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Dáil Éireann debate -
Thursday, 11 Jul 1985

Vol. 360 No. 7

Estimates 1985. - Vote 3: Department of the Taoiseach (Revised Estimate)

I move:

That a sum not exceeding £5,049,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1985, for the salaries and expenses of the Department of the Taoiseach, including certain cultural and archival activities and for payment of certain grants-in-aid.

I shall be speaking from notes because I prefer on this occasion to have the freedom to range more widely than one can when tied to a script. I mention that at the outset, lest there be any misunderstanding on that point.

I want to start, if the Leader of the Opposition will forgive me, with the performance of the Opposition, the soft-headed, soft option party which faces three ways at once, a party which favours reducing taxation——

A strange way to defend the Government. The Taoiseach is here to defend his own record.


I did not think they would like it. Let them stay quiet and listen.

If the Taoiseach can defend his own record, let him do so.


The Opposition party are in favour of reducing taxation and in favour of increasing expenditure under almost every possible head, but at the same time say we should borrow less and that we are borrowing too much. Let us hear what the Leader of the Opposition has to say about taxation. He has the most impeccable sentiments about taxation. Deputy Haughey said in the Adjournment debate last year that Fianna Fáil were convinced that some reduction in tax levels was essential to the wellbeing of the nation and it was their objective to get back to the situation which obtained in 1980 when there were reasonable tax levels compared with today. I fully concur with those sentiments. I cannot, however, reconcile them with the same Leader of the Opposition who——

Could the Taoiseach's speech be circulated?

The Chair has no control over the circulation of a speech. The Taoiseach said that he was speaking from notes. We are finishing up here today but if Deputies want me to enforce the rule about reading from scripts, I will do so.

That is a very threatening statement.

I am not threatening anyone.

I suggest that you give us an outline of precedent in this matter.

This is my time, may I have it, please?


If the Taoiseach has a record to defend let him defend it.

Sit down, do not be silly.


Deputy Haughey is in favour of getting taxation back to the 1980 level but in column 3053, Volume 354, of the Official Report he impugned us for not saving Verolme, Clover and Irish Shipping, the cost of which would have been somewhere in the region of between £150 million and £200 million. There was an implication that if they had been in power they would have saved those firms. He said that if they got back into office they would eliminate the farm tax at a cost of £30 million, and water rates at a cost of about £20 million. They proposed a construction programme at a cost of £200 million and increasing the strength of the Garda and clerical assistants at a cost of £12 million. Pupil-teacher improvements would cost £7 million, restoration of the medical card which Fianna Fáil in October 1982 decided to abolish for old age pensioners would cost £3 million; they would reduce planning charges to a nominal level which would cost £4 million and, to provide £4,000 for site subsidies for 3,000 serviced sites would cost £12 million. A proposed cut in VAT on housing down to 5 per cent would cost £40 million, not to speak of £4 million for harbours and roads and £50 million for co-ownership of local authority built houses. I will not speak of the cost of decentralising Government Departments nor of the cost of treatment of sewage, the expansion of environmental work, building prisons and so on — you name it and they had it. How are they going to spend all this money and still reduce borrowing? We are all looking forward to the response from the Leader of the Opposition. That kind of three card trick and pantomime is all very well in mid-term but it will not take the Opposition through a general election——

——because the people will not forget 1977. They want to know how Fianna Fáil and the Coalition plan to govern. They will not allow their intelligence to be insulted or allow themselves to be treated with contempt. Adlai Stevenson said that we should tell the people the truth, that there are no gains without pains. This Government have done that but the crowd opposite are unwilling to do in government——

On a point of order, is it usual to refer to the principal opposition party as "the crowd opposite"?


I withdraw the remark as there are only about nine of them over there. To the little embattled band opposite——

We know that the Taoiseach cannot bear the prospect of power slipping away from him but he should try to put an urbane face on it.

The Taoiseach did not make an unparliamentary remark.

It may not be unparliamentary but would you agree that it is slightly vulgar?

I ask the little embattled band of Deputies opposite who had the courage to come in here to face the music, have they ever, as a party, considered the wisdom of their course of action, of moving towards a general election on the basis of facing three directions at once and of making no clear indication as to what their policy is. On 16 May 1984 the party opposite rejected the idea that policies should be decided "when discussed and formulated by the party". The mere idea of discussing and formulating a policy was rejected on that occasion. Have they also rejected the formulation and discussion of their economic policy? Does this ban on discussion extend to this area also? Are the party so supine that they abdicate their responsibility in this area also? Their leader is sole spokesman and, when he has spoken, "nobody is free to advocate another policy". Is that the basis on which they want to fight the next election? If that is the case good luck to them, it will certainly be good luck for us. They are not even free to choose their own Lord Mayor.


Can the party opposite consider the wisdom of such a course in view of their record? I must choose my words with care because I do not want my sensitive opposite number to leave in a huff again as he did the last time we had an Adjournment Debate. The record shows that the Leader of the Opposition came to office in 1979, promised overdue action to tackle the financial crisis which he had inherited but took fright and reversed engines for the 1981 elections. He took off in the first few hours of the 1982 election to propose another spending spree but was pulled back by Deputy O'Malley and Senator O'Donoghue and look at the penalty they paid for trying to get Fianna Fáil back on some sensible course. They produced a phoney alternative budget based on the once off benefits of VAT at the point of entry regardless of the damage done to business and, in the early months of 1982, they were back in again free spending until Deputy MacSharry clamped down. Towards the end of that period we had The Way Forward and some attempt to face reality. Of course that did not work and, as shown from the figures I mentioned, they have been out of control ever since.


This is better than the Moscow State circus.

They created a record in U turns and how many more would there be if the country were desperate or foolish enough to put them in for five years? Remember that there would no longer be any constraint as there was, to some degree, on past governments. There would be nobody to put an alternative at party meetings. Does even Mr. Gorbachev exercise such power? I wonder. It is because of our people's refusal to contemplate vesting such power in someone so uniquely marked by the quality of indecision that neither in the polls nor in the in the local elections has support for Fianna Fáil risen above the November 1982 level.


This is a most significant fact in Irish politics. I know that people who voted for us in former years withheld their support in the polls and moved into a "don't know" category. They abstained in local elections but the Fianna Fáil vote has not increased. The Deputies opposite know all too well that the vote for Fianna Fáil in most areas is almost identical to that in November 1982. I know it is up in Galway, Cork, Meath and Waterford but it is down in Roscommon, Donegal, Kerry, Kildare, Limerick and Wicklow——

What about County Westmeath?

Our supporters are withholding judgment on the Government but the significant thing is that although the Government have been taking the toughest measures any Government has had to take since the war, people have not turned to Fianna Fáil. They are waiting to make up their minds and to see what the outcome of the efforts of the Government will be but they are not prepared to vote for Fianna Fáil.


Am I entitled to speak?

I want order in the House and I want order from all sides of the House.

Where is the Tánaiste?

The political balance is thus in suspense. People do not trust the Opposition, they see nothing there to attract them, no alternative policies only the confusion of contradiction and the soppyness of the soft option. That is why they have not turned to Fianna Fáil. That is why they have left their judgment in suspense between now and 1987. That judgment will remain in suspense until we approach the next general election. That this is so is the great failure of Fianna Fáil, the failure to offer any credible alternative at a time when the Government are faced with the need to take the kind of tough measures that no Government have had to take since the war.

Let me now turn to the measures we have taken, the results of which are now beginning to have positive effect. Let me start by dealing with the legislative programme and referring back to the last debate of this kind, at Christmas last year, when the Leader of the Opposition came in to tell us about all the legislation we have not produced. What are the Bills he referred to? He referred to the EC Equality Directive, passed by the Dáil; Dublin Transport Authority Bill, before the Dáil; the Bankruptcy Bill which he did not know was before a Committee of the Dáil at the time; the Companies Amendment Bill, Fourth Directive, ordered for Second Stage; the Air Transport Bill, before the Dáil; the Free Ports Bill, ordered for Second Stage; the Family Planning Bill, passed; the Illegitimacy Bill, published for public reaction and the Children Bill, before the Dáil. They are the Bills mentioned by the Leader of the Opposition.

What about unemployment?

I have outlined the stage those Bills are at. The Leader of the Opposition did not mention at the time the Garda Complaints Bill, now ordered for Second Stage; the Road Transport Bill, before the Dáil; the Courts Bill, ordered for Second Stage; the Health Amendment Bill, ordered for Second Stage; the Farm Tax Bill, passed by the Dáil, and half a dozen others.

What about the Radio Bill?

There will be no more talk from that side of the House about our legislative programme which is well under way. By the end of our term of office we will have put on the Statute Book a series of reforming measures that will go beyond anything any previous Government of any complexion have achieved or attempted.

Liam Cosgrave said that before he lost the election in 1977.

And so we will continue implementing local government reforms to devolve power to local authorities which Fianna Fáil do not like. They would like to control power centrally, in the hands of their party centrally, of one man centrally.

We know where the power is now.

The Government have not done anything like that yet. This is rubbish.

We will devolve educational functions to local level. Fianna Fáil do not like that either.

A Deputy

Fill the potholes.

We will devolve Manpower functions to local level. We will continue with the reform of children legislation with new legislation covering adoption and juvenile justice. We will get a gas network established, develop our gas resources and, we hope, oil resources also. We will rationalise State agencies, establish a national lottery and bring in the child benefit scheme.


Deputies should cease interrupting.

These, and other measures, provide a full programme of work for the next two years and will, when implemented provide good reasons for re-electing us to office. At the same time we have the job of turning the economy round again from its disastrous course full steam ahead for the rocks in June 1981. That has to be completed. We are well on course in this respect. Let me remind the House of where we were and where we now are. In mid-1981, on 30 June, when we took office, the figure for total public sector borrowing — I have the figures as presented to us by the Department of Finance at that time — showed that for 1982, unless we took action, public sector borrowing would rise to £3¼ billion in 1982 money terms which in present money terms would be £4,150 million. That is what Fianna Fáil planned to borrow at the moment they left office in June 1981. The actual figure for 1985 in this year's money terms is £2½ billion, a reduction of 40 per cent in four years. The same is true of the deficit.

This is not based on any facts.

Pick a figure out of the air, divide it by two and you get 50 per cent.

The deficit we were faced with coming to office in 1981 was £1,550 million which in current money terms would be about £2,100 million. Again, that has been reduced by 40 per cent in this year's Book of Estimates to £1,234 million. In terms of borrowing and in terms of the current deficit we have in four years reduced the figures by 40 per cent from the level which Fianna Fáil were contemplating when they left office.

It may be said that this has had some deflationary effects. It has had some deflationary effects but with the other measures we have taken it has been accompanied by a faster growth rate than Fianna Fáil were then achieving.

It created more unemployment.

Let me recall the record of economic growth here. When we left office in 1977 the figures published by the OECD, which I have in front of me, showed that in 1977 the gross domestic product, the measurement of the total output of the country, rose in volume by 8¼ per cent, the highest figure ever achieved in the history of the country. After five years of that Fianna Fáil splurge they had reduced growth to 2 per cent in 1981.

The biggest mistake the people ever made.

All that money spent, those debts incurred, borrowing to be pushed up about £4 billion in 1985 money terms, and for what, for reducing growth from over 8 per cent to 3 per cent. That is the record of the most miserable Government in economic terms we have ever had here.

The Government are borrowing to pay the dole.

Last year, despite the measures we have taken, despite having to cut borrowing by 40 per cent and the deficit by 40 per cent, our economy grew by 4 per cent, more than Fianna Fáil could achieve with all their spending spree of 1981. Those facts are verifiable from the OECD Report or the Central Bank Bulletin. The figures are there and the Deputy opposite knows that and he is afraid of them.

I think you have taken leave of your senses.

If the Deputy opposite can fault any figure I have given in this respect I will apologise to him publicly in the House.

Four billion pounds is an imaginary fictitious figure invented by you.

Deputy Haughey will have his turn.

The figure to be borrowed when we came into office for 1982 was £3,260 million which in 1985 money terms would be £4,150 million. That is the basic fact. Fianna Fáil intended to borrow over £4 billion in present money terms.

That is fictitious and imaginary.

It is nonsense.

That was giving Fianna Fáil 3 per cent growth. I know Fianna Fáil do not like the facts. They like waffle. The Leader of the Opposition can waffle for an hour when I have finished but I am going to speak. What is this growth based on? We now have a growth rate not bettered in any country in Europe. There is no country in the EC whose growth rate last year was higher than our 4 per cent growth rate and I do not think any country matched it. The Danish growth rate was, I believe, fractionally lower. That has been our achievement despite the measures we have had to take. What is it based on? It is based on exports, above all, on exports of goods and services which last year rose by one-sixth, several times higher than the rest of Europe. Why have exports risen so fast? For several reasons. First, because we have restored confidence in the economy we have attracted new foreign investment in high technology industries. The IDA are reporting this year a significant increase in the volume of new industries deciding to set up here and the likely job content of them. We have restored confidence, attracted new foreign investment and reduced inflation to a fraction of the figure Fianna Fáil left it at.

Let us go back to the famous Dublin West by-election, the boobytrap that the Leader of the Opposition set himself and which snapped on him in such a particularly vicious way.

Was that the one where they got the loan of the trees?

A particular form of Fianna Fáil borrowing. Before that by election let us remember that the cost of living under Fianna Fáil had been rising at a rate of 21 per cent.

Was that the Deputy who said he would walk out before he would stand over a cut in food subsidies?

Housewives were desperate as they saw prices rocketing at a level that was unbearable. That rate of inflation has been reduced to one-quarter of that figure in a period of three years, to 5¼ per cent. Inflation has been reduced to a level which is one of the lowest in Europe and it is attracting money into the country as anybody reading papers in recent days will know. This is now one of the healthy economies in Europe in financial terms with a growth rate higher than anybody else and an inflation rate which I believe is the fourth lowest in Europe.

And nearly 300,000 people out of work. That is some record.

That is why we are achieving exports at double the rate of other countries and why our growth rate is higher than that of other countries. Moreover it was after five successive years in which, as a result of the policies pursued by Fianna Fáil and the damage they did to our economy, there was a continuous reduction in the purchasing power of the average industrial wage. The Deputy will be familiar with diagram 3 of the OECD Report which shows the result of his coming into office. In 1979, the year when he came in, after-tax income of average workers was down from then until 1984. We have turned that round painfully and with difficulty and this year the after tax income of workers will be up rather than down. Their purchasing power will rise for the first time in six years, six dreadful years imposed on the country by Fianna Fáil.

All the economic sources, the Central Bank, ESRI, OECD and the Department of Finance, are agreed that this year private consumption and living standards will rise for the first time in a number of years. That is the record that has been achieved and surely that is what any country should be seeking to achieve, rising rather than falling living standards combined with a low rate of inflation and a high rate of growth of exports and of the economy.

Employment is the most crucial and critical area not just for us but for the whole of Europe because every European country faces an abnormal level of unemployment today. Like the rest of Europe we have suffered from this fall in employment which began in 1979. I am not going to make any point about that being the year the Leader of the Opposition came into office, because rising unemployment was universal, but our inability to cope with it was affected by financial chaos created by Fianna Fáil. The increase in unemployment came about because of external causes and that drop in employment has continued until this year. The best departmental estimate is that this year employment will rise somewhere in the region of 3,000 to 6,000 for the first time in five years. That is based on certain assumptions about the social employment scheme which I judge to be somewhat pessimistic in terms of the numbers to be employed by December next. That is a matter of opinion but I must give the figures supplied by our official advisers even if I think they are on the low side. This makes it clear that for the first time, there has been a turn round in employment, and on the best advice we have been given, these numbers are starting to rise after the appalling decline which started in 1979 and which was aggravated by the fact that neither Fianna Fáil nor ourselves had the capacity to do anything to stem it. We would have had, if the financial resources had been available and if they had not been used up in that appalling financial splurge which achieved nothing but a drop in the growth from 8 per cent to 3 per cent in the five years Fianna Fáil were in Government.

Up 4,000 last month.

When Fianna Fáil left office in 1982 unemployment was rising at a rate of 39,000. With an increase in the labour force of about 15,000 that meant there must have been a drop of 24,000 in the numbers employed. That is something no Irish Government ever achieved. At last that has been turned round but it took time to bring that figure down where employment is starting to increase again.

At the same time investment is picking up. There was a major pick-up in investment in equipment and machinery in the second half of last year, so that for the year as a whole investment of this kind rose by 4 per cent. In the first five months of this year the imports of capital goods, the best indicator we have, are up by 20 per cent in volume terms which by any standard is an investment boom, one which has yet to communicate itself to the construction industry because the oversupply of industrial buildings is such that it will take some time before the recovery in industry will involve additional industrial building. The building industry have benefitted from the other measures we have taken and which have produced striking results.

In unemployment.

Would Deputies opposite like to hazard a guess as to how many people living in local authority houses have applied for the £5,000 grant for new private houses? The last figure I gave the House was 1,800 and now that has risen to over 3,000. There has been an additional 3,000 demand for private housing generated by that one imaginative measure. The effect of that on the construction industry in the year ahead will obviously be dramatic. It required on our part a readjustment of the financial provision to make available additional money for grants and to switch extra money into the Housing Finance Agency for extra loan capital, although the building societies are in a position to assist in that respect because they are well off in terms of resources.

That grant is available for secondhand houses. It is no addition to the construction industry.

Do not begrudge it.


These applications create a demand for new houses.

The grant is also available for secondhand houses.

The Coalition have destroyed the industry.

Order, please. The Taoiseach must not be interrupted.

The Deputy knows that under this Government the construction of houses by the public authorities has been fully maintained and completions have increased over the life of this Government. Yes, there was a decline in the private sector because of the impact of the disastrous policies followed by Fianna Fáil, but we are turning that round by creating a fresh demand for 3,000 houses from this one source alone. Politically, Deputy Molloy does not like that but in his heart, as a good Irishman, I am sure he is pleased this is happening.

Under the Government's programme there will be 1,000 fewer——

Order, please. Deputy Molloy must give the Taoiseach an opportunity to speak.

The Taoiseach is making false statements. There has been a drop of 1,000 in the number of houses——

I must have order so that everyone can get a hearing.

This is a subject I know something about.

This is the type of claptrap——

Order, please.


I know Fianna Fáil want to drown out any good news there may be. I know they do not want the Irish people to know that there are 3,000 people living in council dwellings who, due to the efforts of this Government, will be buying houses of their own. But they will not silence us, they will not shout us down, the few of them who bothered to be here today.

Tell us the good news.


The Minister for Communications should stop provoking interruptions.

There was a certain amount of provocation from the benches opposite, but we will forgive it. The road investment programme was so neglected under Fianna Fáil that it fell 10 per cent behind target, but it is now moving rapidly up to be 20 per cent ahead of the target set by that Government, and it is on course. Month by month expenditure under the various schemes has been on course up to June, when it was slightly ahead of the profile for the current year.

At the same time the huge boost in investment in third level education will be another factor working to the advantage of the country in the period immediately ahead. The effects of faster growth, the reversal of a fall in unemployment and living standards, the recovery in employment and the rise in investment, will take some time to be felt by the community as a whole. I have no illusions about that. It takes quite a while before the turn round in the economy is felt by the people and that is why in our planning we have sought to secure that turn round at the earliest possible moment so that there will be a period of two and a half to three years of continuous growth in the period before 1987. Turning a ship around takes time, but that task is well under way.

The same is true in the area of tax cuts which we started this year. This was the first budget to reduce tax rates for many years and it increased the numbers paying the lowest rate of tax, and there are two more budgets to come before the 1987 election. Having got so much done, we are not prepared to allow them to slip back into the popular soft option hands of the Opposition under their present leadership, a leadership which cannot bear to face the unpopularity of doing what needs to be done, a leadership which comes to the brink again and again and shies away from it each time.

I want to say one further thing about unemployment. As politicians we owe it to ourselves to convey better than we do our recognition of the misery felt by the unemployed. One recognises that there is a significant proportion of people on the live register who are actually at work and, far from being distressed are actually falsely supplementing their income from work by these means, but the bulk of the people on the live register are out of work, many of them for a long time with little hope of employment in the future. This misery and hopelessness is widespread through Europe. No politician can be happy with that situation to the extent that he has contributed to it by overheating the economy when there was already a boom, thus lessening the resources available to cope with unemployment or to the extent that any politician has encouraged excessive pay increases which made our workers less competitive and put them out of work. None of us politicians on either side of the House can feel any satisfaction with the situation in Europe as a whole where, in contrast with Japan and the United States, unemployment is such a scourge today. I have endeavoured, within the limits of what the leader of one small country can do in the European Community, to try to convince my colleagues there that there is need for concerted action in this regard.

It is no good fooling ourselves that this is a problem which we in this country can solve. Nor, indeed, can a country as large as France or Britain or Germany solve it on their own. The French tried when the new French Government came into office a few years ago and they failed. But Europe could, acting together — and I have tried to convey that message to my colleagues. Some accept it, but it is still not fully accepted by a number of leaders of the very countries which could do something about it — countries which have the spare capacity, where inflation rates are low, where the balance of payments are in order and where they could stimulate growth. They still have not accepted that message. It is up to all of us who have any influence of any kind to try to ensure that that message is got across.

You do not solve problems of this kind by gobbledygook. Some of the remarks that have been made in this regard by the Leader of the Opposition do not really get us very far. I have a quotation here somewhere which I would like to use.

Somebody should give him a hand.

I have always taken that line in Europe and the Taoiseach knows that. I always took exactly the same line in that matter as the Taoiseach.

I am not disagreeing. The Deputy has been entirely consistent in that. At least, this country under both Governments has consistently tried to convey that message. I give the Deputy opposite full credit for that. However, I am afraid that some of the things which he said at home on the subject are not quite as sensible, but that is another day's work.

I want to refer at this stage to one aspect of Fianna Fáil decision-making to which it is worth drawing the attention of the House. First, we recall when we came into Government in November 1982 we discovered that provisions had been made by Fianna Fáil for a rates support grant and a gap had been left of £58 million to be bridged by charges. Indeed, Fianna Fáil policy in The Way Forward specifically referred to legislation to empower local authorities to charge for services generally.

We never said that the gap was to be closed by charges.

The gap left between the amount provided as necessary for local authorities and the amount of money given for rates support grants was £58 million.

It was a preliminary November figure.

In fact, it subsequently turned out that the figure was wrong and it turned out to be very much higher. I am not imputing any particular blame or making any particular point about that. There was a proposal to fill that gap with these charges. There seems to be a somewhat different approach to this in Fianna Fáil today.

There was no such proposal.

Order, please.

Let the Taoiseach read it out again.

I shall read it out again.

The matter will be examined in the context of legislation to empower local authorities to charge for services generally.

That is The Way Forward.

Is that man still in the House?


I shall enlighten Deputy Molloy by telling him what Deputy Burke had to say on the subject. Let me quote from Deputy Burke on Today Tonight of 6 June 1985:

We never introduced the charges proposed in The Way Forward because we had not got the mandate.

Fianna Fáil were defeated in the election, of course.

However, we did put to the people in our manifesto, in our programme The Way Forward, which was aimed at national recovery, that one small portion of it was that we would consider contributions for water services or other services. This was rejected by the people and we have taken the advice of the people and the decision of the people and that is why we opposed this legislation in the Dáil and that is why we oppose it now.

That is how policy is formulated on the benches opposite. Is it any wonder you are in Opposition.

The histrionics are unworthy of the Taoiseach.

Is it any wonder that you stay in Opposition when you go on like that? Government requires that you make up your mind and go and do it. You do not keep changing your mind. You do not keep welching on your commitment. You do not keep forming U turns just because you are frightened of public opinion. You face up to unpopularity.

Is that why the Government withdrew the Radio Bill?

The first requirement of a democratic politician is to face unpopularity that follows from doing the things that are necessary and carrying them through. Let any politician who likes, including the Leader of the Opposition——


——shrink every time from unpopularity when an unpopular decision is to be taken and turn his back away from them and he becomes a mass of indecision and disqualifies himself from leadership. Unless you are prepared to accept unpopularity you should not be in politics. That is the first lesson. I came into politics on that basis and I am quite willing to take any unpopularity that follows from things that need to be done. I believe that the Irish people will see the merit of the course that we have pursued. I do not think that those who have for the moment withheld their support but not fastened to Fianna Fáil will make a further step towards Fianna Fáil, certainly not on the basis of anything that has happened so far. I do not exclude the possibility, because we are aware that miracles can happen. If Fianna Fáil will actually get together and produce some kind of consistent economic policy to see this country through the difficult years ahead, I suppose it is possible, but there is no sign of it yet. You are two and a half years in and you have not started yet.

You are in.

You are two and a half years in Opposition and you have not started yet. We can produce our record.


This is a confined debate. The Taoiseach and the Leader of the Opposition are each confined to one hour. There should not be any interruptions. There should not be any provocation and it might even be a help if the Taoiseach were to address the Chair.

I am sorry, a Cheann Comhairle, if I have failed to speak through the Chair. I shall endeavour to do so. I was not aware that I had not.

Let me now turn briefly to the question of Northern Ireland and say a very few words on that subject. The current talks between the Irish and British Governments relating to Northern Ireland are continuing. Obviously, while they are going on it would be inappropriate for me to give details. I want to emphasise to the House, however, that the basis for the discussions is the report of the New Ireland Forum and the need to which it pointed to accommodate the legitimate rights of both Unionists and Nationalists in new political structures acceptable to both, so as to end the conflict and instability that has so long plagued part of our island. That objective has been supported by the constitutional and nationalist parties in this island who agreed the Forum report. The outcome of the discussions, which are complex and difficult, cannot be predicted at this moment. Our position has been that the discussions should continue until they either succeed in securing agreement on a real change in the whole context of this problem, or until it is established beyond doubt that a satisfactory agreement cannot be reached. When I am in a position to report to this House on the talks, I shall do so without delay.

Before coming to my concluding remarks, I want to turn away from the polemics of politics — to which the party system, in a sense, condemns us and to which the striking contrast between the policies of this Government and of our predecessors also condemns us — for a few moments to look at some of the things that as a country we should be able to take pride in, free from party feelings or party rancour.

It is necessary at this time, when our country has been through such an appallingly difficult period with this continuous fall in living standards for a number of years including the rise in unemployment and so much that is depressing, that we should look at some of the things that we have achieved as a people and for which no one party can claim credit. I shall refer to some of these. With regard to education, we have never given ourselves the credit which is due to us in this regard. I have said before but I want to emphasise again, because in politics saying a thing once does not always get the message through, the fact is that by the standards of comfort that we live in, where we are one of the least well off countries with output per head 42 per cent lower than the rest of the European Community, we have succeeded in the educational sphere in a manner which is outstanding. The proportion of people aged five to 24 who are being educated is higher in Ireland than in the rest of the Community, although the numbers in that age group are much higher here than elsewhere. We are, in fact, educating to a higher level twice as many people per £ billion that we spend than the rest of the Community. That is an achievement we have never identified——

It is a Fianna Fáil achievement.

I do not think that adds anything to the debate at this point. I am not claiming any particular credit for this Government in that regard. It is the result of the work of successive Governments and, above all, it is to the credit of the Irish people whose commitment to the education of their children has been the inspiration of every Government to devote resources to this end. The reason Governments have increased educational spending to a level that is almost half as high again as the share of national output as it is in France or Germany is because of that commitment of our people which has sustained us. No Government here would survive if they did not adapt themselves to and respond to that instinct.

Secondly, an area of achievement in recent years to which we should direct attention is the extent to which we have devoted resources to the problems of youth unemployment, youth retraining and youth work experience. There is no country in the Community that is as near to being able to adopt the full social guarantee as this country. No other country is devoting such a high proportion of resources for this purpose despite the fact that the number of people to be catered for is higher here than in neighbouring countries.

Thirdly, we should take pride in the commitment of more generous social concern. One of the most striking tables in the OECD report — I should like to use it now in a non-polemical way — is the one that shows the increase in retirement pensions and the purchasing power of such pensions. In the period since 1979 we have undergone the most intense economic difficulties. At a time when other countries such as Denmark, Germany and the Netherlands have had to cut back on social spending and when the living standards of people at work in this country have fallen, we have increased the purchasing power of retirement pensions by 25 per cent. That is an index of our social concern. That is not done just because any Government expect to get votes in that sector. It is well known that people at retirement age have generally made up their minds from the political point of view and they rarely change them. No one expects to get votes by increasing old age pensions and nobody gets votes from doing that. Again, it is a reflection of the social concern of our people, reflected through the political system. The political system works in that respect despite its many critics who, in some respects, are dangerous so far as the democratic system is concerned.

We must also look at our record of social concern abroad. Very few countries today are increasing their share of GNP which is devoted to official development assistance. There are none whose response to tragic crises such as the famine in Africa corresponds in any degree to the response of our people through their private donations. These are all matters in which we can take legitimate pride.

But there are also other areas of which we can be proud. Let us take the case of our breakthrough in high technology. No one could have foreseen 15 years ago that our computer industry would now be on a scale seven times larger in relation to our population than the rest of Europe. This is an achievement all of us should be aware of and of which we should be proud. It has contributed to the way in which we have diversified our trade, the way in which we have taken advantage of the opportunities of membership of the European Community to end that economic dependence on one neighbouring country. This was most debilitating to us and it was constraining on us for decades after we secured political independence. Some 20 to 30 years ago the share of our exports to the UK was of the order of 80 per cent. This has now fallen from 56 per cent in 1974 to 34 per cent today. Some two-thirds of our exports are going elsewhere. For a country that was almost totally dependent on one market, when the Leader of the Opposition entered politics and before I ever contemplated doing so, to have turned that around to a point where two-thirds of our exports sales are to other countries is a remarkable achievement and one that is of enormous importance to us.

Our success in the EC should not be undervalued. In that Community we have secured benefits beyond anything anyone foresaw when we entered it. When we became a member of the ECI do not think anyone believed it would be possible for us, where constraints had to be imposed on fish catches throughout the Community, to secure agreement and to treble our catches over a period of years when everyone else had to cut back. Neither was it predictable that we would secure the right to increase our milk production when others had to cut back. It was not predictable that our repute in the Community would lead us to a position where, when we faced recent developments in regard to European Union, there would be such ready and willing consideration given to our position with regard to neutrality and where people were willing to go to such trouble to accommodate us in that respect. These are achievements of Irish diplomacy in which we should take pride.

Above all, we should take pride in the fact that we have begun to transcend a part of our history that has been dangerously limiting and even positively dangerous to the stability of this island. Together we have re-examined and rethought the problem of Northern Ireland. We may not have reached identical conclusions in all respects — there are differences between the parties still — but in the Forum report we re-examined the nature of the problem in Northern Ireland. We agreed that the two traditions there both held their validity. We agreed that the Protestant tradition, the sense of Britishness of the Unionists, was something that had to be given consideration on a par with the Irishness of people with Gaelic roots in this island.

Not many countries can transcend their history in that way. Not many countries can sit down and look at it afresh and can try to open up the possibility of solving a problem as age old as that and of moving towards peace and stability by a rethink of deeply-embedded, entrenched atavistic attitudes. It has been done elsewhere. France and Germany now have a relationship that no one could have foreseen 40 years ago. We have begun to do that also and we have not given ourselves credit for that. That should be said in this House, irrespective of whatever differences there may be with regard to particular aspects of Northern Ireland policy.

This is primarily a political debate and I shall end it on a political note. However, let us at least take credit for what we as people have achieved. Unless we can take pride in our achievements, there is a great danger we will become so embedded in our miseries of recent years that we will fail to have the spirit to come out of them. If we look at the achievements, at the seven points I have mentioned, they would give any people anywhere reason to be proud and to be confident of their ability to transcend the difficulties that face us. These difficulties are immense but they can be tackled and overcome and, as a Government, we are determined to overcome them. I have confidence in the ability of our people to overcome these difficulties.

The danger we face comes not from outside but comes from any failure on our part to face up to realities and to take decisions that are necessary to guarantee and secure the future. If I may return to a more political note, looking across the House brings this danger very much to life for me. I can only conclude — this is an observation that is not totally party political; if I were outside politics I think that objectively I would reach the same conclusion — that the party opposite are not, as of now, appropriate material to form a Government or for the foreseeable future. That they have been so in the past I have no doubt, and I have said so frequently. I have never been afraid to state my admiration of various Fianna Fáil Governments in the past who have made major contributions to the country at different stages. However, I cannot say I have confidence in the present Opposition party that they have the capacity to take over the reins of Government in a couple of years time in a way that would augur well for the future of the country.

What we are fighting for now is nothing less than our national economic independence. We have secured that in terms of diversification of trade but not in terms of the manner in which we manage our finances. Our forebears struggled through centuries for our political independence and ultimately, after indomitable courage maintained for years, achieved success. Are we now through foolishness, through failure to face up to reality, to surrender what was achieved by them? Are we, at the behest of populism or irresponsibility of a political kind to hand over independence to the gnomes of Zurich or to the officials of the IMF who were so close to our doors in June 1981? I am not prepared to do so and whatever the cost, I will continue on the course we are pursuing to save us from that fate.

Our independence must mean more to us than that. Surely the legacy of our history and tradition demands that we control our own affairs and that we maintain our economic independence. If we wish to put more money into education or into any other area or if we wish old age pensioners to be 25 per cent better off or worse off than people who are at work, we should have the power to do so ourselves instead of being told by the IMF what we might do. That is what has been at issue during the past four years. That is what remains at issue and what may be at issue in 1987.

I will fight to the end to secure that economic independence. We survived in 1981 and we have maintained our economic independence since, though with difficulty. At times we have been closer to the brink than anyone may have realised but for the sake of our people and for the sake of pride in ourselves we must maintain that independence.

Throughout my political life I have maintained that a good Opposition are essential to democracy. While in opposition I tried to contribute in that respect. I recognise that we did not always succeed and there are some aspects of our opposition that I do not look back on with pride but on the whole our record in opposition was good. For every Government there ought to be an alternative but in this instance the possible alternative, having regard to the record and the policies of the people opposite, is one that I cannot contemplate with equanimity. There are many people who, when the time comes to make that decision, will not contemplate the present Opposition as an alternative Government. If I were to hear from the Opposition a single proposal that would be likely to cut taxation instead of increasing it I might have some faith in their future but everything they have said to date would involve increasing taxation and expenditure. Surely that is a prospect that cannot be sustained.

The Government must face an Opposition who have not faced their responsibilities and there are responsibilities on the part of the Opposition as there are responsibilities on the part of people in Government. We must be courageous, indomitable and determined this year, next year and in 1987. We must face the coming years with courage and confidence, confident that our policies are the correct ones. The only option available to the people would be foolishness that would lead to the disaster and misery that began in 1977 and which has cursed us since. On that basis there can be only one result in 1987. This Government will succeed and the future of the Irish people will remain in safe hands until such time as there is a change of heart on the benches opposite, until such time as the Opposition have become an alternative Government which any opposition ought to try to become. In that respect this Opposition have failed regrettably in the past two and a half years.

There could be no more elegant comment on the performance of this Government than the fact that the head of the Government in what should have been a serious, responsible and accurate account of the state of the nation, devoted by far the greater part of his speech to vulgar and sometimes personal abuse of the Opposition.

The old legal story of the senior counsel who having looked at a brief wrote cryptically at the bottom of the page, "no case, attack opponent", is very appropriate in this instance.

In the recent local elections the people pronounced their verdict on this Coalition Government. If the Government wish to appeal that verdict I invite them to go before the people in a general election. The people have made up their minds that the Government should go and it is totally undemocratic for a Government, who clearly have no longer any semblance of a mandate, to hang on to office, powerless and discredited. This Coalition can no longer provide effective Government. They cannot put through the Dáil important legislation to which they are committed publicly. The Tánaiste and his colleague, the Minister for Health and Social Welfare, can no longer speak in Cabinet on behalf of the Parliamentary Labour Party nor can they commit their party to any particular aspect of policy.

On a point of order, is the Leader of the Opposition reading from the notes of which copies have been passed to the Press Gallery?

The Minister may have a copy of my speech. These little mean ways of his are typical of his general performance. I might point out to this relatively new Member of the House that the tradition of handing out scripts applies, to the best of my recollection, only to Ministers.

The Deputy should read Standing Orders.

This Coalition no longer carry the effective support of a majority in the Dáil. A Government who have no support among the general public and who have in effect lost their majority in the Dáil and cannot put their legislation through, should resign if they have any respect left for parliamentary democracy.

The people see this Government as a failure. The country is in the worst condition in which it has been for 30 years. The Government have failed to come to grips with any of the major problems of mass unemployment, high emigration, an intolerable level of taxation and serious imbalances in the public finances. The people are despondent and dispirited. Silly statements, by the Taoiseach in particular, about recovery or about being able to see light at the end of the tunnel have no basis in fact and serve only to make him increasingly a figure of fun, someone not to be taken seriously.

Ministers, national handlers and compliant leader writers have tried equally unconvincingly to create the illusion of an upturn in the economy. But last Friday we had the highest increase in unemployment in any June since records began. And this is on top of an already unacceptably high figure. There is no evidence that the rise in unemployment is tapering off. The truth is that the real rise in unemployment is being masked by an alarming increase in emigration and by training schemes of one kind or another.

Unemployment has risen twice as fast in Ireland as the average in the EC in the past two and a half years, and faster than in any other EC country. We are faring far worse than other countries. That is the real failure of this Government. All EC countries have been operating in roughly the same national economic environment but Ireland has fared worst of all. By contrast between 1979 and 1982, when Fianna Fáil were in office for most of the time, the rise in unemployment in Ireland was less than the EC average.

When the Joint Programme for Government was published by Fine Gael and Labour, unemployment was 170,000.

They said it would be halted and reversed. It has not been halted, never mind reversed two and a half years later. It has officially increased by 58,000 since this Coalition took office. Everyone knows that we are likely to have to brace ourselves for another sharp rise towards the end of the year, if not before then. Every unemployment target the Government have set has been abandoned. How can the Taoiseach and other Ministers dare talk about their economic performance when it has brought this catastrophic level of unemployment?

A new factor has entered into the employment situation which is having a major impact on the published figures. This Coalition Government have brought back the humiliation of emigration to Irish life. The Taoiseach will be remembered as the man who condemned young Irish people to that bitter road again. During the better years of the 1970s there was net migration of some 80,000 into this country. During the local election campaign we all came up against the reality of emigration in home after home. It was for me a humbling and saddening experience to hear intelligent young people say that they saw no future for them at home in their own country and that they were going away to seek the employment denied them at home. That is what the Taoiseach's policies have brought us to. He has resurrected that shameful spectre of former years that most of us genuinely thought had been banished for all time until he came along.

The Irish Statistical Bulletin shows that from the beginning of December 1983 to November 1984 31,000 more people left this country by sea than arrived in it. The great majority of young emigrants going to Britain go by sea. Most of us knew from our personal experience that something of this order was happening. I gave a figure of 30,000 as an estimate on another occasion. Now that is statistically confirmed. An article in The Sunday Press last Sunday estimated that 25,000 people emigrated to America over the past two years. I challenge the Government to deny if they can that something in the region of 50,000 young Irish people at least emigrated in 1984. The official unemployment figure stands today at 228,000, but the basic underlying reality is that probably nearly 300,000 people have failed to find permanent work in Ireland.

If you take the emigration and the unemployment figures together, our situation represents a damning indictment of this Government. Still this Taoiseach has the impudence, the audacity to talk about young people and their problems. He has nothing to offer them, no hope, no prospects.

I note that the Youth Employment Agency has sought to disguise this reality. They need only examine the figures to see that there is no comparison between what has been happening in 1984, and any previous year, particularly in regard to the numbers emigrating by sea. That agency should stop posturing and get on with the task it was established and funded to undertake, namely, the creation of employment for our young people, something that it has so far singularly failed to do.

Let me turn now to what the Government are actually doing in the different sectors of the economy.

The public service recruitment embargo is by now causing serious disruption as well of course as contributing to youth unemployment. It is time to consider allowing recruitment where there would be tangible public benefits such as in the Revenue Commissioners. The ESRI study on "Employment and Unemployment policy for Ireland" concludes that

growth in public sector employment would need to resume in Ireland once we are out of the present financial difficulties — if unemployment is to be contained

and that there is no other credible model. There can be no question of deliberately seeking to create thousands of new jobs in the non-commercial public sector. But we cannot simply block off what is one of the main sources of employment in any country and expect to solve the unemployment problem.

Excessive hopes are pinned in Building on Reality 1985-1987, on the private services sector. But the private services sector too has been depressed by Government policies and actions. Building on Reality relied on this sector to achieve its targets. Yet many services are sharply affected by the downturn in demand caused by the present deflationary policies. With the possible exception of tourism it is unrealistic to expect private services to fill the gap left by all the other sectors.

The key to jobs is investment. During 1983 and 1984 there has been a massive slump in industrial investment in manufacturing industry. Last year, the total volume of industrial investment in manufacturing industry slumped by a colossal 39 per cent. We know that in 1983 IDA job approvals slumped from around 30,000 in the early 1980s to less than 14,000. The current OECD report states that private direct investment in Ireland has been falling steadily in recent years, and that it now amounts to less than 1 per cent of GNP. In other words foreign direct investment in 1984, excluding reinvestment of profits generated here, was less than £140 million.

The situation that these figures depict is little short of catastrophic. A sharp falloff of industrial investment is bound in time to mean a falling off in export growth and in employment. A number of headline announcements in recent times, such as the plant in Greystones for instance are very suspect and it is difficult to have any faith in an industrial policy which loses a project like the Hyster plant for Limerick.

One of the basic assumptions of this Government's industrial policy is the emphasis on wealth creation rather than on job creation. I do not think this was a matter of deliberate choice. When it became obvious that jobs were slowing down sharply, it was apparently decided to switch to wealth creation as the criterion of success——

That is not so.

——because in that way performance would still look relatively good. The doctrine promoted was that wealth created in manufacturing industry would translate not so much into industrial jobs as into spin-off service jobs. But it is now well established that some of the wealth created is very notional and derives from transfer pricing. Another portion of wealth created amounting to several hundred million pounds is being repatriated. To a considerable extent, therefore, the theory of spin-off jobs arising from wealth creation is not working out in practice. Indigeous industry, which has been shedding jobs, on the other hand, since 1975 has failed to increase its share of export markets. Redundancies in 1984 were at a record 31,000 compared with 26,000 in 1982.

I am really astonished that the Taoiseach had the audacity to mention the construction industry because the construction industry is a major sector of our economy that has been devasted by this Coalition and their policies. Employment in the construction industry continues to fall, with an estimated 45,000 skilled construction workers currently unemployed. The public capital programme both in money terms and even more in real terms is far below the levels of 1981-82. Private sector construction, with the phasing out of special incentive schemes, has suffered an even more severe recession. While the Joint Programme for Government spoke of raising housing output to 30,000 a year, last year housing output fell below 25,000 for the first time, compared with almost 29,000 in 1981. It is quite likely that output will fall further this year, with local authority completions — as Deputy Molloy pointed out — down 1,000, and with the effect of the disastrous 5 per cent increase in VAT in this year's budget.

The CIF survey for the first quarter of 1985 shows that construction starts are dramatically down during the first quarter of 1985. In the light of the Taoiseach's piece of frivolous nonsense last autumn about getting the JCBs moving again, it is worth noting that the CIF report states that the decline is particularly evident in the civil engineering sector with 77 per cent of consulting engineering practices reporting a decline in starts and only 4 per cent an improvement.

The Government, as the CIF have noted, have been totally negative towards the construction industry. The CIF latest annual report states:

Construction activity by the end of 1985 will be even 30 per cent lower than it was in 1981 and much of the decline is a direct result of negative measures——

That is not so.

——introduced over the last three budgets and the Government's unwillingness to cut the black economy.

That is the reality and it cannot be disguised by using some very selective statistics in this debate. This Fine Gael dominated and Labour-participating Government are anti-building and construction. It is as simple as that and there should not be any attempt to suggest otherwise. Why that should be I cannot understand. There is no quicker, better or socially desirable way of recommencing employment than regenerating the building and construction industry.

The climate for enterprise has deteriorated sharply over the last couple of years. Ireland has become a high cost country with excessive charges for electricity and telephones for example, and very high rates of personal and indirect taxation. This Government deliberately and as a matter of policy embarked on a programme of massive deflation, consisting principally of heavy increases in taxation and major cuts in capital spending.

The Coalition boast of having simplified the tax system this year is a fraud because we know that it was they who complicated it in the first place. The 65 per cent rate was introduced by the Coalition, then abolished. The same is true for the multiplicity of VAT rates. With regard to income tax there are still not only the three official tax bands, but also the 1 per cent youth employment levy and the 1 per cent income levy.

Notwithstanding the public relations exercise surrounding the budget earlier this year the vast majority of taxpayers know their tax burden is essentially the same as it was. There were in fact no worth-while reductions or relief except for top income earners.

Under this administration, since 1982 the level of taxation has increased by 41 per cent in money terms and 15 per cent in real terms. In real terms the taxpayers are paying £600 million more in taxes than they did in 1982. Even more startling is the fact that income tax, including levies plus social insurance contributions, are estimated to come to £3.192 billion in 1985 compared with £2.162 billion in 1982, a staggering increase of £1 billion. This has all been imposed on a falling number of people in employment.

Can there be any wonder that there is now total resistance to any new taxes? The Government have found to their cost that water charges are not acceptable to households already overburdened by tax. Like so many other Coalition policies, such as the National Development Corporation or the family income supplement, the longer a policy is in gestation the more useful it is politically. A typical example of this is the Minister for Health's listing of the National Development Corporation Bill as a major Labour achievement, when after two and a half years it has yet to see the light of day.

This Fine Gael and Labour Government have bookkeeping mentality. They are the parties whose policy has been to increase taxes. They keep on floating ideas for ingenious or not so ingenious new forms of taxation while Building on Reality promises there will be no easing up in the level of taxation between now and 1987.

Coalition policies are not solving Ireland's economic difficulties. They are increasing them. As long as they are persisted in, there is no hope of any significant relief in taxation. On the contrary the danger is that there will be still further increases.

The financial position of the State has deteriorated considerably since 1982. The Government promised originally to phase out the current deficit by 1987. They are still officially committed to reducing it to 5 per cent of GNP by 1987. At budget time this year the current deficit was projected to be £1,234 million which the Central Bank estimates amounts to a record 8 per cent of GNP. It is now more likely to finish up at 8.5 per cent of GNP.

It is significant that the Taoiseach said nothing about this situation in his hour long address. That outturn of 8.5 per cent of GNP, following the Taoiseach's hysterical statements about the public finances three years ago, should warrant his resignation or at the very least a public recantation. Here are a selection of some of his statements on the current budget deficit.

The Taoiseach in his speech in the Dail on 23 July 1981 said:

The current deficit in the public finances must go in a planned way over a four year period... Without decisive action the show will not remain on the road much longer.

In his speech to the Leinster Society of Chartered Accountants on 4 February 1982, the Taoiseach said:

This obstacle to economic progress has simply got to be cleared out of the way. The gap between the Government's day to day expenditure must be firmly closed over three years.

In his Ard Fheis speech on 16 October 1982, the Taoiseach said:

Only the fixing of and firm adherence to such a target will maintain our credibility in the eyes of those from whom we have borrowed so many billions.

In the Adjournment debate of 7 July 1983, at column 2006, Volume 344, of the Official Report, the Taoiseach said

There now exists a Government who have the determination also to eliminate over a planned period, the need for external borrowing, by bringing current revenue and current expenditure into line with each other.

Fianna Fail had nothing to do with this. These are statements by the Taoiseach and the Taoiseach has been in office since he made them. In the light of these statements the Taoiseach cuts a pretty absurd figure here today, as he faces into a current budget deficit that will be the largest ever both in money terms and as a percentage of GNP.

This is not merely my opinion. It is the opinion of most respected economic analysts. Paul Tansey writing in The Sunday Tribune on 30 June states the following

Fresh from its defeat in the local elections, the Government must now face up to the fact that it is heading towards recording the biggest budget deficit in the history of the State. On present trends, the current budget deficit for 1985 will be in the region of £1,300 million or some 8.4% of Gross National Product. Not only would this be the biggest ever deficit recorded in absolute terms, it would also be the largest ever deficit recorded as a proportion of national income.


I will continue with what Paul Tansey said in that article.

This year, the Government, through its relatively neutral budget, targeted a deficit equivalent to 8% of national income. The slippage that has occurred since indicates that the deficit will turn out at some 8.4% of national income. This would represent the highest ever deficit as a proportion of national income ever recorded in this country.

This is a fact.


Put it into The Guinness Book of Records.

It is all very well in theory, but will what the Taoiseach is writing out there work in practice?

Since the Coalition took office the national debt has increased by more than 50 per cent, from £12.8 billion to £19.7 billion. Fianna Fail were not in office when that happened. This is when the Taoiseach was in office. This is the highest increase ever recorded in the history of the State.

Foreign borrowing is on the increase again this year. Six hundred and forty nine million pounds was borrowed abroad last year, £938 million was borrowed abroad in the first half of this year. The foreign debt has increased by two-thirds under the stewardship of Deputy Alan Dukes. He has cost our country hundreds of millions through exchange losses because of his very costly decision to borrow in dollars at precisely the wrong time.

I note that on Monday of this week the Minister for Health and Social Welfare listed among the Labour Party's achievements the retention of the current budget deficit at a high level. He is not even bothering to pay lip service to what is supposed to be a major stated objective of Government policy. He does not recognise the extent to which the high deficit is an indicator of the failure of the fiscal policy of the Government of which he is a member.

The total Exchequer borrowing requirement this year is £2,019 million. Central Fund services amount to £2,250 million. This Government are now borrowing to pay their way and not to give any investment stimulus of any kind to the economy.

I wish to direct the attention of the House to a piece of gross misrepresentation by the Taoiseach at the Fine Gael Ard Fheis on Saturday, 18 May 1985. The Taoiseach repeated the same sort of gibberish here today. I draw attention to this because it is typical of the sort of doubtful claims and false statements made by this Taoiseach and this Government about the public finances. He stated "The current Budget Deficit that we were faced with in 1982 when we took Office was calculated in today's money at a level of two billion".

This morning that went up to £4 billion. The Taoiseach said that we have since halved that to £1 billion last year and that we are thus halfway to the objective after three short years. That is a blatant untruth. There never was a budget deficit of £2 billion or £4 billion, so how it got from £2 billion, even in the Taoiseach's imaginary fictitious calculations in May, to £4 billion here this morning is beyond me.

The calculator miscalculated.

We never had anything like that as a current budget deficit. When the Taoiseach came into office in July 1981 there was no way in which he could know what the budget deficit for 1982 was going to be. The outturn for 1981 was in fact £802 million, which bears no relation to £2 billion. It is completely misleading and deceitful to attempt to say with certainty, as the Taoiseach did, that he knew in July that the budget deficit for 1982 would be any particular figure, £2 billion or £4 billion. Did the Taoiseach not say £2 billion in May 1985 and £4 billion here this morning?

They are Department of Finance figures.


Deliberate misrepresentations, the Taoiseach is at all the time.


It is in 1985 money terms.

The Taoiseach has introduced a new factor: he calculates the budget for two, three, four or five years ago in today's money.

The Deputy does not seem to understand the way these things are done.


The Taoiseach knows that this is meaningless.

It would be meaningless if I did not.

The current budget deficit of any year is related to that year. One might as well go back through the history of the State and say——


What the Taoiseach did in May 1985 and what he is trying to do here today is to invent a fictitious figure so that he can claim to halve it. When the Taoiseach stated that this Government was half way to the objective he knew that the deficit for this year was going to be about £1,234 million, which, instead of being half of anything, is the largest ever projected in this country, and even now it will be exceeded.

The Central Bank is still concerned about the balance of payments, despite some improvements, because of heavy debt repayments and profit repatriation. While the reduction in the rate of inflation to less than the EC average is a positive feature, I must point out that, despite the Taoiseach's deliberate misrepresentations of the situation, the major reduction was from the 23.3 per cent it had reached under the previous Coalition in November 1981 to 12.3 per cent under Fianna Fáil in November 1982. If it had not been for the Coalition's July 1981 budget which is now generally accepted to have been a ghastly mistake and which helped to raise the rate of inflation by six points, we might have reached this low rate of inflation long before now.

Interest rates remain at a penal level and have not been falling in line with inflation. The Taoiseach might have commented on that this morning. Why are our interest rates, which are a serious, inhibiting factor on economic development, not going down in line with the fall in inflation?

Other indicators are not encouraging. Retail sales are 12 per cent below their level in 1980 and have dropped over 5 per cent since the end of 1982. Industrial production in manufacturing industry dropped by 1.3 per cent in the first three months of this year.

The economic situation, as I have described it, is bleak. The House should not give itself the false comfort of thinking that I am exaggerating the problems. Anyone who reads the OECD 1985 economic survey on Ireland will find it very depressing indeed. Again the Taoiseach is cheating and misrepresenting the situation when he dives into it and picks out some very misleading, deceptive, selective figures. Mass unemployment coupled with heavy taxation and persistent financial difficulties present the potential for a continuing downward spiral such as we have seen since early in 1983 with cumulative deflation. Such a course, if continued much longer, will create unbearable strains on the economy, on the public finances, and on the very fabric of our society.

The Coalition, it would now seem, have missed the oil exploration boat as well as so many others. The international price of oil is moving down, exploration programmes are being curtailed, and Ireland will in all probability be relegated to the reserve league. The revisions this year to the licensing terms have not produced any results.

Our first priority must be to put people back to work. Apart altogether from human and social considerations, each person back at work would on average improve the financial position of the State by between £5,000 and £6,000 per annum, both in terms of tax revenue and savings in social welfare. Every 200 extra people at work in the private or commercial State sector means an additional million pounds to the Exchequer. There should be no conflict at this stage between the need to generate employment and the need to put the public finances right. If we do not get employment, we will never put the public finances right. We have no North Sea oil with which to fund mass unemployment indefinitely.

Immediate priority must be given to revival of the construction industry. The extra 5 per cent in VAT on building should be removed immediately. Imaginative schemes, such as section 23 of the 1981 Finance Act and the joint venture and co-ownership housing schemes outlined in our local election manifesto Power Back to the People could help to boost housing output towards the target of 30,000 new houses a year. Policies designed to encourage urban renewal and better maintenance of the existing housing stock will also help to create employment. It is very depressing for this side of the House to hear the Taoiseach in this debate this morning even talking about private housing when he knows, and I am sure admits, that, as Deputy Molloy pointed out, private house building has nosedived and there is no prospect of it recovering until some positive action is taken by a Fianna Fáil Government or perhaps through the new local authorities on which we are now so strongly represented.

Our road network is still a seriously deficient part of our infrastructure. With major investment programmes in the ESB and telecommunications having passed their peak, there is a strong case for channelling increased resources into road maintenance and improvement. The sooner we provide a motorway ring road round Dublin, and on the most congested parts of the main provincial roads the better.

The time has come to rethink our national energy policy. Even discounting those miraculous oil and gas finds down in Middle Abbey Street there is clear evidence that there is an adequate supply of natural gas off our coasts. The case for proceeding immediately with the construction of a national gas grid is unanswerable. This is a clear case of a revenue-earning investment. Such a project would take a number of years to complete and in the meantime would provide major employment in the construction industry.

A third area that should be evaluated is the provision over a period of a proper public transport system for the Dublin metropolitan area. Deputy Tomás Mac Giolla will be glad when I quote a Moscow transport planner who earlier this year said: "All the evidence shows that the cities of about a million people or more, metros are by far the best transportation system, particularly as rising car ownership causes strict congestion and slows bus times". That is from The Guardian of 24 May 1983. Any extension of the DART would have to be carefully planned, but it could provide a major construction project over the next ten years.

The development of our natural resources under this Government has virtually ceased. An extension of the natural gas grid especially to the glasshouse industry would help to make our horticulture more competitive. We are failing to develop our marine resources. Fianna Fáil intend to entrust this national objective to the new Department of the Marine and to have our forestry managed by a commercial State organisation, perhaps Bord na Móna.

In connection with developing our marine resources, I am very disappointed to read from the New Scientist of 27 June 1985 that:

Denmark has got in a bid for a European Centre for Marine Science and Technology, beating the Irish to the starting post. The EEC's Research Commissioner now has Denmark's plans on his desk in Brussels and the European Commission has agreed to study them.

This is just another example of a badly missed opportunity. Ireland is the natural home in Europe for any marine science or research institution. What are the Government now intending to do to ensure that the Irish proposal, if there is one, gets a priority hearing?

Our industrial competitiveness has been seriously impaired by high service costs. We must seriously consider whether our natural gas reserves give us the possibility of conducting a cheap energy policy, the objective of which would be to maximise economic growth rather than revenue to the Exchequer. Many countries, such as the United States and Canada, and the Netherlands have operated a cheap energy policy. Inevitably a cheap energy policy will have implications for the ESB. We must seek one or more heavy industries for Ireland that will soak up excess generating capacity.

We should take a calculated decision about our natural gas reserves. We can be reasonably certain that they are fairly adequate for a long time to come, and because of the appallingly depressed state of our economy today, it would be justifiable to be profligate in the use of that natural resource. It may well be that we have more of it than we will ever be able to use in the foreseeable future and in that situation there is a great deal to be said for using it to generate economic activity in key selected areas.

Our tourist industry, which has been having a lean time in recent years, must be helped to realise its full potential, especially as it is very employment-intensive. We must increase the range of facilities, both in terms of accommodation and leisure activities. Restoration projects carried out by the Office of Public Works represent to a considerable extent investment in tourism, which generates revenue. The ferry link between Cork and Swansea should be restored. More generally we should look closely at the question of access transport, which is a key factor in the volume of tourism.

We should also examine whether there is scope for expanding the training we undertake of overseas students on a fully commercial basis. There should be a feasibility study of the development of a major international conference centre close to Shannon Airport.

Connected with tourism is the need to take steps to improve our environment. A major effort should be made now to clean up the beaches and strands of Dublin, for instance, and hand them back to the people of Dublin for recreation. At a time of high unemployment the need for leisure and sporting centres is particuarly strong. Developing our sporting activities can itself generate economic activity and tourism. I want Deputy Bertie Ahern, leader of our group in Dublin Corporation, to take immediate action in a number of these areas in our capital city. I would be very grateful to him.

I will be delighted.

Every Deputy in this House could put forward a list of projects but that is not enough. We must again become development minded and adopt a bolder and more aggressive outlook that is actively looking for development opportunities. I am not suggesting everything should be carried out by the State, but the State should actively encourage enterprise and initiative. We must become opportunity oriented.

A bolder approach to the economy is required in which selective cuts in taxation will generate increased activity to make up lost revenue. The Taoiseach was waxing very eloquent that we had not put forward any ideas. One of the ideas we put forward was adopted in regard to selective cuts in taxation in the alcohol area and I am sure it has proved to be quite successful. We must create an economy of opportunity which encourages entrepreneurial ability in both the public and the private sectors. A good Government will seek to encourage a spirit of improvement and development instead of the close down, liquidate mentality that we have in this Government. The next Fianna Fail Government will attempt to harness the enthusiasm that we experienced for much of the sixties and seventies and which is still there, if only the Government knew how to activate it.

Pending our return to Government, however, Fianna Fail intend to use every available means arising from their enhanced strength on the local authorities to create employment and to develop the different areas of the country. Each local authority is a potential development corporation in its own area and we intend to use them all as such. I was very interested to hear the Taoiseach using statistics this morning to prove that all those people that we think are in the majority representing Fianna Fail on the local authorities are not there at all. We are only deluding ourselves.

A policy of decentralisation is more pressing than ever, so that local initiative is given its head instead of being frustrated by the dead hand of a distant and apathetic bureaucracy. By and large local representatives know what is needed in their own areas, and while co-ordination is essential, we must have spontaneous local development and enterprise.

The present Minister for Justice is much better at presentation and public relations than dealing with the deteriorating law and order situation. The murder of gardaí, continuing crimes of violence, attacks on old people, a drugs epidemic, car stealing, housebreaking all add up to a lack of basic security for the citizen. Many people now feel that they have to undertake extraordinary precautions to protect themselves and their homes, which inhibit social contact and community life.

We must re-establish a society where the prospective criminal fears that he will be caught, and that when caught he will receive an adequate sentence. The Government should bring up the complement of the Garda Síochana to the 12,000 planned when we were in office, provide them with the necessary communications and transport equipment, update their training, introduce management techniques and efficient deployment procedures. The Garda, the courts and the prisons must be co-ordinated in the discharge of their respective functions.

Last week we debated in this House the results of the Milan European Council. I said in that debate that the Taoiseach was not a very reliable rapporteur. I was not of course aware at that time that he had just seriously misled the House on the subject of Irish neutrality in the context of European Union. I think it is a very serious matter when the head of the Irish Government engages in what amounts to deception on Members of this House and of the public at large, in the hope that they would never become aware of certain semi-confidential documents.

I want to remind the House first of all of what the Taoiseach said:

I should like to express my appreciation of the manner in which the French and German Governments, conscious of our special position of neutrality, worded Articles 8.1 and 8.2 of their draft treaty so as to place security matters other than political and economic aspects — viz. matters with possible defence implications — firmly outside the framework of the proposed political co-operation arrangements, as they are at present, and within the Western European framework.

In his conclusion he claimed:

Our concerns on neutrality were met.

In a radio interview on 30 June the Taoiseach stated:

I'm very grateful to the French and German Governments for having formulated their draft treaty round the central principle that political co-operation will relate to the economic and political aspects of security, and that if member states want to go further they will go further in the WEU framework.

I have now obtained a copy of the draft Franco-German Treaty, and I have to say that the Taoiseach has substantially misrepresented its contents. Let me read Article 8. Paragraph 1 states:

The signatory States are agreed that closer co-operation on European security matters constitutes an essential contribution to the development of a European identity in relation to foreign policy. They reaffirm that they are prepared to increase co-ordination of their position on political and economic aspects of security.

The first sentence of that paragraph was left out of the Taoiseach's report to the Dail because it would have refuted his claim that the draft treaty revolves around the principle that political co-operation will only relate to economic and political aspects of security. It states on the contrary, in the sentence he did not read out in the House, that closer co-operation on European security is an essential element of foreign policy coordination. Paragraph 2 reads as follows

Those of the signatory States who wish to co-operate more closely in the field of security will do so within the Western European Union in respect of the role incumbent on the Atlantic Alliance and of their specific situation and strategy within the latter.

That was indeed reported faithfully by the Taoiseach. But that then is heavily qualified by paragraphs 3 and 4 which he did not mention. Paragraph 3 reads:

The signatory States consider this co-operation to be an element of the process of European unification, and feel that this conception may extend beyond the composition and current framework of the Western European Union.

Paragraph 4 refers to a joint military procurement policy and reads:

The signatory States are determined to foster the technological and industrial conditions necessary for their security and they will work to this effect both individually and where indicated through the common co-operation bodies.

The full text of Article 8 of the FrancoGerman draft treaty presents a picture far different from that presented to us in a misleading and selective way by the Taoiseach. Paragraphs 1, 3 and 4 are clearly incompatable with Irish neutrality. I regard it as quite deplorable that on this vital and sensitive matter there was not a full disclosure of the actual situation by the Taoiseach, in order that he could paint a reassuring picture which would give those of us who are concerned about Irish neutrality a false sense of security. I hope that all those various commentators in the media who think that we in Fianna Fáil are slightly paranoiac and obsessed with this question of neutrality will read in full Article 8 of the Franco-German draft treaty and not the selective extracts given here by the Taoiseach.

Arising from the Milan Summit, I want to draw the attention of Deputies to a report in The Cork Examiner of 1 July in which the Taoiseach suggested that there was nothing to stop countries, including Ireland, from embarking on a policy of reflation. This is, however, something which hitherto has been firmly ruled out by the Taoiseach and the Minister for Finance. Are we about to witness another of this Taoiseach's classic U-turns? I am glad the Taoiseach had the good grace to acknowledge, somewhat belatedly, that I was advocating in European councils long before anybody else the concept that individual European countries cannot solve their economic problems on their own and by themselves and that the problem of unemployment in Europe is of such a massive proportional extent that it will require co-ordinated, concentrated European effort to tackle it. I acknowledge that the Taoiseach is now taking that line also.

This Government have failed to make any progress towards a permanent and lasting solution of the Northern Ireland problem. The impetus behind the Forum report has been dissipated. The Anglo-Irish talks lack credibility. The Government have already surrendered the common ground of the Forum report, and are allowing Britain to dictate the parameters of the discussions. On 22 March 1985 in a speech to the Diplomatic and Commonwealth Writers Association, a rather strange platform, the Taoiseach stated that the two Governments were together seeking — and I quote: "means by which legitimate expression can be given to these two identities within the present constitutional structure". The admission that the Government are looking for a settlement within the present constitutional structure is a complete denial of the Forum report, and offends against the principle set out at paragraph 4.16 that "a settlement which recognises the legitimate rights of Nationalists and Unionists must transcend the context of Northern Ireland". It is dangerous foolishness to think that lasting or even temporary peace and stability can be found within the existing constitutional structures of Northern Ireland.

Last week in the Dáil the Minister for Foreign Affairs claimed it was wrong to pursue what the Forum describes as "the best and most durable basis for peace and stability" to the exclusion of any intermediary progress. We are not against any measures that improve the situation and in fact have called in this House for the disabandment of the UDR, the banning of plastic bullets, the end of supergrass trials, and the repeal of the Prevention of Terrorism Act. All of these of course would represent nothing more than temporary improvements. They would still not tackle the fundamental problem. In our attempts to get the Dáil to make clear statements on all these issues we were frustrated by the Minister for Foreign Affairs who, by putting down meaningless amendments, prevented the Dáil from expressing clearly its abhorrence of some aspects of life in Northern Ireland, the activities of the UDR, the use of plastic bullets, the supergrass trials and the very discriminatory use by the British security authorities of the Prevention of Terrorism Act. A security solution consisting of harrassment and repression is the only answer that has been given since 1970 to Nationalist grievances.

The Taoiseach is doing grave damage to the cause of constitutional nationalism if he continues to participate in discussions which are not securely based on the sound principles enunciated in the Forum report. The responsibility for the rejection of the Forum report, for a refusal to contemplate any genuine political solution or indeed worthwhile progress of any kind, should be firmly placed on the British Government. It should not be shouldered by the Irish Government. The Irish people have a sound political case. Its validity is not in the slightest degree contingent on British acknowledgment or acquiescence and it is disastrous for the Minister for Foreign Affairs to suggest otherwise.

The Taoiseach, instead of talking rubbish about the odds of success as if he were playing bingo, should articulate clearly to the world that the Northern Ireland state as it stands is an affront to democracy, and to modern civilisation, and that peace and stability can never be found within its existing dimensions.

I wish to protest again against the nature of the contribution made by the Taoiseach at the outset of the debate. He was in many ways gratuitously offensive about this party. I suppose it is his political right to embark on that sort of activity, but it is not really becoming for a head of Government to come into the Dáil to give a state of the nation speech to do this. The House had expected some outline from the Taoiseach of the economic situation, particularly the way in which the budget is developing. He might have given some indication of what his estimate is of the emigration of young people at present and an indication of the outlook for public finances for the rest of the year and for 1986. These are matters which a serious, responsible, mature head of Government would have been dealing with at the outset of the debate. Instead the Taoiseach concentrated on abuse of the Opposition and on going back over economic developments of five, six and seven years ago in a very selective, discriminatory way. For instance, he did not mention that it was the first Coalition Government of 1973-77, of which he was a very prominent member, which started the whole process of budget deficits and foreign borrowing. We have put statements made by him on the record of the House in which he was an enthusiastic advocate of large current budget deficits and borrowing to meet them——

Which reduced foreign debt——


It is the responsibility of the Taoiseach and the Government in an Adjournment debate to give us a reasonable, balanced, responsible and mature outline of the economic situation. I do not think the Taoiseach discharged the heavy responsibility of his office, because he spent the greater part of his speech in simple personal abuse and political attacks on the Opposition party. It may suit his political book to attack the Opposition. But we are not in Government, and he seems to forget that.

He is absent-minded.

We do not have the responsibility of Government, although we will have very soon. At present the Taoiseach has responsibility for Government and it is his duty to defend his record in Government——

I knew the Deputy would not like it.

The fact that he cannot possibly attempt to defend the policies and performance of the Government is a clear indication of why he devotes the greater proportion of his speech to attacking his political opponents. It is unworthy of anybody who claims to have a mature, responsible approach to democratic politics.

There is a smell of death.

The Government have ceased to function.

Rigor mortis has set in.

The Government cannot legislate about anything important. Unemployment and emigration are devastating our society. Criminals and law breakers intimidate and terrorise our communities. Despite record levels of taxation the country goes deeper into debt every day. The economy is in a shambles. People are angry because they are afraid about their future. They know that the Government are finished and are only hanging on to office for its own sake. I say to the Government that the people are sick of them and want them out. They have no right to continue in office. It is their democratic duty to call a general election soon to end this pathetic farce, the pretence that they are governing when they are not, and the country gets into deeper trouble with every week that passes.

That was a lot of noise from empty drums.


I should like a little respect, gentlemen. I was rather surprised to hear the call from the Leader of the Opposition for a general election. It certainly does not echo what members of his party are saying to me around the corridors of the House.


They are the only people who are talking to him.

Deputy Haughey should do a head count before he calls a general election. I welcome the opportunity to contribute to this debate and to put some facts on record. The Leader of the Opposition sounded somewhat disappointed at the Taoiseach's contribution, that it was not a state of the nation address. The document I have in my hand, a "broadcast by the Taoiseach, Mr. Charles J. Haughey, T.D., on RTE on 9 January 1980" is a sad reminder of what happened to the state of the nation address given by that man.

Tell us about Brian Boru.

We lost the Battle of Clontarf.

The Deputy did not fight the battle; he ran away from it. Like King James, having come back and complained about the Irish, he won the race.

What about the loss of the local elections?

In 1980 the Deputy set a challenge and standards for himself and the nation and then turned away. He walked away from them before time.

The Tánaiste is in Government and he should remember that.

We have been in office for two and a half years. When we took over there was a shortfall in the Estimates, imaginary figures and money that did not exist. We found that out very quickly because the figures did not add up. It was obvious at the beginning of our period in office, and in early 1983, that corrective action was necessary, action like that suggested in January 1980 but which was not taken for lots of reasons. It was obvious that we had to take corrective action if we were to retain control of our own destiny here and retain control of the right to make decisions for our economy and policies to direct the economy.

At that time there was a danger of dictation from foreign bankers or, alternatively, or as well as, the International Monetary Fund. We faced that difficulty and took corrective action. That action has been well recorded. We looked at the question of taxation and expenditure cuts. I said at that time, and have oft repeated, that we were faced with critical policy choices and, apparently, conflicting priorities which arose from the impact of the recession and from the way the economy had been mismanaged in the previous years. It was obvious that tough decisions had to be taken. Tough and unpleasant decisions were taken.

The objective was to recreate the conditions whereby economic recovery could recur and to minimise the effect of any deflationary action on growth and employment. An effort was made to maintain the essential fabric of our public services in social welfare, health, education and other areas. We had to try to accommodate those difficulties. It was not an easy task in the context of a very critical fiscal position. At times I wonder if the seriousness of the position was appreciated then or has been appreciated since. There was no room for policies of budgetary expansion; rather many public commentators at that time were calling for major public expenditure cuts damaging in the short term both equity and employment. Some of the harsher measures called for were avoided by deliberate Government choice.

There has been much abuse from Fianna Fáil in the last two and a half years, and repeated this morning, in relation to the fact that the Government have been over-concerned with book-keeping, with balancing the books. These claims are now made with inane regularity. Fianna Fáil claim that the Government are not dealing with the real human problems in society. I must repeat that this is a nonsense, a travesty of the truth. In fact, those accusations are dangerously untrue and the records will show that. The Government have done the maximum possible given the problems they faced in December 1982. On the one hand Fianna Fáil were recommending in 1982 that there would be a current budget deficit of £750 million rather than the £897 million target which the Government set in January 1983. Fianna Fáil never explained how they would have brought about a cut in expenditure to bring in a current budget deficit of £750 million.

On the one hand we were criticised because we allowed the current budget deficit to increase and on the other hand we are criticised because we are not doing the things Fianna Fáil claim they have the ability to do, all sailing dangerously close to the wind on the great Fianna Fáil theory of economic expansion called buoyancy. In 1982, and since, the Government said that the question of the current budget deficit would always be related to the prevailing economic conditions and, in particular, to the importance of achieving economic growth and dealing with unemployment.

Last year when we set out the targets for the current budget deficit for the remainder of our period in office we did so in a manner that would not cause grave damage to the economy. The requirements of financial targets will always have to be geared towards looking at the importance of achieving the growth I mentioned and tackling unemployment. We have continued with significant borrowing but not to the extent that will give foreign banks real control over our economy. That was the big danger that existed in 1982. If the policies of 1982 had been continued it is reasonable to say that we would not be controlling our economy now.

The question of unemployment, which every politician has been reminded about in recent weeks, if they needed reminding, is one of our major problems but it is not a problem confined to Ireland. In the OECD countries more than 30 million are unemployed and in the EC 12 million are unemployed. There is no doubt that the figure for Ireland, 227,000, is a very high one. Politicians, and those involved in the working sector, will have to make an effort to tackle that problem if we are to make some inroads on that figure. We should not delude ourselves into thinking that there are easy options. In the past the country always looked for the easy options, looked for today's solution without worrying about tomorrow's problem. That is not the way the Government have tackled the problems facing them. We have not attempted that since we took office and, as the Taoiseach said this morning, we will not be doing that in the future. We will not be adopting the easy option today without looking at the consequences, because the stakes are too high. We have to look at what will happen to the country in the next three, five or ten years, rather than what will happen tomorrow. We cannot have any bogus solutions. There are no easy answers. We must look at the fiscal constraints, at the amount the nation has borrowed and spent in the last ten or 15 years and take cognisance of the fact that the debt has to be serviced with interest payments.

We must look at the growth of the labour force which politicians welcome but which presents a major challenge to our educational system and our ability to create jobs. It is true that we have been disappointed in the concerted European response to this major problem. We have advocated that if there is a solution, it must be found in the context of a European response. I believe not enough is being done by the major economies in the European context to get us out of this difficulty. It is very important that any action we take in our own economy has to be concerted with action taken in the European context to help us fight back in this struggle against unemployment. We have to take cognisance of the fact that there is a need for competitiveness in all areas, and not just in the area of wages where we have made strides in the past two years.

In the commercial, public and private sectors it is essential to generate jobs that will last and stand the test of the market place. There is need for greater initiative, innovation and managerial effectiveness. Competitiveness is vital to employment creation but this concept must be applied far beyond comparisons in movements of money wage rates. In the short term with given technology, movements in money wage rates greater than those of our competitors will tend to reduce investment and increase unemployment. But critical additional factors at the level of the enterprise include efficiency of production, adequate quality control, marketing skills, good customer service and the capacity for research and development in new products or methods of production. In both the public and private sectors there is need for adequate and mutually understood structures for communication and consultation between management and employees. There is also a need for changed attitudes in the work place.

In the modern enterprise, survival is often dependent on a willingness to develop the commitment of flexibility and change, whether in methods of production, work practices or product innovation. The main responsibility in this respect lies with management, and its quality and capacity for leadership are critical for survival.

There is need for more enterprise, public, private and co-operative because we must all be aware of the fact that there is no Spanish gold or manna from Heaven that will guarantee for us collectively both a reasonable level of employment and rising living standards. In the past we have addressed the question of establishing strong enterprise both in the public and private sectors, and we have heavily State-aided private sector enterprise with many incentives. These enterprises have been assisted in times of necessity. In return we can look for a greater risktaking attitude and approach by private sector enterprise and get them to take on areas where, in the past, there was a reluctance to invest. We only invested in safe areas. We must adopt an entreprenurial attitude so that we will encourage investment in risk areas which is necessary if our economy is to thrive.

We have a mixed economy and this will continue in the foreseeable future. We will have to get State enterprise, private enterprise and co-operatives working in tandem so that there is no conflict. Perhaps we have been slow about clarifying the rules of how all these areas must work together for the benefit of the economy and the people and to make their contribution to the economy.

On many occasions it has been said that this Government are anti-public sector, either in ideological terms or otherwise, but I want to state very clearly that this Government are not anti-public sector.

Mr. Tebbitt could have written that speech.

Thank you, professor. But that is not to say that the concern at their performance in the Dáil, in the Oireachtas committees and in the community generally, is not justified and proper. We as a Government are committed to ensuring a more effective public sector geared to contributing to economic development by well run and profitable State enterprises, to social development, by efficiently organised social services and to improve performance and accountability in public administration generally.

As regards the commercial enterprises, it is important to remember that their financial results have often been adversely affected in the past by inconsistent objectives and by taking on, often with Government or ministerial encouragement, additional tasks in the field of social policy. In judging our history, current difficulties and future, potential standards must be applied. In the Government's view commercial public enterprise has a key role to play in the future of the economy. This means addressing the weaknesses that have arisen and laying emphasis on developing modern industry, commercial viability and the earning of adequate profit.

As leader of the Labour Party I believe in a strong, well organised public sector making its full contribution to the creation and maintenance of jobs. We believe in backing the public sector, in defending it from unjust criticism and supporting it through its difficulties. Through the history of this Government that influence is clear and visible, despite various attacks on companies like CIE. CIE will remain in public ownership despite the demands of some that they be dismantled and the profitable parts hived off.

I believe our attitude to Irish Steel has been sensible. Difficulties have arisen and problems had to be faced but we cannot run away from those problems. They must be faced up to in the short term if there is to be survival in the medium and long term.

As regards this Government's attitude to economic development and economic policy development, certain action was required which was outlined in our economic and social plan Building on Reality. That plan gave the Government a framework with modest rather than exaggerated targets which we have seen in other plans. It showed the Government's spending intentions for a three year period and outlined the policies to be followed by the Government.

Although a significant increase in employment is forecast up to 1987, there is no way we could find a solution to this unemployment problem. We need to get the policies and priorities in place so that the fight back can begin. The long term answers will take a decade or more but there is need for a major debate to take place.

I believe the Government decisions in the national plan and in other areas do not offer false expectations or bogus hopes or remedies. I believe the nation has had enough of cynical opportunist politics that aspire to present as real solutions the passing fancies of any political day. There must be genuine optimism about the future of the country. I believe our people are capable of mastering all the difficulties which may look daunting at present. Looking at our history I firmly believe we can master all these difficulties if we build on a solid analysis of where we are, what the policy options are and doing our best to achieve the realistic targets we set ourselves. I believe that this is the case, whether we espouse the politics of the left, right or centre. We must base all the targets on reality and set out those targets with a far remove from, and indeed, disdain for, any false expectations or bogus remedies. There are many incentives for the enterprise, as I have said already — public, co-operative and private — which is required to assist in the reconstruction of this country and its economy, with the careful rebuilding of national self-confidence in a spirit of realism and in the faith which we have shown in this country down through the years at different testing times.

During the past two and a half years, despite grave and serious difficulties, particularly on the economic side, we as a Government have been serious about protecting the disadvantaged and the less well-off in our society who, despite the economic situation, must be of concern to all politicians. Total spending on social welfare will have increased by a massive £650 million, or 40 per cent, in the three years since 1982. Throughout this period the value of weekly social welfare payments has at least been kept in line with, or increased at, a faster level than prices. For 1985-86 the increases of 6 per cent and 6.5 per cent for short and long term payments are ahead of price rises, which are now turning at 5.2 per cent. We have kept our word on this as a Government when we said in 1982 that we would protect the less well-off, despite enormous pressures in other areas, despite, indeed, at times a public clamouring in relation to excessive spending in this area.

We have also as a Government faced up to and acted on a number of social issues which came before us. We do not take the Fianna Fáil option in relation to social matters which in the past has been to tend to duck and turn away from anything controversial. We have faced up to the family planning legislation, to illegitimacy, to the bringing forward of legislation on children, and this would not be done by the party opposite if they were in a similar situation.

On the question of taxation, we pledged that we would not let the overall burden of taxation rise. That may sound like a pledge that was easy to make; but, given the economic difficulties which we inherited and which were there in this country, that is a pledge which we will honour. We will not run away from it. It will be nailed down in the coming two and a half years. There will not be an increase in the overall burden of taxation. We will not make false promises which would lead to an increase in that burden. In relation to the promises made by the party opposite, there is only one way at the end of the day for those promises to be realised, or even if they were to set out on the road to realising those promises, and that is that they will have to be paid for and paid for by more taxation; or perhaps the speakers from the opposite benches can clarify if they are prepared to slash expenditure on health, education and social welfare, because they have to realise — and I am sure do at this stage, many years later — that borrowing as a percentage of GNP is at its limit and cannot be increased.

Fianna Fáil have never specified and have never come clean as to what they are going to do in relation to, as they say, reducing taxation. I want to re-emphasise that this figment of the imagination of the Leader of the Opposition in relation to buoyancy does not have any bearing on the reality of the economic or political situation. It certainly does not stand up to examination and no figures have been produced, or will be produced because they cannot be, to support the series of figures of buoyancy in the economy — one day £50 million and the next £120 million. Fianna Fáil had opportunities in the past in relation to taxation. In fact, they avoided an opportunity in 1978 when they actually dropped the wealth tax which had been brought in, with controversy, during the period of the Government from 1973 to 1977. We can assume that the lobbying for the dropping of that tax was, indeed, hot and heavy at election time.

In rural Ireland, Fianna Fáil opposed the farm tax measures. In urban Ireland they opposed the measures for different reasons. Deputy Haughey was saying to the electorate in Dublin that they were opposing the farm tax measures because they were not severe enough, while Deputies in rural Ireland were saying that they were opposing the farm tax measures because they were too severe on the farming community. This, sadly, has been a trait in the Fianna Fáil Party — to try to back the two horses at the same time. It did not work in the past and will not work in the future. It cannot, if they have anything to learn from the mistakes of the past.

I have taken the opportunity over the years to read in the Official Report some debates which took place during the last 30 or 40 years. I have noticed one consistent pattern. It is quite striking that history tends to repeat itself. That is, the attitude of the Fianna Fáil Party to the Labour Party down through the years. It is repeated by the Leader of the Opposition at times. I have read speeches, some great speeches made in this House by McEntee, O'Kelly, Aiken, speeches which were directed at the Labour Party down the years, scaremongering tactics about that party, about its component parts and what the Labour Party would do if allowed to increase their political representation in this House. It is only a concern and attack which is launched by Fianna Fáil nowadays when we are in Government. When the Labour Party are in Opposition — and, I say, always participating constructively in Opposition — we get little but disdain from Fianna Fáil. When we are in Government they express concern for us, deep and abiding concern in what I might call crocodile tear terms, as we have had in this House many times. The Fianna Fáil Party shed crocodile tears for us, but they abuse and attack the Labour Party's achievement. They ignore the idea of Labour Party principles and policies when we are in Opposition and when Fianna Fáil are in Government.

Since 1932 their attitude to the Labour Party has always been that the Labour Party can wait on the sidelines. I do not believe that is good enough in modern-day Irish politics. I have said, many times in this House and elsewhere, that the Labour Party are an independent political party. We draw inspiration and take pride from our history and the contribution we have made to Irish politics. We make our decisions in a democratic manner. We made our decision in Limerick during December 1982 on the question of participating or otherwise in Government. We made our decision during the daytime at an open, democratic conference, not in the middle of the night when the democratic voice is silenced, as has, unfortunately and regrettably in terms of political democracy, been the attitude of the Fianna Fáil Party in the last number of years.

We debate the issues of the Labour Party, sometimes perhaps too openly. We allow people to talk politics. Sadly, in Fianna Fáil there is no democratic right to talk politics. You agree with the leader, or you do not belong in the party, as we have seen in the last number of months. No debate can take place in that party. It is sad to see that no debate can take place in that party on Northern Ireland, but equally sad that no debate can take place on the economic issues facing this country. We have seen that the Leader of the Opposition wants to do it his way, wants to be all things to all men, as he has tried to be in the past. As I said at the outset, we feel sorry that he did not fulfil the promise he made on 9 January 1980, a promise which would have benefited the political system, the economy and the people of this country. However, he did not stick with it after he set out the terms. That is extremely sad.

The Tánaiste, to conclude.

I shall conclude, Deputy Haughey has said that this Government have failed. If we have failed, we have failed in one regard. There are a number of people out there at the moment who think that there is an alternative Government. We have stopped reminding them. There are times when Government is difficult; anybody who has been in Government will know the pressures of Government. There are times when all of us in Government at the end of a tough week or a tough day need some solace, comfort, a bit of reinforcement. I look to my reinforcement from my bookshelves and take down books which were printed about a Government of 1982. I read those books and say to myself: "We are doing a far better job than the four letter Government of 1982. We will not sink to those depths and we will persevere, but persevere on reality, on economic facts instead of economic fantasies and we will as a Government, bring this country back on its feet and give its people the hope for the future for themselves and their children."

Anent the concluding remarks of the Tánaiste and the leader of the Labour Party, I should like to make a brief comment. The mixture of right wing policy and left wing propaganda which he included in his speech is the real reason why the workers of Ireland support and vote for Fianna Fáil in elections. With regard to his statement that there can be no discussion on policy in Fianna Fáil, I should like to point out to him and to the House that over a number of months Fianna Fáil elaborated a local government policy to put before the electorate in the recent local government elections. Despite the attempt in this House to pretend that those elections did not give a positive result and a clear indication of how the electorate are thinking, I submit to the House that that policy, as thought out, elaborated, published and put before the electorate, found sanction from the people and overwhelmingly from the workers who are in desperation now with regard to their present position and future prospects.

Various creatures in nature have their own way to defend themselves. We gather the squid squirts out ink in order to decoy his enemy. The hedgehog puts up his quills as a defence when he is in fear. I was going through the House on my way to the Library this morning when I heard the Taoiseach deliver his Adjournment speech. Foaming at the mouth, ranting cheap jibes and attacks at the Opposition, he reminded me of the conductor of an orchestra who had gone mad, with arms flailing and hair standing up on his head. I thought it was not a bad comparison because his orchestra has also gone mad. The conductor himself showed every sign of madness but when one thinks of one section of the orchestra on the left with cadenzas on the gas industry and on local radio, another Wagnerian section playing triumphalistic Wagner music, with monetaristic philosophy incorporated in it, and a tightly knit little band singing "Onward Christian Soldiers", then I can understand what the Taoiseach was at. He is distraught; he does not know where he is going. This explains what the Leader of the Opposition has rightly criticised as a very poor effort at an Adjournment speech from the conductor of the orchestra — in other words, from the political leader of this country. This is at a time when the country needs real leadership. It does not want abuse or the reviling of fellow politicians, whether in Opposition or on the same side. What it needs is real leadership, real thoughts and real policies for the development of the country and for dealing with the ills that are afflicting us, as the Taoiseach and the Tánaiste have agreed.

I submit the real Adjournment debate and the real decisions took place on 20 June. In his speech Deputy Haughey referred to the suggestion by the Taoiseach that what happened on that date did not happen at all. This is a Kafkaesque situation, where the Taoiseach has dreamt himself into the position that there were no elections and no results on 20 June and that he does not have to take cognisance of them. To pull him out of this Kafkaesque territory, I would remind the Taoiseach that in my county the policies which the Tánaiste has claimed we could not elaborate and could not agree on were assessed and voted on by the electorate. Fianna Fáil got an overwhelming majority on the county council, the chairmanship of Cavan Urban Council, the chairmanship of Belturbet Town Commissioners and the chairmanship of Cootehill Town Commissioners. Am I dreaming or is the Taoiseach dreaming? Is he reading Kafka and, if so, has Kafka taken possession of him?

Most of what I have to say will be connected with transport, but first I must refer to the Taoiseach and his Government walking away from the fundamental plank in their election policy in 1982, namely, the wiping out of the deficit. It is not being highlighted now and the reason is obvious to anyone with even the slightest acquaintance with the economic position. I have here Iris Oifigiúil dated 2 July, the most recent publication I could get in the Library. The gap between receipts and issues as of that date was £1,090 million. The current deficit for the whole year is scheduled at £1,234 million. I am not saying we will have a deficit of almost £2 billion, but I want to point out that is not something of which the Government should be proud considering that they made the wiping out of the current deficit the major plank in their platform when facing the electorate in 1982.

A few seconds to look at how the receipts in those figures are made up might be revealing. An extra sum of £32 million over the same period last year has been brought in under the heading of excise. This may be because the Government decided to do what this side asked them to do last year with regard to spirits. I do not know because there is no breakdown under the heading of excise. I know that cars are included but the motor industry say that the increase is not in their area.

The Tánaiste said the Government were committed not to have any increase in tax. Up to this point this year the Government have raked in an extra £20 million in income tax over the corresponding period last year. What is even more significant with regard to the state of the economy is that the income levy and the youth employment levy are both down, the latter by £4 million. That is an indication of the failure of the Government to manage the economy in a way that would ensure people are employed and therefore in a position to pay those two levies. There is the Tánaiste's boast about tax despite the VAT figures for the period between 1 January and 30 June this year as published in the July 2 issue of Iris Oifigiúil. The extra money sucked from the people by a Government who said they would relieve taxes was £67 million in that period and we know that that money must be coming from fewer people because there are fewer with the purchasing power that people had in the previous year.

Overall the extra burden of tax is not something one will find the Tánaiste boasting of but we would forgive him if he remained silent in relation to trying to impose extra taxes on the citizens.

Regarding the transport area, time and again Fianna Fáil have decried in the House the action of the Government in relation to Irish Shipping. That was probably the worst managed episode in any State company since the establishment of the State. In the current issue of Aspect there is a comprehensive study of what is referred to as the £38 million scandal of the Irish Spruce. I have not had time yet to go into the various details of the story. The magazine is published today. However, I wish to state clearly what our policy is regarding a deep sea fleet and I wish to indicate to the House the propagandistic effect of the Taoiseach's words about this area and of course of the general propagandistic position taken up by the people who are selling the Government to the electorate.

Our policy is that we should have a deep sea fleet. I recounted to the House on another occasion the size of the deep sea fleets of a number of European countries with roughly the same population as ourselves, somewhat larger in some cases but the countries concerned are regarded as small. I gave figures in respect of Norway, Denmark, Belgium, Holland and so on. I stated then and I reiterate now that if the people in those countries consider it wise to have a moderately sized deep sea fishing fleet, it is difficult to understand this Government's attitude to the contrary.

I appreciate that there are legal points with regard to the ownership of the Irish Spruce but we should begin with that vessel as a base unit. There would be no need for any hurry in filling up to the total of 230 tonnes deadweight. The Government are pursuing a mad hatter policy regarding the Irish Spruce because the cost to the taxpayer per day to keep the vessel at Marseilles is £17,500 and there is an obligation to pay £2.5 million on the vessel every six months anyway. If the Government could urge the liquidator to finish his job and set out to establish a small, efficient and well run deep sea fleet with the Irish Spruce as a base unit, they would be deserving well of the country. We have pointed out time and again that a ship will be required to carry coal from the US to the large generating station at Moneypoint. The original concept of the Irish Spruce was that it would fill that role so it is totally reasonable that the Government would follow that line.

I could spend all my time dealing with that one point. I was anxious to put on the record what our policy in that respect is and to cut the ground from under the propagandistic statements of the Taoiseach, of his media people and of other members of the Government with regard to the Fianna Fáil view of Irish Shipping.

The Irish Continental Line have been trading profitably but there is a danger that the company will be offered for general sale and that it will be purchased either by a foreigner or by a competitor who would close it down. The Government should indicate that they are concerned that the Irish Continental line should remain, either on its own or in association with some other shipping company, Irish owned, Irish flagged and with an Irish crew. It is disgraceful that the Government have not given any indication on those lines. Both in regard to Irish Shipping and to the Irish Continental Line as well as to other shipping companies, I have stated time and again that the educational impact should be of concern to the House. A chain that is broken becomes very difficult to weld together again. That is all the more so if the chain is an educational one. We all recall the panic in the US when the first Sputnik was put into orbit by the USSR and when the Americans had to look back at theories they had been developing in education for decades. If we break the link in naval training we will find it very difficult to recommence that training and that would leave us in the position of having to engage the services of people from other countries to man a deep sea fleet.

My considered view is that the Government decision in respect of the B & I was simply an expensive way of doing what Mr. Frank Boland, his board and his executives, intended doing anyway and as they would have outlined in their final plan to be put before the Government. There must be more frequent and regular reporting to this House on the proceedings of the B & I Steamship Company.

The Taoiseach referred to the need to face up to reality and to unpopularity. He said all this in that sea green incorruptible way he has of projecting to the people but I could not but think of what happened recently in regard to the local radio Bill. The fact is that the Taoiseach ran like a frightened rabbit from the implications of that Bill which he as Taoiseach passed in Cabinet and which I presume all 15 members of the Government approved of. That was not an example of the facing up to reality, of facing up to unpopularity. It was a cowardly runaway from something that we were told in this House time and time again that the Government would have on the Statute Book before the end of this session.

Another débacle for which the Government must share some of the responsibility is that of the deep sea port of Dublin. This historic anchorage is closed. We are all far too quiescent and smug about this, its actual impact and potential future impact on the industrial and commercial life of this city, not to mention its effect on direct and indirect employment associated with the use of that port.

The Tánaiste said that his participation in Government had been criticised on the basis that it ignored human problems. He gave an indication as to what he thought was a human problem when he moved straightaway into talking about the current budget deficit. For a moment, at that point, I thought he was going to talk about emigration and unemployment, about social welfare benefits etc. No, his interpretation of human problems was to go on immediately to talk about the current budget deficit. We know there have been problems in the port of Dublin in the recent past, we know that labour relations caused a great many of them. We know that voluntarily — without the port being closed — many shipping companies were using other ports up and down the east coast as far north as Carrickfergus, with its impact on road usage, traffic management and so on. These must be taken into consideration. Now that we are going into recess I am worried that we are leaving the historic port of Dublin — an anchorage for ships since it was called Eblana — closed down, with no move being made to solve the problems which could reopen it. The proposition emanating from the Government was: we will make money available provided there are so many redundancies, the very same story we heard last evening about Irish Steel Limited. If the Tánaiste had a better definition of human problems perhaps then in Government, he, the Minister for Labour, the Minister for Health or somebody who is supposed to have competence and concern in that area, would set about smoothing that solution, not just having the Minister for Industry, Trade, Commerce and Tourism coming in here last evening and saying: right, money for redundancies, that is our position, trop court.

We were told that the Road Transport Bill would be on the Statute Book by now. I have been put under considerable pressure from various hauliers' associations with regard to this Bill and the uncertainty surrounding it. The Irish Road Hauliers' Association are very anxious about "own account", where large fleets of "own account" trucks are available, particularly where they are available in industries having a slack season. Again the dilatoriness of the Government has done nothing to wipe out that fear from their minds or to explain to them what is the position. A commitment to enforcement of the law with regard to haulage is something required by the people who make their living from this portion of the industry. There have been suggestions from their associations that if the Garda are not capable of doing it — they are capable of doing it, but they may have insufficient time or personnel — then there should be an enforcement group established by the Minister to ensure that enforcement is properly catered for. I know there is an artificial situation with regard to the Six Counties that calls on Garda manpower to a greater extent than should be the case. That will have to be taken account of and a little bit of forethought given to how the Road Transport Bill will be made effective. We were told — and it is not a bad idea on the part of the Minister; I go along with him to a certain extent in it — that CIE were on their way back, so to speak, that they were doing very well particularly with regard to financing from this House. Then last week, we had a visit from the Minister for Communications seeking and getting statutory authority to convert £30 million of debt into a loan, getting the permission of this House to pay back £3 million per annum for ten years. Why be hypocritical about it? If £30 million, particularly over ten years, is going to be paid to CIE why pretend that the financial problems of CIE have been solved? It is a good thing to try and boost the morale of CIE but we should not do so at the expense of the truth in this House.

We were told also that the legislation with regard to the Dublin city services, the national rail system and the national bus company would be before the House shortly. Of course, "shortly" is an elastic kind of word. We did not see that legislation; I just do not know when to expect it. I do not know whether this Government will ever return, whether we shall meet again on 23 October next. But I do know that a determined effort will have to be made by the Minister to get the board of CIE to increase passenger participation. It is the passenger who will have to pay, either that or we will be in here until Tib's eve voting moneys in this House for CIE. I quoted figures in the House before indicating that the numbers of passengers were going down. No progress appears to have been made with regard to the one man buses, or to the feeder service to DART. Everybody is in praise of DART. The Minister says he will have to get double the number of passengers now in order to make it pay. The one thing that can initiate an attempt at doubling passengers is the provision of feeder buses in regard to which, again, no progress has been made.

During the year this House got an emasculated version of the Dublin Transport Authority Bill. That Bill was brought in here. It has not yet passed all Stages, let alone gone to the Seanad. I would hope that one of the benefits of this Government falling would be that that emasculated Bill would never reach the Statute Book. The Bill that we prepared in Government, the heads of which we sent to the parliamentary draftsmen, catered for a traffic plan — to cover, say, a five year period — which would be carefully elaborated in consultation with local authorities, the Garda, in the final analysis, with citizens, and which would then ultimately be decided on by the Government, published and adhered to. Point No. 1 has been wiped out of the Minister's Bill to such an extent that three or four of his backbenchers stood up and said that they were not pleased with the Bill, that it should not be a weak Bill, that there should be a strong Bill or no Bill at all. The second major plank in that Bill was the power of budgeting and the power to employ CIE as an agent in the city of Dublin so that the Authority would decide what CIE would do in Dublin city and not CIE. I cannot elaborate further on that.

Will the Chair tell me how many minutes I have left?

I am sorry, Deputy, the time is up.

It depends on which watch one looks at. I have three minutes left on mine.

I look at the one in front of me all the time.

The Minister has scared people with regard to the Aer Lingus fleet. The Minister has scared the workers who came to see me about it. I want a commitment from the Government that they will urge Aer Lingus to make as much profit as possible but that they will not leave them in the lurch in the final analysis. I had intended to talk about a very important ESRI study with regard to employment and unemployment which was never debated in this House. It pointed out ways for increasing employment and it is a scandal that it did not get the attention it deserved in this House. It dealt with emigration, youth and the possibilities of employment.

Will the Deputy please conclude?

I will. I also deprecate the fact that this Government have been pursuing small farmers. Thousands of them have been deprived, their unemployment assistance has been reduced or has been completely wiped out.

The Deputy's time is up. He has gone two minutes over his time.

I have a sad story to tell——

Will the Deputy make it very brief?

The port of Dublin has been closed throughout the summer when it should be open and in business. There have been criticisms of the Government in relation to CIE, Aer Lingus, the B & I and the emasculated Dublin Transport Authority and also about Irish Shipping.

The Deputy has gone way over his time.

Yet all the Minister will do is appoint committees on shipping, committees on radio and committees on Dublin port and docks. We are getting no action and no employment.

In relation to Deputy Wilson's criticism of the Local Radio Bill, it was published, introduced into the House and debated last Friday, as agreed between the Whips. There was no disagreement on that matter. Deputy McLoughlin may have been somewhat facetious when he expressed the view this morning that the Fianna Fáil Party's outlook on the economy was that they intended to reduce taxation, eliminate charges and run the country on profits accruing from Knock Airport. This epitomises the irresponsible attitude of the Opposition, particularly in recent months. They seem to have gone back to their 1977 manifesto habits of promising huge reforms, cuts in taxation and additional employment in the public service without any explanation as to where the money is to come from.

My area of responsibility is agriculture, and since this Government came to office the agricultural industry has thrived. Despite restrictive budgetary policies brought in by the Commission, agriculture is continuing to prosper. Last year current exports amounted to £1,630 million. Because of that export record we were entitled, in addition to FEOGA, guarantee receipts amounting to £650 million. The agricultural sector was worth £2.3 billion to the economy in terms of export performance. The figure of £1,630 million was an increase of £250 million over the previous year — an astonishing performance, something like a 16 per cent increase over 1983. The trend continues upwards. The value of these exports in 1984 amounted to £775 million and we are continuing to gain new markets throughout the world not just in EC countries but in third countries in the Middle East and North Africa.

I was annoyed in recent weeks when some Opposition Deputies and other people in the meat trade were highly critical of substantial deals which have been signed abroad on our behalf. The Egyptian deal, which is to run for a three year period, is conservatively estimated to be worth £450 million. We are now exporting more than 50 per cent of our beef to third country markets. Up to recently we were extremely dependent on the British market. Only ten years ago, approximately 70 per cent of our beef exports went to that market. I do not underestimate the value of the British market. We still send over 40 per cent of our beef to that market, which is a very valuable market where we get a prime price for our beef.

Our exports are worth £775 million currently and there is tremendous room for expansion. People ask me about creating incentives for beef producers. There is no need for the Government to introduce huge incentives. The market place is the incentive. The land is capable of producing at least twice as much beef as is presently being raised and it is a pity that our land is not being fully utilised when we look at the beneficial effects an additional £775 million would have on our economy. Fifteen per cent of our beef is consumed at home and we export 85 per cent of it. If beef production doubled we would export an additional £775 million worth of beef, and we are capable of doing it.

It is unfortunate that we have not increased our national herd to a significant degree in recent years. It is not a case of giving grants or incentives; the market place is the incentive in its own right. Some Opposition Deputies yesterday complained that beef prices currently are not as high as they were at the same time last year. That is correct up to a point, but 1984 was a very spectacular year in which beef prices were concerned and cattle prices in particular, and an anomaly existed last year which helped to boost those prices. Fortunately — that may seem contradictory but I use the word advisedly — that anomaly does not exist any longer. That was the existence of the variable premium which applied to cattle slaughtered in Britain and in Northern Ireland and that gave British beef processors a tremendous advantage over beef processors in this part of the country. The result was a flood of cattle particularly into Northern Ireland, and meat factories in this country had a very difficult time competing with the prices being offered by factories in Northern Ireland which were being subsidised by this variable premium. In last year's price negotiations in Brussels we had that anomaly removed and that has resulted in a slight drop in beef prices here but, most important of all, it has resulted in a tremendous boost for beef processors in this country. That is why we are able to get the markets in places like Iran, Libya and Egypt to such an extent. Beef processing is thriving in this country at present. We are exporting beef at the rate of about 350,000 to 400,000 tonnes a year. That is a huge amount of meat. We could increase those exports considerably if we had the beef in the country and we could double the national herd with our land bank as it is.

Let me say that great credit is due to our beef processors and our beef traders, These men go out into countries in Northern Africa and the Middle East and work with might and main to capture markets for which there is tremendous competition from other countries within the EC, South America and Eastern Europe, and they have had tremendous achievements in acquiring these markets. It is most upsetting to hear some meat traders here at home who have not got the same gumption or initiative complaining that they do not get the same share of these markets as the people who discover the markets or make these deals. All credit is due to the people who have gone abroad and brought such tremendous deals back to this country. It is a sad reflection on those who see fit to criticise them, as some Opposition Deputies have done also. I suppose it is fairly typical of the Irish mentality that if you cannot do it yourself you would rather not see anybody else do it.

Certain dangers are to be looked out for as regards the beef trade. I do not want to create any panic or disturbance within the meat trade, but one thing that is patently obvious from meetings in Brussels is that the days when hormones or growth promoters will be allowed to be used in animals are quickly coming to an end. Consumers in Europe are very conscious of the fact that some meats contain growth promoters or hormones and that there is a possibility that some of these can be quite harmful to human health. We would be like ostriches putting our heads in the sand if we did not recognise that.

Hear, hear.

In a recent debate in the Council of Agriculture Ministers, some countries called for the banning of certain hormonal substances. Some people pointed the finger at Ireland as a country where hormones and growth promoters were used to a considerable degree. I say quite plainly that our use of hormones is no greater than that of a number of other countries within the EC. I said at that meeting of Ministers of Agriculture that I would be in favour of the banning of all hormones or growth promoters on condition that every country in the EC did likewise and on condition that all meats coming into the EC from third countries contained no residues of hormones. Some of the Ministers who had been rather cynical about Ireland's use of hormones suddenly pulled back and said: "Oh no, we do not want to ban all hormones, only some,——

The French women went on strike with regard to veal.

——the ones we use." They did not want to have them all banned. We have no fears about competing on equal terms with anybody else where beef is concerned. We would be only too glad to go along with a complete ban on hormones as long as everybody else supplying the market does likewise. At present one of the major countries within the EC will not allow in Irish beef because they say it contains hormonal substances. I know very well that that country allows hormones to be used internally and imports meat from third countries which contains hormonal residues as it suits them because the prices are cheaper although the quality is not as good as it could be. Having a ban on the use of hormones in all countries and on all meat in the EC would give us equal access to all markets. At present we are prevented from having that access.

What country is it?

I do not want to be provocative.

Will the Minister tell me later?

I will tell the Deputy later. We have seen the conclusion of the first year of the milk levy regime in Europe. I am glad to be able to say that we got the statistical correction which we sought. The row which ensued should never have happened because it is normal practice for statistics to be updated as the year progresses. I must say that we were subjected to a particularly vindictive attitude in this regard, but all is well that ends well. I think there is appreciation throughout this country among milk producers that we have got an exceptionally good deal in the context of the milk super-levy which has had devastating effects on milk producers in a number of European countries where they have had to kill off hundreds of thousands of cows and to suffer a drastic reduction in their living standards. That was emphasised very clearly in the stand taken by the German Minister for Agriculture on the price of cereals in the recent negotiations. German farmers have taken such a hammering on the milk super-levy issue that they are not prepared to take another price reduction or any curtailment of prices. This cereals issue remains unresolved but there may be a solution at the July meeting next week.

We had tremendous difficulty in operating the super-levy system in its first year. All countries had similar difficulties. There were problem cases — people who had disease problems in the years 1981, 1982 and 1983 when instead of building up their herds they had to cut them back. There were people with financial difficulties and new entrants to dairy farming. We have brought forward a number of schemes to help these people. The cessation scheme which was put to me by the farming organisations was introduced about six months ago and the Government put up £5 million, exactly what was asked for by the farming organisations. That has been a help to people who want to get out of dairying and also in catering for people who had disease problems. More recently I set up a national reserve so that people who came into milk production between 1 January 1983 and 20 May 1984 will be sure of getting a certain basic quota, something about which they had no degree of certainty previously. This scheme has been very helpful to such people. Overall, the difficulties in the system are being ironed out to the satisfaction of almost all dairy farmers.

I have been critical in the past of the lack of diversity in milk products. We produce commodity items such as butter and skimmed milk powder to an overbearing degree. We should appreciate that milk co-operatives have been making a tremendous effort to diversify during the past year or so. We have had a whole series of new products such as cheeses, yogurts and low fat content milk.

Especially in the north.

Yes. I give an accolade to some of the co-operatives in Deputy Wilson's area, for instance, Bailieboro, who have entered into a major venture for the production of cheese. That type of diversification is to be welcomed. The more value added we can achieve in relation to milk products the better the price the farmer will receive.

In relation to what has been described by some commentators as the "milk war", in the southern part of the country, I intend to bring in regulations which will make it more difficult for producers to shift their milk from one co-operative to another.

Good man.

At present the notice of change can be as little as three months and it is my intention to bring in regulations whereby the minimum term of notice will be one year. That should help some of the co-operatives, one co-operative in particular, now experiencing difficulties.

One of the Opposition Deputies yesterday accused me of not reacting to a paper which allegedly has been published in Europe with regard to a review of the CAP. I said yesterday and I reiterate that no such paper exists. Earlier this year the Agricultural Commissioner, Mr. Andriessen, announced the setting up of six working groups to review the CAP and study it under the following headings:

(1) Agriculture and society — a socio-economic study;

(2) Utilisations of agricultural products — that would mean, for instance, extracting alcohol from cereals and using it to propel motor vehicles;

(3) Alternative production — alternative products to the main ones which are in over supply, such as milk;

(4) Agriculture and the environment;

(5) External trade and agriculture — we are having tremendous difficulties in world markets because of competition from countries such as the United States and New Zealand and there is a necessity to bring order into external trade;

(6) Cereals.

We backed the Germans in their demand that there should be no price reduction in cereals. The initial proposal from the Commission was for a price reduction of 3.6 per cent this year but we will not accept that and the Germans used the veto. We will continue our endeavours to prevent any price reduction in cereals.

Yesterday the conclusions of the working group were considered by the overall Commission in Brussels and today's newspapers contain a report of some discussion which took place in the Commission. That is only a preliminary report which deals with introductory items, not the substantive issues. When the report is published in its entirety — we may have a preview of it next week at the meeting of the Council of Ministers — then we will be able to give an opinion. If there are sections of it which would be to the detriment of agriculture in Ireland then we will make our views known and the House can be sure that I will be defending our interests. We all know that the CAP is under attack and that at least one country would be delighted if it were dismantled.

The Minister does not have to tell us which country that is.

I will not speculate on a paper which has not yet been published and the contents of which I do not know. It is fair to predict that there will be recommendations which would not be for the betterment of agriculture here, so we will have to be vigilant in defence of our interests.

The importation of vegetables and fruit which could be grown here is a problem which is being tackled in an organised and strenuous way with the help of the Minister of State at my Department, Deputy Hegarty. We have provided finance for co-operatives who have set up in the potato industry and we are doing likewise in the horticultural sector. We are providing every possible assistance to see that people who want to produce these varieties of vegetables and fruit get every possible help to counteract imports and we have been quite successful in this regard over a very short time. Gross exaggerations are made about the amount of commodities coming into the country. We import about £750 million worth of fruit and vegetables but about £200 million worth of that could be produced in this country. The other products are tropical, sub-tropical or from the Mediterranean. Of that amount at least £100 million consists of cereals which are mostly used for milling and feeding stuffs. Because of our climate we could perhaps substitute some of that amount, but not all — that would be too ambitions to contemplate.

With regard to the other £150 million worth of imports, we are steadily making progress in our attempts to counteract them by producing the same substances at home. People involved — particulary ACOT and An Foras Talúntais — are to be congratulated in that regard. They are working, of course, in conjunction with the Department of Agriculture.

I am particularly worried about our bacon industry. It is a shambles because most of our bacon plants are outdated and not up to standard. There are exceptions and some people are able to compete with the Danes and the Dutch on foreign markets but too many of our plants are not up to scratch. I am glad that a number of enterprising people are at present in consultation with the IDA and my Department regarding the provision of plants which will equal any in the world. That is what is needed because the quality of Irish bacon is second to none. We need good quality plants and processing units.

The Government have been in power for more than two and a half years and it is time to look at their operation. It is clear that they are demonstrating more and more ineptness and incompetence as time passes. The Government have promised little and delivered less. The longer they remain in office the more their essentially conservative and reactionary nature is revealed. The Government of the Taoiseach, Deputy FitzGerald and the Tánaiste, Deputy Spring have ensured that they will be remembered in the history books — but for all the wrong reasons. They will be remembered as the administration that watched indifferently as unemployment rose to unprecedented levels. They will be remembered as the administration that in their first weeks in office abolished free school transport and went on to introduce a sweeping range of cutbacks in health and social services. They will be remembered as the Government that halved food subsidies on a bank holiday weekend, and ran for cover leaving the announcement of their decision to civil servants. They will be remembered as the Government that gave us the farcical constitutional amendment, and little else in the way of social reform. They will be remembered as the Government that scuttled Irish Shipping. They will be remembered as the Government that introduced charges for local services and then postponed the local elections for as long as they possibly could before facing the wrath of the people. They should have postponed the elections for a further year. The whole thrust of this Government's economic policy since taking office has been that the less well-off should pay for the financial crisis. Practically all their initiatives have been directed against the less well-off, while the most privileged sections of society have managed to escape almost scot-free.

Ultimate responsbility for the Government's direction must rest with the Taoiseach. If the past two and a half years of Coalition Government have done nothing else, it has at least finally disposed of the image of the Taoiseach as a slightly incompetent, but essentially well intentioned politician. Deputy FitzGerald has shown himself to be a hardhearted Taoiseach, obsessed with figures, and totally indifferent to the effects of the Government's economic policies on working class families.

The hypocrisy of the Government's approach is best illustrated by their attempts to justify the halving of food subsidies. These badly needed supports for lower income families had to be chopped, we were told, because they were a blunt instrument that benefited the rich as well as the poor. But of course there have been no moves against the various Government supports that benefit the rich only. There have been no cutbacks in Government financial assistance for exclusive fee paying private schools or private nursing homes, or for bailing out farmers with farms valued at up to £200,000. There is no problem about the State, through the Central Bank, rescuing the small wealthy élite who own most of the shares in Allied Irish Banks, when they faced losses through their own mistake in acquiring ICI.

Irish Shipping, which had been a valuable national asset since the Second World War, which had traded successfully for many years, was chopped without mercy. Irish Shipping staff who had served the company and the nation loyally during the dangerous days of the war and since were cast aside and have been ignored since. It is important to remember that in this country, State companies were established largely to meet needs which private enterprise by their own unaided efforts, could not meet. State enterprise, which showed profits in less economicaly depressed times, is now under attack, but it will be the public who will suffer if the Government indulge in a policy of carving up State firms, and handing their most profitable sections over to their free enterprise friends and supporters. It is significant that Irish Shipping's losses arose from an association entered into with private enterprise in more profitable times. When the favourable economic climate changed, private enterprise, true to its nature, continued to demand its pound of flesh.

Irish Steel is the latest State company to find itself in line for the chop. This is another area where the State had to move in and establish a State company, following the collapse of the privately owned Irish Steel in 1947. Private enterprise was unable to do the job and the State had to step in. The problems of Irish Steel are not of the workers' making. Difficulties arise from other factors some which are directly under the control of the Government such as the price the Government force the ESB to charge Irish Steel for electricity. By taking a £20 million levy from the ESB the Government are forcing up the price of electricity. That is one of the major cost factors in Irish Steel and the Government, and the Minister, Deputy Bruton, have ignored it and put all the blame on the workforce telling them that they, and they only, must take the cuts, wage freezes and so on.

Productivity in the company has increased significantly. It is 18 months since workers had a wage increase. The operating loss for the year up to June was down to £5 million. However, the Government did not do anything about such factors as the price of electricity and instead yesterday put the gun to the heads of the workers and told them to accept their terms or they would be thrown on the scrap heap like Irish Shipping workers. Years of loyal service do not count for anything when the Government give the chop to a State company.

We should contrast the treatment of Irish Shipping and Irish Steel with the consideration shown to Allied Irish Banks in the aftermath of the collapse of ICI. The key issue here is that if AIB's gamble in taking over ICI had come off and they had made a huge profit, as they had hoped, the Irish taxpayer would not have benefited by one penny. However, when the gamble failed the Irish people were asked to take up the tab. Taxpayers must pick up the tab on behalf of Allied Irish Banks. Under the legislation passed by the House earlier this year the taxpayer will have to pay by far the greater part of the cost of the rescue operation, the amount of which is still not known. It is rumoured that the figure will be disclosed shortly. The alleged compromise agreed between the Government and Deputy Haughey, Leader of Fianna Fáil, to involve the Central Bank, was a public relations exercise to calm the public outcry. It means that instead of taxpayers paying directly they will have to pay indirectly through the State owned Central Bank. The Central Bank will not pay the money into the Exchequer they have paid in previous years. Instead the money will be paid to ICI. In the meantime, Allied Irish Banks were able to report this week that they expect to make profits of more than £80 million this year despite the ICI collapse. AIB shares have not decreased in value. Chairman Nial Crowley was able to proudly point to this in response to calls for his resignation and he was put back in because it was shareholders, not taxpayers, who were involved. The losers in the affair once again are the taxpayers.

Of course we do not know the full extent of that bill but no doubt, in the best tradition of the Government and Fianna Fáil, the bad news will be kept until the Dáil has gone into recess. Over the August weekend we can expect the bad news to come forth. That has been a regular feature in recent years. We got news about the food subsidies in August last year and I wonder what it will be this year. Will this year's bank holiday special be the announcement of the cost to the taxpayer of the ICI disaster, £200 million or £300 million? The bad news could be about another State agency because I have heard alarming reports in recent weeks about the financial health of the Housing Finance Agency. Certainly, there have been long delays in applicants getting their loan cheques from the agency. I note that according to the public capital programme the Housing Finance Agency was to raise £65 million, mainly through the sale of index-linked bonds to institutional investors, normally pension funds. That was expected to finance about 3,250 loans. Those loans were mainly for middle income families who would not qualify for a local authority house and would not be able to get a mortgage from a building society.

I hope the Minister will indicate how much of the projected £65 million the Housing Finance Agency were expecting to raise from the sale of bonds was received. My information is that the response was practically nil. If the agency were not able to raise the money in that way, will the Minister tell us how the money is to be raised? Is it to be provided directly from the Exchequer? If so, will a mini-budget be required to raise the £65 million? Will the Housing Finance Agency be allowed go to the wall? I doubt it. It should not be allowed to collapse because the loss of more than 3,000 loans to buy houses would be a devastating blow to the construction industry where unemployment is running in the region of 50 per cent. The financial position of the agency and the future of their operations should be clarified by the Govrnment before we go into recess.

The Government have failed to make any significant impact on the four major problems facing our people, unemployment, taxation, health and education. They have done little or nothing to create new jobs and in many cases have failed to take the necessary steps to protect existing jobs. I should like to refer to one such case, the Clover Meats group. The circumstances surrounding the closure of Clover Meats are rather bizzare and would justify the holding of a public inquiry into the whole affair. My information is that a temporary loan by the Government of a sum as small as £80,000 could have saved the 800 jobs in Clover Meats. That is all that was needed to keep the operation going for a few days until intervention payments of some millions of pounds came through. Those payments have come through since. In fact, management had negotiated a loan of £4 million with two foreign banks, a Paris bank and Barclays Bank in London to modernise the bacon production section of the firm.

The banks recognised the economic viability of the firm to the extent that they were prepared to put £4 million into it. The loan had been agreed at the time the plant closed. The Government could have stepped in to ensure that the factory remained open until the intervention payments arrived. All that was required was a short term loan but instead of granting that facility a receiver was sent in. The receiver has since disposed of the assets. Amazingly, in disposing of the assets he has also disposed of the brand name, Clover Meats. The Wexford factory was sold to foreign interests and, apparently, that factory purchased the brand name, Clover Meats.

The Minister for Agriculture gave a guarantee that the firm would reopen better than before. Let him now explain to the people of Waterford what he meant. That firm can never again open as Clover Meats because the markets are gone with the brand name. If one reads the papers one will see the little war going on between the Purcell Brothers, the Fianna Fáil cattlemen, and Mr. Larry Goodman, the Fine Gael cattleman, to take over the market in Egypt, Libya or wherever. In this case it was the Government's man, Mr. Larry Goodman, who put down a deposit for the Waterford plant, but apparently he has not paid over the rest of the money and the plant is off the market because the receiver cannot sell it again. This plant is lying idle. Presumably Mr. Goodman has his own good reasons for leaving it idle, because since there are many other meat plants why would he bother re-opening Clover Meats. It is better for him to put a deposit on the plant, leave it closed and keep his other businesses going.

There is a widespread belief in the area that the Ministers for Finance and Agriculture connived at the undermining of Clover Meats because very little money was required to keep it going but it was not provided. The skills of the 800 workers in building up the great Clover brand name have gone to waste. The workers in Waterford and Clonmel have not even received their statutory six weeks payment in lieu of notice.

There are so many unanswered questions about this affair that it would probably require a public inquiry to clear it up. But, if the Minister has the answers, he should give them to the House when he is closing this debate. If the Government are allowed to do so, they will walk away from Clover Meats as they walked away from Irish Shipping, from the AIB /ICI problem and from the PMPA/PMPS position where approximately 6,000 small investors were deliberately fooled by the Government. They were encouraged to invest in the PMPS at a time when the Government knew PMPA were going downhill. The Government bailed out the policy holders but let the PMPS depositors go to the wall, suffering a complete loss.

The health services is an area which has been singled out by the Government for particularly severe cutbacks. These cuts inevitably most severely effect the poor, the elderly and the infirm.

Health services have been pared to the bone in recent months, and demands for further cutbacks are putting the health boards in an impossible position. The policy of placing cash limits on the health boards is a particularly cowardly way of running the health services. If the Minister and the Government believe that cutbacks can be made without damaging the overall quality of the service then the Minister has the responsibility to point out the ways in which this can be done. Instead he leaves the health boards short of money and forces them to decide where the cuts are to be made. Then the Minister denies all knowledge of the cutbacks, presumably hoping that public criticism will be directed at the boards rather than at him and his colleagues in Government.

The per capita spending on health services in this country is already lower than any other country in the EC with the exception of Greece, the proportion of our GNP spent on the health services has actually decreased in recent years and further cutbacks could now have disastrous consequences.

It is all the more unacceptable that major cutbacks should be taking place in our health services on the grounds of financial stringency at a time when there is more than £30 million outstanding in unpaid health contributions from the farmers and self-employed. If the Government put half as much energy into the collection of these moneys, as they put into imposing cutbacks, then we would have a much better health service.

The Government plan, Building on Reality, spoke about an emphasis on community care. This is fine in theory, but what is happening is that there have been major cutbacks in budgets for institutional care without any compensating increase in spending on community care. If the Minister is serious about relying more on community care, then he is going to have to provide the finance, personnel and resources to dramatically expand existing community care services.

Much as the Minister might try to deny it, the health services are being savaged. This is obvious to anyone who works in the area, and is certainly obvious to those who are waiting for treatment. Waiting lists for outpatient treatment have grown longer and longer and wards have been closed. The Irish Nurses Organisation have quite rightly pointed out this week that it is dishonest for the Minister to state that there have been no jobs losses in the health services.

It is getting more and more difficult for people to get public hospital services, but it is getting easier for those with VHI to get private treatment. Despite what the Minister says, the process of institutionalising private medicine within the public area has continued and has been consolidated under this Government.

We are repeatedly told that we have the youngest population in Europe. Indeed it has become something of a cliché, but it seems from the way in which this Government have treated young people that they consider them to be a liability rather than our greatest asset. Certainly this is true in the field of education. The Minister for Education announced a few weeks ago, just in time for the local elections, that five new third level colleges were to be built. This was welcome news for the areas involved, but it will be of little or no contribution to a better educational system if these colleges are developed at the expense of cutbacks at primary and secondary level.

In my constituency we have been waiting for Gael Scoil Inchicore for a number of years. We already have the site but the purpose of the argument between the Department of Education and the Commissioners of Public Works seems to be to delay the project. Presumably the Minister says there is no money this year and that everything should be delayed and obviously this is what is happening in Gael Scoil Inchicore. Similarly a community college in Castleknock was promised. They have the site but this project has also been deferred. Announcements like those relating to the new third level colleges receive generous publicity, but there is a constant campaign of cutbacks in first and second level education which receives little or no media attention. These cutbacks have been particularly severe under the present Minister.

At second level we now have larger class sizes, reduced subject choice, poorer guidance facilities and fewer remedial classes. In the primary area we have the worst pupil/teacher ratio in Europe; yet there are hundreds of primary teachers out of work. We would need in the region of 4,000 new teachers simply to bring us up to the level operating in Northern Ireland.

It is a shocking indictment of successive Fianna Fáil and Coalition Governments, that one in four primary schools have prefabricated classrooms, that one in ten do not have drinking water, that three in four do not have a telephone, and that one in eight primary classes have in excess of 40 pupils.

The Department of Education, showing all the narrow and conservative thinking that has dominated their thinking since the twenties, continues to pursue a policy of fiscal rectitude which victimises the most vulnerable and least articulate members of society. If we are to have a fair and democratic system of education, all levels — from pre-school to third level — must receive a fair share of resources.

This is where the whole question of Fianna Fáil's credibility comes in. In order to do this in the health area, the educational area, the jobs area, you have to raise taxes from people who are not at present paying tax. You have to bring in the money from those evading and avoiding paying taxes and you have to put more taxes on the wealthy. Fianna Fáil abolished the tax on the wealthy. We have to put more taxes on capital in order to provide education and health services.

Fianna Fáil made excellent speeches. Deputy Haughey cried crocodile tears for the PAYE sector and for the workers. He said excellent things about what should be done, but when it comes to where the money is to come from Fianna Fáil have no credibility. Even yesterday we saw that they do not want to put one more penny tax on the farmers. They want to ensure that the farmers do not pay, that business people do not pay, that speculators and fly-by-night company directors do not pay and that the tax evaders get away with their evasion. They have not one idea about where they will get that money to pay for the better services and to give more money to the construction industry.

This is what leads to the great lack of hope, to the despair among our young people. They know that, even if we throw out this dreadful Government and put in Fianna Fáil, we will get precisely the same policies. There will be no change. The only people who will make a change and bring hope to the young people will be The Workers' Party.

The Deputy's party will never see it.

Limerick East): The growth of crime is one of the most serious problems facing our community and since I became Minister for Justice it has been one of my priority tasks. As we know, however, the problem of growing crime is not unique to Ireland but is a feature of virtually every modern democratic society. I do not seek to minimise the seriousness of the problem, but it is worth putting on record the fact that other countries, with far more resources available to them, have much worse problems than ours.

It is worth looking at the most recent available statistics for 1981 where crime is compared in different countries. The statistics are presented in terms of numbers of crime per 100,000 of population. We find that in an extensive list of countries we are right down towards the end. In places like Canada there are over 12,000 crimes per 100,000, right down to Denmark, West Germany, the United States, England, Wales, The Netherlands, Australia, Northern Ireland and Greece. Ireland is away down that list. It is also revealing to look at the murder rates of various countries. In 1981 Ireland had 24 murders and the same in 1984, 23 of which were solved. We find that this is away down in terms of rate per 100,000 of population. The Netherlands have almost 11 per 100,000, the United States almost ten, Canada six, Denmark five, right down to less than one for Ireland. Only Norway had a lower rate than us. We have a rate of .70, Norway has .66. We should put that in context before we talk about a crime ridden society with crime rates in excess of equivalent European and American cities. That is not at all true.

In a place like Miami, with a population about equivalent to Ireland, there are about 250 murders and Dallas, Texas has about 400 murders. Any United States city you like to take as an example runs into 200, 300 and 400 murders. The same applies to continental Europe. In Amsterdam the murder rate is extraordinarily high. That is a good example to pick because it provides a bench mark for manslaughter, assaults, offences of all kinds against the person, in direct relationship to the murder statistics and the subsidiary crimes of a related nature which are also taken in context.

That is not to say that we should not be attacking the crime problem, and certainly we will. The Garda are in the forefront of the campaign in the fight against crime. I am absolutely committed to giving the Garda Síochána the resources which they need to enable them to do their job effectively. The main emphasis of our approach has been on increasing manpower and improving equipment; strengthening the criminal law and increasing prison accommodation to cater for the growing number of offenders being sentenced to imprisonment. Deputies should note that over £300 million has been allocated in the 1985 Estimates for the criminal justice programme, the bulk of this going to the Garda Síochána. We have maintained the strength of the force despite cutbacks in other areas of the public service. The general restriction on recruitment is not being applied to the Garda and the national plan provides for the maintenance of the strength of the force at 11,400. This represents a net additional increase of 700 over the past two and a half years.

I noted that Deputy Haughey this morning re-echoed a commitment to the programme for the local elections produced by Fianna Fáil. He promised that he would increase Garda numbers to 12,000. I think there are enough gardaí at the moment. The emphasis should be on how they are deployed, trained, recruited and managed. We can have a very effective policing system here with 11,400 gardaí. If extra gardaí are necessary, then we will provide them in future years but I do not think it is now necessary. My emphasis is on what we will do with the gardaí we have.

I have taken a number of important steps. A new scheme setting out new promotion procedures to be followed for promotion in the Garda Síochána has been set up, agreed between myself, the Garda Commissioner and the various staff associations. The aims of this scheme are to select for promotion to any position in the force the candidate who is best qualified and most suitable and to do this in a way that is fair and accepted as fair, I am confident that the new scheme which has been in operation for over two years now is contributing significantly to the management skills of the force.

As far as recruitment is concerned, it is my intention that new procedures should be introduced which would include the following elements — an educational qualification of leaving certificate standard, a psychological test and a searching competitive interview. The usual requirements in relation to good health and character will, quite obviously, apply. I intend that the new procedures should apply to the next intake of Garda recruits.

Even though I have been over two and a half years in office, I am still working from the recruiting programme which was initiated by the previous Government and I am working from the panel of candidates that arose from that recruitment campaign. In the next recruitment campaign — the first of this administration — the new regulations will apply and also the new recruitment procedures. I also intend that new training procedures should apply to the next recruit intake. As the House may be aware, the Garda Commissioner recently, with my approval, established a committee, which include people from the private sector and the academic field who have valuable experience in personnel training and development, whose mandate is to examine Garda training needs at all levels, from basic recruit training to courses provided for the senior management rank in the force. Having regard to the wide range of training that the committee have been asked to look at, it will, of necessity, take them a considerable time to complete their work. I have, therefore, asked the committee to give priority to basic recruit training and I expect to have their report on this aspect of Garda training later in the summer. There will be in the autumn a new training scheme under which all recruits will come in in the autumn.

I have also taken steps to improve the Garda organisational structure in areas where there was severe pressure on the existing management. Last month I approved the creation of two additional Garda districts — one in the Dublin metropolitan area and one in Cork city. The new Dublin district has its headquarters at Fitzgibbon Street and comprises the sub-districts of Fitzgibbon Street, which has been transferred from Store Street district, and Mountjoy, which has been transferred from the Bridewell district. The reorganisation is designed to relieve work pressures which were particularly heavy in the Store Street and Bridewell districts and to strengthen Garda resources in the city centre area. In addition to the new superintendent, the necessary inspectors and other support staff are being appointed to the new district.

The completion of three new Garda stations in Cork city provided the opportunity for a reorganisation of the Garda district structure there. The new district increases the number of city districts from four to five. It has relieved particularly heavy work pressures in the Union Quay city district and has enabled a reorganisation of a number of sub-districts including those which were in the former Cobh district, which was divided by the River Lee. The necessary support staff are being provided for the new district in addition to the extra superintendent.

What I am saying is that we have enough gardaí, but we should proceed to train them better, recruit them in a more modern and more efficient way and deploy them better. This is an ongoing process which I continued a month after I came into office and which I am continuing now. I think the Garda should also be properly equipped. I have taken steps that they will be equipped. I should like to deal with that aspect now. Every time a serious crime is reported, a cry goes up from one quarter or another regretting that the Garda have not modern equipment, otherwise these things would not happen. They have the most modern equipment. There is no stinting in Garda equipment. I should like to outline what has been done and is in the course of being done.

A modern sophisticated radio communications network is currently being provided for the force. The first phase of this network, which covers almost 700 Garda stations in the 18 Garda divisions outside of the Dublin metropolitan area, is now virtually completed. I understand it will be switched on for the whole country at the end of July. It will provide the Garda with their own independent radio communications system and it will mean that, at practically all times, gardaí and Garda cars on patrol duty will be contactable. I am confident that the new network will be of very significant benefit to the Garda.

The second stage of the national network is the system for the Dublin metropolitan area. I recently signed a £2 million contract for the radio equipment which will go into the 43 DMA stations and the new central DMA control centre. Tenders for a computerised command and control system to be installed in the control room are now being evaluated and I hope that it will be possible to place a contract for this element of the system in the near future and the money for that is provided in the Estimates. Similar systems have proved to be of very considerable benefit to police forces in cities abroad and I am confident that it will also be of immense value to the Garda in Dublin. They need to have the radio system and the new command and control headquarters computerised. That will be provided this year.

Computerisation in another area is also of considerable assistance to the Garda Síochána. The Garda computer service was considerably expanded towards the end of last year when about 60 visual display units and ancillary equipment were purchased. This has enabled the 18 Garda divisional headquarters, some major stations outside the Dublin metropolitan area and a number of the busiest stations within the Dublin area to be linked directly to the Garda computer. This facility for immediate access to records — for example, to check out stolen or suspect vehicles — is of great practical assistance to the Garda Síochána.

Another area where significant progress has been made is in the provision of up-to-date facilities in Garda accommodation. Over two years ago an accelerated Garda building programme was launched. Already 26 new Garda stations have been occupied by the Garda, including large new stations at Tralee, Santry, Ronanstown, Cahirciveen and Arklow as well as three large stations in Cork city. Work is well under way on a further 17 large projects, including new divisional headquarters at Galway and Monaghan, while contracts have recently been placed for major new stations at Roxborough in Limerick and at Swinford. Contracts will be placed this month for major projects at Tallaght, Westport and Sligo and tenders will be invited during the coming months for new stations at Tuam, Ennis, Lucan, Kells, Tipperary and Ashbourne. Planning is well advanced on new divisional headquarters stations for Union Quay, Cork, for Bandon, Letterkenny, Drogheda and Mullingar.

In a time of economic difficulties this level of building activity indicates a real level of commitment to the Garda building programme. In two and a half years a sum, of £8 million has been spent on a new building programme for the Garda Síochána and the Government have made an even greater financial allocation for the future. As I announced earlier this year, almost £15 million has been allocated to the Garda building programme in the next three years.

Apart from the Garda stations I have mentioned, a new headquarters has been provided at Harcourt Street in the DMA and this compares favourably with that of any police force anywhere. The Garda Depot has two major construction projects underway at the moment. The refurbishment of the central block has just commenced and tenders have recently been invited for a major extension to the Technical Bureau. All of this proves that the Government are committed to providing the Garda with the accommodation and equipment they need.

The Garda have also requested the facility of a firing range. Improved firing range facilities which will enable gardaí to have firearms training and to have it improved have also been provided. A new indoor firing range in the depot is now ready for use and it is one of the most modern facilities of its kind. It compares favourably with that of any police force in Europe or in North America. A suitable site has also been acquired for an outdoor firing range and this facility should be fitted out and ready for use towards the end of this year. Again, there is no problem with finance. The site is available and it is being fitted out. In the area of the indoor and the outdoor firing ranges, of the £23 million being spent on Garda accommodation, of the massive amount of money being spent on a radio network scheme throughout the country and in the area of computerisation, the Garda are getting the kind of equipment and accommodation they did not get previously but which they need in the fight against crime. In the future when some high-profile crime occurs, I hope that people will not rush into print arguing about any lack of equipment of the Garda Síochána.

The new garda complex at Santry — the former Talbot Motor premises — is in the process of being fitted out to accommodate a variety of Garda services such as the transport carriage office and the barrack master's stores. The overall progress I have outlined indicates the commitment of the Government.

It has also been my concern to ensure that the Garda, have available to them sufficient powers to deal effectively with crime. It is necessary to have a sufficient number of gardaí — we are committed to 11,400 — and then they should be equipped in the most modern way to enable them to act effectively. Management and deployment should be improved and then one makes sure they have the necessary legal powers to fight crime in a modern society. We have given them power they need in the Criminal Justice Act. It took a long time to get that measure through the Dáil. Only about half of the measures in it have been implemented but where they have been implemented they have been effective and we will be in a position to implement the remainder of the Act in the autumn.

As the House knows, some of the provisions of the Act are already in force. When the complaints board has been set up and the regulations dealing with the treatment of persons in Garda custody are implemented, the remainder of the measures will be implemented. The Act is one of the most important developments in criminal law and procedure since the foundation of the State and I believe it will go a long way towards restoring the balance between the rights of the community generally and those of accused persons. It was a controversial measure. It took a long time to get through the House where it was debated thoroughly and properly, but in retrospect I think people are happy it is on the Statute Book. Anyone who had doubts about it last year had little doubts about it in the spring of this year when crime took on a higher profile than was the case 12 months ago.

I am sure Deputies are familar with the details of the Act but it is no harm to remind a wider audience of what has happened. There are stiffer penalties for firearms offences and the compulsory finger-printing of convicted persons was brought into force on 1 March 1985. With regard to bail, the law now requires that any sentence for an offence committed on bail be consecutive on any other sentence passed or about to be passed on a person for a previous offence. To make this provision more effective so far as sentences passed in the District Court are concerned, the aggregate term which a District Justice can impose when passing two or more consecutive sentences has been increased from 12 months to two years. In addition, absconding on bail has been made an offence for the first time and carries a penalty of 12 months imprisonment. Moreover, any sentence imposed for this offence has to be consecutive on any sentence passed for a prior offence. Offenders who continue to engage in criminal activity while on bail can now expect much harsher punishments by the courts.

Important changes in trial procedures have also been introduced. An accused person is now required to give notice of any alibi he intends to put forward in a jury trial. Majority verdicts have been introduced in criminal trials. The right to make an unsworn statement has been abolished. New procedures to allow proof by written statement and formal admission in trials will not only save court time, which is taken up at present informally proving matters that are not really in dispute, but it will also free a greater number of gardaí to deal with crime instead of being tied up in court.

Some of the key provisions in the Act are not yet in force. They deal with detention after arrest, the offences of withholding information about stolen property or illegally held firearms and inferences which may be drawn by the court against an accused. These will be brought into force when the two other measures are introduced.

On the subject of complaints against gardaí, in introducing the new independent complaints procedure we will be giving effect to another undertaking in the joint Programme for Government — an undertaking that was also given here when we were dealing with the Criminal Justice Bill in this House. My aim will be to provide a system for dealing with complaints that will establish and maintain public confidence in its fairness and impartiality and, at the same time, protect the Garda Síochána from unfounded allegations.

I should like to refer to one aspect that has recently been the subject of comment by at least one of the Garda representative associations. This concerns the provisions in the Bill dealing with what has been referred to as the right to silence. It has been said that the Bill will take away a garda's right of silence, thereby depriving him of one of his fundamental civil rights. It has been alleged that measures that were considered too draconian for criminals are now being introduced for the Garda Síochána. While I do not wish to pre-empt in any way the debate on the Bill when it comes before this House in the next session, I must put the record straight on this matter because of the importance of the issue.

The complaints Bill will make no change in the traditionally recognised right of a garda to remain silent when suspected or accused of a criminal offence. That is the only right of silence recognised by the law and that is preserved in its entirety so far as members of the force are concerned. Like anyone else, a garda will have the right to silence in relation to the investigation of a criminal offence.

However, members of the force are employees of the State and in the discharge of their official duties they are subject to discipline and to the authority of their superior officers in the same way as any other State employee. Indeed, I suggest there is no employee of any kind who is not subject to authority in precisely the same way. What is at issue here is whether in certain specific and defined circumstances members of the Garda Síochána when asked by the Commissioner, or by a senior officer acting with the authority of the Commissioner, to account for some aspect of the performance by them of their duties and in a context where there is no question of criminal charges being contemplated in relation to them, should have the right to refuse to answer such questions. My answer to that question is an emphatic "no". The Bill provides that in circumstances such as I have broadly and briefly outlined a member of the force will be under an obligation to answer. It will be a disciplinary offence for him to refuse to do so. Of course he will be fully protected as regards his right not to be compelled to incriminate himself, because the Bill provides that any statement made pursuant to the request to answer will not be admissible against him or his spouse in any criminal or civil proceedings.

I am satisfied and the Government are satisfied that a provision along these lines is essential to enable the new complaints procedure to work properly. It is by no means unique to the Garda. Can anyone suggest that other employees are not required to answer questions put to them by their employers or that the consequences for an employee would not be very serious if he should refuse to answer questions put to him by his employer? I have dealt in general with that provision because it has become a matter of contention recently and the comments in regard to it are not accurate. The right to silence in criminal cases is not being removed from the Garda. What is in question is the obligation on an employee to answer reasonable questions from his employer regarding his conduct in the performance of his duties.

When the Criminal Justice Act comes into operation I hope it will have the effect of improving the crime situation but we should look at the overall pattern, too. In 1981 crime increased by about 23 per cent over the previous year. In 1982 the increase was 9 per cent, while in 1983 it was about 5 per cent but last year crime was down by 2.6 per cent in the State as a whole. In the Dublin metropolitan area 57,664 indictable offences were recorded, a decrease of 4.8 per cent on the figure for 1983.

There are many who will not believe that. Many of the minor crimes are not being reported now.

(Limerick East): They are being reported and various surveys have indicated that the reporting level in this respect is as high as it has ever been. When more gardaí are put on the beat there is inclined to be more reporting of crime but there is never a correspondence between the incidence of crime and the reporting of crime. There is always a gap between the two. Also, as the incidence of community watch increases the more reporting of crime there will be. There was a real downturn in crime in general last year. There was a bad flare up this year but matters are back on an even keel and I trust that the crime figures at the end of the year will show a decrease also.

I have dealt previously with the scope that exists for worth-while crime prevention initiatives and I accept that for the foreseeable future most countries will continue to place major emphasis in their policies on the detection and apprehension of criminals. The problems associated with the successful detection of crime are such that it makes great sense both in economic and social terms to devote greater resources to preventing crime. I have dealt with that in detail previously.

The neighbourhood watch scheme, which is being introduced on a pilot basis, is being effective. It is now available throughout the country. Many schemes have been set up and a large number of inquiries are being dealt with. I hope that every community, especially in the urban areas, who wish to set up neighbourhood watch schemes will be facilitated by the Garda in the coming months. In this context I might mention that at a time when almost 50 per cent of our population is under 25 years of age almost one third of all detected crime in 1983, the last year for which I have figures, was committed by juveniles under 17 years of age. I shall not comment further on that statistic, but it is frightening. When we are talking about crime prevention we should be talking also about young people becoming involved in crime.

As I said recently, the Garda had two major problems to deal with at the start of the year — one was car stealing in Dublin and the other was the spate of attacks on old people in the west. I am glad that the measures introduced by me and by the Garda Commissioner have been effective and that the incidence of car stealing in Dublin has decreased dramatically in the past couple of months. In the first five months of this year the incidence of car stealing in the country as a whole declined by 29 per cent compared with the corresponding period last year. In the Dublin area the incidence in this respect has declined by about 19 per cent. Also the incidence of the ramming of Garda cars, which was very high in April particularly and to a lesser extent in May, has virtually disappeared. Obviously a major factor in this has been the availability of extra prison space. In addition, larcenies from vehicles are down by 14.5 per cent on the same period last year.

Frequently one finds this sort of pattern that even in a declining crime situation there is a flare up of one particular form of crime. Immediate and remedial action was required to solve the car stealing problem but now it is on a even keel and the incidence in Dublin is well down on the figures for any previous year. The Garda have arrested more than 800 people in connection with the stealing of cars and with stealing from cars and there are now more than 400 persons serving prison sentences in this respect. Obviously these factors have had a major impact on the figures.

During the year also the Garda have been in the front line against subversive elements in society and at no little cost to themselves they have achieved notable success on this front. I wish to refer particularly to the brutal and callous murder of the late Sergeant Patrick Morrissey following the armed robbery in Ardee recently. I wish to put on the record of this House my own and the Government's deepest sympathy to Sergeant Morrissey's widow and family. He was a brave man and gave his life in the cause of protecting his fellow citizens. Events such as this highlight tragically the dangerous task that we entrust to the Garda and the unselfish way in which they carry out that task.

This debate gives me the opportunity once again to reveal the Government's unwavering determination to deal with the threat to democracy and to the security of the State which we face from the activities of the Provisional IRA. The threat posed by that group will continue to be tackled by the Garda whether along the Border or elsewhere in the country. The Garda have had a number of successes in this task in the past year or so. One thinks especially of the seizure of the sophisticated bomb making equipment at Lusk, the seizure and capture of the deadly cargo aboard the Marita Ann and the successful investigation into the armed robbery at Drumree. The Garda are to be congratulated on these successes, but they were achieved at a price to themselves. They have suffered greatly at the hands of the IRA and their cohorts. The recent tragic shooting of Sergeant Morrissey brought to 12 the number of gardaí who have lost their lives through violence in the course of duty since 1970.

Undoubtedly the overspill of violence from Northern Ireland has led to increases in the number of serious offences in this part of the country, such as armed robberies, and has given rise also to an increase in the use of firearms by criminals in general in the commission of even the most petty crimes for which the rewards gained are minimal.

I should like to refer briefly to the situation in our prisons. At the time I was appointed Minister for Justice the average daily prison population was 1,236. At the beginning of this year about 1,500 offenders were being accommodated in prison and in recent weeks the number has been around the 2,000 mark. This is a phenomenal increase in prison accommodation. It is an extraordinary increase for any prison system to have to cope with in such a short period and for reasons I have explained to the House already it is all the more difficult to deal with when no new purpose built prison accommodation will become available for some time.

The pressures on the prison system lead to inevitable difficulties and problems but these are being faced up to as effectively as possible. We must always keep in mind that the only real alternative to the present situation would be to allow back into the community those convicted of serious offences without having served the sentences imposed on them by the courts.

The increase in the numbers that can be held in custody has been made possible by maximising the use of existing custodial accommodation and by the acquisition of Fort Mitchel on Spike Island. Fort Mitchel now accommodates more than 100 prisoners and I hope to increase this by about 50 in the next few weeks. I intend to use the facility as much as possible during the summer months to relieve the pressure on the older closed institutions, as traditionally this is the time of the year when the fine weather the rest of us enjoy can add greatly to the burden of those imprisoned and result in increased tensions among the prisoners.

I should like to refer to an aspect of prison policy that has been criticised by Deputies and also by people outside the House. Every civilised prison system operates a system of parole or some other form of pre-release programme for offenders and ours is no exception. What we operate in this country is a form, or perhaps I should say forms, of temporary release. The system which we operate, in fact, has been praised by people from other countries who have looked at it and compared it favourably with their systems. Probably the main advantage of our system which has attracted favourable comment is its flexibility. It enables the necessary expert advice on offenders to be obtained quickly and decisions to be taken fast in individual cases. Successive Minister for Justice have operated this system and I have no intention whatsoever of abandoning it. Sometimes difficult decisions have to be taken. I have no objections to being criticised for difficult decisions which have to be taken in letting people back into society who have not completed their sentence because we try to rehabilitate them.

There is one incident to which I should like to draw attention, that is a particular Deputy who criticised me on a decision I took. I discovered a letter from the particular Deputy to a constituent recently. He wrote, saying he had been approached about a relative, a persistent young offender who was in prison. In his letter the Deputy said he had been speaking with my office about the case and his letter went on to say:

Unfortunately, after I made strong representations on his behalf in relation to the fact that his father promised to bring him back to England with him within the next couple of weeks if he could be let out they told me that this promise was made on several occasions before and after returning to England in 1982 he was back after a week and got into trouble again and the Minister will not allow his release at this time.

Fair enough, but the letter concluded as follows:

I am very sorry that the news could not be better on this occasion but you will understand that as we are not in Government at the present time my hands are tied.

That is from one of those Deputies over there——

What constituency? He must be from Limerick.

(Limerick East):——who had the cheek to criticise me.

He must be from Limerick.

(Limerick East): Deputy Reynolds wants me to name one of his lads he does not like and I am not going to do that.

The Minister has been caught out himself.

(Limerick East): I am not going to name one of those lads.

The Minister should be allowed to continue without interruption.

(Limerick East): All reasonable people in this House will understand the difficulty I have——


Acting Chairman

The Minister has only one minute remaining.

(Limerick East): In effect the Deputy was trying to buy votes on a promise of releasing a persistent offender from custody and at the same time publicly criticising decisions made by me on the basis of reasoned professional advice. I will not name him at present because he has developed hyprocisy to such a fine art but there is a limit to what I will take of this fork-tongued approach. If he does it again I will name him, and I will name him outside the House as well.

I should like to congratulate the Garda. Two and a half to three years ago there was a massive drugs problem in this city. The dogs in the street could tell one of the godfathers who were organising drugs in this city. The Garda have been very effective over the past two years. Now that problem of heroin has plateaued out. I hope we can ensure that the problem now sweeping the United States, the problem of cocaine addiction, can be kept out of Dublin and that the Garda will be as effective in keeping that problem out of Dublin as they have been in combating the heroin drug-pushing here, arresting the people responsible, processing them through the courts, leading to a situation now in which the better known of them are serving very long prison sentences.

This has been a very disappointing Dáil session not just because of the type of contribution we had from the Taoiseach this morning but because of the amount of unfinished business remaining on the Order Paper today. There seems to have been a blatant disregard by the Government of all their electoral promises to date. The unemployment situation is out of control. The budget deficit is at an unprecedented level. The national debt has grown to a level never before witnessed in the history of the State. There has been a complete U-turn on all the economic and fiscal policies outlined by the Government over the past three years and a breakdown in the Government's parliamentary performance. We see Bills withdrawn and emasculated. We have the Local Radio Bill currently in limbo, the Valuation Bill distorted out of all recognition, the Farm Tax Bill with amendments exceeding the total wordage of the original Bill and the Companies Bill which is to be the next test of strength between the diametrically opposing factions in the Government parties. It appears that the Government are unable to finalise any business they have on hands. They are not in control of their own destiny. What is happening at present is that certain individuals are exerting a veto on what the Government can or cannot do and this veto is being exercised by elements on the far right and far left, depending on whether one is talking about the Fine Gael or the Labour Party.

Certainly it must be unprecedented for the Taoiseach of the day to come into the House and give a state of the nation speech unscripted and unprepared, as he did this morning. One expects a little better from the Taoiseach in his end of term contribution than that which we had to endure in this House this morning. It was obvious from the disdain showing on the faces of the bureaucrats present in the House at that time that they either could not or would not prepare a script for the Taoiseach. They looked at him aghast, at his low-pitched and rather vulgar contribution which certainly reached an all-time low, bar one other occasion when he spoke in the House, and that was in December 1979. Of course, I suppose we can expect that what he was delivering was in accordance with the national handlers' instructions for the day. That is the kind of speech that this country has become accustomed to when the handlers are in possession. I take it that their instructions this morning to the Taoiseach were: you had better show your teeth and stiffen up the neck of your backbenchers before they go on holiday because the chances are they will not be returning, at least leaving them with something to hang on to over the summer. It was a pathetic defence of a disgraced Government party. It was the most pathetic defence of a Government in my time in this House.

The public are disenchanted with Government excuses for their inactivity. One might well ask: what have they achieved anyway? That is the real question that must be posed here today. Had they had any achievements to put on the record they would have been trotted out for the delectation of us all. But they have nothing to show as far as achievements are concerned. In so far as the unemployed are concerned what relief can the Government display that has been shown them, with those figures at an unprecedented level and the numbers of people who must emigrate also at an unprecedented level, not just individuals on a migration train but whole families seeking accommodation on the emigration ship for the first time since the late fifties. What relief have this Government given the PAYE workers? We all know there has been a huge reduction in the amount of the disposable income available to the middle income group. They are the new poor of this country, people existing on increased levels of overdraft every day. All one has to do is check in the city to discover that most private and commercial concerns are existing on increased levels of overdraft made available to them by the associated banks. What do we see the PAYE worker having to endure at present — one billion extra pounds in direct or indirect taxation over a three year period. That is the response the PAYE worker has got from this unfortunate Government.

What have this Government done by way of relief for the poverty trap? There is much talk of doing something to relieve poverty among the ordinary citizens. What about the number of medical cards that have been removed from the ordinary individual who cannot now provide a satisfactory level of health cover for himself or his family? What about the food subsidies which have been so much curtailed that have led to a very steep increase in the prices of all foodstuffs——

What of the situation obtaining at present in the Department of Industry, Trade, Commerce and Tourism where all the money provided in the Estimate this year in support of the bread subsidy has been used up? Unless the Government are going to provide extra money by way of a supplementary budget later this year, then I take it that the next step to be undertaken is exactly what they did last year, removing the rest of the food subsidies and, the bread subsidy in particular, before this Dáil reconvenes.

If it ever does.

We see the increased rents the ordinary tenant has had to endure over the past few months. We see the reduced pay-related payments; the whole social welfare system has been emasculated by this Government and their inaction. There is no justification for this Government remaining in office. I might take one item of interest that is an indicator, more than any other, of the inactivity of this Government and the enormity of its effect on the ordinary taxpayer, that is the difficulty that has arisen over what is now known as the ICI saga, which situation has now reached national crisis proportions. The Government finances are about to be smothered by the ICI liabilities.

On more than one occasion since 28 March last I have drawn the attention of the Government to what everybody in the London market and in insurance generally is talking about, the total losses that would eventually come out of the ICI saga, but my words were waved away as being irresponsible. Now we have an informed leak in The Irish Times which suggests that the Minister, Deputy Bruton is about to make some kind of an announcement before the Dáil rises this afternoon by way of a holding statement. It is suggested in the educated leak that that sum will be more than the £50 million that the Minister indicated in the Dáil on 28 March this year. It is now expected that it might be as much as £250 million. Today's publication of the magazine Success deals very effectively with the real situation.

The Deputy is not going to quote that?

Its headline says that ICI blunders could cost £1 billion. Was the Minister aware of this on 28 March last when he came to the House and advised the nation that the more likely figure would be £50 million but that it would certainly not exceed £120 million and when he and the Minister for Finance give a guarantee that they were taking the matter in hand and that this would obviate the need for any recourse to the Exchequer? The Minister also said that the Government would not now be involved in the funding of the administration of the ICI. The Minister gave a guarantee that in the arrangement entered into by the Department, the supervising authority and the Central Bank, everything was rosy and that the unfortunate taxpayer could rest assured that he would not have to pay the brunt of any of the losses of ICI and that the compensation fund would be used as a vehicle whereby the moneys that were being made available by soft loans etc. would be made available by the Central Bank through the compensation fund.

The facts have been made public today in magazines that have undertaken a survey and have sent people to investigate the whole business in London, whereas the Minister and his staff are obviously unable or unwilling to undertake the investigation that was promised so that before 30 June this year the people would know the full extent of the losses that would have to be endured because of the collapse of ICI. The Irish Times in an interim statement say that the losses might amount to £250 million and Success say that it might be at least £500 million and that it could end up at £1 billion when one takes into account the possible outfall from the reinsurance contracts that were entered into by ICI in their London branch.

It is irresponsible of the Minister not to have responded before this time. I assume the Minister is going to do something before the day is out, because I see some of the supervisory authority officials in the House. The Minister has been irresponsible, particularly in the face of the mountain of evidence that has been talked about in all insurance and business circles and financial institutions in Dublin for the past number of months. Obviously the enormity of the loss will again be glossed over by the Minister. Unless the Minister can satisfactorily answer the questions asked in the two documents referred to earlier, he is not responding satisfactorily to the commitment given by him and by the Minister for Finance when the Insurance (Amendment) Bill, 1985, was being discussed on 28 March last. If the figures are as bad as has been suggested in the two publications mentioned there is no point in awaiting the final report when the audited figures for 1984 come to hand, some time before the end of this year. The reinsurance fallout is well known to take up to five years to come to completion.

The Minister should come clean and admit that he has the report from the administrator as to the total liabilities of ICI and he should tell us how he proposes that the Government will deal with that matter and if he will honour the guarantee given by himself and the Minister for Finance to the people in the face of difficult cross-examination by the leader of this party and myself, that liability would not be attached to the ordinary taxpayer. What does the Minister propose doing about it even if the loss is only £250 million? I am assured that that is only the tip of the iceberg. What options are open to us? Will the Central Bank dip further into their reserves and strip away the cover for the currency to accommodate any further shortfall? Will the compensation fund be used as suggested by the Minister to take up the loss? We all know how the compensation fund gets its money, £10 million is the total coming in from the 2 per cent levy on general insurance and £10 million is chickenfeed compared to the kind of money we are talking about. Will there be a budgetary adjustment? Is that the solution? If it is this Government will not be reconvening on 23 October this year. The Government will die long before then because the budgetary arrangement could not stand up to that kind of impact if it is in the region of £400 million to £500 million as Success have suggested after exhaustive examinations with the major London reinsurers and people working in the insurance business generally in the London marketplace.

Will liquidation be put forward as another option? Some months ago it was suggested from this side of the House that that was an option which might have been considered long before now. In the publication I refer to it is clearly stated that that is the only option available to the Government — the liquidation of ICI and the possibility of calling in the fraud squad to see if there is anything suspect to be looked at. The people who are recommending that are not fly-by-nights; they are the major people dealing with international insurance in the London market, people like Mr. Posgate, the leading underwriter of our times, Mr. Mike Butt of Sedgwick House, a leading insurance business, Michael Till of Burgoyne and Alford and John Gardner from Insurance Solvency International. These are the people who gave evidence to Success. These are the kinds of people who said that there is only one option open to the Government to consider and that is the liquidation of ICI.

Is that what the Deputy is recommending? Is that what the Deputy wants us to do?


Deputy Quinn is in charge of employment and we know his record — 300,000 young people with no prospect except to take the emigrant ship and take menial jobs abroad in London and America.

What is stated here from all the exhaustive investigations that have been carried out is that losses are not less than £500 million. When one adds inflation over the five years before the reinsurance clauses are finally complete and when one takes into account legal costs and the currency fluctuations, that could escalate to £1 billion. That is £300 on the head of every man, woman and child in this State. That is the kind of figure that is being talked about outside. It is about time that the Minister came clean with the people and suggested what option he was going to take to deal with the matter.

Who would be shouting loudest if the question of liquidation was put on as an option? It would be the unscrupulous brokers who took this country for a joyride over the past couple of years and the dodgy reinsurers who were employed by the underwriter attached to ICI in the London marketplace over the past three or four years. Up to 150 reinsurers were used, and my information from the city of London today is that most of them have gone out of business, quite a number are going out of business and others cannot be identified by name.

What were headquarters about in ICI when these liabilities were being put together? Did they know what their leading underwriter was about in the London market? What were the Department doing over the past three years when these losses of ICI were being accumulated? Nobody designated policy to the leading underwriter of ICI in the London marketplace, and a major share of the blame must rest squarely with the Minister who failed miserably to carry out his function as Minister in charge of the supervisory authority.

What did the supervisory authority do in maintaining the solvency margins of ICI over the last few years? Did they see to it that the technical reserves as laid down in the Insurance Acts were properly maintained and that the capital base of the company was maintained? Did anybody scrutinise the risks that were being taken by ICI? What exact information had the supervisory authority over the past few years, and what orders did the leading underwriter of ICI get from his headquarters? The premium growth in the London branch of ICI was up by 100 per cent in three years and this was not matched by any increase in their capital base, and the reinsurers are flying out the door as far as the losses of ICI are concerned. I brought that to the Minister's attention under priority questions a few weeks ago and I was waved off as talking irresponsible nonsense. Now we have the educated leak from the Minister today that perhaps it is up to £250 million now. Who knows what is going on? Is the Minister in charge of his Department at all or has he any means of calculating what the losses will eventually work out at? They have been stated positively by all the experts in the field as being double what he suggests in his educated leak this morning, and that means £500 million that can be met only by the taxpayer eventually. We would like to know when the Minister proposes to take action to correct the situation.

All the world's reinsurance market has been collapsing for the past year or two and only the very best reinsurers will survive. There is no doubt that the sudden death clauses in the insurance contracts that I have referred to here on more than one occasion are now being utilised against the parent ICI. They are all using the way out which has been made available either through insolvency or change of ownership of ICI to redefine or redraw their sudden death clauses. In effect that means that the reinsurance that ICI had is now falling due to be paid by them because their reinsurance contracts are not being kept. That is why the figures will be enormous and to the detriment of the Irish taxpayer in the very near future.

The binding authority I referred to when the Bill was being discussed are still in place if my information is correct. That is not to say that this was not well known to the powers that be, the supervisory authority and the Minister, in 1982 because Insurance Solvency International published their report shortly after that time and it was stated positively that the world reinsurers and the London brokers regarded Ireland as a soft touch and had taken the Irish taxpayer for a joyride, and that could mean the collapse of this economy if the total amount of money being suggested as a total liability has to be met by the taxpayer. For that reason I say that the question of liquidation must be an option with only one proviso, that the Irish policy holder of ICI will be protected. He was not the one responsible for the losses. The total loss in the Irish headquarters, the Irish home market, was less than £5 million last year, so the damage was done in the London branch office.

I tell the Minister that it is a very small technical rearrangement to get an accommodation whereby we would say to those unscrupulous brokers, those sliding out reinsurers, that the Irish people are no longer suckers for what we regard as the biggest rip off of the century as far as insurers are concerned. What excuse can the Minister make? He is going to throw aside 800 jobs in Limerick for the sake of £1 million. They will throw Irish Shipping out the window. He will throw Hyster and Clover Meats out the window for the sake of a miserly, paltry sum of money, but he is going to saddle the backs of the Irish taxpayers with £300 million, £500 million, think of a figure. We are in bingo mathematics according to the way things are happening today and that is no longer satisfactory.

I put to the Minister that the undertaking given here by the Minister for Industry, Trade, Commerce and Tourism, Deputy Bruton and the Minister for Finance will not and cannot be accommodated. Consequently they stand indicted for their misleading of the Dáil and the people here on 28 March. They also misled the House at that time in a contribution on the Insurance Amendment Bill when they talked about the number of guarantees that would be called upon to satisfy the demands of the Institute of London Underwriters. That demand was listed as £20 million and it was suggested that there would be no call up at all because it dealt with the aviation and marine side of their London business and that the bank, AIB, were putting £20 million on deposit with the Central Bank to cover any potential claim that might accrue. The market does not see it like that.

I must put on record that the marine side in particular did not always show an underwriting profit. That market has gone very sour for the past two years and the pay-out on foot of those guarantees is estimated by the leading London reinsurers as in excess of £30 million. The ILU in the recent past have put AIB on notice that they are holding them to the unlimited guarantee which was written by that bank to cover those losses should they arise. It says in effect that the guarantee covers not just marine and aviation, as this House was led to believe by the Minister in March this year, but other possible losses also. I would like to hear the Minister say that they have now taken on the unlimited guarantees demanded by the ILU and that they in effect could amount to an enormous sum of money, certainly far in advance of the £20 million that was put on deposit.

The Minister, Deputy Bruton, who obviously does not like to leave loose ends, must be suffering some pain in overseeing such incompetence, but he must take the responsibility for it because he is the person, together with the Minister for Finance, who gave the guarantees at the end of March. Who is preventing him from grasping the ICI nettle? Why is he allowing the future of our institutions to be speculated upon? Is he going to run in the face of the overwhelming weight of evidence coming from the international scene? How can he disregard all the overwhelming evidence that the amount of money that will need to be met is vastly in excess of the £50 million he indicated last March it would more than likely be?

The people have lost total confidence in the ability of this Government to get anything right. They cannot get the national figures right. They cannot get the budget deficit right. They cannot get the national debt right and there is now unanimous agreement that they have not got the ICI figures right. I challenge the Minister to come in here and say that what has been outlined in either The Irish Times article today or Success magazine in their evaluation of the figures is out of line with the facts. If it is, then we will be delighted to hear it from him today. If not, we can see nothing but the worst kind of economic gloom for the taxpayer who will have to pick up the pieces after the mismanagement of the ICI débacle by the Minister and the Government.

The Taoiseach referred today to the possibility of buoyancy in the figures. I will give one little snippet which shows how the Government have treated the tourism industry. We took some pride in the fact that the Bord Fáilte office was located on Fifth Avenue in New York. It is now closed. It was made available to the Irish Government for some £5 million and loan facilities were arranged. The Minister would not give permission to purchase the building when the lease fell due. It was a class location, a street level operation with the Irish tricolour flying on one of the major streets in New York. CTT, Aer Lingus and CIE had offices there, as well as other State agencies. The Government said "no" and the building is being vacated next month. They are going to a location 14 storeys up in a major office block in a back street. That is the way the Government think the tourism industry should be looked after in our major international market. Not a penny would have been required from the Government for the purchase of that prestigious location.

I referred during the week to the fact that the Priceline offices throughout the country are to be closed down. In the first quarter of this year 6,605 complaints were received from consumers in the seven Priceline offices, but a recent instruction from the Minister's office states that they are no longer to take complaints except in regard to maximum prices orders, which now relate to only five items. They are not allowed to carry out investigations and people are being told to shop around and to see their own solicitors. This typifies the attitude of the Minister and the Government in dealing with the ordinary electorate. They are discouraging the public from complaining against breaches in pricing regulations, misleading advertising and ruthless business practices. This is the way the Consumer Acts are being treated. How can this legislation succeed unless we have a complaints procedure?

This Government are floundering in a quicksand of indecision. The politicians and the Government should try to raise the expectations of people, not condemn them to dole queues and a situation where there is no hope, no possibility of employment for our young people and no hope for the business community. They stand indicated for their lack of progress in the past quarter. The sooner they get their act together, pull tent and go away, the better for the nation in general.

I always enjoy listening to the contributions of Deputy Flynn. I am constantly reminded that the great dramatic tradition of the west is alive and well and that John Millington Synge never once exaggerated in the fine dramatic contributions he made to our theatrical tradition.


The Playboy of the Western World is alive and well and masquerading as a serious economic commentator in this House.

Personal abuse is all the Minister is good for. He is supposed to be a Minister of State.


The Minister, without interruption.

The Minister got the lead from the Taoiseach and he is following suit becuase the handlers have indicated that there is no other way out.

It is an extraordinary thing that when any kind of comment is made in return, people find it difficult to take. I was not making any comment about the Leader of the Opposition. I was making a comment about Deputy Flynn in a manner which he has frequently adopted in commenting about me.

Deputy Quinn is a Minister of the Government.

I will elaborate on my reason for making that comment. My colleague, the Minister for Industry, Trade, Commerce and Tourism, will be speaking in this debate and no doubt will make some detailed replies to the points raised. Deputy Flynn is a former Minister at that Department and his recommendation in regard to ICI was to abandon our international obligations somehow or other and to trim down the ICI operation to its Irish dimensions alone, although he did not rule out the possibility of liquidation. Presumably he has no proposal as to how cover should be provided for the 161,000 people who have employer liability cover from that company.

A minor technical adjustment.

At the end of his contribution there was a suggestion that it was important for us to keep the tricolour flying on the ground floor of a Fifth Avenue building in New York. How could he reconcile one action with the other when his recommendation, primed by the PR lobbyist for the insurance business in London, is to pull the plug on ICI. His entire contribution could not have been better put by the enemies of ICI in London. I will leave a detailed response to my Government colleague.

The Government are prepared to let the taxpayer pay for it.

This Government have reached mid-term in their mandate at a time of difficulty. One can interpret from the results of the local elections that people are very unhappy with the state of the country and with some Government policies. I accept that. Anybody who would not take that reading from the results would not be realistic.

I am glad the Minister has commonsense.

This Government are doing the right thing, pursuing the right course, trying to turn the ship around——

I beg permission to leave.

——in a manner which it was always realised would not be easy. We said at the outset that it would be difficult and would require decisions to be taken which people would on occasion find hard to understand. We did what the Deputy who has just left this Chamber promised to do in January 1981 but he had not the courage to do it and did not get support from the two Deputies here. He has now walked out of this Chamber, perhaps because he suspected that this kind of point would be made.

Let the Minister tell us about the Joint Programme for Government.

It is extraordinary that interruptions from the Government side are personal abuse and points made by Government Ministers cannot be listened to by Opposition Deputies. We have this cacophony of interruption in the hope that a line of argument might be handtripped, fouled, destroyed or distorted. The reality is that the man who has just left this Chamber did not face up to his responsibilities because he had not the political courage to face the consequences of earlier decisions for which he was not responsible. At the end of the extraordinary economic splurge between 1977 and 1981, economic growth was down from 8 per cent to 3 per cent. I do not want to engage in a recent historical review.

On a point of order, while it will not be prescribed reading for anybody, does the Minister propose to circulate his speech?

No, which means that unless the Deputy wants to leave the Chamber, like his leader, he will simply have to listen to it. I was trying to say, before I was interrupted, that in 1987 I will be prepared to stand before the electorate along with the Labour Party members and those in Fine Gael on our separate programmes——

Separate programmes?

We are prepared to answer for what we have done, to point to our successes, and we will naturally also admit our failures. We have made mistakes because we are human. I want to talk about the decisions which are being made on behalf of the people in a manner that is not geared to the next by-election or general election. Our policies have regard for the future——

Spoken like a true socialist.

The Fianna Fáil economic policies which we heard, particularly from Deputy Flynn, respond to a kind of economic manifesto from Tír na nÓg but, regrettably, they do not represent a country of endless youth but one where people have never grown up. We must try to lead the people to a realisation that they are responsible for their own destiny, that independence means looking after our own affairs, controlling our own economy and building resources to create much needed employment.

Deputy Flynn suggested that we should arbitrarily abrogate international obligations in relation to ICI but he does not seem to realise that we have diversified trade from Great Britain and that we now engage in trade all over the world. Deputy Reynolds knows the success of the economy in terms of trade and how disastrous it would be for his company if the reputation of Irish businessmen abroad was undermined by the cavalier way he suggested that we should deal with ICI.


Nobody should underwrite fraud.

If Fianna Fáil aspire to being back in Government — and it is a legitimate aspiration — they should have policies which make sense so that we will not be back in the position in which we were in 1982.


I do not relish this argy bargy but I seem to be unable to make a contribution without constant interruptions. I will give as good as I get.

Did you ever hear such arrogance?

As far as the Labour and Fine Gael Parties are concerned, a majority of people believe that we can confront the economic crisis which currently afflicts the western world in a manner which will not beggar the poorest, abandon the weakest and close its eyes to the sections of the community who, through no fault of their own, are unable to fend for themselves. For that reason, despite the orthodox banking and economic advice which we have received to reduce current budget spending in a number of areas, we have consistently ensured that social welfare increases here are ahead of inflation. We are the only country in the EC which has increased social welfare spending in real terms over the last three years.

Deputy Flynn who has difficulty in regard to statistics and reconciling our statistics with his — so much so that he could not assess the time he had available — can check that the Minister for Social Welfare has increased social spending here at a higher level than any other Minister in the ten member states of the EC.


That hurts and the Deputies opposite do not really want to talk about it. We believe that we can confront this crisis without throwing overboard people in the community who through no fault of their own are unable to fend for themselves. Confronting economic difficulties does not mean that we should stop demands for reform in the social areas of family planning and in other areas where it is needed, because we are not attempting to suggest that our sole concern is with economic management. There are a wide range of areas such as education which need reform.

At mid-term we are on course and we have slowly but surely turned around the crisis which we inherited when we came to office. We have not done it as well as I would have liked or with the success which I hoped we would have had two and a half years ago. However, we have certainly started the turn around and the economic indicators, with one exception, are showing a positive upturn on the position prevailing in 1982. Even a person with an objective criterion of judgment like Deputy Reynolds will share this view. The one big failure which every Western economy has is in the area of unemployment and we are no exception. As Deputy Haughey said this morning if I interpreted him correctly — and I am open to correction on this — Ireland on its own, no more than Britain or France or any other European economy, has within its economic territory the capacity to provide full employment and that we can only do that together working as Europeans. For that reason we must try to encourage our partners in the EC to get the co-ordinated reflation of the European economies to create the kind of employment opportunities that can and do exist. If we try to do it on our own, as happened in 1977 with disastrous effects, or which was done in 1981 in France — a much larger economy — with similar disastrous results, we will simply compound the problem and leave ourselves with less room for manoeuvre in terms of accumulated tax liabilities and debts.

The debt has gone up.

Of course it has, because you cannot turn something around over night. We are not prepared to take the option which Deputy Flynn suggested in relation to ICI, which was to liquidate it.

You are not obliged to meet fraudulent debt.

While I could quite happily continue to argue the points I have been making for some time, I want, in the balance of the time allotted to me, to turn to some areas for which I have responsibility.

There is on all sides — on the side of employers, trade unions, and, indeed, on the side of consumers, a third partner in the industrial relations structure who is frequently not recognised — a degree of complacency regarding our attitude to the state of industrial relations. I should like to put on record that my Department are currently engaged in discussions with the Irish Congress of Trade Unions and the Federated Union of Employers on the reform of our industrial relations institutions. There are two points about those discussions that I should like to raise in the House. Despite what some people may think, and the air of complacency that perhaps surrounds our attitude to these matters — compounded, possibly, by the recession — there are serious problems with our industrial relations. However, I refuse to accept that there is nothing we can do about these but patiently put up with them. Of course, there are limits to what is attainable and, of course, really lasting changes will not be accomplished overnight; but that is no excuse for not making a serious effort. We are not condemned to live for all time with structures and procedures which were designed to serve a society long since gone and which in some cases did not even serve the society for which it was designed particularly well.

People in the labour movement hold that view. It is crazy to think that we can go into the last 16 years of this century and hope that our industrial relations framework will rest comfortably on the 1906 legislation which was conceived and developed in the last part of the nineteenth century for industrial Britain. If anybody was to suggest that we could construct an industrial development policy on legislation that was nearly 80 years out of date, despite the additional court cases, they would be suitably treated with concern. There is a fundamental need to reform root-and-branch the industrial relations structures we have. They are not serving society well now and, as time progresses, they will serve them even less.

In this regard, my predecessor, Deputy Kavanagh, and I have shown a commitment and a determination to see through far-reaching reforms in the industrial relations arena which are unparalleled since the forties, after the end of the Second World War when the Labour Court and the industrial relations machinery were set up.

The purpose of the discussions is to improve industrial relations and not to injure either party to the industrial relations process. Industrial relations will not be strengthened by weakening the trade union movement and I reject completely any approach which has such an end in mind. My aim rather is to make the kind of changes which will actively support the trade union official, shop steward and manager in the conduct of collective bargaining. Caution and tradition are some of the most significant attributes of those engaged on both sides in industrial relationships here. These factors are deeply embedded in the culture and climate of the neighbouring island Great Britain, which has so influenced our legal framework and industrial relations system. In the face of the constantly changing patterns and power relationships of the modern industrial community, these are the very factors that can serve to inhibit and disharmonise industrial relations. I am sure the majority of Members believe that good industrial relations require change, accommodation, flexibility and know-how. It is my intention to bring in a Bill dealing with industrial relations that will modernise the legal framework of industrial relations here. That has been an objective of successive Ministers for Labour going back to 1977 and before.

I should like to refer to another matter that I have direct responsibility for, the European Social Fund, its allocations and application to Ireland. The Taoiseach tried this morning to put on record some of the positive things we have achieved, not in any way to claim credit, as the administration might want to do, but to share that credit as ordinary people for some of the achievements Ireland has made. I should like to add to the Taoiseach's list.

It was a poor list.

On any normal basis of calculation, the basis of juste retour that regrettably but informally operates within the Community, Ireland is only entitled to just less than 2 per cent of any fund going in the EC based on what our contribution to funding normally is. On that basis we should be getting between 2 and 4 per cent of European Social Fund money having regard to the special status Ireland has as an undeveloped region. Last year we got 11 per cent plus and this year we are getting just under 13 per cent. That is not just a tribute to the Government, although the Department of Labour acts as the end agent for processing applications. We got the money because people in Brussels recognised that the applicants, different types of organisations throughout the country, warranted that financial assistance and were capable of making good use of the money. It was accepted that they had maximised their eligibility to get every kind of European funding available to them within the framework of the ESF. I should like to express my admiration and appreciation to all the nameless faceless bureaucrats who made that extraordinary success possible, those in my Department and those in the voluntary and semi-State organisations throughout the country.

This year we will receive £180 million from the EC which will be 55 per cent spending on social programmes, for training, education, job placement and work creation schemes of one type or another. The State, through the youth employment levy or other funding, will provide the balance. That will enable us to embark on a whole range of interventionist programmes in the labour market that, frankly, will have us as the most successful member state in our ability to intervene in the labour market to reduce the crisis of unemployment on the edges. That is all we are doing and I do not make any claim other than that.

We have the highest percentage of young people in the labour market of any EC economy. I am sure visitors, some of whom are in the House, are struck by the fact that Ireland appears to be full of young people. That is not just an impression, it is a fact. Despite that fact we have the lowest level of youth unemployment of any member state. It is still far too high and I am not adopting a complacent position in regard to the level of youth unemployment but, relatively speaking, starting from a high base, we have the lowest level of youth unemployment. I understand that three out of every four young persons who completed their leaving certificate examination, or equivalent, last month will within one year get a job. That is what our statistics tell us. Some anecdotal evidence may suggest that that is not the case and we are trying to improve our statistics. On the question of migration we do not have a sufficiently clear picture; but the picture we have, even taking it at its worst——

The Minister would be as well off without the true picture.

No, I want the true picture. I am not frightened by the facts.

What is the CSO saying?

Until we get the true picture on all issues on this island, whether it is about Northern Ireland, Church-State relations or anything else, we will not get anywhere. For too long we lived in Tír na nÓg and were happy not to have the true picture. I would prefer to have the true picture on the table. Statistics on the area of employment show that three out of four get jobs. They may not get the jobs they want and, certainly, they may not get the jobs their mother would want for them and not enough of them are yet getting jobs. However, we should not allow ourselves to be depressed beyond a level that is not warranted by comparison with any EC country unless we are setting standards for ourselves that we do not expect the Germans, the French, the British or the Americans to apply to themselves.

In the area of the ESF, of intervention, the Youth Employment Agency, AnCO and so on there is an enormous amount of activity going on funded at an unprecedented scale. Opportunity and work chances are being provided for people who would not otherwise get it. I want to pay a tribute to the people who were responsible and who made that possible — every AnCO instructor and trainee, the bureaucrats and civil servants in central and local government and so on. I recognise that the institutions developed in the manpower services to administer and co-ordinate this level of activity are not adequate and are not doing the job as efficiently or as effectively as I would like. It is my intention in the White Paper, which hopefully will be published in October or November 1985, to bring forward the proposals which we have already discussed in this House.

In two years' time when we face the electorate we will be able to say that five years earlier they gave the two parties in Government a mandate to sort out a mess which was of unprecedented proportions. We will also be able to say: this is what we have done, this is what we have changed, this is what we have achieved, these are our successes, and these are our mistakes. On that basis, we will be looking for a renewed mandate.

Democracy thrives on the reality that there is always an alternative Government. That is the fundamental difference between our kind of economic system and political systems——

You had better believe it.

Tragically at the present moment what we are looking at is an alternative opposition because we have not seen any evidence of a coherent programme in the last two-and-a-half years——

Ask the people.

——and these people got £200,000 or £300,000 of taxpayers' money specifically for the purpose of policy development. Tragically, we are in the area of Tír na nÓg economics.

In my view that was a very sick speech made by a sick Minister representing a sick Government.

With a bad doctor in charge.

The basics in regard to this nation's economic and social problems relate to the fundamental need to raise private and public investment. Unless that is done there can be no progress. We must get rid of all sorts of personality and ideological hang-ups and realise the fundamental reality of this issue which involves the recreation of a climate of confidence where investment decisions would be taken in the private sector, where jobs would be created, and where the level of capital expenditure by the State would rise as well. That is elementary and basic economics.

I find it incomprehensible that that kind of elementary basic thinking has not permeated this Government's thinking and actions. This raises serious questions as to the psychology of this Government and the capacity of the Taoiseach to realise what is the fundamental requirement in our society, to get to grips with it, to try to raise the level of investment, to create jobs, to generate confidence and to proceed from there. Politics and economics are intertwined. In my view, the creation of economic confidence is part of the creation of political confidence and is a psychological as well as an economic and financial factor. It is elementary economics to realise that if an investment climate is created in the public and private sectors, employment will rise, particularly if there are direct incentives in the high employment sectors, such as building, construction, tourism and so on.

The key to the creation of jobs is investment. During 1983 and 1984 we saw a massive slump in industrial investment in manufacturing industry. I will give one figure which is in a document published by the European Commission. In this document there is a table showing the investment figures in 1984 for all EC countries. We are at the bottom of the league. The figure is so disastrous that it should make any Government think. In 1984 investment in manufacturing industry in Ireland dropped by 39 per cent — the average overall increase in the Community was 7 per cent. In 1983 job approvals in Ireland slumped from around 30,000 to 14,000. No amount of talk from the Government or from The Workers' Party can hide that. We must have a climate of confidence in three areas — foreign investment, home investment and expansion in the private sector and an expanding capital investment programme by the Government. In all those areas we have had a continuing reduction in investment. That cannot be said often enough because it is elementary economics. I do not believe in the theory that economics is a mysterious science. It is a very basic business. People must have confidence in the society in which they live and the Government must have the political will to encourage investment and so provide more jobs.

The end result of what I regard as the most disastrous period in the history of this State is that unemployment has risen twice as fast compared with the EC average over the last two years. We have 228,000 officially unemployed, and on top of that 50,000 young people with talents and skills emigrate each year. They are going abroad to situations where their talents and expertise cannot be fully used and this Government do not appear to care for their interests.

Last week, on the occasion of the visit here by Senator Kennedy, I had an opportunity to talk to a number of American people who apparently had not been made fully aware of the very serious problems of young Irish people emigrating to the United States in illegal circumstances, in which they will not have appropriate and proper rights and where no care or concern is being shown by an Irish Government on their behalf and in their interests. At this stage of my political life, I find that very sad. I can understand many things but cannot understand how no attempt is being made by the Government to help these young people. They are going to a friendly country which could help if there was any motivation on the part of our Government in the interests of those people.

There is also a very urgent need in our society at the moment for tax reform. We are all agreed about that. This Government have put themselves into a position where they cannot deal with this basic matter for the very elementary reason that revenue is falling and has fallen to the extent that in the first six months of 1985 there is a deficit of £813 million on current expenditure which must be borrowed. That represents two-thirds of the total budget deficit estimate for the whole of this year. That is money spent on day-to-day expenditure and when one has that side by side with a reduction in capital expenditure, a Government are just borrowing to stay in power and for no other reason. They are not investing in the resources of the State, in the productive enterprises. They are washing their hands of the productive aspects of capital investment and are instead devoting their borrowing capacities to current expenditure. This has led to the neglect of the capital programme which is being drastically reduced. Investment is being neglected on the capital side and also on the private side by a lack of public confidence.

The construction industry which is the main sufferer from this neglect has a job loss of 45,000 workers, apart from the spin-off loss of jobs in ancillary industries ranging from cement to civil engineering, tiles, carpeting and furniture, from tradesmen to professional people. These ancillary industries have a strong Irish manufacturing base and a high indigenous workforce.

Not alone is there the sin of omission by the Government but a positive sin of commission. Not alone has that industry been neglected, but it has been positively penalised in the recent budget by a doubling of VAT on house purchase. That is incomprehensible and incredible. It affects ancillary industries and services, investors and money circulation. The construction industry rightly has been called the barometer of a country's economic activity. This is a result of what the French called immobilisme— immobility or lack of political will.

Structurally, this Government cannot function. This was shown very recently with regard to the radio Bill and in the whole subjective approach in the contributions today which were entirely personalised — the disgraceful contribution by the Taoiseach, in particular. He resurrected the subjective approach which he first showed the country, loud and clear, on the election of Deputy Haughey as Taoiseach. People forgot about this, but we had the same twisted subjective approach this morning. It shows that this man is not fit for office. He is certainly not fit to be Taoiseach. This Government must go, on that count if on no other, because of the total incapacity to govern that the Taoiseach has shown, apart from the basic ideological cleavage that exists within the Government and gives rise to this paralysis in regard to decision-making and the exercise of power.

This Government are not concerned about the people, about public finances, about employment, about raising production or investment. They are only concerned about hanging together there. That can give rise to a very serious situation in our society, a quasi-revolutionary situation where people become totally disillusioned and disenchanted with petty men and women staying for the sake of being there and for no other sake, showing no concern or care for people, or the problems of the economy. That is the mood which is abroad at present, particularly among young people. The Government are continuing to feed that mood as long as they continue in Government without any moral authority to rule. It does come down to a moral assessment of the situation based on the political realities, as the people expressed them in the recent local election — that the Government must go. That view is held very strongly. This Government have no right to continue in office any longer. It is as straightforward and as blunt as that. The longer they stay in office, the more they will discredit democracy and bring about this disillusionment and the more psychological harm is done to the public by their continuing presence when the people do not want them there. This is the forum where hard things of that kind should be said. Public feeling has been expressed very clearly. In God's name, the Government should go.

The Deputy even borrows his clichés from the Houses of Parliament in London.

The Government should stop fumbling.

The Minister is a total imitative monetarist. He has no new ideas himself except to slavishly copy the Thatcherite policies in Britain.

The Minister should stop fondling the currency of power for power's sake.

That is a new one.

This Government have led the Irish people on the financial and economic front. The Minister is well aware of what I am talking about. Investors, at home or abroad, do not have any confidence in the future of this country. This has been because of a fumbling Taoiseach and a fumbling Government. It has also been caused by a total ideological incompatibility between the two partners in Government. As long as that feeling exists in the minds of investors we will go nowhere very fast. We are disappearing down the tubes.

My colleague, Deputy Flynn, has emphasised in another area how wrong the decision-making process appears to be. It has been proved that this Government in terms of investment confidence have failed disastrously. As far as we are concerned, at the end of the day that is what is important in the Ireland of today and tomorrow. Let us think in terms of the Ireland of today and tomorrow. Let us stop talking in terms of who did what in the seventies and in the eighties. In 1985 we have the major task of restoring confidence in the economy. We must have people in charge who believe in the future of the country, who will take the investment decisions at Government level and who will encourage investment decisions at private level. What is needed is a party with a clear majority in this House who will govern the country and make the decisions. The Minister opposite is well aware that that comes to the nub of the problem because he has had to live with divisiveness in the Government, he has had to compromise and he has had to live with the Taoiseach who has leaned over backwards and played liberal games while forgetting about basic matters such as investment and the economy. Above anyone else, the Minister knows precisely what is the nub of the problem.

Apart from the lack of encouragement towards investment, the Government have finally run out of steam in terms of their capacity for taking political and governmental decisions. The only way to have a successful Government here is not by way of ideological compromise between wings of Fine Gael and The Labour Party and it is not the way of The Workers' Party. The only way we will have progress is through a Fianna Fáil Party with a clear majority in this House. We will get that majority. The Irish people want it and have expressed quite clearly their wishes on the matter.

The fundamental conclusion one must come to is that this Government have lost all moral authority to rule and any further effort by them to hang on to power will be serious for the future of democracy here. It will lead to a breakdown in respect for the institutions of the State that have been built slowly and painfully during the years. It will lead to a breakdown in respect for democracy and for political parties. If the Minister, through his leader, wants to give that kind of example to a rising generation of young people he will have a serious burden on his shoulders.

There has been no Coalition Government as bad as this Government. I can go back on previous Coalition Governments such as those administered by the late Deputy Cosgrave, Senior, by the late Deputy Costello and by Deputy Liam Cosgrave. They were excellent Governments in terms of integrity, balance and administration. One could criticise them in many ways, as we did, in regard to how they did their job but they did not show the lack of character, the incompetence, personalisation and villification that we have witnessed from the Taoiseach. It has set a headline in demoralising the concept of democracy and, in my view, it is very serious so far as respect for democracy is concerned.

The Opposition seem to believe that the creation of a mood of national pessimism and self-defeat is their best road to political success. They are wrong. What Ireland needs now is a message of confidence from all its political leaders.

I visit industries and every week I meet young Irish people who are involved in new business ventures. There is a yawning gap between the way they see Ireland and its future and the hand-wringing pessimism and pious clichés of the Opposition. Let me take an example. In what was styled a major interview in a recent edition of a monthly magazine, Deputy Haughey delivered himself of the following——

More personal attacks.

He said there was a general collapse of confidence throughout the community.

Has the Minister no programme of his own to talk about?

He said there was no enthusiasm and no initiative. He said that nobody seemed to want to do anything or to undertake any new projects. That is simply not true and any political leader who downgrades the Irish people does not deserve to be a political leader.

For example, yesterday I had the privilege of announcing 70 small industry projects undertaken by young Irish people which will create 500 jobs throughout the country. These 70 projects ranged from an occasional furniture industry in Dublin to a folding stairs manufacturing plant in Galway. The projects included business dealing with new food products, peaches, chocolates, cheeses, sportswear and fashion garments. These are all new projects based on new ideas that resulted from research in the market place and backed by people investing their own money and their hard-earned savings.

But 100 workers in Irish Steel are being fired by the Minister.

Yet the Leader of the Opposition says that no one seems to want to do anything or to undertake any new project. I must ask whether Deputy Haughey and I are living in the same country. Ireland as seen from his vantage point is not the one I see when I meet young people and when I visit industries throughout the country. Yesterday there was the announcement that 70 projects were being undertaken by 70 individuals. This is just an example of what is happening. Earlier this year I announced 74 small projects creating 576 jobs. Yesterday's announcement will involve the creation of 500 jobs. In addition, foreign investment continues to flow into Ireland. We provide a good incentive package, but time and again I have been told by industrialists that what attracts them most to this country is the educational standards and enthusiasm of our young workers.

What about Greystones? What happened there?

If the foreign industrialists relied on Deputy Haughey's speeches they would never even come to Ireland on a site visit. They would not even lift an IDA brochure if they were to rely on the Deputy's pessimistic and downgrading statements about the state of morale and about the lack of enthusiasm among the people.

Like Hyster in Limerick.

But these people luckily come to see this country for themselves and are prepared to sink substantial sums of their shareholders money in this economy. They do so precisely because, in direct contradiction to what Deputy Haughey says, despite our difficulties and admitted disincentives there are people who have confidence, enthusiasm and initiative and who are prepared to undertake new projects.

The biggest advantage this country has is its education system. We have twice as many young people between 16 and 17 in full-time education as is the proportion in the UK. Young Irish people stay at school because they know that is the best way to secure their future, and they are right.

Deputy Haughey would be better off claiming credit for the substantial contribution his party made while in office to investment in education than in spreading depression among young people for what he sees, wrongly, as short term political gain. We have a good country and a good future but we must give people the self-confidence they need——


Hear, hear.

——and not spread the unpatriotic pessimism and attitude that was typified under the heading, "My Way", in Aspect, the aspect prospect from Kinsealy.


Every Minister who has spoken today has referred to some speech made by me.

As a result of the work of this Government we now have a climate which favours enterprise. The uncertainties of wildly gyrating record levels of inflation have been removed. The runaway deterioration in borrowing which prevailed when Deputy Haughey was in office has been halted.

Are the Government not borrowing now?

The tax system has been simplified in the first steps along the road to comprehensive reform and reduction in the burden of taxation. Incentives have been introduced to make it more attractive to invest in the most productive sections of the economy and to allow employees to share in the success of profitable firms.

Usually by way of redundancy payments.

We have introduced tax incentives to encourage worker shareholding in industry so that people will have a financial stake in their own jobs and will be able to earn from industry not only in terms of wages but of dividends also. We have put tax incentives in place so that people, rather than was the case when the party opposite were in power when they had a fantastic financial incentive to put money into property speculation can now under the business expansion scheme put their money in something productive. They can now put their money into manufacturing, with the aid of generous tax reliefs. I am proud to say that last evening I put through both Houses the last stages of the measure to give effect to that scheme.

It is regrettable that the investment is in the Isle of Man or some such place.

We have succeeded in shifting the balance away from investment in non-productive activity towards investment in productive activity and we have also implemented a new industrial policy. This policy provides the basis for strong growth in Irish industry in the difficult and competitive years ahead and this growth will provide the maximum benefits to the nation.

Inflation, which only three years ago was at the level of almost 17 per cent, is now down to 5 per cent. This is lower than the rates of our main trading partners. It is lower than the British figure——

The Minister and Thatcher.

——and it is the lowest for this country for 17 years. This low rate of inflation will be consolidated in the years ahead. Let me remind the House of the significance of a low rate of inflation. It gives people confidence to invest in the future because they know that their money will not depreciate in a year or two. A low rate of inflation enables people also to take a long term view of the future of the country and it is only if people can take that long term view that they will be prepared to make long term investments. By bringing down the rate of inflation we have created a platform for growth and a climate for investment second to none and better than the climate that has existed at any other time in the past 17 years.

In 1984 merchandise exports increased by 28 per cent on the previous year and we expect a further increase of 18 per cent in the 1985 figure.

Industrial output grew by more than 13 per cent in 1984. There has been a dramatic increase in the number of overseas visitors who are coming here to consider the prospects of industrial investment. I was in Germany earlier this year on an industrial investment trip but I was there also on a similar mission two years ago. On my first visit I had dinner at the embassy in Bonn where I was joined by a range of German industrialists, including most of those who are major investors in this country. Despite the fact that the food was excellent the evening was the most depressing I have ever spent. If we think we are the best at wailing we are wrong, because there is no one to beat a German for wailing when he is not making money.

The Minister should be careful.

I listened through the soup, the hors d'oeuvres and through the main course to wail after wail from Germans who had invested here. They believed everything was wrong here, that absenteeism was wrong, that inflation and taxation were too high. They did not think they could invest any more money in the country. Earlier this year I was at the embassy in Bonn again to meet a similar group of German investors. The food was just as good as it was on the other occasion — and my compliments to the new ambassador in Bonn in that regard — but the tone of the conversation was vastly different. Practically every one of the people at the table indicated their intention of making further industrial investment in this country. Every one of them had nothing but the best word to say about Ireland. They believed it was the land of opportunity so far as Europe was concerned and they based this on the fact that we have a young educated population whereas in Germany, as in all other countries on mainland Europe, there are ageing populations which a diminishing workforce will have to support in the years ahead by way of the payment of pensions. We have the most important raw material for industrial growth that exists anywhere in the industrialised world in the form of a young, trained population.

We are very proud of that.

That is why — the Government having set the inflationary situation in order, having taken steps to bring our finances into order and show clearly they have the determination to do the job — our basic national asset, our young people, was recognised by these Germans in a way which had been clouded from their vision as a result of the depressive and negative thinking that prevailed among those who were dealing with this country two years ago. That change in climate typifies all that is happening in this country. Too much prominence is given to those who have bad news to promulgate about our country, those who wish to speak ill of our country. George Bernard Shaw was correct in typifying the Irish spirit as one of great fairness because we were always prepared to speak ill of one another. Unfortunately that characteristic has not changed.

I regret that Deputy Haughey — who has many positive achievements to his name — allowed himself, perhaps in a moment of lack of concentration, to be drawn into making such damaging statements about the morale and the people of this country, statements which I frankly believe he himself does not believe. I am sure he will avail of a later opportunity to express his confidence in the self-confidence of the Irish people so that he will be giving the support I know he would wish to give to the work of the Industrial Development Authority and other agencies overseas, to bring more investment here, rather than spreading a mood of national pessimism of which there are so many ready echoes to be found in people whose interest in this country is not a favourable one.


Deputies should allow the Minister to conclude.

What we now need in this country——

——is a change of Government.

——is a policy for producing and selling more. All the Opposition can offer is a policy of spending and borrowing more. They seem to feel that spending money generates confidence. There could not be a bigger error. Confidence does not come from spending, it comes from success. We shall succeed only if, as a people, we turn up in time for work every day, work to ensure that there is the highest quality of goods and services where we work and, if we are working in a profession, provide good services at minimum cost rather than using restrictive practices to protect our income. We shall succeed only if those of us in the public service give excellent service at the minimum cost to the taxpayer. That is the only basis for success — hard work and achievement, producing quality goods and services that other people will be happy to pay for.

Confidence will not be generated by the spending of borrowed money. Confidence can be generated only by hard work and effort. That is the watchword of this Government. I believe there is no Government who have worked harder to make this country strong than the Government which now serves this House. I know each one of the Members individually. All of them are prepared to work at great personnel sacrifice to ensure that this country's problems are taken fully in hand. I believe that the fact of a hardworking, sincere Government giving a message of patient confidence to our people, is something that will find its response in the realistic answer of the electorate whenever a general election does come about, as I expect it will in 1987.

Try it now and find out.

The Minister should be allowed to continue without this constant barrage of interruptions.

My aim and that of the Government is to create a society here in which everybody will be able to see wealth created. My aim and that of the Government — through the various tax incentive measures to which I have referred — is to create a society here in which everybody sees wealth creation in the productive sector of our economy not just as the enrichment of the few but rather as the enrichment of the entire community. The only way this can be done is by ensuring that as many of our people as possible own shares in our industry. That is why we have promoted worker shareholding in industry. That is why we have promoted a business expansion scheme, to get people to put their savings into productive investment rather than into property speculation. We want a society here in which everybody sees that they themselves will gain directly financially if our industry prospers.

I believe that to be the best foundation for growth in the future. The idea that people should derive their income from industry in the form of wages only in my view is an archaic one, one that may have had some relevance in the nineteenth century but certainly has none in the late twentieth century. We want to be the first society in Europe that creates a truly share-owning democracy.

I should like to refer to some other important achievements of this Government. I believe that the institution of the linkage programme industry was a most important achievement. Up to the introduction of this programme a situation obtained wherein we brought in large foreign enterprises who imported most of the components and products they used from overseas. Therefore we did not receive the full benefit of the foreign investment we had brought in. We have now launched the linkage programme with very top level expertise heading it up, under the aegis of the IDA, whose aim it will be to ensure that foreign industry here will see that their best interests will be served by having quality Irish suppliers of their components rather than importing them from overseas. That programme has been accorded maximum priority by the Government and will lead to the creation of literally hundreds of small business throughout the country, depending on the large international industries we have here already. It is my view that our future lies in small industries of the type I announced yesterday and earlier this year. The linkage programme is the way in which we will create the conditions for those new small industries to be created.

We also want to create an atmosphere of self-confidence among our people. One way in which that self-confidence can be created is through giving people an opportunity of owning their own homes. The £5,000 grant scheme introduced by this Government to encourage those in local authority dwellings to buy their own homes, and give that house over to rehouse a family hitherto homeless, is one of the best schemes ever devised by any Government in the housing area. It releases at much less cost than would be the case if a new house had to be built, some of our housing stock for those who would otherwise be living in a caravan or in unfit accommodation. At the same time it provides encouragement to people to go out and build their own homes, giving employment in the construction industry. It is a great scheme and I am glad to say — as I am sure Deputies opposite will acknowledge — it has also been a great success.

If it was working.

Furthermore, the Government have been responsible for a major overhaul of the child benefit scheme which will come into effect next year. This scheme, combined with other measures already put in place in regard to pay-related benefit, will get rid of the situation we inherited in which many people had little or no incentive to work at certain levels of income because they would be better off on social welfare benefit, particularly if they had large families. We are now in the course of creating a situation in which everybody will have an incentive to contribute productively to the economy. That is the watchword of this Government. We do not believe in spending money just to give people money to keep them happy.

You do not believe in borrowing either.

People will only be happy if they are doing something useful which gives them a sense of dignity. That is why we took the steps to ensure the incentive to work, through the child benefit scheme and the other measures introduced by the Minister for Health and Social Welfare. We approached the problem of the taxation of farmers by encouraging productive effort.

A Deputy

They did not tell you that when you were in Navan.

As a result of the farm tax the resources and time of small to medium sized farmers can be devoted towards producing the maximum amount from their land without the fear of having to pay any additional taxation if they are below 80 adjusted acres. They will not have to use their money for unproductive purposes such as the preparation of accounts and the payment of somebody with a series of degrees to check those accounts so that someone in the Revenue can check the accounts that the auditor checked that the farmer had checked in the first place. Three people who were previously engaged in unproductive activity will now be relieved and the farmer will be able to produce as much as possible from his 80 acres, so that he will be putting more produce into the creamery, more cattle into the factory and more people into employment in the meat and dairy industries. Our approach is to encourage productive spending and not the creation of employment in the public service and employment in the Revenue Commissioners which was urged again——


——by Deputy Haughey who wanted more people in the Revenue Commissioners.


Order, please.


Farmer taxation, instead of leading to a situation where we need more people employed in the Revenue Commissioners doing unproductive work, has meant that we need fewer people employed in the Revenue Commissioners and more employed in our meat factories and in our creameries because our farmers will have the incentive to produce more. That is the spirit of this Government, a spirit totally alien to the people on the other side of the House. I do not expect the Opposition to do anything other than shout——


——because they do not understand what motivates the Irish people. I am quite sure——


The Minister should be heard without interruption.


The man has gone mad.

I paid tribute earlier to the significant investment made by the party opposite to the educational system.

Tell us about ICI?

The building of the regional colleges and the National Institute for Higher Education, to which the party opposite made a contribution as did the parties on this side of the House, is probably the best investment decision we ever made. We now have young people who are an attraction to industrialists all over the world. We are complementing that now with significant reforms of the educational curriculum, initiated by the Minister for Education. For example, we set up a curriculum development board because it is recognised that, while our primary curriculum was modernised during the sixties and seventies, our secondary curriculum was still based on the passive chalk and talk philosophy which unfortunately did not promote initiative and self-reliance among our young people. The Minister, Deputy Hussey, is the first Minister to tackle that problem by her reforms in curriculum education.


I am glad that the Minister is also taking major steps to improve competence among young people in languages by the introduction of oral tests as distinct from written tests in the leaving certificate. It is not particularly useful, if one is trying to sell hats in France, to be able to quote a French poet.

Tell us about the ICI?

It obviously makes sense if one is able to sell——

You are the Minister. Tell us about the ICI?


Deputies should keep in order.

——goods to people in their own language. I am glad that this Government, with the leadership of Deputy Hussey in this area, are putting due emphasis on the need to develop educational standards in languages.


I would also like to refer to the forthcoming——


I want order for the Minister. It is quite unreasonable for Deputies to be ballyragging each other across the House when the Minister is speaking.

He is being provocative and he knows it.

The Deputies opposite are——


——a bit sensitive. My impression is that whenever anybody here says anything adverse to Deputy Haughey he says "Do not hit me now with a child in my arms". That is the attitude he seems to have. Deputy Haughey feels and some of his colleagues also feel that whoever else one may criticise — one can criticise the Taoiseach as much as one likes and one can certainly criticise Deputy Alan Dukes——


A Deputy

And you all do.


——but nobody is allowed ever, without being unpatriotic, to criticise the Leader of the Opposition.


However, as Deputy Lenihan says, this is a knockabout debate and we are entitled to criticise everyone.


A Deputy

The Minister, Deputy Quinn, said you would deal with the ICI difficulty. Will you get on with it?


Deputy Flynn in the course of his contribution quoted from a highly dubious source in regard to the affairs of ICI. I do not propose to follow Deputy Flynn along that route beyond saying that the figures quoted are totally incorrect.

Tell us the figure.

The information provided to the Government by the administrator is not based on speculation by people from outside the company, people who may have good reasons, perhaps even competitive reasons, to do damage to this company. It is regrettable that that sort of matter should be the basis for a speech by any Member of this House.

A Deputy

Hear, hear.

The Minister promised the information on 30 June.

The information available to the Government is reliable information based on a thorough examination of the affairs of the company by somebody who was not writing a newspaper article sitting in an office some distance away and listening to all the talk he can pick up in public houses or wherever such people consort. It is based on solid information derived from working day in, day out, often after hours, in the company.

That information clearly indicates that, while there is a significant deficiency in the affairs of the company, the deficiency is one that is capable of being dealt with and will be dealt with——

How much?

——within the confines of the arrangements indicated to this House by the Minister for Finance where the Central Bank will arrange the provisions of finance for any deficiency in this area.

That is a lot of waffle.

The arrangements indicated by the Minister for Finance still stand and will be sufficient to deal with the problem.


So much for his figures.

I will be making a fuller statement on this matter in the near future, but it is important——


——in view of the irresponsible statements made by Deputy Flynn, a Deputy who usually displays a high level of responsibility——


Will the Minister give the figures to the House?

A Cheann Comhairle, it is 5 p.m.


Give the figures to the House.

In view of the fact that Deputy Flynn made this statement, I feel I should give the assurance I have just given.


I have indicated that a fuller statement dealing with the matters concerned in this issue and including further measures that the Government have in mind to strengthen the insurance market generally will be made in the near future.


The Government's reaction to the crisis in ICI, a crisis which was quite beyond the making of this Government, showed a competence and a swiftness in dealing with a crisis which typifies the approach of this Government to their work.


We did not sit on that problem for months. We took speedy action to ensure that there was not a banking crisis, that the insurance industry did not collapse, that people were not left without insurance cover as a result of a company going out of business with no employers liability cover existing, which would have meant people having to be put out of work. We saw those situations and immediately took the necessary action. That action is now being carried on in a confident way by the present Government and it will continue to be carried on in that way——

A Deputy

Give us the figure.

I wish to express my confidence in the administrator of the ICI and his staff and in their ability to deal with this problem with our full support.

Question put.
The Dáil divided: Tá, 72; Níl, 66.

  • Allen, Bernard.
  • Barrett, Seán.
  • Barry, Myra.
  • Begley, Michael.
  • Bell, Michael.
  • Bermingham, Joe.
  • Birmingham, George Martin.
  • Boland, John.
  • Bruton, John.
  • Bruton, Richard.
  • Burke, Liam.
  • Cluskey, Frank.
  • Conlon, John F.
  • Connaughton, Paul.
  • Coogan, Fintan.
  • Cooney, Patrick Mark.
  • Cosgrave, Michael Joe.
  • Coveney, Hugh.
  • Creed, Donal.
  • Crotty, Kieran.
  • Crowley, Frank.
  • D'Arcy, Michael.
  • Deasy, Martin Austin.
  • Desmond, Eileen.
  • Donnellan, John.
  • Dowling, Dick.
  • Doyle, Joe.
  • Dukes, Alan.
  • Durkan, Bernard J.
  • Enright, Thomas W.
  • Farrelly, John V.
  • FitzGerald, Garret.
  • Flaherty, Mary.
  • Flanagan, Oliver J.
  • Glenn, Alice.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Hussey, Gemma.
  • Keating, Michael.
  • Kelly, John.
  • Kenny, Enda.
  • L'Estrange, Gerry.
  • McGahon, Brendan.
  • McGinley, Dinny.
  • McLoughlin, Frank.
  • Manning, Maurice.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Molony, David.
  • Moynihan, Michael.
  • Naughten, Liam.
  • Nealon, Ted.
  • Noonan, Michael.
  • (Limerick East)
  • O'Brien, Fergus.
  • O'Brien, Willie.
  • O'Keeffe, Jim.
  • O'Leary, Michael.
  • O'Sullivan, Toddy.
  • O'Toole, Paddy.
  • Owen, Nora.
  • Pattison, Séamus.
  • Prendergast, Frank.
  • Quinn, Ruairí.
  • Ryan, John.
  • Shatter, Alan.
  • Sheehan, Patrick Joseph.
  • Skelly, Liam.
  • Spring, Dick.
  • Taylor, Mervyn.
  • Taylor-Quinn, Madeline.
  • Timmins, Goldfrey.
  • Yates, Ivan.


  • Ahern, Bertie.
  • Ahern, Michael.
  • Andrews, David.
  • Aylward, Liam.
  • Barrett, Michael.
  • Blaney, Neil Terence.
  • Brady, Gerard.
  • Brady, Vincent.
  • Brennan, Mattie.
  • Brennan, Paudge.
  • Briscoe, Ben.
  • Browne, John.
  • Burke, Raphael P.
  • Fitzgerald, Liam Joseph.
  • Flynn, Pádraig.
  • Foley, Denis.
  • Gallagher, Denis.
  • Gallagher, Pat Cope.
  • Geoghegan-Quinn, Máire.
  • Harney, Mary.
  • Haughey, Charles J.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Kirk, Séamus.
  • Kitt, Michael.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Leonard, Tom.
  • Leyden, Terry.
  • Lyons, Denis.
  • McCarthy, Seán.
  • McCreevy, Charlie.
  • McEllistrim, Tom.
  • Mac Giolla, Tomás.
  • Byrne, Hugh.
  • Calleary, Seán.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Ger.
  • Coughlan, Cathal Seán.
  • Cowen, Brian.
  • Daly, Brendan.
  • De Rossa, Proinsias.
  • Doherty, Seán.
  • Fahey, Francis.
  • Fahey, Jackie.
  • Faulkner, Pádraig.
  • Molloy, Robert.
  • Morley, P.J.
  • Moynihan, Donal.
  • Nolan, M.J.
  • Noonan, Michael J.
  • (Limerick West)
  • O'Connell, John.
  • O'Dea, William.
  • O'Hanlon, Rory.
  • O'Keeffe, Edmond.
  • O'Kennedy, Michael.
  • Ormonde, Donal.
  • O'Rourke, Mary.
  • Reynolds, Albert.
  • Treacy, Noel.
  • Tunney, Jim.
  • Walsh, Joe.
  • Walsh, Seán.
  • Wilson, John P.
  • Wyse, Pearse.
Tellers: Tá, Deputies Barrett(Dún Laoghaire) and Taylor; Níl, Deputies V. Brady and Barrett (Dublin North-West).
Question declared carried.