Each Deputy will have 45 minutes.
Adjournment of Dáil: Motion.
Debate resumed on the following motion:
That the Dáil at its rising this week do adjourn for the Christmas Recess until Wednesday, 31 January, 1979.
—(The Taoiseach.)
When it became obvious from the Taoiseach's statement just now that he had secured an extra £25 million a year in the hope of our being able to obtain grants from the Community in stringent and rigid circumstances, somebody made a remark to me that the Irish people would drink that in four days.
It would not cover the CIE deficit.
That is so. Therefore, the exercise we have gone through in the past half hour in some respects has not been worth the paper which it has been written on. I say that in the light of my initial reaction to the Government's statement. The proposed terms of our EMS entry, which will be debated fully next week—I hope this will be agreed this afternoon between the three Whips—do not lead to any change in the Labour Party's attitude because the terms negotiated by the Government are wholly inadequate to enable us to meet the difficulties of entry, and would be in no way adequate to sustain this country's currency arrangements following entry.
The most frightening part of the decision is the still virtual total absence of any prospect in it that industry and commerce will have adaptation money coming directly to it in the transitional period. These are fundamental and far-reaching objections to entry on the terms negotiated. I know that our party may well be painted in the week ahead as being a perennially anti-EEC party; this is not true; our party favour entry to the EMS provided the terms are advantageous, unambiguous and provided they give us a reasonable prospect of facing the rigours of entry as outlined now in what can only be described as a glorious face-saving exercise by the Taoiseach after he had launched a major diplomatic offensive throughout the capitals of Europe and after two countries in particular have come up with an extra £25 million a year for the next two years and nothing at all for the further three years in a five-year period. That does not strike me as an adequate reason to enable the Taoiseach and the Cabinet to do what I think must go down as one of the greatest about-turns in our history in our monetary arrangements with Europe and in our relationship with sterling.
The statement made by the Taoiseach in that regard is ambivalent and ambiguous in relation to our integration at present until 1 January with the sterling area. No regimen is outlined here as to what that relationship will be. Admittedly, there may be consultations between the Tánaiste and the Central Bank and the Bank of England but this House is entitled to know and entitled to expect that the Government would have elaborated much more this afternoon on that situation. Instead, we just have a sentence from the Government saying that "It is the Government's hope,"— currency is not built on hope—"and indeed expectation,"—again I would stress that no currency relationship with the Continent or the UK can be built merely on expectations—"that our membership of the EMS without the UK will not, in practice involve a divergence from parity with sterling for some time at least."
That is a very historic sentence and for any national parliament to be asked by the Prime Minister to have a cursory debate this afternoon and give endorsement to major currency changes and arrangements later tonight—we would have been out of our minds if we had agreed to that sort of proposition. We are entitled to vastly more information, entitled to know what the Central Bank have in mind, what is the reaction from the Bank of England and what precisely are the implications for the relationship between the Irish £ and the £ sterling.
Are exchange controls being introduced?
This is another major aspect correctly pointed out by Deputy Barry.
Deputies need not worry; this whole matter is in good hands.
The Minister of State is not in possession but I understood we are to have a full-scale debate on the EMS. I do not mind the Deputy mentioning it in passing but surely he is not going to spend 45 minutes debating something that is coming up whether this evening or next week—the Chair does not know.
I submit that the statement made by the Taoiseach puts the question of the adjournment of the House in a different light. Quite obviously, we are not going to adjourn or we are adjourning until next week; we are not adjourning until January in the terms of the motion before us. Certainly on the point made by Deputy Barry in regard to exchange controls, we are entitled to know the position. We should have been told this afternoon by the Taoiseach without having to wait until next Tuesday or Wednesday what is being introduced in the immediate future in relation to exchange controls. Will the existing system of control under the statute which we recently re-enacted here be maintained?
We have an open border as far as currency exchange control systems are involved. The border is wide open and I can see major problems here. Equally, we had no comment from the Taoiseach in relation to the situation in Northern Ireland. Frankly, I am amazed at that because the Taoiseach took out a massive insurance policy when he originally spoke on this issue in this House. Now, apparently, Northern Ireland does not matter; we are going in and goodbye to Northern Ireland in that regard and the best of luck to them. All the hoo-haa the Taoiseach indulged in some weeks ago in the initial debate on the EMS about Northern Ireland is apparently irrelevant at this stage in accordance with Government reaction.
These are some of the comments I wish to make on the situation which I regard as wholly unsatisfactory. The Government are very much like Christopher Columbus as Deputy Cluskey said here last week—when he left he did not know where he was going; when he got there he did not know where he was and when he got back he did not know where he had been.
And he did it all on borrowed money.
Do not worry; the matter is in safe hands.
The Minister of State is whistling past the graveyard.
Getting back to the Adjournment Debate, I hope that no matter what moneys become available to the Government arising out of entry to the EMS—it seems as though it will be very little apart from some easement of the situation facing the Government in respect of the capital programme—they will try in the 1979 budget to reduce unemployment significantly and ensure a more equitable taxation system and I would hope the budget would increase substantially the real value of social welfare payments.
Our party and the Fine Gael Party have been persistently critical of the 1978 budget in that there was very little effort there to achieve these objectives. Rather were scarce cash resources frittered away in meeting expensive election promises. Unemployment still continues at an exceptionally high level. Almost 100,000 are still registered as wholly unemployed. Government Ministers, including the Minister for Economic Planning and Development, readily agree that the true number seeking employment is far greater. I submit that an unemployment rate of some 12 per cent of the labour force underlines the fact that the 1978 budget, the White Paper on National Development 1977-1980, and the subsequent Green Paper have had little short-term effect on unemployment.
On the industrial front there has been almost total reliance on the new job creation work of the IDA. I now suggest to the Government that there is urgent need for a further substantial increase in public capital expenditure on labour-intensive projects such as local authority house programmes, educational building such as urgently needed expansion of primary school accommodation and other amenity type projects. A substantial number of new jobs in the public service have been filled but there are still many posts which could be filled in education, the social services and the health services. There are great social demands in those areas and there is no reason why additional employment could not be given.
The recently issued report of the National Economic and Social Council was extremely critical of the job creation programme of the Government. It was quite scathing. It substantiates the criticisms levelled at the Government's economic and social policies during the past 12 months. That report noted on 5 December that the annual job creation target for manufacturing industry over 1977 to 1980 comes to over six times that achieved over the 1960 to 1977 period and under four times that achieved in the pre-recessionary years 1960 to 1973. The NESC went on to comment and it is important that this be written into the record of the House:
What is of concern to the Council is that, although a radical break with past experience in regard to job creation in the industrial (and service) sector is sought in the Green Paper, there appears to be an implicit assumption that adjustments or extensions in existing policies will achieve the desired results. Apart from the intensification of some existing policies no major options regarding industrial policy appears to have been considered and presented in the Green Paper.
The National Economic and Social Council have a secretary of the Department of Economic Planning and Development as their chairman. I regard that comment from them as particularly critical in terms of Government reaction. The NESC have been, devastatingly dismissive of the gimmickry contained in the Green Paper regarding work sharing. The Council said:
In view of the relative underdevelopment of Ireland, policies should aim to achieve the full use of all resources, including manpower. Job creation by means of measures to improve infrastructure, rather than work sharing, should be the primary means of making up for any short-fall in employment. The specific possibilities for work sharing which are discussed in the Green Paper are not likely to achieve the aim of making a major contribution to reducing unemployment.
This is the Green Paper written by the Minister for Economic Planning and Development and submitted by the secretary of his Department as chairman of the NESC, but he could not prevent that kind of devastating comment by a national organisation. They simply dismissed it as irrelevant in the context of Government strategy outlined in the Green Paper. We have to come back to an entirely different approach in regard to industry seeking every possible opportunity to establish new industries. The work of the IDA must be doubled in terms of input and impact. They have to expand into a major national industrial development corporation. They have to be given an extension of power, and investment opportunities. They have to be involved in joint ventures between the public and private sectors, between firms in the private sector and between State enterprises and foreign State and private undertakings.
There has to be a major extension of the work of industrial development here. Nobody, least of all myself, underestimates the extreme difficulty in developing enterprise here, in developing new industrial development and ensuring that there are proper infrastructural services for those industries. I am very critical because the so-called Government consortium, which was set up as a Seán Lemass type of consortium, have not even been cosmetic. They only met on five occasions in 1978 and have made very little real contribution to job creation.
I believe, in relation to oil and gas, during 1979 there is an urgent need to intensify and accelerate the oil and gas exploration programme. We should seek substantial aid from the European communities, and any aid we might get from the European bank under the EMS proposals, which are still undefined, so that we can apply some of this money directly to the oil and gas programme with direct State incentives rather than depend entirely on the whim of the international market.
I understand that there is the prospect of a very promising gas find off the south east coast, about 35 miles from Rosslare. We should press ahead with that kind of programme because it could transform our economic situation. The amount of money involved in that kind of operation is much greater than the so-called £650 million. We drink £650 million here in 18 months. At the moment we drink £380 million a year. That is the kind of perspective one should take into account on entering the EMS. We had no prospect of getting £650 million.
With regard to taxation measures in the next budget I fully appreciate that taxation is essential to meet the substantial costs of the public services, including social services, health services and our educational services. I strongly submit that our taxation system could bring about a more equitable distribution of income and wealth. Our dispute with the Government is the manner in which they have ensured the distribution of the weight of taxation here. The virtual abolition of the capital taxation system by the Government in the last budget is a very clever example. The abolition of domestic rates and the virtual abolition of road tax have also made our taxation system much less progressive as it affects the population at large.
With regard to the relief given by Fianna Fáil in relation to capital gains no less than 80 per cent of the anticipated revenue for next year has been wiped out. Senator Alexis FitzGerald in the Seanad this week drew out that point very cogently from the Government spokesman who piloted that Bill through the Seanad. He said that we have 100 per cent relief in wealth tax and an 80 per cent relief in relation to capital gains tax. There is 100 per cent handed back in funds to the Irish Trust Bank, which costs us millions of pounds. We have had a profligate situation regarding the Government in relation to some sections of the community.
We now have the spectacle of a political party pleading everyday for moderation in income increase expectations on the part of wage and salary earners but the same party only a few months ago gave 100 per cent wealth tax relief and 80 per cent relief on total income in respect of capital gains. How can any one who is within the PAYE system take seriously such hollow strictures from that kind of Government? For many years the Labour Party have been emphasising the inequitable features of our income tax system and we have sought constantly the easing of the burdens imposed particularly on wage and salary earners. In addition we have consistently drawn attention to the failure over a number of years to adjust personal income tax allowances in order to bring them in line with inflation. This failure has resulted in a sharp increase in the real rate of tax and it has resulted also in bringing thousands of workers into the tax net who, because of low pay and family circumstances, should not normally be called on to pay tax. Last year the Government implemented their election manifesto promise to increase personal tax allowances. Are we now to witness the deliberate erosion of these allowances because of there not being any manifesto promise to implement this year? I suggest an adjustment of at least 10 per cent in personal tax allowances in the coming budget but even if there is an adjustment of this level we should not forget that the allowances would still not be £20 per week for a single person and not even £40 per week for a married person. The figures would be respectively about £19 and £38 per week. That is the reality for those who must pay income tax.
I propose also that the Government increase substantially the allowances in respect of children by the addition of at least one-third. Successive Governments have failed to provide increases in this area. This failure constitutes a penalty on families. An increase of one-third in this allowance would be barely keeping pace with inflation since the last change in 1976. I am concerned that the Government do not seem to contemplate any increases in the level of allowances or at most would hope only to effect marginal improvements. This would bring thousands of low-paid workers into the tax net and would increase the tax payments of workers whose earnings increased by way of the national pay agreements.
I would draw the attention of the House to the report of the NESC—Comments on Development for Full Employment—where, at page 77 there is the following comment:
In 1977, over 15 per cent of Schedule E wages and salaries was paid in income tax. A comparable figure for farmers' income is not available; it is, however, known that 1 per cent of agricultural income from self-employment was paid in income tax in 1977. The percentage in terms of farmers' income liable to taxation (e.g. after allowances) is obviously higher than this.
That paragraph highlights again the situation of the urban taxpayer vis-à-vis the farmer who could be paying very much more by way of higher contributions.
Wages and salaries constitute 85 per cent of Exchequer receipts by way of income tax but wages and salaries account for only 65 per cent of national income. Therefore, it is obviously both unfair and unjust that our taxation system has not been overhauled radically. Any sensible Government should progress towards a fair system of income taxation and all persons, including farmers, should be taxed on the basis of their real incomes. The case for this proposal has been self-evident for many years. There have been dramatic increases in farm incomes since 1972 as a drive through any part of rural Ireland will indicate. Although farm income is the equivalent of some 30 per cent of the amount earned by those in receipt of wages and salaries, only about £14 million or £15 million will be payable this year by way of income tax on farming profits. Perhaps the figure for 1977 is more accurate. In that year only £15 million was paid by way of income tax on farming profits compared with the £350 million paid by wage and salary earners. The final receipts for this year will show that that gap has not closed in any way. I am not being anti-farmer nor am I being snide about agriculture. I have a deep personal and family interest in rural Ireland, but I am determined to speak on those issues regardless of the reaction I may get from some of the farming organisations. However, I do not share the urban hysteria about farm incomes nor do I share the views of some trade union spokesmen who do not seem to understand the problems associated with farm production, with farm incomes or with all the other issues which affect dramatically the standard of living of farmers. I favour our obtaining the maximum benefit from the CAP but when the money comes in from that fund and when the farmers achieve the benefit thereof, they should pay their share of tax. Hopefully, the Government will show some courage on this issue on budget day and will be prepared to adopt the recommendations of the NESC on this matter. If, as a result of proposals in the forthcoming budget, farmers have to pay an extra £15 million or £16 million and if there is some cutback for them in terms of eligibility for the health services, for example, I should hope that they would be prepared to realise the importance of having a just and equitable system.
The system whereby a farmer's valuation determines his eligibility or otherwise for health services is crazy. I should hope, too, for more equity in respect of higher education grants. It is an outrageous situation that a farmer from, say, north County Dublin with an X £ valuation and who has a high income can qualify for a grant to send his child to UCD while I, as chairman of the grants committee of Dublin County Council would have to disqualify a worker on a limited income. There is no equity in that system and I urge that it be amended. Fianna Fáil will require courage to make the necessary amendment and that is a quality for which they are not notorious whether in relation to family planning, to the EMS or anything else. A Leas-Cheann Comhairle, how much time have I left? There has been confusion.
The Deputy has 14 minutes.
The Deputy will recall 1974 which was a disastrous year for farmers. That year they lost millions and millions of £s.
Deputy Desmond is in possession.
They lost?
Yes.
Since 1974?
In 1974.
I remember the situation. You could buy a calf for ten bob then. The Minister of State knows well that all dairy farmers where he and I come from in south Munster have no liability for income tax but have done enormously well, and the standard of living of such farmers has improved dramatically. There is no reason in the world why his relations and mine in virtually the same part of Munster should not pay their fair share of tax. They laugh at me down there because they think that PAYE is some kind of Dublin joke. I hope the Government will have the courage of their convictions when it comes to spreading the net of the tax burden.
Another area in relation to taxation is the vast speculative profits that have been made in recent years from the sale of farmland and building land. The 1979 Finance Bill should deal effectively with what is now a national scandal. Some professional people have been speculating large sums of money on rural farming land, paying up to £4,500 an acre. It is outrageous that this Government talk about industrial unrest and then admonish public servants to keep quiet and not look for inquiries or anything like that. We have no public inquiry into the vast land speculation in the past 18 months. There is no public inquiry into a situation where the NESC can report to this House about the vast increase in the price of house sites in the past 18 months.
For example, between 1976 and the first quarter of 1978 new house prices rose by as much as 44 per cent, despite the fact that house building costs rose by only 25 per cent. Who has got the differential of 20 per cent? Have they paid income tax on it? Have they even paid profits tax on that differential? As the Minister of State knows, even in his own county the £1,000 house grant is being pocketed and set aside for a Continental holiday through Cork Airport, preferably to Tenerife or perhaps some place more exotic than that, and the £1,000 has been simply added to the price of the house. In order to gain political power, the Fianna Fáil Party pandered to these speculators in the last general election and created a climate of expectation of easy cash. They are now paying a terrible price in industrial unrest. If you create that climate everybody wants to get in on the loot, whether he is a member of the Garda Síochána, a doctor in a dispensary, a civil servant or an industrial worker in a factory. If they see other getting away with it, they too want their share of the greater expectation. If you create that kind of political climate of easy cash expectation, with house prices rocketing 44 per cent in two years, even though building material went up by only 20 per cent, you will reap a bitter wind for that political skulduggery.
House prices went up by 34 per cent during the first year the Coalition were in office.
I want to refer to two or three other aspects. One is the children's allowances. I am opposed to the option being considered by the Government, at the behest of the Minister for Economic Planning and Development, to claw-back children's allowances. The Minister argued that such allowances are paid across the board to everybody. I point out that so also was the abolition of the wealth tax for everybody, no matter how much money the person had. The same may be said for the abolition of domestic rates. You could have ten private dwellings and you got your domestic rate abolished. The Government had no hesitation in abolishing these taxes, irrespective of the income of the payee. We now have a threat to take £8 million of Exchequer saving from the one section of the community who get a bit of cash from the State, namely the mothers who predominantly receive the children's allowances. I do not believe that will happen. It will be disgraceful if it does and we will oppose vehemently any attempt to do it, just as we would oppose the so-called option of my constituency colleague in relation to food subsidies.
The late Deputy Seán Dunne used to say in this House that more Deputies talk themselves out of the House than into it. One Deputy on the Government side is going to follow the example of some of my erstwhile academic colleagues. There is a lot of anti-intellectualism in Ireland, which I do not share. I do not suffer from that dreadful political hatred of people who have intellectual capacity; but I predict that one academic representing the Fianna Fáil Party in Dáil Éireann will certainly talk himself out of Leinster House, judging by the way he is talking about these issues. Perhaps he will talk himself back into Trinity.
The Deputy appears to be afraid of the Minister for Economic Planning and Development.
The Labour Party are totally opposed to the option of the abolition of food subsidies. These basic subsidies are of the greatest benefit to low income families, to large families and to the elderly. This is what the NESC reported in relation to food subsidies and I quote:
The removal of subsidies on food, combined with the fact that income maintenance payments, as outlined in the Green Paper will not maintain their value relative to other incomes, would mean a significant fall in the relative standard of living of those on low incomes.
That is damning the strategy outlined by the Minister for Economic Planning and Development. Food subsidies cost only 1.8 per cent of our total national budget and amount to between £45 million and £50 million. It is well within the capacity of the Government not to abolish food subsidies. To do so would jeopardise the prospects of any rational negotiations in this country.
I want to speak about pay negotiations. One of the most disturbing features of the current industrial relations scene is the extent to which the climate of unending money expectations engendered at the last general election is now influencing pay claims. The moral authority of the Government to hold the rein in these negotiations has been diminished by the Government's behaviour. I have been deeply disturbed by that behaviour, but I have no desire in Opposition to make mischief out of the current air of uncertainty, leapfrogging of wage claims and serious industrial disputes.
I would welcome the commencement of further pay negotiations at the Employer-Labour Conference in the new year. As a member of Dáil Éireann, when in Government, when in Opposition and as now a rank and file trade unionist, I have over the years strongly supported the relative advantages of such national wage agreements. It strikes me as being singularly inept and irresponsible that some Government Ministers, and one in particular, seems determined to confuse the situation and just write off the prospect of further national pay agreements. I do not believe that encouraging, as Cabinet Members seem to be implicitly encouraging, another free for all on the wages front is in the national interests. The Cabinet should not yield to that temptation, to wash their hands in public and in private of the prospect of future pay negotiations being initiated at national level. I know there is a deep feeling of frustration and dissatisfaction with pay relativities and anomalies in this country. I know there has been dissatisfaction with the operations of national pay agreements. I adhere to the view that, in a free-for-all, the weakest go to the wall and suffer most in their standards of life, such as the unorganised workers, the low paid workers, part-time workers, women workers and, above all, young workers because they gain less from the free-for-all in the medium and long term. I believe also that the public servant is left waiting on the wing of the wages scene while the private sector, or indeed the construction sector as often happens, strikes a bloody average of a pay increase. Then the public servant, a year or 18 months later is lucky if the Government of the day provide a few bob in the Estimates for him.
I hold the view strongly that the Cabinet, in recess, should re-think their whole pay strategy in the months ahead. The social partners must be approached again by the Government on the basis that the nation urgently needs a further sustained period of planned development of income, influenced, I would hope, by a socially progressive and just budget. There is no room in these negotiations for any kind of political naivety, as we have seen displayed in the Green Paper. I recall the kind of nonsense we had when the Minister for Economic Planning and Development—in relation to a previous national pay agreement—suggested that the abolition of rates was part of the national pay package.
I hope the Government will get to grips with many of the urgent issues facing the country. The urban transport system in Dublin, and indeed in Cork, is in chaos. I have a letter from CIE which talks about many of the trains on the Dublin suburban rail being old and in urgent need of replacement, becoming daily more unreliable. This is a letter from the manager, Dublin Suburban Rail, in which he says that representations have been made repeatedly for the opening of a number of stations within the greater Dublin area, but no sanction has been received and the problems are compounded. This is a classic example of a letter going to every Dublin Deputy. The situation in relation to telephones is equally critical. It is outrageous that no Government have yet come to grips with a telephone waiting list, which is causing a great deal of anger and frustration but which could equally provide employment.
I make these observations to the Government, not in any carping sense but in the hope that the forthcoming budget will contain measures ensuring the maintenance of a satisfactory rate of economic growth, that will assist in economic recovery, reduce unemployment and, above all, raise living standards. That opportunity exists provided the Government have enough political will and courage to grasp it in their forthcoming budget.
I want, first of all, to say a few words about the announcement this afternoon by the Taoiseach regarding the European Monetary System. I think that what we are being told now is that there has been an improvement sufficient for us to join this system. It does not appear to me—and I have not had as much time as I would wish to consider it—to be any great improvement on what we were told last Tuesday week—that the Taoiseach felt unable to recommend. In regard to the loans that will be made available, the Taoiseach said today:
They will not be wholly restricted to infrastructure.
This was one of the points the Fine Gael Party had been making, that the money coming from the European Investment Bank and indeed through the Ortoli facility was restricted in the way it could be used, in the amount of it that could be used for specific purposes. For this reason it seemed to us then to be unhappy because there did not appear to be sufficient in the capital budget that would allow us avail of these grants at that time. Therefore, we would want to know exactly what that sentence of the Taoiseach means—"they will not be wholly restricted to infrastructure". As the Leader of our party asked a moment ago; does that mean that even though they will not be wholly restricted, they will be mostly restricted to infrastructure. If so, then the same arguments apply.
The Taoiseach continued to say:
I have also been assured that there will be sufficient flexibility as to the manner in which the interest subsidies operate to enable us to benefit fully from these arrangements early in the new year.
Again, we would want to know about that. That is why the suggestion made by the Government party that a debate this evening would suffice was unacceptable to us because we could not possibly have time, or be afforded an opportunity in that time, to tease out the implications of these statements.
We made the point that if the Government were unable to take up the £225 million in loans from the source it was emanating then that the interest would not be fully available. I gather that is changed now—I do not know if the Minister of State in the House knows if the subsidy will be available any way whether or not we take up the full amount of the loans. That is certainly one interpretation that could be read into the Taoiseach's speech today. Could the Minister tell me if that is correct?
The position——
The Minister and Deputy should not get into a debate across the floor of the House on this.
The position is that the Deputy's party were caught napping. That is it.
We will be debating this matter next week, this evening or whenever.
I was genuinely seeking information. I regret very much the Minister's facetious and bad-mannered reply to a very legitimate question I was asking him on behalf of my party.
It is not in order to ask questions anyway, Deputy.
Then the Taoiseach said—and this is really the kernel of the thing—that the reasons for the decision to enter now, which he has been announcing are:
...first, that we believe in the objective of the system which is the basis of a broadly based strategy aimed at improving the prospects of economic development based on symmetrical rights and obligations of all participants. We believe in the desirability of creating a zone of monetary stability.
Everybody does; that is like saying you are against sin; that is not news; everybody believes in that. It is a question of what is the cost to this nation and how do we offset those costs? That was what was in question, not that anybody does not believe in a zone of monetary stability; everybody believes in that.
An even more telling phrase of the Taoiseach's was:
Government strategy for the attainment of these objectives under the new monetary regime will be outlined in detail in the White Paper on National Development which will be published shortly and in the Budget which we will be introducing early in the new year.
That is the real difficulty in which the Fianna Fáil Party have found themselves for the last fortnight. I believe that in this case the budgetary tail was, in fact, wagging the exchange rate dog. The budget was broadly put together. The Tánaiste and Minister for Finance said yesterday that they had almost finished their discussion on the Estimates. The process had gone so far and the Departments had been told what they would be getting, if everything went well, by way of certain allocations for 1979. These allocations were being fed back to the various Departments on the basis of money being available under the EMS, money which would allow them to expand their Estimates for 1979. Things had gone so far. The budget had been sketched.
The White Paper, the Taoiseach said, will be published shortly. If my memory serves me correctly the Taoiseach, the Tánaiste or the Minister for Economic Planning and Development said the White Paper would be available next week. Now, if it will be available next week, it must be actually written at this stage and written presumably on the basis that money will be available from the EMS. The position is, therefore, that the Government found themselves early this week with expectations raised in various Departments and in the Cabinet in regard to how much would be available for 1979. Now, of course, they are unwilling or have not got the nerve, or are indeed too lazy, to take the trouble, possibly the political unpopularity, of rewriting the budget and the White Paper at this stage. That is one of the pressures on them which has caused them to make a rash decision today to go in on what is very little more, as Deputy Desmond pointed out, than was available last week.
That is not true.
I asked the Parliamentary Secretary a question a moment ago and he would not answer it. Either he could not answer it or he would not answer it.
It is not true this was a rash decision.
Deputy Barry, without interruption.
I do not mind facilitating Minister. I think it is a natural part of parliamentary procedure. There are points of which an Opposition Deputy could not be aware and, when I was on that side of the House, I always endeavoured to facilitate Deputies if they wanted a bit of information. If that courtesy is not available now to me then I would wish not to be interrupted.
The Deputy will not be interrupted. The Chair has already said there will be a full-scale debate on the EMS. However, the Deputy is entitled to refer to it in passing, but I would ask him now to come to the adjournment debate.
I think it covers everything.
I accept that.
I was talking about one of the pressures on the Government which forced them to come to a decision in this matter in the last 24 hours. The budget had been drawn together to such an extent that the Government were unwilling, unable or disinclined to risk political unpopularity. Indeed, their whole performance since coming into office 18 months ago underlines and gives credence to the point I am making. We have had a serious deficiency in leadership in the last 18 months. There is, in fact, no leadership at all in the field of industrial relations or in the area of wage agreements.
There is certainly no leadership in the area of house prices and spiralling costs. House prices have gone up in the last 12 months by 40 per cent despite the £1,000 grant introduced by the Government. That has been swallowed up and the ordinary person trying to buy a relatively small three-bedroomed semidetached house in Dublin or in Cork has to pay up to £15,000 or £16,000 for that house. If the purchaser is eligible for an SDA loan he must find a deposit of £7,000 to £8,000 but, in order to qualify for an SDA loan, he must be earning less than £70 per week. Out of that £70 a week he will have to meet astronomically high interest rates of probably £25, £26, or £27 a week, having had to find a deposit of £7,000 or £8,000. Naturally this is beyond the capabilities of anyone earning a wage which makes him eligible for an SDA loan. It is impossible to bridge the gap.
There is no leadership in the area of bank robberies which have become almost a daily occurrence, sometimes regrettably with very tragic consequences. Only this week we had an example of that. The Government appear to think that if they say nothing and do nothing about these problems they will go away. The country is in grave danger of drifting into an economic crisis because the Government have not the will power to try to solve the problems or do anything constructive about them. I suspect they are hoping something will turn up to solve the problems for them.
One of their problems is their inability to admit that the policies under which they assumed office were the wrong policies for the country at its particular stage of development. All the policies have succeeded in doing is bringing about a consumer boom which is of very little benefit, except for some few, to our internal economic structure. This is what they will be remembered for and I suspect this is one of the reasons they are anxious to get into the EMS so that they can in future blame it for whatever corrective measures they have to take instead of recognising that, if we do not solve our problems inside the country, no EMS will solve them for us. The time to solve our problems is not 1 January 1979. It is a continuing process that has to be engaged in all the time in order to secure a balanced economy and provide jobs for all our people and not just higher wages for those at work.
About this time last year the Taoiseach said the country was in exceedingly good shape to take advantage of 1978. If that was so what was the necessity for a 1978 budget which could only have the effect of overheating the economy? Two policies in that budget had the effect of bringing about a huge increase in imports and pressures for wage increases, and consequently on prices, which were bound to be detrimental to the economy in 1979.
The most important problem facing the country in the coming 12 months—Deputy Desmond referred to this—is the conclusion of a national wage agreement. It seems to me the Government are indifferent as to whether or not they have a national wage agreement and, if that is so, it is most regrettable. It is extraordinary that in a 21-page script delivered here yesterday morning by the Taoiseach only one page dealt with the problem of industrial relations. Any citizen, anyone looking at the country from outside and thinking of making some investment here, recognises that industrial relations are the most serious problem facing the country at the moment.
We warned the Government about the abolition of the wealth tax and the modification of the capital gains tax. It would have been more honest to abolish capital gains tax altogether because it has become completely ineffective. Anybody who believes that it is possible to abolish wealth tax and virtually abolish capital gains tax and at the same time expect to be heeded in preaching restraint in wage growth is heading for a fall.
It may be remembered that according to the Fianna Fáil manifesto their strategy was based on a 5 per cent wage increase in 1978. In volume 303, No. 2, columns 357 and 358 of the Official Report, the Minister stated:
I should like to clarify aspects of the target proposed by the Government. The target was formulated only after careful and detailed examinations of the requirements of the economy in both the short and medium-term. Demands for flexibility and for adjustments in line with inflation have to accommodate themselves to the need for pay moderation. The Government's commitment is unequivocal and, if agreement to such moderation cannot be achieved, we shall have to take the necessary measures to ensure that excessive increases, if any, are recovered from those who secure them. The Government would be failing the community if they did not take such steps.
Within days of that budget speech, the 5 per cent wage increase had become 8 per cent. The Government's acceptance of the 8 per cent was fudged over by saying that 8 per cent over 15 months was equal to 5 per cent over 12 months. During the past few months the Minister for Economic Planning and Development has admitted that in many cases wage settlements in the private sector were in the region of 16 per cent, double the national wage agreement figure and over three times the figure which the Government said was necessary for the good of the economy during 1978. What have the Government done about this, in spite of the brave words of the Minister last year? They have done absolutely nothing but preach about the damage being done to the economy, even though the Minister for Finance said earlier this year that failure by the Government to do anything would be failing the community.
I wonder whether the Government appreciate how important exports are and how important it is that home-produced goods should be competitive with imports. If they had appreciated this, they would not have abdicated leadership in this field during the past year. Our industrial growth is dependent on our ability to export. In turn, the ability to export is dependent on the price and quality of our goods. Such goods must be able to compete at home and abroad.
It is no use to pretend that the cost of the wage element is not important. If we continue to give ourselves wage increases above the level of growth, then we are setting in motion an inflationary spiral which will have the effect of pricing goods out of export markets and will allow imports to dominate the internal market. This will lead to a loss of jobs and it is important that costs are kept in line. However, who can blame workers looking for increased wages when they feel they are not being dealt with in an evenhanded way? They are continually told they must practice restraint, while this restraint is not thought necessary or advantageous at the other end of the scale. They see that wealth tax can be abolished and capital gains tax virtually abolished.
Government speakers will say that these taxes brought in nothing. I suppose that is a fair point; they did not bring in a lot of money but that was not important. They did not contribute very much to the annual budget, which next year will probably be in the region of £3 billion. The Government, by having these taxes, could with a clearer conscience and with more authority point out to all sections of the community the necessity of wage restraint in line with growth in the economy.
The Minister knows that the vast army of PAYE taxpayers felt they were being treated unfairly. He has had representations from all sections of that army. Why should they practice restraint when it does not appear to be practised anywhere else? This is the real damage which the Government are doing to the long-term prospects of the economy. They are not seen to be treating people equally. This has had the effect of interfering with our competitive position in the manufacturing sector. It is not obvious yet, though there are straws in the wind.
During the first six months of this year imports rose by 20 per cent in volume whereas exports rose by only 8 per cent in volume. This is half the level of increase in exports in 1977. The volume of retail sales has increased. Is it not quite obvious that much of the consumer boom money at the moment is being spent on imports? In the first nine months of this year car sales were up 35 per cent. The import component of cars, if one takes out the tax element, is extraordinarily high and this applies even to cars assembled in this country. It is obvious that is where the extra money has gone. In an article published after the budget this year it was pointed out that the jobs being boasted about by the Taoiseach and the Ministers to be created by that budget would not be created here but in Japan. Unfortunately that has proved to be the case. Unless the Government can bring themselves to give the leadership that is necessary, 1979 will be even worse than 1978 in that regard.
The unemployment figure also underlines what has happened. It appears now that for 1978 the level of unemployment will be about 8,000 lower at the end of this year than it was at the end of 1977. On page 9 of the Fianna Fáil manifesto it is stated:
The impact of this programme can be summarised as follows:
|
1977 |
1978 |
|
|
Reduction in Unemployment |
5,000 |
20,000. |
That is repeated in the White Paper on National Development 1977-1980. In the table on page 20 it states that in 1977 the reduction in numbers out of work was 5,000 and the figure for 1978 is 20,000. At the moment the unemployment register is running at only 8,000 or 9,000 below the level obtaining at the beginning of this year. If that is so the people who are to blame, who have failed in the leadership of this country, are the Government.
Nowhere is the failure of the Government more obvious than in the housing sector. The price of houses has increased by 40 per cent since Fianna Fáil have come to power. A young couple who wish to purchase a relatively modest house will have to find a deposit of £6,000 or £8,000. They cannot borrow more than £9,000 under the SDA loans scheme and to do this they would be earning less than £70 per week. Out of that £70 they would have to pay between £24 and £26 per week and, at the same time, find a deposit of £7,000 or £8,000.
Obviously this is an impossible situation and it will have an effect next year on the demand for houses. It will have an effect on the construction industry, on cement sales and on employment. Why did not the Government last week—as my Government did in similar circumstances four years ago—subsidise mortgage rates? Why did the Government not raise the income level for SDA loans and increase the amount that could be borrowed? More particularly, why did they not make some effort to control the huge increases in house prices evident since they came into office?
The speculators had to get back their £500,000 that they gave in subscriptions for the general election.
The Deputy should not get involved.
The Deputy asked a question and I wanted to give him a true answer.
The Deputy should not answer any questions, especially when his colleague is speaking in the House.
I thought it better to put the truth on the record.
The Deputy can put it on the record outside this House if he wants to continue in this way.
We are told continually by Fianna Fáil that the construction industry is of vital importance to the country. This is true but by their failure during 1978 to control the price of houses, to subsidise mortgage rates, and to raise the income limit for SDA loans, they are condemning the construction industry to a year's recession in 1979.
There are two matters on which I wish to comment now. One is the question of industrial relations, the way people outside this country see the situation and the damage it is causing. The other matter is the spate of bank robberies that have taken place almost daily this year. It can be said that this is interfering also with the level of investment here by people abroad. Why has so much money been stolen, apparently so easily, by armed robbers throughout the country? It is not just confined to the large urban areas but has happened also in rural areas.
The Minister for Justice was spokesman for Justice when he was in Opposition and at that time he appeared to have all the solutions. He appeared to know exactly what he would do to curb the crime of armed bank robberies. What has he done in 18 months? Can the Government with pride point to a turn down in the figures of armed bank raids in 18 months? Can they say that since they came to office they have fulfilled their promise made repeatedly in Opposition to protect bank premises and control the amount of armed robberies? Can they say they have increased the pay of the Garda to such an extent that we are getting vastly increased numbers of recruits? Is not the reverse of all this true? The Government pushed the Garda force to such an extent that there was virtually a strike a few months ago, until a commission of inquiry was promised to look into their pay and conditions. They did the same with the nurses in the last few weeks.
Has the Minister for Justice done anything in the last 18 months? It is obvious he has not, because the amount of money being stolen is far higher than at any stage in the history of the country and the amount being recovered is far lower. There seems to be no end to this open house for bank robberies. Unfortunately, and this is the real tragedy, the use of firearms is becoming more widespread in bank robberies. Only this week a man lost his life while protecting the wages of a firm on the outskirts of the city. Have the Government decided they will do nothing about this? I hope the Tánaiste will tell us what the Minister for Justice has done during the past 18 months. What has that Minister done to cash the cheques which he gave to the business community, the people generally and the Garda force when he was in Opposition?
In the field of industrial relations was there anyone more vocal than the present Minister for Labour when in Opposition? Was there any occasion, whether on the Order of Business, Question Time, Private Members' Time, Adjournment Debates or Estimates, when the present Minister for Labour, when in Opposition, did not pour forth solutions for all industrial problems? If there was a problem, he would solve it on the spot if he were in office. Has there been an occasion since the office of the Minister for Labour was established, or in the whole 60 years of this State, when any Minister divorced himself so completely from attempting to solve the troubles of a Department over which he has been put? There have been official and unofficial strikes in both the private and public sectors and the Minister for Labour never once intervened. When he was in Opposition he was always saying "Will the Minister intervene? Does the Minister realise the damage being done to the economy by this strike?" and so on. Yet in 18 months, to the best of my knowledge the only direct action the Minister took in any industrial dispute was to refer the Shell dispute to the Labour Court last month. The Minister set up councils, commissions, review bodies and investigation groups to look into various things.
For the last 18 months this country has been sadly lacking in leadership. Every Minister on the Front Bench has at all times endeavoured to avoid personal unpopularity. The Taoiseach, the Tánaiste and the other Ministers will not be allowed by this party or this Parliament to scuttle into the EMS in the hope that the urgently needed measures will be taken. The EMS must not be used as an excuse by the Government to go in on terms which are very little different to what was offered last week: a mere £25 million a year for the next two years. A sum of £25 million is roughly two-thirds of the CIE deficit; it is the budget of two average-sized county councils or perhaps Dublin Corporation. In a budget of almost £3,000 million it is an insignificant sum. The Government should admit that the problems here are of their making and will not be solved merely by entry into the EMS. The EMS cannot be used by the Government as an excuse to try to correct their faults and failings over the last 18 months.
At the outset, lest I forget, I will announce that it is proposed to introduce the budget on 7 February next.
In opening this debate the Taoiseach took stock of our position as the first full year of the Government's period in office draws to a close. I will underline some of the points which this stocktaking reveals. This year's experience proves that it is within this country's ability to meet the targets set by the Government. Our targets for 1978 were to achieve a growth rate of 7 per cent, to raise the level of employment by 20,000, to cut the rate of inflation to 7 per cent by the end of the year and to restrain the borrowing requirement to 13 per cent of GNP. When we set these targets we were ridiculed and were told that nothing like a growth rate of 7 per cent was within our grasp. We were told that even the strongest economies in the world, in current conditions, were well pleased with a growth rate of 4 per cent or even 3 per cent. Moreover the outlook for world trade was not very bright. How in these circumstances, we were asked, could anybody be rash enough or foolish enough to set a target of rapid growth for our own small vulnerable economy.
Our critics pointed out that we were aiming at an increase in employment which was never achieved in any year since the foundation of this State. As regards inflation the sceptics were quick to draw everyone's attention to the fact that our objective implied halving the rate of increase in prices within a year and a half of our assuming office. We know now that the sceptics were wrong. Despite their foreboding and their gloomy prophecies we have succeeded this year in recording a degree of economic progress unique in the history of the State. Under the impetus of this Government's policies national output has expanded by about 7 per cent, a rate which is very close to the highest ever achieved here. Secondly, total employment this year was increased by an amount never even approached in any one year before. Thirdly, while making these notable advances in growth and employment, we managed to get the rate of price increase down to 7.9 per cent in the 12 months ending mid-November compared with almost 14 per cent in the year before we assumed office.
Given the doubts that were expressed when we nailed our colours and targets to the mast, I know it is inevitable that there will be mutterings from the same people to the effect that all the aims we set ourselves were not exactly reached. It is inconsistent both to rule out in advance any likelihood of coming anywhere near a target and later to complain about any slight differences between target and actual achievement. The fact that this is inconsistent does not appear to disturb our critics. Perhaps it should, but it does not.
The year is not yet out and it will be some time before we can make a full and accurate assessment of all developments. The only finalised statistics we have relate to the rate of inflation which I have just quoted. That, for reasons which I will return to later, is somewhat above our target; it is not an awful lot above our target but it is somewhat above it. There is also the possibility that there may be a slight shortfall in relation to our aim in regard to total employment, but I am very happy that the job creation objectives set for the Government's own programme will not alone be achieved but exceeded.
There have been other economic achievements in 1978. This year we expect the volume of consumer expenditure to rise by over 8 per cent. In other words, living standards progressed at a rate which bears comparison with the best we have ever achieved. On top of that investment has been exceptionally buoyant, rising at a rate well into double figures. That is a very heartening development because it means that the basis of future growth and employment creation in our economy continues to be strengthened and broadened.
By and large, then, we are on the course mapped out by this Government before we assumed office but still we face the sceptics. Deputy FitzGerald in his contribution to the EMS debate on Wednesday said that we were moving towards a severe balance of payments difficulty. This view was echoed yesterday by Deputy E. Collins. But this is not so. Our White Paper—on National Development 1977-1980—made it clear that faster growth would be accompanied by some increase in the balance of payments deficit. That is inevitable in an economy at our stage of development with its need for imports of capital goods and materials for further production. Indeed, roughly speaking, 60 per cent of our imports consist of materials which are partly processed in one way or another and are subject to further processing here. Fast growth here has been accompanied by an increase in the deficit from about £120 million in 1977 to, at most, £150 million this year. This is not a big increase. Indeed it is, if anything, less than the rate of increase contemplated in our White Paper and it has also been accompanied by an increase in our reserves.
Admittedly, there have been favourable factors at work and there is no guarantee that next year we will still find no great restraint on the balance of payments. If, for example, oil prices go up, as is speculated, then, like every other oil importer, we will face a higher import bill. What this amounts to is that, as I said in my budget speech, the balance of payments is a factor which we shall continue to watch carefully; but it is a far cry from that prudent view to Deputy FitzGerald's position that we are moving towards a severe balance of payments difficulty.
Our critics on the other side of the House have also been trying to make great play with the export figures. Exports this year have grown at a very satisfactory rate. What the critics have omitted to mention in making a comparison with the previous year is that this year the increase in exports was based on healthy, solid economic growth, unlike the previous year when it was based largely on a massive depreciation in the value of sterling which is not a basis for future healthy growth for any economy. The growth this year was the kind of growth that we need for the future and, in particular, the kind of growth that we are going to need in the EMS.
I should like to return for a moment to the other Government aim to which I referred in my opening remarks, namely, to keep the borrowing requirement as a percentage of the GNP to 13 per cent. A great deal was said in the EMS debate, particularly by Deputy Cluskey, about the alleged financial mess the Government are in. We are not in a mess.
This year, as I hope all Deputies know, we said we would consciously increase our borrowing so as to impart a stimulus to the economy. We have succeeded in doing this, as the details I have just given the House amply demonstrate. Moreover, we achieved what we set out to do within the financial limits which we imposed on ourselves and this year our borrowing requirement will not exceed 13 per cent of GNP. We will not, of course, meet all of our economic targets exactly. My immediate answer to those who will start carping about that is to say that if we do not aim high we will not hit high. But on a more fundamental level I would remind such critics that our targets were based on the premise that pay rises this year would be limited to 5 per cent. As we all know, the pay increases in the national agreement were somewhat beyond that.
Nevertheless, the Government accepted the terms of the agreement in the belief that the national interest was best served by it in the circumstances. Unfortunately, pay settlements in some sectors of the economy have gone beyond the spirit, if not the letter, of the national agreement, and the result is that nonagricultural earnings per head this year are likely to grow by perhaps 16 per cent, which is double that anticipated at the beginning of the year. Nobody with any understanding of how this or any other economy works could expect that increases of this scale would not have adverse effects. Indeed, the marvel is that the effects were not worse.
The fact that Government strategy was not jeopardised by the scale of income increases is a tribute to its fundamental robustness and good sense, but excessive pay increases have brought inevitable consequences in their train. They have retarded growth in employment and adversely affected the trend in prices.
It seems to me that some sections of our community still either fail to see, or indeed prefer not to grasp, the obvious connection between excessive income increases and slower growth in employment. Certainly, if they see it they fail to act on it. Higher incomes mean a higher price for labour which in turn leads to a lower demand for labour. More ominously, it also means that substitutes for labour become more attractive. The continuing high level of redundancies is a stark testimony to this truth.
I would hope that the trade union movement would face these unpalatable facts—they are unpalatable but they are facts. There is a tendency for quite a few trade unions continually to press for more progress in reducing unemployment, and the Government are totally at one with them in this matter—indeed it is the Government's first priority. I do not think any Government in the history of this country have given a higher priority to job creation than this Government, but when it comes to setting aims for wage negotiations at national, and even more, at local level, employment needs seem most of the time to take very much the back seat. The cynic might conclude that fundamentally self-interest of the narrowest kind motivates much trade union behaviour.
I would not agree with this because I believe that the trade union movement as a whole genuinely hold to more worthy objectives and have in view the common good, but I think the movement badly need to get their thinking and priorities straight and to explain to their members the economic facts of life. It is no service to men to lead them on to seek massive wage increases if the net effect is to throw them on the scrap heap in the prime of life or to deny decent jobs to their children.
The fact that our rate of inflation is slightly higher than we had aimed for is also largely attributable to the inordinate growth in incomes this year. I know that some commentators would dispute this: according to them there is nothing we can do about price increases because we are forever condemned to accept the rate of inflation dictated by external forces. I reject that attitude and have always done so, because I do not believe that there is something inherent in our situation which preordains that we shall suffer precisely this or that rate of increase in consumer prices because it is happening across the water. I do not for a moment deny that external influences have a very important bearing on our domestic price trends, but there is nored, and that is that there is a substantial domestic input into prices of many of the items that go into our consumer price index. One can readily think of many examples, particularly in relation to the goods and services produced by those sectors of the economy which are sheltered from foreign competition. If, for instance, the price of transport goes up because workers in that sector are paid more, has this no effect on the cost of living? The answer, of course, is obvious and its implication is quite clear—that we can exert some control on our inflation rate if we restrain our income demands.
I am not in any doubt that if income increases this year had been kept within the guidelines set by the Government the inflation rate at the end of the year would have been 7 per cent or, more likely, less. Quite apart from the unsatisfactory developments which have occurred on the incomes front in 1978, it is clear that the level of expectations at present in both the private and public sectors is totally incompatible with the country's need to create more jobs and stimulate economic growth. Claims for quite unrealistic pay increases, whether in the public or private sector, strike at the very foundations of the Government's overall strategy for job creation and social and economic development.
In manufacturing industry, such claims if conceded could destroy our export industry. They would certainly retard the expansion of exports which after all is the key to the creation of more and better jobs. Of course the same applies to imports. We can price ourselves out of the home market as well as the export market.
In the public sector, excessive claims can only be met by diverting Exchequer resources from more desirable areas of expenditure, whether they be in social welfare or industrial development, or by increased taxation. The Government do not think that the taxpayer should be asked to pay more or that the less well off in our society should be asked to accept less in the interests of conceding excessive increases to many who already have a more than adequate standard of living. The Government are not prepared to jeopardise the country's long term prospects by allowing developments on the incomes front to get out of hand. All those involved in the determination of incomes, at all levels, have come to a clear realisation of what can and cannot be borne by way of increases in nominal incomes in the years ahead.
At present, it would appear that a level of expectation totally divorced from reality is being created. I would suggest that both trade unions and employers have a role of vital national importance to play in defusing this situation. On the one hand, trade unions have an obligation to bring to their members' attention the futility and, indeed, the danger of making unrealistic pay claims; and employers must adopt an attitude which, though not provocative or intransigent, makes it quite clear that totally unrealistic concessions cannot be made.
In their own area of direct responsibility, and throughout the economy, if that becomes necessary, the Government are determined to ensure that developments on the incomes front in the years ahead will not be allowed to prejudice the social and economic development of the country. Indeed, arising out of the Taoiseach's announcement this afternoon, this matter becomes even more acute. Some people have been endeavouring to suggest that in the EMS we would be dictated to in regard to our policies, whether they be in relation to incomes or otherwise. We will not be dictated to but we will pay the price if we do not exercise discipline. In the EMS it will be much clearer than it has been in the past just what the consequences are of irresponsible action by any section of the community. Where the responsibility will lie will be quite clear if that happens.
The Taoiseach has also spoken about industrial disputes and the damage they are doing to us and has drawn attention to the fact that many of these disputes have arisen in breach of agreed procedures. We shall all have to take a hard look at ourselves and the manner in which, at the drop of a hat, so many people appear to be willing to throw overboard procedures which they have agreed on for settling disputes that arise. I do not know for a fact but I think that very few of the disputes that have occurred, say in the past year, have been such that there has been no procedure laid down and agreed to for remedying them. A great deal of the difficulty has come from throwing overboard agreed procedures.
Some of these disputes have not been the result of legitimate agitation against poor work conditions or poor pay; on the contrary, some of them appear to have been not only in breach of agreed procedure but to have been motivated by self-interest on the part of well-paid groups in secure employment who are prepared to put the very livelihood of other workers in jeopardy to secure their aims. I do not think this is an over-dramatisation of the position. We all know cases where jobs were threatened or lay-offs ensued from strikes.
Equally important, but much less obvious, is the amount of potential jobs lost to this country by these senseless stoppages. The widespread international publicity given to the state of industrial relations here this year cannot but help to reduce the attractiveness of Ireland as a location for industrial investment that we so badly need. Since the recession of the mid-1970s the competition between countries for investment with a choice of location has intensified progressively. The IDA, I think by common consent, have performed very well in the face of this competition but how much better they would have done and could do in the future if instead of undermining their efforts by needless industrial disputes, grievances were settled in accordance with agreed procedure.
Deputy Cluskey in the debate spoke, among other things, about the outcome as he then knew it of the EMS negotiations and he said that the Taoiseach in his negotiations on the EMS had helped very considerably in the furtherance of Mr. Callaghan's ambition to have a total review of the operations of the CAP. This is a repetition of what he said in the debate on Wednesday on the EMS. He also said that this and the alleged fact that we are now officially in the second division of the EEC are the two things which the Government achieved in Brussels.
Neither of these charges is true. The European Council resolution states that the introduction of the EMS should not of itself result in any change in the situation obtaining prior to 1 January 1979 regarding the expression in national currencies of agricultural prices, monetary compensatory amounts and all other amounts fixed for the purposes of the CAP. The Council stressed the importance of avoiding henceforth the creation of permanent MCAs and progressively reducing present MCAs in order to reestablish the unity of prices of the CAP, giving also due consideration to price policy. These conclusions are for the strengthening of the CAP in the EMS context, not for its dismantlement.
As for being in the second division, the announcement of the decision today by the Taoiseach was greeted by Deputy Cluskey with a reaction which can only be described as a determination on his part and that of his colleagues to try to put us in, and keep us in, the second division. The Government do not take that view.
It has been alleged by a number of Deputies, some on the Labour side and indeed, I think, by Deputy Barry in his concluding remarks just now, that the Government have given to the rich and taken from the poor. I want to refute that allegation: there is no truth whatever in it. Suggestions that the less affluent members of our society have been neglected by the present Government do not withstand scrutiny. The first thing to recall is that the provision of jobs for the unemployed must be a fundamental part of any serious strategy to alleviate poverty. Any strategy which does not aim at that is not worth talking about if it is supposed to alleviate poverty. The particular emphasis which this Government have placed on job creation and the success which the Government achieved in this regard needs no elaboration; I have dealt with it already.
The transition planned from April next from flat-rate social insurance contributions to pay-related contributions will of its very nature, benefit workers on low incomes. Again, social welfare payments in April last showed a larger increase in real value than in any of the preceding four years while at the same time the Government's success in combating inflation has prevented the rapid erosion of such payments. The fact that living standards generally are expected to rise substantially this year also contradicts the view that only a few have benefited from the Government's strategy.
Opposition speakers have referred to the Government's failure in the area of job creation. Such remarks fly in the face of the facts. First, the Government's own job creation programme in the public sector, in building and construction and on youth employment has been particularly successful. The indications are that the revised budget target of providing almost 23,000 jobs will be met by the end of this year and could indeed be exceeded. Secondly, and building up on this massive job creation effort, the overall employment increase this year will be the largest recorded in the last 30 years and probably in the history of the State. If this is failure, we could do with much more of it in the years ahead.
There has been the usual sleight of hand in regard to the live register. This is a very old chestnut but it really does not work. Nobody now believes that there is a one-for-one relationship between the live register reduction and the reduction in numbers out of work. The very simple example of the school leaver who is not on the register and gets a job which speaks for itself. It should not be necessary to argue about this. It is quite obvious the argument is only made to try to confuse the public as to what is really happening on the job creation front.
I would not disparage the Opposition for being critical; that is part and parcel of political life but I do disparage them and the country will disparage them for the negative and niggling tone which has been the dominant theme on the benches opposite over the last few days.
A classic example of the dog in the manger attitude, which characterises far too many of the Fine Gael and Labour contributions, has been their attempt to denigrate the Government's major achievements in the field of job creation. They have wasted a considerable amount of time in the House in recent days in a desperate effort to confuse and obscure one essential fact: that the Government in 18 months have put more people to work than any other administration since the foundation of the State.
This achievement is our greatest pride. Despite all the anguished arithmetic from the other side of the House, the people recognise that achievement. That is what is galling the Deputies opposite. We had to listen to the hysterical histrionics of some of those Deputies, like we heard, the other day at Question Time, in particular one Labour Deputy weeping crocodile tears about unemployment. Do Deputies opposite think that the people of Ireland and the people of Dublin in particular forget for one moment that the Coalition Government which they supported and which had Labour Party Ministers in decisive Departments, were responsible for record unemployment? We have substantially reduced the appalling unemployment figures we inherited from that Government and from those Labour Ministers. The people know that we have done so and that we are continuing to do so. This is what the Opposition are now reduced to desperation in trying to combat.
The same negative attitude was evident in their approach to the EMS. They wanted to conjure up a scenario that the Government would be wrong no matter what decision was taken. I challenge Labour and Fine Gael to spell out the conditions they believe would be acceptable? I am talking about realistic conditions, conditions relevant to the real world, not the absurd figures put forward by Deputy FitzGerald and Deputy Cluskey. I believe Deputy Cluskey pulled his figures and rigid stipulations out of that deep freeze which is known as the Labour think-tank.
I suppose I was expecting too much. My challenge was not met and so the Opposition have gone on, up to the announcement today, placing each way bets. They have been carefully trying to avoid any decisive stand. A courageous Opposition would have done otherwise and could have helped the Government's negotiating position if they had done so, but they chose to do otherwise. At a historic and decisive point in our nation's history they are listed among the do not knows.
In the past few months we have experienced a dramatic period of compressed history. We will be living in a changed world after 1 January. This would be the case, whether we were in or out. The great mistake people can make—I am afraid some of our opponents have been making that mistake—is to imagine that if we sit back and do nothing things will go on just as they were. This is not so. The EMS becomes a reality after 1 January. It becomes a factor in our economic life. In this system or outside it, we would be guilty of the height of folly if we ignored this fact. It would be idle to delude ourselves that a system to which all but one of our Community partners adhere would not affect us. Of course, it will affect us. I want to make it clear that it will affect that member of the Community which has decided to stay out for the time being. We would be affected, whether we decided to join the system or not, and we would not be isolated from those effects by the fact that another member has chosen not to join. This is why the people of this country have been so disappointed with the type of contribution which has come from the Opposition in the past few days.
We have arrived at a decisive and a historic moment in the life of this nation. We would have arrived at that moment even if we had not joined. I hope, when people have thought about this and its implications, that we can all rise to the challenge. We have the capacity to forge our own destiny. Our success in this system, or indeed if we were outside it, will depend ultimately on the will and the capacity of our people. The recent days and months have given us an opportunity to have a look at ourselves in the mirror, assess our national character, and decide if we have it in us to stand up on our own two feet, to work to build this nation and secure the future of our young people.
I know that there are people around today who in a superficial way find it fashionable to decry patriotism and national spirit. Yet in tackling the challenges that lie ahead of us, patriotism and common sense converge. If all sections of our people can unite in a purposeful way to tackle the problems which confront us, we will succeed in creating a more prosperous and more equitable Ireland for the young people at school and those now coming into the labour force.
There are more enervating links than the sterling link. It is the psychological link of dependence which has made us cling on to the institutions and outlooks inherited from the days before independence. There are still too many in this country who look across the Irish Sea and whose thinking is moulded by what happens over there. This is to be found in some business circles and professional circles and also in some academic circles. Unfortunately, it is to be found in the rigid, grovelling, classconscious approach of some people to industrial relations.
Over the years I have pointed out—I would like to point it out again—that the structures that evolved in Britain are not applicable to us nor are they suitable for our circumstances. It is a very suitable time now for us to look more closely at the example set by our fellow Europeans on the Continent, at what happened to them after the War, their condition then and what they did by a positive, constructive and united approach to their countries problems. They set out with that united approach to work to restore their prosperity. Who can say that their workers are worse off today because of that sense of purpose, commitment and discipline? This is the kind of example we should be setting ourselves.
Members of the Government and Deputies from the Opposition parties will today be meeting representatives of the minority in the North who, through the vicissitudes of our troubled history, have been cut off from their inheritance. Is it not true to say that those people would dearly wish to have the opportunities that are open to us down here? They would expect us to make the most of these opportunities because our success is relevant to their future and, in that context, to the majority of the community in the North. We will not be blind to their true interests if we succeed in building down here a society which proves itself worthy of its place in the great community of European nations to which we are resolutely committed.
We face a new year and a new era. Our behaviour and our sense of responsibility as individuals, whatever our role in society, whether we are politicians, workers, managers or self-employed, is what will determine our country's future. In view of the developments which, I understand, have taken place, I cannot appropriately wish Members of the House a Happy Christmas because I believe we will be meeting again before then. I can, and do, wish all Members of this House a good, hard-working New Year.
I understand that there is some proposal——
I understand that the Whips have agreed that there be a meeting of the Dáil on Thursday of next week from 10.30 a.m. to 5 p.m., the only matter before the House being a debate on the EMS. There will not be questions or a motion on the adjournment. As a result of this decision, the motion before the House has to be amended, by leave, to read:
That the Dáil at its rising next week do adjourn for the Christmas Recess until Wednesday, 31 January 1979.
Question put.
The Dáil divided: Tá, 74; Nil, 39.
Tá
- Ahern, Bertie.
- Ahern, Kit.
- Allen, Lorcan.
- Andrews, David.
- Andrews, Niall.
- Aylward, Liam.
- Barrett, Sylvester.
- Brady, Gerard.
- Brady, Vincent.
- Briscoe, Ben.
- Brosnan, Seán.
- Browne, Seán.
- Burke, Raphael P.
- Callanan, John.
- Calleary, Seán.
- Cogan, Barry.
- Colley, George.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Gerard.
- Cowen, Bernard.
- Cronin, Jerry.
- Daly, Brendan.
- Davern, Noel.
- de Valera, Sile.
- Doherty, Seán.
- Farrell, Joe.
- Faulkner, Pádraig.
- Filgate Eddie.
- Fitzgerald, Gene.
- Fitzsimons, James N.
- Flynn, Pádraig.
- French, Seán.
- Gallagher, Dennis.
- Geoghegan-Quinn, Máire.
- Gibbons, Jim.
- Haughey, Charles J.
- Herbert, Michael.
- Hussey, Thomas.
- Keegan, Seán.
- Kenneally, William.
- Killeen, Tim.
- Killilea, Mark.
- Lalor, Patrick J.
- Lawlor, Liam.
- Lemass, Eileen.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leonard, Tom.
- Leyden, Terry.
- Loughnane, William.
- Lynch, Jack.
- McCreevy, Charlie.
- McEllistrim, Thomas.
- Meaney, Tom.
- Molloy, Robert.
- Moore, Seán.
- Morley, P. J.
- Murphy, Ciarán P.
- Noonan, Michael.
- O'Connor, Timothy C.
- O'Donoghue, Martin.
- O'Hanlon, Rory.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond.
- Power, Paddy.
- Reynolds, Albert.
- Smith, Michael.
- Tunney, Jim.
- Walsh, Joe.
- Walsh, Seán.
- Wilson, John P.
- Woods, Michael J.
Níl.
- Barry, Peter.
- Barry, Richard.
- Begley, Michael.
- Belton, Luke.
- Bermingham, Joseph.
- Burke, Joan.
- Cluskey, Frank.
- Collins, Edward.
- Conlan, John F.
- Corish, Brendan.
- Cosgrave, Liam.
- Cosgrave, Michael J.
- D'Arcy, Michael J.
- Deasy, Martin A.
- Desmond, Barry.
- Desmond, Eileen.
- Donegan, Patrick S.
- Donnellan, John F.
- FitzGerald Garret.
- Fitzpatrick, Tom (Cavan-Monaghan).
- Flanagan, Oliver J.
- Gilhawley, Eugene.
- Griffin, Brendan.
- Harte, Patrick D.
- Horgan, John.
- Kavanagh, Liam.
- Keating, Michael.
- Kelly, John.
- L'Estrange, Gerry.
- McMohan, Larry.
- Mannion, John M.
- Mitchell, Jim.
- O'Brien, Fergus.
- O'Connell, John.
- O'Donnell, Tom.
- O'Keeffe, Jim.
- Quinn, Ruairi.
- Ryan, John J.
- Timmins, Godfrey.
Tellers: Tá, Deputies P. Lalor and Briscoe; Nil, Deputies McMahon and B. Desmond.
Question declared carried. The Dáil adjourned at 4.50 p.m. until 10.30 a.m. on Thursday, 21 December 1978.