Adjournment of Dáil: Motion (Resumed).

On Wednesday, 30th June, 1976, the following motion was moved by the Taoiseach:

That the Dáil on its rising this week do adjourn until Wednesday, 13th October, 1976.

Debate resumed on the following amendment:

To delete "13th October" and substitute "7th July".

—(Deputy J. Lynch.)

An Ceann Comhairle

I am now obliged to call a speaker from the Opposition. I understand that Deputy Haughey will be sharing some of that time.

My colleague, Deputy Colley, has very kindly given me five minutes to conclude my remarks. When the debate was adjourned I was referring to the persistent, intensive propaganda campaign of the Coalition. I believe that we, in Fianna Fáil, will have a major task in restoring public morale, which has been demoralised through being subjected for over three years now to this cynical propaganda by the Coalition machine. We shall have to persuade the people that economic situations can be made amenable to political action. We shall have to establish the fact that, while economists can analyse economic problems, they cannot solve them and that something more is needed by way of an economic policy than simply extending pay-related benefits and exhorting workers to selfsacrifice.

To restore the Irish economy to a reasonable level of economic growth will be a fairly long process but not as long perhaps as some fear. The important thing is to start working towards the objective. Once we are on the way, once the machine starts to roll, people will get back their confidence. I believe the overriding national need at this time is for an Irish Government to demonstrate the political will to conquer the difficulties, to get on top of the situation, to set out a programme of activity designed to achieve that end—in short, to produce an acceptable, viable, national economic development plan.

No one can seriously deny that the fortunes of Ireland today are at their lowest ebb in this century. In the words of Napper Tandy: "She is truly a most distressful country". Our economy has ground to a halt, our young people are left without hope, our agriculture and industry have been disrupted, our dreams of unity betrayed. The Government have failed utterly. Instead of reform they have given us repression, instead of jobs they have given us dole, instead of decisions they have given us divisive debate, in place of trusted leadership they have given us deception and demagoguery. Let the Government look honestly and objectively at their record to date and at the state of the nation today. If they can do that and still claim they are entitled to the confidence of the people and of this House, that they can close down the Dáil now and depart for a long, tranquil holiday, they are capable of self-deception to an extent that amounts, in my view, to a psychiatric condition.

Mr. Colley

The occasion of the adjournment debate can, and indeed, should be availed of to consider the performance of the Government generally. Of course, any consideration of the performance of the Government automatically focuses attention on the economy because of the disastrous situation in which we find ourselves and the grossly incompetent manner in which the economy has been handled by the Government. Before coming to that matter there are a few observations I should like to make very briefly on some other aspects of the Government's performance.

I suppose one should start with the Taoiseach. What I want to say about the Taoiseach was said earlier today by Deputy Haughey, which is—it is a serious charge and is fully substantiated—that the Taoiseach misled the country yesterday in regard to the economic situation of the country. He did so knowing what the facts were, knowing what would be and was contained in the report of the ESRI, a body whose reports have been frequently quoted with approval by members of the Government. He did not even attempt to anticipate the situation by trying to disprove the report of the ESRI which, of course, he could not do.

It is an extremely serious position when the Taoiseach sets out to mislead the people of the country in regard to the economic situation. It is particularly serious when the economic situation is as disastrous as it is now, when what is required above all is that every man, woman and child should understand how serious the problem is and what has to be done to tackle it. The Tánaiste, quite apart from his inactivity—I will not put it any higher than that—in his Department has distinguished himself by calling on a number of occasions for the production of a plan. We are still waiting to know on whom he was calling. As I have said on a previous occasion, some people are beginning to suspect that he was calling on Fianna Fáil because it is quite clear that calling on his colleagues in the Government will mean that his call is falling on deaf ears.

The Minister for Justice yesterday tried to tell us that the situation is improving in regard to serious crime when he knows, as indeed does practically everybody else, that in general the situation has greatly disimproved; but in areas like Dublin city the position is becoming critical and armed robberies, muggings and attacks on old people and children are getting out of hand. I suggest it is no answer for the Minister for Justice to quote comparative figures with cities like Birmingham. Apart from the fact that the figures do not analyse the seriousness of the crimes concerned the comparison must be with the situation in Dublin as it was when the present Minister for Justice took over as Minister. That is the fair comparision. The fact that the Minister, having told us in the House a month ago that he did not intend to increase recruitment to the Garda until he got a management consultant's report and was vague as to when that would come to hand and then announced that he was increasing recruitment by 500 per cent is itself indicative of the fact that, if he does not know what the position is, some of his colleagues do and persuaded or compelled him to make this announcement.

Of course the announcement, like many an announcement of this Government, does not mean what it says or appears to say, because it is quite clear that 500 gardaí will not be recruited and put on the beat in the remainder of this year. However, at least it is an acknowledgement of the seriousness of the situation that now obtains, a situation which is a direct result of the neglect by this so-called, self-styled law and order Government, neglect of their primary and basic duty to preserve law and order. I say that, not only because this Government seem to think that law and order and their enforcement apply only to dealing with subversion but also because as indicated in a reply to a parliamentary question approximately a month ago, it emerged that each year since 1972 the number of gardaí recruited has fallen. It went down in 1973, down further in 1974 and further again in 1975; and this year, subject to the announcement recently made, it was going down even further. That, of course, is a gross neglect of their duty by this Government in the primary area of responsibility of any Government, the maintenance of law and order.

The Minister for Labour can best be described as a non-Minister. Without going into any details of the recent or more distant inactivity of the Minister, it is now clear, even to his own colleagues, that the Minister for Labour, whatever duties he thinks he is discharging, is not discharging the duties of the Minister for Labour.

Aire na Gaeltachta has going for him a very effective public relations exercise. Mark you, in Opposition he had going for him a very effective public relations exercise too, and I say "for him" because it is primarily directed at the glorification of the individual personally and not at the glorification of his colleagues. It is I suppose of interest to know that at last even that efficient public relations machine is falling down because it cannot continue to sell a proposition that has no basis because there is no performance by Aire na Gaeltachta and so he is now becoming widely known as Aire na Geallúntaí.

The Minister for Foreign Affairs has engaged in some frenetic activity, particularly within the EEC, and one recalls his whirlwind tours of the EEC capitals in connection with the regional development fund and other matters. One looks at what is happening and finds that the regional development fund of the EEC, which is of vital importance to this country, is a miserable and unacceptable excuse for a policy by the EEC in this vital area. In fact the EEC itself as a body is becoming paralysed and there is little if any indication of effective action by the Minister for Foreign Affairs to try to cure this paralysis, an area in which the Minister would have had us believe that he was not alone an expert but an influential expert. We have little sign of either his influence or expertise when we look at the present situation in the EEC.

In regard to the situation in Northern Ireland, in which the Minister for Foreign Affairs has a responsibility, the Leader of this party dealt with that situation yesterday. All I want to do in that respect is point out once more that the basic attitude of this Coalition Government was that which was spelt out by the Taoiseach approximately a year ago, perhaps a little more, in a speech in Blackrock when he said that the matter should be left to the two communities in the North. I want to make it quite clear that as far as we are concerned we do not accept that proposition. Of course agreement between the two communities is necessary, but to leave it to the two communities is simply an abdication of responsibility. It is a flying in the face of history, which shows that one of those communities is not prepared to come to any reasonable arrangement safeguarding its own interests unless it is induced to do so by the surrounding circumstances. A withdrawal by the Government in Dublin and an abdication by the Government in London of their responsibilities is simply a recipe for a repetition of all that has happened in the past in Northern Ireland. The Fianna Fáil Government sought very hard, and successfully eventually, to establish the right of the Irish Government to be involved and to have a major say in the developments which have to take place in regard to Northern Ireland. This Government have no right to throw away that hard-fought right established with difficulty, nor have they any right to allow the British Government to abdicate their share of major responsibility in this matter.

There are many other aspects of the lack of performance of this Government on which one could dwell, but there is not time in this debate to do so, unfortunately, and I do not intend to do so. However, I want to come to the area of greatest failure and greatest concern and that is the appalling situation of our economy today. The report of the ESRI published today merely confirms what we on this side have been saying consistently, and especially what we have said in regard to the budget produced in January of this year. It will be seen, if one consults the records, that on that occasion we said that inflation this year was likely to be very close to 20 per cent and that was a calculation based on the consequences of the budget introduced in January. We also said that there would be practically no growth this year. There has been vague talk about an upturn in our economy. It is pretty clear that, apart from one or two areas of exception, that alleged upturn is simply a technical adjustment in the form of restocking. Indeed the situation cannot be otherwise as long as the present excuses for policies are pursued by the Government.

The worst feature of the Government's performance in regard to the January budget is that it was a repeat of what it did in January, 1975—the very mistakes made in January, 1975, which were pointed out to the Government and which they acknowledged belatedly in June by adopting the policies we had been urging on them the previous autumn by introducing certain subsidies and reducing VAT rates on certain commodities—were repeated, but on a bigger scale, last January with even more disastrous consequences. The direct results of that approach has been deliberately to fuel inflation. This, of course, leads to claims for increased pay.

Listening to the Taoiseach and members of the Government talking about the necessity for a pay pause, as they call it, one would think that failure to agree to that was clear evidence of a lack of patriotism on the part of workers and employers and that the Government had no responsibility in the matter, a Government which for the second year in succession deliberately increased the cost of living by direct action in the budget. Of course these increased pay claims arise directly from the Government's own decision and mistakes and it means, in turn, more Irish business becoming uncompetitive and more and more people losing their jobs, more and more demands being made on the Exchequer on foot of social welfare and less and less money becoming available to the Exchequer to meet these demands.

There is nothing very profound or difficult in this. There is nothing new in it. We have been pointing it out to the Government time after time, but they go on repeating their mistakes as though there is no other course open to them. Indeed they try to tell us they are handling the situation extremely well having regard to the difficulties of world recession and increased energy prices.

This has gone on for too long. It is cant, propaganda. There is no truth in it, and people are beginning to see through this bluff of the Coalition. I made reference previously to some scientific evidence of the truth or falsity of these allegations and I make no apology for referring again to it because it is vitally important that our people should know just how false is the proposition that the Government have handled the situation well.

I refer to an article in Review No. 1, 1976, published by the CII, by Dr. Brendan Menton, up to recently a senior economic adviser in the Department of Finance. It is a scientific measurement of Governments faced with the consequences of the oil crisis and the subsequent world recession, Governments whose economies were in most cases more vulnerable than ours to the difficulties that have arisen. It analyses the performance of the Governments of 20 OECD member countries under various headings. What emerges is that this Government come out bottom of the list of 20 under every heading and, in particular, in regard to unemployment and inflation.

That is a scientific measurement of the performance of this Government in the face of acknowledged difficulties affecting other Governments. It is available and it would be worth while if people studied it. Let us get rid of the nonsense that the Government cannot help what has happened. Nobody in Fianna Fáil has suggested that there were not serious international difficulties affecting the economy. What we have said is that this Government have been incompetent and inept in their handling of those difficulties and this contention is now borne out and scientifically established in the short article I have referred to.

One can be forgiven for concluding that during the last few years, when faced with these acknowledged difficulties, the Government, instead of concentrating on solutions to them, have been preoccupied with methods of raising more taxes and new taxes, and that they have totally ignored their responsibilities in the management of the economy. Of course the primary responsibility in this area rests on the Minister for Finance. In my view we have never had a Minister for Finance who was so totally unaware of his responsibilities in the field of the management of the economy. I am saying that out of kindness to him, because I am assuming he was unaware of his responsibilities, not that he was aware of them and ignored them. If he were aware of them his performance would virtually amount to treason. But assuming he was unaware of them, one cannot give him a fool's pardon, because it is inexcusable that he, and his colleagues who were equally responsible, thought it better that in the area of fiscal administration and control that the concentration should be on the raising of more taxes and on different ways of raising tax. As the economy contracted that was the preoccupation of this Government, and of course we are reaping the harvest of that incompetent and inept approach today.

The two areas in which the incompetence of the Government come through most clearly are in the fields of prices and employment. We find in regard to prices that in the first quarter of this year for which we have figures there was an increase of 7.3 per cent in the CPI and in the next period it was 6.2 per cent. Allowing for the cumulative effect, that is approximately 14 per cent in the six months which, again allowing for the cumulative effect, is getting close to a 30 per cent inflation at an annual rate, this at a time when our competitors are getting their inflation down to single figures and when the Taoiseach tells us that unemployment and inflation are the priority areas of Government policy and attention.

I dread to think what might have happened if they were not the priority areas, considering what is happening at this time when we have had repeated allegations from the Government benches that these are their priority areas. At the same time, and as a direct consequence, unemployment has soared and will get worse. Little, if any, effective action has been taken by this Government to solve the unemployment problem.

We have never suggested—nor do I suggest now—that this is a problem which is easy of solution. We say it should be tackled as vigorously as possible. There are, and have been, steps open to the Government all the time to tackle the unemployment problem but they have not taken any of these steps. I do not say there is a single magic wand which Fianna Fáil or the Government can wave to solve these problems. I do say that there is an overall package which can be applied and which will improve the position. I say "an overall package" because clearly what is involved here is complex. There is an interaction between prices, pay, jobs, borrowing by the Government and how capital is used. All this involves an economic plan.

Not that one can guarantee at this time of uncertainty to adhere absolutely to all aspects of it, but in order to ensure that there is an overall view of the use of our resources and that they are used to the most effective purpose, we on this side of the House, although it is not our duty to do so, have practically completed working out an economic plan for the four years 1977-1980. The major factors that must be involved in any vigorous approach to tackling our economic problems have to be the reduction of taxes which, whether one is at the top or the bottom of the salary scale, operate to prevent people from working hard. There is not alone no inducement but there is an active disincentive to work hard. That must be tackled. We have to direct our investment, in particular our capital investment, to the creation of jobs and to the increasing of productivity, in order to reduce our unit wage costs. We have to have a crash programme of employment for young people.

It is alleged that the Government have not the money to do this. Where will they get the money? At the moment they are running an enormous deficit on the current budget. I would remind anybody who takes that line that if this problem is tackled intelligently—and we have demonstrated this —it can be done. In our last budget in 1972 we deliberately budgeted for a deficit, the first time this was ever done. This was not just the sum that was left when we applied all the tax we could as against all the money we had to pay out. This was calculated. We imposed no new tax, reduced income tax, increased social welfare, provided incentives for development in the industrial and agricultural fields, and, as a result, we ended up with growth which produced buoyancy in the revenue and, for practical purposes balanced the budget.

The only place this or any other Government will get money to tackle our problems is from growth in the economy. The policies pursued by this Government have been consistently directed against growth, whatever may have been said. At that time, we told them they were going to hinder growth and they have done so.

A vital part of any overall package designed to deal with our economic growth problems must be the question of pay. It is quite clear that the Government must play an active role in the negotiation of national pay agreements, far more active than has been played heretofore. We must not lose sight of the fact that what really counts in pay negotiations is the workers' actual take home pay and its real value. It follows from that that it is useless for the Government to come here imposing massive increases in indirect taxes across the board and ignoring the consequences of that on take home pay.

The action of the British Government in this field should be of some interest to this Government. Apart from that aspect, I suggest that the most serious consequences in the field of pay arising from this Government's performance has been that it now looks, unfortunately, as though we will have no national pay agreement. When one thinks of the White Paper issued by the Government in regard to the social partners and the exortations we got from the Taoiseach, the Minister for Finance and other Ministers, and their virtual saying that the Government were going to apply statutory controls if it was necessary, then coming back from the brink, and then look at the shambles in which we are today, one despairs of any hope for the future of our economy while this Government remain in office.

It is obvious that Fine Gael and Labour cannot agree on this as on many other areas. In another context recently I quoted the present Minister for Industry and Commerce saying that he had objection, in principle, to any interference by the Government with free collective bargaining. I find that neither the Minister for Industry and Commerce nor any of his colleagues seem to have found any great difficulty in accommodating his principles with the enactment of legislation which was controlling, by statute, the pay of bank officials, nor had they difficulties with the recent Bill which not alone was controlling the pay of bank officials by tying it to the national agreement, but which was actually imposing a statutory pay freeze. That did not present any difficulty, apparently.

In my view the Minister for Industry and Commerce and his colleagues from either the Labour Party or the Fine Gael Party have a responsibility as Members of the Government in this area. If they cannot deliver a voluntary agreement as we did, albeit by the introduction of legislation, on the present course they are following and on the statement of the Minister for Labour, they have left themselves no alternative but a complete abdication of responsibility in this field.

It is no good for the Minister for Industry and Commerce or anybody else to tell us about his objections in principle if what he is really saying is that the Government are abdicating all responsibility in the field of pay. If that is the message we are getting, and there is no other message available, it should be clearly understood that every time the Taoiseach and his colleagues tell about the grave damage which is being done and will be done to our economy by uncontrolled income increases, in effect they are saying: "We are responsible for this because we are abdicating responsibility for trying to bring about pay levels consonant with the interests of the economy for which we are responsible."

The Government have now produced what can fairly be described as an absolute shambles in the field of industrial relations and in the economy generally. I have not been inaccurate in my predictions in the past on the economy. I wish I were inaccurate in what I am about to say. So far as I can gauge it, if there is a national pay agreement, the next six months will be a time of acute difficulty for the economy, but if there is a free for all, the next six months will be chaotic. We will have industrial unrest leading to further loss of jobs, and further loss of production, which will cause a negative growth in our economy, very possibly a fall in revenue to the Exchequer, but with greater demands than ever on the Exchequer in the field of social welfare.

Facing into that situation the unfortunate people are depending on this Coalition, the National Coalition as they like to call themselves. It is difficult to understand where they get the "national" into it, but I will not develop that theme. It is pretty clear that some members at least of this Coalition have allowed themselves to be misled by some bye-election results. The warning signals have gone up for them in Dublin South-West, a very serious warning. If they have not got the message the people are getting it fast, that this Government individually and collectively are disastrous for the country. You do not have to depend on the Fianna Fáil assessment to find that out. You can consult the ESRI or the Economic Review of the Confederation of Irish Industry to which I have already referred.

We are facing into probably the most difficult economic six months the country has ever faced at least since the war. What do we do? We are running away; at least the Government are running away. They think they will be able to avoid some of the worst criticisms if the Dáil is not in session. What sums up the whole approach of the Government is the reason we are given for the lengthy adjournment now proposed by the Government: the floor of the Seanad antechamber has to be repaired. That sums up the whole attitude of the Government and their attitude to the people in general.

Dáil Éireann debate - Thursday, 1 Jul 1976

Adjournment of Dáil: Motion (Resumed).

Deputies

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Níl

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Dáil Éireann debate -
Thursday, 1 Jul 1976