Dáil Éireann debate -
Thursday, 27 Apr 1972

Vol. 260 No. 8

Committee on Finance. - Financial Resolution No. 3: General (Resumed).

Debate resumed on the following motion:

That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.

—(Minister for Finance.)

Mr. Desmond

Having dealt with the prices situation, I propose to comment briefly on the question of wage increases. My concern with the current economic situation is sharpened by the fact that it is the wage and salary earners whose living standards suffer first if the situation deteriorates. In the current climate I have no doubt that this fact will have considerable impact on the wage negotiations now proceeding. Rising costs and prices are the greatest threat to our balance of payments and to our general competitiveness and they are the greatest threat to the prospect of restoring full employment and maintaining our living standards.

The bitter and sharp lesson most wage and salary earners have learned in the past decade is that most increases in wages have been cancelled by increased prices. This process is likely to continue irrespective of whether employers and trade unions like it. NIEC reports have shown what happens when rises in general incomes are not kept in line with increases in output. Sometimes the result is considerable unemployment.

Therefore, the choice facing any industrial worker or any public servant in receipt of salary increases is between a relatively high growth rate—much higher than we have at present—and a higher growth rate in our living standards or a static rate of growth in general employment. Unfortunately at the moment we have a combination of a static growth rate, a decline in industrial employment and rising prices. This situation cannot continue indefinitely without serious consequences to our ability to export. It is in this climate that the current wage negotiations are being conducted.

A special delegate conference of the ICTU took place last February to review the current agreement and to decide on a general wages policy for 1972-74. We know that many of the current industrial agreements will expire in mid-June, 1972. I hold the view that it is in the national interest, in the interest of industrial workers—particularly the lower paid workers—that every effort should be made to ensure that a further short-term phased national agreement should be negotiated by the employers, trade unions and State organisations. Unless this happens there may be a free-for-all on the general incomes front this year which would have unfortunate consequences for employment. Without the stability of a wage agreement it would not be possible to ensure that all groups would get a fair share of the national cake. Every effort should be made to have another national agreement.

The Labour Party have always recognised that wage levels and unit labour costs have a major influence on our export competitiveness and on our employment. Therefore, the stabilising effect of a national agreement would be of benefit to the country. As a responsible political party we recognise that the planned development of incomes can occur only under conditions of a national agreement. If we have a comprehensive, and yet flexible, national agreement the redistributive prospects of the general income will be immeasurably enhanced. In the year ahead the Labour Party will support every effort on these lines by the trade unions and employers. In relation to the national agreement, the trade union organisations are adhering to the general terms of that agreement and have acted with great responsibility and restraint despite two factors. One factor is that there has been a 24 per cent increase in the cost of living in the past three years and, secondly, there have been some efforts made by some groups in the trade union movement to sabotage the national agreement. However, it has held firm and this is to be welcomed.

Unfortunately, the Government, and to a considerable extent many trade unionists and employers, have never accepted the need for a general incomes policy. Earlier this morning I advocated the establishment of a national economic council and the concept of industrial economic development councils in various sectors of the economy. However, it would be unrealistic of me to advocate that kind of economic expansion and, at the same time, try to exclude incomes development in overall economic policy. An incomes policy is concerned with the general distribution of money, not only of wages and salaries but of professional earnings. It means also rents, profits, capital gains, the incomes of farmers and of the self-employed. Frequently politicians, principally because it is easy to deal with wages and salaries, tend to devote their redistributive efforts to dealing with that sector. To some extent it is possible to control profits and they can be levelled upwards or downwards. However, items such as capital gains and the incomes of farmers and the self-employed tend to be ignored and do not play their part in contributing to the general taxation. A positive incomes policy would include all these items. It would not be a sterile, negative policy confined exclusively to wage and salary earners.

Incomes policy is concerned primarily with the manner in which the national income is distributed. There are indications in our economy that this distribution is not fair. Recently estimates were published showing the distribution of personal wealth in the Republic and in Northern Ireland for 1966. These were made by Mr. Patrick Lyons, lecturer in economics at Trinity College, Dublin, in the January 1972 issue of the Economic and Social Review. Those of us who know Paddy Lyons would hardly accuse him of being a member of the Fine Gael or Labour Parties. We may, therefore, give appropriate weight to his observations. It is interesting to note that according to his estimate the top 5 per cent of the adult population, those aged 20 and over, in the Republic owned 71 per cent of the total wealth and it is perfectly clear from that that inequality in the distribution of wealth in the Republic is far greater than in the UK. It is ironical to find that Professor Atkinston, professor of economics at the University of Exeter, wrote in the January-March 1971 issue of the Political Quarterly:

It seems likely that Britain has the doubtful distinction of heading the international inequality league.

We can correct Professor Atkinson and assure him that Ireland tops the league in general inequality. I know the criteria and many fundamental assumptions behind the analysis of Patrick Lyons have been questioned.

Mr. Cunningham

Hear, hear.

Mr. Desmond

I accept many of the reservations made about certain aspects of his analysis but I do not think it adequate merely to dismiss the general indicator which he has exposed.

Dr. FitzGerald

The under-statement.

Mr. Desmond

I would think so.

Mr. Cunningham

It depends on the criteria on which he based his assumptions.

Mr. Desmond

I have read several criticisms of what he has done but, by and large, he is to be commended. In an estimate here he indicated that total personal wealth in 1966 amounted to £2,121 million in the Republic and £1,552 million in Northern Ireland. On this basis personal wealth per adult over 20 years of age averaged £1,231 in the Republic and £1,686 in Northern Ireland, the Northern Ireland per capita figure being over one-third higher than that for the Republic, so that while there are substantial differences between Northern Ireland and the Republic in terms of wealth of means, nevertheless, that kind of figure is disturbing. I think this kind of work shows up in sharp contrast the feeling in many sectors of the community that the general distribution of wealth in the Republic is very far from being equitable.

It is estimated, for example, that in the Republic 3,855 people representing 0.23 per cent of the adult population own wealth to the value of £372 million or about 17½ per cent of the total wealth. In Northern Ireland 2,269 people representing 0.25 per cent of the adult population own wealth valued at £193 million or about 12½ per cent of the total wealth. The indications available to Patrick Lyons and the sources from which he has derived other statistics, notably the inland revenue statistics of 1970 for the United Kingdom, and the reasonable authoritative data he has derived show there is ground for serious concern in the Republic and it is not unfair to assert that we top the international inequality league.

Therefore, I think the present Government are not prepared to face the political unpopularity which any Government must face of taking a sharp look at that sort of analysis and, if necessary, setting up a select committee to investigate the question of wealth contributions to the national exchequer. A great deal more could be done in that regard because I would point out that the wage and salary earners and the smaller farmers and the declining race—so to speak—of agricultural workers suffer understandably from a deep sense of cynicism and frustration and awareness that many other sectors of the community have wealth which is not necessarily taxed or giving an appropriate contribution to the national exchequer. Not merely if one wants to adopt a purely Christian criterion is there the obvious manifestation of wealth which certainly does not encourage the trade union movement and social welfare recipients and other disadvantaged sections of the community to act in a thoroughly responsible way on a national level. There is very little incentive for them when they see and read and hear of publications of that nature It is all very well to say that per capita we have half the GNP of Britain and that we are one of the poorer countries of Europe—which undoubtedly we are—but we are not that poor. I agree with very little of what Bernadette Devlin says but she has always spoken about “a fair share of the poverty” and in a sense there is a certain moral to be drawn from her cryptic reactions occasionally. Very little work is being done at Government level. I think the initiative must come from the Minister and the Department of Finance. I always thought a former Minister, Deputy Haughey, had the capacity to do it and intended to do it, given time, particularly in 1969 when he became interested in low incomes—the first time, I think, in the history of the State that Ministers seriously began to investigate questions of low income and lowly paid workers. At that time he designated 1969 as the year of the lower paid worker. That is the first time ever this was done but nothing came of it. His contribution was cut short by himself and nobody else at that time. The prospect of something being done in regard to income differentials in our community was very sharply reduced. Hardly anybody believes that the general worker ought to be paid the same as a secondary school teacher or that a general industrial worker might be paid the same wages as a general manager.

I do not think we have yet reached the stage where, under the wage system, one can talk in these terms, much as I think one should talk but then people's imagination and their sense of social justice have not been raised up to having that kind of concept in mind whereby income differentials in society would not be very great. This is a socialist concept and socialism in this country in terms of its concepts related to income has made very little impact and has not been very effective. I suppose it will be a long time before any change occurs in the general pattern of income differentials in industrial and commercial life.

Dáil Éireann does not on average last more than 3.5 years so we are running into the last six months of the average life of the Dáil. In relation to income differentials in the community we have done nothing in the last three years. We have made no real effort to narrow the gap and to make our society more egalitarian. As a result the community has suffered in having wider areas of poverty, of low income, of disadvantaged families and industrial disputes and frustrations.

Let me speak for a moment about the ESB strike and draw a moral from it. I was in the trade union movement when, to his credit, Dr. Hillery, who was then Minister for Labour, on 11th April set up the Committee on Industrial Relations in the ESB. Their interim report was issued on the 5th July, 1968, and it quoted another report. It quoted at page 28 report No. 11 of the NIEC of 1965, on the question of an incomes policy and differentials. Deputy FitzGerald signed that NIEC report with men who made a profound contribution from 1965 to 1970, men like Jim Larkin, the late Senator James Dunne and the late John Conroy. It is a disgrace that in 1972 we have done nothing to implement the criticisms contained in that report.

Dr. FitzGerald

All that has happened is that the Government have abolished the NIEC.

Mr. Desmond

The 11th report said in the wider context of a national incomes policy:

We have drawn attention repeatedly in this report to the existence of dissatisfaction with the present personal distribution of income. Some of this may be a symptom of a deeper sense of grievance about unnecessary and undesirable social and economic distinctions or about inequalities in opportunities for advancement. There are, for example, marked differences in the degree of economic and social security as between wage-earners, salaried workers and the self-employed. There are marked differences in the incidence of incremental scales, the arrangements for sick pay, pensions and compensation for loss of employment and in the size and range of fringe benefits generally. Many of these grievances and inequalities in treatment could, with the application of imaginative thought, be removed and their removal would undoubtedly result in a sounder basis for the successful implementation of an incomes policy.

Seven years later we have done nothing to improve the situation. I am pleased to hear that the ESB dispute is more or less over. I have been speaking here so I may be wrong but I gather from rumour that it is more or less over.

Dr. FitzGerald

It is just as well because it is getting dark.

Mr. Desmond

One of the major criticisms in the interim report of the Committee on Industrial Relations in the ESB was:

A new overall pattern will, however, have to be negotiated with care if it is to take account not only of the established rights of existing staff but of the need for a proper future classification of terms of employment and rights to fringe benefits in terms of factors such as seniority, job responsibility and physical and mental working conditions. Working through these problems will among other things, as the ESB Officers' Association rightly pointed out, require strong and independent representation of the white-collar as well as the manual point of view.

Internal relativities appear to have been particularly chaotic among manual workers, but we suspect that not enough thought has been given to right relativities among managerial and senior professional staff as well. It should be a high priority for the ESB to develop a complete series of grading schemes properly related to one another and covering comprehensively relativities among the whole of the Board's staff.

An Leas-Cheann Comhairle

The Deputy appreciates that long quotations are not in order.

Mr. Desmond

I am almost finished.

We would like to be satisfied that the Personnel Department is adequately staffed, notably on the side of job evaluation, to establish schemes of this kind and keep them regularly up-to-date.

There were in that report very considerable criticisms of the wide disparity between manual and white collar workers and the trade unions in the ESB. The personnel department and the personnel director in the ESB, with the whole reorganised executive function of the board of the ESB, have made considerable efforts since 1968 to set this whole situation right. It blew up again in the recent past. It shows the situation in the ESB at that stage and the tremendous inequalities between workers in the public and private sectors. These inequalities are not confined to the ESB. They are in the whole range of semi-State and public employment. Therefore, I greeted with dismay, cynicism and contempt the statement in the budget that the Government are now making equal pay a national aim. I thought it was a civil right, that people were entitled to have equality as between men and women in terms of pay. Such is the political ethos of the Fianna Fáil Party that matters of such elementary social justice are elevated to the classification of national aims. This kind of attitude is indicated by their failure to do anything about conditions in State-sponsored bodies. Everybody becomes preoccupied when we face, as we have faced, the appalling situation in regard to electricity supply, a matter that cannot be condoned in terms of the unofficial action taken but which is a symptom of the underlying malaise and the failure to redistribute money incomes in the community. I hope that in the next 12 months the aim of Deputy Charles Haughey will be resurrected. He announced in 1969 that he regarded it as the year of the lower paid worker. I remember the public services agreement which followed immediately. It contained advantages for the lower paid workers. There was a real measure of advantage in it, but a great deal more remains to be done.

In our community we have not bothered a damn about the large number of lower paid workers. There are many lower paid workers in Government employment. There are some of them knocking around in this House who are not terribly well paid, with due respect to ourselves in this democracy. There are lower paid workers in local authority employment and there are quite a number of them on the farms and in the hotels and guesthouses. There are many of them in the personal services industries.

How many young women are being exploited in hairdressing salons? How many young boys, adolescents, are being exploited in garages? How many young women and married women are being exploited in the supermarket checkouts and in the dry cleaners? They are the lower paid workers. They have no Dáil Deputies representing them. There is a new breed coming into this House: you make your money first and then you enter politics. In the old days, as my father used to say, you worked first and you finish up in Dáil Éireann. The moral of the story now is: become an auctioneer and if you make enough money, then become a politician.

Dr. FitzGerald

There were groups who came in and made their money through politics.

Mr. Desmond

They are the real professionals. The real professionals are those who come in here and use the place to become other things and make their money out of them. There is a clatter of them here. We had an eloquent discourse here last night from Deputy Dowling. I think the analogy is quite apt.

An Leas-Cheann Comhairle

Perhaps we could keep to the financial resolution.

Mr. Desmond

I will keep to the financial resolution. With due deference to all the lower paid workers in Leinster House, in the Chamber and elsewhere, if we are serious about bringing about a greater redistribution of wealth we must think about those lower paid workers. Very often they are not members of a trade union. Only 52 per cent of the Irish labour force is organised in a trade union. There are workers in the private transport firms, people working for small builders, people working on the land and in the other occupations I mentioned, who have suffered disability during their lives and who cannot earn a full wage. Many of them are in poor health.

There are many workers who have no skill at all, due to no fault of their own. There are many thousands of families whose chief breadwinners are inadequate as workers. They cannot cope with a normal working environment. These are the people who are in the low income, low wage, deprived category. They are intermeshed with our health services, with our local government services, and with our social security system. With all the hosannas and Te Deums the Minister got from his own back benches, I do not think this budget really measures up to doing something about these workers.

Deputy Haughey said in 1970:

A genuine and widespread feeling of social concern is the hallmark of a humane and civilised society. It obliges us to see that the poor, the sick, the unemployed and the aged get as big an income increase as can be afforded. It also manifests itself in greater consideration for their physical and mental environment and in practical efforts to lighten their lot and make their lives brighter and better.

On that criterion I do not think that this budget has done very much.

I do not think we should maintain our current system of budgeting. We have a capital budget and a current budget and it is time that we built into the budget system a social budget. There was a time when we had no capital budget and we did not divide our budgetary expenditures on that basis. In the budget there is always a marked preoccupation with the problems of economic growth. In the recent past that has led to the neglect of social development and the neglect of budgeting to relieve problems of social development. There has not been in our community the ferment which there should be in a Christian community about social content and public discussions on social questions. Last year we had a magnificent conference in Kilkenny. I have been able to read only parts of the report. It may irk Deputy Dr. Browne to note this, but it was sponsored by the Catholic Hierarchy. It was a magnificent conference. As I recall it Deputy FitzGerald read a paper.

Dr. FitzGerald

No. I was present as a participant but I did not read a paper.

Mr. Desmond

A full report on the conference went to the Department of Social Welfare. Almost every national organisation concerned with questions of poverty, social security and social services, and voluntary charitable organisations were present at the conference. The trade union movement were represented. I remember that many people were very moved at the areas of deprivation and poverty which were exposed in the community. People had not thought that they really existed. The Minister for Social Welfare said the report would be considered by his Department. To my knowledge nothing has been done in the Department to really get to grips with the problems outlined. Data and statistics were thrown out at that conference. For example, it was shown that some 25 per cent of our community are living below a general subsistence level. The data and statistics were not disputed by the Taoiseach's economic adviser, Mr. Martin O'Donoghue. They were subsequently shown on the "Encounter" programme, but the conscience of the community did not seem to be stirred. It did not seem to be in a social ferment. It may be said that the unprecedented rate of economic growth achieved in the 1960s has justified concentration on problems of national economics.

It is time to assess to what extent our social aims have been met with continuing economic growth. When one considers the level of our social welfare services one realises that there is a great deal of smugness and complacency within the community. One might have expected, for example, that this budget would have set out deliberately to reverse the trend and to ensure that an increasing proportion of our resources is applied to the alleviation of poverty and distress. Instead, the budget simply marks time.

During the past few years the annual increase in the cost of living has been between 8 and 9 per cent. In Britain, for instance, Mr. Barber gave an increase of 12½ per cent in social welfare benefits. In some respects the increases in our budget have been good —for example, those in respect of dependent children— but generally the level of increases in benefits has been appallingly low. For far too long the public here have tolerated standards of social benefits that are an affront to the conscience of our nation. We have tolerated levels of social security benefits which are an insult to our pretension to a Christian community.

The level of our social security benefits does not indicate that we have a progressive dynamic democracy. I do not think it could be said by any stretch of the imagination that the level of our social security benefits marks us out as living up to the ideals of the 1919 Proclamation and the democratic programme of the first Dáil. As a community we can afford better services. The able-bodies section of our community, people like myself, must contribute more in order to ensure that the weaker sections are given, as a right, the benefits that will result in better material standards for them.

Since there is no indication in the budget of any such improvements we might ask along what lines should our social security system generally be developed. The range of services is reasonably broad. One cannot fault them in that respect. One of the areas that is open most to criticism is that of domiciliary services for the old and disabled. During the past fortnight I had the cases of two old ladies, one of whom was 75 and the other 79. These women were living in distress in their own homes. There was no hospital to which they could be sent. St. Kevin's did not want them particularly and because they had no relations in the Dublin area there was no one to look after them. Some relatives of theirs were travelling distances of 30 or 40 miles each day to help them. One of these women was lucky enough to die.

Despite the tremendous work done by the religious orders in catering for many people on a domiciliary basis and who are grossly over taxed, there are many in the same situation as were those two women and nobody is aware of them. The domiciliary home help service in the Republic is appalling. I discussed recently with a nun who is a social worker in London the home help service available in that city which we are inclined to regard as a vast, heartless community. I found that the services there are much superior to ours. They are much more Christian-like too. It is not an easy task for public representatives to have to tell old people that no place can be found for them. The problem in this regard is very serious and should be dealt with dramatically.

To get back for a moment to the level of benefits, who could be proud that, for example, the new rate per day for a retired person of 65 or older, is 89p? What incentive is there for anybody to retire on that sort of pension? I am a voluntarily insured worker and if I were to retire that is the amount I would get. The amount for a man and his wife is £1.48 a day. For some Deputies 89p is nothing more than the cost of a meal in the Dáil restaurant or, perhaps, a few drinks in the evening. The old age contributory pension at age 70 is, again, 89p per day, for a man and his wife, £1.48 per day. My own parents are getting that pension. At 80 and older the rate is 96p per day or, for a husband and wife, £1.55p per day.

A widow with no family will now get, on the basis of her husband's insurance record, the sum of 80p per day or £5.60 per week. All of these rates apply from October next and, of course, there will be price increases then. The Dún Laoghaire/Rathdown community is a more cosmopolitan one than one might think. The Minister for Agriculture and Fisheries referred to it jocously as the "Kingstown republic". There are widows in the constituency who are living alone and who receive no more than this sum of £5.60 per week. I would like to see each Deputy of this House living on that amount for one week. I do not think it would be possible for them to do so.

Mr. P.J. Burke

I came into this House at £1 per day.

Mr. Desmond

There is no relative comparison to be made.

Dr. FitzGerald

The cost of living was somewhat different.

Mr. Desmond

I started in the transport union in 1957 at £8 a week, a trade union official's salary. I now have £2,500, so what relativity are we talking about? An unemployed man with a wife and three children must live on £13 a week. If one takes a minimum differential rent of £1.50 off that it means that five persons must live on £11.50 a week. I do not think we can be particularly proud of the level of benefits payable from next August, and I will not give the assistance rates because they are even lower than the contributory rates. Therefore, we must accept that the levels are abnormally low.

In relation to the non-contributory widows pension, there are 435 widows drawing pensions of between £1 and £2 a week; 860 widows have between £2 and £3 a week; 2,390 between £3 and £4 a week; 10,000, the bulk of widows, have pensions of between £4 and £5 a week; 1,235 between £5 and £6; 480 between £6 and £7; and 720 have £7 plus. I suppose those over the £5 mark would be widows with families. Certainly that payment structure is extremely low. If we in the Opposition ever have the opportunity of doing anything about this—and there is enough talent in the Opposition benches to do this work—we shall do it.

A particular benefit which I am disappointed to note is not in the Minister's budget statement is one to widows during the first six months after their husbands' deaths. The cost of double benefit for that period would be about £1,500,000 and I would have thought that it would have been given by the Government on this occasion. Likewise I thought there would have been a substantial increase for widows with fairly large families, that the Minister would have increased the widows contributory pension rate for the third and subsequent children from £1 to £2 a week. The cost would be £227,000, not a great deal of money. With the amount of money which was available to the Minister, he could have done a far better job in regard to benefits generally.

I was pleased to note that the Minister reduced the qualifying age limit for the deserted wives allowance from 50 to 40. However, I would point out the anomaly that exists in regard to the 36 women who are in no man's land, whose cases were raised in this House, whose husbands divorced them and who because they were divorced were ineligible for the deserted wife's allowance. That anomaly should be dealt with, but not in the way the Minister indicated it might be dealt with, by giving them home assistance. A woman who is divorced by her husband and who is living in this country is invariably a Catholic and invariably, in accordance with the laws of her church, she will not remarry while her husband is alive. However, because her husband divorced her she is put into a separate category. She cannot get a deserted wife's allowance, even though she may have been deserted for a number of years and then gets the word on the grapevine that her husband has divorced her. The Minister will not give her a deserted wife's allowance even though she is perhaps the most deserted person in the world, because officially she no longer has a husband and, ironically, the State, in so doing, recognises the existence of divorce.

Dr. FitzGerald

Enforces it.

Mr. Desmond

Enforces the existence of divorce, although the Constitution says you cannot officially do so.

Dr. FitzGerald

It is hypocrisy.

Mr. Desmond

This denial of the deserted wife's allowance to such women is the most hypocritical action we have seen here, and there was no effort in the budget to meet this matter. May I pose this question to the Government: Do they recognise de facto a divorced person in the Republic? If they say to a woman that they recognise the fact that she is divorced, therefore deny her a deserted wife's allowance and tell her to go to the local relieving officer and prostrate herself to get home assistance, which is what the Government are saying she should do—and the Minister said he would deal with such cases sympathetically—it is a totally cynical approach which should be wiped off the conscience of the community. These 36 women who have had their claims disallowed should be granted the same civil rights or entitlement as other members of the community have in that regard.

There are 2,500 wives receiving benefit. There is particular need for greater public assistance towards marriage advice bureaux and, if necessary, assistance by the Department of Social Welfare and the community generally towards marriage counselling. This should be on a State basis. It is not enough to say to the various churches that if there is a marital breakdown and if a husband deserts his wife that is not the State's business but that a deserted wife allowance will be paid. Everybody would wish to see the full needs of deserted wives met but it may be said that in some respects the State sweeps its responsibility under the carpet in the matter of marital breakdown by the simple procedure of paying a deserted wife allowance and doing nothing of a preventive nature by making money available to voluntary and Church organisations to provide an effective system of marriage guidance counselling and assistance to couples whose marriage breaks down.

We in the community should not regard ourselves as having fulfilled our responsibility when we sweep up the remains of broken marriages, so to speak, by providing homes and institutions where children of broken marriages may go and by providing an allowance for deserted wives. A great deal more money should be spent on preventive and remedial measures. It is not generally recognised that what is required is not amateur psychiatry or amateur psychiatric help to couples whose marriage breaks down. What is required from the Department of Social Welfare and the Department of Health is the employment of professional social workers and marriage guidance counsellors working with voluntary organisations to assist in cases of marital breakdown. This is not in any way to mitigate the importance of the scheme that has been introduced and which has given tremendous help to deserted wives. We should go further and give greater assistance.

It is ironic that in a community which attaches such profound importance to the preservation of family life there is not much practical State assistance given to preserve the fragile fabric of a marriage. In many cases where children are involved the marriage could be saved by social, medical and psychiatric assistance. This is of great importance and deserving of comment in the context of the budget.

I want to make a brief comment about the need for reform of our social security system. A great deal of fuss has been made about the mythical £30 million which the Minister for Agriculture and Fisheries, Deputy Gibbons, will be getting in January, 1973. This, of course, has been revised down to £20 million. We are assured that it will be between £20 million and £25 million. The story is circulating in political circles that what Fianna Fáil intend to do is to have a throwaway budget in March, 1973—they are supposed to be spending this £20 million to £30 million—and that we will have an immediate general election and Fianna Fáil will come back into office. I am afraid this kind of political activity deserves a bashing. What this country needs is a complete overhaul of the system of social welfare. The whole scope of the social welfare legislation has suffered in the Republic. It has been severely limited by the relatively unfavourable age structure of the community, by the relatively low income per capita, by the very low employment structure, employment in agriculture amounting to 27 per cent of the total, by the political climate that operated against aspects of social security in the 1920 to 1930 period, by the very conservative social outlook. As a result, there is the kind of mentality that prompts people to say, “We will give another hand-out in March, 1973, and everything will be set fair for the coming general election”—although I think the election will come rather sooner.

I would point out to the House the need for a radical change in our social security system if we are to meet the challenge of the free trade conditions of the seventies. We inherited the British system of social security when the Irish Free State was set up in 1922. It can no longer be said to bear comparison with the British system, which has changed beyond all recognition while our system has retained the 1922 characteristics of the old British system.

Our system is based on insurability up to an income limit of £1,600. It seems to be forgotten that as far back as 1949 the inter-Party Government, in which Labour and Fine Gael were involved, published a White Paper, "Social Security", one of the few White Papers on social security ever published in this country. It is to the credit of that Government and of the former Deputy William Norton that a very comprehensive White Paper on social security was published. That White Paper proposed that social insurance be extended to cover every person in the population over 16 years of age working for an employer. That Government fell and the new Fianna Fáil administration in the 1952 Act excluded non-manual employees whose earnings exceeded £600 a year. It is ironic that that White Paper in 1929 proposed a retirement pension at 65 years of age for men and 60 years for women.

Mr. P.J. Burke

That was the time you gave tenpence a week.

Mr. Desmond

It has taken ten years for this principle to be accepted in recent legislation. Ireland had to wait until 1961 for the introduction of contributory old age pensions. Other countries had had them for decades before. We then brought it in for persons of 70 years of age on a contributory basis. There were some things on which I did not agree with the former Deputy William Norton but in the matter of social security he was outstanding. The White Paper proposed a death benefit. We had to wait 20 years before that was introduced. Had the inter-Party Government proposals on social insurance been adopted our social security system today would be similar to that of Britain. Now it is decades behind the system in operation in Northern Ireland and Britain.

Had the recommendations of the chairman of the National Health Insurance Board, Most Reverend Dr. Dignan, Bishop of Clonfert, in 1944, been accepted even ten years after they were made we would have a more modern system of social security because he proposed far-reaching, imaginative and comprehensive measures for social security. The Fianna Fáil Party were much more anxious about getting into power and staying in power.

Therefore, I suppose it comes as no surprise to learn that ever since the early sixties we in the Labour Party and the trade union movement have time and time again called for the introduction of graduated social insurance contributions and sickness and unemployment benefits directly related to earnings. We have called for them time and time again and time and time again the Fianna Fáil Party have done nothing about it. The wage related principle is supposed to be under examination by the Government. They have had many years of experience of its operation in Northern Ireland and it is also notable that the Fine Gael Party have accepted and support the general principle of the introduction of a wage-related system of social insurance contributions and benefits and therefore we must accept that the levels are abnormally low at the moment. One of the reasons why we have a mediocre patchwork-quilt level of social insurance benefits, with base standard rates at a low level, is, of course, the failure to introduce the wage related system of contributions and benefits.

Indeed, Professor Kaim-Caudle in his publication "Social Policy in the Irish Republic" five long years ago, made the point that sickness and unemployment benefit in the Republic in relation to earnings are low by European standards, that in all the countries of the EEC as well as in Austria, sickness benefit for a single person is at least 50 per cent of earnings and that in the Netherlands, West Germany and Austria, for a married couple with two children it is at least 75 per cent. Benefit levels in the UK relative to earnings have not been very different from those in the Republic. In 1960 they were 17 and 36 per cent and by 1965, had increased to 20 and 45 per cent respectively. I think, therefore that if one wants to indict the present Government, one need only look at the present system of social security in operation in the State. I know that certain aspects are under review in the Department of Social Welfare. The question of occupational injuries and a wage-related system is under review; the system of children's allowances is under review, with prospects of some selectivity being brought in within that area, but apart from these two areas, no effort whatever has been made by the Cabinet to get around a table to meet the trade union movement and the employer organisations and change radically the whole system of social insurance.

I might make the final point about the system itself, a point which will be disclosed in the Social Welfare Bill, that is, that we shall have very shortly a further increase in social insurance contribution rates. Members of this House do not seem to appreciate the cost of an insurance stamp these days, mainly because the overwhelming majority of the House are not insured employees, but it is no joke for an industrial worker earning £27 or £28 a week—average industrial earnings last September were £27 11s, averaging at the moment about £28—to have to pay £1 or £1.15 a week, and next October we will find it will be £1.35 a week out of a wage packet on a flat basis every week, with no relativity to income and no wage related system in operation. Nobody relishes having to do that.

The Fianna Fáil Party, by failing to amend the social security system, certainly deserve the condemnation of the House and I am appalled that a Parliamentary party with 70 odd members should have a committee with the magnificent-sounding title of the Fianna Fáil Parliamentary Committee on Social Welfare, Labour and Health —there is such a committee in the Fianna Fáil Party—who have seemingly been moribund. The backbenchers of the Fianna Fáil Party are normally moribund, but certainly they would not find any difficulty in exercising their imagination to bring forward major reforms to the Minister for Social Welfare. I recall that last January when Deputy Wyse, who is chairman of this so-called Parliamentary Committee of the Fianna Fáil Party, assured us that we would shortly have the introduction of a pay-related sick pay scheme for insured workers, he went on to say, and it flabbergasted me, that we would have one of the best social welfare systems in the world, especially considering that we are not a wealthy country. He even said it in Cork and the Cork people in politeness did not even laugh. We have this kind of statement from the chairman of a Fianna Fáil committee. I would remind Deputy Wyse that a scheme of earnings related supplements to both unemployment and sickness benefits—the big one is unemployment—was introduced into the national insurance scheme in Britain and in Northern Ireland on 6th October, 1966, six or seven years ago.

Mr. Cunningham

Not at £1 a week contribution.

Mr. Desmond

Nobody objects.

Mr. Cunningham

What is the contribution?

Mr. Desmond

Very substantial contributions and very substantial benefits. Why do you not do it? I think it is an absolute disgrace that I earn £2,500 a year and pay £1.6 a week social insurance contribution, while an unfortunate worker earning £12, £15 or £20 a week must pay the same. There is no justice in that system. I get a retirement pension when I retire with my social insurance stamp and I am covered for widows and orphans' pensions, but relative to my income, I should certainly be paying vastly more and, relatively speaking, should have vastly greater benefits. I would remind Deputy Wyse that the supplement in Northern Ireland is one-third of that part of an employee's average earnings which lies between £9 and £48 a week. It is being revised upwards in the recent Barber budget but the maximum supplement which a person can get in Northern Ireland on top of his basic unemployment benefit is an extra £13 a week.

Mr. Cunningham

For how much contribution?

Mr. Desmond

It is graduated, it depends. I do not in the slightest hide the fact that the contributions are graduated and wage-related. They must be, but people at least get benefits of a full nature on that basis. Thus, an unemployed husband with a wife and two children can qualify in Northern Ireland for up to £26 or £27 a week maximum benefit while a similar family in the Republic would get £9.30 for the husband and wife and £1.35 for each child. Relatively speaking, unemployment in Northern Ireland is very substantially better than in the Republic and the 47,000 or 48,000 people unemployed in Northern Ireland are far better off, relatively speaking, in terms of their benefits than we are in the Republic.

Progress reported; Committee to sit again.