It should not be necessary for Deputy Bruton to raise the question of a sports hall because Deputy Keating, when Minister of State, reallocated all the money twice before he left office. As a former Minister for Finance, I am sure Deputy Bruton is well aware of that.
Adjournment of Dáil: Motion (Resumed).
Debate resumed on the following motion:
That Dáil Éireann, at its rising on Friday the 16th July, 1982, do adjourn for the Summer Recess.
—(Minister for Foreign Affairs).
If the Minister wishes to speak during the debate he will be welcome to join in.
We can talk about many things during a debate such as this.
The Minister, without interruption.
Deputy Kelly has spoken about the lack of political honesty. I would ask whether Deputy Kelly has heard what was said by his party colleague, Deputy Connaughton, in his efforts to convince the people of East Galway that the Coalition Government provided £8.5 million for a peat briquette factory in Ballyforan. I am sure Deputy Bruton will recall that £8.5 million was simply put into the non-voted capital section of the capital programme for Bord na Móna, enabling them to borrow the money if their financial position made it possible. That is how the money was to be provided. Is it honest to tell people at church gates in Tuam and Ballyforan that the Coalition Government provided £8.5 million for the factory? It is not. When someone strikes his breast and talks about being a purist, he should practise what he preaches.
The Minister is wrong.
The Deputy should check the capital programme. I am not wrong. The Deputy would make that statement because voting takes place next week in East Galway.
Deputy Kelly lectured here yesterday and today about honesty in politics. Two weeks ago he trooped into the lobbies and voted to nationalise a textile firm which he knew was not viable and had no chance of survival. He has a good legal brain but if he did not lecture Fine Gael on the legality of that motion he was not being honest and he might as well open his heart to the people and tell them what is going on in this House.
During the last general election campaign we heard much about a budget being sacrosanct; it could not be touched. When the election was over the quest for power started and Deputy FitzGerald, having already gone on bended knees to Deputy Kemmy in an effort to retain power, tried to stay in office. Where then was the purity and sanctity of that budget? We had been told that the nation could not afford anything else, that there could be no changes in principles. When the quest for power was not successful the Opposition called repeatedly for more Government expenditure. They put down amendments to the Finance Bill seeking changes which would cost many millions. They had no thought as to where the money would come from. The sanctity and purity of financial rectitude, as expounded during the election campaign, was thrown to the winds in the quest for power. They would sell their soul for power.
Let them not talk about honest politics when they do not practise what they preach. It does not come well from Deputy Kelly, Deputy Bruton or Deputy Barry Desmond. If Deputy Quinn had been here I am sure he would not have agreed with much that was said. Perhaps it was indicative that Deputy Desmond was alone on those benches as he expounded his theory. I could not help thinking when Deputy Kelly congratulated him that he had got his first recruit for whatever he intends doing. Perhaps it is to establish an SDP here or perhaps it is to make a bid for leadership of Fine Gael. There is more divided opinion in Fine Gael now than there was at any stage since I came to the House in 1977. In Hayden's Hotel in Ballinasloe the other night I said to Deputies present: "Your leader has gone upstairs". They said "Who?" I said: "Your leader has gone upstairs". "Who?" they said. "He is not our leader". The man who went upstairs was Deputy FitzGerald. I know he has become an embarrassment to the solid right-wing thinking in Fine Gael. There is as much divided opinion in that party——
(Dún Laoghaire): As there is in your own.
I hear it in the corridors. I happen to have the happy knack of being a non-drinker and I can pick up all the news late at night when the other guys say what they really believe, and that is when they have a few jars. I can disseminate what they are saying, and they are the same people who try and tell us time and time again about the great unity of that party. They are embarrassed and I know it. They are embarrassed because of the incredible stand they took during their seven months in office. That has now been dented, and the man they sold to the people with a halo of purity over his head is beginning to crack and crumble and many of them are beginning to wonder to whom they should turn. Should it be to Deputy Kelly who has a certain number of admirers in the party or should it be to Deputy Cooney who has a different view on right-wing conservative politics? There are many embarrassing situations, and I could enumerate them——
(Dún Laoghaire): The Minister is very concerned about our party. He should worry about his own.
All the sermons were revealed last night. When things were not going too well, they introduced the phone tapping scandal — the Watergate of Ireland. Does he, Deputy FitzGerald, or the party, forget that during the last general election campaign a certain member of the Cabinet leaked that story to a national newspaper? When the Cabinet and Deputy FitzGerald found out about it the then Government Information Service man, Mr. Liam Hourican, rang up two senior executives in that establishment and asked for the story to be killed. We all know what that means: do not print it. He said if they did print it, on the next day's newspaper, the Government would issue a full comprehensive statement saying they had fully investigated the matter and were satisfied that there was nothing wrong in what went on. The paper in question would have looked foolish in the eyes of the public if they printed a story which the Government fully intended to contradict.
(Dún Laoghaire): The Committee on Procedure and Privileges will look into all that. Perhaps the Minister will be a witness.
I hope they will go into this aspect in detail. There is an obligation on Deputy FitzGerald to come into the House and say whether Mr. Hourican was speaking for him and whether the Government fully investigated the matter and authorised Mr. Hourican to tell the newspapers not to publish the story. We hear about freedom of the press and freedom of speech from people who have a different strain running through them and have shown this clearly in politics when it suited them. When it suits them they put in the jack boot and when it does not they put on a good conservative face. Many of your supporters are beginning to see that you cannot be all things to all men. The old right-wing Fine Gael Party is still there in different faces. You know in your hearts and souls you did the wrong thing when you added an addendum to the Labour Party motion and voted to instruct the IDA to keep a non-viable factory open. You knew it was wrong and your supporters are saying this around the country. If they have not said it to you, go to my constituency and go to East Galway and they will tell you.
The use of the word "you" puts the Chair in a position which it is not entitled to be in.
We know who the Deputy is talking about.
Thank you for your co-operation.
(Dún Laoghaire): Your imagination is running away with you.
Deputy Barrett should also remember about the use of the word "you".
I am asking Deputy FitzGerald to come into the House and take the opportunity during this debate to set the record straight. If I am wrong, then tell me. I will be the first to admit it. He cannot say that. He did not take the opportunity to say whether he knew of the antics of Deputy Mitchell who was supposed to be the upholder of law and order. They are the party of law and order and we see what they did in Government. This is the kind of two-faced dishonest politics we hear from Fine Gael.
(Dún Laoghaire): Perhaps the Taoiseach will make a statement about Mr. O'Connor.
Deputy Kelly said we do not get an opportunity to debate the economy. Very shortly everybody, including politicians, will have an opportunity to do so when the Government introduce their economic plan. Recognising the difficulties which face the economy and the options open to us as a Government, we will produce the correct recipe to tackle our financial problems and chart the way forward to economic recovery and development. Everybody will have an opportunity to say their piece. We will then find out whether politicians are really interested in solving our economic problems.
I am sure that will get the same response as the other actions which the Government took during the last three months. As Minister for Industry and Energy I know industry has problems which are unparallelled in its history. They are activated by the deepest recession we have seen since the thirties. This is worldwide. When one reads economic commentators' reports one could well feel we were slipping back because there are many different opinions as to when world trade will pick up. Recently I had an opportunity to visit Germany and America and they have the same problems which are besetting our economy — declining markets, industry under pressure and in trouble and high unemployment. There are 11 million people unemployed in the EEC. There is the worst unemployment in America since 1938. If we look at it in the context of the industrialised nations of the world, the total number unemployed is 33 million. I do not put that forward as an excuse. That is reality. The world does not owe us a living. We are charged with the responsibility of solving our own problems. We will set out our economic plan and point out what we believe is necessary in order to solve our economic problems. We will call on all sectors to look at the contribution they must make to try to solve this problem. Undoubtedly, two or three years ago many commentators and politicians felt that the recession would be short-lived. Many industrial nations thought the same, but that has not happened. The recession has deepened and lengthened and our industry is facing greater problems than ever before. The Government must ensure that viable and sustainable employment is created. We are not committed to creating an unreal world for industry where the future is not sustainable. We are not prepared, to gain political popularity, to pour taxpayer's money down the drain——
That is a change.
——unlike some of our friends who call for spending of money but do not care where it comes from. The people are beginning to see through the cloud of dishonesty that was produced, marketed and sold by professionals as the most credible party to come on the scene for a long time under a leader who was also marketed and sold with a halo over his head.
From the Bills that have been passed through this House in the last few weeks Members have got a good insight to what our energy policy is going to be in the future. We are not going to dwell on the elements that will make up the economic plan. Nevertheless, energy has a vital role to play in the development of this country. Energy policy seems to move up and down in the perception of priorities by the public. When energy is in plentiful supply nobody pays any heed to it, but when it gets scarce everybody complains that we did not take the necessary steps to foresee difficulties. The action taken by this Government is the same as the decision, in principle, taken by the last Government. Although Deputy Kelly was involved in that decision he now wants to dissociate himself from it and say it is wrong. If he felt as strongly then as he does now about that decision, he should have taken the honourable course and refused to be a party to that decision. Does he not realise the damage that would be done to the economy if energy was scarce for even a short time? He is obviously not prepared to take any action to ensure that this does not happen. I wonder what kind of economic logic is behind his thinking.
In guarding against future liabilities, there is always a premium to be paid. I have never denied that there is a premium to be paid for having our own refining capacity to look after our needs, especially in an emergency. It is up to me to ensure that that premium is kept at a minimum. I have said what it is in recent debates and I am not going to repeat it now. We must ensure that in future the life blood of our economy, oil and energy, is always obtainable. The Government are determined to utilise our natural resources and to ensure that the benefits penetrate all sectors of the economy. When I took over as Minister last March, my first priority was to get the Cork-Dublin gas pipeline under way and to ensure that we could exploit it to the full. That is now well under way. It is being laid at the rate of one mile per day. We expect to have it in Dublin at the end of the year and contracts for its distribution have already been placed. I hope gas will be obtainable to consumers and light industry by early next year. There is great economic benefit to be derived from that source. A Senator said yesterday that we are endowed with riches in the sea and the more we exploit them the better. I have pushed along the development of natural gas and I have tried to activate more exploration around our shores. I am cautiously optimistic that we will find more gas, and statistics tend to support my optimism. Recently we granted quite a number of second round exploration licences with commitments to drill 26 wells. It is interesting to note that the perception of where the most likely opportunities are for more oil and gas has shifted to the Celtic Sea area. It is an area of much shallower water than in the Porcupine area but, nevertheless, with the activity that will be there over the next two or three years I am hopeful that more oil and gas can be found off our shores within a period of about five years.
When one looks at the difficulties which face our economy today, we see the obvious threats. We must tackle inflation which is a cancer in our society, wrecking agricultural incomes and putting more and more pressure on industry. Public expenditure must be selectively pruned because, in any business, when the overheads get too high they must be cut. It is quite clear that we cannot afford the level of services and their cost in these difficult times. The productive base has got too narrow. There is also a view in some sections that profit is a dirty word. You cannot run a business without a profit returning to the company who, in turn, will reinvest money and provide more and more job opportunities. The only alternative to that is socialism.
I do not believe socialism has worked in any country where it is practised. There is a balance to be struck between private enterprise and the mixed economy operation which we have. State and semi-State bodies must become more efficient and less wasteful of national resources. Everybody must cut their cloth according to their measure. Overheads must be cut. Today's profit is tomorrow's capital. We must create an environment which is conducive to the creation of employment. We must help our exporters who, incidentally, in the roughest time that we have ever seen, managed to increase their exports last year. In the first five months of this year they have already grown by 14 per cent which, in an outturn for the year, may be in the region of 10 per cent or 11 per cent. There are signals in the right direction. Our industrial base, by and large, is a modern one by world standards. The attraction of high technology industries which is the result of industrial policies pursued by this and successive governments over the last 30 years has given us a reasonably modern industrial base. As will inevitably happen in deep recession times, we have shed some weak industries, but generally speaking the industrial base in this country is strong. We should build on that strength and look at the opportunities that are there for the future. There are many opportunities in electronics and in the information revolution age which we are entering. There are opportunities for people in the softer industries who need a massive amount of training, people in the electronics industry, the computer industry and the telecommunications industry and, most vital of all, people making another last decent attempt to try to create the downstream agricultural production that we need. If we can use our natural resources to the full rather than exporting raw material to create jobs abroad there are opportunities for the Irish economy. We must get the base and environment right and go on from there.
We are producing a plan which we believe is the recipe for future growth in this country, and we hope we will get the support of all the honest politicians we have heard about in this debate.
I rise to speak on behalf of the Labour Party. We will have only three speakers in this adjournment debate, which by convention has tended to be a review of the year's parliamentary work. I was somewhat amused and perhaps a little saddened to hear yet again the incumbent Minister, Deputy Reynolds, re-run and re-hash the old civil war rhetoric that has bedevilled these benches for so long. It is amusing to hear Fianna Fáil giving out about the halo around Deputy FitzGerald, but the sides in this as in so many other areas could easily swap over. All the abuse that was heaped by Fine Gael on Deputy de Valera over the years is being reversed and the abuse is now being heaped by Fianna Fáil on Deputy FitzGerald.
Where did it all start?
It all started because Fianna Fáil and Fine Gael have little to argue about except personalities, and the Minister has confirmed that in the part of his speech which was not written and which came from his own heart.
All I said was not written. I did not read it.
I compliment the Minister on the non-personality part of his speech in which he said loud and clear that the only alternative to the system we have is socialism, and I agree with him. The Minister said that it does not work anywhere else, but by implication it is working here. A slogan used by the Labour Party in Australia in a recent election there was, "If you think the system is working ask somebody who is not". At the moment 150,000 people here know very clearly that the system is not working. We have said repeatedly to perhaps a deaf or blind audience — or perhaps it is the manner in which we say it — that the rhetoric of Fianna Fáil and the purity of Fine Gael embodied in the policy context with which they have bedevilled this country over the last ten to 15 years at least, without going back to the roots of the civil war, are no substitute for hard core politics. The Minister today again took us down the weary road of rhetoric by talking about holding on to our natural resources, not exporting jobs, all the old guff, with due respect to him, when he knows from his own commercial experience that all the Government had to do was to ban the export of live cattle.
That is not the answer.
This is the real crunch. Fianna Fáil go right up to the edge and say that they are going to plan to do this and that to control resources, but we cannot get them to say that they will now change the board of the Central Bank so that our finances will be controlled, or that they will bring about an effective land policy so that those farmers who want to work on the land productively can have proper access to it, and those people who have, in their own words the misfortune to inherit land and who are not farmers, who by tradition have inherited a home in rural Ireland and who do not wish to use it as a productive base for wealth creation, can be accommodated in a humane and proper way.
Fianna Fáil, and to a certain extent Fine Gael, are lying to the public — I use the phrase carefully — in attempting to suggest that the plan will be produced and that there is a solution within the present system to solve the problems of this country. There is no solution within the operation of the present system. Fianna Fáil and Fine Gael have tried every kind of carrot, lollipop, inducement and incentive to encourage Irish private enterprise to function effectively and to produce jobs. The Labour Party and socialist party of this country have always believed the private sector when they said they were private. They are private, particularly in their balance books and accounts. When they talk about private enterprise, they mean private and after they have got their profit maybe they will produce extra jobs. In 1977 the Deputy who is now Minister for Education and who it is to be hoped will have no part in the writing of this new plan, produced the marvellous famous five booklets. Liam Connellan, Director of the CII, appeared on a television programme with myself and I made the argument then that I am making now, that the private enterprise sector see themselves as having no obligation to produce jobs. In the present economic climate their primary obligation is to survive and in good times it is to make a profit. There is no control over where that profit is invested.
There is no planning here, and even if the Minister and the Taoiseach stand up and say that they intend to control our resources in a planned, coherent way, then the plan will be produced in the autumn in the silly season of politics. Certainly it will not be produced while this House is in session because that would enable us to criticise it constructively. It will be produced in the autumn with a fanfare of publicity and there will be no criticism. Docile journalists will take the handouts and will not even bother to re-write some of the paragraphs, because that, unfortunately, is the way some people in the journalistic trade carry their fashion. There will be no hard core substance to the plan because Fianna Fáil will refuse to bite the bullet in relation to planning.
I do not wish to be destructive in my criticism. I want to outline the kind of format that the plan should have and to suggest it respectfully to the Minister for consideration. In Labour '81, our election programme, the Labour Party suggested a format in which planning could possibly operate within the constraints of our own economy and their own constitution, and we believe it can be made to work efficiently if some kind of socialist planning can be introduced. I quote from page 13:
(57) It has for long been Labour's socialist policy that the economy must be planned. It is evident that the economic strategy outlined here is the first real attempt to plan the Irish economy. But this planning process must be based on new institutions invested with all the authority of the State and community-wide support.
(58) In order to achieve the coherent planning of the economy while avoiding the social disruption which results from a lack of real involvement in decision taking, Labour will take the following steps.
(59) Firstly, the establishment of a National Planning Board to be presided over by the Taoiseach of the day and involving all the senior economic Ministers, together with representatives of the trade unions, employer organisations, farming organisations, as well as other social and public agencies.
(60) Secondly, the introduction of a three year National Economic and Social Plan to cover incomes, prices, employment, taxation, social expenditure, budgetary policy and economic growth. The Budget will become the mechanism for implementing the Plan on an annual rolling basis. Thus its broad outline will be the subject of discussion by the National Planning Board before it is enacted.
(61) A Department of Economic and Social Planning will be established to oversee the planning process and to ensure its implementation.
(62) Thirdly, all estimates of public expenditure, both current and capital, and of revenues and resources, will be made available to the National Planning Board covering both the period of the plan and, in more detail, for each year in advance.
(63) Lastly the setting up a a new Dáil Committee on Public Finances to monitor and evaluate all estimates of income and expenditure. The absence of such a mechanism at present is a serious deficiency in the management of the economy.
(64) If it does not prove possible, in any single year, to reach agreement on central pay norms on this basis, pay will be determined in the private sector by normal free collective bargaining. In the public sector, pay will be determined later by bargaining in the context of Labour's priorities for job creation, investment, social policy and management of the economy. The planning process will continue, in these eventualities, and decisions will be taken in the light of the outcome of overall pay negotiations. Planning will remain, of course, the final responsibility of Government.
Effectively, this House is talking itself out of any kind of valid existence because we are not performing the functions we were elected to perform. In the past three or four years this Parliament on every crunch issue has simply walked away and has adopted the attitude of an Irish solution to an Irish problem. Politicians on all sides realise that we are not the most popular people, that we are not people regarded with any kind of credibility. The kind of nonsense that we have had in the House, whether from Deputy Mitchell on phone tapping or from Deputy Andrews in relation to alleged abuses by Deputy Mitchell as Minister for Justice, is not enhancing our reputation. The statement that provoked the action of Deputy Andrews was provoked by a cri de coeur from the representatives of the Garda to get politicians off their backs. We have known that down through the years there has been that kind of political interference. I share the Minister's concern about the so-called purity of some of the Fine Gael people in announcing what they are trying to announce. It is because that is all that Fine Gael and Fianna Fáil argue about that the public have simply looked in at this circus and said that it does not relate to their problems.
We have not dealt yet with the tax problem. We took the classical line of setting up a commission. We have not dealt effectively yet with the problem of family planning. We know that the Irish-solution-to-an-Irish-problem attitude does not work. Neither have we dealt with the reality of marital breakdown because, like the alcoholic in the cupboard in every family, we are scared to talk on such matters. We have not dealt either with the question of how we manage our own affairs, and these are not determined by outside forces. Neither have we dealt with the tragedy of rural Ireland in relation to land ownership and control. Our visits to east Galway are refreshing reminders of how large numbers of people have to live. The problem is enormous as one realises on any examination of the statistics. In this regard I wish to quote from our party's document entitled, Agricultural Land.
1. A very high proportion of farms in Ireland — much higher than in any of the other EEC countries — are owned by older people who have no direct heirs and no prospect of heirs. Almost a quarter of all farmers in 1971 were over 45 and single. Even this understated the problem. It is estimated that over half of all farmers over fifty in the western counties had no direct heirs, being unmarried or, if married, their children had migrated. In addition, the proportion of farms in the hands of older, heirless and almost unmotivatable farmers has been increasing rapidly for the past twenty years.
2. There is a very high correlation between the efficiency of land use and the age and family status of the farm owner. Older unmarried farmers or older married couples with no children at home show marked declines in output and efficiency. Conway (1975-76) showed that this was true for over one-quarter of all farms in the State and that these farms showed marked declines in output and efficiency in the 1960's.
3. The western small farm economy especially suffers from a very poor demographic and household structure. Over a third of all farmers over 45 in the area were single in 1971. This proportion is substantially greater amongst the smaller farmers and has been increasing very rapidly over the past thirty years. Output on these farms has been stagnant or declining and there appears to be very little expectation of any substantial change in the management behaviour of these farmers.
There is no reason for our not having an efficient agricultural structure but there are social impediments. Neither Fianna Fáil nor Fine Gael are prepared to deal with the basic problem of east Galway, that is, land structure and the tenure of land. We have media-managed and packaged candidates for the two major parties traipsing around the constituency issuing inane statements which do not relate to the problem. The Minister who comes from a richer county but one which has similar problems in the northern region close to the Cavan area knows very well what I am talking about and knows also what the difficulties are. If a family have held land for more than 100 years they will not walk away from it as one might walk away from a sweet shop. It is their home, their roots and everything they hold dear, but let us call it that and not talk about it in terms of an agricultural resource. We are confusing two issues and not dealing honestly with what effectively is the problem.
We have had nonsense from Fine Gael on the colour of the carpet, on the type of lights outside and on phone tapping when we all know that every office in Dublin has the same kind of facility. The sort of material published by both Fianna Fáil and Fine Gael for their election campaigns in east Galway is full of that sort of thing. It makes good copy. Sometimes it is witty and we laugh about it. Instead of being members of political parties we should all be members of Equity.
This Adjournment debate in many respects should be a review of what Parliament has done, a justification for our adjourning until October. Let us ponder that. Why should we adjourn until October? The long break is to enable us to deal with the harvest. It is based on nineteenth-century British parliamentary practice which successive republican Governments of either political hue have not yet covered. I go to my constituency in Ringsend and I am told by the people that I am on holidays until the middle of October. I do not have the nerve to tell them why I have such a long break — that I am expected, with the other Deputies, to bring in the harvest. This is manifest nonsense. We are not doing our job. Yet, we are being told that we must bring efficiency into the public sector.
And into this House.
We are being told that each of us must cut our cloth to suit our measure. What about productivity and efficiency among politicians?
That is all part of the trimming down.
When do Fianna Fáil, with the majority Government they have by way of Coalition with The Workers' Party, intend introducing Dáil reform?
We are a minority Government, as has been demonstrated so often during this session.
That is not true. The Government have the best worked-out coalition arrangement that this Parliament has even known. The unofficial Whip of Fianna Fáil is Deputy Blaney. He is of more value to them outside the party than in it. There is a path worn up and down the stairs to the various so-called Independent parties in relation to the on-going working coalition with Fianna Fáil and The Workers' Party. If the Minister is going to apply that criterion when will it apply to this House and its operations?
I am limited, I think, to 12.10 p.m.; would that be correct?
12.20 p.m.
Thank you. I want to highlight the implications of what the Minister was saying. We all recognise that there is a necessity for restraint in spending in this country because the money is not there. But it is not good enough for Fianna Fáil to say that they are going to cut public expenditure. We know what that has meant in the past. It has invariably fallen on the weaker sections in our society.
Sorry, Deputy, I understand there has been agreement to rearrange the original order. In that rearrangement, I am afraid, you would be asked to conclude not later than 12.10 p.m.
That is what I thought. I might make one final point of which the public should be aware. The Government are now being forced, probably privately by the International Monetary Fund to severely cut public expenditure. There is no indication whatsoever that this Fianna Fáil Government, with the support of The Workers' Party, will be in any way humanely selective as to how that expenditure is to be cut. The examples we have in the past in relation to local authorities demonstrate that the people who suffered most as a result of cuts in public expenditure were the weaker and poorer sections of our society, and that the cuts took place in invisible areas. For example, anybody in a local authority house dependent on local authority maintenance knows precisely where the axe has fallen. They have not cut the libraries and so on that service the wealthy sections of the community. They have not cut services right across the board. They have been selective, and biased and have gone for the weaker sections because they are presumed to be either voiceless or powerless.
I want to give notice to the Minister and the Fianna Fáil Party that if, in the enforced financial rectitude that has finally dawned on Fianna Fáil, either conveyed privately by the IMF——
No.
——or publicly, or conveyed by the OECD, the Brussels people and all the bankers — the Minister persists in referring to the country as a business but he knows exactly how bank managers communicate with businesses that are not performing — I want to say very firmly, and I shall conclude on this point, that the Labour Party, in conjunction with the trade union movement will resist bitterly and fight in this House and outside it any efforts at public expenditure cuts which can be demonstrated to be selective, or to be arbitrarily effected in a manner which means they will affect the weaker and poorer sections in our society. Until such time as cuts start to bite where they can best take effect and best be carried, we will resist any such attempts. I want to give the Minister that clear warning. I hope that during the recess — during which time hopefully we will all refresh ourselves — the reform of the operations of this Parliament will be high on his agenda and that of the Government.
I am calling on Deputy M. Barry who is required to conclude not later than 12.40 p.m.
On an Adjournment debate such as this one is entitled to address oneself to all aspects of Government policy over the past few months. But I have decided today to address myself to the major problem of youth employment, or perhaps what should be more correctly described as youth unemployment. One could be forgiven for thinking that, with the behaviour, or misbehaviour, in this House over the past few months, there was no urgent problem besetting the country.
Unemployment figures have reached a record 140,000, 60,000 of which account for young people under the age of 25. I can see no effort whatever being made to come to grips with this problem. From my experience in my constituency of Cork North-East, from my experience during the recent by-election in Dublin West and during the past few days spent in Galway East, I believe the problem is a major national one reaching crisis proportions. Indeed I believe this single issue will be the one with the greatest consequences for this country since the Famine and one that will haunt Ireland for decades to come unless something is done about it.
The record of the present Government on youth employment is nothing more than a bottle of smoke. The only concrete steps that have been taken were those by the Coalition Government when they set up the Youth Employment Agency at a cost this year of £41 million. When we were debating the Bill to set up that Youth Employment Agency in this House all of the Fianna Fáil Members voted against its establishment. The failure of the present Government to consider or give attention to the problem of youth unemployment suggests to me that they do not consider the matter worthy of their attention. However, those same politicians see fit to eagerly and enthusiastically canvass the votes of young people, and what is more, expect them. It is little wonder that young people have become very cynical about politics and politicians. The minds of the present Government are preoccupied with devising ways and means of remaining in government. While that situation remains it behoves those of us who care to devise ways and means of coming to grips with the problem of youth unemployment and it is in this regard I put the following suggestions to the Government.
Of course the best solution would be the provision of a higher rate of growth in our economy, but that in reality is not on. Since the year 1970 our productivity growth rate decreased from 4.3 per cent to minus .6 per cent in 1980 and there are no great signs of a major upturn in the near future. That being so we are faced with the prospect of a continuing slack in the labour market in the medium term. The question must be posed: what concrete steps do we propose taking to deal with this problem? One possible solution is that of work-sharing. But, like all things in this Dáil, reports are instigated, issued, but nothing happens. The Fianna Fáil Government undertook a report on work-sharing in 1978 which has not seen the light of day since. I presume it is gathering dust on some shelf in a Government Department and will never be seen again.
Despite popular opinion, despite the saying that Irish people do not work in fact they work longer hours than any other country in the EEC. For example, the average working week in France stands at 41.1, in Germany 41.9, Belgium 37.1, Holland 41 hours, Denmark 33.3, Italy 38.9, Luxembourg 40.3, Britain 42.2 and Ireland, the highest at 42.7 hours. Paradoxically it appears that the better-off the Irish, the harder they work. But while other European countries are progressively reducing their working week and conceding longer holidays, the Irish manage to push up the length of their working week and year. Surely progress can be made in this area. Young people, I am sure, would not be against the idea of sharing their job with another person. When we do not have increased growth we are faced with a choice, should a person have a higher income or more leisure time. An OECD report issued earlier this year stated that people are prepared to forgo an increase in their real incomes if they are given greater leisure time and flexible hours.
I appeal to the Government to seriously investigate the prospect of work-sharing because our problem of unemployment will not disappear overnight and there is no magic wand that will solve it. Bearing in mind our circumstances, our borrowing, our high rate of inflation, the huge number unemployed and the number of our young people on the dole, something needs to be done urgently. We are all aware of the social consequences of young people being left without work. There is a lot of talk about drugs, more vandalism, alcoholism and so on but there must be a reason for them. In my view one of the main reasons is that the young people have nothing to do and they become totally frustrated lying in bed all day.
Another problem we are faced with is that of supply and demand. It is unfortunate that the Minister for Industry and Energy, Deputy Reynolds, has left the Chamber because I am sure he appreciates that in any business, supply must meet demand or if that does not happen disaster is inevitable. The same is true of the labour market: supply must meet the demand. While the projection of labour figures is not an exact science, some steps could be taken to make them more accurate. However, the root of our problem lies in our school curricula. Our system of secondary school education and our exam system are too narrowly based. We are not equipping our young people for work. In effect, we are making square pegs for round holes. We cannot allow that situation to continue for much longer. Young people who suffer the strains and tensions of a pressurised exam system end up without a job. It is nonsensical to place young people under such pressure knowing that there will not be any reward at the end.
I suggest that the Minister agree to set up a national curriculum council. A White Paper issued by Fianna Fáil on education proposed setting up such a council. When Minister for Education, Deputy Boland agreed to the setting up of a curriculum and examination board but that has been left in abeyance. On 6 May I asked the Minister to set up a curriculum development council but he fobbed me off. On 8 May I put a question to the Minister asking him to set up a curriculum development board and he fobbed me off. I appeal to the Minister to set up a board which will look into our secondary school examination system and endeavour to change it immediately. We need a broader, vocational and socially based education system if we are to prepare our young people to meet the demands of a rapidly changing world.
One could be excused for getting the impression in recent months that Dublin was Ireland. All emphasis has been on the capital city. All administration and structures are set up in the city on the basis that all our people live in Dublin but it should be remembered that only one million of a total population of 3½ million live in Dublin. The National Manpower Service operate a work experience programme under which young people are employed for six months during which time they are given basic training and £30 per week. That is a commendable scheme and it operates successfully in Dublin where people, at most, must travel three miles to the centre. However, things are not that simple in rural Ireland. One of my constituents travels from Kilworth to Cork daily, a distance of 26 miles, to take part in a work experience programme. At the end of the week she is paid £30 but, in effect, she does not have any income because her bus fares for the week costs £30. That is an indication of one of the disadvantages of living in rural Ireland.
I suggest to the Minister for Labour that those who are taking part in that programme and who live five miles or more from the centre should be given a student pass for bus travel. That would make it easier and more worthwhile for young people living in rural Ireland. We should not expect young people who have spent 14 years going through our educational system to travel 30 miles per day for work training and have to pay their weekly allowance out in bus fares. A special mobility incentive scheme operates in France for young people in their first salaried employment. That gives the incentive to young people to go far from their homes in search of employment. It is a pity that such a scheme is not in operation here where all the emphasis seems to be on Dublin. We have been talking for many years about decentralisation but I wonder if we are serious about that. We appear to be making an effort to become more centralised rather than decentralised.
We are adjourning for the Summer Recess amidst frightening unemployment levels and depressingly low output in production. The Government have promised us a new economic policy and I hope, for the sake of the present and future dole queuers, that this policy will be more than a regurgitation of old systems that failed or a collection of commendable though hardly realistic platitudes. Whatever form this new policy takes it will no doubt advert to the twin aims of full employment and growth. Neither of those aims need be hopelessly unobtainable it approached in a reasonable, rational and forward thinking manner. It is up to us as politicians to lead the way and I ask all Members, in the name of our young people, to seriously set about tackling the problem of unemployment. To date politicians have failed to face up to the problem. If we agree to face the problem I believe we will find solutions. They may not be the most idealistic ones or solutions we would like to adopt but at least we would finish up with an increased workforce. It is our duty as politicians to see that all our people get work, it is their basic right.
Politicians, who have a job, seem to fail to liaise with those who are unemployed. None of us has had the experience, after completing school, of searching in vain for a job for three or four years afterwards. We have failed our younger generation and we are continuing to mortgage their future by borrowing further every day. When many of us are dead and gone our young people will have to pay the debt but that does not seem to bother the politicians. All that seems to bother politicians is power. Politics has become a game of power and our young people can see that game being played daily. It has disillusioned them and frustrates them. If we are to restore the faith of our young people in politicians, and in a democratic society, we need to tackle problems such as unemployment. They are fed up with empty clichés and old words. They need action, but I am afraid this Government will not give them that action because they are not prepared to make a serious endeavour to tackle the problem. I do not think this Government could do worse in the future then they have been doing in the past five months.
In the election campaign this year, the Government party promised the young people this, that and the other. The Dáil seldom if ever acts or speaks on behalf of our young people. It is easy to say that we have not a State Department to deal especially with the affairs of young people. Many Departments should be concerned with youth, for instance, Health, Social Welfare, Education and Agriculture. If there is a will there is a way, and all of these Departments should be brought together in a special effort to tackle the problems of young people. The Government have failed to embark on a national youth policy and I am now asking the Taoiseach to set about this, because in the past decade we have had failure to plan on behalf of youth. The present regime say still that there is no need to plan. Surely they have had time to learn from their mistakes, and in the next few months they will try to plan for jobs for our young people for the rest of the decade, and beyond.
In the fifties in Ireland there was the theme of "the vanishing Irish". If one were to find a theme for the sixties it might be "the prosperous Irish". In the seventies, regrettably, the theme would have been "the divided Irish", divisions in terms of our various vocational interests, the level of strikes, the lack of understanding and cohesion between workers in various sectors. This was a consequence of the sense of growth in the sixties. Unfortunately there was the other development in the seventies which underlined the "divided Irish" theme, the problem in Northern Ireland.
They were the themes of the fifties, the sixties and the seventies. The theme for the eighties is more serious than any one of those. It is the theme being called "the ungovernable Irish". Strangely enough, in the seventies, when there was lack of understanding between the various sectors in our society, a lack of common purpose for one reason or another, we were united in one thing, perhaps more so than at any other time, and that was our EEC entry. For good reasons, for reasons that conferred considerable advantages on us, 83 per cent of our people were united in our determination to join the community.
Perhaps that is not surprising because event have vindicated that decision. The resource transfers last year from the EEC to Ireland represented more than £551 million, equivalent to 12 per cent of our total public expenditure and 7 per cent of our GNP. If you take into account the advantages from these substantial transfers you must ask what has happened to bring about some of the changes in circumstances which have made difficulties for the Government more acute.
We have had the advantages of these huge transfers from the EEC. Some people may suggest that what has happened has been the growth of a pattern which would have been better avoided. When we speak about our people being ungovernable we must coincidentally ask what is the role and the function of Government. Figures would suggest that the public, for one reason or another, have been of the opinion that the patterns of the sixties and seventies should have gone into the eighties. However, public spending has increased from 29 per cent of GNP in 1970 to 49 per cent, estimated this year. That is a very significant and not very welcome development. In the background of the 49 per cent this year, we see a deficit of 5 per cent or 6 per cent in national output.
There seem to have been three main elements in the huge growth of public expenditure in the last decade. The first is public sector pay. The growth in public sector pay seems to have begun to look like an incremental responsibility on the part of Governments, and the people seem to think that they must get more and more. Therefore, we must take into consideration the situation in the semi-State sector in the period of growth in the sixties — they were the engines of that growth, but today many of them are brakes on development. But in the past ten years imbalances occurred in public sector pay which the Government clearly have been determined to correct. We must curb the growth in public expenditure, and I will give one or two examples of ways in which the Minister for Finance might do this.
In 1980, when I was Minister for Finance, we had three public service special pay claims, the Garda, the nurses and the teachers. In consequence of these, at the end of my term of office I had to introduce a supplementary budget. One of the things that emerges from these three matters is that they were not confined to any year. The Garda got a public pay award at the beginning of that year; subsequently the nurses got theirs, and linked with them were the psychiatric nurses in the public sector, who included prison officers. I am speaking about special pay awards over and above the national norm. The prison officers were given a special pay award. The Garda had been given a special pay increase. Then it was realised that the prison officers were passing out the Garda, and in the same year the prison officers came back to maintain a differential with the psychiatric nurses.
There are two examples in relation to teachers. By definition, as a result of agreement in 1960, there is a linkage into the executive grade in the public service in the case of teachers, and when last year they got a special pay increase that ultimately seeped through into the executive officer grade in the public service. The result was that those above the grade had their salaries increased upwards and so did all those below that grade. There is a pivotal effect. Now in the sixties we had a period of tremendous growth, not alone here but worldwide. That growth enabled literally everybody to enjoy a share in the fruits of prosperity. That was justifible in that period of international prosperity and growth. The question now is whether in this period of recession those who enjoyed the fruits of that prosperity are prepared to accept the burdens of the recession and make the necessary sacrifices. The worldwide prosperity has declined, unfortunately, into a world-wide recession. Every economy has been hit, ours more than others because we are so dependent on what I describe as the external environment.
Today the western world has become poor and we, depending as we do on external trading, have become poorer perhaps than others. In this situation any programme designed to deal with public expenditure will have to tackle the linkage to which I referred. If public sector pay takes too much of the available funds the private sector will be deprived. Money will become more expensive because interest rates will become higher and inevitably the rate of inflation will be higher here than it is elsewhere.
For some time past the State has been taking on too much in trying to provide an environment in which people can provide for themselves. The effect of that in the current budget represents almost 60 per cent of the budget and you have therefore 40 per cent being administered by a pay bill of 60 per cent. That underlines the necessity for curbing growth in the public sector by ensuring we are not paying more and more for less. Here I should refer to Commission document 82/422 recently published where they give the principal finance aggregates for all the member states. In 1960 our general Government expenditure in GNP was 26.7 per cent; in 1970 it was 38.9 per cent and by 1982 it was 59 per cent. That is an enormous rate of growth in the general public finance aggregate as a percentage of GNP. Now the private sector is a major element in any programme from the point of view of achieving what we promote. The average in 1982 is 49.8 per cent. In prosperous countries like Germany it is less than that. In Ireland in 1970 it was 9.7 per cent and this year it will be in the order of 14 per cent. Again our public debt this year, and it has been growing all the time, stands at 91 per cent whereas the average for the EEC as a whole is 38 per cent. These figures are clear indicators of the fact that in order to have an effective scheme whereby the Government are enabled to maximise the potential of development resources — I am pleased to note the Government are directing themselves in a very diligent way towards this at the moment — public expenditure must be controlled and not be permitted to grow and grow as if Departments, particularly Health and Social Welfare, had no other function but to channel the moneys made available into whatever directions they may think fit.
We have another function, and the old Latin tag is appropriate here, Quis custodiet ipsos custodes?— who will supervise the supervisors? We have evidence of a huge growth in public expenditure in some Departments. Some of that growth may be as a consequence of our economic and social condition but some of it stems from a lack of a proper awareness in Departments of what their appropriate role is. The Estimate for Health last year was £691 million. This year it is £846 million. That represents 7 per cent of GNP and it is away above the total figure projected by the Minister in his budget deficit for this year.
I shall not repeat what I said on the Finance Bill in relation to health services. Here we have evidence of what Departments have been allowing to happen over the years. They are soaking in money without ensuring that it is applied properly for the benefit of those, and those alone, who require the assistance. It has not been so properly spent in recent years. The original Estimate for Social Welfare last year was £477 million. The Estimate this year is £743 million. That is close to 7 per cent of GNP. It represents a huge jump on the original Estimate for last year.
That brings me to my second proposal. It is unfortunately at this stage a somewhat belated criticism. It is that the Estimate provisions of the previous Government for health and social welfare and the semi-State bodies were not sufficiently strict and rigid in the national interest. They were far too flaithiulach, looking at the level of administrative costs right through the Estimates. It is clear that the increase in these Estimates is far too much. For instance, the administration costs on the social insurance fund, allowing that the social insurance fund is increasing for one reason or another, have gone up by 30 per cent in one year. That is a huge increase in administration costs. If one looks at administration costs generally, one begins to wonder whether or not one will get to the point where funds that are coming through, of the order of £551 million last year, are going to cost us extra money to administer. If we exclude — and this is excluding a lot in relation to the social fund — placement costs, recruitment costs and training costs, none of which are regarded as being administrative and in fact must be considered as being the main role of AnCO and CERT, we find that to administer the social fund in this year cost us £3 million. If we were to include these elements what would the total cost of administering the funds coming through to us from Europe be? We are almost witnessing the development of a new European-based democracy which is bigger than anything that operates in Europe itself and will feed off what is coming through from Europe.
Let us look at some other provisions in the Estimates. The Industrial Development Authority relates to an area which has always been a special favourite of Governments, where Ministers for Finance had to provide almost on the basis of what was asked for. The total provision this year for the IDA is about £203 million. That would compare interestingly with some other provisions which I will mention later. The provision for the building operations, the factories, is down 18 per cent from something over £56 million to something over £46 million. Yet the administrative costs for the Authority are up from £12.3 million to £14.3 million, a rise of 16 per cent. When the previous Government were drawing up these Estimates, were they trying to square these facts one with the other? If the development of factories and provision of advance factories were dropping to that extent, perhaps because the external investment climate was not as buoyant as it used to be, how can we look at the provision for administrative costs climbing by 16 per cent?
I do not want to say again what I said on the Second Stage of the Finance Bill in regard to how savings could be achieved in different Departments. But it is fairly clear that the public service expenditure in terms of salaries and in terms of the service itself is causing an imbalance in our economy and is at the root of many of our problems at the moment. When we developed these services in the sixties there was a need and an obligation to do so because we were in a period of growth after many years of the vanishing Irish in the fifties and the depressed Irish in the years before that. We were a relatively young nation with no native capital and very little native expertise. At that time all of that was necessary and could be justified. We are not now in the sixties but in the eighties and apparently the notion has stayed with us over the last twenty years that the only question that falls to be answered at this stage in relation to public service is by how much it grows each year and what extra services we are going to provide. That can no longer be the test, because it is the taxpayer who pays for the service and quite clearly the taxpayer is now being taxed to the limit of his tolerance and his capacity to pay. It is for that reason that I set up the Commission on Taxation over two years ago, giving them specific terms of reference not just to come up with a more equitable system of taxation but also to take account of the social and economic needs and potential of the country. So I look forward to reading their report. I expect that they will take account of this in their terms of reference, because we cannot talk in terms of more and more tax except to spread it more equitably. We must concern ourselves with the nature of the service being provided and the appropriateness of it at this point.
In regard to the £203 million for the IDA there are two things that have to be said. The climate for external investment is not at all as good internationally as it had been in the sixties and seventies. The Western world is poorer. People are investing in their own countries and it will cost us more and more to attract external investment. So the IDA and their activities need to be looked at in that context. The cost of external investment to the taxpayer has probably reached the limit having regard to the tax incentives we have. I will compare that with the provisions we make for our own native resources. Our fisheries have not been developed to the extent that they should be and the vote this year is a total of £19.5 million, representing .14 per cent of GNP. It is down 3 per cent on last year. Those are the Estimates provided by the previous Government. That is their view of what has to be done in relation to our national resources. There is no reference whatsoever to educational or training programmes. It is assumed here that if one is going to be engaged in fishery activity one must be living by the sea and one's parents and grandparents must have been engaged in it before one. Every other country has training programmes both for city people and for people living near the sea. But are we not all living within cycling distance of the sea. I remember David Owen trying to explain to his colleagues one time over lunch that the problem they were having was that they were all within driving distance of the sea and the British people were very sensitive about their fisheries. We understand that problem because we could all cycle to the sea if we had a day to do it. Let us compare the Fisheries Estimate that that Government provided with what is provided for other areas. Where is the sense of proportion? Look at the Forestry Estimate. The net total for this year is £34.7 million, .25 per cent of GNP. There is provision for education programmes in the Forestry Estimate of £215,000. Are we going to sit on our resources here, fisheries, forestry and agriculture? Agriculture is the key one, and we find that of the total Vote of £265 million — and that is only one side of the picture because most of it comes through from the EEC at this point — £38 million is provided for the total education, research and advisory service whereas the IDA gets £203 million. Our land is too important not just to the farmers but to the whole people to leave it just to the casual chance that the son who inherits will continue to farm. It is much more important that that. We must launch through all of these areas proper education and training programmes. We are soaking up funds in administration, either our own administration or stuff coming though to us from the European Community.
About nine years ago I raised for the first time in this House the question of our right to claim the Rock-all Bank. I was the first person to do so and I was laughed at. I earned the nickname "Michael Rockall". I am glad nobody is laughing now because there, too, is great scope for mineral exploration and fisheries.
The old meaning of "Sinn Féin" to which we might all have subscribed in the old days was "self-reliance". Unfortunately the term has been misunderstood, abused and misrepresented in recent times and even The Workers' Party find the term uncomfortable. While we may not adopt the term, let us at least adopt the principle of that great period when Ireland was coming into its nationhood. We can all subscribe to self-reliance and the development of our own resources.
In that connection we have a message to convey to our Northern colleagues who have a sturdy attitude which we may not have fully recognised as yet. I am thinking not only of people we know on the Nationalist side but others such as Harold McCusker and John Carson, men of sturdy independence whom I have known very well and respected. I hope my reference to them here will not do them any harm, and I assume it will not. We must work with them in a combined approach to the EEC in regard to policies that will be effective both North and South. We must show that we are all self-reliant.
As a nation engaged in trade we are almost exclusively dependent for our well-being on the impact of policies. Our foreign policy must always take cognisance of the external representation of our national interest. Everything we do and say should be in the national interest as an external promoter of the national well-being of the economy and employment. The decisions taken must always take account of the national interest.
Coming back to this House after a short absence, one is not reassured by the atmosphere and by the kind of activity which takes place each day on the Order of Business. Our role as Members of Parliament is to promote cohesion and the spirit of self-reliance, mutual respect and a sense of purpose and to promote respect for the operations of democracy and for our culture and traditions. It is fairly evident that a great challenge is facing us. If the Government tackle this as they propose and the rest respond, then we can give that sense of purpose to our young people. It must be based on the firm principle that the role of Government is to give a person the opportunity to do something for himself, not to ensure that he will be dependent in everything on the Government and thereby on the taxpayer.
I am very pleased to have this opportunity to speak, and I will devote my time to a matter of deep concern to me, about which I have not previously spoken in this Chamber. I know it will be understood that being Jewish, I am deeply concerned about what is taking place in the Middle East.
We have heard many voices speaking out, calling on Israel to withdraw. We have heard even in this House the Soviet line expounded, in the same manner as in international fora all over Europe, by The Workers' Party in their contribution.
Whilst everyone here recognises the right of Israel to exist, with certain exceptions, nevertheless ever since the rebirth of that nation in 1948 attempts have been made to annihilate the people there. The PLO's avowed aim is the destruction of Israel. I wish to put on record two articles from the PLO Covenant.
Article 9 of the Palestinian National Covenant states:
Armed struggle is the only way to liberate Palestine. This is the overall strategy, not merely a tactical phase. The Palestinian Arab people assert their absolute determination and firm resolution to continue their armed struggle and to work for an armed popular revolution for the liberation of their country and their return to it. They also assert their right to normal life in Palestine and to exercise the right of self-determination and sovereignty over it.
Article 15 states:
The liberation of Palestine, from an Arab viewpoint, is a national duty and it attempts to repel the Zionist and imperialist aggression against the Arab homeland and aims at the elimination of Zionism in Palestine. Absolute responsibility for this falls upon the Arab nation, people and Government, with the Arab people of Palestine in the vanguard. Accordingly the Arab nation must mobilise all its military, human and moral and spiritual capabilities to participate actively with the Palestinian people in the liberation of Palestine. It must particularly, in the phase of the armed Palestinian revolution, offer and furnish the Palestinian people with all possible help and material and human support and make available to them the means and opportunities that will enable them to continue to carry out their leading role in the armed revolution until they liberate their homeland.
I often talk about the right of Israel, the right of the Jewish people to their homeland. For 2,000 years in the lands of their dispersal they prayed for the return to Zion, to Jerusalem, their homeland. In many countries Jews were not as fortunate as they were in Ireland where they were allowed to live in freedom, with equal opportunity and equal rights. Most of the Jews living now in Israel came from Arab lands, where they withstood long centuries of persecution, and from Russia, which has an infamous record in regard to the persecution of Jews dating back to the time of the Czars. The nation of Israel has been allowed no respite since its rebirth in 1948.
De Valera once asked my father what was the right of the Jewish people to return to their homeland. He said: "Well, Chief, if 300 years ago not only the people of the northern part of this country had been driven out of the land, disenfranchised and displaced, but the whole of the Irish people had been driven out in the diaspora and only 10,000 Irishmen remained, would they have lost the right to re-establish the land of their forefathers?" De Valera replied that as long as there was one Irishman remaining, they would never lose that right to return. This was always the aspiration of the Jews. Every Jew feels a deep concern for what happens to Israel.
The Jews of Ireland are lucky. The greatest tribute to the Irish people is that there are three Jewish Members of this Parliament. It speaks for the belief of the people of this country that a man's faith is his own business. Jews are not that lucky in many other countries. There are at least 150 million Arabs, perhaps 250 million. They own 5.6 per cent of the earth's richest surface. Many of the Palestinian Arabs came into Israel at the turn of the century. When the pioneers came and reclaimed the land and made it arable there was work for them and they lived well with their neighbours.
In 1938 my late father in America used to say that if the great powers stepped aside and allowed the Jews and Arabs to get together they would sort out their own differences. Not many people are aware that the total fire power of the Arab nations is greater than that of NATO. The arms captured in the recent invasion of Lebanon which the Israelis are trying to return to the Lebanese are sufficient to equip 8,000 men. I have been told it can take anything up to six or eight weeks using over 100 trucks to shift that weaponry.
In the Daily Telegraph of 17 June 1982 there is an article by Hugh Davies in which it is stated that a Mrs. Carol Ghamloush from Barnes, London, is married to a Lebanese gold merchant. She left London to live in Sidon, a city about which she said the only government was the Palestinian Liberation Organisation. The article states:
They ruled the streets with their guns. Trucks with recoilless rifles mounted on the back patrolled everywhere. Whenever they wanted money, they held up a shop and robbed it. You always stayed in at night. It was far too dangerous to go out.
All I can say is thank goodness the Israelis invaded. They have destroyed parts of the city with their bombardment but we welcome them.
They have captured 5,700 Palestinian guerrillas from 23 different nations. The PLO is an international terrorist organisation. This is a fact, and many countries know it. Today very often one believes what one wants to believe. There are many people there — for example, from Sri Lanka, Pakistan, and Bangladesh — who would not have any bones to pick with Israel. The Prime Minister of Israel, Mr. Begin, asked recently: "What for?""To kill Jews?"
This is the first opportunity I have ever taken to use the time available to me in the House to speak on something as important as this subject. I know people will understand my deep feelings on this. I respect, love and revere life. I deplore killing wherever it happens. When terrorists place weaponry on the roofs of hospitals and schools and say to a civilised nation, which Israel is, "Try and come and get us" and they shoot from behind these "obstacles", that is the height of cynicism. Television cameras have never focused in as closely on the deaths of people as they have during this war.
I pray with everyone, for both sides, that peace will come to the Lebanese and the whole of that region in the Middle East and that one day, please God, we will see Arab and Jew working together as brothers.
(Waterford): I shall be dealing with the Government's proposed economic plan, the forthcoming report of the Commission on Taxation and will make reference to the statement made last night by the Minister for Foreign Affairs in connection with Northern Ireland.
In connection with the Government's economic plan which has occupied the time of the Chamber during Question Time, the first test of the seriousness of the Government in tackling the financial and unemployment crisis is in how the plan will be presented. The second test is what it will contain.
I am concerned about the manner in which the plan will be presented. It is probable that it will be produced and presented during the recess. My party believe that the proposal must be put forward as a Green Paper and not as a fait accompli as a White Paper. If the Government are serious about giving unions and workers an opportunity to make an input into it before it comes before us in final draft, the economic plan should be published as a Green Paper. That is our first demand.
We believe in real economic planning. That is the only way forward out of the present economic crisis. We must accept that planning is no longer a dirty word as far as the political vocabulary is concerned. We will reject as an insult to the intelligence of workers a collection of social and economic aspirations and platitudes as an economic and social plan. Only proposals which set specific targets for specific sectors and enterprises and spell out in detail how these targets will be met are entitled to be called an economic plan. That is what ICTU and our party mean by economic planning. To take an example, it is a waste of time to talk in vague terms about creating jobs in the food processing sector. An economic plan which is not a con job must spell out in detail the number of jobs in meat processing factories whether in Dublin, Cork or Waterford, how they will be created and so on. What job creation prospects and target will be set, for example, for the food processing industry by 1983? The plan should spell out how it will ensure that cattle are supplied to the factories, how products will be marketed and what steps will be taken if owners do not meet the targets laid down. Similarly with other sectors of the economy. Job creation can no longer be described as a by-product of businessman making profits. By-products are like by-elections. They are neither predictable nor reliable. An economic plan must be predictable and reliable. As far as we are concerned, free enterprise is the enemy of economic planning. Any economic plan worth its salt must be prepared to tackle its enemies. If the document does not spell out the measures to be taken, for example, to curb the export of live cattle through the port of Waterford where literally thousands of jobs have been exported, then the workers of Waterford will treat this plan with the contempt it deserves.
We have heard a lot recently about the despondency and despair felt by our youth. The single biggest cause of this is unemployment, which lies behind the escalation of crime and violence in our cities and towns. There is an increase in drug taking and our young people view our political process with cynicism. If one was to do a statistical review on the attitude of young people to politicians and the political system I think their observations would be unprintable. We must formulate a concrete, realistic response that will create work to solve the unemployment crisis. Unemployment will get worse as long as the present policies adopted by the parties here are pursued. There are approximately 150,000 people unemployed, but if true figures were published I think the number would be closer to 200,000. The signs are that, in the next couple of years, the figure will go over 200,000 and, if we include young people who are not officially registered, the figure would be closer to a quarter of a million. Waterford is one of the worst hit regions and there are over 4,000 people unemployed there. That figure will exceed 5,000 in the near future. Faced with this prospect, there is an obligation on the conservative parties in this House to produce a plan. I believe they have entered into an unwritten and unspoken agreement with each other to do little or nothing about it. Indeed, their present policies will aggravate the problem. It is easy to go through towns and villages verbalising about the importance of employment. The Taoiseach is noted for doing this, but it is different when it comes to doing something about it.
As a new Member I have watched the functions and operations of the Dáil. Many hours of Dáil debates have been taken up in talking about coinage, lamp standards around Leinster Lawn, telephone tapping and phoney posturing on the Finance Bill. The Workers' Party is the only party who have made concrete proposals for a rational plan utilising the full resources of the State to fight unemployment. We are a small party caught in an uncomfortable position but we have discharged our obligations in a responsible manner. At times we have taken stances which have merited the criticisms of the two major parties, but we make no apologies to anyone. When we were elected we stated quite clearly that our obligation was to represent the working class people to the best of our ability.
At the ITGWU Conference in Belfast recently, Mr. John Carroll called for the banning of imports. That was a ridiculous and stupid comment to make. A ban on imports has never effectively worked and, even if it did, it would affect the livelihood of workers in other countries. If one accepted Mr. Carroll's argument, one would have the ludicrous spectacle of a blockade on the border between Northern Ireland and the South by members of the ITGWU stopping members of the same union from bringing in their products. A ban on imports would raise costs at home and cause inefficiency and lack of competitiveness in private enterprise, which is the root cause of our economic problems. Import controls are unnecessary and a distraction from the proper solution, which is a planned, national drive for economic expansion. We should utilise the full resources of our economy. It is said we are a rich nation but a poor people. That description becomes more apt every day.
In the course of the debate on the Finance Bill we outlined our proposals for a national economic plan. We said the plan must bring about basic changes in our economic policy. There must be a commitment generated in the workforce to the task of economic development and a planned approach to development with the State sector as the engine of economic profitable growth which will mobilise the harnessing of the resources of the economy. If this country's long term economic problems are to be solved, it is essential that the working class should co-operate fully to improve efficiency, to raise exports and to cut imports, measures which are necessary to solve the balance of payments crisis. To get that co-operation there has to be a quid pro quo which is of concern to us and to the trade unions in particular in determining our response to the promised economic plan. Our party do not oppose the principle of an incomes policy. It is a major source of concern to us that, in the present climate of free collective bargaining, the FUE have been able to pursue a very successful policy of divide and conquer which has succeeded in weakening the working class movement. An incomes policy must be incorporated in any so-called plan and should give the working class maximum benefits. We are prepared to guarantee our total opposition to any incomes policy which will see only the workers practicising income restraint. If restraint is going to be practised, it must also apply to dividends, employers and the self-employed. Wages and salaries control must be matched with dividend controls and far reaching taxation reforms to ensure that the self-employed and the wealthy pay their fair share of taxes. There must be a concrete expansion of productive activities in the State and semi-State sectors and plans for job creation must be brought forward. Public services must not be run down and pensioners and young people must not suffer in the drive to cut the budget deficit or to bring about economies which everyone accepts are needed. It grieves me to think that the only victims of sacrifice demanded at this time are the working class people.
We will seek an economic plan which contains a commitment that the shackles on the development of the State companies will be removed. A long-standing practice of the Irish Government has been to place a noose on the abilities of semi-State bodies to expand their possible activities in case they should compete with existing or potential activities in those areas by private sector companies. These restraints, either legislative or executive, through the packing of State boards by private enterprise interests are myriad. I will mention a few examples of how this comes about. There is a ban on CIE from entering into the profitable area of road haulage. It is OK for CIE to run a bus from one country village to another and to be lacerated annually, monthly and even weekly and criticised for the lack of quality of the service they provide and for the expense to the Exchequer of that service. Shackles are being imposed on this company to prevent them from expanding into the private sector and preventing them from showing that they have the capacity and enterprise to compete successfully with the private sector. The ESB are not permitted to become involved in electrical contracting or fish farming, which Deputy O'Kennedy mentioned earlier. It is ludicrous that the ESB must apply to BIM in order to engage in fish farming. The mariculture sector has vast potential for expansion into that development. Yet the ESB, who pioneered this enterprise in this country, are debarred from expanding into that area. Bord na Móna, who are developing the cutaway bogs prevent the Forestry Department from developing wood processing. In our consideration of the economic plan we intend to consider every possible course open to us to ensure the unshackling of our State companies.
The present Taoiseach has said that our party would have an input into the economic plan. We must assume from this that when published it will be published as a form of agreement discussion paper and not a fait accompli White Paper. It would have a realistic response to the proposals which have emanated in the last couple of years from the Labour Party on the one hand and Fine Gael on the other which have generated the problems that society faces at present.
Despite the Taoiseach's contradiction, I recollect that when we met he stated quite clearly that as far as he and his Government were concerned unemployment was their priority, and the greatest evil facing this country at present. Immediately on assuming the office of Taoiseach he said Northern Ireland was the Government's priority. Then I read the transcript of what he said on St. Patrick's Day in New York when he stated once again that Northern Ireland was the priority as far as he was concerned. Lo and behold, shortly afterwards in an interview with Brian Farrell on "Today Tonight" he did an about-face because he was speaking to a different audience and he said once again that unemployment assumed the priority. My party and I give notice that the question of unemployment will be put on the political agenda of this House for the next session and we intend to pursue it at each and every opportunity.
On the question of taxation reform, we await with interest the forthcoming publication of the report of the Commission of Taxation. I understand that the Taoiseach stated that this report is to be circularised next week. Whether it is circularised or not the position is quite clear. No matter what the report may say the demands of the PAYE taxpayer have been noted in this House and by the trade union movement. Particularly since 1979 the PAYE taxpayers have been saying loud and clear "enough is enough is enough".
I understand that by arrangement Deputy Kemmy is to have seven minutes. That being the case the Deputy has about two minutes.
(Waterford): I accept that and I am quite willing that Deputy Kemmy should have his time so I will conclude soon. Last night the Minister for Foreign Affairs made a statement in relation to Northern Ireland. The Workers' Party, the only party with elected Members north and south of the Border, are totally opposed to the sentiments expressed by the Minister for Foreign Affairs, Deputy Collins. He reiterated the Government's opposition to devolved government as envisaged by Mr. Prior and he ignored the fact that it is the only realistic proposal to emerge in modern times. The province has suffered from the actions of gunmen and bombers on the Protestant and Catholic sides. We have stated again and again that Mr. Prior's policy leaves much to be desired. But it is the duty of responsible politicians here to give every help which we in the Republic can give to the people of Northern Ireland and we can continue to press for the democraticisation of the institutions there. It is not the end of it. It is not the ideal solution but, it is a start. We must get away from the sectarian tribalism which has permeated the politics of Northern Ireland for the last 50 years.
There is much more that I would like to say about the situation that our party have found ourselves in, but I believe that we have discharged our responsibilities in a fit and proper manner. At times we went into the Opposition lobby to vote, at other times we went into the Fianna Fáil lobby, but The Workers' Party have arried on the national scene as a national party. We are a growing party and we intend to stay on the national scene.
The matter of extradition was raised in the Seanad last week by three Senators. I support and applaud their stand on this issue. It is time that such a matter was raised in our Parliament. The last two Governments, particularly the present Government, have shied away from this matter and hidden behind all sorts of legalistic and bureaucratic arguments in their efforts to justify their constant refusal to take action on this. A large number of men, estimated at a few score, have killed people in cold blood in Northern Ireland and are cheerfully walking around the towns there as free men.
I do not know what can justify this state of affairs. It cannot be called justice. On the contrary, it is flying in the face of everything that is right and proper. It is an insult to all forms of justice and an undermining of the democratic nature of our society that these cold-blooded murderers should be allowed to disport themselves in this open, carefree and cynical manner. It is also an active and positive form of encouragement to the IRA and the so-called INLA to continue their sectarian campaign of killing, bombing and maiming in Northern Ireland. Surely all fair-minded people and all those who believe in the concept of justice and liberty cannot go on condoning the gross outrage that is taking place in our society. The problem must be tackled now. It is not merely enough to condemn the donothing policy of this Government and of the last Government also. We must press for the implementation of a full extradition arrangement between this country and Northern Ireland.
I welcome the stance adopted recently by the Association of Garda Sergeants and Inspectors on the matter of extradition. That was a progressive and courageous stand. The other law enforcement bodies and any other body concerned with the problem should take a lead from the positive step forward that was taken by this association. Before the Dáil adjourns today I intend putting down a motion calling on the Government to introduce as soon as possible extradition arrangements. I consider extradition to be the most effective means of combating cross-Border crimes. In addition to reducing the incidence of cross-Border crimes, an extradition agreement between Northern Ireland and ourselves would have a dramatic and beneficial effect on relations between the people of both parts of the island.
It is fine to talk about better relations between the people both North and South but we must do something positive to translate these aspirations into action and that is why I am calling for extradition arrangements. The fighting cannot go on forever. We must face the question of extradition openly and honestly and as a vital means of bringing an end to the sectarian murders, bombings and maimings in Northern Ireland. The task of bringing about peace must be given priority both in this House and in society generally. The task of bringing about reconciliation between the peoples of north and south must be pushed into the forefront of politics in both parts of the island. We must take on this task now.
Yesterday the Minister for Foreign Affairs in his contribution made some inaccurate statements. Two of these in particular must be put right for the purpose of the record. The Minister was critical of the efforts of the former Taoiseach, the former Tánaiste and the former Minister for Foreign Affairs to bring about a consensus of approach between the Governments of the UK and of the Republic. The Minister said, as is reported in today's Irish Times, that the Government's initiative during their previous term of office had resulted in a new Anglo-Irish structure which they were still totally confident could be developed and used to make progress towards resolving the underlying political problem in Northern Ireland. The Minister went on to say that the weak approach of the Coalition parties ran directly counter to the consensus which had emerged in recent years among responsible leaders in Ireland and in Britain, that the problem of Northern Ireland demanded a joint approach by the two Governments. The only comment I wish to make on the assertions of the Minister is that in the years ahead a careful examination of the Cabinet papers of those times will undoubtedly show that apart from what was issued in two agreed communiques, those of 21 May 1980 and of 8 December 1980, there were no formal arrangements, that there was no formal consensus to suggest, as has been suggested repeatedly by Fianna Fáil spokesmen, that there was a major historical initiative at that point. The Cabinet records both in Dublin and London will prove that.
On 21 May 1980 the agreed communique that emerged was quite bland. It was to the effect that the Taoiseach and the British Prime Minister had agreed that they wished to develop new and closer political co-operation between the two Governments. It went on to say that while agreeing with the Prime Minister, the Taoiseach said that any change in the constitutional status of Northern Ireland would be brought about only with the consent of the majority of the people of Northern Ireland and that the Taoiseach reaffirmed that it was the wish of the Irish Government to secure the unity of Ireland by agreement and in peace.
The final part of that communique was to the effect that the Taoiseach and the Prime Minister noted with satisfaction the efforts being made by the two Governments, both separately and in co-operation, in the field of security. That was the extent of that communique. Therefore, any effort in retrospect either by the Minister for Foreign Affairs or by any other member of Fianna Fáil to imply that there was the beginning of a unique consensus at that point or that there were new structural arrangements emerging relative to Northern Ireland is groundless. The Government know that very well. It is known also to the former Government and to the Government of the UK.
We then had the notorious communique of 8 December 1980 following a meeting at which were present the then Taoiseach, the British Prime Minister, Deputy Lenihan, Deputy O'Kennedy, Lord Carrington and Sir Geoffrey Howe as well as Mr. Humphrey Atkins. In that communique we learned that the Taoiseach and the Prime Minister accepted the need to bring forward policies and proposals to achieve peace, reconciliation and stability, that they considered that the best prospect of attaining these objectives was a further development of the unique relationship between the two countries. The term "unique relationship between the two countries" was subsequently recast by, in particular, Deputy Lenihan in such a framework that the British Prime Minister had to take Deputy Haughey aside rather irately when on the Continent and lecture him as to the meaning of the English language. He, in turn, had to take Deputy Lenihan aside and, in four letter words, inform him of what he thought he was saying in terms of the interpretation of the communique.
That communique stated that the parties had decided to devote their next meeting during the coming year to special consideration of the "totality of relationships within these islands". We all remember the effusion of interpretations of that phrase. There was no agreed structure, no agreed consensus, no understanding in relation to the veto being exercised by Northern Ireland Unionists, no understanding about phased withdrawal of Britain from Northern Ireland. A tremendous propaganda job was done at the time by Deputy Haughey to imply that, to an extent, there was an understanding of that nature.
On 8 December 1980, the final part of the communique said that the discussions were regarded by both sides as extremely constructive and significant. Immediately a tremendous effort was made to build on to the words "constructive and significant". The problem with Northern Ireland has been that, on both sides of the Border, the dialogue has been carried out in terms of verbal warfare and when that has not succeeded, by a policy of internecine, tribal sectarianism and murder on both sides of the divide.
The language used yesterday by the Minister for Justice, Deputy Collins, presumably more designed to buttress up the faithful in terms of the by-election in Galway next week, than to make a significant contribution towards advancement on a consensus basis, deserves to be repudiated in this House. It is reminiscent of what happened before the implementation of the Criminal Law (Jurisdiction) Act. I am pleased to note that in the Republic, for the first time, that Act has been availed of and criminal proceedings held in the Special Criminal Court. That the Act is now in operation in the Republic of Ireland in connection with criminal acts committed in the United Kingdom is an advance. I vividly remember sitting in the second row of the House in 1975 when the entire Fianna Fáil Front Bench vituperatively denounced the Criminal Law (Jurisdiction) Bill. They opposed it hook, line and sinker, even in the context of giving it a First Reading when it came from Seanad Éireann at that time. Deputy Collins himself opposed it. However, I do not wish to waste time speaking about the contributions of the time from the different Deputies in this regard. This legislation is now in operation and those who commit crimes in Northern Ireland and in the United Kingdom and who seek a haven in the Republic for their murderous terrorist activities will, and should, be charged and dealt with under that legislation. We should even go one step further. I favour the setting up of an all-Ireland court. Now that it has been proved that both jurisdictions can effectively deal with the matters raised under the Criminal Law (Jurisdiction) Act, an all-Ireland court would provide the best possible means of bringing to trial the men of political violence in the whole of the island of Ireland.
As Deputies will recall, after the Sunningdale Agreement the establishment of such a court was one of the propositions put forward by the Irish Government to the Law Enforcement Commission. The commission at that time thought the proposition had attractions. Admittedly, the legal complications were examined in detail but, somehow or another, it faded away in terms of general political support. We should now proceed to establish, by mutual arrangement between our Government and the Government of the United Kingdom, an all-Ireland court. Such a court would be drawn from panels of judges from Northern Ireland and the Republic and should try persons charged with crimes of violence committed as part of a political campaign, namely the very crimes listed in the Criminal Law (Jurisdiction) legislation which has been enacted in Northern Ireland and the Republic. Such a court would have a distinctive impact on the overall situation concerning political violence in this island. It could have a status similar to the Special Criminal Court in the Republic which, of necessity, has had to do a great deal of work without the democratic involvement of juries. This was because, as we well know, in the current climate of the Republic and Northern Ireland, were jury trials to take place, the juries would most likely be completely intimidated and suffer violence if they dared to bring in verdicts against those involved in political violence.
I was one of those critical of the Government's approach to the Falkland Island crisis. I was critical of the comments made by the Minister for Defence at the time and equally critical of the views, apparently contradictory, expressed by the Taoiseach in terms of the directions he gave to the Irish Permanent Representative on the Security Council. I am still very critical of those views. I consider the approach to be insensitive, contradictory and one which has done needless damage to Anglo-Irish relations. It has affected the work and lives of Irish people resident in the United Kingdom. Many of my constituents with relatives living in the United Kingdom, particularly people from Dún Laoghaire, have said that, from letters received, that damage has been done and is, in some respects, permanent. It has also affected our tourist industry this year.
I would say strenuously to the people of the United Kingdom that we want to have normal, friendly, economic, social and cultural relations with them, respecting one another's political views — for example respecting the view that Ireland has a traditional policy of neutrality which it does not in any way propose to give up but in the defence of which policy we will not indulge in the delicate, anti-British sentiment which permeates some of our political cultures and traditions.
We must rise above that. We must be more sensitive, more civilised in our relationship with the peoples of these islands. Only then can we live in reasonable harmony. In certain quarters it is easy to get votes in Ireland by indulging in naked inferiority complex-based anti-British sentiment, which is, of course, a cheap way of getting votes. It is also enormously damaging to the future of Anglo-Irish relationships and demeans and lowers the dignity of our people in their normal relationships with any other people. I emphasise those points because that was part of the damage done in the first 100 days of the Fianna Fáil Party in office.
I have dealt with the situation in Northern Ireland, with the need for an all-Ireland court and with perhaps the most outstanding aspect of Government policy, that in relation to the Falklands dispute. I want to deal now with the question of the Dáil itself. We are about to go into a 100-day adjournment in this House. I do not think we should; I do not think the Dáil should adjourn for a 100-day summer recess at all. We should resume in this House not later than the first week in September. Irrespective of the forthcoming by-election, or past by-elections, the fact that some Deputies and Ministers may feel somewhat exhausted, this House must discharge its obligations as a national legislative Assembly. In my opinion we should not meet in late October, spending perhaps five or six weeks until Christmas discussing desultory, non-controversial legislation, then adjourning for a Christmas recess. Rather we must come back either in the last week in August or, I suggest, the first Wednesday in September and get down to discussing two things which have not been discussed in this House, namely, the unemployment/economic crisis confronting the country and, secondly, the question of taxation.
There is no point whatsoever in the Taoiseach merely publishing in a few weeks time another national plan. There is no point in having a reheated version of the investment plan of 1981, the last one laid before the Houses of the Oireachtas in January 1981. There is no point in our having merely another repackaged version of discredited economic programmes of recent years. Above all, even if we are furnished with a document we could all support in the House — and my support is not just a matter of being in Opposition, if I see merit in such an economic plan and chapters deserving support, that support will readily be given by me and the Labour Party irrespective of its electoral consequences or what interpretation might be put on that support. We need to be in possession of it, have some weeks to read it, to openly and publicly state our views on that economic and social plan, or whatever it is to be called — presumably a National Plan for Economic and Social Development for the mid-eighties. We need to debate it here, each Deputy being given the opportunity of at least half-an-hour or three-quarters of an hour to state his views in detail on it. It is a travesty of parliamentary democracy in this country that, when such documents are produced they are not discussed. For example, one must ask how often are they discussed at a Fianna Fáil cumann meeting with one whole night being devoted to nothing else? How often are they discussed at a Labour Party branch meeting?
I would guarantee the Deputy there would be more people listening at the cumann meeting than are listening to him now.
Well, that is the level of contribution; one tends to despair.
The level of the Deputy's support.
How many people at branch meetings of the political parties have a weekend seminar and debate amongst themselves the contents of such an economic plan? I suggest that the degree of internal political debate in the political parties on such plans is minimal, to say the least. Likewise, there is need in the national representative organisations for such discussion. I believe that the Irish Congress of Trade Unions should spend a substantial part of the summer at special executive meetings examining that plan, having their weekend special conferences on such a plan. There is need for the farming organisation to examine that plan, making their views known to the Government as a matter of urgency. I believe there is an urgency for the other employer organisations, whether it be the Construction Industry Federation or the FUE, to take the plan on board, examine it in detail and come up with urgent alternative proposals if they feel it to be inadequate. As an absolute minimum in this country that is how one proceeds to get some kind of national consensus in terms of such economic and social planning.
The Labour Party believe in a planned economy which is not based on any pseudo-doctrinaire or ideological reasons. We believe in a planned economy because we believe it constitutes the best possible way of bringing about growth and economic development in this country. As I say, the Dáil should resume in the first week in September when that economic and social plan and the report of the Commission on Taxation should be debated. Otherwise I am afraid Dáil Éireann will continue to deteriorate as, quite sadly, its contribution has deteriorated in recent months with interminable wrangling and inconsequential debates. I believe that the State must accept primary responsibility for economic planning, for economic development and for growth. We must plan by directing the use of capital investment here so that it goes into industry and the types of agriculture most beneficial to the community as a whole. I am convinced that a consensus can emerge in this country for a national plan which has, as its objective, a thriving, expanding economy with a wide range of social services and a high general level of welfare. I am convinced that can be done. I do not believe it can be done exclusively by setting up a Cabinet sub-committee for a couple of months, having them produce a document and then letting it lie there and nothing much else following. That exercise was engaged in in 1978, 1979, 1980, 1981 and 1982 and has not produced very much.
We need planning structures. And by planning structures I do not mean that every quarter or every half year the Taoiseach would meet the executive council of the Irish Congress of Trade Unions, have a cosy chat, have their photographs taken and have a broad, generalised communiqué issued. Planning entails more than that. I believe the Taoiseach and the economic Ministers of his Government — if they are to introduce real economic planning — just cannot have ad hoc gimmickry. Instead, we need a well-thought-out strategy. In this regard the abolition of the Department of Economic Planning and Development was a retrograde step. We must tell our senior civil servants, particularly those in the Department of Finance, that there must be a planning structure within major Government Departments. There is no such formal economic and social planning division within, for example, the Department of Finance. There is a public expenditure division, a finance division, a general economic policy and budget division but we need an economic planning and social development division also. Otherwise the production of documents will amount to the collating together of ad hoc economic contributions from different sections of Government Departments, stitched together and lodged as a national plan. That is not economic planning. We need permanent structures to assist the Government of the day in a democratic planning decision-making process.
Such an economic plan must deal with a number of basic objectives. The first must be to identify the area of job creation as a prime national policy objective. We must do that because nobody else will do it for us. We now have a situation where we have an unprecedented number of people unemployed. The Dáil is about to go into recess when we have 150,000 people, at minimum, out of work and some 50,000 of that number are under the age of 25. That is an appalling situation. The first priority of any national plan produced by the Government must relate to the formidable prospect of analysing job creation targets, identifying the areas where employment can be created and maintained and proceeding from that base.
An economic plan must deal with the evil of sustained high inflation. Our inflation rate is running at between 20 and 21 per cent and that is destroying many jobs. If a plan is to have any hope of success it must deal with the question of high inflation and our competitiveness. There is a need for a new and more determined drive for growth in the State enterprise sector. The level of appraisal of State investment projects, particularly of high capital investment, has been appallingly bad to date. An integral part of a national plan must be to give renewed confidence to the State-sponsored bodies, so that productive capital will be provided, projects must be vigorously scrutinised and assessed on a cost-benefit analysis basis before they are launched. Such moneys must be used exclusively towards the development of a vigorous, dynamic and, above all, profitable State enterprise sector.
A fourth aspect of the plan is that we must bring about order and control in the public finances of the State. That must be done within the general ambit of a national plan. There must be some real balance between the economic and social aspects of a national plan in the general interest of justice and harmony. We cannot have economic planning dealing with investment and inflation and no social content. Most of the plans produced to date have not had a social dimension because, after all, why control inflation, indulge in capital investment or control foreign borrowing if in the ultimate we do not have an element of social purpose, social reform, social interest and harmonisation in the community contained within it? I strongly urge that the plan envisaged by the Government be prepared along those lines. I look forward to hearing the Taoiseach on this issue and to reading the proposed national economic and social development plan.
There has been a good deal of criticism of public enterprise on these islands, particularly in the Republic, but I believe that public enterprise should be central to the planned development of our economy. With effective public enterprise here there is no reason why we could not have substantial technological advances and employment creation. Clear objectives must be laid out in the new plan for public enterprise. There must be workable and controlled structures of accountability in any such arrangements. Above all, I believe that State enterprises must be properly funded through direct State equity participation. It is a matter of profound regret that when one looks at the accounts of CIE, the ESB, the Sugar Company, Aer Lingus or any of the two dozen other State enterprises here one will see that successive Governments have objectly failed to fund properly the equity and capital arrangements for them with the result that they grew in a very haphazard way. They grew in such a way that many of them in 1982 are in serious capital straits. That is unfortunate. It is also wrong but is clearly indicative of the total failure of successive Governments to deal with the State enterprise sector in the economy. We have gone from one budget to the next doling out the odd few million here and there hoping that things would work out all right in the end.
We now know that many of our State enterprises are in dire trouble and severely short of basic capital injection. We have to review the role of State enterprises because I am convinced that if they are properly structured and directed they can be a powerful source of growth in our economy. They can satisfy the needs of many people. The idea that the State sector is automatically inefficient, uneconomic and bureaucratic is something I do not agree with. If we agree with that we might as well throw our hats at having any coherent philosophy of State involvement in the economy. There is no excuse for indulging in capital projects which are ill-defined, ill-thought out or badly supervised in the economy and which make little contribution in the long run towards employment. Hand in hand in a mixed economy with a strong State enterprise sector one can have a strong private enterprise sector and that should be reflected in the plan.
I have not the ideological hang-ups about the role of private enterprise that many so called socialists may claim to have. In our relatively small, basically agricultural, partly private, partly public economy, private enterprise must of necessity play a part, and growth can be achieved only on that basis. Therefore, not only must private enterprise be allowed to contribute, but it should be encouraged to contribute towards economic and social developments.
Therefore, I say the Government made a massive error when they imposed VAT at the point of entry to the detriment of the manufacturing side of the private sector, particularly in this period of serious recession.
We in the Labour Party must look seriously at the role of the IDA. Many Deputies at many times have applauded the vigour with which the staff of the IDA have tried to attract industries from abroad, but it is necessary to examine — unfortunately the views of the NISC have not been published — the underlying political philosophy of public support for the IDA. We have placed excessive reliance on foreign enterprise coming in here, being set up and left to its devices. As a result we have developments like the Fieldcrest failure in which management resides in New York without any indigenous expertise. The IDA should be given a degree of autonomy and not be subjected to the whims of different Ministers of different Governments.
Tell us more about Fieldcrest.
I take the Deputy's criticism in that respect. We must have a somewhat unbalanced strategy in relation to future industrial developments here. Therefore we must examine the role of the IDA. I do not wish to be implying criticism of their work in recent years when I say that.
We must also look at the role of the Central Bank and decide whether its constitution should be changed. I suggest it should have more positive powers in relation to State investment. The Central Bank board should be restructured. I share the views of Deputies FitzGerald and Bruton when they suggested the elimination of restrictive practices by the Central Bank. There is particular responsibility on the Government in this respect.
I will refer to some other matters before I conclude. I have criticised Government policy in relation to Northern Ireland; I have dealt with the problems of the Falklands and the results on our relationship with Britain. I have spoken about the Dáil adjourning for 100 days at a time when major economic and social issues need Government attention. There is need for a fundamental change in our taxation system. Therefore I suggest that the Dáil reassemble in the first week——
In August.
That would be fiction, not truth.
The Deputy's Whip has suggested the opposite.
My Whip should be whipped. There has been criticism of our income taxation and of our PAYE and social insurance systems. Therefore we need the Dáil to be sitting throughout the month of September to debate these issues and the supposed social development plans, but especially the report of the Commission on Taxation. If we agree to reassemble in September I hope we will not spend that month and October debating a constitutional referendum on an issue to which apparently the Taoiseach and Deputy FitzGerald have given, allegedly, public commitment. It is generally expected that, before the Dáil will resume, the Government will have published the constitutional amendment to meet the wishes of a section of Irish society. I suggest that the leaders of the two major parties have made a mistake in that. The Labour Party will have a parliamentary party meeting next week and a meeting of the national executive next month when we will be making known our views in that respect. So far, the Church of Ireland, the Presbyterian Church, the Methodists, the Jewish community, the Society of Friends, and other religious denominations here have said clearly that the proposed constitutional referendum is sectarian and divisive and not acceptable to them.
Therefore, the Taoiseach should study all the statements in this regard. So should the other major political parties who have been so careful to espouse a pluralist society. Perhaps we will have more views on this matter in the next month. Certainly, after our meetings later this month we will be making our views known clearly on this issue. Though I personally abhor abortion I do not think a constitutional amendment will deal effectively with the problem.
Those are my criticisms. I have rejected the suggestion by the Minister for Foreign Affairs that the former Coalition Government, their Taoiseach and Minister for Finance were subservient to British opinion in relation to Northern Ireland. An examination of Cabinet documents or of the communiques of 20 May or 30 December would emphatically repudiate that we were unduly subservient in relation to the British Government. Indeed, the expressed opinions of the Taoiseach and Deputy Lenihan had to be repudiated by the British Government. In relation to the Falklands, I have been quite critical of the policy pursued by the Government from the point of view of its effect on Anglo-Irish relations. I suggest to the Taoiseach that the Dáil should meet again early in September, that we should then reform the structures of this House and, above all, try to impress on the Ceann Comhairle that when he tries to impose some discipline on us we will accept that discipline from him. In the past four months this House has been totally undisciplined. There has been interminable wrangling on the Order of Business. The House should resume early in September and get down to doing a proper job of work.
Tá dhá noméid fágtha.
I am coming to my final sentence. If there are constructive proposals from the Government in relation to economic and social development and taxation the Government will have our support. I am quite emphatic about that. It is on that basis that we can advance towards a solution to the problem of unemployment, the problem of taxation and the problem of the deterioration of our relations with Northern Ireland and the United Kingdom, a deterioration which has been on a continuing basis over the past four or five months. That situation should be put right immediately in the national interest as a matter of urgency.
I presume the Taoiseach will, when he comes to reply, indicate the date of resumption of the Dáil.
That has already been agreed by the Whips. It is Wednesday, 27 October.
I suggest that given the volume of work to be done and the extent to which Bills have had to be carried over in this session, plus the pressure at the end of the session, we should come back somewhat earlier so that we do not find ourselves at the end of December in a similar situation with legislation being rushed through under pressure from the Government using their curious majority for that purpose. I regret that the date of resumption should be set as late as 27 October and I would hope the Government would use the power they have to enable the Ceann Comhairle to recall the Dáil earlier than that if, on further consideration, the Government come to the conclusion that there is legislation which needs to be put through this House urgently plus the legislation carried over from this session which should be tackled with all due expedition.
I have not been very happy with the way legislation has been handled in the last 18 days. Originally the Government were getting out of this place on 2 July. We refused to agree to that and insisted on a full debate on the Finance Bill and an adequate debate on certain other Bills. The Social Welfare Bill is a controversial and highly delicate Bill. It is a Bill which became available only last Friday despite repeated efforts on our part to extract it from the Government. We proposed that the Committee and Final Stages be taken in the next session because the complexity of the Bill is such that it requires very careful teasing out to ensure its effects are not counter-productive and contrary to the presumed intention of the Government to improve industrial relations. I regret that the Government, apparently because of the commitments entered into with others, were unable to accept that rational position or agree to continue the debate and give adequate time for it. The Government insisted on closing down the Dáil, instead of extending it, with the help of this curious majority which enabled them to do so. The Bill as passed is unsatisfactory. The fact that it does not contain the clause we sought, the six months term on it, as part of our current legislation is worrying and there may be need to look at it again in a year's time because of an inadequate approach to it. Legislation of such importance should not be rushed through this House.
I do not propose to take up in this debate some of the extraneous issues raised. It would be easy to follow the lead of the Minister opening the debate in seeking to turn it into a debate on Anglo-Irish relations. One can see outside the churches in East Galway how the Government are seeking to abuse the Northern Ireland problem and use it for party political purposes and trying to trade on republicanism for support. The attempt at that exercise in a crude way in Dublin West was answered and I believe the people in Galway West will give the same answer.
Galway East.
Galway East. I do not propose to assist them in that attempt by pursuing the matter further here. We can do so at a later date. I intend rather to concentrate on the economic problems that we face, their origins and character, the challenge they pose and the steps we need to take to deal with them. Even under favourable conditions the problem with which the country is faced would have been very difficult to handle. I refer to unfavourable domestic conditions. The external environment is extremely unfavourable. The Government can rightly point to that external environment as part of the problem we face. No matter what Government are in power and no matter what policies are pursued they would at this time certainly face a higher rate of unemployment than normal. They would not necessarily face an abnormally high rate of inflation and that, under present external conditions, is something that does not derive from anything happening outside our shores. It is the result of domestic policy here and, of course, our public finances are totally under our own control. But we would face, even under favourable conditions, a difficult unemployment situation.
We would also face interest rates at a higher level than we have been accustomed to in the past even if we managed our own affairs with great skill. We would not have been able to avoid the effect of high interest rates in the United States and their impact throughout the world. It is precisely because of the fact that the external environment is so unfavourable that we should in these recent years, when we have had this unfavourable external environment, have avoided policies which aggravated these problems and should have pursued policies which would have given us freedom to take such action as an individual State can take to alleviate them. That we have not done and I do not think anybody can deny that the very exceptional level of unemployment, not merely high but a record level, the abnormal level of our current budget deficit, of our external borrowing and our total borrowing and the abnormally high rate of inflation are all consequences of the mishandling of our affairs by a Government who have held office almost permanently, with the exception of eight months, in the last five years.
All these problems are inherently within our own control. We cannot blame others for them. We cannot even, as we used to do, blame neighbouring Britain for our high rate of inflation. It was always the case that our rate of inflation approximated to that of neighbouring Britain and the view was held by politicians of different parties and, indeed, by some economists, that there was some iron law that dictated that our inflation rate was governed by that of Britain. I was always sceptical of these theories as an economist as well as a politician. We can now see how little validity there is in this thesis about the inflation rate in Britain. It has now reached 10 per cent. Indeed, as I heard in a comment on the news programme "Today" today on BBC, there is an expectation that Government policies there will succeed in keeping that rate to 9 per cent for the current year and bringing it down to 7½ per cent next year.
Yet we have a rate of inflation which exceeds 20 per cent. It is no longer possible for us to attribute the high rate of inflation, the diminution in the value of money here, the increase in our labour costs, to what is happening in Britain. The British Government, by means which I would not like to see any Government here pursuing, have resolved to a significant degree the problem of inflation and our Government here have not, by good means or bad, been able to follow that. So for the first time in the history of this State we have an inflation rate which is twice that of Britain and even the most optimistic forecasts of a decline in inflation here — and there should be a decline in the months ahead — do not suggest that we can improve that ratio within the next year or 18 months at any rate. There is nothing in any projection, forecast or assessment by any independent economic source to suggest that our inflation rate will be less than twice that of Britain in a year's time as it is today.
There is, therefore, something fundamentally wrong at home which cannot be attributed to external forces. If we had wanted to tackle the problems created by the world economic situation we would have proceeded in two directions. First, we would have restrained public consumption and non-productive investment to reduce additional pressure on interest rates arising from excessive borrowing. Second, we would have sought and secured restraint in income growth to maintain competitiveness at home and abroad and thus to maintain or expand employment in face of the adverse trend of world demand. Such a restraint in income growth is of particular importance to us because of the scale of our agricultural sector and the problems created for the sector if unrestrained growth in incomes leads to a high rate of domestic inflation which hits the farming community in which prices are determined externally and the cost of whose inputs are determined to a significant degree by domestic inflation.
These two sets of policies in relation to public consumption and unproductive investment on the one hand, and restraint in income growth on the other, were in fact the policies pursued from 1975 onwards by the Government then in office. Those policies were abandoned in 1977. We have experienced since 1977, five years, with the exception of a brief 18 months intermission, of counterproductive policies creating a situation much worse than that which exists in neighbouring countries in certain key respects — first, in the unprecedented gap between public revenue and expenditure involving abnormal borrowing at home, and more particularly abroad and secondly, artificial stimulation of demand to a level that is 10 per cent above the domestic supply level. We are and have now for some time past been using up resources in this State, resources 10 per cent greater that we are producing — in the simplest terms, living 10 per cent beyond our means.
While all of us would accept, and it has been the policy of successive Governments to accept, that a country which has the potential for development that we have can justifiably run some external payments deficit and that indeed the inflow of capital to our economy under normal conditions is such that if we did not run an external deficit we would be accumulating reserves abroad instead of investing them abroad, nothing in our situation in the past or now can justify an external deficit of this scale. Yet the deficit has been brought to that level by positive Government action in the form of an expansion of public expenditure beyond the level of public revenue, feeding into the system pressures which have increased demand whether in terms of consumption or investment, much of it of a dubious quality in terms of the return we achieve from it, to a level 10 per cent above our domestic output. Associated with this inevitably has been cost inflation undermining our competitiveness. The fact that we have had these phenomena for the past five years is clearly a function of public policy. It is not something that is in any way inherent in our economy. There is nothing about the basic elements of features of our economy to make this necessary. It has happened because it has been public policy to make it happen regardless of the consequences.
There was clearly, to be charitable, a mis-diagnosis of the situation in 1977 when the new Government came to power. That was the time when high growth was already under way, growth in the region of 5-5½ per cent per annum, high growth achieved in conditions of falling inflation — it was 24 per cent in 1975 and would have been about 8 per cent in 1978 and was in fact slightly lower because of some of the measures the new Government took — and falling public borrowing from 16 per cent to 10 per cent in two years in terms of its share of GNP. At a time when the economy was growing by 5-5½ per cent — and when this was achieved by means which have simultaneously curbed inflation and public borrowing — was the totally wrong moment to stimulate consumption and to re-start the cycle initiated by the first oil crisis which had been brought under control after 1975. It has to be said that that first oil crisis is one which took us and other countries by surprise. At that time all developed countries found they had to borrow externally petro-dollars in order to maintain any reasonable level of activity and to re-cycle the petro-dollars, the surplus of financial resources of the oil-producing countries which otherwise would have been sterile and contributed through their non-use to a world depression. But every country rapidly moved to tackle that problem. We, among others were not effective enough to move at that time to prevent an explosion in incomes as people sought to anticipate the consequent price increases that flowed from that first oil crisis that led to the high inflation of 1975. But when that happened the Government then in office took the steps necessary to get it under control and did so with striking success in the years that followed. Unfortunately that policy was changed in 1977 and the mistake made then in seeking to reflate an economy already expanding rapidly was followed by a failure to correct that policy when its results began to show in 1979 in slower growth, rising borrowing and a rising external deficit.
Of course these policies in 1977, while justified on the face of them by economic argument, reflected the desire for popularity in the 1977 election. They reflected indeed planning for that election that went back to 1976 and the type of policies pursued in 1977 but not the actual policies could have found some justification in which could have found some justification in the level of activity in the economy, 1976 when these policies were first devised. The flexibility with which they were applied in 1977 for political reasons, when they had ceased to have any economic relevance and could only be economically counter-productive, is something for which the present Government have to answer. After the failure to correct them in the first half of the term of office of the Fianna Fáil Government from 1977 to 1981 there was a momentary recognition of the dangers in early 1980 and the Taoiseach did offer hope to many people, including many opposed to him politically who would however have responded if he had taken the necessary steps at that time to put things right. But there was an immediate failure of nerve during 1980 which continued until the election in 1981 and this has been continued in this Dáil where the response of the present Government to its minority position has been in such striking contrast to the response of our Government from June 1981 onwards. We have been criticised for some of our policies in that eight-month period but no one has criticised us for failure to recognise the problem, for failure to tackle it, for lack of courage in doing so or for being influenced by our minority position into not meeting our responsibilities. Unfortunately the present Government have failed to respond in the same way to their minority situation.
This is the first minority Government in the history of the State to have shown so clearly that there are dangers in minority Government. On the whole the performance of Governments in a minority in Dáil Éireann during the twenties, thirties, forties and sixties was such that at no stage did they allow their minority position to influence their policies to the detriment of the interests of the country. I do not think anyone could accuse the Cumann na nGaedheal Government of that and I do not think anyone has accused the Fianna Fáil Governments of it. I have frequently said that one of the most successful Governments in the history of the State was the minority Government led by Seán Lemass in the mid-sixties who went ahead with measures to expand our economy and tackled courageously the mini-recession of 1966, despite their position in Dáil Éireann. This is the first minority Government who have allowed their minority in the House to influence their actions in a manner seriously detrimental to the State. It is no great distinction to be a member of such a Government and, with respect to the Taoiseach, it is no great distinction to lead such a Government.
The gravity of the situation created by the defective policies pursued between 1977 and 1979, the failure of nerve during 1980-81 and the repeated failure of nerve in the present Dáil is difficult to overstate because the gap thus created and the gap to be bridged between actual and sustainable living standards is enormous and is without precedent in modern times in any European country. We have an external deficit of 10 per cent and a likely current budget deficit of 7.5 per cent or 8 per cent of GNP, even after the partial correction by the former Government. These are very alarming figures because they are unsustainable. The sustainable level of external deficit is so far below this that it is clear we are living beyond our means at a rate that cannot be afforded and must be corrected by some Government at some point before a crash comes.
To get from where we are to a position of equilibrium in our finances, with the beneficial additional effect of reducing supplementary pressure on interest rates, which are already high for external reasons, requires a major effort by any Government and one which, given the resistance to high taxation which is characteristic of our people at present, must involve painful cuts in public spending. There has been some verbal recognition of this by members of the Government recently but one must wait to see how this is translated, nor merely in terms of a plan which may or may not be specific as to measures to be taken but in terms of budgetary action to implement that plan.
I would not wish to prejudge the plan. I have already offered twice to co-operate in the formulation of the basic assumptions behind this plan. The Minister of State said he would pass on this offer to the Minister for Finance. If we are to have a plan which will provide a genuine basis for recovery and will involve tough action, it will be greatly to the advantage of the country and helpful to the Government if the assumptions behind the plan as to likely rate of growth on the basis of current policies and the likely budget deficit that would accrue, as well as the likely rate of inflation, can be agreed between the parties on the basis of impartial economic advice. If we could agree on the scale of the problem, leaving aside the question of who is responsible, then any Government actions based on that would be soundly based. They could not be open to criticism by the Opposition on the grounds that they start from an underestimation of the scale of the problem and do not represent the true position, criticisms that could very well be levelled at a plan produced unilaterally by a Government who have so far shown such unwillingness to face up to reality.
I repeat for a third time that offer and I hope the Taoiseach will give it serious consideration. I do not suggest for a moment that it would be proper for the Opposition to seek or to have any involvement in the measures proposed in the plan to tackle these problems. That must be the Government's responsibility and the Opposition must retain their freedom to criticise, if they see fit to do so. Could we not agree at least on the scale of the problem we face and on that solid foundation of agreement build our own policies and plans, which might agree in many respects and diverge in others, for putting right what has gone wrong? I hope the Taoiseach will, even at this stage, take up the offer, already twice made, which could provide a basis upon which the Government could build more securely and soundly if they are genuinely concerned to tackle problems which they first created and then failed to tackle over such a dangerous length of time.
To get from where we are now to a situation where we are competitive on the home and external markets requires a reduction in cost inputs, which are primarily labour inputs, and involves, therefore, an incomes policy to cut labour costs in real terms. These requirements are relevant to the question of public service pay, which represents half of all current public spending. Public service pay is relevant both to the scale of the budget deficit and, therefore, ultimately to the scale of the external deficit and also relevant to the question of inflation because of the influence of public service pay levels on other pay levels and on labour costs throughout the economy.
The achievement of progress in these areas requires from any Government courage to take unpopular decisions that will affect living standards which are currently out of line with domestic output. It will require the capacity on the part of any Government to sustain these decisions in parliamentary terms over the period of three or four years. One of our problems is that, even in normal times when the Government have a majority, they rarely run or expect to run their term and even if they aim at four years or a little more people start talking and preparing for an election about a year before that. The time-scale during which even a Government with a majority can act effectively to tackle problems is disturbingly short. One wonders whether our parliamentary terms are adequate to allow for the kind of medium-term plan necessary under more normal and favourable circumstances to tackle our problems. Certainly there is a very grave problem when the Government do not have a majority and their life is in doubt and planning ahead is correspondingly difficult.
There are other problems related to those of the scale of the deficit and the public accounts and the problem of labour costs. There is a fundamental problem of improving the incentive to work and reducing the incentive to accept unemployment. There is a fundamental disequilibrium. There are too many cases of people who are better off by not working. The point was made yesterday by a trade union leader. It is something which is most widely and bitterly felt by workers. The strongest complaints I have had of defects in our system which provide a disincentive to work and an incentive to idleness have come not from middle-class or better-off people looking down from the heights of their affluence at the less well-off workers but from the workers themselves, the vast majority of whom want to work and are infuriated and frustrated when they see that their neighbours who are not at work are better off than they are.
The extent to which that is true is something we must face. During the Dublin West by-election I called to one house and there was a complaint immediately from the householder. He said his rent had been raised by £8 a week and that he was unemployed. It appeared to me that he had a legitimate complaint. As I understood it in those circumstances the rent should not have been raised. I inquired as to his circumstances and what his income was beforehand and what it was now. Without hesitation or seeing anything odd about it, or appearing to think that I should find anything odd about it, he said that he had £92 per week when working and now had £137 a week. He objected to paying £8 more per week in rent. There may have been some mistake about that in the terms of the way the system works. But the striking thing was the difference between his income at work and out of work and his acceptance of that. Many workers do not accept that. They feel there should be some differential between those at work and those who do not work. That there is not such a differential is a result of defects in public policy and administration over a long period.
When in government in 1976 we sought to correct that and believed we had done so, erreoneously as it turned out. We introduced measures and gave a direction on 21 June 1976 that the total sum to be secured by somebody as a result of a combination of redundancy weekly payments, unemployment benefit, pay-related benefit, income tax rebates and differential rent adjustments should be not more than 85 per cent of what it had been when the person was at work. We understood that had been carried through. On coming to Government five years later we discovered it had not been done. Administrative problems arose which were not brought to our attention and may not have been brought to the attention of the subsequent Government. As a result, the system was not operated effectively. That was evident from examples of figures given to us which were similar to those given by the man at the door in Dublin West.
We must tackle this. We cannot continue with a situation where we have to live with civil servants telling us that a computer is not capable of doing anything more complicated than it does at present and that if one overloads the system it will break down. The management of public departments has been defective if Government policy cannot be implemented for reasons like this. It was disturbing to find when in Government that if we wished to take action to deal with this problem, the different ways that action could be taken were, according to our advisers, impractical in anything but a period of some years because the system was so ramshackle, inadequate, inflexible and in such poor shape that it could not tackle the changes which would be required.
That led us to one measure which was not the most satisfactory way of tackling the problem in itself but it is a step in the right direction. In view of the fact that all other methods had been ruled out we decided to tax short-term social welfare payments, that is, so far as pay-related benefits are concerned and at a notional rate of 20 per cent. It was a marginal change and only affected the pay-related element but at least it was an earnest of an intention to do something about the problem and would have had some effect. That decision was reversed by the present Government under pressure from their new-found Coalition partners who do not need representation in the Government. They are much more effective in working with the Government from outside than from within. I find it hard to visualise a Government in which any Minister could exercise such personal leverage in achieving changes in policies as is being exercised by individuals or small groups outside the Government. The Coalitions we had were effective Governments but any Coalition, even ones less effective, would be better than the present system of Government. So much for the question of improving the incentive to work.
We must improve the incentive to increase output in employment by creating conditions in which investment can pay off. That is not happening. The measures which were put through the House in terms of bringing forward VAT and company taxation in order to cover the enormous hole in the public finances which was created through promises made by the last Fianna Fáil Government in regard to the removal of taxation and re-introduction of food subsidies, are fundamentally dangerous to employment. There are enough firms already in the process of liquidation or threatened with liquidation for no Government to want to add to that number by adding to companies' liquidity problems. Companies are now paying interest at the rate of over 20 per cent on their capital. The steps taken by the Government to go for the soft option in their campaign and subsequent budget has had the effect of threatening employment on a substantial scale.
The kind of Government we require is one which will tackle these problems and not aggravate them. It is one which will not, in response to pressures from outside the party, remove measures, even limited ones, designed to deal with the disincentive to work. We need a Government which will not substitute for open measures of taxation and reductions in expenditure, tricks with funny money, bringing taxation back from next year to this year at the expense of threatening employment. That kind of Government has never been less desirable than it is at present yet it is the Government which the parliamentary system has yielded us. There is grave public concern about that. The Taoiseach should have no doubt about that. Many Ministers are becoming increasingly clear about it. While promises were made in Galway last week, one was retracated within minutes of being made. There have been leaks about the Government's plan which suggest that they are determined to tighten up on public expenditure. These suggest that there is rethinking in Government.
For the first time, perhaps the Taoiseach, but certainly some of his Ministers are beginning to realise that people will no longer be fooled. This was made clear by the vote in Dublin West. They want to be governed even if this means tough measures. After the last election although the budgetary measures we took lead to a change in Government, our vote was maintained. My party's vote increased by 1 per cent and the total of the national coalition parties maintained at its previous level. That was significant. It is true that the Government changed. A couple of seats which had been held with the same percentage vote previously were lost but these are the hazards of PR. We accept the result.
The significance of the election was not that the Government changed because of a marginal shift in seats and change in the composition of the Independents in the House and their attitudes. The significant thing was that the Government which took those measures, unpopular in character, maintained their support. It would seem, perhaps, from some of the things we read in the papers now that a belated realisation of this reality is breaking through to the Government. If so, it is to be welcomed, even though the conversion has come so late that great damage is being done and the task of getting us back into shape again is far greater and will impose greater hardships on the economy than would have been the case had the Government responded in the same way when the Taoiseach was first of a mind to do so over two years ago but flinched at the task.
The roots of these problems go back further than 1977 and, if I had time, I would say more about it. I want to emphasise two points before I conclude. The solution to our problems must not be a monetarist solution. Monetarism has been the result, unintended no doubt, of the present Government's fiscal excesses. Faced with an enormous current budget deficit and grossly excessive borrowing, the burden of saving the economy from the Government has fallen on the Central Bank which has been forced, at least in the last couple of days, to use the monetary weapon to correct fiscal distortions.
The indirect result of Government policy has been a stream of bankruptcies and the unemployment of tens of thousands of people, the root cause of which lies, and this should be clear to everyone, with the Government's unrestrained fiscal stance, with their unwillingness to face the damage that was done by high borrowing forcing high interest rates, much higher even than the world situation dictates. The problems we face require political leadership of a high order. Above all, they require leadership that has the confidence, trust and respect of the community which has to be asked to follow an unpalatable course for some years with a view to overcoming these problems and releasing once more the inherent capacity of our economy to achieve relatively high rates of output growth. These growths could have been higher in the sixties and seventies if competitiveness in labour costs had been maintained and which will have to be much higher than in the past to provide employment for the new generation, as well as winding down unemployment.
There is still an inadequate appreciation of the scale of our problem. We need a 3 per cent employment growth outside agriculture and, given the increases in productivity associated with high output growth rates, this implies a 7 per cent growth in annual output year after year, a figure which Deputy Martin O'Donoghue correctly calculated even though his policies were not designed to achieve that result. If we are going to get the bulk of the 150,000 unemployed back to work, we would require a growth rate of perhaps 2 per cent more than that for four years or so. Such growth rates have never been attained in western Europe throughout the post war period nor, indeed, in recorded economic history. To achieve them would require a strength of Government and leadership of a kind that we have not had.
The question facing us now is can our system, with its somewhat ramshackle structure of Government, provide this leadership? If it cannot, it is difficult to see how they can survive the pressures that will be placed on them by economic failure on a massive scale and the constant increase of unemployment, 200,000 and well beyond, possibly rising indefinitely if we do not face the problem. We face a crisis of the regime. If we respond like political pygmies, content to play our party games in this House, we shall be swept aside and even those who will regret this will find it hard not to blame us for our failures.
I recognise that the problem of providing adequate national leadership within the adversary system of politics that is the characteristic of parliamentary democracy is a real problem. At all times it is difficult to achieve that. It is especially difficult at this time, yet the challenge must be met. We must have a Government with the will and the capacity to lead our people along a difficult and, for a period of time, unpalatable course. We face a situation where, more than at any time in the history of the State since its earliest years, we need national leadership that will command the most widespread public confidence. At the same time we have a leadership which commands in this House and outside less confidence than has ever been the case in the past. It is that problem that lies at the very root of the crisis and casts its shadow far beyond the Dáil over the whole country. Its resolution by this House or by the country is a precondition of any start on the long road back to economic recovery and the provision for the new generation of a prospect of earning their living in their own country.
Before the Taoiseach speaks and, at the risk of being told I am disorderly, I wish to protest about the agreement made between the three Whips on the length of the Adjournment which I understand is 27 October. This is wrong and it should be reconsidered. The time should be brought forward by at least one month. There is no sense in such a long Adjournment.
It is a long time since the international scene has been so tense and difficult. Eastern Europe, the South Atlantic, the Far and Middle East have all seen their share of turmoil.
Ireland's position this year as a nonpermanent member of the UN Security Council brings with it special responsibilities in these matters. We have consistently used our membership to be helpful in trying to avert conflict and resolve crises in the interests of world peace and the rule of law in international affairs.
We have also maintained, whatever the pressure, Ireland's right to pursue its own separate policy in international affairs, on disarmament, on support for the United Nations as the principal forum for the resolution of international disputes and in regard to armed conflict in any part of the world.
We will also protect our special position as a member of the European Community which is not a member of NATO and, whenever possible, we will use that position for the benefit of the Community and the interest of world peace.
I went to the UN Special Session on Disarmament in New York in June, not in any spirit of naive optimism but because I saw it as my duty to do so and to add the voice of this country to all those others around the world who were calling for a halt to the arms race. I sought, firstly, a new commitment by the nations to disarmament; secondly, a coherent and comprehensive programme to achieve it; thirdly, some practical Government steps to give substance to that arrangement and among these I suggested that the most visible and effective step would be a freeze on nuclear weapons for at least an initial period of two years during which time there would be no addition to the existing number of warheads, no addition to the number of delivery systems while serious negotiations such as the so-called START talks could be got under way. If progress was made then the freeze could be extended for another two years and so on and if there was no progress then at least nothing would have been lost.
The fourth objective which I sought as essential was a commitment to strengthen and see the United Nations as an international system to help to resolve conflict, to ease mistrust and to build a rule of law among states.
I am sorry to record that the special session ended in failure. At this stage, following that failure, we have to fall back on the hope that the mobilisation of world opinion against nuclear armament, in particular based on the realisation of man's present potential for total annihilation, will continue to work for moderation and sanity in relations between countries.
On the EEC front, there has been intense activity during the last few months, involving the settlement of this year's agricultural price package and the temporary settlement of the UK Community Budget problem after protracted and intense negotiations. The Fisheries Council is involved in trying to reach agreement on the outstanding elements of the common fisheries policy which involve critical issues for this country such as those of access and fishing quotas. Deputies know how vital a common policy is for us because, failing the establishment of such a policy, all member states could have the right to fish up to our beaches after the end of the year.
The House recently had a debate on the tragic developments in Lebanon following the Israeli invasion of that country. I do not propose, therefore, to go over the same ground again now. It is sufficient to note that, following a full discussion, the European Council adopted a declaration in which the Ten maintained their vigorous condemnation of the Israeli invasion and decided to continue our activity to bring relief to the population in distress.
We are keeping in close contact with the situation, which is highly dangerous to world peace. I had a personal meeting a short time ago with Lieutenant-General Callaghan, Commander of UNIFIL, who was home on a brief private visit. This meeting was most valuable for me because of the possibility of a larger UN force being provided with jurisdiction over a wider area than hitherto. I must say, however, that just now the establishment of such a UN force does not appear to be likely. Furthermore despite our belief that UNIFIL should remain in position and provide some stability and hope for the 250,000 people within its area of operation, this, too, now seems far from certain.
Deputies will be aware that there has been disquiet on one or both sides, about important matters arising in economic relations between the Community and the United States. Among these are the determination by the US Department of Commerce that certain steel products imported into the US from Community countries benefited from subsidies and proposing countervailing duties, an embargo on exports of equipment for the projected gas pipeline to bring Siberian natural gas to Europe, interest and exchange rate developments, aspects of the common agricultural policy and US attitudes to it and conditions affecting competition in textiles.
While reactions within the Community on these issues are very strong indeed, more than anything witnessed for a long time, they are also tempered by the realisation that anything approaching a trade war between the Community and the United States would amount to a major calamity for both.
The House will, I know, be conscious of the vital Irish interests involved here. As a country exporting almost 50 per cent of what we produce we have an extraordinarily high reliance for jobs and economic growth on the maintenance of an open trading system in international markets. We would inevitably suffer from any deterioration in trading and economic relations between the United States and our fellow member states who include, of course, our largest trading partners and export outlets. It was agreed at the last European Council that each member state should do everything possible on a bilateral basis to use its good offices to resolve these current difficulties. We in Ireland will of course do what we can in this important area.
A joint council of Finance, Economic Affairs and Labour Ministers is to be held in December and I am hopeful that the Community approach initiated last March on employment and investment will gather momentum and support the efforts for the development of our own economy which will be incorporated in the national plan which the Government will be publishing soon.
The enlargement of the Community was naturally discussed at the last European Council which confirmed previous statements of the European Council on the subject, particularly that made in London last November, on the member states' will to make progress with the accession negotiations with Spain and Portugal. The Council asked the Commission to prepare a list of the problems posed for Community policies by enlargement and to make appropriate proposals which would be processed with all due diligence.
I have recently in Bonn continued my discussion with the Chancellor whom I saw on Tuesday. We had a very full exchange of views on current international, Community and economic developments. We discussed Irish-German relations with special reference to greater economic co-operation between the two countries and how this can be achieved.
The British Government White Paper containing proposals for a devolved administration in Northern Ireland was published last April. Despite our vital interest, neither this Government nor their predecessors were consulted in any meaningful or substantial way on these proposals. However difficult a solution to the problem of Northern Ireland may be, no solution at all is possible which does not take into account the views and interests of the Irish Government and the Irish people as a whole. It has been suggested in some quarters that there was nothing in any agreement so far which required the British Government to consult with us about these proposals. I should point out that in all recent summit communiques there has been agreement on the need to develop new and closer political co-operation between the two Governments; there has been agreement on the need to bring forward policies and proposals to achieve peace, reconciliation, and stability, and to improve relations between the peoples of the two countries; and there was agreement only last November with my predecessor that "both Governments were ready to join in promoting arrangements which might help to reduce tensions between and to reconcile the peoples of the two parts of Ireland". In the light of those joint commitments I can only describe the unilateral course of action since adopted by the British Government as a clear departure from what we understood to be the accepted position.
I want to make it clear here and now that our views on the present proposals and our attitude towards them are based solely on our perception of what should be done to secure peace; what administrative or governmental arrangements will lead to a just and lasting peace in Northern Ireland and what will not. Our views emanate from and are based on the intimate knowledge we have of what is best suited for the island on which we live, and for good relations between Ireland and Britain, which are so important to both our countries. Purely on the practical level, we are deeply and continuingly affected by what happens in Northern Ireland. Security here directly arising from the Northern troubles places heavy strains on our Exchequer and economy. There are side effects which we could well do without on our levels of trade, investment and tourism. These repercussions are not becoming easier to bear and certainly show no signs of being alleviated by the present proposals.
Despite all the difficulties in the present situation and some unexpectedly foolish statements, I have not been deterred, nor will I be deterred, from taking any useful practical steps open to us to foster economic co-operation and worthwhile co-ordination of effort between North and South such as improving the energy situation in the island as a whole by supplying Kinsale gas, and to see if Northern firms can supply more of the needs of Southern firms, particularly in the semi-State sector. These measures may help but, of their nature, they are limited in their scope and in no sense equal to the dimensions of the problem. On the evidence, the economy of Northern Ireland will continue on its tragic way for as long as the political structures are unsettled; and the people of Northern Ireland and this island, of which it is inextricably a part, will continue to suffer.
Economics is part only of the problem. We see in Northern Ireland a society in which civil authority has been upheld now for more than ten years only by the presence of an army in the streets. We see a political superstructure which was brought into being by violence and continues because violence and the old divisions continue. This violence causes untold suffering and works against the sort of Irish unity we want. The conditions which create and sustain it are the divisions within the Northern Community for which past, present and proposed political structures provide no outlet, the economic decline which is both cause and consequence of these divisions, and overall the sense of political futility. My attitude to the April proposals is simple. Essentially, it is that you cannot solve a problem if you do not accept the reason why it exists in the first place.
Northern Ireland has failed as a political entity. To say that is not to reflect in any way on anyone living in Northern Ireland today. It is a simple, factual judgment on a political settlement made a long time ago. To me, it is similarly self-evident that any attempt to reconstruct an administration in Northern Ireland in the old mould must fail because, by definition, it must incorporate in itself the faults and deficiencies which brought the old system into disrepute and eventually destroyed it. The essential deficiency in the old system is that it did not take into account the right to self-determination of the people of this island. That is a right, in fact, which has been recognised clearly and openly on many occasions. Even in the twenties, when the constitutional legislation governing Northern Ireland was first passed, it specifically included provision enabling the two parts of Ireland to come together in the common interest of all their people and so remove this one major issue affecting Anglo-Irish relations. The attainment of that objective is patently the concern of both countries and particularly of the people of Northern Ireland whose interest in a settlement is paramount.
What disturbs me particularly about the present proposals is the fact that institutional arrangements for full consultation were available—admittedly in forms not yet fully developed—as a result of the understanding which I reached with the British Prime Minister in Dublin Castle and subsequently accepted by my successor at his meeting in London in November 1981. The present proposals bypassed and ignored these arrangements.
I used the opportunity presented by the kind invitation of President Reagan to the White House last March to outline our view of Irish unity to the President and to political leaders in Congress. We discussed these views further and ways of getting them across to better effect when some members of the Friends of Ireland Group in Congress visited Ireland last May on a fact-finding mission. I believe that my visits to the United States and the visit here by members of the Friends of Ireland group in May symbolise a new era of communication between Ireland and her friends in America. It is this Government's intention to mobilise the fullest possible measure of support right across the political spectrum in the US for the policy of the Irish Government in achieving unity in peace and to seek to have this aim incorporated as a goal of United States foreign policy.
I wish to avail of this Adjournment Debate to reiterate the policy of the Government on the Irish language and to restate our belief in the importance of the Irish language to the future of this nation.
I have said already that whereas we have had some success in increasing the number of those having a reasonable competence in the Irish language, we have not been as successful in promoting the day-to-day use of Irish as we would wish.
The time has now come for a close examination of the way in whch we are implementing all State language policies and for a national plan for our language based on the best language-planning experience available at home and abroad. Bord na Gaeilge have, in consultation with some outside experts, been working on an assessment of the situation and on an outline plan. I have encouraged this work and have asked Aire na Gaeltachta to supply a first draft of the board's findings within three months. I have also suggested to the Minister that Bord na Gaeilge should convene as soon as possible, in Dublin, a meeting of eminent language planners, including those Irish citizens who have made a reputation for themselves in this field abroad. All Government Departments are being asked to review any expenditure which they make in relation to furthering the Irish language as part of the current general review. All Government Departments and other State institutions have been reminded of their obligation to ensure that services are available through the medium of Irish to all citizens who wish to carry out their business in their own language. And I have also asked the Minister for Education to review the recommendations already made in the White Paper on Education and to examine how best these can be put into effect as soon as possible, particularly those which pertain to the development of new teaching methods.
Within the EEC and, indeed, throughout the world there has been a great upsurge in interest in lesser-spoken languages and minority cultures. This was manifest last October in Strasbourg when the European Parliament passed, by a large majority, a resolution of support for minority languages and cultures
Succesive Irish Governments, down through the years, have set an example for other countries in this area and I hope the role we have played and the money commitment already made will be recognised in any future allocation of regional funds for language promotion and cultural development.
It is important that we identify and if possible anticipate the main features and trends in the international economic and social situation. These will, of course, greatly influence the development of our own economic and social situation. They will help to indicate the policies we should pursue to take advantage of any favourable opportunities international developments may provide. They will also help to show us the measures we must envisage if we are to compete successfully in selling our goods and services at home and abroad and thus create the viable sustainable employment which is the most fundamental of all our economic objectives.
The OECD and the European Commission have recently published their assessments of the international economic and social situation this year and in 1983.
The immediate international outlook is still for high inflation in many countries, significant current account deficits, high interest rates and slow growth in real income. Most countries are unable to provide jobs for all who need them and, as a result, widespread unemployment will remain and, in fact, continue to grow.
The indications for next year are, nevertheless, encouraging in a number of respects from our viewpoint. Output is expected to grow in 1983 in the OECD and EEC areas by 2.5 per cent and 2.6 per cent respectively.
A substantial upturn in international trade is expected in the second half of this year and throughout 1983. This increase is expected to amount to 4¾ per cent in the second half of this year and almost 6 per cent in 1983. This is the most encouraging trade outlook since 1979.
Inflation is forecast to decline further in the OECD area from an annual rate of 8 per cent in the first half of 1982 to just over 7 per cent in the second half of 1983 and for the EEC from 9.7 per cent in the first half of 1982 to 8.8 per cent in the second half of 1983. This decline derives from moderation in wages and the continued weakness expected in oil and non-oil commodity prices.
Despite the improvement in growth, the decline in inflation and an improvement in the balance of payments, unemployment in the OECD is expected to increase throughout this year and next.
Unemployment in the first half of 1983 could reach 32 million people in the OECD area and close to 11 million in the European Community. Of special concern is the fact that the unemployment rates for young people in most countries are averaging about twice those of the work force as a whole. The gravity of the unemployment problem is most starkly demonstrated by the growing duration of unemployment. In the case of European Community countries about one-half of the unemployed have now been out of a job for six months or more.
Restrictive budgetary and monetary policies continue to be followed in most countries. Attempts to ease these policies in the face of growing unemployment have been constrained by already high Government borrowing. High interest rates also are impeding the recovery of private investment.
The moderation in inflation has been accompanied by and has assisted moderation in wage settlements. These, in many countries, are clearly responsive to the need to combat unemployment and take into account straitened financial conditions in the public and private sectors.
As a result, in 1983 labour costs in manufacturing for the seven major OECD countries will rise by only 4½ per cent. We are, therefore, entering a period when, while international output and demand will rise, competition will be much more severe as measured by unit labour costs.
Both the OECD and the European Commission stress that, in order to boost employment, economic structures within the Community must be modernised if the Community is not to be outdistanced by its main competitors. This can be attained only by increased investment.
Our economy has the same mixture of encouraging and adverse features as in the other countries of the OECD area and the European Community. Our unemployment is unacceptably high and has recently risen disappointingly apparently because a number of enterprises which had weathered the recession until now have been unable to hold out indefinitely.
The provision of employment for our rising population is our central economic objective. The Government consider that all sectoral interests and all economic and social options must be subordinated to this one single objective which encompasses all our economic and social hopes. We must be prepared to make any sacrifice, to accept any burden and to postpone any other desired goal in the interests of ensuring sufficient jobs for our growing young labour force.
We have the capacity and the ability to provide these jobs particularly with the improving international trading climate. Already we are providing enough new jobs to more than match the growth in our labour force. The reality still is however that job losses in older industries are offsetting the gains made in creating new jobs.
In 1980 and 1981 we provided 40,000 new jobs in manufacturing industry. This was an outstanding achievement in the face of a deepening and prolonged recession. Unfortunately, the impact of rising costs, contracting markets, keener competition and high interest rates have combined to cause exceptional job losses.
We are engaged in a comprehensive series of actions to combat unemployment and increase and maintain employment.
In our budget we provided an additional £50 million to the construction industry. These funds have been spread throughout the industry in a series of additional projects in housing, roads, sanitary services and schools with a total employment potential of probably 2,000 jobs.
Our budget proposals provided for substantially increased employment premiums for additional persons employed. We also extended the maximum period for which the premiums are paid from 24 weeks to 52 weeks. The effect of our actions is to increase the numbers likely to be employed annually under the scheme to more than 6,000 as compared with 3,500 last year.
The employment premium scheme is particularly effective in obtaining employment for young people. Under the Youth Employment Agency schemes, we expect to have in further training or in work experience this year some 10,000 more young people than last year and this will increase by a further 10,000 next year when the agency's activities will be fully operational.
We must move as rapidly as possible to a situation in which our young people coming out of formal education into the labour force must either be found jobs or have the opportunity to undertake further training which will increase their job prospects.
We have progressed far in improving the general level of education and technological skill of our young people. We must continue that process into the post-school period so that the transition from the classroom to the workplace is made easier. We must reform our school curricula to ensure that young people receive in their normal educational development adequate training in the practical skills which will help them obtain a job.
I should also like to stress the increased role we intend the National Manpower Service to play in finding jobs for unemployed persons. In recent years, a significant amount of the efforts of the service has been devoted to finding jobs for persons wishing to change employment. We are ensuring that the service concentrates now on jobs for unemployed persons. I would ask employers to use the service more by notifying vacancies and help reduce unemployment by selecting unemployed persons as far as possible to fill vacancies.
Our main attack on unemployment however is by concentrating on new industrial investment. This is the cornerstone of our economic and employment policies. We can attain the levels of employment and economic activities we desire only by intensifying the development of the new modern science-based industrial capacity.
Pursuing this policy, manufacturing investment increased in volume by 8 per cent in 1980 and by 15 per cent in 1981. This year a record £142 million in IDA grants will go to industry. Government Ministers and myself personally promote this policy abroad. During my visit to the United States in March, I addressed in New York a gathering of nearly 1,000 leaders of the industrial, financial and commercial world to outline to them the outstanding investment prospects Ireland offered to industrial and service enterprise. In Bonn on Tuesday I spoke with Chancellor Schmidt about the investment possibilities Ireland offers to German enterprises who already employ 10,000 persons here.
Industrial development policy is being complemented by new measures to accelerate domestic enterprise. The National Enterprise Agency recently established will enable new viable projects to be undertaken from our own resources or in partnership with overseas interests. These projects will fill gaps in our industrial capacity, ensure our national resources are fully exploited, transfer the modern advanced technologies to our economy and embark on a steady programme of import substitution.
We now have in the technological, entrepreneurial and managerial skills of our population, in their savings and in the assistance and advice of State industrial and development agencies, a combination of factors which is providing an increasing supply of new permanent viable jobs. Last year it is estimated that 12,300 new jobs in manufacturing industry were in Irish-owned firms.
The Sectoral Development Committee have the role in domestic industry of uniting the efforts of employers, trade unions and the State in ensuring that the full potential of each section of industry is realised. Already, studies are under way and will shortly be completed in the electronics, beef and construction industries. The committee have been particularly concerned at the fact that Irish producers have been steadily losing ground on the domestic market to imported products. It is apparent that there are severe deficiencies in the marketing capability of many Irish producers and we are determined to establish the extent and nature of these deficiencies and to take the necessary measures to correct them.
The increased penetration of our domestic markets by imports is directly adding to unemployment: 40 per cent of the manufactured goods we use are now imported as compared with less than 30 per cent five years ago. Irish producers must improve their product design, their distribution facilities, their marketing strategy and their servicing back-up to stem this increasing flood of imports.
The effect of this import penetration on our balance of payments situation is very serious and I will speak of it later. I would like to emphasise here however, how essential it is for maintaining existing and increasing new employment that we make the necessary changes in production and consumption so that we can replace unnecessary imports by home produced goods.
Many of the job losses we have been suffering are the direct result of the increased penetration by imports of our domestic market. The bulk of them are, undoubtedly, due to the recession which has been with us now for nearly three years.
These job losses will very likely continue, in spite of the improving international trading climate, unless we make a determined effort to prevent them. We have, therefore, taken steps to secure more effective co-ordination of the work of the State rescue and credit agencies and we have sought the co-operation of the banks in anticipating trading difficulties by firms. Already, the Industrial Development Authority and Fóir Teoranta are engaged in helping some 300 firms overcome their trading and financial difficulties. Positive action in this whole rescue area is, in our view imperative in present circumstances.
It is important in these cases that companies come to the State rescue and credit agencies early on before their situations become irreversible. The earlier corrective action is undertaken, the more likely it is to succeed.
Companies experiencing trading and financial difficulties should make their problems known to the State rescue and credit agencies, with a view to obtaining in good time their assistance and advice at an early stage. This assistance and advice can be financial, but it can also be managerial. Many companies in difficulties could benefit from additional expertise, whether in production, marketing or financial management. The State rescue and credit agencies will help in this way, too, as part of a new concerted effort to reduce the level of company failures and job losses.
There have been some extraordinary statements made and attitudes adopted, both inside and outside the Dáil, on this issue of rescuing companies in difficulty. There has been criticism of the Government's continuing efforts to rescue firms in trouble in order to maintain employment or preserve some enterprise of strategic economic importance. Most of this criticism is of a shallow, opportunistic, political nature.
Our view is a balanced and consistent one. The present period is one of exceptional difficulty and companies which would be viable in less severe conditions should be helped over this difficult period if they have the capacity to operate successfully. We believe this now has the support of unions and employers generally as a sensible approach in the current recession. It is justifiable in national cost-benefit terms. In every case, the cost to the State of a closure, in redundancies, unemployment benefit, loss of tax revenue must be measured against the cost of the rescue package.
We have, also, asked the commercial banks, in view of the unemployment situation, to take all measures open to them to sustain companies which are potentially viable in better market conditions.
The current budget deficit, which in common with most countries was increased as a result of the defensive action taken against the recession, is too high. It must be phased out progressively and in a sensible way which does not abruptly further deflate the economy.
The phasing out must be achieved by rigorous control of public expenditure, rather than by further increases in taxation, which is widely regarded as being inequitable and a disincentive to work and enterprise.
I am glad to note that the Economic and Social Research Institute have warned against the risk that crude reductions in the budget deficit could put the public finances in order at the expense of the economy and its potential. This potential will be realised by developmental policies and programmes at the sectoral level which, in our view, must accompany any measures to correct fiscal imbalances.
Our balance of payments deficit is also running at too high a level and cannot be sustained at that level indefinitely. We must restructure our economy, so that we sell more abroad and import less. This country has the highest ratio of imports to output — over two-thirds of GNP — in the entire OECD area. We can, therefore, without contravention of the principles of free trade, expect to reduce that proportion to a level more comparable with that of our free trade partners.
Specific measures are necessary and are being undertaken. In the two years 1980 and 1981, for instance, we reduced oil imports by nearly 1 million tonnes by economies and by having the ESB use Kinsale gas, as far as possible, in place of imported oil. The Government agencies concerned are intensifying their efforts to identify imported products which can be produced at home and to date, £600 million of industrial products and components and £200 millions worth of building materials have been so identified.
New arrangements will co-ordinate the efforts of all the State agencies and bodies in this operation.
Industrial exports in the first five months of this year increased by 14 per cent in real terms. These growing industrial exports are the result of our economic strategy of investing heavily in new industrial capacity throughout the recession and of an improving of the marketing of our products abroad.
Córas Tráchtála has been highly successful in helping Irish firms find and profit from markets abroad. The efforts of Córas Tráchtála will be intensified and for that purpose we provided additional funds in the budget for that agency.
The rate of inflation is falling. All commentators now expect that it will fall to around 14 per cent by the end of the year and into 1983. This will be the lowest since 1979. If a lowering of the rate of inflation is accompanied by a fall in interest rates, this would give the economy a major lift. High interest rates in the US is, undoubtedly, the principal reason why the revival of the European economy has been delayed.
Our high investment rate — probably the highest in the OECD area — is one of the encouraging aspects of our economic situation and our future prospects. This high investment is enabling us to transform the structure of our economy. We are enlarging our productive capacity and providing the economic infrastructure in roads, telecommunications, sanitary services, airports and port facilities necessary for development. We are continuing to develop our general educational and our technological and scientific educational and training facilities so that our workforce is fully skilled in the modern technologies on which our future economic growth will be built.
This high investment is necessary at our stage of economic development where our output per head is, on average, only half that of the European Community average. To increase output, to make good the deficiencies in economic infrastructure and to match the needs of our rapidly-growing population in housing, schools, and health institutions require from us an exceptional effort as a nation. This effort entails putting investment before consumption and accepting that difficult choices must be made in the priorities we give to national and individual expenditure. Not all desirable economic and social goals and objectives can be attained at the same time and at the same pace.
Because of our practical concern for the impact of adverse economic conditions on ordinary people, we have steadily improved the economic and social standards of the disadvantaged in our society.
We have always been concerned to protect and improve their living standards. We have in three budgets nearly doubled the benefits to long-term social welfare recipients. We have introduced a number of special schemes for groups such as the elderly, who now have free travel and free electricity and access, as of right, to medical cards. More recently we have set up a special fund for the housing of the elderly.
It is now becoming increasingly clear, however, that not all the expenditure on social benefits goes to help those in real need. There are, apparently, today a greater number of people in the community willing to draw social benefits and to work at the same time by manipulating the administrative system than was so in the past. There are also those who turn to social welfare benefits when work is available. At least, that is what is widely believed among the general public, particularly among those who are at work and carrying the cost of these abuses. We have now undertaken a searching examination of how we can reduce these demoralising abuses of the social welfare system. We have decided that there must be more effective links between the National Manpower Service and the employment exchanges, and we must establish more clearly what public works programmes can do to provide an alternative to unemployment.
A high level group of experts are now urgently examining this situation of widespread claims to unemployment benefit and assistance, and disability benefit, by persons capable of, or potentially capable of, work as well as the measures taken to prevent and detect abuses of the social welfare system. The Government will give immediate effect to any fair and sensible proposals which will ensure that abuses of our social welfare system are ended, while preserving intact the basic purposes for which this system was established. During the last four years the state of our agricultural industry and the level of farm incomes have been a cause of serious concern. The well-being of the agricultural industry is of significant importance to the whole economy. Twelve per cent of our gross national product arises in agriculture and it employs almost one worker in every five. Some 15 per cent of manufacturing employment and one-quarter of manufacturing output are agriculture-based. Last year, agriculture earned abroad £1,550 million or almost one-third of our total exports.
The Government seek an up-turn in farming, following the difficulties of recent years. Last year saw a move towards stabilisation in incomes and the most recent assessments indicate that farmers can look forward to an increase in real incomes this year.
The Government are convinced that a thriving and prosperous agricultural sector can make a major contribution to overcoming the present serious difficulties of the economy. Yesterday, the Minister for Agriculture and I had a constructive discussion with representatives of the Irish Farmers' Association and the Irish Creamery Milk Suppliers' Association on the overall position of the industry. The farmer interests drew attention to the severe difficulties which the agricultural sector had experienced in recent years and emphasised the need to create the conditions in which the sector could again expand and develop.
The Government fully accept the need to bring about an increase in agricultural output, which would not only result in a much-needed improvement in farm incomes but also bring significant benefits to other sectors of the economy, including the agricultural processing and service industries, as well as to the balance of payments. The Government are determined to bring about the economic environment and conditions under which farmers will have the confidence to expand production and achieve the full potential of their farms.
In this connection the National Economic Plan, which I have indicated is at an advanced stage, will be of particular importance. High inflation and high interest rates have been a cause of major difficulty to the farming sector in recent years. In tackling these problems specifically the plan will be of substantial value to agriculture.
Work is also proceeding in parallel on the preparation of a Four-Year Development Plan for Agriculture. This plan is being prepared by a working group which includes representatives of the farming organisations and other major agricultural interests. The plan, which is expected to be available by about the end of October, will set the frame work for further progress and development in the agricultural industry in the coming years. I welcome the co-operation of the farming organisations and other agricultural groups in the formulation of this plan. This positive approach augurs well for the production of a sound and realistic programme. I should like to say at this stage that once an agreed plan has been prepared the Government will co-operate fully in its implementation. The co-operation of other interests involved in the industry will also be needed. After my discussions yesterday I am confident that we can rely on the required level of co-operation being forthcoming from the farming organisations.
An important outcome of the recent EEC price package is that export refunds for carcase beef are now £60 higher than on live animals. This differential is of considerable benefit to the meat factories in securing supplies of cattle. It is essential that the throughput of cattle in meat factories is increased to the levels previously achieved and this will come about with the increased cattle supplies that the Government's policies are now aimed at achieving.
I should in this context reaffirm our intention to continue to defend in Brussels the fundamental principles of the Common Agricultural Policy. It has had a debilitating and disuniting effect on the Community at a time of great economic difficulty for the Community that these fundamental principles have been challenged in the context of the United Kingdom budgetary problem.
It would create a far healthier, more constructive and more united approach to Community developments if the United Kingdom budgetory position were examined on its merits without any linkage to the common agricultural policy which in its broad lines should be generally accepted now as having served the Community well.
Despite our preoccupation with budgetary and fiscal business in the Dáil and the unprecedented level of parliamentary obstruction we encountered we nevertheless made progress with a number of important legislative proposals.
In all a total of thirty-five Bills were introduced in what have been shorter sessions than usual, owing to the General Election.
We succeeded in legislating for the difficult constitutional situation which followed the Supreme Court decision on controlled rents. Other measures are designed to improve the general outlook and appearance of our urban areas, to protect holiday-makers, to give support and encouragement to community work, to tackle inner city decay and to provide ourselves with modern, up-to-date postal and telecommunications services.
Our national heritage in nature and in historical sites and monuments is a special concern of this Government. The National Heritage Bill provides for a new unified management and control of this heritage through a widely-representative Council. This will ensure a more co-ordinated and responsible approach at a national level to the preservation and enhancement, in the public interest, of our unique natural and archaeological heritage.
We have come a long way in economic development since we became an independent, sovereign nation. We can take pride that we have mastered the technology of modern industry, that our farmers have the skills and technical knowledge needed for a modern efficient agriculture, that our young people are educated and trained to a level comparable with that of the more advanced economies, and that we have transformed the social conditions under which our people live.
We can be confident, from these successes, of our ability to continue to make economic and social progress, but we must also recognise the magnitude of the task. With the fastest growing population and the fastest growing labour force in the European Community we must work harder, invest more and make greater sacrifices than more advanced countries with slower growth in their labour forces.
A new stage of our economic development is now opening up with the upturn in international trade and falling inflation rates.
We end this session of the Dáil with the same message, with the same resolve and with the same policies as we entered into office in March. Before coming into office we had, in the General Election campaign, put forward our budgetary proposals. Central to our budget policy was the elimination of our predecessor's decision to accelerate inflation, at a time when international inflation was falling, by reducing food subsidies, increasing CIE fares and imposing VAT on footwear and clothing.
We incorporated our proposals in the budget which we successfully put before this House. We have implemented the measures we said we would implement. We incorporated them in the Finance Bill on which we stood firm despite an unprecedented irresponsible parliamentary campaign by the two principal Opposition parties who, as an exercise in opportunistic politics, totally abandoned their stated economic and fiscal principles.
We will continue to give the country consistent Government, keeping in constant touch with economic problems, concerned about social inequities, conscious of Ireland's own best interests at home and the independent role she has traditionally played in international affairs.
We will be putting before the nation shortly a new programme of economic development for the years immediately ahead. The plan will both propose corrections in the major imbalances in our economy and our finances and show how we can build a more competitive and better-structured economy. It will cover the next three to four years and enable us to start a new period of economic development and social progress. It will not provide any soft options but it will provide positive and beneficial ones. Above all it will be concerned to create an economy which can move to the new level of output and employment necessary to support our rapidly-growing labour force. Our country has the capacity and the resources to do this. We must shake off self-doubting pessimism and rekindle that spirit of determination and unity of purpose which we have been able to mobilise in pursuit of national objectives on other occasions in the past.
From the last General Election, Fianna Fáil emerged as the largest party. Our policies won majority support in this House so as to enable us form a Government which offers the prospect of stable rule to the country. Stability of Government is what the nation at large demands and what our economic and social situation requires.
By an historic coincidence this Dáil assembled fifty years to the day after that which saw the formation of the first Fianna Fáil Government under Eamon De Valera. That was a minority Government, supoported not only by Labour, but by three Independents. The difficulties it faced were enormous. Ten years of conservative rule by the first Cumann na nGaedheal Government, had preceded a world-wide depression, to which the only answer Cumann na nGaedheal could find were petty measures of social deprivation. There had been much talk of book-keeping and accounting but no real grasp of what the country needed. The new Government agreed that economy measures were a first priority and took some stringent ones indeed. But it realised also that if the country was to progress they had to be accompanied by a determination to build and expand our industrial base in order to provide and maintain employment.
Employment was a principal preoccupation for that first minority Fianna Fáil Government. It has been a proud priority of Fianna Fáil ever since; and I draw this particular historical parallel now in order to emphasise that it has been and will be a priority for this Fianna Fáil Government also.
We have heard enough about our faults and our failings. The time has come to leave the professional knockers sulking in their corners. This country, with its known resources and those yet to be quantified can provide our present population and any future increase with an adequate and satisfying way of life and standards of living.
Good planning and management of the economy, consistent dedicated effort at every level of government will put things right in a much shorter period than many expect. That is our belief; that is the course of action we will follow.
Debate adjourned.