I move:
That a sum not exceeding £5,233,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1979, for the salaries and expenses of the Office of the Minister for Economic Planning and Development, and for payment of certain grants-in-aid.
I propose to refer to the subject matter of the Estimate under three broad headings: first, to indicate the main features of the financial allocation proposed for this year; secondly to summarise the activities of the Department; and thirdly to make some brief references to possible future developments in the work of the Department and some other related matters bearing on that work.
The sum of £5,233,000 being sought is roughly £1.6 million more than that approved by the Dáil for 1978. The biggest single factor in the increase over last year's allocation is the grant-in-aid of the National Board for Science and Technology—subhead 1. The reason for this is that 1979 will be the first full year of the board's existence and their activities are expected to expand as they build up their organisation. This factor alone accounts for almost £1.4 million of the increase in the total allocation sought for this year.
The provision for salaries, wages and allowances—subhead A.1—accounts for almost the balance of the increased allocation, almost £200,000. This is due to the additional staff now engaged in the Department and, of course, to the increase in pay costs. The contribution to international organisations—subhead H—is a sizeable element—£477,000 in the requested allocation. The bulk of this is the contribution to the European Space Agency; as a consequence of this participation we will benefit through the placing by the agency of contracts with Irish industry, universities and research institutions, and through having access to the agency's scientific and technical information services.
The fall from £250,000 in the provision—subhead F.1—for the Special Regional Development Fund reflects the level of commitments expected to mature for payment in 1979. There is a substantial increase in the commitments being incurred this year, but many of these will not mature for payment until 1980.
A noteworthy feature of the Estimate is that the expenses of the National Economic and Social Council this year will be met by way of a grant-in-aid instead of a direct grant. As a result, services such as printing, accommodation and rates—hitherto met from other suheads of the Department's Vote and from other Votes—will all now be included in the one grant-in-aid. The advantages of this change are accounting convenience, clarity and a greater degree of financial autonomy for the NESC.
Those are the main features of the actual financial allocations as compared with the previous year. I should now like to summarise briefly the manner in which the Department have been discharging their responsibilities, statutory and otherwise, in the formulation of policies for economic and social development. The more obvious and more immediate way in which the Department have been at work is in the preparation of planning documents, that is, Green Papers, discussion papers and White Papers. So far three such papers have been produced and further papers will appear in the course of 1979.
The fundamental rationale behind this sequence of Green Paper-White Paper derives from the need to set out national policies for economic and social development, and the Government's approach to that development programme in the perspective of a number of years, rather than having a single annual statement as was frequently the case in the past. Secondly, it is to review regularly the progress towards these agreed objectives and, where appropriate, to adjust plans in the light of any changing circumstances so as to allow a sufficiently long time span within which to adjust and to identify appropriate alternative policies for dealing with changing circumstances.
Part of that approach to planning requires an emphasis on what are usually referred to as macro-economic policies, that is, policies dealing with broad aggregates of national output, trends and investments as against consumption spending, the behaviour of savings, the movement of domestic as against external trade, and so forth. The Department have strengthened their staffing and capability in this area, including linking in to information networks with the EEC.
The second area where work is progressing, but where it will be some time before there are substantial visible results, is in the development of comprehensive social policies. The Government have set themselves as their primary task in the area of social policy the creation of employment. Whatever the merits and demerits, whatever the problems and difficulties arising in other sectors, there can be no satisfactory resolution of the many social problems in our society if we are not in a position to offer adequate work with sufficient continuity at reasonable income levels to all the people who seek it.
We know unemployment gives rise to many of the other problems in our society. It has a significant bearing on the incidence of crime and vandalism. We also know that, in many instances, it leads to difficulties in home life and in marriage, associated with some drinking problems, and so forth. The provision of sufficient employment would, of itself, represent a major step forward in easing the many other social problems in our society. Naturally we cannot expect to solve all the social problems overnight but, as a first step along this way, a programme of work is being carried out in other Departments and in the Department of Economic Planning and Development who are tackling the question of getting adequate information on the effects of many existing Government policies and programmes. At present work is being done on the area of income distribution, including the redistributive effects of public expenditure and taxation policies. This is one area in which we do not have adequate information. As a result, we tend to get many statements from groups, all of which are based on reactions to partial information, whether it is the impact of a particular taxation change or the impact of a particular spending programme. We do not have sufficient information on the over-all impact on taxation and spending which Government programmes have in improving the position of the less advantaged groups in our community.
In addition to this specific work on income distribution, work is also being done in seeking to develop an adequate set of what I might describe as social indicators, that is, an agreed set of measures which might be used as convenient reference points for marking the extent of progress in the area of social development.
In addition to the work on social policy, the Department are also engaged in moving ahead with the development of sectoral policies, that is, a more detailed examination of policies which are appropriate to individual areas of the economy, whether it is segments of industry, the services sector and so on. In particular they are paying attention to those areas which span the responsibilities of more than one Government Department or agency, acting as a co-ordinating body in this area.
Another area in which the Department are pressing ahead is with the development of material relevant to regional planning and development. As we know, there has been no updating of official policy in this area since 1972. At that time guidelines were laid down for regional development based on the then information, trends and development. Naturally, much has taken place since that time. In order to update the situation and have an adequate base from which to launch a policy appropriate to 1979 and the eighties, a great deal of basic statistical and analytical work needs to be carried out. Proposals which would underpin the direction of regional policy have been set out in the Green Paper which was published last year. These proposals were based on three principles, namely, that equity demands a fair distribution of development throughout the regions; that national development can be maximised only if the special development potential of each region is realised; that legitimate regional interests should be given an effective voice in regional development.
While it will take some time before a comprehensive statement on regional policy can be put before the House, I should like to make it clear that the Government attach the greatest importance and urgency to a vigorous programme of regional development. As a specific indication of their intentions in that area and of their desire to have this whole question of regional development revitalised, the White Paper published in January this year contained a Government decision that 2,000 civil servants would be located in at least eight centres outside Dublin as part of a contribution to the decentralisation of Government administration.
In addition to these more general questions of regional development policies, specific issues can arise within any one regional area. The most clearcut example of that is in the Dublin area where much attention has been focused in recent times on the problems of the inner city area. Last autumn an interdepartmental committee were set up, chaired by an official from my Department. The report of that committee has recently become available to the Government. Members of the House will have seen the statement issued yesterday in which the Government welcomed the work of the committee and have set up an action group to further the work of the committee to press ahead with developing a vigorous programme for implementing many of the detailed proposals which were set out in the report of the committee. Additional funds are being allocated to underpin the importance which the Government attach to making an early and determined impact on inner city problems.
Work of that kind illustrates the way in which the Department can play an important co-ordinating role in bringing together the various Departments and agencies involved in any one issue, in this case in dealing with the special problems of the inner city area of Dublin.
In addition to these specific areas of work on developmental policies, whether they be for the economy as a whole or for specific regions or sectors of the economy, a vital area of work in the development of a healthy planning process is the development of adequate consultation procedures. It is important that relevant bodies—employers, farmers, trade unions and other interested groups in our community—should have an adequate say in the formulation of policy so that the programmes for development which materialise and which will form the basis of Government decisions will have been developed as a result of adequate discussion and awareness of the various aspirations and wishes of the many groups within our community.
The Department have a role to play in the process of developing consultation through co-ordinating functions with other Departments and through the valuable work carried out by one of the bodies which reports to me. This is the work of NESC. As you know, the council are representative of all the major areas in Irish life and they are the successors to the earlier National Industrial and Economic Council which did valuable work in the sixties. That earlier body needed to be broadened so as to bring in other groups, particularly the farmers, who had not been represented on the earlier body. This council are equipped with the resources to enable them to study the many issues of economic and social development which they deem appropriate. They function as an autonomous body and, therefore, have the freedom to decide their own areas of work and the manner in which they will tackle those issues. They have produced many valuable reports to date, very often of a specific technical or information-gathering nature, in addition to preparing their own views and proposals on the many policy issues which arise.
It would be fair to note that in the work of the National, Economic and Social Council there is, perhaps, a discernible trend towards the second phase of its work. In the early years there were many information gaps which called for work of a factual nature, bringing together the nation and the dimensions of this particular issue, rather than the council being able directly to tackle and discuss the nature of the policies appropriate to the issues involved. That early phase of information gathering, fact finding, is largely at an end and, increasingly, the council's work will be able to take the form of choosing specific areas for policy making and putting forward their views and suggestions as to the appropriateness of action.
The council report to the Government through me and I have met the council on one or two occasions, to familiarise myself with their work and also to make clear to them the value which the Government place on their activities and to emphasise the necessity for this type of discussion by the major interest groups concerned, on the issues which confront us.
Of the other bodies which receive financial support via my Department, I have already referred, at the outset, to the National Board of Science and Technology, which is the newest body established only last year and therefore still building up their staffing and their range of activities. Already we can say that this body has done much valuable work and is encouraging an increasing flow of research activity in a number of areas which are important for the future development of the country.
The developing of a comprehensive approach to funding, to supporting research and development activities and to harnessing that effort into an effective vehicle for social and economic progress is one area where much further development is needed and where we can expect substantial progress as the activities of the board build up.
The remaining bodies under my Department are, first of all, the Economic and Social Research Institute. That does not require any very deep comment from me at this juncture. It has been established now for almost 20 years; it is an independent body with freedom to choose its research activities and, by and large, the aim is to give the research institute freedom to get on with its programmed work and to ensure that there is sufficient dialogue between the Department and the institute to ensure that there is no undue overlap in activities as between different research bodies.
A newer body which recently assumed the reporting responsibility, is Muintir na Tíre, which, hitherto, had received financial support via the Department of Education. Since the primary thrust or purpose of Muintir na Tíre is to promote community development, it is more appropriate that it should link in through my Department, so that it can make its contribution to the development of programmes in the community area.
I have said sufficient, as to the financial allocations sought and the way in which the programmed work of the Department is developing, to give a reasonable indication of the lines which are being followed.
I should like to touch briefly on one or two other aspects which may be of interest to the House. First, as the House will appreciate, the Department, being a new one, is still in its formative years; it still has not, therefore, achieved a state in which we can say that it has settled down into an identifiable, stable pattern of activity, which would then continue into the future. There are still a number of directions in which further evolution would be appropriate. One of those concerns the time-frame within which planning or documents are developed. The initial ones have tended to take what would usually be referred to as a medium-term time span—that is, periods of three to four years. For many purposes it is, of course, necessary to take a much longer time span. In some sense, it is necessary to think ahead for decades, rather than for simple years. Naturally, the longer the time-frame selected, the more general must be the approach adopted. It is not realistic to attempt detailed specifications or blueprints for the future of society 20 or 30 years hence; it is important to try to pinpoint some of the key elements which might have a decisive bearing or influence on our future position. It is this attempt at what is sometimes referred to as preparing "scenarios" for the future which does need to be looked at and where some useful work can be developed. It is an approach which has been widely used in other areas, mostly in the United States, and in the EEC context there was an interesting study published a few years ago called "Europe Plus 30", implying, from that title, that there was an attempt to look ahead to some of the more important factors affecting the position of the EEC in the early years of the 21st century. When dealing with these longer term studies, the normal approach is to seek to concentrate on a small number of key factors, probably things like population trends, trends in food and raw material supplies, availability of energy and the possible impact of technological and scientific developments.
For small countries, such as Ireland, one may wonder what is the point in engaging in this type of study, because we do not have the same capacity to influence or to affect the trends in any one of these key items in the same way as a large entity such as the United States or the EEC. However, it is this very absence of power, the very smallness of our size, which means that we are not going to influence these worldwide trends, that makes it all the more imperative that we seek to identify them at the earliest possible date, so that we can have the maximum time in which to assess the likely course of events and to identify the most appropriate response, given our particular circumstances. This is one area of future work where we might usefully spend a little of our resources.
The second area, one which I touched on in describing the work of the Department to date, one which requires, I think, further broadening, is the area of specific sectoral or detailed area studies. To date the Department have only had the resources to participate in a small number of such studies. I mentioned the one on the inner city as an example. There are a number of other areas where there would be fruitful scope for a more co-ordinated, broadly-based approach. As the planning framework develops, as experience improves and as other Departments participate more fully in the planning process we see this as one obvious direction in which more work will emerge in future years.
In making these suggestions as to the possible direction of future work I should not like to imply that there should be a rigid or predetermined approach to settling the framework of activity. It is always wrong to cast the work of any Government Department or agency into a rigid framework. There is need to retain the ability to adapt and respond to a changing environment and to quickly incorporate the benefits of creativity and fresh research. This is true in all areas of public organisation. Indeed it is true in all areas of life. If we are thinking in economic terms for the private sector of the economy that stimulus or spur to adaptation is always present through the operation of market forces, through competition of rival firms or through the impact of new products and technological developments. It is the governmental sector which is more capable in the short term, and I emphasise short term, of insulating itself from this process. If it fails to have sufficient flexibility and speed of response, then it runs the real danger of degenerating into a routine, pedantic, bureaucratic systematised process which inevitably operates as a deadening influence or brake on the progress of the community rather than as an engine stimulating it.
These are matters for the future and I draw attention to them in order to suggest to the House that in discussing this process of planning developmental policy-making we should not focus our attention only on the work that has taken place to date but should think in terms of how it ought to evolve in the future. Coming back to the present, our immediate need is to build up support for, and participation in, the planning process by the people at large. In the final analysis planning is not about the development of sophisticated models or the refinement of interesting theories. It is about people and their future. If we are engaging in planning, that is, in the systematic and orderly use of the resources available to us in a way designed to produce the best results for our people, then the people themselves, who are the final arbiters on the success of these planning efforts, must also be involved in the process. Past sequences of green papers preceding white papers were an attempt to develop this awareness and participation in the planning process. The recent proposals for a national understanding are a further step along this road. They represent an attempt to outline a comprehensive set of policies for action designed to achieve the objective of full employment set out in last year's green paper.
The first step in bringing about this understanding is to win greater recognition and acceptance of full employment as a practical realistic goal. It would be reasonable to say that when our proposal for full employment was published last year it was met with polite acceptance rather than ardent commitment and support. The reason for this was many people felt it was a rather foolish type of objective to adopt, conventional wisdom being that it is not practical to think in terms of achieving full employment in a democratic society. For that reason, therefore, people might be forgiven for taking the view that, much as they might regret and deplore unemployment in the same way that they would regret and deplore the presence of sin, they would feel that both would continue to be with us into the future.
I do not propose to debate this morning the feasibility or otherwise of full employment as an objective. It is feasible. The fact that it has not happened in the past is a non-argument because if one always falls back on the argument of history no progress would ever have taken place. The first people who tried to fly aeroplanes, transplant hearts or get people to the moon and so on were all, by definition, doing things which had not been done before. The argument based on past experience, while relevant in helping to identify the starting point, is not adequate as a basis for deciding whether or not any particular objective is feasible and any particular programme for attaining that objective is sensible and appropriate.
The objective has been stated. It is our view that it is feasible and attainable within the time frame put forward, which is very ambitious. Rather than spend five years debating whether full employment can or cannot be reached, the more sensible approach is to say, if we were going to move along that road, what would be the first steps? How could we mark out the signposts and milestones along the road? If we can agree on those let us see whether we can hammer out agreement on the programme of action to mark the first signposts. That is the way we have been tackling this area in recent months. Having stated the objective to be full employment before the mid-1980s, one works back from that and seeks to spell out the more precise targets which would be appropriate in the immediate months and years ahead and then seeks to build support for achieving the more immediate targets.
One of the encouraging features of recent months has been the positive manner in which the Irish Congress of Trade Unions have come forward and given their support to a programme for achieving full employment. They have indicated their willingness to participate in a positive way in any co-ordinated community effort to tackle this problem. Following on that policy commitment, there have been a series of extensive discussions both with trade unions and with employer bodies to see if a sufficient degree of understanding could be hammered out embracing the relevant areas of employment creation, taxation measures, income increases, industrial relations and also how other groups, especially those in receipt of social welfare benefits, would be affected by a programme for economic and social development which had as its primary aim the task of generating the maximum increase in employment.
Those discussions, arising from the trade union and employer response to our Green Paper target of full employment, led to the proposals for the national understanding that are now being examined and voted upon by trade union members. As Members are aware, the proposals fall into two parts. First, there are the statements of policy objectives and general directions of action that will be appropriate over a five-year period in pursuit of full employment and, secondly, a statement of the specific steps to be taken in the coming months in the areas of pay, taxation and other areas. It is the earnest wish of the Government that these proposals will be accepted and put into practice. They are important in their own right because they offer a basis on which all sections of the community can benefit from the economic progress which appears attainable this year. They are important also because, if agreed, they should put an end to many industrial disputes which have damaged our progress in recent months. Not only do they provide a basis for faster progress and an immediate improvement in our social and economic climate they also represent the first major advance along the road to active participation by the community in the whole process of planning our future.
During the next week, workers and employers will be asked to give their verdict on the national understanding. In doing this I would ask each person to give careful consideration to the terms and ask themselves seriously whether they think the understanding is in the national interest and whether they can reasonably expect to achieve a better outcome by any alternative approach. I believe and earnestly hope that in the overwhelming majority of cases the answer to those questions would point in the direction of supporting the national understanding. Here I have to say that I was disappointed to notice advertisements in the daily papers this morning inviting or encouraging members of one union, a very large one, to vote against the understanding and giving a number of reasons in support of that view. While it might be a matter for individual judgment as to whether to support or reject the proposals my disappointment stems primarily from the fact that a number of the reasons put forward for rejecting the understanding are not in my view an accurate reflection of the facts.
It is claimed, for instance, that the proposed understanding discriminates against the lower paid workers but that is not so because the terms of the understanding would provide larger increases for lower paid workers than for higher paid ones. This is so even allowing for the impact of taxation—indeed more so when one takes account of the impact on taxation. I took the case of a married worker earning £60 a week at the end of 1978; allowing for his tax position then and applying the pay increases and the tax changes that are proposed during the coming year I found that when he would have received the increases proposed and would have paid the appropriate taxation on them the increase in his take home pay would be approximately 17½ per cent, which is an above average increase. It may well be that advocates of improvement in the relative provision of the lower paid workers would feel this is an insufficient relative improvement and clearly that must be a matter of opinion. But the basic fact is that there will be a greater improvement in the position of the lower paid workers than in the position of the higher paid workers. So it is simply not accurate to say that the national understanding discriminates against the lower paid workers; it discriminates in favour of the lower paid workers. The only point that could be made is whether there is a sufficient discriminates in favour of the lower paid workers.
Another point that is made is that the proposals in the national understanding do not meet the demands of PAYE workers on tax reform. It is not quite clear what those demands are. The only clear statement I have seen is the statement contained in the proposals of the Irish Congress of Trade Unions that all tax allowances and tax bands should be indexed for inflation, that is, if one's tax free allowance is £1,000 this year and if inflation is 10 per cent then there should be an automatic improvement in one's tax free allowance next year from £1,000 this year to £1,100 next year to automatically adjust for inflation. Again taking the position of a married worker earning about £70 a week I hope all would agree that this is not a very high paid and not a very low paid worker. We could take one earning £50 a week and perhaps I should give the positions of both of them. A married man earning £50 a week would, if we had applied the trade union formula which is simply to index for inflation, save about £46 this year whereas his tax savings available both as a result of the February budget and allowing for the additional reduction that would come at the end of this year would be approximately £144. That is more than three times the improvement he would have under a simple formula of indexation. In the case of the married man earning £70 a week, simple indexation would have brought a tax reduction of about £72 this year whereas the proposals for February and December would bring a tax saving of £170—about two and half times the saving under the indexation formula. As one moves up the increment scale discrepancy narrows and indeed as one moves to higher levels of income the situation is reversed. It is true that the proposals in the national understanding are not as beneficial to very highly paid people as straight indexation would be and it may well be that people on high incomes may feel that they have some case to make for indexation. But whoever has the case to make it cannot be the lower paid workers because the tax proposals here are more generous to lower paid workers than the adoption of the index formula which has been put forward.
I could go on to deal with other points that are put forward but I have said enough to illustrate that whatever the reasons for voting for and against the national understanding might be I have to emphasise that the reasons given in this advertisement this morning are not an accurate reflection of the facts. Indeed, they give strength to the view that what is needed is some clarification of those proposals but I would have thought the best way to get that clarification would be for people to go ahead and support it to indicate that they want this type of approach to succeed and that they want to have a framework established within which trade unions and employers can meet with Government and other interests so that there can be the working out of a great programme for tackling questions of pay, taxation or anything else and reminding ourselves that of course the important contribution in this national understanding is that it also provides a basis for the first time in our history for tackling our employment needs in a very positive way and indeed carries a unique approach in that for the first time we have Government and employers agreeing to underwrite their employment targets. There is a firm commitment if this understanding goes ahead that any shortfall in the employment targets would be met by an automatic programme financed jointly by employers and Government to make good the shortfall through creating additional posts in both private and public sectors. That is a unique attempt to give a very positive impetus to the employment programme. It gives very real meaning to the notion that the contributions of the various groups can be translated into more jobs for our unemployed.
I know that in the past one of the difficulties has always been that trade unions in being asked to accept pay restraint, for example, felt that pay restraint would not lead to more jobs but would simply lead to more profits on the part of the firms who employed them. Here for the first time we are deliberately setting out to create a mechanism to ensure that if each group plays its part, the employers, the trade unions, the Government, the appropriate behaviour on pay or industrial relations or any other item would ensure that money would be channelled into providing jobs up to whatever level is agreed. So it does represent a very valuable major step forward in tackling what I hope all our people would agree is the most urgent need of our community, namely, to find work for our young people in particular. It is for that reason that I would ask all those who are going to vote on this proposed national understanding to weigh very carefully the arguments for and against acceptance and rejection and to make sure that they appreciate fully the nature of the case that is being made to them.
If we can succeed in taking these first steps in launching this national understanding then it is my view that we can very quickly move ahead to build on that initial advance to work out a more detailed programme of action to follow in later years. If, on the other hand, the national understanding or the approach enshrined in it is rejected it will represent a major setback to the development of democratic planning in our community. It will mean that many of the wishes and aspirations of our people as expressed through their trade unions and other organisations, for a greater voice in the running of our affairs will remain frustrated. It will mean also that the Government will of course press ahead with whatever action appears necessary to safeguard the interest of the people and to ensure that the rapid economic and social advance of recent years is not halted by unnecessary obstacles of our own making.
In this whole area of seeking to bring about greater awareness and greater participation by people in the ordering of their own affairs we face the greatest question mark of all about our future. To some of a pessimistic nature this question mark is seen as perhaps the greatest threat to future progress. There is the feeling that it is the enemy within the gates, the attitudes and tensions which lie within ourselves and which lead to confrontation, disruption and damage to our social fabric, that ultimately pose greater threats to our future progress than all the external challenges which modern societies must face. To those of a more optimistic disposition this question mark remains one more challenge to be successfully met and overcome. While no one can foretell the course of events in this area of human behaviour, we can, at least, say that this is one dimension in which the future is of our own making. We have it within ourselves to resolve these tensions and conflicts, and to develop peaceful procedures for the resolution of disputed issues.
The need for reliance on the peaceful resolution of social conflicts grows more evident daily. Progress has brought untold improvements in our living standards; but it has also produced a way of life increasingly vulnerable and dependent on the actions of others. Each day we witness examples of how our way of life can be disrupted by the actions of those groups whose numbers may be few and whose motivation obscure. It is the nature of modern society that many people find themselves with this power to damage the community at little cost to themselves. We cannot hope to sustain our progress as a nation unless we can put an end to the excessive and misplaced use of power.
It is my belief that the development of an effective planning system can play a key role in this process. By identifying the problems which confront us, by spelling out the choices for action open to us, and by giving our people an effective voice in deciding on the course of action, planning can play a powerful role in producing that better tomorrow to which we all aspire.
