I do not think at this stage we can rule out the possibility of an autumn Budget. Reading between the lines of the Taoiseach's speech and assuming that he is still Taoiseach and that the present Cabinet still holds power, I think we cannot avoid an autumn Budget. The hard line on incomes expansion which the Taoiseach marked and which was pretty clear in his speech at the beginning of the debate was followed up by the Tánaiste, his acolyte on the incomes problem, and I have no doubt that all this points to a hard autumn budget.
The Government have succeeded— how I do not know; the people will have to judge this for themselves—quite apart from their political problems of their own making in relation to their treatment of the north and their policy on unity, in managing things so that the economy has, in fact, stopped growing. No further growth expansion this year is predicted and, at the same time, we have a very bad inflationary position in which prices are going ever upwards with wages following not far behind. This is a situation which in other countries has been met by devaluation of the £. Earlier this year I asked the Minister for Finance if devaluation was contemplated because it required no gift of prophecy early in the year to see the bad economic situation in the offing. The newly appointed Minister for Finance, Deputy Colley, proudly replied that there would be no devaluation of the £ as long as he was Minister for Finance. Some people may say that it is unlikely but all I can say is that other countries in a similar situation have been forced to take this particularly drastic step. It is a measure which on the performance of our economy at this time would appear to be one that could be considered here. It would not fall easiest on working people but it is a measure which the Government, by their incompetence in the management of our economic affairs, have certainly brought on their own heads.
Whatever happens, in all probability we shall have an autumn Budget. All of the Minister of this Government have called on the community to exercise restraint. It is the "in" word for this Cabinet. I am not one of those who takes a judgement from a man's private life and applies it to his public life and how he conducts himself in public. However, it is only fair to look at the style of the members of the Cabinet who are calling for such restraint from the community. The Fianna Fáil Government have been in power for 13 years and ever since the former Taoiseach, Mr. Seán Lemass, was in office, the style has been one of ostentatious living and spending; this is the era of the big spenders, the era in which some of the notorious big spenders also happen to be Government Ministers. I am aware—and I know politicians are no more exceptional than other human beings in this—of the kind of political criticism which, cloaking its envy seeks to give an ideological basis for an attack on those who happen to possess wealth. I do not wish to take that standpoint this morning. My point is that when members of the Cabinet make an appeal to their fellow citizens to exercise incomes restraint it is only fair that those fellow citizens should take a look at the living style of those Cabinet members. Certainly it must cause indignation to their fellow citizens, that such representatives, such people, that they who call for incomes restraint, should also be the proud owners of high-priced horses at handicap meets around the country, that they should have the neck to appeal to the community for incomes restraint.
The Taoiseach says he is not addressing his remarks on incomes restraint purely to workers. There was a vague intimation in his speech that unless greed stopped elsewhere he might act there, too, but it was only to those who are unfortunate enough to earn their living on a wage basis that there was a specific threat. The more we look at this Cabinet, the more we try to unravel the social programme of this Cabinet and the more we explain to people about their make-up, the better people will be able to see how seriously they should take this Cabinet.
I am suggesting we cannot take seriously any pleas for incomes restraint on the part of the Cabinet whose public and governmental style has been to hold themselves up to the population as the big spenders, saying: "Spend now. Do not save." I would say without any exaggeration that this is a Cabinet which is hooked on inflation and for these addicts of inflation to address themselves to other citizens on the subject of restraint is a very bad joke.
I do not think the Taoiseach's plea to the trade unions to exercise incomes restraint will be listened to. I do not imagine any trade unions could listen to an appeal coming from the head of a Cabinet who have made so many errors in the management of the economy who, in their most recent Budget showed little concern about the problem of inflation. We are all agreed about that. Even their own apologists admit that the earlier Budget of this year was one which failed to tackle the problem of inflation which at that time was perfectly evident. It was a Budget which threw kerosene on that inflationary fire which had already shown itself in a steep rise in prices.
We remember the increase in turnover tax. We pointed out that such an increase in the turnover tax must mean a sharp increase in prices. Of course, this has now taken place. We also pointed out that it was hypocrisy for the Government to claim that the increased social welfare benefits indicated that the Government had a tender social conscience, when in the period which would elapse before these benefits came in, these unfortunate people would be paying increased prices as a result of an increase in the turnover tax.
Any commentator on economic affairs will tell you that the Government which seeks to raise its revenue on the basis of a single tax, as this Government attempted to do in the last Budget, are a Government which are careless about the effects that will have on prices generally. There is no better way to increase prices than to impose all your taxes under the one heading and seek to raise your revenue on that basis.
The Minister for Finance only yesterday declared in the Seanad that he would be introducing a new value added tax next year. The same Cabinet which are calling for incomes restraint are advocating the introduction of a tax which, as any economic commentator will agree, must lead to further inflation. For this very reason the introduction of the value added tax is being opposed at present in Britain because of its recognised adverse effects on the cost of living.
There is confusion in this Cabinet as to how they will deal with inflation. The Minister for Health, Deputy Childers, said yesterday: "Name a country which does not have a balance of payments problem." Nobody in this House ever suggested that other countries do not have balance of payments problems, but I would ask the Minister for Health to name a country which has a balance of payments problem of the magnitude of ours and which also, at the same time, has rising unemployment and rising prices. That is precisely our situation. Therefore, I would ask the Taoiseach, when he is winding up the debate this evening, to give us the name of the country that has these three maladies all going on at the same time. I do not know of any country east or west of any curtain which has those problems. There were more people unemployed here in May of this year than in any May over the past 12 years, leaving out the number of people out of work in the cement strike.
The Government cannot blame any coalition for this situation. Since 1957 this Government have been in sole authority. They themselves are the authors of the disasters which are overcoming them on every front, economic, political and northern. There is confusion about what is their policy. They may devalue the £. They may be forced to do that. Their mistakes bring this possibility very near. They may bring in an autumn Budget which would seek to add fresh taxes. Quite obviously, they should have dealt with the matter of rising prices long before now. They needed no gift of prophecy to see it. The Civil Service could inform them of the increases which everybody else could see around them. They knew what was happening on the incomes front. They did nothing. They may now bring in this autumn Budget. They have been very fluent on the threat posed by rising wages and at this stage their remedy for their economic problems is the very old-fashioned, conservative one of beating down the wage earners. The Tánaiste's ideal world seems to be inhabited by docile trade unionists who do not eat, who do not look for wage claims, who stay at home doing what I do not know but certainly they are people who do not consume at all. They obviously just exist, immaterial beings in the Tánaiste's own imagination. They obviously do not consume because to consume one must seek increases. These ideal trade unionists do not do any of these wicked things.
The Government were lackadaisical when we pointed out the price increases. In question after question at Queston Time we told successive Ministers for Industry and Commerce that a sharp price increase had been registered in a certain series of goods and the Minister involved replied on several occasions that his inspectors were not aware of the increase at that time. One cannot expect much from a Government with a Minister for Industry and Commerce who has inspectors to spot out price increases and when a Deputy brings, long after the event has taken place, these price increases to his notice he declares himself ignorant of such price moves.
They are a Government, therefore, who have not shown themselves aware of increases when they have taken place and whose seemingly only permanent response to our economic difficulties is to restrain the wage earners in our community. Their only response, in fact, boils down to one of:"Contain wage demands". The Taoiseach in his opening speech, in which he considered the serious threat posed to the economy by inflation, denied that, in fact, he was addressing his remarks only to wage earners but, in effect, the specific threats included in his speech are directed solely to wage earners. They do not enter other areas. This Government are now back at the Lemass philosophy expounded originally in the pamphlet about the closing of the gap put out by Mr. Lemass when he was Taoiseach in the 1960s. That philosophy then announced and now unveiled once more is unchanged. It is that if the wage earners of the country can stop their demands for better conditions our economic problems will be settled. This of course, in itself, is a very doubtful proposition.
Therefore, we have rising prices, a big increase in the deficit in the balance of payments with Britain, a slowing down of growth in the economy and the prospects for later this year in the matter of employment show no sign of improvement. We had the highest unemployment rate for 12 years last May.
What of the Anglo Irish Free Trade Area Agreement? In the month of June our deficit on trade with Britain for the first six months of the year— and these are figures given out by the British Board of Trade earlier this week—was £5.23 million over the same period in 1969. In June alone imports exceeded exports by £5.36 million as against £4.9 million in June of 1969. We are getting far more British imports into the country. It is interesting, on the breakdown of these figures of Irish-British trade, that the biggest area of deficit is in manufactured goods so that our exports to Britain of manufactured goods amounted in June to £5.86 million and our imports for that month form Britain amounted to £9.96 million, nearly £10 million. Of course we buy these manufactured goods in the shops at present, products of the Anglo Irish Free Trade Area Agreement which the Cabinet opposite signed and which they told us would be ultimately for the good of this country. Now we are seeing here in the early 1970s some of the bitter fruit of that agreement, signed by Members opposite with so little heed of its future effects on the economy. All these things, all their mistakes, are now pilling on their heads and their only concern is to get culprits, to get a way out, to scuttle away from the problems which only they have produced by their own lack of action over the years past.
I was making the point, on incomes generally, that if any Government wish to speak on incomes they must have a certain moral authority if their advice is to be even heeded. We all accept the complications arising from the attempt to introduce an incomes policy, complications which may not permit of one being introduced in the first place, but a Government's advice to be heeded or listened to, speaking in this delicate area of incomes, needs a certain moral stature. I do not believe this Government have the moral stature for their advice in the area of incomes to be listened to, let alone acted upon. That is one of the problems the country faces. At a time when advice and guidance and direction must be given in the area of incomes and in every other area, this is a Cabinet who will not be listened to, who will not command respect, whose advice will not be heeded.
Prices may, before the end of this year, have risen by 10 per cent. This is quite possible. The Taoiseach—the innocence of the man is remarkable— in his speech at the beginning of this debate says:
Price rises last year of more than 7 per cent were serious enough but according to many forecasts they are likely to rise by an even higher figure this year.
It is as though he was reading news from another planet. One would never imagine he was the Taoiseach of the Government which have been in power for 13 years. It is as though he is detached from the whole business of price increases. A very frequent trait in Government reports lately, when dealing with the economy and prices in general, is to share the responsibility more or less. When things are going bad the method of the Cabinet is to share the burden but when things are going well they say it is all of their making. Things are not going so well now, so the watchword is "blame the community, the trade unions, the fitters, the cement strikes, the bank strike—blame anybody but, for God's sake, do not let anybody think it is our fault." I do not think that will work. It must be the job of the Opposition to ensure that it does not work because it is necessary, if there is to be any improvement, for people to recognise the kind of Government we have.
Unemployment is increasing; prices are on the increase; the balance of payments situation is becoming worse and the Government are in retreat from all the real problems, but in that retreat they are fighting amongst themselves about the mistakes they have made in relation to problems in this country. It is the type of Cabinet in which you could be talking to your best friend in that Cabinet today and next week a black maria might pull up at his door and a man in plain clothes takes your best friend to Green Street courthouse to answer serious charges. Only last night we heard of the existence of a new branch of the secrt policy. I am not the one to doubt the former Minister for Agriculture and Fisheries on this point. He was speaking evidently from the depths of experience when he said there was a new branch of the secret police in this very building. I hope the Taoiseach will answer this charge. Some months ago the Taoiseach assured the House that none of our telephones was tapped. Listening to Deputy Blaney last night it was obvious that he feels that his telephone is being tapped. Presumably the former Minister for Agriculture and Fisheries speaks to the former Minister for Local Government and presumably Deputy Boland's telephone is being tapped. These former Ministers are entitled to a hearing. They are entitled to call the Taoiseach's bluff and they are entitled to to a statement from the Taoiseach. If the Taoiseach's told us in the midst of the last crisis that none of our telephones was being tapped and if Members of the House allege in this debate——
