Dáil Éireann debate -
Wednesday, 19 Mar 1975

Vol. 279 No. 5

Social Welfare Bill, 1975: Committee and Final Stages.

Question proposed: "That section I stand part of the Bill."

Mr. Andrews

I hope — I hope this is not a pious hope — that the number of Acts outlined in the definition section will in due process of time be consolidated into one Social Welfare Act. The Parliamentary Secretary indicated on Second Stage that there are some 60 Acts and some 350 regulations in existence, apart from a great deal of precedent law on social welfare matters, and he undertook to examine the possibility of consolidating the law. At the moment it is sometimes difficult to identify one's area of concern. In the present situation it is impossible for people to know their entitlements or easily to identify such entitlements but there is an excellent publication produced by the officials of the Department; from time to time one hears criticism of departmental officials but this book sets out clearly the entitlements of citizens and on cursory examination people should be able to discover their entitlements.

I would ask the Parliamentary Secretary to comment on consolidation. Nine Acts are specifically referred to in the definition section, which leaves a total of 51 Acts not referred to in this section. Has a committee been set up within the Department and when does he hope the totality of social welfare legislation will be consolidated? I am not now being in any way critical. I am, I hope, being constructive.

Parliamentary Secretary to the Minister for Social Welfare (Mr. Cluskey)

I welcome these constructive comments by Deputy Andrews. The initial work towards consolidation has begun. This is a very complex area and one which causes considerable inconvenience and difficulty not only for Members of the Oireachtas but for the officials and the statutory and voluntary social workers interested in this area. Deputy Andrews, with his legal background and his interest in parliamentary work, will agree that consolidation is a very large undertaking because of the tremendous volume of legislation in this area which has grown up over the years. I would not like to give the impression that a consolidating Bill will be before the House in the near future. The Deputy will appreciate that would not be possible. Consolidation will require very detailed tedious examination and co-ordination and this will take a considerable time.

I appreciate the Deputy's remarks about the officials of the Department. In recent times a very heavy extra burden has been placed on the staff of the Department because of the number of new schemes and the new approach to social welfare. I can assure the House consolidation will be done as speedily as possible. It would be optimistic to expect that we might have the measure before the House even next year, but the initial work has started and I am as anxious as Deputy Andrews that the work should be completed as speedily as possible.

Question put and agreed to.

SECTION 2.

Question proposed: "That section 2 stand part of the Bill."

Mr. Andrews

This is a section which requires rather close scrutiny to decipher its meaning. One needs to peruse it several times to discover what exactly it means — it is couched in the kind of language in which one unfortunately has to couch these sections — in order to arrive at the kind of benefit or entitlement that finally emerges. Am I correct in thinking that a man or woman reaching 80 years of age is entitled to 70p more than those under 80 years of age? That is my interpretation of subsection (3) of this section. Section 2 (1) states:

Section 77 of the Act of 1952 is hereby amended by —

(a) the substitution for subsection (2) (inserted by the Act of 1974) of the following subsection:

"(2) (a) A pension shall, in lieu of any other rate, be—

(i) where the weekly means of the claimant or pensioner do not exceed £15—at the rate set out in Table A to this subsection,

(ii) where the weekly means of the claimant or pensioner exceed £15—at the rate at which, in accordance with that Table, the pension would be payable if the weekly means of the claimant or pensioner exceeded £14 but did not exceed £15, less £1 for each amount (if any) of £1 by which those weekly means exceed £15, any fraction of £1 in those weekly means being treated for this purpose as £1; provided that if the rate calculated pursuant to this paragraph at which, but for this proviso, the pension would be payable is less than 50 new pence, the pension shall not be payable.

Again, with no disrespect to the draftsman of that section, whilst on perusal on a number of occasions it indicates it has a meaning it is a most complicated form of wording to arrive at the intended meaning. As I understand it, the means test is being effectively lowered by £1. Would the Parliamentary Secretary deal with those points?

Mr. Cluskey

I think the Deputy's interpretation is correct. I accept in all legal jargon used in the preparation and wording of Bills not only is it somewhat complex for Members of the House but it would be completely bewildering to members of the general public. I am glad the Deputy in his opening remarks referred to what he described as the excellent publication by the Department of a booklet which sets out the entitlement of people in what I consider is a perfectly straightforward and simple way. A person who wants to know what he is entitled to under any of the various benefits would not, I am sure the Deputy accepts, go to the Act and try to unravel out of its wording exactly what he is entitled to. He would seek guidance by referring to the booklet published by the Department, which sets out, as I stated, in fairly straightforward and simple language exactly what people are entitled to.

I am sure the Deputy also appreciates, as we are dealing with legislation which affects all our citizens and must be open to legal interpretation, that while we might find the wording of it somewhat strange and at times somewhat bewildering it is necessary, because it is creating legislation, that careful legalistic wording be used in the draftsmanship of this Bill. I do not honestly believe that poses any problem whatsoever to ordinary citizens because I think their references will be either direct to the Department or to the booklet to which the Deputy has so kindly referred.

Mr. Faulkner

On the Second Stage, in relation to the benefits in the Bill, the Parliamentary Secretary stated:

They fulfil the undertakings given to the people in the White Paper on "A National Partnership" which stated that "the Government believe that those who are dependent on social welfare payments should be cushioned against price rises and should also be assured of at least an adequate maintenance of their position vis-á-vis other sections of the community”.

I am sure the Parliamentary Secretary wishes to go much further than that because if that were all that was happening it would mean those who were in poverty prior to the provision of the increases given in this Bill would still remain in poverty. The Parliamentary Secretary further stated:

The increases announced in the budget and provided for in this Bill do not just keep pace with inflation. They represent a real increase...

The increases given in section 2 to pensioners are approximately 21 per cent and the increase in the cost of living, which was announced recently, was given at 23.8 per cent. In that respect it is not a fact to say that the money made available improves the position of pensioners. In my view it has the opposite effect because I believe it disimproves it.

The actual increase in the cost of living of people on low incomes, such as those dependent on social welfare, is very much higher than the average percentage increase in the cost-of-living index. This is because a very much higher proportion of the income of people in the lower income group is spent on food and fuel. Therefore, the actual increase in the cost of living of social welfare beneficiaries, particularly those who depend on unemployment assistance and social assistance generally, is very much worse than the increase in the cost of living which was announced. In my view the 21 per cent increase, which looks big as a figure, does not take into consideration the cost of living increase which was announced and especially it does not take into consideration the extra high percentage increase in the cost of living of those in the lower income groups. The increases given here, far from improving the lot of pensioners, are not sufficient even to maintain the standard of living they had previously.

Mr. Moore

I join with Deputy Andrews in welcoming the publication of the little red book on social welfare issued by the Department.

Mr. R.P. Burke

Mao's little red book.

Mr. Moore

Even when you peruse the book very diligently you have to refer to the Bill to answer the inquiries of many constituents. Does the Parliamentary Secretary know how many people over 80 years draw social welfare benefits? Could we reach a stage when we would say that a man who has reached 80 years of age, especially if he was a lower paid worker and perhaps because of illness or something else has not sufficient stamps to qualify him for a contributory pension, that although we may have a means test he might get a full pension? That man might have suffered ill-health all his life and might not have been able to obtain a sufficient number of stamps to qualify him for a contributory pension. The Parliamentary Secretary should consider the possibility of giving such people a pension without a means test when they reach the age of 70 or certainly 80 years. I am not referring to wealthy people but to those who may not have been able to obtain the necessary number of stamps.

Mr. Cluskey

To my surprise, Deputy Faulkner somewhat distorted the situation with regard to the increased pensions and the cost of living. As I stated on Second Stage, with the implementation in April of the various improvements covered by this Bill the rates of social welfare payments will have been raised by this Government since 1973 by 66 per cent in the case of personal rates of benefit, 80 to 90 per cent for single parent families and 96 to 140 per cent for child dependent allowances.

Mr. Faulkner

Is the Parliamentary Secretary including 1973?

Mr. Cluskey

I am including from the budget of 1973. The percentage increases I have quoted are a matter of public record and they can be verified. Anyone can do the sums, particularly Deputy Faulkner, and there is no question with regard to their accuracy. In the same period the maximum rise in the cost of living has been 40 per cent.

Therefore, when one relates the increase of 40 per cent which is the maximum by which the cost of living has increased since the budget of 1973 to the 80 per cent to 90 per cent increase for single parent families and the 96 per cent to 140 per cent increase for child dependent allowances, it gives total lie to the repeated suggestions in the House that the increases have not kept pace with the cost of living.

Deputies should realise what has happened in this area in the last few years. In July, 1974, there was an increase of 18 per cent and from 1st April there will be an increase ranging from 21 per cent to 23½ per cent while the cost-of-living increase has been about 16 per cent or 17 per cent at the maximum. There is an undoubted improvement in the real standard of living of people who are in receipt of these benefits.

As I pointed out before, I am not for a moment suggesting that in all cases these people are well off or that adequate provision is made for them. There are some areas in social welfare that are doing reasonably well but possibly in other areas they are not doing so well. One of the great drawbacks has been the total lack of research by the Department of Social Welfare. When I came into the Department not one halfpenny could be legally spent by the Department on any form of research regarding where the benefits were going and their effect on the various categories. There was no scientific approach and there was no way one could get an overall picture of the effect these very large expenditures were having in the area of social welfare. I am glad that now we have an allocation and that research can be and is being carried out.

To state that the increases do not compensate for the increase in the cost of living is simply not facing up to facts that can very easily be checked. Not only are the increases keeping pace with the cost of living but they have given a reasonable improvement in many areas. One of the most beneficial aspects is the review that will be carried out next October to ensure that the gains made will be maintained. Deputies who do not speak factually about this matter are not doing any service to the community.

Mr. Andrews

Of course, one can do anything with figures. If an article costs 1p and if it is increased by another 1p that is an increase of 100 per cent. That is the kind of juggling that has been done——

Mr. Cluskey

I accept that I found that under Fianna Fáil administration the basic benefits were very low when we came into office.

Mr. Andrews

Nobody on this side of the House said that. The Parliamentary Secretary is merely reflecting his own prejudices by making a statement of that nature. It is possible to juggle with figures to suit one's point of view. One can misrepresent the total effect of increases by distorting percentages to suit one's case. The reality of the position is as stated by the industrial correspondent of The Irish Times on 15th March, 1975, when he stated that consumer prices rose by 8 per cent between mid-November, 1974, and mid-February, 1975, and by 23.8 per cent between February, 1974, and February, 1975.

We come to the causes for the huge rise in the inflationary rate. We know the Government have been blaming external sources, the Arabs in particular, for inflation in this country but a closer examination shows that it is not the case. In their January report, the National Prices Commission quite clearly laid the blame for at least 50 per cent of inflation at the door of the Government. They attributed the rate of inflation to the Government's attitude with regard to borrowing, either externally or internally from the banks, and to a quite unusual attitude with regard to public expenditure generally.

We will be dealing more specifically with that on section 13, the most extraordinary type of income taxation, applying to employer and employee — £40 million, involving £27 million for the employer and £13½ million for the employee—and we will be describing that form of taxation, couched in legislation of this kind——

Mr. Cluskey

Are we dealing with section 13 now?

Mr. Andrews

I am prevented from doing so by the rules of the House.

Acting Chairman (Mr. M.E. Dockrell)

The Deputy is going beyond section 2.

Mr. Cluskey

So long as I am told that we can all deal with it I do not mind doing so at this point.

Mr. Andrews

Just to balance what the Parliamentary Secretary said in reply to Deputy Faulkner, I want to say that when dealing with figures one can prove one's case but on cross-examination one would give a different percentage.

Mr. Faulkner

To refer to the Parliamentary Secretary's reply to my case, I specifically asked him whether he was including the 1973 budget in the case he was making. He said he was. In that budget, social welfare benefits were increased, very largely because the Government had available £30 million in agricultural subsidies. Since then, social welfare increases have been tied very tightly to the percentage increases in the cost of living as announced by the Government. In 1973-74, it was estimated the cost of living had increased by 18 per cent.

Acting Chairman

The Deputy is going beyond the section.

Mr. Faulkner

I am referring to the levels of pensions. The contributory old age pension granted in July, 1973, to a person without dependants was £7.30 and that was increased to £8.50 in July, 1974, an increase of 18 per cent, the same as the increase announced in the cost of living. The point I made was that the increase in the cost-of-living index as announced was much lower than the increase in the cost of living of a person in receipt of a social welfare benefit. I explained why. I am convinced that the increases given then did not compensate for the real increase in the cost of living.

There is, of course, another problem. It is that the amount of money made available in July, 1973, £7.30, because of rising prices fell in value very rapidly so that by May, 1974, it would buy only £6.20 worth of goods, comparing values of July, 1973. Because of that it was essential there should have been a much greater increase in all social welfare benefits to compensate for the real cost-of-living increase.

Mr. Lalor

I was surprised, having listened to Deputy Faulkner, to hear the unctuous claim of the Parliamentary Secretary that Deputy Faulkner had exaggerated. The Parliamentary Secretary exaggerated out of all proportion. We are talking two years after the Coalition took office. At that time they had the advantage of £30 million from the EEC agricultural fund. In their three budgets since they have been paying for increases by extra taxation — indeed we are having weekly budgets. The Parliamentary Secretary has been blowing about further increases in October. The thing is that there have been further increases in taxation to meet those increased benefits.

Mr. Cluskey

That is not factual.

Mr. Lalor

The Parliamentary Secretary has a way of dressing things up.

Mr. Cluskey

The Deputy has been trying to get something on record. I am now challenging it.

Mr. Lalor

The Parliamentary Secretary will have an opportunity of getting on his feet to tell us otherwise. I was glad to hear the Parliamentary Secretary saying on behalf of the Minister for Finance that there will not be a budget before Christmas. In view of the fact that we have been having a weekly budget that is a big statement for him to make. My main purpose in discussing this section is to get the Parliamentary Secretary to iron out an anomalous situation in relation to blind pensioners vis-á-vis old age pensioners. Blind pensioners are not specifically provided for. A blind pensioner who had been given £7.30 a week and who reaches the age of 68 will have that withdrawn from her and from 1st April her benefit will be increased by the appropriate amount, bringing her to the neighbourhood of £10. Has the Parliamentary Secretary had a look into the possibility of tackling that specific problem to see if an amendment could be introduced to deal with such a case?

While I am talking specifically about a 68-year-old blind lady, I know there are many more cases throughout the country. While I appreciate that there are not too many cases involved, an amendment covering her case would not be very expensive. I know of a widow who, from last week, had her pension reduced from £15.10 to £7.80. That was her compensation for reaching 68 years of age. It would have been better for her if the old age pension age limit had not been reduced from 70 because she would then have enjoyed the benefits of the higher pension for another two years. I am not advocating a higher age limit. I am merely drawing attention to this specific case. This lady was in receipt partly of a blind pension and a contributory widow's pension of £7.80. Would it be possible for the Parliamentary Secretary to introduce an amendment to cover this case?

As Deputy Andrews pointed out a few moments ago, there are many regulations and it was not possible for me to go through them to find the one appropriate to this case. In the case of a widow becoming less well off by transferring from the widow's to the old age pension, can she opt to retain her widow's pension? A regulation in the Department says that once she reaches the age limit for old age pension she cannot keep her blind pension but must transfer to the old age pension. Would the Parliamentary Secretary use his ingenuity to ensure that the person who transfers from one pension to another will not lose financially?

There is the requirement under section 2 that the applicant for the old age pension must reside in the State for a five-year period subsequent to reaching the age of 50 years. I have in mind a lady who returned to Ireland 12 months ago. She had spent 46 years in Ireland before going to the United Kingdom. She is now 68 years of age but will still have to reside here for a further four years before she qualifies for the old age pension. Can anything be done in such cases?

I do not accept the Parliamentary Secretary's figures of increases of 90 per cent and higher since they took office. As Deputy Faulkner pointed out, it was very wrong of him to take into consideration the increases of 1973. What we really want to do is to match the increases in the cost of living in 1973 with that of 1974 and 1975. Then it will be seen that the housewife's shopping basket can buy less for the £8.85 old age pension of today compared with what could be bought with the old age pension in July, 1973.

Parliamentary Secretary to the Minister for Social Welfare (Mr. Cluskey)

We are dealing with one section of this Bill but one would think we were having a budget debate from the number and range of issues raised. As I stated before, there is no question about the benefits people in receipt of social welfare obtained and the factual improvements in their standard of living achieved over the past few years. Anyone can compare the percentage increase in the cost of living with the percentage increase in the various rates of benefit which have taken place over the last three budgets. It is clear that very substantial increases have taken place in the actual living standards of the various categories, ranging from 66 per cent in some cases to children's allowances which increased by as much as 360 per cent and single parent families from 80 to 90 per cent. These are all readily available, verifiable facts. We do not have to speculate about them.

Deputy Lalor mentioned the old age pensioner with a blind pension. I accept that this is a severe hardship. I agree this is more heartrending because we are dealing with a blind person. The majority of people when they go from an active working life to an old age or retirement pension find that they must survive on a fraction of what they were used to while engaged in productive work and earning a wage. This is a sorry fact of our society — a society which the Deputy's party had a bigger hand in forming than my party had. This is one of the things I hope we will be able to do something constructive about for every working citizen by the introduction of a pay-related pension scheme. At present there is no doubt that when a man who has been working all his life finds himself transferred from the position of receiving a reasonably good week's wages to reliance on our old age pension, as it now stands, he suffers a very severe cutback in his standard of living. That is something I hope we will be able to rectify in the not too distant future by the introduction of a pay-related pension which would ensure that, after 40 and 50 years' contribution to our society by active work and participation in it, at least such a man would be left with some degree of comfort for himself and his wife at the end of those productive years. Unfortunately, they are all in the same category at present.

Mr. Lalor

That is not the point at issue.

Mr. Cluskey

The issue is that when a person reaches pensionable age he suffers a setback in his income. The Deputy cited the question of a blind pensioner. To do so makes it a very emotive thing but, if one stands back and looks at it, it applies to nearly every working person in our society who is not fortunate enough to be in certain types of employment, which are relatively few, and which give him a reasonable assurance, when he reaches retirement age, that he can keep somewhat the standard of living he has built up for himself and his family in the course of his working life. Unfortunately, that does not apply to very many of our people. I hope it is something we will be able to rectify.

Mr. Lalor

Yes, but I am talking about the person with two pensions having them reduced to one.

Mr. Cluskey

I think that is possibly the only exception. As the Deputy knows, under legislation two pensions are not payable in this country. But I said with that exception.

The question of inflation is a real problem. Probably it constitutes more of a problem for people on low incomes, such as most social welfare recipients, than for others. In trying to deal with that problem we have made a new approach, that there will be a review in October — within a six-months' period — which, as the Minister for Finance stated, will ensure that the gains granted to social welfare recipients will be protected against inflation.

Deputy Faulkner spoke about all the money Fianna Fáil would spend in the area of social welfare. He spoke of the £30 million that fell into the Government's lap in 1973. Of course, that did not happen; when we got to the cupboard the cupboard was bare, and Fianna Fáil left it bare. We do not want to dig up history; we will come a little closer. I had to listen here on Second Stage — and I heard it again today — to all that Fianna Fáil would do were they only back in power. The fact remains that they did not do an awful lot in this area when they were there. But what is much more important is what exactly are their intentions in this area even when they are in Opposition? I shall tell you, and it is a matter for public record also. Deputy George Colley, who was the Fianna Fáil spokesman on Finance, who was the Minister for Finance in the Fianna Fáil Administration, published on the 15th of January last — the morning of the budget — in The Irish Independent, an article entitled “The kind of budget I would like to see”. Deputy Colley, in that article, listed what he would spend and where he would spend it. He quoted expenditure in the area of social welfare as £20 million. They are not my figures. I did not think this up. Any Deputy who wishes can walk down the corridor to the Library and get a copy of that issue of The Irish Independent of the 15th January, 1975. Deputy George Colley, the former Fianna Fáil Minister for Finance, the present spokesman of the Fianna Fáil Party in this area claimed, and stated publicly in that article, that he would allocate £20 million to social welfare.

I had to listen during Second Reading and again today to accusations that we were not spending enough, that people were dying of starvation, that we are not keeping pace with inflation. In fact, we have allocated £35,500,000 compared with the £20 million Deputy Colley, in his own article on the morning of budget day, stated he would allocate in the area of social welfare were Fianna Fáil back in power. People should take note of that, that not only did they not do so when they were in a position but they were so conditioned to not doing it and neglecting that whole area, even in Opposition, they cannot raise their sights high enough. Even in Opposition when they have no responsibility for finding the money, no responsibility for its implementation, they can come only to a figure of £20 million compared with an actual expenditure of £35,500,000 by our Administration. To talk of how badly we are doing in this area in the face of those facts I do not know. God help us.

Mr. Andrews

That copy of The Irish Independent sounds very like a personal, special edition exclusive to the Parliamentary Secretary.

Mr. Cluskey

No, it was an article by Deputy Colley; it was not a reporter; it was an article written by Deputy Colley.

Mr. Andrews

It sounds very like a special edition personal to the Parliamentary Secretary and exclusive to him.

Mr. Cluskey

That is easily ascertainable.

Mr. Andrews

It is an ascertainable fact; let there be no question about it. The point the Parliamentary Secretary is now making, on this section — which is a development of what we were saying — is that the present Administration are spending £35,500,000 on social welfare. If the Parliamentary Secretary is making that case — again, not to beat the matter of the social insurance contributions — he is clawing back £40 million out of this Bill.

Mr. Cluskey

I am talking about Exchequer expenditure, not total expenditure. The Deputy would have to distinguish between Exchequer expenditure and total expenditure.

Mr. Andrews

The Parliamentary Secretary has got to make his own case. If the Parliamentary Secretary, as he misrepresented a number of situations during the course of his last contribution, did not make that clear, the £35,500,000 has now been qualified.

Mr. Cluskey

I assumed the Deputy would know that.

Mr. Andrews

The Deputy knows what the Parliamentary Secretary is talking about without any doubt or question whatsoever. If a figure such as that stands bare on the parliamentary record, without qualification or definition, it might represent something else to other people than what it is intended to represent. That is the reason why it is as well for us to point out that the Government, in giving on the one hand, are taking back with the other. They are taking back £40 million.

Mr. Cluskey

There is nothing near £40 million involved.

Mr. Andrews

That is the first time that figure has been refuted by the Parliamentary Secretary.

Mr. Cluskey

It is not the first time it has been alleged over there.

Mr. Andrews

And it will not be the last.

Mr. Cluskey

I know that. The fact that it is not accurate ensures that it will not be the last time.

Mr. Andrews

It must, then, be challenged by the Parliamentary Secretary and this is the place to do so. If the Parliamentary Secretary proves to our satisfaction that the total of income taxation being sought under this Bill is not £40 million — or the March budget as we describe it, dressed up as a Social Welfare Bill — then we would be delighted to accept his explanation of the figure of £40 million which has remained unchallenged and which we say is unchallengeable. If the Parliamentary Secretary will explain the figure of £40 million and state that it is a figment of our imagination, we will accept that.

The Parliamentary Secretary speaks also about percentages. What we should be talking about here are the amounts of money being added to existing social welfare entitlements. The people who would benefit from the provisions of this Bill will not thank us as parliamentary representatives for talking of percentages. What they are interested in is money in their pockets, not percentages. What we must consider is the purchasing power of that money in the context of the most extraordinary inflationary situation that has ever faced the country. The remedy for this inflation is not being sought by the Government. What is important is the amount of the necessaries of life that these increases in social welfare will give to the recipients. That is what we should be speaking about.

We should also be talking about a programme, as we would describe it, of direct intervention by the community into the area where people are living in squalid conditions, where people are living in farmhouses on their own, cut off from the community. There are people living in such conditions in rural and urban Ireland. Listening to the Parliamentary Secretary you would imagine that this Bill was the panacea for all the evils in society. It is nothing of the sort.

The Dáil should give a day to a discussion on the whole question of poverty. The Parliamentary Secretary talks of the research he has conducted in his Department and the plans he has, and we look forward to evidence of that. However, we as public representatives, have an obligation, in the first instance, to relate our experience in the whole area of poverty in society and to give a lead as to how to cure this poverty. When the Parliamentary Secretary set up a task force in his Department to deal with poverty he said there were a quarter of a million people living below the poverty line. I asked him on the Second Reading to define what he considered that line to be and that definition is still awaited.

If the Parliamentary Secretary is making the case that this Bill reduces the number of people living in poverty, I can say that it does not. All this Bill is doing is compensating people with money for the increase in the cost of living. It is not giving people a better standard of living nor uplifting the quality of their lives. It merely compensates for the increases in the price of butter, the price of bread, the price of tea, sugar, milk — all gone out of control in the context of price increases. Therefore, I do not think the Government should be patting themselves on the back for giving people that to which they are entitled. The Government who created the inflation are compensating for it by the social welfare increases which they are boasting about in this Bill.

To go back to section 2 and to Table A, I would ask the Parliamentary Secretary to comment on the means test and the situation where the weekly means of the claimant or pensioner does not exceed £6. Does the Parliamentary Secretary consider that is sufficient by present day values? Does he not think he should increase it by more than £1? The problem we face under Standing Orders is that we may not put down amendments which place a charge on the Exchequer. In the normal way we would like to have tested the attitude of the Government by putting down amendments which would uplift the base of £6. At the same time, we have to be a responsible Opposition. It is not good enough for us to say the base should be more than £6, £9 and so on down the line. We realise that the cost would be considerable to the Exchequer. Maybe the Parliamentary Secretary would deal with that question.

Mr. Cluskey

Deputy Andrews talks about the Bill's effect upon poverty. I am not suggesting for one moment that this Bill will eliminate poverty. I have never suggested that, but I will say that, if anything, the change of Government has stopped a number of people from joining the ranks of the category of poverty, ranks that were built up over years of neglect. I would refer to the results of a survey not done by any Government source but by an outside source. Fianna Fáil either did not believe in research in this area or came to the proper conclusion that it would have been an embarrassment to get the facts. The facts are that on the only figures that are available so far there are approximately 20 to 24 per cent of our people in poverty. These figures were calculated around 1971 or 1972——

Mr. Andrews

1971.

Mr. Cluskey

They gave these figures. I do not see any reason to doubt them in the absence of any more authentic figures, but I honestly believe that the policies that were pursued by Fianna Fáil in this area were a recruiting sergeant for the army of poverty which we have and with which we are trying to deal today. I welcome the interest being shown by Deputy Andrews and Deputy Faulkner in this area. You may look back over the records of the House and you will find that Fianna Fáil never acknowledge this problem. They regard an acknowledgment that we had people in the category of poverty as an admission of their own failure and because it was that, they refused to acknowledge the problem existed. The first time they acknowledged it was when this Government brought the facts into the open and admitted the existence of the problem. Some Fianna Fáil members see this as an opportunity, as a stick to beat the Government with. We know that. Every time I speak on this subject, I fully realise the danger of handing them a political stick with which to beat me and members of the Government. I accept that political risk because I am convinced that the first step that must be taken is an acknowledgment by all of us that this problem exists and to a large extent. Without that acknowledgment we cannot hope to cure it.

Deputy Andrews spoke about the easement of the means test and he spoke of £6 as a very low figure. It is not the figure I would wish to have. I should like to see no means test at all but it is not possible to achieve overnight all one would like to achieve. No matter how bad the system, if you see many things of which you do not approve, it is necessary to put something in its place before you tear it down. You cannot abolish a system unless you have something to replace it with. We are in the course of putting something in its place and have already taken a number of steps in that direction. We know what is required and we have come a reasonable distance towards our goal and we have work in hand to go the remainder of the way.

The £6 may not be all we desire but the fact is that two years ago that figure was 50p. It has gone from 50p to £6 in the space of two years. That is reasonable progress and Deputy Andrews cannot make much out of that. I accept that Fianna Fáil have difficulties in Opposition in this area because of their record in Government. That poses major difficulties for any Fianna Fáil spokesman.

Mr. Andrews

I want to make very clear that the Fianna Fáil record in Government is nonpareil. It poses absolutely no problem for us when we come to speak in this area of social welfare.

Mr. Cluskey

You must be very insensitive.

Mr. Andrews

The Parliamentary Secretary is extremely sensitive as well as being rather insensitive. He has said that he is going to introduce this or that programme. Every piece of legislation in existence, almost without exception and every social welfare scheme no matter what the Parliamentary Secretary may think about it or how it was done in an ad hoc or grasshopping situation — schemes introduced without much thought and so on — was introduced by Fianna Fáil. Ninety-eight per cent of existing social welfare legislation was introduced by Fianna Fáil. That is a figure the Parliamentary Secretary cannot challenge.

What the Parliamentary Secretary has done in this section is consistent with what he has done in regard to all the other sections. He has built on the foundation laid by Fianna Fáil and undoubtedly he has extended a number of benefits to other categories as the social demand arises. That seems to be following the pattern set by Fianna Fáil. The Parliamentary Secretary is extremely well-intentioned, and I say that without any equivocation, but well-intentioned promises must be followed by well-meaning action. On the basis of what he has said we shall expect a revolution in the Department of Social Welfare. He is correct in saying that the social needs and demands were not as evident heretofore and there was not as much need for people to involve themselves with the community on a voluntary basis. Not much thought was given to the whole area of social entitlement and how one's fellow citizens were affected. The people now demand a greater concentration in this area and, as I said on the radio the other evening when the Parliamentary Secretary and I had a rather pleasant confrontation, I think social welfare will become one of the most important areas in the whole administration of Government. I stand over that now and that is why I say we expect a great deal from the Parliamentary Secretary. We look forward to what he says he will do. I assure him that we shall in no way inhibit him or hinder him in the production of any worthwhile scheme.

As he said, you cannot tear down a structure overnight unless you replace it by some more effective structure. The Parliamentary Secretary has promised that situation will come about. We look forward to it and will give him every encouragement to bring it about. Meanwhile, the Parliamentary Secretary is introducing a Social Welfare Bill which produces nothing particularly new by the standards he sets himself but he is adding moneys to structures set up under Fianna Fáil.

There are some 60 Acts and 350 Regulations and quite an amount of precedent law in existence on social welfare. Most, if not all, of that was introduced by Fianna Fáil and there is no gainsaying that. The Parliamentary Secretary says that he wishes to introduce a codifying or consolidating Act which will consolidate all these Acts and regulations. Examining existing legislation after 50 years to see how one can consolidate and codify it is a proper progression in any democratic society. It is the sort of thing we should be doing.

Mr. Faulkner

On many occasions the Government and the Parliamentary Secretary have compared the record of Fianna Fáil with the record of the present Government and they have referred in particular to the extra millions being spent on social welfare and the high percentage increases granted. That type of statement is, of course, meaningless; it has no foundation unless it is related to the cost of living. We are all only too well aware of the enormous increase in the cost of living over the past two years. We are only too well aware of the highly inflationary situation in which we find ourselves. Unless we are prepared to take these particular aspects into consideration it is not possible to make a realistic assessment. We have, therefore, to judge these increases in the light of the horrific increases that have taken place over the last two years. The fact is that an increase of 5/- in an old age pension when prices were constant over a long period was a real increase. The recipient could buy more. It is quite a different matter in a highly inflationary period and it is not a reasonable argument, therefore, simply to say that we are spending more on social welfare than the previous Government spent and are a much better Government than they were because of that. In so far as I can ascertain from the figures available to me, the increase in the non-contributory old age pension is roughly 21 per cent: the increase in the cost-of-living index recently issued is 23.8 per cent and that 23.8 per cent is not in itself the reality.

Mr. Cluskey

Where did the Deputy get the 23.8 per cent?

Mr. Faulkner

It was a figure issued recently.

Mr. Cluskey

For what period?

Mr. Faulkner

Mid-February, 1974, to mid-February, 1975.

Mr. Cluskey

Is the Deputy not aware that we gave an 18 per cent increase last July?

Mr. Faulkner

I am very well aware of that. If the Parliamentary Secretary would like me to travel that particular avenue, I shall be glad to do so.

Mr. Cluskey

I would be glad if the Deputy would. We would all benefit from a complete exposé.

Acting Chairman (Mr. Carter)

May I point out that the Chair has a certain function and would Members please not ignore it altogether?

Mr. Cluskey

It is a very wideranging debate.

Acting Chairman

That is so but I would ask Members to confine their remarks to the sections in the Bill.

Mr. Cluskey

We have had a longer discussion on this Bill than we had on the Estimate for the Department.

Acting Chairman

Would the Parliamentary Secretary leave it to the Chair to deal with the matter?

Mr. Faulkner

It is possible that discussion on this section may be relevant on later sections and the discussion, therefore, may not be as long on later sections. A person depending on a low income, such as a social welfare beneficiary, spends a higher percentage of that income on food and fuel and has to meet a higher percentage increase in the cost of living than the average issued by the Central Statistics Office and it is important that these matters should be considered when endeavouring to improve the standard of living of social welfare recipients generally. It is not improved in this particular Bill. Of course, we are all very anxious to eliminate poverty. Its elimination will take some time but year by year we should be endeavouring in the increases granted to reach the point of elimination.

Question put and agreed to.

SECTION 3.

Question proposed: "That section 3 stand part of the Bill."

Mr. Andrews

I am interested in the differential in unemployment assistance as between urban and rural recipients. The weekly rate of unemployment assistance applicable to a recipient in an urban area is £7.70. A recipient living in a rural area receives £7.35; there is a differential of some 35 pence. Will the Parliamentary Secretary be considering the abandonment of this differential? If he is not considering it, why does he think it is necessary? In the case of a person with an adult dependant there is a differential of 45 pence. That is being preserved. What is the cost of maintaining the administration of the differential in the context of urban and rural areas? There may be good reasons for the differential but I have come to the conclusion, without bringing the politics of inflation into it, that one generally finds in rural areas that consumer goods are not priced very differently, if at all, from those in urban areas. Consequently the distinction seems to me to be out of date. That is my personal conclusion.

Mr. Cluskey

This differential was introduced by a previous Administration on the basis that it was considered cheaper to live in a rural area than it was in a largely urban area. Personally, I am not quite sure that that is true. This, along with many other things in the social welfare field, will be examined but I could not give any undertaking at the moment that there will be any immediate change in that situation. In fact, I would have to look at it a lot more closely than I have had an opportunity to do up to now to see how much validity there was in the previous Administration coming to this particular decision and even if there was how much validity there is in it now.

Mr. Faulkner

I imagine it was valid some years ago but not really valid now. I think the Parliamentary Secretary will agree with me that £6.5 paid to a person with no dependants in rural Ireland is very low. If that person is living alone I know that home assistance is available to him but I suggest it might be worthwhile thinking of some other way in which the amount of money could be raised to a more reasonable level. Perhaps extra money could be paid to which he would have a right, rather than having the situation that he must look for the home assistance and the decision rests solely with the home assistance officer as to whether or not he gets it. I am sure the Parliamentary Secretary agrees with me that in such circumstances it might be as well to have some other way in which assistance could be made available rather than have it given in home assistance.

Mr. Cluskey

I take the Deputy's point but I am sure that he is aware it is the intention to bring in a reformed Home Assistance Bill in the very near future. One of the provisions of that Bill will be that benefits will be given as of right. This is an area to be looked at. The number affected by the increases, for the information of Deputies, is approximately 62,000 applicants with 37,000 adult dependants and 102,000 children so a very substantial number of people are involved.

Mr. Andrews

I do not want to delay the House because we understand the Parliamentary Secretary has to bring this Bill to the Seanad before the entitlements become operative. Therefore, it is not our intention to delay the passage of the Bill to any great extent but, nevertheless, we have a duty to seek answers to certain questions and I am sure the Parliamentary Secretary will forgive us for that. In relation to the differential of 35p in the rates of unemployment assistance for urban and other areas what is the cost of administering that differential?

Mr. Cluskey

Practically nil.

Mr. Andrews

How does the Parliamentary Secretary come to that conclusion?

Mr. Cluskey

It is very easy to ascertain if a person lives in an urban area or another area. The cost of the administration of it is very marginal indeed.

Question put and agreed to.

Section 4 agreed to.

SECTION 5.

Question proposed: "That section 5 stand part of the Bill."

Mr. Faulkner

Would the Parliamentary Secretary explain subsection (2) of this section?

Mr. Cluskey

It is a question of capital. At the moment the capital that one could have and still qualify for a pension is approximately £12,000. This is regarded as adequate.

Mr. Faulkner

Is it income from capital?

Mr. Cluskey

Yes, but the way it is assessed a person could have capital to the value of £14,000.

Mr. Faulkner

And still be under £6 a week income.

Mr. Cluskey

Yes, the way it is assessed.

Mr. Faulkner

Perhaps the Parliamentary Secretary sometime would let us have information as to how the assessment is made?

Mr. Cluskey

I would be glad to do that.

Mr. Faulkner

Does it apply to the value of a farm?

Mr. Cluskey

No. It applies to money in the bank.

Question put and agreed to.

SECTION 6.

Question proposed: "That section 6 stand part of the Bill."

Mr. Andrews

Can the Parliamentary Secretary tell the House how many orphans are in receipt of orphans' non-contributory pensions? One wonders, having considered the section in some detail and having gone into the general background of the proper principle of entitlements for orphans, at the idea of a pension of 75p per week and the cost of administering such a pension? That 75p a week might be the difference between heaven and purgatory to the particular individual but, nevertheless, one must question such a pension when considering current day values. The Parliamentary Secretary will probably say that this principle was set down by the previous Government but anything he might say about them will not be embarrassing to me because our record in the social welfare field is excellent. The Parliamentary Secretary is merely building on existing structures and has not introduced any new structures. He has extended the benefits to some degree. Would he answer my query in the context of the efficacy of 75p pension in relation to an income which may exceed £5 but does not exceed £6? No doubt the Parliamentary Secretary, who is very knowledgeable in matters of this nature, will give an adequate reply. I hope my question will be accepted in the spirit in which it is asked.

Mr. Cluskey

I think perhaps the Deputy is a little confused. It is not only a pension of 75p that is involved. The maximum orphan's pension is £5.75 and it ranges from that amount to £4.75, £3.75, £2.75 and £1.75 on a scale. A person may qualify for a pension at the mimimum rate of 75p while earning up to £6.

Mr. Andrews

I understand that. I am pointing out that an amount of 75p is given.

Mr. Cluskey

The Deputy asked for some statistics. I can tell him that 90 per cent of orphans qualify for the full pension of £5.75.

Mr. Andrews

That is a very good figure.

Question put and agreed to.

Section 7 agreed to.

SECTION 8.

Question proposed: "That section 8 stand part of the Bill."

Mr. Faulkner

This section states: "Where the weekly means of the claimant or beneficiary do not exceed £1". In other instances the means are set out at £6.

Mr. Cluskey

It is on a different basis. It is related to the unemployment assistance qualifications.

Question put and agreed to.

SECTION 9.

Question proposed: "That section 9 stand part of the Bill."

Mr. Andrews

Is the Parliamentary Secretary happy with regard to the amount he is giving under this section? He is increasing the old age care allowance from £4.15 to £4.95. Will he tell the House the number of persons in receipt of this allowance? The scheme is most worthwhile.

Mr. Cluskey

This pension is to cater for persons of pensionable age who are not in receipt of a pension from the Department but whose yearly means are just outside the upper limit for a non-contributory old age pension. The allowance is payable to people who are incapacitated and who require full-time care and attention. The section provides for an increase in the rate payable from £4.15 to £4.95, in line with increases in the prescribed relative allowance.

Mr. Andrews

The State is getting off very cheaply.

Question put and agreed to.

SECTION 10.

Question proposed: "That section 10 stand part of the Bill."

Mr. Faulkner

We welcome the reduction in the qualifying age to 67 years. If we were to compare Fianna Fáil's record with regard to such matters, we could say we introduced the retirement pension for people of 65 years. Those people in that category who reach the age of 67 will not receive any increase except for the fringe benefits.

If a person aged 67 years is working and if he decides to continue working, I understand he is no longer insurable in the ordinary way. If he wishes to continue employment, can he insure for occupational injury? If he is insured for occupational injury, is this regarded as sufficient protection in the case of accidents? Will it be regarded by the employer as sufficient protection in the sense that he will continue to keep that man in employment? A considerable number of people who are working at the age of 67 years are frightened that if they draw the pension and reveal their age they may lose their employment. This is a matter that should be clarified by a positive statement.

For example, recently a man came to me and told me his wife had reached the age of 67 years and he wondered what prospects she would have of getting a non-contributory pension while he was in employment. At first I thought it was a case where the wife was older than the husband, but when I questioned the man he told me he was 67 years but that he was employed and, therefore, did not want to draw the pension in case it would affect his employment. If a person is covered for occupational injury, is this regarded as sufficient cover by employers generally?

When a person who has been stamping cards for years becomes pensionable and decides to draw the pension while continuing to work, what is his position with regard to health benefits? What is the position of his dependants? Does his right to health benefits remain as it had been while he was stamping his card? Many people are worried on this score and, while I think I know the answer, it would be as well if we had it from an authoritative source.

Mr. Andrews

With regard to the reduction in the age limit, as Deputy Faulkner pointed out, Fianna Fáil introduced the retirement pension for people of 65 years. While we are not in the business of prophesying or crystal-ball gazing, with the emphasis on early retirement in time this scheme will be applicable to people of 60 years or even younger. Is the Parliamentary Secretary in a position to state whether the age limit for old age pensioners will be reduced to 66 years next year?

Mr. Cluskey

The Deputy will appreciate that even if I were in a position to tell the House, I would not be in a position to discuss budgets that have not been introduced yet.

Mr. Andrews

Then I have to go into the area of prophesy.

Mr. Cluskey

Speculation — the Opposition are not bad at it.

Mr. Andrews

I leave that to the Government. On the basis of prophesy, the natural progression would be to reduce the old age pension qualifying age to 65. One can foresee that it will not be long until people retire at 60 years or 55 years, if they are not doing so already, and we will have to consider that situation well in advance. Because of technological and scientific advances and medical disciplines, people are living longer and they will be retiring younger and I have no doubt the Parliamentary Secretary will examine the proposals we have made about programmes of retraining people for retirement occupations. We do not think the programmes already there are extensive enough. One hears that people in retirement go to seed and that in a year or two they will die.

An Ceann Comhairle

This is not relevant.

Mr. Andrews

I appreciate we are probably in the area of religion. No doubt that person might like to——

Mr. Cluskey

Retire to the Seanad.

Mr. Andrews

——spend a longer period in the land of the living and that is why I ask the Parliamentary Secretary to examine our proposals in this respect.

Mr. Cluskey

I recall that we extended social welfare provisions to religious orders but I do not think that gives a right to speculate in regard to purely religious matters. I am sure the Deputy will forgive me if I refrain from so doing. Deputy Faulkner asked whether a man who, having reached old age pension age and who is working, would be covered for occupational injuries and health hazards. He would.

Mr. Faulkner

Might I explain? I gave the case of a man who would be drawing the old age pension and who would be afraid he would lose his job. What I wanted to know is when a person having reached 67 years, who is employed and covered for occupational injuries and health hazards, whether that would be sufficient to satisfy any employer in the matter of accidents that might occur in the course of his work.

Question put and agreed to.

Sections 11 and 12 agreed to.

SECTION 13.

Question proposed: "That section 13 stand part of the Bill."

Mr. Andrews

The draftsman engaged in a piece of irony or sheer coincidence because this is numbered 13. It is an unlucky section for those who are superstitious about number 13. We would describe it as legislative subterfuge. It is dressing up a sweet on the outside with all the attractions of the confections but inside there will be the bitter pill. The section is well known to the people of the country but it has been very well played down by the Departments of Health and Social Welfare. The GIS have not mentioned it at all. One can appreciate why.

The Opposition say that on its imsurabl plementation it will mean taxation of an extra £40 million. The Parliamentary Secretary has refuted that figure but he has not given an alternative one, whether the figure should be more or less. This is a piece of penal legislation. The Parliamentary Secretary mentioned £35 million as being effectively provided for in the Bill. On the other hand, he rejects £40 million.

Many people are not aware that this section proposes to raise a further £40 million in taxation. The employer is to be charged 84p more and the employee 40p more for the insurance stamp, yielding £27 million and £13 million respectively. By any mathematical calculation that is £40 million. The Government in this matter have been guilty of legislative sleight of hand. On Second Reading the Parliamentary Secretary was asked what will happen to a figure of £5 million which is being collected under the pay-related benefit scheme. We say that a figure of £8 million has been collected in the nine months up to 31st December last.

Mr. Cluskey

There is nothing in the section dealing with that. The Deputy can hardly relate something to the section which does not apply to it.

An Ceann Comhairle

This section deals with insurance rates only.

Mr. Andrews

I know what it deals with because I have been studying the Bill very closely.

Mr. Cluskey

I am glad the Deputy has been studying the Bill very closely. Perhaps he will stay with it now.

Mr. Andrews

I will not be put off by a conspiracy between the Chair and the Parliamentary Secretary. If they want to engage in that type of parliamentary tactic, they will not prevent me from making my case, however good or bad, by the standards they may wish to inject into the debate.

This Government have raised £40 million under this section by directly taxing the employer and employee. Under the pay-related scheme £5 million is still unaccounted for. I pointed out that of the £8 million collected under that scheme in the nine months to the 31st December, 1974, only £3 million have been expended. By any stretch of the mathematical imagination that leaves a balance of £5 million.

An Ceann Comhairle

Matters appertaining to the pay-related scheme are not appropriate under this section.

Mr. Andrews

All I want to know is what has happened to the £5 million. If the Government are raising £40 million under section 13, why did they not consider setting the £5 million against that figure? That is one of a series of questions which arises under section 13. In our view, that section gives this Bill budgetary status. Any Bill which raises £40 million is a budget by any standard. We must question economic thinking behind a measure of this sort. With the permission of the Chair, if one can relate to the £50 million collected per-Christmas by the additional infamous petrol charges, postal charges——

An Ceann Comhairle

The Deputy knows these matters are not relevant.

Mr. Andrews

Of course, they are relevant.

An Ceann Comhairle

The Chair has ruled that they are not relevant.

Mr. Andrews

The Chair has not heard me on its relevance yet. I stated that the pre-Christmas budgetary charges in the context of money sought by an increase in petrol charges, postal charges——

An Ceann Comhairle

The budget debate is over. We are now dealing with the Social Welfare Bill — increased contribution rates.

Mr. Andrews

That is what I am dealing with.

Mr. Faulkner

Surely the Deputy can discuss the need or otherwise of the increase in relation to the increased taxation charges which have already taken place?

Mr. Andrews

We are discussing that.

An Ceann Comhairle

The Chair is anxious to avoid the repetition of a budget speech.

Mr. Andrews

I am not repeating myself. How can one avoid the repetition of a budget speech when one is effectively dealing with a budgetary measure? If you examine section 13 closely, Sir, you will see what the section does. It raises income taxation by sur-charging the employer and the employee to the extent of £40 million. Under the heading of any economic thinking that is a budgetary charge. This Social Welfare Bill could be described as the March budget. When one uses the term "budget" in the context of what legislation the present Government might introduce, I can understand the confusion it is causing the Chair.

An Ceann Comhairle

It is not causing the Chair any confusion. The matter before us is section 13 dealing with the new rates of employment contributions.

Mr. Andrews

I appreciate that and that is why I——

An Ceann Comhairle

There can be no widening of the scope of the section.

Mr. Andrews

——do not want to cut across the ruling of the Chair. I suggest that the Government in their pre-Christmas budget raised £50 million by taxation, in their January budget they raised £48 million——

An Ceann Comhairle

The Deputy is repeating himself.

Mr. Cluskey

He must do that because he has nothing to say.

Mr. Andrews

I have a lot to say and my colleagues have more than enough to say. You have to repeat——

Mr. Cluskey

The people in Galway had a lot to say about this, too.

Mr. Andrews

I will be interested to see the end result of the Galway by-election.

Mr. Cluskey

You will see the end result of the Galway by-election in the general election.

An Ceann Comhairle

Can we please get back to section 13 of the Social Welfare Bill?

Mr. Andrews

I will make a bet with the Parliamentary Secretary——

Mr. Cluskey

You are on.

Mr. Faulkner

The Parliamentary Secretary means we will win the seats.

Mr. Andrews

Senator Michael Higgins, decent man that he is, will never see the inside of this House——

An Ceann Comhairle

There should be no reference to a Member of the Upper House.

Mr. Andrews

It was a fond reference.

An Ceann Comhairle

Be that as it may. It is a convention that we do not refer to the Members of the Upper House.

Mr. Andrews

No doubt the Parliamentary Secretary will say that all previous Bills increased social insurance contributions. We are saying that never in the history of the nation has an income taxation charge been sought in a Social Welfare Bill. Can the Parliamentary Secretary tell the House whether it is the intention of the Government to eventually divest payment of social welfare insurance from the Exchequer to the employer and employee? Will he also explain why this progressive development is taking place? To date that has not been satisfactorily explained.

I am sure he will have enough to chew on these few points. More specifically I would like him to deal with the £40 million increased taxation sought and the progressive divestment of the payment of the stamp on to the employer and employee from the central Exchequer.

Mr. Faulkner

When the budget provisions for social welfare purposes were announced, I put down a question asking the Minister for Social Welfare the price of the new insurance stamps. The reply I got was that the information was not yet available. At that time I thought that a strange reply because I assumed that the Government would have done a thorough analysis of the cost of the increases announced in the budget and would have known immediately the cost of the stamp to the employer and employee. However the reply, while vague in itself, gave one very clear indication — that the increase would be exceptionally high. Their hesitation in giving particulars was because they were afraid that whatever welcome might be given to the social and income tax provisions in the budget they would be more than cancelled by the new stamp price. We now know the increase in the price of the stamp. It has been widely described by employers as "horrific".

The unions have also been very critical of it. In so far as the workers are concerned, it has shown them that the much highlighted tax reliefs granted in the budget are a sham. What has actually happened is that they are no better off taxwise than they were prior to the budget. The saving reaped from income tax relief is now being paid out by them on the insurance stamp. The cost of the insurance stamp is now a tax in the real sense of the word, as Deputy Andrews has already underlined. Up to recent times the cost of the stamp was kept within limits and little notice was taken of the relatively small increases in its cost which took place annually. But I can assure the Minister for Finance and the Parliamentary Secretary that, henceforth, very particular attention will be paid to the increases because they now rank in the same category as income tax, VAT and the other types of taxation. The Government will need to exercise the same care in relation to increasing the price of the social insurance stamp as they do at present in relation to other taxation increases. Workers are particularly perturbed about the high contribution they must now make. I might add that they are equally annoyed by the manner in which the Government dealt with this matter, pretending on the one hand to be improving the workers' tax situation while at the same time planning to take money back from them through another type of taxation and this before the income tax relief came into effect. It is very much on a par with the manner in which the petrol tax was introduced before Christmas.

An Ceann Comhairle

The Deputy is now deviating.

Mr. Faulkner

It is well beyond the time that the Government should introduce a straightforward budget packet, explain the real reasons for taxation and defend their proposals instead of dealing with such a serious matter in a piecemeal manner. It shows a complete lack of planning by the Government which can have nothing but detrimental effects on the economy generally.

Employers have described the increase in the price of the stamp as horrific. It should be clearly recognised that the only way in which we can assure the under-privileged of a really fair deal is by developing the economy. Over a short period it may be possible to improve the lot of those in serious need by transferring moneys from one area to another. But unless we can ensure the development of the economy as a whole, a real improvement in the standard of living of such people will not be effected. We can increase the percentage of the national cake apportionable to those in the lower income groups but unless we take steps to enlarge the cake as well the poor will remain poor. Therefore, it is vitally important that the Government avoid taking any steps which might prevent or reduce economic expansion. It is obvious to everybody that the increase in the price of the insurance stamp to the employer and employee is helping to undermine seriously any steps which had been taken already to encourage an expansion of the economy, such as, for example, the budget deficit. There will be little doubt that in the highly inflationary situation in which we find ourselves, coupled with the very high unemployment figures——

An Ceann Comhairle

The Deputy is straying very much from the subject matter of the section.

Mr. Faulkner

The extra impost of the social welfare contributions will have adverse effects on employment. Employers will be paying approximately £28 million extra this year in social welfare contributions, at a time when their greatest problem is shortage of cash. This huge sum will more than offset the measures taken to give relief to firms. It will reduce also the effect of the meagre expansionary provisions of the budget.

We should remember also that a very large number of employers are small employers. Many of them are finding it very difficult to keep going at present and this horrific increase in the price of the insurance stamp may itself force that type of employer to let men go. Rather than improve the lot of those dependent on social welfare, we will be adding to their number.

In his budget speech the Minister for Finance stated that he was proposing to transfer the State's contribution to the social insurance fund to the employer and employee over the next six years and that he was commencing this year. Because of the rather involved way this section is drafted, it is very difficult to ascertain whether or not that is being done this year. In any case, the argument he put forward was that it was necessary to do so in order to bring this country into line with the EEC situation. In the past the social insurance fund was made up of contributions of the employers, employees and the State, of almost equal amounts. I see no reason why the State's contribution should be reduced, particularly this year. In fact I can see a very good case for increasing it.

I would question the reason why we should alter our system to bring it into line with the EEC situation. There is no EEC requirement of which I am aware which necessitates such a change being made and, therefore, we have no obligation so to do. If our system is the one most suitable — and it would appear from our experience that at present it is — then I can see no reason why it should not be continued for the present at any rate until the reasons for the change are announced by the Government and their merit discussed in this House.

If the reason for the change is simply to get more money for ordinary Exchequer purposes, as was the case with the petrol increase, I am convinced that that would not be a sufficient justification.

It is the duty of the Government to ensure that the economy will expand, particularly for the benefit of those in receipt of social welfare benefits and to refrain from doing anything that might obstruct that objective. It is not merely the Opposition in this House who have expressed concern about the increase in the price of the social insurance stamp, but concern has been expressed also by workers, employers and the media. The Government might well take particular note of that.

Sir, you ruled earlier that it was not in order to refer to the money which is in excess of requirements in the pay-related benefit fund. I do not propose to go into any detail in relation to it except to say that there are at present approximately £5.2 million in excess. In this section it is proposed that the State, the employer and employee would contribute some extra money because of the current, exceptional, unemployment situation. I think the amount it is suggested that the State would contribute is £7.1 million, which would leave about £7.9 million to be contributed by the employer and employee Taking those £5 million extra in the pay-related benefit fund into consideration, it would appear that the State proposes to contribute only the difference between those £5 million and the £7.1 million, which would be approximately £2 million, and that the employer and employee will contribute the remainder. As I said at Question Time, I am convinced that something should be done in order to reduce the overall payments which are being made by the employer and employee and which are exceptional in this year.

It is also stated in relation to this extra special contribution that it will apply until 4th April, 1976. From our experience we know that when 4th April comes there will be plenty of reasons found to continue it and I cannot see that it will ever be reduced. Again, I want to emphasise that this increase is far too heavy, that it will damage industrial development and in that way damage the prospects of workers in these industries. In this particular year and in the present highly inflationary situation in which we find ourselves, the Exchequer should have found a great deal more money for this purpose than they propose to make available to the social insurance fund.

Mr. Moore

I am opposed to these increases and also to the sloppy way in which the whole thing was brought about. This increase was mentioned in the Minister's budget speech but no details were given, so that when speaking on the budget one could not attack, defend or even praise this matter. We have got this now some months later and it is a punitive measure both on the employer and the worker at a time when we should be straining every nerve to try to create more employment. This section will discourage the growth of employment. The social welfare stamp is becoming so dear that the employer may well say that if he could get rid of one employee he would save his wages and perhaps equate this with a saving on the social welfare stamp.

I would ask the Parliamentary Secretary if any thought has been given to the lower paid worker. Does he pay the same as the higher paid worker? Over the years we have tried to bring some equity into the matter to help the lower paid worker. There should be graded payments under this Bill. The lower paid worker may find that he is far better off not working. I am not suggesting that many men do that type of thing, but the temptation is there, because, due to the crazy system of taxation, if a man works and wants to work to help to create wealth for the nation and for his fellow men, he will be penalised all the more.

I remember reading The National Partnership, the White Paper issued by the Government. While it promised certain increases in social welfare benefits, I cannot recall offhand that it threatened any further increases such as in the social welfare stamp. Over the years there has been an evolution, if not a revolution, in social welfare. We have now reached the stage that we have to ask ourselves what is an improvement. Certain benefits are increased but this is nullified by the inflationary situation. Then we have a Government measure which cannot be called deflationary but which will add to that inflation and have the effect of depreciating the take-home pay of the worker. We can see, therefore, that the Government's whole attitude to taxation and the financing of social welfare benefits——

An Ceann Comhairle

The Deputy does not seem to be referring his remarks to the section at all.

Mr. Andrews

It is a legislative subterfuge.

An Ceann Comhairle

Will the Deputy allow the Chair to rule in this matter? I am allowing the Deputy some latitude. I am allowing a fleeting reference to such matters as have been referred to by Deputy Andrews, Deputy Faulkner and Deputy Moore, but the Chair cannot permit Deputies to go into these matters in detail.

Mr. Moore

The explanatory memorandum accompanying the Bill and the Government's White Paper, refer to these matters, and I submit, with all due respect to the Chair, that I am entitled to refer to them.

An Ceann Comhairle

I have told the Deputy he is entitled to make a fleeting reference to such matters, but I want him to deal more effectively with the section itself.

Mr. Moore

That is my intention, but just how effectively can one deal with a very defective piece of legislation here? It is hard to see any consistency in this Bill, which has been described as a social charter, but when we examine the details we find that workers are being penalised, as shown in the Bill here. We must make some protest against this.

An Ceann Comhairle

The Deputy is speaking generally on the Bill. We are now dealing with section 13.

Mr. Moore

I hope the Parliamentary Secretary has got my message. It may be a bit late now to amend the Bill, but when the Minister for Finance introduced his budget some months ago he intimated that there might be a second budget this year, and the Parliamentary Secretary mentioned earlier that there would be further legislation on these lines here.

An Ceann Comhairle

I must ask the Deputy to get back to the section.

Mr. Moore

I am quoting what the Parliamentary Secretary said.

Mr. Cluskey

I did not say anything of that nature at all.

Mr. Moore

He said other legislation would be coming along.

Mr. Cluskey

Of what nature?

Mr. Moore

On social welfare. He spoke of the codification of all the social welfare legislation.

Mr. Cluskey

Was the Deputy here when I spoke about it?

Mr. Moore

I was, yes.

Mr. Cluskey

I made it quite clear that I thought we would be lucky to have it by next year.

Mr. Moore

I am not disputing that that is what he said, but what I am saying is that he promised further legislation. I am asking if we are to have another budget this year.

An Ceann Comhairle

Would the Deputy come back to the employment contributions, section 13?

Mr. Cluskey

I realise the Deputy has some difficulty. He came in and just looked at the Bill and wondered what he would say about it.

Mr. G. Fitzgerald

The working people of Ireland will understand it after the 7th April.

Mr. Cluskey

They will, and I am glad the Deputy is beginning to realise that.

Mr. G. Fitzgerald

It will be held to your eternal disgrace.

Mr. Moore

I admit to the Parliamentary Secretary that I had some difficulty with the Bill, but I had not half as much difficulty with it as the Government had. If there is another budget and more taxation with no specific mention of an increase in the stamp, are we to take it this may well happen before the year is out? This is what we have to try to find out from the Parliamentary Secretary who has devoted a great deal of his time to this. I suggest that if he is going to hail this legislation as a step forward he should try to reconcile that with the fact that it will be a step forward and will not merely further increase taxation on any employed person.

In conclusion, is any relief given to a voluntary organisation which has to employ a full-time typist or somebody similar? Will they still have to pay the full price of the stamp? We are penalising them enough. When replying, the Parliamentary Secretary might clear up these few points.

Mr. Cluskey

I have a certain amount of sympathy for the Fianna Fáil speakers on this section. Some of them who knew what the section was about were scratching around for a long time trying to find something on to which they could latch in this area in trying to put across that this was a harsh imposition on Irish workers. We had exactly the same word repeated as if it was a great political trick to get it by the Ceann Comhairle, comparing it to a budget and a shocking imposition on Irish workers.

Mr. Andrews

Is the Parliamentary Secretary saying that it is not?

Mr. Cluskey

Of course, I am.

Mr. G. Fitzgerald

And you represent them? Shame on you.

Mr. Cluskey

That is the difference. I am glad the Deputy put his finger on it. He is misrepresenting them.

(Interruptions.)

Mr. Cluskey

I am glad the Deputy made that point for me. Fianna Fáil are misrepresenting this Bill.

Mr. G. Fitzgerald

Go back to your workers and ask them.

Mr. Cluskey

I do not have to go back. I am am in constant contact with them.

Mr. G. Fitzgerald

You have forgotten about them, like many others.

Mr. Cluskey

The workers are aware of what is happening in this area and of what did happen and they are capable of comparing and knowing where they come off best and under whom.

Mr. G. Fitzgerald

There are 102,000 unemployed.

Mr. Cluskey

We have the 102,000 unemployed on one hand and this terrible imposition on the other. I have never heard such gross misrepresentation as I have heard in this frantic attempt to grab this bone and worry it like a hungry dog.

Mr. Andrews

A £40 million bone.

Mr. Cluskey

Not only is there no meat on this bone, there is no marrow in it either.

Mr. G. Fitzgerald

No meat for those who are feeling the pinch.

Mr. Cluskey

The workers know what exactly is involved in this Bill, where the money is going and what benefits they will get. They also know that the increase in the stamp is a normal annual event and they are not falling for this misrepresentation by Fianna Fáil speakers that this is the first time this ever happened in our history. Fianna Fáil must give little credit to the intelligence of our workers in thinking they would swallow that kind of misrepresentation.

There is provision in this section to increase the price of the stamp in the normal way as it has been increased since the stamp was introduced. There is an extra provision for the exceptionally high number of unemployed that, unfortunately, we have at present. I regretted very much hearing Deputy Moore, who represents a working class constituency, implying that some of these people would rather not work.

Mr. Moore

The Deputy did not say any such thing.

Mr. Cluskey

He implied it when he said that because of the benefits that were being paid and because of the price of the stamp for lower paid workers, they would find it more to their advantage not to work.

(Interruptions.)

Mr. Moore

I am surprised at the Parliamentary Secretary. That is dishonest.

Mr. Cluskey

I am surprised at Deputy Moore. It is regrettable that we have such an exceptionally high number of unemployed because of difficulties which are worldwide.

Mr. Andrews

The Arabs.

Mr. Cluskey

Yes, they have contributed substantially to it. It is necessary and desirable that proper provision be made to ensure that these people will get unemployment benefit to tide them over this difficulty which we all sincerely hope is temporary. The big bonanza that Fianna Fáil think they have found in social welfare and the increase in the stamp is an illusion based on their misconception of the intelligence of working people.

Mr. Moore

It is no illusion for the man who is going to pay the increase.

An Ceann Comhairle

I must ask Deputies to desist from interrupting.

Mr. Cluskey

It is no illusion that this section provides for 10p extra on a worker and 21p extra on an employer for a limited period which is set out in the Bill and which will expire in April, 1976.

Mr. Andrews

Yes, but will it?

Mr. Cluskey

There is no question, it will. I am saying it. It definitely will.

Mr. Andrews

But will it be reintroduced immediately afterwards?

Mr. Cluskey

I should not think so, no.

Mr. Andrews

You are saying definitely not?

Mr. Cluskey

No, definitely not.

Mr. G. Fitzgerald

We will hold him to that.

Mr. Cluskey

It is quite clearly spelled out in the Bill that it is of a temporary nature and the date on which it expires is also spelled out. Deputies need not refer to me but to section 13 of the Bill which we are discussing.

Mr. G. Fitzgerald

We are entitled to be suspicious.

Mr. Cluskey

Workers want to be insured against the contingencies of working life and want to know, in the event of being unforunate enough to become unemployed, that there will be some benefits available to them to ensure that their heads are at least kept above water, financially speaking, for the period of their unemployment.

Mr. Moore

That is not new.

Mr. Cluskey

This provision is designed to ensure that in these exceptional circumstances money will be available to them. Deputy Faulkner made great play about the increase in the stamp not being announced in the budget. Deputy Moore made the same point.

Mr. Andrews

The amount of the increase.

Mr. Cluskey

It is quite true the amount of the increase was not announced in the budget. Opposition speakers have been trying to put it across that this was a new departure. They know quite well it was the normal procedure, applied year after year since the introduction of the stamp. The procedure is that the Minister for Finance announces a certain increase but he never — I stress "never"— announces what the increase will be. Never has the increase in the stamp been revealed until the Social Welfare Bill was circulated. This kind of misrepresentation is not even good politics. It is not good sense.

Mr. Moore

The stamp was not increased every year.

Mr. Cluskey

The Deputy is continuously underestimating the intelligence of the worker.

Mr. Moore

The Parliamentary Secretary did no research on this and on the ability of the worker to pay this increase.

Mr. Cluskey

That is not so. If Deputy Moore wants to follow this through, then let me tell him that the highest proportion in the increase started going towards the worker when Deputy Haughey was Minister for Finance. That can be found in the records.

Mr. G. Fitzgerald

That is not true.

Mr. Cluskey

That development started when Deputy Haughey was Minister for Finance and it stopped only when this Coalition Government came into office. The Deputy need not question my research. He is quite capable of doing his own research.

Mr. Andrews

But the Parliamentary Secretary is misrepresenting the situation.

Mr. Cluskey

Increases are a matter of record and the record can be examined. The worker's share of the increase in the stamp was considerably larger under Fianna Fáil. That development started when Deputy Haughey was Minister for Finance and continued right on under Fianna Fáil; it was only corrected and the worker's share brought into proper perspective when the change of Government took place.

Mr. Moore

That is a very loose statement. We could not accept that.

Acting Chairman (Mrs. Hogan O'Higgins)

Deputy Cluskey is in possession and Deputies should stop this chit-chat.

Mr. Cluskey

The Opposition Deputies seem to think that any kind of wild inaccuracy they utter here will be accepted as fact by the workers. I am afraid that assumption is based also on a very low estimation of the intelligence of the workers.

Mr. Andrews

We have the greatest respect for their intelligence.

Mr. Cluskey

The workers do not take these inaccuracies as facts. It may surprise Opposition Deputies to know that workers can make calculations. It may surprise them to know that they have calculated and they know exactly what is happening.

Mr. G. Fitzgerald

Explain.

Mr. Cluskey

I will. The average earnings of an industrial worker in September, 1974, were £43 a week. Deputy Fitzgerald, shadow Minister for Labour, must be aware of the inaccuracies that have been trotted out here.

Mr. G. Fitzgerald

Do not try to cloud the issue.

Mr. Cluskey

This is the kind of figure any shadow Minister should have at his fingertips. Of course, wages have increased fairly substantially since September, 1974. There have been developments on the wage front. However, taking the September figure of £43 a week, the tax gain for a single man is £26.25; for a married man without children it is £42 and for a married man with two children it is £46.18. The big discovery Deputies opposite appear to have made in this field of social welfare is the additional 10p a week. As I said earlier, workers want some degree of assurance and some sense of security in this very unpredictable period from the point of view of employment. If a worker were unfortunate enough to be unemployed for one week in the next 12 months he would recoup the 10p plus any increase put through now. Deputies opposite talk as if they had found some tremendously contentious item. They have not. It does not exist. First of all, they tried to misrepresent the position by arguing that the increase was not announced in the budget. They tried to pretend this was unprecedented though they knew very well it was normal procedure. As spokesman for Labour, Deputy Fitzgerald may recall that the Leader of the Opposition, Deputy Lynch, asked that the Minister for Labour be brought before the Committee on Procedure and Privileges for discussing a particular matter before the Bill had been introduced. The normal procedure applied in this case. There was only one departure: there were two by-elections in Galway and on the Monday before polling day we published the total amount of the increase in the stamp. That was a departure. Had Fianna Fáil been in office and thought that this kind of publication might be politically damaging in the by-elections we would have waited until the Thursday or the Friday after polling day to find out the price of the stamp. We had no fears in this direction.

Mr. Andrews

And no seats in that direction whatsoever.

Mr. Cluskey

We respect the intelligence of the workers to realise if we are going through a severe economic crisis and there is large unemployment they must contribute in some way towards the added necessary protection for them during that period. That is the political bone the Deputies have been worrying for God knows how long. They should face up to the realities because there are very little pickings on it. If it gives the Deputies any consolation they are welcome to chew away for another while.

Mr. Moore

That is a very poor argument. The Liberties will not like that.

Mr. Cluskey

The Liberties will.

Mr. Moore

I hear there is a change there too.

Mr. G. Fitzgerald

I listened with interest to the Parliamentary Secretary. He reminded me of the boy at school who committed a childish prank who went home to his father and told him he did not do it. As he looked across at us in a most apologetic kind of way he was also trying to tell us that he did not do it. I am afraid, no matter how he sets out to convince people, it will be forever remembered that he was the man who increased the cost of the social welfare stamp by this enormous amount at a time in the history of the country when the working people never needed support so much. He will also be remembered as the Labour Parliamentary Secretary who turned his back on the working man and on the people he allegedly represents. I am sure recent events are omens in themselves and indicate clearly to him that even at his own organisation level difficulties have arisen and the people there have seen the light and seen that the happy Coalition days are over, the bonanza he spoke about, where social welfare is concerned, is over.

I could go into detail, if I was allowed to do under the section, and tell the Parliamentary Secretary why that bonanza was achieved and what little credit was due to the present holders of office. We have £40 million budgeted for by the Parliamentary Secretary on the instructions of his colleague the Minister for Finance. We naturally cast our minds back to when the Minister for Finance sat in a stoney silence the night he introduced his budget. When he was asked by Deputy Dowling how much the stamp increase would be he refused to answer. Nobody then believed that any Parliamentary Secretary or any Government could bring about an increase in the cost of a stamp of almost 40 per cent. Would the Parliamentary Secretary tell me when was the last time we had an increase of this magnitude in the cost of the social welfare stamp? What research did he do into the effect this will have on the working people? The Parliamentary Secretary's officials are good at producing figures which try to create an impression. He may say to me that the average wage of an industrial worker in this country is £43. I would love to believe that every worker was earning that money. The emphasis is on "average" and we must remember that many people are not earning that amount of money.

The Parliamentary Secretary allegedly claims to be the man championing the less well off in our society. We also have a Government who talk about the redistribution of wealth. They should change that title to the creation of poverty. Never have a Government, in the short period they have been in office, created so much poverty as this Government. I believe the Parliamentary Secretary, as distinct from the others, was sincere in his utterances but it is now obvious he has no more interest in the ordinary working people.

Last November we had an increase in the cost of the social welfare stamp. We were told that the working man would have to have his health contribution in the stamp increased. The Parliamentary Secretary will probably say that was not his function, that it was his Minister who imposed that increase. The Parliamentary Secretary is imposing the present increase and we will have another increase. In other words, we will have had three increases in the space of four months. This Bill imposes an increase of £1.25p in the price of the stamp, divided between the employer and the employee. I am not concerned about the extra imposition on the employer. I advise the Parliamentary Secretary to listen carefully to me because I will hang this around his head in six or 12 months' time.

Mr. Cluskey

I might hang more around the Deputy's head. Let him not start hanging things around my head.

Mr. G. Fitzgerald

Is that an indication the Government might be going to the country.

Mr. Cluskey

No. We do not find that necessary.

Mr. G. Fitzgerald

I will say to the Parliamentary Secretary in six months time that he was the cause of losing this or that job because he is telling the employer that he must pay 80p extra per employee per week. I understand for the ordinary male employee the cost of the stamp, holiday pay and superannuation will be £7.50 per week. This is around the figure the Parliamentary Secretary spoke about. This imposition will cut down on employment and increase the unemployment situation. Is the Parliamentary Secretary determined, like some of his colleagues in Government, to create a country where eventually there will be no work available? I know the Parliamentary Secretary has been led astray and advised by people in a certain way. He should go back and research this thing because I believe, slowly and surely, the Government are grinding the wheels of industry to a halt. The Parliamentary Secretary looks dubiously at me and indicates I am not sincere in what I say. Have we not over 102,000 unemployed in the middle of March? In addition to that there is a lack of confidence in people, a fear of the awful word "redundancy" and of receiving notice, a fear of going in on a Monday morning and being told their jobs are gone and they are being laid off. The Parliamentary Secretary is asking for 80p extra from many employers who are in difficulty.

I am concerned about employees working in certain specific industries. Could the Parliamentary Secretary tell me how many industries have not yet implemented the final phase of the 14th round agreement? How many of them have not implemented the first phase of the 15th round or part of it? Why is that? Why is there an escape clause in the new wage agreement? It is simply because so many firms and industries are tottering. The employer is being loaded with more burdens in an already critical situation. My concern is not for the employer in such circumstances but for the many employees. If, as a result of this measure, a firm decides to economise and to cut its work force, the Parliamentary Secretary must accept responsibility for the redundancies created. Under this section the employee is asked to pay an extra 45p. Before Christmas he was asked to pay 11p——

Mr. Cluskey

There has not been any increase in the social welfare element since the last budget. The references by the Deputy to payments before Christmas, after Christmas and next year are gross misrepresentation. I can sympathise with the Deputy because there is so little he can say against the Bill.

Mr. G. Fitzgerald

There are more ways of killing a cat than by choking it.

Mr. Cluskey

The Deputy has tried most of them by now.

Mr. G. Fitzgerald

I am warning the Parliamentary Secretary of the situation that exists. He is a Labour Party member but he does not appear to have concern for the people who have not been paid increases under the 14th and 15th wage rounds. Is he aware that they may not be paid those increases, that, in fact, many of the workers are on a three- or a four-day week? If I were Parliamentary Secretary in those circumstances I would resign or I would be frank with people and admit I had let them down. I would not deliberately tell untruths and misrepresent their situation and I would not ask them to accept another burden. If the liaison of the Left means anything, the end of the Labour Party is in sight and obviously the political career of the Parliamentary Secretary is in danger. For that reason I advise him——

Mr. Cluskey

The Deputy should not terrorise me in that way.

Mr. G. Fitzgerald

The Parliamentary Secretary should do what some of his colleagues are doing—he should move on his own. I appreciate he is tied by what the Minister for Finance tells him to do. It is understandable in a Coalition Government——

Mr. Cluskey

If the Deputy wants to make it really creepy, perhaps we could get the lights put out.

Mr. G. Fitzgerald

There is no need for that. I am asking the Parliamentary Secretary to listen to me but I have the impression he is treating it as a huge joke——

Mr. Cluskey

It would be very difficult to treat the Deputy's contribution on this matter other than as a joke.

Mr. Andrews

The Parliamentary Secretary is most ungracious.

Mr. G. Fitzgerald

I did a lot more for the working people of Ireland in a practical way; I created jobs for them and I worked with them. Because of the Parliamentary Secretary's sour grapes he is being most personal in this House. I am not making any jokes about the working people and if the Parliamentary Secretary alleges I am doing so I can only say shame on him.

By imposing this extra cost on the working people, not only is the Parliamentary Secretary saddling them with more burdens but he is putting jobs in jeopardy. I know of many firms— I can name them—where the wage agreements have not been honoured and where jobs are in jeopardy. The Parliamentary Secretary should be ashamed of introducing this Bill in the present circumstances. I am glad we are opposing it; I am convinced it should be opposed every inch of the way.

Today we had a discussion on pay-related benefits. We found there was a huge income in the first nine months of the year, one that was well in line with budgeted figures. However, the expenditure was only equivalent to about one-third of that amount. That extra revenue obtained by the Government should have been utilised so that the extra increases sought under this section would not be required.

A few minutes ago the Parliamentary Secretary said there has been no increase in social welfare contributions since last November. From April next an employee will have to pay £1.95 for his social welfare stamp. That man will not be concerned about how this amount may be broken up; all he is interested in is the fact that he will have to pay practically £2 per week. Despite what the Parliamentary Secretary may say, there was an increase of 11p in the cost of the stamp last November, there has been the huge increase of 45p and now the employee is being asked to pay more. There have been three increases in a few short months in the cost of the social welfare stamp. The amount will cover three different contributions but it all comes from the pocket of the working man. The Parliamentary Secretary will have to answer the questions of the people when the time comes.

Mr. Andrews

This discussion has been deliberately led into a debating cul-de-sac by the Parliamentary Secretary and, having reached the wall at the end, we must pull back and get to the basis of Fianna Fáil's opposition to this section. The Parliamentary Secretary has avoided challenging the figure of £40 million which we say will be collected when section 13 becomes law. I do not know if, in the excitement of his contribution, the Parliamentary Secretary deliberately did not deal with the figure of £40 million which we say will be collected but we would like to know if that will be the case. Equally, we should like to know what the Parliamentary Secretary has to say in relation to the £5 million which is the surplus collected under the pay-related benefit scheme.

Deputy Faulkner put forward a clear articulate argument on the matter of the £5 million being collected under the pay-related scheme, composed of £8 million in contributions up to 31st December, minus outgoings of £3 million. This is public money. We know it is there and that the Parliamentary Secretary can identify it. We should like to know what will happen to it. We suspect what will happen to it but we are entitled to keep our powder dry in that respect. I should like to place that specific reference on the record of the House because we can refer to it later when our suspicions become fact. We are entitled to have this information from the Parliamentary Secretary.

I will not sit in judgment on the contribution of any Deputy as to its electoral value or otherwise but the Parliamentary Secretary in some way appeared to have cornered the market, as it were, in defence of employees— how concerned he is about them. How concerned is he about them? He has now increased their social insurance contributions by 40p a week. We consider this to be a penal taxation. Let us be clear that in all the juggling of percentages that has taken place there has been nothing like this form of taxation in the history of the nation. Employers and employees are being asked to pay a combined amount of £1.25 per week extra making the total contribution £4.23 per week for men, of which the employer will pay £2.59 and the employee £1.64.

The Parliamentary Secretary has not washed his hands of the record number of unemployed in the history of the country. Without engaging in gobbledegook or economic speculation, this will act as a disincentive to employment of extra persons by any employer, or to increasing his productivity. On the January budget we stated that industry should receive £25 million in reliefs. It got £13 million in tax concessions. Now what happens? Industry is being asked to pay £27 million in real cash terms. This Bill proposes to claw out of industry that massive sum. I called this section "unlucky 13". Not only is it unlucky for the employers but because of its disincentive to employment it is unlucky for the employees.

The tax reliefs given in the January budget were offset by the imposition of £48 million in new taxation. I do not want to go over the ground covered by other Deputies but there was new taxation of £50 million before Christmas. The Parliamentary Secretary would like to suggest that the Opposition lack concern for the workers. Of course we are concerned for the continued employment of every worker in the country as well as for the creation of new jobs. In our concern for the worker we must also be concerned about the employer because if an employer goes out of business so do five, ten, 20 or 30 of his workers.

If there is more unemployment the Government will have to share the responsibility because of the imposition of this extra taxation of £40 million. At the beginning I described it as legislative subterfuge, legislative sleight of hand, and anything the Parliamentary Secretary has said on this section has not changed my mind. It is not my function to stand up for the employers but if they go out of business workers will lose their jobs. The work force of this country have done their duty well to the well-being of the nation. We appreciate that and let it not go abroad that we underrate their contribution. What we want is work for them. There are 102,300 people unemployed today. Our great economic soothsayer, the Minister for Finance, has said the situation will improve in the second half of the year. We hope it will and any encouragement in that direction that we can give to the Minister for Finance will be willingly forthcoming.

We do not require a lecture on the philosophy of keeping people at work. The Government philosophy in that respect has been found to be badly wanting. The Parliamentary Secretary must try to defend an indefensible position: he must say that the economic problems besetting us have their origin in external rather than internal causes. That is not so. If we pick up a newspaper any day we will find figures quoted showing what the realities are in regard to the control of inflation. In The Irish Times last week, with the compliments of the National Prices Commission, it was pointed out that the Government have been borrowing too much both internally and externally. I should now like to quote from The Irish Times of Saturday, 15th March, 1975. I have already quoted the first sentence of this contribution to the newspaper by its industrial correspondent. The heading was “Prices up by 23.8 per cent in 12 months”. It read:

Consumer prices rose by 8 per cent between mid-November, 1974, and mid-February, 1975, and by 23.8 per cent between February, 1974 and February, 1975. Much of the quarterly increase was due to the increases in drink and tobacco imposed by the January budget and to the higher price of petrol.

The Arabs did not increase tobacco.

Acting Chairman

The Deputy is wandering from section 13.

Mr. Andrews

If you say so, Madam Chairman, I will return to section 13. If the Parliamentary Secretary is so concerned about workers —and I am sure he is—what is he or his Government doing about inflation? In addition to the £40 million being sought under this section, the housewife is being mulcted day in and day out by uncontrolled price increases in the basic necessities of living. I am not talking about motor cars or trips abroad. I am talking about bread, butter, tea and sugar.

Acting Chairman

That is not relevant to section 13.

Mr. G. Fitzgerald

The Deputy must go around before he can come to the point.

Acting Chairman

He must get to the point directly.

Mr. Andrews

I appreciate the Chair's well-intentioned stricture. Will the Parliamentary Secretary explain if the figure of £40 million is correct? What is happening to the balance of £5 million collected under the pay-related benefits scheme? Why is this surplus not being used for the purposes of this section?

How was the figure of 31p—21p to be paid by the employer and 10p to be paid by employee—arrived at? As the Parliamentary Secretary said, this will cease operation on the 4th April, 1976. The Parliamentary Secretary has not yet explained how these projections were arrived at and he must have the answers to those questions. If he can tell us how this figure of 31p was arrived at, surely he can tell us what happened to the £5 million.

Mr. G. Fitzgerald

Was the Parliamentary Secretary expecting support from his colleagues?

Mr. Cluskey

No. If I were that would imply I was not 100 per cent sure of their support. The fact that I am left to deal with this is an expression of their confidence in me. I am very happy with that situation.

I find myself in a very difficult situation. The debate on this section which deals specifically with an increase in the cost of contributions has developed into what might be called a budgetary debate, or even a debate on the Estimate for the Department. I am not casting any reflection on the Chair because, irrespective of the rulings of the Chair, Opposition Deputies have persisted in trying to get on the record what they consider is a great political find and will benefit themselves and their party. That is the only explanation one could give to the repeated flaunting of the rules of procedure of the House and of the rulings of the Chair. However, if that is the way they feel they should deal with this Bill, that is their business. However, it is a regrettable situation.

Fianna Fáil are trying to misrepresent what is happening. To try to say that this is the first time the stamp has been increased is ridiculous. The price of the stamp has increased over the years. We could repeat ourselves ad nauseum. It is very difficult if one is to observe the rulings of the Chair and the procedure in the House to confine oneself to what is relevant to the section and to speak at length without repeating oneself several times or ranging over a wide field not related to the section. I do not intend to repeat myself nor do I intend to range outside the section.

The financing of the social welfare system has gone on year after year by increasing the price of the stamp—a certain proportion being paid by the employer, the employee and the Exchequer. In my opinion no thought has ever been given to whether it was the right way to finance social welfare or if there were alternative ways of doing so. If there were alternative ways, they should have been examined. Personally I do not believe it is the best way to finance social welfare. I also believe that the flat rate increase in the price of the stamp is not fair or equitable in all cases. I think it militates against the lower-paid workers. I have said that and I believe it.

Mr. Andrews

Does that exonerate the Parliamentary Secretary.

Mr. Cluskey

No, it does not.

Mr. G. Fitzgerald

It appears we taught the Parliamentary Secretary one lesson anyway. In other words, the Parliamentary Secretary now agrees there are not many people earning £43.

Mr. Cluskey

I know what I am saying and I am well able to express it.

Mr. G. Fitzgerald

What about the £40 million?

Mr. Cluskey

We on this side of the House were the first to question the financing of the social welfare services. In fact, the first time it was ever questioned in this House was by me in the Estimates speech for the Department of last year. We have now announced in the House, although apparently it does not register with people across there, that we are examining the whole question of the financing of the social welfare services. I think there is a fairer way to do it and I sincerely hope that in the relatively near future we shall be able to come up with proposals along those lines. Deputy Andrews asked if saying that exonerated me.

Mr. Andrews

No, I did not say that. I said that in relation to a specific comment made by the Parliamentary Secretary.

Mr. Cluskey

I do not know what he meant by that. However, what I am saying is that even if I believe it may not be the best way to deal with the financing of social welfare, it is not possible to change it until one has something better with which to replace it. We are now examining whether or not there is a better way to do it. If we come up with a better way, we will introduce legislation to finance the services in a different way. As I said before, in relation to something else it is neither wise nor possible to tear down an existing structure until one has something better with which to replace it. We are examining the possibility. We hope there is a better way of doing it and if there is we will bring it before the House for approval. I do not think there is anything else can be said relevant to this section without repeating oneself or else range all over the show as if it were a budget debate or a debate on the Estimate for the Department.

Mr. Andrews

I do not want to exhaust either the Parliamentary Secretary or the House. Far be it from me so to do. But the Parliamentary Secretary does make the point that there is nothing more relevant to be said on the section. But there is. There are two matters which he appears to be ignoring. I do not think he is doing so intentionally but I would ask him to reply to two specific questions I posed repeatedly throughout my contributions on section 13. The matter of the figure of £40 million is to be raised under section 13. I will put my question in a different fashion. Has the Parliamentary Secretary got a figure for the increase which will be raised by the imposition of £40p per week on employees and 85p a week on employers? How much will that income be on an annual basis? He must have that figure. He must be able to tell us how much this section will raise by way of increased contribution on the social insurance stamp.

The second question I would pose is how was the figure of the special increase arrived at—the 10p to the employee and 21p to the employer, giving a total of 31p? We are entitled to have that information.

I have already agreed with the Parliamentary Secretary on what I would regard as the other matter extraneous to section 13. He stated that one cannot suddenly pull down a structure without having something with which to replace it. Of course, we accept that entirely. Without any doubt one cannot do so without having something better with which to replace it. But, to return to the two questions I should like to have answered, I can assure the Parliamentary Secretary that if we get a reasonable answer then we will put the section to the test of the House. I cannot go any further than that.

Major de Valera

Is the Parliamentary Secretary in a position to give an answer to these questions?

Mr. Cluskey

The Deputy might know that the Minister for Finance stated, in his budget speech, that this element of the increase was for an anticipated rise in unemployment benefit, that it was anticipated it would realise £15 million, that £7.1 million would be made available by the Exchequer and £7.9 million through contributions. Those figures have been on public record since budget day.

Mr. Andrews

But the Parliamentary Secretary said they were not. He said it was not traditional to give a figure for the amount of the stamp when proposals to increase the social insurance stamp were made, that it was not a matter of public record.

Mr. Cluskey

The £15 million was a matter of public record. There is no question about that.

Mr. G. Fitzgerald

What is the Parliamentary Secretary now saying?

Mr. Cluskey

There is the allocation in subsection (2) of section 13 of the 10p to the employee and the 21p to the employer.

Mr. G. Fitzgerald

But the total figure?

Mr. Andrews

I do not want to be diverted from my pursuit of this matter. The Parliamentary Secretary has given an answer to the first part of the question. I do not think it is the correct answer but I do not want to embarrass him. He might not have the information readily available to him. But surely he can find out instantly how were the figures of the special increase arrived at, on what basis? Surely there must be some reason for the sum of 31p being raised as between the employer and employee?

Mr. Cluskey

The reason is that it is to raise £7.9 million out of a total of £15 million it is anticipated will be needed for an increase in the numbers of unemployed people.

Mr. Andrews

Does the Parliamentary Secretary then anticipate more unemployed?

Mr. Cluskey

What it is doing is that in the Estimates for the Department, which were published some time ago, we now realise—in fact, they are published figures—that the numbers of people who have been unemployed due to factors of which the Deputy and everyone else is aware have increased and there will be an increased demand on the unemployment fund as a result. As the Minister for Finance stated, the £15 million is to cater for that.

Major de Valera

Perhaps we might be able to sort this out a little more if we look at what I conceive to be the mechanics of this. Would the Parliamentary Secretary agree that, in the first instance, the money is collected by means of a stamp? That means that the Department of Posts and Telegraphs sells so many stamps. Is that not really what happens? Therefore, in the first instance, the revenue goes into the Department of Posts and Telegraphs and, through that channel, finds its way into the central Exchequer. When the Minister's Department pays out benefits, they are paid from funds that come from the Exchequer, paid out of the Exchequer so that the flow of funds — and please correct me if I am wrong; I am trying to get a picture in order to lead to another question— in this case is as follows: both the employee and the employer contribute the moneys through the channel of the Department of Posts and Telegraphs, and that goes into the Exchequer. That is money into the Minister for Finance, and money out is the disbursement from the Exchequer to the Parliamentary Secretary's Department for the purpose of social welfare. Therefore, it is a question of balance.

What we do not know is how closely the Minister for Finance has balanced things, because it would be unreasonable to expect that there would be a mathematical balance down to the last stamp. It simply does not happen in that way. However, I think the Opposition are entitled to ask the following question: is that sum of money based solely and fairly accurately on the requirements of the Minister's Department or is the Minister for Finance collecting more through the stamp than he needs to give back to the Department of Social Welfare? With that machinery it cannot but be an estimate for the Minister's Department and the only estimate the Minister can give in order to arrive at the increase in the stamp is on the basis of two pieces of information, that is, the numbers on the books. That can be a fairly accurate figure and is available to the Minister for Finance.

Is the 31p or the rest of the stamp closely related to that? Let us take them separately, the increase in the ordinary contribution and the special increase for unemployment. As far as the increase in the ordinary contribution is concerned, I imagine that a reasonably accurate estimate can be made from the books of the Department as to the sum required and I hope that the stamp is closely related to this; in other words, that the Minister for Finance is not taking a chance on the Department nor getting a rake-off from the Department. I am not accusing anyone of using those possibilities but they are there. The possibility is there for the Minister for Finance to underestimate and not provide enough and hope to goodness that there will be fewer claims, to overestimate, or hit the best balance possible. What I want to know is, is it an accurate estimate?

As regards unemployment another factor comes in. This is the question of the statistics of probabilities and in estimating the 31p the Parliamentary Secretary is on a different level. Here is something outside the Parliamentary Secretary's direct information from his Department. One freely grants that there is an element of uncertainty in this. On what basis is it estimated that it is required to levy 31p per stamp in order to cope with prospective unemployment claims? We are not in a position to discuss this unless we have two bits of information: first, what estimate of rapidly rising unemployment is taken? I am not asking that for political purposes or to knock the Minister about the head about unemployment. There is an economic situation here and, as I have said on other occasions, let us all face it and do our best. Certainly, having made the first estimation of the increase, the Minister will have in his Department the information to say how much benefit is required on the increased figure. It can be averaged over the number of stamps he knows about in the first estimation and then 31p can be arrived at in that way.

I think it is fair to ask these questions not having been given the information which would categorically refute the possibilities I have mentioned. I take it the Parliamentary Secretary does not regard me as being unfair in putting it to him in that way.

Mr. Cluskey

No.

Major de Valera

We need those basic elements to give us some idea: the unemployment increase is of such an order or is feared to be, because that is all it can be, and, please God, it will not be as bad as he fears, and if for that reason he has a surplus, we shall be delighted to see it because it is socially desirable. We also need to know the number of contributors that are likely to be involved. If there is unemployment there will be fewer contributors and unemployment may be associated with not only fewer employee contributors but fewer employer contributors. I am not exaggerating when I say that there is a very heavy burden coming on employers now. If there is any employment content at all the strain from this source is being felt and I do not think that is an immoderate statement. Would the Parliamentary Secretary answer the question about the figures?

Mr. Cluskey

As Deputy de Valera pointed out estimating for anything, and particularly social welfare, is far from being an exact science. It is very difficult, if not impossible, to forecast with accuracy what will take place in various fields that affect social welfare.

The Deputy mentioned the question of revenue being collected by way of stamps purchased through the Post Office and that the Post Office sent the proceeds to the Exchequer. That is not quite the case: they go from the GPO to the social insurance fund. As the Deputy is probably aware, this is always based on an estimate of what will happen and it is impossible for anybody to say now how many will draw disability benefit, how many will be sick or unemployed or how many will draw unemployment assistance between now and next year. One must judge in the light of experience and current events. Sometimes you are nearer right than others but you never hit the target dead on. This is all done on the basis of contributions from the Exchequer, the employer and the employee and calculated after the event has taken place. I am sure that Deputies will appreciate that while it is difficult in a normal year to make accurate predictions there was a much greater element of risk of error this year in regard to unemployment. One had to judge on past experience and what was currently happening and predict as accurately as possible how long this trend would continue, when it would peak and when it would come back to what we regard as normal proportions.

I am sure the Minister for Finance took all these factors into account when he predicted that we would need approximately £15 million more than had been allowed for in the Estimate for the Department in order to ensure that sufficient money was available for those who became unemployed. At best one makes an educated guess as to what the developments will be and if that is true in a normal year it is even more true in the circumstances of the last few months.

This worldwide recession, according to the OECD predictions will be ended a little earlier than most people expected. Some OECD commissioners concerned with economic affairs have predicted that it is ending. I do not know if it is a true trend or not, but there has been some decrease in the number of unemployed and in the number on short time in recent times. I fully accept the Deputy's comment when he expressed the concern of all of us at the number of unemployed and the desirability of doing everything possible to ensure that number is kept to the minimum.

Major de Valera

I completely understand the attitude of the Parliamentary Secretary but I think the time has come when we should trust ourselves with information and the Parliamentary Secretary and the Minister for Finance would do a great service to the country if, in matters like this, there was very full disclosure even if it involved the possibility of giving a political stick to an opponent to use. These sticks will be used in the political battle in any case and it is, perhaps, better that they should be factual rather than fanciful if they are to be used at all.

I ask for this information because it is very hard in the absence of it to form a reasonable judgment and do what the Parliamentary Secretary wants and what any reasonable Deputy in the House wants—help in this particularly serious situation. One of our serious objections to this section and to the legislation as introduced was that while it caters for a problem, the cure tends to aggravate the disease. As the section stands— apart from trying to get information on which to judge the validity of the increases proposed—we have legislation here which, while it is palliative and I am sure necessary to some degree to treat the disease, at the same time it aggravates or tends to aggravate the disease.

Unemployment has increased and for the moment we shall attribute that to general recession, blaming nobody in particular for it. It is a fact, and in that situation you must provide for the increase in unemployment by putting on this 31p levy. On the other hand, there is inflation and to keep up the social welfare level— here one might argue with the Parliamentary Secretary although it might be unpopular that he could have made the adjustment in another way; that is beside the point I want to make— the method of payment he is adopting is aggravating both inflation and unemployment.

You increase the benefits and the contributions. If you like, this is a typical commodity price increase. It is a typically inflationary factor. It is contributing to inflation. On the other hand, it is contributing to unemployment because from information I have collected there will be firms at the point where this may prove to be the last straw that breaks the camel's back. In that event you will be encouraging unemployment. The Parliamentary Secretary may ask me to give him a specific case, but I hope that this fear is not sufficiently grounded to be really dangerous. The increase in the cost of labour which this will necessarily involve will mean the discouragement of employment. It is mainly on that ground I find the section objectionable. This will aggravate the disease it is alleged to——

Mr. Andrews

Cure.

Major de Valera

I will not say "cure". I say palliate. This is not a cure. The Parliamentary Secretary talked about the financing of the whole system and I have a great deal of sympathy with what he said. I find it very hard to see how, without a revolution in the whole system, there could be a sudden change. In the absence of the information the Parliamentary Secretary has not given us I cannot be very specific but I wonder if, in an exceptional case like this, having regard to the taxation imposed over a wide area and over so many items, a straightforward subsidy from the Exchequer would not have been the most economic, the cheapest and most effective way of dealing at least with this 31p increase in unemployment assistance. Would that involve less administration? Would it be a less costly method and would it give the Minister greater elasticity? I confess I cannot answer these questions in the absence of the specific information I have tried to indicate to the Parliamentary Secretary is so essential. One is indulging in guesswork. It is an unhappy position for the House to be left with guesswork when it comes to deciding, as the House will decide, the fate of this section. Will the Government have so many votes and the Opposition so many votes? Is that the way in which a serious matter like this should be disposed of or will we come to specific conclusions on a reasonable basis on this section? That cannot be achieved without much more detailed information than we have at the moment.

Mr. Andrews

Deputy de Valera has dealt with the matter in a very analytical way. We have not received information to which we are entitled, not only as an Opposition but as the Dáil sitting in full Committee. Because of the unsatisfactory nature of the Parliamentary Secretary's replies to our queries it is about time the question was put.

Question put.

The Dáil divided: Tá, 60; Níl, 55.

Tá

• Barry, Peter.
• Barry, Richard.
• Begley, Michael.
• Belton, Luke.
• Belton, Paddy.
• Burke, Joan T.
• Burke, Liam.
• Byrne, Hugh.
• Clinton, Mark A.
• Cluskey, Frank.
• Collins, Edward.
• Conlan, John F.
• Coogan, Fintan.
• Cooney, Patrick M.
• Corish, Brendan.
• Cosgrave, Liam.
• Creed, Donal.
• Hegarty, Patrick.
• Hogan O'Higgins, Brigid.
• Jones, Denis F.
• Keating, Justin.
• Kelly, John.
• Kenny, Henry.
• Kyne, Thomas A.
• L'Estrange, Gerald.
• Lynch, Gerard.
• McDonald, Charles B.
• McLaughlin, Joseph.
• McMahon, Larry.
• Malone, Patrick.
• Crotty, Kieran.
• Cruise-O'Brien, Conor.
• Desmond, Barry.
• Desmond, Eileen.
• Dockrell, Maurice.
• Donegan, Patrick S.
• Donnellan, John.
• Dunne, Thomas.
• Enright, Thomas.
• Esmonde, John G.
• Finn, Martin.
• Fitzpatrick, Tom (Cavan).
• Flanagan, Oliver J.
• Gilhawley, Eugene.
• Governey, Desmond.
• Griffin, Brendan.
• Harte, Patrick D.
• O'Brien, Fergus.
• O'Donnell, Tom.
• O'Leary, Michael.
• O'Sullivan, John L.
• Pattison, Seamus.
• Reynolds, Patrick J.
• Ryan, John J.
• Spring, Dan.
• Taylor, Frank.
• Timmins, Godfrey.
• Toal, Brendan.
• Tully, James.
• White, James.

Níl

• Allen, Lorcan.
• Andrews, David.
• Barrett, Sylvester.
• Blaney, Neil T.
• Brady, Philip A.
• Brennan, Joseph.
• Breslin, Cormac.
• Briscoe, Ben.
• Browne, Seán.
• Brugha, Ruairí.
• Callanan, John.
• Calleary, Seán.
• Carter, Frank.
• Colley, George.
• Connolly, Gerard.
• Cronin, Jerry.
• Crowley, Flor.
• Cunningham, Liam.
• Daly, Brendan.
• Davern, Noel.
• de Valera, Vivion.
• Fahey, Jackie.
• Farrell, Joseph.
• Faulkner, Pádraig.
• Fitzgerald, Gene.
• Fitzpatrick, Tom (Dublin Central).
• French, Seán.
• Gallagher, Denis.
• Geoghegan-Quinn, Máire.
• Gibbons, Hugh.
• Gogan, Richard P.
• Healy, Augustine A.
• Herbert, Michael.
• Hussey, Thomas.
• Kenneally, William.
• Kitt, Michael P.
• Lalor, Patrick J.
• Lemass, Noel T.
• Leonard, James.
• Lynch, Jack.
• McEllistrim, Thomas.
• MacSharry, Ray.
• Molloy, Robert.
• Moore, Seán.
• Murphy, Ciarán.
• Noonan, Michael.
• O'Connor, Timothy.
• O'Kennedy, Michael.
• O'Leary, John.
• O'Malley, Desmond.
• Power, Patrick.
• Timmons, Eugene.
• Tunney, Jim.
• Walsh, Seán.
• Wilson, John P.

Tellers: Tá, Deputies Begley and B Desmond; Níl, Deputies Lalor and Browne.

Question declared carried.

Sections 14 and 15 agreed to.

SECTION 16.

Question proposed: "That section 16 stand part of the Bill."

Mr. Andrews

This section is a new concept introduced into social welfare legislation by the Government and we must give them credit for introducing what might be described as a compensatory section to deal with inflation. The Government are responsible for the legislation introduced and it is understandable that they would take measures to guard themselves against their own misdoings. We can expect consumer prices to increase in the coming year by 25 per cent—some economic pundits forecast that they will increase by 30 per cent. The erosion in the benefits between 1st April and next October will be in the region of 6 to 10 per cent and there will be a decrease in the value of benefits.

Since the social welfare increases were first announced in the budget last January inflation has taken care of 6 per cent of the increases. In fact, they will not take effect until 3rd April or 4th April next. Effectively the benefit of the increases that have not yet been paid has been eroded by about 6 per cent. No doubt the Parliamentary Secretary will suggest my figures are wrong and, having regard to the way the Dáil operates, there will be charge and countercharge. It is my belief that between the time the increases were announced in January, 1975, and next October when they will be reviewed, inflation will have taken at least 10 to 15 per cent of the purchasing power of the increases.

We welcome the section. However, as I suggested during the Second Stage debate, the Government need not be particularly proud about this section. It is a natural development of an inflationary economy; it is an economy that appears to be controllable but is not being controlled. Because of the intention behind the section we do not intend to oppose it. On the contrary we welcome it but we do so with the reservations to which I have referred.

Mr. Cluskey

This section is necessary to allow for the increases to be paid in October, to ensure that the increases provided in the budget this year will retain their purchasing power for social welfare recipients. I regard the innovation of a review—other than an annual review—as a welcome and progressive move. It was something that we had been seeking without success when we were in Opposition.

In September the House is normally in recess and it would not be possible to adopt the normal procedure of coming to the House then, getting the Bill passed and thus providing for payment of the increases in October. I am glad Deputy Andrews has accepted the progressiveness of this measure and I appreciate the welcome he has given this development.

Question put and agreed to.

SECTION 17.

Question proposed: "That section 17 stand part of the Bill."

Mr. Andrews

Would the Parliamentary Secretary be good enough to give the House a fuller explanation of the operation of this section? I appreciate that it entitles people to continue to be voluntary contributors but I should like a more explicit explanation. I do not wish to be critical of the drafting of every section—in fact, this is probably one of the least complex—but for the record it might be as well to explain in layman's language the meaning of the section. I am not asking the Parliamentary Secretary to give the House a deep analysis but perhaps he would give us a brief résumé.

Mr. Faulkner

I should like to welcome this section which grants entitlement to a person who was once a voluntary contributor to become a voluntary contributor once more. Since all workers were compulsorily insured the right to continue as a voluntary contributor was taken away and I think the Parliamentary Secretary will agree that this created a considerable amount of dissatisfaction.

If a person who was a voluntary contributor is readmitted, will be start his payments as from 1st April or will he pay the back payments he would have paid had he been allowed from the outset to continue as a voluntary contributor? As numerous people were involved in this and as it created considerable dissatisfaction, I would suggest that as much publicity as possible be given to the fact that those who once were voluntary contributors will again become voluntary contributors.

Mr. Cluskey

This is a very desirable addition to the Bill. People who had built up entitlement during a considerable number of years found that in certain circumstances they lost this entitlement. This is a means of allowing them, if they so wish, to continue full coverage. Deputy Faulkner asked whether they should pay from 1st April next. I had not got the information but I think that if it interferes with their entitlement in any way they would be asked to pay retrospectively but that if it did not they would not have to do so. I am sorry I do not have the information but I will give it to the Deputy in the immediate future.

Question put and agreed to.

SECTION 18.

Question proposed: "That section 18 stand part of the Bill."

Mr. Andrews

We accept the section in the spirit in which it appears in the Bill but we wonder if there is any possibility of extending it.

Mr. Faulkner

What struck me is that in cases where children from urban areas are in schools outside them it is a pity to see this provision lost in relation to such schools, irrespective of whether 50 per cent of the children live in the urban area. We should like to see school meals provided everywhere through the local authorities. Can the Parliamentary Secretary say whether the powers vested in urban councils in relation to school meals are being fully utilised?

Mr. Cluskey

As far as I am aware they are. To say the least of it, this section removes a grave source of irritation for people living in urban areas and paying rates in them whose children, sometimes in 90 per cent of cases, attend schools just outside the operational area of the council. The section is so worded that it will remove the possibility of situations arising such as the Deputy has in mind.

Mr. Faulkner

If 49 per cent of the children in a school outside the boundary are from the urban area there will still be considerable frustration.

Mr. Cluskey

That is possible but the Deputy is posing a hypothetical case, one that will not arise. As well as Ballymun, the first one to give rise to this problem, there are other areas in the Dublin suburban belt which will be getting out of this difficulty because of this Bill. The alternative would be to extend the borough boundary and that would be a long and controversial process.

Question put and agreed to.

Section 19 agreed to.

Title agreed to.

Agreed to take remaining Stage today.

Bill reported without amendment, received for final consideration and passed.