I shall be brief in my comments because all that has to be said regarding this Bill has been stated by other speakers. They have referred to its obvious inadequacies and have made the point that the Bill does not tackle the roots of inflation. They have made the point that the spiral of rising prices followed by salary increases will continue at the end of 1971, probably in an accentuated form. It has been stated that the Bill is a panic measure, that it does not answer the needs of the economy and comes after a series of mistakes in the management of the economy.
Probably the major mistake early this year was the Budget itself. Admittedly, the present Minister for Finance did not draw up the terms of that Budget but, when he became Minister for Finance, he committed himself totally to its terms during the course of the Budget discussion. At the time I thought it was extraordinary support to give to a Budget he did not introduce. However, he gave that support totally and without qualification, as can be seen from the Official Report.
The Budget early this year did nothing to damp down the inflation that was raging throughout the country. The increase of turnover tax threw fuel on the flames and merely aggravated the problem. We pointed out that, in practical terms, the increase in turnover tax would not be confined to a 2½ per cent increase. We stated that it would lead to further calls for wage claims and add to the difficulties many working people were experiencing in attempting to cope with the increased cost of living.
The Budget was a grievous error: it was incomprehensible when it was introduced and it is even more so now. The Minister now comes to the House and seeks support for the Prices and Incomes Bill. The Minister does not inspire us with confidence in his judgment and the provisions of the Bill do not convince any of us that it will lead to an improvement in the matter of incomes.
The Minister's speeches prior to the introduction of the Bill, as well as the Bill itself, have alienated major sections of the trade union movement. The Bill was not introduced into this House without introductory speeches by the Minister. In the early stages he announced his intention of not honouring the 12th round pay agreement. Therefore, even if the Bill were the best in the world, the Minister's opening salvos in introducing the Bill were disastrous in their consequences. After the Minister's reckless intervention it can be questioned whether the employer labour conference can ever be the same again. The Minister's sally into the sphere of industrial relations this year will probably be seen in years ahead as the most disastrous intervention by any Minister in the last ten years.
The clauses of the Bill give no sign of departing from this mistaken way of dealing with the problem. The employer-labour conference structure may well be affected and the whole concept of free negotiations between employers and employees has sustained deep injury. The Minister stands convicted of contributing to this serious turn of events.
I do not know what was in the Minister's mind when he suggested at the outset that the 12th round of the agreement he had entered into would not be honoured. Some advisers may have suggested that there would be some psychological bonus to be gained from saying that he intended to stop the 12th round and to stop the gains offered in that round being given to employees. They may have suggested that there would be some psychological bonus to the employees when, in fact, the Minister changed his mind on this decision of his not to honour the 12th round agreement.
If such advice was tendered it was very mistaken and certainly misunderstood. It disimproved the whole climate of trust between employer and employee. It helped to make matters worse. Many trade unions, and those who have experience in this field, know that the whole idea of phased agreements and of employees agreeing to accept increases 12 months ahead was a hopeful sign in the arrangement of incomes in this country. If modest, it was, to some extent, a rational approach to the matter of incomes and their distribution. Where one could get employees to agree to take a percentage increase one year, and more the following year, this move contributed to an orderly assessment of how we should distribute incomes throughout the community.
It is no secret to say that the future of phased agreements looks bleak. The union leaders, at the end of 1971 or 1972, suggesting to their members that they might abide by a phased agreement, would not get an encouraging reception following the Minister's recent mishandling and intervention in this area. The Minister has contributed to growing militancy on the part of the unions as a result of his recent speeches and actions. It does not matter that he withdrew from his first ridiculous position. The damage had already been done.
I do not see how we can trust either the Minister or this Government to come to a correct assessment of what should be done. They stand convicted for adding their own quota to the inflationary processes at work. They ignored the warnings given and dismissed them as Opposition speeches. They did not consider that the warnings merited serious consideration. We have this Bill now. The speeches leading up to its publication and the psychological climate and mentality which produced it, and notably the Minister's own speeches, have worsened the situation considerably.
In fairness, I do not see how one could ask the unions and the employers to come together nationally for rational, meaningful discussions. The possibility remains that the Minister may be totally out of touch with the point the negotiations have reached in the national discussions. Some people who took part in the discussions have already mentioned that the Minister appeared to be out of touch with what was happening at the employer/labour conference. It has been said that the Minister's intervention was disastrous. The Minister's first intervention came two months before the conclusion of the conference, and it terminated any possibility of success.
We come now to the reasons one cannot support this Bill. How can one suggest that this is a sincere attempt to control the rise in prices? There have been many warnings during the past two years of the massive increases in prices. It is not an original observation to suggest that prices were rising at a phenomenal rate. I do not know of any other European country where prices have risen so fast. Prices have risen by 17½ per cent in the last two years.
If the Government had wished the trade unions to moderate their wage claims, action obviously was called for at an earlier stage in order to control prices. This was the approach adopted by other countries in a similar situation. On the other hand, we ignored those warnings. When Deputy Colley was Minister for Industry and Commerce, we on many occasions raised the problem of rising prices. The Minister told us then that he was not aware of any complaints on that score. The Minister considered that the existing price control machinery was adequate.
This Bill shows, in view of the changes inaugurated on the prices machinery front, that the previous machinery is not considered adequate. There is no guarantee that prices will stop rising in 1971. All evidence points to further increases in prices at a time when the Government are seeking to stall wage increases. If this Bill is carried, we can predict that, by the end of 1971, employees will be worse off than they are this Christmas. The trade unionists of this country will be poorer than they are now.
There is no attempt to clarify the intent of this Bill to control prices during this 12-month period. The Minister has shown sympathy towards the need for price increases: he spoke during the Budget debate of having examined applications for price increases. He told Deputies that they would sympathise with many of those applications if they were in a position to read them, as he was. I am not suggesting that certain price increases are not warranted. The Minister appeared to have more understanding of the factors leading to price increases than he has for those at the receiving end of the same price increases.
We can ask how we could support a Bill which we can foresee leaving the poor poorer and the rich richer in one year's time, if this Government are still in office to see its full passage. We could not in conscience support this Bill. It is a stopgap measure. The fundamental thinking behind it assumes that if we can halt the wage increases for a year stability will be restored to the economy. This is a fundamental misconception. It is one-sided in its effect. It will not control prices and, in fact, it will not stabilise wage increases in our economy. Rather it will have an explosive effect and we will have a real move forward for very large increases at the end of 1971. The Bill does not improve the area of industrial relations between employers and employees. Industrial relations will be worsened as a result of the provisions in this Bill.
If the Bill has damaged the overall atmosphere of trust and the whole organised structure of industrial relations, it can also be said to have dampened down any possibility of what I would refer to as creative or constructive relations between employer and employee. One of its clauses actually puts a stay on productivity agreements in the year of the Bill's duration, 1971. It states that there should be no change in such productivity agreements over this particular area and, in effect, says there must be a moratorium, a stay, on all innovation based on productivity agreements during 1971. In other words, those employers and employees who base the improvement of their relations between themselves on the rock of productivity must, during 1971, no longer constructively base their relationship on productivity. The Bill specifically forbids them so to arrange their affairs.
Whether the Bill, if enacted, will call for even sterner measures against the unions at any time in the year in question—further restriction on their scope for withdrawal of labour, and so on—the Minister has not yet said. This is not simply a fantasy of the people in Opposition. We have had previous expressions of intention to control unions in relation to their freedom to negotiate.
Nobody here would suggest that our economy is not in a bad way and that we do not face serious problems. I fear we are much closer to the type of situation Deputy Burke mentioned in relation to the middle-fifties than some Members of this House may realise. No doubt some members of the Government realise it. If we are not close to national bankruptcy we are certainly very close to increasing unemployment, emigration, and all the ugly and sad things that happen when we have an increase in unemployment.
I believe that had action been taken, in sufficient time, on the prices front there would have been trade union response to such Government action. Had the Government won moral authority in this area by demonstrating their determination to control prices I think we would have found a response from trade unions. The trade unions were left alone to cope with rising prices and, coming on to the 13th round agreement, they were putting forward large claims for increases which, in the light of experience of rising prices over the past two years, were necessary and essential.
The experience of other countries suggests that had the Government tackled prices in a determined fashion the response of trade unions would have been favourable. In the sense of the positive direction of the economy, of meeting the problem of inflation, of doing something about our adverse balance of payments situation, and of bringing about a growth in the economy, we have not had such government here since November, 1968. Since the PR campaign, I do not imagine we have had any government of this sort in this country. The events of the past year suggest the Government had not time to think about their business in the past 12 months. Nobody would quarrel because a party has internal problems but it is a matter of concern to all of us when the party happens to be in government; we are all involved in the mess; we are all involved in the things they did not deal with.
The Taoiseach recently said that inflation is a world-wide phenomenon. Various Governments have sought to tackle the problem as their circumstances suggested. We shrugged the problem aside. Our whole taxation policy added to the dimension of our problem. Our Budgets are monuments to the absence of measures to cope firmly with inflation here. In conscience, we could not support this Bill. It does not give any guarantee of rigid control of prices over the next year. It does not add up to any Government realisation that to control inflation means controlling it at the correct time. A carefully determined schedule of control is necessary. By trying to tackle all the problems at once, by confining the operations to a year and by giving no guarantee about control of prices, the prospect is that the end of the year 1971 will see a really horrific situation in which our inflationary problems will not be even half-way towards solution. The danger is that, if this Bill is enacted we shall be worse off before the end of 1971 than we are now.
If industrial relations have been damaged then this Bill adds to the damage. Consider the provision which empowers the Government to take over union funds. Whether this power conflicts with our ratification of Convention No. 87 of the ILO is something that requires more study. Article 4 of Convention No. 87 states that workers' and employers' associations shall not be liable to be dissolved or sustained by administrative authority. It is arguable whether the deregistration of a union—the witholding of an negotiating licence—becomes an essential condition of a union's existence and whether the power to take away the licence of a union by seizing its funds amounts to dissolution under the terms of Convention No. 87. This matter should be looked into closely.
Certainly, it can be said that the Government's intention to seize union funds must further affect relations between employer and employee. To think that they can be improved against the background of this Bill is naïve. If we are sincere and serious about improving industrial relations, it is almost a platitude to say that the rôle of government should be one of improving the organisational structure between employer and employee. When this neutral balance is titled at any stage in the direction of one or the other of these pillars of our economy, there is trouble in store for us. Where it seems the balance has been so titled, and where there appear to be penalties aimed at the actual corporate existence of the unions, it can be said there will be little constructive advance in relations between employer and employee. I do not think anyone can say this is a healthy situation and it cannot be said that we can look forward hopefully to controlling inflation.
To control inflation a partnership between Government, employers, employees and their unions is needed. This Bill and the Minister's statements disrupt any possibility of any such partnership being a reality in the coming year. Theoretically and on paper the Bill may appear to be an answer to some of the problems we face but it is a superficial, facile and panic measure. It does not show any evidence of a serious analysis of our problems having been undertaken by the Government. The Bill does not call for support and it does not justify support on this side of the House.
Our Budget arrangements contributed to growing inflation. Various developments in industrial negotiations have been seriously harmed. Phased agreements may become of interest only to historians of industrial relations. I suggest that the man or woman who would advocate a phased agreement in 1972 or 1973 would get a very bad reception. The phased agreement was one of the hopeful developments in our industrial relations. It was a modest one and it did not achieve the full objective of an incomes policy of course, but it was a step in the right direction. Theoretical and dogmatic conceptions should be discarded in the area of industrial relations. We should be satisfied if we can advance step by step in the right direction.
I am suggesting that this Bill represents a backward step. It is a one-sided approach to the problem. It is superficial. It will not solve the inflationary problems we are faced with and it is particularly tragic that this should be the Government's response at this time of danger to our economy. I am convinced that our economy is at that dangerous stage and that a large increase in unemployment is possible during next year. The figures for last month show an increasing trend towards rising unemployment. Whatever about politics and political parties it is regrettable that the Government of the day have lost the confidence of the unions at this terribly crucial time when confidence between all the important elements in the economy is so essential if the country is to ward off some of the problems.
Admittedly, inflation as a world phenomenon is beyond our control but we have failed to take the steps, the logical and intelligent steps at the right time, to try to surmount our problems. We failed this year and last year. We had the evidence of rising prices, but no action was taken. This Bill gives no guarantee that increases in prices can be held back during the coming year. At the same time, it is clear that some control is sought over wages. There has been too much aggravation. As employees have been left severely alone in the past year as they faced rising prices, I do not imagine that this Bill will get a constructive reception from the trade unions. They have lost confidence in the ability of the Government to legislate for the economy as, in fact, we have ourselves.
