Dáil Éireann debate -
Thursday, 15 Jul 1965

Vol. 217 No. 9

Committee on Finance. - Vote 3—Department of the Taoiseach (Resumed)

Debate resumed on the following motion:

That the Vote be referred back for reconsideration. — (Deputy Cosgrave.)

Mr. Clinton

Before reporting progress, I had outlined what I believe to be the cause of most of the difficulties which face us at present. One thing about which people are being continually exhorted is saving. I agree with that to some extent but the Government are completely inconsistent in appealing to the people to save. On the one hand, the people are being asked to save and on the other, all the temptations in the world to spend money are being put before them.

There was a question about selective credit at present. Enormous sums were advanced to people to buy public houses and build luxurious lounges in existing public houses, to build luxurious hotel lounges, palatial State and semi-State offices. They were anything but essential services and they had the effect on the people we were exhorting to save of inducing them to spend. We increased the hours of drinking on Sunday and Monday—all day on Sunday now is drinking time. As I say, we were exhorting people to save and at the same time, putting at their disposal every temptation to spend more. In the same way, we have asked people to increase output; yet we give them no example from the top. The lower paid workers in CIE are asked to give greater output when, at the same time, the executives are driving around in luxury motor cars with special drivers. While that situation exists, how can we expect a response from the people?

I am glad that discussions are taking place between the Central Bank and the commercial banks in relation to the directions in which credit should be given, but at the present time it looks very much as if we are shutting the stable door when the mare has gone. It looks as if the Central Bank have some influence simply because they happen to be the lender of last resort. This contract between the Central Bank and the commercial banks should all the time have been in existence. It would have meant we would not have this foolish expenditure we have had heretofore.

An enormous amount of development remains to be accomplished in the country and we should be extremely selective in the direction in which we give credit. I have spoken about State extravagance. One of the places where it is obvious is in Government entertaining. When the inter-Party Government were last in office, the expense account for entertaining in the Department of External Affairs was something like £6,000. Today, it is between £23,000 and £24,000. That is the sort of extravagance a small country like ours should not be expected to bear. In many European countries, we have costly embassies when we should simply have trade representatives. It is not of very much use to us to pose as a wealthy country. There would be far more respect for us if we exhibited ourselves for what we are —an ordinary poor country, underdeveloped, trying to make our way in the world.

The export incentives we have been providing are really the only worthwhile measures being taken which are likely to have some effect. We know the wonderful effect of the income tax reliefs afforded on exports. When we tried in the Finance Bill to get some extension of the scope of these reliefs, our suggestions were turned down. As a result, we have practically lost an export valued at £3,000 a year. I refer to the export of day-old chicks. If we are anxious to keep our exports up, that was an obvious subject for an extension of export tax reliefs.

The Parliamentary Secretary to the Minister for Industry and Commerce yesterday spoke of the attitude of young people to their responsibilities to the country in which they were brought up, educated and provided with certain skills. He said they had been leaving industry in his part of the country for no reason except that there was not sufficient social life there. I submit there must be something wrong in our educational system when this is so because we have probably as much patriotism in this country as there is in any country under the sun.

I was in Yugoslavia two years ago and was amazed to find that education is free, up to and including university standard, though the standard of living is extremely low. In face of these facts, Yugoslavia does not lose its graduates when they are qualified. It is difficult to know why, but apparently there is a great sense of patriotism there. I found there are no restrictions, no efforts made to hold their graduates but they stay to ensure that they will make their contribution to their country.

The Parliamentary Secretary spoke about attracting Irish people back home to work. Many people who come back make a sacrifice in doing so and are very badly rewarded. I have posed cases to the Minister for Education on the question of correcting the position where children, because they had not the means of getting a knowledge of Irish, were not allowed to sit for the Intermediate Certificate.

An Leas-Cheann Comhairle

That would be a matter for the appropriate Estimate.

Mr. Clinton

It is, but the Parliamentary Secretary to the Minister for Industry and Commerce spoke about attracting back Irish people who have certain skills and I feel entitled to refer to it. The Parliamentary Secretary also referred to employment exchanges. They are really unemployment bureaux instead of employment bureaux. Nobody tries to find out where people are unemployed, what skills they have and where there are vacancies for them. There is no central organisation in any part of the country to make an effort to let it be known that people with certain skills are available for employment at certain times. Accordingly, we often have people idle who could be placed.

Another sector that is deplorably neglected and that has great potential is the fishing industry. We have done little or nothing to develop it over the years. It has great export potential. The Second Programme for Economic Expansion forecast great things for the fishing industry. It stated that landings would be doubled between 1960 and 1970. In fact, during the past four years, landings have gone down, indicating there is insufficient interest and insufficient Government investment in the industry. It has been thrown around from one Parliamentary Secretary to another and from one Minister to another. An American survey team in their recommendations suggested there was a considerable potential in this industry; yet we have done nothing about it.

The Minister for Industry and Commerce asked what we should do after we have achieved our economic growth. I have indicated that we have an enormous job to do with any wealth we can get for years to come, that we shall never be embarrassed by too much money or even softened by it. On this side of the House, we are prepared to co-operate with the Government and anxious to give whatever help we can in the present time of difficulty.

Mr. Treacy

The Prices Bill is the culmination of the political malaise which has set in. It is a measure in which Fianna Fáil never believed. It is the result of haphazard planning and irreparable harm has been done to our economy and immeasurable suffering imposed on our people by this type of planning. It must be admitted that this country has been in a state of unrest for some time, that there has been great uneasiness abroad in the land. The people are forced to face the stark reality that our economy has been run down very badly, that we are facing a serious recession, that our balance of payments has widened to the extent of £50 million, that the banks have now placed a stranglehold on our people in respect of credit and that all prices are spiralling.

The sections of the people with which I sympathise most, in this atmosphere of rising costs, are those unfortunate and helpless sections who are dependent on small State pensions and fixed incomes. It is true to say that these people have been living in one long nightmare of bewilderment about how they could keep body and soul together. These unfortunate people, by reason of the increase in the cost of the essentials of life—one can readily understand their position—have been left in the predicament of trying to exist on 37/6 a week in those times of high prices.

The lot of those people, in particular, is very distressing. The city and the country have been living in an atmosphere of glittering wealth, opulence and splendour in recent times with banquets, balls and all the wild spending that goes with them. This image has been projected to the world by Telefís Éireann and Telstar. We have been shown as a land flowing with milk and honey, a rich man's paradise. It is right to point out to those in power in this country, lest they have lost touch with the real people, their suffering and want, that despite the false image which they have tried to create for too long there is much poverty and want in this unhappy land of ours.

I said this Prices Bill has come too late. It was the Government's avarice for extra revenue which was primarily responsible for the unhappy situation in which we are today. Two years ago, in their avarice, they imposed upon this House and this country the turnover tax. They increased the price of all commodities, especially the essentials of life—bread, butter, tea, sugar, clothes, shoes, fuel, light, by deliberate policy, despite the pleadings of this House that it was unjust and inequitable. This was fraught with serious repercussions which, of necessity, involved an increase in prices. Any fool could foresee what would happen.

Prior to the turnover tax being imposed, and when it was being discussed in this House, the price of quite a lot of commodities, against which presumably these people were going to compensate themselves for collecting this tax for the Minister for Finance, when it was introduced, jumped very considerably. After this we had the ninth round of wage increases and prices leaped further still. They have continued to rise unbridled since then. The facts are that the benefits of the last round of wage increases have been completely dissipated by this spiralling of prices. The workers are no better off.

There has been no real increase in wages and the distracted housewives of this country have found that money is no longer of any value. This is a situation for which the Government are directly responsible. The Government, unfortunately, held fast to the capitalist idea of laissez faire and no pleadings of ours could get them to invoke the prices measure which was on the statute book all the time. They maintained that prices would find their own level. How could prices find their own level when, in fact, competition in relation to many facets of industry in this country no longer exists?

The Government have been largely responsible for this situation by reason of certain panic measures which they took in the belief that we would enter free trade conditions in the European Common Market. They advised all facets of industry and agriculture to merge together, to group themselves and to interlock in anticipation of our entry into this market of some 200 million people. They have spent quite a sizeable amount of money on adaptation towards that end. More often than not they have been, during the past two years, whittling away the kind of protection which Irish industry enjoys by reducing tariffs and quotas gradually and exposing the industrialists and the workers of this country, to this unfair kind of competition in anticipation of our entry into a market which is as far off now as it was three years ago.

This kind of interlocking and merging of groups in industry and agriculture has led to the fixing of prices. Is it not a fact that the price of bread and flour—the staff of life of our people—is determined by monopolies in this country? Is it not true that the price of drink and cigarettes is fixed by a ring of cartels? Is it not true that we have evidence of groups coming together in respect of petrol, clothing and even in the provision of services which the people require? Is it not a fact also that the lawyers, doctors, dentists, engineers, and architects come together and fix their charges for those essential services? It is very largely true that competition would seem to be nonexistent in a large sphere of industrial activity. This measure, in that kind of situation, should have been introduced long before now.

It would seem to me that this Government have lost control of our economy. We now have a situation where banks are placing a stranglehold on credit. We have seen a serious recession take place in the building industry in the city and country. I want to ask the Taoiseach now does he regard housing as being of a productive nature. If he does regard it as productive, will he insist that the moneylenders make available the capital which is required for the furtherance of this essential service for the people?

I want to pose the question: do the Government control the banks or do the banks control the Government? It would be a tragedy if this country were accelerated into a recession by reason of a shortage of capital. I appeal to the Taoiseach to have courage, to face up to these moneylenders, and to see to it that they do not precipitate an unnecessary economic crisis. It now seems that the Taoiseach will be forced to find credit abroad, if that is necessary. It must be appreciated that a country which is forced to borrow from abroad forfeits a certain amount of its independence. I should hate this country to become a pawn in the hands of any foreign combine or country. We would lose our sovereignity as a result.

I heard the Parliamentary Secretary to the Minister for Industry and Commerce speaking yesterday on a subject which is very dear to my heart, that is, the implementation of a manpower policy. We have the reports of the Committee on Industrial Organisation —these gloomy reports—declaring after an impartial investigation carried out by this body in 26 industries employing over 76,000 workers, that in freer trading circumstances, 11,000 workers would become redundant, and that if certain positive steps laid down by this committee were not taken towards re-adapting themselves, reequipping themselves and strengthening themselves for the rigorous competition we are about to face, another 23,000 workers will become redundant.

Redundancy is rearing its ugly head. I appeal to the Taoiseach, and to the Ministers concerned, to accelerate the implementation of a manpower policy. In a situation in which the protection which Irish industries enjoy is being frittered away, it is self-evident that many of our industries will go to the wall, and that there will be dislocation. There is already evidence of this in some industries. Now we know the size of the problem, and we require the implementation of a manpower policy as a matter of grave urgency.

We believe that the problem of creating new jobs quickly for all those who need them, of providing price stability, and equilibrium in our balance of payments, requires the establishment of a separate Department, a Ministry of Labour whose function and responsibility it will be to plan this manpower policy programme in respect of redundancy compensation, in respect of retraining, education and forecasting for future contingencies. We do not think the Department of Social Welfare, which we understand is to be charged with this responsibility, is properly equipped or suitable for this purpose. Indeed, that Department would want to reorient itself in mind and attitude to deal with the problems of the Irish workers. We feel that in a country where there are so many thousands of men and women standing idle—while the vast resources and potentialities of our country are still dormant, wasted and unexploited—we should have a separate Ministry of Labour.

We do not believe that the Government's Programme for Economic Expansion will achieve the things it has set out to achieve, any more than the First Programme which operated from 1958 to 1963. The First Programme stipulated that there should be the provision of 100,000 jobs, and it is pertinent to point out that after the First Programme had operated from 1958 to 1963, 170,000 persons emigrated from this country. The Second Programme is, unfortunately, mere indicative forecasting. We ask the Taoiseach to devise the necessary machinery and make the necessary arrangements to see to it that this Programme will become a reality and is not merely planless planning as was evidenced in the First Programme.

I appreciate that Deputy T.F. O'Higgins wants to get in and that the Taoiseach will be speaking at 4 o'clock, and I do not want to stand in the way of those two important members of the House, but I want to refer to remarks made by Deputy Dillon here yesterday in regard to the part which the Labour Party played in the general election. Deputy Dillon seems to have taken exception to remarks made by the Leader of the Labour Party in Tullamore prior to the election. He inferred that that statement was in some way responsible for Fianna Fáil gaining office, and Fine Gael losing votes.

That statement was merely a reiteration of the policy of our Party which was decided some five or six years ago. No one could have been under any illusion as to where the Labour Party stood on that issue. If Fine Gael lost votes on that occasion, it is rather childish to attempt to blame the Labour Party, or any other Party for that matter. Whether Fianna Fáil won votes, or Fine Gael lost votes, the important thing is that the Labour Pary gained seats and votes. I feel it is only right for me to comment on that matter. It is a bit audacious for astute politicians to seek to apportion the blame to another Party for their own losses. I want to make it clear to all and sundry that ours is an independent Party. We have our own policy for solving the economic evils, and we are seeking power, in the same way as other Parties seek power, through the democratic franchise of our people, to become a sizeable Opposition in a short time and by the grace of God and the wisdom of the Irish people, the Government in the immediate years ahead.

Mr. Molloy

Listening to the Taoiseach——

Mr. T.F. O'Higgins

What about the arrangement?

The Taoiseach

What arrangement?

Acting Chairman (Mr. Cunningham)

I am not aware of any arrangement.

Mr. T.F. O'Higgins

There is no arrangement then.

Acting Chairman

I was not aware of any arrangement and Deputy Molloy offered first.

Mr. T.F. O'Higgins

There is no arrangement then.

Mr. Treacy

I indicated in my speech that there was an arrangement with the Whips

Acting Chairman

The Deputy said he thought Deputy O'Higgins wanted to speak.

Mr. Treacy

There is an arrangement between the Whips of our Party and the Fine Gael Whips.

Mr. Molloy

I was not so informed.

Mr. T.F. O'Higgins

The position then is that there is no arrangement.

The Taoiseach

What arrangement is the Deputy talking about?

Mr. T.F. O'Higgins

The position then is that there is no agreement. I understood the agreement was that I should conclude for Fine Gael at 3.50 p.m. and that the Taoiseach should get in at 4 o'clock.

The Taoiseach

I was not aware of any such agreement, but if the Deputy says so, I am agreeable.

Mr. T.F. O'Higgins

It is not a question of dealing across the House. Either there was an agreement or there was not.

The Taoiseach

I will take the Deputy's word that there was such an agreement but I did not know of it.

Acting Chairman

Perhaps Deputy Molloy would give way.

Mr. Molloy

I do not wish to interfere with any agreement in any way. I was not aware of any agreement but I will make sure to be aware of any such agreement in future.

Mr. T.F. O'Higgins

It is not a matter of concession or of grace. I have risen on a number of occasions and I was surprised that the Chair did not observe me.

Acting Chairman

I was going on the list of speakers.

Mr. T.F. O'Higgins

I am grateful to Deputy Treacy for giving me the opportunity to say a few words. What I was going to say in the few moments available to me is that if it is true that the difference between a politician and a statesman is that a statesman thinks of the next generation while a politician thinks of the next election, then, without doubt, the actions and conduct of the Taoiseach in recent years have been more consistent with those of a politician than with those of a statesman.

It is true to say that most of our present economic difficulties, whether they are correctly described as a crisis or as a danger or threat, have been caused by the Taoiseach's cynical disregard for the economic advice which he must have received when he brought about an apparent 12 per cent increase in wage standards at the beginning of 1964. There were those at the time who feared that the percentage increase was beyond the level of productivity and that it might not be justified on that account. The fact was then apparent and is now clear to most people in the country that political considerations prompted the Taoiseach's decision at the time and that he was then more intent on succeeding in the by-elections then imminent in Kildare and Cork.

It is now clear that that 12 per cent increase was rushed through for the purpose of ensuring success in those elections. I said it was an apparent increase because the fact has been, and it was pointed out at the time, that the result of the wage increase was that the working people would pay for it with their own money. It is and has been a disturbing feature over the past 12 months that unfortunate workers who were led to believe that the increase was in real terms found that their pay packets, nominally up by 12 per cent, were being eaten away by rising prices. By February of this year, just before the general election, price-levels had risen by 11.4 per cent, surely a drastic increase.

At that time our balance of payments deficit was running at over £30 million. By that time there was already apparent a shortage of credit, conceded in certain circles only. By that time there was also a by-election in mid-Cork which the Taoiseach and his Party could not win. In those circumstances the political decision was taken again. That was to make the issue of that by-election a pretext for a general election before the economic difficulties became apparent to everyone. So we had the election and the slogans and I only wish the papers were there now so that we might see them. But the tattered posters are still there with their bedraggled messages: "Let Lemass Lead On", "Stay With Prosperity" and "Vote for Continued Good Times". These slogans were put forward by a Party whose Leader must have been aware that the balance of payments deficit was then running higher than £50 million, that a capital shortage was apparent, that there was a downfall in industrial and agricultural output, that unemployment was running at a level of 50,000 and that emigration had increased by 40,000.

Now it is over. The election was won by Fianna Fáil. I have here a quotation from a speech made by the Taoiseach in Castlebar. The Irish Press heading was: “Fine Gael Bank Policy will Start Capital Flight”. He went on to say that the country had already had experience of this when a contraction of bank credit took place and the banks were calling in loans, as a result of which many firms were put out of business and some were put into bankruptcy. He pledged himself that he would never allow such a thing to happen and he did this at a time when he knew that a contraction of credit was coming and when he hoped to conceal it.

We are faced here with what the Taoiseach is prepared to describe as a difficulty, not yet a crisis, although his Deputies call it a crisis when they are looking for sympathy and co-operation. Let us remind the Taoiseach that this has happened before. There was precious little sympathy before when an Irish Government, beset on all sides, were trying to face up to their responsibilities. We are now prepared to act in a responsible manner. We have always done this but we will not, now or at any other time, double-talk or double-deal with the people. We are available to the people of this country as a constructive and alternative Government.

The Taoiseach

To put the matter right, I have consulted with our Chief Whip and he has informed me that there was no arrangement so far as the Government Party are concerned that Deputy O'Higgins should be given time.

Mr. T.F. O'Higgins

I have been informed differently.

The Taoiseach

With regard to the debate as a whole, the remarkable thing about it is that there has been no serious criticism offered of the proposal which the Government have put forward for dealing with the present economic situation and, indeed, there was not a great deal of comment on the proposal either. Most of the speeches delivered in the debate were irrelevant to the situation with which I dealt in my opening statement.

Some of the Deputies opposite who spoke in the debate said that the situation is not as serious as I had represented it to be. Others contended that it is even more serious than the Government realise. So far as I am concerned, I presented to the Dáil all the relevant facts of our economic situation and I left it to Deputies to form their own judgment on those facts. The Government's interpretation of these facts suggested the need for some corrective action at this stage.

Now, as the Minister for Industry and Commerce pointed out in his speech yesterday, the corrective measures upon which the Government have decided at this time are fairly mild, and I myself in the course of my remarks referred to the possibility that they may prove to be inadequate. Our main purpose at this time is to put the country on notice that present economic trends point to the possibility of serious difficulties, not that they are immediately with us but that they may be just ahead. We are, as it were, sounding a cautionary note and urging that all interests should combine to prevent the situation from deteriorating. This may prove to be enough to get the situation put right again. I hope it is.

Both Opposition Parties, of course, attributed the difficulties of this time to the Government, either to the things we did or did not do, and suggested that, in fact, the difficulties could have been avoided altogether if they had been foreseen in time. This, of course, is the stock-in-trade of a political debate and, as far as I am concerned, I could have forecast with some accuracy the nature of the comments that would be made.

Mr. Corish

The Taoiseach made the same comments on some occasions.

Mr. Norton

Who would be responsible but the Government for the present situation?

The Taoiseach

If Deputy Norton would sit quiet and listen, I shall try——

Sir Anthony Esmonde

The Taoiseach said that the Government are not responsible.

The Taoiseach

I have not said anything of the sort. Perhaps the Deputy will allow me to explain my ideas; we all hope he will understand. The Government are not greatly concerned with these criticisms. Our purpose is to get the situation put to right as quickly and as completely as possible so that the national progress will go on as before. Nor do I think it is correct to say that the situation developed suddenly or without warning to Deputies who have been keeping in touch with the trend of events. I can say with confidence that I have not at any time in this House or outside it during the past years, since the idea of a national development programme such as we published was born, done other than emphasise the magnitude of the effort that would be required by the country, the difficulty of the targets we had set ourselves and the certainty that before we had realised these targets, we would encounter difficulties and problems that we would have to overcome.

During the course of this year in every speech I made on our economic situation, early in the year, in some speeches during the course of the election campaign, and in practically every speech dealing with this topic since the election, I have tried to draw public attention to the danger signals which were showing, and to express warnings that the position could not be allowed to get worse.

Indeed, one of the consequences of my having spoken in this vein was the allegation made yesterday by Deputy Dillon, and repeated today by Deputy Ryan, that we were not even trying to win the election. I am sure Deputy T. F. O'Higgins will agree with me that that is all nonsense, in view of the comments he has made. If there are Deputies opposite who seriously seem to believe that we were not trying to win the election and if in such circumstances they could not come within an ass's roar of winning themselves, they should chuck in altogether.

Mr. T.F. O'Higgins

The Taoiseach was having an each way bet.

Mr. Dillon

On running a minority government.

The Taoiseach

It is always a matter of some difficulty to decide the stage at which a Government, having regard to the development of a combination of adverse economic circumstances, should take remedial action. So far as we are concerned, we came to that conclusion, when the trend which had been set up early in the year and had, in fact, become noticeable towards the end of last year, was clearly continuing. We were fully persuaded when the most recent trade figures appeared and when we saw signs that precisely similar problems were beginning to develop in other countries in Europe and elsewhere. I do not think the Dáil would have accepted earlier than this that there was a need for action in the light of the facts as they knew them. For my part, I am confident that we have not moved to check these adverse developments too soon or too late. I think the time is about right.

Mr. T. Lynch

It is soon enough.

The Taoiseach

There is, of course, the experience of the Coalition Government in somewhat similar conditions in 1955-56. I am sure Deputies opposite must be aware of the fact that the great majority of Irish economists who have since commented on the situation at that time expressed the view that the Coalition Government of the day did too much too soon.

Mr. L'Estrange

You said too little too late at the time.

Mr. Dillon

They have changed their tune now.

The Taoiseach

The point I am trying to make, however, is not that what they did produced the adverse consequences that followed but that to justify them they felt they had the political necessity to exaggerate the magnitude of the difficulties of the country at the time.

(Interruptions.)

The Taoiseach

It is true that by reason of these measures the adverse trade balance of the day was very quickly wiped out but they generated a depression situation in the country which put many thousands of workers out of their employment and plunged the country into a recession from which it took two years or more to recover. The policy of the Government in the situation now existing, the situation which may be developing, is to do the minimum we think will suffice, and in this way to avoid repetition of the mistakes which we think the Coalition Government made in the circumstances of ten years or so ago. The measures on which we have decided, of course, can, and will, be increased, if necessary, but the aim will always be to do no more than the situation calls for and to rely to the greatest possible extent on public co-operation and understanding of the national needs rather than on restrictions imposed by the Government.

Yesterday Deputy Sweetman was arguing in favour of dealing with this situation in the same way as the Coalition Government had dealt with the situation in 1956, by the imposition of import levies and pulling down the level of imports by restrictions of that kind. In my opening statement, I made it clear that we had given very full consideration to the need for imposing controls over imports of that character and we came to the conclusion that the situation did not call for these restrictions. If we should be driven by a serious worsening of the situation to action of that nature, then we recognise that the consequences would take much longer to repair.

The levies imposed by the Coalition Government in 1956, whether or not they intended them to be protective, did prove to be so. They operated to cause an inflation of costs and of prices in the trades and industries to which they related. When the time came to get rid of them, when we came into office in 1957 with the declared intention of getting rid of them, we found that this proved to be much more difficult than we had assumed. On the one hand, the Minister for Finance, in a difficult Budget situation, was——

Mr. L'Estrange

You did not get rid of them.

The Taoiseach

——not anxious to lose the revenue the levies were bringing in. On the other hand, there were many firms that had availed of the levies to let their costs increase or that had benefited in some way from them and there was pressure to urge their continuance. In the event, while most of them were got rid of by repealing orders of the Government, some were never got rid of at all and were ultimately incorporated in the permanent tariffs of the State.

Mr. Dillon

Hear, hear.

The Taoiseach

I have made clear, however, that, in the situation which we see developing in the world, a decision to deal with temporary difficulties of this type by increasing the protective measures in operation here would be highly detrimental to the future of the country and would offer no sort of permanent solution to these difficulties.

Deputy Sweetman asked for an elaboration of the decision of the Government regarding these higher market development grants. Looking over the script of my speech, I realise that what I said could have been misleading to some extent. While the amount of market development grant paid to any industrial producer will be related to the actual cost to him of meeting the British import charge, the awarding of the higher grants will be determined by the expansion of his exports to any market, whether Great Britain or not. It is, of course, clear that these market development grants are also a temporary arrangement. The permanent grants will continue so long as the British import charge remains and these additional grants are being undertaken only for the second half of this year.

I think it necessary to re-state, for the information of Deputies, the conditions which have caused these economic problems to arise at this time. There is, first of all, the falling-off in the rate of expansion of industrial exports, due primarily to the impact of the British charge and in some cases to the fact that rising costs here have priced some of our industrial products out of export markets. There is also the temporary falling-off of our cattle exports by reason of the re-stocking operations which are going on at this time. Then there is the diminution of the capital inflow which has been an important feature in our economic affairs in recent years and which is due to the general international situation and to the restrictions imposed by some foreign Governments on the export of capital from their countries. Then there has been this unexpected rise in the imports of consumer goods.

Any one of these factors, arising at this time, would have been a cause of concern but all coming together at the same time must give rise to some very real difficulties. If, at the same time as all these temporary factors are producing these economic problems for us, there should be another wage inflation, then this could cause a very grave threat to the level of employment here. I emphasise that all these difficulties are temporary. They will all disappear but, until they do, we must conserve our resources and avoid any courses which could make this situation worse so as to generate a really serious economic recession—and that is what the Government are determined to prevent.

Deputy Cosgrave argued yesterday that these problems stem in some way from the turnover tax. With all due respect to Deputy Cosgrave, the turnover tax had as much to do with them as the Zulu War or the Night of the Big Wind. The turnover tax came into operation in the autumn of 1963. The adjustment of retail prices which was involved had been completed before the end of that year. The ninth round wage agreement came into operation at the beginning of 1964. 1964 was, however, the best year ever in the history of this State in terms of higher production, higher exports and higher employment.

Mr. T.F. O'Higgins

It is not true.

The Taoiseach

This alone disposes of the argument that the turnover tax, or any consequences following from the turnover tax, has any relevance of any sort to our present situation. If the rise in prices due to the turnover tax were the measure of our price problem, this would be of no great consequence at all. Indeed, in the circumstances which we now have, in which the consumption expenditure of our people is rising faster than national production, the classical economic remedy would be to increase taxation. We have decided not to adopt this policy but to endeavour to follow courses which we hope will make any further price-raising changes in our taxation unnecessary.

A great deal of nonsense has been spoken here, as I think most Labour Party Deputies realise, about this ninth round wage agreement, the wage agreement that came into operation at the beginning of last year. At the time that agreement was negotiated, a rise in wages was justified by improving national circumstances. It would, in any event, have taken place whether or not there had been a national agreement. Some Deputies are trying to suggest that there would have been no inflation in costs, due to higher wages, if that agreement had not been made. At that time, there would have been either a disorganised type of round of wage increases, such as had taken place in previous years, or else a better organised arrangement such as the National Wage Agreement provided for.

When the Government realised that this would happen, that we were in for another round of the old haphazard kind, we suggested to the Irish Congress of Trade Unions and to the Federated Union of Employers that they should get together to see if it was possible to get a national agreement. We were anxious to have such an agreement to protect the workers against loss of earnings due to strikes, and to protect the country against loss of production during strikes. We were anxious that they would negotiate what we would regard as a better system of dealing with these matters because we realised the great advantage it would be in our campaign for economic development if we could hold out the assurance of a period of industrial peace for whatever term a national wage agreement was negotiated. When those who met to negotiate failed to reach agreement, when the negotiations broke down, I met the parties and urged them to resume the negotiations. Ultimately, they met again and succeeded in producing an agreement. The Government did not intervene at all in the actual negotiation of the agreement or in the wording of the document.

Mr. Donegan

Not half.

The Taoiseach

The help the Government gave to the parties to reach an agreement was an assurance that whatever they did agree to would be applied throughout the Public Service and throughout all the State-sponsored bodies in respect of the workers employed by them. As I understand the arguments put forward here by Deputy Cosgrave and other Fine Gael speakers, it is that that agreement should not have been made.

Mr. Cosgrave

I never said any such thing.

The Taoiseach

If that is not what they are trying to suggest, there is no sense in their remarks at all. I want to repeat that, by and large, the national agreement has held. It is true that it is threatened by the action of a few unions in what appear to be contraventions of the agreement. But, by and large, the great majority of the workers of this country and their unions are adhering to the terms of that agreement. In a recent speech I posed certain questions in that regard. I asked whether this method of adjusting wages by periodical national agreements of that kind is worth preserving and do the parties that negotiated the agreement in 1964 want to preserve this method. So far, I must say I have got from all the parties concerned affirmative answers to these questions. But all those who believe in this method, who want to preserve this method and see it developing in the future, and yielding for the country and the workers the benefits it can give in the future, will need now to assert themselves to preserve it. If this is to be done, it is going to require some expertise in leadership and some clear policy statements.

The aim of the Government in regard to wages and salaries and the general level of earning and remuneration throughout the community is that these should increase continuously at the maximum rate feasible without danger to employment, without danger to the competitiveness of our exports and with due regard all the time to their effect on prices. I believe that the principle the Government have been enunciating over recent years has been generally accepted throughout the community, and by "generally accepted", I mean by the employers' organisations established here. The old order in which improvements in wages and working conditions were obtained by workers only by industrial action through their trade unions is rapidly disappearing. This is the understanding of the situation existing here which it is important we should promote amongst our workers. Workers have, so far as it is possible for the Government to give it, an assurance that it is general national policy to ensure that wages will increase by periodic adjustments as national circumstances improve.

When the National Wage Agreement was being negotiated, I said to the parties in the private discussions I had with them, and I said here in the Dáil, when the negotiations were in progress, that according to all the expert advice available to us an increase of about eight per cent or nine per cent in the general wage level was all that was possible in real terms, and that if the money incomes of workers were increased by a percentage more than that prices would rise to the extent of the excess. This is not something we decided should happen. This is an inexorable economic law, which prescribes we cannot better ourselves in real terms by more than we are actually producing. I have said that if the National Wage Agreement had provided for an increase of that size the rise in prices resulting from the agreement might have been averted. I do not mean to suggest that there would have been no rise at all in any price. There are some commodities in respect of which any increase in costs must be immediately reflected in prices, but, over all, the price level would not have been affected to the same degree.

I want to say a few words about what are called the status increases given to persons employed by the Government and to persons in the public service and in some of the State-sponsored organisations.

Mr. Corish

The Taoiseach said the percentage increase of eight or nine per cent would have been reflected in a similar increase in prices. The Taoiseach described the extra increase as a bonus of four per cent but prices went up by 11 per cent.

The Taoiseach

There were other factors. The increase in the price of imported materials was bound to have some effect on the level of industrial production. There was last year an increase in the price of potatoes and meat which had quite an exceptional and, in my view, very disproportionate effect on our consumer price index number. Deputies talk about this index as a cost of living index. It is nothing of the kind—it is a general price index. In the index now prepared and published, there are a great many prices taken into account which do not enter into the cost of living as ordinarily understood. We are, I think the House knows, contemplating another consumption survey next year upon which a new price index will be based and published some time in 1967.

Mr. James Tully

It will be hard to find words for that.

The Taoiseach

Most Deputies who understand these matters will realise that since the last consumption survey, the survey upon which the present index is based, there have been considerable changes in the pattern of consumption and in the pattern of trade. For example, in the preparation of the present index no account at all is taken of prices in supermarkets. There is also complete exclusion of the prices charged for packaged foodstuffs, which have become increasingly popular in recent years. This consumption survey we are proposing to organise next year will, I am satisfied, show that there has been quite a considerable change in the pattern of consumption during the 12 years since the previous survey. However, that is irrelevant in some degree to what I have been saying.

I was dealing with the question of status increases for civil servants. I am well aware of the misunderstandings about these increases prevalent in the country and I am also well aware of the misrepresentations about them which are being circulated. They have certainly helped in some way to invoke a situation of dissatisfaction which I think would be dissipated altogether if there were a full understanding of what has happened. The Minister for Finance in April last issued to the press an explanatory statement in this regard. I urge Deputies to refer to it if they want to make themselves familiar with the position in this regard, because, of course, it is very much longer than anything I could attempt here today.

What was involved here was very largely a process of completing the eighth round and, in some cases, seventh round wage adjustments in the State services. This was partly due to procedural delay—the slow method by which the machinery of conciliation and arbitration applied to the public service operates—and partly to the application of the principle that the pay of public servants should be related to the rates established in private employment. The completion of these wage and salary adjustments in the public service had necessarily to follow on the completion of similar adjustments in private employment. Furthermore, the adjustments in the scales of many of the substantial groups employed in the public service necessarily involved adjustments in the scales of supervisory grades.

This process is now nearing completion. As the Minister for Finance said in the statement to which I referred, it will be well worth while if it yields finality. The Government accepted the arbitration awards where the issue went to arbitration whether or not we were very happy about these awards. Deputy Cosgrave put a finger on a weakness in the system in referring to the multiplicity of those schemes and of arbitration boards. It would be very useful if we could get a unified system. This is something now being discussed with staff organisations, but I would not like to attempt to forecast what will emerge from these discussions.

Deputy Cosgrave and some other Deputies were referring to what they called a national incomes policy. I wish Deputies who use this vague phrase would attempt to tell us what they understand by it and attempt to define it in more precise terms. I believe this is a phrase used by lazy people to conceal the absence of thought and understanding of this situation. At best, it represents a process of wishful thinking, the hope that some magic formula will emerge out of the air which will solve all these problems and introduce the golden era in which after their day's work employers and workers will be dancing around maypoles together. So far as I know, no satisfactory incomes policy of the kind Deputies appear to be thinking of has emerged in any free democracy.

Mr. T. Lynch

Tell us what you are going to do.

The Taoiseach

Efforts have been made in Sweden and I confess that in Sweden there appears to be a system of wage adjustments which works reasonably well but I do not think it is applicable in our circumstances. Sweden is the richest country in the world.

Mr. T. Lynch

They do not have a Fianna Fáil Government.

The Taoiseach

The problem of wage adjustments there in relation to the improvement of national circumstances must be a simple matter as compared with this country. I would plead with Deputies opposite who use this vague and, to me, almost meaningless phrase to stop doing so until they are prepared to define it.

Mr. T. Lynch

Tell us what you are going to do.

The Taoiseach

I have tried to explain the Government's ideas as to how wages should be adjusted here, the procedure we should follow and the aims that should be applied. I may say our situation in this regard, like our trade union organisation and our industrial traditions, is similar to that of Great Britain.

Mr. Corish

Could the Taoiseach tell us——

The Taoiseach

If the Deputy will let me finish this argument, then I will listen to him. We are certainly watching with great interest the efforts made by the present British Government who in this regard are acting under the leadership of Mr. George Brown, to secure acceptance there of the guiding principles which have been outlined to the British trade unions. We hope he succeeds because, owing to this traditional similarity between their situation and ours, we would expect that his success would influence thinking within our trade union movement, too.

Mr. Corish

The Taoiseach believes, therefore, that the free negotiations for wages and salaries should be continued?

The Taoiseach

Certainly. I want to make it clear that I believe this should be done through the process of national wage agreements and that the guiding principle should be the improvement in national circumstances since the previous agreement of that kind was concluded.

Mr. Corish

The Taoiseach must also concede that there may be things over which workers and salary earners have no control and the free negotiation of wages must include consideration of prices?

The Taoiseach

That is true, and also the effect on prices of any increase which may be proposed. But remember this, whatever the circumstances, we also have to have regard to the national aim of giving the maximum security of employment to workers and to increase the amount of employment available and I would urge that those should override almost every other consideration at this time.

Deputy Cosgrave and, I think, some other members of the Fine Gael Party, referred to the policy for the control of banking which they announced during the election. It was obvious during the election that most of the Fine Gael spokesmen did not understand it themselves. I certainly did not even pretend to understand it. I want to say in this regard that I have no complaint whatever to make at this time regarding any failure of the commercial banks in this country to comply with Government policy.

Mr. T. Lynch

We have no complaint either.

The Taoiseach

Deputy Corish asked me what has been the response of Irish industry to the help given to it to meet the effect of the British import charge through these market development grants. By and large, there has been a fairly good response; in some cases, perhaps, no response. There was a situation which induced some firms to withdraw altogether from export business for the time. Most firms certainly set out to try to hold the level of their export trade as it was previously, even though it was now less profitable. Some firms, the most enterprising in the country, have been increasing their exports during this period and notwithstanding these difficulties.

Mr. Corish

Could the Taoiseach give any sort of assessment of the damage done by the British surcharge?

The Taoiseach

May I say that the Government's interest in industrial expansion, in maintaining and increasing the level of our industrial output, is primarily the employment it creates and the guiding principles in the application of aids of this kind are always related to the effect on employment? May I say that Deputy Corish's assumption—at least, it seemed to me to be his assumption—that all price rises which have taken place here were either avoidable or attributable to the avarice of manufacturers or traders or to some malice on somebody's part, is far too naïve even to be taken seriously by himself. I know the Labour Deputies who spoke in the debate alleged that the Government were trying to put all the blame for price rises on the trade unions. Deputy Sweetman says we are trying to put all the blame on the commercial community. I said in my opening statement that I was not seeking and was not concerned to allocate blame anywhere, that I was confining myself to stating the facts and having looked at the implications of these facts for the future of the country——

Mr. Sweetman

We put the blame on you and Fianna Fáil.

The Taoiseach

——to make known what the Government had decided should be done to head off the dangers that seemed to us to threaten. If there should be a failure on the part of any section to take note of these dangers or to show any tendency to act in a manner which would be calculated to aggravate them, then it would be our duty to say so and I hope we would not hesitate to do so. In such event, there would almost certainly be such a worsening of the situation that some plain speaking would be expected, apart from whatever remedial action would be proposed.

I have said that the main concern of the Government in this situation is to protect the level of employment and to assist, if we can, the process of a continuing increase in the amount of employment available. Workers will be the main sufferers, if not the only sufferers, in a trade recession by reason of the disemployment of many of them, the loss of overtime earnings or short-time working for others and insecurity for all.

So far as the balance of payments deficit is concerned, that could be rectified very easily and very quickly by mass unemployment, as was done in 1956, but our determination is to find ways and means out of the situation which will not have these effects, to do so by a process of stimulating exports and by seeking public co-operation in avoiding unnecessary imports at this time.

If industrial exports are to be stimulated, and stimulated in the degree we require, then some essential conditions must be met.

Mr. T. Lynch

Something must be done.

The Taoiseach

The first of these is that there must be a vigorous effort by all industrial producers to increase export trade, even if for the time being it is less profitable than it was previously or may become in some future time. Secondly, they must be encouraged and helped by assurances against rises in production costs which could involve them in serious losses if they set about expanding their export business; and, thirdly, in so far as it involves investment by them in new productive capacity, then this must be facilitated by the Government and by the financial institutions of the State, and encouraged by a trade union desire to create a climate of confidence in which it will be undertaken.

In the course of the discussion Deputy Cosgrave and Deputy Larkin referred to the general desire that exists throughout all sections of the community that in the future adjustment of wages the maximum benefit should go to the lowest paid workers. This is a desire that we all have and it is certainly an aim that few would openly contest. However, let us be quite clear about it, it is not accepted in the trade union movement, nor is it capable of fulfilment in the absence of some central trade union authority with executive powers. I am sure Deputy Larkin understands the position very well. He is associated with a union that caters mainly for those unskilled and lower-paid workers. Other Deputies, Deputies in the Fine Gael Benches, may be less familiar with this problem.

I could perhaps give an instance which will help to bring the character of the problem home to Deputies when I mention that it was stated, I understand, at the Labour Court yesterday in support of the case made by the Dublin printing craftsmen now on strike, that what they were seeking was an adjustment of their wages which percentagewise would be similar to that which the Government had given earlier to postal workers. One will see immediately that that cuts across any such aim of using the higher resources available in the country to bring up the lower-paid workers by a proportionately higher rate than more highly paid craft workers. This policy, which, as I said, we all would support in principle, of securing the major advantage for lower paid workers when rising national resources make an all-round increase possible, requires some regulatory authority within or without the trade union movement, because it must mean that the higher paid workers will accept a lower percentage increase than is given to those at the bottom of the scale.

There may be, and there is in my mind, some doubt about the desirability as a permanent arrangement of continuing national wage agreements of the kind negotiated last year. These national wage agreements providing for a percentage increase in wages and salaries must necessarily involve some stratification of the existing wage relationships, some disregard of the productivity achievements and the actual level of prosperity in individual industries and occupations. If wage rates were to be related to productivity, related to the prosperity of particular occupations, to the growth of a particular industry, then changes in the relationship between wages in one occupation and in another would be fairly frequent. Some would rise and some would not, but it does not seem to be practical politics at this time. Regular and peaceful methods of general wage adjustments, whenever they are feasible, appear to require at this time either a percentage increase or a flat-rate increase. However, it might be possible for the leaders of our trade union movement and of our employers' organisations to get together to work out a different and better method. This, of course, would be possible only if there were a period of industrial peace and a genuine effort to try to reach agreement on these matters.

In this regard I want to refer briefly to the speech made here yesterday by the Parliamentary Secretary to the Minister for Industry and Commerce regarding the development of a manpower policy. The Government are now coming to the point of defining our policy in this regard and to the preparation, where necessary, of legislation to commence bringing it into operation. In this very important question, which is certain to have a profound influence upon the future of the country's economic progress as well as on our industrial relations, we would be greatly assisted by the holding of joint consultations with the representatives of workers' and employers' interests. The basic aim must be to give all wage-earners, as far as possible, a security of livelihood that will extend beyond job changes brought about by reason of technological or economic development, and to ensure that national development will be facilitated by the availability of skilled and trained workers at the right time and in the right place. This policy, however, will never get off the ground at all except in conditions of economic expansion, and this is another reason why, in the interests of workers as a class, there should be concern now to ensure that economic progress will continue and that nothing will be done to bring it to a stop even for a short time.

Some questions were asked here regarding the Prices Bill to which I think I should refer at this stage. May I refer to the comment of Deputy Treacy that this is a Bill that should have been introduced long ago? I would not agree with him. Indeed, the Government have grave doubts about bringing it in at all, mainly because we think it may generate among the public false ideas as to the possibilities of price control. As the Minister for Industry and Commerce emphasised yesterday, no system of control, no matter how ruthlessly enforced, can prevent prices from rising when costs are going up, that any attempt to maintain a standstill in prices in any industry or in any occupation when costs were rising would involve only a cessation of work in that industry and the disemployment of the workers concerned.

As I say, however, in all the cases where prices have risen or where increased prices are proposed, the inquiries envisaged by the Minister for Industry and Commerce can be extended to include not only the actual justification offered for a price increase but the measures of reorganisation of methods of production or distribution which would enable prices to be reduced. This would apply particularly in the case of some foodstuffs where, as Deputies know, it is often suggested that the chain of distribution is too long or involves costly and wasteful processes. Whether price inquiries should be held in public or in private is not a matter upon which we should take a rigid stand. It is one that should be settled in regard to the circumstances in each case, and flexibility should be the rule.

Inquiries will be conducted either by prices advisory committees or by advisory bodies. The distinction between them is that advisory bodies can go beyond the examination of the justification for some proposed increase in price to include reorganisation of methods that might make possible a reduction in price. Or they can be, of course, and will be if there is need for it, carried out by the officers of the Department of Industry and Commerce. I presume it is not necessary to answer Deputy Corish's query, that the Bill applies only to the prices of commodities and services and does not extend to wages or salaries.

Mr. Corish

The Taoiseach will appreciate the reason I asked the question. There is no definition I can find.

The Taoiseach

The wording of the Bill puts that beyond any possibility of doubt.

Deputy Sweetman asked me for an explanation of what he thought was a discrepancy between the figure I gave in regard to the decline of our external assets and that given in reply to a Parliamentary Question by the Minister for Finance. The figure I gave related to the decline in the external assets of the banking system and Government funds between mid-December, 1964, and mid-May, 1965. The totals at each of these dates were: in mid-December, £242.1 million and in mid-May £208.6 million, the difference being £33.5 million.

Mr. Sweetman

The Taoiseach said that in the same period last year they increased. The same period last year, they did not increase.

The Taoiseach

I am quite certain my figures are accurate.

Mr. Sweetman

The Taoiseach always is, but he is usually wrong when he is chancing his arm.

The Taoiseach

Not because I gave them, but because they were checked and double-checked by very competent officials.

Mr. T. Lynch

The Taoiseach has only ten minutes. Will he tell us what he intends to do?

The Taoiseach

The business of this session of the Dáil will conclude next week. The Whips of the Parties have got together and, I understand, have prepared a timetable which will enable the business to conclude on Wednesday evening, subject to a long sitting on Wednesday. In that regard I want to say that a tribute is due to the Dáil staff who have worked so very hard to keep this House supplied with the necessary documents to enable our business to be done during this period in which printing facilities are not available.

Deputies

Hear, hear.

The Taoiseach

I am sure Deputies on both sides share my concern to bring this session to an end fairly soon in order to relieve the staff of the task at present laid upon them.

I want to say that, in the coming session, the Minister for Finance will submit legislative proposals to the Dáil for altering the present procedure for dealing with financial business in a manner which will, we believe, facilitate its discussion by the Dáil and, at the same time, secure an economy of Dáil time and permit of the debates on the Departmental Estimates being considered over the whole year in order to remove the pressure involved in the present system of getting them all concluded before the end of July.

This end of session review of the national economic situation, which I have given to the Dáil, may be regarded as less cheerful on this occasion than it has been in recent years. It would be unrealistic, as I have tried to make clear on many occasions, to expect that national progress could always go on at an even pace, without difficulty and without interruption. The regulation of the country's economic affairs is the main business of the Government at this time, and that is what we are now doing, although in circumstances different from those we would have wished or, indeed, expected.

Running the government of this, or any other country, would be a very simple matter if things always went right. The test of the basic soundness of our development plan and of the capacity of our national economy to overcome periods of temporary difficulty is now with us. It is also a test of the maturity of our community, a test which we will pass successfully if we can bring about the general co-operation we need and the adaptation of individual and sectional conduct for which the situation calls. At this point of time, I do not think we need entertain any doubts whatever about the outcome of this effort of ours to get over this period of difficulty and to get the national economic advance going ahead again at the rate we envisage in the Second Programme.

Mr. Dillon

Would the Taoiseach answer one question? He spoke of the vital importance of maintaining industrial exports——

The Taoiseach

Increasing industrial exports.

Mr. Dillon

——and emphasised the impact of the ten per cent levy by Great Britain. He mentioned the industrial development grants or whatever he called them. Psychologically and practically, would it not be much more effective for the purpose of offsetting the levies simply to say to industrial exporters to Great Britain: "Send us the bill and we will pay it" or are there some international obligations which would forbid that situation?

The Taoiseach

There are certain difficulties which, I think, the Deputy will realise.

Mr. Cosgrave

Can the Taoiseach say if the industrial grants apply to countries other than Britain? In his opening speech, he confined his remarks to Britain.

The Taoiseach

I have been trying to explain that. While the amount of a grant given to any industrial firm will relate to the cost of the British import charge on that firm, higher grants will be given to any firm which expands its exports to any market. Is that clear?

Mr. Cosgrave

That is different from what the Taoiseach said.

Mr. T. Lynch

I asked a question and I said I would insist on an answer. It is not a laughing matter.

An Leas-Cheann Comhairle

Order. Deputy Corish.

Mr. Corish

The Taoiseach said on Tuesday that it might be necessary to recall the Dáil to give effect to some proposals which might have to be implemented. Would the Taoiseach be able to say at this stage whether or not the recall would occur in August or September?

The Taoiseach

As of now we have no intention at all of recalling the Dáil, but I warned Deputies of the possibility because the situation is obviously fairly fluid and serious damage might be done if action the Government considered necessary had to be postponed until October.

Mr. Cosgrave

I take it the Dáil will be recalled if it is found necessary to take any further action?

The Taoiseach

If the situation warrants it.

Mr. T. Lynch

I gave the Taoiseach notice of a question and it was taken down by the Taoiseach's colleague, the Minister for Industry and Commerce. I gave him notice that I expected him to answer and tell us where and when did he seek foreign credit. What were the conditions?

The Taoiseach

The Government have not yet attempted to float a Government loan abroad. Certain of the State-sponsored bodies have financed some of their development by external loans. Particulars of these were given to the House by the Minister for Finance. My purpose in referring to this possibility was rather to discount it as a way out of our difficulty rather than to indicate an intention on our part to resort to it. Countries like Denmark and Norway, recently floated loans in the New York market, and we have noted the cost and conditions of those loans and the amounts raised, amounts that would not be significant in relation to our circumstances. I do not altogether rule out the possibility but I referred to it mainly for the purpose of removing any impression that there was likely to be any early relief for our balance of payments problem from that source.

Mr. T. Lynch

I would put it to the Taoiseach that he said he had sought credit. I wrote it down in my notebook.

Mr. Sweetman

May I refer the Taoiseach to Appendix VII? He will find that the comparative figures for the previous year's external assets were £230 million in May and £236.9 million in December but he said in his speech "As compared with an increase in the same time last year". There was actually a decrease last year and a decrease this year. That is why the comparison is wrong.

The Taoiseach

I think the Deputy is wrongly interpreting my remark.

Mr. Sweetman

Everybody is out of step but our Johnny, and Johnny was caught this time.

(Interruptions.)

An Leas-Cheann Comhairle

Order.

Mr. Norton

The Taoiseach made no reference to the restriction of credit from the point of view of the housing problem. Would he reassure the House now that the new restrictions on credit which he mentioned will not affect the amount of money made available for housing?

The Taoiseach

I made it quite clear that we have asked the banks to restrict credit for the importation of unnecessary or avoidable imports and the purpose of doing that is to ensure that to the full extent possible the financial resources available to the country will be used for these productive purposes.

Mr. T. Lynch

The banks have been refusing money for housing for the past three months.

Question put, and a division being demanded, it was postponed in accordance with the Order of the Dáil of 25th April, 1965, until 10.15 p.m. on Tuesday, 20th July, 1965.