That the Dáil at its rising this week do adjourn for the Christmas Recess.
Nineteen seventy-five was not a year for which the Government entertained any great expectations of economic advance. In January, I said that the budget had been framed in the most difficult circumstances faced by any Irish Government for very many years. I mentioned the view that had been expressed by the OECD that its member countries' economies were being put, at that time, to a test which was probably unprecedented outside time of war.
In those circumstances, what was our response to be? We could simply have battened down the hatches and allowed the ship to be blown about at the mercy of the economic storm until it blew over. We could have cut public expenditure back sharply, raised taxes substantially and restrained borrowing. The consequences for employment and for the standard of living of the weaker sections of the community would have been appalling. We rejected that option. We refused to inflict suffering on the people that might well be unnecessary.
Instead, we aimed at careful expansion, at maintaining employment and living standards as far as possible. We adopted a policy which, as I acknowledged at the time, was not without its risks—although, in line with the views of many of the experts, we expected that the international situation would show some improvement.
Certainly, we did not expect that it would get much worse. Regrettably, this is what has happened all over the world. The world recession has proved to be much deeper and of much longer duration than was originally expected.
Until fairly recently, it was thought that output in Europe would be virtually maintained in 1975. It is now estimated that it has shown a marked fall. Midway through the year industrial production in most member states of the EEC had fallen to the level of early 1972; over the Community as a whole it fell by 12½ per cent. At present, there are about five million people out of work in the Community. Taking a somewhat wider view, the depth of the recession is perhaps best illustrated by the fact that, for the first time since the war the volume of world trade fell this year—and the fall was substantial, between 5 per cent and 6 per cent.
World-wide economic recession has been with us for some time now and I and my colleagues have found it necessary, on many occasions, to set out the facts of the international situation. We have been criticised for this and it has been suggested that we have tried to evade our responsibilities and to put the blame for our economic ills solely on external forces. This, of course, simply is not fact. I myself and my colleagues have tried, at all times, to bring home to our people that we, ourselves, must do everything that is within our own power to remedy our difficulties.
In fact, as a result of the budgetary and other measures taken by the Government, industry here has not been affected as adversely as in some other countries but the recession has inevitably had an adverse impact on the economy. It is estimated that our industrial exports will show a fall of 7 to 8 per cent over the year as a whole, although this decline has been offset by a marked increase in agricultural exports. The uncertain economic climate which originated in the oil crisis of end-1973 induced a marked lack of confidence among consumers. Coupled with a high rate of inflation and rising unemployment this has resulted in exceptionally high levels of personal saving and led to sluggishness in home demand with further detrimental effects, in turn, on both employment and potential spending power. More than 109,000 of our people are now registered as unemployed or on short-time. This, of course, includes a number of persons who, although on the live register, are recognised not to be appropriate for inclusion on it.
There are, however, some encouraging signs. The trade figures for September and October give some evidence of a recovery in imports which may indicate a levelling off of the decline in domestic activity. There was a rise of 2½ per cent in the volume of retail sales in September. Similarly, if we adjust the unemployment figures for seasonal influences, there are some indications that the underlying trend may be stabilising. The increase of only 2 per cent in consumer prices since last May also provides grounds for satisfaction although, of course, it was largely due to the June budget. The underlying increase is certainly higher.
Turning to the prospects for next year, I am afraid that they do not offer us a great deal of comfort. While it is expected that there will be strong growth in the economies of the United States—where recovery is already an established fact—and of Japan, the prospects for Europe are much less good. Broadly speaking, the improvement foreseen in the economic fortunes of our EEC partners is expected to do no more than make up the fall in production this year.
At all events, it seems likely that we may not be able to draw a great deal of benefit from the international recovery until towards the end of next year. As I said last week, it is going to be a tough year and we have to face up to that. We are balanced on the knife edge between even greater depression or—if we act sensibly—recovery.
There have been suggestions that if export markets are unlikely to provide much of a stimulus, the Government should give a fiscal boost to home demand. We are getting near budget time and I cannot, just now, anticipate what will be in the budget. However, I should stress that the Government's room for manoeuvre in this area is limited. As I mentioned earlier, we adopted a courageous budgetary policy last year, a policy involving acknowledged risks, in the interests of maintaining employment and living standards.
This action helped to push up public expenditure. At the same time other factors caused a shortfall in the yield of taxes. The prospective deficit on the current budget is now almost £280 million, more than twice the budgeted figure of £125 million and total Government borrowing at home and abroad will be of the order of £700 million, as against £450 million originally intended. The steep rise in costs has also, of course, pushed up the bill facing us for next year and if we were to meet all the demands originally put to us for 1976, without additional taxation, it would be necessary to borrow almost £1,300 million. All Deputies will appreciate that it simply is not possible to finance a gap of this magnitude: and it is utterly unreal to think of increasing it to boost home demand, or for that matter for any other purpose. A prudent and responsible Government can accept certain risks for a time but to persist in incurring these risks would be the height of irresponsibility.
So far as the composition of our spending is concerned, we have been exploring all avenues by which the composition of public expenditure in 1976 can be adapted to assist in economic recovery. We are strongly of the view that in face of the facts of the economic situation, in face of the numbers affected by short-time working and unemployment and having regard to the tens of thousands who have not got even the basic increases under the present national agreement, there could be no justification for devoting scarce resources to further increases in pay for those in secure employment in the public sector, on top of the substantial increases they have received in the last two rounds of wage and salary increases. Resources must be released for purposes which can contribute in a more direct way to the creation of self-sustaining employment.
Looking at the question of pay in a wider context, it is also necessary to get our production costs back in line with those of our competitors. We have lost ground here. I know that price is not the only factor in competitiveness and that wages and salaries are not the only cost of production. However I think nobody will deny that they are an extremely important cost. We can take no comfort, therefore, from comparisons of unit wage costs in manufacturing industry. Since 1970, these have risen here by 73 per cent more than in the United States, 64 per cent more than in Germany, 34 per cent more than in the Netherlands and 26 per cent more than in France.
Up to now two factors have shielded us from the full impact of this worsening position. Costs in our major market—Britain—have been rising almost as rapidly as our own and the slide in the value of the pound has made our selling prices, measured in the currencies of the countries in which we are selling, in particular the continental and American markets, that much cheaper. However, we can no longer rely on these factors to cushion us from the full effects in international markets of our deteriorating cost position.
Let me be quite clear on what this means. In 1974 the value of the goods we sold abroad was equivalent to almost 40 per cent of the value of all we produced. If the income from tourism and other services is counted as well, the extent of our dependence on what we can sell abroad or to persons from abroad would be even higher.
Some of what we sold was industrial goods and some agricultural but they had this in common—they sold in a market where competition was sharpened by the world recession. Without these exports, tens of thousands of our people now working in good jobs would have been without them; and the entire fabric of our economy, whether in its social, cultural, or financial aspects, would have been different.
There are, of course, many who say that their work does not directly affect the ability of this country to sell abroad what it produces. Perhaps they work in an office or on a building site or in a field or on the roads in a job remote from the task of selling in foreign markets. This is a mistaken conception. The price of what they deal in—whether it is houses, or services from a bank or an office, or merchandise from a shop, or welfare provided through a Government Department—goes directly or indirectly, into the price of the goods we must sell abroad in order to maintain, if not to improve, our present standard of living.
It was because of this decline in our ability to sell abroad, as measured by our competitiveness, that the Government, sought the meeting last week with representatives of unions, farmers and employers. During the meeting I conveyed the Government's view that to maintain employment those who have jobs should agree not to press for any further pay rise at least until the end of 1976, apart from the payment of the final instalment of the present national pay agreement. I said that those with incomes from other sources must accept a similar restraint.
I want to make it clear now that it is the intention of the Government, if agreement on a pay pause is reached, to introduce legislation providing for restraint in non-pay income, including dividends, directors' fees and rents similar to that which would apply to pay under the present agreement and the pause.
Farm income is unique in being largely dependent on EEC decisions under the Common Agricultural Policy and on such factors as weather conditions and market fluctuations. However, State expenditure on agriculture also makes an important contribution. The Government will keep under review the level of such expenditure in the light of the restraint in other areas of non-pay income while, at the same time, taking into account the general development of farm incomes and the need to encourage investment.
The regulation of professional fees and hire purchase charges is already covered by the Prices (Amendment) Act, 1972. Similarly, bank interest rates and charges are already subject to supervision under the existing statutory powers of the Central Bank. The supervision of these rates and charges to accord with the measure of restraint implicit in the pay pause will be kept under review by the Central Bank.
There are complexities in each of the areas of non-pay income, but it would be our aim to have a draft Bill ready as early as possible in 1976, and to have other necessary measures ready at or about the same time. To ensure that the Bill and other measures are comprehensive and can be introduced at an early date, it would obviously be desirable that the Government should have an early indication of intentions in regard to pay. This aspect of the matter is being pursued.
The Government recognise that business profits have fallen, in many cases quite sharply, in the recent past as a result of the world-wide recession. The legislation on the control of profits will be framed in such a way as to reconcile the need for industry to shoulder, where necessary, its due share of the burden of income restraint, the need to increase capacity to benefit from the recovery of world economic activity, and the need to provide the self-sustaining employment which can come only from investment in productive equipment and facilities. For let us be quite clear on this, without investment and the profits that come from it there is no future for this country. In today's world they are, in the end, the means by which employment is created and sustained. Other Ministers will be dealing further with this question.
The Anti-Discrimination (Pay) Act, 1974, provides for equal pay by the 31st December, 1975. The Minister for Labour was presented with a report by the Labour Court yesterday which finds that the obligation to pay equal pay on the due date could result in a significant loss of jobs. The Government have, therefore, decided that amendments to the Act are necessary with effect from the 1st January, 1976.
In view of the very serious budgetary situation the Minister for the Public Service will be seeking an early meeting with representatives of trade unions in the public sector to discuss the matter.
I now turn to an equally difficult area, Northern Ireland. If we have maintained what has been called "a low profile", we cannot and would not wish to cut ourselves off from what is happening there. We cannot look with disinterest at the plight of our fellow countrymen. We cannot remain indifferent to the pattern of the last six years in part of this island of killings and bombings and tortures, the proliferation of protection rackets, the growth of sectarian killings and reprisals—and the suffering in purely human terms to which they contribute.
Our immediate objective is to contribute in every way possible to the restoration of peace in Northern Ireland. We continue to believe that the soundest basis for peace lies in political agreement between elected representatives in Northern Ireland based on the principles that both sections of the community must be intimately and directly involved in the institutions of government and that appropriate recognition must be given to the relationship between the two parts of Ireland in such fields as security and economic and social matters. This policy does not derive from any wish on our part to interfere in the affairs of Northern Ireland but from the nature of the problem to be solved. In a stable society any scheme for government must have widespread acceptance in the community. In a society as deeply divided as Northern Ireland has been for the last six years the need for such widespread acceptance is even greater.
I should like to say clearly to the majority community in Northern Ireland that we are prepared to support, with all the forces at our command any solution which is designed to give a fair deal to all and to deal vigorously with violence from whatever quarter it comes. We have recognised the factual position of Northern Ireland and that its status can only be changed by a decision from the majority of the people there. In all this, let me be quite specific. We in Government have, as strongly as anyone in this House, an aspiration to see the unification of our island; but we see just as clearly that this cannot be brought about by violence.
We have no desire to coerce anyone into joining with us. Any future coming together of both parts of this island, if it is to be meaningful and effective, can only happen through the free choice and decision of the majority community. I would hope that my assurances on this point will help to create a society in Northern Ireland where people on both sides can work together. In addition, I would add that we are willing to work jointly within Europe for the general development of the island as a whole and particularly to use European resources to develop both our economies.
Security is an area where our help can be immediate and obvious. I am not sure if the extent of our efforts to this end are fully appreciated where they should be. Certainly the type and frequency of some public commentaries recently would lead one to think otherwise. The tone, if not the content, of some of these comments would certainly not lead one to the conclusion that there is a fundamental community of interest between this country and Britain in suppressing violence.
Towards this end we in recent years have increased the strength of our Army by more than 40 per cent, so that its complement is greater now than at any time except during the war. Its capability of carrying out its role in aid of the civil power has been enhanced. Over the past year the Army acting in this way has carried out more than 4,000 patrols along the Border and operated more than 11,000 checkpoints, in addition to carrying out other security duties on the Border and in the rest of the country.
Our police force too are at their highest level for many years. The effectiveness of the Garda can be gauged by the number of persons caught and imprisoned for offences connected with violence. I do not need to cite their recent successes in detecting and bringing to justice persons guilty of the most heinous crimes—crimes against the Irish people—to indicate just how successful in their operations the police force are and how great a debt of gratitude we owe to them, and to the Army, in the present difficult circumstances.
We have also gone a long way towards making our courts more effective in the struggle against violence; and where there are defects or shortcomings in their operations we have shown ourselves ready to remedy them. We have before the Dáil now a Bill which, when enacted, will remove some of these outstanding deficiencies.
In all this—in building up our security forces, both Army and Garda, operating a judicial system which is effective and in proposing legislation to deal with loopholes where they are found to exist—we are acting with the full support of the people of this country. We are expressing in a practical way their will that political violence must never be allowed to take root here. For apart from their natural abhorrence of the results of violence where it has occurred and the suffering that goes with it, the people of this country know full well just how grievous is the damage being done not only to Northern Ireland but to the entire island by those who pretend to protect or advance their interest by the bomb and the bullet.
For us in the present year alone the cost of the Army and of the Garda will be of the order of £120 million. The total cost to the economy in compensation for damage arising out of Northern violence or in lost tourism or business is now about £250 million.
I need not emphasise in this House in present circumstances the uses to which this money could have been put. It could have provided jobs for tens of thousands of our people. The size of our unemployment figures is, in part, a reflection of the actions of violent men in our island. Do these people think they are furthering any cause by continuing their campaign of maiming and killing?
It is on these principles that our policy on Northern Ireland is founded. I have used my numerous opportunities of explaining our policies on this and other issues to heads of Government of the various countries in Europe whom I met in Dublin, Brussels, Helsinki and Rome during the past year. During these discussions I have been careful to set out our policy clearly and factually. We are anxious that an understanding of our position should be widespread and should develop in the countries of the Community in which we live and of which we are part.
For it is in that Community that much of our hope for the future lies. The war that is being fought in the streets and for the minds of the people of Northern Ireland—and let me say of the Irish people living in America and elsewhere—is an anachronism. That is part of the real tragedy. In Northern Ireland the battles and the catchcries are often of 50 years ago or even longer. The principles being fought for and against are already established. The Community of which we are all a part will soon know no borders in trade, in agriculture, in the rights of passage and of work, and will, if all goes well, continue to develop in the direction of even greater integration of peoples and of purposes. In time, and with patience, this prospect will, I hope, become clearer to all, so that we can live in peace with our friends and kinsmen of the North—that they will live in peace with each other and with us.
So far, my remarks have necessarily been concerned with the grave problems facing the country, both in the economic and political spheres. I am happy now, to be able to turn to some of the many achievements of this Government over the past year, in the face of the difficulties which I have mentioned. Indeed, if I were to attempt a full review, I would be here for many hours yet. I shall leave much of the record to my colleagues and confine myself to some of the principal features.
There has been continued progress in social reform. During the year, significant increases were provided for in all the main schemes of social insurance and social assistance, further improvements and extensions were introduced and positive steps were taken towards fundamental reform of the system. Taken together the increases in rates of benefit raised the weekly levels of all social welfare payments by between 27 and 30 per cent in the current year. In fact, the effect of these increases is to raise the level of social welfare payments, by comparison with those applicable in the spring of 1973, by amounts ranging from 75 per cent to more than 100 per cent. In the same period the consumer price index rose by about 48 per cent. There has, therefore, been a substantial real increase in social welfare payments and their level has been well maintained in relation to earnings in general.
The duration of pay-related benefit was increased on two separate occasions during 1975 so that a qualifying person who is sick or unemployed can now receive payment of pay-related benefit continuously for almost 12 months provided he or she has the necessary underlying title to disability benefit or unemployment benefit. In this way, those unfortunate enough to be unable to work for long periods due to illness or to unemployment retain for up to 12 months a reasonable measure of relationship between their incomes and earnings in general.
The Social Welfare (Supplementary Welfare Allowances) Bill, 1975 represents the fulfilment of the Government's commitment to reform the outdated home assistance scheme. The National Committee on Pilot Schemes to Combat Poverty has now entered into contracts providing for substantial EEC financial backing for their programme of research in areas related to the causes and ultimate solutions of hard-core poverty; and studies are at present under way of such crucial development areas as pensions, insurance of the self-employed and the financing of social welfare and health services.
We are conscious, of course, of the need to ensure that with the rapid pace of development in this area, anomalies do not arise which might adversely affect the incentive to work. In fact, we have studies in hand at present and if the results show a need for adaptations to existing regulations or practices, these will be made.
These are the main elements in the Government's planned approach to the social welfare services. They are in line with the long-term aim of creating, not alone an effective income maintenance service, but also a flexible and sensitive system capable of providing those in need with adequate support of all kinds and with the assistance they must have. As I said during the course of my radio and television address last week, whatever the problems or difficulties, the Government will continue to protect those in our community who, through, either old age, sickness, unemployment or bereavement, are genuinely unable sufficiently to provide for their own well-being. But I must emphasise that our ability to do this in the way we would wish will be circumscribed first, by the budgetary limitations to which I have referred and, secondly, by the reaction we get to our call for a pause in incomes in 1976.
Expenditure on health services will total £214 million in this year, or nearly 6 per cent of our GNP compared with 4.8 per cent in 1972. While I will acknowledge that increased remuneration, and inflation have been responsible for much of the increases in this area, nevertheless it is a fact that real improvements in the services account for a significant part of it.
I might emphasise here that the more efficient use of the resources of the health services as administered by the health boards is, in the Government's view, of vital importance—and the more so at the present time where, because of the economic situation, there is a need to take a critical look at all aspects of Exchequer expenditure.
Standardisation of the guidelines for determining eligibility for medical cards—which at the end of September covered 1,136,000 persons or 36 per cent of the population—has been achieved throughout the country.
While the provision of a good hospital system is essential, the number of people requiring institutional care can be reduced considerably by the provision of adequate integrated community care services. Ideally, medical doctors, psychiatrists, social workers, home assistance officers, public health nurses and voluntary organisations should work in close liaison. Measures are being taken to this end.
Voluntary agencies and groups continue to play a vital role in relation to community care services. Almost 150 social service councils and care of the aged committees, comprising the local voluntary agencies in the area, are at present active throughout the country. The complexity of the social services now available led the Government to promote the establishment of community information centres. These are designed to provide information to individuals and groups about the whole range of statutory entitlements and benefits. The centres are run by voluntary groups, as representative as possible of the local community supported and serviced by the National Social Service Council, with the aid of funds from the Department of Health. To date, 25 centres have been registered and more are in process of being registered.
The problem of general hospital reorganisation has been tackled by the Government. The inadequacy of the existing system, with specialist services provided in many hospitals, and the need to reorganise the service in larger units have long been recognised. Within two-and-a-half years of coming into office the Government has produced a hospital development programme which provides a firm basis for planning a greatly improved, fully modern general hospital system throughout the country.
Turning to education, the new boards of management have now been set up in most national schools and for the first time parents are being given a significant voice in the management of these schools. Deputies are aware of the procedural arrangements for the appointment of the boards. Parents generally, I understand, have nominated two lay people among their own representatives. Thus not only are there two elected parent representatives but in most cases there are also two other lay people on the board. All of this should lead to greater identification of the local community with the school.
Local support for our national schools is expressed in a great variety of ways, not least of which is that of financial support. The Government have been concerned about the extent of the burden falling on local sources and so authorised a massive increase in the amount of State aid made available towards the operating costs of the schools. Under the new capitation grants scheme, the grants available towards heating, cleaning and maintenance of national schools were increased to £6 per pupil and in the case of special schools for the physically and mentally handicapped £12 per pupil. The previous level averaged about £2 per pupil. It was no mean achievement in times of economic difficulty to have effected such an extraordinary improvement in the balance as between the central and local financial support for the schools.
We have also increased substantially the rates of capitation grants and supplemental grants in lieu of tuition fees payable to secondary schools.
During the past year, the grants for secondary school buildings were increased significantly. For the first time ever, grants of 80 per cent of the cost are now allowed for the provision of furniture and equipment in addition to building costs and fees in the case of new secondary schools and of school extensions. Furthermore, the grant for civil works has been increased from 70 per cent to 80 per cent. In fact, a record expenditure has been incurred in the present year for the erection and extension of first and second level schools.
We have been engaged at their request in continuing consultation and exchange of views with various interests in higher education with a view to elucidation of the Government decisions and their implementation in this area.
In several major respects, the task of implementing public policy falls on the local government sector. It is a measure of the importance of the services administered by local government that in 1975 estimated total expenditure on them will run to £368 million. The corresponding total figure for 1972-73 is just over £208 million. It is obvious that with expenditure of this level decisions as to priorities in spending in present circumstances will be of the utmost importance in local government.
In housing, our record speaks for itself. During the five-year period up to 31st March, 1973 an average of 15,600 private and local authority dwellings a year had been completed with 21,600 houses for 1972-73 being the highest output figure recorded. Since this Government assumed office, the annual rate of output has exceeded 25,000 dwellings. The output so far this year has continued to be satisfactory. Notwithstanding the present difficult economic situation and pressing demands for resources in other areas, public capital expenditure on housing in 1975 will be approximately £115 million as compared with £46 million in 1972-73.
The Government's housing programme is important from an economic as well as from a social point of view. Housing output accounts for about 40 per cent of the total output of the building and construction industry. The Government's firm commitment to a high output of new houses is at the same time a substantial declaration of support for the building industry.
Another important infrastructural requirement in the modern world is an adequate telecommunications service. Capital investment in telephones has been increased substantially in recent years. The Government are aware of the urgent need for continued expansion and intend to maintain investment in telephones at the highest level possible.
Since the beginning of last year schemes have been completed in Dublin, Fermoy, Clonmel, Cavan and elsewhere to improve the system. Some 60 new exchange buildings have been erected, more than 200 exchanges have been extended, 10 major trunk schemes were completed and some 4,000 trunk circuits between the principal exchanges were provided. A further heavy programme will be completed in the coming year, including 40,000 telephone connections.
Tá gach dícheall á dhéanamh ag an Rialtas chun leas na Gaeltachta agus leas na Gaeilge a chur chun cinn ar bhealaí réadúla. Tá meas ag cách ar dhíoghrais agus éifeacht an Aire agus a chruthú sin ar fáil againn le déanaí.
Tá Bord na Gaeilge bunaithe chun labhairt na Gaeilge mar theanga bheo a leathnú i measc an phobail i gcoitinne agus, don chéad uair tá an phríomh-fhreagracht ar Roinn ar leith, Roinn na Gaeltachta, i bhfeidhmiú an bheartais ghinearálta chun an pobal a spreagadh ar thaobh úsáid na Gaeilge ar fud na tíre.
I should now like to turn from domestic to foreign affairs and to refer to the marked expansion of our role and influence in the international scene. On 1st January last, Ireland assumed responsibility for the Presidency both of the Council of the European Communities and of European Political Co-operation. The six-month period of our Presidency underlined the greatly expanded role which we have come to play in international affairs as a direct result of Community membership.
In the Community's external relations the Irish Presidency played a leading role in bringing to a successful conclusion the negotiations with the African, Carribean and Pacific countries which culminated in the Lomé Convention on trade and development co-operation. The success achieved in advancing the difficult negotiations in the context of the Euro-Arab dialogue marked the beginning of a new step forward in relations between Europe and the Arab world. The Irish Presidency played a key role in ensuring that the outcome of the first preparatory meeting for the Conference on International Economic Co-operation would be such as to leave open the possibility of maximising further opportunities to get this conference off the ground. It contributed also to the successful completion of the renegotiation of the UK membership of the Community, the Community's response to developments in Portugal and the significant improvement in relations between the Community and the United States.
In order to provide the necessary basis of information and contacts, essential for a more active foreign policy, the Government have greatly extended the range of our diplomatic relations. The extension of our role has also involved a marked increase in the number and intensity of contacts at Head of Government level. During the past year or so, I have had discussions in Dublin with the Prime Ministers of Britain, France, Belgium, Canada, Australia and New Zealand, in addition, of course, to hosting the European Council meeting here last March. I again met my Community colleagues in the further European Council meetings in Brussels in July and in Rome earlier this month. I also travelled to Helsinki for the conclusion of the second stage of the Conference on Security and Co-operation in Europe and while there, I had useful talks with the Prime Ministers of Finland, Austria, Norway and Switzerland.
I now propose to refer to important developments in the major sectors of the economy over the past year.
Agriculture continues to play a vital role in the national economy and has stood us in good stead this year. Of the increase of £203 million in total exports in the first nine months of 1975, nearly £140 million was due to increased agricultural exports. The Government are fully conscious of the enormous potential for further development that lies in our agriculture, having regard to the many advantages we enjoy. This was a point made last week by the leaders of the two major organisations representing farmers. While the main lines of agricultural policy are now determined in Brussels, this Government aim to give every encouragement to farmers to increase their production. On this subject, I should like to say a few words about the package of measures aimed at improving farm structures in the Community.
Fundamentally, these measures aim to create viable farm units, that is, those capable of giving the occupants a fair income and reasonable working conditions. There should be no dispute about these aims or the need for structural improvement in Irish agriculture. This policy is not seeking to push people off the land. The whole policy involves absolutely voluntary options—generous incentives to develop the farm, the chance to retire from farming in reasonable security, the opportunity for further education in farming or retraining for another job.
It needs to be stressed again that under the farm modernisation scheme aids for all farmers are more generous than they were before implementation of the directive. It has been suggested that the directive is unsuited to Irish conditions. Much of this criticism seems to be based on a view which would condemn farmers to a standard of income and of living that they would not accept, as has been clearly shown in the past. Our attitude to improvements of the directive has been to implement it first and then to base our case for modifications on direct experience. We are now discussing a number of features, including comparable income, with the EEC Commission.
In the area of responsibility of the Minister for Lands, the farmers' retirement scheme has now been in operation for some 18 months and the response indicated that it has made a decided impact, with more than 1,400 applications for participation received to date. At this point 600 applicants have been adjudged eligible to participate.
In relation to farm structure, I may mention that the recruitment of Land Commission inspectors, which was suspended in 1970, was resumed last year and a substantial number of new inspectors have been appointed. This strengthening of the inspectorate will bring solid results in the current year's Land Commission programme. Apart from the area acquired by way of exchange, it is expected that direct intake of land in 1975 will be of the order of 20,000 acres. A dynamic drive has been initiated to dispose of acquired land and it is anticipated that allotments in the year will amount to some 35,000 acres.
I set out the position in relation to the EEC stocktaking of the CAP in my recent statement to the House on the Rome meeting of the European Council and I will not go over the same ground now except to say that the fundamental principles of the policy, so vital an interest for this country, have been safeguarded. Since then, the Commission's price and other proposals for the coming year have been published.
It is worth underlining that since joining the EEC, farm prices have increased substantially—milk prices by over 80 per cent, cattle by over 25 per cent compared with autumn 1973, and by 70 per cent compared with autumn 1974, pigs by over 90 per cent, cereals by about 100 per cent and sugarbeet by over 120 per cent.
The setback in farm income last year was only a temporary one and farm income is expected to increase substantially in 1975. Prices for cattle, in particular, have been satisfactory in recent months, even exceeding prices last spring in a reversal of the normal seasonal pattern. I would urge farmers to avail of the opportunities now open to them, especially in the milk and beef sectors and to expand their output further. I can assure them that they will continue to have full Government backing to this end.
I have already referred to the Government's support of the building industry. In the sphere of manufacturing industry, the promotion campaign of the Industrial Development Authority continues to be successful. The job potential of new projects approved this year will be about 17,000 and the total investment involved will amount to about £320 million. This is somewhat below the average achievement in 1973 and 1974 but it is nevertheless a notable achievement considering the adverse investment climate which has prevailed over the last 18 months. The firms secured have included some of the finest overseas industries in terms of job potential, growth prospects and level of technology. Examples are Burlington Industries Inc., the largest textile group in the world, which is setting up a modern synthetic fabric-weaving plant in Tralee; the GAF Corporation which is to establish a European manufacturing base in Mullingar; and Fieldcrest Mills Incorporated which is building its first plant outside the USA in Kilkenny, an integrated operation going from raw cotton to the final production of high quality terry towels.
Another encouraging feature of the 1975 performance, despite the recession, is the remarkable level of industrial investment by existing domestic industry. In the first eight months of this year the IDA have approved proposals from domestic industry involving a total fixed asset investment of £127 million and a job potential of 5,500. These figures compare with £50 million and 3,700 for the corresponding period of last year.
Considerable progress has also been made on measures to ensure the optimum development of our natural resources. Satisfactory agreements were recently concluded by the Minister for Industry and Commerce with private mining interests for the exploitation of the Navan lead/zinc ore body and the question of maximising the amount of processing of the ores in question in this country, whether by smelting or other activities, is being methodically pursued.
I would also refer, to the steps which are being taken by the same Minister to ensure that a wide-ranging and substantial exploration of our offshore areas is commenced next year and continued over the next few years. Negotiations on the conclusion of licensing agreements with many of the major international oil companies are now at an advanced stage and the successful conclusion of these discussions would hold out prospects of our being able to achieve economic and social progress on a scale not hitherto conceivable.
In conclusion, we are facing a period unique in our history. For the first time for more than 100 years our population is rising substantially and consistently. Emigration has ceased— if not gone into reverse. There are more young people seeking jobs. At the same time, the structural change in our society—from a community based largely on agriculture to one based on industry and services—is continuing. At the best of times, changes of such a character and magnitude would impose a strain on Government and on society. At present, when the world is in recession, the stress is all the greater—and is likely to become more so as the problems I mention develop. For this reason particularly, it is desirable that we should be able to see, with reasonable clarity, the place of this country in the world and the relationship between public and private expenditure and between what the Government should do and what private initiative and effort should do. All of these considerations require that we should, now that there is some better prospect of stability than in the recent past, set about the preparation of a plan to ensure opportunities for employment in our society, and economic growth, with stability in prices. The preparation of such a plan is in hands.
However, I am not so naïve as to expect that any plan, in itself, can produce the sort of results we need. For this, action which is logical and persistent in the pursuit of a settled objective is necessary. In this area we need a great sense of national discipline and realism. At present, we see three main areas for this action.
The first is the European Economic Community of 260 million people in which this country voted overwhelmingly for membership, and on which much of the future of agriculture, industry and investment in this country now depends. In our dealings with the Community over the past year we have had what I think we can call, with justification, a measure of success. Our presidency passed with praise on all sides for organisation and was important in the substance of the work done during its currency. Britain, our neighbour, both our major supplier and market, decided as a result of the work culminating in the Dublin Summit last March to remain in the Community. In the European Council meetings in Brussels and Rome and in the many other ministerial and official level meetings where the work of the Community goes on day after day and week after week we have, at the least, held our own. If there is a criticism to be made, it is that the impetus of the Community towards the ideal of economic and monetary union has over recent years weakened. The Community has expressed the ideal and set itself up to achieve it: but refuses the means or, indeed, the interest to attain it.
The second area of vital concern to us is Northern Ireland. I have said enough here today and elsewhere to establish clearly the Government's views on this. What I have said can be summarised simply: we must show for the opinion of others the tolerance we would expect for ourselves; and we must never let any part of our country be a refuge for the men of violence whose actions have disgraced the name of Irishman. Our aspirations remain, but so does our realism. Our fundamental wish is to see a just and lasting peace in all parts of Ireland. We know that this can be established only with consent both of the majority and the minority in Northern Ireland. We will give every help we can to the achievement of this objective.
In both the European Community and Northern Ireland events outside the control of the Government and people here will to a considerable extent determine the future. In relation to our economy our future will be determined by what we do. We are now to a greater extent than at any time in recent years arbiters of our own destiny. World prices are no longer the main determinants of the rate of our inflation. The price of materials from abroad is no longer the sole, or even the major, cause of unemployment.
It is for this reason that the Government recently asked for a pause in all incomes in 1976, after the end of the present wage round. This pause could ensure work for those without it and that many persons now in employment will be able to continue in their jobs. That is the prime objective of this approach to the social partners, to maintain jobs where they exist and to provide jobs where they do not exist. In order to do that we sought a pay pause so that those who are in secure jobs could recognise the obligation of the community as a whole to provide jobs for those without them and to make certain that those within them would retain them. We have many advantages in the modern technologically advanced industries which have been established in recent years, largely with export markets in mind, in our agriculture, service industries and mineral wealth and, above all, in the enterprise and intelligence of our people. I believe that this is our greatest natural asset. I believe, therefore, it is essential to repeat that in present circumstances we need a sense of national discipline, a sense of discipline coupled with realism, the realism that if we are prepared to face the challenge we have the ability and the capacity and if we show that sense of national discipline and realism we can surmount and overcome these difficulties.
If we have the sense to develop the potential of these resources, the future will be bright. But we must earn this future by, at the least, some forbearance, before we can enjoy it. It is with these objectives in mind that we put these facts clearly before the social partners from whom we expect a response in the national interest.