Ireland ends grants to industry: Resources will be directed into technology and marketing

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THE most sweeping changes in Ireland's industrial policy since the 1960s will see cash grants to industry replaced by state equity stakes and repayable investment finance.

Private sector finance will increasingly be sought alongside state support in risk-sharing investment, with under-developed Irish firms in particular earmarked for growth. Following strong criticism of the scale of state grants to multinationals, resources will instead be directed into more practical technology, product development and marketing aid.

A special task force report, published yesterday, blames a 'free funds' grant culture for 'an unhealthy climate of dependency'.

The proposals, to be phased in over four years, are the new Dublin coalition's main response to Ireland's unemployment - at 18.6 per cent rivalling Spain's as the EC's highest. The priority is to expand the narrow private sector in an economy dominated by large state enterprises and overseas-based manufacturers.

Energy, post and transport costs charged by state firms will be held down or cut. International telephone charges will be cut and efficiency of ports and road transport improved.

The blueprint was attacked by opposition leaders, who claim it dilutes changes demanded by last year's Culliton report, a comprehensive industrial policy review.

Des O'Malley, a former industry minister, complained that steps the report recommended to lower punitive tax levels and stop the proliferation of state aid agencies and local enterprise boards were being ignored.