Dáil Éireann debate - Thursday, 18 Dec 1980

Adjournment of Dáil: Motion (Resumed).

Debate resumed on the following motion:

That Dáil Éireann at its rising on the 18 December 1980 do adjourn for the Christmas recess.

—(The Taoiseach.)

Minister for Health (Dr. Woods)

At the outset I should like to congratulate the Taoiseach on his very fine and comprehensive speech at the opening of this Adjournment Debate this morning. It was a very informative and well balanced speech which truly stated the situation in the country at the present time. I was particularly glad to note that here again, the Taoiseach once more underlined the fact as I fully recognise, that the Government are totally committed to the needy sectors of our community notwithstanding present difficult economic circumstances. This is why the Government during the year have given the highest priority, despite economic difficulties, to maintaining and advancing our social provision for the needy and disadvantaged. This is in contrast to policies which are being operated elsewhere at a time when many Governments tend to panic.

This year we brought about a real increase in social welfare benefits and we have undertaken in the second national understanding to continue to increase these benefits at least in line with the cost of living. The Taoiseach reiterated this promise on the part of the Government again today. Deputy O'Toole said that at this stage there is need for some imaginative and bold initiative. That is one of the weaknesses of the thinking and writing of many people in current circumstances: they want to see some magic wand, or some Santa Claus something that will save us from our difficulties and change trends overnight when in fact they would be far wiser to recognise that there is no such magic wand or Santa Claus in our present circumstances but that what is required is painstaking, well-balanced management of the economy and that this is what the Government under the leadership of the Taoiseach, Deputy Haughey, are giving the country. It is principally to be seen in the day to day management of the economy in the extremely difficult circumstances prevailing nationally and internationally.

I should also like to congratulate the Taoiseach on his recent historic meeting with Mrs. Thatcher on December 8. In contrast to what has been said by many Opposition Deputies I believe that it was a historic occasion. It raised to a new plane the discussions between Dublin and London on Northern affairs. It was one of the most impressive assemblies of Irish and British Ministers probably since the Anglo-Irish Free Trade Agreement was negotiated in London in the mid-sixties and certainly the most elaborate meeting on Irish soil. In this sense it was a particularly significant advance from our point of view. If Deputy O'Toole looks for some imaginative steps I certainly think this was a very bold and imaginative step on the part of the Taoiseach.

But it is in the handling of the economy at present that I think management is of the greatest importance. As Minister for Health and Social Welfare I have to face daily, weekly and monthly the difficulties presented by present economic circumstances. It is in this context that I appreciate particularly the skilful management of our public finances which has been undertaken in the current year. I heard several Opposition speakers call for cuts in our spending on social services and health and at the same time or on another occasion call for increases in a variety of services. This kind of panic and fear on one hand and overreaction on the other has been characteristic of coalition governments as we know them. We are fortunate at this time to have a very steady hand in control of all our affairs.

The Opposition spokesman on Health, Deputy Boland, said that it was a bad year for the health services and for the Minister for Health and that very little was achieved during the year. The facts do not bear this out. The general hospital development programme gathered pace. This is a major reorganisation of our hospital services. Work on the new St. James's Hospital has commenced. The first stage of the development has begun. The Beaumont Hospital has advanced towards its target of completion in 1982. The new hospital in Tralee will be completed relatively early next year. The major new hostel extension at Letterkenny is also close to completion. So, in quite a number of areas we have major changes in the provision of hospital services, a major up-grading and development of these services. These developments are rightly demanded by the people. It means the provision of a very much higher level of specialist and consultant service for the population, which can only be to the benefit of our health as a nation. This is showing already in our general standard of health as a community.

A variety of new facilities for the mentally handicapped and physically ill were commissioned during the year. These include hospitals, day care centres and workshops. A total of 79 projects were advanced during the year, some brought to completion and others advanced to stages nearing completion. Perhaps the most significant step in the provision of accommodation for the mentally handicapped was the commencement of work on the Cheeverstown complex in Dublin, a very interesting and novel complex, really a village for the mentally handicapped

At the very beginning of the year when I assumed responsibility in the Department of Health I established a special division with an assistant secretary responsible for it to strengthen the community based services for the aged and the disabled. We are at present reviewing the effectiveness and efficiency of the home help and meals on wheels services, which are a vital part of the service for the elderly, and other services will be reviewed in the future. The whole Department was given a new orientation, one with particular emphasis on community and voluntary work. This special division within the Department will be responsible for services for the family and child. In this connection the report of the task force on child care services has been completed and the Government have approved its publication. It is only a matter of printing the report. Work on preparing a Children's Bill is in hands. As Deputies know, the task force have been working on their report since 1974.

In consultation with the various interests involved I am taking steps to reorganise the National Social Services Council. This will involve the establishment of a national council for the aged and we expect to announce this shortly. It will advise on all aspects of the well-being of the aged.

During the year we made an announcement regarding the common contract for consultants. This will be implemented from 1 April 1981 in the case of health boards and such hospital authorities that have agreed to accept it. The time span will allow for making the necessary transitional administrative arrangements and for continuing discussions with those parties who have not yet signified their acceptance of the new provisions, with a view to giving such clarifications and undertakings as may be necessary. Discussions on the common contract have been going on since 1977.

I have established a national committee and an advisory body to plan and co-ordinate activities in support of the objectives of the International Year for Disabled Persons, 1981. I am glad to say that today they published their first report. I understand we are the first country to have a report ready before the commencement of the year. I should like to congratulate the national committee on the matter. Copies of the report will be available to Deputies. In addition to the report a substantial calendar has been issued. Despite the concern expressed in this House earlier in the year, this committee have got under way and are dealing efficiently with the job they were given. Both the national committee and the advisory body are working together quite happily.

During the year I was presented with the report of the working party dealing with the question of general nursing. It is a major report and in the long-term it will have a significant effect on the standard of nursing training and the profession itself. The Health (Mental Services) Bill, 1980, has been introduced and has gone through its Second Stage in the Dáil. We look forward to Committee Stage which will allow us to consider and discuss the various proposals made. We hope to introduce Committee Stage early in the next session.

The National Rehabilitation Board have been reconstituted along the lines recommended by the management consultants, with some ideas that I added. The reconstituted board are progressing very well and this has given a major uplift to the rehabilitation board.

We had a difficult year because of the need to make economies where possible in the very expensive health services. I am sure the health agencies were allocated sufficient money to allow existing agencies to continue without any disruption. In this connection I had a series of meetings with the chairmen and chief executives of the health boards and I should like to thank them for their co-operation in dealing with the difficult circumstances we faced during the year. The nurses dispute was settled under the normal procedures available and a new structure has emerged from that settlement. I hope that, following the use of the machinery that was available to the general and psychiatric nurses, we will be able to go ahead with the work we want to do without the worry of dealing with salary scales that needed updating, as was seen from the report of the arbitrator. On 1 November we introduced the family planning regulations which gave effect to the Family Planning Act. Despite many protestations about the Act, it is extraordinary how many people are making use of the legislation. A considerable number have applied for import licences. Despite the concern expressed by a very vocal minority, in general the system seems to be able to handle the Act a lot better than one would imagine from reading reports in the media. I appreciate that there are those who are anxious to see the Act fail. They have expressed that view to me and much of the protestation and noise comes from that quarter. I can only report to Deputies that since the legislation was passed there is an increasing use of the facilities provided.

Deputy Boland said we did little for the health services. It is interesting to note the expenditure on those services in 1976, the last full year the National Coalition were in Government. For instance, on community protection, expenditure in 1976 was £6.1 million while in 1980 it was £14.1 million. On community health services the sum spent in 1976 was £50 million but in 1980 it was £84.5 million. In respect of community welfare services in 1976 expenditure was £16.5 million while now it is £45 million. The psychiatric programme cost £39 million in 1976 while it was £98 million in 1980. The programme for the handicapped cost £22.2 million in 1976 while the figure was £65 million in 1980. The general hospitals programme was £154 million in 1976 but it was £398.3 million in 1980. The general support services programme cost £22 million in 1976 while it was £33 million in 1980. In respect of all non-capital programmes, the cost was £300 million in 1976 while it was £738 million in 1980.

Having regard to these figures it is difficult to see how people can be so critical of the efforts made to improve our health services. A great deal has been said about the mentally handicapped. I would point out that projects now being undertaken or in the process of planning will provide 1,500 additional residential places and more that 800 day places mainly for mentally handicapped adults. I mention these figures to make it quite clear that, notwithstanding the protests made about the need for further spending in these areas, the spending is considerable and is increasing. There is a commitment to spending in each of these areas, which commitment will continue.

I appreciate that people want many services and many of these are indeed very desirable. Nevertheless, we can only progress proportionately with available resources. We are fortunate in present circumstances in the resources currently allocated to these services. Needless to say I am keen to get as much as possible in any circumstances that may arise in future. Under the social welfare section we brought up to date the report of the Department covering the years 1976 to 1978. Very detailed information about the services is provided by the Department, and I hope to keep these reports more up to date in future.

In this year's budget, in line with Government policy, there were quite substantial increases, 25 per cent for long-term benefits and 20 per cent for short-term benefits. These were the highest allocation ever made to the social services in any budget. This has been recognised by the organisations representing widows and old age pensioners in particular. We have carried out a variety of other welcome measures in the budget. In 1976, £46.3 million was allocated to children's allowances and in 1980, £74.5 million.

One measure undertaken during the year related to the transfer of land. We modified the way in which land transfers were treated for old age and non-contributory pensioners. This has turned out to be a very successful administrative measure and has been very widely welcomed.

We have also had the national free fuel scheme which was debated recently in the House. Today, we have had the completion of Committee Stage of the Social Welfare Consolidation Bill, and in this connection I wish to thank the Members of this House and of the Seanad for their co-operation in bringing this very large Bill through the consolidation phase. It was a very onerous undertaking which involved five very lengthy meetings and a great deal of detailed consideration and discussion. I want to place on record my appreciation of the work put into this by the Chairman, Deputy O'Keeffe, and the other members of the committee. We have now moved an order to have this Bill printed, which means that it will be available to the House for Report Stage at the commencement of the next session. This should mean that it should be passed before the budgetary measures become law, so as to avoid having the measures overtaken. All Members of the House will be very pleased with this.

The Taoiseach, in his speech, made reference to the undertaking in the national understanding to provide for improvements in maternity leave. We have also undertaken to widen the scope of our social services by introducing paid maternity leave and increasing the statutory health eligibility limit to £8,500 from 1 June next. Concerning maternity leave, the Minister for Labour will be introducing legislation to grant women the statutory right to maternity leave.

As Minister for Social Welfare, I am preparing a scheme which will provide that a working woman on approved maternity leave will receive an overall weekly amount, including the value of any tax refund, which will correspond to her average net earnings. This will be a very major social step ahead and is one which has been promised under the national understanding. The scheme has already been prepared and we would hope to be able to bring it into operation early in the next session.

Acting Chairman (Deputy Griffin)

I should like to remind the Minister that he has approximately five minutes left.

Dr. Woods

We have also recently introduced in the Dáil and Seanad, passed and now largely paid, a double week's payment in December in accordance with an undertaking given in the national understanding. This was the first time that such a measure was introduced. Most of these payments have been paid out, except for those who did not come to collect their payment on the dates appointed, 11 and 12 December.

Mr. Hegarty

——during the month of December. Finally, I refer to the White Paper on the national income-related pension plan covering employees and the self-employed. This White Paper is now at a very advanced stage and I expect early in the new year to be able to publish it. It will represent a very major advance in our social legislation, one which I am sure the House will welcome and which people at large will be very glad to receive. This will be a very worthwhile paper when it comes and I look forward to an early follow-up of legislation to implement the proposals in this White Paper.

There are various other measures which we have taken, including those related to dental benefits. One of the main benefits there, which I regard as a most important one, is the examination and investigation fee, which is an original concept introduced this year. It arises largely because we have reached a stage where we are less concerned with pulling teeth and more concerned with preserving them and making sure that they are examined with reasonable frequency. That is a very major step ahead which will be recognised in times ahead.

In conclusion, notwithstanding the present financial constraint I look to the year ahead with considerable optimism, feeling confident that, with the support and co-operation of the voluntary and public authorities, the medical profession and all concerned with the provision of health services, further significant advances can be made.

We are fortunate at present in having a Government who have not run away in panic from our social welfare services and our health services, and who have given a commitment — a commitment repeated here again today by the Taoiseach — to the more needy sectors of our community that, notwithstanding the economic difficulties, not only will their position be maintained but, in many instances, it will be improved. I believe the country is being very well managed in that respect. I would like to thank the Deputies wo have co-operated during the year and have given ideas to me in the course of debates. I wish the Ceann Comhairle, the Leas-Cheann Comhairle, the Members and the staff of the House a very happy and healthy Christmas.

Mr. Pattison

At this time of the year, on the occasion of the adjournment debate, the Government place their record during the preceding 12 months before the House and we have the opportunity to comment on it. This debate is noted for the amount of figures, percentages and quotations that have been given. One of the best yardsticks, as far as I am concerned, for judging the performance of any Government is their performance in relation to the less well off people in the community. I am glad that I was able to be here for part of the contribution of the Minister for Social Welfare, because there are some facts and figures which should be recorded here. Charitable and voluntary organisations get many demands for financial assistance from people who are not able to make ends meet. One has only to talk to anybody who is involved in the St. Vincent de Paul Society, the principal voluntary body dealing with people who are badly off and suffering hardship, and one can be told that the demands on their resources this year are of record-breaking proportions. The Government are not really interested in those poor people. I hate to think what the situation would be for the less well off people if we had not got so many people who give their time and some of their resources, which many of them badly need themselves, to help people who are dependent on social welfare benefits.

We do not get an indication of the problems of poverty if we only view the percentage increases in expenditure by the Department of Social Welfare one year against another. The people who work in voluntary charitable organisations take a tremendous responsibility from the State but they are not given the recognition and the support which they deserve. Many people who are very badly off find it very hard to get enough to eat and enough fuel to keep sufficient heat in their homes. At this time of the year many people think of the less well-off people, but those people have the same problems 52 weeks in the year. The Department of Social Welfare have a particular responsibility in this regard. I know it is another Department which have responsibility for price increases. Nevertheless, the Department of Social Welfare could do a lot more to help the people in our society who are very badly off.

The Minister referred to a number of social welfare improvements which were given during the year, particularly the double payment at Christmas, which was given because of negotiations on the national understanding. It is unfortunate that quite a number of social welfare recipients cannot get this double payment. There are many social welfare recipients who are in receipt of sickness benefit or unemployment assistance who are not regarded as long-term recipients of social welfare benefits. It is unfortunate that that element of discrimination had to come into this double payment. I hope that in future years that will be corrected. I am sure Government Deputies, as well as Opposition Deputies, know of many people who are suffering from long-term illnesses who thought they would get this double payment but because of a technicality, they were on monthly certificates and they will not get it. That should not have happened.

I was pleased to note that the Minister referred to improvements in relation to benefits for working wives and mothers. The social welfare code discriminates against mothers and wives in employment and I saw practical evidence of it a few weeks ago.

I am not criticising the official concerned because he was administering the law. I refer to a young married woman who after six weeks maternity leave could not resume work immediately because she was worried about the health of her child. She took a number of further days off and her employer dispensed with her services. When she went before an appeals officer he dismissed her permanently for entitlement to employment benefit and assistance simply because she had acted as a mother should, being more concerned about the welfare of her child than with work. She had been prepared to lose employment benefit for the period when she was not available for employment because of the child's health, but it is absolute discrimination to have sentenced her permanently to disentitlement from benefit or assistance. It is a reflection on the code, not on the officials.

I was pleased to note that the Minister foresees some improvement in relation to all that area of maternity and post-maternity leave, and it would not be a bad idea if he carried his good intentions further and tried to ensure that all these cases will be dealt with by female appeals officers. Fifty per cent of employment benefit and assistance appeals are by women and I suggest that female appeals officers would have a better understanding of their problems. I do not know if there are female appeals officers but I have not seen any in the country.

Another point I should like to draw attention to is the publicity given by the Department to improvements in social welfare benefits. During the year we saw page advertisements in the newspapers about a change in the code which allowed improved benefits, but it was noticeable that there was not any reference to disimprovements, and this led to confusion, misunderstanding and hardship. I refer to the elimination of the rule about the three day waiting period in every 13 weeks in regard to sickness benefit. This was not in the advertisements. Apparently it is only the improvements which are publicised, and if that is the general rule about such publicity then it should be paid for by the political party.

This three day waiting rule on practically all claims is extremely unfair on many people who sometimes go back to work perhaps a week before they are fully fit. Then they may have to stay out again and there is another three day waiting period. The advice to people who are out sick is not to go back until they are sure they have recovered fully before they send in their final certificates, because if they get sick again, say after three days, they will have to endure a second three day waiting period.

I hope the Minister will have another look at that rule. I submit it should never have been introduced. Apparently the Government are conscious of the fact that they were doing wrong when they introduced it, because they deliberately omitted it from their advertisements in regard to other changes in the code. They must have felt very guilty and hoped people would not notice or complain.

Figures and percentages have been quoted indicating that there is now more need than ever for charitable voluntary organisations to help needy people of whom there are more than ever before. All of these voluntary organisations are working overtime to try to alleviate the hardships that have been created, particularly by inflation and rising prices. In the past year the health services and local authority services have been seriously curtailed. Of necessity these services must expand, but this year they have been curtailed overall by 10 per cent. Again percentages mean nothing; it is the effects on the ground that count. Everybody has felt these effects during the year. The health services, and in particular the services for the aged and infirm have been very much curtailed. The hospitals and institutions that cater for those people have long waiting lists. The services that provide medical help for those people who stay at home, services such as the public health service, have been seriously curtailed. Curtailment in the public health services has led to a greater demand on hospital services. Sometimes it is pennywise and pound foolish to curtail services like that, because if the health service cannot afford to maintain its services then things will get very bad and the people who depend on the services will require much more expensive treatment in the long run. The case is similar with local authority roads and the necessary work on pollution. The solution is not to cut back because this usually causes more problems which cost a lot of money in the long term to put right and, as time goes on, the cost of putting things right goes up.

On unemployment, the dole queues are longer. We do not need figures and statistics to tell us. All we need do is visit some of the employment exchanges — and Friday is a suitable day — to see that the queues are much longer than they were last year and very much longer than they have been for many years. There is of course a big increase in the number of people who are working only short time and these are not included in the unemployment figures. Neither have we figures relating to female workers who are discriminated against under the social welfare code, because, once they are disqualified from signing on at the labour exchange they are no longer listed as unemployed even though they have not got a job. It is very difficult to estimate how many such unemployed persons there are but it certainly is a large number.

It is now over 18 months since the Government produced any policy document in relation to energy. The Government are using the cost of oil as an excuse in every area. Yet at the same time they appear to be doing absolutely nothing to reduce our dependence on oil. A few token things have been done. Our economy is 72 per cent dependent on oil and the transport sector accounts for almost half of that oil import; yet the Government have not produced a national transport policy. The Energy Ireland document, produced in July 1978, is now completely out of date. In fact it is not a very accurate document in many respects. But it is the only thing produced by the Government and, having regard to the importance which the Government themselves place upon the cost of imported fuel — and that comes down through every aspect of Government spending — it is amazing that there has not been an updated document on our energy position.

Only recently I was amazed — and the Minister of State was involved with me in this work and so will appreciate what I have to say—that when the coal mine on the borders of our constituencies closed we had to depend on some foreign investor possibly coming in and getting that mine working. We hope that this will happen, that either a native or a nonnative will get that mine open; but it emphasises the point I am making. I, in my innocence, thought that the Minister for Energy would have some plan to put those people back to work immediately. He has not, and I hope that this time next year, if the Minister is still there and if I am still here, we will be talking about plans carried out in 1981 to ensure that we have a national plan to utilise our coal reserves and resources, to provide much-needed employment and reduce imports of oil and, of course, reduce our dependence on oil. That is something that has got to be looked at immediately. If whatever Government are there for the next 12 months will set up a State body to develop our coal resources they will be doing great work by way of job creation and releasing much-needed resources now being spent on fuel imports for the many other needs of this country.

Mr. Callanan

There has been much talk about the state of the country and the Taoiseach spelt out clearly at the beginning of his speech the effects of the recession on the economy. It is very difficult for any Government in such circumstances, but we will not panic as the Coalition Government did and people will continue to support us because they are aware of the severity of the recession. I wish to give my views on how the limited amount of money at our disposal should be spent.

Mr. L'Estrange

There is money for everyone except the farmers.

Mr. Callanan

I will not forget the farmers. I can speak with authority on that subject because I have long associations with farming and farm organisations.

The last speaker was not correct in saying that nothing has been done about the energy problem by this Government. The responsible Minister has done much to find out how best to use our natural resources for energy purposes. I am expecting some provision for the development of private bogland, perhaps grants for drainage and road making and even machinery. The possibilities of solar and wind energy have been investigated, and it is quite wrong to assert that nothing has been done by the Government in this matter.

The present Minister for Social Welfare and his predecessor have done excellent work and have greatly helped the community. I agree with Deputy Pattison regarding the need for voluntary organisations and I pay tribute to the Society of St. Vincent de Paul and other organisations who help the needy. The present Government are also doing much and of course we would all wish to do much more.

I would like to see one change in the area of old age pensions. I have asked successive Governments to increase the income limit for receipt of the old age pension to a realistic level. The present limit is ridiculous. I make a special appeal to the Minister on this matter. The Government rightly increase the level of old age pension every year but they do not raise the income limit.

I also make a special plea regarding the allowance for care of the aged. Unless the old person is bedridden the allowance cannot be claimed by a relative, although it can be claimed by a stranger. If a decent allowance were payable to a relative there would be far fewer people living in homes and dependent on the State. I have spoken on this subject from both sides of the House and I renew my appeal to the Minister. It should be pointed out that the allowance is payable to a person caring for a relative when they are the only two people living in a house, but it is not payable if there are two physically fit people living in the house unless the aged person is bedridden. This is certainly wrong.

There has been much talk about the abuse of farm social welfare. It may be news to some people that of those who voluntarily opted for factual assessment of income last year 80 per cent were deemed to be entitled to an increase. That gives the lie to the allegation that small farmers are robbing the country.

I wish to congratulate the Minister on one change which is particularly appropriate in country areas. When a person decides to sign over property that person will qualify for old age pension purposes once the deed is sent for stamping. Formerly the deed had to be stamped and this could take between six and 12 months. This change is to be welcomed.

Farm incomes have definitely fallen by 40 per cent, and no other section of the community could stand such a loss. No matter how well the Minister does in Brussels, he will not succeed in getting price rises of 40 per cent. In my opinion the EEC must do something to subsidise the cost of production, but the Taoiseach did not mention this in his speech. Let nobody be foolish enough to think that a price increase of 40 per cent can be agreed in Brussels. I have been very worried by rising prices and the increasing costs of production. Price rises are not the answer. If we got £100 less per beast and had the cost of production reduced we would be better off, and that is my opinion as a farmer. Nobody appears to be mentioning this in Brussels. They seem to be against subsidising the cost of production. Subsidies for artificial manures, lime, oil and so on are very important to keep down costs on the farm. Nobody objects to an increase in cattle prices but it is must be remembered that if cattle prices are increased all other costs will also be increased and the farmer will end up worse off than ever.

I think it was Mr. Cashman who said we would be better off if we had not gone into the EEC. I myself had certain reservations but I would not go as far as that. I believed prices would not continue to increase, that they would level off and the cost of production would continue to rise. I emphasised that fact. I do not know why these matters were not discussed in Brussels because they are very important. As I said, I do not believe increased prices are the answer. The EEC have never seriously looked at the cattle industry.

I hope something will be done this year about the western package. We expect a large sum of money for infrastructure in the west of Ireland and we will use this money for arterial drainage schemes. I hope something will be ironed out between the farming organisations and the Government. I realise the present situation is difficult because farm incomes have fallen so low that it will take a great deal to give farmers the courage to continue.

I do not agree that if we subsidise bank interest rates everything in the garden will be grand. I read a survey the other day which showed that 80 per cent of farmers did not borrow. I have sympathy with the young farmer who borrowed on instructions but I do not have any sympathy with the man who has too much land and borrowed to buy more. These people have gone crazy. Did the people who advised the young farmers to borrow think prices would continue to rise? These young men now find themselves in financial difficulties and the danger is that they might get soured — and I know some of them who are soured. Something should be done for these people. I would not agree that the salvation of farmers lies in subsidising bank interest rates. That would help a certain number of farmers but the 80 per cent who do not borrow will not benefit although they need help. Let us put this matter in perspective.

The Minister is anxious to do the best he can in Brussels for agriculture. Interested parties should realise that Irish farming is in the dumps because of the recession. If anybody can get farming moving again it will be this Government. Surely nobody would hand it over to the mixum-gatherum who were in power before and ask them to put farming on an even keel? I do not believe the farmers will do that even though they are complaining. They complained bitterly in Donegal but when they came to the boxes they knew where to cast their votes. I hope something will happen soon to put farming on a more even keel than it is at the moment.

The most important topic outside farming is employment for young people. I am astonished at the switch round of interest. When we were at the by-election in Cork there was not an oil crisis and there was very little unemployment. All the talk was about taxation, and the take-home package. Now all the talk is about unemployment. I would rather be employed and paying tax than join the lines of unemployed. The unemployment figures have risen rapidly to a dangerous level about which I am very worried. I have always said that if a person has brains he should put them to work because if he is not usefully employed he will use his brains in another way.

Years ago we had unemployed but they were not educated. Today we have educated unemployed and it is up to everybody to do what they can to provide employment for these people. If young country people get jobs in towns they often have to travel eight or ten miles from their homes. To get to work they must have a car and they have to pay about £400 car insurance. Can anything be done to start a national insurance which would help young people who are not bad drivers, because they have to pay scandalous amounts for insurance at present? They can no longer get to work on bikes because they have to travel very long distances and this insurance places a terrible burden on them.

Could the Minister for the Environment see his way to giving more money to the county councils in the coming year? As he knows we get a percentage of what we need from the Department and we are finding it very difficult to carry out essential works. County councils and local authorities are having a tough time making ends meet. I congratulate him on the reduction in the interest rates charged by building societies. We try to look after the real poor, but there is a second type of poor. They are young married couples with huge mortgages. They are not so badly off while they only have one or two children but if the wife has to stay at home and look after her children their income is halved and they still have to meet the same repayments. I should like to see something done about that.

It was stated here that nothing was done about small industries. That is not true. When multinationals set up here and anything goes wrong they just pull out. The IDA were told to put the emphasis on small industries. It is not correct to say that we are not looking after small industries. The number of new jobs created this year was very high, but unfortunately industries which are not modernising are closing down.

Mention was made of the buy Irish campaign. I always try to buy Irish, but sometimes it is very hard to get Irish made goods. For example, one will get Irish Christmas cards early in the month but they are not available nearer Christmas. Perhaps shopkeepers do not keep enough of them or people buy more of them than foreign made cards. Sometimes Irish goods are not displayed and people have to ask for them. I do not ask anyone to buy Irish if it is not of good quality. Elderly people tend to buy Irish Christmas cards more so than young people, and perhaps we should consider having more attractive Irish made cards. A vast amount of money is spent at this time, and if people concentrated on buying Irish made goods they could create a lot of employment. The campaign is a good one but it is not going as well as we would like it to.

Deputy O'Toole said that every party wants to do the best they can. That is true. No politician would be such a fool as to try to do wrong. I should like to give some advice to the Opposition as a member of the older generation. It is to concentrate more on policies and not spend so much time slagging the leader of this party, because the people will look at policies and they do not want to hear what happened ten years ago. We had an excellent debate on agriculture and also had a debate on something which happened ten years ago. The papers were full of that but the agricultural debate got little mention. I thought some of the leaders of the Opposition were good but they lost out by abusing the people in power. It was the greatest mistake they ever made.

I was speaking to a person who saw two people being interviewed on television. One was a Fianna Fáil person and the other Fine Gael. This person turned off his television because he said they would only contradict one another. If members of parties gave credit where credit was due to each other it would be better. If, for example, Deputy D'Arcy and I were having a debate and I said: "That is a good point, Deputy D'Arcy" people might say: "We will watch this because there might be some common sense in it". We spend too much time abusing each other and not enough time considering what we should do for the good of the country.

I appeal to the leaders of the Opposition to stop abusing the leader of our party. We are very proud of him. The Opposition should have better policies with which to go to the people and not go to them abusing any party.

All Members should take an interest in the industries in their areas. From discussions I have had with managers and directors of firms in my area I am aware that they cannot continue at the present level and must commence a scaling down of their operations. In some cases up to 25 per cent of the staff have been let go by what were up to now sound industries. The hotel industry are using the winter months as a time to give holidays to their staff. Some hotels have had to reduce their staffs drastically because their overheads and expenses are so high. They say they cannot afford to carry any surplus staff at present. The Government may blame oil and the recession here, there and yonder, but they must remember that when they opened the floodgates in 1977 progress could not be made. There is little use in trying to fool us in this or any debate because the facts are there for everybody to see. The Government must accept full responsibility for these problems.

I have a great interest in the work of my local county council and I should like to tell the House that it is hard to assess the amount of damage that has been done to the work of that body in the last two years. The increase in income of the county council in the last two years has been tied to 10 per cent, together with a small increase of valuations of about 3 per cent, but in the same period costs faced by most councils rose by 25 per cent. Our road network has deteriorated to an appalling state. Our arterial, main and county roads are all costing road users a lot of money. It is because of the condition of those roads that people are detained for long periods in traffic jams and cannot travel in comfort or safety on them. It is important that we upgrade our road network. In my view our people would prefer to pay road tax in the hope that progress would be made on the improvement of our roads.

Another area that has suffered is housing. If we are to have a contented society we must provide good houses for our people. It is the responsibility of the State to provide houses. During the period of office of the National Coalition great strides were made in the provision of houses, but in the last three years most county councils have had to scale down their operations. During the term of the National Coalition Wexford County Council built approximately 172 houses per annum. Since 1977 that council averaged 135 house per annum. The waiting list in 1977 was 800, but in 1980 it has risen to 1,300. That is a clear indication of the lack of progress in a well off county such as Wexford. It is the responsibility of the Government, who have refused to provide the funds for housing. There is little the county council can do about that problem.

Mr. Connolly

That is not correct. The Deputy should look up the record of the last two years.

An Ceann Comhairle

Deputy D'Arcy should be allowed to continue without interruption.

Mr. D'Arcy

The figures I quoted were released by Wexford County Council. The Government may say that they gave us so many millions of pounds extra, but it should be remembered that when we were building houses under the National Coalition they cost in the region of £10,000 or £11,000 and that now they cost about £21,000. The increased allocation is not of much benefit to the 1,300 people on the waiting list. Wexford County Council have had to reduce the number of houses they can build annually by 40.

Mr. Connolly

That is not correct.

Mr. D'Arcy

Private house building is also in a bad state. A three-bedroomed house in Wexford, taking into consideration the cost of a site, of services and the house, costs in the region of £25,000. A young married couple borrowing £12,000 from the county council must meet repayments of £32 a week. In the majority of cases such a married couple may have saved only £5,000 and must get a further short-term loan from a bank or the credit union. That additional borrowing costs a further £30 per week. The repayments on a three-bedroomed house at present is in the region of £60 per week in Wexford. We have adopted a scheme under which we lease a site to a builder and allocate people for the houses. The majority of people housed under that scheme face repayments of £60 per week. I understand that the next set of houses will cost in the region of £23,000, an increase of £3,000. It is serious when we are talking of such people facing repayments of £60 per week with the industrial wage in the region of £100 per week. How can such people be expected to house themselves? Costs have escalated out of all proportion and as a result private housing development in most counties will not proceed.

As a Deputy in this House I have an interest in the county councils and they are important to the people. They represent the last semblance of democracy in our country. The Government should pay a little more attention to ensuring that sufficient money is available to the county councils to provide the services in each county. This Government have caused Wexford County Council the loss from one year to another of £1 million. The county manager was before the council last Monday asking us to approve overdraft accommodation for £1 million. It is unbelievable that things could deteriorate in such a short time.

The consequences of the Government's inability to provide definite criteria for the development of agriculture in the main dairying and beef production areas have yet to be felt. That we have allowed 1980 to pass with such a volume of live exports of cattle while we are operating at such a reduction on the EEC guide price is contributory to our inflation rate and also adds to the erosion of the farmers' confidence. However, the attitude, consistent on the part of this Government, is that it will sort itself out in time to come. In plain language all it means is reduced numbers in our cattle herds.

Interest rates are another avenue of involvement for the Government. With such a lot of development in agriculture over the past few years following on the Farm Modernisation Scheme there has been a massive injection of money from the ACC, the banks and other sources into agriculture. The cost of this capital has risen very significantly in a short period and another means of extracting money from agriculture is the increased interest rates. In this case I can describe it as farmers' own income. The very high numbers of cattle slaughterings in 1980, somewhere in the region of 480,000, must be described as the seed of next year's crop having been eaten and then one can realise the full extent of our plight. Quick and definite decisions are required in order to stabilise the situation before we can start to plan a regain of lost territory. Money allocations to subsidise increased interest rates which have been brought about by this Government party would not strain the Exchequer to any great extent but would go a long way to ease the present pressure on agriculture. Since the days when Deputy Clinton was Minister for Agriculture farmers have viewed Agriculture Ministers' meetings with apprehension. We have now our second Minister for Agriculture under this Government and there is no improvement. We have lost momentum.

Taking into account our position with regard to inflation compared with other EEC states we have a very special case. We have very little real development other than on borrowed capital. We are very susceptible to cost increases. An accumulation of these factors provides us with very useful machinery to seek a justifiable price increase. Farmers' income in the past two years has fallen by 40 per cent and upwards depending on the enterprise. Various figures are floated around by the Government and the farming organisations, but my belief is that the drop is in the region of 40 per cent. A good case can be made for a price increase of a minimum of 12 per cent. We hear Mr. Gundelach sounding the warnings about the cost of subsidising surpluses in agriculture. We have heard such warnings before and we will hear them again. It is vital at this stage that as far as our agricultural industry is concerned we should have a price increase.

I appeal to the Minister for Agriculture and to his Ministers of States when they go to the negotiation tables and when leaving the airport in Dublin not to weaken their own case by talking about all the difficulties they are going to meet. This has been their attitude for the last two years, and before they leave the airport that information is in Brussels. They have weakened their own case consistently.

What has happened to the farmers? Why did the increase in agricultural production stop? It is not too hard to point out what has happened. One big thing as far as this Government are concerned was the infamous 2 per cent levy imposed in the 1979 budget. Deputy Callanan talked about panic, but this was panic at its best. We saw the then Minister for Finance making five or six different statements on this issue and the farmers got not alone this 2 per cent levy but four others as well, three in the same year. This did unbelievable damage to confidence in agriculture. People said and still are saying, "What next? What have the Government in mind for us?". They had a meeting with the IFA and the headline in the paper next day was "Surrender". Surrender to whom? Then we had the PAYE march and back came the 2 per cent levy and others on top of it.

One cannot believe the amount of damage the introduction of this 2 per cent levy did to the confidence of those engaged in agriculture. Following on that in the 1980 budget we come along with another tax known as the resource tax. This was another measure that bore no relation whatsoever to income or profit, and this is where the Government made a fatal mistake. Any tax, no matter what measure is implemented, should be related to profit and to income. Both these measures bore no relation whatsoever to either, and this is where the mistake was made. When farmers got their cheques and saw five levies deducted from those cheques, that is what affected them. They said, "I am not going to continue producing extra milk or extra beef" and they started to scale down their operations. The first of these measures, the 2 per cent levy, is now before the courts. I hope that it will have to be paid back to the farmers, because it should never have been taken from them in the first place. We told the Minister at that time what damage it would do. It raised only £10 million or £12 million. I am not sure of the exact figure.

Mr. L'Estrange

It was £17 million.

Mr. D'Arcy

If the court shall so decide the Government will have to pay back the full £17 million. I hope they also have to pay interest on it.

Regarding the resource tax is it not awful that at present numerous farmers who have made arrangements to borrow money in 1980 to pay rates, resource tax and also the accountant will not be paying any income tax because they have no income on which to pay it? Those facts cannot be contradicted. The interest rate payable on money at the moment is 16.5 per cent, and that is exorbitant, although I accept that it did go up to 20 per cent. At present in certain cases the commercial banks are imposing penalties on people who are unable to meet their commitments. I have known at least two or three cases where a bank manager has written to tell a man that on top of the ordinary interest rate he will have to pay a further penalty of 2 per cent. I appeal to the Minister for Finance to take up this question with the banks. It is his duty and responsibility. We have heard the Minister for Agriculture state that anybody in this predicament should contact his local TD or the Department of Agriculture, but the majority of people are afraid of the bank manager and what he may do with them next year or the year after. They are afraid to submit the necessary evidence. The man to whom this case should properly be made is the Minister for Finance. This is another area in which we are on our third change. There is certainly no consistency in this.

Mr. Briscoe

Why do you not submit the evidence you have?

Mr. D'Arcy

I make the statement here as a responsible Wexford Deputy. I have seen the evidence. I hope the Minister will accept that what I say is correct. I have no doubt that if the Minister wishes to interest himself in this matter he can get sufficient evidence because it is available all over the country.

Mr. L'Estrange

Ask some of the county councillors in rural Ireland. They have it and they are not afraid to mention it, some of them.

Mr. D'Arcy

The Fianna Fáil Party are at present asking themselves what is happening. They may say everything is rosy in the garden, as the Taoiseach said this morning. I make no personal attack on the Taoiseach. It is his role to play the game that way but there is no use in him fooling himself: everything is not rosy. Everything is difficult, whether it is industry, agriculture or employment. The majority of people are in serious trouble. The recession in agriculture is being felt in every rural town. Business people are coming to me to ask what is happening because the farmers are not spending money and the shops' turnover is going down. It is the Government's responsibility to create confidence in agriculture and get the necessary investment.

We are to have the budget on 28 January. If the Government attempt to introduce a levy or tax on agriculture that does not relate itself either to income or profits it will be the last straw as regards agriculture. We had the statement by Donal Cashman in this morning's Irish Independent that agriculture is worse off than before we joined the EEC. I said this four or five months ago and I understand our leader said it only a month ago. It is true. Is this not a shameful position to be in? The one thing for which we joined the EEC was to get extra money for agricultural exports. We now find the income of those in that industry so reduced that they are worse off than before we joined — a pitiful situation.

I should like to quote from one of our leaders, Donal Cashman, chairman of the IFA, who said: "Ireland is becoming an economic lame duck in the EMS. In 1980 we have the highest unemployment rate among EMS countries, the highest increase in wages and salaries, the highest balance of payments deficit, the highest level of Government borrowings and our inflation rate, slightly below that of Italy, is more than double the EMS average." If everything was rosy in the garden I doubt if the national leader would make that statement. That statement is correct. Nothing is rosy in the garden.

As regards the new land policy put forward by the Minister, I criticised it on the day it was published. My greatest criticism is that so many Departments are involved in it — Lands, Agriculture and Finance. We shall have problems when that legislation is enacted. My second criticism is that we have been promised this document for about three years. We were told by the then Minister, Deputy Gibbons, in Kilkenny that he had it available. We were told by the present Minister for Agriculture, Deputy MacSharry, that he had it available. At the end of three years we find in portions of this document a passing of the buck, in plain language. ACOT will operate a certain section; somebody else will operate it. It is a lazy document. Sufficient research was not put into it and it is inadequate in every respect. It is unbelievable that at this stage the Minister for Agriculture would involve three Departments in any legislation.

The intrusion of the civil service in any areas that are properly the domain of private enterprise with the powers they have assumed acts as a deterrent to private citizens who might reasonably become involved in these areas but for the multiplicity of petty rules. The State has intruded to a far greater extent than is either prudent or acceptable. In direct contrast to the private sector the public sector is growing at an alarming rate to the detriment of the economy. The complexity of the rules governing relatively minor transactions perpetuates the civil service habit of making the simple difficult and the difficult impossible. I call for simple direct procedures where a citizen deals with the State so that the citizen gets on with his business with the minimum interference from the State. The making of all these rules only expands the non-productive civil service and at the same time harasses the ordinary people beyond reason and any planned future legislation such as this should bring with it the minimum intrusion into the life of the ordinary citizen.

I believe the land policy has good points in it. In principle it is good, but it is physically impossible to operate any legislation with three Departments involved.

In the past two years we have seen a development in the social services area, particularly in my own constituency, as regards medical cards. In assessing eligibility for medical cards an invisible £2 a day is added to the income of the person concerned if he or she has the right to live in the house made over to a son or daughter. This invisible income works out at £14 a week with the result that these people are not eligible for medical cards. I call on the Minister for Social Welfare to ask the Department under his control to stop adding this £2 per day invisible income to old age pensioners. I have seen quite a few old age pensioners with no medical cards. The cost of getting a doctor to call to a house now is about £6 and as a result of not having the money these pensioners refuse to send for the doctor. This is an unfortunate development for our old people. I appeal to the Minister to have this procedure stopped immediately.

I shall finish by calling on the Government to stop the decline and stabilise the economy and try to restore the confidence of our people.

Mr. Briscoe

I should like to put the record straight regarding a number of statements made by Deputy D'Arcy. The Minister of State, Deputy Connolly, has asked me to point out that in 1977 the number of houses built was 24,500; in 1978 it was 25,400; in 1979 it was 26,400 and in 1980 the figures is expected to be 27,000 houses completed, an all-time record.

Mr. D'Arcy

Give me the Wexford figures, please.

Mr. Briscoe

The Coalition Government allowed private building to run down completely. In order to qualify for an SDA loan you would have to be on the dole in the period 1973-1977. The income limit of £2,230 was never increased in that period of their office. The loan for a new house was £4,500. We increased the salary limit three times and we also increased the loans for new houses and for reconstruction purposes. The total amount of money made available in 1977 by the National Coalition Government in respect of SDA loans was £17 million. This year the amount available will be £65 million.

I should like to deal with a subject that has not been affected by the recession and I know the Opposition will agree with me on that. I am referring to the amount of money allocated to youth and sports. The Minister of State at the Department of Education, Deputy Tunney, is present and I hope he will not be embarrassed when I say I have the highest of praise for the way he has carried out his work. He has been most imaginative and has introduced many innovations in his Department.

More than 50 per cent of our population are under 25 years of age. In the last year of the National Coalition Government the total allocation for youth and sports was £469,000. This year we will have spent £10 million. The Minister of State has introduced a scheme for development officers for which 100 positions have been approved. Eighty-five people have been appointed already. Under the scheme introduced last year the voluntary organisations who employ development officers qualify for financial assistance over a four-year period.

This year some 20 million has been spent on cross-Border developments, another of the Minister's innovations. Expenditure of this kind may come as a surprise to some people because this is not what we read about generally under large black headlines in the newspapers. How many people are aware that we are the only European country who award athletic scholarships? Last year we awarded six such scholarships and we are awarding more scholarships this year. The Government recognise the importance of sports and physical recreation activities in the lives of the people. I know that the Minister considered that for too long we were trailing behind other European countries who were spending much more money on facilities for physical recreation and he endeavoured to correct that situation.

The Minister has participated in various conferences and has hosted conferences this year. This year the youth employment scheme will cost £1.58 million. The scheme is of benefit on two counts: first, it provides employment and work experience for young people; secondly, it provides amenities that would not be there otherwise. There is a national plan for such facilities. Already 19 major sports recreation centres are under way and 45 others are at the drawing board stage. Santry Stadium, which is well-known, was literally a derelict site. Nothing was done about it during the period of office of the National Coalition but now it is one of the most up-to-date tracks in the world. It has flood-lighting equipment and an eight-lane running track. The Minister can be proud that he pushed through this project. He did this with the agreement and co-operation of Dublin County Council and Dublin Corporation. They played their part also and they deserve to be congratulated.

The National Sports Council, which was established in February 1978, have done excellent work. They have been very successful in promoting the "Sports for All" events. The National Sports Show and the Recreational Planning Conference held in February of this year were promoted most effectively by the council. I should like to take this opportunity of congratulating Cospóir on the wonderful contribution they have made to improving the quality of life and to congratulate the Minister of State for having selected the right people for the committee. I should like also to compliment him on the appointment of the O'Sullivan Committee. They have just reported to the Minister on youth—an excellent report carried out by dedicated people.

All of this has been happening in our social life. It grieves me that amidst all the gloom and doom there has not been a reference by any Member of the Opposition to what has been done in this area. It is having a tremendous impact on the life of our young people. Today the White Paper on Education was published and the future of sports, recreational and other activities is outlined in that document. Let us compare that with the paper on education brought out by the Fine Gael spokesman on Education, Deputy Collins. I challenge anyone to show me one word in that document on the subjects that I have mentioned. Fine Gael have no policy with regard to youth.

Mr. L'Estrange

The Deputy is using the Minister's speech.

That is full recognition by the Department of Education that not just physical recreation but youth work generally is an integral part of the education of the young person. In 1972, I remember trying to get across to a number of people this philosophy that youth work was part of school education, and that it was the second chance for many young people to get an education. The Department of Education, under the Minister, Deputy Tunney, recognised this.

Vocational education committees will be developed as the appropriate local statutory body to develop youth work services at local level. The chief executive officer will be the person responsible for arranging, co-ordination and co-operation at local level between the voluntary sector and the various statutory agencies in the development of services to youth. A programme will be introduced initially in four pilot areas with the appointment of special full-time link officers and the provision of additional funds in these areas. The Minister is to be congratulated on that.

Increased moneys will be given to Comhairle le Leas Óige, a youth advisory body in Dublin. That body never got one increase in their total allocation for the four years that the Coalition Government were in office. Under our Government they have had a substantial increase.

In paragraph 18 of the White Paper, the Minister states that it is proposed to support the reorganisation and further development of youth services in Dublin city area by Comhairle le Leas Óige. The Minister recognises the special needs and circumstances of the greater Dublin area and is at present considering the question of extending beyond the city boundary the type of services being provided by the comhairle.

This, again, is most progressive and long overdue. When we were in Opposition we pleaded with the then Government to extend across the city boundary because so many of our young people straddled the boundary of Dublin. I have always felt that the boundary should go as far as the county boundary and embrace the whole of County Dublin. It is very unfair that when funds were needed they could be made available within city limits but sometimes when they were needed more urgently outside the city boundary the money was not allowed to be spent.

I would ask the Minister to look at the question of the limit on spending money on people under 12 years of age. He has guaranteed financial provisions for all the national youth organisations. It should be accepted by all that there has been a welcome, if belated, breakthrough on youth sports and perhaps even the Opposition might acknowledge that. All the youth organisations have been most lavish in their praise of the work of the Minister of State. I am delighted to have this unexpected opportunity to tell that to the Minister in person. These youth organisations are very appreciative of his dedication to sport and youth work generally. I am a regular reader of the Catholic Youth Council paper Utopia which frequently has articles on some new aspect of youth work which the Minister has initiated.

I have made the points which I wish to make on this aspect of life. We have listened to a lot of speakers from the Opposition decrying the state of the country. The previous speaker said that the Taoiseach's speech this morning painted a picture of everything in the garden being rosy, which the Taoiseach did not do. He explained that because of the economic policies of this Government we have come through this year better than many of our European counterparts. I do not think that anybody could query that. He has stated quite clearly that the essence of good economic management in times of economic difficulty is to maintain intact the ability of our economy to provide acceptable standards of living, while improving as much as possible its basic capacity so that we can seize the new opportunities rapidly and effectively when the economic world climate improves.

This Government have pursued, as an integral part of their economic policies, the policy of having the capacity to avail, more quickly than most, of the new opportunities when the curtain of recession rises. If the world recession does not end within a reasonable time, it will mean economic disaster for the whole of this part of the world as we know it. I am an optimist and I believe that the recession will end sooner rather than later. The amount of investment in this country is the best proof of what outside investors think of us. Many new technological industries have come into the country. We have a work force made up of young people who have been well educated and have the intelligence to adapt to the new, highly technical skills, which will be required by many of those industries. The computer industry immediately springs to mind. I am quite certain that because they know their investments here are sound many foreign industries are setting up here. It is quite a compliment to our people that we are not feeling the cold quite as much as other countries in Europe.

The Minister for the Environment referred to what we consider is essential and what the European Community consider is essential to us, new infrastructures and improvement of existing infrastructures. If we do not do something very quickly about our roads we will not be able to avail, after a certain period, of industries that would like to come in here. Our road systems, particularly in the Dublin area, must be developed. I have been most consistent in stating that failure to improve our road systems as rapidly as possible means that there will not be any future prospect for many of the children going to school today.

We are forging ahead as rapidly as we can in installing new telephones. I believe that the figure for telephone installations this year will be an all-time record in spite of all the difficulties. A telephone has become almost an essential service to many people today. I did not have people coming to my clinics looking for telephones ten years ago but today about 20 per cent of those who come are looking for telephones. It is a sign of the times that the telephone has become such an important service. This is a very healthy sign.

We have made progress this year in spite of the difficulties we have experienced. Most people hope that we will not have industrial unrest in 1981. We had a pretty good year, industrially, compared with previous years. As the Taoiseach said trade union members, particularly, are beginning to realise that their jobs can be put in jeopardy by irresponsible strikes, particularly unofficial strikes, which take place. I do not know of any official strike which took place during the past year. As far as I know they were all unofficial.

It is to the credit of the Government that our job creation programme has continued at the rate it has. No. country in Europe can boast of the same percentage of its population in relation to job increases as we can. Most European countries are experiencing a continuing decline in employment with very little new industries opening up. I believe we can look forward to a good year in 1981 if we can exercise a certain amount of discipline. The Opposition should resolve in 1981 to be a little more responsible, if they can. I feel a certain sense of shame at their conduct over the Taoiseach's meetings with Mrs. Thatcher. They were less than honest in their attempt to denigrate those meetings. I do not believe they did their parties or the country any good. When the leader of our nation meets with the leader of another nation we should accept communiqués from both of them in the manner in which they are presented and in relation to what they state.

Mr. L'Estrange

I would like to take up the last comment of the previous speaker, first, in relation to the Opposition not being responsible. We have been a responsible Opposition from the foundation of the State. As regards the last meeting with Mrs. Thatcher we were quite responsible but reading the papers and listening to commentators one would think that it was more hysterical than historical. We have always hoped for an end to the unfortunate conflicts which exist between our brothers in Northern Ireland and ourselves. We want to see bridges built, the hatred and the fears which have existed there for far too long ended and our people coming together. If the Government at any time are able to do what we were able to do at Sunningdale, good luck to them and we will be 100 per cent behind them. At Sunningdale we had the Unionists and men like Brian Faulkner, John Hume, Gerry Fitt, Austin Curry, Paddy Devlin and others coming together and working as Irishmen should, forgetting the bitter past.

We want to see that in the country again. If the Taoiseach or anybody else brings us that far along the road to reunion he will have our support 100 per cent. I would like to give credit where credit is due. As far as the Minister of State, who is in the House, is concerned he has taken an interest in youth and we congratulate him for what he has done over the years. We wish him well in his job. It is wrong to say that we did nothing in that particular ministry because since the foundation of the State we have also been interested in our youth. I realise at the present time that 50 per cent of the youth of the country are under 25 years of age. About 63,000 young people left school last year and many of them are now looking for work. If they do not get it I would much prefer to see them running in Santry or engaging in some other leisure activity than becoming involved in vandalism or going to pubs or taking drugs. Deputy Tunney will always have my support in promoting sporting activities for our youth.

However, I am afraid Fianna Fáil have given up their proposals on sports and other such leisure activities. For instance, they disbanded the Garda Band about 14 or 15 years ago and it was only on the eve of the general election that they resurrected it. Of course it might be better to forget some of those things, but the last speaker referred to what the Government had been doing for the needy. I will tell him what they have been doing. They intend to close down the organisation set up to combat poverty. That is a retrograde step because we have never had such widespread genuine poverty. However, that organisation dared to criticise the Government and they are therefore being closed down.

Listening to the Taoiseach's speech today I thought I was on another planet. Apparently things in Inishvickalaune are different from the rest of the world or the rest of Ireland. The Taoiseach blamed the rest of the world for the present miserable state of the economy. He blamed the increase in oil prices. When we were in government the price of oil was increased by 400 per cent but in the lifetime of this Government so far the increase has been between 80 and 90 per cent. We did not get much help from them at that time; they castigated us and preached the gloom and the doom they are accusing us of today.

In the short time I have I will ask the Government to spell out for us their policies on agriculture. In 1976 when we introduced proposals to deal with agricultural problems they marched into the lobby to vote against our effort to restore some confidence in the battered agricultural community. What have they done about industrial relations, about unofficial strikes in respect of which they pledged in the manifesto to take positive action?

Last weekend, we have been told, the Government shut themselves in Barretstown House for a think-in on the economy. They promised in the manifesto that there would be less Government borrowing. In this respect, if the Taoiseach can be accused of anything in his year of office it can be the number of U-turns he has managed. Mrs. Thatcher said she would not have a U-turn. If Mrs. Thatcher is not for a turn somebody apparently is. The Government were to take immediate action to correct the economy, particularly to correct Government borrowing. All they have done is to open cowsheds, and one of them even unveiled a plaque to himself. That will not do much to help our battered economy.

We were told that State borrowing would be reduced tremendously: borrowing as a percentage of GNP was to come down to 8 per cent. It is now 14 per cent. This week we passed Supplementary Estimates for £664 million. Ordinarily there should be a budget if that amount was to be voted, but of course we are on the eve of a general election and it is better to pull the wool over the eyes of the people than to admit that extra taxation is being imposed. In 1977 we were accused of over-borrowing but the present Government, in three and a half years have more than doubled the national debt which now stands at £7,500 million. In other words, we have borrowed more in the past three years under Fianna Fáil than in the previous 57 years of independent Government. I defy the Minister in the House to contradict that.

The servicing of that enormous debt is costing us more than £500 million a year, more than all the money being taken annually in income tax. Last year we had to pay more than £880 million interest on loans borrowed between 15 and 20 years ago.

The Government have done a U-turn on industrial relations. The Taoiseach told us he would clamp down on unofficial strikes but he has not taken any action apart from recognising a certain group of unofficial strikers, the first time any Government has done that since the foundation of the State. We in Fine Gael would back the unions in their official actions but it is irresponsible unofficial union action which has been doing untold damage.

I will give more instances of Government U-turns. Free school transport was to be abolished but when they were put under pressure they shied away from it. They were to penalise farmers in the £40 to £60 PLV bracket whose rates were accordingly trebled. Now they have asked local authorities to return half of the rates already paid by these farmers. However, farmers are paying from 60 to 70 per cent more in rates this year than last year and more than 100 per cent higher than in 1978, although their incomes have been halved in comparative terms. The Taoiseach also spoke about the growth rate which is above the community and OECD levels. When we left office, despite the fact that we had gone through a most severe recession and had to cope with a breakdown of law and order, we had a growth rate of between 5¾ per cent and 6 per cent. Perhaps the Taoiseach would tell us exactly what it is today. Is it 1 per cent or is it 1½ per cent or is it 2 per cent? We do not seem to know.

The Taoiseach then spoke about expanding our exports above the Community and OECD averages. If there has been an increase in our exports it is because farmers are selling off next year's breeding stock. We are selling next year's seed potatoes and our dairy herd has been reduced this year by 500,000 cows. That is most serious for the economy and the whole country.

The Taoiseach also spoke about bringing down the rate of inflation from a peak of 20 per cent to the current rate of 12 to 13 per cent. Who does he think he is fooling? According to the November figures, which came out recently, the annual cost of living increase stands at 18.2 per cent. It is wrong that the Taoiseach or anybody else should mislead the people of this country. What we want from the Taoiseach is the truth, and the whole truth, because things are certainly bad at present. We are living on borrowed time and on borrowed money and the present Government are keeping the full truth from the people, and unless they are removed from office very quickly this country will be faced with economic ruin. The economic situation is far more serious than the Government care to admitand, unless some positive action is taken soon, irreparable harm may be done to the whole economy.

There is no use in continuing to hope that the present Government will take any necessary or desirable steps. They are prepared to pull the wool over the eyes of the electorate. They are too preoccupied with the political matters on which their own survival depends. We have mounting unemployment with 115,000 people and 50,000 school-leavers without a job. It is increasing by 5,000 per month with factories closing and the Government seem to have no policy. There is a spiral of rising prices without parallel in Europe. We have a national debt. Large sections of our population are forced to exist on social welfare benefits. Factories are on short time and closing weekly. Farmers' incomes have been reduced by 50 per cent in the last two years. There is unrest at every level, as is shown by demonstrations on our streets. What are the Taoiseach and his Cabinet doing to face up to this? They are doing nothing except performing a public relations operation. Despair and despondency stalk this land today especially among farmers. If there is a mood here at present it is one of quiet desperation due to the uncaring attitude to the plight of so many of our less well off people and the dictatorial and arrogant attitude of some of the brass necks in Fianna Fáil. Increasingly people are becoming aware that the Government are divorced from the people.

The arrogance of Fianna Fáil is magnificent in its impertinence. It shows a complete disregard for the hard-hit sections of the people. Even more, it shows the corrupting effect of power held by the wrong people for the wrong reasons and for too long. As far as we are concerned in this party, of which I am proud to be a member, we are committed to promoting the welfare of all sections of the community and strengthening in every possible way our agricultural and industrial arms. We recognise the vitally important part that agriculture has to play in national development and in securing a better standard of living for all our people in country and in town. It is a fundamental part of our policy to restore prosperity to the agricultural community, which is the foundation stone of our economy. Farmers earnings have been almost eroded.

There is only one remedy available. That is to get Fianna Fáil out of office as speedily as possible, and we challenge them to go the country in a general election before the country crashes like a pack of cards around their heads. The country has been propped up in preparation for a general election by excessive borrowing and by the printing of confetti money. It is time the people woke up to the slick, crafty public relations gimmickry before it is too late and the ship sinks altogether.

Mr. Bermingham

In the time allotted to me I will try to recapitulate on some of the arguments that have been put forward by my party in this debate. One thing that I find difficult to understand is the note of optimism being struck by the Taoiseach and the Ministers in these times, because even the youngest child knows that the country is in serious economic trouble. That is obvious to everybody. Yet we have Minister after Minister coming in here to paint a rosy picture and going around the country trying to tell us that everything is grand and that we are flying. Do the Ministers really think they are talking to fools?

I think it is more sinister than that and that they are trying in no unmistakable manner to build up euphoria for an election. This is the only explanation I can think of. It is the duty of the Government to admit that they have failed in the measures that they proposed to take three and a half years ago. The slogan at that time was "get the country moving". We all remember that. They must have meant that they were going to go into reverse because they have moved backwards since then as we can see.

I have here a document issued to the voters in Kildare by Fianna Fáil in 1977 and it makes very interesting reading now since Fianna Fáil, who were going to get the country moving again, have put it in reverse gear. They were quite successful with this type of propaganda all over the country. I will not bore the House with all the things in it because everybody knows this was going on in every constituency. There was talk about people from Kildare travelling long distances to work by car who would do well. But they increased the cost of motoring despite the removal of the tax. In successive budgets they increased the price of petrol, and particularly in the last budget when 20p a gallon was put on petrol. So much for cheap oil and fuel which means so much to industrialists and people going to work. Now they try to tell us that our troubles are due to the increased costs of oil and petrol. Why did they increase the price of petrol so much in their last budget?

They talked of the high percentage of young people out of work in 1977 and said they would provide 20,000 new jobs during their first year in office, including 5,000 jobs for young people, and would create a further 60,000 new jobs during the following two years. That is what they were telling the people of Kildare in 1977. The truth is that unemployment figures in that county have doubled under this great Fianna Fáil Government. The number of unemployed in August 1979 was 1,466 and this figure rose by August 1980 to 2,230. Instead of the great move forward we have witnessed the reverse and the example I have given is typical of every county.

I have with me an interesting document from the Kildare County Development Scheme listing the redundancies which have occurred in the country during the past two years. They are as follows: Killdara Spinners, 150 jobs lost; Irish Ropes, 110 redundancies, Curragh Knitwear, 30 redundancies; Rotary Screens, 35 redundancies; Bamfords, 33 redundancies; Fruehauf, 25 redundancies; Donnelly Mirrors, 18 redundancies; Task Printing, 20 redundancies; Irish Commercials, 12 redundancies; Athy Wallboard, 165 redundancies; Bordens, 15 redundancies; Tegral, 36 redundancies; Kildare Wallpapers, 77 redundancies; Irish Ceca, 28 redundancies: Doyle Concrete, five redundancies; donaldsons, 38 redundancies. Fianna Fáil stated in their manifesto that they would provide jobs for all our young people, yet there have been over 500 redundancies in Kildare, a county which many people say is fortunate because it is near Dublin and has all the advantages for industrial expansion.

Ministers have the audacity to say in this House and elsewhere that everything in the garden is rosy. Whom are they trying to bluff? It is the duty of the Opposition to point out that they are not being truthful, to say the least, in saying that the economy is doing well. The figures I have given cannot be denied. The former Taoiseach said that when the Fianna Fáil Government left office in 1973 they told the Coalition to hand it back to them in good shape. That the Coalition did. The economy was then in a growth position in spite of the worst world recession and the greatest increase in fuel prices ever seen. Because of the economic policies adopted by Fianna Fáil and the foolish handing out of money to certain people we now face a disastrous situation, and that is the outlook of all reputable economists.

The manifesto stated that Fianna Fáil would provide more houses and, believe it or not, more money for roads. A television programme recently supplied visual evidence of the state of our roads when they showed a bicycle wheel half hidden from view in a pothole in County Kildare. The road in question was an arterial road.

In the same Kildare where we were promised more for housing not one penny was provided for new house starts, and this I know because I have the honour to be the chairman of Kildare County Council. We did start a few new houses with money which had been allotted to finish houses already in progress but held up due to delays of various kinds in existing schemes. The amount of money provided for houses in County Kildare last year was one third of the amount provided in 1976, the last year of the Coalition. These are facts which I defy Fianna Fáil to deny. We deserve better from people who had previous experience in Government and should have known better.

They told us in the manifesto that there would be more gardaí on the beat and that they would stop vandalism. Can any Minister seriously say that they have carried out these promises? That is the position as I see it and it cannot be denied. Everyone knows it well.

As I said, the local authorities are left without money to do anything. We were promised huge increases in amenity grants to carry out necessary works. Our council, in common with every other local authority, were unable to pay money due for houses completed in their area. They were unable to pay even a quarter of what was due to these unfortunate people who had entered into commitments because their loans had been approved by the local authorities and then found that the money which should have been provided by the Government was not there. This fact is known to every member of every local authority. Everyone knows that less than half the number of local authority houses needed are being built this year and that the housing lists are swelling. My local authority were talking about taking itinerants off the roads to see what we could do for these unfortunate people. We put at least 300 people in my county into caravans since Fianna Fáil came into power because of the failure of the Government to provide a fair share of the money needed for local authority housing.

We now turn to another area of Government responsibility, agriculture. I have the honour of being spokesman for agriculture for my party. I will not repeat all I said about agriculture less than a week ago. There is no need for that. No Minister got up to contradict anything I said because it was the truth. I do not make statements which are not true. If we had more of the truth and less of the "wide" stuff that won elections in 1977 we would have a better Government and the country would be in a more satisfactory state.

I have here the market outlook for cattle and sheep published by the Irish Livestock and Meat Board. The Minister for Agriculture told us everything was rosy and that the farmers understood everything. It says in this document that a significantly lower level of cattle output is expected in 1981 and that, based on normal disposal rates marketing, it could decline to 1.6 million head compared to this year's 2.6 million head. That speaks volumes.

Agriculture is one of our basic industries, one of the potential areas for job creation. Whatever else happens, this are cannot be allowed to decline. If it does its revival may be impossible. The Minister for Finance said it was a mistake to take away the subsidy on rates for certain categories of farmers under £70 valuation. He brought these people into the rates net in the last budget. Recently he realised this was a disastrous move and he told these people they did not have to pay their second moiety. If that is not muddle, not having a set policy, I do not know what is. These people are paying extra rates because the rates subsidy was taken away. Some people paid their second moiety and are finding it very difficult to get the money back.

I know small developing farmers who were advised by the Department of Agriculture and by the agricultural instructors to borrow heavily to make their farms more viable and to develop their farms under the farm modernisation scheme. They borrowed at roughly 10 per cent and they are unable to repay that money at the present rate of 17 and 18 per cent. This is a fact of life. The Minister now tells them that the Agricultural Credit Corporation and the banks will not press them for this money. That is not an answer and I will explain why. These people borrowed at 10 per cent and they probably could have repaid that money but the interest rate has risen by 8 per cent. There is no point saying they do not have to pay this year but that they may pay over two years if the interest is mounting up. This could mean that instead of owing £6,000 they might end up owing £10,000. That does not solve anybody's problem and that is the state our smaller farmers find themselves in.

I have here another report which shows that the present situation is very serious, not only for farmers and agricultural workers but for the whole economy. It says that the agricultural economy continued to decline in 1980 and that both the volume and value of output decreased. That is a very serious statement not alone for the farming sector but also for the country. It goes on to say that cattle numbers will be 450,000 fewer at the end of 1980 than they were at the end of 1979. That reminds us of the people who had to eat seed potatoes during the Famine. Now we have people selling good cows in order to pay debts they cannot afford to allow to run riot by added interest. This is the situation and yet the Minister says that everything in the garden is rosy. Who do they think they are codding? Do they think people are gullible enough to accept that kind of talk? Small farmers have approached me looking for subsistence money. These are people striving to advance themselves, who borrowed money to build and so on. The Minister told us what he did for these people. If that was his best it was not good enough and he will find this out when he goes to the country.

The downturn which commenced in the agricultural economy in 1979 when output and incomes declined was strongly maintained in 1980. That happened under the great Fianna Fáil who were going to get things moving. We have proved beyond doubt that they are moving in the wrong direction. Farmers in my area used to grow vegetables under contract for Erin Foods. A group from the NFA had an interview with the Minister yesterday. They provided vegetables for the factory in Carlow. The sugar company made a decision to close that factory and that leaves thousands of acres idle in the area. I am not talking about the unfortunate workers who will be out of a job although they must be considered also. The people who grew the vegetables for Erin Foods never welched on their contract. Before they sowed the crop Erin Foods knew what the price would be. The farmers delivered the crop. The workers achieved every target set by management. However, the Department of Agriculture never considered it worth their while to set up a marketing system for this operation and now the sugar company has made a decision to close the operation.

The Minister for Agriculture said the IDA would do everything they could to replace the industry for that area. I presume it will be foreign industry. The NFA representatives who visited him yesterday were told that they should make any proposals they had to the board of the sugar company. That was a poor answer for a Minister for Agriculture to make in this situation. They had serious proposals to make about how to keep the industry going and they were prepared to organise to keep it going. If the Minister had any interest in the future of agriculture he would grasp these people by the hand and say that he would investigate and see what could be done to keep the industry going. He would say that he would take investment from the people if they had it to give, employ experts and investigate the possibility of getting into frozen foods. These are goods which are saleable in Europe and, as a food producing nation, it is our duty to sell them. As was said by a famous farm leader we import £450 million, worth of food every year. Yet our food processing plants in Tuam, Carlow and elsewhere are closing down for want of a marketing system. The Government have completely reneged on their responsibility in this area.

As regards prices I moved a motion recently in the House on this subject which my party had put down. I do not intend to repeat what I said then. Fianna Fáil made promises in 1977 about prices. They complained about the terribly high rate of inflation at the time and about the price of food. The then leader of Fianna Fáil did a grand tour of the country and had the personality to win votes. He came into my constituency and went into a supermarket in Newbridge. A woman who was in the supermarket, on seeing Deputy Lynch, rushed up to him with a pound of butter in her hand and asked him what he thought about the price of it. He said if his party were put back in power they would do something about that. They did. They took the subsidy off it and increased the price by 17p per pound. That is the kind of irresponsibility they were elected on. Inflation is running riot and the Government are making no attempt to stop it. They promised all kinds of things in the manifesto.

Mr. L'Estrange

The sun, moon and stars.

Mr. Bermingham

They said they would report price increases in the newspapers and on television and explain them. I remember they called the then Deputy Keating "Mr. Prices" and succeeded in damaging him to such an extent that he lost his seat in the House. The Minister can easily say that inflation over three particular years was higher than over other years. The increases we are talking about which occurred in the last three years are on top of the prices Fianna Fáil complained about so bitterly in 1977. The rate of inflation means nothing; it is the price of the article that counts. Fianna Fáil, by deliberate action, increased the cost of household goods such as washing powder which every woman throughout the country must purchase to do the family washing. Even the soap that people use to wash themselves was increased in price. The Government increased the VAT rate on it from 20 to 25 per cent. Those facts cannot be denied. In their famous message to Kildare voters in 1977 Fianna Fáil said that price increases would be down to 7 per cent the following year and would continue to reduce thereafter. If it was not so serious it would be laughable.

Mr. Bermingham

The facts cannot be denied and I challenge Fianna Fáil to face the public. If the public are prepared to put up with them they are bigger fools that I thought they were.

Mr. P. Barry

The last speaker deserves the congratulations of the House for his speech. We have had many members today reading from prepared scripts and with many letters after their name but it takes an ordinary person to say something which is clearly recognisable by all listening. I thank the Deputy for that. We are now at the end of three-and-a-half years of Fianna Fáil Government, at the end of one year under a new Taoiseach and at the end of the first day of a new Minister for Finance. I am sure there is not any Member who cannot deny that the present economic crisis is without precedent. In one year the number out of work has risen by more than 30,000 which is twice the rate of increase in any other EEC country with the exception of the UK. The number of young people unemployed has risen by 45 per cent and the prospects for school leavers has never been as bad. Our youth should read and study carefully the speech made by Deputy Dr. FitzGerald this morning. We should have a hard look at the future and see what it holds for us and whether the policies we are pursuing, as he said, were geared towards people of our own social status and age rather than for the huge balloon of young people coming onto the market for work at the moment. The prospects for school leavers have never been as bad as they are now. Those looking for jobs next summer when they leave school will have to join a dole queue which, on the official estimation of the Central Statistics Office, it seems will be over 100,000, perhaps nearly 140,000, but on the method of ascertainment employed by the present Minister for Finance when he was in opposition, probably over 200,000. That is staggering and probably the highest unemployment figure ever recorded in this country. There is no sign of improvement ahead. The present Minister for Finance while he was in the Department of Labour last week tried to describe the rising unemployment of 4,000 last month as successful Government policy and spoke about better things to come.

I want to say a few words about the Taoiseach's speech today in the same vein. They may be fooling themselves but they are not fooling Deputy Bermingham, me or anybody outside this House, particularly the parents of teenage children who see them leaving school or being laid off from work. In every case it is the poor and the young who bear the first brunt of an economic crisis. Unemployment is rising and will keep rising as long as the Government's own finances are in such a state of chaos and the high level of interest rates in Ireland continues to choke of investment as it has been doing. Earlier this year the Central Bank forecast a fall in investment of 9 per cent in real terms and now it appears that that then pressimistic figure is going to be even worse and the fall in investment may be as much as 11 per cent. Never before has there been such a collapse in investment in this country. Unfortunately, it will mean further loss of jobs in the months and perhaps the year ahead.

Our level of unemployment is higher than ever before. The collapse in investment is worse than ever before. Our budget deficit is larger than ever before and our level of foreign indebtedness is greater and growing more rapidly than ever before. Our industrial exports have slumped since the beginning of this year and, although the year-on-year figure may not be down very much, the major growth in that was in the first three months of this year and there has been a downward trend ever since. Farm incomes are collapsing for the second year running and many farmers are worse off than they were before we joined the EEC. The Government are doing absolutely nothing about it other than pretend that there is no crisis and an example of that is today's speech by the Taoiseach. It seems to be a totally unreal world that the Government are living in. It is like somebody standing out without a hat or a coat in the rain with his shoes leaking and somebody pointing out a cloud over a distant hill and saying that that cloud has a silver lining.

The people are not interested in what is going to happen at the end of next year or in 1982, even though we as politicians are concerned. The people are concerned about the rate of price increases now, the level of unemployment now and their prospects in the months ahead. Can they hold on to their jobs and not join the many thousands who have already lost them? The Taoiseach said two weeks ago that the balance of payments was correct in itself. It would be, he said, only — only, mind you — £550 million in the red, but last week the trade figure showed us that he was wrong, that it would be over £600 million in the red and the prospect, as Deputy FitzGerald pointed out here this morning, is of rapid deterioration in the next year. A month ago the Government were forecasting that inflation would be down to 12 per cent during 1981. We know now that even before the next budget is introduced CIE, ESB, petrol and gas price increases are on the way. Therefore, inflation in 1981 probably will be 15 per cent or 16 per cent. CIE, ESB and gas are the very things singled out by Fianna Fáil in 1977. "These prices over which the Government have direct control" were the words used there, and they said that they would pay special attention to see that they did not increase. God knows, prices have increased at a frightening rate in the last three-and-a-half years but I venture to say that nowhere did they leap ahead with such encouragement from the Minister for Industry, Commerce and Tourism and from the Government as they have done in those areas where the Government have direct control. The Government's only response to this appalling state of affairs has been to attempt to conceal the reality of the situation from the public and to blame what they could not hide on world trade. We have that in the early part of the Taoiseach's speech this morning. He said, and I quote:

We in Ireland have suffered severely from the effects of this world recession largely because the oil-price increases ... took away a greater share of our resources....

Riddle me this, a Leas-Cheann Comhairle. How is it that Germany, which is exactly as dependent on imported oil as we are, does not have these problems? How is it that England, which is not dependent on imported oil, have exactly the same problem? It would lead me to believe that it is not a question of how much oil or what percentage of it you import or how dependent you are on imports. The cause of the problem inside the country is how the Government manage the economy of the country and cater for those price increases. Obviously the German Government are handling it well. Clearly the Irish Government are not doing well and the British Government, even though self-sufficient in oil, also have problems.

I can say that during the last crisis we handled it well. Up and down the country farmers, manufacturers, housewives and the unemployed are looking to the Government for some sign of ability to produce policy measures to deal with the mess that the country is in. They have seen no such sign. They have not even seen a sign of any real concern about the effects their policies are having on the standard of living of people. The Government have produced not one single effective proposal to meet the crisis of youth unemployment. They have introduced not one single measure to prevent the continuing slump in farm incomes. They have done nothing to bring the chaotic state of public finances under control. They have made no attempt to control inflation. They have done nothing to help solve the growing housing shortage at a time of unemployment in the building industry. They have done nothing to improve industrial relations which we acknowledge to be in dire need of improvement.

In each of those cases that I have listed Fine Gael have urged specific measures on the Government — to be met with either silence or incomprehension — in the field of public finances, farm incomes, youth unemployment, inflation, housing shortage and industrial relations. In each of these the Fine Gael Party produced policies designed to meet the needs of today in all areas and in every case the Government met them with silence. Certainly they have not adopted the proposals virtually all of which could have been adopted very easily and quickly. We must contract this economic incompetence with what we were able to do in very much worse circumstances, indeed the worst recession since the thirties, only five years ago. When we were in Government we took action wherever and whenever necessary. When the NESC came out with proposals to cut inflation by introducing food subsidies we were able to implement them and they worked. We introduced measures to increase employment by subsidising firms to enable them to recoup the unemployed. We maintained the value of farm incomes right through the recession by negotiating reasonable farm prices in Brussels. We have had two Ministers for Agriculture since the change of Government in 1977, the sum of both not being equal to half the value of Deputy Clinton as far as the Irish farmers were concerned.

Deputies

Hear, hear.

Mr. P. Barry

We produced specific proposals to help people finance their own housing requirements. I do not remember any comments by the Government on them but obviously they have been rejected by the Government. Those measures would have an immediate affect on employment in the construction industry. We produced proposals to secure improvements in industrial relations. The Government said that they were interesting, but they did no more about them, even though Deputy Mitchell tried to point out this morning here that for the second Christmas running there was danger of the public being without a bus service.

The country has never before been faced with such a picture of financial mismanagement and Government ineptitude. The inability of the Government to act decisively is in part due to the hopeless budgetary position they have got us into by ill-conceived policies and failure to control their own spending plans but the greater part is due to complete absence of any idea of what should be done.

I waited in vain to see if anything would come out of the Taoiseach's speech this morning. There are only two parts about which I think I could agree with him. There is the plan for the economy that is to be produced after Christmas but we must wait to see if there is anything in it. I often wonder if we are living in the same world as those on the opposite side of the House because the Taoiseach this morning said that it was "this economic comnonsense which has enabled our economy this year"—he then listed seven or eight different things—"to grow at a rate which is above the Community and OECD averages". That would seem to me to be not in accordance with facts. He talks of a 2 per cent growth rate and I presume that this is what he says is above the OECD and Community averages. But if this is what he is talking about nobody believes that this economy has grown by 2 per cent in 1980 except the Taoiseach and his advisers. It was very difficult to get from the Minister for Finance, the present Minister's predecessor, exactly how this figure was arrived at when questions were asked the day before yesterday. If you pluck a figure like that out of the air and if you know what the Community and the OECD averages are, you take a figure above that and you say the growth rate is above the Community and OECD averages. That is just not true.

The Taoiseach also said this economic commonsense had enabled us to "to maintain levels of investment which are among the highest in the Community and the OECD area. "The Central Bank earlier this year said that investment was dropping at a rate of 9 per cent and it seems now that even that figure was not steep enough; it may be 11 or 12 per cent. What the Taoiseach said this morning is not in conformity with the facts.

His third point was that this economic commonsense enabled us to "expand our exports at a rate above the Community and OECD averages". How was this done? By selling off our breeding stock in the farming industry. That is not a good omen for next year or the year after, if our exports have to be kept up at the expense of our breeding stock for 1981 and 1982.

Our economic commonsense, he said, enabled us "to achieve record levels of new job approvals in modern competitive high technology industry". The IDA have been doing a magnificent job in the 30 years they have been established despite the fact that they were described by Fianna Fáil at the time as a typical product of the Fine Gael mentality. I think the people looking for jobs today and in future can thank God for the Fine Gael mentality that established the IDA to provide the jobs. Job approvals, good as they are for 1982 or 1983, do not put people into work today. There is quite a lengthy gap between the time a job is approved and filled, and now is when we have 130,000 people unemployed.

Economic commonsense, the Taoiseach said, enabled us "to not only maintain but to increase marginally the volume of agricultural output." Deputy Bermingham should go back to his constituency and tell them not to worry, that although their income may be down 50 per cent, in the country as a whole we have increased marginally the volume of agricultural output. This we are told at a time when the farm industry is 50 per cent worse off than it was three years ago and many farmers in all parts of Ireland are worse off than they were before we joined the EEC.

Economic commonsense, the Taoiseach said, enabled us "to reduce our external deficit". Bravo: how is that done? By borrowing more money abroad. The Taoiseach and Ministers keep on trotting out the arguments that our external reserves are increasing. If one goes into a credit union and borrows £10, spends £5 in a pub and puts £5 in the bank one can say then one's bank balance is improving. That is how our reserves abroad are improving. The Taoiseach also said that this economic common-sense enabled us "to bring down the rate of inflation from a peak of 20 per cent to the current annualised rate of 12-13 per cent"—this on the very day, an hour before the CSO comes out and says that the annual rate of inflation in Ireland today is 18.2 per cent. To get the real message one must read the small print; one must parse and analyse the phrase—"the current annualised rate of 12-13 per cent". He has us there. No matter what the Taoiseach's differences are with Deputy Colley and Deputy Martin O'Donoghue he learned one trick from them and it comes out here. In the budget of 1979 the then Minister for Finance. Deputy Colley at least a dozen times in his speech—and it was repeated at least a dozen times the following day by the then Minister for Economic Planning and Development—used a certain phrase. I was amused the other day when the Taoiseach shouted across the floor: "Some of those fellows would not last five minutes in my Cabinet". Deputy Martin O'Donoghue lasted much less than five minutes. In that budget speech and on the following day there was constant reference to an end of year rate of inflation of 5 per cent. When the end of the year came the annual rate of inflation was far higher but, apart from that, they used this figure in negotiating wage agreements and to justify a lower increase than many of us thought right in social welfare and for many other purposes.

Constantly repeated in the speeches of the then Minister for Finance and the then Minister for Economic Planning and Development was the phrase "an end of year inflation rate of 5 per cent" and it was only when they were tied down a month or six weeks later that we discovered where the 5 per cent came from. The impression you were meant to get and which most people did get was that the Government had planned or were planning for inflation to reduce to 5 per cent by the end of the year. Eventually, we discovered that what was being referred to was their estimate of what the rate of price increases between mid-August and mid-November would be. It was 1.2 or 1.4 per cent. When you multiply that by four you get the annual rate of 5 per cent regardless of what might happen between January and August or between November and January. It is precisely the same effort to fool that was in the Taoiseach's speech this morning—"the current annualised rate of 12-13 per cent". The figures that came out this morning put the annual rate of inflation which is measured from one year to another at 18.2 per cent. The rate of price increases which is traditionally low between August and November is 3.1 per cent. You multiply that by four and you get 12.4 and this is where the 12-13 per cent comes from.

To my mind, that is dishonest. The Taoiseach may feel that it is sufficient to get out of the House having made his speech and he may hope that he will pull the wool over some people's eyes but the people who know, the economists, bankers, industrialists and those who are looking at the country will see precisely what is happening. The rest of the public know well that the annual rate of price increases in the past 12 months was not 12 per cent. They know that because they find it out every time they go into a shop, to a cinema, go on holiday, pay their ESB or their gas bills. So far as they are concerned the rate of price increases has been nearer to 20 per cent, despite the effort made by the Taoiseach this morning to fool us.

In his speech this morning the Taoiseach said that we had been able to "reverse the trend in interest rates and bring them down to their current level of being the third lowest in the Community". Interest rates came down because they came down internationally; it had nothing to do with any internal decision here. The Taoiseach also referred to "the lowest number of days lost through industrial stoppages since 1977". Any time the present Government get a chance to score a political point they say that things are better now than they were in 1974, 1975 or 1976—any of the years of the Coalition Government. Yet, this morning the Taoiseach referred to 1977. I suppose it could not be that things were far better when we were in power? He used the year 1977 and that must mean that 1978 and 1979 were even worse. I would not be proud of such a record, even though I presume the Taoiseach and the former Minister for Labour are proud of it.

The Taoiseach did not tell us what the Government propose to do about the situation other than issuing a new plan early next year. If the figures quoted by Deputy FitzGerald this morning are correct, it has to be the concern of this and every future government to create jobs in sufficient numbers to absorb school leavers and also to cater for the enormous number of young people who will be looking for jobs in the next 25 years.

I hope the Chair will pardon me if I deal with a local matter. I was disturbed to read in one of today's papers that Senator Whitaker was quoted as saying in a debate in the Seanad that Irish Shipping should not give the order for the bulk carrier to the Cobh dockyard. I have not read the Seanad debate and I do not know if the Senator said that but that was my understanding of the newspaper account.

The Minister could have given both.

Mr. P. Barry

The Minister knew the situation. He was told the position at the time but it did not prevent him from leading marches around Cork city for what he knew was a politically false purpose. I am just as concerned now to see that the skills are preserved and not allowed to move from the environment of shipbuilding in Cork Harbour. It may be, as the Minister has said, that an order has been given. If that is the case I am delighted. If Senator Whitaker implied that the order should not go there he was wrong but, as I say, I have not read the Seanad debate.

In his speech the Taoiseach stated:

The European Commission has now urged that the solution to unemployment is in a package of short-term and medium-term measures designed to strengthen competitiveness and to help achieve more effective adjustment of the structures of the economies of member states in order to re-build the foundations for more sustained growth.

That is waffle — it means precisely nothing. However, I should like to refer to one point as a warning to the Minister. The Taoiseach referred to "measures designed to strengthen competitiveness". That is extremely important in this economy. We must concentrate our minds in the years to come on the task of providing jobs but much will depend on our ability to export goods. If we are to do this our goods must be of top-class quality, they must be designed for the markets to which they are exported and they must be competitively priced. Part of the damage done to our economy earlier this year by the present Government in the budget was to interfere badly in the competitive position of our industry. As Deputy Byrne has pointed out 20p extra was put on a gallon of petrol, a savage increase which affected all transport costs. Worse still, they increased the tax on "other oils", as they were called.

In every bulletin which has come out in the past year from any organisation concerned with business or employment in this country — the chambers of commerce, the FUE, the CII, the IMI — in every seminar one goes to and in every submission to a Minister about what he can do for industry — and, I am sure, during the talks which the Government had with the Employers Federation before the national understanding was agreed to — the first item for discussion every time was the damage done to industry by the imposition of this tax in the last budget. Not alone must they not increase that tax in the next budget, but they must remove it. I think it was the Taoiseach who said in his speech this morning that the industries where the job losses were greatest were those more traditional industries, the industries which are more labour-intensive. That is another place where the last budget damaged our industry, they increased the employers' contribution to pay-related social insurance.

That tax on other oils cost the ESB £11 million last year, all of which has to be recouped from either the housewife or the industrialist, in the form of higher charges. They could not do otherwise and this will continue as long as that tax continues. The Government put up the postal and telecommunication charges, again affecting the competitive position of our industry. These taxes are all equally damaging to our competitive position, as was the increase in indirect taxation by 4 per cent in the budget which, by the time the complete result was felt, amounted to 6 per cent, accounting for the high level in the settlement under the national understanding, which will, in turn, damage our competitive position not alone this year but next year as well. This is in complete contrast to the position when we were in office.

Ironically enough, the NESC advised us that the economy and the finances of the Government were in a sufficiently strong position for us to borrow more and invest more in order to come out of the recession. We did precisely that. We introduced a scheme giving £20 per head per week to employers who took somebody off the unemployment register and we introduced the food subsidies, which had the effect of commencing the winding down of inflation. That allowed us, in 1976 and 1977, to have two national agreements which were primarily responsible for getting this country out of the last recession at such a fast rate, indeed the fastest in all Europe. When we handed over the management of the economy in 1977, it was such that the then Taoiseach, Deputy Lynch, in the Adjournment Debate in 1977, was able to say that the country was in a sound condition on which to build. Heaven knows how that effort has been wasted in the last three years.

If we do not tackle this problem of making our industry more competitive, we could have serious problems. I thoroughly agree with what the Taoiseach said about productivity this morning. There are three or four different groups of people involved in this. One is the Government, another is the employers. I sometimes think that more jobs are lost and more damage done to industries by managers and employers than by trade unions and employees. The third group are the people working on the floor of industry. The Taoiseach said "We know from research studies that our general level of productivity is much lower than that of our trading competitors in the Community." I am afraid that is true and it is one of the things to which we must direct our attention. "While this is a matter to cause us concern, it is also a challenge." He is absolutely right there. "There is no reason, if we put our minds and our wills to it, why we cannot achieve the same levels of productivity as workers and management have achieved in other countries. The fact that they have been able to do it shows that it is possible for us to achieve comparable levels of efficiency by using known methods of organisation, management marketing, and technology." The Taoiseach ends up by saying "Increased efficiency is not necessarily a question of working harder; it is a matter of working in a more organised and rewarding way". Any Minister for Industry and Commerce and, indeed for Labour and Education — and it is primarily an educational problem — who addresses himself to the problem of low productivity in Irish industries would be doing a most important and most necessary job in all our efforts to increase the work force and to reduce the level of unemployment in the future. If we are going to export, we must be competitive, our productivity must be higher and our costs lower. Not just the costs incurred inside industry, but those imposed on industry by a Government must be kept low. If nothing else is done in the budget next year, the Minister must ensure that any further costs, no matter how indirectly they may bear on our competitive position — and unfortunately it already appears that two of those costs will go up, the cost of transport by CIE and the cost of electricity by the ESB must be avoided.

We are helped somewhat at the moment by the difference between the £ sterling and the Irish £ in our exports to the United Kingdom, but not to the rest of Europe. However, if it should happen in the next six or twelve months that the £ sterling starts to fall in value to nearer parity with the Irish £, we shall find it more difficult to export to the UK and, even more seriously, we shall be exposed to imports from the UK in the future. Not only will there be a danger to the creation of new jobs, but we will be endangering existing jobs if we do not see that our competitive position is maintained at all times.

I am delighted at the marvellous news which has just been handed to me.

An Leas-Cheann Comhairle

It has been kindly confirmed. Everyone is. The Deputy has a couple of minutes left.

Mr. P. Barry

I should say, on behalf of the Opposition and of everybody in the House, how pleased we are that this unhappy occurrence has come to an end. We hope that nothing like it will ever occur again anywhere in this country.

Minister for Finance (Mr. G. Fitzgerald)

I endorse the closing comments of Deputy Barry regarding that unfortunate situation. We hope the news we have just received is correct. I am sure we will all be very happy if that is the position. I am glad of the opportunity to contribute to this adjournment debate. I believe the Opposition's approach throughout the day ignored the fact that this year has been one of the most difficult peace time years for international economies in history. To argue that all our problems over the past two-and-a-half years are the result of Government policy is absurd. Nothing could be further from the truth. No one, two-and-a-half years ago, expected the oil price rises which followed the Iranian revolution or their repercussions.

The fact is that under the impact of the multiple and unforeseen oil price shocks the pace of activity of the international economy dropped dramatically during 1980. For instance, growth in the OECD area is now expected to have been about 1¼ per cent for the year as a whole, but this masks expansion early in the year followed by a sharp decline in the second half. Of course, with this international contraction in output came the problem of rapidly rising unemployment. Any commentary on our current economic situation which fails to give due weight to this international background can only be misleading.

This Government were however, very much alive to the dangers which could, and indeed did, materialise internationally this year. From the early part of the year we took every opportunity to warn at Community level on the potential for serious economic damage which was inherent in unduly defensive reactions to the impact of the oil price hike. Our concern was that the deflationary impact of higher oil prices would be compounded by that of restrictive economic policies. We also felt that the cumulative effects of the restrictive actions of individual countries would lead to a longer and a steeper slowdown in activity than those taking them expected.

More fundamentally, while we agreed that the reduction of inflation should be an important international economic aim, we stressed that we did not believe that it should be pursued irrespective of the costs in terms of unemployment and lower growth that would accompany an over rigid approach to the inflation problem.

Deputy Barry referred to the German economy. It is absured to try to draw comparisons between the German economy and the Irish economy. Everybody knows that the German economy is one of the most developed in the world, but everything is not going well in Germany. During the first oil crisis Germany was in surplus on her balance of payments; this time she is in substantial deficit. There are now almost one million unemployed in Germany and the figure is growing rapidly. It is difficult to compare economies such as Ireland's and Germany's.

As Minister for Labour I participated in the EEC Council of Ministers for Social Affairs and urged the need for Community action to tackle the growing problem of unemployment in the Community. I stressed that it is essential that the policies of the Community in relation to economic industrial and regional affairs should be aimed at increasing employment.

Now, as Minister for Finance participating in the Council of Finance Ministers, I look forward to the opportunity of influencing EEC economic policy also in relation to employment problems. In this connection I should recall that the EEC Heads of State at their European Council in Luxembourg earlier this month, expressed their concern at the rapid increase in unemployment in the Community and decided that the Commission will intensify its studies in this area on the basis of which the Council, jointly composed of Finance and Social Affairs Ministers, will consider the matter further.

Having had experience since 1977 of the Council of Social Affairs Ministers I believe this to be a major step forward in the European scene. It was during my Presidency that the Social Affairs Council first proposed that the joint meeting should take place. Now that the Heads of State are giving in the green light, I look forward to participating in that work.

In summary, international economic conditions this year have been particularly adverse. This Government have taken positive steps to influence the course of international economic policy, and with some success. As the Taoiseach pointed out in his contribution to this debate, international comparisons show that our economic performance this year has been relatively good. The reasons for this lie in our positive attitude to economic policy at home.

This year's budget was based on the principle that we were not prepared to force the economy into recession by deflationary policies, in the interests of reducing the balance of payments deficit or for any other reason. We took the view that the economy needed time to adapt to the massive increase in oil prices. The budget was designed to meet, to the greatest practicable extent, the pressing need for growth in output and employment.

Our policy steps did not, of course, end with the budget. The budget approach was pragmatic and flexible, an approach that was essential in the rapidly changing external economic environment this year, and that pointed to the need for action as the year went on.

The steps we took during the year to support economic activity were also pragmatic and impressive. We have acted decisively, despite what has been said in this debate, to support farmers' incomes in the face of the acknowledged difficulties in farming. The Government have introduced four separate aid packages for agriculture this year at a cost in 1980 of over £40 million. These include reduced interest loans for farmers from the Agricultural Credit Corporation and the associated banks, arrangements for the restructuring of existing borrowing, rates relief and increased allocations and grants for the Farm Modernisation Scheme, the Disadvantaged Areas Scheme and other schemes. We have undertaken also to remove the resource tax on agricultural land with effect from 1 January 1981. Investment in agriculture is also needed and will be taken into account in the Public Capital Programme allocation for agricultural expenditure in 1981. This, together with the Government's proposals for a new land policy, will enhance the prospects for future agricultural prosperity and clearly show our active concern for the problems currently faced in agriculture.

The Government also contributed decisively to the drawing up of the second national understanding, particularly in relation to its non-pay provisions, and I acted for the Government in the negotiations leading up to the understanding. The understanding is an attempt — unique perhaps in present-day Europe — to chart a path through the recession in agreement between Government, trade unions and employer organisations.

One has only to look at the strained state of relations between government and both sides of industry in some other countries to realise how imaginative and positive the national understanding is. My experience as Minister for Labour brought home to me with particular force the point that it is only through close contact and continuing co-operation with both sides of industry that Government can hope to deal with today's difficult economic problems, and I will bring this attitude in my new position as Minister for Finance.

Once the national understanding was endorsed we put into effect a series of job creation measures as part of our commitment in the understanding. This series of measures involved a total expenditure of almost £100 million and represented a significant stimulus to economic activity. The measures in the package are concentrated on infrastructure and were chosen specifically because of the impact they will have on unemployment.

By associating this package with the original allocations made for capital expenditure this year, we can see the major Government commitment to supporting investment this year. The total allocation for the Public Capital Programme this year now amounts to more than £1,375 million, which is no less than 37 per cent higher than the same figure for 1979 and more than 17 per cent greater than the original provision made at budget time. The allocation for all major categories of capital spending have been increased substantially compared with the initial budget allocations, with the exception of energy where the initial provisions already showed substantial growth over the previous year.

Á key area singled out in the package is the development of telecommunications to which our recent package allocated an additional £23.4 million, more than 23 per cent greater than the budget provision. This will not only be directly beneficial in terms of employment but will accelerate the rapid progress now being made in improving the efficiency of the telephone services. The package will also result in raising the total allocation for building and construction by more than 30 per cent above that for 1979.

Substaintially more money has also been provided for agricultural and industrial development and to expand employment and training programmes. I regard the latter as particularly important because the success of our industrialisation programme hinges critically on the availability of skilled manpower. The package includes a provision intended to expand the engineering faculties of UCG, UCC and TCD and thus help to meet the demand for engineers created by the high technology industries the IDA have been successful in attracting here.

We have also acted to deal with youth unemployment, which is a matter of particular concern. We have provided a number of programmes specifically designed to help young people in the important transition from education to work. These programmes include: pre-employment courses in the vocational comprehensive and community schools; secretarial courses held in over 200 centres and involving work experiences; the transition year project for students who have reached intermediate standard but are undecided whether to continue formal education or seek employment, and the work experience programme. Expenditure on this programme in 1980 is estimated at £2.1 million and about 6,500 young people will participate in it.

We are also determined to explore other ways and means of increasing youth employment. When Minister for Labour I set up a special working party on youth employment with representatives from employers, trade unions and youth organisations. The working party's report was published on Monday last. The report's recommendations are now being studied and I am confident that they will provide a sound base from which to make further progress in this matter.

We have also acted in relation to interest rates and to the availability of credit to industry and agriculture. Earlier in the year interest rates reached very high levels but we acted with speed to reduce their impact on productive activity. For instance, the Central Bank permitted the banking system until October to bring in foreign currency freely for on-lending to domestic borrowers. Moreover, the Exchequer provided foreign exchange guarantees in respect of borrowings for agriculture and industry by the ACC, ICC and associated banks totalling £150 million. In addition, a subsidy was also given tobuilding societies.

Thankfully, interest rates have come down in recent months and they are now at their lowest levels since mid-1979. They are also, as the Taoiseach has pointed out, low by EEC standards. The Government were particularly anxious to ensure that this reduction in interest rates would extend to all categories of borrowing, and particularly to mortgage rates, and we are pleased that the building societies have deferred to our wishes in this matter.

This review of policy demonstrates conclusively the Government's ability to modify policy effectively to meet the demands of changing circumstances. Charges that the Government have refused to do anything about our economic situation are totally without foundation. I agree with Deputies that a call for trust is not a substitute for policies, but I believe that when the ability and willingness to introduce effective policies is clearly shown, as it has been by this Government, then the call for trust deserves a positive and more responsible response that we have got from the Opposition contributions to this debate.

The measures which the Government have taken have, of course, involved additional expenditure not foreseen at budget time. In addition, the buoyancy of tax revenue has reflected the pace of economic activity. But the borrowing requirement as a percentage of GNP will not reach the heights attained under the Coalition.

The Government, of course, could have sought to make good the limited slippages on the expenditure and revenue sides by increasing taxation but this would have added to the depressive impact of the international recession, and that we were determined to avoid.

Developments here in the public finances, as in the economy as a whole, should be seen in the international context. Any commentary which tries to give the impression that this Government are unique in exceeding their intended borrowing requirements is seriously misleading. In fact, very few European Governments seem likely to stay within the borrowing limits they set themselves for this year. Virtually all economies have been hit by rising unemployment and slower growth, which has reduced the expected buoyancy in revenue and at the same time caused Government expenditure to rise. Even in countries where policies were generally restrictive in intention, they have in fact given some support to economic activity to the extent that the automatic tendency towards an increased budget deficit that accompanies an economic downturn in activity has generally been accepted by Governments. It is as well that this has happened since, if Governments internationally had acted to offset the recession-induced increase in deficits by cutting expenditures or raising taxes, the international economy would have been sent even deeper, and perhaps uncontrollably, into recession.

The corollary of a budgetary deficit is, of course. Government borrowing and there have been criticisms of the level of our borrowing and particularly our foreign borrowing. I would ask the critics whether they would be prepared to accept, as the Government would not, the deflationary effects of lower overall borrowing or the impact of substantially greater reliance on borrowing at home. But, more generally, borrowing abroad by a country which is in the course of development, as we are, has long been regarded as legitimate. Foreign capital inflows to finance investment have featured at one time or another in the development process of most advanced countries. No one denies that we need massive investment in infrastructure, economic and social, and in the productive sectors, both to create jobs and to narrow the major gaps between levels of provision here and in the other EEC member states.

We are already devoting about 30 per cent of GNP to investment, which is a very high level by international standards. In such circumstances a foreign capital inflow is a legitimate and desirable way of easing the pressure on resources. Incidentally, in considering the level of foreign borrowing by the State in this country, the leading role which the Public Capital Programme plays in investment here must be taken into account. Relative to GNP, State borrowing for capital purposes is high in comparison with the position in other EEC countries. Foreign borrowing must also be seen in the context of the balance of payments deficit, and the factors going to create that deficit.

Successive oil price rises have created massive surpluses for the oil producers. As conventional means of combating the deficits of the oil importers would have plunged the world economy into a very deep slump, it came to be recognised that borrowing abroad to finance such deficits was legitimate in easing the process of adjustment. Today even major countries with unimpeachable records of financial integrity are borrowing abroad for balance of payments purposes. As a small country severely hit by oil price rises, it is surely acceptable for us to do likewise. I am not, of course, implying undue complacency by the Government about the level of borrowing, or about all the reasons which gave rise to it. Interest payments on State debt are pre-empting a growing proportion of tax revenue, a fact which increasingly limits the room for budgetary manoeuvre. This year interest payments will represent over a quarter of total revenue.

Borrowing for remunerative capital purposes is justifiable, as I have said, but borrowing to finance a growing current deficit is more questionable.

Dr. FitzGerald

Hear, hear.

Mr. G. Fitzgerald

My predecessor expressed concern at his budget speech——

Dr. FitzGerald

And did damn all about it.

Mr. G. Fitzgerald

Would the Deputy allow me to continue without interruption? As my predecessor is in the House I will pay him tribute for what he has done in this, one of the most difficult years, certainly in peace-time, of any economy such as ours. I believe that in Deputy Michael O'Kennedy we have somebody going to Europe of whom we can be proud and who is supported by a united Fianna Fáil. We wish him well and know that his efforts in Europe will be as helpful to us as they were here.

My predecessor expressed concern in his budget speech that the burden on the taxpayer for debts created to pay for current services will not continue to grow indefinitely, and I share that concern. Furthermore, some reasons for growth in the current deficit are easier to accept than others. The growth of unemployment gives rise to expenditure the necessity of which all would accept. But large increases in public service pay, when so many are without work, are a much less attractive source of growth in the deficit. The Government agreed to sizeable special increases in the public service this year. I would underline our growing concern about the impact of this trend on the public finances. In current conditions there are more pressing priorities for the use of limited public moneys.

Developments this year have confirmed the correctness of the policies we have been pursuing. The Taoiseach has already listed, in his contribution to this debate, the many commendable aspects of our performance and I do not intend to go over the same ground. But there is one area on which I would like to comment, namely, the balance of payments.

Our balance of payments deficit last years was £730 million, a very substantial increase on the previous year's level, brought about as a result of the oil price explosion. This year the deficit should be reduced to somewhere of the order of £600 million, despite an increase of about £200 million in our oil import bill. This represents a fall in the deficit from over 10 per cent of GNP in 1979 to about 7 per cent this year.

Dr. FitzGerald

And next year?

Mr. G. Fitzgerald

If my memory serves me right it was 9.5 per cent in one of the years when the Coalition were in power and the Deputy was then a member of that Government.

(Interruptions.)

Mr. O'Kennedy

The Deputy is disappointed that his prognosis did not materialise. He is still waiting for next year to turn up.

An Leas-Cheann Comhairle

The Minister to continue without interruption.

Mr. G. Fitzgerald

The only other Community country expected to show an improvement in its foreign balance is the UK, and there the improvement arises as a result of UK Government policy and of that country's position as a major oil producer. In a number of other EEC countries the balance of payments is expected to deteriorate, by up to 3 per cent.

The trade statistics for November published earlier this week have drawn some adverse comment. Although the trade deficit for the month was high, it is fully taken into account in my assessment that the balance of payments deficit for the year will show a substantial fall.

Further information, from the 1979 Labour Force Survey, will be available shortly which will show more precisely the extent of the employment achievement in recent years. Employment has held up very well in face of the recession this year. The seeming paradox of high unemployment and the maintenance of the existing employment level is explained by the very rapid increase in the labour force experienced in recent years, resulting from our young population and a high net immigration in recent years.

Some 35,000 new jobs in manufacturing will be approved this year, a record achievement, while about 20,000 new jobs will actually be created. Unfortunately, industrial job losses are still very high. While much of this job loss can be attributed to the international recession and consequent contractions in our markets, it does display a weakness as regards competitivences which must be tackled if we are to benefit in full from the expansion of new industries and from the coming international upturn. I agree with Deputy Barry in this.

Finally, it is a source of satisfaction that our currency continues to hold its position within the EMS. This is partly because the main aim of monetary policy during the year—namely, to maintain and indeed increase the official external reserves—has been achieved. The reserves at mid-November showed an increase of £190 million or almost 20 per cent on end-December 1979. This improvement in the reserves' position has been brought about by the reduction in the balance of payments deficit and by capital inflows through the public and private sectors. Our experience within the EMS and the healthy state of our reserves show how groundless is the threat which Deputy Garret FitzGerald conjured up of the IMF taking charge of our affairs.

Mr. L'Estrange

Before long.

Mr. G. Fitzgerald

It is generally agreed internationally that the low point of the recession may have passed and that there should be a gradual improvement in the world economy next year. One of the uncertainties that was hanging over the international outlook was the likely trend in oil prices. That uncertainly has been reduced by the decisions reached this week by OPEC Ministers at Bali on a pricing formula for OPEC oil. The further increase in oil prices decided on at Bali is unwelcome, since oil-importing countries worldwide are finding great difficulty in meeting their oil bill at existing price levels. Experience also teaches that it is unwise to place too much reliance on the prospect that there will be oil price stability for any extended period following OPEC decisions. Nevertheless, the oil price rise decided on at Bali is small in comparison with previous increases and, even if there is some further movement upwards in oil prices during 1981, it is possible that overall the real price of oil will remain reasonably stable and this should not implede the expected international upturn in economic activity.

It would, however, be unrealistic to expect a quick return to fast growth internationally and we have no intention of raising expectations in this regard. We recognise clearly that the world economy is still in a weakened state following the battering it has received from successive oil crises over the past decade. It will take time for international economic structures fully to adjust to the new conditions. As a result the recovery in the world economy will be gradual.

Our own economy is obviously responding to the measures which the Government have already taken. We do not yet have up-to-date data on all developments over the last few months but the pointers are favourable. The most recent survey of business opinion, taken in November but relating to October, shows, for instance, that the order book situation of manufacturers has stabilised and that new orders, both for the domestic and export markets, are improving. Moreover, the trade statistics show that imports of investment goods have begun to pick up in recent months after being quite sluggish earlier in the year. It is an encouraging sign that private investment activity is reviving and, taken in conjunction with the likelihood that IDA job-creation targets will be exceeded by a considerable margin, is a positive indicator for the future. I would add that the IDA's achievement in securing an excess of jobs above target reflects and increase in the number of small firms, most of which are domestic. This is a particularly welcome response to the Government's policies. The Government are now completing, as the Taoiseach has stated, an investment plan for 1981 aimed at securing a high level of investment, both public and private, next year. I was interested this morning to hear some Deputies calling for such a plan and I wondered if they had heard the Taoiseach's speech where he definitely stated that this investment plan would be introduced early in the new year.

It is our intention also to follow this investment plan with a paper with a setting out the Government's programme for medium-term development. The aim will be to maximise the benefit here of the expected upturn in the world economy. Investment is needed to do that, which is why we are placing such emphasis on it. Our approach demonstrates how unfounded has been the charge that this Government have abandoned planning. Deputies Garret FitzGerald and O'Leary both called for an economic plan during this debate. They need not worry; one is coming, as stated by the Taoiseach before either of the Deputies spoke.

Dr. FitzGerald

Confined to investment.

Mr. G. Fitzgerald

We are prepared to discuss the investment plan with the social partners because we believe that the best, indeed the only lasting approach to the extent to which Government acting alone can maintain growth. We can improve the conditions for growth and indeed help it along but ultimately it is the response and actions of the other economic agents which are critical to our economic expansion.

Mr. L'Estrange

They would send the farmers to the workhouse. It used to be "to hell or to Connacht".

An Leas-Cheann Comhairle

We will send Deputy L'Estrange home for Christmas.

Mr. G. Fitzgerald

Our producers must exploit the opportunities which renewed expansion in their markets will provide them and we, as a community, must tailor our expectations for incomes and living standards to what the economy can bear. In particular, we must ensure that the loss in competiveness in the past, which has already cost us dear, is made up and that we continue to improve our competiveness in the future. If we do, we should be able to achieve the expansion in output and employment that our growing population needs.

Nothing I have heard from the Opposition benches during this debate has changed my opinion of the prophets of gloom and doom, whether in Government or Opposition. Thank God for a steady, progressive, committed and dedicated Fianna Fáil Government for the sake of the people of the country.

Lastly, this is Deputy O'Kennedy's last day in the House for some years and I take the opportunity of wishing him every success in Europe.

Mr. L'Estrange

This might be the last day for many of us because we might not be coming back.

(Interruptions).

An Leas-Cheann Comhairle

The whole House would like to join in that wish to Deputy O'Kennedy.

Question put.

The Dáil divided, Tá, 58; Níl, 37.

Tá

Ahern, Bertie.
Ahern, Kit.
Andrews, Niall.
Aylward, Liam.
Barrett, Sylvester.
Brady, Gerard.
Brady, Vincent.
Briscoe, Ben.
Browne, Seán.
Burke, Raphael P.
Callanan, John.
Calleary, Seán.
Colley, George.
Collins, Gerard.
Conaghan, Hugh.
Connolly, Gerard.
Coughlan, Clement.
Cowen, Bernard.
Daly, Brendan.
Doherty, Seán.
Fahey, Jackie.
Farrell, Joe.
Fitzgerald, Gene.
Fitzpatrick, Tom. (Dublin South-Central).
Fitzsimons, James N.
Fox, Christopher J.
French, Seán.
Gallagher, James.
Geoghegan-Quinn, Máire.
Haughey, Charles J.
Herbert, Michael.
Keegan, Seán.
Kenneally, William.
Killeen, Tim.
Lawlor, Liam.
Lemass, Eileen.
Lenihan, Brian.
Leonard, Jimmy.
Leonard, Tom.
McCreevy, Charlie.
McEllistrim, Thomas.
MacSharry, Ray.
Meaney, Tom.
Moore, Seán.
Morley, P.J.
Murphy, Ciarán P.
Nolan, Tom.
Noonan, Michael.
O'Donoghue, Martin.
O'Hanlon, Rory.
O'Kennedy, Michael.
O'Leary, John.
Reynolds, Albert.
Smith, Michael.
Tunney, Jim.
Walsh, Seán.
Wilson, John P.
Woods, Michael J.

Níl

Barry, Peter.
Barry, Richard.
Begley, Michael.
Belton, Luke.
Bermingham, Joseph.
Boland, John.
Burke, Joan.
Burke, Liam.
Byrne, Hugh.
Collins, Edward.
Conlan, John F.
Cosgrave, Liam.
Cosgrave, Michael J.
D'Arcy, Michael J.
L'Estrange, Gerry.
McMahon, Larry.
Mitchell, Jim.
O'Brien, Fergus.
O'Brien, William.
Deasy, Martin A.
Desmond, Barry.
Enright, Thomas W.
FitzGerald, Garret.
Fitzpatrick, Tom.
(Cavan-Monaghan).
Flanagan, Oliver J.
Gilhawley, Eugene.
Griffin, Brendan.
Harte, Patrick D.
Hegarty, Paddy.
Horgan, John.
Keating, Michael.
Kenny, Enda.
O'Leary, Michael.
O'Toole, Paddy.
Pattison, Séamus.
Taylor, Frank.
Timmins, Godfrey.

Tellers: Tá. Deputies Moore and Briscoe; Níl, Deputies L'Estrange and B. Desmond.

Question declared carried.

The Dáil adjourned at 10.40 p.m. until 2.30 p.m. on Tuesday, 27 January 1981.