With your permission, a Cheann Comhairle, I wish to share my time with Deputy Gilmore.
Private Members' Business. - Economic and Social Programme Talks: Motion.
Is that satisfactory? Agreed.
I move:
That Dáil Éireann regrets the collapse of the talks for another programme for economic and social progress provoked by the failure of the Government to terminate the 1 per cent income levy and eliminate the "dirty dozen" social welfare cuts; and, in view of the hardship caused by both measures, calls on the Government to reverse them in the next budget.
The fact that a Coalition Government which includes the Labour Party would force the collapse of the talks for a new programme for economic and social progress will have surprised some people and distressed a great many people living at the margins or existing on low pay. Yet that is precisely what has happened. Over recent weeks, for whatever reason, the Government has deliberately and calculatedly contrived the breakdown of the talks. I say "for whatever reason" because over tonight and tomorrow night the Government, including the Labour Party, either those opposite me or behind me, will have an opportunity to explain its reasons to the House. It is a most dramatic policy reversal by both Government partners. From the Labour Party, it is a kick in the teeth for their paymasters in the trade unions.
The manner in which the Government contrived the breakdown is a matter of public record, but let me summarise it. When the Government introduced the 1 per cent income levy the Minister for Finance explained it was temporary and due to the extraordinary circumstances that surrounded the preparation of the budget in the context of the currency crisis. Every indication was that "temporary" meant until the next budget when the creative synergy of the two parties would be given full rein. Labour Party backbenchers were given the nod and wink — do not panic, the levy is for one year only.
At the outset the Congress told the Minister that the levy would have to go if there was to be another programme for economic and social progress. The Minister for Finance seemed to indicate agreement. However, in October, for some as yet unexplained reason, the Minister began to backpedal. The signals he sent out were that it would take two budgets but, he explained, after all, that was really only effectively one year — in other words, to January 1995. After that the Government's position began to harden further. The Government would start to undo the levy in 1994 but the pace of completion would depend on the progress of the talks.
The Congress probably took some of its own members by surprise by offering to accept the termination of the levy in two budgets, acknowledging that it would have to take into account the implications for the public finances. The Congress negotiators, having moved to what they believed was the Government's position, must have been amazed to experience the Ministers, Deputies Ahern and Quinn, table a new offer: that the Government would eliminate the levy over three budgets. It is hardly surprising that the Congress leadership concluded that the Government was not serious about securing another national agreement. For a Government to suggest the elimination of the levy over three budgets was transparently ludicrous in political terms. To keep shifting the goalposts as the Congress moved closer to the Government's original position further underlined the belief that the Government had fundamentally changed its position.
There is further evidence that the Department of Social Welfare was prepared to roll back at least some of the cuts introduced by the Minister, Deputy McCreevy, a political consideration for so doing being the commitment given by the Labour Party to reverse the cuts during the general election campaign. However, for some reason this course of action was stopped and neither Deputy Quinn nor Deputy Ahern seemed to support the reversal of the "dirty dozen".
Although all of this is a matter of public record it is important that this House clearly understands that the collapse of the talks was deliberately contrived by the Government. Why the Government considered that this was the appropriate strategy is a question for which I hope we will be given an explanation during the course of this debate. It is certainly difficult to reconcile the Government's decision to collapse the talks with the high-flown rhetoric when the Programme for Economic and Social Progress was sold to this House by Fianna Fáil and warmly supported by the Labour Party. For example, Deputy Ruairí Quinn, speaking for the Labour Party, warmly welcomed what he called “a long term strategy for the development of this country over the next decade”. During his speech of 19 February 1991 he emphasised on a number of occasions that it was a strategy for the nineties — in other words, that the agreement was to last for a decade. He told the House on 19 February 1991, Volume 405, column 750 of the Official Report:
It is the Labour Party view that the overriding priority of such a strategy should be the creation of an efficient and modern social market economy which would provide every individual in our society with the opportunity for personal growth and development. Economic benefits derived from such a strategy must be shared, on an equitable basis, and no section of our society must be left behind as we move forward, together, in the last decade of this century.
It appears now that not only is the Labour Party in power prepared to change that strategy so lauded in 1991, but it is prepared to pursue a strategy where sections of our society will be left behind. It is extraordinary that the Labour Party should want a long term strategy in Opposition, a strategy to protect the poor, low paid and marginalised, and as soon as the same Labour Party gets into Government it is prepared to wreck that strategy that is already in place. There are literally hundreds of thousands of low paid workers, public and private, in the economy and the question must be asked as to how they will fare in the absence of a new agreement.
What about the most vulnerable category of workers, often without the protection of a trade union, who at least under a Programme for the Economic and Social Progress-style agreement secured minimal increases under the various joint labour committees? I am referring to industries which pay very low wages such as the rag trade, or where cowboy and fly-by-night operators proliferate, such as contract cleaning and contract security. I am referring, for example, to the hundreds of non-trade union organised employments in the tourism industry and to low paid employments where women workers are especially vulnerable and are often the sole breadwinner in the family. I can only presume that these are the sections of society that Deputy Quinn, in 1991, assured this House that the Labour Party would not leave behind. He may have been referring to the tens of thousands of low paid workers in the public service. For example, the CPSSU represents 10,000 clerical assistants and clerical officers. As the Minister is aware, 82 per cent of the clerical assistant grade are women and 75 per cent of the clerical officer grade are women. These categories of clerical staff typically contribute between ten to 15 years experience and service before they can aspire to a wage which is still less than the average industrial wage and a good deal less than the average clerical wage in industry.
The second OECD report of 1993 shows that the clerical assistant grade had 60 per cent of average industrial earnings in 1981 but that the same post had only 50 per cent of average industrial earnings in 1991. This is important in so far as references are frequently made outside, and sometimes inside this House, to the 9 per cent and 10 per cent provision for pay increases in the public sector pay bill. Yet the lowest paid civil servants got pay increases in 1992 and 1993 of 3 per cent and 3.75 per cent, respectively.
This kind of comment also conceals the widening gap between the pay of lower grades and that of top civil servants. In this regard it is interesting to note that while Mr. Maurice Doyle is concerned about the public pay bill, meaning pay increases for low and average paid public servants, he does not advocate replacing the pay determination system which looks after him and other well paid public servants. It now appears that the Minister for Enterprise and Employment, Deputy Quinn, has bought the neo-liberal orthodoxy which, among other things, sees competitiveness as solely being a function of wage costs. Consequently, the real reason for breaking down the national talks is that both the Minister for Enterprise and Employment and the Minister for Finance are in agreement that the public sector pay bill must be restricted. If that is their reasoning, why not say so?
I wish to refer to this new orthodoxy of neo-liberalism. In provoking the collapse of the talks for a new programme for economic and social progress the Fianna Fáil-Labour Government is clearly responding to the mounting campaign by advocates of this new orthodoxy of neo-liberalism. If one takes Commissioner Padraig Flynn's version of it, this new orthodoxy would strip the social cost associated with the job. If one takes the version of the Governor of the Central Bank, Maurice Doyle, the demand is for what he calls "a more flexible labour market". What does the neo-liberal term "flexible labour market" mean in ordinary man's language? It means low pay, the old Adam Smith iron law of wages — so long as the labour content cost remains the same you can create as many jobs as you like but obviously if there are to be more jobs and the labour content cost remains the same then the level of pay must be reduced.
Meanwhile the new leader of the Progressive Democrats, Deputy Harney, expressed the same philosophy in committing herself and her party to leading a crusade of self-reliance. What does this mean in ordinary man's or woman's language? It means a better deal for the elite, the educated, the assertive and the devil takes the hind most. How can one be self-reliant without an income? What does the message from the new Progressive Democrats leader signal to the 300,000 people who are unemployed? How does Deputy Harney, who represents the same constituency as me, propose that the 10,000 plus unemployed in Dublin south west will participate in her crusade of self-reliance? Norman Tebbit told the unemployed to get on their bike and look for a job. Ten years later the message from the new leader of the Progressive Democrats is the same. The Progressive Democrats Party wants the State to get off the backs of the people. If the State pulls out of its supportive role for the 10,000 families in Tallaght and Clondalkin who have no bread earner in the household, where will the crusade of self-reliance lead them? The Progressive Democrats campaign may more appropriately be termed a crusade for the selfish. Perhaps Deputy Harney and the Progressive Democrats believe, like Maurice Doyle, that many of these people are not really unemployed.
According to Maurice Doyle, the 1986 survey which showed that 2 per cent of social welfare claimants were fraudsters is only the tip of the iceberg. This is Mr. Doyle's view despite the increasingly rigorous measures enforced by the Department of Social Welfare in recent years to properly root out social welfare spongers. Is Maurice Doyle so removed from the reality of life for the unemployed that he believes there is a significant black economy in the constituency which Deputy Harney and I represent? If he does, he knows sufficiently little about life for the unskilled unemployed in large urban estates as to disqualify him from serious comment. Yet so pervasive is the new orthodoxy of neo-liberalism that both Deputy Harney and Deputy Avril Doyle of Fine Gael have been prepared to espouse Maurice Doyle's ivory tower perspective. Presumably they believe this philosophy captures the temper of the times.
There was no word from Maurice Doyle on recent shenanigans in the financial world where social welfare spongers would be small fry by comparison. There was not a word from him on his primary role as the guardian of monetary policy on why more than £200 million of our foreign reserves was frittered away in vain at the beginning of this year. There was only a passing reference from him on his other main function of supervising the banks. There was no analysis of why institutions returning profits hitherto undreamt of should at the same time be crucifying the Irish consumer. There was no comment from him either on what proportion of the £130 million — six months profits for one banking institution — was as a result of speculation against the Irish Pound at the beginning of this year and on the measures which might be adopted either at European or domestic level to minimise the chances of such speculation recurring.
He will have to get a new speech.
Looking at the terms of the Government's amendment, it would appear that the Government has decided to place the blame for collapsing the talks at the door of the Irish Congress of Trade Unions. The first paragraph of the Government's amendment makes it clear that it was the Congress's insistence "on the removal of the 1 per cent income levy and the full reversal of the social welfare cuts within an agreed time span as well as the full implementation of the current programme" which caused the collapse of the talks. I have gone to some pains to show that this is not the case.
Congress, I think to the disbelief of a great many of its members, offered to accept the abolition of the 1 per cent income levy over the two budgets and in doing so believed it moved to the position the Minister had espoused when the discussion began. Given the usual life span of Governments and political reality, it is transparently ludicrous, and was never intended as a serious offer to the trade union movement, that the Government would back track and now say it proposes to remove the 1 per cent levy over three budgets. Therefore, I find it difficult to appreciate that the Labour Party will vote against the trade unions and their membership tomorrow night and support the Government amendment. I disagree with my colleagues when they say that the Labour Party will support this Government amendment.
Mock surprise.
I cannot believe that a Labour Party, which is not only supported but funded by the trade union movement and which was so fervent an advocate of the concept of comprehensive centralised bargaining when in Opposition, would when given the opportunity in Government want to wreck that process and set aside the framework that was put in place for a decade, as the Minister, Deputy Quinn, told us at the time. I still believe that between now and voting time tomorrow night the Labour Party will, when they have seen the amendment which has been finally produced by the Government, feel it necessary to exert — presumably behind the scenes — sufficient pressure on the Government to change its position.
Indeed, the entry of Minister of State Burton into the House reminds me that she has had no small role in this buildup, because the Government amendment refers specifically to the question of the Congress demand to reverse the dirty dozen social welfare cuts. It will be recalled they are the same cuts about which Minister Burton not too long ago said that they had "gone for a Burton". That is the difficulty with being an inexperienced Minister; you tend to read out or be unable to resist any catchy phrase that is penned for you. My colleague, Deputy De Rossa, established clearly in the House that far from being "gone for a Burton", only one of the cuts — and I will leave it to him and Deputy Gilmore to deal with that in detail — has been slightly modified and the rest are extant. I find it difficult to accept that the Labour Party will come into the House and vote to enforce that situation against the wishes of many of its supporters.
What are the merits of free collective bargaining? As I have said, there is no doubt that the weak and the marginalised and those on low pay will suffer. I can understand that there must be sections of the trade union movement which support free collective bargaining in as much as some enterprises can afford to pay a great deal more. I can understand also a wish on behalf of the trade union movement to escape from the suffocating embrace of the partnership and consensus that has stifled political affairs in this country for so long. Of course, the dynamics of the position have now been changed by the decision of the Labour Party to go into Government with Fianna Fáil. In that case it is understandable that the Congress would want to release itself from that embrace and that political issues which cannot be debated in a climate of consensus and so-called partnership might now come to the forefront of the agenda. There is no doubt that the weak, the marginalised and the low paid in this economy will suffer if the Government persists in provoking this collapse.
The statistics for the period 1980-87, when compared with either the period of the Programme for National Recovery or the Programme for Economic and Social Progress, indicate that the lot of those who are socially excluded in our society was worse under a free collective bargaining policy.
I indicated that I wanted to share my time with Deputy Gilmore, but before I give way I must say that the elements I have praised in a comprehensive approach to centralised bargaining does not mean that in any way I fall for the social partnership "red herring", because when it comes down to where economic power is yielded and where it matters in the workplace, there is no real partnership. There is no partnership, unfortunately, as between the workers and management, nor has there been any real measures introduced by Government to enforce it.
I find it interesting that Deputy Des O'Malley, for example, recently opposed the minimal shareholding that the workers in Aer Lingus have been afforded as a result of the recent experience of the unions and workers in Aer Lingus. That is evidence that the concept of partnership is largely ephemeral. It has never penetrated down to the workplace; and where real economic power and industrial democracy matters, it does not exist. Deputy O'Malley was quite explicit. He said that the reason he did not think it was a good idea was that it could prevent the privatisation of Aer Lingus at some stage in the future. That is a massive vote of no confidence in the workers of Aer Lingus who negotiated their way through a very difficult period and who presumably, if confronted with a situation that would be likely to be in their interests and the interest of this country in the future, would adopt a similarly sensible approach.
The purpose of the Democratic Left motion tonight is to call on this Government to accede to two very modest demands: to abolish the 1 per cent income levy which the Government described as temporary and to reverse the dirty dozen social welfare cuts which was a central plank in the Labour Party's election manifesto 12 months ago, and which at least Minister Burton would have us believe are already abolished.
These are the two very modest demands which the Irish Congress of Trade Unions made as a condition for the opening of talks on a new Programme for Economic and Social Progress. The Government's refusal to accede to them not only sinks the prospects for a new Programme for Economic and Social Progress type agreement but also raises a fundamental question about the nature of this self-styled partnership Government. In the opening paragraph of the Programme for Government we are told that the partnership Government would be new in character and that its understanding of “Partnership” was to extend beyond the normal confines of party politics. It states:
The key to our whole approach will be to develop a strong sense of partnership, not only in terms of political structures, but throughout the economy, our society and our community. ...the aim of the Government will be to create economic prosperity and social justice...Achievement of our aims will be accomplished by broad social consensus, social solidarity, local initiative etc., etc.
"Broad social consensus"— is that not what the Programme for Economic and Social Progress idea was all about, wider than a national pay agreement, involving the social partners in talks and an agreement about what was essentially the Programme for Government? Indeed, the last Programme for Economic and Social Progress anticipated that it would be succeeded by similar type agreements and referred to the then Government having accepted the Congress proposal “to adopt a long term strategy for the development of this country over the next decade”.
There are few who would argue with the principle of involving social partners in such a broad agreement, although there are inevitably differences over the content of the agreement, its implementation and the extent to which the effectiveness of the social partners has been blunted by the operation of the agreement. Certainly, it has often appeared to me that the effectiveness of the trade unions has been blunted by the last Programme for Economic and Social Progress, that they appeared to have been sucked into an establishment consensus and that on key social and economic issues they had lost their cutting criticism of Government performance.
One would have thought that a Government so loud on the concept of partnership and so close to the trade union leadership would have been more than anxious to conclude another national agreement which might, as the outgoing Programme for Economic and Social Progress did, have committed the social partners to support for the Governments' policy programme. It is certainly hard to understand why the Government has passed up the opportunity for national industrial peace for the remainder of the Government's lifetime, because it was not prepared to concede to Congress two measures which it claims it had intended conceding in any event.
So much for the broad social consensus as the key to achieving the Government's objectives and as a nucleus of the partnership Government. This episode has pulled away the pretence of social partnership, lifted the guilt and showed us what we always suspected: that this Government partnership is nothing more than the naked frames of two political parties thrashing about in their lust for political power.
The rebuff to Congress and the Labour Party's evident happiness at co-habitation with Fianna Fáil must by now be raising serious doubts among trade unionists about Labour's commitment to the historicl relationship between that party and the trade union movement. As a trade unionist, though not a member of the Labour Party, I have always supported the concept of a political arm for the trade union movement, for trade union affiliation to the Labour Party and for trade union support for parties and politicians who represented and defended the interests of workers. That is the way it should work, but in practice the Labour Party in Government seems only too willing to turn its back on the trade unions. The last period of no national agreement also coincided with Labour's participation in Government in the mid-1980s. Is the same to happen again? Many trade unionists must now be wondering what return the Labour Party has made on their considerable financial and public relations investment in the Labour Party 12 months ago.
The Government's rejection of the call to remove the 1 per cent levy and the dirty dozen affects more than the trade unions. It affects the poor and the organisations who represent them. Once again today an ESRI report tells us that Ireland has the fastest economic growth in Europe. We have become accustomed to such reports on our country's economic wellbeing. They keep telling us that our economy is doing well — high economic growth, low inflation, low interest rates, good performance on Maastricht convergence and so on — but it makes one wonder about economics. What we see around us is high and ever rising unemployment, increasing levels of poverty, an ever widening gap between rich and poor and growing consequential social problems such as crime and drugs abuse.
Poverty is becoming the forgotten condition in this country. Last week the Conference of Major Religious Superiors published an excellent document entitled Towards Full Citizenship for All which they hoped would influence Government thinking on the forthcoming budget and would inform the now aborted Programme for Economic and Social Progress talks. On page 16 of that document it is stated:
Despite the fact that national wealth has grown, the number of people living in poverty has grown, not declined.
The conference of Major Religious Superiors support this with figures which show a dramatic rise in the numbers of citizens now poor in this country. In the period between 1973 and 1987 the number of people in households with incomes below 40 per cent of the average household income almost doubled, from 253,157 in 1973 to 453,202 in 1987, an increase of 80 per cent. The corresponding increases of the numbers below 50 per cent and 60 per cent respectively of the average household income were 53 per cent and 39 per cent. The total numbers living in households with incomes below 60 per cent of the average household income — in plain language, living in poverty — was 1,186,115, or one third of our total population. That document went on to show that in the years between 1986 and 1993, during which the economic belt was being tightened and the people were being told that everyone would have to make sacrifices, they were the poorest in our society who had to make the greatest sacrifices.
Let us take income. The annual income of the average social welfare receipient increased by only £979, or 28.9 per cent, between 1986 and 1993. In the same period the annual income of the head of a department in large Irish companies increased by approximately 17 times that amount, by in excess of £16,000, or 58 per cent, while the income of a Department Secretary increased by over 25 times the increase of a social welfare recipient, by £25,847 or 72.4 per cent. Indeed, the rate of increase in income of high earners contrasts sharply with the rate of increase for the lowest paid workers in the public service who received £3,306, or the average industrial wage earners who received £3,348. Therefore, it will clearly be seen that the gap in benefits between the top earners and the lowest paid is compounded when account is taken of the reduction in the highest rates of tax from 58 per cent to 48 per cent.
The figures published by the Conference of Major Religious Superiors, showing the growing gap between the better off and the poor, concentrate only on comparing social welfare recipients and low earners with high earners in the public service and private industry. In fairness it must be pointed out that these high earners pay high levels of tax and that their earnings are either publicly known or traceable. But what of those who have been making untaxed incomes over those seven years through land or business speculation who have salted away their considerable gains beyond the reach of the Revenue Commissioners? What has the Government done to narrow the gap between those high rollers and the poorest in our society? The answer is — nothing except legitimise it through the tax amnesty. It is no longer a cliché but a fact that in Ireland the rich have been getting richer and the poor poorer. The numbers dependent on social welfare have been increasing. Again, between 1986 and 1993 the numbers receiving social welfare increased by over 77,000 to 820,000 while the number dependent on social welfare rose to nearly 1.5 million. Despite these increases in the numbers of social welfare recipients the actual percentage of GNP expended on social welfare declined from 14.7 per cent in 1986 to 14.2 per cent in 1993, which reduction was achieved by targeting social welfare recipients for cuts and harsh measures.
We have all heard of the "dirty dozen" cuts Congress wants eliminated. Indeed, the Labour Party 12 months ago — I am now looking at a Labour Party election leaflet from 12 months ago — listed the dirty dozen and wanted them all repealed. Soon after the Social Welfare Act, 1993, had been passed in April last, the new Minister of State, Deputy Joan Burton, who is present in the House, declared that the 1992 cuts had been substantially reversed, that the dirty dozen were dead and gone. However, SIPTU prepared an analysis of the provisions of the 1993 Act and the various regulations which the new Government had introduced since taking office. Their conclusion was: yes, some of the cuts had been eased marginally——
——but most of them had not. None had been totally reversed, five had been eased, four left unchanged and three had actually been rendered worse. In fact only one of the cuts — that dealing with exceptional needs payments — is said to have been completely reversed, although that is arguable——
Not on the ground.
——when one sees what is happening with community welfare officers in health centres. It is interesting that of the various cuts which have been left unchanged almost all of them are those which substantially affect women more than men. The numbers affected by the reduction in the minimum maternity benefit are small in any one year but they are all women, low paid women at that. Similarly, the numbers affected by placing income limits on deserted wife's benefit are small, but they are all women. The vast majority of part-timers claiming unemployment benefit and deserted wife's benefit would also be women; and, of course, the many thousands of people who have still not received arrears of social welfare payments on which the European Court of Justice ruled are all women too.
Therefore, not only have we circumstances prevailing in which the dirty dozen cuts have not been reversed but some have actually been extended, as the Government surreptitiously continues its campaign of assault on the social welfare constituency. Most of the people affected by the dirty dozen cuts, who have suffered most from them, are women. That is a disgraceful outcome from a Government that not only claimed it was going to have partnership — that is now in smithereens, because there are no talks with the Irish Congress of Trade Unions on a partnership agreement of any kind — but promised it would reverse the social welfare cuts, which clearly it has not done. This is a Government that promised it would look after working people and encourage work, but ends up imposing an additional 1 per cent tax levy on earnings; a Government that promised it would defend and promote the interests of women and ends up savaging women on the social welfare system much more than anybody else.
What this Government is doing is driving the poor of this country back into the queues, back into queueing at unemployment exchanges awaiting their miserable unemployment assistance payments; back queueing at health centres waiting to be interviewed by a community welfare officer and be subjected to the humiliation of having to beg for some small allowances gradually being whittled away; queueing on hospital waiting lists awaiting medical treatment; queueing for housing, as part of the 30,000 on the housing list, which has grown by 5,000 since the last assessment of housing here was undertaken.
This is the Government who, instead of defending the poor, is rendering the poor poorer while offering tax amnesties to the rich.
I move amendment No. 1:
To delete all words after ‘That" and substitute the following:
"Dáil Éireann notes
— the preconditions set by the Irish Congress of Trade Unions before it will enter into discussions on a new programme, viz. "the removal of the 1 per cent income levy and the full reversal of the social welfare cuts within an agreed time span as well as the full implementation of the current Programme";
— the agreement reached at a meeting between Congress and Government on 13 October, 1993, that "the Central Review Committee should continue to meet in 1993 to transact the business it has undertaken well in the lifetime of the Programme for Economic and Social Progress and that in relation to the social welfare issues raised, the Committee would work to identify any issues that required action and would convey their views clearly to the Minister for Social Welfare”;
—the proposals put forward on 15th November, 1993 by the Minister for Finance and the Minister for Enterprise and Employment on behalf of the Government confirming that the phasing out of the 1 per cent levy would begin in the 1994 Budget and would be completed not later than in the 1996 Budget;
—the expressed wish of both Government and Congress in their joint statement of 21 October, 1993, "for a new Programme that had employment as the cornerstone";
—that the Government remains available at any time to resolve the present impasse in a way which would be consistent with its responsibility in terms of employment and the public finances;
and expresses the hope that Congress will review their position and open discussions on a new programme in the light of the Government's stated position."
The amendment sets out clearly for the information of the House the position of the Government in relation to our efforts to open talks with the social partners on a new programme. In particular, it addresses the difficulties which exist in relation to the 1 per cent income levy and the social welfare issues referred to in the notice of motion. I call on the House to take note of this position.
As I indicated in my budget speech earlier this year and in reply to questions, there were sound and valid reasons for introducing the 1 per cent income levy. It was introduced in the context of exceptional budgetary difficulties arising from the repercussions of the international recession both in terms of slower economic growth than had been anticipated at the time of negotiation of the Programme for Economic and Social Progress, PESP, and of a sharp increase in the numbers in receipt of unemployment compensation.
I wish to share my time with the Minister of State at the Department of Social Welfare, Deputy Joan Burton, and with Deputy Chris Flood.
I am sure that is satisfactory and agreed.
I would remind the House that maintenance of firm control of the public finances to achieve a steady reduction in the national debt-GDP ratio is vital to our economic wellbeing. It is an overriding principle underpinning the Programme for a Partnership Government and the Programme for Economic and Social Progress for which all the social partners signed on. The Programme for Economic and Social Progress itself acknowledges that to depart from that overriding principle would plunge the economy back into a spiral of rising inflation and interest rates, lower real incomes, declining standards of living and collapse of the investment we need to create jobs.
Any slippage in our overall discipline on managing the public finances would place in jeopardy the progress we made in these respects in recent years. The levy was a vital measure to enable us to maintain that budgetary discipline as part of our overall strategy for combating unemployment and to continue the momentum which we have developed in keeping the public finances under tight control.
By exempting the lower paid, we minimised the effects of the levy on those least able to bear any extra burden. At the same time, it was a means of seeking an equitable contribution to our budgetary difficulties from all income earners in a position to bear such a burden. It is important in this connection to appreciate that due to the combined effects of pay increases and tax concessions over the period of the Programme for Economic and Social Progress, real take-home pay by those in employment has increased substantially at just under 5 per cent on average.
To secure the same revenue as from the temporary levy through adjustment of income tax rates would have required an increase of the order of 1.5 per cent in both tax rates or a 2 per cent increase in the standard rate or a 5 per cent increase in the top rate.
The House must appreciate that the raising of revenue of the order of £145 million per year would not be easy and that managing without resources of this order would have profound implications for the full range of public services. I find it interesting that the Members who have put down this motion are obviously more concerned about its removal than about the implications of its removal for both the public services and tax reform.
Above all, the levy is a temporary measure which means that we are committed to its removal when budgetary circumstances permit. In this regard, both the Irish Congress of Trade Unions and the Government have acknowledged that the phasing out of the levy would have serious implications for the public finances. Furthermore, the parties to the recent discussions recognised that these would have to be taken into account in any negotiations on a new programme.
I am of course acutely aware of the situation which may face the country if discussions on a new programme do not commence. The House must not lose sight of considerable achievements of recent years under the Programme for Economic and Social Progress and its predecessor, the Programme for National Recovery. The process of consensus between the social partners which underpinned these programmes enabled all concerned to make their contribution to solving the problems facing us in a coordinated fashion which took full account of national priorities. I attach considerable importance to continuing to have agreed support in the community for the macroeconomic strategy which has underpinned these programmes.
I will mention for the information of the House some basic achievements of which we can all be proud. Considering the unfavourable international economic climate, our economic performance has been impressive. Over the three years of the Programme for Economic and Social Progress for example, GDP growth is expected to average about 3.5 per cent per annum. This contrasts with average growth for about 1 per cent for industrial countries, of over 0.5 per cent for the EC and a fall of over 0.25 per cent for the UK in that period.
This growth has been driven by exports of goods and services which will have increased in volume by over 7 per cent over the period with merchandise exports increasing by over 11 per cent. This export performance in a period of adversity internationally underpinned the large surpluses in our balance of payments. The volume of private consumption also grew but more modestly. While investment declined in 1991 and 1992, a modest growth is forecast for 1993.
Our progress on the employment front, while not satisfactory, still compares well internationally. Over the past two years there was a slight decline but this year an increase of about 5,000 is expected. In contrast, over that period, employment is forecast to fall by over 2 per cent in the EC and by over 7 per cent in the UK.
Inflation has averaged just over 3 per cent over the past two years and is forecast at just over 1.5 per cent for this year. This places us firmly in the low inflation league internationally. It is vital that we remain so if we are to continue the improvement in our economic performance.
The foregoing are just some of the improvements which our economy has achieved in recent years. By any reasonable economic yardstick, they are very impressive. They also compare very favourably with the early 1980s before we adopted a consensus approach. I need hardly remind the House of the combination of low growth, high inflation and excessive taxation which was a feature of those years.
The major challenge facing us now is to improve prospects for employment by continued attention to the fundamental macroeconomic policies which have stood us in such good stead in recent years and other appropriate policy measures. Continued attention to our industrial competitiveness will be essential if we are to build on the solid foundations which we have now created and continue to tackle the problem of unemployment as a national priority.
Unemployment remains a very serious problem. It increased substantially during the period of the Programme for Economic and Social Progress reflecting a lethal combination of limited migration opportunities, slower economic growth than we would have wished for and rapid natural growth in the labour force. While it is heartening that the trend in the live register has shown considerable improvement this year and will be below the budget day forecast, there are no grounds for complacency.
Unemployment — and the relentless pursuit of suitable measures to deal with it — will continue to be a primary concern of the Government. We consider that there is already in existence a national consensus that increasing and maintaining employment, reducing unemployment and tackling the exclusion and marginalisation caused by long term unemployment are primary national objectives. In the Government's Programme for a Partnership Government 1993-1997, we laid particular importance on the measures necessary to sustain economic growth in such a way as to maximise the potential for employment growth.
In the National Development Plan submitted to Brussels, the Government placed primary importance on jobs and employment. We emphasised once more the need to reinstate the long term unemployed and those most in danger of becoming so into the economic mainstream. The plan's targets will be achieved by a strategy aimed at the national and community objective of greater economic and social cohesion. Specifically this will be achieved through the following:
— the development of the growth potential of the economy in agriculture, industry, the services sector, forestry, fisheries and tourism;
— infrastructural investment to improve the capacity and competitiveness of the economy;
— the development of the skills of our people through education and training; and
— a special increased emphasis on harnessing local community leadership and local initiative.
Under the Programme for a Partnership Government, we have also established the National Economic and Social Forum which provides an unique opportunity for representatives of groups which in the past have been outside the normal national consultative process to put forward their views on national priorities. This matter was raised by Deputies. It was always a valid objective and that is the reason we dealt with it. The forum includes women's groups, the unemployed, the disadvantaged, people with a disability, the elderly, youth and environmental interests. I understand that the forum will be taking a critical view of existing schemes for the unemployed including an assessment of non-market work opportunities.
The national consensus arrangements in the Programme for National Recovery and the Programme for Economic and Social Progress played a vital part in the impressive economic performance I outlined earlier although obviously we would prefer to have done better. I, for one, am committed to continuing this process provided it is focused on the priority needs of the economy. I regret it has not yet proven possible to find sufficient common ground to enable negotiations for a new national programme to get under way with the social partners. However, it is also vital to all concerned that we should not prejudice the future budgetary position by making large concessions on the expenditure and revenue sides in advance of negotiations on a programme. Furthermore, changes in taxation are a matter for the Government and Dáil Éireann in our discharge of our responsibilities in the public interest. That has always been the way in this House.
The Government has made significant moves to meet the concerns expressed by the Congress on the basis that implications for the public finances would be taken into account in any negotiations on a new programme.
We agreed with the Congress on 13 October last that the central review committee should continue to meet in 1993 to transact the business it has undertaken well in the lifetime of the Programme for Economic and Social Progress and that in relation to the social welfare issues raised, the committee would work to identify any issues that required action and would convey its views clearly to the Minister for Social Welfare.
On 15 November last, the Minister for Enterprise and Employment and I put forward, on behalf of the Government, proposals to begin phasing out the 1 per cent levy in the 1994 budget and to complete this process not later than the 1996 budget.
These proposals comprise a very significant move by the Government by any standards. They reflect a clear wish on our part to facilitate commencement of national talks on a new programme. However, the Government must be certain that in making concessions such as these it does not put at risk the very considerable progress which has been made in getting the public finances in order and in tackling the still considerable overhang of public debt.
The Government cannot, of course, simply agree to any demands that any one of the social partners may put forward with no certainty that it will reach an agreed understanding. If the process failed after the Government had conceded these matters it would have dispensed with £145 million, in addition to conceding on outstanding issues of social welfare and others in the programme, and would be left with no room to manoeuvre in the new circumstances. I believe that any Government that would do that would not be acting responsibly. The social partners put forward almost impossible conditions before we sat down to talk. It amuses me that Deputies Rabbitte and Gilmore believe that the order of negotiations is to concede everything and then to proceed to talks with no certainty whatsoever of reaching agreement. If the Government did that I have no doubt that this House would rightly castigate it as it would not have been responsible. That is what we are being asked to do, but we cannot do business that way.
We are prepared to continue to deal with this matter in a certain way, but not in a way that makes no sense in normal negotiations in a civilised country. I believe we have gone a long way to solving the problem which the Irish Congress of Trade Unions has had with the income levy by what we were prepared to do on that front. I hope that on reflection ICTU will give further thought to its position. If there is any way in which I can help to clarify the extent to which the Government was prepared to meet with Congress if we had gone into talks, which we never did, I would be only too happy to meet its representatives at short notice to discuss this matter.
In these circumstances I am sure the House will agree that the Government has acted responsibly and in the only way it could at all times in relation to these issues. It simply cannot put at risk all the achievements of successive Governments of recent years which are so vital to continued and urgent attention to solving our unemployment. We remain committed to the ideal of national consensus but not at any price. I urge the House to support the amendment.
Listening to the Opposition holding forth on social welfare would suggest that the welfare system before 1992 was in some sort of near-perfect state to which we must return regardless of the consequences. Well, it was not perfect then just as it is not perfect now.
Less perfect.
Going back to pre-1992 will not make it perfect and in most cases will not even improve the situation. The discussion on the so-called dirty dozen — in reality now far from a dozen — has become hackneyed and unconstructive, reflecting a level of intellectual dishonesty in Opposition thinking.
The Minister prefers to forget them.
Quite frankly, the constant repetition of the dirty dozen phrase has become for some in the Democratic Left and others an instrument of intellectual terror to resist any kind of change or reform in the social welfare code. If Members do not like something or even if they do not understand it, they cry "dirty dozen" and we are all supposed to shrink back in terror. It is so characteristic of Democratic Left and the political cul-de-sac it is now in. Deputy De Rossa now leads the Hare Krishna tendency in this House. Instead of serious policy contributions we get a dreary combination of a monotonous mantra such as dirty dozen from him and some delightful one liners from Deputy Rabbitte. They give us a sound bite on everything but a policy on nothing.
There are other much more serious issues in the social welfare system which need consideration but which have been ousted from discussion by the unwarranted obsession with the 1992 cuts on the part of certain people. May I point out to those who are so obsessed that the recommendations of two key organisations — the Combat Poverty Agency and the Conference of Major Religious Superiors — focus on a whole range of constructive and important issues, for example, child benefit, income levels, access to employment. These people are the experts in the field and they know these are the real issues for unemployed people at this time. Interestingly, neither document from these two recognised bodies mentions the 1992 matters.
The social welfare system we have is not entirely suitable for the problems of today. It cannot easily cope with the different work patterns, with part time and casual work, with short term contracts, and so on. We have to recognise that this system must change. We cannot simply require that all of its elements remain in place as if it were some sort of perfect system which dealt with all our problems. The system needs substantial reform and overhaul. Continuing to fight the phoney war on the dirty dozen is not the way to achieve reform.
I do not intend to list out all of the issues which arise; this has been done on a number of occasions in this House. For the record, I want to say, as I and the Minister for Social Welfare have said on numerous occasions, that the major changes of 1992 have been reversed or modified. The changes that caused most distress and affected most people have been reversed in the extra £180 million spent on social welfare in this year's budget.
Rubbish.
We have restored optical and dental benefits to long term unemployed people. We have restored disability benefit to the long term unemployed as well. We have allocated an extra £12 million to the supplementary welfare allowance scheme referred to by Deputy Gilmore and we have introduced a code of practice in conjunction with the ESB, the gas company and health boards on fuel debts. That code clearly indicates peoples' entitlements under the scheme and provides a basis for good budget management by people on social welfare. I am pleased to say it has been widely welcomed by those dealing on a day to day basis with those on low incomes who have problems with debt management.
Tell that to the moneylenders.
However, we have not allowed our agenda to be determined by the 1992 cuts. We addressed other issues which are actually far more important to the majority in this country. The substantial increase in child benefit — a major benefit targeted directly at women who are in the majority of caring parents — and the other payment improvements which we introduced this year benefit far more people and address the issue of family poverty to a far greater extent than any further reversals of the 1992 changes could possibly do. Again, let me refer to the documents of the Conference of Major Religious Superiors and the Combat Poverty Agency which both highlight child benefit as a key weapon in the fight against poverty in families. This was one of the areas that this Fianna Fáil and Labour Government chose to concentrate on in this year's budget. The Structural Funds allocation to the local development fund will do far more to address the problems of unemployment than will further reversal of cuts.
Let us look at the remaining demands of Democratic Left. We are being asked to restore the so-called alleviating payments to men — in other words, to reintroduce sex discrimination into the social welfare code. Has Deputy Gilmore actually read that particular directive? In view of his comments on women, does he actually favour the reintroduction of sexual discrimination against women in the social welfare code?
But we have sexual discrimination. What about women part-time workers?
We are being asked to reduce the penalty for fraud.
The Government has already reduced the penalties for tax fraud.
The specific cut for people who receive redundancy settlements over £12,000 has not been reversed. However, after discussions with the trade unions and people affected by redundancies, we did introduce major improvements into the taxation of redundancy payments. These tax changes have more than compensated for the specific 1992 cut. Is Democratic Left asking that we reverse these tax changes, thus giving a lower benefit to those being made redundant?
On the issue of deserted wife's benefit, the position of married women in the social welfare code needs the most serious consideration. This is particularly so in the case of women in situations of marital breakdown. Indeed, the Commission on the Status of Women makes a clear recommendation on the importance of an overall review of the social welfare system in this context. Let us address the fundamental issues. For example, is social insurance the best way to provide income maintenance? If it is, how can we improve it and, if it is not, what system should be put in place?
There is a real problem in the public perception of social insurance. Social insurance is primarily social — that means that we all pay so that those who suffer certain contingencies can get benefit. The right to benefit only arises if the contingency is suffered, that is if one is unfortunate enough to become sick or unemployed and if one is fortunate enough to live to pension age. If these contingencies do not arise, there is no entitlement. One does not have a right per se to get PRSI money back any more than one has a right to get one's mortgage protection money back. A person is a very fortunate person indeed if the short term contingencies do not arise and he or she does not need to claim insurance.
Let us address the real problems of income maintenance. We need to do that regardless of whether there is another Programme for Economic and Social Progress. We need a system which ensures a basic level of income for everyone while at the same time rewarding work done. We need to deal with the problems of part time and casual workers. On this issue, let me nail on the head a persistent, but widely held erroneous, view of the 1992 cuts.
There is no doubt that there are a number of problems with regard to part-time workers. This is an issue which does not arise from the so-called dirty dozen. In fact, it arises from what everybody would regard as a very progressive move, that is providing social insurance coverage for part-time workers. This was done in April 1991 and the people concerned came into benefit from January 1993. In order to ensure that part-time workers would not get more from unemployment benefit than from work, a number of new rules are introduced from January 1993. These rules are now causing problems and the Department of Social Welfare is now very actively trying to find a solution.
We have already found a solution for dockers and we are looking at other categories of casual/part-time workers. The solution is not easy. There are problems where full-time workers have taken voluntary redundancy and then returned to work for the same employer on a part-time basis, generally at lower rates of pay and probably lesser conditions while receiving unemployment benefit for the days not worked. The evidence would suggest that these people want to work part-time and the employer is effectively using the social welfare system to encourage them into leaving full-time work thus getting a lower paid workforce.
There is a real risk that the social welfare system would be used to undermine full-time work. This would have very serious consequences for the trade union movement and for the social welfare system. We do not wish to see this happen. This is an issue that needs to be addressed by the social partners and I look forward to continued discussions in this area. It is a very difficult area in which to get measures right without undermining traditional full-time work and the conditions which have gone with full-time work up to now.
I repeat that this is not part of the "dirty dozen". The suggestion that it is included in the dirty dozen points to what a meaningless designation that is. In fact, every change in social welfare is being lumped under this mantra. The strangest of all is the inclusion of the taxation of disability benefit — this was actually agreed to in the 1992 Finance Act.
The unpalatable reality is that the social insurance system for unemployment payments is not suitable for present day conditions. It was designed for and suited a working environment in which people worked full-time for an employer, occasionally were unemployed for a short period and then resumed full-time work. It was never designed to deal with long term unemployment or with work patterns which involved part-time work, casual work or contract work where there is not an employment relationship and so on. These are increasingly features of employment both here and throughout Europe which particularly affect younger people. I recognise that it is difficult for people to come to terms with these changes but both they and the social welfare system must adapt.
Serious issues in the social welfare system need to be overhauled and reformed. We should have a constructive debate and I welcome any ideas which the Opposition may have on serious reform of the social welfare system, but we are wasting our time dealing with the ghosts of 1992——
Because they are haunting the Minister. They are her own ghosts.
——which some groups are either unwilling or unable to lay to rest.
(Interruptions.)
The Minister, without interruption, please.
Having listened to the contributions from Democratic Left Deputies, I wondered if they could count.
I thank the Minister and Minister of State for sharing their time with me. Anyone recalling the last number of years would come to the conclusion that the two previous programmes benefited the country and our people. For that reason it would be regrettable if a new programme could not be put in place due to the reasons stated by Congress or any other reasons. I regret that preconditions were set for the commencement of talks for a new programme. That was not the best way forward. The best approach for negotiating any major programme is for those involved to come to discussions without preconditions and if at the end agreement could not be reached on the major issues then they could decide not to go along with the programme. If a major player withdrew the programme would be in jeopardy. To lay down preconditions at the start was probably unwise.
Despite the impasse that has developed I hope it is not too late in the day for good sense to prevail. The Minister for Finance has moved on the demand by Congress, and his move should be taken by Congress in the right spirit. We had hoped that a new programme would concentrate fundamentally on job creation bearing in mind that the basic aspects of the economy have to all intents and purposes been put on a sound footing. Due to lower inflation, lower interest rates and increased competitiveness in the economy, backed up by the Structural Funds, we could make substantial progress in job creation. I hope that even at this late stage the Irish Congress of Trade Unions, to whom I appeal tonight through the medium of this important debate, will come back into negotiations with the Government and the other social partners and drive the bargain they see as essential for their members without putting in jeopardy the progress made here over the past number of years.
I propose to share my time with Deputies Allen and Theresa Ahearn.
That is satisfactory.
Fine Gael has not tabled an amendment to this motion which we will support by voting against the Government's amendment. I am sorry the Minister of State, Deputy Burton, has left as the points in relation to social welfare will be dealt with more conprehensively by my colleagues, but it is somewhat disingenuous of her to lecture us on why the dirty dozen should not be replaced when the Labour Party, more than any other, made their abolition a political virtue and flooded the country with leaflets stating that one of its primary objectives, if in an influential position following the election, would be to abolish them. It is similar to the fourchette, the Labour Party is hoist with its own petard in this regard and need not be surprised that some of the chickens are coming home to roost. It would have much more credibility in regard to some of those issues if it was consistent.
Our main reason for supporting the motion is that since the 1 per cent income levy was announced in this year's budget, Fine Gael resolutely opposed it because it is an unjust and dishonest tax. It is unjust because it applies to the first £1 of income for those liable to pay it. That is not the way our tax code operates. Rather, it operates on the basis that one is allowed earn so much tax free income after which one pays a graduated rate of income tax. It is arbitrary and unfair that a person earning just over £9,000 per annum has to pay a tax levy on every pound earned. Our second reason for opposing it is that it is dishonest. It would have been honest to raise the standard rate of tax from 27p to 29p in the pound and call it an increase in income tax. It is likely that a programme manager, a PR committee or consultancy team claimed it would be much easier to sell a 1 per cent income levy than a 2 per cent increase in the standard rate of tax. Revenue Com missioners figures indicate that it would cost £78 million to abolish it after the first year and £130 million in a full year. However, most people appear to be working on a figure of £150 million which is not correct unless we are expecting a major increase in incomes next year.
We were told that the 1 per cent income levy was a temporary measure in the teeth of a currency crisis with volatile and high interest rates, with an increased national debt repayment arising from devaluation and because of the labour pains of putting the Government together. It now resembles the youth employment and health levies and will become a quasi-permanent feature of our tax structure. The levy costs the average industrial worker £2.45 a week, irrespective of the person's circumstances. It is a very crude instrument. It means that people earning just under £9,000 per year may have to refuse overtime or promotion because they might earn more than £173 per week.
This levy must be seen in its proper context. It was part of a budget that also introduced a probate tax and increased VAT on clothing and footwear to 21 per cent. The figures clearly show that during the period of the Programme for Economic and Social Progress tax revenues increased from £7.9 billion to £9.5 billion this year and the growth in tax revenues has exceeded the combined rate of the real growth in the economy and inflation. The real burden of taxes is rising substantially. Given this country's special demographic and dependency problems, that is not acceptable. The core problem in relation to this Government is that it is a high tax and high spending one.
Some aspects of the Programme for Economic and Social Progress failed completely and if school leavers are to have better prospects any new centralised agreement must be more akin to the Programme for National Recovery than to the Programme for Economic and Social Progress. During the period of the Programme for Economic and Social Progress public expenditure increased from 35 pence to 38 pence in the pound, unemployment increased by 39 per cent, or 80,000, and public sector pay increased at a much higher rate than private sector pay. In 1988 the average industrial wage was £208.33 compared to £237.55 last year. In the public sector the average wage increased from £278.42 to £381.52, a widening of the gap from 33 per cent to 60 per cent.
One of the difficulties for the Congress of Trade Unions is that SIPTU and the public services committee hold differing views. Of course a case can be made for individual low paid public servants and in relation to restructuring pay deals, but the 600,000 private sector workers did not have similar access to the special pay deals as public sector workers. The Congress of Trade Unions is correct to integrate the issues of pay and tax because if the tax code is altered every worker will be affected. All workers would benefit from the abolition of the 1 per cent income levy. Increasing real incomes by reducing taxes would mean treating all workers in a similar fashion and the integration of pay and tax is vital in that regard.
I have taken an unpopular line in relation to the issue of competitiveness and the need for a pay freeze in 1994 but I have done so on the strict understanding that the savings the Government would make from a pay freeze — we are talking about a 1 per cent increase in public sector pay costing £40 million — could be used directly to increase living standards by tax cuts. For example, the tax proposals we put forward would mean a 5 per cent pay increase for the average worker. On that basis we could ask the social partners to accept a moderate pay deal and people would have more money in their pockets. What is the point in having major pay increases if they are frittered away in higher taxes? Competitiveness is vital because the people excluded from the Programme for Economic and Social Progress were the school leavers. The banks negotiated new productivity deals and people in employment were in a strong position, but school leavers could not get jobs and had to emigrate. Any new deal must take that into account plus the fact that our tax system is a barrier to employment. The gross cost for every £1 of net pay in new low paid jobs is too high and the majority of new jobs pay under £20,000 per annum. Therefore, the only way the cost of providing a job can be reduced is to lower income tax. That would bring equity into the PAYE sector.
A number of changes need to be made and the 1 per cent income levy is only the tip of the iceberg. I cannot justify a married couple with ten children being entitled to the same tax free allowance as a married couple who do not have any children. Neither can I justify people earning £72 per week paying tax at 33 pence in the pound. The exemption limit is too low. A single person earning less than £90 per week or a married couple earning less than £180 should not have to pay income tax. If a wife whose husband works takes up a part-time job every pound she earns will be taxed at the marginal rate of 48 pence in the pound because her husband will have used up all the tax free allowances to which she might be entitled. Such people want to work and jobs are available for them, but the cost is horrendous. Those are well established problems of the tax burden which bear down excessively on low and middle income workers. I have not studied the NESC report in detail but it puts forward a similar view. Many of my party colleagues and I have reservations about a centralised corporative style of Government in which the Government cannot be criticised because matters must be raised with the CRC. That stifles opposition and debate. Those issues must be addressed and, in this regard, tax reform should be the cornerstone of any deal.
The Minister said that if the 1 per cent levy is put on the table and removed, the unions will make another pay demand. This suggests that he does not trust the unions and thinks he will not be able to made a deal. If the Minister put these costly tax reforms on the table, he could ask the unions what they would be prepared to give in pay moderation and say to them that if they fail to reach agreement, they will be taken off the table. The Minister could say to the employers——
We would be prepared to do that but that is not the question. Their attitude is that we should concede first and then talk.
As a sovereign Government——
We would have to concede first.
If the Minister put costed tax reforms on the table he could say to the employers that the Government has narrowed the tax wedge and ask them what they would be prepared to do in terms of employment. In turn he could ask the trade unions what they would be prepared to give in pay moderation to improve our competitiveness. If the Minister fails to reach agreement he could say that all bets are off. There is no one more shrewd or cute — a former Taoiseach used more adjectives in describing the Minister's ability to make a deal — than the Minister who knows only too well that if there is trust and good will he could show leadership in dealing with our structural problems with the social partners. This would have lasting economic benefit.
This is a missed opportunity. I do not know if it is a phoney war but I can assure the Minister that my party is adamant that tax reforms must be the cornerstone of any new deal and the first step along this road must be the removal of the 1 per cent levy.
The Minister of State at the Department of Social Welfare gave us a lecture this evening using a prepared script which I am sure she did not read before rising to speak and when she had concluded she rushed out the door. She did not want to hear the response from Members on this side of the House. Having been elected to this House this time last year on the backs of the unemployed, the elderly and the sick, she wants to forget that she made promises. She stated in her speech:
Let us deal with the real issues and stop wasting our time dealing with the ghosts of 1992 which some groups are either unwilling or unable to lay to rest.
The people will not allow her to forget the promises she and her party made around Hallowe'en 1992. These are the ghosts that are going to haunt her come Hallowe'en 1994 or 1995 or until such time as the dirty dozen cuts are reversed. I will deal with these later.
Many of the Labour Party Ministers are not socialists. They used this as a flag of convenience to attain power but once they got a sniff of this they discarded the flag of convenience that they had soldiered under. This is a matter of regret because many people put their hopes and trust in some of these Ministers who have betrayed the people that supported them in their thousands. We are now aware of the consequences.
This debate is taking place at the end of a year during which the Government made a two pronged attack on young people by introducing a means-test for European Social Fund grants and grants to third-level colleges and by introducing measures to abolish unemployment assistance for needy students during the summer months. These socially regressive decisions have caused extreme hardship to young people, mainly from families in the lower paid and middle income groups — the PAYE sector.
This two pronged attack on young people, coupled with the failure of the Government to address the inequities in the third-level grant scheme has resulted in continued blatant discrimination against the sons and daughters of those in the PAYE sector and the unemployed. These measures, coupled with the introduction of the dirty dozen, have resulted in a serious exclusion of so many families at a time when we are supposed to have a Government with a social conscience. However, I can see no evidence of this. The attitude seems to be that they are in power and forget that they promised to do anything.
In recent months the Government fiddled around with many proposals while the unemployment figure went through the roof. In real terms, it now stands at more than 300,000. To date the Government has failed to respond to the proposals made by the Conference of Major Religious Superiors, to which reference was made, to introduce an optional work programme which my party supports. This highlights the Government's inactivity and ineffectiveness in responding to this great social problem. Unemployment, and its social consequences, are growing daily and there is no real evidence of Government determination to deal with these issues. The social consequences through crime and drug addiction are evident in all major urban areas. The Government seems to be intent on dealing with these issues through highpowered hype rather than through real policy.
The ongoing negotiations between the Government and the Irish Congress of Trade Unions on a further programme for economic and social progress must be looked at carefully. We must examine some of the statements arising from the earlier negotiations. In any new programme priority must be given to the need to address the unemployment crisis. There must be a coherent national strategy to deal with long term unemployment. Any agreement must include measures to provide opportunities for the majority of the long term unemployed. There must be a commitment to reforming the social welfare system. In this regard we must take into consideration many of the proposals made by the commission. There must be real tax reform and the tax reform package must contain an incentive to work. These social issues must be addressed in a Programme for Economic and Social Progress agreement. While this may be a forlorn hope at this stage, any agreement must not just be about wage increases alone.
Recent statements announcing the elimination of the infamous dirty dozen must be questioned. I intend to respond to some of the points raised earlier. To date the Minister for Social Welfare has not specified in this House if the remaining nasty nine cuts of the original dirty dozen have been reversed. I am sure the Minister will be present in the House tomorrow night to respond to some of the questions I wish to raise. It is most regrettable that the Labour Party which in November 1992 committed itself to reversing the dirty dozen is now telling us that we should forget that it ever said it.
In recent months I have often heard the Minister, Deputy Woods, and the Minister of State, Deputy Burton, say that the 12 cuts have been reversed. At 1 p.m. one Sunday afternoon I heard on radio that the dirty dozen has been reversed — hallelujah.
And into the bargain they called me a liar.
That is correct; I also heard that. These statements are inaccurate, misleading and — I will use the word — untruthful. The truth is that just three of the famous cuts have been reversed while, as I said, the nastiest nine which affect women are still in place. The Labour Party has shown again that in Government it will allow itself to be walked over in order to retain the trappings of power.
The Minister for Social Welfare should clarify once and for all tomorrow night in the House (1) whether reduced minimum pay for maternity benefit remains and that only women currently in employment are eligible; (2) whether injury benefit has been reduced by £15 per week and is at the same level as disability benefit; (3) whether maintenance orders for spouses and children are recoupable from lone parent payments; (4) whether those under 55 who have been made redundant and received a payment of £12,000 or more are disqualified from receiving unemployment benefit for nine weeks; (5) whether alleviation payments have been completely abolished; (6) whether in respect of the supplementary welfare allowance the first £5 has to be paid by the claimant; (7) whether deserted wives' benefit is means-tested if a person is earning more than £10,000 a year; (8) the position in regard to part-time workers — what we were given tonight was a recipe to confuse the House — and (9) the position in regard to exceptional needs payments.
The statements tonight in regard to these payments were misleading. It was stated that they had been withdrawn. The position is that an agreement has been put in place covering payments to the ESB and An Bord Gáis but the Minister should clarify the position in regard to mortgage and rent subsidies. There are many examples of people affected by the Minister's original circular and the statements made in this House were designed to mislead.
Debate adjourned.