I said on the last occasion, that there was one thing in the document The Way Forward, with which I agreed, that it was recognised by the Government that there is a crisis in the economy. A few months ago the Minister for Finance talked about boom and bloom but he now recognises that there is a little problem in the economy. Some months ago the Government and the Minister for Finance gave the impression that there was not any problem whatsoever, that things were flying along grand and that they had everything under control. I am glad that a real debate can now take place, that the people on the Government benches have come to earth and have decided that there are problems in the economy. A large proportion of those problems have been created because the Government failed to recognise that there were problems. It is late in the day to do this and I believe great harm has been caused to the economy by the Government failing to recognise this. For years Fianna Fáil have continued to say there was boom and bloom when they knew in their hearts that was not true. Now they have been forced by circumstances to recognise that there is need for this debate on the economy. Our party recognised that when we were part of a Coalition Government. We recognised that steps had to be taken to bring the economy under control. Now the very people who laughed us to scorn for that are coming to the same conclusion.
Inflation which averaged 17½ per cent last year will be nearer to 13½ per cent this year. It is clearly on the way down, but no thanks to the Government. This is due to outside influences, the reduction of interest rates and many other things. It could have fallen faster and sooner but for taxation increases necessary to deal with the situation in the public finances which were faced up to for the first time last July. That situation was a direct result of Fianna Fáil Government policy when they ran riot offering this, that and the other to everybody when they must have known as responsible people that those things could not be achieved. Germany and Britain now have low single rates of inflation but both have rising unemployment, especially Britain. I want to make clear that the Labour Party will not support this plan or any other plan which proposes to reduce inflation by cutting wages and increasing unemployment. If the inflation is to be brought down by cutting workers' living standards and creating further unemployment we will have no part in backing that plan. That kind of plan has been tried in other countries such as Britain and undoubtedly they have brought down inflation but they have created a huge unemployment problem. The Labour Party want it clearly understood that we will not support a plan that increases unemployment which we regard as the major problem.
Our wage levels are among the lowest in Europe but this has not produced the results it should have produced in the industrial sector that could have been achieved by proper management and competitiveness in other fields. What we want is productivity and we are prepared to support any plan that shows how productivity can be increased. There is no evidence to show that this can be done by lowering the ordinary workers' wages and their standard of living. If it is to be done in that way — and that is how we see it spelled out in this plan because it is admitted that there will be increasing unemployment for three years — then I say the matter should be put to the people for decision.
The way to increase productivity is by well-planned investment and ensuring co-operation between workers and management in industry. Irish workers will co-operate in increasing productivity and industrial profits. They will accept moderation in wage payments if they get by right something in return for the implementation of such a policy. I think I speak for most workers when I say that certainly they will help. I have evidence of people who have foregone increases and are prepared to forego increases in order to keep industry going in these times. I can produce case after case where such co-operation has been offered. What do the workers get in return? They must have a right to share in the profits of the business which will increase with increased production. Are they to have no share in the profit in that case? Must they just work harder and earn less? With inflation their earnings become less. Are they to do that so that other people can get all the profit? Would anybody ask one component of industry to agree to such an arrangement?
There are three factors in industry, management, capital and workers and one is as important as the other. Does anybody suggest that because of the economic situation workers should forego increases, work harder and produce more in order to increase profits through greater competitiveness while foregoing any right to a share in the extra profit for extra sales? No sane person would expect an equal partner to accept this. I should dearly like to see realised the Government's objective of increasing employment in manufacturing industry by 9,500 per annum in the years 1983 to 1987. Employment in manufacturing industry is not much higher now than it was seven years ago. I remember Deputy O'Donoghue, as Minister for Economic Planning and Development when his party introduced the budget giving handouts all over the place — no car tax, tax concessions for industrialists and so on — saying — I do not quote him but this is the impact of what he said — that if the strategy of full employment by 1985 did not work he would consider the proposals I offered. He told me that across the floor of the House. He knows and I know now how well it worked. We now have the worst unemployment problem in the history of the State as a direct result of the policies introduced by him and his party on that occasion. In a statement on this policy he said he would rely totally on private enterprise to provide the necessary jobs and would give them budgetary incentives to do so. How did it turn out? He knows how many jobs they created. We never had such a high unemployment figure. We have no work for the young and no prospect of it within the next few years.
In the document it is stated that private enterprise will be boosted so as to create jobs. That will not happen. With modern technology fewer people will be employed in private enterprise. We envisaged setting up a corporation to create jobs and set aside £20 million for it. However, the Government formed some new kind of enterprise board and set aside £5 million for it. This has now been cut back to £3 million. The Government stand condemned on the creation of employment. There is a lot of waffle in the document. There is no constructive proposal on how the Government will help sectors which could produce jobs.
As regards agriculture, the Government are closing down two research stations. We have a great opportunity to process food and develop the meat industry, but instead we are cutting back. We should be ashamed. There has been a lot of talk about finding oil and so on but our greatest wealth is on top of the ground — the soil which is capable of producing food which is eaten all over the world. The food processing industry has been deliberately run down. Erin Foods closed their plants because market research was not carried out into the kind of product produced. That will be evident to anyone who gives a cursory glance at the agricultural situation. The Government intend to cut back on the money available to agricultural research and close down two testing stations. If we intend to bring down inflation and get rid of our debt by closing off every prospect of advancing in industry so that our bookkeeping can be tidied up, God help us. Fianna Fáil and Fine Gael both say that the national debt must be wiped out and that we must have a clean sheet in four years' time. Is there something sacred about four years? Is it necessary that it must be done in that time? Is there a case to be made for taking longer than that and so have money available for investment to produce jobs and develop the food processing industry and offal industry? The leather tannery in Waterford has closed down. Yet leather is rammed in here from South American countries and we have allowed it without any protest being made to the EEC.
One section of Erin Foods was closed down in Carlow because they were producing an article which was out of date. One thousand acres in Carlow and south Kildare were under vegetables. People made a living out of it and about 400 people were employed in the plant. The workers met every target set by management and farmers never failed to deliver on their contracts. These are indisputable facts. No market research was carried out and the article could not be sold because it was out of date even while it was being produced. The Minister should deny what I am saying if it is wrong. We had the material, the work force and the farmers, but the finished product was out of date. Now we are told the Government intend to cut back on research and so on in order to balance the books in a period of four years. We in the Labour Party do not accept that programme and never will.
I welcome the proposal to introduce company development plans. We need this kind of approach and if we are to concentrate our resources on the expansion of a more select number of firms our present grants policy will have to be changed. The National Development Corporation, who were opposed by this Government and attacked by the media, are recognised in this document. We were intent on giving a major investment role to the National Development Corporation with power to invest selectively in existing companies and form joint ventures with companies, mainly Irish domestic firms. The one weakness in the Government's proposal for a company development plan is that they do not discuss how the present grants policy of the IDA, which is for capital grants, can be married to the objectives of the company by company approach. Our primary objective must be the creation of jobs and the employment of young people. If we are to achieve that objective there must be cutbacks in the capital programme and investment by banks and financial institutions will have to be controlled by the Government.
Many people accuse my party of wanting to nationalise the banks. They seem to have the idea that we will get guns, hold up the bank managers and then take over. If the Government do not have control over the banks and financial institutions they do not have control over the country and cannot direct economic or other growth. There is nothing in this document to show how this investment plan will be implemented or where the money will come from. I know it will not come from the ordinary workers' savings. These ordinary people will not be able to save because the increase in wages will be about half that of inflation. This means that the Government cannot depend on the savings of the 90 per cent of the population, the ordinary people whose living standards will be reduced.
In the Coalition budget we provided £20 million to set up the National Development Corporation to help industry. It was decided that the Government would take over and nationalise the paper manufacturing industry and I agreed with them. As a people we should recognise that nationalising an industry is not the end of the story. We should ensure that the industry is profit-making and can be run economically. If the company is not run economically, the decision to take it over was wrong. All State industries should be run economically and in a businesslike way.
I cannot see anything in this document which will produce the extra jobs necessary. We must give young people hope. It does not matter if we do away with our budget deficits in ten, 15 or even 20 years. If the Government aim at clearing the budget deficit within four years, they are doing that at the expense of providing jobs.
No one would deny that many of the objectives outlined in this plan are desirable. The Taoiseach and the Fianna Fáil Party tell us this plan will be the saviour of our nation but there is no evidence to show where the employment will be provided. I went through this document with a fine-comb and cannot find where these jobs will be provided. We are told there will be a drop in employment for the next few years but that is not acceptable because there are about 200,000 people of all ages unemployed and every day we have more redundancies. Recently the last foundry, which produced machinery parts for Bord na Móna and the Sugar Company, closed in Athy. Is the Minister for Industry and Energy going to allow that firm to remain closed? If so, the Sugar Company, Wavin and other firms will have to import spare parts. Is the Minister saying nothing can be done unless somebody buys this foundry which provided a service? Some of the people were employed there for 40 years and many workers acquired special skills there. The foundry had been in existence for the last 50 years and had withstood the pressures of the war years when raw materials had to be dug out of dykes and ditches to keep the company viable. We must now tell Bord na Móna, who were one of this firm's big customers, that they must import their spare parts. Because of political pressure certain industries are nationalised. That is not a good idea. The IDA had 40 per cent of the shares in that company and believed it was essential that we have our own foundry. Unless someone buys this foundry, which is unlikely, our industrialists will have to buy their machinery and spare parts in other countries. This is the type of industry we should nationalise because it is essential that we have a foundry within the State.
The plan contains no ideas about where the State should participate. Apparently £370 million is to be allocated to the public sector during the first three years of the plan for restructuring but there will be no more money during 1986 and 1987. There will be no funds available during those last two years of the plan. The Government should go before the people and try to defend this policy.
We have a much more realistic approach. While recognising the problems in State commercial companies we would identify their growth areas and give them funds to enable them to engage in profitable ventures either on their own or in partnership with the private sector. We must make the necessary money available to the public sector if our young people are to have any hope for the future. The Fine Gael plan at least proposes a role for the National Development Corporation but the plans put forward by both the major parties lack a recognition that private enterprise has been a massive failure in employment terms. It has failed to produce the kind of jobs necessary to give employment to our people.
There is no use in waving flags and talking about freedom. Security is a lot more important to ordinary people than freedom and security for our young people is sadly lacking. If we want jobs to be created in the private sector the level of grant-aid paid out as distinct from grants approved should vary with the number of jobs created. We should not worry about offending some American or British investor. Grants should be paid on the actual number of jobs created and not on the number of jobs projected. American businessmen in my constituency have set up industries which were to have employed 800 or 1,000 people but the number of new jobs is only 300 or sometimes as low as 100. We give these people the money to buy their factories and machinery and to train workers but place no binding commitment on them as to the number of jobs to be created or production levels. The business of the private sector is to make profits. I do not object to that because profits are a necessary ingredient for future investment in public and private ventures. However, as politicians our job is to generate employment for our growing labour force and we must be businesslike about spending State money and get the best value in terms of lasting employment.
The section on jobs contained in this plan depends on three things: a growth in exports of 12.25 per cent per annum, a growth in international trade of 4 per cent per annum and a 6.25 per cent growth in investment. What evidence have we that exports will increase at all? The economist who called this plan "the road to God knows where" was slightly off the mark. Considering the kinds of assumptions on which the plan is based, it might more appropriately be called "the road to Hell" because as we all know the road to Hell is paved with good intentions. There is not a shred of evidence as to how these desirable objectives are to be achieved. They are just wishful thinking. I would hope that these assumptions would be proved right because God help us all if they are not. There is little else in the form of hope for the future in this document.
Let us consider the actions taken by the Government when they were belatedly forced to admit that there was something of an economic crisis. What did they do? During the recess they crucified the poor. Our party will tonight challenge the Government in a motion condemning their actions on the cutbacks in the health service. An unfortunate woman in my constituency has been told that the tablets she has been taking for some time will not now be available free on the medical card and will cost £10 per week. This woman is aged 90 and lives alone and she has no income other than the old age pension. Is this how the Government expect people to tighten their belts to put this plan into operation? The Government will be obstructed by this party if they attempt to implement that kind of policy. They often tell us of their concern for the poor but I challenge any Minister who claims that this is the way to cut back on expenditure. It reminds me of a county manager telling the county council that he must lay off workers while increasing staff in the office. If these are the kinds of criteria to be adopted, let us say to the lower income group that they will have to pay so that our finances can be put into order within four years.
I can point out many places where we could save money. I will not stand idly by and allow the Minister to take tablets from a woman of 90 years of age living on an old age pension. Her doctor told her she needs these tablets to keep fit and well. Anybody who is in touch with ordinary people will appreciate that we cannot allow the Government to make savings in these areas.
A great deal of work needs to be done throughout the length and breadth of the land. Councillors have proposed schemes which need to be implemented, but we are told money cannot be spent on them. We will not allow the Government to cut back in these areas while our people are unemployed. The only suggestion the Government can make to the local authorities is that they should charge for services. I have no objection to imposing charges on people who are able to pay. This year our county manager introduced an increased charge of £25 for water connection to houses, irrespective of the type of house. The old rating system was bad, but it was not as bad as charging £25 to connect water to a caravan where an unfortunate man and his wife and family are condemned to live because of the lack of a housing policy. A man with six bedrooms in his house has to contribute the same amount. Unfortunate people are being asked to subsidise the bigger man. We in the Labour Party will have no part in such a plan and we will do our best to obstruct its passage through this House.
