Dáil Éireann debate -
Tuesday, 10 Nov 1970

Vol. 249 No. 6

Prices and Incomes (Temporary Provisions) Bill, 1970: Second Stage.

Minister for Finance (Mr. Colley)

I move "That the Bill be now read a Second Time."

When moving the First Stage of the Bill on 28th October, 1970, I indicated briefly the reasons why the Government considered it necessary to introduce such a Bill at this time and I explained in broad terms what the purpose of the Bill would be. In my Financial Statement to the Dáil on 28th October, 1970, I elaborated on the economic background and the circumstances which had made Government intervention essential and I outlined the Government's broad strategy for bringing under control the inflationary forces which are now threatening the economy. The Financial Resolutions, which the Dáil approved on the 28th October and the other steps which the Government have announced to cut back the deficit on the current Budget and to moderate the rise in public expenditure are one part of this strategy. While those measures—by reducing aggregate spending—will ease inflationary pressures arising from excessive demand in the economy, action must still be taken to deal with the danger that inflationary pressures due to rising costs will be accentuated by further increases in incomes in excess of the growth of national productivity. The purpose of the Prices and Incomes (Temporary Provisions) Bill, 1970, is to deal with this danger.

I should like to reiterate now as forcefully as I can that the Bill is not aimed at cutting back workers' living standards; it is rather aimed at safeguarding their existing living standards in real terms, at avoiding a further disimprovement in the level of employment and at creating conditions in which steady economic growth can be resumed. This legislation—as the long title puts it—is "for the purpose of safeguarding the economy, in the national interest, from the present serious dangers threatening it". It is legislation which, whatever its immediate impact, is clearly in the long-term interests of every section of the community.

I do not propose in this speech to cover in detail the sequence of events this year and last which have made it necessary for the Government to take decisive action. I would like, however, to answer the argument that the Government could have avoided the necessity for these steps. Ever since the pay settlement for maintenance craftsmen early in 1969, the Government had repeatedly made it clear that the level of the 12th round increases which followed the maintenance settlement was grossly excessive and bound to worsen the economy's competitive position and to affect adversely both employment and economic growth. The Government tried by exhortation and by a stricter application of existing price controls to ensure that the 12th round did not get completely out of hand and that leap-frogging and escalation of claims in the later stages of the 12th round would be avoided.

We were partially successful in this effort and the Government were hopeful that a period of restraint or moderation in money income demands would follow and that the economy would be given time to absorb the 12th round increases. This could have enabled us to overcome the economic problems stemming from the 12th round in a relatively short time and without serious deflationary measures. The way would then have been clear for a return to a more acceptable rate of growth.

The Government tried to facilitate agreement on a voluntary basis to such a period of moderation. Our hopes— as set out in the Third Programme— that a proper institutional framework would enable unions and employers to work out arrangements on pay which would be consistent with the national interest were encouraged by the unanimous adoption by the National Industrial Economic Council of a Report on Incomes and Prices Policy and by the apparent recognition by both unions and employers of the need to avoid a recurrence of the 12th round.

The report which was published in April, 1970, proposed new institutional arrangements designed to help achieve a closer relation between increases in money incomes and increases in national production. It will be recalled that the Government moved quickly to put the new arrangements into effect. Following discussions with the Irish Congress of Trade Unions and the Irish Employers' Confederation, a new body—the Employer/Labour Conference—made up, of trade union representatives and employer representatives —including Government and State-sponsored bodies—was set up and met for the first time on 22nd May, 1970. The Government also indicated that they favoured the setting up of the Incomes and Prices Committee recommended in the NIEC Report and the proposal that the NIEC would set income guidelines.

Despite this encouraging start, the subsequent sequence of events was most disappointing. After almost six months, attempts to reach agreement at the Employer/Labour Conference ended in failure, while action to set up the Incomes and Prices Committee and to get the NIEC to set guidelines for income increases had to be deferred in view of the unwillingness to accept the NIEC policy at the Annual Conference of ICTU. The breakdown of the Employer/Labour Conference talks raised the prospect of another round of pay increases even greater than the one which followed the 1969 maintenance settlement. This could have been disastrous.

As a result of the phasing of 12th round agreements, total non-agricultural wages and salaries were expected to increase by 7 per cent in 1971 without any new wage agreements. If another round of increases on the lines of the 12th round or greater were to occur, it would introduce such pressures on prices and costs that—even allowing for a substantial degree of wage inflation in Britain and abroad —we would have to take steps to protect the balance of payments and the parity of the Irish pound of such severity that considerable unemployment and a fall in national output would be almost inevitable. The development of the 12th round showed that once settlements have been made in a number of key sectors, neither Government exhortations to unions and employers nor price control have much hope of stopping them becoming generalised.

The failure of attempts to secure a voluntary agreement by the Employer/ Labour Conference was accompanied and followed by substantial wage claims by certain unions—some were for an increase in the region of 50 per cent or £8 to £10 a week—and by a rising level of expectations on the part of the workers generally.

Dr. O'Donovan

That is not true.

Mr. Colley

It is true.

Dr. O'Donovan

It is not.

Mr. Colley

Of course it is true.

Mr. Desmond

Which claim?

An Ceann Comhairle

Deputies will get an opportunity of replying to the Minister later.

Dr. O'Donovan

We can reply plenty on that.

Mr. Colley

It was agreed that that was true by the Congress of ICTU in our discussions with them.

Dr. O'Donovan

It is not true.

Mr. Colley

I was there.

Dr. O'Donovan

I have been with them.

Mr. Colley

I was there.

An Ceann Comhairle

Will Deputy O'Donovan allow the Minister to make his speech?

Mr. Colley

The Deputy does not know what he is talking about. I was there.

Dr. O'Donovan

That is not true.

Mr. Colley

The Deputy should not accuse me of telling lies. I am saying I was there and it was said.

Dr. O'Donovan

I will accuse any member of this Government of telling lies if I feel like it.

Mr. Colley

It is easy enough for the Deputy to make assertions of that nature.

Dr. O'Donovan

I am telling the truth.

Mr. Colley

The Deputy is not telling the truth.

Dr. O'Donovan

The Minister should quote the incident.

An Ceann Comhairle

Deputy O'Donovan will get ample opportunity of making a speech.

Mr. Colley

He will get ample opportunity to tell more lies.

Mr. Desmond

Will the Minister state the claim?

Mr. Colley

If the Deputy does not know he can go and find out.

Mr. Desmond

Which claim?

Mr. Colley

The Deputy can go and find out.

An Ceann Comhairle

Order.

Mr. R. Burke

Could we have a House to hear the excellent exchanges?

Mr. L'Estrange

They are not there to back the Minister today, whatever is wrong.

Notice taken that 20 Members were not present; House counted, and 20 Members being present,

Mr. Colley

The Government were satisfied that action had to be taken and they felt the serious situation justified their taking the unpredecented step in peacetime of interfering with the normal processes of collective bargaining. As I said in the Dáil on October 28th:

No responsible Government could have delayed action any longer or have refrained from the measures which we propose to adopt. We have a duty to safeguard the national economy and to protect the weaker sections of the community from the consequences of the selfish actions of their better placed fellows.

The action which the Government propose to take is not, of course, confined to pay. While wages and salaries are by far the most important constituent of total incomes, inflationary increases in other incomes are economically as unjustifiable and, from the viewpoint of equity and fair play, even more undesirable. The Government measures in this Bill apply equally to all forms of remuneration as well as to directors' fees, dividends, rents and fees for professional services. Furthermore, the extension and strengthening of price control is not only designed to hold price rises to the minimum, but, in conjunction with the increase in the direct taxation of companies already announced, to ensure that moderation will apply equally to aggregate profits before distribution.

Before going into the detailed aspects of the Bill it is important that at this point I should re-assert the objective towards which the Government have consistently aimed. The objective is to mobilise the intelligence and common-sense of our people in a successful fight against inflation. The achievement of a rational and realistic policy on incomes is a first principle in this situation. The Bill makes it crystal clear that the Government has not deviated by one iota from that principle.

The gravity of the problem and the grim consequences for the nation if it is not tackled are now widely appreciated among our people. The vast majority of our citizens now understand the urgency of the threat to their living standards, to their prospects and to their jobs. They want to see, and they are entitled to expect, a voluntary wage agreement which is realistic and adequate to our situation.

The Government have demonstrated their readiness to hear representations made by the public services, by congress and by the employers over the past few weeks. We are, in the national interest, justifiably impatient for a solution but because understanding and consent are essential in meeting this major national problem we have accepted some of the arguments put to us. Any agreement now reached must be acceptable to the Government and such an agreement would have the full backing of the Government under this Bill.

If after all this, there should be no acceptable agreement then the Government will act and this Bill enables us to do so in a decisive manner. We intend to protect the welfare of our people. We will not allow sectional interests to cudgel or cajole their way to selfish gains at the expense of the community.

I should like now to indicate broadly what the Bill sets out to do. I intend to deal with the main provisions of the Bill under the following headings: remuneration, prices and charges, company fees and dividends, rents, penalties and other matters.

The Bill distinguishes between basic rates or scales of pay, including normal incremental scales of pay, and other terms and conditions of employment. The latter embrace all forms of remuneration by way of overtime, allowances, bonuses and cover as well such items as hours of work, superannuation, holiday and sick pay arrangements. So far as basic rates of pay are concerned, the Bill makes it an offence for an employer to increase the rates in payment on 16th October, 1970, by more than the authorised amount, that is, the amount that the Government will fix by order. As Deputies are aware it was the Government's original intention that the limit on pay increases should be 6 per cent or 24s a week if greater but not exceeding 36s a week and that these figures should be set out in the Bill. In deference to the representatives of ICTU, and in the hope that agreement may still be reached voluntarily on a moderate increase for next year, the Government have decided to leave the figures open for the moment. I must make it clear, however, that the Government in proposing the limit to new increases of 6 per cent were aware that this would still result in an inflationary increase in overall wages and salaries during 1971 in view of the level of income commitments carried over under 12th round agreements. Increases limited to 6 per cent would, however, result in some slackening of the rate of increase in incomes in 1971 and 1972 compared to 1970.

Setting a limit to increases in rates of pay by reference to the rates in payment on 16th October, 1970, could be unjust in some cases where the rates in payment on that date were obviously inappropriate. In particular, some groups of employees, especially non-unionised groups, who usually get their increases towards the very end of a pay round when the pattern has been clearly established, could be very harshly treated. Accordingly, provision is being made for exceptions from the overall limitation. The details of this provision might be more appropriately discussed at Committee Stage of the Bill; at this stage, I will confine myself to saying that the exceptions are being limited to cases where employees had got no increase in 1970 or where they had submitted claims which had not been disposed of before the 16th October, 1970. Some groups will be covered automatically by the exceptions provisions while others will have to submit their cases for examination to the Labour Court or other appropriate body.

With regard to other terms and conditions of employment, the Bill makes it an offence for an employer to amend or vary the terms or conditions in operation or effect on 16th October, 1970. This means that improvements in such things as hours of work, allowances, and rates of remuneration in respect of overtime are barred by the Bill. I think it well to emphasise this since some comments on the legislation have suggested that a wide loophole exists here. The opposite is the case; the control proposed here is rigid. Bonuses, commission and similar payments may continue to be made provided the terms on which they were payable as at 16th October, 1970, are not varied. The Bill makes provision for exceptions broadly on the basis that alterations or variations to which an employer had committed himself before 16th October, 1970, may be implemented.

While the Bill places the onus on employers not to pay unauthorised pay increases or later existing terms or conditions of employment, it provides that trade unions which assist or encourage a strike aimed at getting an employer to commit an offence, themselves commit an offence. They commit a further offence if they use their funds in support of a strike, for example, by paying strike pay. The protection which they enjoy under the Trade Disputes Acts is not affected.

The Minister for Industry and Commerce already has wide powers of control over the prices of most commodities and services under the Prices Acts 1958 and 1965. These existing powers will be rigorously applied to ensure that only unavoidable increases in costs are passed on to consumers and that every effort is made to absorb them first, either by raising productivity or by accepting a lower level of profit, if that would not have unduly detrimental effects on the firm or industry. Increases in the prices of imported raw materials or in wages and salaries cannot all be absorbed by higher productivity or out of profits. What we must aim at is ensuring that increases in costs are avoided to the fullest extent possible and that they are not passively passed on in higher prices. In order to ensure the most effective use of the powers of price control this Bill is making certain changes in the prices Acts. These will give power to investigate and fix the margins of profit of importers, manufacturers, distributors, wholesalers and retailers; to require retail traders to display their prices for all or any commodities being sold by them and to fix the maximum amount which may be added to the price of goods for wholesale tax or for turnover tax. The Bill is also extending the prices Acts to new houses and to charges for professional services, contracts for the supply of goods or services, banking or insurance charges, interest charges and hire-purchase charges which have been excluded from the scope of the Acts up to this. While there will undoubtedly be many practical problems of implementation involved, it is the Government's intention that prices policy should be vigorously implemented and the co-operation of the public at large is essential to our doing this. Particularly in the case of many services of a personal nature, the ultimate sanction lies with the consumer. There is provision in the Bill for the Government to transfer any functions under the prices Acts vested in the Minister for Industry and Commerce to another Minister if that Minister could more appropriately exercise these functions. It is intended, for instance, that the Minister for Local Government will be responsible for controlling the prices of new houses.

The Bill prevents a company from paying fees to a director for a financial year ending after 16th October, 1970, at an annual rate exceeding the rate payable on that date in respect of a similar office. The general restriction on increases in basic rates of pay in the Bill applies to directors equally with other employed persons. The restriction does not, however, apply in the case of new companies.

The Bill also prohibits the payment by a company on or after 16th October, 1970, of ordinary dividends for any financial year in excess of the rate paid for the previous financial year or the average of the rates paid for the three previous financial years if that should be greater. In comparing the rates, provision is made for alteration in the amount of the company's share capital either by increase or reduction.

While the restriction does not apply to a new company, it does apply to a new company which was formed as a result of the reconstruction or amalgamation of another company or companies. The amalgamated or reconstructed company may not pay dividends in excess of the aggregate of the amounts paid by the previous companies in the preceding financial year or the average of the amounts paid in the three preceding financial years. Companies which contravene these restrictions shall be guilty of offences.

I now come to the control of rents and I intend to deal with this subject in some detail because the position is a complicated one and some confusion seems to exist.

There is already statutory control of rents in the case of certain unfurnished lettings of pre-1941 dwellings below specific valuation levels. That control is imposed by the Rent Restrictions Acts, 1960 and 1967, and it is not affected by the present proposals. What this Bill proposes is to extend to all lettings of dwellings and apartments, whether furnished or not, business premises and non-agricultural land, irrespective of the valuation of the property concerned and irrespective of the date of the letting of the property. The term "letting" includes a fee farm grant, a lease and every other contract of tenancy in consideration of a rent or return, including a fine. Accordingly, it will not be possible to escape control simply by providing in a lease for a substantial fine in lieu of increased rent. One object of this is to prevent increases in the prices of new houses sold by way of a long lease, a fine and a ground rent.

The Bill proposes that, apart from certain increases to which I shall refer in a moment, rents may not exceed the rents that were payable on 16th October, 1970. It is important to note that, if there was no letting on 16th October, 1970, the maximum rent will be the rent that would have been payable if there had been a letting on that date. The landlord will not be able lawfully to recover any amount in excess of the maximum rent. The Minister for Local Government may make certain exceptions to cover local authority houses. This is designed, inter alia, to preserve the operation of the differential rent system. I should make it clear, however, that there is no intention of increasing the scale of differential rents for any existing tenants, though, of course, they could be liable for increased rates. A landlord who increases the rent in contravention of the Bill will be guilty of an offence. Where the rent is in excess of the maximum rent, the tenant may recover the excess if he has paid it. Also, in the case of a bona fide dispute as to the amount of the maximum rent, the withholding of the rent by the tenant, pending determination of the matter by the court, will not give the landlord ground for ejecting the tenant.

The Bill will, however, allow for an increase in the rent to cover expenditure by the landlord on necessary repairs and maintenance, but the increase allowed will be limited more or less in the same way as a similar increase is limited in the case of a controlled dwelling under the Rent Restrictions Acts. An increase on the same lines will also be allowed for improvements made with the agreement of the tenant or under the terms of the letting. Where the landlord pays the rates, he will, of course, be able to increase the rent to take account of any increase in rates.

The Bill provides for a restriction on the recovery of possession by a landlord who seeks to evict a tenant in order to evade or contravene the proposed legislation. The principle of combining protection of possession with control of rent is already enshrined in the Rent Restrictions Acts, 1960 and 1967.

In the case of assignments and sub-lettings made without the consent of the landlord, where such consent is required either expressely in the letting agreement or by implication, the letting will be voidable at the option of the landlord. However, the landlord's consent may not be unreasonably withheld. In the case of a dwelling, a specific protection is being provided for the surviving spouse or any member of the family of a deceased tenant. The protection is the same as that already provided for the Rent Restrictions Act, 1960. Where a non-statutory tenant of a controlled dwelling (within the meaning of the Rent Restrictions Acts, 1960 and 1967) dies, and the letting is terminated before administration or before the executor has taken up occupation, the surviving spouse of that tenant or a member of the family (who was bona fide residing with the tenant at the time of his death) may continue in possession under the same terms and conditions as the deceased tenant.

As regards proceedings arising from the new provisions for the control of rents the district court is being given jurisdiction in all cases where the rateable valuation of the property does not exceed £30. In the case of properties with valuations above £30 the circuit court will have jurisdiction unless the parties agree in writing that the proceedings should be in the district court.

Before I leave the control of rents, I think I should stress that, whereas the control of prices is a matter for the Minister for Industry and Commerce or any other Minister to whom functions are transferred in relation to a specified commodity, service et cetera, the control of rents is a matter for the tenants concerned and for the courts. In other words, in so far as the civil law is concerned, the Bill in effect proposes to apply the well established and well tried system of rent control under the existing Rent Acts to all rents (other than agricultural rents). No Government Department will be involved in the actual fixing of the rents themselves except in so far as the Minister for Local Government may make regulations to deal with the rents of local authority houses. The Bill sets out how exactly the maximum rent is to be determined, what are the permitted increases, the remedies available to the tenant who is overcharged and the protection he has in case it is sought to evict him. Additionally, a landlord who contravenes the proposed statutory control by increasing a rent will be guilty of a criminal offence. In this latter respect, the Bill goes much further than the present rent code.

Employers, trade unions, landlords or companies guilty of an offence will be liable:

(a) on summary conviction, to a fine not exceeding £200, or (b) on conviction on indictment, to a fine not exceeding £5,000, with a further fine not exceeding £5 in respect of each individual in relation to whom the offence is committed for each day on which the offence is continued.

The court may order that the amount of a fine shall be a charge against moneys payable to the person concerned from central or local government sources.

A person who is fined shall not be liable to imprisonment in default of payment of the fine but the court may order that payment of the fine be secured by seizure, entry into possession and, where necessary, sale of the property of the person. "Property" includes land, shares, debentures and (in the case of a trade union) any deposit made by it with the High Court under the Trade Union Act, 1941.

The Probation of Offenders Act will not apply in relation to offences under the Act.

I should mention that it would be possible to charge an offender in the district court with a number of separate offences, e.g. in respect of a number of individual employees.

Most of the other provisions of the Bill are designed to ensure that the main provisions of the Bill can be effectively implemented and I do not propose to deal with them in detail now.

It is intended that the Bill will expire on 31st December, 1971. This is, in fact, short-term emergency-type legislation which I hope will introduce some realism into the whole incomes situation. I know that many people fully realise the futility—indeed the plain madness—of increases in money incomes of the kind we have been having and with which we are being threatened. They feel helpless to do anything effective, however. They fear, and one can understand their fear, that unless restraint is exercised generally, the only result of moderation on their part will be to lose them their place in the queue and enable more selfish sections to move further ahead. This is a very real dilemma. The individual worker or group of workers must have some assurance that restraint on his part will not simply result in someone else moving ahead of him without any net benefit to the community at large. This Bill endeavours to give this assurance. I recommend the Bill to the House for its approval.

Mr. P. Belton

To hear the Minister speak, one would think the present situation is the fault of the workers and employers and not of the Government. Towards the beginning of his speech, he says:

I should like to reiterate now as forcefully as I can that the Bill is not aimed at cutting back workers' living standards.

That is utterly untrue because we see already how it will cut back workers' living standards.

Ever since the pay settlement for maintenance craftsmen early in 1969, the Government had repeatedly made it clear that the level of the 12th round increases which followed the maintenance settlement was grossly excessive and bound to worsen the economy's competitive position and to affect adversely both employment and economic growth.

The Minister goes back to 1969. He does not go back to 1963, when an increase of 12 per cent was given to win two by-elections. But the Minister will not go back to that date. He will not go back to 1965 when a policy of prices and incomes was agreed between employers and employees.

The breakdown of the Employer/ Labour Conference talks raised the prospect of another round of pay increases even greater than the one which followed the 1969 maintenance settlement.

That strike occurred because of increases brought about by the Government. When foreign biscuits were pouring in here, killing the demand for Irish biscuits, the Government did nothing. It is late in the day to be talking about measures to redress the balance of payments situation and prevent the devaluation of the £. These steps should have been taken three, four or five years ago. But Fianna Fáil did not feel like taking these steps three, four or five years ago. The Minister quoted a speech he made here on October 28th, when he said:

No responsible Government could have delayed action any longer or have refrained from the measures which we propose to adopt. We have a duty to safeguard the national economy and to protect the weaker sections of the community...

There is very little in this piece of legislation for the weaker sections of the community. There is, in fact, nothing at all. It is not the employer or the worker who has created inflation; it is the Government. We have had an excessive growth in Government expenditure and excessive increases in taxation. We had, for example, the doubling of the turnover tax. That was done against the advice of every economist, against the advice of every member of the Opposition and, I am sure, against the advice of many members of the Fianna Fáil Party. But the Government went ahead. Most price increases in recent years have been brought about by higher indirect taxation which generated demands for higher wages. Increases in wages put up prices. As wages increase, prices increase.

In 1965 the NIEC adumbrated an incomes policy, a policy which was ignored by the Government. It was agreed by the employer-labour representatives but ignored completely by the Government. One could say that it is the Government's attitude which has encouraged unions and employers to resist an incomes and prices policy now. Such a policy was agreed on but, because the Government would not accept the recommendations in the NIEC report, both sides lost interest.

Fine Gael have always been in favour of an incomes policy and, at the time, I spoke to the then Minister for Labour, Deputy Dr. Hillery, about such a policy, but he would not have it; he did not believe in it. The Government ignored completely any control of the growth of non-wage and non-salary incomes. If salaries and wages are to be kept down then equally other incomes must be controlled. The Government would not accept that policy. The NIEC, following on the lines of the policy adumbrated in the Fine Gael Just Society programme, suggested that unearned income should be taxed when it reaches the shareholder and not while the money is still in the hands of the holding company. I do not believe the Government even examined this suggestion. Did the Government, in fact, initiate the suppression of any such proposal?

The effect of the corporation profits tax will be to prevent money being ploughed back for the purpose of providing more employment, more wages and a better national income. On the other hand, if the dividends were taxed when they reached the hands of the shareholders that would be a more equitable system than the Minister's suggestion because dividends coming from English companies would then be taxed here; at the moment there is no control over any money coming from English companies. People with money invested in Britain are better off than are those who invest their money in Irish companies. A dividend acquisition tax would catch all money whether invested in Britain or here at home.

At no stage was any attempt made at a prices and incomes policy. Things were allowed to drift. More inflation followed. The Government failed to take the initiative after the maintenance strike last year. At that time opinion was very much in favour of cutting down on expenditure. What happened? In March of last year Deputy Haughey, then Minister for Finance, spoke on television and radio and said that there was a crisis: a few months later there was no crisis because there was a general election in the offing.

The Opposition parties, employers and workers have now to come along and bail out the Government. This is not our job. Apparently the Government expect everyone to rally round. Surely Fianna Fáil should have looked at this matter over a period? They should be able to continue in Government and do their job properly. Now they are shouting that everybody must come to their aid.

The Government have made the position worse by their handling of this crisis. On October 16th the Minister for Finance said that wages were frozen and there should be no more increases. As negotiator with the civil servants he granted 17 per cent but asked them to show responsibility and accept 7 per cent and, later on, 10. Within weeks he broke this arrangement.

This climb down was inevitable because it was asking employers to break their word in agreements already made. The ICTU made it clear all along they were willing to negotiate. In a letter from Mr. Cosgrave, President of the ICTU to Deputy Cosgrave, Leader of the Opposition, it was stated that it was their view that a thirteenth round settlement along the lines advocated by Congress would still be possible if the Government would withdraw the proposed legislation and enable them to continue negotiations along these lines. That letter enclosed details of their proposals. They are willing to negotiate but this price freeze was brought in on a "take it or leave it" basis.

They have modified the 6 per cent automatic freeze proposed but this does not solve the problem. It is unrealistic to negotiate under threat because employers know they do not have to give an inch. The unions can negotiate up to 6 per cent—why give any more? I do not see how there can be a wage freeze and at the same time ask people to negotiate. The employers are now in a position where they can offer up to 6 per cent—perhaps less, if they think they can get away with it.

The introduction of this Bill at present is prejudicing voluntary agreement and makes it more likely that the enforcement of a wage freeze will be necessary. A freeze is undesirable at any time. It is the last resort because of the undesirability of interfering with collective bargaining. It can only be for a brief period and when that period is over, in 1971 as the Minister suggests, the floodgates will open and the last situation will be worse than the first.

I suggest the Government should hold back this Bill and give the negotiators a chance. They may fix something above 6 per cent but over a period it can be graded down instead of suddenly cutting it off. Because of the possibility of the present talks succeeding and fixing a figure in excess of 6 per cent the Minister has deleted from the Bill the 6 per cent and left it to himself under section 2 (6) to fix the amount. This is totally unacceptable as a power for the Minister. The amount should be fixed in the Dáil and not by a Minister. A provision that would eliminate the authority of the Dáil is totally unacceptable. Under section 22 the Minister, by order under this section, may modify the provisions of this Act so far as may appear necessary or expedient. This is quite unacceptable and on these grounds Fine Gael will object to the Bill.

I should like to ask the Minister if the people who came to Ireland on an IDA grant and got permission to repatriate profits at any time will not now be allowed to do so. This was something guaranteed to those coming here and investing their money here. Is that now gone? Also, is the corporations profits tax arrangement a temporary measure or is it to be permanent? In the past few months Fianna Fáil have been stating half truths and not giving the full facts to the Dáil. The credibility of the present Government is gone. Most people cannot believe in it. One can see that today in the papers. Over the past few weeks we have been asking about the strength of the police force and how many are going around with guns and we now see, when the Government are pressurised, how many people they can arrest in a few days. In other words, they knew this was going on but were not going to do anything about it. Likewise, in bringing in a prices and incomes policy you are asking the people to co-operate. I do not see how they can agree 100 per cent. Fianna Fáil are the party in power and they should have led the country and it is they who should have taken steps to protect the economy. They did not do so.

When the Minister for Finance broke the agreement with the civil servants who had agreed to accept 17 per cent in two instalments he broke the phasing principle of agreements. If he has broken his word on that how can any trade union negotiate an increase and put trust in the Government since the Minister might break another agreement if it was phased?

This was a panic move. In the Irish Times of November 9th the Taoiseach said that these changes were interpreted by some people as implying a change of policy and by others as a sign of indecision or weakness on the part of the Government. This, he said, was not the case but it became clear after the original announcement that there was a wide gap between Government thinking and that of many sections of the community on inflation. There is a wide gap between Government thinking and the people. There is no doubt about that. If that is the only excuse the Taoiseach can give I think it is a disgrace.

I do not think any employer in the country wants that 12th round broken. But the Minister jumped at it, broke it and then changed his mind. He now tells the trade unions "You negotiate up to 6 per cent and if you do not I will make it 6 per cent". Fine Gael were the first to say that the 12th round must not be broken if there is to be any credibility between employer and employee and if there is to be an improvement of relations in industry. Everybody else followed the Fine Gael line in this matter except Fianna Fáil.

We had the ex-Minister for Finance saying there was no need for a wage freeze but perhaps one should not pay too much attention to this statement having regard to the battle for leadership that raged in the Fianna Fáil Party. However, it is a fact that some members of Fianna Fáil said there was no need for a wage freeze. There is no doubt that this proposal was a panic measure. I do not know if it was to get some people into line, whether it was bad economics or perhaps it was the case that not sufficient homework was done on the subject. The Taoiseach's reply to this whole matter was most inadequate. The Government have now backed down because the original decision was not the right one. For how long will the people put up with this kind of Government?

It has been stated that these measures will settle the economy but how can the people be asked to keep wages and profits at the same level if the Minister brings in measures whereby costs are increased? He has asked people not to look for extra wages and profits but he has taken measures that will increase the cost of living and thereby cause inflation. In other words, it is a case of "Do as I say but do not do as I do."

The Minister was specific about how the Irish people would have to work to prevent inflation. What about the £7 million he has told us will be saved? Will the Minister tell us from what source this will be obtained because the people are entitled to know this? I doubt very much if the Minister has any idea. The Government will do nothing but the Minister has told the people what they must do. Does the Minister think that the sums of money that have been spent foolishly in the past can now be retrieved or is it the case that as a result of the Minister's action we will have unemployment?

The Minister also mentioned that rents will remain at the same level apart from differential rents. My understanding is that if a person gets an increase of £2 or £3 per week or if a son starts working the rent will increase. Can the Minister state if rates will be frozen because this I regard as an essential measure? If rates are not frozen it will affect severely the person who is paying £7 or £8 per week in repayment of a housing loan. If there is an increase in rates the householder must pay it but, in addition, the ordinary person who goes to purchase articles at the grocery shop is, in effect, helping to pay the grocer's rates because the cost is inbuilt in the prices of goods. The same applies to the tailor or anyone else. The increases are included in the articles that are purchased and in this way the worker is being subjected to very severe and unfair increases. If rates are not frozen I can see an increase in the cost of all items and the Government's policy will be a failure. It is well known that the last course adopted before bankruptcy is to freeze wages and prices.

The Minister is hitting at the small shareholder with the introduction of corporation profits tax because this shareholder will get less next year. By allowing a dividend to be paid and by taxing the person with a large income, you protect the smaller shareholder. I should like the Minister to tell the House if the corporation profits tax is a permanent measure.

We have frequently asked that Bills be phrased in language that does not require the expertise of a solicitor to interpret. From my reading of section 17 of the Bill a trade union official, not the union, can be fined £5,000 but perhaps I am misinterpreting it. It is also stated in section 20 that an authorised officer shall be furnished with a warrant of his appointment. That officer may walk into any business and look at books, accounts and documents; he can copy and take extracts from any records. Even the Revenue Commissioners—who are not responsible to anybody from what I can see and can do things their own way—do not do this. They may disagree with you about your accounts and you then furnish them with the appropriate records, but under this Bill an authorised officer may walk in and take the books with him. I do not think I am incorrect in my interpretation.

We in Fine Gael cannot in any circumstances accept this freeze. We are of the opinion that had minor checks been made since 1965 there would not be any crisis today. However, Fianna Fáil let things slide and it is they, not the wage earners, who are responsible for our present situation. They set up many commissions involving employers, trade unions and Government officials but they did not take the advice of those commissions. They wasted the time of the commissions and discarded their recommendations, perhaps adopting one or two minor recommendations.

The workers have been asked not to look for an increase and the Minister has said that he will save £7 million, although he will not say from what source he will obtain this money. The Minister has asked the workers, business personnel and industrialists to accept his ruling. They have to accept this, the Minister says, but he does not tell us what it will be. If that is the case, I cannot see the worker or the businessman accepting it. If commissions are being set up again, the members on them will not be believed. The next time a commission is set up the men on it should be selected because of their ability and knowledge of business matters and because they will give fair and straight statements of their beliefs. Nobody must be picked because he is purely a political hack. Commissions will be set up shortly. I guarantee that the personnel on them will not be picked for ability, but because they are known.

Finally, I should like to ask how the worker can accept this Bill unless the Minister for Finance tells us more about the workers' £7 million on top of the £30 million, £40 million or £50 million. This Bill is necessary because of the Government's inefficiency.

Mr. Tully

I was going to say that I was disappointed on hearing the Minister's speech. Of course, I am not disappointed: it is a masterpiece of evasion. The Minister does not attempt to give us any direct reason for the Bill, or to explain the thinking behind the Bill. The reason for that is simple: there was no thinking behind the Bill. It was introduced in a certain way as something expedient to do at a certain time. The Government and their advisers knew it was a silly thing to do, and throughout the country the Bill is already known as "Colley's folly". How stupid can people be when they attempt to do things in this way? The Government tried this type of thing before and failed. They are careful to say that this Bill involves no imprisonment. Imprisonment was involved in the last penal Bill under which ESB workers were sent to jail. No one knows who paid the fines or who paid for the taxis to take the workers away from jail. If this had not been done the ESB would have had to close down completely.

One of the things which causes this trouble is the attempt by a man like Deputy Colley to deal with a matter about which he knows very little. I met Deputy Colley as a chairman of the joint labour committee and I felt at the time that he was an intelligent and fair-minded young man. If he had developed along those lines, he could be quite good in dealing with labour relations. I do not know what has happened since that time and whether coming to this House, being appointed a junior Minister and then to a major ministry has changed him and forced him into the position of coming in here with a Bill which, I am sure, if I understood him correctly in his early days, he could not possibly believe in. If the Minister stopped to consider the matter, he would realise that much of the trouble with labour relations in this country has been caused by people who lay down wage increases as being this round, that round or the other round. We have been talking about the 12th round and the 13th round. I do not know when this system of "rounds" started. How many rounds have there been of either a major or a minor character?

I am a trade union official of 23 years standing—of course, I could not be expected to know as much as some of the people who drafted a Bill like this! It is easy to put down a phrase, thinking it will cover everything. The position, as those of us who are in the business know, is that wage increases occurred in the industrial sector, or appeared to occur, each year at regular intervals, and almost every year. Post-war it appeared that there would be increases every year. The lower-paid workers, because they were not on the same level and because their trade unions were particularly active, had to get two or three wage-rounds in between the official rounds. We have now reached the stage where trade unions have got into the habit, having levelled off wages, of trying to have wage increases phased for one year, 18 months or two years. Last year it was suggested that an attempt might be made to cover a three-year period. But the Government came along and successfully ensured that workers will not be prepared any longer to bargain for a wage increase which will carry them forward further than they can see, and that is usually a period of six to 12 months. We are back at square one again when there was a question of trying to get a wage increase every year.

The big trouble about all this is that those who made a wage agreement early in 1969 which carried the workers over until the end of 1970 now find themselves in a position where someone named the increases which they hoped to negotiate from the end of this year or early next year as being the 13th round. Thirteen being an unlucky number, the Government decided to catch this round. Those who succeeded in negotiating an agreement earlier this year calling it the 12th round have got the benefit of an increase. But the trusting workers, those who trusted the trade unions and employers when they said it was all right for them to negotiate for a two-year period ending between October 1970 and the middle of 1971, must be told that the Government are going to have a say in what they will get and that they will not be able to negotiate freely. This is what has happened as a result of the idea that it is possible to take action of this kind and enforce it.

The phraseology of the Bill itself is changed in a number of ways. We have numerous references to increases granted before 16th October and increases granted after 16th October. What happens in the case of a wages discussion perhaps with a settlement in sight, which took place, not before or after 16th October, but on 16th October? This is an example of the loose wording of the Bill. If it is agreed that something which occurred on 16th October is not caught under the Bill, then we know where we are. It is said that increases granted before 16th October are not caught and increases granted after 16th October are to be dealt with in a certain way. What about that one which took place on 16th October? I am mentioning this because it shows in one way how the people who were preparing this Bill do not seem to understand very much about wage negotiations.

We have had numerous statements here by the Minister for Finance. In his effort to tell us something about what is before the House, he gave us a welter of detail which does not mean a damn thing. He seems to forget one thing: a number of Prices Bills were put through this House and that which went through in 1965 included a section which was put down by the Labour Party and accepted by the Government. It laid down that certain things were to be done in public and we got a guarantee that the regulations in that Bill would ensure that prices would not rise.

Since the last general election the person who has been responsible for ensuring that prices did not rise was Deputy Colley, as Minister for Industry and Commerce, and the person who now comes into the House and informs us about price rises and who introduces a Bill for the purpose, as he says, of dealing with that question, is the same Deputy Colley, with the difference that he is now Minister for Finance.

The reason why this is necessary, I suggest, is not, as the Government say, because trade unions and their members have been looking for and getting wage increases to which they were not entitled but because the Minister for Industry and Commerce, Deputy Colley, failed miserably to do the job for which he was appointed. He failed to keep prices at a reasonable level and he now has the audacity to come into the House and say that workers have been forcing up prices.

I am sure it has not escaped his notice that certain people, by increasing profits, have seemed to wax wealthy, particularly during the past couple of years. The reason for that is that no effort was made to keep down prices. To make matters worse, since 16th October last, when this legislation was announced, we had the extraordinary spectacle of the present Minister for Industry and Commerce giving a list of items in respect of which he has allowed price increases and consequently we have had a continuing process of price increases while, at the same time, we have had the people responsible for keeping prices down encouraging them to go up without the public hearings guaranteed under the 1965 Act.

The Bill before the House by implication makes certain charges and the Minister, in his brief, makes one charge which was challenged by Deputy O'Donovan immediately after the Minister uttered it. There was a lot of shouting across the House and the last we heard the Minister say was that the statement made by Deputy O'Donovan was a lie. Apparently the Chair did not hear that statement being made. I should like to put it on the records of the House that if the Minister for Finance asserts that there are wage demands being served and processed, under what he chose to call the 13th round, for £8 and £10 per week, the Minister for Finance is not telling the truth.

I want to make this very clear because the Minister for Finance called a member of my party a liar earlier in the proceedings. I challenge the Minister for Finance to produce evidence that any body of workers, through their unions, attempted to process or to make demands through normal channels for wage increases of £8 and £10 a week. If the Minister for Finance is as sure of his facts as he claims, he has a very simple way of proving it when he is replying. Because the integrity of Deputy O'Donovan has been challenged here I wish to emphasise that nobody can legitimately do that inside this House or outside. Deputy O'Donovan is able to stand on his own feet.

As I have said, there is one way in which the Minister can clear this up and I am challenging him to prove the allegation he made. In his speech he made reference to a number of things, kind of throwaways, as if they were something those of us in the House might not understand and which he, being the superman he is, could explain. One of the things he referred to was the discussion which took place at the employer-labour conference. I accuse the Minister and the Government of losing their cool, as they say, in this matter. In fact, the employer-labour conference met and when they did not reach agreement no effort of any kind was made at reconciliation. The Government immediately jumped in to make a statement.

The fact that they made that statement, in which they said they would stand on those grounds and that there was no question of negotiation on the terms which they were laying down, and the following day were prepared to backtrack to some extent and the following week were prepared to backtrack again, does not mean they were being more reasonable. It means they just did not know what they were doing. They had jumped at the suggestion that they should show the whip to the workers of this country, and then they suddenly felt that not only would the workers who supported Fine Gael and Labour not take it, but the workers, deluded as they might have been, who supported Fianna Fáil would not take it either.

In this respect, I challenge the Minister for Labour to come in and to deny that one of the results was that the Donegal workers in the area now about to have a by-election went to his door and said that they would not take it. If the Minister for Labour thought he was getting away with a wages standstill which would not alone prevent workers from an increase next year in the 13th round but which would take away from them something to which the Minister for Finance had been a party in the 12th round, he found out very quickly that it would not wash.

There was a fluttering in the dovecotes, and the result was that there had to be a second look at it. The Government then said: "We will allow the agreement which was made with the workers in the public service to go through". I do not think anybody in the country will prepare a golden crown for the Taoiseach or the Minister for Finance because they agreed to honour an agreement to which the Minister for Finance was a party. All the Minister did was to go back to the position he was in when he agreed to the increases being granted to public service employees.

I wish to repeat that if the Minister for Finance or any of his colleagues in the Government think they can get away with negotiating for months on a wage increase, agreeing to it and signing an agreement and then, when it suits them, declaring that the agreement will not operate, they have another think coming. That is one thing they had better appreciate.

The Minister for Finance should have known all this because he has had the experience of being chairman of a joint labour committee: he has had experience of the way in which trade union agreements operate. There are others in the Government whom I would forgive for not knowing, but I will not forgive any of them for breaking their word. I must give credit, however, to the Fianna Fáil backbenchers, some of them not dissidents, men who have always supported the Government from the back bench. I am glad Deputy Dowling is here. They were men enough to say: "We come from the working class and if you do this we will not support you in a vote in the Dáil."

If Deputy Dowling or other people want to say afterwards that I am not giving the facts they are entitled to do so. I will give credit to them because they realise, and anybody who ever had anything to do with trade union negotiations, or even working for a wage, realises that this is something which will not be taken from a Government or anybody else. I congratulate the Fianna Fáil backbenchers who assisted the trade union movement, the Labour Party or anybody else who helped to put pressure on the Government to make them change their minds. They also made it clear that the 6 per cent next year was not on. Therefore, the Taoiseach said he would meet the Irish Congress of Trade Unions and he then took this way out. He said: "Oh, we will allow you to negotiate." I am not quite with Deputy Belton's view when he said that they could negotiate up to 6 per cent but that they would not sanction anything over that, because the executive of Congress would not be such fools to take that even from the Taoiseach. I know that the Taoiseach said they hoped it would be kept pretty close to the 6 per cent.

Now, it is either free negotiation of wages or it is not. If the Taoiseach or the Minister or anybody else thinks that he can get a respected body like the Irish Congress of Trade Unions, and the trade unions associated with it, to negotiate on a wage agreement with the whip of the Government over their heads —"Be good boys or this will come down on you"—then he is making a mistake again. As I said before, I give credit to the Fianna Fáil backbenchers or anybody else who helped to have this 6 per cent restriction removed, but I would warn them that it is not the end of the road because there is the grave danger that at the back of their minds the Government have the idea that if the employers and the trade unions reach an agreement which they think is too high then they can step in and say, "You just cannot do that." Certain sections of the Bill hint at this in a vague way. If section 22 of the Bill is passed it would mean that in future legislation passing through here will assume a different pattern. We will not be arguing for days or for weeks over sections of the Bill. All we will need to do is to put down what is in section 22 (1) which reads as follows:

If in any respect any difficulty arises in bringing into operation or giving full effect to any provisions of this Act, the Minister for Finance may by order do anything which appears to be necessary or expedient for bringing that provision into operation and giving full effect thereto.

If this is passed as it is future legislation will consist of one-section Bills: if a difficulty arises in bringing into operation anything a Minister wants to do, then he may by order do anything that is necessary or expedient to bring what he wants into operation. Is the Minister for Finance serious in suggesting that this House, consisting of adults who have been elected to the House, are going to accept that? Has he the idea that after what happened here last week all members of the Fianna Fáil Party will accept anything? I do not think they will swallow that. I do not think anybody will agree that a Minister, whether he be the Minister for Finance or any other Minister, shall have the right not to carry out what is laid down in the Bill, that if at any time he gets an idea that something should be done he shall make an order and that shall be done. The Minister is not going to get away with that. If he thinks he is going to get away with it I suggest he should look back on his own experience of dealing with trade unions and find out whether or not they consist of the sort of people who will accept that sort of thing.

The Minister had a lot of pious stuff in his speech. It says very little about the Bill and it refers to all sorts of reports. If there was a prize for the production of reports this Government would get that prize. We have had more reports on all kinds of things, on everything under the sun, with no action being taken on most of them. The Minister must realise that and that various types of reports which were introduced over the years were forgotten as quickly as they were produced and I am quite sure that he does not expect us to take his reference to them seriously. In his speech he stated:

The Bill makes it crystal clear that the Government has not deviated by one iota from that principle.

The principle referred to is one enunciated in the previous paragraph. I suggest that the Government have deviated by two large iotas and before they are finished with the Bill they will be deviating by quite a number of iotas. The Minister also said that the Government "want to see, and they are entitled to expect a voluntary wage agreement which is realistic and adequate to our situation". I hope he means that because I have a suspicion, and so has the trade union movement, that what the Government mean is: "You are going to be good boys, you are going to do what we want and, if you do not, you know what is going to happen". I suggest to the Minister that the less pressure he tries to put on at this stage the better for all concerned. The Minister also used a number of peculiar phrases. He said that:

Setting a limit to increases in rates of pay by reference to the rates in payment on 16th October, 1970, could be unjust in some cases where the rates in payment on that date were obviously inappropriate. In particular, some groups of employees, especially non-unionised groups, who usually get their increases towards the very end of a pay round when the pattern has been clearly established, could be very harshly treated.

I am glad the Minister has put his finger on this point, which perhaps many non-unionised people in the country will take, that if they are not members of trade unions they can expect to be harshly treated. The Minister went on:

Accordingly, provision is being made for exceptions from the overall limitation. The details of this provision might be more appropriately discussed at Committee Stage of the Bill;

He went on to say that at this stage he would confine himself to saying that the exceptions were being limited to cases where employees had got no increase in 1970 or where they had submitted claims which had not been disposed of before the 16th October, 1970. Reading the Bill it does not suggest that that was what was in the draftsman's mind.

Let me say that one of the peculiarities of the Bill is that where small increases were given, I will not say granted, in 1970, they are being used as an argument for no further increases in 1970 while others have had the advantage of larger increases. I know of a particular instance of a case in point. A group of people are employed by CIE as school bus drivers. They are very badly paid. When a wage demand was served on their behalf by the trade union, CIE said first that they were contractors and then that they could only deal with them individually. They then gave them £1 a week out of the goodness of their heart. They nearly said: "This is not because of a wage demand. We are giving you this anyway." Eventually when they had to go to the Labour Court, they adopted a line which I understand William Martin Murphy adopted in 1913 with the strikers in Dublin by saying: "Oh, we cannot deal with you as members of a trade union or as a group. We can only deal with you as individuals."

Does the Minister suggest that, because CIE gave an increase of £1 a week to these people who are very badly paid, that should satisfy them? Does he suggest that a percentage increase next year—6 per cent or whatever he has in mind—should be sufficient? Does he not know that there are many workers in the country who are in the same position? If he works that one out—and maybe he might before he replies—he might have some other ideas on this whole matter.

The Minister also said:

With regard to other terms and conditions of employment, the Bill makes it an offence for an employer to amend or vary the terms or conditions in operation or effect on 16th October, 1970. This means that improvements in such things as hours of work, allowances, and rates of remuneration in respect of overtime are barred by the Bill.

I am quite sure the Minister knows that, while the standard working week has dropped down in most cases to 40 hours, there are still people who are required by law to work 50 hours per week. Quite a number of them are working 48 hours. Quite a number are working 45 hours. Many State employees are working 42½ hours and negotiations have been going on for some time to have this reduced to 40 hours. Local authority employees are working 42½ hours. That is supposed to be coming down to 40 hours.

The Minister says that all these are now cemented, that they cannot be interfered with until the Minister decides that this Bill will cease to exist at the end of 1971 and then they can move again. Is it reasonable that, if the professional and nursing staffs in hospitals are given a 40-hour week, the non-nursing staff, who also do a considerable amount of nursing and who do hard work—they must be dedicated because they work for very bad wages —must work for 42½ hours, not because it is the right thing to do but because the Minister says so?

Is this the general idea or is there something else which we seem to be missing in the Bill? The Minister made it very clear that there can be no question of increases being given in bonuses for increasing productivity and yet he said:

These existing powers will be rigorously applied to ensure that only unavoidable increases in costs are passed on to consumers and that every effort is made to absorb them first, either by raising productivity or by accepting a lower level of profit....

Will the Minister tell me how he proposes to raise productivity without offering an incentive to the person from whom he expects the higher productivity? Maybe there is a way which I do not know anything about and, if there is, I will be glad to hear from the Minister what it is.

During the passing of the 1965 Bill the Labour Party were adamant that there was only one way to insist on the proper price being paid and that was by an order ensuring that the price range and price list would be exhibited in every retail shop. The then Minister, the present Minister, said: "Not at all. It cannot be done. We will not insist on it. We will not say it should be done", and eventually they voted it through this House.

Mr. Colley

Quote.

Mr. Tully

The Minister is well aware that I have not got the quotation.

Mr. Colley

I am also aware of the fact that on occasions the Deputy puts words into my mouth which, when examined closely, do not correspond with what I actually said.

Mr. Tully

Is the Minister calling me a liar also?

Mr. Colley

I am not calling the Deputy a liar. I am asking him to quote what I said and not to use his version of what I said.

Mr. Tully

I will give some of my colleagues the exact quotation. The Minister for Finance is not the Minister who said it. It was the then Minister for Industry and Commerce, Deputy Hillery.

Mr. Colley

I thought the Deputy said the then Minister and now the Minister for Finance.

Mr. Tully

No.

Mr. Colley

I apologise then. I know what I said myself.

Mr. Tully

I did not say that.

Mr. Corish

So the Deputy is not a liar.

Mr. Tully

I am not. However, the then Minister would not agree that this should be done and now the Minister for Finance says:

In order to ensure the most effective use of the powers of price control this Bill is making certain changes in the Prices Acts. These will give power to investigate and fix the margins of profit of importers, manufacturers, distributors, wholesalers and retailers; to require retail traders to display their prices for all or any commodities being sold by them and to fix the maximum amount which may be added to the price of goods for wholesale tax or for turnover tax.

I think the Minister will agree this means that the retailers must exhibit price lists and this is what was supposed to be impossible four or five years ago.

I am surprised that wholesale tax and turnover tax were mentioned here and that another tax was not. I think it was the present Minister who told me it was suggested in the Budget of his predecessor, Deputy Haughey, that it was expected that the added value tax would be introduced in next year's Budget. That would be before the Prices Act goes out of operation. When the Minister is concluding he might make a comment on that.

I would also be very interested to know what exactly is meant by this:

The Bill is also extending the Prices Acts to new houses——

May I add that one of the things which do not appear to be in the Bill is any attempt to tie up the price of building land? I asked the Minister for Local Government a question about this today because in my opinion the price of building land in urban areas in particular appears to put about £2 per week on average on the expenditure of the ordinary householder who is unfortunate enough to have to go into a new house

—and to charges for professional services—

I wonder how this will be done?

—contracts for the supply of goods or services, banking or insurance charges....

Does this include motor insurance? Perhaps the Minister will let us have a reply to that question because, if there is one place where there are exorbitant charges at present, increasing every time you look at the insurance rate, it is in motor insurance. If that is not the intention it should be.

On the question of directors' fees and dividends the Minister has been very naïve or else he thinks we are very naïve because he says:

The Bill prevents a company from paying fees to a director for a financial year ending after 16th October, 1970, at an annual rate exceeding the rate payable on that date in respect of a similar office. The general restriction on increases of basic rates of pay in the Bill applies to directors equally with other employed persons. The restriction does not, however, apply in the case of new companies.

Would the Minister say if he is aware of what happened when something like this was done before? Is it not true that increased fees were funded and left over until the Act went out of operation and were then paid out and that was that? I am sure the Minister is aware that that is not usually done where the workers are concerned. I am aware of only one employer who funded the increase which the workers would have got but for the fact that the order was in operation and he paid it to them after the order ceased to operate. Perhaps the Minister would say whether he is aware that this can happen and if he thinks it will happen again. If it may happen again how does this proposal prevent directors' fees from being increased?

The Minister also said:

The Bill also prohibits the payment by a company on or after 16th October, 1970, of ordinary dividends for any financial year in excess of the rate paid for the previous financial year or the average of the rates paid for the three previous financial years if that should be greater.

Would the Minister say is there anything which will prevent them from increasing the shares or giving bonus shares on which the same dividend will be paid so that in fact the effect is the same and an even greater amount can be paid without any interference from the State?

As far as rents are concerned it is all rather vague but it does appear as if the Minister for Local Government may make certain exceptions in relation to rent restrictions to cover local authority houses. It appears that the Minister is perfectly satisfied that, while it may be all right to make private owners of houses stay within the law, local authority tenants can still be rooked. We have reached a stage where local authority tenants are being asked to pay £6 and £7 and in one case of which I know £8 a week. I think I heard Deputy Healy from Cork say last year that people who were paying £8 in Cork were very happy with the situation and thought they had good value.

Mr. Healy

There is no such person in Cork.

Mr. Tully

I must get the Official Report because it is only the written word which can prove whether these things are right or not.

Mr. Healy

I did not say that any person in Cork actually pays £8 a week.

Dr. O'Donovan

The Deputy said something very like it.

Mr. Tully

I think the Deputy said they were very happy to pay £8 a week. However, if the Deputy says he did not say it I will accept his word and have a look at the Official Report later.

The whole point of this Bill seems to be that the Minister has made up his mind or the Government have made up their minds, that the workers are responsible for creating a situation in this country which I say was created by the present Government.

Mr. Corish

Hear, hear.

Mr. Tully

Perhaps it is unfair to blame the present Minister too much because the last Budget was introduced by a gentleman who, as I said at the time, had his mind on other things. It appears that it was a lazy man's Budget, that there was very little attention paid to it except that the 2½ per cent turnover tax became 5 per cent and this I believe is the main cause of our troubles today.

Mr. T. O'Donnell

Hear, hear.

Mr. Tully

This situation arose and was allowed to continue by the present Government. Because of the internal wrangling of that Government, fighting each other for position and indeed fighting each other for the existence of their party, they reached a stage where they had little time for the nation's affairs. This resulted in a situation in which the Minister went dashing to the news media to say he was clamping down on wages and the position was not negotiable. He then gave way twice on it and now he is attempting to put a "pig in a poke" Bill through this House. He is asking us to vote for a Bill and if that Bill becomes law he can take certain options which are not spelled out in the Bill. He proceeds to deal with this in a way that makes everybody suspicious.

I do not want to take up the time of the House; otherwise, I would give details of the discussions that took place at the employer-labour conference. It is remarkable that the settlement which the Minister proposed in his first non-negotiable statement was less than what the employers had offered, so he was even further down the scale than they were. The position seems to be now that he wants to tie up in any way he can the workers and the trade unions. He is even saying that— this would be rather amusing if it were not so tragic—if a trade union supports a demand for something he wants to say is illegal, while it does not interfere with their rights under the Trade Union Act, and that they are not breaking the law as far as the Trade Union Act is concerned, they are breaking the law to such an extent that he can fine them up to £5,000; and he further threatens that if he cannot get that from them in any other way he can take it out of the negotiating licence. It is a very neat one. As was said here previously, if the employer breaks the law by giving an increase of an amount which the law says he is not to give, if this is passed, the Minister is then in the happy position that he can do what I think only the income tax people can do at present—he can go and seize property belonging to that person for the purpose of reimbursing himself; he can take the bed from under the person concerned. This is the sort of penal legislation which will not be accepted in this country. The Minister should appreciate that.

The Minister also talks about the way in which the workers' trade union are to be responsible if they encourage action. The Minister does not in his speech try to spell out what he means by "encourage" action. Members of his Government might not know but he should know that trade unions and trade union officials are affected in a certain way. If, for instance, they take a ballot vote and workers vote in favour of going on strike in spite of what this Bill says, does that mean that the trade union are assisting these people to go on strike? If they pay them a grant in any way to keep them from starving when they are on strike, does that mean they are liable to be fined £5,000? If the trade union say they will not support these people and if the people concerned consider that they have a genuine case for a strike, does the Minister not realise that what he is doing is opening the way to anarchy, that we would have unofficial strikes from one end of the country to the other? Is he not, in fact, thumbing his nose at the workers and saying: "I will not let you be paid strike pay if you go on strike"? We know that if a group of working men feel they are entitled to something nobody will prevent them from looking for it and the next thing we will have is the whole country up in arms—one strike starts, the union is charged and fined and every worker in the country is out on strike before it finishes. Is that what the Minister wants?

This is a most unreasonable Bill. I do not agree with the suggestion that it can be operated, or indeed that it can be passed in this House. I am prepared to say now that I do not believe the Taoiseach and the Minister for Finance will have the same number marching through that Lobby with them when this Bill goes on test as the Taoiseach had when he was on test himself. I feel this is one time when the dissidents, as they like to be called, will be prepared to show their metal and show that they cannot be kicked around or that they will not allow the people of this country to be kicked around either.

It appears this Government have allowed prices to soar. There is nothing to curb price inflation. They allowed developed land prices and house prices to reach the highest level. This was dictated by a housing shortage. No effective control was exercised over profits. The prices of many essential commodities have gone so high that people are now beginning to consider what was an essential commodity a few months ago as something they can do without. Butter is a prime example of this. People have turned completely from butter because they are unable to pay for it. The Government did nothing to curb the activities of speculators and Tacateers and they caused house prices to rise and to reach their present high level. Any reasonable person knew that a crisis was in the making in recent years but, like the House of Lords described by Gilbert and Sullivan, this Government did nothing but they did it very well.

The Irish Congress of Trade Unions and the employers will be meeting again to discuss the question of wages for the year and I suggest to the Minister that further discussion of this Bill should be adjourned until the free discussion with those people takes place. When it is finished then let the Minister come in here and say whether or not he is satisfied that they have been able to reach agreement. If they say finally to him: "We cannot reach agreement; we are stuck and there is nothing we can do about it" he can say to the Members of this House: "The Government must take action." Until that time comes I believe the Minister or the Government should not attempt to put control on wages which will be ineffective, will cause trouble for everybody and most certainly will not do what the Minister suggests he is trying to do.

Mr. Healy

It seems to me that the Opposition speakers are accusing the Government of interfering in this matter of industrial relations and at the same time they blame the Government for not interfering in rising prices and rising costs of everything. I should like to explain my point of view to Deputy Tully. It is a minor one but I should like to get it clear. There is no doubt that there are local authority houses in Cork city where the maximum economic rent is £8 a week. Anybody would be glad to get one of those houses because in order to pay £8 a week under the differential rent scheme the tenant would need an income of £60 a week coming into the house. I do not know if we have ever had an applicant in that happy position.

Mr. Tully

I do not want to interrupt the Deputy but does "£60 a week coming into the house" mean the entire earnings of all the family? As Deputy Healy knows, very little of that goes into the pocket of the wage earner.

Mr. Moore

There are allowances. Several allowances are given.

Mr. Healy

There are allowances for children. The fact, of course, is that when the family who are earning get married the rent is reduced to 10s a week and the man does not lose any of the benefits of the house he has. It is a sad reflection on all of us that this Bill has had to come before the House and that we have seemingly failed to come to an agreement on this matter. We take great pride in our civilisation and Christian virtues but we have not been able to come together and solve our problems freely for the economic good of the country.

Inflation is not peculiar to this country. It attacks the biggest economies in the world but, of course, as we are a smaller and weaker nation the effort from us must be greater. We should be realistic about what we can afford to pay and what we can afford to give. Some people say that the Government have waited too long. That is a debatable point. Of course, it is now said that the Government should not interfere at all. It is right the Government should wait until all other avenues have been explored, until it appears that things cannot improve without Government intervention.

The Government have been patient in this matter. We are not the kind of people who can be regimented or who can be forced. We are easily led but we are very hard to drive. Therefore, the Government are very wise in letting people generally see that it is absolutely necessary for our economic salvation to take some measures, be they voluntary or compulsory. Something must be done because wages are chasing prices and prices are chasing wages.

There is a large section of the community whose income is static. They are the most to be pitied. They are the least well off in organisation or in worldly goods and they should be the concern of all of us. It is natural that people generally are worried about the position at the present time. We talk about our standard of living and of maintaining it but I wonder if there is any country in the world where such a large percentage of the population live so well and do so little for it as in this country. I have travelled quite a lot and I have seen many other countries. I have seen well-off countries where men have two jobs and their wives are working also. Those people have a very high standard of living. However, there are other countries where men have no work and they are on the breadline. It seems to me that we maintain a relatively high standard of living. A large percentage of the population do very little to earn that either for themselves or for the rest of us.

The intention behind the Bill, if I understand it correctly, is to encourage workers and employers to come together in a realistic atmosphere and hammer out a solution which, even as a temporary measure, will halt the spiral of increasing wages and prices and general inflation. I hope the Bill does this. We pay much lip service here and elsewhere to the lower paid worker. I have not been able to understand how an increase can be given to industrial workers or local authority workers if the differential has to be maintained. If it has to be maintained, how is it possible to improve the lot of the lower paid worker?

At the present time several local authorities have claims for increased wages and salaries. There is no doubt about the justification for an increase, whether the one demanded is the proper one or not, but the status differential must be maintained. I cannot see in those circumstances how the lower paid worker can improve his position. This matter should be tackled. Most people are concerned that it shall be tackled.

What prevents this happening? Is it the union, or is it the power of those who have secure positions and high salaries and wages? I believe the people generally will welcome this Bill if it means the coming together of the workers and employers to hammer out something which will be a guideline even for one or two years and then we can see what happens.

The Minister is making a fair effort to bring in all sections of the community. I am sure that if suggestions are made to include in the Bill some sections which are not now included, the Minister will regard these suggestions sympathetically. It is his intention that all those who can should suffer a restriction of increase in income until this crisis has passed. That is not beyond the bounds of our ingenuity and intelligence. It only means a certain amount of goodwill.

This is a difficult matter to debate in this House because the House is so constituted that one party must try to score over the other party. Traditionally it is regarded as the duty of the Opposition to condemn everything brought in by the Government. If there is any credit due, it may come many years later. However, this Bill is designed to deal with a problem in regard to which I hope all sections of the community, both inside and outside the House, will work together towards finding a solution. In that way they will be working for the nation and its future prosperity and disaster will be averted. I welcome the Bill and I am sure there are many people in the country who are hoping as I do that, directly or indirectly, it will be beneficial to our economy.

Mr. Hogan

This is a very disappointing Bill in so far as it represents a belated attempt to correct our economy. It also, by its method of introduction, portrays a Government who do not seem to know where they are going economically any more than politically. We had a draconian type of legislation with loud trumpets, a non-negotiable, Bismarck-like approach. The "Iron Chancellor" was to introduce this measure a few weeks ago. The second leg of the 12th round wage increase was to have been curtailed and a ceiling of 6 per cent imposed. When the crunch came the man became a mouse and the second leg of the 12th round was to be allowed to run its course, and properly so—it should not even have been mentioned—and the ceiling of 6 per cent for the moment is left open to regulation, so that I presume there can be adjustment from time to time. Therefore, the bodies who believe in collective bargaining will have to come along cap in hand at intervals and say to the Minister for Finance: "Now, Sir, can we have another little rise or can you give us something in advance?"

This whole position and the necessity for this Bill being introduced now in its present format derives from the fact that the Government have failed to govern. Under the then Taoiseach, Deputy Lemass, we had a gamblers Government; under the Taoiseach, Deputy Lynch, we have had no Government. Much of our trouble derives, I believe, from the introduction of the turnover tax originally. Whatever may be said for or against it now, at that time people were not prepared to accept it. No effort was made to bring the people around to thinking on those lines and it met with immediate opposition. It was never a popular tax and there was a very unpleasant economic development afterwards. The behaviour of the then Taoiseach, Deputy Lemass, led to the undermining of our economy. His pathetic effort to remain in power, bearing out the fundamental philosophy of the Fianna Fáil hierarchy that the party always come before the nation, has culminated in our economic decline since those years.

There was an effort to introduce a wage agreement in those days. The then Taoiseach insisted on the Federated Union of Employers and the Irish Congress of Trade Unions sitting down together and hammering out a wage agreement which he was advised by his economists the economy could not stand. He was told it could not stand more than 7 or 8 per cent and 12 per cent was arrived at.

The steady growth we have had and the good industrial relations we had between 1960 and 1963 have disappeared. The further budgetary measures or, shall we say, lack of budgetary measures, by reason of the fact that we were on some occasions facing a general election, have again left us in a sorry economic position. There have been two economic collapses in the last decade. Every economist will tell you the one thing you must avoid is stop-go; yet in 1965 the then Minister for Finance introduced into this House a second Budget a few months after the first one, with a general election intervening, of course, asking: "What happened to my March Budget?" Clearly, if his original budgetary arrangements were proper he would not have found it necessary to come crying to the House: "What happened to my March Budget?"

The real explanation is that the March Budget was an election Budget. It was not designed to deal with the economy. A great opportunity was missed. At that time we in Fine Gael advocated a prices and incomes policy with a different equalisation in tax. That was part of our party programme. We did not get it across to the public or at least we did not get a majority in the House to enable us to implement it. At that time Deputy Lemass sneered at the idea of a prices and incomes policy. Now it is being adopted, rather late. I believe it would have been possible then to get the trade unions and other bodies to sit down and negotiate sensibly on those lines. It is more difficult now.

I would draw the Minister's attention to the fact that a few months after the general election the NIEC report strongly advocated a prices and incomes policy. Since then there has been no attempt by the Government to come to grips with this problem. As far as I know there has been no study group set up to investigate it. One would have thought that after the general election of 1965 and after the Budget introduced at that time, they would have tried immediately to formulate a prices and incomes policy but they did not.

In 1965 we had a trade gap of £150 million. The restrictive measures then introduced gave us a breathing space. It was our first setback in this decade. It was due entirely to our own mismanagement. There were no international influences or forces at work to cause this. That phase passed. The restrictive measures imposed are visible today in the form of houses unbuilt, water schemes lying in abeyance and a failure to achieve economic growth. Our economic growth fell to 1 per cent in 1965. We got over that depression and began to improve a little bit, but things began to deteriorate at a later stage.

Here I accuse the Government of absolute neglect. Even if the Government could not or did not feel they should embark on a prices and incomes policy, they could at least have controlled prices. They have adequate machinery there. That machinery was very evident a few months ago when the publicans tried to increase their prices. The Government's own revenue was being touched; immediately they acted and acted on a pretty well organised and influential body and prevented any rise in the price of alcoholic liquors. On the other hand, when CIE and Posts and Telegraphs looked for their increases—I do not know what negotiations took place— we all know what happened. There was a substantial rise in CIE charges and a rise in Posts and Telegraphs charges which, under the new decimal system, will amount to 60 per cent. It must have been obvious to the Government that things were going wrong. In 1969 we had the extraordinary situation of Deputy Haughey, when he was Minister for Finance, saying on television and radio that we were in a financial crisis. A few weeks later he said there was no financial crisis. Naturally, everybody wondered how the economy improved so quickly.

In the spring of 1963 a White Paper was introduced into this House by the former Taoiseach, Deputy Lemass, called, "Closing the Gap" in which he trotted out the jargon we are all familiar with nowadays that spending had outpaced productivity. He told us that we would have to tighten our belts. It was even thought there would be a pay pause. When the Cork and Kildare by-elections arose and 6,000 people in Dublin North East voted against the Government because of the implementation of the turnover tax-that by-election was fought on the turnover tax—Deputy Lemass said our economy had improved so much between the spring and autumn of that year that we could give out largesse. I suppose an economy could improve in five or six months but not to that extent. Deputy Lemass was able to change the red light of spring to the green light of autumn. Mr. Lemass's son-in-law, Deputy Haughey, when he was Minister for Finance was able to change the economy from a crisis position to a no-crisis position within a few weeks.

No effort was made in the last Budget to meet this crisis. We have mounting inflation. The easiest way to curb inflation is to tax people, thereby mopping up their spending power. That system is all very well if one has a closed economy and a dictatorship but this system would be followed by wage demands and subsequent price increases and that is the hole in the bucket. We have made no effort to plug that hole in the bucket and every time we have increased taxation we have aggravated this position still further.

There has been very little mention in this House about the wholesale tax. The turnover tax came into operation on 1st November, 1963. In 1965 it brought in £13 million; in 1966 it brought in £14 million and in the last financial year it brought in £20 million. The wholesale tax, which is another broad based tax, brought in another £20 million. It is estimated that in the financial year 1970-71 the proceeds from the wholesale tax and the turnover tax will be something in the region of £66 million and we must add to that the recent increase in the wholesale tax from 15 per cent to 20 per cent. This particular form of taxation which, when it was first introduced, brought in £13 million now brings in nearly £17 million a year.

It should have been obvious to the Minister for Finance and the Government that our economy was in a precarious position. I am speaking from memory but in the year 1967 we had a trade deficit of over £100 million; in 1968 the trade deficit was £150 million and in 1969 it was over £200 million. In other words, our trade deficit doubled in that short space of time. Receipts from invisible earnings could not bridge that gap and even though they were increasing on a steady plane from £120 million to £130 million and from £130 million to £140 million, the economy was obviously in difficulties. While we had a trade deficit of £100 million in 1967 invisible exports such as tourism, the £20 million a year we receive from emigrants abroad plus the £6 million to £8 million we receive as investments from people who have worked abroad but have come home again, were not sufficient to bridge the gap. Our invisible earnings were sufficiently good in 1968 to give us a balance of payments credit of £15 million. The following year our balance of payments went up to £22 million and the year after that it went up to £69 million.

I appreciate that we do not receive quarterly returns on our balance of payments but we do get monthly trade figures and we can see what is happening to the economy by comparing those monthly trade figures. We also have other economic indicators which serve as useful guidelines, but I cannot see how Deputy Haughey, when he was Minister for Finance in 1969, could cry "crisis" followed by a cry of "no crisis" within a few weeks. There was a crisis but the Government failed to act because it was an election year. This question of stop-go economics arises because of the electoral test which the Government have to face periodically. The Fianna Fáil Party put the interests of the party before the economic interests of the country.

Ours is a relatively weak economy and we should not have to sustain two economic crises in the one decade. I do not hold out much hope for this legislation. The Minister has said that the co-operation of the public at large is essential. I should like to ask if either the Minister or the Government he represents have earned the co-operation of the public on either the political or economic plane. Clearly they have not. They have enjoyed tremendous loyalty from their followers, much more than they deserve, but there must be a place called "Stop". I believe we have arrived at that place. I do not believe the people will give the degree of co-operation which the Minister has said is essential to make this Bill work. In 1965 the Government sneered at the Fine Gael suggestion of a prices and incomes policy. If the Government had tried to control prices, even if they failed to do so, one would at least be able to say they had some credibility.

This is the party that lecture that they are always prepared in the national interest to do the unpopular thing. I ask them now to do the unpopular thing—unpopular from their own point of view and unpopular with their own hierarchy—resign and go to the people.

Dr. Cruise-O'Brien

Other Deputies on our benches will discuss in considerable details many aspects of this very complex measure. I should like to discuss one particular aspect fairly briefly. The Minister said, among other things, that it is the Government's intention that a prices policy should be vigorously implemented and that the co-operation of the public at large is essential to our doing this. We on these benches strongly favour the implementation of a vigorous prices policy, maintained with impartiality and integrity, and we would favour the co-operation of the public in the implementation of such a policy but—and there is a very large "but" here—in order to get the co-operation of the public it is necessary that the public will have confidence in those seeking that co-operation. We know that confidence is lacking at present and why. We went into all that the other day. I do not think the Government should ask for such very wide powers as are demanded here, wide and ambiguous powers. We do not know how they will be used or who will use them in some cases. In one case they are complete, blanket powers. I do not think the Government have a right to ask for such a blank cheque at the moment and that is largely what they are seeking here.

The powers which this Bill would give, if the Oireachtas made it law, could open a very wide door to graft of all kinds, ordinary graft and political graft, graft for a party and graft for certain sections of individuals. We must hope that any Government would not pass through that door and would resist such temptation. We know that we have a Public Service of very high integrity. This is quite a rare thing in the world and a fortunate position for us but unfortunately we cannot feel the same kind of confidence in our Government. We do not feel that confidence not because we do not want to feel it but because the Government themselves have forfeited it by their record of behaviour. Their use of the powers which they at present possess for regulative economic intervention has been such as to arouse in the mind of any impartial person deep disquiet as to what they might do with enormous powers of the kind entrusted to them here.

For example, in relation to planning permission for building development, they possess powers in many ways analogous to what this Bill would grant and the manner in which they have used these powers has been alarming. We have seen cases in which a builder or contractor has been refused planning permission by officials who are operating the laws with the integrity we would expect of Irish public officials and such a builder or contractor has simply gone ahead with building because he knows that a responsible Minister who is in relation with him will grant the permission. That is to say the official working of the system has been set aside by the intervention at top level of a Minister abusing the great powers confided in him.

We must hope that no such abuse would occur in relation to these powers but we cannot have any real confidence that this would be so because if a tradition of corruption—we must call things by their names—sets in, in relation to the use of regulative powers, it readily spreads to further regulative powers which the Oireachtas may give. I think the tradition that has been established in this matter in relation to Ministerial intervention in the process of Departmental regulations is a tradition which calls into question how the Ministers who will obtain these almost fantastically wide powers will use them. That is one aspect of the lack of confidence which we feel. It is quite an important aspect but it is not the only one.

There is another. Many Deputies have pointed out and the country has noted with, I think, pain, the remarkably fast changes of foot, unprecedentedly fast, which the Minister for Finance has adopted in relation to regulatory measures which he considered desirable. These have flickered and fluctuated in a most astonishing way in the space of a fortnight and, of course, the country has wondered why these devastatingly rapid changes in assessment in relation to proposals which were originally said to be non-negotiable, irrevocable and so on suddenly became very negotiable and highly revocable. The country wondered why and I think most people have connected these fluctuations and flickerings with the internal difficulties of the Fianna Fáil Party, with bargaining and movements for position which are going on inside the party. Indeed, we have noted in the past few days that one of the Minister's former colleagues, one of those who voted confidence in the Taoiseach and in the Minister the other day, has been perambulating the corridors of this House talking to anybody who would listen to him, including members of the Opposition, and drawing attention to defects in this measure before the House, pointing out that this or that is unconstitutional or unnecessary. I am referring to Deputy Haughey, former Minister for Finance.

With that kind of confidence in the Minister among his own colleagues we have some insight into how it may have become necessary suddenly to change front on this matter. The more dangerous a thing is, if this kind of sparring proposition continues within that party, it may well affect the powers that will be used and the manner of use of the powers. I quite grant that in most cases where the phrase "the Minister" is used in these provisions what is understood is the Minister's Department functioning impartially, as we expect our Government Departments to do, but we know from the example of planning permission, and other examples too, that this does not exclude the deus ex machina intervention of a Minister, or Ministers, personally and there are dangers that that personal discretion Ministers may possess in relation to very wide powers like these may be misapplied.

Let us have a look at some of the powers granted to the Minister and to the Government by this Bill. Subsection 2 (6) (a) provides:

In this section "authorised amount", in relation to basic remuneration, means such amount or amounts as may be fixed by order or orders made by the Government under this section.

Subsection 2 (7) provides:

In this section and in section 3 of this Act "the authorised Minister", in relation to any matter, means—

(a) in case the matter is subject to the approval of any Minister of State, that Minister, and

(b) in any other case, the Minister for Labour.

Section 3 (1) (b) refers to the increase being accepted by the authorised Minister. A little further on at (2) (b) it is provided that a claim to which this subsection applies may be applied in certain ways, and so on. Section 3 (2) (d) provides:

in a case where the authorised Minister is satisfied that the basic remuneration of any employees had previously been determined by reference to the basic remuneration of employees in another employment, the provisions of paragraphs (b) and (c) of this subsection shall be modified, in their application to the case, to the extent that the authorised Minister may, at his discretion, dispense with the reference, examination and recommendation provided for in these paragraphs.

I do not think any Member of this House, outside the ranks of Fianna Fáil, is prepared to grant that kind of blank cheque to any Minister in the present Government at the moment. Again, in section 3 (3) it is provided that:

... the agreement shall, if the employer and employee so agree and the authorised Minister so consents (if such consent is required), or if the authorised Minister, in exercise of a statutory function, so directs, be deemed, for the purposes of section 2 of this Act, to apply in relation to the employee.

That is followed by other provisions of a similar character.

We come then to prices. Section 8 (1) (a) provides:

The Minister may inquire into the margins of profit and by order fix the maximum margins of profit of persons carrying on business as importers, manufacturers, distributors, wholesalers or retailers of commodities or any specified commodity in respect of such business carried on by them.

Has the practice of the Fianna Fáil Government been such as to convince the country that discretionary powers of this kind may not be abused for the benefit of those business firms which contribute, for example, to Taca? Is that the experience of the country or is the experience quite different? If it is quite different it is, I think, clear that we here, if we pass this Bill, would be entrusting Fianna Fáil with a further major implement of State patronage. We know that the Fianna Fáil Government have used the economic and social powers of the State for party advantage and we have grounds to fear that these powers here might be liable to the same kind of abuse.

Section 8 (1) (b) provides:

Margins of profit may be specified in an order under this subsection in such manner (including the setting out of provisions by means of which they may be ascertained) and by reference to such matters as the Minister may think appropriate.

Even more alarming, section 8 (2) (a) provides:

The Minister may by order fix the maximum amount which may be added by persons accountable for wholesale tax or by persons accountable for turnover tax in respect of wholesale tax or turnover tax chargeable on commodities to the prices charged by them for those commodities and the Minister may fix different such amounts for different commodities or for different classes of such persons or for both, or may fix different such amounts in respect of different quantities, measured by value, of a commodity or commodities sold by such persons.

The Minister must, I think, agree that powers of that kind are extremely liable to abuse. In crude terms, powers of that kind are worth a lot of money, if they are abused. I hope the Minister, when he comes to reply, will answer on this point: how will he guarantee to the country that these powers, presented to us as measures to combat inflation, will not be used for the further tightening of the grip of the Fianna Fáil patronage machine on the country?

Mr. Colley

This is a most revealing speech.

Dr. Cruise-O'Brien

I hope so.

Mr. Colley

This is the best Deputy Conor Cruise-O'Brien can do: it is one of the most revealing speeches we have heard for a long time.

Dr. Cruise-O'Brien

We are trying to do some revealing.

Mr. Colley

The Deputy does not know how much he is revealing. That is his trouble.

Dr. Cruise-O'Brien

I wonder, when the Minister interrupts in this way, does he realise how his words sound. His attitude is: "We are a very high-minded people combating inflation. This is our sole task. This is an honest Bill. The problem of inflation has to be faced and we are courageously facing it, turning our faces in three or four directions simultaneously."

Mr. Colley

Deputy O'Brien has not referred to it once yet.

Dr. Cruise-O'Brien

That applies to the Minister himself, he having taken up so many different positions, and to his colleagues who are going around this House trying to undermine the Minister. The country's experience of Fianna Fáil, of the methods by which they work and the abuses they permit, are such that people will recognise the foundation of truth in what I have been saying and that is that a government which systematically abuse the powers they already have for patronage purposes will abuse even more widely the exceptionally wide and quite extraordinary powers—unprecedented, the Minister says, in peace-time—which they are now asking the Dáil to give them.

I have given some examples of the kind of power we are asked to hand over to these people. The most extraordinary one, probably the most unconstitutional one and the one that will, perhaps, have to be withdrawn and may fall, even if it is not withdrawn, by the decision of the court, is this extraordinary section 22 (1) and (2) which provides:

If in any respect any difficulty arises in bringing into operation or giving full effect to any provision of this Act, the Minister for Finance may by order do anything which appears to be necessary or expedient for bringing that provision into operation and giving full effect thereto.

An order under this section may modify the provisions of this Act so far as may appear necessary or expedient for carrying the order into effect.

This carries within it a process of self-amendment of a completely unlimited and undefined character. This is, I think, possibly the most ambiguous proposal ever submitted in any democratic assembly. These proposals are presented to us as the latest means, unspecified and ambiguous means, the Government have found for the purpose of checking inflation. We do not believe that this measure would have that effect. We have no confidence in the way in which it will be operated. We have no confidence in the intention behind it. We, and the people whom we represent, are conscious, if not more so, of the need to check the tremendous upward movement of prices which has occured and which has been unchecked by this Government. However, we think inflation cannot be checked effectively except by a Government which can, in the words of the Minister for Finance "obtain the co-operation of the public" and this co-operation cannot be obtained by a Government in whom the country has lost confidence.

The provisions of the Bill which concern the trade unions will be examined by members of this party who have long trade union experience. Already, Deputy Tully has given the Bill some examination from that point of view. I have no such long trade union experience and, therefore, I do not propose to speak for my party on that aspect of the matter. However, no experienced trade unionist with whom I have spoken believes these measures, as they stand, to be workable. Nobody thinks that the normal process of negotiation could be conducted under these limitations and with this sword of Damocles hanging over them. In the opinion of many experienced trade unionists this Bill would become a licence for unofficial strikes because the normal process of negotiation would be abrogated and the functions of the unions themselves would be abrogated. Therefore, in respect of wages the Bill would not have the effects which are claimed for it. Possibly the section dealing with rents is the most defensible part of the Bill in that at least it would be, as the Minister has said, the tenants and the courts who would operate the provisions of the Bill.

In relation to prices and profits, the provisions of the Bill are open to serious abuse. We could only believe the provisions would not be abused and that those who operate them would not succumb to the temptations inbuilt in them if we had confidence in the Government. This is the nub of the matter and we will be forced back to this again and again. The only kind of Government that can fight inflation successfully is a Government in which the public have confidence. The present Government have been in power for little more than a year but they have forfeited the confidence of the people and are afraid to face the electorate. The Government cannot impose measures of this kind, both drastic and vague, on an electorate whose confidence they have lost and whom they are afraid to face.

Mr. Moore

I should like to make an appeal, although it may fall on deaf ears on the benches opposite, that this Bill be looked at realistically by those Members in an effort to understand its underlying purpose. I am sure most Parliaments in the world today are passing similar legislation in order to control the tremendous threat of inflation——

Dr. Cruise-O'Brien

That is not so.

Mr. Desmond

That is not true. Ask Mr. Ted Heath——

Mr. Moore

I have no affinity with the British Conservative Party. The Deputy probably has and, perhaps, he would ask his Tory friends what they are doing.

Dr. Cruise-O'Brien

Give us some examples of the Parliaments who are passing similar legislation.

Mr. Moore

If one takes the United States——

Mr. Desmond

It does not operate there.

An Ceann Comhairle

Will Deputies please allow Deputy Moore to continue?

Dr. Cruise-O'Brien

The Chair did not say anything when the Minister for Finance interrupted me.

Mr. Moore

Last week a member of the Labour Party said in this House, and it is on the records of the House, that this Government had caused world inflation. One may say it is a crazy remark but it is on the records——

Mr. Desmond

World inflation?

Mr. Moore

Deputy O'Donovan said it and the Deputy may check on the matter if he wishes.

Mr. Desmond

He must have been referring to the size of Deputy Haughey's head.

An Ceann Comhairle

If Deputies do not wish to listen they can leave the House.

Mr. Moore

If the Government had not acted to check inflation it is not the Deputies sitting on my left who would suffer. It is the people——

Dr. Cruise-O'Brien

A Cheann Comhairle, is there a quorum to hear the Deputy's remarks?

Notice taken that 20 Members were not present; House counted, and 20 Members being present,

Mr. Moore

In order to emphasise the unrealistic attitude of the Labour Party, I repeat that last week a Deputy of the Party accused the Government of being the cause of world inflation. If anyone doubts me I would refer him to the Official Report of last week in which he may read this tremendous statement by a member of the Labour Party. It may be that we will not get a realistic approach to this Bill, but it would be unfair to the Labour Party to judge them on that one man's statement. If the Government had not acted on this, it would not be the well-paid worker or the capitalist who would suffer but the lower-paid worker and people in the social welfare categories. It is the duty of the Government to take some steps to arrest this tremendous problem of inflation. Every country in the world is affected in a similar manner because today no country can be an island economically. They will all feel the effects of inflation sooner or later. I had hoped that we might have a realistic approach from the Opposition and that they would appreciate that steps had to be taken to safeguard the living standards of the people. I am afraid this is not so, from what I have heard so far, particularly from a speech by a Deputy who had not done his homework on the Bill but just launched an attack on the Government. This serves no useful purpose, because if no action had been taken there would have been rapid progress in the inflationary tendency. The people here might have been in the same position as the workers in Germany in the 1920s when inflation got out of hand and when employees brought sacks on pay day in order to carry home their earnings.

The Government could be rightly condemned if they had not taken the necessary steps. I am not in favour of State interference with free negotiations of wages and salaries. I hope that the present conference between the Congress of Trade Unions and the employers' organisations will produce a formula for wage and salary increases which will safeguard the living standards of the workers affected without adding to the inflationary trend. What right have we in this House to tell trade unions and employers about their duties? How can we tell them to come to an agreement, if we are not sincere?

We have had a most facetious approach to this Bill by Opposition speakers. Do they realise that the fate of many of our people lies in their hands? Unless we can correct this spiral, people will suffer badly. Do Opposition speakers think of the lower-paid workers, of the unemployed and of those who must emigrate? We, on this side of the House, must think of these people. It has been said that the Government have lost the confidence of the people. We have heard this for years. In each succeeding election the ordinary workers—and I look on anybody who gives any service as a worker—have always returned this Party as the biggest party, and on all but two occasions as the Government. I do not want to make a party speech. The Bill before us is so serious that we must bring whatever capability we have into operation in order to ensure that this Bill will be the most effective weapon possible to check the inflationary spiral. This Bill must safeguard the standards of the people to whom I have referred. It must protect the lower-paid worker and the people in the social welfare categories.

Last year we had a maintenance strike which went on for a long time and was eventually settled. Do the Opposition Deputies realise the harm done to the lower-paid workers by that strike? One trade union which caters for unskilled men had to bring the men out on strike in protest against the craft-workers' unions because the position was so bad. That was deplorable, because if the trade union movement is split we will not have the industrial peace necessary for progress. I mention that just to show that the trade unions, the employers and the general public must work together to check this inflationary spiral. We must check it. The Government, in their wisdom, have put several clauses in the Bill in relation to certain penalties. I have been talking to a man who was protesting against the Government's measures in regard to the profit tax. I mention this point in order to show the shallowness of the Labour Party, who say that this Bill is designed to force down the standard of living of the workers. I never heard such a puerile argument in all my life. Deputies who do not do their homework on a Bill do more harm than anything else. They can injure the worker more seriously than the most vicious employer.

I do not like State interference in free negotiations on wages and salaries. To my mind it is altogether wrong. Up to now we have failed to get voluntary agreement between trade unions and employers. The Government has to step in, even if only to call the attention of the public to the way in which inflation was getting out of hand. I do not wish to discuss the conference now going on. I have confidence in the ability and patriotism of the trade union leaders, and hope they will produce an agreement which will keep the State out of free negotiations.

Mr. Desmond

The Deputy seems to forget that there is no conference on at the moment.

Mr. Moore

It has been arranged again.

Mr. L'Estrange

"Arranged" is the right word. The Deputy blurted out the truth.

(Interruptions.)

Mr. Moore

I have confidence in the people at the conference and I hope they will come forward with a solution.

Mr. Desmond

They have already said the figure will be 6 per cent or 7 per cent.

(Interruptions.)

Mr. Moore

The Deputy has not got a monopoly of information. The point is that if the labour-employer conference should come forward with an equitable solution this might not be welcome in all quarters. It will be welcomed by this side of the House and by the vast majority of the people. We have no vested interest in industrial strife.

Mr. Desmond

That does not follow from this Bill.

Mr. Moore

Wishful thinking. The previous Taoiseach, Mr. Lemass, and the present Taoiseach, Mr. Lynch, asked the trade union movement to prepare their own legislation, and a small group to which I belonged also asked them to introduce their own legislation on trade union organisation. I hope some day to see them do it.

Mr. Desmond

We were never asked to do it.

Mr. Moore

On several occasions.

Mr. Desmond

On incomes?

Mr. Moore

On trade union organisation.

Mr. Desmond

That is a different thing. This is a bit farcical. One would think the Government at least would brief their own Deputies.

Mr. Carter

Deputy Moore is a lot better briefed than the Labour Deputies. He is not trying to bluff trade unionism in general.

Mr. Moore

I must be very wise, seeing that I get under the Deputy's skin so much. I attended a discussion recently as a member of Fianna Fáil. Fine Gael and Labour members were there on the same occasion. I was asked by a member of the audience did I think production should be allied to wages and salaries and I said I did. I recalled that the NIEC's first report stated that we should have a relationship between wage and salary increases and productivity. Strange as it may seem, the Labour member that night said this was heresy. I am glad to see from this morning's newspaper that Deputy Michael O'Leary has put forward the same argument. It is new thinking on the part of the Labour Party. The NIEC, on which trade unions, employers and the Government are represented, came forward a long time ago with the basic argument that you must have productivity-related wages and salaries, yet we had a member of the Labour Party saying this is heresy.

Unless we can produce our goods at prices which will enable us to sell them in world markets we will not be able to maintain our present labour force, we will have more emigration and more unemployment. That is what the Government are trying to do in this Bill. I do not say it is a perfect Bill—no Bill is. Every Bill has much the same flaws. For instance, section 22——

Dr. O'Donovan

The Deputy has a high imagination. If he ever saw a section like that before he is a genius. He must be dreaming.

Mr. Moore

In order to get the general co-operation of the people it should go out from this House that the House realises that some anti-inflation action had to be taken. If there is inflation it is the less better off people who will suffer. It will be said by Opposition speakers that this is an attempt to downgrade the worker, but the Labour Party must realise that the workers, particularly in this city, are men and women of intelligence who will not be misled by such statements. Even the people who criticised when they thought the 12th round might not be allowed to go its full course now realise that something must be done.

If the Opposition are to be realistic they must desist from their usual slanging match against the Government. One speaker said today that some Fianna Fáil backbenchers who are trade unionists had almost threatened revolt. As far as I am concerned, I deny that. The trade union members of Fianna Fáil examined this Bill very carefully, which is more than can be said for the Opposition, and I deny emphatically any militant action on the part of some of us on that score.

During the years it has been said that Fianna Fáil were a monolithic structure, that there was no divergence of opinion in the party. Now they say we are split and today it was said that backbenchers have been given another cause for criticism. I wish to point out that during the past 30 years any legislation aimed at the benefit of the mass of the people has been introduced by Fianna Fáil. Thirty years ago Fianna Fáil brought in an Act which was described by the trade unions as a workers' charter, and from then onwards every progressive piece of legislation has been introduced by Fianna Fáil. Our economic policy has been adapted to suit the needs of our people, to abolish emigration, to create employment and to give our people as high a standard of living as is enjoyed anywhere in Europe. There will be no attempt to go back on our social outlook and I am convinced that when the time comes to discard this Act, when this Act will have served its purpose, the economy of the country will have been righted. We must remember that inflation cannot be allowed to go on and on. When the rich get richer, any Government with a social conscience must step in in order to stop the suffering of the weaker sections of the community.

When the Opposition come forward with some alternative, even in the form of constructive criticism of this Bill, we shall be able to measure their sincerity or lack of it. Their present attitude is not doing the people or the country any good. The Labour Party Deputies have not bothered even to read the Bill, judging by their contributions here this evening. This is the time when they should be making constructive contributions because unless inflation is checked there will be no living here for the great majority of our people—there will be higher emigration and unemployment and the economy will not be able to bear any increase in social welfare benefits.

We would be guilty of the greatest crime imaginable if we were to allow that to happen. Care of the aged and of the infirm weighs heavily on this side of the House compared with the other side. We are not satisfied with the payments being made to the lower paid workers and to those drawing social welfare benefits, and we have a task to build the economy so that we can give a good living to our people who wish to remain in this country, give ample and adequate payments to the widow, the orphan, the old age pensioner and the blind person, but you will not have the means to do that unless this inflationary spiral is checked. This is why this Bill has been introduced. A Government do not introduce unpopular legislation unless it is absolutely necessary. While this Bill may be unpopular with the Opposition the mass of the people realise that something had to be done, and they tell us this. Something is being done and I hope the Bill will achieve its purpose and that next year when the Act will be taken off the Statute Book we will have a healthy economic climate and inflation will have been checked.

While we may learn from other countries we must reject the advice of the Labour Party that we should ask the advice of the British Tory Party. We can work out our own salvation. However, we must have honesty of purpose, and this applies to the whole House, in meeting the problem. We must have an honest approach to the matter, as the people outside have, for they are saying that something had to be done. As I said, I hope and believe that next year when the Act is being removed from the Statute Book the threat of further inflation will have been removed.

Mr. Cosgrave

I should like to think that the solution to this problem would be so simple that it could be settled within a year. The problem that exists is one that has become aggravated because of the delay in tackling it when it should have been tackled. The proposals in this Bill have a number of defects some of which have been referred to but the most obvious defect is the fact that it has been introduced on foot of the announcement of the Minister for Finance when he introduced the supplementary Budget on the 28th October and reversed, or substantially modified it within a few weeks. That is the kernel of the weaknesses in the Government's proposal to deal with this problem.

Without going back too far but long enough to diagnose the serious situation which arose 18 months ago, and short enough to be within the memory of the general public, as well as Deputies, the House is familiar with the rapid changes of Government policy over that period. On the 18th March, 1969, the then Minister for Finance went on radio and television and made what amounted to a crisis speech emphasising, and directing the attention of the public to, the indices which proclaimed that the country was facing an economic crisis. The situation was so grave and so serious that he took the somewhat unusual step of requesting Government time on radio and television to make that announcement. Within a month that decision had been reversed and in a short time an easy give-away budget was introduced and a general election followed.

It is hardly necessary to recount the events or to reiterate the circumstances that have characterised the ineffectiveness of the Government over the period that has elapsed since the general election. However, all during that time prices have been rising, wages have followed price rises and salary increases have been negotiated and demanded to compensate for these rises. It is well to recall, as has been referred to in this debate, that the event which preceded the crisis speech of the then Minister for Finance was the serious maintenance strike which almost paralysed the economy and brought the nation's industry and progress to a virtual halt. That was the red light as far as wages and salary discussions were concerned and it was seen as such by the Minister when he made his crisis speech on the radio. However, political considerations intervened.

I accept the view of some Deputies opposite that this is a matter which should be considered in a rational and reasonable fashion. It might be possible to expect this to be considered in a rational and reasonable fashion if that were justified by Government policy and Government action, as reflecting Government intentions, but the career of events to the reckless progress of the nation over the last 18 months does not warrant that belief. But what is affecting the Government's attitude at present—and this applies in this sphere probably more than in any other sphere of activity— is the complete crisis of confidence in the inability of the Government to deal with the situation——

Deputies

Hear, hear.

Mr. Cosgrave

——and that is on their own action. It was Deputy Haughey who, as Minister for Finance, made that crisis speech. It was Deputy Haughey who, as Minister for Finance, reversed that and gave away in the 1969 Budget the election bonanza in order to achieve success for Fianna Fáil, and it contributed to that situation. The last 12, 14 or 15 months have witnessed the situation in which nobody knew, not even Government Ministers, what was Government policy on any issue. That is not a criticism by the Opposition, that is an expressed view of Government Ministers on their own colleagues and on their own policy.

Then we had the Budget that was introduced in May this year. That Budget was characterised by one single predominant aspect of financial and economic policy. Contrary to the advice of the Central Bank, contrary to the advice of the NIEC, contrary to the advice of the Economic and Social Research Institute, flouting the recommendation of distinguished economists and writers like Professor Fogarty or others, it doubled the turnover tax: the single biggest inflationary factor introduced into the economy in the last 12 or 18 months by Government action. Time passed and the turnover tax increase was more than doubled in effect. There was a 2½ per cent increase but can anyone, can even the most zealous Government supporter or defender, assert with conviction and proof that the increase was confined to 2½ per cent? Of course, it was not. I am no blind adherer to the view that prices can be controlled by a commission, or an inquiry, or a tribunal, or by legislation, but what action did the prices section of the Department of Industry and Commerce take during the time when that turn-over tax was being increased by more than 2½ per cent? Precisely none.

The Minister for Finance in March of this year was Minister for Industry and Commerce and he made an announcement which was headlined in the Irish Press that drink prices were not to be increased until he had inquired into them. Of course, that was in the middle of two by-elections. No one even remembers it. What happened to that inquiry probably cannot even be discovered in the Department.

Time passed and when an announcement was made by the licensed vintners organisation or some other organisation, or possibly by the two vintners organisations, that prices would be increased, the present Minister for Industry and Commerce said: "You are not to do it until I hold an inquiry." We have not yet been told what has happened to that inquiry but we all know that drink prices have increased. Now we are asked to give our support to and to consider in a rational, and detached, and objective manner a Bill that proposes to further strengthen the price control mechanism for a limited period.

Would there not be greater confidence in considering this Bill if we used the existing mechanism however defective it is? If it is found to be defective, the Government should say it is defective and not create a false impression that Government Ministers are out with their arms stretched to prevent price increases, for the temporary purpose of getting a few votes in a by-election or to cajole or to bemuse trade unionists or others into believing that some action is being taken.

This Bill suggests in the long title that its purpose is to amend and extend for a limited period the Prices Acts, 1958 and 1965. While the turnover tax was being doubled and prices were being increased, the Taoiseach announced in the course of a debate in the Dáil that it was Government policy to limit wage and salary increases and price increases to 7 per cent for a specific period and that this was a major contribution to a rational approach to prices and incomes and a constructive effort on the part of the Government to secure public confidence in a policy that was designed to achieve what are generally recognised as acceptable and welcome ends.

For a few days that looked, like so many other things, on the face of it, to be bona fide but, what happened? Within a few days or a few weeks post office charges were increased. Was the increase limited to 7 per cent? Did it conform to the norm that was to be applied to trade unions, or to other sections of the community, or to company dividends? CIE bus and train fares were increased. They were let out. As in so many other things, the stable door was closed after the horse was gone.

Then the Supplementary Budget statement was introduced here and the impression was created that at last this Government would take decisive, firm, relentless, action. Within a few days, faced with widespread criticism from every section of the community, not least from within, from some members of the Fianna Fáil Party, this decision was abandoned. This decision was unworkable and indefensible because it suggested quite unfairly that some categories of workers, in particular certain sections of the workers in the public sector, sections which had voluntarily withheld from pressing their full claims for the 12th round and who agreed to take the full 12th round award in two parts, sections who had shown a public spirited response to the appeals made by the Taoiseach and Government Ministers, the appeals made by employers and also, possibly, by some of their own trade unions— they had acted in a public spirited fashion and had agreed to forego some portion of the award until a later date —should be penalised while others who had pressed forward regardless of the consequences and without taking into account the public interest or even the interest of fellow categories of workers would have benefited.

That situation was then abandoned. That decision was withdrawn and it was announced that it was negotiable. The fact is that no section of the community, the employers, the trade unions, the Dáil, or the public, can believe or accept that the Government have any fixed economic policy in regard to wages or prices. A decision taken today is reversed tomorrow. We are reverting to the old stop-go policies which were criticised in the past as being the cause of so much misery and so much disruption of the economy. There is today a complete lack of confidence in the capacity of the Government to handle the problem and to pursue a fixed policy, properly thought out.

I have given examples: the failure to deal with individual cases, the notable examples of the increases in the price of drink and other commodities, the failure to operate the existing price mechanism to control excessive margins being added when the turnover tax was doubled. As I said, nobody suggests and nobody believes, and the price increases in the shops refute the suggestion, that the increase of 2½ per cent in the turnover tax was confined to that. How much more than 2½ per cent have these increases been? How can the country have confidence in a Government who operate in such a fashion?

This Bill has been badly drafted and it is impractical in many spheres. Attention has been directed to the provision in section 22 particularly. Section 22 gives arbitrary power to a Minister. It is true that in time of war or a comparable period when there is practically a closed economy and when the only supplies being brought in are brought in under Government control or direction, when everything from an ounce of tea is sold under controlled circumstances and in limited quantities, it is possible and has been found practical to operate rigid price controls but, with these limited exceptions, in an open economy, in circumstances such as exist at the moment, it is impossible. What makes this Bill even less credible than it otherwise would be is the crazy idea that adopting the most arbitrary powers in some way or other reinforces, because of the phraseology or terminology of the section, the Government's determination. This Government are not determined because they have not got any convinced policy on economic or financial matters. They have shifted their ground. Since March, 1969—and not even the shortest memory will forget that period—no circumstances of an external character have altered the situation. In fact, the emphasis by the Central Bank, the emphasis by the NIEC, the emphasis and criticism of the Economic and Social Research Institute, as well as the other writers and commentators I have mentioned, all pointed to the fact that this is an internal price inflation. In this situation there are no external circumstances such as beset this country at the time of the Korean crisis or at the time of the Suez crisis. There are no external, economic influences that raise substantially the prices of imported commodities such as oil or other goods that we have to bring in here. There are no external factors as a major contributory cause of this situation. This is a domestic inflation to a large extent and mainly created by excessive Government expenditure and a wanton disregard of the public interest——

Deputies

Hear, hear.

Mr. Cosgrave

——by a Government that are so divided that they cannot concentrate for any protracted period. Nobody believes that it is possible to get a coherent, convinced Government policy for a two- or a three-year period. We do not even ask that. We ask for a six-months' period, not even 12 months, and we cannot get it for six months. The Budget was introduced in May and the supplementary Budget was introduced at the end of October, a Budget designed to present to this country what might be described as a package deal. It was represented, on the one hand, as going to control prices, going to restrict wage and salary increases to a fixed amount, and on the other hand to control dividends, to swipe off excessive profit. If one examines that it is equally badly drafted and equally damaging to the economy.

Under the proposals enshrined in the Finance Bill, which is part of this package deal, the changes made are even worse in some respects, from the point of view of the progress of companies, than the steps taken in respect of wages and salaries. If, to take a particular example—and I do not tie myself rigidly because it is impossible to be absolutely rigid on the figures in this case—under the proposals that are made it may happen in respect of certain companies that a total of 24 per cent of their profits will be taken in tax for the coming year between 30th June of this year and 1st January, 1972. It will be a matter for the Finance Bill to go into this in detail but the fact is that at present the 8 per cent allowance in respect of CPT which is allowed for to 30th June this year will be wiped out under this Bill. That means that the amount in respect of income tax on which the assessment will no longer be valid and in order to meet the charge for income tax next year they will have to allow a further 8 per cent. It is conceivable that in certain cases a total of approximately 24 per cent will be involved. This is a fantastic example of an incompetent and an inept government taking decisions without thinking out the consequences or without evaluating, in consultation with the interested parties, the consequences of their actions.

I believe that the suggestion that has been made that it is possible to negotiate on the basis of the statement made by the President of the Irish Congress of Trade Unions is certainly worth further examination. Mr. Maurice Cosgrave who, as far as I know, is no relation, speaking on this matter outlined on a very significant date, the 28th October, the night of the supplementary Budget, in broad terms—and nobody suggests that the details that are presented in certain aspects of his address can be other than subjects for negotiation and discussion—that further talks were possible on foot of the statement he made.

I believe that the general consensus of opinion in this House is that these talks should be allowed to be resumed, that there is a widespread recognition that excessive and unwarranted price increases followed by increased wages and salaries affect all sections of the community, affect, as Deputies have said here and as commentators and social workers outside know, particularly pensioners, the old, the sick, widows, people tied to fixed incomes whether they are on State or other pensions. It is, therefore, in the interests of the community as a whole that action should be taken to deal with this but it is equally in the public interest that haphazard ill-thought-out decisions should not be put forward as Government policy, should not be put forward to the country as sound national policy when the reverse is the case.

I sympathise with the Minister for Finance in his present position, trying to advocate a Bill or a piece of legislation in which a number of members of his own party do not believe. The Government have, by their actions over the last 12 or 18 months, particularly since the end of the maintenance strike, indicated that they had no capacity to deal with the situation and that it is suggested that some form of Draconian legislation can provide a solution. This might be possible in wartime. It is not certain that it is desirable at any time but it might be workable in the limited circumstances of a closed economy. How, for instance, is it suggested or can anyone believe that it is possible to control the price of houses with the price of land free, with speculators having had a 20- or a 25-year honeymoon and certainly the best of it in the last five years? It has been suggested here that the local authorities have bought up land, particularly Dublin Corporation. Of course they did. They woke up eventually when there was hardly a decent piece of land within close proximity to Dublin that had not been acquired by private speculators because naturally they could outbid the corporation until a short time ago and then the corporation went to town and bought land nearly as far out as the edge of Kildare. But the failure of the corporation and the failure of the Department of Local Government was to provide the services when that would have contributed to easing the housing problem.

Deputy Clinton and Deputy Burke had a question here today, the answer to which emphasises the gravity of the housing situation. Figures were given which showed the substantial decline in the number of people who availed of the loan facilities this year compared with last year. Of course, the Minister for Local Government was able to point to a decrease in the assets of the building societies during this year. Is it any wonder their assets did not increase with a bank strike on, when nobody could get money? Is it not likely with the existing situation of loans of over 9 per cent that people on fixed incomes and meeting the rising cost of living could avail themselves of loans or could meet them. One of the serious repercussions of that situation is that Dublin Corporation, Dublin County Council and Dún Laoghaire Corporation are facing an appalling housing problem because of an increase in the number of applicants. There is also the fact that some applicants, who might otherwise avail of other facilities, or because of the loan charges and other difficulties, are obliged to compete with those who should be the special interest and consideration of the local authorities, and are now obliged to seek accommodation in caravans. The proposal in the Minister's Budget is to tax still further the people who supply caravans as a means of solving the housing problem.

Was an economic policy ever more obviously incapable of solving or contributing to a solution of the difficulties which face this country than the one enshrined in this Bill and in the Supplementary Budget? There is no doubt that this measure cannot be advocated in the terms in which it is now framed. It is already reneged on by the Government, by the Taoiseach and by the Minister. Even the Irish Press said that the wages freeze had thawed. We will have to wait until the Finance Bill to discuss certain other economic and financial aspects.

Examples have been given of attempts made elsewhere to solve this problem. Last night I had an opportunity of listening to an interview with the present British Prime Minister. When it was put to him that in order to deal with the problem compulsory powers should be used he rejected that as a solution to the difficulties over there. He rejected it as unworkable in a free society. It may be that this will tax democracy to its limits. It may be that it will tax the wisdom and forbearance, and in the last analysis, the patriotism of those involved in it but certainly passing unworkable legislation, enacting unworkable, ill-thought-out measures, above all by a Government who have no steady, united policy on economic or financial matters is no solution to the problems which affect this country and no remedy for the ills which affect so many sections of our nation.

Dr. FitzGerald

The first thing we have to say in relation to this matter is that all of us accept that a problem exists. Indeed, we indict the Government for having contributed so much to its creation. There is a problem and we have to consider seriously how best to tackle it. It is our view from these benches that the method adopted by the Government, the timing, the manner in which the proposals have been put forward, the way in which they have been played around with and modified, the way in which they are now being put to this House in the middle of the very negotiations which we hope will succeed, and which the presentation of this Bill it seems is designed to prejudice, all those things must be matters of concern for anybody who is worried about, as we all must be, the economic situation facing us at the moment.

I should like, first of all, before making my own remarks on this Bill, to make a few comments on the Minister's speech. In reading through it a number of points struck me and I think it is fair to make those comments first in reply to what he said before coming to my own views. I was struck in the very first minute or so of his speech by the use of the word "strategy" to describe what the Government are at. I do not think what they are doing could be dignified even by the name of tactics but to call it strategy is to devalue a word as many words have been devalued by the Government in recent months. In regard to the process the Government have adopted, whether one goes back over five years, two years, or over the last few weeks, whatever perspective one takes, one cannot find much signs of strategy about what has been done. There has been a great deal of muddling along, failure to take initiatives when they should be taken, to take initiatives at the wrong time, taking wrong decisions and then hastily climbing down on them and undermining confidence not only in the Government but in government itself.

The Minister then went on to speak about this legislation as being clearly in the long term interests of every section of the community. The use of the words "long term" here seems to me to betray a failure to appreciate the kind of situation we are facing. I could understand the Minister arguing that the Bill is necessary in the short term interests of the community. I might disagree with him but there is an arguable case. The one thing that this Bill does so far as the long term is concerned is to prejudice the possibility of securing a long term solution. Nothing would be more calculated to undermine the possibility of achieving either a voluntary agreement at the present time or agreement on a voluntary incomes policy in the months ahead as this kind of legislation introduced at this time into this House. Whatever about this Bill being necessary for short term reasons it certainly cannot be described as being in the long term interests of the community.

One is struck, in reading the Minister's speech, by the omissions. That is, perhaps, not unusual. Selectivity is part of the art of politics but it is an art which is exercised with singular skill and care on the other side of the House. The story, as told by the Minister, starts rather late on in the game just as the Taoiseach in another debate earlier this year started with a phone call from Aer Lingus, as if that was the first thing which happened. We learned later that many other things had happened before that. So also in this debate we are faced with statements which imply that all this started early last year, ever since the pay settlement for maintenance craftsmen early in 1969, this, that and the other.

That appears to be the starting point. There is no reference to any earlier event. Is there a reason for this? I think there is. The reason is that so many of our problems derive from the Government's failure to take any action about an incomes policy since 1965 when it became a real possibility with the report of the NIEC laying down principles for such a policy. I will come back to that later. I merely want at this point to refer to the omissions from the Minister's speech of any reference to the earlier period.

The Minister, in talking of what the Government have done since the spring of last year, confined himself— here he is being quite exact—to talk of what the Government tried to do by exhortation and he also referred to the stricter application of existing price control. I will come back to price controls later. Exhortation is all we have had. Of course, what we should have had in this period was the planned implementation of an incomes policy with leadership from the Government, bringing with them the unions and employers who had committed themselves formally to an incomes policy in 1965 and who from the spring of 1969 onwards were receptive to the idea of some kind of incomes policy because of the threat they saw looming up after the inflationary settlement of the maintenance craftsmen's strike.

We are told by the Minister that those exhortations were partially successful. He did not, however, tell us in what manner or measure they succeeded. It defeats my imagination to understand how any Minister could claim any measure of success in battling with this problem of incomes inflation, when this period has seen the most drastic inflation of income claims and has seen a situation so serious that for the first time in peacetime an Irish Government have been tempted to bring in a wage freeze. If there had been anything like partial success, if there had been anything other than total failure, the Minister would not now be facing this House with this measure, and for him to claim partial success is again to abuse the meaning of words.

Another feature of his speech which puzzled me was his reference to Government measures in this Bill applying equally to all forms of remuneration as well as to directors' fees, dividends, rents and fees for professional services. Again, the word "equally" is one of which I thought I knew the meaning, but I do not understand the equality between a 6 per cent limit on wages and a nil limit on dividends and other incomes. I can argue later whether this is in fact a right proportion, and certainly, taking a long term view, I believe wages and salaries should of course rise faster than dividends and other higher forms of income. Whatever the merits of that, for the Minister to claim that the Bill deals equally with two things when it puts a 6 per cent limit on one and a total ban on the other is again to abuse the English language.

Mr. Colley

If the Deputy wants to be exact, perhaps he will not again refer to the proposals as a wage freeze.

Dr. FitzGerald

Of course you can freeze things at varying levels.

Mr. Colley

He has already referred to a wage freeze.

Dr. FitzGerald

Would the Minister like to define it?

Mr. Colley

A wage freeze surely means no increase in wages.

Dr. FitzGerald

I see.

Mr. Colley

This is the ordinarily accepted meaning. I would not have taken the Deputy up on it except that the Deputy wants to be so exact.

Dr. FitzGerald

I do not accept that. My own view is that if you freeze something at a particular level, it can be 6 per cent higher than what it is now or 6 per cent lower, but if you say by law it must remain at a particular level and be no higher, that is what I call a freeze.

Mr. Colley

How would the Deputy describe it if it provided there was to be no increase in wages?

Dr. FitzGerald

I would describe it as an even more stringent freeze. The Minister went on to use another interesting phrase, that "moderation will apply equally to aggregate profits before distribution". The measures are designed to ensure that moderation will apply equally to aggregate profits before distribution. I am not very happy with this concept. If that is the purpose of the various tax changes that have been announced in conjunction with this Bill, they are ill-conceived. I do not see that there is any merit or value in trying to control profits as such. I am fortified in this belief by the report of the NIEC, signed unanimously by those who were the members of the council at that time, including the trade union representatives, who came down firmly against profits control where profits are earned competitively. As far as I am concerned the higher profits are the better for future investment. What I am concerned about is the relative distribution of incomes derived from profits. For the Minister to be attempting to prevent profits rising as distinct from preventing people living on unearned incomes gaining an advantage at the expense of workers is to focus his attention in the wrong direction. If in the year ahead, as I believe will happen, we have a diminution in the volume of industrial investment and if the rate of growth of our industrial development in the year ahead, in the year after that and the year after that again is slowed down by this, the blame for that will rest with the Minister whose economic views are so simplistic and so ill-conceived.

I should like then to ask the Minister a question. I am puzzled by one feature of his speech and indeed by one feature of the Bill. The Bill as originally conceived, we are told, involved a proposal to restrict income increases to 6 per cent. No such phraseology appears in the Bill; instead, under section 2 (6) the Minister takes power to decide for himself what that limit will be. I shall come back later to the question of whether this is the kind of power which we should give to any Minister, never mind a Minister in a Government as discredited as the present one.

It seems to me we are in a situation in which either an agreement will be reached between the Irish Congress of Trade Unions and the employers, in which event this Bill becomes superfluous; or it will not be reached, in which case the Minister may claim that the Bill is necessary. But for what purpose is it necessary to keep open his options as regards the amount of the increase. I can see only one explanation of this that makes good sense; there are others that make, I would think, bad sense. The explanation that would make good sense, in the sense that it would be logical, not that I would accept it, would be that the Minister is waiting to see what voluntary agreement is reached so that he can apply compulsion to that voluntary agreement.

If that is the case we should be told, because that is not clear from the Minister's speech. He merely said any agreement now reached must be acceptable to the Government that seems to me fair in the present difficult circumstances—and that such an agreement would have the full backing of the Government under this Bill. Under those innocent words does there lie an intent to apply all the legal paraphernalia in this Bill, including the fining of trade union officials in their own personal right, in order to support this voluntary agreement? This is much too much like the process of volunteering for tasks which we are told is at times adopted in the Army where the volunteering is far from voluntary but is in fact compulsory.

If that is the reason for leaving open the amount here, then the Minister should say so. If the reason is that the Minister is waiting to see the result of the voluntary negotiations and he is then going to fix some other figure than 6 per cent out of his head, and without consultation with the Dáil impose a freeze at some figure that he then chooses, I would object to that on the grounds that the whole question of the degree of wage restraint that is necessary is something for the Dáil to discuss and decide. If there is to be any such measure as an unprecedented wage freeze, then it is a matter for this House to decide the amount. The reasons I can detect or imagine for this peculiar feature of the Bill of dropping the 6 per cent and leaving it to the Minister are reasons which concern and worry me.

It is disgraceful that the Minister should produce a speech here which leaves us in doubt as to what manner of Bill this is, in what circumstances he intends to use it, and whether he intends to convert a voluntary agreement into a legally compulsory one or not. That is a question I should like the Minister to answer now, because we shall have the most fraudulent and absurd debate in this House if we have to wait until the Minister is replying before we get the answer to that question. Would the Minister say simply whether I am right in thinking there is some intention here to make voluntary agreements, if reached, legally, compulsory? If I am wrong in that, will he say he has no such intention and that will not be done?

Mr. Colley

No, the Deputy is right in his assumption. This was made clear in the Government statement which referred to the change in this section of the Bill. It was made, incidentally, at the request of the executive committee of the Irish Congress of Trade Unions and not for any obscure reason that the Deputy has been speculating on. It was announced publicly, but I know the Deputy chooses to ignore that kind of thing when its suits him.

Dr. FitzGerald

When the Minister says I am right in my assumption I would point out that I have produced a number of alternative assumptions. I do not want to be misled. Is the Minister saying it is intended to apply the compulsory paraphernalia of this Bill to any voluntary agreement reached and that this was requested by the Irish Congress of Trade Unions?

Mr. Colley

That is not what I said.

Dr. FitzGerald

Perhaps the Minister should clarify this.

Mr. Colley

I said the change was made for the reason that it was requested by the Irish Congress of Trade Unions. This fact was announced publicly. The Deputy has been speculating on other reasons for it, although the plain reason was the one which was announced publicly. The other thing I said was that it is intended, if a satisfactory agreement emerges, to apply it under section 2 by Government order.

Dr. FitzGerald

I see. That seems to me a most startling thing and indeed a very odd thing to have discovered at this stage in the debate. I had expected to be told I was raising hares and trying to damage the Government, but to be told it is the Government's intention——

Mr. Colley

May I point out to the Deputy the Government statement announcing the change stated that.

Dr. FitzGerald

I have not the wording of that in front of me but if it is anything like as obscure as the Minister's opening speech then it did not say it in words that made any sense to me or to the trade union movement. If, indeed, it did say it, will the Minister say why he came into this House and did not say it in his Second Reading speech because surely the purpose of a Second Reading speech is to explain what the Bill is about? How could the Minister justify coming in here and waffling along about full backing if what he meant was applying the compulsory powers of this Bill to voluntary agreements? I shall not press the Minister any further; he has answered my question. It seems to me a somewhat astonishing answer but it is one we need in order to be able to proceed sensibly with this debate.

Another interesting phrase in the Bill—perhaps it has some technical significance which is obscure to me— is where the Minister states that the protection the unions enjoy under the Trade Disputes Act is not affected. This immediately follows a statement that if unions do not do what they are told to do they will be committing a criminal offence and will be fined. If they use funds for strike pay they can be fined again and substantial fines can be imposed on unions and union officials. I wonder what kind of protection they enjoy under the Trade Disputes Act is not affected? I understand the purpose of the Trade Disputes Act is, in general terms, not in legalistic terms, to protect unions against this kind of situation. I admit it was intended to protect them from being sued by employers but it is not much encouragement to unions to be told that the Government are still going to protect them from being sued for large sums by employers but will collect the money themselves by way of fines. It is a curious way of ensuring continued protection under the Trade Disputes Act. Possibly, it is a redistribution of income between employers who might sue them and the Government who might take the money from them by way of fines. That last phrase about the Trade Disputes Act was perhaps superfluous or at best ironical.

Mr. Colley

Does the Deputy think we ought to remove the protection?

Dr. FitzGerald

No, I just think it is ironical to add it at that point. It is not much assurance to trade unions who, if they make the slightest move against the Government measures, are going to be fined and have their union officials fined, to be told that they will not be sued also by employers. One would think this was a great concession on the Government's part.

Mr. Desmond

They forfeit their deposits and lose their licences. The Minister was once upon a time chairman of a joint labour committee and I was a member of the workers' side. I can hardly credit the Minister with bringing in this kind of Bill.

Dr. FitzGerald

Having gone over the Minister's remarks I should like now to make my own speech rather than a counter speech to his, although I think it is important to have raised these few issues, particularly the one which elicited that important piece of information.

The problem we are facing today is one largely of the Government's creation, not exclusively, because in any situation of this kind blame is shared and no Government, even one of the calibre of the present Government, are capable of causing chaos singlehanded. It usually needs a bit of help from other members of the community and there are always people in the community willing to give such a Government a hand. Nevertheless a very large part of the responsibility for this situation does devolve on the Government.

Over the relevant period we have had a growth in Government expenditure and taxation at a rate which has imposed strains on the economy and, because of the impact of this, upon the purchasing power of the people who have to bear the burden. These strains have shown themselves in the form of claims for higher wages. More particularly, there has been—and this has been referred to by other speakers —the choice of indirect taxation as the only means of financing this increased expenditure. The effect of this is to push up prices by the maximum amount. The doubling of the turnover tax in the last Budget is the clearest and most lunatic example of this.

The advice the Government received before the last Budget was unanimous on this point. It was, perhaps, not surprising the Irish Congress of Trade Unions should have advocated that any increase in tax should take the form of direct taxation but the Central Bank backed up the Irish Congress of Trade Unions, and these are two diverse bodies which approached the whole problem from what must be described as slightly different viewpoints, and reached the unanimous view that the answer was direct taxation; it took a Government of some stupidity to turn round and do the exact opposite. People with little or no knowledge of economics realised that if the burden of increased taxation was put in the form of indirect taxation this would have an immediate impact on prices. Prices were already, for other reasons which the Government were in turn largely responsible, rising so rapidly as to create a problem of excessive wage demands. This particular form of taxation was disastrous in the circumstances.

I frankly fail to understand the reasons for it. They have never been explained to us. The Government must have had some idea in their heads as to why they did it but they have failed completely to justify the action. It would be interesting if, when the Minister is replying to this debate, he would tell us the secret about the last Budget. There have been many mysterious rumours about it because of the events which occured on that day and after it but obviously some of these rumours have no foundation; they are pure speculation. There must have been some reason why the Government or one or other of the Ministers for Finance or the Minister for Finance and the Taoiseach—whoever decided it—chose this particular method of taxation. It may be that the decision was taken by the Minister's predecessor and due to subsequent events he has been unable to discover from his predecessor why he took this particular decision.

I would have thought at the Government meeting prior to the Budget, before the former Minister for Finance had his accident, that somebody round the Cabinet table would have asked the Minister for Finance why he was rejecting the advice of the Central Bank, the Irish Congress of Trade Unions and any economic commentators that had dealt with the matter. Perhaps the Government had other things on their minds. Perhaps that was the meeting at which, according to Mr. Boland, the Government were told the secret of the arms importation business and where the Taoiseach assured all concerned that no other steps would be taken. It was all over until Deputy Cosgrave acted in the matter. Mr. Boland has told us there was such a meeting in which that happened. I look forward to the Taoiseach's reply to my question on that matter next Thursday. If that is the case, one could understand that in the exciting atmosphere of that meeting, when the Government were told about the activities of some of their colleagues, that they were not going to be sacked—all was well; it was all over and Jack was letting them off this time with a caution and the Probation Act —such matters as why the Minister was imposing increases in indirect taxation against all the advice did not, perhaps, attract the attention of the Government on that occasion. Perhaps the present Minister is in the position of not knowing the reason. This would explain why in the Budget debate and thereafter we have been given no explanation. All we can say is that it was a disastrous decision and in the absence of any explanation it must be regarded as one of the more damaging eccentricities of a Government in the last stages of decline.

More serious in the long run has been the failure of the Government to cope with the problem of a prices and incomes policy. On this matter there exists a clear divergence of outlook between this party and the Government party. It is one of many issues on which the two parties are divided, one of the many issues on which the differences between them have been pinpointed in the Just Society policy of Fine Gael put forward in the 1965 election and up-dated considerably since. The Minister will perhaps recall, as we have reminded him on a few occasions, that in the 1965 document Fine Gael not alone put forward the view that there should be a prices and incomes policy—the Minister might say if that is all we did that it was merely a platitude—but we went far beyond that. We gave serious consideration to how such a policy should be implemented and we reached a conclusion with which I would hope the Minister would agree—it has been advocated certainly on the other side of the House from time to time—that you cannot have an incomes policy confined to wages and salaries only; it must extend to all kinds of income.

Having reached that conclusion we went farther than the Government have ever been prepared to go and tried to consider how best that could be done without having a disrupting effect on the economy. We considered price control as a long term policy and rejected it because while price control might be necessary in an emergency situation it cannot be imposed as rigidity as it would have to be to be effective for any length of time without creating grave distortions and therefore it is a policy that must be used selectively and at appropriate times.

One of the problems that the Government face is that they have devalued price control by introducing it in 1965 when it was not terribly necessary and keeping it on in the years between because they had not the political guts to remove it when it was not necessary and they now find themselves in the position that they cannot convince anybody that they are going to operate this policy with the firmness necessary in an emergency. Because they have operated it ineptly for so long, that confidence has been lost. We considered price control as a weapon in a long term incomes policy and we rejected it as such but not as being necessary in a crisis while recognising and stating firmly that price surveillance and constant inspection of price changes and constant pressure when prices are rising inordinately are necessary. The distinction here is important and is sometimes missed: a rigid price control as a permanent policy is unworkable but constant surveillance of prices is necessary.

What should be done if it is found that prices are rising inordinately, disproportionately to profits, and profit margins are widening? This can only happen if there is some lack of competition or some serious imperfection and if this exists it is the duty of the Government to deal with it in the first instance through the restrictive trade practices legislation. If we had a fair trade commission which worked effectively and quickly problems of that kind could be resolved. If there was a monopoly putting up prices that monopoly could be tackled but if you introduce price control and apply it to all products, regardless of whether competition exists or not, it is bound to be ineffective over any length of time. As a permanent measure tight price control was something we found was not the answer.

We, therefore, chose the approach of price surveillance as the permanent approach, active use of the Fair Trade Commission to deal with monopolies and cartels of any kind and Government intervention where necessary in individual cases to deal with prices rising inappropriately, without having tight control over all prices. We did not see in price control a long term policy that could play an effective role in a long term incomes policy. Accordingly, we looked elsewhere.

What about profits control? I have already dealt with that. Profits control, which limits the growth of profits, would merely have the effect of limiting investment and is something which should not be undertaken at any time, I think, even in a crisis and certainly not as part of a permanent policy. We are fortified in our belief that we were right in that decision by the unanimity with which the NIEC shared that view in its 1965 report and the solid support of the trade union movement for that view in that report.

What about dividend control, controlling increases in individual dividends and saying that no dividend should go up by more than X per cent, the same amount or a lesser percentage than wages? Again we recognised that this is a possible weapon and necessary in an emergency, perhaps. Certainly, if you are to have any kind of wage freeze you must have a dividend freeze at the same time but as part of a long term incomes policy we rejected it because if you have that rigid approach to dividends, regardless of the efficiency of a firm, year after year dividends given by that firm could not be increased by more than a fixed percentage so that somebody who invests in an efficient firm can never reap any benefit by way of income from that, you will create two effects. You will discourage intelligent investment if it does not matter which firm you put money in because you get the same increase in dividends so long as it is not actually going bankrupt. People will not bother investing intelligently and funds will be deployed unintelligently, ineffectively and contrary to the national interest.

The other effect, if you control dividends rigidly, is that you will have an accumulation of profits inside the firm, definite growth of capital in the firm as firms will hang on to their profits when there is no point in paying them out in dividends when they are not allowed to do so and this will lock up resources in firms, some of which will not be efficient in using these resources whereas, if they were paid out in dividends, they would get back into circulation and would be attracted to more efficient firms. This effect could also be damaging to the national interest. Moreover, we would have problems of capital gains although these can be overcome by capital gains taxes at times when needed and which Fine Gael also propose in the Just Society policy. We therefore rejected that kind of dividend limitation as part of a long term incomes policy. We were left in the position that we believed you could not seek restraint in wages and salaries unless you could also guarantee to workers that the effects of this restraint would not accrue to their disadvantage through a disproportionate increase in other kinds of income. We had to find a solution and the solution we propose is one which might create some technical problems for the Revenue Commissioners but I think it is the only possible solution.

We are trying to ensure that those who live on unearned incomes, interest and dividends—and this would apply to professional fees also and to other sources of income apart from wages and salaries—should not have increases in their standard of living disproportionate to those of workers who are in most cases living on lower incomes and who are at the disadvantage of not being their own masters. Concerned with the income people get as purchasing power, which is derived from income after tax, what we want to ensure is that the total aggregate volume of income after tax, accruing in a form which I might call roughly "other income and professional fees" should not rise more rapidly than the aggregate of wages and salaries.

This is something that can be tackled by introducing a tax on aggregate dividend income which would be levied only if the rate of growth of dividend income and other incomes of this kind were disproportionate and greater than the growth in wages and salaries. If you have such a tax in abeyance, available to apply in such an eventuality, you could say to the workers with a clear conscience and with a conviction that would carry to them that you are guaranteeing that if they are prepared to restrict their demands the benefits of that would not accrue to shareholders in companies concerned and other better off people but would be retained for the workers themselves.

That assurance is necessary to the ordinary worker to whom it seems that if he cuts back on wage claims and accepts a 6 per cent increase instead of 10 per cent or 10 per cent instead of 15 per cent the only effect of his taking less money out of the pool is that the shareholders will get more. This is an over-simplified view—there is more to it than that—but it is a view that has sufficient foundation in reality and is sufficiently strongly held to make it necessary to disabuse people of it. It is necessary to give worker a real conviction that if they restrain their demands and accept smaller increases it will not mean a redistribution of income from them to shareholders. This you can do if you are prepared to introduce the kind of dividend equalisation tax measures that Fine Gael proposed in pacific times in 1965, that the NIEC adopted and put forward in report No. 11 in November 1965, seven or eight months later. If you do that you can find a solution to this problem. That was a concrete and useful suggestion.

Our analysis was, I think, an analysis seeking the right solution and it is an analysis that stands up to any reasonable economic judgment. Fine Gael were not looking for some gimmick to get popular support. They were looking seriously at this problem and trying to find a serious solution to it and, having analysed the possible solutions, accepted some and discounted others on the grounds that, one way or another, they were against the national interest, we were heartened by the fact that six months later it was considered by the NIEC and adopted. We have been consistently disheartened since.

Have the Government ever read that part of the report or done anything about it? Nothing has happened in regard to this dividend equalisation tax proposal. I am not clear what its effect was. I do not know whether the civil servants drew it to the Minister's attention or whether the Minister read it for himself and did not bother to inquire further, or whether it was sent to the Revenue Commissioners asking them for their views and came back from them with a note to the effect: "This would be difficult to implement and should not be pursued". All I know is that we have not heard of it since. All I know is that when the NIEC came to deal with prices and incomes again this year, and when they came to recapitulate what they said in the 1965 report, that recapitulation contained some significant omissions and changes. If you read through it you find it is word for word an account of what was said in the 1965 report up to a certain point and then it goes on to suggest exceptional solutions to exceptional problems.

One of the striking omissions is that, at the point where they are quoting directly from the relevant passage in the 1965 report, when they come to the dividend equalisation tax proposal, it is dropped and nothing is put in its place and we now have a report which says in a desultory way that something ought to be done about other incomes and then passes on to deal with wages and salaries and how they should be controlled. I do not understand how the trade union representatives came to sign a report that omitted one practical suggestion for evolving a genuine incomes policy. I would be interested to learn where that omission was initiated. Who decided to drop this? It was scarcely the trade union representatives who decided: "We want only wages and salaries controlled. Please drop this dividend equalisation tax". I have no reason to believe the employers proposed this omission. Perhaps they did, but I do not think so. I think what happened was that the civil servants who provided the secretariat for the NIEC, something which has outlived its usefulness in practice, deliberately omitted this particular proposal because, for some reason, they thought their Minister did not like it and, perhaps, the members of the NIEC did not advert to the omission by carrying out the kind of textual comparison necessary in a case like this dealing with a document emanating ultimately from a Fianna Fáil Government. Whatever the reason—I suspect this was the reason and, if not, the Minister can tell me so in his reply—this was omitted and we now have no proposal of any kind for an incomes policy. We have a proposal to freeze everything until the end of 1971, at which point of time the floodgates will reopen.

This was the only concrete proposal omitted and never mentioned again. I sometimes wonder if, perhaps, it is not all the fault of Fine Gael. Is it that we made the mistake of recommending it? Did that damn it? Is it the case that the Government's sensitivity to any suggestion by the Opposition ruined it? The Government say they want constructive criticism but, when constructive suggestions are offered, they fail to accept them. Unfortunately the Opposition suggested the solution and, because they did, apparently the problem cannot now be solved. But I doubt if there is that degree of pettiness on the other side of the House; if there was we would be in a bad position. I would ask the Minister to explain to us what happened and tell us how he thinks a long-term incomes policy could cope with the problem of non-wage and non-salary incomes. Has he a better solution? Will he let the House know what the solution is? We have gone on now for five years since this proposal was first made and there has not been one peep out of the Government as to what their solution is. The only solution is to suppress the only constructive suggestion made.

This wage freeze Bill now prejudices any chance of ever introducing a long-term incomes and prices policy. Not only that but the Government have not an idea in their heads as to how one could go about getting such a policy. The Government completely failed to grasp the opportunity provided for them in July, 1965. Last year, they failed to grasp the opportunity that existed for a constructive initiative in the field of a prices and incomes policy following on the maintenance workers' strike. Anyone in close touch with the situation at that time, anyone in contact with employers and trade union leaders, could not but have been aware of the malaise and the concern that existed and the fears there were about the inflationary consequences of the maintenance workers' strike. Indeed, the Minister for Finance at the time seemed for a moment to grasp this and he went on television with his dramatic crisis speech. It seemed as if he, perhaps, understood something of what people were thinking and fearing and as if he were prepared to make use of this opportunity to launch a prices and incomes policy in a very favourable climate. Unfortunately for the country it was the moment Fianna Fáil chose for a general election and they were not going to go into a general election with any talk of an economic crisis and so the crisis was switched off three weeks later and the whole problem was left in abeyance.

As the months drifted by people forgot the strike and the inflationary effect of it but, within a matter of months, they would be facing further wage claims which would be likely to equal, or exceed, the amount given to the maintenance workers and then the country would face a serious economic crisis indeed. That was all forgotten by the Government because there was an election coming up. They did not even have the guts or the intelligence after the election to revise the Budget, as they might have done. It is not easy to tell people there is no crisis, there is a crisis, there is not a crisis all in a matter of three, four or five months.

Not one word was heard about a prices and incomes policy. We may have had a few exhortations, but nothing positive, nothing constructive. We drifted through 1969 and into 1970 before anything was done. The second opportunity was missed and the crisis we are in now as far as incomes are concerned is a serious crisis and it is a crisis for which Government neglect of these two opportunities is mainly responsible. I do not think this can be sufficiently emphasised. Criticism of Government by the Opposition rings, perhaps, hollow on the benches over there and much attention may not be paid to them, but I think they should listen and they should try to understand whether at times what we are saying does not have the ring of truth. What I am saying now has, I think, the ring of truth and I was myself closely involved in many of the events about which I am talking; I was aware of what was going on and I am quite clear an opportunity was missed.

The Minister may say in reply that the immediate reaction to the 1965 incomes proposal was discouraging and that, when the proposal was published, there was a pulling back, a feeling that representatives had gone too far to reach agreement, and he might well claim that for some months after the report was published it would have been unwise, perhaps, to make any attempt to get an incomes policy going. He could be right in that. I would think he would be right in that, but what is unforgivable is the fact that, instead of waiting for the immediate reaction and tension to die down, and then acting, instead of waiting after the limited increase of £1 per week in 1966, and then raising the subject again, the Government were content to drift on through 1967, 1968 and 1969 without doing anything. That, I think, was unforgivable.

It was equally unforgivable to miss the opportunity supplied by the maintenance workers' strike. Anyone in touch with events could not have failed to realise that amongst trade union leaders there was a realisation that there was a serious problem and a willingness to accept some kind of Government initiative towards a solution of that problem. I would go so far as to say that hints were dropped but they fell on deaf ears because the Government had other preoccupations of a selfish and political character. The damage done there will take years to remedy. These things need to be said, and apparently more than once, if they are to make any impact on the other side of the House.

The position has, unfortunately, been further prejudiced by the ham-fisted way in which the Government have handled the present situation. I do not want to go over this at length because other speakers have done so; I propose to deal with matters that have been less developed. We all know the record: the announcement of this rigid 6 per cent freeze, with no climbing down, including the taking away of 4 per cent of what should be given to public service employees and others.

It remains a mystery to me how any Minister could have acted so stupidly. I wonder where the advice, if any, came from? It would seem a little surprising that public servants, advising the Minister for Finance, would come to him and say: "We think it a good idea that you should take 4 per cent from the 10 per cent we are getting next year". I am not suggesting that public servants at that level would be guided mainly by their own self-interest, but I am suggesting for them to propose a course of action that would obviously create an outcry and could threaten to bring down the Government seems somewhat improper. I cannot see any adviser to the Government in the Civil Service giving them that advice.

Where did this idea come from, of stopping the 12th round and of taking away a large part of what was awarded to public servants? Was it the product of advice given to the Government or some irascible attitude to the public service among members of the Government? Did it happen that when they got recommendations from the public service about how the matter should be handled, that perhaps did not contain this proposal, some Ministers might have said: "These public servants are making recommendations about the wage freeze that will not affect them. They will get the 10 per cent while others will only get 6 per cent. We will fix them and see that they only get 6 per cent." I find it difficult to credit that advice, so misconceived in the public interest as well as being contrary to the private interests of the people concerned, could have been given by public servants to the Government. Perhaps some kind of prejudice against public servants may have operated with the resultant disastrous proposal.

The manner in which the Government climbed down was even more damaging. They ignored the protests of the trade unions and of the Opposition; they ignored Professor Basil Chubb who denounced on the television what they had done. It was Professor Chubb who had proposed the figure of 6 per cent, who had chaired the Employer-Labour Conference, who informed the Government of the breakdown and proposed that they should take action to deal with the matter. The only advice the Government were prepared to take was when the former Minister for Finance spoke on the matter. Apparently the Government valued his views to such an extent that, while they would not listen to the views of the trade unions or Professor Chubb or to the voice of reason in the newspapers, they listened only to Deputy Charles Haughey. One wonders if this was solely because of their respect for his financial wisdom or whether other considerations might not have entered their minds. Certainly the decision of the Government to climb down immediately Deputy Haughey spoke, having ignored all previous representations, did not enhance confidence in the Government. Indeed what little confidence remained evaporated rapidly at that point. The whole procedure adopted in this case was disastrous: to take up a position, allegedly unalterable, and then to stumble and climb down when the voice of a distinguished backbencher was heard is not a way in which the Government should run this country, particularly in the present serious situation.

I am puzzled why this legislation was introduced at this time. It must be said in fairness to the Government that Professor Chubb stated he could not see any prospect of agreement and he recommended that the Government would take the matter up. I think he was wrong and current events show that he was wrong in this matter——

Mr. Desmond

He certainly was.

Dr. FitzGerald

With respect to Professor Chubb, a person for whom I have the greatest possible respect——

Dr. O'Donovan

He was also wrong about night lectures at universities.

Dr. FitzGerald

I am afraid that Deputy O'Donovan is leading me in a direction in which the Chair will not permit me to stray. The debate could be about Professor Chubb in his many aspects but, in fact, it is only about Professor Chubb in his capacity as chairman of the Employer-Labour Conference. That he was wrong in his judgement is shown by the fact that the employers and the unions are negotiating again. There is a possible argument that the wage freeze may have concentrated their minds to a greater degree——

Mr. Desmond

He was premature and Deputy Haughey panicked.

Dr. FitzGerald

That may be a fair way of putting it. In any event the two bodies concerned are negotiating again. Given that they have agreed to negotiate and that there is some prospect that they will reach agreement, what course of action should the Government pursue? I would have thought the correct course would be to say "In view of this announced willingness to negotiate we are willing to withhold our legislation for the moment until we see if agreement is reached. If agreement is not reached it will be necessary for us to act". I consider such action would have a beneficial effect but the Government have blundered ahead and have introduced this Bill in the middle of negotiations.

Let us consider the position of an employer who is negotiating at the moment with the ICTU. He knows if he fails to reach agreement the Government will slap down the 6 per cent figure—at least this is the impression the Government intend that people should have. In fact, the Minister has eliminated the 6 per cent figure and has kept to himself the power to fix the figure. The employer realises that if he stands firm the increase will not be much more than 6 per cent, whereas if he negotiates in an effort to bridge the gap between the 6 per cent and what the ICTU want he will end up with a figure of 9 or 10 per cent or more. In those circumstances an employer will scarecely negotiate with great enthusiasm. He is in a sound position: if he stands firm and does nothing he will not have to pay more than 6 per cent; if he enters into serious negotiation he will have to pay much more, so why negotiate?

I am afraid that the introduction of this Bill in the middle of negotiations seriously prejudices the position, much more seriously than if the Bill were kept in abeyance. It would be more beneficial if the Bill were introduced later when all else had failed. It is recognised everywhere, and now by the Tory Government in Britain, as is evident in today's papers, that the trouble about a wage freeze is that while it may hold things down for the moment a terrible head of steam builds up in the kettle underneath during the period of the wage freeze. When it is removed the top blows off and this is what happened in Britain. Britain's problems at the moment are those of the aftermath of a wage freeze. The Government can buy time with a wage freeze, perhaps until they think it is an appropriate moment for an election, and then let the country fend for itself. However, a wage freeze cannot resolve the basic problem. During the period of a wage freeze wages and salaries are held down with threats of prosecution and fines if they seek increases beyond the prescribed limit. During that period the atmosphere and climate for negotiating a voluntary incomes policy could scarcely be worse. If this Bill is proceeded with and if we have a wage freeze, as if apparently the Minister's intention, and if that is the position when a voluntary agreement is reached, then we are in for trouble. The Minister should try to use the threat of a wage freeze in the background to concentrate the minds of employers and workers— and particularly workers—in such a way as to get them to negotiate seriously. The Minister would need to adopt a more flexible approach than he has done. He is telling us that it is his intention that this Bill will be applied even if a voluntary incomes agreement is reached.

This does not give much encouragement to reach a voluntary agreement. Moreover, employers are not in a position where they feel that if they fail to reach agreement they will be taxed on their profits. The one excuse for taxing company profits on a short-term basis might be that it would be a good threat which might encourage employers to negotiate seriously on the basis that if they negotiated seriously and reached agreement their profits would not be taxed. But that is not what the Minister says. Employers are to be taxed anyway. There is no advantage to them in reaching agreement. The particular way in which the Government have tackled this is one in which they have made it most unlikely that a solution will be found through voluntary negotiations, and even if such an agreement is reached the Government will make it compulsory. That will ensure that it is unpopular and a climate of opinion will be created in which negotiations for a long-term incomes policy will be impossible. It would be difficult to devise a more roundabout, complicated way of making a mess of things, even if such had been intended. But it was not intended. It was the outcome of stupidity and changes of mind rather than "strategy," to use the Minister's word in the opening speech.

These are the reasons why this Bill must be opposed. I recognised, at least as well as many Members of the House and perhaps better than most Members, how serious the position was. I have done my share of exhortation in a more practical way than the Government. I have tried, in many speeches and in many articles over the past year and a half, to convey the threat which was building up. I have tried to persuade the Government to do something about it and to make a move towards an incomes policy. I have tried to persuade employers and unions of the seriousness of the situation and of the need to find some solution. The Government have not been making a similar effort. Perhaps their minds were elsewhere. It is a curious position when the Opposition side of the House must give a lead, while the Government dither on year after year and their exhortations are so clearly dishonest and so unconvincing that nobody pays any attention.

The Government have failed to produce a concrete case or to explain in clear language why it is necessary for action to be taken. This has left it to members of the Opposition to preach the gospel more convincingly and to put forward facts and figures. I have tried to do this. I have become convinced that government by Opposition is unsatisfactory and that until, in the near future, the position is reversed and the Opposition are allowed to do their governing from the Government benches, this country will continue to be in a mess. Nothing the Minister has said and nothing in the Bill have convinced me otherwise.

The Bill makes a bad situation worse. I do not exclude that in a crisis, when the last point is reached where it is possible to retrieve anything, a Government might be forced, because this Government have made such as appalling mess of things, to introduce a wage freeze. I recognise that Governments may make such a mess of things as to make a temporary wage freeze necessary. I do not believe that such a wage freeze, if imposed, can do anything other than hold off the danger for a period, while in the mean-time building up a head of steam behind it. The Government which find themselves forced to introduce such a measure are a Government which are defeated. They are conceding defeat without even trying to solve the problem. This Government have not attempted to get serious support for a voluntary incomes policy. I do not know whether it was because the Fine Gael Party proposed a voluntary incomes policy. One detects something like that in Britain where the Tory Party are proposing an incomes policy.

Mr. Colley

Deputy Cosgrave seemed to be quoting Mr. Heath with approval this afternoon, and his attitude to it did not surprise me.

Dr. FitzGerald

His attitude to what? His attitude to a wage freeze? I am talking about the Tory Party's attitude to a voluntary incomes policy. That is a different thing. They condemn every solution to the problem, but Tory parties are not very intelligent as we can see in this country over the last few months.

Mr. Colley

We have been noting that in the last half-hour.

Mr. R. Burke

Would the Minister like to withdraw his views?

Mr. Colley

No. My remark was accurate.

Dr. FitzGerald

The Minister is ambiguous. He was talking about something else. The Minister is incapable of speaking in clear terms on the issue. I have clarified it. I do not demand that the Minister withdraw his remark. It is clear what Deputy Cosgrave was talking about.

Mr. Colley

I would be quite willing to withdraw something which was inaccurate, but it was accurate.

Dr. FitzGerald

Accurate, but misleading.

Mr. Colley

The Deputy chooses to misrepresent me.

(Interruptions.)

Dr. FitzGerald

We have had evidence of the inability of the Minister, or even of the Taoiseach, to be accurate. I do not wish to end on this kind of note. I am concerned to explain why we cannot support this Bill at this time introduced by this Government. I hope I have made that clear.

Parliamentary Secretary to the Taoiseach (Mr. Andrews)

I intervene on this Bill very briefly. I was sitting here for the last half-hour with a certain amount of impatience trying to understand what the last speaker was getting at. One would need a prepared glossary to understand what Deputy FitzGerald's solution to the problem is. He is the only Deputy who has conceded that there is a problem. Having conceded that there is a problem in the context of inflation he has not proposed an alternative solution to that which the present Fianna Fáil Administration have proposed. The Ministers' concise and clear statement is:

This legislation—as the long title puts it—is "for the purpose of safe-guarding the economy, in the national interest, from the present serious dangers threatening it."

I would respectfully add: "and for safeguarding the continuity of existing wage packets and to ensure job opportunities for those seeking employment."

(Interruptions.)

Mr. Andrews

If the Deputy wants to put that word on the record of the House it is entirely a matter for Deputy L'Estrange.

Mr. L'Estrange

Not Taca? Which word?

Mr. Andrews

Not Taca. The Deputy used an entirely different word which would not be consistent with parliamentary language.

Mr. L'Estrange

"Take all the Cream Association." Leave the skim milk to the ordinary people.

(Interruptions.)

Mr. Andrews

This is the sort of facetious remark and contribution which we would expect, and have been hearing, in the context of this debate. I am always willing to listen to intelligent interruptions. If Deputy L'Estrange thinks that is an intelligent interruption, God help his intelligence.

(Interruptions.)

Mr. Andrews

A criticism was made by Deputy Cruise-O'Brien and I am entitled to answer criticisms made by that citizen. He said the whole credibility of Fianna Fáil is in question. I would refer him to his recent statements in relation to the climb-down by his party in the context of the ECC. I remember a debate during the last session in which Deputies Keating, Cruise-O'Brien, et al, came out four square against the EEC.

Dr. O'Donovan

Yes. It is still the policy of the party.

Mr. Andrews

I am very glad to have that on the records of the House. I understood that in the recent past there had been an apologia on the part of the Labour Party, in the interests of coalition.

Dr. O'Donovan

No. We were well received over in Brussels.

Mr. Desmond

We are supposed to be discussing the Prices and Incomes Bill.

Mr. Andrews

Deputy O'Donovan has agreed that Labour have not changed their attitude in regard to the EEC. That is a very important admission, or is there a lack of communication within the Labour Party?

Mr. L'Estrange

Those standards from high places——

Mr. Andrews

I want to deal with what the Deputies have said.

Dr. FitzGerald

He has not spoken on the Bill so far.

Mr. Andrews

I will deal with the Deputy very shortly. It is extraordinary to hear Deputy FitzGerald beating his chest and saying: "How pure we are".

Dr. FitzGerald

At least I was relevant.

Mr. Andrews

How does he equate what Deputy O'Donovan has said about the EEC when Fine Gael want to go in and Labour want to stay out?

Mr. L'Estrange

Some of you do not want to import arms, others do.

Mr. Andrews

If we did not introduce this legislation at this time we would be in a very bad position.

Dr. O'Donovan

We will not sell our gold.

Mr. Andrews

That is why this Bill——

Dr. FitzGerald

The Deputy has not read my analysis of the Labour Party in the Irish Times.

Mr. Andrews

I am not being disrespectful to the Deputy but I must say I find it sometimes very difficult to understand his articles.

Dr. O'Donovan

Jealousy gets you nowhere.

Mr. Andrews

I am one of the most magnanimous Deputies in the House.

Dr. FitzGerald

I accept that.

Mr. Andrews

I never suffered from that particular defect. If a man can do good for himself, good luck to him. I have never had one scintilla of jealousy. If Deputy FitzGerald wants to write his long-winded articles in the Irish Times that is all right, but if he wants me to accept them that is another matter entirely Anyway, I am entitled to comment on them.

Dr. FitzGerald

Hear, hear, if they are relevant to the debate.

Mr. Colley

I once quoted Deputy FitzGerald's articles in the House and I was howled down by Fine Gael who said he was a Fianna Fáil hack.

Dr. FitzGerald

That was some years ago.

Mr. Colley

Before the Deputy came into the House.

Mr. Andrews

We have the extraordinary situation, within the ambit of the prices and Incomes Bill——

Dr. FitzGerald

We hope so.

Mr. Andrews

We had an extraordinary piece of political backslapping before the 1.30 news on Radio Éireann last Sunday when we had Deputy Michael O'Leary and Deputy O'Higgins talking about coalition and putting up a great show of self-congratulation. There was an air of great mutual smugness. One of them said: "It is a coalition," and the other said: "It is not a coalition; it would be an inter-party arrangement". Of course we have heard the new term "bi-party". Do they think the Irish people will accept that there is any credibility among the two parties——

An Ceann Comhairle

This does not seem to arise.

Mr. Andrews

It is a change of attitude. The Labour Party alone——

Dr. FitzGerald

Is this on prices or is it on incomes?

Mr. Andrews

This is the alternative to Fianna Fáil. Is it not an extraordinary suggestion to be made to the Irish people? The Irish people are too intelligent to accept it.

Mr. Desmond

It is better than a Haughey-Blaney coalition.

Mr. Andrews

I have dealt basically with a number of the matters which arose in the debate and have suggested how relevant they have been. I felt the points should be answered. One final point, referring again to Deputy Cruise-O'Brien, relates to when he said that this Government have lost the confidence of the country. That statement came from a Deputy with only 17 Members, mainly Dublin based, behind him. How can he say this Government have lost confidence when his representation is 17 Deputies in Dáil Éireann?

Mr. Desmond

Go to the country.

Mr. Colley

You said that last time.

Mr. Desmond

Go now. There is not a public servant in Clontarf who would vote for you.

An Ceann Comhairle

Will the Parliamentary Secretary get to the Bill?

Mr. Andrews

They are matters which I felt had to be answered. If you ask me to get back to the Bill, I will accept your ruling, Sir. Deputies opposite got up and criticised the introduction of the Bill. That is one of their functions, but they have been critical without offering an alternative solution to the problem facing the country.

Dr. O'Donovan

We have not yet roared like lions and acted like sheep within a few days.

Mr. Andrews

Is this relevant to the Bill?

An Ceann Comhairle

Interruptions are never relevant.

Mr. Andrews

I will not allow myself to be dragged back into the cauldron which you want to keep me out of. I wish to refer to a statement by the Minister for Finance on 28th October when he said that no responsible Government could have delayed action any further or refrained from the methods introduced to safeguard the national economy.

The reason for this Bill, to which no alternative has been offered, is to ensure the continuity of existing wage packets; to ensure, as it were, that there will be no over-reaching, over-demands for greater wage packets to the detriment of the less well-off section of the community. This has been the basic philosophy of Fianna Fáil throughout their existence, the protection of the less articulate member of society against the demands of the more organised, possibly, and more articulate members of society. If the situation had continued, as it was continuing, and this is generally admitted, we would have a very serious unemployment situation.

This is described as a Prices and Incomes Bill and on that point, if I may just refer particularly to prices, it is fair to say that there has been machinery available to control prices to some degree. However, speaking as a non-economist, it is fair to say that the machinery did not work very well. These defects are to be remedied in this Bill and from now on there will be stricter control in regard to price increases. In regard to the watchdogs of price increases we have a very important sector of our community with responsibility to ensure that there will be no excessive price increases and if there are to report them. I am referring to the housewives of the nation who go out looking for the daily bread, as it were, to the small shopkeeper, the middle shopkeeper and the supermarkets. They are the people on whose shoulders fall a considerable burden with regard to keeping prices down. I would appeal to them particularly in the context of this legislation.

There is no doubt that the housewives have been, in the main, the bulwark of the country and it is to them I appeal to keep an informed and rational watch on price increases throughout the country. I would also appeal to housewives—just to put in a small plug here—to buy Irish. By buying Irish one ensures that people— the housewives' husbands in the main— are kept in their jobs. In this context I suggested a short time ago that shopkeepers, particularly the larger shopkeepers, the supermarkets and so on, should set aside part of their shops for Irish goods only. I was criticised very severely for that on the basis that in the ordinary way shop assistants would point out where Irish goods are. I do not accept that. The sooner shops set aside an area devoted exclusively to Irish produced goods the better. It is a very reasonable suggestion and I would ask shop owners to take note of it.

The Minister in his brief states that:

The vast majority of our citizens now understand the urgency of the threat to their living standards, to their prospects and to their jobs. They want to see, and they are entitled to expect a voluntary wage agreement which is realistic and adequate to our situation.

That is another nub of the proposals being put forward by the Minister in this context. If we, as a Government Party, stood aside at this stage and did not exercise our responsibility what would be the position? We would have leap-frogging in wages, goods becoming dearer, wages following goods and so on up the inflationary spiral as a result of which very basically we would have very very little to offer in terms of competitive exports abroad. This is another real factor. If our goods— and Deputy FitzGerald will agree with this very basic economic proposition— cannot compete abroad, then the situation is that people are put out of work at home. That is a very reasonable proposition and if this Bill were not to be introduced I could see that situation being brought about.

Dr. O'Donovan

There is no evidence of it at the moment is there— no evidence that our goods are unable to compete abroad?

Mr. Andrews

No, I have just made a statement of fact. That is not what I said. If the Deputy reads what I said he will understand it.

Dr. O'Donovan

I know what the Deputy said.

Mr. Colley

There is, however, evidence of a number of jobs which would have been created not being created because of lack of competitiveness.

Mr. Desmond

And the Bill will do nothing to ameliorate that situation.

Mr. Colley

Oh, yes it will.

Mr. Dowling

Deputy O'Donovan said the other day that we were the cause of world inflation.

Mr. Colley

He did; that is true.

Dr. O'Donovan

I said we led it, and so we are leading it.

Mr. Andrews

That shows how, in the world context——

Dr. O'Donovan

There is no other country to compare with us.

(Interruptions.)

Mr. Colley

We did not think we were that influential but we listened to the Deputy's suggestion.

Mr. L'Estrange

If Deputy Aiken had his way we would send every ship to the bottom of the sea.

Mr. Andrews

Sir, I might as well get into the picture too. If Mr. Dillon had his way he would have rabbits running across Shannon Airport. If that is the sort of silly argument we are going to conduct we might as well —is Deputy L'Estrange finished?

Mr. L'Estrange

Yes.

Mr. Andrews

Good. There has been a lot of adverse criticism to the effect that in some way we reneged on the 12th round agreement, that in some way we stood down from the original announcement made by the Minister that there would be no concessions allowable in relation to the 12th round agreement. I think the Minister's attitude is perfectly reasonable. In his brief he stated:

In deference to the representations of ICTU, and in the hope that agreements may still be reached voluntarily on a moderate increase for next year, the Government have decided to leave the figures open for the moment.

This is a very reasonable proposition and one seen by the trade unions, despite what the so-called socialist party say, to be a reasonable proposition.

Mr. L'Estrange

You have not got the boys in for a vote tonight; keep going.

Mr. Andrews

We will give you a vote any time.

(Interruptions.)

Mr. Colley

Do Deputies want to let me in?

Mr. L'Estrange

He came in to keep it going.

Mr. Andrews

This is not so. That is absolutely untrue. Is the Deputy going to speak after me?

An Ceann Comhairle

The question of who speaks is a matter for the Chair.

(Interruptions.)

Mr. Andrews

That gives the lie to the Deputy's suggestion that I am continuing on the debate.

Dr. FitzGerald

The Parliamentary Secretary might like to explain how reasonable it was for the Duke of York to march his men up the hill and then down again.

Mr. Andrews

This is the sort of completely fantastic remark which is completely consistent with the Deputy's contribution to this debate.

Mr. Desmond

I did not know he had a sense of humour.

Dr. FitzGerald

I am suggesting the analogy between the Minister first of all giving the 12th round, then cancelling it, and then giving it back again.

Mr. Andrews

God save Ireland from Fine Gael. I will have to repeat what I was saying because Deputy FitzGerald came in with a fairy story which he must have learned years ago. I was quoting from the Minister's brief where he said that as a result of representations made to him by the ICTU he saw fit to reconsider his proposals in relation to the 12th round agreement. This to me was more than reasonable. If I may take to task a citizen by the name of Derek Marlowe who writes in the Sunday Observer, in the Sunday Observer of two weeks ago he suggested that the Taoiseach and the Fianna Fáil Government did a complete somersault——

Mr. L'Estrange

It would not be the first one.

Mr. Andrews

—— in relation to the 12th round agreement. He went on and wrote what could only be described as a most vitriolic attack on the Fianna Fáil Administration, and a very uninformed one at that. If any credence could be attached to what he did say we would admit there was something in what he said, but there was not. Mr. Marlowe, for the benefit of his English readers——

Mr. Desmond

Now, now.

Mr. L'Estrange

The Union Jack.

Mr. Andrews

—— Should get his facts straight because one assumes that this Tory newspaper is for the benefit of the British public in the first instance. I would assume that what we read here in that newspaper would be published in England unless it is for Irish consumption only. I do not know. However, Mr. Marlowe and others like him should get their facts right before they start criticising in an uninformed fashion.

Mr. Desmond

I believe he is an Irishman.

Mr. Andrews

Many newspapers have offered criticism in an informed fashion. That is what it is all about. On the question of the implementation of the 6 per cent wage rise, again there was a suggestion that in some way the Government party and the Minister for Finance somersaulted. Nothing could be further from the truth. The situation now is that the Minister has asked the Employer-Labour Conference to reconvene and to reconsider on a voluntary basis a national wage agreement, again in the interests of the community and in the national interest. This, in my opinion, is entirely——

Dr. O'Donovan

Someone is wasting time. Either we are or they are.

Mr. Andrews

What does that mean exactly?

Dr. O'Donovan

Somebody is wasting time. Either we are here or they are outside.

Mr. Andrews

I do not understand what the Deputy means.

Mr. Desmond

Fianna Fáil would believe anything.

Mr. Colley

It is not only Fianna Fáil. Congress believe it too.

Mr. Corish

Believe what?

Mr. Colley

That we are not wasting our time.

Mr. Desmond

Congress?

Mr. Colley

The change in this Bill was made at the request of congress.

Mr. Desmond

It was not.

Mr. Colley

And the Deputy knows that.

Mr. Desmond

It was not made at the request of congress.

Mr. Colley

Well, at whose request?

Mr. Desmond

Congress specifically asked the Minister to withdraw the Bill.

Mr. Colley

Correct.

Mr. Desmond

I will give the quotation.

Mr. Colley

Did congress request this change or did they not?

Mr. Desmond

I will quote in my own speech, but congress did not ask the Minister to make this change.

Mr. Corish

Did they ask the Minister to withdraw the Bill?

Mr. Colley

Yes.

Mr. Desmond

The Minister then had to find a way out.

Mr. Colley

It is perfectly clear that congress requested this.

Dr. FitzGerald

What is "this"?

Mr. Colley

The change which was made in the Bill and Deputy O'Donovan says either we or they are wasting our time.

Mr. Corish

When the Minister said he would not withdraw it, what did he expect them to do?

Mr. Colley

That was entirely a matter for them.

Mr. Corish

They had to look for modifications when they knew the Minister had his hordes behind him.

(Interruptions.)

An Ceann Comhairle

Deputy Desmond may not quote anything at this stage. He will get an opportunity to make his own speech. The Parliamentary Secretary.

Mr. Andrews

Great play has been made here be Deputy FitzGerald— and he was allowed to develop it at some considerable length—with the prices and incomes policy as proposed in the Just Society document, the author of which has now retired from politics for some reason best known to himself. Let me say he is a man for whom I have respect but, nevertheless, he seems to have got out of being in some way a party to the implementation of the policy document for which he was responsible in the main.

Mr. L'Estrange

He did not get 21 directorships when he left.

Mr. Andrews

As I say I have great respect——

Mr. Colley

He did not get much support for his policy either from the Fine Gael Party.

Mr. Andrews

I have some respect for the man and I do not intend——

(Interruptions.)

Mr. L'Estrange

He did not get 21 directorships.

Mr. Andrews

I could give a very easy answer and a very truthful and honest answer to that remark but I will not give it in the interests of the man for whom I have a certain amount of respect. This Just Society policy has been bandied around as if it were the panacea for all the weaknesses the Fine Gael Party see in Irish society. First of all, it has never been costed. That is the main argument.

Mr. L'Estrange

That is wrong.

Dr. FitzGerald

Which part of it was not costed?

Mr. L'Estrange

It was costed at the last general election.

Mr. Andrews

It was costed at the last general election? Why was it not acceptable to the public? Is the Deputy looking for confirmation to Deputy FitzGerald or does he know?

Dr. FitzGerald

Which part of the policy was not costed? The Parliamentary Secretary knows that is untrue.

(Interruptions.)

Mr. Andrews

It was costed in a slot machine: put in 1d and hope to get the right result. Any figure is good enough.

Mr. L'Estrange

It was not challenged at the time.

Mr. Andrews

Because we did not think it was worth challenging.

Dr. O'Donovan

I think we should get back to the just prices.

An Ceann Comhairle

The Parliamentary Secretary.

Mr. Andrews

On the question of the Just Society and the prices and incomes policy and so on which Deputy FitzGerald mentioned, I think it is fair to say that around the time it was produced I went into the Fine Gael headquarters off the Green and paid my 1s for this document. I studied it at some considerable length and, having studied it at some considerable length, I said to myself: “My God, these headlines,” and that is what they are.

Dr. FitzGerald

The Parliamentary Secretary got the summary. You can get only the summary for 1s.

Mr. Andrews

Almost every single one was enshrined in Fianna Fáil policy before this so-called Just Society policy was produced. These are the actual realities of the situation.

Dr. FitzGerald

Could the Parliamentary Secretary refer us to the Fianna Fáil prices and incomes policy?

Mr. Andrews

Who would not want better provision for the aged as enshrined in this Just Society policy? Who would not want that?

Mr. L'Estrange

We know who has not given it.

Mr. Andrews

Which politician in his right mind would not want that? Another one of their great platforms in this Just Society document is more housing. Who does not want more houses?

Mr. L'Estrange

They are not getting them.

An Ceann Comhairle

The Parliamentary Secretary is getting away from the Bill.

Mr. Andrews

They are getting them at 13,000 or 14,000 houses per year.

An Ceann Comhairle

The Parliamentary Secretary should come back to the Bill. We cannot have a debate on housing. Would Deputies appreciate that we are discussing a Bill?

Mr. L'Estrange

I agree.

Mr. Andrews

Deputy L'Estrange will speak after me.

Dr. FitzGerald

Tell us about prices and incomes and we will stop interrupting.

Mr. Andrews

Deputy Dowling described the Fine Gael policy——

Dr. FitzGerald

On prices and incomes?

Mr. Andrews

——as a Just Society policy possibly and suggested that the Labour Party policy was a sick society policy. I think that is a fair analogy. Our policies are there.

Dr. FitzGerald

Where?

Mr. Andrews

Many of them are in operation.

Mr. L'Estrange

And you have a united party?

Mr. Andrews

We have an absolutely united party.

Mr. L'Estrange

Fianna Fáil would say anything.

Mr. Andrews

Never more united.

Mr. L'Estrange

To keep their hands near the loot.

Mr. Colley

That is their obsession.

An Leas-Cheann Comhairle

The Parliamentary Secretary.

Dr. FitzGerald

On the Bill?

Mr. Andrews

It is very difficult to make a rational contribution on the Bill when there are interruptions.

Dr. FitzGerald

Only when the Parliamentary Secretary is off the Bill.

Mr. Andrews

It is a matter for the Chair to decide whether I am off the Bill or not. The Deputy should know that. I have another couple of quotations which are of some considerable significance in the context of this Bill produced by the Minister for Finance. He said that what we must aim at is that increases in costs are avoided to the fullest extent possible and that they are not passively passed on in higher prices. I want to come back again to the question of housewives acting in a watching capacity. If they see undue increases in the shops in the price of goods I would appeal to them to bring these matters to the attention of the Department of Industry and Commerce or to the attention of the Department of Finance. I think it is not unreasonable to ask them to do this in their own interest and indeed in the interest of their families also. The Minister states:

In order to ensure the most effective use of the powers of price control this Bill is making certain changes in the Prices Acts.

I have already referred to that and suggested that the Prices Acts were not altogether effective. This is the reason why I also welcome this Bill. The Minister continues:

These will give power to investigate and fix the margins of profit of importers, manufacturers, distributors, wholesalers and retailers; to require retail traders to display their prices for all or any commodities being sold by them and to fix the maximum amount which may be added to the price of goods for wholesale tax or for turnover tax.

This, in my opinion, is right legislation, is just legislation and, in the final analysis, when we do have to face the electorate, in two by-elections immediately and a general election in three or four years time——

Mr. L'Estrange

Whistling passing the graveyard.

Mr. Andrews

——they will exercise their judgment and say that Fianna Fáil were once again correct in their analysis and once again courageous. Despite all the Opposition have thrown at us in the recent past, Fianna Fáil are still the Government and will continue to be the Government for a long time to come.

Mr. Desmond

Now that we have got back to the Bill itself the first question which this House must face is the reason why the Government decided to bring in this piece of legislation.

I recall a friendship and meetings on many occasions with a former Member of this House, a very admirable individual and a man of great perception in economic affairs, a man who has signed many of the NIEC reports, a man who committed himself to signing the Report on Full Employment in 1965-67, the incomes policy reports, a trade union leader of outstanding calibre—James Larkin. His advice to me as a young, aspiring trade union official from 1957 onwards was that if one did not know how to deal with a particular problem one should not hesitate to say so to one's members. He pointed out that in the field of prices, and particularly in the field of incomes and in the field of industrial relations, any attempt at a sideways bluff of trade union members, of industrial workers, would not work. There are none so harsh, none so dismissive, none so intelligent in their assessment of a piece of industrial bluff. Jim Larkin, whom I in many ways regarded as the finest trade union leader of the 1950s and 1960s, very often used a particular phrase at the Trade Union Congress meetings and in industrial debates. He started many of his contributions by saying: "Let us not talk ourselves into a crisis situation. Let us not talk ourselves into a situation whereby a bad position becomes even worse."

This, in many respects, can be said about current developments by the Government in relation to this so-called temporary provisions Bill. To me, as somebody who is involved in the trade union movement and industrial negotiations with employers on a relatively junior level, it is a display of appalling ineptitude, an almost incredible display. This is a display on which in any normal political democracy, in terms of Cabinet decision and Cabinet action, no self-respecting Minister for Finance, above all no self-respecting Minister for Labour or Minister for Industry and Commerce, could stand before the bar of any western European parliament without not merely being howled down by the Opposition but literally laughed out of the House. It is a matter of considerable concern that this House has not reacted in the same manner towards the somersaulting, the gyrations of Deputy Colley. The only thing that is missing in this House—as it is a tent-like structure anyway—is a trapeze wire to enable the Members of the front bench of Fianna Fáil to do their somersaults in public because they certainly do them in Government Buildings around the Cabinet table almost, one might say, depending on whom they were last talking to.

Mr. Andrews

Your constituency executive is against coalition and you are for it. How are you going to somersault out of that one?

Mr. Desmond

I will stick rigidly to the Prices and Incomes Bill. The only comment one can make is that this Bill is the product of a Cabinet which must, by any normal process of Cabinet assessment, go down in the history of this country as being of the most light-weight variety.

Mr. Andrews

The Deputy is reading too many newspapers.

Mr. Desmond

I do not think any other body of men sitting around the Cabinet table could come to the multitude of conflicting and contradictory conclusions which they have come to in relation to the economic management of this country over the past three or four weeks.

I know that many Deputies have respect for Deputy Haughey. I know that many of us had an admiration, of a kind, for his economic perception, for his ability to analyse economic problems in a calm manner. He had one capacity—to keep his "cool". He lost it at the end of the arms trial, unfortunately for him, and he lost his credibility as a result. Certainly, as regards economic affairs, I do not think Deputy Haughey at least in the Fianna Fáil Party would have made such a total—to use a quite unparliamentary term—"idiot" of himself as the Minister for Finance has done in recent weeks. If I may use the language of the politicians and the word that we have all killed in recent weeks, Government credibility is completely lacking in relation to this Bill. It is a product of a Cabinet which obviously have not got the foggiest idea where they are going or what they want to do. It is a classic example of the non-government of the Taoiseach, Deputy Jack Lynch, a man who is honest, by and large, very devious—many Cork people are—very, very clever in many respects, a very useful "traffic cop," a man who can guide things, provided the cars are dead straight in front of him, but not a man of imagination, not a man who is going to influence the course of economic affairs in this country.

Mr. Andrews

Like you are.

Mr. Desmond

He never, since he became a Parliamentary Secretary——

Dr. O'Donovan

That remark is not worthy of the Parliamentary Secretary.

Mr. Andrews

What did I say?

Dr. O'Donovan

He said: "Like you are".

Mr. Andrews

The Deputy is echoing his own thoughts across the Chamber. He is quite wrong.

An Leas-Cheann Comhairle

Deputy Desmond.

Mr. Desmond

I have spoken of the question of credibility and we must underline the reasons for it. I do not get any particular pleasure from indulging in personalities but——

Mr. Dowling

That is a joke.

Mr. Desmond

——policies are made by the members of the Cabinet and if the members of the Cabinet lack the capacity to make the policies one must be critical of the members of the Cabinet. The first criticism one must make is one of the Taoiseach himself, a man who has vacillated not merely in relation to the running of the country but also in relation to the running of his own party. I do not think that is relevant to this debate but it is yet another example of total non-government, of no conscious personal decision to influence the course of events. It is often better, I admit, to do nothing because if one does something one may make a bad situation even worse, but certainly in the field of prices and incomes one does not have to have a great deal of academic training, of personal perception in economic affairs, to know that one could have done a great deal right through from 1964 onwards.

The crucial period was from 1964 to 1970. The Government are now trying stupidly to make up for in twelve months, between now and the end of December, 1971, the non-management of the economy between 1964 and 1970. I must confess I did not become a Deputy until 1969 but I can certainly confirm that, were it not for our public servants, were it not for the competence of the professional staff of the Department of Finance in particular, were it not for their ability to at least place the facts continuously before successive Ministers for Finance —if Deputy Haughey had not been so arrogant he might have got more information from his staff—the country would indeed have cracked long ago. There is no doubt that in the crudest sense the Fianna Fáil Party played politics with the economic situation from 1964 to 1970.

It does not require much effort to recall the Taoiseach careering on his magnificent public relations job around the country, reassuring everybody that the nation's economy was at the highest possible pitch, that it was expanding with a dynamic upsurge of industrial exports and so on. Of course, when it suited his purpose in 1969, he had no hesitation, with his bland, wide-eyed innocence, in raising expectations in this country, but when the election was over he realised what he had done.

It is a reasonable assessment of the situation that political expediency and party policy were placed before the best interests of the country in the middle of 1969. It must also be said that we have destroyed in this country for the 1970s—whatever you want to call this period, the swinging seventies, the socialist seventies or the sharp-eyed seventies——

Mr. Andrews

The socialist seventies——

Mr. Desmond

It can certainly be said with reasonable certainty that, for the first half of the seventies, any attempt to introduce among trade unions, in the public service, in the manufacturing industry or among the public at large, what the Minister calls a rational and realistic incomes policy will cause trouble. We will have a lot to live down because of this Bill since it is the very opposite of what one would hope to see achieved in this country. I say this as a member of the Labour Party who has consistently advocated the need for an incomes policy here. I have never regarded myself as being isolationist in the Labour Party in that regard. I do not possess any personal inverted socialism whereby one has to destroy totally all nuances of capitalism in Ireland and only then in the purity of one's soul can one hope to get an incomes policy. I happen to be somewhat more realistic.

I favour an incomes policy but if I were a trade union official—I am no longer one now—I would find great difficulty in trying to convince any group of industrial workers of the need for an incomes policy, of various criteria to be built into an incomes policy, as a result of the stupid provisions contained in this Bill. This is something which must go on the record of this House. The Minister had the cheek to come into this House and to say in his speech:

The objective is to mobilise the intelligence and commonsense of our people in a successful fight against inflation. The achievement of a rational and realistic policy on incomes is a first principle in this situation. The Bill makes it crystal clear that the Government have not deviated by one iota from that principle.

The only thing I can say to the Minister is that most certainly the speech we heard from him this afternoon does not in any way enunciate a broad policy, in terms of the first principles for the implementation of an incomes policy here. In fact, what you have got in this Bill is a straightforward proposition for wage control. That is a reasonable summing up of what was in the Minister's statement. It is not an overstatement in relation to this Bill. It is simply a piece of political expediency dressed up in straightforward wage control.

I do not believe any Member of this House is under the slightest illusion as regards the difficulties in respect of price control. Even the most reluctant Labour Party Member is very much aware of the extreme difficulty of trying to influence the level of retail prices in any economy. It is an exercise which calls for a vast bureaucratic machine in any country. It is an exercise which, by and large, needs to be done at the very most for only a very short period. I would bring to the attention of the House the fact that in anticipation of this Bill, between 16th October when the statement was made by the Minister for Finance, and today that many a margin has been marked up on retail prices in this country. I went to a shopping centre in south County Dublin the other day and it did not require any great shopping experience on my part to be able to see the various commodities which have been jacked up 6d, 11d and 1/- over the short period of even a fortnight with no great apology on the part of the wholesalers and retailers concerned. Therefore, the announcement of this Bill, the statement by the Government that they were bringing in this kind of extension of prices control was an automatic incentive to wholesalers, and retailers in particular, to add it on before they were caught. They have done so already.

I predict to the Minister that a sharp look at the consumer price index for mid-November, when it comes out later on, will show that there has been a sharp increase in the third quarter of 1970. The front bench of the Government will get a surprise when they see what has happened to prices in that regard. The Bill is unparalleled stupidity. One may add this to unparalleled treachery which was the phrase used by Mr. Boland.

I would also point out that a great deal of the difficulty goes back to the maintenance dispute and the failure of the Government to make some effort then to come to grips with the situation. We know during the period between January and March of 1969, almost two years ago, we had a very serious and major maintenance dispute. Subsequently, a report was issued by Mr. Con Murphy and presented to the Minister for Labour in September, 1969. The then Minister, Deputy Haughey, had the commonsense and the competence to see the situation. I would have found it difficult in March, 1969, to disagree with his analysis when he announced on television that an inflationary crisis was hitting the country. The Taoiseach, Deputy Lynch wanted a general election in February of that year after the Ard Fheis but was stopped from having it. He finally went to the country in June, and the various remedial measures in the portfolio of Deputy Haughey met a sudden death in the interests of political expediency.

In that period, from January to March, 1969, there were 33,000 trade union members involved in a dispute the cause of which was the action of 1,500 maintenance craftsmen. At that time a great number of trade union members and the vast bulk of employers realised there was a very serious situation and people were looking to Deputy Haughey to pull the chestnuts out of the fire. The Government side stepped the issue then, and have now made a very bad situation even worse.

It is quite ridiculous for the Minister for Finance to announce to this House that "The gravity of the problem and the grim consequences to the nation if it is not tackled are now widely appreciated among our people." I do not think they are appreciated. I do not think anything Fianna Fáil say at this time is particularly appreciated. In fact, at this moment politicians and party politics are regarded as dirt by the ordinary people of this country, to use the famous phrase of the President, Éamon de Valera. No matter what the Minister for Finance may say or no matter what spokesmen of the Labour Party or the Fine Gael may say in this House, people no longer pay much heed because they do not think very much of us. That, I think, is one good reason for a general election.

Mr. Tunney

The Deputy should not be so self-conscious.

Mr. Desmond

The Deputy is not particularly self-conscious. The Taoiseach regards me as being rather bumptious.

Mr. Colley

The two things go together.

Mr. Desmond

Deputy Tunney need only consult his constituents in any part of Dublin North West to find out what they think of how the country is being run by the politicians. The Minister goes on to say that the people of Ireland want to see, and they are entitled to expect, a voluntary wage agreement which is realistic and adequate to our situation. If the situation were not so serious such a statement would be amusing. How can we have a voluntary wage agreement which is realistic or adequate when the Minister has already put his two big feet into it and then withdrawn one foot. He says there is no change, no modification: "We are merely changing their minds on a few incidentals and we want the employers and workers to get together to reach an agreement." The employers have expressed astonishment. I can see the face of Mr. Charles Cuffe of the Federated Union of Employers. The trade unions had given up hope and then the Minister decided to go back on his tracks. I think the word "astonishment" used by the employers in relation to the current situation is a fair and honest summing up of it.

How does one reach a voluntary agreement under political duress? Surely Deputies are only too well aware that there exists a system of collective bargaining with employers and workers using their respective strengths across the negotiating table and reaching agreement on a voluntary basis? Under the 1946 Industrial Relations Act they are expected to negotiate such a wage agreement. What happens? There are a couple of scare headlines in the newspaper that some group of electricians are looking for a 100 per cent increase, that at a branch meeting they had decided to "have a go". They informed their executive, it was leaked to a particular newspaper and literally overnight the Minister for Finance almost called an emergency meeting. The claim was never even sanctioned by their executive.

Mr. Colley

Is the Deputy talking about the 100 per cent or the 50 per cent?

Mr. Desmond

The famous 100 per cent.

Mr. Colley

Could I ask the Deputy to deal with what he promised to deal with today? When I made a statement here about 50 per cent, a colleague of his said I was a liar and the Deputy backed him up.

Mr. Desmond

I will never accuse the Minister of being a liar. He is much too naïve to be called a liar.

Mr. Corish

His own colleagues may call him a liar.

Mr. Colley

He was backed up by Deputy Desmond who said he would deal with it when he spoke.

Mr. Desmond

And I will deal with it.

Mr. Colley

Good.

Mr. Desmond

As regards the headlines about the 100 per cent increase in incomes, I can reassure the Minister that that claim never saw the light of day.

Mr. Colley

I am talking about the 50 per cent to which the Deputy referred today.

Mr. Desmond

It is no harm to refer to this panic situation where the Minister ran out the lifeboat. He came up with this proposition with which Mr. Lemass often toyed but had the common sense not to bring in.

This is a proposition for which Deputy Haughey had profound contempt and he would not bring in. Deputy Haughey is a much more perceptive individual than that. When somebody decided to seek a 100 per cent increase in the electrical trade, a claim never sanctioned by any electrical trade union or any joint industrial council, the Government immediately panicked. The Taoiseach—largely, I think, through laziness—did not check up on this. Certainly, it became apparent during the arms trial that the Taoiseach does not keep his ear to the ground. He is able to give a magnificent public impression of doing so, but I do not think he actually does so. The word "petulant" might well describe his general reactions. Certainly, this Bill is a petulant reaction.

What about the other claims? There was a suggestion regarding the famous £8-£10 a week increase. We have asked Deputy Colley to state in public which claim was for 50 per cent or for £8 to £10 a week. The only claim I am aware of, and I do not regard it as either a 50 per cent claim or an £8 to £10 a week claim, is the suggestion that the Aer Lingus group of trade unions were trying to negotiate a broad package deal which would amount to a very substantial increase in wages. I never heard that suggestion put into monetary terms.

Trade unions are a very useful flogging horse for politicians. I am a member of a trade union and I will fight until my death as a member of a trade union to get the best possible conditions of employment. Ironically and perversely I will resent the increases sought and obtained by other trade unions. The peculiar thing is that trade unions are unpopular among their members. Trade unions, rather like politicians, are a very convenient group of people to "have a go" at.

The Minister chose to launch his anti-inflationary fight against trade unions and in doing so he chose his ground very well. Farmers do not like trade unions because they think they are getting a larger slice of the national income than they are entitled to. Employers naturally have reservations about trade unions, but they are much more understanding in the current negotiations than the Minister gives them credit for. Certainly, entrepreneurs and middlemen have no great grá for trade unions. This Bill is derisive and destructive of the trade union movement; it is an effort to emasculate the whole system of industrial relations.

Out of that chaos the proposition of the Government is that we should have a voluntary wage agreement. The Minister should put in question marks the words "voluntary wage agreement". We should be under no illusion here. The Minister is now trying, having made a hamfisted intervention, to backtrack and force unions and employers into a corner hoping they will reach a voluntary agreement. If they do not do so the Minister will be stuck with this Bill which he knows is inoperable, ineffective and stupid. He knows in fact that it will do more harm than good. Some of the chairmanship during the employer-labour negotiations will, according to the statement made by Professor Chubb, come in for some censure. Former Taoiseachs, former Ministers for Finance and former Ministers for Industry and Commerce had sufficient political sensitivity to know when to keep their fingers out of the difficult big pie. On this occasion, because of an alleged scare and because the Government were in a political trauma, they jumped in where angels, by and large, would fear to tread.

One must refute the implied suggestion by the Minister that the trade unions were going to be irresponsible. It is not true to say that the ICTU negotiators were being irresponsible. In fact, most members regarded their negotiators as being alarmingly responsible. Professor Chubb suggested that an agreement should be entered into between now, the end of these negotiations and the end of 1971 to cover a period of 18 months from the termination of current agreements. The first phase was to be 12 months with a minimum of 24s a week or 6 per cent, whichever is the greater, subject to a maximum of 36 per cent. One gets the impression now that it was the Government's idea to introduce the 6 per cent or 24s but I do not believe they ever considered these figures until they received the report from the official side.

Mr. Colley

I said at the time of the announcement where we got those figures from.

Mr. Desmond

I do not believe the Cabinet discussed what the minimum or maximum increase should be. Professor Chubb suggested in the second phase, the six months phase, that there should be an 8s minimum or 2 per cent, whichever is the greater, subject to a maximum of 12s. He also suggested a review after 12 months and if real earnings had not risen by at least 3 per cent over the 12 months the amount of the second phase increase should be considered by the employer-labour conference. He also suggested that claims relating to anomalies should be referred to the Labour Court or the appropriate arbitration body. Professor Chubb's formula, which is now classified in the trade union movement, was not specific as regards the application to women or juveniles; it simply posed the question as to what the appropriate negotiating figure would be.

Congress wanted an 18 month agreement commencing between January and June, 1971. They wanted an initial increase and after six months a further increase. The figures mentioned were not fantastic, £2 10s and 30s; after all, the dustmen in Britain received 14 per cent. When one thinks that the normal increase is averaging out in Britain at present at about 10 per cent the congress proposition was not alarmingly inflationary. Congress admitted they did suggest that in respect of every 1 per cent increase in the cost of living there should be an adjustment of 4s 6d, a difficult but negotiable proposition, in my opinion.

This is now public knowledge but the Government's anxiety to put their nose into something when they would have been well advised to stay quiet for at least a month or so, aggravated a bad situation. The employers also came up with agreements commencing up to June, 1971, an 18 months period. The employers happened to agree that there should be for the first stage a 24s a week or 6 per cent increase with a maximum of 30s a week; for the second phase of the 12 months, 12s or 3 per cent with a cash ceiling of 15s and the second phase to be reviewed by the employer-labour conference and, if the real value of the first phase had declined, a 3 per cent adjustment would be made. They made the proposition that adult females should receive 80 per cent of the adult male figure, something very important bearing in mind that a very large number of women workers are now engaged in industry. The negotiations eventually broke down.

The Minister, I think, is more than well aware from the many occasions when he and I sat on opposite sides of the table in the Labour Court, when he was but an up-and-coming solicitor, the man who presided with great competence and honesty over meetings of the joint labour committee——

Mr. Colley

We were not on opposite sides.

Mr. Desmond

No, the Minister was the independent chairman. He was half opposite. The Minister will recall that time after time the discussions broke down or adjourned and that time after time we walked out and time after time we came back and reached agreement with the assistance of the Minister. I would also recall to the Minister, and particularly to the Taoiseach, the famous occasion when the trade unions were demanding an increase of 16 per cent and the employers were offering 8 per cent. Admittedly, two by-elections were pending. Mr. Lemass then jumped in and suggested we should settle for 12 per cent and gave his blessing to that. It is said in retrospect that he was the greatest inflationary factor in the wage situation. At least there was a political touch about a great many of his actions. He knew what he was doing, why he was doing it and when to come in and not to come in. He did not dive in off the deep end.

What was the Government's reaction in the present case? Obviously, they consulted with officials and saw no further hope and decided to launch this magnificent piece of inoperable, provocative, stupid legislation, the Prices and Incomes—so called—(Temporary Provisions) Bill.

Mr. Colley

Before the Deputy goes on, may I say that he began a sentence which was very interesting a few minutes ago. He was talking about the coming negotiations and I think he began to say he was not without hope. He did not finish the sentence.

Mr. Desmond

I am not without hope that, notwithstanding the duress imposed on the negotiations by the Minister by virtue of this legislation going through the House, agreement will be reached. If agreement is not reached the Minister will have to take a fair measure of responsibility.

Mr. Corish

This thing is throwing a spanner into the works.

Mr. Colley

No. I think Deputy Desmond in the sentence I recall had spoken about the hamfisted way in which the Minister and the Government had handled this but he was going on, as I suspected and as he now confirmed, to say that notwithstanding this he thought there was some hope of an agreement. Might I suggest that if that were the result, an acceptable agreement, this would not be evidence of a hamfisted action by the Government.

Mr. Corish

The hamfistedness is on the Minister's side in having this debate when teams are talking to each other. Remember the ESB Temporary Provisions Bills. The Government could not make them work. Remember when the Government put ESB workers into jail and got the ESB to pay the fines to get them out.

Mr. Colley

We are not putting anybody in jail.

Mr. Corish

You will not get the money either.

An Ceann Comhairle

Deputy Desmond.

Mr. Desmond

This brought home a very vivid lesson. I remember the night the late Deputy Larkin gave a polite and lengthy lecture to the Minister for Labour, Deputy Dr. Hillery, at that time, and the Minister put his hand in his pocket and paid for the taxis to Mountjoy to resolve the situation because he at least saw the non-application of coercive legislation. One does not want to be accused of softness, of being namby-pamby in terms of industrial relations. There is a time when a Government must bring employers and workers around the conference table on a consultative basis. It is the Government's job to place before the trade union movement and the employers' organisations the facts of the situation in unequivocal terms. I should be the last to deny that there exists in some sectors of the trade union movement a failure to appreciate fully the economic situation, but I suggest the way one convinces people of the need to respond and the way to obtain settlement of a critical national wage situation is not by saying: "If you do not like the pianist we will shoot him," because somebody must continue to play. This is in fact what the Government have suggested.

The meeting between the Taoiseach and the Minister and the council of ICTU on 29th October illustrated the inadvisability of proceeding with this legislation. It is always embarrassing for a Government or a Minister to come before a National Parliament and say: "I made a bags of it. I was wrong. I should not have done what I did. I want to withdraw the legislation." I think this is what should now be done with this legislation. To put it very harshly, the Minister might as well do it now because, having lost so much face already, there is very little left to be lost. Therefore that legislation should be withdrawn.

There is the inevitable inflationary dilemma facing Irish workers. I accept that there is a critical situation but I do not believe it is half as critical as the Minister would suggest. I think in many respects we could talk ourselves into a crisis and that would be very dangerous. There often comes such a time in the industrial development of a country where there have been real and substantial major increases in real earnings. In the past half decade there has been a real, substantial and measurable increase in the standard of living of workers, whether white collar or otherwise. The vast bulk of industrial workers are only too acutely aware in their daily lives of the extent to which their own firm has economic liability, particularly if it is engaged in industrial exports to Britain. I do not think Irish workers are as stupid as Fianna Fáil think——

Mr. Colley

We do not think they are stupid at all.

Mr. Desmond

I do not think they are but I think there is the implied assumption in the Government's reaction that because trade unionists, entrepreneurs and manufacturers are so incapable of facing the realities of the economic situation and of accepting income increases somewhat more moderate than perhaps they had heretofore been accustomed to, the Government had to act. The Minister has an obligation to ensure that the facts are made clear nationally to trade unionists through the normal industrial channels.

Perhaps I am, as a Labour Deputy, treading upon dangerous ground, but one has to ask oneself what the consequences are likely to be if workers in a particular firm price themselves out of a very competitive export trade. One has to particularise and that is why this global legislation will not work. In the eventuality I mention, who will suffer? Will the directors lose? Not at all. They will get at least a year's honorarium. The managing director will not suffer. There may be short time. There may be unemployment. Workers may be laid off. There may be a reduction in bonus earnings. That is not a prospect any worker would like to face. He certainly would not face it with any degree of equanimity.

Mr. Corish

How could he if he is not consulted by management?

Mr. Desmond

Quite so. Take the case of workers who might seek an increase of such magnitude as to put the company out of business. That, of course, is not likely to happen. Wages as a percentage of costs of production range from 15 per cent to 25 or 26 per cent. Wage increases can be absorbed with great facility by the majority of employers. These increases can act as a tremendous incentive in making employers more efficient and more productive. To go through that exercise in the best interests of democracy would be a far better exercise in curbing inflation as against going through an exercise which will, in both the short and the long term, prove futile by and large.

It is to be 6 or 7 per cent between now and the end of 1971. What will happen then? You will have those who will feel they were deprived of the 13th round. You will have those who will be engaged all through 1971 in drafting the 13th, 14th and 15th rounds. You will face a really critical situation. That is why I strongly suggest this proposed legislation should be scrapped.

I was myself involved in the 12th round in the public service sector and I had a great regard for Deputy Haughey because of the manner in which he negotiated that agreement. The agreement was accepted, though some had substantial reservations, particularly on the local government side. I remember the last incumbent of the Department of Labour strongly advocating phased agreements spread over 18 months if it was not possible to spread them over 20 or 24 months. We had a very difficult job selling the concept of phased agreements, but we believed the agreements were in the national interest.

What happened? A fortnight later the whole principle was dropped. The sea lawyers in the trade unions quite justifiably said: "We were right. It should have been in one go. It should have been for 12 months and we should go back every 12 months and get 5, 6 or 7 per cent. Forget about phasing. We will never again sell it."

The Minister has done irreparable damage so far as phased agreements are concerned to the future of good industrial relations. If the current negotiations are successful, can one imagine the difficulty there will be in trying to sell a phased agreement to the workers? The difficulty will be extreme. It must be said, no matter what one may think of Deputy Haughey, that he would not "have lost his cool" and gone back on phased agreements.

We must raise the level of wages of the industrial worker but that rise must be related to the growth in productivity so that there will be a greater measure of justice as between one group and another. There must be a greater measure of justice as between differentials. As trade unionists we must assist in maintaining export competitiveness because we know, if the Government do not, that there are 40,000 industrial workers living off exports. We have no wish to damage export competitiveness where these 40,000 workers are concerned. The tragedy is that any wages or salary control is likely to meet with tremendous opposition. The cry will be: "Look, the Government did us and we are now going to do the Government."

Debate adjourned.