued during the period when the row was going on between the millers and the Minister. If costs go up, prices must go up and this must be accepted. It is far better, and more in accord with the prices and incomes policy to which I have adverted, that price increases come in small slices and when they should come and that industrialists and employers are not put out of business while an argument goes on, an argument that has as background the question of whether the Government wants the argument to go on so as to keep their options open for an election or by-election.
If this Government changes—this seems to be on the cards—and if there is a Fine Gael Minister for Industry and Commerce, which also seems to be on the cards, quite clearly the prices section of the Department will no longer be a racehorse running in hobbles and every effort will be made to keep prices down, but the proper attitude of allowing small increases in  prices before large losses are sustained will be adopted. There will not be a situation in which an industry loses £26,000 per week. In the particular industry to which I refer it was possible for the millers to stay open and continue production. The industry has been rationalised and there are not so many millers. But if some other industry is kept waiting for 15 months and if the net result is that people must pay in the increased price back money for that industry, how many of the smaller units in that other industry may have gone to the wall in the meantime because the bank would not give them the necessary overdraft?
I am not a miller; I am merely a dryer and storer of wheat. The amount of the award given to people such as myself in this case was less than one-third of what the second largest firm of accountants in the country produced as the proper figure. I shall not comment on that; it could not matter less. The amount involved was greater than the net profit in that business which employs 125 people. The net profit involved in that operation, which would be the largest operation, was greater than the net profit. If that is so, is it not true that, if this is how the Government behave in regard to the prices section of the Department, many other things follow. One is that the consumer is being cheated by having to pay a lower price for a period and then having to pay a much higher price later on. Again, this leads to the worker saying: “I have not sufficient wages; I must look for a big increase because I have a big increase in the price of a commodity, in the price of shoes or clothes for my children. I must seek a very large increase.” All this happened because of the changes of a by-election or a general election: the options were required to be kept open.
There is absolute necessity for price control because in a small country like this it is possible in certain industries for a few people around a table to decide on price increases and put them into effect. Other people may follow suit: if they do not, they may be subjected to pressure to the extent—the  Minister referred to monopolies which is a matter that must be dealt with— that they would have to follow suit because this is such a small country. While there is absolute necessity for price control it is also true that the attitude of the Minister introducing a national prices commission to which he will refer everything is somewhat like that of Pontius Pilate washing his hands.
The Minister is charged with responsibility for prices; it is his job and the prices section of the Department is there to advise him and, like all branches of the Civil Service in this country, they are an honourable body who will advise correctly. It is then the Minister's job to have the guts to go to the Cabinet and get them to make the smaller price increases as these become necessary rather than postpone them for political reasons.
Without discourtesy to any member of the National Prices Commission I say there is no necessity for that commission. There is a virtue in doing justice and letting it be seen to be done; but if one does one's job in regard to keeping a keen eye on prices and keeping them as low as possible, while at the same time defending the net profit of the companies on which every employee depends for his next pay packet. one will do a much better job and should be capable of openly defending one's actions in this regard.
A price increase when necessary is easy to defend. Evidence can be produced before any group from a board of directors to a trade union, and any group of people can see if you increase the cost of raw material by 25 per cent that entails an increase of a lower percentage in the cost of the finished product. Anybody can see that, if you have a legitimate wage increase of, say, 10 per cent, that entails a lower percentage increase in the cost of the finished product. If you marry the two together, if they happen at the same time, anybody can see that the addition of the two is the proper price increase plus any other increases there are.
There is no point in acting like an ostrich: there will be price increases. They should be made regularly, as  they are justified, and not until they are justified, All I can do from my position is make deductions and I deduce that lack of speed is not in fact the fault of the prices section of the Department. There should be far more speed.
It is the fault of the politicans. The difficulty about the National Prices Commission, which has now been instituted, is that it looks as if it is a very authoratitive body on which all shades of opinion are represented and justice must be done. In my considered opinion the prices section of the Department of Industry and Commerce plus the Minister would do justice and do it must faster. This is a case of washing one's hands and putting aside the difficulty while, at the same time, making quite certain to be there with the golden key to open the new factory on every possible occasion.
There is the question of the services section of industry and the shop-keepers. The only message I can get from page 45 of the Minister's speech is that the small trader should sell Irish and that the efficient small trader has nothing to fear. I am aware that the introduction of large supermarkets in certain areas has helped small traders in close proximity particularly if the small traders were prepared to change the type of their business. The bringing of people to any particular spot means that if one puts the goods in front of them one has one's chance of selling some goods. While that is true in certain individual instances, the fact is that the small traders of this country have been having a pretty difficult time. In the case of drapery the large multiple supermarkets have gone into this line and very many of the things that everybody wears are now purchased in these supermarkets. All that seems to be left to small drapers are expensive things like men's suits or ladies' dresses. The loss leader is something that cannot be blazoned across a small front window and I have the greatest sympathy for the small traders in the retail trade. I wonder have the Cabinet talked about this at all. I wonder whether there should be some relief extended to them in relation to turnover tax beneath a certain turnover?
 I am aware that with the new currency and decimalisation supermarkets find themselves in difficulty with fractions and that the fraction always goes in their favour. They defend their actions in this regard by saying that they do not charge any turnover tax on purchases under five new pence. There are very few purchases under five new pence at present. A person going into a supermarket will probably make at least two or three purchases. This gives the supermarkets an advantage. There is one large chain that does not charge any turnover tax. They carry it themselves. That means their prices have to be a bit higher. Indeed the maze of prices, the dropping of prices from one day to another, the almost computerised way in which this is done and in which they get their high profits and the fact that they give no credit means that they have extra-ordinarily great advantages over the small trader.
I am putting forward an idea. I have no right to put it forward as Fine Gael policy because it is not passed as such at this moment and I want to be quite specific in what I say this morning and quite truthful if I can be. If I am not truthful in anything, I am being mistaken, not deliberately untruthful. In my opinion the small retail traders could be given some alleviation of tax in respect of their sales. I do not think it would cost very much. At present it might cause administrative difficulties but it would help them to preserve themselves in whatever degree of comfort they are lucky enough to enjoy at the moment.
The highly expensive exercise of industrial training is necessary but it is being paid for by company profits and sometimes these are extremely slim. I remember the late Deputy Sweetman in this House being assailed at one time—he was in Opposition at the time—when he said that, in general, company profits in Ireland were far too low. He defended his assertion by saying that we had no source of wealth apart from profits from which we could get reinvestment. In that I agree with him. One per cent might look a very small amount to somebody who is selling French perfume and getting 300, 400 or 500 per cent profit and  selling very little of it but if one were selling some of the heavy items that are produced one might find that a profit of 2 or 3 per cent on turnover might be a very, very good profit. As I understand it, the subscription towards AnCO is 1 per cent. From that point of view I think it is a bit high. I know that if one can prove that 51 per cent of one's turnover is just retail sales or that, you do not pay but there are many industries where for themselves industrial training is not necessary. I am not exactly clear on their position but I think they can opt out. If one is in an industry where the work being done requires no industrial training one will never get any benefit from the operations of AnCO. Therefore, it is questionable whether there should not be a more liberalised approach that would help these people who are in the position of having a low percentage profit and having to pay a large subscription towards industrial training.
The Shannon Free Airport Development Company continues to do well. Fine Gael back it and feel that it is a good development. There is no more to be said about that except that whenever the Government changes we will see that it proceeds as well as it did before. I take a pretty jaundiced view of trade with Rumania, Bulgaria and such countries. I do not think it is on. Their line is that when they want something out of you they cannot get any-where else, or when they want currency, they will do a deal one way or the other, but when they do not want either of those two things then they will do no deal. They will also be extremely difficult to satisfy as to quality, delivery and various other things. If dissatisfied they will refuse to pay. I can instance a case of an English businessman who had a very difficult time and was, in fact, nearly put to the wall by the fact that the Government of one of the countries I have mentioned —obviously I will not say which— refused to pay for a large consignment of goods and that was that.
If somebody in London owes a firm here money the firm can probably get their money through a solicitor there almost as quickly as if somebody  owed the firm money here, but if somebody in Rumania or Bulgaria owes a firm here money it could be a difficult process to collect the money. I speak here with a little knowledge of the subject. While I would give the go-ahead to make trade agreements the Government should be careful not to lead some of our good companies on to the wrong side of the curtain because they can go to the wall very easily. When the receiver of the goods says that he is not satisfied one may take it he is the final arbiter if his government goes with him and in 99 cases out of 100 the purchaser is, in fact, the government. If I was in the Minister's position I would probably make these trade agreements with eastern bloc countries but I would not produce them as a great advance.
The fact that the Minister is going to move forward with the same sort of provisions as were included in the Prices and Incomes (Temporary Provisions) Bill, 1970 is of interest. He did not advert to the fact that that Bill was introduced as sister legislation to another Bill, namely the Finance No. 2 (Temporary Provisions) Bill, of that year and that in one Bill there was the pegging of prices and wages and in the other Bill there was the imposition of extra corporation profits tax. That move was universally condemned by members of the trade union movement, by the Federated Union of Employers and by every responsible body in the country. I am aware that a week or so ago the Minister granted an alleviation to the tune of £20 million but I want to advert to what was done on that occasion.
The idea was that all concerned with industry were to tighten their belts and up to 31st December, 1971, there were to be no increases in prices or wages and industrialists were to do with less profits by the imposition of extra corporation profits tax. Within a fortnight, and more power to them, the trade unions organisation had the Government on its knees, but a statement had been made at that time in relation to corporation profits tax provision that money was necessary and had to be collected. It was announced that the Government needed £3.6 million in that year and it would collect £6  million in a full year. The situation was that the Government could not do without the money and they were therefore going to collect it.
What happened was that companies were caught in a pincers movement between two forces: one was that wages, salaries and other costs could go up and the other was that there was to be extra taxation from profits. Because of that decision a large public company did not go on with an extension which meant the loss of 150 jobs and they publicly said so. That is not the sort of industrial Government we want.
I know there is a need for consumer protection. I have said that already today. I have already adverted to my recipe for consumer protection; swift action by the Minister when the prices section of the Department of Industry and Commerce has investigated every side of an application for a price increase so that we can get down to some kind of a prices and incomes policy that would include a clause such as that contained in the present National Wage Agreement that where prices go up above a certain level there can be a compensating wage increase. We cannot have a situation where the Government are going to delay a price increase because they want to keep their political options open because that destroys any hope of the coming together of a nation in this industrial adventure which has to provide the new jobs and that is why this Government is not suitable for such work.
I want to advert again to the Verolme situation and to say that we in Fine Gael are fully aware of two sister operations in Cork: one is Irish Steel Holdings and the other is Verolme. We back both of them to the hilt. I was the only member in this House, apart from the Minister, when there was serious criticism about the prices being paid by Irish Steel Holdings for scrap metal, who investigated the matter. I took the view that the service provided by the company, which was accused of having preferential treatment, was an expensive service which covered the whole country, that did not collect scrap metal in Cork and not in Donegal, that did not take the easy bits and leave the difficult  ones behind. I said publicly that the accusations made were improper and incorrect but notwithstanding that the Minister has seen fit to send the matter to another inquiry. I suggest if the Minister had investigated it he would have come to the same conclusion that I did. Maybe he did investigate it, and maybe he did come to the same conclusion, but this phobia of always sending things to inquiries and commissions is unnecessary. A Minister for State should have the courage to investigate a matter, stand up on his feet, say what he thinks and act accordingly. As a result of the inquiry that is being held a doubt has arisen in Cork. I am convinced the inquiry will come out with the same results and conclusions that I reached from my investigation namely, that the company providing the services of giving scrap metal and steel to Irish Steel Holdings is giving a good service at a reasonable price.
Mr. Lalor Mr. Lalor
Mr. Lalor: I did not direct it. It was the Fair Trade Commission.
Mr. Donegan Mr. Donegan
Mr. Donegan: If the Minister had said that the firm was providing for the whole 26 counties the collection and delivery of scrap metal in the most difficult and facile places the Fair Trade Commission would never have taken the matter up. I want to emphasise the backing of Fine Gael for Verolme and Irish Steel Holdings. I want to make it quite clear that when we gain office, which will not be too long, we shall make every effort to see to it that these two companies are not only continued but expanded.
Mr. Desmond Mr. Desmond
Mr. Desmond: Perhaps it is a measure of the current party political neurosis of Dáil Éireann and the state of the Government that for the past three hours there have only been four or five Deputies present for an Estimate of major national importance, affecting employment and our future industrial development. I suppose one could say that after the events of last evening the attitude of the House towards a ministerial Estimate is, in the words of Deputy Hogan, rather like the atmosphere of a psycho-therapeutic institution—these were the words he used to me. The interest shown in the  lengthy contribution by the Minister is not encouraging for our future industrial development.
The question the House must ask itself is to what extent there exists within the Government the capacity to develop a strong industrial, independent Republic, a Republic with a dynamic economy and with a firm industrial base which would be competitive in a European setting. Notwithstanding the Minister's statement, I have come to the conclusion that with regard to industrial development and dealing with problems of employment and adaptation, the present Government is one of the most ineffective, incompetent and incoherent in the history of this State.
I do not like to have a go at individual Ministers. There was enough of that yesterday and it was a sad day for the country and for the Dáil. One must regard the present Minister for Industry and Commerce with a certain sense of gloom as being, perhaps, the worst of all the Ministers in that post during the years. There have been some distinguished Ministers such as the late Seán Lemass and William Norton, both of whom made their contributions in their own way. Deputy Lynch was notably mediocre as Minister for Industry and Commerce. Deputy Colley was a star that went into orbit but never really got anywhere—it kept on spluttering and still splutters. He made no contribution while he was Minister for Industry and Commerce. With respect to the present occupant, I think he is likely to make an even more undistinguished contribution and in making this comment I have no desire to continue the personality obsession this House has seen in the recent past.
We had a rather interesting but turgid brief from the Minister and he referred to the problem of redundancy. I do not think the explanation he gave will give any hope or inspiration to redundant workers, any more than the statement of the Minister for Finance on 27th October. The Minister for Finance stated:
There are indications, moreover, particularly by way of increased  redundancies that certain types of firms have been suffering from slack home demand, from recession in certain important markets abroad and from other factors.
In the first nine months of 1971 there have been 5,715 redundancies. In reply to a Dáil question on 27th October, the Taoiseach gave this figure in respect of the first nine months of this year and stated that the figure for 1970 was 3,896. If the pattern of current redundancies is maintained, the total for 1971 will reach 7,500. This projection is in line with the trends indicated in the recent annual report of the IDA. It is an accurate indication of the abject failure of government policies and of the tragic and undesirable irrelevance of large portions of the politically forgotten Third Programme for Economic and Social Development.
Of all parties in this House, the Labour Party have consistently advocated and stressed the importance of employment policy in the overall economic strategy. In the outline policy document of the Labour Party at the last general election with regard to industrial development—I admit it was rather inadequate although it dealt with employment—it stated that the biggest failure of the Irish economy and our society generally has been the inability to provide employment for those who wish to remain in Ireland. It stated that full employment is the basis of all the Labour Party's social policies.
Some Deputies of the Labour Party have been critical of the work of the NIEC on various issues. However, one report which commanded a great deal of respect and which recognised the importance of full employment was the report on full employment in January, 1967. I charge the Government with absolute culpability and with abject failure to implement the policies recommended in the report of the NIEC. If these policies had been implemented when that report was published we would not now be facing the spectre of 7,500 redundancies in 1971. No amount of absolving by the Minister will get rid of that fact.
That report contained one particular sentence of major importance, namely,  that full employment will not be achieved without a full sense of social independence and national identity and without a widespread feeling of obligation to make this country a progressive and distinctive political and economic entity.
Frankly, I do not consider that the extent to which these developments are being brought about under Fianna Fáil is in any way evident from the employment statistics of the country. The evidence is damning. It is an indictment of Fianna Fáil, who have been in office now for so long. One could say that Fianna Fáil have made no contribution towards the economic or industrial development of the country. Of course, when everything is going well they claim total responsibility for the success, but when the opposite is the case they disclaim any responsibility. Were it not for the guiding hands of responsible public servants, notably in the Department of Finance and in the Central Bank, the situation would be much worse. In terms of economic and social programming during the past two years the contribution by the Cabinet has been nil. We may hear occasionally of a particular Minister “doing his thing” in respect of some local factory that may be about to be closed, but that is about the extent of Fianna Fáil thinking on economic and industrial development. These isolated instances are exclusively for local consumption and local political involvement.
The NIEC Report on Full Employment made a prophetic comment when it said that the question phrased in the report concerned the will and the conscience of the entire community and that to harden the will and to rouse the conscience of the community would require dynamic leadership and sustained backing from political and religious leaders, from trade unions and employer associations and from other organisations that influence and form public opinion and attitudes. The report said that without such leadership, particularly in the political field, the policies that will raise living standards and expand employment will not be chosen and implemented.  We have had an exhibition of political leadership in the realm of national economic responsibility during the past couple of days. The Government will now proceed to yet another crisis next week within their own parliamentary party. In the meantime the serious economic and social development problems will continue to exist. After next week's crisis, we can presume that the Government will go on then to their Ard Fheis crisis and thereafter to the crisis of a general election and a referendum.
There was mention in the Minister's brief of regional policy, of economic development within the regions, of the freeing of trade, of the allocation of industry, the role of the IDA, the role of Córas Tráchtála, the work of the Institute for Industrial Research and Standards and so on, but all of this is simply a question of marking time. The fundamental criticism that I must make in relation to the Government is the work, if one might call it that, that they have been doing during the past two or three years. It should be pointed out that, whatever may have been the advances in living standards, our community has permitted stagnation and has permitted avoidable unemployment of some 65,000 to 80,000 people per year. This is the bitter fruit of Fianna Fáil's often claimed social plans and programming.
It is necessary to look at the employment statistics to understand the scale of this failure. In recent years it has become the ploy of the Government, of some sections of the official-dom, to equate the targets of national effort with the short-term projections of growth. Thus we had the collapse of the Second Programme and we have the imminent demise of the Third Programme. Of course, these are put aside while we are faced with the almost self-congratulatory noises that we have been hearing from the Minister for Finance regarding the feasibility or the likelihood of a 3 per cent rise in GNP. Five years ago this would have been treated by the Government with derision and three years ago it would not have been written into the Second or Third Programmes.
The essence of planning as I understand  it and the essence of the First, Second and Third Programmes was the setting of targets and the pursuing of very demanding economic goals which reflect the social and economic objectives of the political parties of a nation as well as of the community. All of this has been abandoned by the Government in retrospective arithmetical exercises of a completely negative economic character. One has only to consider the growth performance of the economy in the period of each of the Programmes for Economic Expansion in order to see the kind of problems that we are facing now. If, for example, one takes the period from 1959 to 1963 it will be seen that there was a quite respectable growth rate of 4.4 per cent. During the period of the Second Programme 1964-1967, the rate was 3.3 per cent and it is running currently at about 3 per cent, but this is dropping. Thus it will be seen that the rate of growth has declined alarmingly. Of course, the growth rate is bound inextricably with employment and it must be remembered that the GNP growth rate laid down in the NIEC Report on Full Employment was 5½ per cent per annum by the end of the decade. This report itself was considered at the time to be something of an understatement of the position in terms of the requirements for full employment.
Industrial growth and expansion are central to the entire economic development of the country and especially to the creation of new jobs. The Third Programme has been abandoned totally by the Taoiseach, by the Minister for Finance and, indeed, by the Fianna Fáil trade union group of which, I understand, Deputy Haughey is now chairman. He is now so discredited, apparently, that he can have whatever position he likes.
The Third Programme set down the annual target of 6.5 per cent for industrial growth in the period 1969 to 1972. That was a reasonable target having regard to the 1963-72 average rate of 7.2 per cent. The performance has been very poor. In 1969 the growth rate was 6.5 per cent; in 1970 it was 3.5 per cent and we are to have a 4 per cent rate in 1971. The productivity rate also has  been very disappointing. Output per worker in industry rose by 6.8 per cent in 1968. In 1969-70 the corresponding figure had fallen to 1.5 per cent.
Investment is crucial to industrial progress. After the encouraging performance in 1969 when capital formation reached 24 per cent of GNP, which gave us all cause for hope, there has been a notable slackening off in this vital factor, namely, the ratio of capital formation to GNP. The Confederation of Irish Industries commented that the absence of coherent Government policies for industry at this crucial time is adversely affecting business. The Confederation of Irish Industries was quite clear-cut in its repudiation of the shambles of Government policy on industrial development.
We had the three-card trick by the Minister for Finance a fortnight ago. In order to recover from putting Irish industry into an industrial strait-jacket and having to cope simultaneously with substantial wage increases and very substantial increases in taxation, in corporation profits tax, he reversed engines, as Deputy Haughey predicted he would. Under a camouflage of a new capital programme, a new injection of £20 million into the economy, he reversed engines on the question of industrial profits taxation, a major change of policy, a change of policy which, to some extent, caused the redundancy which we are experiencing. Other factors were involved, of course.
It is important to point out that the latest economic review of the Confederation of Irish Industries states that it can be seen that, between 1970 and 1971, pre-taxed profits fell by 7.2 per cent to £16,834,000 as compared with £18,147,000 in the previous year. More important than that, during the same period retentions of profits fell by over 26 per cent, a massive drop from £4.941 million to £3.645 million. This is the result of Government taxation policy. It is not very often that a Labour spokesman becomes preoccupied about the corporation profits taxation policy of the Government but, when one sees the outcome of the policy of the Minister for Finance, one sees a situation of considerable political difficulty facing  the Government and of major economic difficulties facing the country.
Irish industry is losing out in terms of price competitiveness, and losing out very severely at the moment. The prospects for the next 12 months are not too good. This is illustrated by a number of factors. It is illustrated by the movement of unit wage costs, a 44 per cent increase in unit wage costs. The trade unions have their responsibilities in this area as well. Generally speaking, the unions have been quite responsible despite the provocative stupidities of the Minister for Finance on the Prices and Incomes Bill. Some people may query the appropriateness of such comments on this Estimate, but a question of employment is involved which is a major issue in relation to the Estimate and one has to take into account all the different factors.
The movement of unit wage costs was referred to by the Minister, a 44 per cent increase between 1963 and 1970, compared with 29 per cent in the UK, 16 per cent in Germany, 9 per cent in France and 15 per cent in other countries generally. Irrespective of Irish entry into the EEC, the movement in unit wage costs relative to the movement in the major countries of the Six is not very encouraging. We have had a very substantial increase in the share of competing imports on the home market. This has been glossed over by the Minister. Substantial information is now available from the annual industrial reviews which are available to the middle of this year. They were recommended by the National Industrial and Economic Council as a means of reviewing industrial progress under the Programmes for Economic Expansion.
These industrial reviews were reasonably useful. Unfortunately they have tended to deteriorate into statistical exercises of checking figures against projections prepared by the staff of the Department, as distinct from throwing up the real problems in industry and trying to do something about them. I will deal with that later on. The information available from these reviews shows a growing share of home consumption of industrial products being taken by competing imports and an  increasing share of industrial production being exported.
From the data available from these reviews and from the Department of Finance, it will be seen that, for manufactured goods as a whole, competing imports constituted much the same proportion of home consumption in 1965: 14½ per cent as against 13½ per cent in 1960. There was no movement in the first five years of the 1960s. In the five years up to 1970 the proportion rose to 19½ per cent and in 1971 it is expected that competing imports in the Irish domestic field will be in the region of 20 per cent.
The increase in imports between 1965 and 1970 was particularly noticeable in the case of textiles which went from 27 per cent of home consumption to the very substantial figure of 36 per cent of home consumption. In clothing and footwear it rocketed from 8 per cent to 18 per cent showing the change in the whole pattern. In metals and engineering it went up from 16 per cent to 19 per cent. Therefore, there is a very substantial increase in the share of the competing imports on the home market. To give another statistic it went from 14.6 per cent of domestic expenditure in 1965 to 19.4 per cent in 1970. This is a factor which affects price competitiveness and employment. We have also had the slackening in the growth rate which I mentioned previously.
I am not a Jeremiah. I have always felt that too many Irish politicians were too busy knocking Irish industry and knocking our very substantial industrial development in the early 1960s— major industrial development, there are now almost a quarter of a million people working in Irish factories. The position is serious. I do not think we can get away from that. In considering the rather sorry story of economic stagnation and lost opportunities it is essential to remember that all this economic data is a reflection of the human situation in which we find ourselves. We have 65,000 people unemployed and this represents a massive human problem.
While I have reservations about the breakdown of the unemployment figure which is a relatively artificial figure.  particularly having regard to the substantial agricultural payments of a subsistence nature built into it, nevertheless the position is serious. Longterm unemployment is an important characteristic of the Irish situation. In each of the years from 1962 to 1967 some 70 per cent of unemployed had less than six months work during the previous year. Unemployment is highest in the categories: short-term unemployed, those who are chronically unemployable, and persons who are seriously ill or handicapped and, of course, those who were in receipt of unemployment assistance until retirement benefit was introduced.
The national situation might be summed up as follows, without being unduly harsh: The employment policy of the Government is beginning to fail, beginning to drift into being a non-policy; our industrial growth is stagnant at the moment; general investment has slackened; the overall competitiveness of Irish exports has been eroded; more unfortunate than anything else, the concept of economic planning has been totally abandoned. We will get a Fourth Programme of Economic Expansion only because of a sense of obligation in the Department of Finance to inform the Economic Development Division and the senior officers. They are men who have given their best. Many of them have been extremely brilliant in producing reports such as the Report on Full Employment, the Report on the Economic Situation in 1965. That could be reprinted with 1971 being substituted for 1965. The same lessons are to be learned. These men may produce a fourth programme but as the Fianna Fáil Party are no longer interested in this kind of exercise, I am afraid planning has been abandoned and there is no real interest in it.
To quote one of the most recent commentators, the most alarming fact is the failure of the Government to analyse in any detail the reasons for the failures that I have referred to. What is now urgently necessary is a complete, root and branch, review by the Government. The Government are in power. They are not likely at the moment to commit self-immolation. They do it  only individual by individual and there are enough individuals still left. The urgent necessity now is for a complete review of Irish economic experience over the past five years, for an immediate reassessment of planning procedures and for the preparation of a five-year comprehensive national economic plan to become operative from 1st January, 1973, the date of accession to the EEC. Unless this is done there will be a harrowing transitional period from 1973 to 1978. It may be that the Government will use such a plan as the next general election gimmick. They can publish in the middle of 1972, the five-year plan for 1973 to 1978 but this, unfortunately, is what is necessary. Nobody knows the intentions of the Government in relation to any one region for the period 1973 to 1978. Regional managers of the IDA will tell you that they are in receipt of no policy guide-lines from the Government as to what they should or should not do.
It is tragic that the Programmes for Economic Expansion so far have served only as window-dressing for the Fianna Fáil Party and their speech writers. I do not think that party has the will or the desire to produce the necessary ingredients for successful economic planning. They are totally reluctant to get down to this exercise. Consequently we have had the statement here today by the Minister for Industry and Commerce that the low increase of 3 per cent in industrial output resulted in the slow growth of total national output in 1970 and that employment in the transportable goods industry in 1970 rose at a slower rate than in the previous year. There was a frank confession on the part of the Minister when he said:
The Government recognise that our economic growth in 1971 will be below the potential growth rate of the economy and are particularly conscious of the problem of redundancy to which I shall refer later. In order to provide a stimulus to economic activity and to encourage business confidence the Government have announced a reduction in the level of company taxation——
I have read abject confessions of  failure on the part of the Government but this is very abject and represents a litany of where failures have occurred. The Minister went on to say:
——and have also made available an additional £6 million to the Industrial Development Authority...
He gave to the Shannon Free Airport Development Company a miserable £½ million in the hope that this injection would be enough to get the necessary boost. It is not proving to be enough. I submit that the Government must now take their courage in their hands and produce for the five years 1973 to 1978 a decent, credible programme of economic planning. There is nothing wrong with having national plans. If the Government are prepared to review the economic experience in the past two or three years and to have a thorough reassessment of the planning procedures of the past three or four years I am quite convinced that they have the capacity, not at Cabinet level, but at public service level. At public service level there is the capacity to produce a five year plan for 1973 to 1978 and then we may once again have some faith in the first three programmes which are now abandoned and which need to be, not just resurrected, but reconstructed and extended into the seventies. Otherwise the projection of the IDA of 7.500 redundant workers in 1971 will be a reality by the end of this year, something which we will bitterly regret. I move to report progress.
Progress reported; Committee to sit again.
Dáil Éireann 256 Committee on Finance. Vote 40: Industry and Commerce.