No one with any sense of responsibility can now have any illusions as to the danger and the folly involved in national wage and salary increases which are unrelated to national productivity. We, the ordinary people of the country, have had bitter experience in this regard over the past few years. The past few years have been a period in which resolution and certainty on the part of the Government have been singularly lacking, a period in which far-reaching decisions were arrived at not because they were logical or desirable in the circumstances but because they represented an attractive compromise between what the Government felt they should do and what the political exigencies of the moment dictated was expedient to be done. Certainly, since 1963, the people have been bewildered with demands from the Government for stability in wages, followed by Government contrived upsurges in prices and inevitable movements towards wage adjustments which because of an inherent leap-frog character seemed to develop into a further cycle which in itself was unending.
I have no desire to go back over any number of years, but in order that this problem, the problem which the Minister endeavours to deal with in this motion, may be properly understood, I should like to remind the House that a little over two years ago, in February, 1963, there was issued on behalf of the Government a White Paper Closing the Gap. That White Paper was issued at the apparent end of a round of wage increases. In it a number of things were stated and a number of sentiments expressed on behalf of the Government. Paragraph 1 on page 3 said that the purpose of the White Paper was to draw attention to the economic danger caused by the gap between incomes and productivity which had developed over the past year or so—that is, 1962 —and which threatened to become wider, and to seek the understanding and co-operation of all sections of the community in efforts to close this gap. That was printed in February, 1963.
In paragraph 10 on page 7 of the White Paper, the point was made that:
When income increases greatly exceed the growth in national production there are adverse effects also on the country's trading position. Home-produced goods are made less competitive in foreign markets by the rise in production costs. At the same time some of the new purchasing power is being used to buy a greater volume of imports. Less exports and more imports mean a bigger gap between what we earn abroad and what we spend abroad —an increased deficit in our balance of international payments.
These sentiments were expressed in this White Paper in February, 1963. On page 9 in paragraph 18, this was stated:
There is a general obligation on the Government to promote the highest possible growth rate and the highest possible level of productive employment consistent with reasonable stability of prices and external payments.
And on page 10 in paragraph 20, this statement is made:
As a more immediate matter, the Government are convinced that it is necessary to avoid the damage to the national economy which would occur if further wage and salary or other income increases, whether in the public or private sector, took place before national production had risen sufficiently. General restraint is essential and may reasonably be expected.
Then in paragraph 21, the Government stated:
In the light of the considerations set out in this White Paper, the Government deem it necessary that Departments and State-sponsored organisations should not accede for the present to any claims for increases in wages and salaries, or for changes in conditions of work having the same effect, which would arouse expectations of similar increases in other employments. They trust that there will be a full appreciation of the fact that the Government should not, in respect of persons whose remuneration is provided directly or indirectly from public funds, or whose employment arises in the provision under statutory authority of public services, follow a course they are convinced would be contrary to the national interest. It is not envisaged that conciliation and arbitration procedures should be put in suspense but rather that the findings should be considered in relation to their possible reaction in other sectors and, if necessary, not applied until this can be done without damage to the national economic interest.
I direct the attention of Deputies to that White Paper, to the sentiments it contains and to the expressions of policy to which the Government subscribed in issuing that document, and I want the Minister and the Government to imagine what the general public expected would be the course of conduct of the Government following publication of the White Paper in February, 1963.
Whatever may be thought or was thought of the sentiments which were expressed, the country was entitled to expect action by the Government at least consistent with the opinions they had expressed: "Stability of wages could only be maintained if there was stability of prices", and the point was made in the White Paper, Closing the Gap, that now with the year 1962 over, it was essential to maintain stability in prices and costs if we were to trade competitively with other countries and were not to run into further difficulties in our balance of payments and matters of that kind. That at least was expected from the Government, and a Government who were resolute, who knew their mind and were certain of their policy and confident in their future would have been expected to act in a decisive way in relation to a problem of that kind.
Many people have been for too long too patient with the lack of consistency shown on the part of the Government. This document had scarcely been published and digested by the public when a dramatic change in the attitude of the Government took place, or rather a course of conduct was embarked on, which was in direct contradiction of the demand for stability made in Closing the Gap. Deputies will remember that a few weeks later we had the introduction by the Minister for Finance of the turnover tax. I do not wish to debate the merits of that tax or to go over any of the ground that was covered so often, so vehemently and so energetically in this House and elsewhere in regard to the turnover tax: I merely want to remind the House that a Government who made such a virtue of stability in costs and prices, a Government who pointed to every section of the economy, to every group of workers and every person engaged in any productive activity in the country in February of 1963 and intimated as they were entitled to do, to the sense of patriotism and nationalism in all of us, the importance of stability, a few weeks later came in and by their own act proceeded deliberately to destroy the vesture of stability.
The imposition of the turnover tax met from Fine Gael benches the criticism in which we said that this form of taxation would step up inevitably increases in prices. When a tax of this kind comes in, based on goods which people had to buy, it was inevitable that the cost of living would begin to creep up and that the possibility of stability of prices and wages would be remote. It is now beyond controversy that immediately following the operation of the turnover tax, a violent upward surge in prices took place. So dramatic indeed was the increase in prices that there were near riots in many large stores throughout the country. It was in that situation which had its dramatic effect in the autumn of 1963 that the full mischief involved in the turnover tax became apparent to the people. Stability disappeared. Here again were a muddling Government, unsure of themselves, unsure of their policy, doing something completely inconsistent with the principles set forth in the White Paper Closing the Gap.
The turnover tax increase in prices began to create, as it inevitably would, considerable political embarrassment for the Government. At that time the Government were maintained in office on a shoestring, and a rather frayed shoestring at that. In the autumn of 1963, there were two by-elections, one caused by the death of a Fianna Fáil Deputy and the other caused by the death of the late William Norton. In those circumstances, as the country will recall, to deal with this situation caused by the turnover tax, the Taoiseach decided to grasp what he regarded as the nettle and to grasp it firmly. He did himself initiate the ninth round of wage increases. That was done in the autumn of 1963, eight months after he had in this White Paper pointed out to all concerned the importance of stability and the national danger of further wage increases which were out of line with national productivity.
Why the change? What had taken place in these eight months which would have justified such a drastic change of front? He was either right in the autumn of 1963 or he was right in the February of that year. Certainly his conduct was inconsistent. We now feel, and we accuse the Leader of Fianna Fáil and all who were party to it at the time, that this time two years ago, they thought first of Party interest and only secondly of the national interest. The principles so firmly stated in February, 1963 counted for nothing when they were likely to lead to a Fianna Fáil defeat in Cork city or Kildare. In those circumstances, national interest stood by while political expediency took the first seat.
We had then the 12 per cent initiated by the Taoiseach, conducted by him and brought on by him for the purpose of winning two by-elections and so securing his Government in office. Now that is over. The elections were won but today every worker's job may be in danger and this country may be at risk to pay the cost of Fianna Fáil victories in Cork city and Kildare. That is the result of the Government's action which is here to be read and thought over by the country two years later. It is serious that we should have, in these circumstances, to attribute to the leader of the Government, the Taoiseach, irresponsibility. We do not do so lightly. We do so because we are convinced from what we have experienced and seen that the past two and a half years have been an exercise by him in political expediency which, in fact, has worked to the national harm.
This motion is introduced now on behalf of the Government who have created such a sorry mess. It is introduced in an effort desperately to stop a cycle which was started for political purposes in the past. I suppose some effort has got to be made, sometime, somehow, to deal with the situation which, if it is allowed to remain unattended, will grow to enormous proportions. We wish to direct the attention of Deputies and the country to what is the motive behind this tardy Government action. The 12 per cent wage round achieved its purpose but unfortunate workers found that the increase which they got melted away in their pockets and that, in fact, the ninth round of wage increases was eaten up as rapidly as it was granted by further increases in prices. The year just concluded has been a year in which there has been, following the 12 per cent, a rapid increase in living costs, bringing the pinch of want into many homes in this country where it had not been felt for a long time before, and in the past 12 months, most workers, irrespective of the size of their pay packets, learned well the danger and the folly of a national wage increase which was not related to an increase in national productivity.
As to the rise in prices in the past 12 months, in the last Dáil and in this Dáil and during the course of the general election, we in the Fine Gael Party directed public attention and the attention of the Government to what was happening, to the fact that wage increases were being eaten up by price rises. We asked and demanded time and again that something should be done by the Government to stem, stop and curb rising prices and we were told contemptuously by Government Ministers that there was nothing in the problem that we were advocating, that rises in prices did not matter, that if an effort were made to curb prices, unemployment would follow, that everything was grand, the sun was shining, we were all making hay, and it was only the bad boys in Fine Gael and other Parties who were endeavouring to suggest that clouds were gathering on the horizon when they were not.
Despite everything we said and advocated, nothing was done by this Government to deal with prices. In the course of this year, in a most important —I say this and I do not mind whom it offends—a most important political document was published, that is, the political manifesto of the Fine Gael Party, a plan, Towards a Just Society. In that document, in March of this year, many things were advocated, many constructive proposals were put forward, all of which are now becoming generally acceptable to more and more people. Amongst the things we advocated in that document was the introduction of a rational prices and incomes policy. Our policy for incomes and prices was based on the firm conviction that a proper incomes policy should have as its object a continual and orderly growth in the economy, a continual and orderly sharing by all workers, by all producers, in a continual increase in national wealth.
I should like to remind the House that our ideas and our policy proposals in that regard pre-dated anything subsequently done in England by the present Labour Government.
We realise, and realised then, and in the document I have mentioned it is realised, that prices and incomes cannot be separated and that "incomes" must include not only wages and salaries but also dividends and other unearned income. We suggested at that time as part of the incomes policy that price behaviour, the trend in relation to prices, should and could be estimated if it were accepted as a principle that prices should fall when productivity was increasing faster than the national average and would rise when productivity was increasing more slowly. We indicated that by machinery to watch that trend and those circumstances, it would be possible for a Government who knew where they were going and were confident and sure of their own policies to be able to indicate likely price behaviour and to take steps and have appropriate machinery to react accordingly.
Believing these things were possible, believing in our prices and incomes policy, we saw in March of this year, and still see, no difficulty in a Government who know what they are doing, initiating through appropriate machinery a national incomes policy which would be related firmly to productivity and which would end the crazy and disastrous race between wages and prices.
I mention the Fine Gael document Towards a Just Society and our policy in relation to wages and prices, our incomes policy, at this stage in this debate for the purpose of saying once again how our views are now beginning to be seen to be correct even by the Government.
In the general election the Taoiseach went on record in criticism of our incomes policy. He spoke in Mullingar on 6th April of this year, the eve of poll, and the Irish Press carried the heading “Wages. Taoiseach hits out at Fine Gael incomes policy. Fianna Fáil stand by free negotiations. Wage control opposed by the Government.” The Taoiseach was reported as follows:
The Taoiseach said that Mr. Dillon had not defined his policy. He probably meant and certainly intended the public to understand some system of Government regulation of wage and salary increases
—a thing of course, that was never intended or contemplated—
and he went on to say : "We in Fianna Fáil do not believe that any system of this kind is workable. It has ever been successfully operated in any country except the Communist countries."
There was the Taoiseach high and merry on the eve of poll saying to the people of Mullingar that "an incomes policy is out; we will not accept it; we will not tolerate it; we will not have it; no country has it except it is a Communist country." He went on to say in that speech that the Fianna Fáil Party and the Fianna Fáil Government believed in wage agreements freely negotiated and that no hurt or hindrance, bar or regulation, would be imposed to prevent such agreements.
Now the election is over. All the hustle and bustle has died down and the country is face to face with reality. The bills have now to be met. It is now recognised that during the past two years, certainly the past 18 months, we went through a period of roistering inflation, a period in which there was unlimited expenditure by the Government, a period in which the banks advanced to any investor what money he wanted to take a gamble on the stock exchange. The rumours of a new loan, a new flotation, sent many investors to their bank managers, there to get what credit they wanted to take a flutter.
It was a period in which the Government set an example to the country— spend and spend and spend. It was a period in which every section was taught to believe in the Good-Time Charlies and so forth, a period in which an election was held in an atmosphere in which "Lemass was to lead on," in which the clock was not to be put back. Levies and all the things of the past must be voted against by keeping Lemass in office, the Fianna Fáil Party doing what they had been doing.
The banners are no longer waving. The posters are rain-stained now, peeling from the walls. The face of the Taoiseach that appeared on every hoarding is no longer to be seen. Now, in the autumn of the year, the facts have to be faced when the leaves are tumbling from the trees. The incomes policy, this Communist device, this thing that Fine Gael advocated, that only would be thought of in a Communist country—the thing Deputy Lemass in his Mullingar speech referred to when he said: "I want to make it clear we are definitely against it. If we are in government, we will not apply it; if in Opposition, we will oppose it strongly"—is all right now.
Now what has he to say? On 27th October—last week—the Taoiseach spoke, as is now the habit of members of the Government, at a dinner outside this House. He spoke to the Dublin Chamber of Commerce. Of course, important statements are never made here where they should be made and discussed in the Irish Parliament. The Taoiseach said this:
An incomes policy is a fundamental requirement of continuing economic growth and it is also the foundation of a just——
I thought I was about to read "society".
——social policy which must involve degrees of income redistribution.
An incomes policy was put forward by us in the general election after we had thought it out. We did not require a group of civil servants to do it for us. We got down to this planning for a just society in order to deal with current Irish problems. Our views in relation to an incomes policy, the things we advocated, are now recognised by the Taoiseach as being a fundamental requirement of continuing economic growth. I suppose a convert is always welcome. We know that the prodigal was welcomed by the killing of the fatted calf. It is better now than never that there should be a recognition by the Government of the sanity involved in an incomes policy. It is better than never that the things we advocated in the last election and which the people could have had six months ago if they had taken the wise decision of putting in a Fine Gael Government, should now be recognised and that there should now be some faltering steps towards this objective than that there should be the continual display of political expediency which we saw, to the national cost, just two years ago.
An effort was made in the past fortnight to deal with prices. I say an effort because it is merely a bit of windowdressing. It is very little use controlling prices when they have already gone beyond the limits of the ordinary people. Price control should have been adopted, not along the lines the Minister has adopted but steps should have been taken to deal with prices many months ago. If it had been done even in the spring of this year, if it had been done at the time we advocated its doing, I do not believe the country would be face to face with the economic crisis which causes dismay to everyone. The present dismal situation has been brought about because the Government did not face up to the facts when we urged them to do so.
Now we have price orders, the old-fashioned way of dealing with prices, the old blanket restriction, instead of an intelligent approach to prices, instead of economic planning. However, we have to accept, and we do accept, some step as being better than no step until such time as it is possible to get into office a Government who will know surely where they are going, know surely the methods to achieve their purpose.
It is in these circumstances that this motion is proposed by the Minister. It is not a motion that is particularly attractive to us or indeed to any section of the House. However, it is a motion which we understand to be a genuine attempt to investigate a problem. Quite certainly no one could advocate or wish to see a leap-frogging into the months or years that lie ahead which would threaten the employment and the security in employment of all sections of the community. That would be nationally disastrous. If a start must be made in seeking out the causes of leap-frogging, we hope that start is justified.
This motion deals with particular aspects of clerical employment. It refers in particular to employment in the State-sponsored bodies such as Aer Lingus, Bord na Móna, CIE and the ESB, and also refers to the corresponding grades in the Civil Service. In relation to these, the allegation has been made by successive Ministers for Finance in the past three years—it was made in Closing the Gap and it is being made now again by the Minister for Finance—that these inequalities do exist and that they tend to initiate and spiral off unjustified wage increases at a time when the economy cannot meet such. I do not know whether that is true or not. I have no means of knowing it. I have heard it said so often by Ministers for Finance, but then, I have heard Ministers for Finance say so many things that subsequently on investigation do not appear to be precisely adequate. I feel that that particular allegation should be inquired into. An inquiry should take place into this matter so that it may be clarified once and for all.
I say that in the conviction and belief that this is not, and is not intended to be, a wage freeze. It has not been so introduced by the Minister and I accept that such is not involved. We see no reason why, if the proper methods are applied to the economy and the aims we have in common, there should not be an orderly expansion of the economy, with all sections of the community getting their fair share. We certainly see no justification in present circumstances for endeavouring to apply old-fashioned methods— the idea of a wage freeze so often talked of in the past.
If there is to be an inquiry, I hope it will be quite clear that it will not affect the existing applications and the arbitration and conciliation machinery relating to present claims. As far as we are concerned on these benches, we introduced the idea—we fought an election to do it—of arbitration in relation to the Civil Service. We believe in it. We believe it is the right way of doing things. We trust it is clear that all applications which are in the pipeline will not be affected by this motion. I should also say in relation to arbitration that we take credit for the fact that it was we who introduced arbitration for the Army, teachers, Garda and Post Office workers. These things are important to remember and are worth preserving and fighting for.
I do not know how the Minister is going to appoint his board or tribunal. I think the term "tribunal" is unfortunate. I suppose it arises from the Act under which this motion comes. I hope it is not going to be a star-chamber operation. I hope the board or court or whatever it may be will be, and will appear to be, impartial. It is a pity that they must be appointed by the Government. I suppose no other ready machinery is available. But I hope the Government will realise how essential it is that there will be confidence in a body of this kind. Their inquiry should relate to existing inequalities and should not subsequently be used as a coin for the future. I shall explain what I mean. This tribunal will operate in a time of economic difficulty for the country, a time in which many problems may appear very definite, very large and very real. In relation to many of their recommendations, I hope they will be tempered by a realisation that in other times, in times in which things are easier and better, many of the views they form may be varied.
The country now finds itself facing a situation which, in our view, is directly attributable to indecision, muddling and feet-changing on the part of the Government, to decisions taken on the ground of political expediency rather than national interest. Because this situation is now upon us, we are faced with stormy weather and all the rest. It is because of that we feel that some form of inquiry such as indicated by the Minister should be supported and agreed to by the House.
