The central and crucial failure of the Government is their inability to devise and implement an incomes policy. They are unable to get agreement from the social partners to a realistic incomes policy because they have no medium-term plan for the economy. They are not able to indicate to the social partners what could be achieved in the future if restraint is practised at present.
The Government ask other people to plan. For example, they ask farmers to have a plan for their farm in order to qualify for the farm modernisation scheme. However, the Government have no plan for the economy or for public finances over which they have direct control. Hence they can offer no genuine confidence of gains in the future in return for restraint at present by the trade union movement and others seeking increases in incomes. As a result the Government stagger from one expedient to the next in their relations with the trade union movement. The failure to achieve a policy which would bring the level of wage and salary increases here down to the level obtaining in other EMS countries is at the root of all our economic problems.
It is not oil which is the main reason for our high inflation rate. There are many other countries, such as Luxembourg, which import 100 per cent of their energy whereas we import only 80 per cent. Yet Luxembourg has an inflation rate which is one-third of ours. We cannot blame increases in oil for our inflation rate. The cause of our inflation is to be found in our own country, in the Government's failure to exercise the political leadership necessary to set a plan before the people and get agreement from them and particularly the social partners for a realistic incomes policy which would bring income increases in nominal terms down to what is realistic, based on increased production.
Inflation is responsible for all our major economic problems and I will identify four main economic problems which can be traced to the fact that we have an inflation rate which is twice or three times the average inflation rate obtaining in other EMS countries with whose currencies we are linked. First of all, despite the best efforts of the IDA, we are losing thousands of jobs each year in older, well-established industries simply because those industries cannot compete with the products of other countries whose rate of increase in costs is less than ours. In other words, unemployment is caused by our high inflation rate. Secondly, the drastic 50 per cent drop in income and living standards of farmers is traceable to our high inflation rate because the costs which farmers must pay for what they need to produce the goods is going up at twice or three times the rate of the prices they receive for what they produce from the EEC. Thirdly, the high interest rates which are crippling business at present and the credit restrictions recently introduced by the Central Bank are due to the high inflation rate and are making investment difficult. We can only keep parity within the EMS and keep our currency on a par with other currencies in the system by using tight monetary policy as a means of compensating for our failure to exercise any real control in the area of increases in nominal income. Those seeking funds to invest are being asked to pay the costs of the Government's failure to get a realistic incomes policy. They are being asked to bear the entire burden of maintaining the parity of our currency against others. Fourthly, the fact that our public finances are completely out of control and that the Government are not able to manage their financial affairs is directly attributable to our high rate of inflation. These have been due to high increases in public sector pay. So called special pay increases are to blame for the fact that we have had substantial current budget deficits in the last few years and have had dramatic increased in our foreign debt. These are attributable to the Government's failure to hold any sane line as far as public sector pay is concerned. That is an extension of the Government's failure in general to get control of inflation in the economy.
Our four main economic problems — growing unemployment, agricultural depression, high interest rates and the chronic weakness of our public finances — are due to our high inflation rate which, in turn, is chiefly caused by the Government's failure to exercise the leadership necessary to achieve a sensible incomes policy related to our economic position. The result has been diminished economic independence. It is ironic that this country, which was founded on a philosophy of sinn féin, of self-reliance, is now more so than practically any other country in Europe economically dependent because of our failure to manage our finances and achieve an incomes policy. We owe more abroad than any other country in Europe. We are living further beyond our means than any other country and this as a country founded on the philosophy of self-reliance. It is ironic that the Government, who include economic self-reliance among their aims and which is included on the membership card issued to all members, are the party responsible for doing more to make us economically dependent on foreign bankers than any other party who ever held office. The more we owe to foreign banks the more we must tailor our policies to the needs and demands of the foreign banks who are lending us money. The more we owe the more interest we must pay and the less will be left over for independent initiatives by the Government, whether job creation or whatever in the future.
At present almost three-quarters of the amount collected by the Government in PAYE has to go directly towards servicing the national debt. That means we do not have the economic freedom to take initiatives because so much of the Government's revenue next year and the year after is already committed to paying off the debts of the past. We have a debt which is equivalent to 106 per cent of everything we produce in an entire year.
Whether they be public servants or private individuals, farmers, industrialists or workers, the Government owe 106 per cent of everything everyone produces in this country in a year. One half of that national debt will have to be repaid within the next five years. That is the extent to which our economic freedom has been circumscribed by the failures of past economic policies. Failures in past economic policies and, in particular, failure in the area of control of public expenditure, are due to our failure to get an incomes policy and to have a realistic approach to increases in wages and salaries within the public sector and in the economy as a whole.
As I have said, in the next five years one half of our national debt will have to be repaid. People who are working at the moment should not think that does not matter to them. The Government's ability to provide pensions in the future for the workers of today, who are enjoying some of these artificial increases in salary which are not related to true increases in production — as a result of the Government having had budget deficits and substantial increases in debt — is being diminished by feckless financial policies.
The Government's ability, by the use of incentives and grants and other means, to provide the conditions in which jobs can be created for the young people in our primary and secondary schools who will be looking for jobs in the next ten to 15 years is being drastically circumscribed by the huge debts which are being incurred at present simply because the Government have no policy on inflation and on incomes and, as a result, are living far beyond their means. Perhaps I should illustrate what I am saying about the seriousness of the situation with which we are faced by quoting some figures.
I want to refer to increases in nominal incomes because very often they do not mean much of an increase in actual spending power because inflation goes up to compensate for increases achieved in incomes. It is like a dog trying to catch his tail. No matter how fast he goes, he never quite catches it. In the past two years alone nominal paper incomes went up in Luxembourg by 14 per cent; in the Netherlands by 11 per cent; in France by 27 per cent; in Germany by 12.3 per cent; in Belgium by 13 per cent; and in Ireland by 38 per cent. There is only one country in the EMS which had a faster increase in nominal incomes in those two years than we had and that is Italy which achieved the dubious distinction of having an increase of 40 per cent. I stress that I am referring to nominal paper incomes. With all due respect, I do not think we would wish to emulate Italy in that matter.
The Government were solemnly warned on this subject by the National Economic and Social Council, who were set up specifically to give warnings on this type of issue. In their report published in November of last year, I think, on the economic situation between now and 1983, the NESC said that between 1975 and 1979 the increase in Irish unit wage costs in national currency terms was substantially higher than in any of the principal competitive countries which together account for 75 per cent of Irish trade except Italy and the United Kingdom.
The Government failed to achieve an incomes policy and to create a sense of confidence in the future in which workers and others who are now demanding increases in incomes would be prepared to say: "No, we will not seek more than we believe the country can afford this year because we know the economy is being sufficiently well-managed that, if we wait until next year or the year after, that money will not be wasted on some one else but will be there to be enjoyed in the future by ourselves and our children whether it be in the form of pensions or jobs for our children." Because the Government are unable to create this sense of confidence in the future, they are unable to get the restraint necessary. They are unable to create a sense of confidence in the future because they have no confidence in the future themselves. They have shown repeatedly an inability to make up their minds about any matter and stick to the decision they have made.
I will give two classic examples of the Government's indecision and inability to give leadership. First we had the spectacle of the Taoiseach's broadcast in January 1980. He went on television to tell us that we must tighten our belts. Most people responded to that broadcast and believed the Government and particularly the Taoiseach meant what they said and intended to exercise restraint on public spending in a constructive way in order to provide a secure future for our people.
What happened? Almost within a month that broadcast was followed by a highly inflationary and extravagant budget. It was followed later in the year by Government intervention in the national understanding discussions, not in the interest of obtaining restraint, but in order to persuade the employers to pay more than they felt they or the economy could afford. Far from the Government intervening with a view to getting restraint and getting inflation under control, after the Taoiseach's broadcast the two major initiatives by the Government, the budget and their intervention in the national understanding discussions, went precisely in the opposite direction to the oratory of the Taoiseach.
That undermines public confidence in the meaning of words uttered by politicians. Some people may say politicians and their words do not really matter to the economy. I believe they do. There is no other body to give economic leadership apart from the political leaders. If the political leaders seem to be unable to stick by their words, the public feel they are not getting the leadership they require.
Consistently the Government got their sums wrong about increases in the cost of the public sector. I said already that I believe the failure to achieve an incomes policy is at the root of the problems we are facing in our public finances at the moment. I shall illustrate this. Taking the years 1978 to 1980 combined, the total amount by which the Government under-estimated in their budgets the actual increases which occurred in public sector pay was £213 million. That is a lot of money to get wrong.
The share of the total amount of Government spending which is now being absorbed, not in services for the public but in paying people who are keeping the Government's machine going, has gone up from just over 30 per cent of total Government expenditure in 1970 to almost 40 per cent in 1980. On present trends, by 1990 half of total Government spending will be absorbed solely in pay and pensions.
The most alarming feature of this entire exercise is the fact that (1) it is unplanned — I have already mentioned the £200 million excess increases which occurred in the past three years over what the Government had planned — and (2) the extent to which these increases are outside the national understanding.
In 1980 the total increase in the public sector pay bill amounted to approximately £300 million. Of that, £151 million was due to the national wage agreement. No one would object to the Government paying the terms of the national wage agreement, even though beforehand it was agreed it was excessive. However, a further £150 million of the increase in the cost of public sector pay in 1980 was due to special pay increases over and above the national understanding terms. As much extra money was due to special or anomaly pay increases as to the basic increases under the national understanding. This was in a year when practically no other employer competing to sell his goods — it was different for the oil companies who have a captive market, who can dictate any price they like and consequently can pay any price they like for labour — was able to meet the basic terms of the national understanding, let alone to give special pay increases.
Lest it be thought that all these special pay increases went to the civil service, whom everybody likes to give out to from time to time, only 12 per cent went to the civil service. A figure of £97 million went solely to employees in the health services. It is people in subsidiary bodies not under the direct control of the Government who have been receiving the largest proportion of special pay increases.
I said earlier that Government finances here are more out of control than in any other country in Europe, and I will illustrate that with some figures. The budget deficit, the figure by which the Government spent more on current items than they took in in 1980, was 6½ per cent of all money spent. In Luxembourg they had a budget surplus of 6 per cent. In France they had a budget deficit of only 1 per cent, in Belgium, 2½ per cent, and in the UK, a country which everybody likes to say is very badly managed, the budget deficit was only half of 1 per cent. This illustrates the extent to which, in comparable international terms, our finances are being mismanaged.
Many of the people who talk blithely about withdrawing from the EEC, the EEC being a bad deal, do not realise how much the Government rely for their day-to-day expenses on money they get from the EEC. Ten per cent of every £1 spent by the Government comes from the EEC. If we were not members of the EEC our budget deficit would be approximately twice its present level. In 1974 only 4.6 per cent of the amount being spent by the Government here came from the EEC. This means that the Government are more reliant on the EEC than it is healthy for us to be.
What is extremely worrying is the extent to which in the last two or three years we have come to rely more and more on borrowing money abroad rather than at home to finance Government deficits. In 1977, 37 per cent of all public sector borrowing was financed by borrowing abroad. In 1980, 60 per cent, almost twice as much, of public sector borrowing was in the form of foreign loans. This has two consequences which should be identified. If the Government are borrowing at home it does not increase the total money supply in the economy, because it is getting money in the form of loans from one sector and rather than have savers spending the money themselves the Government spend it for them. Therefore the total amount of money in the economy is not being increased and therefore currency inflation is not being increased.
However, when the Government borrow abroad they bring in new additional money to the economy, and more cash is chasing the same amount of goods; whereas as a result of domestic Government borrowing the same amount of cash is chasing the same amount of goods, the only difference being that the Government are spending the money rather than somebody else. By foreign borrowing the Government are helping to fuel the fire of inflation and adding to other failures in inflation control. Secondly, and particularly important, the Government are creating a situation in which we are not any longer in control of the rate at which our own currency is bought and sold.
As a result of excessive reliance on foreign borrowing by the present Government, if we were to decide it might be in our interest to devalue our currency — I do not believe it is, but it is an option that should be open to us — we are restricting our freedom to do so. If we borrow abroad on the scale we are now engaged in, we are closing off that option because any attempt to devalue while we owe substantial money abroad will mean we will have to repay more money than we borrowed because those who have lent us money abroad will demand repayment in their currencies rather than in ours; if we owe them £100 and we devalue our currency by 10 per cent we will have to pay our creditors £110. As a result, a combination of high inflation on the one hand, which is pushing us towards devaluation, and high foreign borrowing, which is making devaluation impossible, is forcing us into a corner and potentially forcing us over the precipice.
I do not believe the Government realise how serious is the situation into which they have got the country. I do not believe the Government realise how much the irresponsible management of our finances is making the achievement of a united Ireland impossible. Our national debt per head of the population in the Twenty-six Counties is almost six times that of the national debt per head of population in Northern Ireland. If we are to have a united Ireland are we going to ask them to take over our debts? Is an economy that owes six times as much as their economy per head of population to foreign and domestic creditors going to be an economically attractive promised land for the people of Northern Ireland who would want to join us and take a share of our debts? I believe we cannot have a united Ireland until we get our finances under control. Only then will we have the economic viability to go forward and offer those people an attractive and economic proposition to make up for whatever other sacrifices of a political or constitutional nature they may have to make. At the moment we have nothing to offer. The economy of the Twenty-six Counties has not produced sufficient jobs in the past ten years to provide for its young people. Unless we can do much better in the management of our economy we will not have anything to offer the people whom we want to join us in a common endeavour on this island.
Inflation is at the root of our problems. We cannot provide jobs for young people unless we get inflation under control. We should think in terms of tasks not problems: the solving of problems inspires very few people but the fulfilling of a task can inspire the public to do something they would not want to do otherwise. Our greatest task is to provide jobs for our young people but we will not be able to do that unless we get inflation under control on the basis of a sensible incomes policy.
Our past performance with regard to the creation of jobs is not good enough. For instance, our GNP has grown by 15 per cent in real terms. In the same period the number of people employed has increased by only 2 per cent. All the increases in the wealth of the country have gone to a smaller number of people who are employed and the rest have been left outside. In the meantime the number of people depending on the few employed has almost doubled proportionately. This is something people may not realise. The number of children and old people depending on those at work has almost doubled in the past 20 years. Yet, during that period we have not created enough jobs in any one year which all the independent commentators tell us we will have to create every year for the next ten years if we are to provide jobs for our young people. In this connection we are talking about children now in our schools. It is not airy-fairy talk about children who may be born in the future. All of the young people for whom we will have to provide jobs in the next 20 years are alive today. They can be counted, they are in our schools. Yet we have not in any year created enough jobs. That is the seriousness of the task facing us.
I shall illustrate the point I am making by referring to statistics. Mr. Kieran Kennedy and Mr. Foley carried out a study that was published by the ESRI in 1978 and they showed that to create full employment by 1986 we would have to create jobs in manufacturing at a net rate of increase of 10,000 jobs a year. In the period 1953-76 we created jobs at the rate of only 1,500 per year. In 1980 there was an increase of approximately 5,000 in manufacturing but at no time have we come even half-way towards achieving the rate of increase in manufacturing employment which has been independently identified as necessary to provide jobs for our people. We will not do it until we make our country competitive, by getting our inflation rate down to that of the other EMS countries. No matter how much the IDA spend, all of their good work is and will be negated by job losses in existing industry. This is happening because our inflation rate is too high. We cannot solve our employment problem until we do something about our inflation rate. We should realise the future consequences for this country of present trends of failure to provide employment for young people. In this connection I would identify some major consequences of likely trends in unemployment.
First, there will be a much more severe incidence of family poverty. It has been identified that there is a close correlation between severe deprivation and long-term unemployment. Secondly, we will have a much higher level of taxation to support a greater number of people out of work. This level of taxation will be even higher than what we know we will have to bear as a result of having to pay our existing debts. Thirdly, innovation which is essential to economic progress will become all the more difficult because trade unions naturally will resist any change in the manufacturing sector that might jeopardise jobs. They will be totally concerned with protecting existing jobs because they know that if people lose jobs there will be nothing for them. Innovation which requires a buoyant economy, which requires a situation to exist that if a person leaves a job he knows he will get a job elsewhere, will be stifled by a higher rate of unemployment.
The fourth major consequence is that there will be political tension between the few in employment and the many unemployed. This will become more acute and will become something that could destabilise our entire political system. Prolonged experience of unemployment will destroy self-confidence and the self-discipline of a large portion of the population and will sap our entire national morale. Finally, quite possibly we will face the prospect of a dramatic increase in emigration.
These are the prospects that are staring us in the face but the Government do not have a policy to meet them. They are staggering from one expedient to another. They have no idea where they are going. They have abandoned the feeble efforts that were made by the then Minister for Economic Planning and Development, Deputy O'Donoghue. He did not produce economic plans but rather produced papers that discussed options and discussed what the Government proposed to do in the following year, but even those feeble efforts have been abandoned by this Government. There is no plan for the future in the face of an extremely difficult situation. If any household saw that it had as severe a problem in its family budgeting as this State has, it would take far more effective measures to tackle the problem than have this elected Government.
We must recognise that the problem we face is basically a political one. Only politicians have the mandate to get people to look to their future and to see that the present irresponsible trends in our economy are brought to an end. The only sensible purpose the Government have is their anxiety to win the next election. Does anybody bother to ask what Fianna Fáil would do with power if they got it after the next election? Do they have an idea what they would do for the next five years if they were re-elected? They have no idea what they would do if they were re-elected after the next election. I believe if they are re-elected after the next election they will be even worse than they are at the moment because now they have some sense of purpose, that of winning the next election. If they were to win the next election that meagre sense of direction would be gone and they would not have a unified aim.
I would like to say what I believe must be done and what my Party, if given the opportunity to do so, would do to deal with the very serious problems we face. I believe we must have a five year economic plan. If I were to direct any criticism at the National Coalition Government it would be that they did not have an economic plan. That is the most serious mistake that was made because the National Coalition were not able to offer a clear direction to the people in regard to where they were going and where the sacrifices which were being made were leading in terms of improvements.
The next Fine Gael Government will have to have an economic plan setting out over a five year period what can be achieved as a result of measures taken this year. That plan must have three aims. The first aim must be to reassert our economic independence by reducing our dependence on foreign debt and over a clearly defined period eliminating our current budget deficit. The NESC have recommended that the Government should set a three year target for the elimination of the budget deficit. I believe that would be too severe. I feel the aim should be to eliminate the deficit over a five year period.
I also believe we must eliminate our net foreign debt, that is the extent to which the amount we owe abroad exceeds our external reserves. In 1977 our net foreign debt was only £170 million, in 1980 it was £1,600 million and it is estimated that at the end of 1981 our net foreign debt could rise to somewhere in the region of £2,250 million as against £170 million in 1977.
The second aim of that plan must be to bring our rate of inflation down to below the average rate of inflation in the other EMS countries. The third aim must be to double the rate of growth in manufacturing employment because only by doing that can we obtain sufficient jobs for the young people we know will be looking for them.
How does one achieve an incomes policy? The first requirement is for the Government to set an example in respect of pay within the public service. There is one clear statement which the Government must make. I refer to the reservations entered by the Irish Congress of Trade Unions in the paper, "Economic and Social Policy 1980 to 1983, Aims and Recommendations". That paper said that the Government should say, in certain circumstances, that they are not able to pay any more. The Irish Congress of Trade Unions said that they rejected the suggestion that pay increases in the public sector should be based on the Government's capacity to pay. One could swear that the Government were paying the money out of their own pockets. They are collecting that money from the taxpayers. The Irish Congress of Trade Unions are in fact saying that there should be no limit to the taxpayers' ability to pay up, notwithstanding the fact that the bulk of congress members are the very taxpayers the congress are saying have no limit to their ability to pay for increases in public sector pay. Could any proposition be more ludicrous?
The Government must take a firm line on increases in public sector pay and they must relate those clearly to actual increases in production in our economy. There is a need to set up an independent unit, which would estimate in each year the extent to which we can afford increases in pay. At the moment estimates of this sort are being made by bodies who can be accused of special pleading. It is suspected that employers or the Government make unduly pessismistic estimates of what we can afford to pay in terms of increased wages in the following year. We need an independent body which would identify a year ahead, on the basis of existing trends, what we can afford to pay. I believe that must be positively stated so that everyone would realise the limits within which our economy must operate.
Secondly, we must reform the budget procedure in the Dáil. The experience has been that in the second half of every year we have an avalanche of Supplementary Estimates adding on more expenditure on top of the expenditure which was solemnly agreed as being the limits to which expenditure would move in the Estimates and budget debates which had taken place only a few months previously. The Dáil after making that solemn decision is faced with an avalanche of Supplementary Estimates saying: "It was not enough, we want more." This is an example of total lack of planning of public finances. The worst aspect of it is that those Supplementary Estimates are predominantly required for increases in the public sector pay and invariably they are paid for by borrowing rather than by taxation. The first requirement for getting sanity back into Government negotiations is for them to make a clear statement, and to have that written into law, that Supplementary Estimates will have to be paid for by supplementary taxation and that they cannot be paid for by borrowing. That is the only way we will restore discipline into budgets. Budgets have ceased to mean anything over the last five to ten years.
Thirdly, we must discuss a budget in a proper fashion when it really matters. I do not know how many hours we have been debating this but I safely say that we have discussed it for approximately seven days. In my opinion they were seven totally wasted days because not one single word uttered by any speaker on this side or the Government side will have the slightest effect on a comma or full stop in the budget. We are being brought in simply to give out a large quota of hot air without the slightest hope of influencing in the least anything the Government are doing.
The proper way is to introduce the budget in September before the year it applies to and not in January as something which cannot be changed. The Estimates and Government proposals should be discussed here in the autumn session before any firm and final decisions are taken and before the Government are committed to certain circumstances. In that situation, if a Member suggests that a certain tax is too high or a particular expenditure is too high, it would be possible to make adjustments to reduce both. That could make some difference because the year would not have begun and there would be scope for the Government to take account of what Deputies were saying. At present anything we say will not make the slightest difference because the Government have made up their minds and will not change irrespective of what is said. However, they will introduce Supplementary Estimates because they will find that, without having the slightest control over the matter, expenditure will have gone through the roof.
If we had such a debate on the budget here, as is held in almost all countries, we could get people to see that there is a direct connection between the high rate of taxation, the high rate of public sector pay and the high demands for various other kinds of expenditure. People would begin to be responsible and realise that budget deficits have to be paid for in the form of increased taxation. We as politicians could begin to give the type of lead we should be giving to our people. The House is so unreformed that it is incapable of giving a lead to anybody. If we could reform the Dáil, and in particular the way we deal with the budget here, we could give economic leadership in a way we have never done in the past. It is no accident that, in practically every other country in Europe where their finances are properly managed and where there is no significant budget deficit, the budget is discussed in advance of the year to which it applies. People are able to see the cost of the Exchequer demands in terms of actual increases in taxation.
We should consider introducing what is known as the structural budget system which operates in Holland where an independent agency states whether or not the Government's target for public expenditure is realistic. The Government have introduced Estimates which I believed to be significantly fraudulent in that they simply under-provide for items in a way which is irresponsible. The Government know that they will be proved to be irresponsible because the money will have to be provided on a scale that it is not provided for at present. We will have that avalanche of Supplementary Estimates. Yet we will be asked to go through the charade over the next three or four months, if we are still here, of debating these Estimates, even though we all know in our hearts that they do not mean anything because they will be invalidated by Supplementary Estimates a few months later. That should not happen. There should be an independent agency, like the Comptroller and Auditor General which, instead of looking at Estimates after they have been spent to see if the money has been misappropriated, would look at the Estimates when they are published and say that they believe that, given the assumptions upon which Government policy is working, the Estimates are realistic or unrealistic. We need a Comptroller and Auditor General who will look at Government expenditure before, as well as after, it takes place. In that way we could have meaningful discussions about Government expenditure because we would know that the figures we are discussing are genuine. They are not genuine at present.
There is no proper control of the training of manpower in the economy. We have the various education institutions producing all sorts of graduates for whom there are no jobs and, at the same time, despite our large unemployment we have substantial shortfalls such as insufficient computer programmers, a shortage of engineers and people with all sorts of skills. We need a manpower training authority which would, in the manner of the National Science Council, co-ordinate the entire range of Government spending on manpower training, whether it be by the Department of Labour, Agriculture or Education, to see that the money is being spent in a way that meets the perceived and real needs for labour in our economy. At present there is no unitary control of the expenditure on universities, schools and AnCO. They are all going willy-nilly. If they happen to come out right in the end, it is good luck; and, if they do not, it is bad luck. There should be clear control of Government expenditure on manpower training so that it relates to the jobs that are available in the economy.
A lot of arguments have been made against my call for a firm approach to incomes policy and a new approach to the national understanding which would relate increases in income to real increases in production in the economy. What about firms doing exceptionally well which should be able to reward their employees by giving them more than the national average increase in wages? What can be done about that situation? One of the main reasons why national understandings failed in the past was because employers were unable to reward workers who were making an effort. As a result, a pile of anomaly claims built up and the whole thing went up in smoke. Across the whole range of industry we need to introduce a scheme of profit-sharing and there should be tax incentive schemes for firms who introduce profit sharing. Those profit-sharing schemes should be excluded from the national understanding. If a firm has a real substantial increase in its profits above a certain norm it should be able to pay an increased amount in the form of a profit-share to its employees over and above the national understanding. Those schemes should be audited and examined centrally and be given a tax incentive to get them started. If we had a national scheme to encourage profit-sharing in industry we would be able through those to reward firms achieving substantial increases in productivity without breaching the basic terms of the national understanding, because those profit-sharing payments would not be considered as wages and therefore would be outside the terms of the understanding. We face a very challenging decade and I regret the Government do not seem to have an idea of the extent of the problems or a proposal to meet them. I hope, therefore, that an early opportunity is given by the Government to our people to make their decision as to who is best fitted to govern the country.
