I move: "That Dáil Éireann at its rising on Wednesday, 18 July, do adjourn for the summer recess".
It is proposed that the Dáil resume after the summer recess on Wednesday, 17 October 1979.
I propose first to say a few words on the economy and our prospects and then deal briefly with recent developments affecting Northern Ireland. Other Ministers and speakers from this side of the House will deal in more detail with some of the matters to which I shall refer.
Normally, it is usual in an opening speech in a debate like this to deal with the economy and in particular with the performance of the economy in the previous year. I think we can say that Ireland did well in 1978. For the second year in succession, our rate of economic growth was amongst the highest in the entire OECD area which covers most regions of the world; total employment increased by 17,000, which was the best performance since the foundation of the State; and inflation fell to 7½ per cent for the year as a whole.
There are other indications of the country's sound economic performance last year. The industrial sector, which is and must be the mainstay of our economic prosperity, recorded an increase in output of the order of 10 per cent. The growth in total exports was well above the growth in world trade and reduced the balance of payments constraints that might have hindered us. Indeed the balance of payments deficit turned out at a quite manageable £150 million or so or about 2 per cent of gross national product. Finally, with regard to the components of growth last year, I am pleased to be able to record the excellent increase of 15 per cent in investment.
Encouraged by the successes of 1978, the Government embarked on 1979 with a strategy aimed for a second year at very high growth, at achieving an increase of 25,000 in the numbers employed and at allowing some increase in living standards for those already in employment, although at a necessarily lower rate of increase than in 1978.
These targets which were set out in the White Paper of last January were built on the assumption of a relatively stable international environment for prices and growth and on moderate increases in income at home helping to keep down costs and maintain competitiveness. The Government made their own contribution in two ways.
The first concerns fiscal or budgetary strategy. They announced a series of measures in relation to company taxation designed to encourage investment still further and so help in the development of our industrial base. The "Industrial Plan 1978/82", published recently by the Industrial Development Authority is based on this strategy. It indicates the objective of creating 75,000 new jobs in industry alone over the next five years at a cost of £1,800 million.
The budget itself increased and redirected resources towards investment——the estimate for the public capital programme was raised by 22 per cent over its 1978 outturn——and towards increasing employment, chiefly in the public sector and in building and construction.
In these programmes we made a positive effort to tackle the complex problem of unemployment especially among the young. I recently gave the House some details of the forecasts for demographic trends in our country. These show that the inflow of young people to the work force will be very much higher than elsewhere in the EEC and could increase at four or five times the Community average. This generation of young people seeking a role and a voice in their own country imposes on us, as a community, an obligation and an opportunity unique in our history. We have set ourselves the task of responding to this challenge. To create employment on the scale needed will call for new jobs at an unprecedented rate. This in turn calls for fresh approaches and a radical break with our past. The early results are encouraging and show what can be done with innovation, commitment and effort. 1978 saw a record rise in employment with an increase about double the previous best. Despite the difficulties this year we expect to repeat and hopefully improve on that performance. We have already launched new schemes such as the work experience programme under which about 2,000 young people have already been placed. Further initiatives such as the National Hire Agency, the development of the environmental improvement programme and the creation of the National Enterprise Agency are expected to make a further contribution to meeting these employment needs. But in the final analysis these initiatives can only succeed if they are under-pinned by sufficient growth in productive, profitable employment whether in industry, agriculture or services and also if they are whole-heartedly supported by trade unions and employers with appropriate policies and behaviour.
In addition to stimulating employment, the budget also set out to continue the important process of restoring order to the public finances by reducing Exchequer borrowing as a percentage of GNP. With the cost of servicing debt now running at about two-thirds of total capital expenditure, this is a vital ingredient in our overall strategy for growth and stability. We cannot accept a situation where the repayment of past debt would exceed expenditure on new investment. This is what would happen if we continued to increase the public sector borrowing requirement.
Budgetary strategy notwithstanding, it would now appear that as a result of oil price increases, the severe winter with its effect on food prices and continuing industrial unrest, the White Paper target of 6½ per cent GNP growth will not be achieved. There can be many views on what the eventual outcome will be. Recently, I quoted in this House the view of the EEC Commission that growth this year would not exceed 3.8 per cent. While it is not possible to be precise given the uncertainties which still surround the economy, it would seem that at best the growth rate for the year would reach 5 per cent.
One damaging influence on the economy has of course been the reduced supply and increased cost of oil. There can be no doubt that the oil price increases we are experiencing this year will have an adverse effect much greater than was thought likely in January. It now seems as though the price rise for this year will be in the region of 40 per cent. This will have the effect of reducing our living standards between 1 per cent and 2 per cent because this is the extra amount which we must pay abroad for our oil. These higher costs for oil will mean that our balance of payment deficit will worsen by more than £100 million. This can only be met satisfactorily by either increasing our exports or cutting down on other imports by this amount. I want to emphasise here again that there is no way that we or any other country can compensate for the increase in price which is, in effect, a real and permanent transfer of resources to the oil producing countries. If we try to do the impossible, by for instance, seeking higher money incomes, we will only create more unemployment and drive our inflation even higher. A much more patriotic and useful response for people would be to "buy Irish" whenever possible. This would both cut our import bills and provide more jobs here at home. We can come through the present difficulties, as we have overcome difficulties in the past, but we will need foresight and discipline.
The second major line of approach to our strategy is concerned with just these issues. Policy for incomes in the next year or two is at least as important as budgetary and fiscal policy. Indeed, both are echoes of the same central theme. This is that all parts of the economy must work in harmony together. This is the first principle on which the draft national understanding worked out with employer organisations and unions is based. The understanding attempts to produce a logical and coherent approach to the problems of creating full employment in our society. It deals with the encouragement of investment, welfare and health services, with taxation and employment creation. And at its core is the approach to incomes over the next year or so. The draft agreement, as it now stands, provides for increases which err, perhaps, on the side of generosity, given the sudden and serious downturn in our prospects and that of our trading partners. But this generosity will not be misplaced if the understanding results in industrial peace and the increases in productivity of which I know this country is capable.
I want to emphasise this aspect of the understanding; it is a risk; there can be no question about that. But it is a risk taken for a worthy motive. If we succeed we will create more employment in our country. We will have taken a step away from the attitude that those with work have no responsibility for their fellow Irish men and women without jobs. It is on this connection between employment, incomes and investment that the draft understanding is based. And it is in the interests of every person living in this country that it should succeed.
The need for care in our approach is emphasised not only by the way in which the oil and world trade prospects are developing but by the likely deficit on our balance of trade this year. In the year to the end of May the deficit was £458 million greater than in the previous year. Some of this is represented by increases in imports of consumer goods. This is a trend which must be modified. But the largest percentage increase is in capital goods ready for use which are up in the first four months of the year by more than 50 per cent on the corresponding period last year. The inference from the figures is of a continuing high level of confidence among investors.
This is particularly welcome. We can reduce inflation and increase employment only if we maintain and if possible increase the high rates of investment of recent years. Investment promises to be the most buoyant element of growth again this year. In the first five months of the year, cement sales were over 13 per cent higher than in the corresponding period of 1978 and that despite very harsh weather. Allied to this fast pace of activity in building and construction is a continuing rapid growth in other types of investment. I have mentioned the IDA plans for the creation of 75,000 new industrial jobs over the next five years. These plans demand for their success an expenditure of some £1,800 million in industrial investment over that period. That in turn requires not only the active support of Government but the maintenance here of a favourable environment for enterprise.
There are many strands to a strategy of this sort. Agriculture as a basic industry must be developed and made even more efficient so that it can compete in the increasingly competitive world about us. Industrial relations must be conducted in a reasonable and moderate way without resort to confrontation; the tax regime must at the minimum not be inimical to investment; we must devise and operate a policy on energy which slows the drain abroad of our resources and varies the sources from which we derive energy—so as to reduce our vulnerability to price increases or shortages of any particular fuel source; and above all inflation must be contained.
I will deal now in more detail with each of these questions.
Agriculture is a vital part of the structure of the Irish economy. Since we joined the European Economic Community there has been a great increase in the value and volume of production, reflecting both the enterprise of Irish farmers and their ability to take advantage of a large and growing market. Over the past two years, this upsurge in production has been particularly remarkable. Total agricultural output rose by 17 per cent and net output by 13½ per cent. This growth has come from right across the main farm enterprises—from a record intake of milk at the creameries, from a large throughput at the meat factories, and from the record cereal harvest.
The combination of higher output, improved prices and modest increases in input prices led to a substantial improvement in prosperity. Farmers and their families enjoyed an increase of almost £100 million in farm incomes last year. Average incomes in agriculture were 8 per cent higher in real terms in 1978 than in 1977.
Last year, our agricultural exports were worth about £1,000 million. In 1972, just before we joined the Community, they were worth £257 million. Without the contribution from our agricultural sector, our external economic situation today would be much less favourable; and it is no harm to stress this point against those in this country who criticise the CAP, which has contributed so much to our prosperity. They fail completely to recognise the very great benefits it brings not only to our GNP but also to our balance of payments and to total employment. The benefits that have been gained by the farming community have spilled over into the entire economy and have brought a new life and vigour particularly to rural Ireland.
These favourable trends continue. In spite of the weather, deliveries to creameries this year were 7 per cent higher in the first five months compared with the same period in 1978. On the processing side, there has been a good improvement in cheese production, which is a most encouraging step towards a more diversified dairy industry. We need to reduce our dependence on the production of butter and skim milk, and I would hope that this year will see a move in that direction.
Disease eradication schemes tie up considerable financial resources and have done so now for a long number of years. At a time when the prosperity of farming has never been greater and the demands on the Exchequer more intense than ever, it is necessary to free as much as possible of those resources for other purposes. This can be achieved only by firm action, over time. In the meantime, it must be seen as eminently reasonable that the farming industry which will be the main beneficiary from the elimination of disease, and the main loser if we fail, should make a realistic contribution to the cost. I am afraid that I am not one who subscribes to the view that healthy cattle are for the benefit of the farmer but that the taxpayer must look to the care of diseased stock.
In general, the prospects for the farming sector remain good. We have realised our initial expectations of the benefits of the CAP, and the industry is on a new plateau of prosperity. The ending of the transitional period bringing our prices into line with those of the Community will mean that in future increases in farm incomes will depend more on increases in efficiency and production. This, in turn, requires a great deal of new investment both in farming equipment and in the education and training of the farming community itself.
Capital investment in agriculture has indeed been high—last year it was double the 1970 level in real terms. Farmer training and advice will be rationalised and improved under the new Comhairle Oiliúna Talmhaíochta. Farmgate prices for the first few months of this year are well up on the same period in 1978. The market prospects are sound and the industry itself is in good economic heart. In a world where basic commodities can often be in unsure supply, it is indeed a comfort that Ireland possesses a prosperous and forward looking agriculture to provide an abundant supply of the most essential commodity of all.
One of the most serious problems facing our country today arises in an area in which we in Ireland have always prided ourselves. I mean in human relationships. Over the last century, we have had our share of industrial strife, of confrontation between employer and employee but in recent decades we have avoided, in the private sector of our economy, that deep-seated and pervasive hostility and distrust that we have seen to be so destructive of prospects for economic advance and higher living standards elsewhere. In relation to levels of pay, the viewpoints of employers and employees inevitably diverge but I would hope that the close-knit nature of our society and the absence of deeply-rooted class differences will continue to ensure that these differences of views are tempered by a general spirit of reason and co-operation for the good of all which has been, I believe, a significant source of strength in our efforts to attract new industry here.
If there is an "Irish disease" in these matters, it seems to be the frequency and duration of disputes in basic public services, most often but not always in the public sector, disputes that directly affect the general public and often bear with particular severity upon the old and the weak, as well as doing considerable damage to our economy and to prospects of increasing or even maintaining employment. With reference to the last part of that sentence, there is one such dispute going on at present; I refer to the petrol distribution dispute. With the Minister for Labour I appeal to those involved to return to normal working and to pursue whatever claims or grievances they have through the usual processes for these purposes. The last nine months has been a particularly bad period in respect of disputes in the public sector. Indeed, it is officially estimated that in the last six months alone, over 1,300,000 man-days were lost as a result of industrial disputes. Of these about 85 per cent were attributable to the dispute affecting the Post Office. But even these statistics, daunting as they are, cannot convey the full extent of the losses suffered, in lost orders and goodwill, in reduced confidence in our country as a place to invest or in which to holiday, in increased costs of running businesses and even in threats to public health and in the defacement of the city here in Dublin.
When we look at the causes of the disputes that occur, whether in the public or the private sector, there appears to be a wide variation in the degree of justification for starting them or for continuing them. In some cases, a strong case is made for higher pay, perhaps by reference to improvements in pay of other relevant groups of employees and the claim is conscientiously negotiated through all the agreed procedures before there is resort to strike action, following a failure to agree. In other cases, something similar happens but workers may lose patience before agreed procedures are fully used or exhausted: this can give rise to particular difficulty in obtaining settlements. In yet other cases, we appear to have a situation where groups use their key positions to make a naked grab for substantial increases, with little support or justification and regardless of the wider consequences of their actions.
The organisation of industrial relations in Ireland and the legislative framework in which they are conducted are based on the principle that in a free and democratic society, workers are entitled to withdraw their labour and to demonstrate peacefully. Further, the negotiation of pay and conditions of employment and the resolution of opposed viewpoints in industry have generally been conducted through the system of free collective bargaining. This system has considerable strengths in efficiency and flexibility. Traditionally, the role of the Government was to underpin the smooth operation of the system through the provision of such back-up services, as the Labour Court and its conciliation service. In its own employment, it sought to provide a model of good procedures in the various schemes of conciliation and arbitration.
Changes in society inevitably led to evolution in the role of the Government in this area. With changes in living patterns and a multiplication of dependencies, strikes and pickets are often now directed, in effect, and sometimes inescapably so, not against an employer but against the public and against workers themselves—who have to pay anyway for the eventual settlement of the claim, in higher prices, higher taxes and, less directly but just as surely, higher unemployment. An important development over time has been the progressive increase in the proportion of the workforce whose pay must be paid by the Government, that is to say by the taxpayer. In these circumstances, the Government is itself the dominant employer in the country with a massive pay bill. Even beyond this, successive governments over the last 20 years have assumed clear responsibility for economic growth and for progress towards full employment, involving vast expenditure, current and capital, for development purposes and for service of debt incurred to finance this expenditure. Over this period, our economy has become fully exposed to free trade and international competition and more recently we have opted for an independent exchange rate regime within the EMS.
Against this background, the Government have had no option but to exercise a more active role in respect of the framework for industrial relations. Successive governments have encouraged the evolution of national pay agreements, culminating in the more ambitious draft national understanding. The trade union movement and employers' organisations have played a full part in this endeavour. A major aim in all this has been to establish a basis for a fair balance between the general interest in maintenance of vital services, in economic progress and in growth in employment, on the one hand, and the ability of workers of a particular category or in a particular employment to negotiate satisfactory pay and employment conditions. Some hold that the national agreements unduly restricted this latter ability and that this was at the root of many disputes. Many people would say, against that, that the claims submitted and pursued in some cases through disruptive strike action, show that the legal framework is unduly titled in favour of particular groups of strikers to the disadvantage of the public at large and of the economy.
The Government acknowledge that the industrial relations climate must be improved. It was for this purpose, in order to help us to find the right balance in our circumstances of to-day that we established last year a Commission on Industrial Relations to carry out a comprehensive and in-depth review of existing legislation and of the relevant institutions and structures. The review must cover all parts of the question and any changes recommended must be based on a balanced view both of rights and obligations of all parties. For this reason, it would be a matter of particular regret if trade union representatives were to withdraw from the Commission where they can put forward their views for whatever amendments of the law they judge to be needed. I would appeal to the Congress of Trade Unions not to withdraw from this Commission, because I know they themselves believe that a well-balanced system will be in their interests as a congress as well as in the interests of those they represent.
In any discussion of industrial relations, the question of equity in the taxation system will arise. This is why the Government included taxation policy among the subjects for discussion in the draft national understanding and will pay particular attention in the framing of their budgets to the work of the Committee on Taxation to be set up under it.
It is no harm on this question to step back a little and look at the way the problem may be developing. In 1960, local and central taxes and contributions to the social welfare system, which are a form of tax, were equivalent to about 20 per cent of GNP. Last year, the corresponding figure was of the order of 34 per cent. This large increase in the proportion of the earnings of the people, taken by the State in direct and indirect taxation, is an indication, if that were needed, of the vital importance of equity in the system. Deficiencies which have gone unnoticed where the total burden was small are magnified beyond all comparison by the way in which that burden has grown.
The Government are firmly committed to the concept of equity in the tax system. Already we have taken steps towards improving the lot of the income taxpayer. In the two budgets so far introduced by this administration income tax allowances have been increased by 68 per cent for single persons and 103 per cent for married persons, increases which go far beyond the increase in prices over the period. Despite these improvements, a sense of grievance exists in particular, on the part of the PAYE sector, based on the belief that not all recipients of income are paying their fair share of tax. There is merit in this view and the Government will continue to remove its basis.
Unfortunately, this is not something which can be done instantaneously. The tax system is complicated: it is one of the pillars on which the economy rests. It is an instrument for controlling demand and the balance of payments. It affects our rate of inflation and the value of our currency itself. There are legislative and constitutional issues bound up with it as well as purely economic questions. Priorities have to be established. There is no doubt that our over-riding priority is the implementation of our programmes of economic and social advancement. These difficulties and priorities make it a practical impossibility to effect an immediate transformation of the tax system. Job creation and financial stability are the foundations of the economy and they depend on a sound and logical approach to the burden and distribution of taxation.
The Government will bring about the maximum degree of equity in the tax system as quickly and fairly as they can. As regards other income tax payers new arrangements for farmers will commence next year as well as positive steps to combat tax evasion. The revised system of taxation announced for farmers is designed to ensure that the contribution from the farming sector will be in line with that from other sectors. As regards other self-employed people the budget estimate of the Minister for Finance for income tax revenue from this sector envisages an increase of 44 per cent from them in the present year.
Taxation is an area where above all others justice must be seen to be done. With this in mind the Minister for Finance has stated clearly that in future more emphasis will be placed on legal proceedings, rather than compromise action, with a view to making public information available about tax evaders through their prosecution in open court. With the help of 500 extra staff which have been authorised for the office of the Revenue Commissioners accounts will be examined minutely where suspicions of evasion exist.
Already much progress has been made. The changes of the past two years have meant that the burden of income tax on married taxpayers has been eased by comparison with single taxpayers and also it is those with smaller incomes who have benefited most. These changes which are surely desirable on grounds of social justice emerge clearly when our income tax structure is compared with that of Northern Ireland and Britain. Whereas the lowest rates and highest rates at 25 per cent and 60 per cent respectively are the same in both areas the tax burden is lower on those with smaller incomes in the South but greater on those with larger incomes. Thus for a single person income tax in the South is lower up to earnings of £80 weekly but beyond this point it gradually becomes higher. In the case of a married man tax is lower on earnings of up to £150 weekly. The differences in this case are greatest for those with average earnings of £70 to £80 weekly where the tax burden is about £4 less per week than in the North and Britain.
These examples serve to show that on any reasonable basis of comparison the burden of PAYE tax payers is distributed fairly and in a manner which takes special account of the needs of families.
On energy in 1978 we spent more than £300 million or over 5 per cent of our total resources in buying oil from abroad, compared with some 2.8 per cent, that is almost half, in 1972. What we pay this year and next will be substantially higher. There is no point in deluding ourselves about the fact that energy payments will be an increasingly serious drain on our resources. Neither should we delude ourselves as to the seriousness of the problem. All increases in employment depend on economic growth and economic growth for us is impossible without a more than corresponding increase in the consumption of energy. The mathematics are simple and inescapable. Every 1 per cent by which the economy grows calls for an increase of more than 1 per cent in energy consumption. We must buy from other countries more than 80 per cent of the energy we require—thus leaving ourselves highly vulnerable to externally generated shortages or price rises. Those who oppose diversification of energy sources or who advocate that we wait for full development of renewable sources would do well to consider these facts and say also how with that policy we can sustain, let alone, increase employment or prosperity in this country over the next 15 to 20 years. The simple truth is that unless we get our energy policy right, there will be no economic growth, no employment creation and no increases in living standards for the foreseeable future and the real problems will not be those of growth but of survival.
Although our consumption of energy per head of population is the lowest of the Nine countries in the Community we have made every effort to reduce demand for oil by 5 per cent in compliance with the policies of both the EEC and the International Energy Agency.
The Minister for Industry, Commerce and Energy has already taken steps to control the distribution of gas diesel oil. The net effect of this measure has been that for some months now supplies of oil for domestic heating have not been generally available. Further measures to reduce consumption of oil include an authorisation to the ESB to proceed with the construction of a major coal burning station, at Moneypoint in County Clare, the provision of grants to industry for the employment of consultants and for re-equipment work to secure more efficient use of energy, the prescription of improved building insulation standards, the imposition of a maximum speed limit of 55 m.p.h., limiting heating in public buildings and Government Departments to 18ºC, and an advertising campaign designed to encourage significant savings in the use of petrol.
A year or so ago, forecasts by the International Energy Agency and other organisations had envisaged that the demand for oil would exceed supply towards the end of the next decade but there was always the hope that new discoveries of oil, nuclear energy, intensified conservation efforts and the development of alternative sources of energy would help to bridge the gap.
This respite no longer exists. We have now been denied that ten years. In common with the countries of Europe and the rest of the world, we must base our policy on short-term measures and on a fundamental reappraisal of the longer term prospects. Because of the extraordinarily large demands, even the discovery of more oil on the scale of the North Sea finds, where more than £20 billion has been invested, will not change the picture. Neither on all present estimates, will we get more than marginal help from development of solar, wind, tidal or geothermal sources, which are unlikely to be providing substantial amounts of energy at competitive costs for another 10 or 20 years. There may indeed be some prospect in the development of an interconnector for electricity with the UK or continental systems and this is being pursued. There is no doubt in my mind that one of the main planks of future policy must continue to be conservation. Here, many of the remedies are obvious but an essential pre-requisite will be a sound pricing policy. Already this year we have had to bear the impact of the increase in oil prices which will add about 2 per cent to our inflation rate. Anyone who criticises the Government for this should look at the communique issued by the Council of OECD Ministers after their recent meeting which states that:
Higher oil prices should be passed on in an appropriate manner to energy users in order to encourage conservation and the development of alternative energy sources.
This is a fact of life now and seeking scapegoats among the oil companies or the organisation of the market or the way oil is distributed will help no one.
The second main plank of policy must lie in the use and development of energy sources which are not based on oil. Here Ireland is participating in full in research into renewable sources but, as I have said, there is as yet no prospect of commercially viable supplies from any of the more commonly mentioned sources. The plain fact is that the two alternatives on which we must pin our hopes for the immediate future are coal and nuclear power.
I come now to Northern Ireland. Since I spoke last on Northern Ireland in this House there has been a change of Government in the United Kingdom. I have met Mrs. Thatcher, the British Prime Minister, briefly, in London and the Minister for Foreign Affairs had discussions with Mr. Atkins, Secretary of State for Northern Ireland, in Dublin last month. We have also had a meeting with Lord Carrington, the new British Foreign Secretary.
One purpose of these meetings was to enable each of us to apprise the other of our view of the situation in Northern Ireland and of the way in which a solution could be found.
Let me emphasise first what should by now be obvious to all. A solution will not be easy and cannot come quickly. Attitudes are too irreconciliable. In this decade there are now 2,000 avoidable deaths and 20,000 avoidable injuries, with untold damage to property and to the way of life of a generation, standing in the way of negotiation and change and a just and lasting peace. These personal and national tragedies make a settlement both more difficult and more essential. While violence persists there can be nothing but unemployment and deprivation. And this affects the quality of life in the entire island and the type of society we can create. The current instability wastes resources on a colossal scale. The British Government are already spending £1 billion a year to support the Northern community. And the cost to us here of the additional security and other measures necessary as a result of what is happening in Northern Ireland is even higher proportionate to our resources.
Against this background there can be no failure to seek a solution. Equally, an attempted solution based on certain assumptions would be totally wrong.
Security is an essential element in the present stalemate situation but a solution cannot be found through security measures alone. The problem has existed for two generations now and has broken out in more or less sustained violence in almost every decade since Northern Ireland was established as a separate entity. This has been because there exists in the area two traditions for the reconciliation of which all political institutions so far developed there have failed to provide. Policies based on security alone will never eradicate the historic fear of each other of these two traditions: and political institutions based on the support of one of the traditions will inevitably exacerbate the sense of insecurity of the other.
Neither will an approach succeed which is based on an increasing degree of integration of the Northern administration with that of Britain. The effects of following that road even a small bit of the way for reasons of expediency or temporary advantage in British politics are only too obvious. But long-term effects would be even worse, for integration would weigh the scales even more oppressively against the Northern minority and would offend against the deepest feelings of the vast majority of Irish men and women in this island and in the world today.
The first priority must be to establish an administration in which both parts of the Northern community can live and work together. Prime responsibility for devising the form and substance of such an administration rests with the British Government whose policies have led to the present impasse and who are the authority directly responsible for the administration of the area. But a solution cannot be devised without the co-operation of the two Governments and the consent of both parts of the community in Northern Ireland. We for our part would welcome an opportunity to work with a new regional administration, in the North, based on the principles to which I have referred.
In considering the powers that might be devolved to democratically elected representatives in Northern Ireland the record cannot be overlooked. There is well documented evidence that the widespread practice of maladministration in loyalist dominated councils was a contributory factor in the violence of this decade. We cannot afford to neglect this lesson. Even with the restricted functions now operated by local authorities in Northern Ireland there is evidence that the attitudes and practices of the former authorities have been continued.
The future Ireland to which we aspire must be one in which all citizens will find a place in equal enjoyment of human rights and freedom, without distinction of culture, tradition or religion.
That future must take account of the aspirations of the majority of the people of this island to reconciliation and unity by peaceful means and consent. The old historic and economic arguments against that course no longer hold the force they did. And there are new arguments now based on our place in Europe and in this 20th century. We have a common interest with the Northern people in peace and stability: we have a common interest in developing the potential of our island together. In agriculture, what is good for this part of the country is good, almost inevitably, for Northern farmers. In industry, our efforts can be complementary as well as competitive. The range of advantage in relation to a co-ordinated approach to many service industries—like tourism—is vast.
I mention these aspects to illustrate the extent of the common ground which exists between us and the need which exists for a declaration by the British Government of the wish to encourage the Irish people to come together, in reconciliation, under agreed structures, for the good of all of the people of both islands.
It is in the belief that progress achieved in this way, by discussion, negotiation and consent, as well as for reasons of common humanity, that the people continue to co-operate to the fullest extent possible in eliminating terrorism. The acts which have been committed in the present campaign in the name of Ireland are acts that will compel any decent Irishman to hang his head in shame.
There need be no doubt about the determination of the Irish Government to employ the full resources of security and of the law available to us in pursuing and bringing to justice those who engage in this campaign of violence.
There are, however, two complaints which are often voiced about security. The first concerns extradition. On this we have on numerous occasions made it clear that for constitutional reasons we cannot ratify the European Convention on the Suppression of Terrorism, the convention endorsed by the Council of Europe. This has been unjustifiably interpreted in some quarters as an unwillingness to give full commitment to the defeat of terrorism.
While we remain unable to ratify this convention we will be participating in a new EEC Agreement which will allow the European Convention on the Suppression of Terrorism to be applied between member states of the Community. This new agreement is based on the principle of "try or extradite" and it is tailor-made to meet our constitutional difficulties.
While we are anxious that full use be made of this new agreement as soon as it is ratified, together with the existing provisions of the Criminal Law Jurisdiction Act, to ensure that terrorists do not escape justice, it remains a fact that although the Criminal Law Jurisdiction Act has been in existence since 1976 evidence has not been forthcoming from the authorities in Northern Ireland that would allow the bringing to justice of suspected terrorists. If the present law is inadequate, there is always the course which this party have frequently advocated of establishing an all-Ireland Court which would quickly get over the difficulties.
Another complaint is based on the place of the Border in terrorist crime. We do not deny that the Border is a factor in the present campaign. Some would say it is its major reason. But it is—and can only be—a part of the total and to exaggerate its importance for propaganda or other reasons, does no one a service. Similarly, remarks from the media criticising this country's security efforts do no good. We have a common purpose in defeating terrorism and this purpose is not served by ill-founded public statements and comments on what we are doing. One such was reported on radio today, and I will not refer to it any further.
The ultimate solution is not one concerned with security alone. It is concerned with common humanity and the ability of Irishmen to live and work together. In this approach, the border itself would wither away, as an irrelevance.
The Government have at all times stressed that realisation of their objectives was subject to certain conditions. In relation to Northern Ireland these conditions depend both on how well we manage our affairs here, on how the political and economic situation develops there and on the attitude of the British Government. All these factors interact in the developing scene.
In relation to our economic programmes generally, it is clear that the conditions on which they were originally developed no longer obtain and that the potential for development of the economy in 1979 will not be realised. Some of these conditions are beyond our control—for instance, the rate of growth in world trade, the effects of the current oil situation and import price levels generally. We must not worsen the effect of these external factors by acting unwisely in relation to those conditions which are within our own control. I mean that we must not conduct our industrial relations in such a way as to impede economic growth. We must not seek incomes at a level which will inevitably destroy our competitiveness. We must pursue an energy policy which takes account of the realities in the world about us. In this area, in particular, self-indulgence or fantasy will destroy our prospects for growth and ensure that many of our young people will never get remunerative work. We must reduce our dependence on borrowing and reform our taxation system so that the burden is more equitably distributed and enterprise is encouraged. Investment is, in the end, the rock on which the whole economy is based.
These are difficulties which must and will be faced by the Government and I am convinced by the people of Ireland. The Government's development programmes have been followed since we came to office two years ago. The logical and consistent structure set out in these programmes have provided the framework within which the economy has developed so rapidly over these two years.
The resilience of the economy has shown, despite shocks external and self-administered, convinces me that Ireland is capable of sustained growth. This is not a conviction born of misplaced optimism but is based on objective assessment. We have a still underdeveloped agricultural sector which has great potential. We now have a guaranteed market with reasonable prices for the main commodities we produce. Secondly, coming late as we did to industrial development, we have created and are expanding a new industrial sector capable of competing in terms of equality with the best in the world. Much of this work is in areas of outstanding potential and is equipped with the most modern and sophisticated machinery. Our industry has duty-free access to the largest market in the developed world and our industrial output constitutes only a miniscule proportion of the overall output of the area. Consequently, we should be able to sell our industrial output provided its nature, price and quality is right.
Finally, we have a large and growing supply of adaptable, and increasingly skilled labour. The investment which successive Governments have put into education is bearing fruit. No one can fail to be impressed by the calibre of our young people. Our task, and theirs, is to release their undoubted abilities in a constructive way.
With these advantages, there is no reason why we should not be able to achieve continuous progress. It is our own actions that will make or mar our future.
