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Dáil Éireann debate -
Friday, 11 Jul 1975

Vol. 283 No. 8

Developments in the European Communities—Third Report and Fourth Report: Motion (Resumed).

Debate resumed on the following motion:
That Dáil Éireann takes note of the reports: Developments in the European Communities—Third Report and Fourth Report.
—(Minister for Foreign Affairs.)

This Fourth Report is one of the items for discussion today. I should like to discuss chapter 19 of this report which deals with energy and, in particular, with the agreement of the International Energy Programme and the establishment of the International Energy Agency.

As the report points out, there is specific allowance in the International Energy Programme for accession to the agreement by the EEC. Unfortunately, however, one of the Nine has decided not to accede to the agreement. Consequently, the Community as a whole cannot sign the agreement. As the report points out also, Ireland signed the agreement on November 18th last and this should have been ratified by Dáil Éireann before May 1st this year but because it had not gone through Dáil Éireann at that stage—not only Dáil Éireann were in this position because the agreement had not been ratified by the Parliaments of a number of other countries at that date—there was a general putting forward of the signing of the agreement until September 1st next when, I hope, we will become full members of the IEA. There has been some criticism of this International Energy Agency from many sources in different countries but, by and large, anybody who considers the situation brought about by the energy crisis during the past 18 months should realise that it is essential that the consumer countries of the world should not find themselves in the position again in which they were in October, 1973—unprepared totally for the embargo on oil supplies imposed by the oil-producing countries. Having experienced that situation, we would be criminally negligent if we did not make some arrangement to deal with the eventuality of another such emergency.

After the Washington Conference of February, 1974, it was decided that countries inside the OECD—the OECD had already started to formulate an energy policy for dealing with emergencies—would be at least rash if they did not realise the effects of an oil embargo and if they did not take some steps to avoid a recurrence of those effects.

The effects vary from country to country. As a country which imports more than 70 per cent of our energy needs in the form of oil, we were hit hard. In fairness to the producing countries it can be said that we, like other countries in the West, built our economies in the fifties and sixties on oil that we bought at cheap prices, at below value. However, it would have been expecting too much of human nature for any of us to have told the producers that they were not charging enough for their products. We took advantage of the situation and advanced our economies on this cheap energy. However, the producing countries decided then to put an embargo on products and they quadrupled the price of oil within ten weeks. This had a profound effect on our economy. However, the underdeveloped countries were hit much harder than were the developing or developed countries. It was against that background that it was decided at Washington that some form of co-operation should be devised whereby we could develop methods or strategies to deal with another emergency. It was decided also that there should be some type of long-term co-operation in regard to the research and development of alternative sources of energy because the amount of oil in the world is limited. Figures quoted in newspapers and journals differ in this regard so that nobody can be sure of what are the world's oil reserves but we know they are limited. That, in itself, is enough to warrant the development of long-term co-operation in respect of the research and development of alternative sources of energy.

The very important point of the agency is its relations with the producing countries, not in a spirit of confrontation but of co-operation. It is essential if the world is not to go into conflict again over energy and oil.

The fourth objective of the agreement is to induce some sort of transparence into the oil market. The international oil companies are big and wealthy. They are powerful in a lot of countries and they transcend ordinary political boundaries of countries. To have every country looking at them in isolation would not give a true picture of their activities. One of the most important functions of the agency is that they should come to understand how the oil market operates. By gathering information collected from the 18 countries who signed the agreement they would come to understand and control, better, if it is necessary to control, the multi-national oil companies. I would not like to prejudge that though it is natural for people to shout at multi-national oil companies and say that they are robbing the countries of the world. I would not like to prejudge what the findings of this co-ordinating group of the International Energy Agency will be on this matter but it is necessary that Governments, in co-operation with one another, should have as much information as possible. If it is necessary to control multi-national companies they should have this information.

For any one country to say that, with the limited amount of information at their disposal, they could control the multi-national companies is ridiculous because the fact that they are multi-national means that there must be a multi-national approach to controlling them. There must be an approach amongst Governments to control them. The four objectives of the agency are in conformity with the Government's attitude towards an energy policy. There has been a lot of criticism about the composition of this agency. There was criticism because some countries joined and others did not and because of the alleged domination by other countries. It is true that one of the partners of the EEC. France, did not join the agency. That is regrettable and I should like to see the EEC joining as a bloc. Their combined weight of voting within the agency would exceed that of the US, a country a lot of members fear.

Members prefaced their remarks about the US by saying that they thought the Americans were a marvellous people, that they were all for them but we should not associate with them. This is contradictory. Of all the great nations of the world the United States have been the most generous in their attitude towards other countries. The fact that France did not join is a matter for the French Government but when people say that we should not join the agency because France did not join they should remember that Germany, Italy, Holland, Belgium, Luxembourg, Denmark and the United Kingdom joined. In all eight of the nine members of the community joined the agency. I am convinced our decision to join the agency was the correct one.

The Norwegian Government decided against full membership because they could not agree to the oil-sharing programme but the other three objectives of the agency have been confirmed by that Government. It is interesting to note when accession to the agency was being debated in the Norwegian Parliament it was carried by 102 votes to 18. Among the 102 who voted in favour was an opposition party who criticised the Government for not becoming full members. Norway at present export oil but yet their Parliament thought they should become full members of this agency.

There has been a tendency to look upon this agency as having been set up deliberately to confront the producing nations but that is not true. Obviously, the interests of the consuming nations are different from those of the producing nations. In this agency the consumers have drawn up a programme for a discussion with the producing nations. This is feasible and has a good chance, in spite of the fact that the Paris meeting in April did not produce the results we hoped for. I hope that meeting will be reconvened before the end of this year and that at that meeting there will be agreement among the producers and consumers on oil prices, the future of the oil industry and on other raw materials which some of the producing nations are anxious to have discussed. I believe this will come about.

When people criticise the international agency they remark that there will be oil off our shores in a few years. For that reason they believe we should join the producers. People who make those remarks are ignorant of what the letters OPEC stand for. I have heard responsible people say that we should not join the IEA but that we should join OPEC. The latter organisation is one for petroleum exporting countries. We have not got any oil but yet it is suggested that we should join an organisation of petroleum exporting countries. Those people also show a great ignorance of the composition of that organisation. If a nation wishes to join OPEC that nation must have the support of 75 per cent of the existing membership, a similar economic outlook to the other members and must be accepted by the five original members of that organisation.

Hopefully, we will discover oil off our coast but that is another story. Drilling is in progress and the licences have been issued. I hope oil in significant quantities will be discovered off the coast. It should be remembered that we are not married for all time to this agreement and if that day comes we could consider joining OPEC. However, we must deal with the situation as it is now and not what we hope it will be in the future. This kind of comment on this agreement shows a shallow appreciation of what the IEA is about or what the world oil market is about.

There has been a lot of criticism of the agency because of the voting system within it. The allegation has been made that this is dominated by the United States and that they will shove their opinion down the throats of every other nation. This is not true because the voting has been carefully weighted to ensure that no one country can dominate the agency. The agreement cannot be changed without the agreement of every signatory to it. That means that the United States have a veto on the changing of that agreement but we also have a veto on the changing of it. We can veto any effort made, even by all of the other 17 members, to change that agreement.

The majority voting in the agency is very carefully blended so that no country can heedlessly hold up progress, nor can any country or group of countries put their point of view against the consensus of the wishes of the participating countries.

It has been said from time to time that, say, the United States, Holland and Japan could by combining their votes bring about, for example, the introduction of a rationing system for oil. This is not true, because there is the unanimous vote that can change the agreement, and there are two other types of votes. There is the majority vote which deals really with the management of the whole agency, and it needs 60 per cent of the votes to carry any proposition under that, and not just 60 per cent of the combined votes. As I say, there are two types of votes. Each participating country has what are called general votes and then there are votes according to the consumption of the participating countries. Under oil consumption we have no vote, but neither have three other countries—Luxembourg, New Zealand and Norway—because our consumption is less than 1 per cent.

Under the agreement the United States have 48 votes plus three participating votes, making a total of 51. However, the eight countries who have joined the agency from the European Communities have between them almost as many as the United States and, if France had become a member of the European Communities, they could outvote the United States in the agency. Therefore, to infer that this is an agency dominated by America for selfish reasons is misleading. I think the whole history of the United States would show that they have not been selfish for the lifetime of anybody in this House or, indeed, for hundreds of years, in their attitude to the rest of the world. I am sure it is not their intention to use this to have their own way in the energy field in the world today.

It is totally untrue to say that the United States, Holland and Japan or, as in the other example given, the United States, Germany and Japan, could by coming together force their will on the rest of the eight. It is untrue even according to the figures in the printed agreement, because between these three countries they have nine general votes and between them they have 71 oil consumption votes which gives them a combined voting strength of 80. However, two-thirds of the 60 per cent that is necessary for a change is 93 votes. These countries between them have only 80 votes, but even if they had 94 votes which would give them the 60 per cent, they could not do anything unless they had the support of a further six countries because the voting is designed in such a way in the agency that for a majority vote there must be 60 per cent of the combined votes plus nine countries in approval of the measure. Of course, it is true to say that three countries could block anything the others proposed, but that is the kind of negative thing I cannot see ever arising. What we want is an assurance or a method that would allow us to stop the agreement going further than we would like it to go.

The other example given was the United States, Holland and Japan, but in that case they have only 74 votes. Therefore, the people who trot out these figures have not read the agreement, or if they have they have not understood it or have not made any effort to see that what they are saying conforms with what is in the agreement. This agreement was read by a number of people very casually. Without having read the small print of the balances that are there, they have trotted out these figures in public to bolster up what was in the agreement.

This country made a major contribution to the devising of the system of votes, particularly in relation to the devising of the oil consumption and the general votes. This indicates that even the smallest country can have a significant say in future policy agreements under the International Energy Agency.

One of the co-ordinating groups in the IEA is Research and Development, and this we consider to be very significant and important, because a country that is 70 per cent dependent for its energy on imported oil must, as far as possible, diminish that dependence internally, if that is possible, but certainly, if that is not possible, it should try to diversify its supplies of oil from outside sources. The Government, recognising the necessity to pursue this vigorously, have agreed to the third development programme of Bord na Móna. Tributes have been paid in this House on a number of occasions to Bord na Móna, and I would like to join in those tributes. Twenty-four per cent of the electricity generated in this country is being provided by turf. Within the next few weeks I shall be bringing a Bill before the House to allow them to go ahead with the third programme under which the amount of electricity being generated from peat will be increased, but not necessarily by 24 per cent because we shall hopefully get back on to a growth margin there again.

Then there are the expected finds off the coast. I should say here that there is no danger, as has been inferred, of anybody getting their hands on our oil off the south coast. That is our property, and what we are agreeing to share in this agency is the stocks of oil it is necessary under the agency and, indeed, under the EEC, to maintain. The levels of stock holding for both are exactly the same, 90 days. It has been said that this will cost us a fortune, but this is based on the assumption that this 90 days is additional to the 90 days we have to provide under EEC regulations. Of course, it is the same 90 days, so even if we never joined this agency we would have to provide 90 days storage for oil anyway. As I say, it is not true that membership of this agency will allow people to get hold of the oil or gas we hope to have on the south coast. All we are being asked to do in the event of an emergency in another country is to share our 90 days' supply to the proposed level below that, depending on the level of shortage in other countries or indeed, in all the countries combined.

We have joined this agency for 10 years. The whole agency will be reviewed after five years. Our initial period is three years and then we can give one month's notice if we desire to pull out of the agency. Therefore, after four years we could be totally out of the agency again. Maybe the picture will have changed by then, we may have oil and we may want to pull out. At the moment we have no oil and we would be very lax and indifferent to the needs of our people if we did not see that, in the event of another oil emergency, there was some oil-sharing system in which we could participate.

If we have more than our requirements of oil in future and if we pull out of this agency in another four to ten years' time, if a country finds itself in an economic recession because of an embargo imposed by a supplier of oil, if I am Minister I would hope to influence the decision that we would not adopt an isolationist selfish policy, that even if we had no international binding commitment to share oil, we would supply it to a neighbour or any other country. That would apply to any Government in this country at any time, that if that should happen we would recognise our moral if not our legal obligation to help a neighbour in trouble.

There has been a great deal of talk about the floor price for oil and about the price of oil being too high and the suggestion is made that we are proposing to increase it. That is not what is intended, as is quite obvious.

Up to 1973 the price of oil was a dollar a barrel and is now about ten dollars a barrel. The thinking behind the floor price for oil is that the price should not be allowed to drop to one dollar a barrel again. This is intended to ensure that there will be sufficient people interested in producing oil and that the price will be sufficiently rewarding to encourage people to get oil in places where the cost of production is very high. The Minister for Industry and Commerce within the last three weeks issued licences for the exploration of the Celtic Sea for oil and gas and there was a queue outside his door for those licences. If the price of oil was a dollar a barrel and if it was available in unlimited quantities from the Middle East countries, nobody would be looking for a licence because it would be impossible to get oil out of the Celtic Sea at a dollar a barrel. It must be profitable and commercially viable to explore for oil. The producers must be assured of a return in the long term on their huge investment. If Governments do not agree to a level below which the price will not be allowed to drop, interest in the Celtic Sea will be nil. People will not put their money into that type of exploration and exploitation which does not offer a reward or even a possibility of getting their investment back.

When we talk of a floor price or a minimum price for oil, we are talking about a price that makes it feasible for exploration to take place. That applies also to the production of other forms of energy—solar, fusion, fission, nuclear. Production must be made attractive to investors. We are not talking about putting the price of oil up beyond its present level. We are talking about giving a reasonable guarantee to people who invest money in exploration where the operation is very expensive. The cost of the drilling now taking place off the south coast of Ireland is running into millions of pounds and that is not the most expensive place at which to get oil. The place at which gas has been found off the south coast is only 30 miles out and is in relatively shallow water. The further out one has to go and the deeper the water, the greater the cost. If the oil that is brought ashore is double the price at which oil is available on shore, there is no inducement to invest in exploitation. We must be realistic.

It is in our interests to get as much control as possible of our energy supply and to get it as near our shores as possible. We will not get that if the price falls to a level at which nobody is interested in exploitation. In that case we will remain dependent as to 70 per cent of our requirements on imported oil from the Middle East and vulnerable to the same embargoes that have done so much damage to the economy in the last 18 months. We must avoid that possibility. We must ensure, in co-operation with the EEC or the IEA that we will be protected in the event of another emergency and that funds and encouragement will be provided for the exploration and development of other forms of energy. The International Energy Agency allows us to do that. The decision by Ireland to join that agency was a correct one. We would have been negligent in our duty if we had done otherwise. The price of oil may rise marginally this year. I just do not know. Increases of up to 20 per cent have been quoted in relation to the OPEC countries on 1st October next.

If we were to allow another five or six years to elapse without taking action and were to allow ourselves to slide back into dependence on imported oil, even though it benefited us in the immediate future to have cheap oil for industry and the country generally, we would be rightly accused of negligence. We are talking at a time when there is no certainty about there being oil off the south coast but if we do get it we do not want it for the purposes of trade, unless we get it in huge quantities. We want oil as a source of energy on which to build our economy. The more control we have over that energy within our own shores, the more control we have over the economy and the less danger there is of being affected by decisions taken thousands of miles away that are totally outside our control and are taken regardless of the effect they will have on our economy. I do not blame producing countries for taking decisions without regard to what they do to us. They have their own business and their own countries to run. They have this valuable product which they have been selling at too low a price. We failed to face up to that fact for 20 years. We failed to allow the price to move up gradually. Therefore, we took the full brunt of 20 years' increase in two months, with the resultant inflationary effect on so many countries.

This debate is in relation to an agreement in which there are 19 chapters. The Minister has been speaking for 40 minutes on one chapter. He should have a House.

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

I want to repeat, in reference to this paragraph, this chapter in the Fourth Report, that I consider the decision of the Irish Government to join this International Energy Agency to be the correct one. I regret that the European Community have not been able to join as a community. I hope in the future that the French Government may change their minds or that we may find some other way of accommodating them. Even though the French Government have not joined the agency, before every meeting of the agency a co-ordinating group of the nine countries meets to ensure that the attitude put forward by the eight countries in the agency is acceptable to the French Government. A conscious effort is made to accommodate the views of the Community within the agency. I believe this agency is the correct place for this country to be at this time. I do not know what our attitude may be in five years' time. It may have changed but at the moment the correct decision has been taken by this country to join the International Energy Agency.

I was rather interested to hear the Minister saying that we have no proof that there is oil on the Continental Shelf.

I did not say there was no oil. I said we have no proof that there is oil.

I thought the Minister for Industry and Commerce said on some television programme or elsewhere that we had oil.

He said we believed there was oil.

Is there no proof that there is oil?

There has been what one would call shoals and finds of oil but it has not yet been proven that there is oil which can be commercially exploited.

During the Minister's speech on chapter 19 of the report he spoke about the price of oil. We all know from statistics we have seen that oil will cost about twice as much to take from the sea bed as it costs to take it out of the desert. The cost price of oil at the well head is about 10p per barrel in the Arab countries but I presume it will cost more than twice that when it is drilled from the sea.

We do not want to tell people that we will have cheaper oil or cheaper petrol. Some months ago, when I asked the Minister for Finance a question about the tax on oil and petrol, as far as I remember he told me that the tax on a gallon of petrol was 42p. There is no point in saying that the cost of petrol is solely the responsibility of the Arabs or where it has to be drilled. The real problem where petrol is concerned is the high rate of tax. I was glad the Minister spoke about energy and how important it is both in relation to this country and to the world. The reason why I called for a House was that there are 19 chapters in this report on development in the European Communities and the only Minister to speak on the two reports was the Minister for Transport and Power and he did not refer to very important chapters in this report. He did not refer to the common agricultural policy, to the regional policy, or to the social policy.

When we are debating the European Economic Community I should like each Minister to tell the House and the public exactly how Europe is affecting his particular Department. The Minister for Transport and Power dealt only with his own Department. Will the Minister for Agriculture and Fisheries come in and tell us about the common agricultural policy?

I think he has already done so.

Will the Minister for Labour come in and tell us about the effect where his Department is concerned?

I have not got the list here but certainly one other Minister, not counting the Minister for Foreign Affairs, has spoken. I believe it was the Minister for Agriculture and Fisheries.

He spoke on his own Estimate?

No—on this motion.

We will check it out. If each Minister would spend even half-an-hour dealing with his particular Department and telling us exactly how the Community affects his Department and what benefits have accrued, that would be a good thing. The last time we debated this was on 13th March and big changes have since taken place in Europe. We have had the result of the British referendum in which 73 per cent decided Britain should stay in Europe. I know that, irrespective of what Britain did, the Government had decided we would remain in Europe. In that decision they had the full support of the Opposition. We now have to face Britain's remaining in the Community as a reality. We must now get down to a realisation of the fact that when we joined, 88 per cent of the people having voted in favour of joining, that was only the beginning and not the end, as some seemed to think. Ministers and their officials will have to fight very hard for what we demand from and expect of Europe. The common agricultural policy is the keystone because it is the only really definite policy we have in Europe and it had a very big influence in rural areas on the decision of the farming community. What has happened in the two-and-a-half years since?

I am sorry to interrupt the Deputy, but the Minister for Agriculture and Fisheries spoke in this very debate on the 9th April last.

I say every Minister should.

I appreciate that but the Deputy singled out the Minister for Agriculture and Fisheries as a Minister he wanted to intervene in this debate. He has already spoken.

In the two-and-a-half years we have been members what developments have taken place in agriculture? None. We have had the green £ but that was because the £ was floating. There were no new policies. One thing farmers have been howling for in the same period is a common agricultural policy on sheep. Our members have demanded this in both Strasbourg and Luxembourg. We have tabled several parliamentary questions. On the last occasion M. Lardinois said in reply that he would have proposals for a common agricultural policy on sheep before the April adjournment. The Parliament adjourned today and there have been no proposals for a common agricultural policy on sheep. At the last meeting in Strasbourg about three weeks ago I was speaking to M. Lardinois and he told me there was no hope of having any proposals on a common agricultural policy on sheep before the end of November. As a parliamentarian, I know that when one is told there will be no proposals before the end of November, that will be coming up to Christmas and Parliament will adjourn once more, this time for the Christmas recess, that simply means there will be no common agricultural policy for sheep until 1976.

The Minister for Foreign Affairs was President of the Council of Ministers for the last six months and pressure must be put on the Commission to bring forward proposals. If the Council demand it the Commission must present them. This is the situation. Even M. Lardinois in cross talk said: "If you want a common agricultural policy on sheep you will have to fight for it." We can fight in the Parliament, but the Minister has the bigger stick and he can hit harder. He must fight for it. That is one aspect, but it is a very important aspect.

Deputy Herbert has worked very hard on the regional policy as rapporteur and as a member of the regional policy commission. The Irish delegates were very much involved in the regional policy and its development. The whole of Ireland qualifies for development funds. The amount allocated is somewhere in the region of £35 million over the next three years. This is very small. People are very worried because the Minister for Finance made statements which could mean this money disappearing into the total capital budget. No one will be satisfied until the Minister clearly defines, if it is his job, what plans he has for this regional fund and where the money will be spent. The criteria laid down by the Commission were related in principle to infrastructure. Millions could be used on the development of the telephone service, on roads, on harbours, on rural water and sewerage schemes, on industrial estates. All these would qualify for aid from the regional fund. These are the things we want. I am sure every Member is as anxious as I am to have the position clearly defined. We do not want to see these moneys swallowed up in the capital budget and used for the purposes for which the capital budget is used. I sincerely hope we will get from the Minister for Finance detailed plans as to how this regional fund will be used. This is very, very important.

I come now to the farm modernisation scheme. Every rural Deputy is only too well aware that in February of last year the Minister for Agriculture and Fisheries decided that farmers applying for grants to improve their farms would have to be classified either as development farmers or transitional farmers and, until such time as they were classified, they would not qualify. Farmers were in no way geared for the farm modernisation scheme. One of the essentials would be a farm accounting system and our farm structure was not geared to that. The result was thousands of farmers could not get grants. The agricultural committee adviser got bogged down. The applications piled in. The land project officials who deal with classification were snowed under with paper. I asked the Minister by way of parliamentary question to postpone the introduction of the scheme until such time as the farmers were classified and would qualify for grants. That was not done. A very serious situation developed. The service industries in agriculture, light engineering and so on, were adversely affected. There were redundancies. If a farmer did not get a grant he could not buy a manure distributor, erect a hay shed, carry out land reclamation and so on. The small service industries—there are quite a few in my constituency—began to feel the pinch. Workers became redundant. Even at this moment we are still not ready to implement this scheme. We have the disadvantaged areas scheme. The farmers in these areas according to the outline plan the Minister has will not qualify for benefits similar to those of their French counterparts—we will be able to go into this in greater detail on the Estimate—because farmers in France and other countries will qualify for higher benefits than the Irish farmer will. There are certain differences.

I come now to this fearful word "inflation". As a famous Member of this House once asked: "What is inflation?" It is everything that is bad. As a member of the European Community we are in trouble because of the rate of inflation which is somewhere around 27 per cent. If I am a baker producing bread, and it is costing me 20 per cent more to produce bread than my competitors, I will be out of business in a few weeks because I cannot compete. The Minister for Industry and Commerce in a television interview admitted this.

If the cost of our goods for export continues to rise, and the rate of inflation compared with the average for other European countries is higher, we might as well close our doors because we will be out of business. This is not a European problem. If we were not in the European Community today our cost of living would be higher according to the statistics available. If we do not control inflation, and if we allow the cost of our goods for export to rise, we will be in trouble. The recent budget did not do enough to grapple with inflation. It has already been said here that an attempt was made to reduce the cost of living by the introduction of subsidies and by removing value-added tax. Even before the value-added tax was taken off briquettes had gone up in price. I read in a Press report yesterday that bread will increase in price. We will not control inflation that way.

The budget was designed to do something different.

The budget was designed to grapple with inflation. In my view "inflation" covers the lot.

It was designed to create an atmosphere in which some of the more substantial areas of inflation could be attacked.

We know about the green £ and the 11 per cent devaluation. I saw a statement by a prominent person—he is not a Member of this House so I cannot mention his name—that the Irish £ as compared with the unit of account, which is the European system, is of higher value. Last week I saw in a European document that the Irish £ is .003 less than the £ sterling, as far as comparison with the unit of account is concerned. Granted, the reason for that may be that they are sent back to the banks here. I thought it wrong that a prominent member of the Government party should make the statement that the Irish £ was stronger on the international market than the £ sterling. It is not.

We must be clear on this. We have one prominent member of the Government party saying we should break the link with sterling while the Minister for Finance says we should not. The person who says we should break the link with sterling should point out what we will link the £ with. Will we link it with the dollar? What will happen to our cost of living? Will the £ have to be devalued? That is a field in which I would have to do a great deal of research and learn a lot about because that is high finance. I am sure there are very few people in this House capable of talking about that. The Minister for Finance should be the Government spokesman on financial affairs, and not prominent members of any other party.

The person about whom the Deputy is speaking is a Senator, not a Member of the Government. He is as representative in financial matters as Senator McGlinchey is of the Fianna Fáil Party in political matters.

People are asking these questions.

We will give the same answer as the Deputy's party will give about Senator McGlinchey.

Senator Halligan is a prominent member of one of the Government parties. I took it that he was speaking as such, or was he speaking on behalf of the Labour Party? I do not know. We have him saying one thing at a dinner and the Minister for Finance in this House or in the Seanad saying something else. We must have responsible Government.

Did Deputy Lynch say something about the £ sterling with which Senator McGlinchey disagreed?

I do not know of any time when Deputy J. Lynch said anything about the £ sterling and Senator McGlinchey differed from him.

He said things about other matters and Senator McGlinchey did not agree.

When the Parliamentary Secretary is speaking he can quote him. I do not recall them.

They are fresh in my mind.

Fine Gael and Labour seem to differ on several important matters. The only person we can believe is the Minister. The Taoiseach speaking at the last Fine Gael ardfheis clearly and distinctly stated that part of our inflation was of our own making. I am sure the Minister for Foreign Affairs will agree. Yet, other Ministers on television and in this House say that the oil crisis caused all the problems. The person I believe in this case is the Taoiseach. Our inflation problems will not be solved by Europe, or by the USA or by the Arabs. We will have to solve them ourselves.

Before the Minister for Foreign Affairs came into this House the Minister for Transport and Power spoke on chapter 19 of the report on energy. I understand the Minister for Agriculture and Fisheries spoke about it also. When debates on developments in the European Community take place in this House it is important that each Minister should come into this House for a half-an-hour and explain to the Irish people how these developments affect their lives.

I am glad Deputy Nolan and I who are members of the European Parliament have this opportunity to speak about the Community. Neverthless, the circumstances that allow us to be here today to debate this motion are a little bizarre. We have one very important item which has been under discussion in the EEC for some time. It is the dual mandate proposal. It affects those of us who happen to be Members of both Parliaments. It reached its most bizarre circumstances this week for those of us endeavouring to put this country's point of view in Europe at the plenary session which is occurring at the moment. They are discussing the wine market or something like that, but there was a debate this week which had great relevance to the Irish situation but the Irish voice was prevented from being heard over there because of the silly pairing arrangement which has broken down in this House. We were prevented from being heard in Europe.

Hear, hear.

I have no doubt that the responsibility for this breakdown rests completely with the Opposition.

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

During this week the debate in the European Parliament was dealing with the social action problems in the Community, European union and matters pertaining to agriculture and the like, but the Irish voice had to be put forward by only one Member of this House. All Deputies who would have been out in Europe would have had something to say on these very important matters. I would have dealt with them on behalf of the Socialist group but, because of the problems here I was not able to do that business. At short notice, somebody else was called in the European Parliament to make the contribution I would have been making, which I would have done with particular relevance to the Irish situation. The Leas-Cheann Comhairle has told me I cannot speak on this particular matter. I express the hope that sanity will prevail in the next couple of weeks so that the Irish voice can be heard in Europe.

Deputy Nolan spoke about the agricultural policy and said that in the last two years no new agricultural policies had been adopted here at home. I would have thought that the entire complicated agricultural policy in Europe, its acceptance and the working and the operating of it during the last two-and-a-half years— the introduction of the various directives and proposals dealing with agriculture—posed a great deal of problems for the Department of Agriculture and Fisheries, for the farming community and for all the various industries. We have been getting the best from the various regulations and in doing this we have been adapting ourselves very well and very quickly to the European situation.

What I said is that we have been overloaded with work. Our organisations have been doing excellently but they have been overloaded.

In the policy area many of the schemes and directives are very extensive and new and they could not in effect be regarded as policy at all. The main problem is to co-ordinate our agricultural policy with that of Europe and from that point of view I would say that the two-and-a-half years have been very well spent by those connected with agriculture here. We have got by far the biggest bonus for this country from the various Community funds.

Deputy Nolan mentioned one matter in which I am particularly interested, the sheep market. I think I was the first Member of the European Parliament to put down a question about the introduction of a sheep market to the agricultural Commissioner back in April, 1974. He could not see any hope at that time but later on we pursued the question. An oral question by one of the English Members was debated in the Parliament and on that occasion we saw the first signs of a proposal to bring in a sheep market. The various problems, like the energy crisis, that have been besetting the Community as well as ourselves have put a brake on many of the new policies. As a result of a debate about a month ago we now find that the possibility of a sheep market is being postponed. This matter is very important to many areas, particularly my constituency of Wicklow, where the operation of that market would be of great benefit to the sheep men. We look forward to the implementation of this either by the end of the year or early next year. The promise has been made. Whatever we may feel about the agricultural Commissioner, I believe he has endeavoured to bring this in; but because of the lack of finance, he has had to postpone its introduction, like many other schemes.

I want to make one reference to what Deputy Nolan said about Senator Halligan and his remarks about the sterling link. He was allowed to make these remarks. It is only fair to say that any Member of this House or of the Seanad can put forward his ideas on any aspect of economic policy when he prefaces what he says with the remark that he is making it off his own bat, that they are his own ideas, and in that way perhaps stimulate a debate on this very important problem. I think there is some merit in what Senator Halligan said about linking sterling with some other currency or group of currencies. Our concern over the past year or two has been with the decline in the £ sterling against the major currencies of the world. It is continuing to decline and has declined rapidly over the last few weeks and months. It must be an item of concern to the Minister for Finance and the Minister for Foreign Affairs to see this continuing drift in sterling.

It was estimated recently on British television that the £ would possibly drop as much as 30 per cent against the 1971 level. This will represent a very considerable devaluation of the £. It will also mean a devaluation of our own money over which we have no control. It is only right that a discussion should be stimulated to see how best the Irish economy can be safeguarded.

Is that official Labour Party policy, to break the link?

I have said that Senator Halligan made these remarks as personal remarks in order to put forward an idea which it is useful at this point to consider.

The Deputy has been allowed to speak as he has spoken because references were made to it previously, but it is a standing rule of the House that Members of the other House should not be introduced in the House by name and the views of Senators are not relevant to discussions in this House.

I accept your ruling, Sir, but I felt it was only right that I should underline the fact that Senator Halligan spoke as he did as an individual and not as a member of the Government or the spokesman on economics for the Labour Party.

The allocation under the regional fund for Ireland has been mentioned by several speakers from all sides. There is a feeling among many people that Ireland's share was not as large as it should have been. Nevertheless what should be appreciated about the fund is the fact that it has been set up. This was by far the most important decision made during 1974, and its delay for 12 months, when the clock was stopped for a year, caused problems for us here in not having this fund to draw on. The fact that it has been set up has given us the opportunity to put forward our schemes and prepare them adequately so that we can immediately make use of the fund that is there. I do not think that anybody can suggest that the fund is adequate or inadequate until we find out whether we are getting the benefits to the full extent of the applications we are making to this fund.

It is my information and my impression from what has been said lately that new budgetary allocations for the coming year in the Community will be larger and the regional fund will have the benefit of a larger allocation. This is particularly so because of the many problems which have beset the western countries during 1974. This is one area where help and assistance can be given to the less well-off sections of the Community. This fund was set up and devised to bring up the standards of living in the less well-off areas and Ireland as a whole was accepted as one of those areas. I must say as one of those who hails from the eastern part of the country, which is regarded as somewhat better off, I am not in favour of the lobby that seems to get under way and which says that all the regional fund money should be spent in a certain area. I could send anybody from the west, the south-west or north-west into parts of Wicklow where the fund could be used with just as much benefit and where it certainly would raise the standard of living in the area equally with other parts of the west. Not all the poor areas can be found in the west. The hill farmers and the small industries in the mountains of Wicklow and in the west and south-west of Wicklow would benefit just as greatly from the fund as anywhere else in the country, and it is wrong that anybody in this Parliament or elsewhere should start a bandwagon to have the money spent in any particular area.

It is a pity, now that the full allocation of members to the European Parliament has been made since the British Labour Party decided to send its members, that there are now no representatives from the northern part of Ireland in the European Parliament. This is one of the areas of the Community that needs a spokesman.

Agreed. It just shows how the British treat that part.

I think it has been a big blot on the British that they have not put forward the names of one or two people from that area. I do not know what the alignment of the various Unionist parties is at present with the British Conservatives. I do not know if there is any attachment there, but in the former years there was a link between the Unionist parties and the Conservative Party; but they have 11 out of 12 members up there and it would seem to me that one of those could have been allowed representation in the European Parliament. The only voice that the minority have in the British Parliament is that of the SDLP member from Belfast. I expect that his duties are onerous. Because of the electoral system in that part of the country, the SDLP instead of having four or five members at Westminister, have only one. Therefore, he would not have enough time perhaps to take on the added duties of Europe. If the Convention develops into some sort of Parliament I trust that that part of Ireland will be represented in the European Parliament.

I am a member of the Social Affairs and Employment Committee of the Parliament and consequently I have a profound interest in this area. It had been my hope to speak this week on some of the problems in this regard. Since 1974 the Community, together with all other western countries, has experienced a worsening economic and social crisis. In our case it is probably the worst situation we have ever faced. There are three major elements to be considered in regard to the social situation in the Community. First, there is the inflation-unemployment situation. There is the social action programme being undertaken by the Community and there is the institutional development in the social policy area.

The unemployment-inflation situation dominated all the considerations of social development in 1974 and also during this year. It is reckoned that within the Community there are between 6,500,000 and 7,000,000 people out of work or on short time. The impact of the depressed markets continues to hit all the member States and it is expected that there will be little or no growth in production this year. This problem must be tackled not only by the Community as a whole but by national Governments. The proposals in this regard that were put forward by the Minister for Finance and accepted in this House will go a considerable way towards tackling the inflation-unemployment problem. Therefore we can point out to our fellow members that our Government are pursuing a very active policy to curb the worst excesses of inflation.

Nevertheless, all aspects of Community policy are concentrated on these central issues. There is a grave danger of increasing social problems in the Community countries. This situation would result in a loss of credibility and of confidence in the institutions of the Community. Therefore the social action programme, which is particularly relevant to countries like ours, must be put into effect immediately so as to avoid any loss of this confidence and credibility. We know that already in this country some of those who advocated entry to the EEC are saying that, perhaps, many of our problems result from our membership. However, it would not be accurate to blame the EEC for the recession that has occurred. But unless the Community indicate a willingness to tackle these problems many people will believe that our membership of the Community is responsible for our trouble.

The Deputy is intelligent enough to instruct the Minister for Labour.

It is not my job to instruct anybody.

The Deputy has the ability to give the Minister a few lessons.

While we can offer opinions, we cannot instruct. Perhaps the Opposition would like to let us know their opinion. The social action programme can be described as being the first real attempt to develop a social policy covering a wide range of subjects. While initially the programme is limited in scope, it provides a basis for concrete achievement and for the opening of doors in a number of areas. In this regard tribute must be paid to Commissioner Hillery for the development of this programme. Perhaps in putting forward this programme he has in mind many of the problems that we are experiencing. However the funds available to him in this sphere are totally inadequate and I trust that in the allocations for the coming year these funds will be greatly increased so as to allow for the full development of the programme.

In regard to unemployment the Commissioner has told us that he can deal with the problem only in very limited areas. For instance he is not allowed give direct grants from the social fund towards the unemployment situation. He must devote the money to pilot schemes, to education, to training schemes and so on. On several occasions we have asked him to endeavour to do something for that section which is hit badly at the moment, the school-leavers. Many of these young people are not included in the unemployment figures in any of the Community countries. As a first step the Commissioner has been asked to initiate a study in the Community which will determine a figure for the number of school-leavers seeking jobs. We have asked too, that financial support be given from the fund to those people, be they young or old, who are not included in the social welfare benefits of the national countries.

This is an area which is neglected in all the national programmes. Something must be done to relieve the problem of unemployment for school-leavers and also for those who, by virtue of their entitlement to benefit having expired, are not in receipt of any social welfare payments. It is an area in which the Community could help with the Social Fund.

The programme of pilot schemes and studies to combat poverty is the first Community social action programme outside the field of employment and it represents a beginning of the task of creating a comprehensive and effective policy for the alleviation and eventual elimination of poverty and deprivation in the member states. A major priority must now be the commencement of work on the preparation of social policy proposals for the period after 1976. The work of preparation must be a consultative and flexible exercise which will ensure responsiveness to the real needs of the people. The social policy must be given a broader scope to cover all social problems whether or not they are in the field of unemployment. This is one of the actions I hope the Commissioner will be taking note of. Certain advances have been made in the institutional aspects of the Community social policy. The reactivation of the standing committee on employment is to be welcomed in this regard. It provides an effective forum for discussion between governments and between the Commission and the social partners.

Utilisation of its budgetary powers by the European Parliament to facilitate the development of a social policy was also an important step forward. It was regretted by the Minister for Labour during the Irish Presidency that his attempts to bring the Labour and Finance Ministers of the Community together to deal with the problems of unemployment in the Community did not meet with a ready response from many of the well-off Governments of the Community. It is to be hoped that the work he put into this during his term will bear fruit in the coming months under the Italian Presidency. It is the greatest initiative that could take place to answer many of the problems of unemployment existing in the Community. I should like to state that those points would have been better aired in the European Parliament this week. It is right that I should mention how well the Irish Presidency of the Community was accepted and how highly it was praised by all European Parliamentarians. The dynamism of the Minister for Foreign Affairs in pursuance of the Presidency changed a lot of old inbuilt ideas about the Irish throughout Europe, particularly in Britain. There the advent of the Irish Presidency was looked upon as a possible disaster for the EEC but, at the end, those ideas were changed 100 per cent.

The highlight of our presidency was the signing of the Lomé Agreement which allowed the EEC to help the less well off countries of Africa. Those involved in that Lomé Agreement owe a debt of gratitude to the Minister for Foreign Affairs for pursuing that convention to a successful conclusion. However, the Minister for Foreign Affairs was as successful in pursuing other areas of policy in the Middle East and the United States. The Minister for Foreign Affairs carried out his work with great vigour. This country got its greatest boost by being able to produce a Government Minister who had the ability and the stamina to cover so much ground and be involved in discussions on so many policies in that six months. I hope that in the next few months sanity will return to this Parliament to allow us to continue the work we have been doing in the European Parliament.

During the course of his contribution to this debate the Minister for Transport and Power referred to the fact that Members on this side of the House had not read the energy agreement.

He had a damned cheek.

On two occasions today the Minister made that incorrect accusation. I read the agreement and I am aware that my colleagues read it. The Minister also stated in Cork on 6th June that Members on this side had not read the agreement. All reports of the debates on the agreement will show that Members from this side considered it in detail. We are convinced that that agreement was not for the benefit of this nation. I am not going to repeat the reasons we have given for this because they are already on the record.

The Minister for Transport and Power today said we had suggested that this country should join OPEC. Nobody from this side suggested that we should join OPEC. I take it the Minister was referring to Deputy O'Malley, who said that we should be exploring the possibilities OPEC could hold for us in the light of, hopefully, our becoming a producer nation. It is right that we should be exploring that possibility because we seem to be on the threshold of becoming a producer nation, despite the fact that the Minister for Transport and Power said today that we have no evidence of oil in commercial quantities off our coast. We hope it is more than a possibility that we will have oil in commercially viable quantities. For that reason we should explore the prospects of a link with OPEC.

Some people wrongly feel that only Arab countries can be members of OPEC. Venezuela is a member of OPEC and I do not think one could say the economy of that country has much in common with the Arab countries. However Venezuela sees her future lying in being a member of OPEC rather than joining the consumer group of nations. As I have explained, we did not say we should join OPEC.

The Minister also said we contended that the USA, Japan and Holland could exercise enough voting strength, more than 40 per cent, for a majority decision. Nobody on this side of the House said that. What we said was—and I was one of those who said it—that the USA, Canada and Holland jointly could exercise sufficient voting strength in excess of 40 per cent; and the reason we singled out these three countries was that, as everybody who knows anything about oil companies knows, these are the home countries of the multi-national oil companies—the USA, Canada, and Holland because of Royal Dutch Shell.

The Opposition were also accused by the Minister of criticising the USA. The Official Report will show that we did not criticise the USA but that we criticised the multi-national oil companies, and it just so happens that some of them are to be found in the USA. We all know the power these companies can wield even in world politics. There was an instance of that away back in 1956 at the time of the Suez crisis. The crunch came when Britain and France went into Suez, and the big question mark was: should the United States go in? It is a well-known fact that the then Secretary of State, John Foster Dulles, favoured going in, but the power behind the scenes in the multi-national oil companies succeeded in changing his mind. Hence the other two nations had to pull out of Suez. I am not saying they should not have done so, but I am just exemplifying the power exercised by these companies on their governments, in this instance, the USA. Therefore I refute the suggestion that we were criticising the United States; our criticism was aimed at the multi-national oil companies.

Another point we made was that this agency created a confrontation between the consumer countries and the producer countries. The Minister for Transport and Power denied this. As far as I know, there have been two efforts to bring the producer countries and the members of this agency together in Paris, and both of these meetings broke up in disarray. That is confrontation, and the oil producing countries see it as confrontation, in the main, by consumers, with one or two exceptions in the case of importers.

Again in regard to voting, we would ask why, when the system of voting was being decided, was it decided on the basis of oil imports rather than oil consumption? If it was based on imports instead of consumption, the United States and Canada would not have the voting strength they now enjoy within this agency, because the United States import only 20 per cent of their oil needs and produce the other 80 per cent. They could be completely self-sufficient, but, like the good businessmen they are, they tend to spare their own resources as far as they can. Canada is self-sufficient in oil. If the voting strength were based on oil imports rather than oil consumption, that would be much fairer to countries like ours who, as yet, have no oil resources at all.

France has been mentioned as not joining the agency and we can only guess the reason why. However, since the other members of the EEC have joined and France is a major partner in the Community, they must believe, as we on this side of the House believe that even if we never find oil, it is possible to procure your own sources of oil. The difference between France and ourselves is that they have full refining capacity; we have only 50 per cent. I must repeat what has been so often said already: that since the oil and energy crisis, which has increased our oil bill from £30 million to over £200 million, we have taken no visible steps to meet a similar crisis in the future. If there was a repetition of the October, 1973 crisis—and there is no reason to believe it could not happen—we would be caught with our trousers down around our ankles.

As we have been saying since 1973, our first aim should be to be self-sufficient in refining capacity. We still have the same capacity, 50 per cent. It takes three years from the time you turn the first sod, to build an oil refinery. Apart from what we read in the newspapers—and there is only one proposal in the news at the moment —there is no evidence of the construction of an oil refinery in the near future. There were three definite proposals for oil refineries as we were leaving Government. I do not know if the three proposals are still there. One of them was in some difficulty recently about land options down at Shannon. It seems these proposals have not been taken any further. We are in the same position as we were in 1973. This energy agency can be of no benefit to us.

Debate adjourned.
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