: Deputy Horgan is in possession and may speak for another 30 minutes.
Government's Economic Policies: Motion (Resumed) .
The following motion was moved by the Taoiseach on Tuesday, 21 October 1980:
That Dáil Éireann re-affirms confidence in the economic policies of the Government and expresses approval of the measures being taken by them to mitigate the effects of the present world recession, to expand employment, to assist the agricultural industry and to promote general economic development.
Debate resumed on amendment No. 1:
To delete all words after "That" and substitute
"Dáil Éireann affirms its lack of confidence in the economic policies of the Government, and particularly its concern at the rise in prices, unemployment, and public borrowing, the collapse of agricultural incomes and of tourism, the failure to provide adequate funds for local services such as housing, health and roads, and the chaotic state of industrial relations."
—(Deputy FitzGerald).
and on amendment No. 2:
To delete all words after "That" and substitute
"Dáil Éireann:—
—Noting the continuing dramatic increase in unemployment;
—Noting the Government's failure to make any significant impact on the inflation rate, currently running at almost 20 per cent;
—Noting the prospect of sharply increased foreign borrowing for purposes unrelated to productive investment;
—Noting that the problem facing some of our traditional industries have now reached crisis proportions;
—Noting the serious fall in farm incomes in the current year; and
—Noting the decline of the tourist industry
Declares:
—That the Government's mismanagement of the national economy is now a question of fact rather than of opinion; and
—That it believes a general election should be called to give the electorate the opportunity to pass judgment on the Government's failure."
—(Deputy Cluskey).
: When we adjourned last evening I had been analysing that part of the Taoiseach's speech which referred in particular to what he alleged were the positive indicators in the Irish economy. I should now like to turn very briefly to the contribution made by the former Minister for Economic Planning and Development, Deputy O'Donoghue, in his defence of the Government of which he was a member and which he now supports. I have never heard a more qualified defence of anything. When one analyses what Deputy O'Donoghue had to say one realises that he reserved all his eloquence for the Fianna Fáil manifesto and for the two years or so following the publication of that manifesto. In relation to the direction which economic policy has taken since he left the Cabinet his silence was the more eloquent part of his speech. I should like to take him up on the couple of points he made in defence of what has been done.
It was Deputy O'Donoghue's belief that Fianna Fáil economic policy would trigger off a wave of investment—an unhappy mixture of metaphors if ever I heard one. It is now a matter of record that whatever investment it may have triggered off, Fianna Fáil's economic policy also triggered off a wave of purchasing, not least the purchasing of expensive consumer durables. When he was a Minister Deputy O'Donoghue greeted a group of Japanese businessmen in the Shelbourne Hotel and remarked laughingly to them that given the rapidly escalating increase in imports of Japanese-manufactured motor cars Fianna Fáil had contributed very positively to the Japanese balance of payments situation. That was a merry jest at the time and the Minister was at some pains to conceal his jocosity when he faced questions in the House on the matter. If it was ever a merry jest, it is a very sick joke now.
I am also intrigued by Deputy O'Donoghue's suggestion that the major part of the blame for the economic crsis can be laid at the door of external factors in general and at the rise in oil prices in particular. The case could be made for the argument that previous Governments could not be faulted, whatever else they might be faulted for, for not anticipating the oil price rises of 1973-74. Every government in the western world had been lulled into a sense of false security by the stability which had existed in the oil price sector over previous decades. Deputy O'Donoghue is attempting to have it both ways with a vengence in saying that our present economic crisis can be traced in large part to oil price rises and in absolving his party and his Government from any responsibility for having failed to foresee the fact that the 1973-74 situation could and almost certainly would return. When Deputy O'Donoghue and his colleagues came into office in 1977 they had seen the effects of the previous oil crisis and if they neglected to assume in what passes for economic planning on that side of the House that the same thing could and probably would happen again they stand proven guilty of most extraordinary negligence, if not irresponsibility.
The other scapegoat which Deputy O'Donoghue chose to identify was basically the trade union movement and he suggested that a commitment which had been required from the Irish people by the Fianna Fáil Government had not been totally honoured in the area of restraint. It is amusing that in his speech he simultaneously invokes restraint and condemns the previous Government for having practised it. He seems to suggest that the trade union movement in general, working people, should bear a large part of the blame for what has happened because they have failed to exercise sufficient restraint.
These are very delicate times. The national understanding is due for discussion and will be voted on by the trade union movement tomorrow. I would not want to say anything which could be interpreted as political interference in that legitimate exercise tomorrow by the trade union movement. However, the degree of restraint which is being exercised by the trade union movement, in recommending to its members an agreement containing a commitment by the Government on employment targets is, given the unbelievable shortfall in job targets in the last national understanding, little short of extremely generous.
When we talk about restraint we will also have to accept that the famous hair shirt of the former President and former Taoiseach, the late Mr. de Valera, sits very uncomfortably indeed on some of the well upholstered shoulders on the far side of the House. When it is stripped of its politics and its rhetoric Deputy O'Donoghue was, basically, trying to say yesterday that it is the same kind of crisis as 1973-74 but we have a different Government and they are better able to handle it. The differences between 1973-74 and today are very marked and the situation is now far more serious than it was then. In the first place, the industrial recession coincides with an acute crisis in agriculture, which was certainly not present in the mid-seventies. It would be amusing to hear some of the farmers' reactions to what Deputy Leyden said last night when he was contrasting the price of cattle now with the price of cattle in 1974. The farmers are not living in 1974, they are living in 1980 and they are not interested in comparisons, they are interested in prices.
The second major point is that the industrial recession coincides this year with the decline in the number of foreign tourists into the country with the consequent serious loss of foreign earnings. Tourism is one of our most important export markets in a sense. The combination of a bad year in agriculture, a bad year in tourism and a bad year in industry adds up to a situation which is totally different in a very real sense from that which obtained in 1973, 1974 and 1975 in particular.
This recession is occurring at a time when our foreign borrowing requirements are not only large but expected to grow. The degree to which the economic crisis may be expected to get worse rather than better can, I believe, be made more clear if the Minister for Energy or the Minister for Finance when they speak in this debate give us a number of key factors. Would the Minister for Finance give the estimated sums for servicing the Government borrowing for 1981, 1982, 1983 and 1984? Will he give us an estimate of the cost of providing the current level of Government services, including the pay and non-pay commitments of the draft understanding in 1981? Will he give us estimates for tax and non-tax revenue in 1981 based on the existing tax structures but allowing for income tax and income changes contained in the national understanding? If we are given those figures during this debate rather than the woolly optimism of the Taoiseach we may be in a better situation to discover exactly the irresponsibility into which the economic policy of Fianna Fáil has led us.
One of the key areas involved in economic management is that of unemployment. It has long been the contention of this party that unemployment is not just cyclical but structural in its nature in the society we live in at the moment. There are a number of developments which make this even more inescapable now. One of them is the quantum leap in technology which is taking place with the introduction of the microchip. We are already losing jobs because of the microchip but we have to face the fact that we will be losing jobs whether or not the microchip is there. The microchip, in a particularly pointed way, draws our attention to the massive problems which will face any Government in this country in the future in providing adequate employment for all our people. Will we accept some of the current rhetoric which implies that there simply will not be jobs for, first of all, a minority and then, perhaps, even a majority of people, that we will have to train people in leisure at extraordinary costs, some modern equivalent of bread and service while the few jobs that are there are rationed out in some streamline version of the patronage system? Will we insist that the wealth which is there, which is being created and which will be created in even greater quantities by the sophistication of technology and the industrial process, should be shared out more evenly in service jobs, better social facilities and in shorter working hours for the vast majority of the working population?
There is a real political crunch involved here in this analysis of employment and unemployment. You cannot divide what you have not got and wealth has to be created before it can be distributed. One would think, when we hear some people talk about this, that there was no wealth in the country at the moment. When one hears Government speakers talk about productivity one would think that working people were the only people expected to become more productive. Are the owners of capital not also expected to be more productive?
I do not know how one measures productivity on the capital side but a crude way of measuring it would seem to me to be that when one looks at what is happening in investment one sees what is virtually an investment strike by the owners of capital at the moment. The political situation is that the owners of capital have gone on strike and they expect the workers to make up for their strike by their increased productivity. There is a major capital problem even on the public side. The Government's public capital programmes have been doctored in some areas almost to the point of extinction and in other areas are tied in to commitments of quite possibly a disadvantageous kind.
When I talk about the public capital programmes being doctored to a dangerous extent I want to give one particular example which will be of considerable relevance. In the nine months to 30 September 1979 the Department of Education approved 53 tenders for new schools; in the first nine months of this year it approved 17 tenders for new schools. In the nine months to 30 September 1979 the Department of Education approved tenders for 56 extensions to primary schools; in the first nine months of this year it approved tenders for extensions to 20 primary schools. If there was ever a more graphic or dramatic indication of what is happening to the public capital programme of public investment than that I would like to be shown it.
Even in areas in which public investment is taking place we need to look at the small print. Look at the postal and telegraph services, for example. The Minister, Deputy Reynolds, and the Government are claiming and giving details of a certain amount of public investment in the telecommunications area this year. I sometimes think, in passing, that there are only two things which keep the postal service going at the moment. One is that half of the population of Ireland are writing individually to the Taoiseach asking him to solve their personal problems and the other half are being written to by Deputy Mark Killilea, with kindest personal regards, telling them why they cannot have any telephones. But in relation to this telecommunications equipment, which forms such a fundamental part of our infrastructure, we need to ask questions. We need to ask why is it that we are buying equipment from a particular country and of a particular kind. Is it the case, as I suspect it to be, that the reason we are buying equipment from a particular country of a particular kind is that that country is the country which is making the loan finance available to us to buy the equipment? In other words, we are in the position of the miner of 100 years ago who had nowhere to shop except the company store and had to pay company prices with the wages the company paid him. We cannot escape these facts. Nor can we escape the fact that services have to be paid for and that Irish people will be slow to be satisfied with an even lower level of services than they have at the moment.
I was amused to see a recent issue of Business and Finance which had a picture of the Taoiseach on the cover with the legend “Hey Big Spender” and the quotation underneath it from the budget speech of 1980:
We cannot ask the taxpayer of tomorrow to pay for the services we require today. This would be socially unfair and economically irresponsible.
It is our contention that it is not only the taxpayers of tomorrow who are being asked to pay for the services we require today but some of the people who exist in Irish society today and in particular the children who are going to be in our schools who have no votes and whose schools will be either unrenovated, unheated or inadequately cleaned or maintained because of this Government's present policies. So it is the children of today who have no income, who have no votes, who are going to be asked to pay in part for any decision to maintain even the present unsatisfactory level of services.
I said at the beginning of my contribution that the irony of the present debate was that it was from these benches that the taxation was being proposed and it was on the Government benches that the illusion was being maintained that there was plenty of money for everything and that the future of the economy was in sound hands. We do not believe that we can have good services without taxation or without fair distribution not just of the current income but of the capital wealth of society. That is why we insist on the need for a wealth tax and insist also on the need for a capital gains tax which is at least restored to its former level, a level which has been cut to the extent of at least 70 per cent by the Fianna Fáil amendments to it. Even the most passionate people who marched on those income tax marches in Dublin not too long ago were aware that services cannot be paid for out of thin air. The Irish Congress of Trade Unions in their sponsorship of that protest made consistently and courageously, in the atmosphere of some hysteria that may have obtained in some quarters at that time, the case that what they were looking for was not a decrease in the burden of taxation overall, because that would have meant inevitably a decrease in services, but the redistribution of the incidence of taxation.
The question of how we raise money to pay for services, whether by borrowing or otherwise, is of course a very acute political one and in the Taoiseach's speech there was a warning that we should not in our fiscal or economic policy put some kind of national concensus at risk. He said deflationary policies—and now I quote—
would only intensify our economic problems and open up divisions in a society which because of its small size and limited resources should be united in pursuing the overall objective of the prosperity of all.
I am no more in favour of deflationary policies than the Taoiseach is, but the difference is that he is actually pursuing deflationary policies while pretending not to. In addition in that sentence he is begging what must be a record number of questions. He says it will open up divisions in our society. Does he seriously think there are not divisions in society at the moment? In The Irish Times of yesterday an article headed “What recession?” describes an assistant in a Dublin tobacconist's saying that he was quite accustomed to taking orders for £2,000 worth of cigars from a single customer at a time. An earlier section of the article states that the hi-fi and television department in a certain store had doubled their turnover in the past year. A great number of the people the assistant in that department deals with would have at least three colour televisions, one each for the bedroom, kitchen and television room. He said that bedroom hi-fi's are selling extremely well at £375 per unit. High fidelity in the bedroom seems to be Ireland's answer to the Irish recession, and a unique one at that. On the other side of the coin we have—and I have to be graphic because the figures demand graphic exposition—100,000 children living in families whose sole form of income is social assistance. We have the development in and around our cities of alleged new towns which are breeding grounds for social dynamite, and not only social dynamite but political dynamite as well, in the future. We have in the face of all this the Government's repeated contention that everything is basically all right, that the economy is basically in sound hands. Seán Lemass used to say that a rising tide lifts all boats, but what happens when the tide goes out? Under the Fianna Fáil laws of physics it is the smaller boats which go aground first, not the largest ones; the largest ones stay afloat with their splendidly uniformed crew——
: And the hi-fi audible from the stateroom.
: And the hi-fi audible from the state room. The people in the small boats are stranded on the bottom. These are the people who are trying to get a house, if they have not got one, from the local authorities. They are the people whose food bills are affected by the cut in the subsidies on basic food products. They are the people whose schools will not be able to match, from the private resources at their disposal, the gap left by the cutback in public expenditure. The Taoiseach thinks that there is a consensus in Ireland which must not be fractured. There is a consensus in Ireland indeed. We are increasingly terrified not just of what the Taoiseach has done but of what he might do between now and the next general election.
There has been enough harking back to the verdict of the electorate in 1977. The electorate have already given two subsequent verdicts on this Government, one in the European elections and the second one in the local elections. There are quite obviously two groups of people who, more than anything else, will influence the result of the next general election. The first group are the group of people who will be voting for the first time. I believe that Labour offers them a more radical vision of society. The kind of policies expounded here by the party leader yesterday afternoon offer them a more concrete and realistic vision of the future of an Ireland in which they can have a full share in anything which the Government have to offer. The second group of people who will help to determine the result of the next election are those people who voted Fianna Fáil in the last election. I believe that when these two look around and inspect the various alternatives on offer they will come to the conclusion certainly that Fianna Fáil do not offer them what they pretended to offer the last time and, hopefully, that we will offer them something very much more realistic.
: The Deputy has five minutes remaining.
: The Chair will be glad to hear that I do not propose to take up those five minutes.
The Irish people are sick to death of promises. They are terrified of another round of Dutch auctioneering which will raise their hopes to unattainable heights only to be dashed again after the next election. They are aware increasingly of divisions in Irish society that the Taoiseach has tried to paper over but that no amount of papering over will indefinitely obscure. In the next election they will be looking to a party that will promise less but will deliver more.
: I propose to deal primarily in my contribution to this debate with the activities of the Department of Energy for which I am responsible and some of the plans for the future. I hope also to have time to deal with some other matters including a few of the references we have just heard from Deputy Horgan in the earlier part of his contribution today and indeed at the very end. But I must resist that temptation at present and come to it later, perhaps even savour the anticipation of it.
: That is unlike the Minister.
: The extent to which our whole economy is affected when essential supplies of a major energy source are interrupted has been brought home to us all in recent weeks. The inconvenience and hardship to which the community was subjected and the damage inflicted on our economy during the dispute gave us a foretaste—and a small foretaste at that—of what might be in store for us if there were a major interruption in oil supplies, due for instance to an escalation in the conflict in the Gulf area.
If, as I have said, we experienced only a small foretaste and escaped the worst consequences of the dispute we can thank the Army. The performance of those members of Óglaigh na hÉireann who were involved in this essential operation was an example to the whole community. The manner in which the officers, NCO's and men set about what must have been a daunting task and then got on with the job in their characteristically straightforward and business-like way earned the admiration and respect of our people. It also showed what can be achieved when there is a will to succeed. This approach need not be reserved exclusively for military operations. We all have something to learn from the experience.
In this connection also I want to thank the Garda who co-operated so effectively with the Army throughout the operation. Their assistance was essential to the success of the work of the Army and all the Army personnel I have been speaking to have been most appreciative of the fine job done by the Garda.
I want also to express my appreciation of the dedicated and unstinting efforts of the officials of my own Department of Energy. It is as yet a relatively small Department but the wholehearted manner in which they tackled a massive workload was in keeping with the highest traditions of the public service. In the nature of things, in the world we live in now, the Department of Energy will have an increasingly important part to play in the economic life of the nation. The manner in which the Department rose to this recent challenge augurs well for its future, I want also to record my own thanks and that of my Department to the officials of the Department of Industry, Commerce and Tourism for their invaluable assistance during those difficult weeks.
Any discussion of the situation in the Irish economy must take into account the particularly open nature of the Irish economy and what has been going on in the western economies with whom we trade, and on which we are so dependent. The primary causal factor in the current economic difficulties is the burden which the energy constraint imposes both in the short and in the medium term on our economies.
Western economies generally are heavy importers of energy. This fact makes all the economies in developed countries vulnerable to disturbances in the oil market, and these give rise to very sharp increases in price. Increases in oil and energy prices will have raised our energy import bill from under £400 million in 1978 to something over £800 million in 1980. The magnitude of the problem which this increase causes for the Irish economy can be illustrated by saying that in 1980 we are spending on imported energy an average of £120 more per annum for every man, woman and child in the country than we did in 1978.
This externally caused price increase has had a serious deflationary impact on our economy. It is, in many respects, just like a very large tax, yielding £400 million, but it does not have a counter-balancing beneficial public expenditure which is associated with the taxes that are levied as part of the national budget. While this Government, or indeed any Irish Government can do nothing to influence the world oil market and the forces that give rise to price increases of this kind, the Government have been very active in recognising the importance of energy in the economy, and in developing strategies for dealing with the energy situation within the economy.
In changing from an economy based on low energy costs to one of high energy costs production levels and competitiveness can be maintained only by taking positive steps to ensure the more rational use of energy resources. On average the energy costs in Irish industry as a proportion of operating costs have risen from below 5 per cent in 1973 to over 10 per cent this year. Yet I am far from convinced that there is sufficient urgency at management level both in the public and private sectors in securing the advantages that rational use of energy can bring.
Good energy management does not necessarily mean that large capital investment must be made to save money. Simple good housekeeping in regard to energy use can I submit cut an immediate 5 per cent off almost any energy bill in this country without affecting production or comfort levels. This trimming down would release as much as £50 million to reinvest and create jobs not to mention the existing jobs which it would protect.
I have, therefore, placed considerable emphasis in my Department on conservation matters. I have mentioned elsewhere that at least 15 per cent of our energy demand in 1990 could be saved by proper energy management and while I would not wish to be bound by such a figure, I contend that it is quite modest in comparison with the conservation targets of other countries.
In the domestic sector which accounts for nearly one third of primary energy consumed. I have recently announced details of a grant scheme under which up to £50 will be paid by my Department in respect of the insulation of attics, the lagging of hot water cylinders and the draught proofing of doors and windows. This ambitious scheme is aimed at having this type of insulation installed in every house in the country by 1990.
Since setting up the Department of Energy, I have taken a particular interest in the efficiency with which we use our energy, and the possibilities for conservation, because, of course, conservation is not merely using less energy; in fact, in many cases it does not mean that at all, but means the more efficient use of a particular form of energy. I have instructed my Department to develop sectoral utilisation programmes to encourage the better use of energy in industry, agriculture, services, public buildings, and particularly in the home.
I intend to pursue these policies vigorously over the coming months. Unfortunately, a nationwide tour which I had planned to promote these policies had to be postponed due to the recent tanker drivers' dispute. I hope to re-arrange the tour very soon.
: The tour to Castlebar was not postponed.
: Sin ceist eile.
: Will the Tánaiste re-arrange the party which was to start it all up, which I think was also cancelled?
: No. The one in Dublin was held. That will not happen again.
: I am sorry, I missed it.
: Sorry about that. We missed Deputy Kelly too. There is a wider aspect to efficient energy utilisation and conservation. This arises from making sure that the most appropriate fuels are used in every application or usage of fuel: direct combustion of natural gas for heating for example, or use of coal in efficient appliances rather than electricity or diesel.
The State can influence the individual decision by ensuring that the pricing strategies, the investment strategies, and the promotion strategies of the energy agencies under its aegis are consistent with the national priorities. My Department will, as their resources expand, be systematically addressing those issues, and in this way will contribute to the recovery from the present difficulties which have been initiated by the external upheaval in the oil market.
The establishment of a Department of Energy specifically charged with developing an energy policy under my direction is symbolic of the importance which the Government attach to what can be done within the constraints imposed on us from outside. The primary concern of the Government in the energy field is with improvement of our security of supplies. In order to increase security of supplies, my Department have been examining ways of reducing dependence on imported oil, on diversifying sources and suppliers of fuel and, for short-term difficulties, ways of ensuring increased stocks of coal and of oil.
We are not just thinking about these matters, we are doing something about them. At present the generating capacity of our electricity grid is about 60 per cent dependent on oil. In the knowledge that oil is beginning to run out, we would be foolish to keep to many of our energy eggs in that particular basket. Already, steps have been taken to change the situation.
At present, we have about 447 MW capacity generated from peat. Between 1982 and 1984 two further peat-fired stations generating 40 MW each will be commissioned—one at Shannonbridge, County Offaly and one at Lanesboro', County Longford. Between 1985 and 1988 900 MW of coal-fired generating capacity will be brought on-stream at Moneypoint, County Clare.
A particularly exciting project which is being explored by the ESB relates to the burning of Arigna low-grade coal for the generation of electricity by a specialised technique. I have given the ESB approval to proceed further with this project. Some 45 MW of power could be produced from this low-grade coal, if—as I expect—the project finally proves feasible and a power station is built. The advantages of a project of that kind in such an area in terms of permanent jobs and the use of native resources is, of course, obvious.
The ESB are also testing the potential of anthracites in the Leinster coalfields for the generation of electricity. Should the tests prove successful, it opens up new prospects for the use of high sulphur anthracites in the Leinster coalfields which are not suitable for domestic use.
Chipped timber and forestry waste are now being used with considerable success for the generation of electricity. This type of fuel is at present being used at Allenwood, County Kildare, Portarlington, County Laois, Lanesboro', County Longford, Cahirciveen, County Kerry, Miltown Malbay, County Clare, Screeb, County Galway and Gweedore, County Donegal.
Until this year, slack left over from domestic coal was re-exported to the UK. Now this has ceased. All slack available is being used by the ESB and the Irish Sugar Company. The slack is mixed with chipped timber and peat or is used on its own.
This country is second only to the Soviet Union in the extent of its peat production. Bord na Móna's third development programme will produce additional milled peat sufficient to more than double the present output of briquettes. Two new briquette factories are being built. One is in Littleton, County Tipperary and it is expected to commence production in 1981; the other is at Ballyforan, County Roscommon, and it will start production in two phases, the first phase in 1984 and the second in 1987.
While large-scale commercial development of bogs by Bord na Móna must continue to be the cornerstone of policy on the optimum utilisation of our turf resources, I am satisfied that measures to increase turf production by private interests are also necessary. As I said here in the Dáil yesterday in reply to parliamentary questions, I hope to introduce a short Bill during this Dáil session to promote private bog development. I envisage that Bord na Móna will act as an agency through which financial assistance can be provided for projects which conform to certain criteria.
Since the Department was set up I have encouraged the development of a programme for alternative energy and my Department have been considering how best these alternatives should be evaluated and the agencies that will be most appropriate for such evaluations.
Much valuable work was already under way, particularly in the semi-State bodies and several programmes had been initiated by the NBST and An Foras Talúntais. The prime example is the early start made on short rotation forestry in which a renewable supply of biomass will provide us with economic and strategically valuable supplements to imported fuels.
The second area where decisive action has been taken to accelerate the development of native resources has been in harnessing windpower. To date an engineering consultantacy firm has been employed to implement a scheme to assist the local grid on Inis Oirr, and there are projects for meeting energy needs on the farm or in remote areas from windpower.
The ESB will shortly be installing several machines to test the best methods of connecting small machines into the national grid and an overall programme is being prepared to place these projects in an appropriate context to harness successful results from the major engineering development projects abroad.
My Department has devoted a considerable effort to the development of a policy for natural gas, and to its proper implementation. We have seen how major investment programmes in the public sector can go wrong, and it is particularly important that the planning for an extension of natural gas from Cork to Dublin and later other towns should be planned in a way that will safeguard the consumer and taxpayer. The project to extend natural gas is being addressed in three stages:
(1) planning of a pipeline, identification of the problem areas and a detailed costing by the best commercial practice,
(2) preparation of a reform programme in the Dublin Gas Company, and evidence of movement away from the unacceptable practices and inefficiencies in the Dublin Gas Company, and
(3) preparation of the financing package that will enable the project to go ahead.
It would appear on the basis of what I have seen of the work to date, that some extension of the gas distribution system would be justified, and would indeed be attractive provided two conditions are met (a) that the pipeline is designed and constructed by the most modern and cost-effective method, and (b) that the vehicle company for distribution of gas in Dublin is also efficient and cost-effective.
The report which reviewed the town gas industry, and indeed the consultants' report commissioned by the Dublin Gas Company itself indicated very clearly that, on the basis of the current practices prevailing in the Dublin Gas Company, the distribution of gas by it would not be a reasonable proposition, and would bring no relief to consumer or taxpayer. I have arranged a detailed review procedure of what is going on in the Dublin Gas Company on a monthly basis, and I will expect significant progress over the winter months.
As I announced last summer I hope some time next year to be in a position to put forward the definitive proposals on natural gas development, taking into account the detailed planning that has been done in the meantime, and the reactions in the Dublin Gas Company to the development programme proposed by their own consultants.
I have mentioned earlier the efforts being made to reduce our national dependence on oil. This is, of necessity, a gradual process and even if fully successful will still leave us significantly dependent on oil. We are therefore examining urgently the means by which we can increase the security of our supplies of this vital fuel. The setting up of the Irish National Petroleum Corporation is an important contribution to this objective.
The Government have set up the Irish National Petroleum Corporation so that the country can take advantage of any changes in the structure of international oil markets that favour government-to-government contracts. The INPC is engaged in securing some proportion of our oil supplies on the basis of government-to-government contracts and has been conducting discussions in a number of oil-producing countries.
The securing of a substantial increase in the quantity of oil stored within the country is another major objective of mine. There is a need for the oil industry itself to make a contribution in this regard. In addition, while some big industrial users have very substantial storage and stocks of oil, it has been painfully demonstrated in recent weeks that many others have not. I recognise that the cost of increasing storage and filling this storage with product can be burdensome for some industries but let me point out that the cost of not doing so may prove to be very penal indeed for industry, workers and the economy.
The Irish economy which has in the past been so dependent on imported oil is particularly vulnerable to the kind of disturbances in the oil market that we have witnessed in 1973-74 and in 1979. Coherent planning and decisive action, such as was taken recently in the petrol tankers dispute, can significantly reduce the damage caused to the economy by disturbances in energy markets.
: Is that the army in Saudi Arabia?
: I know the Deputy may not have welcomed what happened.
: I did not say that.
: I know the Deputy did not say that, he was very careful not to, but he is implying it. He is welcome to his opinion but the fact is that that kind of approach I have tried to demonstrate is being applied to the field of energy generally and it is very important, as I indicated, not just for the sake of industry and workers employed in industry but for the sake of our economy generally, that this should be done. I did promise early on that I would, if I had time, revert to certain other matters which had been touched on by Deputy Horgan and indeed by others. I heard Deputy Garrett FitzGerald yesterday dealing with some matters on which I want to comment.
The Government elected in 1977 set the standard by which future Irish Governments, of whatever party, would be judged. The success of our efforts to create jobs was such that many people took it for granted that almost everyone who wanted a job could get one. In reality, however, nothing like this had ever been seen before in our history. Strenuous efforts have been made since then, and indeed repeated in this debate, by Deputy Garrett FitzGerald yesterday and by Deputy Horgan today to propagate two myths about the job creation programme initiated following the general election of 1977. The first myth is that most of the jobs created were in the public sector, with the implication that they were useless, non-productive jobs. The truth is, and the record shows this, that the bulk of those jobs were created in the private sector and that, of those created in the public sector, many were in such fields as telecommunications, which are vital for the development of both public and private sectors.
The second myth is that Fianna Fáil made irresponsible promises to get back to office in 1977 and that this is the cause of the difficulties we face today. Those who make this charge conveniently ignore facts such as the reference on page 6 of our manifesto—"pay rises of about 5 per cent"——
: That was not in the newspaper advertisements.
: ——which was teased out in great detail during that election campaign. If the Deputy is unable to remember that, perhaps I could jog his memory by reminding him that this particular item was latched on to very quickly, not only by political commentators but, and fairly, by our political opponents who thought they were on to a good thing. Here was an Opposition party talking about pay rises of 5 per cent.
: That was the norm in those days, that has been forgotten.
: I am afraid the Deputy's memory is very truncated. Does the Deputy remember now what the rate of inflation was at that time? It was in the region of 15 per cent. It had come down. In that context, to talk about increases of 5 per cent was something, I suggest, no other political party in this country would attempt to do.
: We achieved that in 1976 and 1977.
: The Minister without interruption, please.
: Is there any other political party who would attempt it? Try to reconcile that with this image which is now being put across of irresponsible promises designed to lure the people to vote for them, not caring where the money came from. That is the picture which is tried to be put across, but the facts are different. I know people do not like to be confused with the facts and to be reminded of the facts, but they are different. It is important for the sake of future politics here that the facts should not be completely swept under the carpet.
The people who try to propagate this myth are obliged in order to do so to pretend that our economy was unaffected by the massive increase in oil prices and the worldwide wave of inflation which it caused. Of course that is demonstrably untrue. They would have people believe that these things had no impact on the level of our spending and our borrowing. They try to pretend that what Fianna Fáil proposed in their election manifesto was inherently something which would produce the figures of borrowing and spending which were produced by what happened to the price of our energy. I dealt with this earlier to illustrate the kind of impact it made on our economy.
It is important to realise that, in order to put across the image I have mentioned, it is necessary for those who are doing so to engage in a number of pieces of deception, whether self-deception or otherwise I am not quite sure. It may be different in different cases. Quite apart from this abandonment of reality in which the critics have to engage, there is one fundamental question such people must answer. Do they say we should not have created the jobs we did? I should like people to think about that. I should like to address this question to Deputy FitzGerald who criticised as yesterday on this, and not for the first time, and to Deputy Horgan who did so today and, indeed, to any other Deputy who proposes to participate in this debate. Before he or she launches forth on this criticism about the irresponsibility of Fianna Fáil and what we are alleged to have done to our finances in 1977 and subsequently, would he or she please consider and then answer the question? Is he or she saying we should not have created the jobs we did? Unless people are saying that, they are dishonest in their criticisms. If they are saying that, I would be quite happy to argue with them the rightness of our commitment to job creation.
An additional what I suppose one might call sub-paragraph in this myth which is sought to be put across from the benches opposite and, indeed, by some commentators who perhaps should know better is that, if we had applied no stimulus to the economy in 1977 and 1978, the economy was correcting itself. Deputy O'Donohue dealt with that last night, but it is worth recalling again that the facts are different from the myth which is sought to be propagated. The facts show that, if we had not given the stimulation we did, there would have been virtually no net increase in employment.
: There has not been. It has got worse.
: I did not think it would be necessary for Deputy Kelly but obviously it is necessary to point out that what I have been talking about is the kind of performance by the Government in what might be called more or less normal economic circumstances. Of course we are not in normal economic circumstances today. As I have said, the standards set by the Government elected in 1977 are the ones by which future Governments of whatever party will be judged. Those standards relate primarily to the performance in job creation. If we are to be told by Deputies opposite—which is what we are being told although it is not being put this way—that we should not have created those jobs, people have to come to the conclusion, perhaps not for the first time, that the parties opposite, whatever other qualities they may have, have not got the quality of being able to tackle the essential and major problems facing our people.
Unless we can provide work here at home for our young people and our growing population of young people, we are a failure as political parties; we are irrelevant to the future of this country; and this institution in which we sit today will become irrelevant. I do not believe we should allow that situation to develop. I do not believe the ultra orthodox economic views being propounded by some people, including people on the Labour benches, and which we have been hearing for quite some years, are correct economically. One of the problems about economics is that so many experts have totally different and diametrically opposed views on the correct course. I do not think economics have any real value other than in so far as they advance the general situation of our people. I suggest that the approach which was put forward to the people and implemented by the Government elected in 1977 demonstrably improved the situation of our people.
To argue that the undoubtedly difficult problems which arose in regard to the level of borrowing and public spending, and the size of the deficit in the current budget, arose primarily because of the policies being pursued by the Government, and to ignore the impact of the massive increase in oil prices and the massive inflation worldwide and deflation in economies worldwide, is simply to distort reality. Perhaps it is tempting to do this for party political purposes, but it is not healthy for the future development of our economy to confuse the issue in that way and to mislead people in that way.
It is true, of course, that any Government faced with the massive increase in world inflation, and in the price of oil on which we are so dependent, have to adjust policies. This has had to be done, but it is not true that those who are now preaching the doctrine of virtual monetarism can claim that they have the answers to our problems. Demonstrably they have not. This is not merely a question of theory. One can look at what happened to the economy when they were in power. They do not have the answer. So far as borrowing is concerned, of course, there is a definite constraint on this. Of course we cannot view with equanimity the use of so much of our current income simply on servicing debt. That is perfectly true but, on the other hand, the real test—subject to the overall constraint of whether one can pay back or not—of whether borrowing is justified is what one does with the money.
I suggest that what was done with the money borrowed by the Government elected in 1977 was the best use that could be made of it, namely, the creation of jobs. The kind of criticism to which any Government, including this Government, should be subjected is whether the borrowing in which they engage, or the bulk of it, is being spent on unproductive purposes, as was the major criticism we made when we were in Opposition at the time of the previous oil crisis. The major criticism we made of the Coalition Government and their borrowing—and we should remember that their borrowing was totally unprecedented—was that there was virtually nothing to show for that borrowing.
I believe that the overall economic situation in which we find ourselves is difficult but it can be tackled successfully. Obviously there are constraints to which we will be subjected while the world economy is in difficulty but the whole stance of the Government has to be one that is governed by an expansionary approach, expansionary in the sense of trying to create more jobs and protect existing jobs as far as possible. Recognising the limitations that apply at the moment, one has to be geared up to take advantage of any possibilities that will arise in the future.
I am not by any means advocating a disregard of the constraints which apply themselves automatically to excessive borrowing and excessive spending but I am advocating that we should not allow ourselves to be governed in our approach to the economy by the tenets of monetarism—even if they could be shown to be correct and to work and certainly that has not been shown nor do I believe can be shown—because the primary purpose of economic policy should be the advancement of our people. Even if monetarism were successful, in our circumstances of a growing population and high unemployment it would not do that.
For that reason we should bear in mind that it was demonstrated after the 1977 election what could be done. Whatever the economic difficulties around us, we know now that an Irish Government can achieve what was achieved at that time. Therefore, all our efforts should be geared to re-establishing that situation as fast as economic circumstances at home and abroad will allow.
: I think the Minister will agree, and his longer experience will confirm, that as a rule politicians allow their card to be marked by economists. They tend to find a clipping in the newspaper favourable to a prejudice of their own and they rush in here and brandish it. A curious situation has developed in regard to the matter under dispute, namely, that far from having our cards marked by the economists and independent commentators one could be very tempted to the self-flattering conclusion that exactly the opposite has happened in the past three years.
I have noticed during that period that although our message from this side of the House has been a very simple one and has always been the same one, it is only in recent times that it has been taken up in almost the same words by outside, independent commentators. I do not flatter myself that any of the commentators in the press, in the ESRI or in the banks regard me as a monument of skill and judgment in this field but at the same time, I find it uncanny that headlines are appearing regularly over their reports that almost look as though they were lifted out of speeches made by me, by Deputy Barry or by Deputy FitzGerald any time in the past three years.
Every politician has an eye to his own coverage. As a rule I find that a scripted speech on the economy containing many percentage figures and decimal points if it is printed at all—unless it is a very poor day—will be printed in a heavily abridged form and will be pushed on to page 17 alongside advertisements for agricultural machinery and tents for hire. If you want real coverage you must say something about a "hot" subject, such as the North or something that consists of personal abuse. That guarantees immediate, automatic coverage but subjects dealing with bread and butter issues, the nuts and bolts of the economy, do not get that coverage. They are not "hot" subjects or they are not perceived as such by the press and by the people. Therefore, a person could put out scripts—I do not just mean election-time scripts that are transparent—that genuinely correspond to a speech made on the economy until he was blue in the face and he might never see such speeches getting through to the people.
A simple example of that was in The Irish Times of yesterday's date where a gigantic headline surmounted an article by their economics correspondent on the level of the national debt and on the level of debt servicing which that required. He computed that as running away with 25p in every £ of revenue collected. My own calculation was nearer to 27p but whether it is 25p or 27p we on this side of the House, and myself in particular, have repeatedly called attention to this feature. I have repeatedly called attention to this in speeches made here and outside but I had to wait for an outside commentator to feel suddenly in his gut the conviction that it was of some importance before it surfaced in that form.
I am not making any complaint about that. I hope nobody thinks I am whingeing about coverage or about the way the press do their job. Far from it. In a general way I have no complaints at all on that score but I say it is uncanny that suddenly in the second half of 1980 economic commentators are surfacing like bubbles in a pond and the message delivered is the same as that we have been enunciating here and outside since 1977.
I am sorry the Tánaiste had to leave because I want to take up and meet head on a point that he made here a few minutes ago. Essentially, our message is that the economy was visibly on the mend from the end of 1975 onwards. In that black year I had a fair amount of free time because while the post of Government Whip is hectic at times Mondays and Fridays are fairly clear and I used to spend those days closely scanning economic indicators. It was quite evident to me, and to everybody else on our side, that from about the end of 1975 these indicators were showing an upward turn. From about that time onwards the number of new car registrations was rising and the unemployment figures, although still appalling, were coming down, inflation was moderating, the balance of trade was improving and the level of State indebtedness was being sharply reduced by Deputy Ryan who put up with and manfully absorbed more unjustified abuse than I ever remember a Minister for Finance accepting. It may be that former Deputy McEntee took abuse of that kind because I remember he was a favourite punchball for critics when I was a student; but since that time nobody has come in for so much unjustified abuse.
Those indicators, for which thanks have to be given to the Government of which Deputy Ryan was Minister for Finance, were showing positive signs from about the end of 1975. In 1976 those signs became very strongly positive. We realised the people were having a hard time; we were having a hard time ourselves. There was not one of us who was not worse off financially by having a job in Government as Minister or Minister of State than if we had had a job in the outside world. We were not codding ourselves that the people were bleating without reason. We never flattered ourselves that that was so.
The solid indicators showing that the recession had bottomed out—to use a favourite expression of Senator Keating—and that the economy was coming right were visible a full 20 months before the general election. That was why the Government reduced the level of public borrowing, which was unsustainable—we did not dream, even in a nightmare, that it would reach the level we now see— and why the burst of public expenditure—and I include in public expenditure the remissions of taxation which excite private expenditure and have a certain encouraging and promotional effect on economic mechanisms—at the latter end of 1977 and 1978 set in motion by the Fianna Fáil Government in response to their election promises, was unnecessary and damaging. We were told in 1977 and 1978 that what we were saying was sour grapes, that the people were doing well, were high on the hog, delighted with themselves and we were bleating about a lost election.
Two years on what do we find? That same message, almost in our own words, is coming through from the Economic and Social Research Institute, from the newspaper economic commentators and from the people who write the bank reports. The Irish Times, Business and Finance page on 29 and 30 September last published two much-quoted articles written by Dr. Brendan Walsh and Dr. Colm McCarthy of the Economic and Social Research Institute. I will briefly quote from the first article:
An air of unreality pervades some recent pronouncements on the state of the Irish economy. The conclusion of a UK agreement, the moderation of the trade deficit and the recovery in the level of gross foreign exchange reserves may have given the impression that the underlying economic situation has improved since the budget. This in turn may have raised hopes that a reflationary fiscal stance is now appropriate. In fact the condition of the public finances is worse than was predicted in the budget speech, the improvement in the trade deficit is slight and may be temporary, while the increase in reserves is less than the increase in official foreign debt.
... But the actual situation is much worse than it would have been if the manifesto targets had been adhered to ....
This borrowing spree has been financed externally to an extent that has serious implications for Ireland's external debt and for its creditworthiness.
That spree became necessary because of the election promises made by Fianna Fáil and which they naturally had to meet on being elected. It would not have been necessary if the public finances had not been run down by the remission of various forms of taxation purely to buy votes. I am sorry if there is an element of political prejudice here; but I see the most direct possible connection between the billions of yen and the millions of marks we had to borrow and the hand-outs the 1977 election called for. This must be the twentieth time I have said this; but it is only now beginning to surface among independent commentators. I will now quote further from Dr. Walsh and Dr. McCarthy:
The build-up of foreign debt also raises doubt about the punt's apparently strong showing within the EMS. When the current account of the balance of payments is deeply in deficit, a strong exchange rate performance financed by foreign borrowing is artificial and does not reflect underlying market forces. Such apparent strength cannot be maintained indefinitely.
That was a very prescient observation. If they had published their article four weeks later they would have been able to add the performance of the Irish pound over the last week to their data. The article continued:
The main reason for our concern about Irish public finances is our fear that the current political atmosphere may preclude the kind of action that is needed to stave off a precipitate financial crunch.
That is not a member of Fine Gael or the Labour Party speaking. I do not know the politics of these gentlemen, and I do not care what their politics are, but no one has ever alleged they are not absolutely competent, capable and, above all, independent commentators. The Irish Banking Review quarterly, September 1980 said, and I do not know who wrote this article:
The pursuance of a policy of incurring current budgetary deficits in each of the past seven years, even in years when the economy was experiencing relatively favourable growth—
That was in 1977 and 1978
—has greatly limited the capacity to react to current high unemployment by stimulatory spending programmes in the public sector. Such policies are meant to operate in a contra-cyclical fashion by providing a stimulus to demand when the economy is weak and, similarly, playing a smaller role when demand in the private sector is strong.
In the Republic, in the past oil-troubled seven years, public fiscal policy has not been conducted with the necessary refinement and discretion in reaction to changes in the general economic climate. The accummulated deficits and borrowings have been allowed to rise to a point where moderation of the trends of recent years is urgently required.
To point out how dramatic and quick this change has been let me revert to the figure I mentioned, which occupied the headline in yesterday's The Irish Times, of 25p in the revenue pound being needed to pay the interest on our debt. I think the figure is 27p, but whichever is right, the figure in the last year for which the National Coalition were responsible was 21p. If I am right, in three years that proportion has jumped by 30 per cent and an extra 6p in the revenue pound is being posted out of the country in the form of interest on State borrowing. That means 6p less in the pound for productive investment and job creation the Tánaiste was talking about.
On 11 October 1980The Irish Times published a speech by Senator Whitaker made at Westport, County Mayo, the previous evening. Since Senator Whitaker is, by common consent, the father of Irish economic planning and was the architect of the change of industrial policy and the national psychology, almost, at the end of the fifties and the early sixties, I think his views are entitled to be listened to with respect. I admire Senator Whitaker very much. The fact that he was appointed a Senator by Deputy Lynch I take to have been then a genuine tribute by Deputy Lynch to a man whose political allegiance he was never planning to buy.
I am not making any particular point about his being a Taoiseach's nominee. The Senator is an absolutely independentminded man and I am very glad that he is in public life. As reported in The Irish Times of 11 October, Senator Whitaker, speaking about the national understanding, said that “it will not make us more competitive unless there is a quite abnormal increase in productivity” and that “this tends to occur only when there is a strong upsurge in demand”. The Senator went on to say that “we have not left ourselves any room for attempting to spend our way out of the recession”. That is what I have been saying during the past three years. It would be insulting to the Senator for me even to hint that he was taking his tone from speeches made from these benches or from the Labour Party benches; but it is like a dream to me that I wrote that myself. The Senator went on to say that:
Unbridled inflation would merely store up worse trouble for the not-too-distant future.
In other words, he is saying what has been said in the Irish Banking Review about there being no scope for the operation of the counter cyclical reflation which would have been possible if the Government had resources and not flung money away for votes. The report in The Irish Times continued:
In Senator Whitaker's view, the Irish economy is suffering the full effects of the current international recession because "resources were over-used here during the last few years when we ran the boat's engine at full throttle even though the current was with us".
Even in the good years prior to the current recession, we were devouring the seed-corn by drawing down our external reserves and borrowing abroad to boost an already-high level of private consumption.
The good years were those prior to the recession, the years 1977-1978. The Coalition must take the credit for those good years just as they would have to take the blame had they been bad years. The report continues:
Now that the economic tide has turned against us "we are in the uncomfortable position, having used up our spare fuel, of being forced back by the current".
I must confess that I had not thought of that elegant figure of speech, but it expresses exactly what has been said from these benches since 1977.
I should like to give the House a concrete expression of what I am saying about the relationship between election promises. Government borrowing and the situation in which we find ourselves now, that is, that when the reflation is needed badly the Government have their back to the wall. With the Irish economy in a weak position, we are in the worst possible position to apply the type of measure which Deputy Ryan, as Minister for Finance, applied in 1976.
Let us consider merely one item in the Fianna Fáil election promises. I refer to the remission of motor taxation on vehicles below 16 horse power. In September 1977 there were some 545,000 private motor cars in that category. In 1979 that figure had risen to 640,000. While I do not have the figure for 1978 I am splitting the difference and assuming that the figure then was half way up that climb. I am assuming also that the difference between the then £5 registration fee and what would have been collected in motor taxation would have been £50, give or take a few pounds either way, depending on car size. I have calculated on this basis that in the year 1977-78 the Government threw away £27.25 million in terms of uncollected motor tax. That is the amount that would have been collected had the tax not been abolished—and it was abolished in the absence of any demand for such a move. There were complaints from time to time that the rate of taxation should have been related to engine capacity, for instance, rather then to horse power; but the principle of motor taxation had never been assailed and it would never have occurred to anyone to assail it until the buzzing brainpans of Senator Ryan and Deputy Donoghue and those who helped them decided suddenly that such a move would bring in a good deal of votes. Undoubtedly that action brought in a lot of votes, but at a cost of £27.25 million. This figure for 1978, calculated on the same basis, would have been £29.5 million while in the year 1979-80 it would have been £32.037 million. That makes a grand total of about £88 million thrown away in three years on that one item of taxation.
In addition, there was the over-hasty abolition of rates on private dwellings. We had been planning to phase out these rates. Indeed, we had already phased them out by one-quarter and the remaining three-quarters were due to be phased out in the following two-and-a-half years. I have not calculated what was lost as a result of the immediate abolition of these rates. Neither have I counted what was lost by way of wealth tax or capital gains tax, of which virtually 80 per cent disappeared. Neither have I counted what was lost by way of income tax remissions. I have concentrated solely on the loss in terms of motor taxation. That was £88 million in three years, but since we are now three-and-a-half years on the up-to-date figure should be about £105 million. One can reasonably increase the figure on the assumption that the rates of motor taxation would have been increased as they were increased regularly in the normal way and also on the observation that money in 1977 was worth more than it was in 1978, that in 1978 it was worth more than it was worth in 1979, and that in 1979 it was worth more then it is worth now. The pound which Deputy Haughey inherited here on 6 December is worth now, in terms of our major trading partner, 82p and about the same in terms of our cost-of-living index. The Taoiseach has managed to knock 18p off our pound whether we are talking in terms of dealing in Irish goods and services or of the products which we must import from our major trading partner. That figure could be increased to allow for both these factors; so that approximately £150 million has disappeared from the public purse in the past three-and-a-half years in consequence of that single election promise on motor taxation. That is a lot of money, money which would not be despised even in an industrial development budget. It is money which would have paid for many of the services which are now being curtailed and which would have rendered unnecessary the abolition of, for instance, house improvement grants.
I am sorry if I am boring the House with this message, but it is a message that must be put across to the people. As was said here yesterday, the Government that will be formed after the next election will find themselves with many ugly and hard choices to make. I suspect that as soon as the Donegal by-election is over we shall witness some sign of these harsh decisions. However, without being forced to opt for an even more inflationary counter-cyclical treatment, which could be financed only by increased foreign borrowing or by the reimposition of tax rates at a level and with a suddeness which would probably be very damaging to the economy, administering a shock that it could not take, without giving my view as to what the correct course on that might be I wish to say to the House that the main failure of this Government has been their failure to appreciate the fact that intensive care treatment of the economy by way of heavy foreign borrowing, or by way of whatever year to year mechanism one may choose, fails to solve the underlying problems facing the economy. In terms of their main failure what I have been talking about for the past 15 minutes is relatively minor. The year to year mechanism chosen to deal with the situation fails to insulate the economy against its vulnerability to outside forces. It is not possible permanently and fully to insulate any economy but we have been able to identify our weaknesses. Politicians on all sides are tired of repeating time and again what these weaknesses are, but there has not been anything basically done to deal with any of these problems. There had not been applied any psychological discipline. It might not be any harm to condition the people to fairly substantial changes in the way we operate here. It might not be any harm to apply some discipline and to take a few decisions of a kind that would make sense to the people though they might feel the brunt of them painfully.
In Volume 310 of the Official Report for 13 December 1978 the then Minister for Health, Deputy Haughey, spoke on the EMS and in his whole contribution, which covers about ten columns, there is not one word of praise or of encouragement for the Government of which he was a member and there is not one word which could have implied a sense of solidarity with the Government. From that point of view it was a curious contribution. Deputy Haughey said:
Confining ourselves strictly to that theory, we must admit that our economy is doing very badly.
Deputy Haughey was referring to the comparison between our economic levels and that of our neighbours. Deputy Haughey spoke very late in the evening and his comments were not noted by the press. That finger pointing at Deputy Lynch and Deputy O'Donoghue was not picked up by the press. Having observed that the economy which had been in the charge of his own party for 18 months was doing very badly Deputy Haughey went on to give his long-term recipe for the economy and it is as follows as reported at column 1510 of the Official Report:
There is one factor which everybody must accept plays a major part in this situation. One factor more than any other, or at least in direct line with others, contributes to our low level of economic achievement. That factor is the level, the appropriateness and the suitability of our infrastructure. I suggest it would be generally accepted that the inadequacy of our infrastructure, our roads, telephones, technical education, transport and all these things which for convenience are put under the generic title of "infrastructure," is a major factor in our not being able to reach much higher levels of output. This is the major impediment preventing Irish industry, agriculture and commerce from performing in the way they might otherwise perform. I do not think they can be expected to function in the inadequate infrastructural environment we have today.
Deputy Haughey then referred to the amount of money that the Government were putting into roads and telephones and said that it was quite inadequate.
What have we seen in the way of conditioning the people, of a changed psychology, of a changed atmosphere of Government, of a different approach to Government mechanisms? What have we seen over the last ten months which could make us feel that the Taoiseach or the Government had any clue about putting into practice the lessons which the Taoiseach as Minister for Health was able to give to the House? What has been done about roads and telephones? It is notorious that the roads are worse than they have ever been. What has been done about technical training? We are always hearing about it and about the fact that employers cannot find enough computer operators or programmers and that if they want anybody to operate a machine at anything above the level of turning a screw they have to send to England for someone. One only has to open a paper on a Friday or Saturday to see hundreds of skilled technical jobs going abegging, not upper management jobs but skilled technical jobs, while we have 105,000 people on the unemployment register. What is being done about that? What is being done about providing a permanent system of inducements in order to achieve a higher output of engineers for example? What is being done to encourage the universities and third level institutions to remit fees altogether in the engineering faculty? I would not regard that as discrimination. Of course, if I were a parent whose children wanted to become lawyers and so on I might envy in a mild way the aspiring engineer who got this third level education for nothing, but that is what national leadership is about. We need engineers and computer operators and programmers and if we cannot get them by ordinary salary inducements we must get them some other way.
The speech from which I have just quoted actually mentions technical education. What has been done over the last ten months to solve that structural flaw in our system or to condition people away from white collar desk jobs? The French do not think it beneath their dignity to do that. When I was in Paris I saw in every underground station advertisements to the effect that "blue is beautiful". They did not put it as crudely as that, but essentially the message was that there is no need to assume that only white collar jobs are socially respectable. The only reason we deem it crude to do that is because the English do not do it. There is no reason why we should not pick a leaf from the French book and follow their example.
What is being done about language training or the level of language competence here? The last manager of CTT for the German market, which is our most important European market, said that the level of competence in European languages among Irish exporters is lamentable. Not one in a hundred can speak adequate German or French let alone Dutch or Italian. What is being done about that and in regard to the leaving certificate syllabus, the training of teachers, in regard to inducements and even compulsions to produce results there?
I will invite a smile from the House if I mention Chinese, Japanese or Arabic, but it is not a joke. Those are the languages spoken by gigantic proportions of the world population. What is being done to get us to a level where some of our people will be able to meet these people on their own terms without relying on their use of English? It is all right for the Japanese and Chinese to learn English, but apparently it is not all right for us to do the same for them. Any country like ours that depends increasingly on high grade industrial exports in a world which is full of countries which have enormous potential markets should direct education in such a way so that we will have enough people to fulfil these requirements. We are doing nothing, nor was there any sign of action in the last ten months which was supposed to be the millennium.
What is being done about industrial relations, another structural problem? The Taoiseach promised legislation on that but he backed off just like he has backed off everything else. I am not an advocate of any particular legislation but the proposals made by our party in Deputy Mitchell's document some months ago would represent, if put into practice, a very considerable advance on our present situation.
I hope I will not be misunderstood because like every other citizen I very much admired the Army's performance in the recent petrol dispute and I support everything that the Tánaiste said by way of praise for the Army, the Garda and the officials of his Department, but we would be a very foolish people if we expected the Army to pull us out of these industrial problems indefinitely. We cannot rely on the Army indefinitely. This did not get much coverage although it is highly relevant to the recent dispute, until the Tánaiste made certain that it was highlighted but it appears that there is certain evidence which would lead the average citizen to assume that a certain subversive intent was at work. If that is so we can be sure that the same subversive element is already at work trying to undermine the willingness of the Army to do menial jobs of this kind at a time of national emergency. I have no doubt that the Army, from the Chief of Staff down to the most recent recruit are rightly proud of the job they did in the petrol dispute. However, as a people we would be crazy if we supposed that we can in the indefinite future rely on the Army to shift petrol, to shift refuse, or to do any other job which our lamentable industrial relations leave undone.
What is being done on incomes policy? What is being done about creating an atmosphere of equity so that we will get reasonable wage settlements and so that our competitiveness is not going to be destroyed? We have heard a lot about cost-competitiveness and the importance of not pricing ourselves out of markets. I do not need to underline the relevance of that to the national pay agreement. The Tánaiste when referring to national pay agreements reminded us of the small print in his party's manifesto, in which it was stated that Fianna Fáil promises were conditional on a 5 per cent rate of wage increase. In retrospect, that was pretty ridiculous because settlements now, when slippage is taken into account, tend to be more like 15 per cent. I interrupted the Tánaiste to point out that 5 per cent in previous years was pretty well the norm. I should like to remind him of the wage settlements which the National Coalition presided over in 1976 and 1977. On 16 September 1976 a national wage agreement was ratified for a seven-month period amounting to a 3 per cent increase of basic pay, plus £2 per week, subject to a maximum of £5 per week or £3 per week if greater. On 23 February 1977 a further agreement was ratified for a duration of 14 months. Under that agreement the first phase was for 2½ per cent of basic pay, plus £1, subject to a minimum increase of £2 or a maximum of £4.13. Phase 2 of that agreement, from 1 September 1977 to 31 December of that year, was similar. They are like dreamland figures now. Nobody thinks in terms of 2½ per cent or 3 per cent, even for a fraction of a year. There was nothing strange or eccentric about the 5 per cent figure in the Fianna Fáil manifesto, because that was at that time more or less the norm.
Who has destroyed that? Who has destroyed the psychological climate in which such a norm was possible? It was possible for the National Coalition. I do not stand over every line of the wealth tax, introduced by the National Coalition, perhaps it should have been amended, perhaps the threshold at which it began should have been higher, and, above all, perhaps we might have sold it more skilfully. However, the principle I still believe in. Even if it was wrong it created the impression among people who do not have anything, among people where there are three generations of a family living in the same three-bedroomed house, people who cannot get a job, people whose children sit in overcrowded schools and will in 50 years' time be in the same dead-end situation they are now in, that there was a Government who were trying to achieve something like equity. It created the impression that the Government were trying to be fair to all sides.
That atmosphere, together with measures we were able to take because we had the money to do so, such as the application of food subsidies and the remission of VAT rates, ensured wage agreements in 1976 and 1977 which Deputy O'Donoghue had the honesty and the manliness to admit were the foundation of the recovery of 1977 and 1978. Deputy O'Donoghue admitted that in the Bulletin of the Department of Foreign Affairs, and I respect him for that. We paid a heavy price for laying that foundation, we climbed out of that foundation 12 seats short in this party and a couple in the Labour Party. The benefit of that settlement was reaped by the people in 1977 and 1978, and has only been dissipated because in order to get Fianna Fáil into power promises were made the fulfilment of which has left them fiscally in a hopeless position from the point of view of meeting this round of recession.
What has been done about some long-term policy on public sector employment? I never enunciated the myth the Tánaiste was complaining about, that the only job creation was in the public sector. I am aware that it was not. There was an enhanced effort by the IDA. Our Government never stinted the IDA and their efforts, even in the depths of recession, were always spectacular. I freely admit that the performance of the IDA has been excellent over the last couple of years. I must say that the Minister for Industry, Commerce and Tourism, Deputy O'Malley, has always been active in giving that body every possible support and he cannot be faulted on that score. I admit that the performance of the IDA was superb, but the public sector at the same time has got out of hand in its numbers. In the two-and-a-half years after we left office the non-industrial civil servants—I am not talking about people who lay telephone cables—increased by 5,500 people. How can that be right? I am not criticising the public service, naturally. I hope I will not be misunderstood on that score. The last time I made a speech about this I got an anonymous letter from a person who said he was a public servant telling me I was a disgrace criticising them, that their only "perk" was the fact that they were permanent. The writer of that letter felt that could not be rated very highly, although many people would rate it highly. There is no long-term policy about making sure that we have the right number of people in the public service, and about making sure that we are getting value out of the way the civil service is organised and run. That is also part of the infrastructure situation we are up against, because the public service has to be paid for and it is running away with more than half of what the State takes in in revenue.
What is being done about the encouragement of self-reliance, about the encouragement of the co-operative movement, about the encouragement of voluntary effort? What is being done in terms of tax relief towards the encouragement and inducement of voluntary effort?
What is being done in regard to energy policy? The Tánaiste has been making the right noises since he became Minister for Energy, but when I look behind the noises I do not see a lot. There are measures which will be uncomfortable and disagreeable to apply which should be considered. They will have to be applied sooner or later in order to meet this energy ogre which is hanging over us all the time.
I have enumerated eight infrastructural problems not one of which has been approached or confronted by the Government. I have referred to the communications infrastructure, the training infrastructure, language training—in other words, a broader educational infrastructure—industrial relations, incomes policy, public sector employment, the encouragement of self-reliance, and the trying to hand back to the people part of the load the State has taken on itself and energy policies. There are probably other fields where one can say nothing fundamental has been done, but those bitter problems will have to be faced even after the economy has undergone intensive care treatment of the type that is looming up fast. That treatment will only get us over the worst of the immediate recession, and it will do that only at the cost of a lot of pain to people. The long-term vulnerability is much more serious.
I do not accept that this oil induced crisis is spectacularly different from the one we faced in 1974. One rough guide I thought up and applied is to measure the cost of oil imports as a proportion of total imports. In 1975, our worst year in that respect, oil imports roughly represented 13.2 per cent. In the first five months of 1980 oil imports represented almost the same figure, 13.6 per cent, of total imports. It is possible that that figure has increased since then because, with the deepening recession, import demand has slackened for capital commodities and not so much for oil. However, as the economists say, it is still a figure of the same order as we had to contend with in 1975. I do not accept, therefore, that there is any spectacular difference in the Government's favour between conditions today and those which existed five years ago. In fact, we have slipped back very seriously through the extension of the national debt and the encouragement of quite insane expectations among our people in response to election promises, and the failure to confront the structural problems I have detailed in the course of my contribution.
: I should first like to review some of our recent industrial history and to make some comments on the present situation in which we find ourselves in terms of industry, investment and employment.
Ireland's entry into the EEC in 1973 was the single most significant step for the Irish economy in the seventies. In the industrial area the jump in foreign investment attracted by the opportunity to produce within the tariff barriers of the EEC was dramatic. This investment has been the main thrust of our industrial expansion since then. A firm invests in the hope of earning a high rate of return. If the climate for earning and retaining profits is good investment will expand. Successive Governments have recognised these basic principles which would encourage the private sector to play a major part in the expansion of our industry. Our basic philosophy has been to encourage the private sector to provide this thrust for the expansion of industry. Government policy first formulated in the fifties by Fianna Fáil and continued by successive Governments since then set out to create the environment necessary to implement this philosophy. It is aimed to improve access to export markets and to provide a favourable business environment. In this way firms were and are encouraged to invest, to export and to make and retain profits for further expansion.
Growth in investment is essential if output is to increase. High output in industry leads to both productivity and employment gains. Growth in productivity improves the company's competitiveness and facilitates higher living standards for its employees while the provision of new employment fulfils a basic national need. In Ireland manufacturing industry has been the engine of economic growth in recent years. In the period mid-1977 to March 1980—which is the latest period for which official statistics are available—the number at work in manufacturing rose by 16,000. It is worth comparing this impressive outcome with the fall in manufacturing employment in the preceding four and a half years. Job creation is the principal objective of our industrial development drive. At this stage much of the real struggle for a secure industrial base is behind us. Looking back at the structure of industry in the fifties and sixties I sometimes shudder now at its weakness then in so many aspects. Today we have the fastest growing industrial sector in the EEC: our growth in output and investment and jobs is faster than in any of our EEC neighbours. This growth has taken place in a free market economy which offers positive incentives for expansion and job creation. While the next ten years will present many challenges and problems for Irish industry I believe they will be somewhat easier than the past decade in one major respect, in the sense that we now know what we have achieved. We know that we can measure up in many sectors to the highest international standards.
Irish industry today is better able to withstand adverse conditions than it was at the beginning of the last recession in 1974-75. Then the impact of free trade coupled with the effects of the general slow down resulted in many closures particularly in the older traditional industries. Since then the IDA have worked to strengthen Irish industry and assist it in weathering harsh new conditions. The industries that have survived through the last recession are now stronger and more competitive than they were six years ago. This is borne out by the indications during the current difficult period. A higher than average proportion of job losses are resulting from firms shedding labour rather than closing down. During the last recession 30 per cent of job losses were attributable to closures compared with a figure of 15 per cent this time. A higher proportion of the jobs lost during the current recession will therefore be regained when trading conditions improve.
In this regard, despite the current slow down, the IDA's experience in negotiating new industrial projects and in generating first-time jobs on the ground is highly encouraging. Last year was a record for this country. In 1980 it is expected that the IDA will again exceed their target. In the first six months of this year they created 8,500 new first-time jobs on the ground which is 63 per cent of the full years' target. They confidently expect to repeat this performance during the second half of this year. The level of job approvals— as opposed to job creation which I have just spoken about—which is the most positive indicator of the rate of future manufacturing job creation is also very encouraging in this exceptionally difficult year. By the middle of the year, 30 June, the IDA had achieved 71 per cent of its total, overall annual target of job approvals. SFADCo, through its intensive promotion of small indigenous industries in the mid-west and the attraction of new or the expansion of existing projects in the Shannon Industrial Estate will also make a worth-while contribution to the overall national job approvals and creation effort.
Our current export performance has also many gratifying features. In the eight months ending 31 August 1980 the total value of exports was £2,638.6 million which is more than 20 per cent greater than in the corresponding period of 1979 and which I regard as a highly praiseworthy achievement especially when viewed against the background of deteriorating international trade conditions resulting from the world recession. It is now estimated that total exports for 1980 will amount to at least £4.2 billion, an increase of almost 21 per cent on 1979. General indications, together with information available to Córas Tráchtála directly from exporting industry, suggests that this figure will in fact be achieved.
In sharp contrast with the 1974-75 recession when manufacturing output fell in four consecutive quarters, output in the first half of this year, despite a dip in June, is up 2 per cent on the first six months of 1979. At a time when the trend of industrial production in the European Community is universally downwards Irish output is still expected to be higher for the year as a whole in comparison with 1979.
All these results constitute an impressive record by any standard at a time like this. They do not come about by chance; they are the fruits of deliberate policies and of very hard work and of a most professional approach by various agencies. I believe they set a pattern for continuing real growth in industry in the years ahead. There is no question in my mind that we have the resources to make this happen if we want to. We have a high degree of political stability, something which I suppose we take for granted but which is a more precious commodity than perhaps we realise. Our people have a clear sense of identity and they now have self-confidence which is greatly strengthened by the experience of the last 20 years, a period in which manufacturing industry here grew annually by 6 per cent in real terms. We now have had consistency of industrial development policy for over two decades and this also is a matter we may take for granted somewhat but it is of fundamental importance particularly in reassuring potential investors.
We have successful and dynamic promotional enterprises and an attractive and developed range of incentive programmes without parallel in Europe. We have some of the most modern plant in Western Europe, arising from the fact that our drive for industrialisation is less than 25 years old. Our skills are not inhibited by hide-bound tradition, and our industry is increasingly oriented towards sectors of long-term growth.
Finally, and perhaps most significantly, for the first time in the history of this country there is available a substantial group of Irish managers capable of competing with the best in the world. This, I believe, may be our greatest resource, and it is one that has only become available to the Irish economy in very recent years. In the 1950s and earlier the enterprising Irishman too often went abroad out of necessity and was lost forever to us, but the Irish emigrants of the 1960s have begun to come back bringing with them the skills, experience and vision acquired in their years abroad.
I am particularly pleased to see the growth of this last factor—the emergence of high quality native Irish managers and entrepreneurs. I believe this is the way of the future and that the 1980s and 1990s will increasingly see the growth of indigenous industries in all kinds of sophisticated and technologically advanced areas, industries owned and managed by Irish entrepreneurs and managers.
Even today there are clear signs that this is happening. While there is a widespread impression that the IDA have concentrated most of their efforts on the introduction of large overseas companies to Ireland, this is to a great extent due to the fact that the establishment of such companies here usually attracts much more attention in the press than similar investments by Irish firms. The IDA however, with my strong support, are committed heavily to the maximum support and encouragement of Irish industry. Over the last three years the number of jobs approved from domestic industry has increased significantly.
In 1973-1974, for example, job approvals for domestic sources represented 41 per cent of the total job approvals, while last year this figure was 58 per cent, a very significant increase.
Last year small firms employing 50 persons or fewer accounted for 24 per cent of jobs approved for assistance by the IDA. This year the figure is expected to be at least 33 per cent of the total approvals. The rapid growth of small industries in Ireland can be appreciated by a comparison of the results of the first year of the Small Industries Programme in 1967, when a total of 34 projects were approved, with 1979 when on average three projects were approved every working day.
I am particularly pleased to see this kind of progress not only because 90 per cent of these projects are Irish owned, but because small firms play a very important role in developing a balanced industrial structure. They bring jobs to towns which are not large enough to sustain major industries. Since 1967 small industries have been located in 440 separate locations throughout the country. On top of this they encourage native entrepreneurial talent. One in four projects helped by the IDA is created by persons not previously engaged in manufacturing, persons who are developing and exploiting their own ideas.
At the beginning of this year 23,000 persons were employed in small grant-aided firms, equivalent to 10 per cent of the manufacturing labour force. Over the decade of the 1980s the growth potential for small industries will be greater than ever due to the increasing number of "spin-off" opportunities arising from new larger scale industries.
The 1980s will also see a vast array of new business and job opportunities becoming available to Irish entrepreneurs and managers. In Ireland today we already have companies who are operating at the very core of the electronics revolution which is now sweeping the world. As a result of our calculated and deliberate policy, one out of every two US electronics industries now making greenfield investments in Europe are being located in Ireland. Today there are 13,500 persons employed in the electronics industry here; by 1985, in this industry alone, the number employed will be just below 30,000. The opportunities for native Irish entrepreneurs in this field alone will be immense.
Within the IDA we have a special industrial intelligence unit which identifies developments which show the greatest prospects of growth in the years ahead and which could provide the best opportunities for the continuing expansion of the Irish industrial sector. The main area where I expect to see dramatic impact being made by Irish businesses is in biotechnology which will have as great an impact in the 1990s as did electronics in the late 1970s and early 1980s.
All of these new technologically sophisticated industries will provide Irish industry with many opportunities over the next decade. These opportunities will call for new creative approaches by Irish companies, such as the acquisition of new overseas markets and the development of established markets, the development of new products and new markets by entering joint ventures with strong companies, and the development of new markets directly by investing heavily in R and D and marketing.
On the marketing side it will call for a high level of skills from Irish marketeers and salesmen. Over the next decade the real thrust for growth will have to come from developing new export opportunities where we have a competitive advantage. Here, I would expect that the favourable light in which Ireland is held in many countries would help these efforts. In this regard, I can assure Irish industry that the State bodies under my control will be there to advise, encourage and assist any Irish manufacturing firm who adopt a bold and innovative approach to their continuing development.
Three key points which are relevant to our economy at present are (1), we have entered a changed international situation, which is demanding new thinking and new attitudes on our part; (2), these changes will demand a new personal commitment from everyone in this country—our problem will not be solved by new economic measures alone; and (3), to continue to make progress we must shed a number of myths on all sides in our society and face our realities more objectively.
In Ireland we are not only a very small economy in world economic terms but we are a very open economy. This smallness of our economy has dictated the type of economic policies we have tried in the past. During the early 1930s, for example, an attempt was made to develop Irish industry behind high tarriff barriers—to create a siege economy. The result of this could only be very limited in the protectionist international climate of the time. It was realised that the Irish market was too small a base on which to build the desired improvements in living standards. These improvements could only be achieved if the market for Irish goods were expanded, so from the late 1950s on we became staunch advocates of free trade. We had the Anglo-Irish Free Trade Agreement of 1966 and in 1973 EEC membership, both of which increased our exposure and vulnerability to international competition.
The second characteristic of our economy—the openness which I mentioned—is essentially a function of our smallness. It is simply impossible to produce all the goods we require domestically. The extent of the openness of the Irish economy is demonstrated by the fact that this year exports and imports combined are expected to be equivalent to about 121 per cent of our GNP. The comparable figures for western Europe and the USA would be about 48 per cent and 15 per cent respectively. At present over half our total factory production is exported. Two in every three jobs in manufacturing industry are export related to some degree.
This smallness and openness makes us very vulnerable to fluctuations in world economic activity. The clearest example in recent years is in the case of oil. When the price of oil is raised we either pay the increased cost or the tap is turned off. We should ask what is happening on the international scene generally. While there is some indication that international economic growth may turn upwards by mid-1981, this is likely to be within a different framework from that of the sixties and seventies. During the last three years in particular we have seen the painful adjustment process to a new world economic order. We have seen enormous price increases in oil and the supply disruptions which have demonstrated how vulnerable not only Ireland but the whole world is to movements in this precious source of energy. It has been brought home to us with renewed force and urgency the need for change in our whole way of life so that we can reduce our dependence on oil and learn to develop patterns of life that are less demanding in their energy needs.
Almost uniformly in every western country we see implacable inflation and steadily rising energy costs holding out grim prospects for the eighties with all the major western economic forecasting institutions from the OECD to the IMS and the EEC looking at slower growth in output, increasing inflationary forces, persistent monetary instability and dramatically increasing unemployment. This is the international framework within which we will have to operate in the eighties. We should all be aware of it whether as a businessman, trade unionist, worker, public employee or farmer. For our small, open and energy importing economy the impact of these uncertainties and problems will be inescapable and our future will be very bleak indeed unless we can develop a national will to create productive jobs, unless all sectors in our society can agree on working together and unless we stop trying to deceive ourselves about the economic realities of today's world.
Some years ago in the Solomon Islands there was a phenomenon called the Cargo cult. On an abandoned military airstrip islanders wearing American GI uniforms marched in formation before a control tower. In the tower a man wearing earphones carved from wood spoke into a wooden microphone. Other islanders sat patiently looking at the sky watching and waiting for a silver airship to arrive in answer to the magic they were making. During the war the Cargo cultist had seen that the GIs were able to call down wealth from the sky apparently without doing any work, merely by talking into little boxes, signalling with flags and marching in formation. Lacking any understanding of the elaborate production, transportation and communications technology, the hard work and productivity that made possible this abundance of goods, the cultists attributed it all to what they saw and they tried to achieve the same results by ritual imitation. When their efforts failed to produce the desired results they often became increasingly fanatical and dogmatic. They would kill off their livestock, consume their food stores and seed corn, destroy their tools and refuse to work until the wealth came from the skies.
There are, I regret to say, certain parallels between our behaviour and that of these primitives in the South Sea Islands. Both societies suffer from a failure to perceive reality and an unwillingness to act upon it. The difference is mainly one of degree. But any society that acts upon false perceptions of reality is in serious trouble. The question is: what is our excuse?
In this country we presumably do understand that our security and progress towards greater and social wellbeing, more and better jobs and inflation free economy depend on sustained economic growth and productivity. We do understand that to have these we must encourage high levels of investment in research and development and in replacement and modernisation of plant and equipment in order to increase productivity. We do understand that we face an exceptionally rapid increase in the working age population, not just for years but for decades ahead, and these young people have to be provided with an opportunity to work and build a better future in this country.
We do understand that to enjoy an increase in our standard of living we must create additional wealth. We do understand that growth in our wealth depends on our ability through our manpower and other resources to turn raw materials into goods that are competitively priced and saleable on the international market. Yet we have been acting as if these economic facts of life did not exist. We have been concentrating on the distribution of any wealth created, or expected to be created, rather than on the creation of such wealth. We have been emphasising short-term interests—protection of current income differentials and outmoded and unproductive jobs—at the expense of vital long-term economic issues. We have tolerated the bludgeoning attempts by some of the more powerful groups in our society demanding more than their fair share and holding the rest of the community to ransom thereby ensuring that the weaker sectors get less. We have put up with the disruption and the economic damage caused by unofficial disputes by people who apparently do not care about the impact of this bad image on jobs and employment. We have supported these people in their attempts to subvent democratic procedures by refusing to pass unofficial pickets.
Our response to these fundamental issues has been in many ways as bizarre as any Cargo cult manifestation. Like the Cargo cultist, we have been drifting along blindly on the assumption that to make progress all we have to do is follow a certain ritual—to get a higher real income all we have to do is strike; to create a new job all the Government have to do is employ another person. Too many people in the country have been sailing along assuming that the Government can spend vast extra sums of money on welfare, reduce taxation, increase capital spending, provide the conditions for full employment and produce a balanced budget all at the same time.
Life is not like that. As a nation we live in a highly competitive world which does not owe us a living. We have to earn our wealth and pay our way. We all agree that full employment and a high standard of living are important, but statements of hope or good intentions are not enough. To achieve our ambitions we have to produce and sell goods and services that are wanted in home and overseas markets. Unfortunately problems that confront us today are survival problems. They will not yield to the Cargo cult mentality. We must be clear about the scale of the challenge that confronts us. We have to define the choices open to us, set realistic targets and, above all, we urgently need to recognise and remove the unexamined assumptions and myths underlying so much of our contemporary thinking.
Essentially we need to understand a few basic economic facts of life. We spend our lives either producing goods or services or using them. This means working to the full capacity of everyone if the nation is to make the best use of its resources. It is so obvious that it is often ignored. We must all work because there is no free lunch. It follows that we cannot consume more than we produce. We cannot increase our standard of living without either producing more or taking somebody else's share from somewhere in our society. Unless we increase the total national cake we cannot take a bigger share without letting someone else go hungry.
We must understand that growth in living standards of the whole nation cannot be achieved without increased productivity by whoever can contribute. That is common sense, but how often do we see efforts to bring about the changes necessary to increase productivity being resisted, or else extravagant demands made in advance of the changes? Increasing the prosperity of our nation means more and harder work and, above all, a commitment to change. However, in the time in which we live there tends to be disenchantment with work and the prevailing culture is that it is only the idiot who goes home tired, who does not avail of all the day's absence he is allowed, or who does not create the maximum overtime opportunities for himsilf and his colleagues. There are many other aspects of human behaviour, of community interests, of external trade, of the distribution of wealth and so on, on which we need an understanding if we are to develop a society which is not racked continuously by sectional conflict. The fact that we are a small nation should make it easier for us to communicate and to give all our people an opportunity to grasp the interdependence of industry, agriculture, trade unions, Government and the whole fabric of our society.
In the final analysis the key to a sound economy is the creation of viable, productive jobs. We must create these kinds of jobs at a rate and on a scale never achieved here before if we are to create the conditions in which we can attain full employment and a rising standard of living. The essence of our problem at the moment is that we are not creating enough wealth to do either. Growth in our wealth depends on our ability, through our manpower and our other resources, to turn raw materials into goods and services that are demanded at home and overseas. The value added through this process is the source of the wages that pay for the needs of the work force and their families and of the taxes that fund Government programmes and thus determine the community's standard of living. It also provides the surpluses or profits for private and public enterprise to maintain the capital stock and to finance the further growth of value-added in the future. In a small and open economy such as ours this value-adding process has for the most part to be carried out in direct competition with foreign producers. This means that we cannot tolerate the creation of non-productive jobs simply for the sake of creating employment. Artificially created jobs by the State mean simply that we as a nation become less productive and less competitive. These nominal jobs must be paid for by either increased taxation or an increase in State borrowing. We must reject the illusion that the State in some sense can create new short term jobs at the stroke of a pen. These so-called jobs cost money. They have to be paid for by the rest of the community. It is a fundamental law of economics that in the long run it is impossible without disastrous consequences to take more out of the economy in wages, taxes and profits than is put into it in the production of goods and services. This basic value-added principle needs to be more widely communicated and understood by each individual in our community and we must give as high a priority to the creation of the wealth or added value as we do to the distribution of it.
It takes actual productive projects to create long-term, self-sustaining jobs and growth. This means that we have to go out and identify new markets, develop new products and produce them competitively. In an increasingly tough international climate opportunities are not necessarily going to be easy to come by. Achieving jobs and output targets of the scale needed will not be a matter of a few grandiose gestures. It will require a sustained effort, with small products as well as large, in a wide range of industries where Ireland is able to establish and maintain a competitive edge.
The key requirement is enterprise. Enterprise of all kinds will have an important contribution to make. Foreign enterprise will continue to be a vital source of new investment and jobs. Public enterprise, either alone or together with the private sector, has a contribution to make. However, domestic private enterprise will have to take the leading role through both the expansion of existing business and the creation of new business. In this context the role of Government is to create the conditions in which enterprise, both public and private, can flourish. My Department and all of the State agencies under my control are striving hard to build this role and to create these conditions.
The production that we have been able to achieve in a year as difficult as 1980 is indicative of the even greater triumph that I think can be brought about in easier years in future and it is very unlikely that we will have to face again the kind of international trade difficulties that we and other countries face at this time.
: Deputy Tully.
: Perhaps the Chair will be good enough to note that I am offering to speak.
: I find myself in agreement with a lot of the second part of Deputy O'Malley's speech. The only trouble is that it is rather a pity that he did not know as much about the economics of this country in 1977 as he appears to know now. The lecture he has just delivered to us about the fact that we cannot hope to get prosperity just by wishing for it suggests that he did not know that at that time. He has given us the story of the "Cargo Cult". The first time we heard about that in this country was in the Fianna Fáil general election manifesto of 1977. This document did exactly what the "Cargo Cult" did in that, according to Fianna Fáil then, all we had to do was return them to power and, hey presto, everything in the garden was going to be lovely. We were going to have employment, we were going to have lower prices and so on. Lest anybody should try to say that this was not so, let me give a couple of examples.
Two nights before the last general election Deputy Jack Lynch, then Leader of the Opposition and subsequently Taoiseach, was asked in a television interview what Fianna Fáil proposed to do about the unemployment situation which at that time was bad, admittedly. He said "We are going to abolish the dole queues". The interviewer was somewhat taken aback and he asked "When will that happen?" Deputy Lynch said, "Immediately Fianna Fáil take office". Twice within the first six months subsequent to Fianna Fáil's resuming office in this state Deputy Lynch repeated that and then he forgot all about it. It was so incredibly stupid to suggest that it could be done that it should be rated with the ideas of the "Cargo Cult" people.
That was not the whole story. Prices were to be reduced according to this manifesto, by 1 per cent in 1977, by 2 per cent in 1978 and 2 per cent in 1979. They did not go into 1980. I assume that there would be no increase at all then and that would be away ahead of Deputy O'Donoghue's 5 per cent increase at that time. There would be increases in output of 4 per cent in 1978, 3 per cent in 1979 and 3 per cent in 1980. Borrowing as a percentage of GNP was to be 11 per cent in 1977, 13 per cent in 1978, 10.5 per cent in 1979 and 8 per cent in 1980.
Again we must examine the situation and we must consider the whole story in this vote of confidence or no confidence which is before the House. Until the Minister came in—and other people have spoken including the Taoiseach and the Tánaiste— nobody seemed to have a clear notion of the way in which we ordinary people live. Apparently they are not aware. Deputy O'Malley, Minister for Industry, Commerce and Tourism, in the first part of his speech seemed to suggest that he also is not aware of the position we have at present. As Deputy John Kelly so ably pointed out, oil price increases are not the major factor which Fianna Fáil would have us believe in our disastrous economic situation. In 1974-75 we had the first blast of the open economy and on top of that we had a world recession which we survived. In 1976-77 the country was coming out of that recession and was handed over to Fianna Fáil with all their promises. We have finished up in the disastrous position we now face.
During the past couple of years, and particularly this year, local authorities have been given such a small amount of money for housing and the provision of SDA loans that young people will now have to settle for any type of accommodation they can get. There is no prospect of getting new houses, which were available while the National Coalition Government were in office. People who are now getting married cannot hope within a reasonable time to be housed by a local authority. According to the figures I recently received, it seems that local authorities are now back to the old Fianna Fáil system where people will have to wait up to five years before they will be considered for rehousing. This is in line with what Fianna Fáil said in 1976 and again early in 1977, that the National Coalition were building too many local authority houses in relation to the total number of new houses being built.
People who applied for SDA loans were promised in writing by local authorities that loans of up to £12,000 would be available to help them build their own houses. This money had been promised to the local authorities by the Department of the Environment. It must be remembered that to qualify for an SDA loan an applicant must not earn more than £105 per week gross. People who received this written promise from the local authorities went to the banks and got bridging loans on which they were paying large amounts of interest, but in June this year the local authorities discovered that the money would not be made available to them by the Department. Despite the relatively small amount of money given recently to each local authority in order to redeem the SDA applicants, there are thousands of young people building their dream houses—some of them have actually moved in or are in the course of completing the work—who must sell their houses in order to keep out of debt. This is what the Fianna Fáil Government are doing to the people to whom they promised better housing loans and grants.
On the subject of rents paid by local authority tenants, I challenge the statement made by the former Minister for the Environment that he met and discussed with the National Association of Tenants' Organisations the matter of rents and the purchase price of houses. He met them and told them what he proposed to do and apparently regards that as discussing the matter. That is not acceptable. Handing over now to somebody else when everything is in a mess is not the solution.
I do not know whether the Ministers speaking here ever look at the type of road on which they are travelling when using the State car. I travelled in a State car for over four years and I could see whether a road was in bad condition, but I do not belong to Fianna Fáil. If I were a Fianna Fáil Minister I probably would not be able to see it now either. Obviously they cannot see that the condition of the roads is abominable. More accidents are now caused by bad roads than by any other factor. I travel a lot around the country and even on national, primary and secondary routes it is not unusual to find people driving in the middle of the road because they dare not drive towards the side due to potholes. The lesser county roads for which no money is available are in an abominable condition.
I was amused yesterday at Question Time to hear the Minister for Energy speaking about grants being available to people who want to repair bog roads. Where is the money to be found? If enough money is not being allocated to keep national, primary and secondary roads in order, where are local authorities to get the money for this type of work?
Apparently the Fianna Fáil Party are still unaware that all over the country road workers are being laid off, pensionable servants of local authorities, because the money is not available to keep them. This is not the type of treatment they were promised in the manifesto. It riles me when I hear people talk about how well the country is doing. Such people have never known what it is to be told that there is no longer any work for them. It would be a very good thing if some members of the Government had that experience and had to go home to their families without any prospect of further employment. Anybody over 45 who loses his job has not a chance of ever getting permanent employment again. A person is now too old for re-employment at 45 because the labour market is flooded with people under that age, particularly thousands of young people, many of whom have university degrees. These young people are doing temporary jobs washing up in cafes, working as waitresses and doing any odd job they can get because they do not want to go home and admit that even with their degrees they are unable to find employment. I know one young girl who speaks seven languages. She applied for employment in the civil service. They told her she was not up to the standard. So obviously the standard must be very high and there must be a tremendous number of talented young people who are unable to find employment if somebody who speaks seven languages fluently is unable to get a job.
Again the Government do not seem to understand the position in which the building industry generally is at present. I will never forget the attitude of Fianna Fáil when they were in opposition. Two or three of them in particular, including the present Minister for Labour, got up day after day and shouted across the House at me about what Fianna Fáil would do when they got back into power and how they were going to give 5,000 extra jobs in the building industry. If there was a drop of 1 or 2 per cent in the amount of cement used in any particular year there was a song and dance about it. They raised it on the adjournment and said everything they possibly could. The sale of cement in the last 12 months has dropped by over 30 per cent and I do not hear the people over there saying so much about it now. The fact that there are several thousand fewer people employed in the building industry now than when we were in office is not mentioned now.
I agree that the Minister for Industry, Commerce and Tourism is correct when he talks about the tremendous efforts the IDA are making to start new industries here and I was glad to see them being able to conclude arrangements with some of the industries with which negotiations were started in our time. I suppose the Minister will take credit. However, the credit is due not to him but to the IDA who have done so much work to get them here. But the Minister should also be prepared to admit that, while they are doing the best they can, the number of firms closing and the number of people losing their jobs is far greater than the number of jobs being created. As a result we have, according to the statistics, over 106,000 people unemployed at present. This does not take into account the number of people who are on a short working week, because apparently by some manipulation it has been decided they will be left out. They are now not regarded as being unemployed and there are thousands of them in the country including an additional 500 this morning in Cork
If we are going to have a factual debate we should stick to facts. Those are the facts and those are the things which we must bring to the notice of the general public. When in opposition Fianna Fáil said, at a time when the figure for unemployment came to about 107,000 that the real figure was 160,000. If we work on their basis and add all the people who are on a short working week, I would suggest that the correct number of people unemployed must now be about 180,000. They are the people who really will have a hollow belly laugh at the statement being made by the Ministers who spoke here, particularly the Minister for Industry, Commerce and Tourism, who told them about the wonderful prospects there are for this country in time to come.
One thing that Deputy O'Malley did not mention, and which I was waiting for him to make a comment on, was the question of prices. When Fianna Fáil took office in 1977 there was great joy in certain camps. One lady in particular, who was head of an organisation outside, said it was a wonderful thing that a woman had been put in charge of the Department that looked after prices. That was the last time she was mentioned in connection with looking after prices. They politely let that slip to one side and it was never mentioned again. There is nothing that she could be very proud of if she was in charge of prices. However, the Minister himself is in charge of prices, and if we compare what has happened now with what was happening during our term of office everybody must be satisfied that there is absolutely no control whatever over prices. I met a fellow some months ago and I thought he was being funny because he was telling me that his eldest girl had just started work. I asked him what she was doing and he said she was working in a supermarket. I asked him if she had a good job and he said she was employed full time changing prices. I was in a supermarket last week and a girl who was doing the very same job told me there were four of them employed full time marking up prices in one supermarket every day. They do nothing else but go around taking off prices and marking them up. In this case they were marking up the price of biscuits 3p a packet.
We see in the Fianna Fáil manifesto that they were going to pay particular regard to price control. They were not going to allow any prices to be increased without going through the due process. It does not appear to be necessary even to publicise price increases now. Coal was increased on a couple of occasions recently and it was not necessary to notify the Prices Commission. Indeed, the Prices Advisory Body report is currently about four months late. Having sanctioned prices and the prices having been put into operation, the public are not informed unless RTE give two or three of the really shocking ones in the morning news and then forget about it. The newspapers will not publish it at all, and I do not see why they should because the news is months late and people are paying these prices before the news is given in the Prices Advisory Body report. This news should be issued and it should be published immediately, because that also was one of the promises made by Fianna Fáil-they were going to give a weekly run down of prices and price increases.
There is something else with regard to prices which is rather horrifying. It is that in supermarkets particularly—and they are not the only ones to blame—about 80 per cent of the products, including agricultural products such as carrots, potatoes, peas and so on, are imported. Since most of them are imported from Britain there is a mark up on the price immediately and there is nothing the Prices Advisory Body can do about it, apparently, because at present there is a difference of about 18 per cent between the púnt and the pound. This means that what is being offered in the supermarkets is the price in pounds sterling converted to the púnt and the result is that 17 or 18 per cent is added to the price of what could be bought cheaper before we joined the EMS.
I know there are people in every party who believed that joining the EMS would be the greatest thing that this country could do. I believed at the time—and I opposed it when I was in Government—that the idea of joining the EMS was a bad mistake for this country because now it has reached the stage where people who are on a fixed income, and people who have a small amount of money invested, are finding that with the clamour at present for a devaluation of the púnt they will be literally beggared. Goods are now very much dearer than they would have been in the normal case. The answer, of course, is to buy Irish and I would be 100 per cent behind those who say we should by Irish in every case. I do not shop a lot but any time I go into a shop to buy anything for myself I always insist on buying Irish. I am amazed at the difficulty I have in getting somebody to supply me with an Irish article. I do not know whether it is because there is not as high a profit on it or some other reason, but again and again I go from shop to shop looking for shoes and shirts and they do not have any Irish articles.
Something must be done about this if we are really interested in buying Irish. We see advertisements on the television practically every evening and people are spending a lot of money advertising Irish goods and appealing to people to support Irish made goods. But what do we find? Last week or the week before last Telefís Éireann wanted a new floor covering for their new building. So what do they do? They do not even ask for an Irish article, they purchase the article in Holland. That was a sore blow to carpet manufacturers who pay. I believe, as much as six figures in cash over a 12-month peiod to RTE in advertising revenue. Yet RTE have the hard neck to say that the type of floor covering they required for their building was not manufactured in this country. Would somebody tell me why Irish goods manufactured here were not good enough for the floors of a new building built by RTE. There is a carpet factory in my constituency—Navan carpets are well known not alone in this country but throughout the world. Is it not extraordinary that while their employees have to go on a three-day week the national television service, through whom they carry out a considerable amount of advertising, buy floor covering in Holland? I suggest this Government should do what the previous Government did, that is, when an effort was made by another semi-State body to purchase material abroad, they were told they just could not do it. I have raised this issue here now. I attempted to get a question to the Minister for Posts and Telegraphs about it but it was ruled out of order. I am quite sure it was to save a blush that that was done.
In regard to education the position is that there appears to be a cut back in the amount of money made available. Our primary schools are too small to accommodate the additional pupils wanting to commence school this year. I believe—and it is our party policy—that the State should and will ultimately provide kindergarten facilities for children so that they can be trained into the school routine a year or so before they commence at the age of four or five. Indeed if there were kindergarten schools available there would be no reason why the commencing age should not be five. The situation obtaining is that people who can afford to pay can take their children to kindergarten schools. Yet when other children want to go to school at four years old they are told there is no accommodation available to them. I was involved in an attempt to get accommodation for one group in Navan when, at first, 70 four-year-olds were told there was no accommodation at all for them. Eventually 40 of them were taken and the remainder were told they would have to try later on. But this Government who talk so much about the rights of people did not consider that those parents or their children had any rights at all. Much as we may dislike pre-fabs there are still some available which would be adequate until suitable schools were built. But very little effort is made to make them available, certainly in the case of the Navan school, and I am quite sure the same applies all over the country. Many people wonder why so many children leave school at primary certificate level or shortly afterwards. The reason is that there is no accommodation for them in many secondary schools around the country. Indeed in this city there are children who cannot get into a secondary school. There is no point in the Minister saying that adequate accommodation will be made available in some years' time, that the money is not available. The money should be made available. That is the sort of thing for which money should be made available. Unless we are able to educate our children we will not have a nation of people able to look for employment and support themselves later in life. Indeed I understand that the figure for those children who do not go any further than secondary education is something like 66 per cent of the school population which makes the picture appear rather bad. Here I am not blaming the present Minister or Government. I am afraid that has been the history for a number of years. It is just too bad that such people are unable to get the education to which they are entitled. Before the last election we heard a great deal about the tremendous reductions that would be effected in class numbers. The fact is that these numbers have gone in the opposite direction and there appears to be nothing done about it.
There is something else about which I feel very strongly and have spoken many times in this House, that is, the training of school children for the trades they will follow when they leave school. Technical schools and colleges are doing a lot. But there is a craze in this country with parents feeling that they are doing better than anybody else if they are able to send a son or daughter to university. I feel that is a serious mistake because we need technical people; we need technicians. For God's sake why can we not train our children for the jobs they are prepared to do and can get at a later stage. Why waste money getting degrees which are not worth a damn to many of the people who get them? Parents may feel a glow of pride when their child receives such a degree—and many of them do not pass—but, when they do, the priorities are not in order. The whole concept will have to be changed.
Recently I heard of an extraordinary state of affairs. As everybody is aware the town of Navan is regarded as the home of furniture. There are more furniture factories in that town than in any other in the country. I asked if it would be possible to have an old technical school there converted for the purpose of providing accommodation for trainees in the furniture trade. I was told it was not necessary. I had a discussion with some furniture people in Navan recently and I was very surprised to learn that in Dublin, where there is such a school, there are eight pupils only being taught for the whole of the country. If we are in earnest about bringing industry into the 1980s that figure should be much nearer 100 than a mere eight. It is ridiculous that this sort of situation should obtain.
I am glad to note that the Minister for Posts and Telegraphs has just come into the House. He has always been very forthcoming about the number of telephones we would get this year, next year, the year after and so on. I have told him on many occasions that there is a telephone in my room in this House on which it is possible to dial ten times and get eight wrong numbers. As recently as yesterday I was endeavouring to telephone my home on that telephone. First I got the engaged tone—I subsequently learned the number was not engaged—then it was out of order; then there was no tone at all; then I got Dundalk telephone exchange, bearing no relation whatever to the number I was dialling. On the sixth attempt, I got my home number. One can do a tour of this country by picking up a telephone and dialling any number because one will find one gets any number in the country rather than the one dialled. This is the sort of thing that must be dealt with. The Minister may contend that the equipment installed over the years was not what it should be. Perhaps that is the reason. But before we talk about hundreds of thousands of new telephones, let us get the existing ones working, when perhaps it will then be possible to talk about others.
I write to Government Departments fairly often. I do not write to the Minister or his junior Minister. I do not believe it is the function of the political head of a Department to deal with individual queries. Generally I write to the secretary of the particular section dealing with such matters, to the civil servants paid to do the job. Usually I get a courteous reply. I am surprised at the number of people who tell me that they have been waiting for four or five years for a telephone. I hope the Minister's claims that he will be able to supply all these phones will come true. We shall only have to wait and see.
The Minister should make some comment on what is happening with regard to the changeover in the Department of Posts and Telegraphs and the ordinary postal services. Almost 12 months have gone by and, as some Member said here yesterday, only one official, as far as we know, has been appointed. What is being done, I do not know. I do not agree at all with this changeover because, while the Minister has given a guarantee that it will still be a monopoly service—in other words that the board to be set up will carry out the work—he has also said that in the postal end of it there will be provision for certain private services. If he believes that that is a misquotation, I can quote his exact words. It cannot be the two things; it will either be a monopoly service by the new board or a service which will allow other people to cream off what is a good way of making money and then let somebody subsidise what is left. That is an old ploy used before by Fianna Fáil and I would not be surprised to see it happen again.
On the subject of telephones, in the social welfare sphere the telephone service and letter post affect the lives of hundreds of thousands of our people who are dependent on social welfare. I am always amazed when told that someone phoned the Department of Social Welfare and was passed around from one section to the other. I know the officials in a number of these sections in the Department of Social Welfare and, with one exception, I find them most courteous, intelligent and willing to help. If people who have not got an old age pension book for three or four weeks ring from the country to the section dealing with their book and are put from one to the other until they have spent their money on phone calls and eventually are left holding a dead line. That is not the way to deal with them.
The Minister for Social Welfare must try to ensure that what has recently happened will never happen again, for whatever short time he will be in that position. It is outrageous that when the book of a person depending on an old age or a widow's pension is terminated — and the Department can easily find out when this occurs — that person should have to wait for weeks on end before getting a renewal. In a recent extraordinary case a woman got a contributory old age pension book last June, drew her pension for a couple of weeks and then the new book was due. She applied for it and got a widow's pension. There was no way in which she or I could persuade the Department that she had not got a widow's pension, even though they had terminated her widow's pension and sent her the other book. This is a serious thing about which this Government must do something. People receiving social welfare are entitled to a better deal than they are getting.
Furthermore, I am aware of at least one person who is due nearly £2,000 back money and cannot get it although promised it in three or four weeks' time. There are old age pensioners who are due £300 and £400 back money and cannot get it. Why can they not get it? My guess is that this is one way of saving money, holding on to money for a little while to save having to borrow that amount; and if this happens to a couple of hundred people, it amounts to a substantial sum. It is not good enough that this should happen. The Department of Social Welfare must ensure that people get what they are entitled to.
I recently saw a statement attributed to the same Minister in his office as Minister for Health, that doctors were sending too many people to hospitals. Did he really mean what he said? He is also quoted as having said that some people go to hospital for the purpose of having someone hold their hands, but holding a very ill person's hand might be a very important thing to that person. We need a hospital service. At present, it is extremely difficult to get an old person into any hospital through no fault of the health board officials or of the officials of the Department of Health and certainly no fault of the hospital officials. The fault lies with the Government who are responsible for providing the necessary money to make hospital beds available. It is no use telling us that in 1985 or later we shall have a wonderful health service. Those who are ill now want hospital service and attention now, not in four or five years' time. I heard Deputy O'Donoghue saying yesterday that what the Government were doing was correct. The same Deputy is one of the people being blamed for the bringing about of the Fianna Fáil victory three-and-a-half years ago which that party were then so proud of. When "Charlie's Angels" took over, he fairly quickly got the works, I grant that. I was surprised at his coming in here and attempting to justify what the Government are doing now, which is a complete contradiction in many cases of the economic policy being carried out when they took over in 1977. The Government will have to look at what they are doing and saying.
I would like to touch very briefly on the question of industrial relations, which in this country could not be much worse than they are. I was for 30 years a trade union official and during my time as general secretary of a trade union, if I signed an agreement accepted by the members on behalf of those members, I would not tolerate the tearing up of that agreement by a couple of people who thought there might be some way of getting more. As far as I am concerned, unless unofficial strikes result from an employer unjustly dismissing people and giving them no chance to make a case for themselves, they will have to be banned. They will not be banned or outlawed by the Government because no Government can do this without making martyrs of certain people. Unless the Irish Congress of Trade Unions, of which I was a member for about ten years, deal with people who flout the wishes of the majority of our trade unionists, we shall reach a stage of anarchy and the first to suffer from this will be the trade unionists themselves. I have no apology to make for saying that. We in the Labour Party do not stand for anarchy; we stand for organised bargaining. That is the way it should be done and must be done.
On the question of farmers, the Taoiseach spoke recently about his plan to reduce the rates for the 40- to 60-acre farmers, who would not now have to pay the second moiety. In this connection I have three questions. Firstly, what will happen to those too honest farmers who have already paid, as I know some have? Will they get this money back? Secondly, the reason why so much of a row is being kicked up by this category of farmers is that Fianna Fáil increased the rates to, in many cases, over double the amount, by taking away the rates abatement on agricultural land. What about the 20- to 40-acre farmers? Where do they stand? Is there some reason why they should be left out? This must be dealt with and I would like a straight answer.
In relation to the Department of Justice I am appalled as every decent person must be at the trend of shooting gardaí. We have brought into this part of the country the worst things that were happening in the North. Fianna Fáil have brought it on their own heads. When we were trying to do something about it four-and-a-half years ago Fianna Fáil sneered that we were a law and order Government. I would like to see law and order now.
: In relation to the issue that Deputy Tully raised about phones in his room and at home I am glad that he accepts that the political head of the Department need not know every telephone number. I have never pretended that the telephone service is what it should be but I will outline what is being done and what will be done in that area. I will also cover the other areas in relation to the splitting up of the Department and the point the Deputy made in relation to social welfare people who cannot get their pensions. I am aware of complaints in this area and I made provisions in the Post Office framework to ensure that if a person has not received his book he would be paid on the stubs of the old book until the new one came through.
: The postmasters say they heard nothing about that.
: Any postmaster who contacted the GPO got direct instructions to pay the social welfare on the old stub.
: Why did the Minister not tell them all?
: I have listened with interest to the contributions from the other side of the House and these contributors have been sadly lacking in positive suggestions and positive thinking as to how the Opposition would cope with the current recession.
I will illustrate with a few statistics just how well the Government have been coping with the recession which is generally regarded to be as bad as that experienced in the thirties. The current recession first began to affect our economy at the end of 1979. In contrast with the 1974-75 period when the Coalition were in office, manufacturing output has held up well and the predictions are that an increase of 3 per cent in volume terms will be achieved in 1980. To contrast the percentage change in manufacturing output at the time when the recession was biting deepest with this year: in the third quarter of 1974 it fell by 1.0 per cent; in the fourth quarter of 1974 it fell by 2.9 per cent; and in the first quarter of 1975 it fell by 3.2 per cent. In the first quarter of 1980 manufacturing output rose by 2.2 per cent. For the entire year it is estimated to rise by 3 per cent.
As an illustration of how our policies have been effective in maintaining employment the numbers on the live register show that the rate of increase, so far, has been much slower than that registered during the last recession in 1974-75 despite a substantial increase in our population and an increasing number of young people coming on to the labour market.
The numbers employed in UK manufacturing industry have fallen by 7.5 per cent in the period 1975-80 while in Ireland the numbers have increased by 14.7 per cent.
In relation to GNP, of course the current recession affects our EEC partners as well. In the UK GNP is expected to fall by 2.25 per cent this year with investment in the manufacturing sector expected to fall by 4 per cent and output by 6 per cent.
It is interesting to compare these statistics with current projections for Ireland where our GNP is expected to increase by up to 2 per cent this year while in the UK it is expected to decrease by 2.25 per cent. Manufacturing output here is expected to increase by 3 per cent while in the UK to decrease by 6 per cent. Investment in manufacturing is expected to increase by 10½ per cent while in the UK to decrease by 4 per cent.
The Opposition are complaining that the Government are spending too much, and are calling for cutbacks. They are not of course prepared to say where these cuts should be made. This shows that the Opposition have no ideas of their own. They are able to say where they think the Government are spending too little. Surely if it is possible for an Opposition to identify where too little is being spent, then, the same approach should tell them where spending is too high. But the greatest confusion of all is to call for cutbacks in spending and then go on to suggest areas where more should be spent. This indulgence in hypocritical contradictions and criticism is no substitute for economic policy.
I now turn to the areas in my Department where we are making our contribution towards economic development. In a modern society, one of the principal functions of a Government is to foster and maintain a climate conducive to economic growth and social development. That climate is made up of many elements. Some, such as the state of business confidence, are intangible. Others are very practical and relate to a country's infrastructure—housing, roads, transport, sanitary services and, perhaps most important of all in the last two decades of the twentieth century, telecommunications.
A high standard of telecommunications service is essential for all those engaged in trade and industry if they are to be efficient and to match their competitors, most of whom in the EEC, in other European countries and in the United States and Canada have a high quality of telecommunications available to them. A high quality of service is particularly necessary to offset the natural disadvantages inherent in siting industry in remote areas, and industries in these areas cannot hope to prosper without a good standard of telecommunications services. The free availability of telephones is most desirable too from a social point of view.
The Government have recognised fully the need to develop our telecommunications services and since taking office, have pursued a consistent policy designed to provide, in the shortest possible time, telecommunications services on a par with those in other EEC countries. We established a review group to advise on the most appropriate structure for the services. Their principal recommendations were quickly accepted and work is proceeding on the establishment of a statutory body to run the services. A Green Paper was published earlier this year and work is being concentrated at present on getting the White Paper ready for publication. I hope to have this ready for publication in January next and draft legislation presented to the Oireachtas soon after that.
In the meantime, the Government must press ahead with all possible speed in developing the services, Indeed, the need for accelerated investment was recognised in advance of the review group's report when a special building programme was initiated. This was followed by the announcement of our development programme, estimated at 1980 prices to cost approximately in 1980, £120m; 1981, £246m; 1982, £219m; 1983, £150m; and in 1984, £145m. The total cost is £880 million in 1980 costs. We are now coming towards the end of the first year of that programme.
Since taking office, I have not made any secret of the fact that the telecommunications services require substantial improvement if they are to make the maximum possible contribution to our economic and social development. At the same time, I hope Deputies will accept that the magnitude of the task is such that it is impossible to transform the service in even two or three years by adopting a crash programme. The Posts and Telegraphs Review Group who examined the matter gave their estimate of the time needed as at least five years, which accords also with the Department's assessment. What we will achieve in the first year of our programme is to begin to lay the foundations from which substantial improvements will flow on a gradual basis over the next four years or so. There will, for example, be a number of significant developments next year but it will take at least a further four years in all to accomplish the task we have set ourselves.
Perhaps the most important development in the first year of the programme was the decision to order digital equipment which offers many advantages over exchanges of earlier design such as reduced space requirements and lower maintenance costs. It will also afford us the opportunity to introduce such services as touch dialling and abbreviated dialling. There will be two suppliers, L.M. Ericsson Limited, Athlone, with whom my Department has had a long and happy association, and Telectron Limited, Tallaght, who will supply exchanges designed by the French firm C.I.T./Alcatel. These exchanges will have a high local manufacture content.
I want to say a few words now about the various elements in our development strategy. A prime requirement in the development of the service is the availability of the buildings needed for new telephone exchanges, for staff, for training and for stores. The programme for the provision of these buildings is now well under way. For our current accelerated programme over 500 new or extended buildings are needed. To erect new buildings over 500 new sites were needed; to date 485 sites have been acquired leaving only a small residue still outstanding. Two hundred and twenty three buildings have now been completed or are in course of construction, leaving over 300 to complete the building aspect of the accelerated programme. To date £8¾ million has been spent or committed on sites and a further £47 million on buildings. This year alone over £26 million will be spent on sites and buildings.
Planning work for most of the remaining major buildings in the programme is well advanced and construction work should get under way in the course of the next year. Just as telecommunications is part of the infrastructure for the economy, so sites and buildings are the infrastructure of the telecommunications service, and must be taken as a first step in raising the quality of the service. It will be evident from what I have said that this part of the programme is being tackled vigorously.
Raising the quality of the service for existing subscribers and making it available to those on the waiting list entails in the first instance the provision of sufficient trunk and subscriber exchanges. Many such projects are already in hand. Next year, for example, new computer-controlled trunk exchanges will be completed in Dublin, Cork, Mullingar, Kilkenny and Tuam, while digital trunk and subscriber exchanges will be completed at Athlone, Naas, Galway, Bantry, Kells, Donegal, Sligo and Ennis. The list speaks for itself. Work is either in hand or at an advance planning stage for numerous other projects.
In addition to exchanges, of course, there must be an adequate trunk circuiting system to carry traffic. Many major schemes are in progress. These include a new cross-channel radio link which will come into service shortly in conjunction with the first phase of a major new trunk exchange at Adelaide Road, Dublin. Another is the Dublin-Sligo-Letterkenny radio link which will become operational on a phased basis during the first half of next year. Trunking schemes due for completion before the end of this year include: Dublin-Wicklow, 960 circuit radio link; Dublin-Arklow, 960 circuit radio link; Dublin-Enniscorthy, 960 circuit radio link, and Wicklow-Arklow, 960 circuit radio link.
Other schemes either in progress or to be undertaken next year include the upgrading of the Dublin-Navan-Mullingar co-axial cable, and the provision of a new radio link between Dublin and Waterford via the east coast.
According as these exchange and trunk schemes are completed there will be a progressive improvement in the quality of the trunk service, beginning about the end of this year, and gathering momentum over the course of next year, enabling industry and business to function more effectively. In order to protect the co-axial cables from damage due to water seepage my Department has commenced a systematic programme of pressurising the existing cabling network. All cabling to be installed in the future will of course be pressurised. This programme of pressurisation will make a very significant contribution to the overall quality and reliability of the service and should be completed in two years.
The second element of the programme requires the conversion to automatic working of the remaining manual exchanges. There are some 450 of them even though they serve only 10 per cent of subscribers. Our aim is to have all exchanges converted by 1984. Here too, the necessary work is well in hand. Over 300 exchanges are already included in the auto-conversion programme. For most of the others, sites have been acquired. Our programme envisages the conversion of a further five exchanges this year. Next year about 60 exchanges are due for conversion. Some of the major ones include: Ballymote, Bantry, Buncrana, Ceannanus Mor, Donegal, Gort, Manorhamilton, Milford. The exchanges due for conversion before the end of this year are: Raphoe, Newcastlewest, St. Johnston, Rathkeale, Ballingarry.
In 1982, over 200 exchanges will get automatic service and, in the following year, about 140 are scheduled for conversion. That will leave a small number to be attended to in 1984. In the nature of things, some slippage in the dates for conversion of individual exchanges or groups of exchanges to automatic working is inevitable but I am confident that the entire programme can be implemented over the next four years.
The third element in our programme is the provision of service virtually on demand. At present, we have a waiting list of over 90,000 while demand is running at a rate of about 65,000 a year and there is every reason to suppose that it will continue to grow. If we are to eliminate the waiting list, therefore, the connections rate must be stepped up substantially. We have made a good start this year. Although I cannot say exactly what the final connections figure will be, I can say that it will be a record—well in excess of anything achieved before.
My target is up to 60,000 and although we lost ground in August because of an exceptionally high level of faults caused mainly by bad weather conditions and which necessitated the transfer of staff from installations to repairs, I still expect to go very close to achieving the targets for the year. Many additional exchanges needed to enable service to be provided for applicants are on order and more will be ordered next year. The local cabling network is also being built up both by Departmental staff, the numbers of whom are being greatly increased, and by contractors.
Besides the telephone network, of course, we must expand the telex and data services which are of vital importance to the business community. The telex network in Ireland is already highly developed and we are about tenth place in the world in terms of density of subscribers. The first large, fully computerised telex exchange in Europe was brought into service in 1974 and, to meet demand for the rest of the decade, a third telex exchange will be brought into service early next year. The initial capacity of the new exchange will double the existing capacity of the telex system. A new development in the telex service is the provision of electronic teleprinters which are now in widespread use in all parts of the country.
The internal telex service is completely automatic and an automatic service is available to 99 foreign destinations. In the last year, there has been an unprecedented increase in the demand for telex service and, while more telex applicants are being connected than ever before and many hundreds of existing subscribers are changing to electronic teleprinters, there is at present a backlog in meeting demand. I am glad to say that a special programme to provide the necessary trunk circuits, exchange systems and terminal apparatus to meet this demand is nearing completion. Our aim is to provide telex service virtually on request by the end of next year.
The data transmission service has also expanded rapidly this year and it is expected that the number of data terminal devices, or modems as they are called, supplied to subscribers by my Department will total about 1,000 by the end of the year. A new data centre was opened in Dublin recently, which will enable the growing demand for data lines to be met. In addition, a new data communication network, Euronet, to provide access to computerised information databases in other EEC countries was brought into service this year. This is a joint venture between the EEC telecommunications administrations and the European Commission and is the first international data network in service in Europe. Arrangements are in hand to substantially increase the capacity of this network over the next few months and provide a better quality of service to subscribers. A similar network to provide access to computerised databases on an intercontinental basis is expected to be in service by the end of this year.
I think it will be obvious from what I have said that the development of the telecommunications service is being pressed forward vigorously and will clearly ensure that in a relatively short time development of our economy will not be retarded by shortcomings in these services. But as this debate is about the Government's economic policies, I would like to say something also about another direct spin-off from the telephone development programme. I refer here to the additional employment the programme itself generates.
I have already mentioned the buildings aspect of the programme. The buildings currently in progress are, it is estimated, giving direct employment to over 1,450 persons, and it is expected this will grow by 2,000 on the basis of continuation of the present planned level. This is clearly a substantial injection into the economy. These figures do not take account of the extra employment generated in the industries and businesses servicing the building industry. Activity on the scale I have outlined represents a significant contribution to the construction industry, which has a low import content.
So far as employment in the Department is concerned over 850 extra staff have been recruited this year and this is expected to reach at least 1,200 before the end of the year. I would like to stress that these are extra jobs not the filling of existing vacancies. It is planned that our intake next year will be of the order of 1,500 and could in practice prove to be more. All these jobs will be for work directly connected with our development programme. In addition, as I mentioned earlier, contractors are being employed extensively to supplement the efforts of the Department's own staff on work such as poling, ducting, cabling and exchange installation giving additional employment which is estimated at about 175 this year and 400 next year.
Again, some £30 million was spent this year on stores and transport required to service the telephone development programme. Well over half of this was spent on Irish manufactured stores, and this clearly contributes in a variety of ways to the economy but particularly in the employment it affords. In this connection. I also want to mention that my Department is making a determined effort to maximise the contribution of Irish firms to the improvement of the telecommunications services. To this end we recently staged exhibitions in Dublin and Limerick of components we use and which, we feel, could be made at home. I am happy to say that the initial reaction has been most favourable. I honestly hope that this exhibition succeeds in arousing the interest of more manufacturers or would-be manufacturers. There are some who will see in this an opportunity to help expand or diversify their existing businesses. Others, perhaps, may be inspired to build a business from scratch. All these can be confident that for the foreseeable future there will be a need for their products and their services. In turn, this leads to the provision of jobs at home, in itself a major consideration in the decision to mount this display and exhibition. It will also mean that tens of millions of pounds will continue to circulate here which up to now has been spent abroad.
As Deputies may know already, long-term arrangements have been negotiated for the supply of digital exchanges to be manufactured here. These arrangements will not only ensure the continuity of employment in these two firms but also, as part of the deal, involve the establishment of other industries giving substantial employment here. In fact up to 1,000 new jobs will be created.
It will be evident from what I have said that in committing themselves to the current accelerated telephone development programme, the Government are making an important contribution to mitigating the effects on this country of the present world recession and ensuring that our economy gets the maximum benefit from this programme.
Turning to the postal service, the other major service run by the Department of Posts and Telegraphs, there is clearly not the scope for expansion in this area as in the telecommunications service. Indeed, the main concentration in the postal service must be in providing a service of consistently high standard at economical rates. The period following the strike last year was a particularly difficult one for the service and for users of it. As Deputies know, lengthy negotiations on staff claims have led to agreement on new pay scales on the basis that ready co-operation will be extended by the staff in measures aimed at improving productivity and service to the customer.
Discussions with union and staff representatives have already begun and will continue on an extensive scale in a joint endeavour to ensure that the customer who has to foot the bill gets a good service and reasonable value for the money he pays. I am confident that we will be successful in achieving these ends.
I am convinced that as well as providing good services now we must also look to the future. If our costs continue to rise as they have done in recent years the volume of business cannot but be affected. Faced with the challenges of maintaining high quality services and cost effectiveness, the postal business must clearly adopt a greater orientation towards marketing.
I am very conscious of the value of the skilled and dedicated staff in my Department and the unique country network of offices which we have. I am concerned that these resources should be used to the greatest extent possible to meet public needs. To this end I have arranged that special attention will be given to the whole process of anticipating customer demands and providing the services which customers require and which will be to the financial benefit of the postal business.
The aim is to foster greater use of all the services and facilities which the Post Office can offer, whether in terms of carrying letter or parcel mail or of providing services at post office counters. This may involve the development of new services, and the adoption of more flexible approaches to existing services. Any possibility that would give a better service to users is not being ruled out.
The four broad areas under examination are (i) basic postal services; (ii) express collection and delivery service; (iii) financial services and (iv) other agency services.
One area of my Department's operations which has been growing well in recent years and which offers scope for further expansion is philately. Irish stamps in recent years have been praised internationally for the high quality of their design and production. These qualities have no doubt contributed to their appeal to collectors throughout the world with the result that the Department's revenue from philately will be of the order of £1 million this year. Well over half of this revenue comes from overseas so our stamps are a good source of foreign earnings for the country. A number of steps have been taken to maximise the return from the Department's philatelic efforts. These include continuing attention to the design and production stages of stamp issues to maintain high standards, extensive publicising of new issues of stamps in international philatelic publications and among philatelic dealers and collectors overseas, and the appointment of three agents in the recent past to promote Irish stamps in the British, European and American markets. I aim to continue the good work which has been done in this area of philately.
Good staff relations and a positive attitude towards operational and technological changes will be vital to achievement in the Department and by the various staff organisations to promote these objectives and it is an area to which the Minister of State and myself have devoted considerable personal attention. I think it is true to say that there is still throughout the community as a whole an insufficient appreciation of the futility of confrontation as a means of conducting industrial relations. There are still those who think that benefits can be won without their being earned or by obstructing rather than promoting technological and other changes. We must continue to press the point that apparent gains achieved by these means are illusory and counter-productive and have to be paid for by inflation, slower economic growth and higher unemployment.
So far as the Post Office is concerned, the opportunities for progress and development over the next few years are clear. If they are to be grasped, the Government's commitment must be matched by a similar commitment on the part of management and staff to use the resources provided fully and productively. The necessary skills and talent are available in the Department to do the job.
I have been impressed, in my visits to various post office locations throughout the country since I became Minister, by the evident personal desire and enthusiasm of the staff to see the Department develop and progress and so to provide the public with the standard of service to which it is entitled. These positive attitudes must, in order to be effective, be reflected in a co-operative and flexible spirit towards change and efficiency throughout the organisation. They will then be translated into real achievement.
I now turn to the Department of Transport and in addressing this House as Minister for Transport. I am conscious of the key role which the transport industries—both public and private—for which I am responsible play in the national economy. Now that the effects of the world recession are being brought home to all of us in no uncertain terms. I am determined that my Department and the State companies under its aegis should strive to make the maximum possible contribution to our economic development and in this way facilitate and hasten the day when rapid economic growth—which our country needs so vitally—can be resumed. In this context I think it would be useful if I mentioned the principal areas of development coming within my responsibilities so that Deputies can more fully appreciate the Government's purpose.
As an island nation, adequate air and sea links are essential to us, more particularly as so much of our economic activity is dependent on trade. The contribution of the national air companies to the economy is impressive. In 1979-80 the companies' air transportation activities generated revenue of £152 million while the companies' ancillary activities brought in an additional £86 million making a total revenue of £238 million. Roughly three-quarters of this revenue comes from overseas making the air companies the country's largest single exporting industry and foreign exchange earner. Last year the companies carried a record 2.5 million passengers and over 64,000 tons of air cargo and provided steady employment for around 6,000 persons. These few figures illustrate the scale of the companies' operations and their impact in a national context.
The companies' ancillary activities are mainly in the aviation related area, in hotels, leisure and catering activities and in financial and computer services. These three sectors now provide a major share of the profits from ancillary operations. A new and important development of these activities is the jet engine maintenance plant, Airmotive, which has been launched at Baldonnel, County Dublin. This project, which requires a total investment of £24 million already employs some 60 people. That number is expected to rise to 150 by December next and the plant will employ 600 people at full production. Overall the companies' ancillary activities are proving their worth, in supporting the companies primary transportation activity, creating employment and providing a wider and more diversified base for the airlines' operations and profitability.
The State airports represent an essential infrastructural element in airline operations and are a major source of economic activity in their own right. In 1979 the airports generated a total revenue of nearly £40 million and the airport management agency Aer Rianta provided employment for nearly 2,000 people: the airports handled over 4½ million passengers and 63,000 tonnes of freight and mail. These figures, as well as those I have cited for the airlines, represent the direct and readily-identifiable contribution of the total air transport sector to the national economy. There are, of course a whole range of indirect benefits which are not so readily quantified and yet have a very real impact. These would include items such as the heavy promotional expenditure abroad by the national air companies, the contribution to trade, business and tourism generally of the companies' extensive network of air links, the financial, managerial and technical skills built up by the airlines and increasingly recognised in developing countries, for example where we are constantly seeking out new opportunities in the consultancy field.
There is little doubt that air transportation has been the largest single contribution to the growth of international tourism and Ireland is no exception in this respect. The pleasure travel market is now a vital element for the airlines and this will be clear from the severity of competition between airlines in such areas as fares, especially on the North Atlantic.
Air transport is a dynamic and rapidly changing business. It is not without severe problems, including the escalation in the cost of fuel, the massive investment involved in fleet renewal, severe competition, fluctuations in traffic due to cyclical swings in world economic activity and so on. Our air companies are coping well, however, and I am confident that they will continue to make a major contribution to our national development. In the context of access transport generally, the Government recognise the importance to the economy of the ports and in conjunction with the harbour authorities is taking steps to ensure that our portal facilities are capable of meeting the demands of seaborne trade and of resumed economic growth. By the end of 1980, a total of more than £11.6 million will have been spent on the Cork Harbour development scheme of which over £11 million will have been met by Exchequer grant. The sum of £5.7 million has been provided by the Government for this purpose in 1980. A grant of £1.125 million has also been provided this year by the Government towards the construction by CIE of an additional roll-on-roll-off berth at Rosslare. The availability of the new berth since earlier this year has greatly increased the potential of the harbour and has enabled B + I to introduce the new Rosslare-Pembroke service. Traffic, both tourist and cargo, has been growing steadily on the continental and cross-channel routes served by this harbour with important beneficial results for the Rosslare area. This and other investment in portal development and improvement has also contributed significantly to employment in the construction sector. A grant of almost £1 million has been approved for quay reconstruction at Drogheda and the Government have also given a commitment to proposed extension of deepwater facilities at Foynes Harbour to enable the harbour to accommodate prospective new traffic.
I need hardly emphasise the importance to the economy of adequate shipping services. As an earnest of its commitment to the development of such services the State has provided £10 million in equity most of which has been taken up towards the acquisition by the B + I of an additional car ferry. The ferry which is at present being built at Verolme Cork Dockyard will be launched in early November and should be in service for the 1981 tourist season. Similarly, Irish Shipping will be placing an order for a bulk carrier with Verolme in the near future. Together, these orders will enable the dockyard to maintain employment.
The Irish shipping industry has, of course, had to contend with the problems arising from worldwide inflation and in particular the continuing escalation of fuel costs, as well as a depressed tourist trade. Despite these problems, Irish Shipping Ltd. have continued to trade successfully with the help of their ancillary commercial activities which provide additional sources of revenue to compensate for the slumps which are endemic in the shipping industry. B + I have turned in a loss after depreciation, interest and all other charges of £1.1 million in 1979 and a loss of £3 million is likely for 1980. The difficulties occasioned by the postal strike and petrol shortage contributed to the loss in 1979. The situation in 1980 is attributed to industrial action at Liverpool which cost the company £1 million, the disappointing tourist season and the unremunerative level of rates and fares due to the high level of competition on cross-channel routes.
It must be emphasised, however, that the B + I Company and Irish Shipping's subsidiary—Irish Continental Line— have a very important role in the promotion of Irish tourism which would be difficult to quantify in money terms. Both companies have made a significant investment in shipping infrastructure and are very well equipped with modern fleets and ready to take optimum advantage of improved circumstances.
In the face of the same adverse situation the private sector of the Irish merchant fleet has continued to operate valuable regular cargo services and coastal and short-sea voyages at highly competitive rates. The fact that the fleet can, though with difficulty, maintain itself against all competition—shipping is virtually unique in that it enjoys no form of protection against outside interests —speaks well for its efficiency.
Whilst on maritime matters. I should mention that plans are well advanced for the provision around our coasts of a maritime VHF pilot scheme to improve maritime communications. The initial scheme will consist of up to four remote VHF transmitting and receiving stations controlled from two centres, that is to say, Malin Head and Valentia Coast radio stations. Tenders have been invited for the supply of the equipment for these stations. In the case of Malin Head one remote station will be located close by within 8 km of the station with the other to be sited south of Malin Head on the west coast.
The maritime VHF network will make it possible for ships, fishing vessels and pleasure craft to communicate with the coast station through that medium and it will also provide increased capacity by extending the link call facility from the public telephone system to this network.
The Transport Consultative Commission which earlier looked at the question of passenger transport services in Dublin, a subject I will return to later, are now studying the adequacy, cost and efficiency of the services provided for domestic and international road haulage. I expect the commission to finalise their report in the new year and I am hopeful that the report will represent a major contribution to the continued growth of an efficient transport industry geared to the needs of the eighties.
I am confident that there is much scope for increased efficiency in this sector and I am heartened by experience in the international road haulage sector. The development of roll-on/roll-off ferries to the United Kingdom and the Continent, combined with our membership of the European Community, has led to the creation of this entirely new industry which did not exist ten years ago. It is estimated that employment in the industry at the end of 1979 was over 1,000 and growing at a rate of 20 per cent per annum. There are excellent prospects for maintaining this rate of growth as Irish hauliers make inroads into the dry freight business from which many of the specialist international hauliers were excluded prior to the 1978 Road Transport Act. The liberalisation measures in that Act have been of very significant benefit to our international haulage industry in facilitating diversification from carrying refrigerated goods only to carrying dry freight, which is a substantial growth area.
I am promoting the growth of the international haulage industry by the negotiation of bilateral agreements with various European countries to facilitate Irish hauliers' operations to those countries. Four such agreements are in operation and I expect that several others will be concluded in the coming months. It is also my policy in the EEC and the European Conference of Ministers of Transport to press for much greater facilitation of international multilateral transport.
At present we hold 76 EEC multilateral authorisations and in accordance with a recent EEC decision I have arranged for a number of these to be converted into short-term authorisations, each valid for a period of 30 days. This will enable more use to be made of the multilateral authorisations and will also give me the opportunity of giving authorisation to a greater number of Irish hauliers. We also hold 16 ECMT multilateral licences and this figure is being increased to 22 from January next year.
Deputies, I am sure, are keenly aware of our notorious traffic problems which represent an unpleasant side-effect of the country's prosperity. Traffic congestion in our cities and towns results in the waste of economic resources at a time when our economy can ill afford it. The problem is at its worst in Dublin and I am taking steps to tackle it there. Although these steps may not be entirely appropriate or necessary elsewhere, they indicate the general principles on which the problems can be tackled in other cities.
The programme of action I am pursuing in Dublin has been derived from the Report of the Transport Consultative Commission on Passenger Transport Services in the Dublin area. Arising from that report, the Government decided to establish a Dublin Transportation Authority. I have set up a task force to implement this decision. The task force are representative of the Government Departments directly concerned, the city and county manager and the Garda Commissioner. Pending the establishment of the new Authority, the task force have also been given responsibility for traffic management and for the further evaluation of road and rail investment plans for the Dublin area.
The new Authority will have the overall functions of ensuring the integrated planning and operation of transportation in the Dublin area. The chief feature of the new structure will be a single plan for roads, public transport and traffic law enforcement and a single body responsible for co-ordinating the management of traffic in the area. Using the commission's recommendations as a starting point, the task force are pressing ahead with development of the necessary proposals. I indicated in April last that I planned to have the necessary legislation enacted within about 18 months. That is the time-table to which the task force are working.
: Will the Minister be there then?
: In the traffic management field, the task force and their technical working arm, known as the operations group of the task force, are implementing a strategy designed to reduce traffic congestion, particularly at peak hours, by a transfer of commuters from cars to buses. This is in line with the report of the commission. The first concern has been to improve the level of enforcement of parking regulations.
In accordance with a recommendation of the task force the number of traffic wardens is being increased from the present level of 60 part-time staff to the equivalent, between full-time and part-time staff of 100 full-time staff. Recruitment of extra wardens is taking place at present and I expect that they will be on duty within the next month or so. Additional Garda motor-cyclists are also being assigned to traffic duty.
The task force are also making progress with regard to improving public transport. I have accepted recommendations by the task force in relation to the introduction of bus priority measures. These measures will be introduced on the main arterial routes between the city centre and the suburbs of Rathmines, Terenure, Blackrock, Whitehall and Artane. The measures will be introduced on a phased basis next year, starting in the spring. Bus priority measures will follow later on the remaining main routes. It is desirable that bus priority measures dovetail with the introduction of new buses in Dublin. CIE, who are represented on the operations group, plan to introduce more than 500 new buses in Dublin in 1981-1983, about 200 of which will be introduced during 1981. I will return to this aspect later.
It is in all our interests that the traffic problem in Dublin be tackled. I believe that the programme I have outlined offers the best hope of tackling the problem effectively.
Any discussion of transport matters or transport policy inevitably focuses attention on CIE. The usual highlight of such attention is, of course, the huge and growing annual subsidy which the Exchequer provides for the continued provision of CIE road and rail services. The continuing substantial increases in the CIE subvention are viewed with the utmost seriousness by the Government. As Deputies will be aware, the very sharp decline in the CIE financial position in 1979 resulted in the appointment of the international consultants, McKinsey and Company, to make a study of CIE's financial position with a view to determining such corrective measures as might be possible to bring about an improvement in the position.
The consultants are at present in the final stages of completing their report and Deputies may be fully assured that the report and recommendations will receive urgent consideration by the Government. Despite recent premature publicity I can assure Deputies that there is no preconceived idea on the Government's part in relation to closure of rail lines. The McKinsey report, together with other recent reports on transport matters, notably those of the Oireachtas Joint Committee on State-Sponsored Bodies, the NESC report on transport policy and the report of the Transport Consultative Commission on passenger transport services in the Dublin area will ensure that the Government will be fully alert to the complex issues which must guide policy-making in these areas. The McKinsey study includes an analysis of the underlying financial and operational characteristics of each sector of CIE services, covering passenger and freight services by road and rail, as well as the social and other non-financial benefits and costs of major services.
Debate adjourned.