In so far as the people will look at the Budget which was introduced yesterday to see how it affects them, the immediate reaction will be to see little change. This attitude will overlook the real gravity of the economic and financial position, because the Budget temporarily obscures and indeed turns a blind eye to the real state of the nation's finances. It allows the present dangerous economic trends to continue, ignoring all the warnings issued by a variety of informed opinion such as the NIEC, the forecasts of the Department of Finance in the review of 1969 and the outlook for 1970, and every other person or group concerned at the serious extent of inflation.
When the full effect of the taxes that have been imposed by raising the turnover tax becomes operative, then the impact not merely will be severe but will raise very substantially the cost of every item, increasing taxation in a manner which informed comment suggested was the least satisfactory and least desirable method in the circumstances.
In addition to that, there is no over-all plan to deal with major economic and social questions. One of the most significant aspects of national affairs and probably the one which has given rise to the greatest concern in recent times has been the state of industrial relations. With the exception of a brief reference, which ignored the attitude this Government adopted in recent years, little was said about it in the Financial Statement. The reference was as follows:
Under threats of disruption of their business the tendency of employers has been to buy industrial peace at too high a price in labour costs.
It is right to inquire who gave the employers and the unions the green light in this regard. It is now six years since direct Government action and intervention was taken for the first time during the negotiation of the ninth round. Deputies will recall that the Government intervened at that time in order to gain temporary political advantage at the pending by-elections in Kildare and Cork. The result of that intervention is the very serious inflationary situation which has rapidly developed. Undoubtedly, some of the price rises which occurred were outside the Government's control but the extraordinary spur given by that intervention has been reflected in all wage and salary discussions since and the consequences to the economy have been more than serious.
Informed opinion has expressed great concern at the way this Budget ignores or makes little reference to these particular factors and suggests no policy to remedy the situation. Comments made in the NIEC report, the Central Bank report, the report in the Irish Banking Review and other statements made on the state of the economy all express grave concern that when some form of deflationary action was necessary Government policy and Government directives were the other way.
The NIEC report No. 28 adverts to the fact that on balance fiscal policy was expansionary during 1969 despite the warning given by the Minister for Finance in a broadcast in March of last year. The report states that disappointingly little was achieved in the course of the year because last year's Budget tended to offset the disinflationary impact of the November, 1968, measures. It refers to the substantial increase in lendings by non-associated banks. It considers that monetary policy may have exercised some disinflationary influence in the latter part of the year. It then considers what will happen in 1970 on the assumption that the over-all economic trend would be accommodated by a combination of capital inflow and domestic credit creation of approximately the same order as occurred in 1969.
It refers to the outstanding concern that has been expressed about the problem of the evolution of money incomes. It states that the trend towards an increase in aggregate employee incomes of a higher order than that which obtained in 1969 would occur partly because of the carry over, as most of these were not applicable for the whole of 1969 but will apply for the whole of the current year, to which must be added the second and third phase which will apply from some date this year within the framework of settlements made last year. It points out that allowance must also be made for drift and increased employment. It assumes that further increases in incomes and Govvernment expenditure will contribute to a current balance of payments deficit estimated at £90 million. It expresses concern, a concern which has been shared by every individual or group who have considered the situation, that the growth in GNP in real terms in 1970 will be about four per cent, that personal consumption will rise by 12 to 13 per cent, that investment will rise by about 19 per cent and that the consumer price index will be the same as in 1969, namely 7½ per cent.
In fact, the effect of the Budget will be to add an unknown figure because, as Deputy Dr. O'Donovan pointed out yesterday, when the turnover tax was first introduced it was understood it would amount to 6d in the £ or 2½ per cent but when the turnover tax was first introduced the very minimum increase was three per cent. No one believes that the 2½ per cent increase in turnover tax will result in an overall tax of 5 per cent. The seriousness of these price increases was considered by Mr. Fogarty of the Economic and Social Research Institute and he dealt with the matter at some length in a lecture he delivered in March of last year. He expressed the confirmed view of other commentators when he said:
If, for example, income tax or turnover tax are increased the man who has accepted a pay increase that is reasonable from the point of view of stopping the rise in prices has to pay the tax just as much as the man whose increase was out of all proportion. Naturally he feels aggrieved and unfairly penalised.
Mr. Fogarty went on to say that this particular tax hits the just and the unjust alike and that it will mean a substantial increase in consumer prices. He said it was opposed to every piece of advice that was given to the Government in the course of the comments that were made and in fact, is the form of tax that was rejected as unsuitable in present circumstances.
I want, for a moment, to advert to a matter I referred to earlier—the question of industrial relations. With the exception of the intervention by the Government which sparked off the present inflationary situation five or six years ago, and which is highlighted and referred to again in the recent NIEC report where it recommends certain institutional and other changes, nothing whatever has been done about a prices and incomes policy in the intervening five years. In the earlier NIEC reports, Nos. 11 and 18, guidelines were laid down and suggestions were made for the adoption of a prices and incomes policy but nothing was done about it. Now, after a lapse of five years, during which the situation has got substantially worse, we are back where we were in the beginning.
So far as one can see, the Government have ceased to take any effective interest in industrial relations, ceased to intervene in a positive or purposeful fashion. Maybe as a result of the action that was taken five or six years ago they are anxious to keep their fingers out of the pie. With the exception of the establishment of the Department of Labour, nothing positive or constructive has happened. In fact, the establishment of that Department has coincided with the period in which the Labour Court has ceased to be effective or influential in settling disputes or evolving a policy in respect of industrial relations—with one sole exception: it is right that the conciliation officer of the Labour Court should have his efforts adequately recognised and appreciated. He has performed, on many occasions, a most useful and constructive role. A conciliation officer, however, is not a policy for prices and incomes. A conciliation officer in the main is concerned with settling disputes when they occur, with bringing parties together. His role is something like the old role of the tangler in a fair. He tries to split the difference.
The real problem with which we are faced in the economic field is that of bringing price and income increases under control. Though this statement has been made and remade, emphasised and re-emphasised, there does not appear to be not merely sufficient public understanding of it but any understanding at all so far as the Government are concerned. The damage which can be done and will be done by a continuation of the present situation created by the rate of inflation that has characterised the economy in the last couple of years has been pinpointed and all the bodies that I have referred to have time and time again adverted to this situation. Recent experiences in the export field reinforce everything that has been said in that regard.
To say that a prices and incomes policy is necessary is not to argue against higher wages, nor against a more just distribution of wealth within the community. It is merely to underline a self-evident fact: that if, as a result of incomes in this country going up too quickly, our costs are higher than those in other countries, particularly in Britain, then our goods will become uncompetitive; we will not be able to sell them and larger numbers of people will not only not have higher wages but may well find themselves out of jobs of any sort. This situation was noted in the OECD Economic Survey where it said that the movement of earnings and productivity suggests that wage cost pressures on manufacturers must have increased considerably, that the earnings per unit of output have risen by as much as 9½ per cent. This contrasted with the favourable experience in the previous two years. Unit labour costs rose much more than in the United Kingdom, Ireland's major export market, and in most other OECD countries.
The fact that these warnings have been given before may well cause people to think, and even this debate may create the impression, that because people have been saying: "Wolf, wolf" there is some effort made to deny workers legitimate improvements in their standard of living. Certainly it cannot be denied that in the past, employers have used as a standard negotiating tactic the threat that higher wages could lead to a loss of employment but on this occasion the figures which have been published by the NIEC, a body which not merely embraces employers but is representative of workers in the State, surely leave no doubt that we are dealing with an exceptionally dangerous and serious situation.
The figures which I have quoted from the OECD show that between the third quarter of 1968 and 1969 unit wage costs increased in Irish industry by 11.53 per cent as opposed to only 3.45 per cent in Britain. This, as the OECD report pointed out, is a trend which we could not sustain for long without disastrous consequences. We have advocated for many years, and in our policy published as far back as 1965, the basis and principles on which a prices and incomes policy should be adopted. A detailed report was made subsequently by the NIEC in 1965 and now again, five years later, when nothing has been done, a further report recommending far-reaching institutional changes adverts to the same situation.
In no area of Government administration have the Government shown themselves so devoid of leadership, so incapable of acting effectively and so unwilling to take action as in this critical area. This is not a situation that has developed overnight or without warning. For most of the last decade, certainly for the last six years, the need for a prices and incomes policy has been a constant matter of public debate and discussion among all those who are concerned to establish a high but stable rate of economic growth. No one pretends, and we do not believe nor is it advocated in the NIEC report, that a prices and incomes policy can be 100 per cent satisfactory. If it was 50 per cent, or even less, it would be an improvement on the present position. The efforts made in Britain initially ran into many difficulties and left many problems and questions unresolved but the one outstanding attribute of the economic policies that have been pursued there over recent years, whatever initial mistakes were made in delaying devaluation and so on, has been the consistency with which they have been applied and in the economic field consistency or an approach based on a consistent, constant effort to deal with the situation pays off.
Nobody would seriously suggest that this problem is not one that requires a great deal of thought and consideration. In this country over the past half-century we have developed attitudes and traditions in the field of industrial relations which make it difficult now to approach these issues from anything but the most narrow, sectional standpoint. The challenge which now faces the country, the Government, employers and trade unions is by imaginative and effective leadership to make a determined effort to convert public opinion and the opinion of those directly involved to a broader and more modern outlook in regard to these problems.
This task is not impossible even if it may be difficult. Most people have come to realise that the increases in incomes which have been won over the last few years, and which in particular instances and in some cases when taken in isolation, appear to be substantial, have been eroded by a corresponding increase in prices. This has been recognised by trade unions, employers, by those who have commented on this matter, and even by individual workers. That is where the Government have failed lamentably in this Budget and the climate now exists, because of widespread national concern over substantial price increases, in which effective and purposeful action may be taken in order to create a wider understanding and acceptance of a system of achieving improvements in incomes which in some cases might be modest in monetary terms but would have real value because they would not result in corresponding increases in prices.
A successful prices and incomes policy must include certain fundamental elements. There must be a clear and explicit acceptance of the principle that national incomes should rise in line with real growth in national resources. It is essential also that those who traditionally have believed that income increases can be obtained only by wrenching them from employers through militancy, must be convinced that employers accept without equivocation the need for a steady improvement in living standards. There must be acceptance of the changes which need to be made in the relationships between the various groups in the community. Any incomes policy which is to have any chance of success must include some understanding of, for example, the particular problem of improving the position of the lower paid workers in relation to other groups.
Another key matter in any incomes policy is that there should be full confidence in the various institutions involved. The defect which everyone recognises in the NIEC report and the recommendations that are made—and that is no reflection on some of the persons concerned—is that a number of the members hold dual positions and consequently are inhibited from recommending or adopting policies that are necessary in particular circumstances. They are inhibited by reason of their other positions from recommending changes that might conflict either with the particular bodies they represent or, especially in the case of some Government nominees, conflict with the Government or with individual Ministers.
This report on prices and incomes deals again with many of the problems that have been adverted to in the past. It recommends the establishment of a prices and incomes committee; it deals with the role of the Labour Court, of the Fair Trade Commission and the prices section of the Department of Industry and Commerce. At one stage it makes the astonishing comment that this prices section should be used, implying that in recent times that section has not been functioning.
The report also refers to the statement made in the third programme which indicates that the Government have decided that the Restrictive Trade Practices Act should be amended to empower the Fair Trade Commission to investigate restrictive practices and then it states that the prices section should operate effectively. Finally, it recommends the establishment of a new body.
The Government must make up their minds about what they want and what should be done in this field. The Labour Court as at present functioning has ceased to be effective in any sphere of industrial relations except in regard to its conciliation officials. The prices section of the Department of Industry and Commerce has ceased to operate effectively and it has not got the confidence of the public in general; it has been found to be ineffective and inequitable in the way it operates so far as industry is concerned. This was highlighted recently when, after an announcement that the price of beer and stout was to go up, the Minister for Industry and Commerce announced that it would not go up. Once that was announced it was obvious that there was going to be some change in the Budget. The effect of the Budget will be to increase the prices of beer and stout just as surely as if the usual penny or twopence had been imposed on them and the increases will be just as real as far as the consumers are concerned.
There is a multiplicity of bodies all of which are supposed to operate in regard to prices and incomes. None of them is effective because of the failure to adopt a constructive and consistent policy in regard to all the problems involved. The NIEC report refers to this multiplicity—the prices section of the Department of Industry and Commerce, the Labour Court and the Fair Trade Commission—and now there is to be a co-ordinating body to deal with them. This problem must be faced in a realistic fashion.
For many years the Government have sat staring at the problem like a rabbit hypnotised by a weasel and the evidence is that far from developing a policy they have retreated from the position which existed five years ago. They have been a party recently to the NIEC report which in fact represents a retreat from the recommendations made in an earlier report.
In the Third Programme reference was made at page 142 to the need for a prices and incomes policy and stress was laid on the need to avoid disruption of national development by the commitment on the part of the Government to action in that field. Now, more than a year later, there is an NIEC report on this matter which takes the country back to where it was in 1965.
Some three years ago the Department of Labour was established and it was expected that they would apply themselves energetically to promoting an understanding of the need for new attitudes, new methods in the incomes field and that they would give a lead in promoting the necessary changes in regard to relations between employers and employees. In effect, the Department have said: "Do not make any effort towards a solution of the problem or become involved in adopting and spearheading a policy for industrial relations or a policy in respect of the harmonisation of the traditional conflicts which exist in respect of these two key areas in the economy". The only action the Government took in this field, facing the mounting crisis, was a call last December for a seven per cent limit to incomes increases. That intervention, coming at that time, was so absurd and unrealistic that it merely discredited the Government in the sphere in which they should have had influence and be a source of leadership or guidance. During the whole of last year, the Government said nothing and gave no evidence of any sense of leadership or direction.
The 12th round was allowed to develop on the basis of income increases ranging up to 20 per cent and more. Then, at the very end of the year, it was suggested that, for the remaining workers, all they should get was 7 per cent. This was an example of the inability of the Government to give leadership or to face the problem. The facts are that during last year, the Government were so concerned with winning the general election that they refused to take effective action to keep the economy under control or to provide the leadership and direction. Instead of financial leadership, the crudest form of political expediency took over. That situation has now been ended. One of the consequences of such action is that different sections have themselves taken action— because of the intervention by the Government.
The Taoiseach yesterday, on behalf of the Minister for Finance, said that, under threats of disruption of their business, the tendency of employers has been to buy industrial peace at too high a price in labour costs. Is every employer in the country, is every major concern, not bound to consider what happened in 1964 when the then Taoiseach intervened and, as a result, succeeded in securing a wage and salary adjustment more than the trade unions themselves expected, more than the trade unions themselves were negotiating and more than the industries concerned, in the circumstances of the country as a whole, could afford? That situation, because of the deliberate action taken at the time, has bedevilled industrial relations ever since and has affected the attitude which the Minister for Finance, through the Taoiseach, yesterday commented on in the paragraph I read.
But the situation that is now developing, the magnitude of the increase in consumer prices which can and will occur, is alarming. This has been highlighted by every informed commentator—all of them pointing to the gravity of the situation and all of them indicating that action should be taken to deal with it. The NIEC Report, to which I refer so frequently, said:
The magnitude of the increase in consumer prices which could occur this year is alarming. If it materialised, it could seriously damage competitiveness and therefore put many existing jobs in jeopardy and erode one of the basic conditions for future growth in output and employment. It could create new social tensions because many social categories could not be adequately insulated from its effect. On the external side, even given the present level of external reserves, the risks associated with a deficit of £90 million are unaccepably large. Our reasons for this conclusion are the extent of State and State-guaranteed borrowing which occurred last year; the likelihood that it might be very difficult to borrow abroad on the same scale this year; the uncertainties connected with capital flows; the fact that the balance of payments has continuously deteriorated since the end of 1967; the dangerous expectations that would be consolidated by maintaining the inflationary momentum through 1970 and the serious problems that these would create for the economy in 1970 and 1972.
Let us turn to a quarter that could not be regarded as unfriendly to the present Government. The other day, Maynard, in the Sunday Press, calculated that, in the last year, between rising prices and income tax, an investor would have needed to earn 12 per cent simply to get his money back in real terms. These inflationary pressures, to which every body has referred and of which we are all the victims in one form or another, were triggered off by the action of the then Government in 1964. Of course, the immediate aftermath of that was satisfactory from a political point of view so far as the Government were concerned. The immediate effect for those who got wage increases was beneficial but the effect on the economy has been very, very serious.
This particular form of collecting tax increases is, in the opinion of all the commentaries I have mentioned, the worst form of tax for dealing with the present position. But, over and above that, what will be the fate of the small trader? The small trader faces extinction not because of competition from supermarkets, native or foreign, but at the hands of a rapacious Government who are using Irish shopkeepers as tax collectors. That is the real danger in it. The little traders, the people everyone is anxious to see continue; the people who have been the backbone of the small towns; the people in family businesses in which a son or daughter succeeds the parents or possibly, in some cases, family concerns in which are bound up not merely the interests of the family itself, but the interests of those employed in them; the people affected by rising rates; the people whose lot the increase of £2½ million in the Health Estimate is meant to ease—these are the people who will find the burden of operating this tax possibly as great as—certainly no less than—those who will be obliged to pay it. This tax is, in the view of those who have commented on it, the worst form of taxation to deal with the present situation. It taxes, as the reference by Mr. Fogarty indicates, the just and the unjust alike. The inflationary situation that has developed is so grave that the March quarterly issue of the Irish Banking Review had this to say:
There can be no question that a dangerous degree of inflation exists. It is equally unquestionable that this state of affairs should not be allowed to continue, still less to grow worse. In many of its recent reports the Central Bank has called attention to the urgent necessity for restraining the growth of the external payments deficit. It may be assumed that all responsible, well-informed opinion is unanimous on this important issue.
——with one exception, the Government. This serious situation is such that we believe that the time has arrived for a review of the Free Trade Area Agreement. Last year the rise in the exports to the United Kingdom slowed down sharply. Most of the deceleration was accounted for by the fall in the value of agricultural exports, sales of live cattle and fresh or chilled beef, which accounted for over 50 per cent of all agricultural exports and almost 30 per cent of the total exports. Exports fell by 5 per cent in value and by about 9 per cent in volume. The numbers of live cattle sold dropped by 58,000. There was an increase of 12,000 in respect of chilled or manufactured meat. The over-all effect was a drop of 46,000 in the number of cattle sold to Britain.
The time has come for this country to consider the position on two fronts. We must consider it in respect of the slowing-down in the opportunities for the sale of cattle to Britain and in respect of the effect of the continued reduction in tariffs at the same time as the British continue the import deposit requirement. It is true that the terms of that deposit requirement have been modified but it is still operating in breach of the agreement. If that policy is to be continued, and if there is no further action by the British to relax that imposition, I believe the time has come for this country to consider seriously deferring further tariff reductions. From the middle of this year we will be at a half-way stage in the term for which the tariff reductions take effect. There is an obligation in present circumstances, and a justification because of the British action, for this country to postpone further tariff reductions. The agreement provided for review procedures where it operates unfairly or inequitably or contrary to the terms or the spirit of it. It is now time for a full-scale review. Initially, when we accepted that position, we accepted it on the basis that it was an interim arrangement pending membership of the EEC. A considerable period has elapsed. While the negotiations and discussions in connection with the EEC membership may be accelerated this year the fact is that two major matters —the drop in the exports of cattle and the effect of the import deposit scheme being continued—entitle this country to request a full-scale review and afford us an opportunity of considering what action should or might be taken in respect of the situation which is developing.
The effect of this Budget in raising the cost of living will not appear immediately. In the usual tradition it is a case of taxes being imposed which will fall on the old reliables immediately after the Budget—there is a week's respite this time—but the inter-action and reactions of these price increases in respect of a wide variety of commodities must impinge on the very categories mentioned yesterday. There was great play made yesterday in the Budget speech of concern for the lower-paid and weaker sections of the community. Comments have been made on this point in the press and elsewhere. Every single individual which the Budget was designed to assist will be affected adversely by the increase to five per cent in turnover tax. The categories of persons least able to bear the increase will be affected. This was emphasised in the comments made and in the speech by Mr. Fogarty. The argument has been brought forward on the basis of past experience that the people who are least able to bear the price increases will have to meet them to the same extent as the people who have done well in wage and salary negotiations. Mr. Fogarty said that if the income tax or turnover tax were increased the man who accepted a reasonable pay increase would have to pay just as much as the man whose increase was out of all proportion. He said that such an increase would hit the just and unjust alike.
On all the evidence, this is the wrong way to deal with the problem. The shopkeepers and traders of the country are being used as tax-collectors. Past experience in respect of turnover tax shows that it stimulated price rises. The action of the Government in 1964 led to wage rounds. This followed the introduction of turnover tax. The discussion in respect of wages and salaries in progress at that time was held because of the introduction of turnover tax. This increase in turnover tax will add to the prices spiral. It will inject into our economy the very things which were mentioned as unsuitable economically and financially and as those which should not be applied at present. We have added to the projected 7½ per cent price rise another 2½ or 3 per cent as a minimum. All experience shows that the rise will be greater than that.
This position was allowed to develop by reason of the Government's policy. It has been facilitated by the terms of this Budget. We realise that this problem will take time to settle. A prices and incomes policy would have to be operated not merely with goodwill but with the co-operation of the various interests. The fact that no action has been taken in this Budget would appear to indicate that the Government have no policy to deal with this problem. It would indicate that not only have they no policy but that they are allowing the recommendations made by the NIEC and other bodies to remain dormant.
This cannot be achieved by having a multiplicity of bodies dealing with it. The first thing is to decide what is to be done and then to take action to deal with it. It cannot be dealt with by a multiplicity of bodies such as the Labour Court, the Fair Trade Commission and this co-ordinating body that is recommended. Those bodies have been acting and inter-acting on each other with no authority or sanction behind them effectively to deal with the situation. This has resulted in the present serious economic position.
The Government recognise in the Budget that some action had to be taken to compensate farmers for rising costs, to compensate pensioners and other retired persons. The increase granted in respect of the beef subsidy, the milk subsidy, pensions, the increases in respect of retired State personnel to bring them up to the level of existing retired State and semi-State employees, all will be negatived by increases in prices and in the cost of living. The Budget will mean in a very short time a substantial rise in consumer prices. The NIEC's most recent report adverted to the prospects facing the economy and stated that the forecast of a deficit of £90 million rested on the assumption of a 14½ per cent rise in non-agricultural employees' incomes in 1970 compared with last year, some slackening in the increase in public capital and current expenditures and the fact that consumer prices would rise by about 7½ per cent.
This situation, to which the NIEC referred, would in other countries need measures such as changes in hire purchase regulations, in interest rates, the availability of credit, and import controls. This Government are relying on one single regulator, credit restriction. This again is a blanket system to deal with it. Credit restriction affects the just and unjust alike, as it were. Credit restrictions have meant difficulties for those who want to build houses. They have meant a full stop for many. Credit restriction applies most unfairly to the smallest borrower, and less severely to the bigger institutions. Nobody will suggest that insurance companies, large industrial and other concerns who want to build, buy or rent offices, will have any difficulty in getting credit, but the person who wants to buy a house under the Small Dwellings Acts, the person who is faced with the problem of a mortgage, will feel the pinch of credit restriction most severely. Bank managers throughout the country, accordingly, have been instructed to operate a policy whose implementation has been left in their hands by the Government. Of course it is the poorest individual citizens who feel the brunt. The same is true of the effect of the turnover tax.
This, in our view, is the wrong way to deal with the economic situation. If there is to be a tightening it should operate fairly and equitably over the entire area. The Government's method of dealing with the economy at the present time is the method which was dismissed as being totally unsuitable by informed comment, by the NIEC, by people such as Mr. Fogarty. It has been adopted by the Government because they regard it as a simple way out and because it makes no distinction as between the stronger and the weaker sections of the community. It is no wonder, then, that there has been associated with this Government the stigma that their concern lies with those who have most rather than those whose needs are greatest.
We are anxious to see a policy put into effect that will look after the older sections, the pensioners, those in need generally, the sections which we have repeatedly referred to as pensioners, the people on medical cards, the people whose needs are in no way catered for in this Budget. But the medical card system under which a defective, deficient health service is operated is being continued. The reliefs provided in this Budget are merely to redeem a promise given that the rise in rates as the result of health charges would not exceed 2s in the £.
That is a reckless and an irresponsible way of dealing with a problem of this magnitude. The real defect in this Budget is that it provides a system of taxation that will hit the weakest just as it hits the strongest, that will hit those who have been referred to so accurately in the address given by Mr. Fogarty to the trade union group— that those who have got the biggest wage and salary increases as well as those who got the least under this system will pay equally. The Budget differentiates in no way between the weakest and the strongest.
As far as the present dangerous position of the economy is concerned, there is no doubt that the action of the Government in this Budget is neither in line with the recommendations and advice given nor in the interests of the country as a whole.
There is another aspect of it that I feel bound to comment on. It is the recent statement of the Minister for Agriculture and Fisheries that he was looking for a sum of between £14 million and £20 million, and the subsequent rejoinder of the Minister for Finance that he could not give it. This form of public bargaining between one Minister and another is, first of all, contrary to the collective responsibility of Ministers, who are supposed to act in a united fashion and, secondly, indicates a lack of cohesion. In the course of his remarks, the Minister for Agriculture and Fisheries said it was a reference to an earlier practice. I do not know of any such earlier practice of this character. The only conclusion one could come to is that there was an effort being made at compromise in order to secure some support in the by-elections then imminent. This creates the impression that the Government are disunited in respect of matters that affect the economy and I am surprised the matter has not been the subject of some reference by the Taoiseach. I look forward to some comment from the Taoiseach to the effect that, if it happened on this occasion, it is not approved of and is deprecated as a line of action for Ministers in the same Government.
As far as the effects of the Budget are concerned, we believe the result will be to raise prices further. It will not improve our competitiveness at a time when we should be aiming at more efficiency. It will inflate still further the present dangerous inflationary situation. It lacks any form of constructive economic or financial approach to the problems that beset the country. It will generate still further the very things that every commentary that has been made suggests should not be generated—increases in prices, a weakening of the weaker sections, interference with our capacity to compete effectively and efficiently not merely with out competitors in the British market but with those on the continent of Europe—countries we will have to face if we become members of the EEC.
The policy that has been adopted in relation to this Budget is contrary to every piece of informed advice that the Minister is being given from any quarter and it may well be that when the Budget is considered in retrospect and the results and the policy are apparent, the circumstances surrounding it will long be remembered.
