The Parliamentary Secretary may recall that some such sentiments were expressed prior to the election of 1973 by people who knew what the score was but they did not include the Parliamentary Secretary, the Minister for Industry and Commerce or Deputy Staunton. I am speaking of the present occupants of those positions. There was a complete romp throughout the country by Deputies opposite pretending they could and would control prices, stabilise prices and halt the price rises, to use their own words.
What has happened? We find that the latest recorded figure for the consumer price index for mid-February is the second highest ever recorded in our history. It is certainly one of the highest at 7.3 per cent. We also find, on the basis of a recent OECD publication, that so far this year we have had the highest inflation rate of any developed country in the world. Yet, the Minister for Industry and Commerce, judging by his intervention while Deputy Lalor was speaking feels that to refer to this is a by-election gimmick. No doubt he thought in those terms when he was in Opposition. One would have hoped that by now, with his experience in office of dealing with these problems, he would realise just how serious the consequences are of the promises he made and his failure, in particular, and that of the Government in general, to implement those promises, that there is a great deal more involved in those matters than a by-election gimmick. I freely confess that as far as I or any member of this Party can bring this about we will endeavour to ensure that the people who will vote in these by-elections will have brought to their attention what was said by the Government in February, 1973, and what has happened since.
Deputy Lalor gave a number of examples of prices. I will not go over them again, but the Minister for Industry and Commerce had not arrived when he gave them, and he might like to have his memory refreshed. Deputy Lalor was working on the basis of figures up to February or March, but I have figures up to May of this year in respect of certain foodstuffs. In February, 1973, bread was 13.1p, now it is 18p; butter was 27.8p and is now 48p; cheese was 26.4p and is now 72p; eggs were 29.6p per dozen and are now 50p; and sugar was 10.6p for two lbs and now 23.5p. We all know about potatoes. Incidentally, the increase in the price of potatoes was the major item in the increase in the cost of living in the quarter prior to the general election of 1973. I thought the Parliamentary Secretary might have to recall that. I have just given these few examples of what happened to the price of some foodstuffs under this Government which was to control and stabilise prices.
There are other items besides foodstuffs. I would like to mention some items in which the price between 1973 and 1976 has doubled, or more than doubled and in one case has almost doubled. The pint went from 19p in 1973 to 38p this year. Bus fares from Ballyfermot, Inchicore, Bluebell, Drimnagh and Walkinstown into the centre of Dublin in 1973 were 8p, and now they are 16p. Petrol was then 36p a gallon and is now 88.3p. Road tax on a ten horsepower car went from £26 to £50. Gas per therm went from 19p to 38.64p. Letter postage went from 4p to 9p per letter. Cigarettes went from 29p to 49p for a packet of 20 untipped. I do not think anybody can dispute the facts referred to in the first part of Deputy O'Malley's motion that there has been a gross failure by the Government to honour their undertaking and there has been an inordinate increase in the price of virtually every commodity.
We are, of course, concerned with this enormous price rise. Everybody must be concerned with it, apart from the gross dishonouring of what was probably the major promise by the Coalition in the last general election. This Government is one of the best Governments, if not the best, we have ever had in the field of excuses. Of all their performers in that field, I do not think anybody could compete with the Minister for Industry and Commerce. He has frequently and at considerable length told us about the difficulties involved, but in particular about the difficulties arising from the energy crisis and world recession.
We are led to believe that there is absolutely nothing this Government can do, or could have done, in regard to the increase in prices. Indeed, it has been suggested that this Government, by inordinate borrowing, have cushioned us from the worst effects, by way of inflation and unemployment, of the oil crisis and the recession. It is suggested from time to time that if we were in office things would have been much worse because we would not have borrowed so much. I do not want to develop that theme at great length, but since this is the major defence we hear from the Coalition, we ought to have a closer look at it.
In this connection there is a most interesting article in the Economic Review of the Confederation of Irish Industry, No. 1 of 1976. It contains a short article, with tables attached, written by Dr. Brendan Menton, until quite recently one of the senior economic advisers in the Department of Finance. It is entitled “Irish Economic Performance Since the Oil Crisis”. I do not know whether the Minister has had an opportunity to read this article but if he has not I recommend he read it carefully. I would like to refer to one or two matters that appear in it.
Some tables were constructed to try to throw some light on the issue of whether all that is required to reverse the situation in which we find ourselves is a satisfactory upturn in world trade. For this purpose, certain indicators were taken for 20 OECD countries. Indicators used are, first, the difference between actual GNP growth and average GNP growth during the 1960's; second, the difference between actual inflation and average inflation during the 1960s; third, the change in the foreign balance from 1973 as a percentage of GNP; and fourth, the change in unemployment since 1973 as a percentage of the labour force.
What emerges is that the rankings of the countries on the four indicators are worked out. In every case in which the indicator was worked out, of the 20 countries Ireland ranked last in 1975 and 1976, and in the overall performance over the whole period. The only place in which we did not rank last was in 1974; there we ranked second last. The greatest contributors to this poor showing by Ireland were the disimprovement in inflation and in unemployment since 1973. I would like to quote from the article on pages 62-63 of the Economic Review of the Confederation of Irish Industry, No. 1 of 1976:
...Ireland had the worst economic performance of any of the countries studied despite the fact that it was not one of those countries most open to the adverse effects of the oil crisis (as estimated by the OECD). Nor is there any suggestion in the results that either the size or dependence of foreign trade of the countries examined made them particularly vulnerable to the crisis.
The message is clear enough. Not all the blame for our current economic situation can be ascribed to the oil crisis and the world recession. Poor economic management is the other obvious contributory factor.
That is an article written by a man who, up to recently, was the senior economic adviser in the Department of Finance. The figures and tables on which that conclusion is based are contained in that booklet and they make extremely interesting reading. They also demolish the case that has been made time after time by the Minister for Industry and Commerce and his colleagues to justify, or attempt to justify, their inept and incompetent performance in the field of prices and inflation and in the field of economic management generally because it is almost impossible to separate economic management from prices and inflation.
That brings us to the third part of this motion which is the Government's own contribution to this appalling rate of inflation. The motion described it as the highest in Europe but, as I have said, a recent publication of the OECD shows that it is the highest of any developed country in the world. I say it brings us to that because the contribution made by the Government to inflation is intimately connected with their unbelievably poor attempts at managing the economy.
The facts are that in every budget introduced by this Government, except that of June, 1975, about which I will speak in a moment, substantial increases in taxation were imposed. Outside of those budgets very substantial increases in prices were imposed or sanctioned and in the case of petrol a very substantial increased tax was imposed. In all the areas directly under the control of the Government there have been inordinate increases in prices and I have mentioned some of them. There were the postal charges, the telephone charges, the increased cost of TV licences, increases in bus fares and the contribution to social welfare by workers and employers. All of these matters are directly controlled by the Government. When we look at what has happened there we find that in almost all of the cases the increase involved under this Government has been greater than almost any other increase attributable, say, to the private sector, whether the portion of the private sector involved was affected to a greater or lesser degree by imported inflation.
Of course, this was a consequence of the Government's whole approach to the management of the economy and to the problems that beset the economy. The problems are always there but they were considerably aggravated by the energy crisis and the recession in world trade. No speaker on behalf of Fianna Fáil has ever attempted to suggest that there were not large-scale problems arising from those factors. What we have said was, first, that before there was any energy crisis things started to go wrong and that almost all the economic indicators showed a down-turn from the middle of 1973. Furthermore, when the energy crisis and the world recession occurred, the performance of the Government in dealing with them was inept and incompetent. Figures given in the article by Dr. Brendan Menton prove that beyond yea or nay. As compared with any of the other countries with which one would think of comparing our performance, we come out worst. That is not a coincidence.
In this debate I think it right to concentrate on what the Government did in regard to price increases in relation to their effect on the economy generally. Here we come to something I have never been able to understand. I have sought explanations from different members of the Government but no rational explanation was forthcoming and I doubt if any rational explanation can be given. The following is just a limited example and, with more time, it could be expanded considerably.
In January, 1975, the Government introduced a budget. By itself the budget was responsible for increasing the cost of living by 4 percentage points. They did this despite the fact that for some months previously we had been urging strongly that instead they should reduce the consumer price index or at least hold down the increase in the index by subsidies and changes in VAT rates. They did not listen and introduced a budget that increased the cost of living by 4 percentage points. They did this on the eve of negotiations for a national pay agreement knowing that they were about to take place and the inevitable happened. By the way, it is not as though all of this were something new to the Government. We told them at the time that the national pay agreement was coming up and we told them what the effect of what they were doing would have. The national pay agreement was negotiated on the basis of that additional increase in the cost of living.
In June, 1975, the Government introduced a budget in which they did what we advocated. However, the effect was to bring us back to square one, to bring down the cost of living by 4 percentage points. If they did it the first time, the overall increase would have been 4 percentage points down instead of which it was 4 percentage points up and this need not have happened. That was carried right through the national pay agreement, not just for the public service where it was enormous but right through the private sector. In January, 1976, we got a budget which increased the consumer price index by approximately 5 percentage points, again, just in advance of negotiations on a national pay agreement. I cannot give a rational explanation for this and I have heard none from any member of the Government. It is so totally irrational that it defies any explanation but what it adds up to is either gross ignorance or gross incompetence in the handling of our economy and, in particular, in the handling of the effect of price increases on our economy and on pay and incomes.
If nothing else had happened it alone would be sufficient justification for this motion in the name of Deputy O'Malley which condemns the Government's total failure to honour their own undertakings of February, 1973, and is also deploring the major contribution of the Government to our appalling inflation rate, so much worse than our competitors who have been facing the same problems as we have been facing, some have even greater problems, arising out of the energy crisis and the recession in trade in the world in general. I believe the amendment in the name of the Parliamentary Secretary is only a joke. We are being asked to approve the measures taken by the Government to control prices and charges for goods and services. I believe I could be forgiven for saying in terms of what the Minister for Industry and Commerce was saying in early 1973, what control of prices, what control of the charge for services? As regards the subsidies on certain essential items we asked the Government to do that long before they did it and they did not do it when they should have done it. When they brought in the subsidies they were simply bringing back the position to what it was, creating an unnecessary expense for the whole economy. All of this adds up to ample justification for this House to condemn roundly the incompetence and ineptitude of the Government in their handling of price control and all that goes into that which is very complex.
