Before we enter into consideration of this Bill, I wonder would the House be agreeable to widen the scope of the debate so as to embrace the discussion that normally takes place on the Appropriation Bill. The object of the proposal is that when the Appropriation Bill eventually comes before us it will be passed formally without discussion.
Private Business. - Finance (No. 2) Bill, 1968 (Certfied Money Bill): Second Stage.
Question proposed: "That the Bill be now read a Second Time."
Acting Chairman
I think this is an excellent suggestion as it will serve to prevent duplication of the discussion. However, the fact that it will save duplication will also mean that it will save time and perhaps the time thus saved could be made available to discuss Private Members' Motions. I suggest that the time saved by broadening the discussion be made available for this purpose.
I am afraid the Senator seems to be optimistic about time.
After four months he is entitled to be.
We all know that speeches take much longer than anticipated. Personally I do not see that any time will be available for the purpose suggested by the Senator.
The Bill translates into legislative form the new taxation announced on 5th November, 1968, and provides for the improvement of savings incentives as well. The reasons for the higher taxes were primarily economic. The action taken to reduce the prospective deficit on the current Budget had, therefore, a demand-management function as well as a budgetary one.
During the past eight months, consumer expenditure rose at a faster rate than the economy could continue to sustain for long. The recent general increase in incomes very much exceeded the growth of productivity. The balance of trade became more adverse and the estimated balance of payments deficit for this year was put at £15 million, as compared with a surplus of about the same amount in 1967. This year's prospective balance of payments deficit would not, on its own, give rise to undue concern. However, the large deficit and accompanying difficulties forecast for next year were disturbing.
In the light of the many signs of a dangerous inflationary trend developing and of the existence of a real threat to our competitiveness and economic stability, the Government decided to take timely corrective action. The measures adopted were an increase in postal charges to bring Post Office income and outgo into balance, taking one year with another; moderate hirepurchase restrictions; advice that available bank credit should be reserved as far as possible for productive purposes; increases in the rates of duty on beer, spirits and tobacco; and an increase from five per cent to ten per cent in the rate of the wholesale tax with effect from 1st January, 1969.
The October trade figures, which came to hand after the Financial Resolutions were introduced on 5th November, have underlined the necessity for corrective measures of the kind taken by the Government. Our apprehensions about the external situation also were, unhappily, confirmed by events soon after that date. Fortunately, the action taken by the Central Bank in diversifying our external reserves has increased their value and strengthened our reserves position.
The Bill now before you is straightforward and is summarised in the explanatory memorandum circulated with it. Detailed explanation of any points not clear to Senators would seem to be more appropriate to the Committee Stage and I shall gladly provide any further information sought then.
I look forward, in this House, to an informative debate and hope to hear useful comment. In recent weeks, some critics have been hinting at better solutions to our economic problems than those advanced by the Government. But they have failed to spell out fully their superior alternatives. I hope that any courses, fiscal or otherwise, offered for consideration in this House, will be specified in reasonable detail.
Even more unhelpful than the generalisers are the moaners who foretell gloom and disaster for the country, who for political ends magnify the present problems and risk further inflationary pressure by suggesting another early pay round. I want to make it clear that while the present situation needs careful management, it is not a crisis. We are confident that by the measures we have already taken, by constant vigilance, by a general policy of restraint and by timely intervention where necessary, we can bring the nation safely through the present unsettled period.
I now ask that the Bill be read a Second Time.
First of all, I should like to say that we welcome the Taoiseach in this House, but we regret the circumstances which have required him to take this Bill. It is most unfortunate that the Minister for Finance should have suffered an accident which has not only inflicted on him pain and discomfort but has prevented him from participating in the work of the Oireachtas for several months. We have always welcomed him. He has participated in constructive discussion and we regret that he is not in a position to be here today to take this Bill. His absence has imposed on the Taoiseach personally, who has many other difficulties, a very serious additional burden which must be a great strain on him. It is most unfortunate that this should have happened.
The Budget which we are examining here today seems to me to be the biggest Budget ever imposed in the history of this State. I am open to correction on this, but from the research I have done I feel that the extra burden of £19.4 million exceeds the burden imposed by any previous Budget. My calculation of the turnover tax Budget is that the annual burden in that case was about £17 million. It must be a matter for concern—and the Taoiseach has to accept this—that the Supplementary Budget, introduced some months after the main Budget, should exceed any main Budget ever introduced in the history of the country.
Clearly this suggests a situation that must give rise to concern. Whether it is a situation involving blame on the Government or not will be a matter for discussion on debate. The Taoiseach may not agree with me or others on this side of the House as to the degree of blame to be attached. He must, however, accept that it is a matter of serious concern. If it is not a matter for blame on the Government, and if in fact the Taoiseach's view is that it was completely unavoidable and that nothing he could have done would have avoided the situation, then we must think twice about our system of managing our affairs. If our affairs are so unpredictable that they impose a need for a Budget of this kind at short notice, then we must consider again whether we are controlling our affairs adequately, whether this Government are doing their job properly or whether the mechanism of Government finance is inadequate.
We must consider first why this Budget is necessary. The two main reasons for it are the increase in public service remuneration, which is £9 million, and the agricultural subsidies, which are £6 million. These are the reasons and they must be examined precisely to see how they have arisen and whether there is anything we can do about them. We must ask, first of all, whether these burdens could have been forseen in whole or in part. That is, I think, a fair question to which we have to seek an answer.
Secondly, given that they were not foreseen, rightly or wrongly, what, in fact, from the purely financial point of view, is the burden of taxation required to pay for these additions? By how much is this taxation to be increased and is the Budget well judged to yield the kind of results it should yield?
The Budget imposes taxation not just for five months but for 12 months ahead, because a Budget applies for 12 months. Does it impose too much or too little taxation?
Thirdly, the Taoiseach has stressed the relationship of the Budget to the economic situation. It is an exercise in demand management. Is it the right exercise in demand management? Is this the right way to control demand in our economy at this stage? How is it that demand got out of control so quickly? How is it that it got to the point where such drastic action was required, apparently for economic reasons?
First of all, we will consider the question of whether it could have been foreseen in advance or, if it could not have been foreseen completely, could it have been foreseen in a large measure? Could anyone have known how much the remuneration of the public service would have increased the demand on the Exchequer? In the system of collective bargaining, you have an element of uncertainty. I feel that you could not have given a precise figure at the time, when negotiations had not concluded, but nevertheless we are entitled to consider whether the figure could not have been assessed broadly, and whether the likely burden could not have been assessed and provision made for it. Secondly, in dealing with the agricultural subsidies it is quite clear that the magnitude of these was somewhat due to favourable weather conditions after a number of years of unfavourable weather, but I believe that the burden involved could have been foreseen to some degree but certainly not to the same degree as the public service remuneration.
In that way, it should have been possible to estimate the bulk of the burden fairly adequately in April last. I do not think it is fair to blame the Government for having failed to foresee in April the necessity for a large part of the agricultural subsidies. But they should have known something. People associated with the industry told the Department that their calculations on the grain harvest were incorrect and the Department failed to take notice of these warnings. I do not know how early these warnings were given to the Government or to what extent these burdens should have been foreseen at the time of the April Budget but I suspect that a small part could have been foreseen if they had taken the advice given. The bulk of these requirements became clear at a somewhat later date.
I think, taking the two together, probably the majority of the total increase in expenditure was reasonably foreseeable at the time the other Budget, the so-called main Budget or principal Budget, was introduced. The Taoiseach may argue that even if he could have foreseen this extra expenditure, to provide for it in the Estimates would have damaged the Government's negotiating position with the bodies concerned. There could be something in this.
By the time the Budget was introduced it was, however, clear, without any question or argument, that the Government's negotiating bodies could have made provision for an increase of a certain amount for the public servants; the provision of a certain amount could have been made. But this was omitted, rather deliberately it appears.
The Taoiseach might have been reluctant to draw on that particular method of making specific provision in the Budget for part of the requirements, on the basis that he did not know precisely how the negotiations might tend to go. But even if the Taoiseach felt it was not clear that full provision should be made on this basis, it was clear that an increase per cent, perhaps four per cent or whatever it might have been, could have been provided for at that time, and knowing that this burden was coming up, the Budget in April could and should have been more reasonably constructed.
There is a leeway in Budgets for a certain amount of adjustment. This is always the case when Budgets are introduced, though in this country— for reasons perhaps associated with loyalty to Mr. Gladstone because of his Home Rule policies!—we do not do this. Nevertheless, by adjusting the allowances for net errors of estimation, and perhaps also by justifying the estimates of buoyancy of revenue—though of this latter point I am a little uncertain—it is possible to produce a Budget which is, in fact though not in name, optimistic or pessimistic, expansionist or deflationary.
There is room for some leeway, therefore, but the April Budget this year did not leave room for any further expenditure. Current expenditure was increased by ten per cent. That increase was planned in the knowledge that there was a major increase due in the public service within a few months, and with that knowledge the Government should have been more cautious.
The Government should have planned the Budget in such a way as to leave them with as much leeway as possible to meet this extra cost, not leaving themselves in such a position that not even hidden provision was made for it. It is fair and constructive criticism to make that point. I suppose if I were speaking in a more partisan manner I could push this further, but I do not want to do that. However, I think it is fair to make these criticisms on the question of foresight.
The second question is : has the right amount of money been raised; is it too much or is it too little? I shall make some criticisms here and the Taoiseach may, in his reply, say whether I am wrong. He may say I am unfair, but I should like to make the point that in so far as the calculations I put forward to the Government tentatively for consideration are incorrect, if I am unfair it is the Government's own fault.
The Taoiseach in presenting this Budget, in this House and the other House, has failed to explain the reasoning behind his calculations. That has been the persistent failure of this Government in presenting Budgets. There is this tendency, whether it is on the part of the Department of Finance, the Minister for Finance, or in this case the Taoiseach himself, to keep their cards close to the chest, to bring in Budgets and merely explain enough to justify the increase in expenditure but not to express the reasoning behind it.
No adequate explanation has been offered for this Budget. Perhaps the right amount of extra taxation was imposed but we have not been given reasons to show that this is so. I personally doubt it. The Taoiseach's explanation in the Dáil was superficial. If I recall correctly, and I was present at the time he presented the Budget in the Dáil, his justification for imposing this burden of taxation was that under five main headings. Expenditure in the next financial year he suggested would be increased by £27 million. The additional revenue raised by the Budget in a full year is £19.4 million. This was not disclosed in the Budget; it was only brought out in the course of a reply to a Parliamentary Question, nor was it brought into relation with the natural buoyancy of revenue which occurs every year when revenue rises especially with changes in the value of money.
All we have got to go on is this figure of £27 million, trotted out with no explanation in relation to anything, as justification for this Budget. It may be that the Budget is justified, but it has not been shown to be such. I hope that in this House the Taoiseach will explain the reasoning behind this Budget, explaining how the burden of taxation imposed in it was arrived at. If a Government are introducing a Supplementary Budget, exceeding in magnitude any main Budget in the history of this State, they ought to explain the reason for it. They cannot merely throw out irrelevant figures and simply pass on to another subject. We should not allow in this House a matter of such importance to be treated in such a slipshod manner.
I am putting the following queries to the Taoiseach in the hope that I can extract some explanation from him. The increase in tax revenue is £19.4 million in a full year, of which only £4.2 million accrues in the current financial year. This in itself is an extraordinary position—to have to impose £19.4 million in a full year, in order to get £4.2 million in the current year towards an £11 million deficit in the current year. It indicates serious mishandling of the situation.
What it indicates above all is that the Budget was introduced too late, because if the Budget had been introduced in September, as it should have been, the money would have come in earlier. I say September advisedly, because the Government, from the economic point of view, were entitled to hold off taking action during the summer months to see how the economy would develop. From the financial point of view, they knew what they would need to do to cover the Budget deficit much earlier, but the Government were justified in holding off dealing with the financial deficit until they had a clear view of the economic situation, and this was not clear until September.
It was probably from that point of view that the Government were right not to introduce the Budget before September, but I cannot understand why it was not introduced then.
The burden of the milk requirements, the wheat requirements, the public service remuneration requirements, were known, not perhaps in every detail but sufficiently for the purpose of deciding not to postpone the Budget further, making it necessary to impose a far heavier burden on the economy in a full year in order to achieve a particular sum of money in the year in question. By the time this Budget was introduced, however, so little time was left in the year that this enormous increase in the overall burden of taxation will only yield this £4.2 million, this little mouse, partly because administrative deficiencies prevented the Government from imposing an increase in the wholesale tax until several months after it was announced. This seems to be a deficiency in the system and suggests there is something wrong in that area. It certainly is a very inflexible form of taxation if you have to postpone its introduction for several months. I fault the Government, therefore, in so far as this Budget is necessary, in not introducing it when it became clear that it was economically desirable in September.
The Taoiseach will recall that in the Quarterly Report of the Economic and Social Research Institute in September last, support was given for some kind of action. If this Budget were necessary to the economy, it was known to be necessary at that time, and financially it could have been much lighter from the public's point of view, if it had been introduced in September. I, therefore, fault the Government for not introducing this Budget earlier. I cannot regard it as wholly a coincidence that this Budget was not introduced until after the referendum was held. The Government must be faulted for not introducing it before the referendum. One must reasonably assume that the postponement of the Budget for those two months was for other than purely economic reasons.
This taxation of £19.4 million will yield £4.2 million in the current year. Therefore, it will yield £15.2 million more next year than it will yield this year. I hope I have got this calculation correct. The Budget is therefore increasing the burden of taxation above the level at which it will be this year, after this year's Budget, by approximately £15.2 million next year.
Adding to that the natural buoyancy of the revenue we get a very large increase in tax revenue. Foreseeable at this point of time for the financial year ahead my calculations suggest that the natural buoyancy of revenue at existing tax rates in the current year looks like being, on the Government's estimates, around £31½ million. The corresponding figure for the natural buoyancy of the revenue at the then existing tax level was in the last financial year about £26 million. That is what the Government got in extra revenue apart from increases in taxation.
I accept that the deflationary measures taken in this Budget will reduce the buoyancy of the economy, and therefore it would be optimistic to expect a similar buoyancy to the extent of £31½ million in the year ahead. I find it difficult to believe, however, that the natural buoyancy of the revenue next year could be less than £20 million, and it could well be nearer to £25 million. The position therefore is that without any extra taxation whatever imposed in next year's Budget, with the taxation imposed by this Budget, we get a picture of the Government planning to get next year as a result of this Budget an increase in tax revenue of between £35 million and £40 million, without any changes in taxation in next year's Budget. That is a colossal increase, and it is an increase which seems to run beyond the likely requirements of the economy. If I am wrong in that perhaps the Taoiseach will inform me. All we have heard from him in justification of this enormous increase in revenue now provided for in the financial year ahead, is that he has the expectation that under five heads expenditure will rise by £27 million, but he has not told us the amount by which it will rise under each individual head.
I itemised each one of them.
You mentioned the items in question but I do not recall that you gave us in detail the amount under each individual item.
I did, and the Senator has said other things too that I disagree with and which are not quite right but I do not like to keep interrupting him.
I appreciate that, but if I make an assumption of fact and it proves to be wrong and that will invalidate my subsequent argument, I will welcome an interruption and correction from the Taoiseach.
The items were given in each case.
It is possible that they were itemised and that I missed that.
That having been done, we are still left with the situation that we have this sum of between £35 million and £40 million extra revenue and only £27 million of it justified by commitments for increased expenditure. There will no doubt be increases under other headings, but the main areas for Government expenditure which increase significantly are included in the £27 million that the Taoiseach has mentioned, and I wonder whether the other headings, other than Civil Service remuneration, will rise by more than £3 million in the year ahead? If I am wrong perhaps the Taoiseach will tell me. As regards civil servants' remuneration I understand that the expectation from the public financial point of view is that there might be an increase of four per cent next year—at least that is the figure that one has heard mentioned. After the nine per cent this year it would be reasonable to expect a figure of four per cent next year, costing about £4 million.
As far as I can judge, therefore, and I would like the Taoiseach to tell me if I am wrong, it seems to me that taking into account all the demands likely to arise including the increased expenditure which the Taoiseach has predicted in presenting this autumn Budget, the total increase in expenditure is unlikely to reach £35 million next year. If that is wrong the Taoiseach will tell me so, but he should have made this clear before now. If it is not, then we are in the situation under which the Government has not only anticipated next year's Budget but has introduced in November taxation increases affecting the next financial year which are more severe than would have been required in April next. That is economically unsound as it involves, I would have thought, an excessive deflation of the economy at this point of time. It is also financially unsound to overtax people now in order to get taxes which would not even be required next April, and it would be politically dishonest to do it if the intention were to do it so that next April an easy Budget could be introduced. The Government and the Taoiseach ought to defend themselves from that implication which tends to be drawn from the facts and figures before us, and if he had presented the picture more fully and more openly than has been done in the Dáil or in the Seanad so far, such an imputation might not be so easily made. I would like to press him to put his cards on the table and to explain precisely the thinking behind this extraordinary Budget. It cannot simply be laughed off in a few remarks as if it were a matter of minor importance.
Thirdly I come to the relationship of this Budget to the economic situation. This is more difficult and I am a little uncertain myself as to how to attack it. I must say, however, that the inflationary situation which has given rise to the need for such sharp deflationary action should not have been allowed to arise. The Taoiseach may say, indeed, that it is easy to say that from the Opposition benches, but less easy from the Government benches. I am sure that is right, but nevertheless this is a criticism which people in opposition are entitled and, indeed, required to make. To have allowed such inflation to occur that it requires a Budget which goes beyond any Budget ever introduced previously in this country suggests some degree of mismanagement.
It seems to me that the situation was not a very severe one when the Budget was introduced in April. The Government would have been wrong to take sharp deflationary action then, but we must ask what went wrong between April and November to justify this remarkable action. The Taoiseach himself in the Dáil on a famous occasion asked "what went wrong?" and I now propose to ask him a very similar question. What went wrong between April and November, and what inflationary situation developed of such a magnitude as to require the most severe Budget ever imposed for economic reasons? Something very great must have gone wrong, and I do not think that any explanation that he has given to the Dáil or to this House has been sufficient so far. Somebody somewhere must be responsible for such an extraordinary and rapid deterioration of the situation as is implied by this Budget. I believe the factors involved were the same as the inflationary factors that applied in 1965— viz., excessive Government expenditure, excessive credit expansion, and excessive increases in incomes. These led to the inflationary situation in that year, but now even the magnitude of the inflationary increases at that time has been exceeded.
First of all, on public expenditure, the problem here arises of the remuneration of the public service, to which we must give a little thought. My understanding is that the 9 per cent increase in the public service has spread itself throughout the country as so often happened before. The private sector suffered from the failure of the public sector to control increases. I understand this started because of a claim in a particular sector in the public service where grievances existed and required as a remedy an increase in salaries larger than the increases appropriate to or desirable in other sectors of the public service, and I am referring to the Post Office. The Government were right to settle for a higher figure than the proposed 7 per cent in the case of the Post Office. But the failure of the Government to introduce any kind of incomes policy, and in particular any type of prices and incomes board means that if the Government under any pressure agrees an increase beyond what is nationally desirable, that increase becomes generalised throughout the whole public service and certainly throughout the country.
We have suffered repeatedly from action of the Government, appropriate in some cases in its own right, but then generalising itself and creating undue problems because of the failure of the Government to prevent that happening. In other cases the intervention carried out was inappropriate. I refer to the Taoiseach's own intervention as Minister for Industry and Commerce in the ESB dispute in 1961 which was regarded at the time, and still is, as extremely damaging to the economy. The whole of the inflationary pressures on incomes started at that time. People have said that it followed the later wage round involving 12 per cent, but that is not so. In fact the 1961 wage round jacked up the level of the two-yearly increases. The Taoiseach as Minister for Industry and Commerce intervened repeatedly in that dispute to jack up the offer so as to get the dispute settled before the General Election. We were lucky that when it was generalised throughout the economy it was watered down to 12 per cent.
Since then we have had great difficulty in getting back from it, and we have had these excessive increases every two years. Once a 12 per cent figure is set, it is hard to get unions to accept anything else.
Economic hindsight and no political reality.
This remark was made by the Taoiseach recently. I do not understand to what he is referring. If he is referring to remarks I made, if he reads what I wrote at the time he will find that it was not economic hindsight. We are all subject to the accusation of hindsight. We all indulge in it but I do not think that accusation is always appropriate and on this occasion it is singularly inappropriate.
We are faced with a 9 per cent wage increase throughout the economy which seems to be attributable to the Government not settling in an appropriate way a single special increase. In Britain this problem has been solved because they have struggled to introduce some kind of incomes policy. They introduced a statutory incomes policy about which I am not enthusiastic. But they have one feature which I will recommend to the Taoiseach and that is the idea of a Prices and Incomes board to safeguard claims of this kind. Such a board could have investigated and identified the particular grievances of this group. They could have said that this group merits an increase beyond the normal amount because they have been held back and held down in the past, and therefore we recommend this 9 per cent as a special case. The trade union movement, who are generally reasonable men, contrary to the allegations frequently made against them, would accept that kind of situation if it were put to them. But where an increase of nine per cent is given and spread throughout the entire public service, how can you expect the workers in the private sector to hold back? They have been trying to hold increases in salaries at a reasonable level as they have been exhorted to do by the Government and they find themselves sabotaged by the Government's failure to control its own affairs in this respect. This needs to be said because it is one of our critical problems.
Apart from the agricultural trouble facing this country our biggest problem is this critical incomes policy issue. It is critical not because of any particular deficiency in our trade unions or on the part of the negotiating arm of management, not because of anything peculiar to the Irish people, but primarily because the Government will not organise its own affairs properly in this respect and is continuously introducing wage increases by its failure to cope with problems within the public service and its failure to have a system under which a particular group with grievances will get an increase without having it generalised to everybody. So much for the excess increases in incomes, which is one of the inflationary factors. It must be put clearly on the shoulders of the Government. You will not find anybody in trade unions or in management outside who is prepared to take responsibility for it. They have become irritated at the Government's behaving in this way and at the Government continuing to give a lead in the opposite direction to that in which its own exhortations point. A large amount of Government expenditure arises in this particular area.
I should like now to deal with the problem of credit. I should like the Taoiseach to explain what has been the credit policy of this country for the past six to eight months? He has not explained it in the other House or here. I cannot understand it. There is no explanation for it and I feel confident it is disturbing opinion by the extraordinary way it is being managed. The Central Bank last May advised the Associated Banks that in the 12 months ahead they should increase credit by not more than the same amount as in previous years, that is £64 million. This was a reasonably appropriate figure. I think it was high at the time but the Central Bank knows more about it than I do, and therefore I accept that it seems reasonable enough. During the following six months the volume of credit was increased by almost the entire £64 million. The Central Bank said they would increase credit by £64 million during the year. I should like to know from the Taoiseach was this ladling out of £64 million in the first half of the year all due to seasonal pressures? Some of the comments in the Central Bank's statement yesterday make it clear that there is more at stake here. The advice of the Central Bank was not adhered to. It was departed from and in departing from it credit in this country has inflated at a rate that has no parallel. Since the end of October, 1967, this increase represents £95 million. The increase in credit which was inflationary in 1965 was barely £50 million. We have the experience behind us of a year with an excessive wage round increase and Government expenditure excessively up, as it were. If you increase credit in such a year by a large amount you are asking for trouble.
In constant money terms £64 million is the same as the £50 million odd of three years earlier. Yet the actual increase represents £95 million since end October, 1967, and nothing was done about it. The Taoiseach had nothing to say about credit beyond the fact that it should be given for the usual productive purposes. There is no explanation as to why credit is not restrained or what the Central Bank felt about it or what the Government felt about it. Surely this is a matter that should be discussed in the Houses of the Oireachtas. What kind of legislature have we that these things are not probed and properly discussed in full? In the Central Bank statement of yesterday you have to read between the lines and one sees between the lines what people do not intend to put there very often. But they appear to be saying—"We laid down the guideline of £64 million credit out of which the Government were to get their share. They grabbed far more than their share because they cannot control themselves. This means we are faced with either adhering to our limits as we did in 1965, cutting credit to the private sector, or else we have to face abandoning our limits."
In 1965 we insisted on a limit being set and we got that far but deflated the economy too much. It is obvious that the Central Bank now takes the stand that they cannot repeat this and that all they can do is to accept the fact that there has to be a restriction of credit and to tell the private sector to take it easy and to do their best. The Government ignored what their own advisers were trying to do. The Central Bank's advice may have been unduly generous in April but instead of adhering to that advice the Government bulldozed their way ahead and grabbed more than their share, so that inflationary pressures from credit are now a powerful force.
There is a tendency among some economists to play down the importance of credit as an inflationary factor but I believe credit is a much more important factor in Ireland than we appreciate. The 1965 crisis was largely due to credit inflation. The breakdown in credit control this year and the breakdown in the system which the Central Bank introduced in 1965 is due to the Government's incompetence in managing their own affairs. I do not know what the banks are supposed to do from now on. They are supposed to tighten up a bit, but how much? Nobody seems to know what line of guidance they are to follow, and by how much they are to restrict credit. They have been told to go easy but that is very different from what they were told in 1965. This is a matter which needs to be discussed and debated by both sides of the House and it is a matter to which the Taoiseach must give an answer.
So much for the Budget and the economic reasons for it. Our economy is sound and I hope that it will be much less affected by these measures than it was in 1965 and very much less than it was on previous occasions. The trouble is that the Government seem unable to control their own expenditure or even to forecast it. There are so many open-ended commitments such as those to the public service and for agricultural subsidies, that the Government must bear the blame for the position in which they now find themselves. There is this open-ended commitment to the public service and there is also the commitment to subsidies for agriculture. I do not know the answer to the problem but it is something that must be tackled by both sides of this House. I agree with the Taoiseach that the situation requires deep concern for the long term future rather than dark gloom about the immediate future, but even with all those criticisms there is one aspect of the Budget on which we are perhaps moving in a more positive direction.
Given that we have a situation where the economy has been allowed to get out of hand, given that something needs to be done, given that the choice of the Government was to tax and hit consumption or to cut credit drastically as was formerly done, the balance is more nearly right now than it was formerly. Formerly the step taken was to cut back capital investment. We disrupted the building industry in 1965 by cutting capital investment, on the grounds that it was easier politically to cut investment rather than consumption. If one can interpret this Budget as having any sensible pattern at all, the decision to cut the growth of consumption rather than to cut capital investment is a step in the right direction, if that is the objective the Government have in doing this. If this is the policy behind their action, to that extent something good has been done. It is evident, however, that the Government's approach is so devious and so unclear, that the Opposition have to delve into the whole matter to see what is the thinking behind it. That is not an efficient and competent approach by the Government.
I wish now to refer to another matter of current concern, the Free Trade Area Agreement with Britain. I referred at some length to this matter in the first Budget debate of this year and I commend to the Taoiseach my remarks at that time. I have been concerned at the tone and content of the Taoiseach's remarks on the progress of this Agreement. The Taoiseach is generally very careful in what he says and it is not like him to make claims which are not sustainable. On several occasions recently he has made claims for the Free Trade Area Agreement which he must know cannot be sustained. The Taoiseach must know well that the increase in the value of our exports to Britain due to the Agreement as distinct from those increases that would have happened anyway, is a tiny proportion of the total increase. I have done very careful calculations on this matter and gone into it in great detail. I have tried to determine as closely as possible the growth of our exports following the Agreement. I have given the fullest credit possible for the increase in our exports which followed the removal of the synthetic fibre duties. I have been generous in attempting to assess the agricultural benefits, using authoritative data, which is also available to the Taoiseach. I have tried to give credit for every possible benefit, and the sum total of what I got up to the time of the first Budget this year was an increase in the current rate of value of our exports of about £6 million. I defy anybody to produce a refutation of those figures.
The Minister for Finance, when replying to the Budget debate—he may not have been well at the time—referred to these figures rather briefly. He did not attempt to refute what I had said but made the point that I had said that the balance of the Agreement at this stage was in our favour and that anything I said about the future was only speculation. The losses up to that time from increased imports amounted to £2 million. The net gain was £6 million and this may now amount to about £5 million. In this Agreement all the gains come at the beginning and after that will come the losses. These losses have not yet begun to hit us but they are foreseeable.
My figures stand until they are challenged and they show that the Agreement will work against us in the latter half of the period. I calculate that by 1975 Britain's gain from the agreement will be £70 million, of which £45 million would be at the expense of Irish industry. With this £45 million would be an extra £25 million caused by the diversion of trade, which we at present have, with other countries, to Britain because of the lowering of our tariffs on British goods but not on foreign goods. That is a tentative calculation, but Britain's gain at our direct expense can be calculated fairly firmly at around £45 million. The benefits to us are in the nature of £3½ million from agriculture and these agricultural benefits cannot grow. Even if our industrial benefits continue to grow, it is difficult to see how the total benefits to this country from the Agreement could exceed £20 million, assuming that there are no losses in agriculture, as now seem to be threatened in the current discussions with Britain.
The Taoiseach has referred to these chinks in the Agreement, but even if we do not lose agriculturally, the most we can expect to gain is between £15 and £20 million, while our losses would be in the region of £45 million. This Agreement is one that should never have been signed and the Taoiseach knows that I was sceptical about it from the beginning. I spoke against it at the time even in the absence of any particular Party line in the matter. Subsequently I allowed myself to be persuaded in this matter. Now I wish that I had stuck by my own judgment and that I had pressed my own Party to reject the Agreement. We should have taken another course of action.
The Agreement, from every point of view, is a disaster. It increased our dependence on Britain of whom we should be becoming more independent. I have no objection to Britain as a country to be dependent on if we have to be dependent on somebody. Britain is perhaps the most liberal of the great Powers, but for a country of our size to be totally dependent on a country much bigger such as Britain is very damaging, and for a Government to set out to increase that dependence without any certainty of a broader link with the EEC is unwise and dangerous. To do so in order to get benefits that amount to less than one-half of what was given in return, is damaging and irresponsible. To do so in an Agreement which has chinks and loopholes is ludicrous. We are now threatened with reduction in quotas which were to have expanded indefinitely, and this makes the Agreement ludicrous.
Having said that, when an Agreement of that kind is breached by the other party, an Agreement which was suspect from the beginning and is working out in a manner even more seriously to our disadvantage than had been foreseen, then, I would have said, this is the moment for the Government to seek to regain some liberty of action in the matter and to put themselves in a position to be able to re-negotiate aspects of the Agreement. It is no moment at which though—this is a more difficult point and one where the Taoiseach may have reasonable counter arguments—to announce that the deposit is to be paid for by the Irish Government, before they start negotiations with the British Government about it. The Taoiseach can argue that in the mood of panic there was danger for our export orders: that had he not acted quickly orders could have been lost. He may say that the announcement of the import deposit was justifiable. It may have been justified in the short term, but I doubt whether it was justified in the long-term view. If the Taoiseach had dealt with this breach of the Agreement as it should have been dealt with I do not think he would have taken those measures.
Was I to ask for quota restrictions, as the Fine Gael Party have suggested?
Fine Gael asked for nothing of the kind. I take exception to the Taoiseach misrepresenting, in a manner which can scarcely be described as truthful, the Fine Gael position. The Taoiseach knows there are sound and good reasons why the British do not want to impose quantitative restrictions. This arrangement allows them to do the only thing they do not want to do. That is why it is a protection if we insist on it. In fact, the British are not prepared to impose quantitative restrictions on the world at large; and they could not impose quantitative restrictions on us separately from the world at large because this would be contrary to GATT. This traps the British. It traps them in the position that if the Agreement were adhered to they could not effectively impose restrictions on us.
They could not impose quantitative restrictions on those investments because they are not prepared to impose them generally. Having imposed other restrictions on other countries, which are illegal as far as we are concerned, they could not impose quantitative restrictions on us because they are a breach of the GATT agreement. I compliment the Government in getting in such a clause but I do not compliment them on the way they negotiated this Agreement. I hope that is adequate reply to the Taoiseach on his interjection and on his reply to the Fine Gael statement.
I do not want to develop this clause of the Agreement in greater detail beyond saying I think the House is entitled to some explanation as to why we are negotiating about cheese. We were told clauses of the Agreement were such that the British could not impose restrictions on the entry of Irish cheese except in the context of the international commodity agreement through which produce of British agriculture would also be controlled and an agreement which would give us the same claims as the British farmers would get. If that is the position, why are we negotiating about it? Why are we having any discussion with the British on this? Why is it that a few days after the breach of the Agreement by the British we went to negotiate something which is our right under the Agreement?
Is this one of the chinks the Taoiseach pointed out? Is it the chink which I pointed out at that time, contrary to the view of the Minister for Agriculture? Is his exchange of letters with Mr. Peart not governed by other clauses, articles 8 and 9? I suggested that, in an article I wrote in the Irish Times. Three days later the Minister for Agriculture replied to that article in the Dáil and said that I was wrong—that the exchange of letters was governed by other clauses and therefore it would be out of question for the British to restrict imports from Ireland without restricting their own products. Why contradict me? Is it that I was right and he was wrong? Is that the chink which is causing so much difficulty?
The Taoiseach has a duty to tell us more about this. I do not think the House should be left in ignorance of just what is happening under this Agreement. One point, finally, I should like to make about this Agreement is the most worrisome. We had agreements with the British which were unsatisfactory and which became so because of an erosion of our position and changes in British policy over the years, but under those agreements we held certain rights in the British market in return for which we gave them certain privileges which cost us virtually nothing. They were preferential considerations at the expense of other countries. This was a fairly happy arrangements.
The 1938 Agreement, reinforced by the 1948 Agreement and modified by the 1960 Agreement, was a basically strong one. We got certain rights in the British market in return for concessions at the expense of foreigners, not a bad arrangement. What do we do? We negotiate an Agreement under which we negotiate away four-fifths of our industrial trade. We gave the British free access to Irish markets in respect of four-fifths of their industrial goods in return for the same concessions as before, which brings in some £3½ million in the case of agriculture and certain benefits industrially which I have mentioned. Now, supposing that Agreement having been signed, Fine Gael had pressed in the Dáil for its rejection and succeeded in getting it rejected, and the Government, having signed this new Agreement, faced the difficulty that the rights which we had in the previous Agreement had disappeared, if we rejected this new Agreement after the British Government had signed it, the rights which we had for the previous 25 to 27 years could also have been put in jeopardy.
A Government which negotiate an agreement giving another country certain rights and by so doing put their own country in jeopardy if that agreement is challenged at a later stage, are a Government which act ineptly, and that is the real concern about this Agreement. The real concern is that we are now stuck with an Agreement appallingly disastrous to us and from which it would be impossible to get the enormous benefits we had under the previous one. What are we supposed to do about this breach of the Agreement? We should be told what the Government intend to do. We will give them one opportunity of doing that.
The Taoiseach's statement was that it was a breach of the spirit of the Agreement which is one of the biggest give-aways in our relations with other countries during the last 50 years. Those are things which need to be said. I do not wish to be unfair in criticism but it is the job of the Opposition to probe such acts. The Government are not frank on this in regard to chinks and cheeses and I am right in probing this issue and seeking from the Taoiseach an elaboration of what has happened so far and an adequate defence of an Agreement so disastrous to this country.
There are two other particular matters I should like to deal with before turning to general issues of Government action and Government performance. One matter relates to Biafra. We have been frustrated in this House from discussing this issue month after month. We were frustrated earlier in the year by being told we could not be given time for discussing this matter and we have been frustrated during the last four months because we have not met. Our policy in this matter has been deplorable and the Irish people think so. Many Members of the other side of the House, and I suspect many members of the Government, think so but because the Minister for External Affairs is adopting a purely legalistic attitude we are frustrated from expressing our views and playing our role in this matter.
It is vitally important that this war be brought to an early end and it will not be brought to an end by inaction but by action. We are one of the few countries to have diplomatic ties with both sides in the war. We are a neutral country not with material interests but with spiritual interests and we have nothing to lose by trying to play our role in this matter. We are not concerned with preserving oil resources as the Russians are. We know the British are supplying arms in this war. What motives have prevented us, for well over a year, from protesting to Britain against the supply of arms? How many representations did it take and how many months did it take to persuade our reluctant Minister for External Affairs to mention to the British that this was a matter which was causing us concern?
Why this reluctance? What are we afraid of? What kind of relationship have we got with the British that we are afraid to raise this matter that people of this country are so concerned about? Irish people feel deep outrage that a neighbour of ours, because of commercial interest, should supply those arms to a country which is at war and which now threatens the lives of 7 million people, people with whom we have close and friendly relations and with whom many of our own people have worked. We could and should have played a different role here, a stronger role and an earlier role. We should be playing a part in the United Nations. I know that the Minister for External Affairs takes the view that any interference by white people in Africa would be resented, but that is not the case. There are white people and white people, and I do not think it is the case that a helpful initiative on our part would necessarily be resented in the way that he suggests.
I do not think that we can any longer content ourselves with taking the easy way in this situation, saying that it is better to do nothing in case we might do harm. We have a responsibility, and a desperately urgent one, and I feel sure that there are people not only on the Government side but in the Government who share my view. I feel that if I raise this matter now without pressing it any further at this point, because there is a motion on the Order Paper, perhaps I may encourage members of the Government to press the Minister for External Affairs on this, to take some kind of action that would satisfy our people that we are doing something to deal with this appalling situation.
I want to move now to the general issue of the quality of government. What this country needs at this time is an energetic Government, a democratic Government in the sense of a Government not merely democratically elected but a Government which in a democratic manner seeks to extend the area of democracy in our country, a socially progressive Government, and a Government in command of the situation, whose Ministers know what they want to achieve and how to achieve it, and who seek advice on means to achieve their ends from the Civil Service rather than advice on what those ends should be.
I believe that we have not had such a Government for some time past. What we have is a Government which is lacking in new initiatives and new ideas and which, from its inception in 1957—I do not say from 1932—has been dependent on the Civil Service and on outside sources for new ideas and new initiatives. The Government which came into power in 1932 had policies and ideas, many of which I would have disagreed with if I had been old enough to be taking a part in political life, and some of which were excellent ideas, but in any event they were their own ideas and they set out to implement them, right or wrong. They were a Government of men who knew their own minds, and though many of the things they wanted to do I regard as reprehensible, they were at least a Government in command of the situation.
Since then, during the last 11 years, we have had a Government which clearly—and there is no need to produce evidence of this because it is before our eyes—have been dependent for their initiatives and ideas on the Civil Service and on outside sources. I challenge the Taoiseach to tell us truthfully what half dozen major changes in policy effected in this country in the last ten years have come from the Fianna Fáil Party which have not been prompted by the Civil Service or by vocational interests outside.
Where is the fruit of the three years in Opposition from 1954 to 1957? Where are the new policies and ideas that should have been generated in that period? Remember what happened. The Government came back into office in March, 1957, in very serious times indeed, but nothing happened until December of that year, when Mr. Whitaker, the Head of the Civil Service, wrote to the then Minister for Finance, Senator Ryan, to suggest that some kind of economic programme was needed to set the country on its feet.
The correspondence shows that the Minister for Finance acted with some promptness, and that that initiative was followed up and an economic development scheme was produced on which the First Programme for Economic Expansion was built. The evidence we have suggests that the Government's share in the development of that policy was limited to two slight differences—one about the proposed policy change regarding feeding barley and I have forgotten the other.
The rest of that First Programme was what was proposed by the Civil Service and initiated by the Civil Service. The Government in office for nine months had done nothing and did not seem to know what to do. It must be said to the credit of the Government that they published the advice given to them and published this correspondence. In an endeavour to restore confidence in the country, they came clean and told the truth on that occasion, that the source from which the ideas had come was non-political. It was an honest, honourable and courageous thing to do, and I have constantly commended and congratulated the Government on that action in publishing the correspondence, but at the same time I am entitled to rely on the evidence and to say that it is clear from it they did not have a programme or a policy of their own.
I have not been aware during the last ten years of any major reforms of any significance which have been initiated and seen to be initiated from the Fianna Fáil Party as distinct from the various public service or vocational bodies and proposals from the NIEC and the Civil Service. This is not government as it used to be in the 20s. It is not even government as it used to be in the 30s and it is not government as it must be in the 70s.
The quality of government has fallen to a low level. This is because the political Party in power did not come in with any set of clear-cut policies which it wished to bring into being and put into force. The first Fianna Fáil Government was elected with a clear-cut and clearly-stated viewpoint. It knew where it wanted to go, but the country has suffered since then from the absence of such a situation. The Government has benefited from the good advice given to it by the Civil Service, particularly in regard to economic development, and where the Civil Service Departments concerned were well qualified to assist the Government in securing economic growth, the Government is to be commended on taking that good advice, sometimes politically difficult advice. But it cannot be commended for any initiative by the Fianna Fáil Party in areas where the Civil Service Departments concerned have not had the imagination and the confidence to produce the policies required, in which cases there is a total vacuum, or has been so far at least.
We will, no doubt, be told that the Fianna Fáil Party are producing a social programme, but how long have they taken to do this? It has taken nearly 12 years, and they are taking their ideas belatedly from the Department of Social Welfare. In fact they could do nothing else, because they themselves have no ideas, and we have not had a social programme because unfortunately the Department of Social Welfare have been lacking in ideas and so this country has waited and waited and got nothing for its pains. Maybe a social programme will now be scraped together, but there has been no great display of imagination so far which would raise hopes as to the level or quality of policies that we can expect to be produced. It should not have taken 12 years to get to this point. There has been no lack of pressure in reference to social policy, but the Fianna Fáil Party have been so excessively concerned, first of all with the referendum and secondly with the gerrymandering of constituencies, that they do not seem to have time to think of anything else, and any social policy which does emerge will have to come from the Government Departments concerned and not from the Government or from the Fianna Fáil Party.
I do not think the country should go on like this. The time has come for a change, a change that will enable us to see in office a Government which has its own policies which have been presented or are being currently prepared, in some cases for publication in the near future, by the principal Opposition Party. Nobody on the other side is entitled to criticise the principal Opposition Party on the grounds that they do not know what it intends to do when it is put into office. No Party, including that which took office in 1932, has ever presented this country in more detail and showing clearly what it wants to do. The electorate have never been given before a better opportunity to decide in favour of a particular course of action by a Party with particular policies. Never before has the intended course of action of a Government been put so clearly on the table.
Nonsense.
I think that "nonsense" is a rather inadequate interruption, which does not contain as many letters as the policies that this Party have put before the Irish people in the last three or four years.
We need an imaginative Government, a democratic and socially progressive Government and a Government in command of the situation to the extent to which a Government needs to be in command of the situation. We need a Government with Ministers who come into office with clear-cut policies which the Civil Service will help them to put into force. The fault of the Civil Service is that it places too much emphasis on avoiding any embarrassment to its Ministers. If the Minister has no policy the best way not to embarrass him is not to produce any policy. If however a Minister comes in with policies to which he is committed, the best way not to embarrass him is to implement them. The way to get the most out of the Civil Service is to have the political side doing its job—determined to put its policies into force. If we have to rely on the Civil Service to prepare the policies, in some cases we get good value but in some cases we get bad value. But even when they fail abysmally we should not blame them. It is not their job. The burden put on them in the last ten years is one that should not have been put on them. There are many criticisms that may be made of the Civil Service but they should not be criticised for not doing the Government's work.
It is 11 or 12 years since Fine Gael formulated a health scheme and then it was put out of office. The Minister for Health came in here I think three years ago with similar ideas. We pressed him and he said they would be put into operation in some months, but we have not heard of them since.
What has this Government contributed by way of new policies in social welfare? I know they have raised social welfare expenditure. But I also know the proportion of public expenditure devoted to social welfare has constantly and steadily declined. Would anybody like to challenge that statement? I was waiting for an interruption, perhaps "nonsense" from Senator Ó Maoláin, but nothing has been said. Therefore, I shall have to repeat it. The proportion of public expenditure devoted to social security and social welfare has constantly and steadily declined under this Government in case that was not heard the first time I said it.
I heard the Senator.
There has been no cutting down in the old age pensions.
In 1958, the year after the Inter-Party Government left office 24.0 per cent of expenditure was devoted to social security. In 1964 at the point when this issue was raised strongly and forcibly that figure had dropped by 21 per cent. In 1968-69 the best estimate I can make, and the Minister will contradict me if I am wrong, is 20.5 per cent. In the ten years of Fianna Fáil government social security has been so downgraded that as a proportion of current public expenditure it has fallen by 20 per cent.
Would the Senator give the figures?
The amounts have been increased but by a hell of a sight less than everything else has been increased. The figures show that in absolute terms social security has gone up by a very big increase. Since 1958 you will see it rose from £33 million to £79 million, but when you look at the increase in the other items there is no comparison. That is an increase of almost 2½ times.
Would the Senator like to go into old age pensions increases per week?
I suppose they have gone up by 2½ times. But subsidies have gone up from £15 million to £66½ million. That is almost 4½ times instead of 2½. There is an increase in public consumption from £71 million to £77 million, an equivalent amount. Secondary education rose from £2 million to £9 million, which is 4½ times. The increase in social security by comparison with all these increases has been so much less than the increase in the rest of Government expenditure, that it is now downgraded and represents a one-fifth smaller share of Government expenditure than it did when this Government came into office.
Compare it with the percentage of gross national product and national income. You are taking that which suits your purpose.
The percentage of social security has gone up but less than other Government expenditure. Everything goes up including prices but the thing that goes up least is social security.
Nonsense.
Nonsense is not a reply.
Give us the figures for each week.
I will not talk about a particular pension but about the whole of social security. I will not stand here and talk about old age pensions but about all of social security. There is £79 million of it, that is a one-fifth smaller share than it was in 1958.
Give us the figures.
Social security expenditure was £33 million in 1958 and £79 million in 1968.
Give us the figures per week.
I am not talking about weekly expenditure but the total amount. The current Government expenditure figures for 1958 is £139 million. My calculation gives a figure of £385½ million for 1968 but the 1968 figures are estimated to a small degree. However, you can take them as being accurate, to within one or two decimal points.
The other side of the House do not like this but the Irish people have a right to hear it. One of the reasons for this is the Government lack of concentration except on increasing weekly rates of existing benefits which have been done fairly well, and social welfare is at a much better level than in 1958. The reason why the share is smaller than it was, as a share of public expenditure, is the Government has no energy or imagination to introduce reforms or new areas——
I do not want to interrupt the Senator but new areas of reform have been introduced and are effective.
Would the Minister allow me to finish my sentence? If my reply is inadequate and I leave something out the Minister can supplement my remarks. There were only two major reforms of consequence —in 1961 the retirement pensions scheme and later the occupational injuries scheme. That was put forward as a reform but perhaps it is straining the word "reform". What are the other major schemes? I shall allow the Minister time to tell us.
Acting Chairman
Perhaps the Senator will finish his speech.
I was prepared to give the Minister two minutes silence for this funeral oration on Fianna Fáil. Let us move from social welfare and health to local government. Our country is going through a period of economic growth. We have great changes taking place, regional colleges of technology being built, regional tourist boards being set up, regional hospitals being established. A whole new area of local government is growing up and both inside and outside Parliament there is complete dissatisfaction with the failure of the Government to devolve authority to the local bodies. We have a situation here which is totally unsatisfactory. There is no real local autonomy, no real local control. There is a great need for a whole new regional structure but nothing has been done about that, nothing has been said about it. Even in Northern Ireland big reforms are being introduced, some of them for particular reasons which do not apply here, but these include reforms which are radical in the structure of local government. What great reforms are coming forward here? What are the Government's proposals radically to reform the local government structure. There is no evidence whatever of them, there is no word of them.
We had the referendum.
That took up a year of the Government's time but it did not take 11 years, the period during which the Government have been in office. Take Parliament. Is there anybody who believes that Parliament is not in need of reform? Is there not widespread dissatisfaction with the performance of Parliament? Everybody knows that Parliament as at present constituted cannot perform its proper role in the light of the nation. There is a total absence of the committee system which is in operation in almost every other country, but there is no sign from the Government of any proposals for reform. There is nothing but a determined effort to prevent any development, a determination to retain control of Parliament in their own interests. Even when certain reforms were suggested by the Constitutional Committee, even if such reforms did not require constitutional action, these reforms were dropped.
Take the field of industrial relations. Year after year we wait for the Bill that has been so much talked about for so long. It is 11 years since Fianna Fáil came in and in all that time there has been nothing done about incomes policy. It is three and a half years since the National Industrial and Economic Council made certain recommendations.
We have had some imprisonments—ESB workers and others.
I am talking about constructive progress. Where has there been any action about an incomes policy? Nothing has been done. The Government, to which the responsibility belongs, have done nothing. How are we to control wage and salary increases if we do not control non-wage and non-salary incomes? How are we to persuade wage and salary earners to go along with appeals for restraint if you must have an incomes policy applying to all incomes? The Government do not want to take any steps in this direction because such steps would be unpopular with its more powerful and influential followers.
They gave them two reliefs of sur-tax. It is intended to be helpful, a Leas-Chathaoirleach, I am sure.
Incomes policy is an area where progress is now most required. The Government's determination to do nothing is leading to a serious situation here. Inflation could be brought under control. Their unwillingness to outline incomes policy for non-wage and salary income is impending progress. Until we get a government prepared to do something about this, wage inflation is going to be with us.
What are we hearing about workers' democracy from the Government? What steps are taken to give the worker a say? What is the Government doing about all these things? Is the Government leading opinion in this matter? If it is it cannot be doing it very loudly because I have not heard it.
What about our foreign policy? One can argue either that we have no foreign policy or two foreign policies— but certainly not one foreign policy. In reality we cannot call what we have got a foreign policy. One can talk about the foreign policy of the Department of External Affairs and about our economic foreign policy but we have not, in fact, got a foreign policy. We have shuttled back and forward, between different positions depending upon the advisers who might have been there or who might have resigned over that period. You can trace the evolution of our policy depending on the presence or absence of particular advisers. Is this Government leadership? What is the Irish position in the world today? Are we playing a leading role as a neutral country with the western countries? We are not highly regarded and we are not playing a role. We have not even a foreign policy designed to further our interests. We are drifting closer to dependence on Britain. This is something we have drifted into without realising its extent.
What about the Irish language? Here there is the greatest reluctance to face facts. The fact is the Government have lost the support of the Irish people for the language by wrong policies with regard to the language. But they have also lost the support of the language organisations too. It takes genius to lose both at the same time.
We come now to agriculture and the best I can do for the Government with regard to agriculture is not to speak about it. I do not think anybody in this House on the other side is going to make a speech on the Government's agricultural policy and how well it is going and how pleased the farmers are about it. I have not heard such a speech in the 3½ years I have been here.
This is the record of the Government in so many areas. It is the record of a dying Government. Many people who are not committed to Fine Gael or to the Labour Party want to see the end of this Government. The people are tired of them and they want change.
I also said we want democratic government. We have had democratic government in that our Governments have been democratically elected. They are, within certain limits, behaving democratically but only within certain limits. They are bureaucratic rather than democratic. They are authoritarian. They reject consultation and participation. It is beneath their dignity as a Government to consult people. They are a Government which retain tight control of local affairs and trust nobody to do anything. They are a Government which in their arrogance in regard to general educational activity, even in university matters, have alienated the entire body of opinion in these areas. They are a Government which have irritated the managers of secondary schools to incredible bursts of anger such as we have not seen before in my memory.
They have shown what they think of the true ideas of democracy by their repeated interference with the freedom of speech on RTE, and their incredible performance in trying to prevent a camera team being sent out to a foreign country without the permission of the Minister. Even the French Government have not attempted to do that. They have done that most undemocratic thing of all, withholding advertising from a newspaper because it did not agree with their policy. That is a most damaging thing to do. I would condemn any Government for that alone even if its performance otherwise was very good. It has attempted to increase its authoritarian hold through the referendum. It has now resorted to undemocratic gerrymandering and in order to ensure control of the democratic activities of our people it is proposing a Criminal Justice Bill with measures in it which to my mind are of the kind that the Northern Government are about to abandon. It is not a truly democratic Government. They govern democratically or want to bring the people with them or which want participation or consultation. They resist those instinctively.
The people do not want that Government any longer. They put up with it in the past because they felt that such a Government might be more efficient at times. At times they put efficiency before democracy but they do not do that any longer. Now people want to run their own affairs. The growth of vocational bodies and of community organisations is all part of a change which this Government have failed, to its peril, to recognise. This Government has failed to live up to the standards required for imaginative government, democracy, socially progressive government and a Government in command of the situation.
My language has been strong, and perhaps too strong, but I think one is entitled to emphasise these points. At times I feel I must speak plainly. I speak with as much detachment as I can in this House, but there are times when one should abandon detachment and speak with force, determination and vigour. It is time for a change. Everyone knows it is the job of the Opposition to provide an alternative. If an Opposition fails to do that it has failed the people. There has been criticism of the Opposition in the past to this effect. Often the criticism has been unfair. But when it has been repeated by people not in Fianna Fáil, but by fairminded people, that criticism must have had some force. But that criticism is diminishing and it has not been heard in recent months to the same extent as earlier.
There is a growing confidence in the ability of the principal Opposition Party to provide an alternative Government. This position shows itself in small ways but convincingly. I have seen it and smiled. When people who previously regarded the Opposition as of no consequence and not worth talking to but who left everything to the Government, come along and try to find out what the Opposition leaders are thinking and begin to make representations and begin to show they feel they had better hitch their wagons to a different star at this stage, and begin to show a serious interest in the policies of the Opposition; when journalists ring up and say "I am writing for my paper abroad and I think it is important we should have an idea how the next government is going to govern", when businessmen come and ask similar questions; and when vocational bodies show a willingness of a kind that we have not known previously to talk to the principal Opposition Party—these, gentlemen, are the signs of change. There is a swing now in favour of a change of Government, a swing which was inhibited until recently by the feeling that there was not an alternative Government ready but this alternative Government is now ready. We have now virtually completed our policies. There are a number of areas which we have not yet covered about which we will be publishing views and comments within the next weeks. When I say "weeks" I am not like the Minister for Health. With him weeks are not weeks but we shall adhere to "weeks".
We will now make it clear what we intend to do in areas in respect of which we have not yet made clear our position. We will ensure that there is no area about which people are in doubt. There will be no danger that people will not know what they are voting for and what our policies are.
These will provide for more taxation?
Yes, where that is done we shall state the amount of expenditure involved and show the calculation and the increase in the burden of taxation that will be involved. We said correctly the last time that the educational reforms would have been paid for out of buoyancy of revenue.
How did the Government pay for educational reform?
Out of buoyancy of revenue. It may have been naïve of us to say this at the time though it was true. In future we shall make it perfectly clear what will involve increases in the burden of taxation beyond the buoyancy of revenue.
Are you suggesting that the present educational policy is covered by the buoyancy of revenue?
The addition to expenditure represents a tiny fraction of the total buoyancy of revenue. It should have been within the power of the Government to do much besides this without increasing the burden of taxation.
I believe we now have before us the prospect of a new Government, an exciting Government, a Government that will appeal to our people at this stage and above all to our young people, a Government determined upon reform of Parliament and reform of local government, clearly moving towards the creation of a new society in this country.
This debate gives the opportunity of dealing not alone with the taxation policy of the Government but also indeed the general economic situation of the country. However, in regard to the Finance Bill (No. 2) which we have before us, the Labour Party is opposing the passage of this Bill. We are against this Bill because of its effect on the cost of living. We are against it also because no provision has been made to help the unemployed, the sick, the widows and orphans and the old age pensioners to meet the increase in the cost of living. An increase in the cost of living is brought about not alone by the provision of this Bill but also by the very alarming increase in the cost of living sanctioned by the Minister for Industry and Commerce after the referendum. We have been building up a tradition in this country of providing for extra benefits to the social welfare receipients to compensate not alone for the increase in the cost of living brought about by budgetary provisions but also for an increase in the standard of living. I acknowledge this to the Government that we have had this picture of meeting not alone the increase in the cost of living of these people but also of improving even marginally their real standard of living. We have in this mini-Budget departed from this very good practice that has obtained for quite a number of years.
We have an increase in taxation, an increase in the cost of living, an increase in the burden on everybody but more particularly on the people who are badly off, the social welfare and social assistance people, without at the same time making any provision to help them because of those increases. We know it will be pointed out that certain benefits are being increased from 1st January but those are being increased by, and flow from, the first Budget of this year. They were then talked about and announced. We subsequently had legislation, another beating of drums, and now on the 1st January we shall have another beating of drums when finally those people get the money.
I mentioned this before. Why should those people have to wait like this? It is not easy for them to grasp and understand what is going on when they are told in the newspapers and in the Budget speech about an increase in benefits. We find no increase coming along. Those people are puzzled. Usually about three or four months later we have legislation to provide for those increases. Again it is blazoned in the newspapers. Again the people see there is something coming and very often they have to wait until the 1st January in the following year to get any of their benefits. The point I am making is that here we have a Budget which increases the cost of living for everybody. The price of tobacco, the price of cigarettes, the price of a pint is increased as much to those people, and perhaps more to them, as to anyone else. Here we are increasing those prices and giving no benefits to assit them to meet the increase in the cost of living. This practice which I have referred to of providing for increased benefits, while at the same time providing for increased taxation and an increase in the cost of living, has been a good one and has enabled the Labour Party in quite a few Budgets to support the Budget proposals, at least not to vote against the proposals.
Here we are in a situation which is different from that of recent years in that we have provided for an increase in the cost of living but have given no concession to the people who most need protection in the circumstances. I have referred to the people who are perhaps most in need of benefit, the social welfare and the social assistance people, but the increases in the second Budget are also very serious for those people and for another group of people, those people who have been saving to make deposits on houses. I am told that as a result of the Budget increases the prices of houses will be increased by £100 to £200. I have this on good authority. I hope it can be contradicted because it will certainly put those people who, as I say, have been saving to make deposits on their houses, in a bad way and this will be a serious set-back for them. Those people who have been planning to get married and saving diligently to make deposits will now find as a result of this measure by the Government that they will have a further set-back and they will not be able to make a deposit. They will have to continue to scrape and do without a house.
The Finance (No. 2) Bill is being opposed by the Labour Party for the additional reason that the severity of the imposts is to a large extent due to the neglect of the Government over the past six months. Most of us will acknowledge this. Those increases are due because of Government expenditure, during this parliamentary year, in their attempt to abolish proportional representation. There was a great waste of money, a waste of time and energy involved in this. It is obvious to most people and it must have been especially obvious to the Minister for Finance that there was need to do something about this increase in expenditure during the summer. We were all conscious of the situation then but for Party political purposes the Government avoided doing anything about the increases or the introduction of a second Budget until the end of the year.
This was, of course, to avoid the controversy that would probably result at a time when they were trying to hoodwink the people to abolish proportional representation. I suppose this must be a problem for any political Party in office, a problem of being caught in a dilemma, where there is need for a Government to do something which is politically disastrous, and at the same time not wanting to do it for fear of loss of votes.
A Government in a democracy must be prepared to accept their responsibilities in a position like this. I charge this Government with neglect for Party political purposes, of declining to take action to control the situation since April and failing to take measures to rectify the economy until now. The economy as a result is not in a good state but I agree with what the Taoiseach said this afternoon, that is that it is not a crisis.
The Government, dealing with the position, I suppose had a choice. They had a choice of cutting consumption or cutting investment. They decided to cut consumption and, like Senator G. FitzGerald, I agree with the principle of this. I think the Government were right in choosing to cut consumption rather than to cut investment. It would have been disastrous to cut investment. It would have interfered with the building programme and it would have led to loss of employment in the building industry. We all know too well the severe repercussive effects which can flow from that, so I am glad the Government made the choice of cutting consumption rather than cutting investment.
As I said, we are not in a crisis, but equally we should not be complacement about our position. No real progress has been made to achieve full employment. This is something which we all agree on but there is no hope whatever, with this Government in office, that we will achieve an incomes policy. I also think the trading position of our economy will be increasingly difficult.
Let me speak about full employment for a moment. We have seen week after week, in the employment figures which are circulated to us, a larger increase of unemployment over the corresponding week of the previous year and over the previous week of the current year.
I suppose we can be told that there is an explanation for the figure in any week being larger than the corresponding week last year, but I am disturbed at the increases week after week. Every week shows a small increase, not much but unfortunately very alarming. It seems to me that we are further from achieving full employment than perhaps we have been. I agree that progress has been made in providing industrial employment, but obviously not at a sufficient rate, not with such speed as to be able to absorb the disemployment created in agriculture.
In regard to an incomes policy, I agree fundamentally with what Senator FitzGerald said on this—that it is virtually impossible to expect the trade unions to agree to a policy of wage restraint when there is obviously no restraint on other incomes in the economy. I do not know whether I would be regarded as violating our laws by making a reference to the increases in allowances to Members of the Oireachtas. I supported the increases at the time, but as a person who has been involved in trade union negotiations I must say it was obvious that the extent and the timing of those increases were such as to make more difficult reasonable negotiations in the 11th round which is now nearly finished.
Why did you not tell them that the initiative came from the Labour Party?
The Labour Party have for a long time been pressing the view that the level of the allowances was inadequate and I think that Senator Ó Maoláin will remember that I acknowledged on the passage of that Bill that the increases were badly needed, and I drew on my own experience of knowing three members of my own union who were Members of the Dáil and have died since I came into political life and whose families would have been in better financial circumstances if they had never taken up political offices. That was one of the crying needs, to do something about the allowances, but the point was that this should have been done at a far earlier stage. The mistake was made, and may I make the point that Deputy Corish, in speaking on this in the Second Reading in the Dáil, made a plea that for the future we should have some sort of machinery for doing it instead of the Houses of the Oireachtas doing it themselves—which is not a very correct description of the position because, of course, we have to depend upon the agreement of the Government—that there should be some sort of tribunal or body to advise on the level of the allowances and the timing of the various suggestions?
As I said, a mistake was made, but have we come any nearer to finding a solution for the future or are we to have a situation that the allowances will be left as they are for the next decade? Now do not let anybody misinterpret me and say that I am advocating further increases at this time. I am not. What I am saying is that the position should not be let lie for such a long period that we would again find ourselves in the same difficulty, giving rise to the same criticism and the same outcries from other people in another decade. We should in the meantime provide some way of doing this at a pretty regular rate, putting the decision on the result of a recommendation from some people outside ourselves.
On the question of an incomes policy, what I was saying was that I saw no possibility of the trade unions agreeing to a policy of wage restraint at a time when they are convinced that this Government have no wish or will to restrain other incomes.
Such as?
Such as profits, such as the examples I gave, in an interruption, to Senator FitzGerald. In the first Budget this year, and in the Budget of the previous year, an estimate was given of surtax payers, of money handed back to them, and we were told that they would not work unless we handed out this to them. The ordinary worker sees this sort of position, and if you could look over at that hotel across the road I am sure you would see quite a few very grand and expensive cars, Mercedes, et cetera, and I suppose the chances are that you will see passing by those very expensive cars some old man, evidently in want, some child obviously undernourished.
Not likely. Do you not see the Mercedes drive up to Liberty Hall?
Would you like to take a bet?
Come down to brass tacks now. This is at Liberty Hall and they drive up to the Trade Union Congress.
Senator Ó Maoláin keeps interrupting me with questions which he will not allow me to answer, but about the question of Mercedes outside Liberty Hall, first of all I do not work in Liberty Hall and let me assure the Senator that I do not own a Mercedes. I should like to have one.
I did not say that you had.
Secondly, let me inform the Senator that no member of the Irish Transport and General Workers Union, which is the union that owns Liberty Hall, and no official of the union, has a Mercedes as far as I am aware, and Senator Miss Davidson sitting beside me confirms me on this.
You do not have to go too far from Leinster House to see one.
No, you do not have to go very far. The streets are crawling with them. I have no objection to a Mercedes.
Why do you have to single out wealthy people in the hotels when Labour people have them also?
I was trying to make the point that you have this contrast between the very obvious and ostentatious wealth and at the same time very real poverty. If any Senator does not believe me I can take him around many flats in Dublin and show him the conditions in which, unfortunately, many of our people have to live.
Why did you not try to build houses instead of putting up a big skyscraper?
I did not build any skyscraper. I do not work in a skyscraper.
You heard about one that was being built.
Yes, I heard about one. The Irish Transport and General Workers Union built a skyscraper in order to invest the funds of their members which they are obliged to invest for the protection of their members. It was built as an office which would largely accommodate their own people who were working in deplorable conditions.
What about the ones in the rent-per-square-foot part? I should like to hear about that.
If I may get back to the incomes policy, with the permission of the Leader of the House, I was making the point that I can see no prospect of the trade unions accepting the situation under the present Government. If I may also make the point at the risk of rousing the Leader of the House again, the trade unions have no confidence in, or, indeed, respect for this Government. We saw the position during the referendum when trade union leaders were attacked by advertisements paid for by Fianna Fáil. Through their advertisements they charged trade unions with misappropriating their members' funds.
It was trade unionists who signed these advertisements.
They were paid for by Fianna Fáil and the advertisements further called for a public inquiry. Are we to have these public inquiries or are you satisfied that having slung enough mud at trade union leaders and having been defeated, you will forget all about it? A public inquiry can be instituted by the Government at any time. The Minister for Industry and Commerce has to get records of returns of the expenditure of every trade union. He has available information on how the funds are applied. He can call for information. An officer in the Department of Industry and Commerce is responsible for it. Are we to have this public inquiry? Will the trade union leaders be cleared of this mud-slinging or are we expected to put up with it and tolerate it? That was Fianna Fáil in the midst of a referendum. We have had our political arguments, that is accepted, but to charge trade union leaders with misappropriation of their members' funds is a most serious allegation and it is deeply resented not alone by the trade unionists but by ordinary members.
I would refer the Senator to speeches by Mr. Barry Desmond and Deputy O'Leary, this talker and orator from Dublin North Central, and he will see what I am talking about on that question.
Are they not entitled to make speeches?
Read those speeches. Did you not see anything exciting about them?
Will the Leader of the House allow me to make my speech?
Yes, but do not ask questions then. Make your speech but if you ask questions we will give you the answers. If not, we will not interrupt you. I like to be polite and answer questions.
I am glad to have that assurance from the Leader of the House. I do not think the Government are in a position to give us the necessary leadership to make progress towards full employment or towards the acceptance of an incomes policy. This Government have been discredited by the results of the referendum. They are further discredited by the obvious differences within the Cabinet among people contending in the succession stakes. We are now nearly as good as Northern Ireland in that respect.
You misinterpreted enough during the referendum; do not bring it in again.
The quicker this Government go out of office and we get real leadership the better for the country and the better will the progress be towards full employment and the other desirable objectives. I referred to our trading position and the fact that this has disimproved even though we are not in a crisis. I want to make a point which I made previously, and which has been made by many people, about our dependence on the British market. Nearly three-quarters of our exports go to Britain. There are two points I should like to make about that. There is, first of all, the importance of the market and secondly, the need to diversify.
My interest was aroused by a recent article in the Irish Times about the need for a press office in our Embassy in London. A better case has been made about our position in London because there, I believe, from talking to ordinary British people, they had little idea about this country, its problems, the progress we have made, and they are inclined to think or talk about anything Irish as if it is something funny. You are expected to be funny if you are an Irishman. Any developments in Ireland are expected to be funny if you do not take them seriously. This is largely because there is some ignorance in England about Irish problems.
They have not been reading their own recognised newspapers. Ireland has been properly commented on in some of their own journals.
To the ordinary British people Ireland is something strange or something funny.
For those who wish to know, the knowledge is there for them.
Acting Chairman
The Chair would like to tell you that he would like Senator Murphy to continue his speech not by way of question and answer.
If I do not attempt to reply I am charged with avoiding the issue. I will try to be more orderly and I am sure other Senators will be equally so.
Acting Chairman
I hope they will.
I wonder would the Taoiseach, in reply, say whether every consideration has been given to the desirability of improving our public relations in London. I know the Northern Ireland Government expend a lot of money and have a lot of people engaged on that very essential work in London. I am saying this in connection with the first point I am making, that is the importance to us of the British market.
I want now to come to the second point, the need to diversify. I know I will be told that it is easier to advocate diversification than to achieve it, but I think we can make the point that the growth in our industrial exports has been impeded in recent years on two occasions by unilateral action by Great Britain. Senator FitzGerald argued that they were acting against the letter and spirit of the Agreement. The Taoiseach does not accept that they were necessarily acting against the letter of the Agreement, but we will all agree that they were acting against the spirit of it. The most recent example is their decision to impose import deposits on our manufactures and here I join in the tribute to the Taoiseach for the swift action he took to meet that situation. Nevertheless, it will cost the Irish taxpayer £2 million because of the unilateral action by the British.
Perhaps we can learn something from the British. When British interests are at stake they take precedence over those of any other country regardless of agreements. Perhaps we are too much inclined to abide by such agreements at the expense of our own interests and I want to suggest here that if our employment prospects are adversely affected we should learn by what the British have done on two occasions. They put their own interests first and we would be quite entitled, indeed we would be obligated, in the interests of our own people and of our own workers to take similar action. We have had the example from the British of the import deposits. If our interests are affected we should be ready to adopt the same procedure and put import deposits on goods which might affect the employment of our people, always provided that the industries concerned have taken all possible steps to improve their efficiency. I am not advocating that we should do anything or employ import deposits in a situation where a manufacturer is inefficient and has not made a real effort to improve the efficiency of his organisation.
Where such efforts have been made, where reasonable efforts with the aid of the appropriate grants have been made to improve efficiency and where there is a possibility of workers being thrown out of their employment, we should act to protect our own interests as the British have acted to protect theirs. I am not advocating this in retaliation for what Britain has done. Britain has acted to protect her own interests: equally we should be ready and willing to act to protect our interests.
In regard to the development of exports to countries other than Britain, I should like to give credit to the work of Córas Trachtála Teoranta. They are very hardworking and enterprising. They may not be successful in all their ventures but that is not their fault. Further investigation should be made of ways and means to encourage exports to markets other than the British market. We should give some special encouragement to exports to other than that market in order to spread the risk. We should diversify our exports to get out of the difficult position where three-quarters of our exports go to Britain and a situation in which, when she acts in her own interests, such action can have very adverse effects on our economy.
There are tax reliefs on exports and it is difficult to suggest what further tax reliefs we could give, but perhaps it might be advisable to provide market development grants to encourage exports to other countries. We did something like this to offset the British levies on our exports some years ago. I may be told that this will be against the GATT Agreement. I think we should stop being such gentlemen in relation to these matters. Most other countries, when their vital interests are at stake, do not stick to the letter and spirit of GATT. Equally I think we should have more regard to our own interests than to the sancity of any international agreement.
I have no particular proposal to make on this, but a special study should be made of the question of providing some special inducements to exporters to other than the British market because of the danger of concentrating on that market. If there are difficulties because of GATT, we should try to find a way around them as other countries do.
I want to go on to the reference to saving made by the Taoiseach when introducing this Budget in the Dáil and to the extra inducements provided for saving. We all agree that there is need for more savings if we are going to have more jobs in this country. The steps to allow the savings banks to provide investment accounts are very welcome. They may be a bit belated but they will help the savings banks to induce people to keep their money on this side of the Border when it is inclined to go across because of the better facilities provided in Northern Ireland. I want to welcome the arrangements for savings bonds to be introduced on 1st January. This is expected to provide an incentive for long-term savings and again it is in the national interest. The Government have finally acknowledged the case made over many years for an increase in the rate of interest on deposits in the Post Office and in the trustee savings banks. These have been brought up to 4 per cent as from 1st January and will help savings in that part of our economy which is of such great importance.
There is another improvement which again I think arises from 1st January. From that date you can withdraw up to £30 from the Post Office Savings Bank, whereas the limit previously was £10. Many of us who have £30 in the Post Office Savings Bank will welcome this improvement. You still have the difficulty that there is a waiting period of six days before further withdrawals can be made. I hope that another look may be taken at this. One often finds that the people who avail of the Post Office Savings Bank are people who are saving small amounts. I witnessed a distressing incident in a post office recently. A student was trying to withdraw money. He had to travel because somebody had died. He had some money in the Post Office Savings Bank but he was told he could not withdraw it because he had withdrawn a small amount some days previously. The poor chap was stuck. This does not help to encourage saving from such people. I know that this arrangement is to protect the depositors themselves but one can have a saving account in any commercial bank where you are not subject to such restrictions. I hope another look will be taken at this to see if further improvements can be made and to see if this is the furthest possible step to improve the service being provided for the ordinary people by the post office.
We have heard nothing about the Giro system. This has been advocated by the Irish Subpostmasters Union. It came into operation in Britain in October of this year. I know Britain have been looking at this and talking about it for years. It is in operation all over the continent for decades and the British were very slow and lazy about providing the service. We, of course, had not gone ahead of Britain. We had not done anything about this yet. The commercial banks have stepped in to try to capture the market though in fact what they are providing is not really the Giro system. It is really a modernisation of credit transfers which is a service that the domestic banks could always provide. They called it the Giro system in an attempt to steal the wind out of the sails of the appropriate Minister. We have been too slow and too lax and have done nothing about it. When is anything going to be done about providing the service here?
In my final remarks I will leave the land and take to the sea. We are discussing the Appropriation Bill with the Finance Bill and I want to mention what may be regarded as a rather small point but a very important one. It is a very big point for the people involved. I refer to the almost complete lack of fishery protection around our coasts. Some years ago we extended the limits of our territorial waters for fishing. We always seem to be slow about doing these things. We made no additional provision whatever for protecting those extra leagues of sea which we had designated as our territorial seas. We made no move to protect them for our own fishing. There are, I believe, two corvettes but there can be only one at sea at a time. If it is known that a corvette is around Donegal, the foreign trawlers around the south-east coast know they are quite safe for days. Nothing can happen.
The Minister for Defence made a very fair and honest reply to this point in an Adjournment Debate in the Dáil recently. I think it boils down to this: the Government are considering what should be done. Goodness knows, they have been a long time considering this. The vital intersets of our fishermen are being interfered with while the Government are still considering the problem. There is not much point in investing a lot of public money in improving fishery harbours and providing grants for the purchase of new boats if we are not prepared to protect our own fishermen around our own territorial waters. There is an idea among many people, and certainly among those dealing with fisheries, that fish is in inexhaustible supply. They believe all you have got to do is go out and catch it. Why are we having the invasion of foreign trawlers around these coasts? Is it that they have fished out their own fishing grounds and the herrings are virtually non-existent there?
Why do they come within our territorial limits? They come because the fish are there. I do not think that the herring fishing has yet started at Dunmore East. It is very late and they are now wondering whether they are going to get herring around that part of the country this year. It is alleged that the Dutch trawlers around Dungarvan, when the herrings were coming in, cleaned out the whole place in a few days while the corvette was under repair. The fishermen know more about the herring than I do, but I am told that the fishermen fear that the season has been destroyed by fantastic concentrations of foreign trawlers within territorial limits while the corvette was in for refitting after the very heavy work it did following the crash of the Aer Lingus plane into the Irish Sea. It is alleged that the people who act as agents—and I am not using "agents" in the spy story sense but the people who act in the interests of foreign companies—knew that the corvette was there and that it would have to be there for weeks, and the way was clear for foreign trawlers to come in and clean out the place.
Whether they cleaned it out or not is beside the point when we, as a nation, have not protected the interests of our fishing. Every other country provides adequate protection for its fishermen so that the fishing within territorial waters is maintained for the native fishermen. I am told that in the Isle of Man they get adequate fishery protection by putting an officer on the local trawlers. These officers go on different trawlers each day so that the poachers do not know which trawler has the fishery protection officer on board. In this way they can provide adequate protection. Surely if the Isle of Man can do it we can at least protect the interests of our people. I know, as I acknowledged already, that the Minister concerned is aware of the problem and that it is being studied. For goodness' sake, hurry up with the studies and provide fishery services for these people.
Senator O'Kennedy rose.
Business suspended at 6 p.m. and resumed at 7.30 p.m.