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Dáil Éireann debate -
Tuesday, 17 Nov 1970

Vol. 249 No. 9

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

Question again proposed: "That the Bill be now read a second time."

This is the second week in which Members of this House are participating in a debate on this Prices and Incomes (Temporary Provisions) Bill, 1970. I want to express in the strongest possible terms my serious objection to this Bill. We have had an undertaking from the Minister and from other members of the Government that this measure is purely a temporary one. We have been told that this Bill will be suspended as soon as the economic position of the country has been corrected.

There are two provisions in this Bill to which I take serious exception. Section 4 of the Bill mentions the prohibition of certain actions by trade unions. Section 4 reads:

—(1) If a trade union initiates, takes part in, encourages or persuades others to take part in or assists a strike to which this section applies, it shall be guilty of an offence.

Further on we see in this section that if the funds of trade unions are used to assist or encourage members in a strike the trade unions shall be guilty of an offence. I address a question to the thousands of trade unionists in this country and ask them is the trade union movement aware of this provision and are they taking a measure of this kind lying down? Are we taking too much for granted in this country? Are those who are associated with the trade union movement now reaching a stage where they are so self-confident that they are inclined to forget what has been responsible for giving them the small measure of freedom which they have and which has taken them out of the gloom and slavery of our workers from 1913 to 1923? There are thousands of workers in this country who know quite well the value and importance of the trade union movement and how essential it is. I cannot understand why, since the Minister for Finance and the Government announced the provisions of this Bill, there has not been more vehement reaction from the trade union movement. There has not been much reaction yet. The Members of this House have had a memorandum submitted to them by the ITGWU. This was an intelligent memorandum. I ask the trade union movement is that sufficient protest to make having regard to the terms and serious provisions in this emergency legislation. A trade union may feel justified, having regard to the reckless manner in which the Government have allowed the cost of living to soar, and having regard to other circumstances which may crop up in industry and which may warrant serious attention, in taking strike action. We find, under section 4 of this Bill that a trade union, which is the voice of the organised worker, the safeguard of such worker, and the movement on which the worker's future and the future of his family depends for their very existence is committing an offence if they take the only action which is available and effective on behalf of their members. Fianna Fáil say there is an economic crisis. May I ask the Minister is not the real purpose of trade union funds to assist their members in fighting for their rights and also in fighting to overcome injustice. It is quite well known that the main purpose for which the trade union movement was founded was to raise the workers of this country.

The trade union movement has been criticised very severely. Can anybody say that the trade union movement has taken any drastic action that was not warranted? Before strike action is taken, there are usually negotiations between the shop stewards or branch secretaries and the management and, where these talks or negotiations break down, it is the duty of the trade union to protect its members from serious financial loss. Furthermore, through the machinery of the Labour Court, the claims and considerations of management and trade unions are considered. Let me pay tribute here to the work done by Mr. Dermot McDermott in his section of the Labour Court where many problems have satisfactory been solved.

We find here that, in the event of a submission to the Labour Court on which the Court may decide that substantial increases in wages or improvement of conditions of employment are called for, this decision may not be put into effect by the management or by the employers concerned. What, then, is left open to the trade union to do? Must the workers concerned continue to suffer from the injustice, be it a curtailment of staff; a suggested redundancy; a claim for a substantial increase in pay due to increases in the price of food or of the necessities of life; an unfair and unsympathetic rent system under which workers will be obliged to pay increases in rent or the very high cost of building for which the Government must be charged with full responsibility? The Minister has not made clear what the trade union is to do in such eventualities. Is it completely to disregard the views and feelings of its members or is it to take positive action on behalf of the interests of its members?

Under section 4, it will be an offence for a trade union to encourage, promote or even suggest strike action. That provision seeks to weaken trade unionism. I cannot understand why we are not hearing more about this provision which seeks to handcuff and blindfold the trade union movement in this country. In conscience, I cannot subscribe to this thinking. Most of us are aware of the teaching of Pope Leo XIII in Return Novarum and we are aware of the document Quadragesimo Anno issued by a more recent Pope in which we are advised on the subject of the right of workers to organise. Clearly, the trade union has authority, according to these documents, to speak on behalf of the workers. Furthermore, we see that the workers has the right, in honesty and according to his conscience, to strike if he so thinks fit. This emergency Bill seeks to render impossible the functions of a trade union.

The trade union has a duty to its members. I am surprised that ICTU did not, as a protest against this measure, ordain a black standstill day in this country in order to drive home to all of us the significance of the provisions of this Bill which is an effort by Fianna Fáil to paralyse the activities of the trade union movement here. It is not too late yet for those who have official responsibility in the trade union movement to take action which will ensure that every adult in this country will realise what Fianna Fáil seek to do in their own interests and against the interests of the worker who seeks justice or who seeks his rights. I am not one to tell the trade union movement what they should or should not do: they know best themselves their own business. I say to the Minister for Finance, however, that he is no person to introduce legislation such as that contained in the Bill before us.

I do not accept the word of the Minister for Finance that this can prove merely a temporary measure. This measure can operate so long as Fianna Fáil want it to operate. There can be an economic emergency for as long as Fianna Fáil want an economic emergency to exist. They have created scares and emergencies when it suited them to do so—scares and emergencies for which, often, there was no foundation.

That is why I feel this is a dangerous Bill to have on the Statute Book. It is a Bill to make way for which all other legislation has been put aside, this being given primary consideration. It is a bad piece of legislation, evilly disposed, introduced with bad motives, one which provokes the highest possible suspicion. It is a distasteful piece of legislation.

I had been hoping that the debate on this disastrous Bill would have provided an opportunity for a high degree of protest from the Fianna Fáil side of the House. We seem to have reached the stage at which even the Deputies within Fianna Fáil who are affiliated to trade unions are standing idly by and allowing the Bill to come into the House and to be passed through it with their support and their votes. I want to challenge those Fianna Fáil Deputies who claim to represent various trade unions to display any sincerity or loyalty they have to the members of the unions with which they are associated and their determination to fight for the rights of the workers within those trade unions. I challenge them to go into the division lobbies and to vote for a Bill which contains a provision making it an offence for a trade union to fight for the rights and the interests of its members. I protest with all my feeble poers of eloquence against this Bill. It is wrong and I do not like it.

I have seen many horrible Bills introduced here in the past 27 or 28 years. There was the Criminal Justice Bill and the infamous Marts Bill. There were various other types of legislation throughout the years but I do not think there ever has been a Bill which aroused my suspicions and my fears more than this one. I do not think there was a Bill introduced here in the past 27 or 28 years to which I have taken such serious exception, particularly to the provisions clearly set out in section 4 prohibiting certain actions by trade unions. It is a bad provision and it is the duty of the press and of television and radio to make this provision known and understood by working class people throughout the country.

Another section to which I take grave exception is section 22:

(1) 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.

This establishes a very dangerous precedent in this country. We have the name of being a democracy. We have the name of having a free Parliament in which there is supposed to be free expression of opinion. We expect that all legislation enacted by that democratic parliament will be in accordance with our democratic principles. I ask Fianna Fáil, and the Minister for Finance in particular, if they are satisfied that section 22 is in accordance with democratic principles. It is a section in which for the first time steps are being taken to have legislation by ministerial order. This is highly dangerous. It is a highly dangerous authority to vest in any Minister for Finance.

It can be argued that the present Minister for Finance would not make orders which would seriously affect the rights of the working class people. It is to be expected that the present Minister would use intelligent judgement in the making of orders under this section. However, it must be appreciated that this provision will be on the Statute Book and that orders could be made under it, by an irresponsible Minister for Finance. God knows, in recent times there have been shuffling, reshuffling, appointment and reappointment of Minister to and fro, and it is not outside the bounds of possibility that there may be appointed an utterly irresponsible Minister for Finance who would take advantage of section 22 and proceed to make orders with complete disregard for the rights of the working class. In such a case, all this House can do is take it and like it.

We must assume that whichever orders are made by whichever Minister for Finance will get the full backing of the Fianna Fáil Party. We have had ample evidence of that in the past few weeks. The danger I see in this provision is that it gives freedom to the Minister for Finance, it gives him a blank cheque, to legislate independently of this House. The purpose of Parliament when legislating is to give serious thought and consideration to every section and every subsection of a Bill presented for examination by Deputies. If we are to adopt a new procedure of legislation by order, I want to warn this House as seriously as I can that it is a dangerous and inadvisable step for a democratic Parliament to take. Deputies on all sides of the House should realise that.

There are many other objectionable provisions in this Bill. Sections 4 and 22 are sections to which I take strong and serious objection. We are told that the moment the financial and economic position is corrected the provisions of this Bill, known as a Temporary Provisions Bill, will cease to be implemented. When does the Minister for Finance propose or hope to have the economic position corrected? Is it not true that, for many years past, the main plank of the Fianna Fáil Party at every general election and every by-election was that they would take practical steps to rectify any defects in our present structure?

There always appears to be a balance of payments problem. There always appears to be some kind of crisis. Now we have the crisis known as the inflation crisis which they alone through their actions, through their stupid decisions, through their incompetence, their lack of co-operation, their lack of consideration for the public and their lack of proper economic planning—and we have had none—brought about. Is it not true that there appears to be an extraordinary air of prosperity in the country? In many cases families have two or three motor cars. We have singing publichouses and saloons with ballad sessions and they are full to the doors. We see all this. Years ago at the various church gates there were donkeys and carts and ponies and traps. Now there are the high horse power motorcars. Perhaps these things are good. We do not wish to deny our people these things. No one has ever said, and perhaps no one will ever say, that our people should be denied these rights, but there are two sides to every story.

As well as what appears to be an air of extraordinary prosperity in parts of the country, there is also a high degree of concealed, hidden poverty. While we have high spending and high living and a limited selective few living in the lap of luxury, we also have the lonely sections of the community, the invalids, the sick, the aged, the unemployed, the mentally retarded. We have those sections of the community in the midst of that great spending and prosperity and they appear to be completely forgotten and neglected.

It is correct to say that in this country there are very wealth people, very rich people, very well-to-do people, people who "got rich quick", people who became well-off overnight. It is also true to say that the gap between the rich and the poor is becoming wider and wider. Those of us in rural Ireland who are associated with charitable organisations such as the St. Vincent de Paul Society and other charitable and voluntary movements, whose purpose it is to aid the lonely, the sick and the forgotten, know quite well that we have today a vast amount of concealed, hidden poverty which should be dealt with and which is no credit to the apparent prosperity suggested by the high horse power cars and the ballad-singing lounge bars.

I have often pondered on the sadness and loneliness and depression which must overcome the numerous poor people who, because they possess a certain amount of self-pride—thank God in Ireland today there is in some of our people a certain amount of self-pride—do not make known to local authorities, to Deputies or to councillors the circumstances in which they live. Members of all parties who know there are various pockets of that kind of distress and poverty and loneliness should not be backward in speaking for those people who cannot speak for themselves. They are unable to stand up at council level or in our Parliament to speak for themselves. They seem to be the forgotten and lonely poor of this country.

One would imagine that, after the greatest part of 50 years of native Government—and Fianna Fáil Governments were continuosly in office since 1932 with the exception of two brief breaks, one of two years and the other of two-and-a-half years—loneliness, poverty and distress would have been eliminated, but they have not. It must be borne in mind in speaking of inflation that at the moment our national debt is over £1,000 million and we will shortly reach a service figure of £100 million per year interest on our national debt. Is not that an extraordinary state of affairs? There we see the results of a Fianna Fáil administration, one might say continuously since 1932, except for the two brief periods in which there was a ray of sunshine from the point of view of achieving an economic recovery—the two periods of inter-Party Government.

In addition to the £100 million per year interest on our national debt of £1,000 million we find that our local rates are approaching the figure of£50 million per year. If one adds that £50 million to the £100 million interest on our national debt and the £1,000 million national debt one finds that there is very little return for such a vast sum of money. In spite of all that, our trade figures are not very encouraging. They have undergone very serious deterioration. Our merchandise import excess was over £100 million in 1968 and over £150 million in 1969. Today it is over £200 million. That is an extraordinary financial position for a country such as ours, coupled with a further economic disablement—the fact that our balance of payments current account depreciated from £15 million credit in 1967 to a £60 million deficit in 1969. That was an extraordinary change from credit to debt. That is worthy of very serious note when one talks about how we stand financially and how this Government are paying their way, how this Government are planning and handling, distributing and administering the money of this country, money which the people entrusted to them to handle wisely and spend prudently. It is worthy of note that in 1967, less than three years ago we had £15 million credit and now for 1969-70 we have a deficit of almost £60 million. What happened? Is it not bad management? Is it not irresponsibility? Is it not bad planning? Is it not imprudent spending? Surely we must take a very serious view of figures like that?

We must also take a very serious view of the alarming state of industrial relations. There seems to have been no effort made by Fianna Fáil to bring workers and employers together in an atmosphere of commonsense, of give and take, having regard to the economic position of the country. We had a Minister for Labour who did nothing about industrial relations; we had a Minister for Finance who knew the economic disaster into which this country was falling and who did nothing about it; we had a Taoiseach in charge of all who did nothing about it. We had various Ministers all interested in Departments other than their own, all quarrelling amoung themselves, jockeying for power and authority, all waiting to see if the Taoiseach would rise up and there were three or four of them waiting to bounce into his seat. They were not interested in industrial relations. They were not interested in the question of a harmonious relationship between worker and employer. They were not interested in the working out of a voluntary formula, in the interests of the country, whereby we could be described as having some degree of industrial relations.

Is it not correct to say—I have yet to hear it denied—that our industrial relations, according to figures from the International Labour Office, are the very worst in Europe, that we are losing more manhours through strikes than any other country in Europe? Can anyone say that we have not won the strike championships over Britain, that we have not beaten France in the strike championships? Here we are trying to get into the EEC—I do not propose to deal with our application now, another opportunity will arise— but is it not a fact that a country must at least show that it has some economic standard? We are anxious to co-operate with the rest of Europe. Have we an impressive economic record? Is it not correct to say that a Bill of this kind is not an impressive certificate for the rest of Europe? Is it not also correct that if we are discredited and shamed it is due to the incompetence of Fianna Fáil? We have the trophy for the greatest strike record in all Europe. Shame on the Department of Labour for inactivity and disinterest and shame on every voter that files into the division lobbies for Fianna Fáil with such a record of loss of time, loss of production, loss of man activity, all due to the fact that we are Europe's best country for strikes.

We have bad industrial relations, the greatest strike record in Europe, our national debt is beyond our wildest dreams, the servicing of it beyond our most vivid imagination, and there is still a greater crisis to come. Inflation has been allowed to go unchecked by Fianna Fáil, because with the jockeying for power and office among themselves they took no notice of the country and they allowed everything to run amok like a boat on the high seas without a skipper, going with the tide, going with the highest waves and as the wind changes it changes its course. That was how it was with the economic position of this country. There was no guide, no leadership, no planning, no stability. All these crises have taken place, deliberately manufactured and imposed upon us by Fianna Fáil, but the greatest crisis of all is yet to come.

I want to warn this House that a very serious situation is prevailing at the moment. As this is the first day on which the banks have opened to the public after the many months of lockout—I shall not use the word "strike" because it was not a strike—we find that numerous people who have money on deposit in our Irish banks are now going to transfer their savings to the British banks, to the American banks or to the Northern Ireland banks. Of course, the American banks remained open while our own banks were closed and by so doing they helped business and, consequently, they did business. Is it not a serious matter for the economy of the country that some hundreds of thousands of pounds, be they savings, investments or otherwise, will now be transferred to banks outside the country?

Our people have become fed-up with the lock-outs and strikes in our banking system. The stage has been reached where there is no confidence in the banks. The people of this country have not been able to withdraw their own money. The result of all this is that their investments will now go abroad. Now that we can see this crisis arising, will the next crisis not be brought about by the devaluation of the £? When speaking on prices and incomes we must take into consideration the valuation of the £. The value of the £ has diminished as a result of the activities of Fianna Fáil. Now that the bank crisis is over, the view has been aired and aired considerably that devaluation may be considered by the Government. In connection with the provisions of this temporary Bill, what is to be the position of people whose incomes, whose investments and whose savings are limited if the Government, as they are free to do, decide to devalue the £? They can devalue up to 10 per cent as was done in France without consultation with anybody.

This may be all right for those of us who concentrate all our energies on helping the poor but, as the late President Kennedy said, the country which cannot look after its poor, cannot for too long, protect and safeguard its rich. No country can survive on its poor. This devaluation is sure to come and it will have serious and detrimental consequences for many of our people.

The Minister for Finance has been cute enough to avoid all references to devaluation. Having regard to the figures I have quoted, how is the Minister to rectify the present economic situation because, if the trade union movement have any common sense or intelligence, they will ignore the provisions of this Bill? There is no worker or workers' trade union who will subject themselves to such provisions in view of the living costs that are forced upon them.

I want the Minister for Finance to tell us openly if he has not the question of devaluation of the £ under consideration. As I have said, he can devalue without any consultation or without any regard to this House. We have all read and studied the facts in relation to the reduction in the valuation of money in France and other places and we are only too well aware that there is nothing to prevent our Minister for Finance from devaluing to the extent of 10 per cent.

Is the Deputy relating that to this Bill?

I am. It is very relevant to this Bill.

Is the Deputy suggesting that this can be done without legislation?

Yes, the Minister for Finance can do it and that is what I am afraid of. To give Deputy Haughey the due to which he is entitled, if he were Minister for Finance he would certainly warn and advise the public of his intentions in the event of a devaluation of the £. My information is that the Minister for Finance is considering this step but that the public are not aware of this. I raise this matter because of the connection between the value of the £ today in relation to prices and in relation to incomes and wages and to its worth in the event of devaluation. It looks as if we will be limping from one crisis to another and I am warning the public of this situation. Certainly, we are going into a crisis of devaluation which must have a serious effect on the economy of our country.

I put it to the Minister for Finance that we have reached a very serious situation—a situation that is causing great anxiety among our people. The time has come when the Minister must face up to this problem and when he must face up to the problem of some form of economic planning because there seems to be a complete absence of any such planning on the part of the present Government.

Another set of figures which I wish to put before the Minister are in relation to unemployment. According to the Central Statistics Office, the total number of people unemployed in July, 1970, was 63,785. If we take the same week in 1969 the figure was 50,626, a decrease of 13,159. There are 13,159 fewer in employment today than there was this time 12 months.

We are debating prices and incomes.

Of course, those people's incomes are gone. Prices have very vastly increased on every single commodity since this time 12 months. The standard of living which those people enjoyed last year—and which they cannot enjoy this year—is directly caused by the Government. In addition to the 13,159 more unemployed this year than last year there are at least 10,000 more unemployed who are not registered as unemployed.

This does not come within the scope of the Bill.

I should not like to widen the scope of the Bill so that we could deal individually with all the unemployment figures but having regard to the vast increase in Government taxation of 211 per cent and in local taxation of 105 per cent and when we see over 13,000 more people unemployed it is extremely difficult to follow how this money is being spent. However, if we take the years 1967, 1968 and 1969, and if we compare imports with exports we find in 1967 our imports were £392 million and our exports for the same year were £276 million. There was a trade gap there of £116 million. When we come to 1969 we find that imports were £588 million, exports £358 million and a trade gap of £230 million. Surely a presentation of facts like this must disclose a high degree of incompetency, a high degree of neglect and no planning for the future on the part of the Government.

The Deputy knows the trade gap figures are not the relevant ones. It is the balance of payments figures which are relevant.

I have already quoted the balance of payments figures, the national debt and the interest which has to be paid on it. Those figures are all very relevant.

Yes, but the trade gap does not really mean a great deal until you relate it to the balance of payments figures. I know the Deputy knows this.

It is no harm for the Deputy to give a little prompt lest I might not know this. I have not had the training or the experience which the Deputy had by being in the Department of Finance but when I see gaps and losses I am not concerned with what the title for them is. If the figures are factual they are there no matter what the Deputy calls them. I have already pointed out the balance of payments figures, and I am sure Deputy Haughey will agree with the figures I have quoted. The balance of payments current account depreciated from £15 million credit in 1967 to £60 million debt in 1969. Deputy Haughey and I are in full agreement on that. I am sure something serious must have happened, for which the Government must bear the full responsibility, to allow £15 million credit in our balance of payments in 1967 to become a loss of £60 million in 1969. At the same time, we have had this trade gap between our exports and imports from £116 million in 1967 to £230 million in 1969.

That is bad management, lack of planning, poor bookkeeping and certainly bad economics. Those are bad figures. I am sure the Deputy will not dispute that we have the highest and best record in Europe for strikes and for the loss of time through strikes. All those things lead me to the conclusion that this is a bad Government. I cannot come to any other conclusion. Can I say it is a good Government, a Government with commonsense and intelligence? Can I have confidence in a Government with the economic position as it is? Can I have confidence in a Government who spend £100 million on servicing a debt of £1,000 million? Is it not a fact that this Government have hawked the good name of this country all over the world looking for loans to try to keep the ship afloat? The forests of this country are mortgaged to the Germans. That was a condition in relation to some of the loans obtained.

The Deputy is completely enlarging the scope of the debate on the Bill before the House.

We ought to have a House. When I left an hour ago there were two Deputies from Fianna Fáil. One of the Deputies there now is not the same. There are still only two over there.

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

Deputy O'Donovan loves to wander in here, call a House and then wander off.

I attend more in the House than the Parliamentary Secretary.

There is one Labour man in the bench. That should be noted for the record.

I was referring to the serious neglect on the part of the Government in administering the affairs of the State, but Deputy Haughey made reference to the trade gap in relation to the balance of payments. He does agree, and I am sure the House agrees, that in the short space of two years our trade gap has just about doubled under this Government's policy. While in 1967 we exported £116 million worth less than we imported, we now find ourselves in the extraordinary position of importing £230 million worth more than we exported last year.

This is not a Budget debate. The Prices and Incomes Bill is before the House.

I accept the ruling of the Chair on that, but I do say we would have been in a much sounder position financially if tourism, fishing and agriculture had yielded a greater return. The wealth of this country and our future financial prospects depend on our earnings from those sources. Our earnings from tourism, which will be debated under another Estimate, have been disastrous. It was obvious that the tourist industry was running into trouble at the end of last year and earlier this year. Despite that, the Government took no steps whatever to protect the tourist industry. It could very easily have consulted with Bord Fáilte with a view to their undertaking an advertising and publicity campaign in the United States, Britain and in Europe which would have yielded a better return and could have improved our financial position, thus lessening the necessity for this panic measure.

The root cause of the necessity for these panic temporary measures has been Fianna Fáil themselves. Yet you will hear the Minister for Finance and many other Fianna Fáil Deputies asking the Opposition to suggest what they should do, what type of legislation they would introduce, in similar circumstances. The position is that if the Opposition were in Government those circumstances would never have arisen.

They did.

They did not. The Deputy never heard of the Suez Canal crisis. The Fianna Fáil Party blamed the inter-Party Government for the Suez crisis. In the years in which the inter-Party Government were in office there was thorough and exact national housekeeping. The day they went out commonsense housekeeping went with them.

Nobody asked them to go. Did they not run away?

Will they chance another coalition?

That is a matter for the Irish people, but the Deputy seems very much afraid of consulting the people as to whether they should——

I am asking the Deputy would he chance another coalition?

We are discussing the Prices and Incomes Bill.

The Deputy has asked me a question: would I chance another coalition?

This is completely irrelevant.

I am proud of the contribution I made, small as it was, to the last inter-Party Government——

We are not debating that issue at all.

——which brought about greater prosperity.

We did not have high prices at that time.

Will you chance a coalition?

Anything will be chanced to get Fianna Fáil out. The sooner the Fianna Fáil Government are permitted to relax over on this side of the House for ten or 15 years the better for this country. They are a group of very tired politicians who have lost control, who have no policy and no leader. Such a Government cannot steer a ship into a safe port. This country is facing the rocks of economics and financial disaster when a Bill of this kind is being introduced to dismantle the trade union movement, to legislate by order.

That is why I hope that this House in its wisdom will reject this legislation. I again call on the trade union movement and whatever Deputies have an interest in the trade union movement to give Ireland one black day on which there can be a national protest against the provisions of this Bill which is one of the greatest blows to democracy this House has experienced for many a long day. We have had a Criminal Justice Bill and the Marts Bill, but these pale into insignificance beside this temporary measure which is introduced because of the incompetence, lack of knowledge, lack of experience and lack of planning on the part of Fianna Fáil. Let them have the common sense to consult the people before passing this Bill. Let them ask the people are they satisfied with the state of this country as a result of the steps taken by Fianna Fáil in recent times. I venture to suggest that the people are only waiting for an opportunity, whether it be this month, in three months' time, in a year or in two years. I hope and trust the Government will have sufficient courage to take up the challenge of the leader of the Opposition, Deputy Cosgrave, when he called upon them to throw off the coat of cowardice. The Fine Gael Party have a variety of material. We do not have to depend on All Ireland medals or anything else for leadership; we have leadership on the record of service to the State and not on the kicking of a ball or the wielding of a hurley. Fine Gael are not afraid of a general election and I venture to suggest the Labour Party are not either. The Labour Party were never afraid of anything. We are prepared to face the people without hesitation.


Deputy Dowling always professes to be the champion of his trade union but Deputy Dowling will go into the Division Lobby and vote so that his trade union will be rendered powerless under section 4 of this Bill. If Deputy Dowling is such a trade unionist he should stand by his fellow trade unionists and vote against the Government on this Bill. Deputy Dowling is going to disregard his trade union colleagues and participate in a sell-out of trade unionism. This will mean that, if Deputy Dowling's trade union deals with the problem or the grievance of a member and participates in strike action, it will be an offence and if the funds of Deputy Dowling's trade union are used——

It is not an offence.

The Deputy has not read section 4.

I have read it.

Deputy Dowling did not read section 4. Probably section 4 of the Bill was read to the Deputy. He did not read it himself. I give Deputy Dowling a little more credit than that. If Deputy Dowling had read the Bill himself, the Lord knows what meanning he would take from it. I take it Deputy Dowlings was advised that section 4 was harmless and he could therefore vote for it. I put it to Deputy Dowling that section 4 of the Bill renders his activity as a trade unionist useless. On every occasion possible Deputy Dowling stands up in this House and tells Deputies that he is a trade unionist and loves his faithful colleagues in his trade union, but today he is allowing this legislation to be passed which is a sell-out and a betrayal of his fellow trade unionists.

The Deputy heard what I said the other night.

If Deputy Dowling has the high trade union principles he professes to have when he speaks as a trade unionist, he is called upon by the ICTU to oppose this Bill, and I challenge him to do so. I can bet that Deputy Dowling will be the first man, as meek as a mouse, behind the Minister for Finance to vote for a Bill which will take the teeth out of trade unions and paralyse the rights of the trade unions to fight for the rights of their members. This is a complete sell-out by several Members of Fianna Fáil who profess to be sympathetic towards the trade union movement.

Deputy Flanagan kicked out a deputation of trade unionists when he was Parliamentary Secretary.

I did because the Deputy was on it. I was not going to allow the Deputy to misrepresent me.

"Flanagan kicks the trade unionists out."

Rather than let the Deputy in I made sure that he could not get in. I made sure he could not misrepresent me from inside; he could do it from outside. I am glad Deputy Dowling admits I kicked him out. May I say if Deputy Dowling came in tomorrow morning or if he comes in when we are in Government——

That will be a long time.

——which will not be too long now, with the intention of misrepresentation he will be kicked out a second time. The Deputy should be under no misapprehension about that.

I join in the appeal made by Deputy Cosgrave that this windy Government should pick up courage and allow the people to pass judgment on their financial and economic structures and on this Prices and Incomes (Temporary Provisions) Bill. If this Bill is passed, all I can say is that democracy is taking a hell of a walloping.

This has been a long debate and the ground has already been extensively covered. It is perfectly correct that it should be a long debate and I trust it will further continue so. I agree with Deputy Flanagan that this Bill contains the most dangerous set of precedents infringing upon the freedom of the trade unions that I can recall for a very, very long time, certainly since the end of the Second World War.

I want to limit what I have to say here very specifically to the issue of a prices and incomes policy and to the question of whether this Bill can be seen as establishing any form of coherent or acceptable prices and incomes policy. Not surprisingly, my contention is that it does not. The first point one must make here—it has been made before, but it is necessary to make it again at the outset—is that while no one denies, far from it, that we are at present in an inflationary situation it has to be clearly seen that the responsibility for that inflationary situation rests with the Government which has been in power for so long.

The other night the Tánaiste made great play with international comparisons of one kind or another. The Tánaiste is a person for whose integrity I have very great respect, but, with due respect to him, he has one speech on economics and I have heard him make it so many times, both before and after I became a Member of this House, that I almost know it by heart. It is the invariable "Tighten your belts", "Stiffen your upper lips", "Fasten your lapstraps and hold on tight" cautionary nineteenth century Benthamite tale. In the course of his speech he said, at column 1173 of the Official Report for Wednesday, 11th November, 1970, if we look at other countries of Europe we will see that:

...the only way a government can get a real consensus for dealing with inflation is when it is patently obvious.

I do not accept this concept. It is the function of the special economic skills at the disposal of the Government to see more clearly than the general public what is coming. The Government stands singularly condemned for its failure to do this. In the context of another debate the Taoiseach took great pains to emphasise that what was being considered for the confidence or otherwise of the House was his present Government and not his previous one. With due respects I think this is an infantile way to escape the collective and continuous obligation which a Government has for policy exercised by it over the last few years. It is a device, if applied to this instance, which does a great deal less than justice to the previous Minister for Finance.

Specifically, I think the last two formal spring Budgets contributed more than any other single factor to the development of inflation. The first of these was an election Budget but the last one, for reasons best known to the then Minister for Finance and Cabinet, was comparably inflationary in its purpose. Since this Budget was, in fact, presented to the House by the Taoiseach I do not think he can escape responsibility for it. With the doubling of the turnover tax and the virtual failure to take any other fiscal measures whatever, I think the biggest single impetus towards inflation and regressive taxation upon the ordinary working classes was delivered.

The then Minister for Finance had a number of attractive qualities which are relevant to the present situation in which we find ourselves in discussing this Bill. First, he possessed the sympathy of the trade unions to an extent which his successor does not, and he is unlikely to acquire it. The fact that he possessed that sympathy was shown by the spectacularly publicised addition to his library which he acquired in recent months. He also had the rather endearing quality of being independent to a great extent of the advice given by his civil servants. Such, at any rate, was his reputation. I find this attractive not because I have any disrespect for the Civil Service—far from it because in so far as the country has functioned with any degree of rhythm and continuity in the past ten years, the credit is largely due to the Civil Service—but because one gets so tired of Ministers coming to this House and to Fianna Fáil cumainn presenting as innovations what, in fact, are policies thought out for them by their permanent officials. It is attractive to come across a Minister who has a reputation for a certain degree of independence of mind.

In this instance, however, I think the independence of the then Minister let him down because the last Budget which so largely contributed to the necessity to introduce the present legislation was one introduced in the teeth of the advice of every practising economist in the country and every major representative journal of economic opinion. It must, therefore, largely be seen as a major casual factor in the present situation in which we find ourselves. The Government suddenly discovered the necessity for a prices and incomes policy which they describe as temporary: how temporary, I do not know. The Bill, as I shall have occasion to argue at greater length in a moment, shows all the signs of extremely hasty draftsmanship. It is festooned with provisions for ministerial orders; it contains one typographical error and one grammatical mistake. The indecent haste with which the Government have rushed this measure to the House must be seen in the context of the fact that respective economic bodies such as the NIEC—Deputy O'Donovan may not agree with me—have been urging on the Government the adoption of an incomes and prices policy——


——as far back as 1965 and absolutely nothing was done about that until this hasty, ill-conceived measure was introduced. The immediate background to the introduction of this Bill was the breakdown of the employer-trade union discussions on an agreed pay policy. The proposals of that conference were never formally published but through the national Press sections of them, almost totalling the whole, have become available to us. It is my considered opinion that in fairness to that conference and its chairman, Professor Chubb, the proposals made by that conference were at least better than those now put before us. They were better, first, in that the period envisaged was more flexible than this one—12 months in the first instance and six months in the second with provision for review after 12 months, as opposed to this measure which applies for a longer period and carries with it the great question mark as to just how temporary it is.

Secondly, the proposals associated with Professor Chubb contained the germ of more sensible teeth than this measure where prices and dividends are concerned. It argued for strict control of retail prices in essential and key items and in a number of important services. It argued significantly that prices of goods and services supplied by the public sector should be subjected to the same close control and should not be exempt from the obligation to maintain constant price levels.

I confess that I find the Bill confusing and I am conceited enough to think that this is a reflection upon the people who drafted it rather than on myself but, as far as I can see, it does not contain comparable restrictions on spending in the public sector and upon increases in the cost of services provided by it. Perhaps I shall later be enlightened on that point. The proposals of the joint conference at least possessed the merit also of being tri-partite, certainly on the last point. In other words, they contained restrictive provisions for employers, employees and also in respect of the State. For example, it was argued that tax increases should not take place except where it was necessary to cover raising social welfare benefits to a level at which at least the recipients would not be wrose than they were in 1970 relative to other sections of the community. That provision in respect of taxation I do not find in the Bill and I think it is a defect.

If Press reports are to be believed, the Chubb proposals contained quite constructive suggestions in an embryonic stage about, for example, the raising of the levels of payment to women and juveniles. With all their faults—I do not endorse these proposals; far from it—there was a quality of constructiveness in them which is lacking in this rather tattered and rushed-together measure. The conduct of the Government in increasing the turnover tax and in failing to give comparable gurantees about future increases in taxation acts as a positive disincentive to the organised working people to accept the Government's intentions, vis-à-vis the stability in prices and dividends and not merely in incomes.

The OECD Report on Policies For Price Stability which was published in 1962 and which received considerable but still-born publicity in this country argues that so far as the instruments of policy are concerned all Governments recognise that the fundamental condition for success in price stabilisation is proper management of the general level of demand through appropriate general, fiscal and monetary policies. This the Government have not achieved. Rushing in to plug a hole in one particular section of the economy is impossible. I have no doubt it will be impossible to prevent effective increases in prices and this will make nonsense of the theoretical pretensions of this Bill. This is already seen in the operation of the turnover tax. The turnover tax on ESB accounts is no longer absorbed by the Electricity Supply Board but is added on as an additional item on the bill. This is something which affects everybody above the level where they are prepared to live in darkness. Though there are such people in our unjust society, fortunately, there are not very many of them.

This measure follows rapidly upon very unexpected major increases in certain spheres. I am thinking specifically of the ostentatious increase in CIE fares and the penal increases in postal charges. But these are not the only increases which were slipped through just before the Minister for Finance's "Iron Chancellor" statement here. Television rentals have been jerked up.

Will price control be effective under this Bill? It is my submission that it will not. It may be effective in the case of a consumer price index but I have no doubt that the periodic reviews will be easily evaded by those seeking to increase prices. As Deputy Desmond pointed out, it will be possible to conceal price increases by lowering or diluting the content. One example would be reducing the number of matches in a box of matches. It will be possible to do this kind of thing. Secondly, there are many items which substantially affect the real cost of living on large sections of the community and these items do not appear on the consumer price index at all. For that reason it would be very difficult to track down such increases. I do not believe the ordinary shopper is going around checking the prices of clothes and food to see what the prices are at the moment and he or she will not, therefore, be able to present complaints to the Minister for Finance six months hence if his or her cost of living goes up. Indeed, I do not believe the Minister has any serious intention of entertaining such complaints. It would be a ridiculous system. I do not believe it will work. It is like applying the Censorship of Publications Act to the cost of living.

Again, the introduction of decimalisation will provide an opportunity for concealing prices in the retail distributive trade. I am quite sure that, if there are discrepancies, prices will be rounded up and not down. Deputy Desmond has had a question on the Order Paper for a long time now asking the Minister for Posts and Telegraphs what stamp will replace the 9d stamp when decimalisation is introduced. I am sure the cost of the stamp will be rounded up and not down. If the ordinary workers feel that this is a wage freeze measure rather than a serious attempt at the introduction of a prices and incomes policy then their scepticism is, I think, fully justified in the light of the total disinclination of the Government to emulate the example of attempts made at a prices and incomes policy in other countries, something with which the Minister for Health appeared to be superficially familiar, and in the light of the adoption by them of fiscal policies which actually increased the cost of living so very clearly in the last year or two. Because of that I do not think any trade unionist can feel that this Bill has any teeth where prices and incomes are concerned. It has teeth only where wage packets are concerned.

In my relatively brief experience of reading Bills I have never encountered one which contains so many provisions for ministerial order. Section 2 (6) (c) provides:

The Government may by order amend or revoke an order under this section including an order under this subsection.

Section 6 (1) provides:

The Government may by order, whenever it so thinks proper, transfer from the Minister for Industry and Commerce to any other Minister of State having charge of a Department of State any power, duty or function...

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...

I could quote ad nauseam. The Bill is shot through with these provisions for the making of ministerial orders, culminating in section 22 (1) 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.

In other words, if the Minister finds he has forgotten anything he can make an order substantially amending the Bill, either for better or for worse. It is true orders must be laid on the Table of the House and can be challenged but, with the built-in majority which the Fianna Fáil Party possess and which, apparently, they can wheel into unanimous action through that lobby, even if opponents bear the bloodstains of mutual knifing, I do not think we can regard that provision as a safeguard against the extremely dangerous tendencies in this Bill. The Bill is in many respects a highly undesirable and dangerous measure.

With respect, this Bill will prove a lawyer's delight. Sophisticated lawyers will not have the slightest difficulty in driving a coach-and-four through these provisions. It looks like being a good year for them, but this is not a particularly dignified way in which this House should proceed to legislate.

There are some provisions which worry me considerably. Perhaps the Minister could clarify what precisely is meant by "basic remuneration" in section 1. Lack of clarity is not helped by the fact that it is in this section the grammatical error occurs. At the risk of seeming pedantic, the comma is misplaced in line 3 of paragraph (1):

"basic remuneration" means remuneration for work done including remuneration for time or piece work or both but excluding remuneration for overtime work, shift work premium, fees paid to a director of a company by the company in respect of the office of director, remuneration in the form of a bonus or commission, allowances in the nature of pay and benefits in lieu of or in addition to pay:

If the English language means anything it means that everything after (1) is excluded from basic remuneration. If the intention was to say that basic remuneration includes remuneration for "time or piece work or both" but excludes remuneration for overtime work, shift work premium, et cetera, then they should have said so. I hope the Minister will clarify this because at the moment I do not know what is excluded and what is included. This is another section which will inevitably come into future wage negotiations.

Another lack in the Bill is any explanation of the place of incentive schemes. Surely it would be the wish of even this administration to encourage development and productivity. The incentive scheme plays quite a role in productivity and development. I am not suggesting that in the short time the Government left themselves to rush his measure through incentive schemes could be negotiated, but a more painstaking and long-term view of a prices and incomes policy should unquestionably give some regard to the place of incentive schemes.

The Minister for Health again appears to have missed the point that the growth in productivity in different sectors of the economy occurs in an unrelated and very often widely fluctuating way. Very often these growths are produced as much by technological innovation as by anything else and the American economist, Machlup, produced an argument destructive of a comparable measure which Senator O'Mahoney endeavoured to introduce in the United States in 1959 and his argument is equally destructive of the measure now before the House:

If a nation is committed to a full employment policy, that is to a policy of using demand inflation to create employment, it can avoid inflation only by avoiding anything that may create unemployment.

And the O'Mahoney plan, instead of checking inflation, would actually tend to make inflation perennial and perpetual. I recommend this criticism to the Minister as it applies to the Bill we are discussing today.

I do not understand the reference this Bill makes to the special remuneration for special skills which occurs in many sectors of industry. In pages 5 and 6 of the Bill there is reference to "similar or analogous work". Under section 3 (2) (c) (i) the definition of what constitutes "similar or analogous work" will be difficult to define when contemplating a pay claim. The provision states that where:

a board or the said Body or the Labour Court, as the case may be, is of opinion that the rate of basic remuneration of an employee on the 16th day of October, 1970, is inappropriate having regard to the rate of basic remuneration then payable to employees generally for similar or analogous work...

In this case it can sanction an increase. I wish the lawyers, the Minister, the Labour Court and whoever is involved the best of luck in defining what constitutes "similar or analogous work".

From time to time reference is made in the Bill to "authorised amount". It is not clear what this "authorised amount" will be. At one point it appears to be fixed at a certain percentage but in section 2 (6) (c) it is stated that the Government may by order amend or revoke an order under this section including an order under this subsection. Does this mean that the Minister may vary what constitutes the "authorised amount"? Does it mean that he can sanction certain pay claims which are in excess of the percentage he recommends in order to avoid trouble for himself? On the other hand, may he disallow certain claims that fall inside the percentage? This point is totally unclear and leaves the Minister with wide and undefined power. I am not arguing that an absolute and unchangeable figure should be struck by this House. I am merely saying that in his reply the Minister should spell out his intentions in regard to his power to vary the "authorised amount".

The matter of payment of directorial fees is inserted in the Bill in an impressive manner but, in my opinion, it is purely window-dressing. I do not believe this section will be enforceable. The point has been made by other speakers that the great majority of Irish companies are privately owned and, therefore, they are in a position to distribute increased profits in a variety of ways on which it is difficult to check. It is also true that the position of an externally-based company with an arm in this country is obscure and it does not seem that such a company can be reached by way of this Bill. I have no doubt that the extremely sophisticated lawyers employed by people highly sophisticated in the acquisition of wealth— who constitute the majority of our directors—would be able to drive a coach-and-four through this section. If anyone believes this will "take in" the ordinary lower-paid trade unionists they have got another think coming.

We are all aware that enormous abuses occur in the utilisation of expense accounts. This is a subject on which successive Ministers for Finance have ignored recommendations that they should adapt the tax structure to catch these people. I do not see how it would be possible under this Bill to counter the expense account living— what Professor Paddy Lynch called "the alimentary exhibitionism" that goes on among the top percentage of company directors in this country. When the ordinary worker, whose wages are frozen, cycles by the Inter-Continental Hotel and sees the people inside quaffing their brandies and eating vast meals on expense accounts I do not think he will consider he is being ruled by a Government who have any serious desire to introduce a proper incomes and prices policy.

These may be rather arid points but it is necessary to make them. It must be stated that, although attempts are made under section 10 of this Bill to limit dividends, the dividends are merely stalled and are not lost. However, wages, once denied, are irrecoverable. If a company fails to pay a dividend at a rate it would like, the share value of that company appreciates so that a shareholder either can take his profit now by selling part of his shares or, alternatively, the dividend money is accumulated. If and when this Bill ceases to have effect presumably these moneys can be recovered. The ordinary worker cannot recover what the Government are taking out of his pay packet by way of this Bill.

This legislation is being introduced in the shadow of our application for membership of the EEC. This is not the time or the place to expand on this topic but it is a firm view of my party that unqualified entry into the Common Market will cast a terrible shadow over security of employment—I am thinking in particular of ordinary industrial workers. That shadow has cast itself in the last two days with the disintegration of Palgrave Murphy and its associated companies, with attendant unemployment.

Perhaps I am being excessively cynical when I suspect that the Government are rather grateful for the breakdown in negotiations which permitted them the opportunity to introduce this Bill. The Government may be seen as equipping themselves with harsh repressive powers in anticipation of the serious unemployment and industrial unrest that may lie ahead if the present mismanagement of our economy continues. I suspect that this Bill, with its implications for the future, is designed to jeopardise and weaken the trade union movement in this country.

I should like to comment on the trade union movement and the likely effects of this Bill on that movement. This gives me an opportunity to reply to Deputy Dowling who said that it would not be illegal to strike. That may be true, but the Deputy is playing with words. It may not be illegal to strike but it will be illegal to strike successfully if the aim of the strike is in contradiction of this measure. It is not much consolation to workers to know that they can strike but if they succeed in attaining their objectives they are liable to payment of fines.

The Bill provides in section 4 (3) (a):

The funds of a trade union may not be applied in furtherance or support of a strike to which this section applies.

In section 4 (3) (b) it is stated:

Where funds of a trade union are applied in contravention of paragraph (a) of this subsection, the trade union shall be guilty of an offence.

Penal measures in the sense of imprisonment will not be applied but it is stated in section 17:

(1) A person guilty of an offence under this Act shall 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, together with, in the case of an offence under section 2 or 4 of this Act which is a continuing offence——

this is an obvious reference to a successful strike which produces a wage in excess of the amount laid down by this Bill

——a further fine not exceeding £5 in respect of each individual in relation to whom the offence is committed for each day upon which the offence is continued.

First of all, I ask the Government in all seriousness whether this measure is enforceable. The Tánaiste asked us to look at parallel legislation in other countries. Experience of other countries, including Britain, right up to relatively recent times, has shown that ultimately the sanction of the law cannot be effectively employed in a wage dispute of this kind. In our own country the measure introduced with respect to industrial relations in the ESB proved comparably unenforceable. Lloyd George is reputed to have made a famous remark during the First World War when the miners threatened to strike for a sum in excess of what he thought was right during wartime and when his initial desire was to put them in prison as he was legally entitled to, but realising that there were 250,000 miners he said: "Have we jails for 250,000 striking miners?" There are no provisions made for jails here, but provisions made here are comparably ludicrous.

What will happen if this Act is infringed by a union? Say 100 workers go on strike for an increase in excess of the amount in this Bill. Will their union be fined £5,000 plus £500 a day? For 14 days that would be £7,000, making a total of £12,000. What happens then? Presumably the unions would take the matter to court but, if they do not pay the fine, the only measure that can be taken is to seize property. This raises a ridiculous image of the Government taking the ITGWU of which I am a member, into court, successfully prosecuting them and, on non-payment of fines, going down to Liberty Hall, going up to the fourth floor and into the office of Mr. Michael Mullen and distraining his desks and filing cabinets. I do not believe this is enforceable. If one looks at the practice in other countries one will see that they all have accepted that in the long term it is not possible to legislate effectively against the majority of the people or against large numbers of the people. I quote the OECD report again. It reads:

Once guidance has been given the problem is to get people to follow it and to do so without damage to democratic values.

Again, the OECD report states that Governments are becoming increasingly convinced from their own circumstances of the need to evolve some form of national incomes policy. At the same time, it goes on, they are committed to the maintenance of smooth functioning of the free economic institutions and the maximum degree of freedom for wage and price determination. It follows that in our kind of society a successful incomes policy must derive its ultimate sanction from the understanding and co-operation of all concerned — not by the sort of coercive legislation which we have here. Again the report reads:

This does not mean that the Government have a purely passive role to play.

This is largely the role this Government have played for the last five years. The report says that the Government must formulate its policy clearly and be prepared to defend it against criticism and that in general it must do all it can to secure public agreement that what it is proposing is both necessary and fair. This is most decisively not being done here.

If we look to other countries, we find the majority of them have resisted the coercive role. The Netherlands is one exception to this. The Swedes have avoided enforcement. The Austrian Price and Wage Commission set up in 1957 had no legal power. In France the path of persuasion has been followed and the same is true of Canada. From time to time persuasive attempts may have been broken by the introduction of temporary provisions but the operative word is "temporary". I do not think we have any guarantee that this measure is temporary at all. The proper function of a Government is to create a climate of acceptance for their policies and this Government have failed to do that.

I am not one of those who totally dismiss the relevance of a prices and incomes policy. Speakers from the other side of the House have asked us to be constructive. Leaving aside the fact that I do not believe it is our function in the Opposition to provide remedies for the inadequate fiscal policies of the present administration, I would be prepared to be constructive to a degree. I believe in a prices and incomes policy resting upon the agreement of all the parties concerned. I do not believe that the resolution of wages, particularly the wages of lower-paid workers, can be left totally to free bargaining, particularly in the jungle context which too often prevails in Ireland. The attainment of that atmosphere of acceptance is a function of Government. We have not seen that exercised here. This one-sided intervention in the prices and incomes field is an admission of failure on the Government's part and a last ditch effort to stave off the serious economic consequences of their own inflationary policies.

One last word about trade unions: I could not emulate Deputy O.J. Flanagan in terms of rhetoric, though I confess that I share his concern about the implications of this Bill for a democracy and more particularly for the trade union movement. Looking at sections 4 and 18 together it will be seen that the funds which the trade unions will apply in contravention of the Bill shall make the trade unions guilty of an offence. Section 18 provides:

A body corporate may be sent forward for trial or sentence and may be prosecuted on indictment for an offence under this Act and any unincorporated body of persons may be prosecuted as if it were a body corporate.

This is a very serious and significant change in our attitudes towards trade unions here. The trade unions are not the insensate monoliths which one would sometimes think when listening to the conservative speeches of successive Fianna Fáil Ministers. Trade unions are a buttress of our society and their story is in many ways the story of the development of free institutions in this country. They played an honourable role in the history of this country and one which cannot be discounted. Sometimes the weapon of the strike, which this Bill seeks to blunt, has been used, as in 1913, in ways which brought dignity and status to depressed, dejected and underprivileged countries. Sometimes, as in the munition strike, strikes were used to help to bring about the attainment of freedom in this country, to which Deputies on the Fianna Fáil side of the House are supposed to be so devoted. During that long story for the attainment of trade union independence one recurrent theme crops up again and again: right and wrong.

I do not know whether the Minister is familiar with the details of the Taff Vale case, where a railway company sued the unions for damages for loss through picketing. The railway company won. The judgement was reversed on appeal. The House of Lords upheld the original verdict and defined further that the funds of the trade union were liable for suing. That was possibly the most celebrated legal case in the history of British trade unionism. Among its incidental side-effects was to give a tremendous impetus to the development of the British Labour Party. If the Minister's Bill has a similar effect in Ireland it will secure some beneficial results which were not perhaps anticipated by him.

Hope springs eternal.

Just break up that monolith over there.

There is a good chip off it at the moment.

This decision was subsequently reversed by British legislation by the Liberal Government. Since that time the principle of the right of a union to strike and to picket freely and the principle that its funds are not amenable to corporate action has been one of the buttresses of free trade unionism in Britain and in Ireland. This Bill seeks to take that away. It is a shattering and frightening infringement of the rights of trade unions and, therefore, of the rights of the vast majority of the ordinary working people in this country—rights which were hard-won in the teeth of vicious, conservative, sectional interests in this country. I am sad to see this Government seeking, by a piece of battered, rushed, unpremeditated legislation, to strike so vicious a blow at the foundations of one of the major democratic institutions in our country. I hope that the lesson that the Government are prepared to do that will not be lost on the ordinary workers.

We are coming into a period of job insecurity and increasing inflation. The threat of competition looms over some of our slightly ramshackle industries. Irishmen's jobs will be in jeopardy in the next three or four years to an extent which has not existed for very many years. The whole tariff protected empire constructed by Fianna Fáil with some benefit to the workers, and still more benefit to the acolytes of Fianna Fáil itself, may collapse in the next five years. If that happens, the people at the top will be able to get out. The people at the top are always able to get out without getting their fingers burned: the Potez and Sharjah companies are examples. At this point of time, then, the Minister for Finance seeks to destroy one of the most firm bastions for the protection of workers we have in this country, namely, the trade union movement. The timing is not a coincidence but is very much a cause and connection.

I hope the trade unions will see the danger which threatens them and will unite in vigorous opposition to this hasty and ill-conceived measure. If they do, they will have the full support of all of us on this side of the House. If and when the Committee Stage of this Bill is reached, certainly I shall—and have no doubt many others will, too — make strenuous attempts to repair the faulty draftsmanship and to have withdrawn the objectionable and anti-democratic points in the Bill. Unfortunately, we shall not be able to repair the incapacity of this Government which has put together this ramshackle and undemocratic Bill which stands like a beacon testifying to the economic failure of both this Government and the one which preceded it, as the Taoiseach would say.

Siúd is go n-admhaíonn cainteoirí ó gach taobh go bhfuil dul amú ar chursaí eacnamaíochta na tíre seo — chomh maith le roint mhaith tíortha eile ar fuaid an domhain — aontaím leo agus fáiltím roimh an mBille seo. Ní rud taithneamhach é do Rialtas ar bith cur isteach go hoifigiúil ar shaoirse na ndaoine maidir leis an modh oibre coiteann i gcásanna pá agus tuarastail. Ní dhéanfadh an Rialtas seo é marach gur theip, amach is amach, ar an gnáth-chóras agus nach raibh aon dul as acu ach an srian a tharraingt sula raibh sé ró-dhéanach. Bhí sé mar dualgas ar an Rialtas an Bille seo a thabhairt isteach.

In view of the fact that there is acceptance on all sides that the economic state of this country and, indeed, of other countries at the moment is not the best, I welcome this move by the Government to seek to correct the situation. All speakers in the debate so far have acknowledged the unhealthy state of our economy. Some have argued that it has its roots in events as far back as 20 years while others say ten years and others still five years. That being so, I am at a loss to understand why there is so much criticism of the Government's action in seeking to remedy what has been acknowledged as the unhealthy state of our economy.

It is distasteful to any person and to any party to have to do what is unpopular but responsible persons recognise that one cannot forever do what is popular. Paradoxical though it may sound, one can do well and yet not necessarily do well politically, and vice versa. However, that does not free a government from the responsibility of taking corrective measures when it is necessary to do so in the overwhelming interests of the nation. After all other efforts have failed, the Government must act in this manner. In so far as this Bill is an indication of acceptance by the Government of their grave responsibility to act in the interests of the nation and to discharge their duty by the nation, I welcome this measure. Nobody here is anxious to cut across the traditional methods of free collective bargaining which exist here and elsewhere although it might be said, in passing, that there are certain countries where this collective free bargaining——

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

I should like to have it on record that there are in the House only one Fine Gael Deputy and two Deputies from the Labour Party— sorry, the socialist party.

All evening there have been only two Fianna Fáil Deputies in the House, Deputy Haughey on the back bench and the Parliamentary Secretary on the front.

I do not know why the Parliamentary Secretary should be so sore.

I was saying that there are countries where collective bargaining does not obtain, and the extraordinary thing is that they are countries in which the ideology preached by the socialists of this country exists.

The Deputy knows that is not true. Up to now he had been making a serious speech.

I hope all the time to be serious. I think there is evidence to show that in most of those so-called socialist countries workers are told given certain rights, workers are told where they will work, they are told to what extent they shall produce and they are not given the freedom which workers in this country enjoy. If, presently, when he is speaking Deputy Keating has evidence to the contrary——

I agree that that is the case.

That is the point I was making.

I agree that in those countries there is lack of freedom for collective bargaining and I deplore it as much as the Deputy does.

I am happy to hear Deputy Keating dissociating himself from those countries and I hope that his opinion will be maintained as long as he remains a Member of this House. Having said that, and again bearing in mind that the correct thing is not always the popular thing, I think we should not pledge ourselves entirely and forever to follow traditions. I know there exists the sacredness of not passing the picket. Latterly, I think it has come home to trade unions that that is a tradition and a principle which has been abused, and I think that although we should allow certain liberties, it behoves us all at any stage not to liberalise these things to such an extent that we deprive ourselves of all disciplines and fall victims to a new and more destructive weapon.

As far as labour relations are concerned, I am a member of an association affiliated to Congress. I would not claim to be an expert in the matter of labour relations but I said a few months ago in this House that I thought all people in Ireland were enjoying a standard of living somewhat higher than that to which they were, as I saw it, entitled.

When we examine this we find that in what I buy I am buying somebody else's service, somebody else's sacrifice. The more a worker puts into whatever he is producing, the more he puts into whichever service he is providing, the cheaper it will be on me. That is the situation about which I am not entirely happy. It may suit Deputy Oliver Flanagan, coming from a constituency which at the moment cannot boast a Labour representative, and looking forward to the next general election, which will occur some years ahead, to make the case that as far as he is concerned all workers in this country are working as hard as they possibly can and that speakers from these benches are inclined to be overcritical of trade unions.

I would be as concerned about a forthcoming general election as Deputy Flanagan, but I would not make little of the workers in my constituency by not telling them that I believe they could work a little harder. I know from themselves that they could, and what I am concerned with is to correct the circumstances which prevent their doing it. I venture to say that in some factories workers possibly have reason for not giving of their best. There are circumstances in which they see a managing director, other directors, work managers and so on, enjoying huge salaries but appearing only occasionally in the factory. In such circumstances the only consultation with the workers is on the odd occasion when something has gone wrong but where, for a period of ten years, the workers may have been working diligently on their machines, attending punctually and regularly, but getting no recognition apart from the paper money that comes at the end of the week in their pay packets.

Management are inclined to forget that all workers, as is their entitlement, feel as important as management, that they are not people who should be recognised only when something goes wrong. If the ordinary day's work which workers are prepared to give is not acknowledged in means other than the financial means I have mentioned, workers become discouraged. They are sensible people who realise that in circumstances in which there is a reduced week, when production is reduced, the cost to the workers in monetary terms is high and they would welcome an opportunity which would guarantee to them that if they work harder than they have been working heretofore—and they are capable of doing it—they will get better recognition, the human recognition about which I spoke. As well as that, in circumstances in which a worker's example will be copied by other workers, ultimately that worker will get more value for his pay packet. Workers will welcome these circumstances.

I cannot foresee this happening until the approach which I know exists in some factories, from management down, is changed. We should be careful to realise that when we talk about workers we are not talking solely of manual workers. When I talk about people enjoying a standard which I think, economically speaking, they do not deserve, I talk about teachers, solicitors, doctors, junior counsel and senior counsel.

Today I cannot see evidence of a desire on the part of the people of Ireland to contribute towards Ireland as they should. Contrary to what some people might think, my knowledge of people—and I would match mine with that of anybody else—is that they are happiest when they are working. There is nothing so frustrating or annoying as for somebody to be watching the clock and waiting for the hour of release. We are happiest when we are gainfully employed. It is best for us to be gainfully employed, obviously without being exploited at any stage. At this level rather than at the level of a particular Bill would I like to see the difficulties that exist at the moment being tackled.

On the other hand, since all other attempts at correcting our present unsatisfactory state have failed, I very much welcome this Bill. Here, again, I am at a loss to understand the attitudes of other speakers who would have me believe that they are interested in the workers. I very much welcome section 3 (2) (b) (ii) which provides for certain groups of workers, some of whom happen to be in my constituency and regarding whom I made representations when this Bill was first announced, workers who had been proceeding in the normal procedural way towards the conclusion of the 12th round and who were cut off in midstream. I thought at the time that it was most unfair that this should have happened to those people.

Contrary to other speakers who would point to the Minister and say: "For this, that or the other reason you have changed your mind", I think he is a good man who will change his mind in the light of new and better ideas. I do not think we should create a principle that, having said one thing on one occasion, irrespective of whether that was true, you must hang on to it forever. I must say that in this Chamber—and this is the Chamber in which on occasion we hear people talking about the terrible thing it is to tell a lie—there are different ways in which we can tell lies. I suggest that any time you distort the truth you are telling a lie.

I am very thankful to the Minister. Were it not for the fact that he has made provision for groups of workers, such as groups of workers in Unidare in my constituency, I would not be speaking about the Bill in the terms I am now using. I welcome the Bill and I hope that, notwithstanding the new climate which exists, the satisfaction of that unfinished 12th round will proceed as if nothing else had happened. I understand that in the matter of the 13th round there will be certain inhibitions and I am not making any case so far as they are concerned. Certainly I will watch carefully to see that, in the matter of the unsatisfied 12th round application by these workers, they will get credit for the fact that the only reason it was not finalised was, perhaps, that they had been handling it in too gentlemanly a fashion.

Other speakers spoke at great length about the desirability of satisfying demands made. Perhaps that is an over-simplification of exactly what they said. There is an obligation on us, in circumstances in which we know that all is not as well as it should be, not to think entirely of ourselves. Here, perhaps, the people of Ireland and, indeed, the people of other countries in the world today, are at fault. There is an obligation on us to think of future generations and if it is in the interests of future generations of Irish people—and there is no question of "if" as I see it —that we should act on our own behalf and on theirs and take these measures, we must do so.

I must take slight issue with my colleague, Deputy Thornley. I am hoping this is a temporary measure. I am hoping that by the end of 1971 the position will have improved and it will not be necessary to continue with the terms of this Bill. If by 1971 the position has not improved—and I do not see why not—there is still, as I say, an obligation on us to hand over to future generations an Ireland as good as the one which was handed to us. It is not fitting for any Deputy here or any citizen of Ireland to behave in any other fashion.

This is the age of equality. What I find about the age of equality is that we all want it, but we all want equality with the person above us. Nobody wants equality with the person beneath him, and I am speaking of financial matters. Here is the problem of the times in which we live. We can come in here and say how desirable it is that this should happen or that something else should happen. We can advocate that that which belongs to somebody else should be divided so that poorer people may benefit but we must also say that in our desire to provide this genuine equality we are prepared to make sacrifices and that we are so concerned that, irrespective of how long we may stay in politics, or what may be our fate in future general elections, we are prepared to contribute towards achieving it.

I wish to oppose this Bill because the measures which are being introduced to control dangerous inflationary tendencies are, in my opinion, sham and shabby. In brief, the effect of this legislation is to control wages and to exert partial control over prices. Originally, as we know, the intention was to freeze wage rises at 6 per cent.

The Minister for Finance at column 61, Volume 249, No. 1, of the Official Report of 28th October, 1970, said:

The Government are convinced of the necessity for prompt and effective action to safeguard the economic future of the nation and we will not be deterred by any unpopularity which our policy may encounter.

There was to be no compromise, he said. There was to be no negotiation. Strong words indeed.

The Deputy is not quoting now.

I beg the Minister's pardon. I unquote after the word "encounter".

That is right. Let us be accurate. Thank you.

There was to be no compromise. This is what we were told. There was to be no negotiation. Strong words indeed coming from strong, dynamic leaders. Then at the first sign of trouble the Government, true to their form, capitulated.

No, a wise decision.

Within three days there was a dramatic climb down, as the newspapers described it, in the freeze ultimatum of the Minister for Finance to the unions and the headlines in the national Press of October 31st, just three days after the freeze announcement, ran:

Six per cent ceiling on wage rises abolished. Government changes mind on wage curbs. Freeze plans amended. Pointer to an early election.

Where, then, might I ask the Minister for Finance were the strong words? Where was the firm leadership? Where was his and his Government's position of no compromise?

The Deputy is opposing it because it is not strong enough? Am I misunderstanding him?

Let me finish. I shall not interrupt the Minister.

Where then, might I ask, was the strong Government dedicated to safeguarding the economic future of the nation, the Government not to be deterred by unpopularity? It was missing. Indeed, that Government never existed and those strong words and their subsequent withdrawal were typical of a week, inept and inefficient Government making a gallant attempt to govern. Indeed, one might say they were making a gallant attempt to show their renewed strength, their renewed vitality, their renewed dedication of purpose, after their recent sordid crises. They survived those crises tarnished and shamed but unbroken. "Fianna Fáil professionalism" was how their survival was acclaimed by the Irish Press. If this is professionalism, may God help Ireland. After discrediting themselves before the eyes of the nation and the world, after debauching themselves privately and publicly, after perpetrating what can only be described as the rape of the virtues which we cherish —decency, honesty and integrity—for their own selfish, political ends, their apparent survival was hailed as professionalism. What, in the name of God, is this country coming to?

When the Taoiseach failed to consult the people after that crucial vote was taken he dealt democracy a death blow and it cannot be said now that we have Government by the people. We have instead an oligarchy—Government by a select few. I do not suggest for a moment that the Taoiseach did this for his own self aggrandisement, rather would I think it was out of loyalty and fear. Loyalty to what? Loyalty to the ruthless, unscrupulous band that are prepared to divest themselves of all honour and all principles to remain in a position of power and influence. He also did it out of fear, fear of the people.

I am afraid the Deputy is drifting away from the Bill before the House. The matter he mentions was discussed here at length on the Vote of Confidence.

With respect, Sir, quite an amount of latitude was given to other speakers and I can assure the Chair I will not dwell on this sordid episode for very long.

You will, Sir, appreciate the Deputy's difficulty in trying to make a case.

I said the Taoiseach was afraid. He was afraid that the decent people of this country were saturated with graft, patronage, the sordid affairs of Government——

Perhaps the Deputy will come to the Bill.

——and particularly, and this is very relevant, with the mismanagement of the national economy and the affairs of state generally.

In a recent "7 Days" television interview the Taoiseach stated that he would not go to the country primarily because of the state of the economy. We all knew what he meant. He meant the deplorable state of the economy. Who is responsible for this deplorable state in our economy? Who has been in Government all these years? Who is supposed to be managing our economy? The blame can only be laid at the feet of Fianna Fáil. This present inflationary crisis, as the Minister for Finance said, is clearly manifesting itself in symptoms which are plain to all and show no sign of easing. He also said at column 64 of the Official Report of the same day, 28th October:

Price inflation also erodes the competitiveness of our goods both on the domestic and foreign markets thereby reducing exports and further increasing imports and unemployment.

The source of the most recent downfall in our economy can be traced to the then Taoiseach, Mr. Seán Lemass, in 1964 when he granted the workers a wage rise of 12½ per cent. I suggest he had one motive for doing it, a political motive; he did it to ensure the continuance of Fianna Fáil in office. He did it to satiate his own party's lust for power. Within a few days that same Taoiseach said that the country could not afford it for three years. He jeopardised the economy and set in train the galloping inflation which we are witnessing today. He set in train the economic crisis which we are experiencing today. Yet nothing was done by the Government to remedy the situation. Indeed, the practice of buying the electorate at successive elections has been adopted and maintained by the present Administration. Where is this inflationary course going to lead us except to economic ruin, mass unemployment and mass emigration? The Minister for Finance said later on, on the same day, at column 64:

Thus, over the past year, industrial production has slackened significantly... the fall in industrial production in the second quarter of 1970 is a matter of serious concern;... Unemployment has increased. Consumer imports are mounting and the external deficit is at an unacceptably high level. Tourism is in danger of losing its momentum.

What are we doing to solve our economic problems? We are constantly borrowing abroad. We are increasing taxation and now we are going to clamp down on wages. The Minister for Finance, at column 65, again said:

We must dispel the illusion that rising money incomes represent rising living standards.

I submit, Sir, this is the very illusion, the very attitude, that has been inculcated by the present Government in the minds of the electorate.

The workers have been beguiled by the Government into a false feeling of security, a false feeling of national wealth. "You never had it so good" has been the cry of the day. This thinking has been fostered in the minds of the people and now the worker is asked to restrain his demands for wage increases. He is asked to settle for a small increase in wages without any strict control being exercised in regard to prices and to the cost of living generally. The prices section depends on the vigilance of the customer. The Government intend, I understand, fixing the maximum price for household items. May we ask the Minister for Finance what is to be his order of priorities? Will all household items be covered by this price control and what price base will he use? What guarantees can the Minister for Finance give that the control will be maintained and enforced? I understand there are only six inspectors in the Department to deal with control at manufacturing level. Is it the Minister's intention to recruit more inspectors and, if so, when will this be done?

Let us take the question of rents, for example. How many tenants will be prepared to take their landlords to court? Do the Government and the Minister think seriously that flat dwellers are sufficiently independent to stand on their own feet and assert their rights? If that is the Minister's belief, I am afraid he is very much out of touch with the common people.

Personally, I am in favour of a prices and incomes policy but not this policy. If the true state of the economy were to be exposed to the country at large, if the Government were to be honest and tell the people the meaning of inflation and the effects that are bound to accrue from it, if they were prepared to tell the people what is the national cake and how much each section is entitled to, then there would not be so much disgruntlement and so much dissatisfaction among workers. The people must be told that there are very tough times ahead. Workers must be told that any rash action on their part would precipitate dire consequences. If the question of profit participation is seriously researched and implemented, it will go a long way towards correcting the appalling state of industrial relations.

The Government have been indicating and fostering the belief in the minds of the people that times were very good and that under continued Fianna Fáil leadership they were bound to improve. That is sheer and utter political bluff and as long as such bluff continues we are bound to have discontent, bound to have poor industrial relations and bound to have a very poor economy, whereas if honesty, integrity, openness and sincerity can be introduced into the whole framework of the scandalous political set-up in this country, I am convinced it will be all for the best. If the true position is outlined not only to workers but to trade unions, to management and to all concerned and if each of us puts his shoulder to the wheel in an effort to revive the old spirit of nationalism in its true form, we can then start on the road to true prosperity.

However, in order to achieve such prosperity, the directive, the encouragement and the leadership must come from the Government. They are not there at the moment. We must also give some incentive to the workers who are convinced now that they are getting a very poor share of the fruits of their labour. They are convinced that profits are not being divided in an equitable fashion. If the facts were put before the workers I do not think there are any who would be so stupid as to cut their own throats. If there is a breakdown in individual firms in this regard where the workers know what profits are being made and to where the profits are going and if they get their true share of these profits, they will reciprocate and we can begin to benefit from them.

As well as an equitable share in profits let us, for God's sake, give fair play all round and let membership of Fianna Fáil cumainn no longer be the criteria for employment and promotion. Let us begin to have justice and equality for all. There is neither justice nor equality at the moment. I make that statement categorically. There are certain industries in this country to which the admission card for either employment or promotion is a Fianna Fáil badge. This state of affairs is working to the detriment of those industries because it makes for wrong promotion and, as a result, there is bad management and bad supervision. Such industries are not thriving as well as they should. I make a special appeal to the Government to give up the show business, to give up the ballad sessions in Cork and elsewhere and let us get down to serious government. Let us try to make this small country a better and a much happier place in which to live.

In the present circumstances it might be expected that I would repeat the attacks made by these benches and, indeed, made by most members of the Opposition on this Bill. However, I shall not do so, not because I disagree with those attacks but because at this stage we can take them as read. It would be repetition on my part.

Hear, hear.

The points have been made and made quite unanswerably but I am prompted to speak because of my genuine belief that the scale of the economic crisis now approaching is very great indeed. Nationally, the crisis is very serious.

We have been asked repeatedly by the Government benches for practical alternatives. Such a request is at once an admission of inadequacy but it is also a cry for help—a cry for help to which we must respond. At a time of great crisis we, as an Opposition, are in duty bound to offer not only to the nation but to the Government who, might I say, seem to me to be vastly inadequate—indeed, the Government are almost irrelevant in the context of the present problems—an analysis of what is going on. Secondly, we must offer some serious suggestions as to the direction in which efforts should be made which would at least ameliorate the present crisis.

Let us start by trying to characterise it a little. I do not think it was done in the Minister's introductory speech but I think it is permissible to do it now because the Government, by their own admission, have taken a very extraordinary step. They have taken it, presumably in the face of what they consider to be very special circumstances. I did not find those spelt out very adequately in the Minister's speech, which I will come to a little later. It is well to spell out this extraordinary situation.

First, let us clear the party abuse out of the way by saying, at least from my point of view, absolutely explicitly that the present crisis is not of Fianna Fáil's making. It is not of the making of any part of Fianna Fáil and, indeed, it is not confined to Ireland. I will have very severe things to say about the activities of Fianna Fáil and of this Government, who have failed to give us protection, who have failed at crucial moments to recognise how serious the situation was and who have done irrelevant and trivial things at very serious times. That is something entirely different from suggesting that the crisis is confined to Ireland or is of their making. Indeed, if we are blunt about it, we do not possess the degree of economic independence in this country at this time which would have permitted us to do more than ameliorate it because it is something which is very fundamental at the moment in the economies of all the western countries.

Let us try to say something about its peculiar characteristics first because there is now a good deal of agreement among all shades of economic opinion that the inflation which is now gripping most of the capitalist economies in the world is a little different from anything which has occurred previously and is not amenable to the remedies to which we have grown accustomed over a fairly long period. A special word has been coined, in fact, a slightly awful amalgam word, in the United States to describe it but it is a useful word nonetheless because it refers to the essential characteristics. The word is "stagflation" meaning that simultaneously one has industrial stagnation, failure in job creation, failure of growth in GNP, failure of continuing expanding industrial investment, but inflation continues to storm on, not just at the rate that one expects at the height of a boom but at a sometimes self-accelerating rate, even when the boom is over.

Something fundamental, in fact, seems to have gone wrong this time between the relationship we have grown accustomed to, between the level of prices, the level of unemployment, the percentage utilisation of capacity, the rate of increase in wages and the stage of the general business cycle that one is at. Therefore, the traditional checks and balances which were built into capitalist economies, the sort of cooling of an economy which took place to a degree, spontaneously, do not seem to be working. There is a general apprehension all over the world that traditional policies of taxation or traditional policies of the control of money will not be very satisfactory either to break this inflation.

As far as one can see this is a new situation which applies in Japan, Germany and the United States as well as in Ireland. It is something which has been a fairly long time in coming. This month many people agree about how serious it is. It is fair to remind the House at this time that very serious and very explicit warnings were uttered in this House at the time of the Budget when we questioned the relevance of the Budget.

Inflation has many causes. It would have been very valuable in the Minister's speech, or, indeed, in the supplementary Budget, or some time recently, if we had got an insight into Government thinking about what the causes are of the current inflation in Ireland. We got only an implied assumption which was a substitute for thinking and analysis but which is something which we from those benches must reject. The assumption was that the source of inflation in Ireland at this moment was the intransigence of the workers who are looking for higher wages. The assumption was that this was the source, full stop, that there was no other source, no attempt to assess what part of current inflation was due to this and what part to other causes and there was no attempt to evaluate those other causes. The assumption was simply that it is the workers' fault because they are unreasonable in asking for more money.

Of course, if that assumption were true the answer would be: "Then you must persuade the workers not to look for more money. If you cannot persuade them you are entitled to clobber them". If the premise were true, the assumption that you could cure the present inflation just by a wages policy would also be true. We could, of course, spend time debating the subject as to how you attain a wages policy but we could then agree if the assumption were true that that was the thing to do and if only we did that we would be all right. The thing that is depressing in the Government's presentation of their financial documents in the mini-Budget, which was not so mini, and in this Bill is, first, that this is patently not true and, secondly, that there is not any analysis or any explanation as to what the real truth might be.

A fairly large number of different sets of situations which produces inflation is recognised by economists. We have had the situation, if one wants to try to locate some of the difficulties, that until very recently rates of interest have been unprecedently high but the source of this high interest rate all over the world has, in fact, been the calls by United States industry for European capital. They have bid up the rates and that bidding up of the rates has put up the charges of industrial manufacture all over the capitalist world. It has put up the cost of money which had a bearing on the price of houses, the price of land and the price of everything. There has been a major inflationary contribution to the whole western world through the need of capital for United States industry at a time when the United States Government were attempting, by means of the control of money, to dampen down a boom situation in the United States.

I will be trying later on in what I have to say to produce some reasons as to why we should take certain actions to protect our economy, to protect our whole nation against inflation. I am going to suggest we should be taking steps to protect ourselves against these enormous rises in the international price of money which are not dictated by internal Irish conditions and which have not obtained in small economies which do not choose to be as open as ours. In small economies they exert a much more vigorous currency control. There is a line of help to be sought in the matter of currency control, in the matter of damping down our currency at home.

I am not trying to analyse all the causes of inflation. Even if I had the time, even if I thought this would be the place, I would not have the expertise to do so. However, that expertise exists in Ireland or at least it exists to a considerable degree, assuming the problem is amenable to rational analysis at all, and my conviction is that to a very great extent it is amenable to rational analysis. If one is to analyse it one must trust the economists. One must ask them the appropriate questions and listen to their answers, and one must not decide in advance that a situation such as this, very difficult, naturally very dangerous, will be solved in a single way at the expense of the workers because it is caused by the unreasonableness or intransigence of the workers.

Most large companies are fairly happy to soak up higher prices for raw materials. Their price fixing mechanisms enable them to pass on the cost, if they are in circumstances where the market will stand an increase in price. Again with our open economy, very many of these raw materials are imported and the price rises of our basic materials which set off a rise in the prices of consumer goods do not grow inside our economy at all. They grow elsewhere.

Therefore, there is an aspect of the high cost of money in our inflation. There is an aspect of wage rises in our inflation. There is an aspect of price rises in our inflation. There is a psychological aspect in our inflation, the psychological aspect being that if it is impossible to control prices then the best thing you can do is to spend all you can now because prices will be higher in a year. If there is the expectation of continuing inflation and if one has no confidence either in the resolution or the ability of a Government, that itself is inflationary.

There is a major contribution to inflation which is under Government control and which I have not mentioned yet. Many of the causes of inflation I have just enumerated are not under Government control or are not under the control of this Government. Therefore, the ones which are under Government control become particularly important. The Government themselves can exercise an influence. It is precisely in the area of taxation policy that a Government can have a vast effect on inflation. This is why— and I shall come to the analysis of this later on—the Budget of last April was so extraordinarily foolish and trivial and particularly irrevelant to the problems of the country. What is so terrifying is that a Government can so misread the situation.

We had the ironic and amusing situation that the Taoiseach was dismissing criticisms of his recent Government policy by the previous Minister for Finance on the basis that since he was no longer Minister for Finance he did not have access to the recent figures and, therefore, he could not form a valid opinion, at least not as valid as the present Minister for Finance and the Taoiseach who did have access to the most recent statistics and who also had access to the Government's economic advisers. What is ridiculous in this situation is that many months ago persons in the Opposition, who did not have access to the sophisticated documentation or to the economic experts, were able to read the situation correctly, whereas the Government were not so able.

I might in passing just amplify a little this thought about access to documentation. We have had in a recent report on the structure of our public service a criticism as to the degree of secrecy that exists in the public service. Criticism was offered from a very formal, respectable and almost solemn public source. It was not an external criticism. I think it is unanswerably true that we have accepted the British system, but we have not reformed it in the way the British have. Most other countries in the world make their Civil Service a great deal more open and make the information in Civil Service files available much more widely, not just to opposition politicians but to newspaper men and to the public at large. There is, by our standards, quite an extraordinary system in Sweden whereby any serious citizen can have access to any documentation other than that which is considered top secret. This is very salutary and very good.

I do not propose to amplify that point, which is not relevant to this Bill, but I would make a plea in passing, since it comes up very acutely when an opposition are striving to assess a situation to the best of their ability and make a constructive contribution to the solving of a national problem. It would be very useful for us to have a greater degree of access to detailed economic information. It would be, it seems to me, no weakening of our democratic traditions but rather a strengthening of them if we could be briefed at the highest level and, indeed, at the level of confidential information, by public servants in regard to the state of the economy. It may be that we are looked on as so irresponsible or so foolish that we could not correctly use any such information. This is unduly contemptuous towards responsible parliamentarians.

There may be information in the Government's hands at this moment, for example, in regard to matters like the level of our external assets or the situation that will be revealed when the work of the banks is brought up to date—which is profoundly relevant to our assessment of the state of our economy or to our assessment of whether such a Bill as this is necessary, which is profoundly relevant to our assessment of what other actions may be necessary at this time—which we should be very glad to receive and which, I think, we are entitled to receive. However, to some extent that is an aside.

We can only note when the Minister had the opportunity to provide us with the arguments which apparently convinced him that the introduction of this Bill was necessary he did not see fit to put those arguments before the House in his introductory speech. I look on this as trivial, irrelevant and a little offensive to Parliament at a time when we have agreed there is a serious crisis. During my short time in this House the attitude shown in Parliamentary answers and speeches is that neither the Opposition nor the nation at large, through the media which report this House, are entitled to know the contemptuous, throwaway attitude of the Government and the Fianna Fáil Party. All a Minister has to do is to string together a brief of platitudes which lasts 30 or 40 minutes and then depend on the automatic, trained majority to endorse whatever the Minister has chosen to do. There is, therefore, no need to argue one's case.

However reliable the trained majority it is surely necessary to put the facts not just before the Opposition—because we are only here as those deputed by the population at large—but to put them before the nation. If a Government do not argue their case they degrade democratic institutions and they also reduce the level of argument to the exchange of political abuse as, regrettably, so much of our political debate throughout the country now is. Ministers have a responsibility to try to raise this level by treating the House more seriously. If we resort to abuse and head-on attack it is because we get so little real basis for argument in introductory speeches.

As we are assessing the relevance of a Bill such as this which is a wage-freeze, whatever it may be called, I want to refer to the general economic strategy of the Government during the last 12 years. My conviction is that this Bill is irrelevant. The basis of that conviction resides to some extent on an analysis of what the Government have done to develop the economy, on the strategy they have used, on the effectiveness of that strategy and also on the perspectives for the continuance of that strategy into a new situation.

It is a widely held belief that we are entering a new phase in the economic development of the western world. Obviously we are in relation to the Common Market, but in even more fundamental ways we may be entering a new phase apart from whether or not we join a united Europe and apart from the effects of a united Europe. We must have an opinion as to whether the implementation of a measure such as this for something of the order of 13 months will make any material difference to the progress of our economy and the checking of inflation. It is irrelevant partly because of its own nature, which I shall come to in a detailed critique in a moment, and partly because of its relationship to the general strategy of the Government.

At the end of the fifties, very little heralded, in terms of explaining to the public what was happening, there was a major change in the strategy of the economic development of this country by Fianna Fáil. I am not now going to burden the House with an analysis of whether the policy of the thirties of developing industry behind protective walls was a correct one or whether the policy after 1958 of inviting in foreign capital was a correct one; it could be argued that each was right in its own context as, no doubt, the Government would argue. I want to characterise what seem to me to be the essential features of the Lemass industrialisation based on asking in overseas industries with very special concessions to people who brought us know-how and marketing connections. This opened up our economy, first of all, and, secondly, it increased our exports. In terms of selling and in terms of buying raw materials it made us very much more a part of the world economy and, therefore, very much more open to influences that emanate from outside the country. It ended the little protection we had of a home-grown, protected industry.

Another essential feature was that very many of the firms set up were subsidiaries. The object of the exercise was to establish subsidiaries of such big and technologically advanced firms as could provide us with their research, development, expertise and world connections. Our contribution when viewed on the basis of these multi-national companies was necessarily very small; we were a very small part of their whole activity. Because of tax concessions and special grants these companies were able to get enterprises off the ground with very little of their own money. What little they did have to put in, over and above the grants and special arrangements, could often be borrowed here because they were extremely desirable properties. They looked good investments because of their great expertise and good connections. The point about all this is that while the factories built and the jobs created were very important to us as a tiny, peripheral, weak but open economy, taken separately they were very marginal and very trivial to the multi-national companies that established them. As very little of the multi-national companies' own money was involved they could take their profit out without taxation while the going was good and kiss off the tiny investment they had made when the going was bad because they did not have much of their own money involved in it anyway.

This has worked very well in terms of job creation. I shall argue at another time that it has worked very badly in terms of this country's real interests, but it worked well in terms of job creation for a period of a little over a decade, at very great risk to our level of employment. The extraordinary thing is that since the end of the last war, with the exception of one little hiccup which unfortunately or fortunately, depending on one's point of view, greatly damaged an inter-Party Government, the economics of the capitalist countries, if I may be permitted to use that term descriptively without making a valued judgment, boomed fairly steadily for a quarter of a century without serious interruption at a rate which no economist, left or right, in any western country expected at the end of the last war.

We have grown accustomed to assessing the correctness of what I call "the Lemass industrialisation" at a time of uninterrupted boom. This looks like coming to an end, perhaps sticky, perhaps dramatic, perhaps by slumps or by a simple fading away through lack of growth as has been happening in the United States for more than a year. There may be seeming growth because of price inflation but there is lack of real growth and in fact diminution of industrial production. We seem to be entering a period when the methods of controlling economies, whether they are Keynesian methods or Freedman methods, are not working very well, when the indicators are pointing in opposite directions and the pundits also. For us, small, peripheral and weak it is a dangerous time, a time when, if you develop in this way, you have gains when things are good but you are very vulnerable when things are bad.

It is against that background that we are entitled to assess the significance of a freeze Bill such as this. I made the analogy elsewhere that you can heat a house by burning the furniture and you get a magnificent blaze while the furniture lasts but when the furniture is used up you have no heat and no furniture. We have had a sudden blaze in industrial growth and the creation of jobs by burning the furniture in national terms, in other words, by selling the assets we had to anyone who would buy them, but we have not so much more left to sell and we have not a world climate in which people want to buy these assets at present.

I should be very interested when the Minister is summing up this debate if he would discuss the level of investment from overseas and the expectations over the next 12 months because it is crucial for the maintenance of employment here that the capital inflow should continue. It is an essential part of the basic supposition of what I have chosen to call the Lemass industrial development that this inflow should, in fact, go on.

We are entitled to express the thought, first, that this itself can be an inflationary mechanism. This form of building up industry can be inflationary itself for a number of reasons. Also, at a time when you have combined stagnation and inflation you are left extraordinarily vulnerable to the smallest changes in the level of the western world's capitalist economy which is becoming more and more integrated. We are entitled to measure the relevance or validity of a Bill such as this against our judgment of whether this has been a valid way to develop the industry of Ireland. I am suggesting it was not because it produced industrial growth at great risk and also at the cost of selling national assets or letting them pass into the hands of people who have no concern with the welfare of the nation. This continued opening of our economy rather than building an economy more and more based on a public sector of a very controlled and protected sort is exceedingly dangerous. It was a mistake because it assumed that what was good for a large dynamic economy like Germany was good for a small peripheral economy like Ireland. As a socialist, I argue the opposite. I argue that while capitalism has been very good for Germany in the last quarter century it is very bad for Ireland. We can get growth at the cost of selling our assets and losing our sovereignty. If we want to retain our assets and our sovereignty we cannot get growth by capitalist methods. It is a terrible dilemma that can be allowed to continue for a decade or so but it seems that we are now coming to a time of reckoning and that the growing industrial crisis is making the incorrectness of the basic choice the Government made 12 years ago or so more and more obvious.

I am suggesting that some of the insights and attitudes of the previous generation of Fianna Fáil politicians were superior to those of the present generation; their weakness in regard to industrialisation was that they did no go far enough and stopped short at certain crucial stages and also that they did not have the democracy, the product development, the efficiency and many other things that would have commanded success. In my view, the basic strategy of the thirties, the forties and early fifties was superior to the strategy of the last 12 years when taken in the context of the ups and downs of the world economy and not only in the context of a boom period.

Detailed criticisms of the Bill have been expressed and I concur with most of the criticisms expressed from these benches. There is no point in repeating them but I want to look at some of the basic thoughts which are often better expressed in a Minister's speech than in the Bill itself which is of necessity concise and legal in its concept. The first thought relates to points I have already made about the cause of inflation. The Minister says that 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. I want to deal with the thought that it is only permissible for workers to seek wage increases that are directly proportional to productivity or that if productivity rises 2 per cent they are entitled to a 2 per cent wage increase but not otherwise. This is accepting something that I think no trade unionist, no socialist would accept, that we must accept forever the way the national cake is now divided and that the portion of the national cake given in wages to workers must never increase.

There are other ingredients in a national cake and we see no reason why some of the other ingredients should not change in magnitude as well as the workers' portion. We believe that the slice to be paid in wages and salaries should get bigger and the slice to be taken in profits should get smaller. What is inherent right through this Bill and through the Minister's speech—I shall come to this more specifically later—is that nothing must be done to alter the sharing out of the wealth created by the working people. We, on the contrary, are absolutely explicit that it is the proper task of any trade unionist to strive to make the share accruing to his members bigger and the share accruing as profits smaller.

I have accepted the analogy of the cake. Let us turn to the analogy of the tug-of-war. There is, in fact, continuously a tug-of-war between workers and employers: the workers want more money and the employers want more profits. If you pay higher wages your profits go down; if you can get away with lower wages your profits go up. The interests of the two categories, workers and employers, are opposed and all the time there is a tug-of-war. It is generally a calm, peaceful, well-regulated tug-of-war, but a tug-of-war nonetheless.

I certainly do not accept the proposition that wages can rise only if productivity rises. There are other areas from which increases in wages can come. It is also true that, even if you accept the proposition that rises in productivity have to match rises in wages, they do not, in fact, have to match percentage point by percentage point. This is a fallacy if one works out matters of profits, matters of turnover, matters of costs. If one gets into the extremely tangled subject of making serious productivity measurements, and if it were my intention to go on talking for the next few months, we might set out on a serious examination of that which is such a central idea in this Bill, namely, that we know what productivity means. We might start to examine different examples of different people's ideas of different definitions of different methods of measuring because, in fact, simplistic definitions of productivity break down almost as soon as they are examined at all.

Serious experts at different times for the same economy give differences of productivity growth for the same country over the same time spread of as much as 1 per cent. Anyone who peruses the literature of productivity will find this. You may ask: "What is 1 per cent?" but, if one expert says productivity is growing by 2½ per cent, and the other says it is growing by 3½ per cent, percentage-wise there is a vast difference between the rate of growth. It is not a difference of 1 per cent; it is a difference of 1 and 2½ between the two estimates. To put it another way, the higher estimate is two-fifths higher than the lower one.

Forty per cent.

Yes, 40 per cent difference as between two experts on the same subject. We are not talking about wage increases of 40 per cent but experts for the same economy at the same time, working from the same set of basic assumptions and from the same premises, can differ by 40 or 50 per cent in their estimates of how fast productivity is increasing. These are not the sort of phoney 50 per cent increases that were drummed up in an effort to terrorise the public about the unreasonableness of wage demands. I will come back to this later; it was a most disgraceful distortion of the truth about wage claims in an effort to show how unreasonable workers were. Perhaps the Minister, repeatedly challenged from these benches on this issue in this debate, will be able to produce some facts when he replies. Perhaps he will.

These are the differences in the estimates of experts of the rate of growth of productivity. They could differ by as much as 50 per cent in their estimates. We would be in a totally different category if we were to talk about differences of 50 per cent in the rate of growth of wages. Nothing so unreasonable as that would be permitted in a capitalistic economy but, of course, rates of growth of profit of the order of 50 per cent, 100 per cent, 200 per cent or 1,000 per cent are perfectly acceptable inside the Irish economy at a time when workers are told they must not even have increases in wages which will compensate for the inflation that is publicly admitted.

This is the reality of this sort of ridiculous juggling with figures and efforts to tie people to rates of increase in productivity. You end with the pompous and vacuous phrases like those which appear in the Long Title of the Bill which says: "An Act... for the purpose of safeguarding the economy, in the national interest, from the present serious dangers threatening it...." That is great stuff. All one needs is a clean sheet of paper, a pen and some ink and one can write anything. No action that anybody has taken in any public way, in this or any other country, at this or any other time, would go outside that definition. Everything that governments do is for the purpose of "safeguarding the economy in the national interest in the present serious dangers that threaten it". This is trivial, baby jargon. It sickens everyone who looks seriously for a government of action. The trouble is that when one gets into idle rodomontade like that, one does not just discuss the Bill with the Minister producing it. One discusses it with the institutions at large. You do not just discuss it with a particular set of politicians; you discuss it with politicians at large. You do not just discuss it with one particular section of a parliament; you discuss it with parliament at large. This crisis is much too serious for this sort of trivia.

The Minister said in his opening speech that he would like to answer the argument that the Government could have avoided the necessity for these steps and he asks: "Could they have done otherwise?" We will come to that at some length when I discuss the alternatives and the constructive suggestions we have to make. Could they have done otherwise?

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

I was considering the statement of the Minister that the Government could have avoided the necessity of taking the steps they are now taking. In fact, a very wide spectrum of economic opinion, some of it totally without any political overtones, has been advising for a period of years that we were in a dangerous situation from the point of view of inflation. I have already referred to what one might call the psychological component in an inflationary atmosphere where people lose their confidence in the future steadiness of prices. They are thereby urged either to make purchases or investments as quickly as possible before prices increase.

We had the on-again, off-again antics early in 1969. The great performance given by the then Minister for Finance told everybody of the serious situation that existed and then it was spirited away for political reasons on which we need not dwell. This lighthearted on-again, off-again attitude to a crisis actually engenders a psychological atmosphere conducive to inflation. In itself, that action was a contribution to inflation, although a minor one. I have already indicated that the real sources are not inside the Irish economy.

In April this year we were presented with a Budget which we subsequently debated. All of the factors that had been obvious for a year were revealed to the Government, although we had then a different Minister for Finance. We repeated the warnings about inflation and in the Labour Party we took up a political position that was not our traditional one and which involved political risks. We said at that time that the economy was over-heated and that the inflationary danger was real.

If I may quote myself on this issue, at column 217, volume 246, of the Official Report I said:

I see danger signals in the American economy, just as I see them in the British economy. All of the people to whom I, as a responsible public representative, have to listen also see danger signals in the Irish economy. Yet, if this Budget is to work out, there are two assumptions that are questionable. It seems to me that not alone is continuing inflation accepted in the Budget but it gives the Government a vested interest in seeing that that inflation continues.

It was not a Budget that merely accepted inflation; by virtue of the increase in turnover tax it automatically increased prices and infuriated wage-earners.

Although the Budget contained provisions of which we approved we voted against it for the main reason that instead of controlling inflation it increased it. It was a Budget with a vested interest in inflation; it required, demanded and increased inflation. Six months later the Minister said: "I would like to answer the argument that the Government could have avoided the necessity of taking these steps." There is no answer the Government can give because these measures would not be necessary if action had been taken even six months ago. Such action was urged by everyone including Fianna Fáil economists but there was the dreadful governmental irresponsibility in introducing a Budget that did not check but encouraged inflation.

At column 219, volume 246, I said:

I believe that there will be a very severe political battle to be waged during the next year on the basis of the correctness or otherwise of the measures inherent in the Budget. Either the Parliamentary Secretary's analyses are correct, either the analyses of the Minister for Finance are correct, that the inflation plus the economic growth can be contained and that, therefore, no savage cooling of the economy becomes necessary within the 12 months, or they are both wrong.

That was half a year ago. It was quite clear that they were both wrong. It was clear to everybody except to those people themselves. We might recall the extraordinary circumstances of that Budget which was prepared by Deputy Haughey whose Budget Statement was read to the House by the Taoiseach. The debate on that Budget was replied to by the present Minister, Deputy Colley. Deputy Colley inherited it halfway through. I remember thinking at the time what an extraordinary summing-up speech the Minister, Deputy Colley, made in the light of Government responsibility in regard to inflation. He might have said that it was a poor Budget, but not his own. Deputy Colley might not have said that crudely, but he could have said that he inherited it but did not think much of it. Effectively he could have said that, but instead he endorsed it in very definite terms. He hooked himself completely. It was ridiculous, irrelevant and preposterous as a Budget which made worse the acute problem about which everyone warned and which has now engendered these repressive, panic, ineffectual measures. The most serious thing, possibly, is the ineffectual side of these measures.

I said, when speaking on the Budget in April;

While it has exceedingly short-term attractions, it presents us with the most profound dangers in regard to stability and economic growth and development over the next 12 months.

This was not evident to the Minister with his advisers and experts who, according to the Taoiseach, are necessary if one is to have any economic influence, but it was very evident to the Opposition. I said:

Therefore, it seems to me an irresponsible Budget at a time when a much more responsible Budget could have been introduced. I am to some extent mystified by the political motivation behind it because I believe that, at bottom, it is a political Budget.

I went on to talk about what the political requirements were. I said:

We can only speculate on what they may be.

This was on 29th April. I also said:

There is obviously some reason for producing a Budget which so signally failed to guarantee the two great requirements of a Budget; to ensure the continuance of economic growth and to ensure economic stability.

This speech was no different from those which came from the Labour Party benches and from the benches of the Fine Gael Party. The inadequacies were perfectly plain to everybody.

What could the Government have done to avoid the necessity for these steps which the Minister now expects us to believe were unavoidable? They could have behaved responsibly six, 12 or 18 months ago when all the danger signals were perfectly plain to see. They made it vastly worse than it need have been by actions so stupid that it is hard to conceive that they came from persons who are not totally preoccupied elsewhere. I was told during my political life, and before, that while it was not required of one to admire Deputy Haughey one had to respect his intelligence. Budgets are not drawn up overnight. They are the result of lengthy periods of gestation. This was Deputy Haughey's Budget although he did not read the Budget Statement to this House. It was extraordinarily foolish and irrelevant and made the problems vastly worse than they were.

No amount of shuffling of Ministers on the Fianna Fáil benches will relieve the Government of responsibility for refusing to take steps against inflation when they were called for from the political left of the spectrum and when we took the risk, as the socialist party, of saying "Cool the economy". This, for people who base their support on the working classes and on the trade union movement, was a political risk. It was correct and it was courageous. Our judgment was correct, but not a continuation of what we traditionally do. It was a recognition of a new situation. The Minister is profoundly at fault and the trouble is that the matter of timing is crucial in the management of the economy. Since the timing was so bad the trouble is that the damage done by this unforgivable year of delay and procrastination may go on echoing down the economy for a decade. It is not just a mistake or a piece of irresponsibility. It is not just a piece of stupidity. It is a very serious situation. If there is any truth in what I said at the outset about the oncoming economic situation, then a major blunder instead of serious defensive action at the beginning of a crisis period could be very serious indeed.

I want to refer, as others have done, to the employer-labour conference and to the matter of its termination. Though it would be convenient to cast the labour movement in the role of irresponsible villains, any examination of the facts would indicate that this was not the case. There was a sharp and dramatic, and by some of the participants, completely unexpected termination of that conference at a time when very fruitful discussions had taken place and when further fruitful discussions were reasonably anticipated. That conference was "switched off" quite dramatically in a manner which gave rise to the suspicion of collusion in the minds of some of the participants. I have said deliberately the "suspicion of collusion" because I am not in a position to indicate that collusion took place but serious, responsible people believed that it had taken place. It seems to me we have a great responsibility over the coming months and years to build mechanisms for discussion and to build mechanisms by which the conflicting forces in society can be minimised and whereby conflicts can be brought to a rational, humane and mutually advantageous conclusion. Actions which disrupted the building of mutual confidence across a negotiating table are dangerous and irresponsible at a time like this. I do not wish to say more than this. Were I to spell out the details of actions which led one to suspect collusion I might make a delicate situation worse. I am glad the discussions have been resumed and I hope they will continue to a fruitful conclusion. I believe that rational discussion among people who respect one another is the way to solutions in a country like ours. I deplore anything which disrupts the possibility of such rational discussion.

While on the subject of rational discussion, may I say that there is an extraordinary piece of politicking by the Minister in his speech where he told us about substantial wage claims by certain unions. The Minister well understands what a wage claim is. The Minister is well able to distinguish between a wage claim and what some inflated individual with no responsibility to anyone may say. The Minister understands that distinction perfectly. He talks about substantial wage claims by certain unions; some claims were for an increase in the region of 50 per cent.

At a time of national difficulty, this is an effort to portray the trade union movement as grossly irresponsible and to make it the scapegoat for the mess that has not been created but that has been made worse by an incompetent Government. That sort of stunt damages very much the possibility of reaching sane, rational and humane decisions on the basis of discussion because that discussion has to be based on mutual trust. If people pull stunts one's trust diminishes. The Minister has a responsibility, when replying, either to validate that or to withdraw it.

The nub is in the next sentence which states that the Government were satisfied that action had to be taken and felt the serious situation justified their taking the unprecedented step in peacetime of interfering with the normal processes of collective bargaining. At least, the expression "unprecedented step in peacetime" is an accurate description of the Government's action. It is a step which, indeed, a conservative prime minister in another country referred to, the other day, as being unacceptable in a free society— an interesting observation. I do not deny totally the possibility that it may be necessary—it is necessary, perhaps —in imaginable circumstances if a large number of other steps are being taken at the same time.

We have never said there was no crisis. We said the opposite. We said there was a crisis—at a time when the Government were pretending there was no crisis and were doing so for the most disgraceful of reasons. We have accepted that all sides must play a part in its solution. We have never denied that all sides had to play a part where they would get less than they would wish: we have never denied the need for bargaining.

The only thing we have denied is that problems such as this can be solved at the expense of that section of the community which is already the poorest and the most exploited. That we will not have. That is the essence of one of the criticisms of this step. Interference with the normal process of collective bargaining is a step that is not, at this time, contemplated in Britain or in any of the Scandinavian countries. We shall examine, in a few moments, the table in regard to inflation in the various countries of the world. However, whether it be the socialist Government in Sweden or the conservative coalition Government in Norway, they have set about remedying their inflation problem by doing everything else they can think of except interfering with the normal process of collective bargaining. The Tánaiste, Deputy Childers, cited Sweden as an example the other day. He might concern himself with this decision by a sophisticated, successful Swedish Government that you do everything else you can think of by means of taxation, money control, price control —genuine price control not window-dressing—and, if necessary, import regulations but not by statutory interference with wages and salaries. There are practical reasons why you do not do this.

As a matter of principle, I have objections to any interference with free collective bargaining. However, I would not urge my objections of principle on the Government. I would say the argument for the Government's not doing it at this time is that it is counter-productive. Essentially, this is a law for the freezing of wages. What are our objections? We would not know so much about these objections if there were not so much experience in developed economies of efforts at this sort of thing. Our geniuses are just discovering a weapon when it has been discarded by others. The Dutch started trying to do this in the late fifties—a dozen years ago. They had a varying experience of it and then they discarded it.

Since the rate of profit in different companies is different, the rate of payment for skilled work in different companies is different. The ability of different companies to pay a bit over the odds is different. You get a mechanism of wage creep that nobody has found a way of stamping out but that wage creep increases the differences of income of working people. It increases inequalities. It increases stresses within the trade union movement. It has the result, inevitably, of a freeze like this. This is one of the great practical criticisms as distinct from the fundamental ones which I would have. It breaks up relationships within the trade union movement. It diminishes the influence and the authority of trade union leadership. Tiny sections of the working class in very special situations can take actions not in the interests of the working class as a whole which make the position of the unorganised —the old age pensioners, the poorest sections—even worse. You disrupt a very carefully-evolved and delicately-balanced structure of trade union organisation whereby it is possible to correlate and to organise constructively the separate drives of separate sections. The sense of disgust, outrage, fury, of one particular section of workers is almost always understandable but the actions they take are not always totally defensible. Of course, one admits the possibility of unreasonable actions by certain persons, but is it not obvious that anything that disrupts the formal links of democracy is harmful and likely to generate a situation of disturbance and anarchy? Is this, perhaps, what the Minister wants? Is he hell-bent on a course of disruption so that the activities of a tiny section of working class people may be used to damage the interests of the whole working class and of the trade union movement in general?

Perhaps that is not what he wants, but it has been the experience in many countries all over the world where statutory wage freezes of this kind have been tried that this was the outcome. Whatever was the intention of the people who propounded such legislation, that is what happened there, and that is what will happen here. If we accept that this is a time of crisis and that concessions are required from all sides, surely we need to guard the situation through which opinions are exchanged and surely we need to guard the structure involved in the trade union movement? Surely we need to strengthen the trusts that exist between membership and leadership? It is extraordinarily irresponsible to contribute to the fragmentation of an organisation that has been built with great love and care during a long period and in which unity is such an important ingredient. That is irresponsible at any time, but it is particularly so at a time like this.

I should like to turn to another section of the Minister's speech. Perhaps we could argue that this was necessary if it had not been dressed up with the terrible hypocritical verbiage in which it has appeared. We might have thought it necessary if serious arguments had been produced; but what is so depressing, disgusting and trivial is the part of his speech in which the Minister sets out to say that this freeze applies to everybody. Apparently we are taken to be so stupid here that such triviality and shallow argument is sufficient for us. The Minister said:

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 fairplay, even more undesirable.

Let us tease that one out a little as a piece of serious debate on a serious subject in a national crisis. The Minister referred to other incomes which are not wages and salaries. We take it that the Minister was not talking about pensions and social security payments, which are under Government control anyway. He was speaking about profits, but profits generally accrue to people who are able to work: they are in addition to wages and salaries. People who earn profits from shares or ownership of property have the profits as surplus above the income they get from wages like the ordinary citizen.

The Minister might argue: "The poor things, the only income they have is their profits and if we do anything to the level of their profits they may have to work". Perhaps he was defending the rights of profit-earning people not to work, but let us assume that he was talking about people who work and who earn salaries or wages and earn profits also. Such people are already rich by the standards of this country. They are already earning something over and above wages and salaries.

The Minister said we must not have inflationary increases in those things which are above wages, et cetera. He did not say such things should be reduced. He did not say they should be frozen. He said we should not have inflationary increases. If we are to be serious at all let us make a comparison here, although I am not sure that the nonsense spoken by the Minister deserves such serious consideration. However, let us pay it the compliment of analysing it briefly. If a man has a wage or a salary which just about meets his outgoings, he has no accumulation, no surplus: he spends what he makes, and a small change up or down will make an enormous difference in the way he can dress and feed his children. This is axiomatic. In such a case, 10 per cent more or less will make a significant difference to a person who is not saving a lot. How ridiculous, therefore, is the comparison between such an income and that of a person who earns profits. In the case of a person who earns £20,000 a year in profits, does it matter whether such a person gets £18,000 or £22,000? How dare we, at a time of serious national crisis, give thought to the protection of such a gentleman as if it were parallel to the case of a worker who earns £20 a week and who is asked to accept £18 a week? The whole intent of this section of the Minister's speech is ridiculous even if it were workable, and it is not workable.

Reference was made to directors' fees, dividends, rents, fees for professional services. The Government measures in this Bill will apply equally to all forms of remuneration as well as to directors' fees, et cetera. What a ridiculous and offensive utterance that is. It is the sort of stuff which might be expected to be produced by propagandists, unsophisticated people without education, but to present it as serious argument to a serious Parliament is ridiculous and offensive.

By profession I am a veterinary surgeon. The arrangements the Minister proposes we should enact in this House come to an end at the end of December, 1971. I know the way professional people collect their bills. First, there is no way on earth that a valid comparison can be made between one year and another because the tasks they do are not comparable. The tasks they do from one year to another are not identical. There are no two identical pieces of legal work. There are no two identical medical cases. There are no two identical veterinary cases, et cetera, through all the professions.

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

I think it should be put on record that when the House was called for there was one Member on the Fine Gael benches and there were two on the Labour benches.

It is up to the Government to keep a House. That is what they are paid for.


Deputy Keating is just quoting what he said here six months ago. He should give us the reference next time.

There are two now in the Fine Gael benches and two in the Labour benches.

(Cavan): The Parliamentary Secretary can count.

I was talking about the matter of the statutory regulation of fees for professional services and I was pointing out that there is no satisfactory way to do this because on no two occasions are professional services offered identical and, therefore, there is no possible mechanism which one could think of which would determine whether, in fact, a professional person had done more work and was therefore entitled to more money at the same rate for the job, or had done the same amount of work and was increasing the rate for the job.

To say that you can freeze professional fees in this way is, of course, simply to mislead the people. It is a ridiculous suggestion. To say that you can do it for a period of 13 months when, in fact, many professional persons are paid that much or more in arrears is also ridiculous and offensive. This equating of a weekly pay packet or a monthly salary with the fees of professional people in this context is simply designed to deceive. If there were any suggestion of the building up of a mechanism by which standard rates would be enforceable, standard rates would even be assessed, with knowledge by the public of what the standard rates were, a mechanism for seeing that these things were observed or anything like that, we might say: "Yes, maybe it is very difficult but it is not impossible." But when it is thrown out in this casual way for something that is purporting to end in 13 months, in the light of what everyone knows about professional fees it is just a bit of hypocrisy; it is just degrading Parliament; it is just mocking Deputies. The intention is simply to have little phrases that propagandist hacks can trot out, to be saying something. It has no serious relevance at all to the problem in hand.

On the question of dividends, again we are expected to take this one seriously but, on the matter of dividends, money not paid out is retained in a firm. For money retained the assets of the firm increase. Although there are, of course, generalised movements of the stock market from time to time which apply to all shares, by and large share prices taken statistically over a reasonable period in the stock market reflect the size of the assets as well as other things and are influenced by the size of the assets.

I am saying obvious things that everybody knows. Therefore, the suggestion that somehow you can balance a pay freeze with a dividend freeze is the same sort of trivial and offensive exercise as the bit about the professional fees. People who own shares have the value of what they own increased when the dividend is not distributed. If the Minister were to be serious on this I think socialists would not object if he were to take power to fix the level of profits, which is a totalally different thing, and tax profits and reduce profits in fact as a method of curbing an inflationary situation. That is something to which socialists would not object a bit. We would advocate it. If the Minister is casting around for ways in which he might combat inflation that is one of them, widely known and widely used but, of course, he does not propose to do this. He has this ridiculous trivial window-dressing of saying: "No, we will curb dividends." That is irrelevant to what we are discussing. It is not intended as a serious contribution to the regulation of an inflationary situation. It is a bit of window-dressing. They can say to workers: "You have a frozen pay packet and think of the poor owners of shares who will not get any more dividends." Of course these are Irish shares.

This is not serious. Nobody takes this seriously. Nobody believes it. It just degrades the level of public life and public debate. We could go on to the matter of directors' fees and the matter of rents because anybody with any understanding of how companies work—and we must assume that there is some such understanding in the ranks of the Fianna Fáil Party— knows that very, very many methods are available to directors of circumventing the intention of this legislation which are not available to workers.

If the Minister really intended to control profits as distinct from dividends there are steps that could be taken. Then he would be taking on powers in regard to the organisation and structure of industry which we would wish him to take on. We would, as socialists, applaud this interference with the sacred right of property to earn the highest possible interest. If the Minister wanted it tit-for-tat, if he wanted a swop whereby workers would agree not to have any more of the essentials on condition that owners of shares would agree not to have any more luxuries, even that serious, though slightly ridiculous, deal might be discussed. However, this is not an attempt to do it. This is simply wasting people's time in an attempt to mislead and therefore ultimately an attempt to degrade.

The Minister talks about ensuring that moderation will apply equally to aggregate profits before distribution. "Moderation" is a nice word in regard to aggregate profits when one proposes to freeze wages. Would the Minister like another sort of swop? Would he like to say "You have moderation in your aggregate profit increase and we will have moderation in wage increases"? Let us both have moderation if it is moderation he is concerned with. That again might be envisaged. That, of course, is not what is being proposed.

In this thing that passes for a speech the magnificent sentence occurs:

The objective is to mobilise the intelligence and commonsense of our people in a successful fight against inflation.

—the intelligence and commonsense of our people having been mobilised in the previous paragraph by the sort of nonsense on which I have been spending time.

Having made it clear that aggregate profits are free to rise, as are professional fees, while wages are not so free, we then get another magnificent piece of logic of the sort of empty rhetoric about which paper is unable to protest when it is written on it. The Minister says:

We will not allow sectional interests to cudgel or cajole their way to selfish gains at the expense of the community.

For "sectional interests" read "workers' interests". We will allow professional fees, we will allow profits, we will allow rents to rise, but not wages. It is a nice reversal of the meaning of language. When he says: "We will not allow sectional interests to cudgel or cajole their way to selfish gains" he means, in fact, the exact opposite. He means, from the text of this Bill, "We will allow, we are allowing sectional interests to cajole their way to gains at the expense of the community". What sectional interests? The sectional interests the Fianna Fáil Party represent, the sectional interests of property, of private capital, of profit-producing wealth. They are the sectional interests that will be allowed to cudgel and cajole their way to selfish gains at the expense of the community. For "community" read "the working people" who produce the wealth. This is a simple piece of class legislation aimed at freezing the incomes of workers while doing nothing about profits. It is, therefore, an effort to solve a crisis not produced but exacerbated by an incompetent Government at the expense of the working class alone. When we indicate a willingness to fight these measures what we are fighting is the lopsided solving of the problem. We will not have it solved at the expense of the weakest people.

The Minister talked about some of the difficulties of implementation. He said:

This means that improvements in such things as hours of work, allowances, and rates of remuneration in respect of overtime are barred by this Bill.

He went on:

I think it well to emphasise this since some comments on the legislation have suggested that a wide loop hole exists here. The opposite is the case; the control proposed here is rigid.

We have experience of efforts of this sort in other countries. All that experience indicates that at present no mechanisms exist by which rigid control can be exerted. No mechanisms have been invented or evolved. All the experience from other countries is the opposite so for the Minister gaily to say that the control proposed here is rigid, without spelling out what that control is, is to be irresponsible, I suggest, in a very difficult situation.

I should like to quote from a recent Pelican book called Western Capitalism since the War by Michael Kildron about the experience of Holland because anyone who studies the problem of the control of incomes and prices must familiarise himself first with the Dutch experience. Talking about a national wages policy at page 86 of that book the author says:

Guiding principles adopted in the Summer of 1959 took into account increases in productivity attained and expected in individual firms, zoning differentials, profit-sharing arrangements, pensions and saving schemes, levels of employment in different sectors, the likely effect of wages and of prices on the general level of wage differentials between firms and sectors, the length of wage contracts, and the length of the working week.

He comments:

It was you might say complex.

It is, indeed, complex. The Dutch made a serious shot at it and not by rushed legislation in a crisis. Eleven years ago they set about trying to implement either a freeze or a wages policy and found vast complexities. The same author continues:

A "clarification" was issued in October. It specified the base periods for productivity measurements, for contracts of different dates; the divergencies permitted between actual and indicated wages and their permitted time limits; the different forms of payments of increases during contracts of different duration; and the methods of calculating them. Within a year new difficulties arose as to what other criteria, such as profits or earning power, it would be desirable to take into account together with labour productivity in determining the permissible rate of wage advance in each industry. By 1962 the system had become so involved that the Government produced a new formula.

He quotes the formula with which I shall not burden the House. He goes on:

This, too, was found unworkable, ...and wages policy other than is implied in deflation was abandoned in practice well before its formal abolition in December, 1967.

I shall not quote other sources. There is a valuable ILO book of 1966 on the matter of the effectiveness of the sort of thing the Minister proposes. There is a great deal of accumulated experience all of which indicates that real, valid legislation in this area is extraordinarily difficult to operate, difficult to set up, difficult to make work and, with growing complexities as time passes, particularly difficult to make work with any degree of equitable sharing of the burden. This leads me to the heart of the critique of what the Minister is trying to do. I am not concerned for the moment about what is produced in the long term—in the long term there is produced merely the dam burst so that one is right back to the wage curb as it was before the freeze occurred—I am talking now about what happens while the freeze is still in operation. All the experience is that if there is a policy of freeze which cannot be operated totally then such policy is unenforceable and unpoliceable. You then get the circumstances of wage creep, you get the situation of a very small group strategically placed, outraged, militant, who, not-withstanding legislation, are able to win advantages for themselves. Workers and employers, when they put their heads together, are well able to think of methods by which these openings can be hidden. At least, this has been the experience of many countries for more than a decade.

Therefore, some sections do benefit during a freeze. This has a number of effects and one effect of which I talked earlier is the disruption of trade union organisation, disruption of the normal methods of negotiation, the creation of contempt for and distrust of conciliation and arbitration machinery which has been evolved carefully and advanced delicately and which, at times, plays a very valuable role. This is the result one gets from trying to enforce a mechanism that does not work, or at least for which no methods have been found for making it work, even if it were admitted in the abstract that it was desirable to find such methods. Again, all the evidence from many countries is that when the statutory period of freeze is over, the dammed-up demands are all released and it is possible to plot. This bland presentation of the Bill would seem to infer that this was something which nobody knew anything about and that it was not necessary to draw on the experience of other people or that it was necessary to set up a mechanism that would make it work. However, when the dam bursts at the end of the statutory period—13 months, or maybe less in this case, or even a few days more, depending on what humour people here are in to keep on talking —we will be right back to the curb of wage increases that would have taken place anyway. Such has been the experience of many countries for more than a decade. What is gained is a very short-term respite and not any permanent advantage. That respite is gained at the cost of creating fury and distrust within the working-class movement as well as disrupting very carefully evolved machinery.

Of course, it is a convention to criticise strikes or to blame workers for unreasonableness or intransigence. Strikes get a bad press. Then, from the other side, there is a natural tendency but a mistaken one, to justify or to seek to validate every strike action. Of course, that is not right either. We are aware that groups of workers are capable at times of behaving unreasonably and selfishly, holding other sections of the working-class movement to ransom and advancing their position to the detriment of the weaker sections. That can happen. It is undesirable and it is rare but it is not unknown.

Any serious student of the working class movement or any real friend of the trade union movement will admit this for the sake of trying to ensure that it happens as seldom as possible and for the sake of removing the circumstances in which it can happen. But our formula here in this Bill is precisely for the widespread occurrence of such actions by groups of people who say "We are all right" if they can win their particular local battle.

The reality of evolving capitalism is that different enterprises and different sections of an economy become more and more interdependent. There is no way out of that. Take a modern motor car, for instance. The components of the vehicle are fabricated in a very large number of factories but, unless all of the components of the right quality arrive at the place of assembly at the right time, it is not possible to have a car. We have all seen examples of where a handful of workers have asserted vast economic power as well as vast bargaining power in relation to their own conditions of work. This is inevitable with the development of capitalism because small numbers of highly skilled people are put into absolutely vital positions. They can cut off the flow of motor cars or they can cut off the supply of electricity. They can assert enormous economic influences. Therefore, it is obligatory on them, and it has generally been the case, to ensure that there is a parallel growth, a sense of responsibility and a sense of commitment to the community as a whole, that there is the refusal to use this special and extraordinary power in a selfish way.

Generally, that has been the result, it must be admitted, invariably, but surely it behoves us if we are trying to have wise legislation in regard to labour relations to avoid a situation where we encourage tiny numbers of workers with enormous economic power to behave irresponsibly. If they are convinced that nobody is to be trusted and if they are convinced that the world in which they live is a free-for-all, if they are convinced that matters are settled in the market place by how much one can get, as seems to be the belief of the British Tories at the moment, then what serious argument can one offer them for behaving more responsibly in the light of the interests of the weaker sections of the community? If one believes in ruthless competition and in the rule of the market place for oneself and for one's own business, then why not for them?

It does not work, of course. It is socially disruptive. It is destructive of human values, but what is said implicitly is that the right of employers to go on earning increased profits must be protected but the right of specially situated sections of the working class to use their extraordinary bargaining power, which becomes greater every year, to increase their circumstances must be forbidden by law. That is the sort of bargaining that Fintan Lalor repudiated in very graphic words a long time ago. If one wants responsibility from one side then one must have responsibility from the other side. The heart of the criticism of this Bill, when it is in operation, is that it will not work, that it cannot be made to work, that it increases injustice and social inequality, that it disrupts the working-class movement and that it disrupts, in a special way, the trade union movement. Then what happens at the next stage of the game when the statutory period is over?

(Cavan): We will have to get the Parliamentary Secretary to the Taoiseach back to do a spot of counting.

What becomes of this moment which we are now told in the Bill will be at the end of 1971?

We are back to one over there again.

We should put that on the record. There is only one Fianna Fáil Deputy there. Can we have a House again?

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

It is interesting to note that there are only three Fine Gael Members in the House.

It is your job to keep a House. There was only one Fianna Fáil Deputy, the Parliamentary Secretary to the Minister for Agriculture and Fisheries. We brought you in here to show there was only one of your Deputies there.

It is interesting to see how interested you all are in this.

It is your job to keep a House.

Deputy Keating. Could we have some order?

The young boy with the strong family dynasty does not know it is the duty of the Government to provide a House. He is chief Whip and he does not even know it.

Do not worry about my job. I know my job.

It is your job to keep a House.

There was only one Fianna Fáil Deputy present.

We will put it on the record that there are only three Fine Gael members present.

We will put it on the records of the House that there was only one Fianna Fáil Deputy present. The Parliamentary Secretary does not know his job.

I know it. There are only three Fine Gael members present.

When a House was called there was only one Fianna Fáil Deputy, a decent man, present—the Parliamentary Secretary to the Minister for Agriculture and Fisheries.

This is disgraceful.

It is your job to keep a House.

It certainly is not yours.

It is not my job. It is your job to keep a House.

Would the Deputies argue this point outside?

I want to turn aside from the real regulation of wages and the bogus regulation of profits to the equally bogus regulation of prices because, as the Minister pointed out, there are, indeed, wide powers of control over the price of most commodities and services under the Prices Acts of 1958 and 1965. Of course, in the case of the latter Act, the person who is now Minister for Finance was then Minister for Industry and Commerce and was charged by this House with responsibility under the 1965 Act. We must be struck by the fact that in the intervening five years, since that rather inadequate Prices Act of 1965 became law, how little it has been used.

We approve of a Prices Act. We approve of a much stronger Prices Act. We approve of the real regulation of prices of all sorts, which, of course, implies regulation of profits. However, we have never seen the least intention by the Government, except in regard to certain very sensitive commodities, and then as a matter of window-dressing, really to regulate prices. One, therefore, asks oneself to what extent in an open economy is this possible at all.

I do not propose now to go into any lengthy analysis as to what proportion of different sectors of consumption goods is imported because it varies from sector to sector. However, very significant proportions in every sector are imported goods and goods in an economy like ours which are not readily replaceable. The complete absence of such goods would cause great economic disruption and unemployment and, indeed, a breakdown in the function of the whole economy. The supposition here is that we will be able to reach out, assuming, of course, that this section is to be taken seriously—I suggest it is not, that it is only window-dressing—and control the price of essential imports or else do without them, in which case, of course, they would not be essential.

There is no mechanism by which we can do this. There is nothing we can do at all about the rate of inflation in Britain, Germany, America or Japan. Those are very serious matters. It is even more serious that all of those countries are now inflating at roughly comparable rates and there are no islands of price stability left in the capitalist world. How can we possibly prevent the manufacturers of those countries from passing on increased changes and increased costs to higher prices, assuming the market will stand it? We are not so significant that the loss or gain of our custom is of very much importance either way. How then can we control the price of imports? We cannot do it anyway but yet with an open economy, which is so essential to the whole economic thinking of Fianna Fáil, we are profoundly dependent on imports. We have to have the products to continue producing and exporting.

We cannot switch off our sources of supply from primary producers. We can hope that we can pass on those higher costs in our exports but we cannot pass them on in prices at home if we have a price freeze. If, on the other hand, we have a differential price freeze we say: "If your product is for export and the export market will stand it you may raise the price but you may not raise the price for domestic consumption." You then start differentiating against people supplying the home market. You say all sorts of reasonable, plausible arrangements can be introduced but, of course, you will cost all of the inputs for all factories and you will have a careful look at the balance sheets of all the companies, and you will indicate how much of the increases in import prices should be passed on and to whom, and will employ people to do this for every centre of manufacture in the country. It is cloud cuckoo land. There is no way in which this can be done but what can be done is a rather similar sort of arrangement which will not bear equitably on all sections of producers. You can easily do it and dress it up to put the boot into some section of the industrial community that you do not particularly like at the time while allowing others to gain increased rates of profit.

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

Deputy Keating.


Would Deputies allow Deputy Keating to make his speech?


Would Deputies please cease interrupting? If these interruptions continue I shall adjourn the House. This is a waste of parliamentary time.

I was referring to the differences in the seriousness of the efforts to control prices, on the one hand, and the efforts to control wages, on the other hand. There is a lovely piece of understatement from the Minister when he says:

There will undoubtedly be many practical problems of implementation involved.

I suggest that without a vastly greater mechanism than currently exists, without vastly greater experience than currently exists, there is no way in which very significant and serious price rises can be prevented. If we are to take the Minister's intention seriously, there will need to be a vast number of persons scrutinising and supervising a vast number of firms extremely closely. Again, the Minister says in relation to changes in the Price Acts:

These will give power to investigate and fix the margins of profit of importers, manufacturers, distributors, wholesalers and retailers...

Almost all the productive industry in the country would come within that net. However, we are not asked to believe that this is a profit-fixing mechanism and we come to the conclusion that, again by a fairly well-known set of devices which have been evolved in many countries over a long period when efforts of this sort were made, it is easy to circumvent these mechanisms.

We hear that the Minister for Local Government will be responsible for controlling the prices of new houses. We welcome this. It is something we have been urging for a very long time, and in the past we have been assured that the power to do so would mean such an enormous invasion of the rights of certain individuals that it was impossible to do so. Unless we hear of serious efforts being made to control the price of land we must doubt any powers of Local Government to control the price of new houses. It is a perfectly simple argument. If the price of land rises the cost per site to the developer rises. If the price of the finished house is fixed, the profit per house diminishes, and to the extent that you rely on private builders earning a profit, the production of houses, therefore, diminishes. Therefore, you do get price-fixing in regard to houses at the cost of the supply of houses in circumstances where a housing crisis already exists and at a cost of employment in the building industry. Without more evidence of serious thought and without evidence of powers in other areas this is the inevitable sequel to what the Minister proposes to do.

The Minister later on in his speech refers to ordinary dividends. I have already dealt with this and I think it is too ridiculous to merit any further treatment. What this all boils down to is that one part of this Bill is serious, effective and semi-enforceable, though unjust—this is the freeze on wages. The freeze on profits is unenforceable and is window dressing. The freeze on prices is semi-enforceable, is window dressing and will operate in an unjust and differential way.

This is an effort by the Government to solve a problem, which they have contributed to and made worse at the expense of a particular section of the community, in a disruptive way and in a way that has been found to be very unsatisfactory in other parts of the world or to be a total failure, in a way which makes the problem worse and in a way which, in any case, comes to an end after a period of 13 months when all the indicators are that the crisis will still be very grave. All the experience from other countries indicates that we will get the bursting of the dam and the passing through of a whole series of wage claims which had been saved up.

There is, of course, another alternative which it is well to refer to because it is very serious. The alternative is that the Government do not in fact propose that this wage freeze should end at the end of 1971. They consider it politics at this time to pretend that it will only last for this period because a more prolonged or open-ended wage freeze would produce even greater fury than this one is producing.

We have to look seriously at the possibility that this may be the Government's concealed intention because it is hard to conceive, semi-enforceable, unjust and differential as it is, that there would be any significant benefit except of an exceedingly short-term nature were it only to be operated for 13 months. It seems odd we could conceive that a Government would sow such disruption and incur such enmity for the sake of a gain which was so very trivial. It is, therefore, a serious possibility that this is the thin end of the wedge and that a wage freeze will continue for a considerably longer period. It is an occasion to warm all wage earners of the danger that this is the Government's intention. It is an occasion also to warn the Government that their chances of persuading wage earners to accept this totally lop-sided solution to the problem is very slight indeed.

What is depressing about the whole thing is, not just the inadequacies of the Bill itself which are obvious and have been dealt with at length, but that such a ridiculous piece of legislation should be seriously offered at a dangerous time. What is serious is the extraordinary paucity of any economic insight or economic thought from the Government benches. I have a favourite quotation about this which I cannot resist giving the House. It is from a Minister—and I find the calibre of the present Ministers dauntingly low— and it is a quotation from the Minister for Justice, Deputy O'Malley, who, on 29th April, said:

Neither the Opposition nor anybody else in the country can justifiably criticise this Budget. It is one of the finest pieces of thinking financial legislation that has ever been introduced. The Opposition were flabbergasted that, with all their moaning and groaning, the Minister for Finance was able to balance his books and introduce a Budget such as this.

We were indeed flabbergasted, but that was six months ago. The terrifying thing about the statement is that the Minister for Justice, Deputy O'Malley, did not have to say it. Nobody made him and he thought it was a valid, useful and sensible thing to say at that time when it was so patently ridiculous. It is very worrying at a time of a serious economic crisis to have the running of governmental affairs in the hands of such extraordinary people. It is, in fact, a contribution to inflation. A reasonable public will say: "O.K., with their tame voting machine they are determined to hang on to power. God knows what will happen. We might as well spend our money now." The instability engendered by this sordid clinging to office is itself inflationary.

I shall leave my analysis of this Bill and go on now to try to tell the Government what ought to be done in what is generally accepted to be a very serious situation. We are in the situation where the rules by which the game of managing economics was played until recently seem to have broken down. There was a fairly well understood relationship between prices, unemployment, the percentage utilisation of capacity, increases in wage rates and things like that, but now we have this new situation where an under-utilisation of capacity may be inflationary. The argument is that where there is an under-utilisation of capacity in a particular context the cost per unit product rises and it is possible to pass on this increased unit cost to a consumer who will accept a price increase. Under-utilisation can be inflationary and the deflationary checks which in the past have worked in a semi-automatic way to control inflationary situations do not seem in the altered circumstances of industry to be effective any more.

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

Mr. J. Lenehan

You are a Labour man. What did you get for your farm? Would you answer that question? You will not, of course.

Interruptions must cease. Deputy Keating.

Mr. J. Lenehan

Labour my bottom —there is nobody in Labour over there. He blamed Charlie Haughey for selling another farm.

Interruptions must cease.

Mr. J. Lenehan

Let him tell me what he got for his farm. He has the signs of labour on him.

Will the Deputy cease interrupting?

Mr. J. Lenehan

I wonder if his wife would ever be in labour, not to mind himself.

I would personally wish that Deputy Lenehan's last observation might be recorded in the proceedings of the House——

Mr. J. Lenehan

I hope it is.

We have a sort of shameful tradition here that the more egregious and offensive things that he says are traditionally omitted from the record. Perhaps this is good for the image of the Dáil nationally. In fact, I am sure it is. It would be very depressing if the public at large were to know of the extraordinary, infantile and offensive things that emanate from him but I think at a certain point it may have a——

On a point of order, for the dignity of the House and the future of Parliament in this country I think that the proper thing would be for Deputy Lenehan to withdraw his last few remarks.

Mr. J. Lenehan

If I made the last few remarks I withdraw.

I fear that Deputy Lenehan was out of order in his last two remarks.

The Deputy has expressed his regret for these remarks if they caused offence. The Deputy said that if he had said anything that was offensive he regretted it. I take it the House is satisfied with that.

Mr. J. Lenehan

If it prevents him sleeping with his wife, I withdraw it.


If further offensive remarks are to follow a withdrawal by a Deputy those remarks should also be withdrawn.

The Chair will have to judge the appropriateness of remarks.

I would ask, with respect, if the Chair does judge that the last remark of Deputy Lenehan, after the remarks he withdrew, is in fact, unparliamentary and improper?

The Deputy should not be too unctuous. We get a fair share of unparliamentary remarks passed on that side of the House.

Fewer, I would say, on average, than from Fianna Fáil. I think the Minister who sat across from me for many years knows that to be true. Would he agree?

I would not.

Then the Minister has joined his fellow. Birds of a feather flock together.

(Cavan): The Minister must stand over every one of the votes of his party.

Including Deputy J. Lenehan.

Would the Deputy in possession be allowed to proceed? Deputy Keating.

I was referring to some of the features of the inflationary crisis which now engulfs a large part of the western world and, as I said at the outset it is not of Fianna Fáil's making and is much bigger, as the saying goes, than either of us. It is practically a worldwide phenomenon and a very dangerous one, but we are in the special circumstances of a small economy which is also a very open one. It has been deliberately made so as a matter of policy and it will be for events and history to judge whether this was the correct thing to do or not. I have given my opinion on it elsewhere and I shall refer to it again but the point we must accept is that extraordinary circumstances are arising in the world and whether it be OECD currently reprimanding the British on their situation and demanding deflation there or whether it be the spokesmen of any of the major international agencies or the leading economists, there is general agreement that in regard to Britain they may have to deflate in quite a savage way or may have to devalue or may have to do both. These two prospects in a nation with which we do two-thirds of our trade, with which we have a free trade agreement are extraordinarily serious for us and, therefore, any initiative from the Government in regard to protecting our economy against inflation and other perils must be taken in the light of suppositions about what may happen in Britain because if either or both of these twin perils in Britain, deflation or devaluation, come to pass the repercussions on us will be very serious and profound.

Therefore, we must look to a series of measures which I now want to consider to protect us as far as possible from the effects of an international recession as a result of an international inflationary crisis. It has been repeatedly said across the floor from the Fianna Fáil benches: "Say what you would do". That is what I propose to do in the remainder of my speech. By way of preface, I say that this to a limited extent is our duty and responsibility as an Opposition. It is our duty and responsibility as citizens, if we have anything to contribute to the debate to do so whether we are in Opposition or not but it is only our duty and responsibility to a certain extent because we may diagnose obvious ills before the Government does—that being the case this year and last year— but our taxes, as well as the taxes of the minority of the Irish people who vote for Fianna Fáil as well as the taxes of the majority of the Irish people who vote for the two parties in Opposition, support civil servants, some of them of a very high degree of expertise and almost all of them of a very high degree of dedication, honour and commitment to the weal of this country.

I want to repeat that at any time, and particularly at a time like this, I believe it is in the national interests that vastly greater access to these people, to their economic forecasts and to the whole mechanism which they, of necessity, have had to build up in the Department of Finance and elsewhere, should be much more widely available. That is a legitimate demand and a proper demand to make in a democracy in the light of the right of the people to information and it is a particularly legitimate demand to make at this moment, first, because the information exists and, secondly, because it is gathered at everybody's expense and, thirdly, because it is misunderstood or disregarded for what seem to me to be vastly improper reasons by a Government in whose competence I have no confidence whatsoever. We need access to sources. We can still do better than the Government without any sources except those available to everyone but the circumstances are such that the Government obviously need the economic expertise that exists in other parts of this House.

Is it not a wonder that the general public do not appreciate that?

The general public do appreciate that. I want to come to the matter, which is central in this country and many other countries, of a serious policy on wages, prices, profits and incomes right across the whole spectrum and I want to spell out briefly the thoughts of the Labour Party on this subject because we recognise it is a crucial subject over the foreseeable future. Our thoughts are that we are, in fact, in a most fundamental form the people who believe in governmental decisions, in popular decisions to regulate the economy. We are the enemies of laissez faire. We are the enemies of the principle that the market place must be supreme. We are the enemies of letting, to us, ruthless processes determine all of these important things—wages, prices, incomes, et cetera.

There is no objection anywhere in socialist theory and socialist belief to the principles of such an incomes policy, none at all—rather the contrary. We approve of them and we believe in them. We believe that the wit of humane people is able better to determine how human resources and human products should be distributed for the common good than the rulers of the market place, the rulers of capitalism. Our critique of capitalism is, in fact, that in producing the economic growth, as it has undoubtedly done, it has been ruthless, cruel, inefficient. It has distributed the product of human labour very unequally and very unfairly and, in this century, in quite an unnecessary way. The humane decisions of honourable humans can do better than the market place.

First, let us make it absolutely clear that there is no objection whatsoever by socialists to the principle of regulations by and large. We admit its necessity. We admit that an economy has good times and bad times. We admit that unpleasant and unpalatable decisions have to be taken. We admit incomes cannot go on rising indefinitely out of step with production, et cetera, et cetera, et cetera. But we are convinced that a real policy, which would regulate prices and incomes in a humane and rational way, would involve a very, very, profound interference with all of the basic mechanisms of capitalism and particularly with the basic mechanism which gives victory in industrial competition to the firm that can maximise its profit. Whatever you do, essentially the victory is to the person who can earn 20 per cent on his investment over the person who can get only 10 per cent.

We have been having a series of quorum bells this evening. I cannot personally be sending signals to people on my behalf, but I have not been repetitive in what I have had to say and, though what I say may displease some people, I hope it has not been trivial. I hope it has been relevant. I have endeavoured to be serious and constructive. I am being serious and constructive now because the question of an incomes policy is absolutely crucial and the suggestion that the Labour Party or the Labour movement will set its face totally against such a policy, or disrupt it, is not in my view the truth.

The Deputy may be right but he will appreciate that his colleagues who spoke before him took a very different line. I appreciate that the Deputy is approaching the matter much more seriously but he will, I am sure, appreciate that his colleagues took a different line from the one he is taking now.

I am about to spell out now our reservations when the thing is done in this way.

I think I know what the Deputy is going to say and I appreciate his line of argument, but he is the first member of his party— I have heard or read the speeches of his colleagues—who has approached this on a serious basis and admitted that a prices and incomes policy on the lines, as he said, of restraint and so on is sometimes at least necessary and is not objectionable in principle. I am saying that in the knowledge of the reservations he is about to express.

In amplification, let me say there are members of the Labour Movement who are also members of the NIEC, people held in very high regard and affection, people whose talents are highly valued and whose standing in the Labour movement is in no way impaired, who have put their names to an NIEC document which, I am quite happy to say, contains a vast amount of serious thought and good sense and which, while not totally acceptable, is certainly a basis upon which to go on looking at the problem. Let me also make the point that it was not rejected totally, as I recall the decision of congress in the summer. It was deferred, but not rejected.

I think that is true.

I am anxious to make it clear that from our point of view we will be resolute in this matter but, I hope, simultaneously reasonable. I said at the time that, as far as I am concerned, the genesis of the problem, exacerbated as it has been by the Government and by the Fianna Fáil Party, is not due to the action of the Government.

I do not like to interrupt but I hope the Deputy, while he is spelling out the principles—I appreciate the logic of what he is doing— will appreciate that one cannot reconcile these principles with the speeches made from the Labour benches in relation to the rights of the trade unions. Surely he understands what I am talking about.

I do and I believe one can reconcile these things. In fact, I believe there is no problem whatever and, if the Minister so pleases, he has a magnificent opportunity when he closes the debate to indicate the discrepancies, the conflicts, the differences and ultimately assess the ridiculous postures adopted——

I am not saying the Deputy is adopting a ridiculous posture.

Then other people are, or I am different from them in some way. The Minister has the right of reply and if he feels I am diverging widely from my colleagues he might welcome that for reasons other than the wisdom, or otherwise, of what I am saying. However, I want to continue about the necessary conditions, having said there is no fundamental a priori objection to an across the board policy on profits and wages. It would genuinely have to be across the board. It would have to show willingness to interfere with what we consider the essential mechanisms of capitalism in regard to profits. It would have to be effective in regard to prices because there is an ascending order of difficulty in regard to regulation. It is easy to regulate the wages of certain workers. It is more difficult, but possible, to regulate the wages of other workers. It is very difficult, even impossible, to regulate professional fees. Any mechanisms by which it might be possible to regulate profits are not found in this Bill. Likewise, it is easy at the moment to regulate certain prices and totally impossible to regulate others. With our view of the mechanisms in our society and in our economic system, we would need to be convinced that this was a serious effort, not just for wages, but for profits, incomes and prices. This is essential.

Another reason I am so opposed to the present proposals is that such arrangements must of necessity be by agreement in what Mr. Heath was pleased to call "a free society". Agreements must be reached by discussion and on the basis that they are acceptable to all. It does not have to be for a 12 month period or even a 24 month period if the Minister extends the time limit. The Minister was not present earlier when I suggested that he might consider it essential to extend the period. Such agreement may not be essential for a finite period. Solutions that extend for such a period may get one out of difficulty but they do not solve the long-term dilemma. Therefore, one is left either with the principle of legislation, which may not be possible to continue indefinitely, or with a situation where there can be discussion and agreement and the recognition of the interests of all.

I have said that this Bill is extraordinarily disruptive of the trade union movement. Perhaps I may be presented by the militant left as one who is urging class collaboration, who is trying to damp down class struggle and of various crimes against the working people. That is a risk one must take. The trade union movement has evolved slowly and, while there are continuous efforts towards unification and harmony, there are also continuous tendencies towards division and disruption. A point that has emerged clearly in highly evolved societies in the recent past is the extraordinary leverage and power of a few people. There exists the great danger that if there is not a sense of justice and fair play and of trust, individual groups will say "if it is the law of the jungle or of the market place it is our duty to look after ourselves".

In that way lies extraordinary disruption and doom, from which neither the Minister's party nor my party would benefit. Others might benefit, but neither Fianna Fáil nor Labour would benefit in our political outlook or in what we seek to attain. This is why the voluntary principle is so important and anyone who has any knowledge of the trade union movement will know there is no other course.

I have tried in general terms to spell out the base lines by which one might approach the entire matter of a prices and incomes policy. The Minister may think this is in conflict with the right of free collective bargaining but I do not agree. The might of the trade union movement is such that either you have agreement by free collective bargaining in the light of the interests of the trade union movement and the nation or you do not have any agreement. What the Minister has done in freezing wages is to ensure that the possibility of a voluntary arrangement is much more remote. I do not wish to recapitulate on the original statement that there would be no negotiation and the subsequent negotiations that took place. It was an embarrassing situation for everyone and one might well surmise on the reasons. What is crucial is that it took place and, therefore, sections of the trade union movement will draw the conclusion that it is no use entering agreements, that it is merely necessary to have a go. The action undertaken by the Government is disruptive of the trust on which serious negotiations can be built.

It is for other persons in other places to approach cautiously what is a difficult and very important problem. I should like to mention some courses that could be adopted to protect us against a worldwide problem. I think there is strong evidence to assume that this Bill will be passed; the discipline of the party opposite, if nothing else, will ensure that. I am voicing objections in the hope that other days will come and other counsels may prevail.

So far as I can see from a study of the economic position in other countries in the western world, one must have a multiple approach and strategy to curb inflation. The approach of other times was that the problem could be solved by money control or by taxation. It was thought that when prices rose demand diminished and, therefore, the cycle tipped over from an inflationary to a deflationary situation. There is an in-built set of ups-and-downs with an inflationary situation succeeding a deflationary situation. The feeling is that none of these mechanisms by themselves, and left to themselves, are enough any more. Therefore, it is necessary to combine a whole series of approaches.

Since our opinions have been sought about mechanisms which might be used and since we have been accused of being negative, I propose to indicate in broad outline what our approaches would be. I referred in this speech to the effect of the US industry on the inflation all over the world through interest rates. Because US firms were suffering an effort was made by the US Government through the US banks to diminish the availability of credit and they came to Europe, and to London, to the Euro-dollar market, and to other places. With their own inflation, coupled with their relatively high levels of productivity in industry, they were able to justify borrowing at rates which less sophisticated economies could not sustain. They upped the interest rates to extraordinarily high levels. This is one aspect in the present crisis even though the interest rates are now coming down. They started a process which has taken on a momentum of its own.

We need mechanisms by which we can protect ourselves against world interest rates. That is easy to say, but I recognise that it is not easy to do. There are small, peripheral economies in Europe which have such protection. We are totally open to the flight of capital and to anyone who offers a half a point higher than we can at home taking our capital away. This is very dangerous. At the same time, for the vast majority of our industries, it is impossible to make the rate of profit on borrowed money which would warrant these high interest rates and still mean a viable investment. It is totally impossible in agriculture. One cannot get the returns which would enable one to borrow at 10 or 11 per cent and still show a worthwhile investment. High interest rates are very important for us in a damaging, negative way. The flight of capital is also important for us in a negative way. I am not advocating a total prohibition on capital export or total control but I must say that other nations have evolved mechanisms by which capital could be kept at home and by which differentials could be made between world capital prices and the price of borrowing inside their own economy. A system of differential taxation whereby interest accruing from investments outside Ireland would have more tax on it than interest accruing inside Ireland, would exert a differential effect. The sterling area had to protect itself against this type of overflow by the mechanism of the dollar premium whereby any moneys one wanted from outside the sterling area—and this was not against the dollar area but against all other currencies—had to be purchased against other purchasers and investment moneys for overseas outside the sterling area were therefore bid up to a premium which fluctuated from day to day, and got up to 48 or 50 per cent above the face value of the moneys purchased.

I am not suggesting total rigidity but a mechanism of this sort would induce lower interest rates at home and would keep capital at home. Both are vastly important on the protective side at this time. In other places I have spoken of the effects of mortgage rates on house purchases. The Minister is also aware of the capital starvation of our fishing industry. If capital were to be dammed up in Ireland it would seek investment in outlets and would be available at a lower price. Mechanisms which protect us against the exceedingly high world rates—even though they are coming down now—are desperately important and would cushion us against international shocks.

The other effect of the current openness of our economy is that a highly sophisticated company, such as a subsidiary of an international company with expert marketing and with a product which would stand a high rate of profit, can afford to borrow but the indigenous, traditional industry in which the rate of profit is lower cannot afford to borrow. By exposing us to world interest rates the differential between the less glamorous indigenous industry and the highly technical, export-orientated industry which has come in in the last 12 years is accentuated. It strengthens the sector in our economy which is not based in Ireland or orientated towards Ireland at the cost of the industry which the Fianna Fáil Party were largely instrumental in building up when they believed in a different policy.

I am well aware that economists all over the world in many peripheral under-developed economies have invented all sorts of techniques. I am not familiar with all of them. I am satisfied they exist and are workable without being unduly restrictive and without total prohibition and without the miseries and the grinding of people and their liberty. It does not have to be miserable and grinding. Reasonable allowances can be made. I can see no reason for not doing something like this in a weak, peripheral economy which is too open, except the surrender to the wishes and interests of the biggest financial institutions which are not predominantly Irish-owned, anyway, and which are very little concerned with the fate of Ireland as Ireland, as distinct from a place where they can make money.

I have talked about the dangers in the present economic position and about the Lemass industrialisation. It is very dependent on international markets holding up and on the big international companies who have come in believing that it is still profitable to remain here, and not adopting a posture where they protect their home base and let cheaply-acquired subsidiaries simply float off into bankruptcy. While the mechanism worked in a period of relative boom it leaves us exposed to the close-down of subsidiaries. At a time of contracting economy this can have a multiplier effect. If one puts a thousand people out of jobs the loss of earnings reacts on other people and the contraction begets contraction, and then one has the whole inflationary cycle.

The spokesman of the Department of Finance—the present Minister and his predecessor—indeed, in various speeches in my period in the House, have resisted suggestions from this side about mechanisms to combat inflation, for cooling the economy, certain taxation activities on the basis that they would put us into a recession. They have been acutely conscious of the dangers of recession or of an inflationary situation arising. Yet, you see, the total open economy, which depends for its growth on jobs created by foreign investments, is terribly vulnerable in these circumstances. So, Government policy created the situation where, if such developments as now appear on the economic horizon do, in fact, go ahead and become more marked, we are very defenceless. We would be in a much stronger position of defence of our jobs and, therefore, of earnings, of spending, of keeping the economic wheel turning, had we a much stronger public section in this country.

We have had what is to me a depressing retrogression in the food industry. I have always, personally, applauded, and I think the Labour Party has applauded, many of the incursions undertaken by Fianna Fáil, through the medium of semi-State companies, into areas of industrial activity where, for reasons of lack of profit, normal capitalists were not interested in going. We criticised these because they were often undemocratic and often bad employers, because often, far from being workshops or research places where worker democracy and all sorts of sophisticated modern industrial relations situations might be elaborated, they had many defects but the basic idea that one might, as a result of a Government decision, go with public money into an area of development potential, but which was neglected, is something we applaud.

We regret that the Government did not go further in the structure of these industries and their democracy, and so on, and also in the extent of it. Perhaps the fishing industry is an extreme example but the whole of the food industry is pertinent. We have had a retreat from that position rather than progress. To the extent that our food industry is dominated by foreign firms, at a time of recession ours is the peripheral company that can be let go. The unemployment will not be created in the home base metropolitan area of that company but rather in areas from which workers have always emigrated and, so, the problem will be solved. It is, therefore, essential— because the problem will be with us longer, in my opinion, than today or tomorrow—that we strengthen the public sector. We are familiar with all the criticisms of public sectors. One cannot say it must be strengthened without insisting that it be genuinely public and democratic and a place in which there is the highest development of worker-participation and advanced forms of relationship between different levels of the work force. When that is said, obviously, it is in the nation's interest, as a protection against the sort of crisis now upon us, to push much further into this area. That used to be, as I understand it, Fianna Fáil policy in the thirties. It fits in with my analysis of Fianna Fáil as having retreated from a rather radical posture to the now basic authority that expresses concern with workers and small farmers and the interests of the biggest financial groupings. It fits in with my analysis of Fianna Fáil that they should be less and less willing to be vigorous and to help innovations in the public sector in which they were pioneers in Europe. It is a regrettable retreat for which the Irish people will pay dearly.

A strong public sector is a mechanism by which one can exert all sorts of influence on prices. One can carry on a defensive structure or posture at a time of recession. One can break the rules of the ordinary economic book of laissez faire capitalism at the market place for the human good if one possesses such a mechanism.

How? By subsidies? That means further taxation. The Deputy will say, and did say, that that is, in fact, inflationary in the sense that, if you have to raise any substantial amount of taxation you will affect a number of items which will be of importance in the cost of living.

Yes, certainly, by subsidies. The exchanges between the Minister and myself in the course of this speech have been, I think, reasonable and amicable. I am amazed and appalled at this interjection, I am bound to say, for the reason that it emanates from a Minister for Finance who, by his training, experience and sources of information, should understand these matters far better than I do. Yet, the whole point in this area is that one does not treat taxation of every description as being equally inflationary.

I agree.

Some taxation is vastly more inflationary than others. The sort of taxation in the last Budget was almost the most inflationary thing that could be thought of.

I understood the Deputy was arguing for an extension of public enterprise in the context of combating inflation and, as a process in doing this, that one could break the ordinary economic laws——

——or letting large losses occur of the sort that a private company could not sustain——

——in which event, the State has to pick up the tab. If there is a big sum of money involved, and you have to raise it by taxation, you cannot avoid touching items which the Deputy would say was inflationary from the point of view of taxation. I think there is a fault in the Deputy's logic.

The better I understand the Minister, the more I am depressed. The sorts of actions I am talking about would have an inflationary aspect in certain circumstances but they would also have an aspect which was a very great defence against inflation. It is a question of making a balance sheet. In the first place, there are some forms of taxation that are hardly inflationary such as a capital gains tax. It might have the opposite effect. Therefore, to say that income tax is inflationary is already a poor beginning. It varies enormously. In the second place, one may do something— it is correct to do something—which has a strong gain and weak debit. Every action has a negative aspect. It is not a reason for not doing it. No action is unalloyed good.

To do what the Deputy suggests would, of necessity, in our circumstances, entail some taxation which the Deputy has described as inflation.

I accept what the Minister says but I do not consider it a significant point because in my view the gains would far outweigh the debits. One, therefore, might consider the entire matter of taxation policy. We have had unduly simple debates on taxation policy in both Budgets this year. Not all from the Government side, there were various suggestions about what you can and cannot do about taxation. I think one of the sources of fury for working people, which makes any sort of discipline much harder to work out with any hope of success, is our experience in regard to rising prices vis-à-vis the turnover tax. One of the forms of indirect taxation which shows a particular effect in a shopping basket may yield money easily, but in terms of generating a psychological effect and a counter-production effect, indirect taxation is of main concern because one simply concludes that others are working for themselves—for instance, shopkeepers are able to put up prices— while we are left out of this hunt and we have to protect ourselves.

The second point in this respect is that prices go up everywhere in advance of social welfare increases. We all applauded advances in social welfare benefits this year but it was done at the cost of inflation. This will always be the case unless such advances are not less than the order of 8 per cent or 10 per cent. Otherwise they are valueless. On this matter of taxation, it does not matter where you raise the money, because you must at the second level consider the psychological atmosphere you would generate. It is agreed that there is a profound psychological effect in the form of taxation we are now engaged in. Once the conviction becomes widespread that things will be dearer next year, who then wants to save? In such circumstances people come to believe that they might as well enjoy it now and generally a profound inflationary atmosphere is generated throughout the country.

Therefore, the taxation structure we have is indefensible. The initiative of a Minister for Finance in regard to company profits can be a useful one. I cannot claim special expertise in this area and I cannot suggest that solutions are likely to be reached because one form of protective taxation may impinge in another way in another form. However, I suggest that the taxation policy of the Government in regard to its imbalance between direct and indirect taxation has been an ill-judged one which has contributed to inflation. From that point of view, it is necessary to look to the raising of revenue by other methods.

At the risk of being misrepresented, a risk one has to take at times, I suggest to the Minister that it is worth considering the matter of the ownership of the banking system, of the insurance system and of the various other credit institutions in the country. I say "at the risk of misrepresentation" because I fear this will be interpreted as a suggestion towards the complete appropriation of the banks. I am not advocating that. Let me say at this point that the interference of the State in banking is of great antiquity. It exists more or less in many countries. It exists to some extent everywhere because the State being the collector of money has vast power. The State, of course, has long been operating such simple things as Post Office savings.

A system like that operated in Sweden—I am not advocating precise copying of that but I think it gives useful insights—would give the Government great power in relation to money supplied. This would be very useful. In Sweden there is a Government bank, publicly owned, competing on identical terms with others. The experience in France is that two banks have for long been State-owned but this is not known because of the way they look at the outside and compete for people's deposits. Sweden places representatives of the State on the bank boards explicitly as the people's representatives.

The other enormous area are the insurance institutions of all sorts. The experience of France, Sweden and other European countries is that without outright nationalisation, without total government control of the banks and other institutions of credit, the State may, nevertheless, move into these areas as it does, indeed, already in Post Office savings and in Britain through the Giro system to a greater extent than in Ireland at present. In this way the State, through monetary means, can influence the economy much more vigorously than by forms of taxation, et cetera. If the Government are looking for suggestions, this is an area where real progress could be made.

One can look to yet another area. Apart from having a stronger public section in our economy, we could look to a much stronger Irish sector which is not public. From his familiarity with the history of economic thinking in his party, the Minister will be aware that it is not such a long time when it was not permitted to have foreign interests as the dominant shareholders in a company here. This was very widespread. The situation where decisions can be taken a long distance away, affecting the rate of employment here by people who have no concern with our national welfare, is profoundly dangerous.

Debate adjourned.