Since the Appropriation Act was passed just prior to Christmas this country has joined the European Economic Community. We can say truthfully that any discussion which we have on the Act now is to a large extent outdated by the events which have occurred since we became members of the EEC. This is a historic occasion because it will be the last time that we as an Irish Parliament will be discussing an Appropriation Act having full command of our sovereign rights. In the referendum the Irish people decided by an overwhelming majority that they were prepared to secede a substantial part of their sovereign rights in the interests of the European Community. They were prepared to join the other eight member countries of the EEC to work together for peace, prosperity and for the economic and social betterment of all the peoples. We made that historic decision. It was the right decision. We, therefore, must accept the fact that henceforth many of the decisions which will affect the future of this country will be made outside our shores.
During the referendum campaign, capital was made of the argument that we were selling away our sovereign rights which we had fought for so hard during many generations. A huge majority of the Irish people decided that as Europeans they wanted to join with their fellow nations in Europe in the interests of all our peoples. I do not know the form next year's Appropriation Bill will take. Possibly the form will be the same, but the circumstances can never be the same. We all hope that our decision will prove in the ensuing 12 months that the action taken a few weeks ago was the right one.
I am concerned at the effort being made now among the representatives of several nations, including our own, to give more teeth to the European Parliament. It was suggested that it would become a more democratic assembly if there were direct elections to the European Parliament. In theory, that is right. Obviously, government by the people means government by direct election of the people in universal franchise. That is the accepted basis for democracy. If you have direct elections by the people to any assembly, whether it be a town commission or a European Parliament, it can then be described as a democratic assembly. The decisions made there by a majority must be binding on all the people concerned.
What worries me is that if direct elections to the European Parliament come about, will it mean a lessening of the importance of the national parliaments, including our own, or will it mean that the power of the Commission will be lessened and that the democratically elected European Parliament will have greater powers? If it means that, I am in favour of it. One of the weaknesses of the present institutions is that the Commissioners have too much power and the European Parliament have too little. The European Parliament have been held up to be merely a talking shop. All they can do is to rubber stamp decisions already made by the Commission.
If it means a lessening of the powers of the national parliaments, I would be against it. Our representatives should be very slow to agree to any change, however desirable, if it will mean a lessening of the powers of the national parliaments.
Last year could be described as a mixed year. There have been a number of favourable indications that the country was pulling out of the trough into which it had fallen in the previous two years. Some indications were the improvement in the balance of payments situation brought about by improved terms of trade; an increase, though a modest one, in the gross national product; an increase in volume in industrial production by about 5 per cent and, most important, an increase in industrial exports of 21 per cent in money terms but somewhat less in volume.
A most encouraging feature was the substantial increase in industrial exports to EEC countries which amounted to some 90 per cent. Of course, percentages can be misleading. If we export one pound's worth to Europe and this is increased to two pound's worth, it is nice to put it down in an official document as an increase of 100 per cent. It is important to look at the base but the trend is in the right direction and if we can maintain that trend as members of the EEC it will mean great things for this country particularly in regard to industrial employment.
Our efforts must go towards selling more agriculturally processed goods and industrial goods in the Common Market. Our exports efforts were assisted by the virtual devaluation of the floating £. Even having regard to that it was a worthwhile effort during 1972 and our industrialists and those in charge of meat processing and other industries are to be congratulated on their efforts.
On the unfavourable side we still have the troubles in the North which undoubtedly have affected the tourist industry and have discouraged investment not only in the North but in the whole country. People in the USA and in Europe look at Ireland as one small island and the wide publicity given to the problems in the North has affected the island as a whole.
In the final analysis, employment is one of the indications of a country's well-being or otherwise. Unemployment has continued at a very high rate. At the turn of the year there were almost 76,000 unemployed. That is a sad state of affairs considering the enormous investment which has gone into industrial enterprises during recent years. The net increase in industrial employment during the past four years has been only 2,000 and that is likely to fall during the current year. We may find at the end of this year that after four years of endeavour and heavy industrial investment our employment situation in manufacturing industry has remained the same for the last four years.
While industrial investment has been high it has shown a tendency to decline in recent months. This, no doubt, has been brought about by the troubles in the North which have dissuaded investment.
There has been continuing severe inflation during the past few years which is higher than most, if not all, the other countries in western Europe. This is the factor most likely to inhibit our efforts to increase industrial employment. If we cannot maintain inflation at a lower level than that in Europe and the UK we will not be able to export to these countries.
We will also be in a serious situation in the home market. If our small market is thrown open to imports from the UK and continental firms we will be in a serious situation if we cannot even maintain our home market. Inflation is not just a textbook subject to be spoken about in seminars; it is a serious fact of life that effects everybody. Unfortunately, the lower we go in the scale the more its effects are felt. The man down the line will suffer most. One of the primary efforts of the EEC must be to tackle inflation. It can be tackled to a limited extent by individual countries but can only successfully be overcome by joint effort of all EEC countries.
As the Minister for Finance has stated on a number of occasions, if the countries of the EEC cannot control inflation it will destroy us. Inflation can destroy and unfortunately it destroys the weakest first.
If, on the other hand, we control inflation and keep our costs within reasonable bounds I am very optimistic for the future of this country. There are certain markets in which we cannot hope to compete where mass-produced goods are turned out by giant industries. We have neither the necessary capital nor the technical know-how nor have we a large enough home market as a firm basis for that type of industry.
There are more specialised types of industries for which our industrial setup is particularly suited. Then we have perhaps our greatest advantage of all— our agricultural industry. Every effort should be made in Ireland to process the raw materials coming from the land whether they be in the form of livestock or vegetables and to export them in the finished state. If we are competitive in these spheres, this country will profit greatly from membership of the EEC.
Because of the huge increase that has taken place in the price of most agricultural products and produce over the last year it would be wrong to assume that that increase would continue forever. There was a big gap between EEC prices and the prices in Ireland for food and livestock. We were hamstrung by the fact that for generations we were exporting through a subsidised British market. We were exporting to the UK at a loss. In fact, the Irish taxpayer was paying the British consumer to eat Irish products at less than world market prices. That situation has now been put to one side and the result is that there is a big increase in the price of some food. This situation will level off. It encourages our farmers and industrialists to become as efficient as possible in order to sell in EEC at profitable prices.
One worthwhile development took place during the past year. That was the Employer-Labour Conference agreement. It did not solve the problem of inflation but we can say that, if that agreement had not come about, inflation would have been far greater in this country over the last 18 months. That conference gives great promise of joint action between the employers, employees and the State to work jointly together in the interests of the country to control inflation, if at all possible by voluntary means. The statutory controls are only a last resort when everything else fails. Other countries have found it necessary to impose statutory controls but everybody would prefer to see inflation being controlled by the employers, employees and the State coming together and deciding on a programme that would damp down the rate of inflation in this country.
To get the worker to accept that situation he must be told what he is going to get out of it. He is entitled to see what share of the national cake he is going to get. You cannot expect a worker to agree to cut down on the rate of increase in wages unless he sees that at the end of a certain period it is going to be better for himself, his family and his job. There is a tremendous public relations job to be done in that field. The worker feels envious when he sees the boss driving around in a £6,000 car when, at the same time, he is being asked to hold his wage increases to some agreed formula. There must be justice on both sides and it must be seen to be done. The ordinary man in the street cannot believe that sacrifice is being equally borne if on one side he sees extravagant wealth. We have it in this country. On the other side there are men working for £20, £25 or £30 per week, but they have wives and children to support, they also have high taxes and rates and now they have high food prices to cope with. This problem must be faced jointly, so that everybody will be assured that the efforts and rewards will be shared until inflation is overcome.
There has been talk recently of the carcase meat industry. I am not a farmer so I do not wish to take sides on that issue. However, the producer is entitled to get the best price for his product. Obviously, he will fight hard against any question of control or any question of a combination of circumstances that would prohibit him from getting the best price possible for his livestock.
If we could slaughter all our cattle here and export the meat to the Continent, the UK or elsewhere in the form of chilled beef the advantages in increased employment would be tremendous. It was stated on a television programme recently that employment in that industry, which is about 4,000 now, could be trebled if all livestock were killed at home. In the short term this may not be practical; in fact, it could well be undesirable. If we are going to reach the ideal and slaughter and process at home, and to use the ancillary by-products at home, it must be done over a period of years. The traditional cattle trade in this country could not be phased out overnight. It would be undesirable to phase it out suddenly. Until we reach a time when the meat factories can offer as good a price to the farmer as the exporters, the present system should stand.
It is a pity that the meat factories come under the aegis of the Department of Agriculture and Fisheries. They are an industry and it might lead to an improvement if they were to come under the aegis of the Minister for Industry and Commerce. If they had the same opportunities and the same advisory bodies as industry, it should be possible for them to put their industry in a very efficient state so that they could offer the farmer as good a price for cattle for slaughter as he now gets for exports of cattle on the hoof.
The time is opportune for a study in depth of the cattle industry to enable us to assess the advantages that would accrue to the country if cattle could be slaughtered at home and, from the farmer's side, what the changes would mean to him. Nobody wants to see a monopoly of any kind in this industry. It would be most undesirable if the farmer could not enjoy a competitive position that would ensure him of the best price for his livestock. It is urgent that some national policy should be decided on very soon. In recent months there have been a large number of redundancies in our meat factories. This is a particularly sad state of affairs because a number of those meat plants are situated in rural areas which can least afford to have unemployment. It is vital that the Government tackle the situation very quickly and produce a national policy so that the proprietors of meat factories, the workers and the farming community will know where they stand.
I should like to mention the question of industrial development with specific reference to small industries. I sometimes wonder if our stated policy on industrial development is the right one. I agree that the type of industries which offer the best hopes of employment are industries with established export markets. They have a lot to offer and have the necessary technical personnel. Industries of that type have played a very significant part in providing increased employment over the years. No organisation has done more than the Shannon Free Airport Development Company which has provided an example for other industrial estates around the country. This type of development is highly desirable. They are the type of industries that offer quick success because they have an established market, technical know-how and the required capital.
It is often forgotten that we have a huge number of small industries that employ less than 100 people. Perhaps that figure might be a little high in speaking of small industries in this country but it is the figure generally taken in outside countries. Over 90 per cent of our industries employ less than 100 people and they are responsible for approximately 40 per cent of the total number employed in industry. In other words, they are a very significant section of industrial employment and should get every possible encouragement from the Government and semi-State sources to continue in business. Many of those industries have been established for many years—they were probably established by one man, and were passed on to his son and grandson down through the years—and have continued in business under very difficult circumstances. Their roots are in the soil. They are not likely to put the key in the door and close up if things get bad. They have become used to trading under difficult conditions over the years. They are the type of industries we should encourage to stay and to flourish in this country.
While a good deal has been done for them, particularly by the small industries section of the IDA, I think a lot more could be done to help them through difficult periods which occur in every industry from time to time. I would like to see a special section set up in the Department of Industry and Commerce to keep in close touch with groups of small industries. I should like to see such industries getting advice not only on how to reorganise their business but advice on possible product changes in their factories. One must remember that the majority of those industries cannot afford to employ fulltime accountants and it may be possible to supply some accountancy service to them.
They should also be made more aware of the existing semi-State enterprises which were established to assist industry. I am thinking of institutions like the Institute for Industrial Research and Standards, the IDA and other organisations which have been set up in recent years and which have undertaken a lot of good work already. Many small industries do not know how to go about getting help from those institutions. Much of the time of the office staffs of small industries is taken up with filling in forms for such things as PAYE, VAT, income tax and statistical returns. We public representatives receive them in their finished form but they are the result of much unpaid work on the part of small industries. Some way could be found to assist the small industrialist to deal with those numerous forms which have increased so much in recent years and, unfortunately, will continue to increase in the years ahead.
The Government have a serious obligation, in the present free trade situation, to help the small, long-established Irish industries to survive in the very difficult and competitive times ahead. The best contribution that the Government, and especially the Minister for Finance, could make to assist any industry, large or small, would be a significant reduction in taxation. The Minister has corrected the appalling error he made a couple of years ago when he increased effective taxation on industry to 58 per cent. It has now been put back to 50 per cent and the result of that sensible step can be seen in the increased investment which industry is making in new plant and new buildings.
Contrary to what some of the know-alls, who have no experience of industry, have been saying from time to time, if taxation is reduced it will not be frittered away in high living by the owners or the directors of the industries. The major portion of it has been ploughed back into industry again. The best judge of how to improve his industry is the business man himself. There may be some directors or businessmen who pay out too much in dividends or who otherwise do not conserve their liquid resources, but these gentlemen do not stay in business too long. Some Senators will agree that business is a hard school. In business it is a case of the survival of the fittest.
I should like to refer to another matter that is being referred to a lot at present. I was glad to see it was emphasised recently by our new Minister for Foreign Affairs, Deputy Brian Lenihan. I am speaking about the question of regional policy. Regional policy and monetary union go hand-in-hand. Monetary union has not made hopeful progress among the nine EEC countries, but if a regional policy fund were to be set up during the current year and if decisions were made much sooner than we think as to how that fund will be spent, it would be a matter for the individual countries to decide their own regional policy.
Have we got a regional policy? I know we have regional development organisations. There has been a lot of talk about regional development. I cannot think of the numbers of "Save the West" campaigns we have had over the years, or of the various organisations set up to assist in stopping emigration from the west. I am not aware of any overall, national regional policy that is ready and tailor-made to take advantage of any funds that may be coming from any EEC fund set up for this purpose. The time has come when we should seriously consider putting the regional development organisations on a statutory basis.
I am a member of the Mid-Western, or Limerick-Clare-North Tipperary, Regional Development Organisation. It has worked exceedingly well from the very first day it was established. I think it was the first—if not the second —RDO established. All the various interests concerned—the local authorities, harbour boards, tourist organisations, representatives from industry and commerce, and so on—worked together in a regional team. From the word "go" there has been no conflict of interests. It has been quite remarkable how representatives from various counties and areas, some of them representing very small statutory bodies, came together from the first day realising that their local area was going to benefit, if the area as a whole benefited.
Serious consideration should be given to putting these regional organisations on a statutory basis. At the moment they are purely discussion groups. In the RDO of which I am a member there is no such thing as a vote: there is either a unanimous decision or the proposal goes by the board. So far, this has worked out, but I do not think it would work out inevitably. The normal democratic process demands that you have a vote now and then, and the majority vote decides the issue. Much could be done through these bodies if power is devolved from the central bodies to the regional organisations. If there is a devolution of power downwards—not power taken away from the smaller authorities—I could see these regional development organisations playing a significant part in the context of the Common Market. They have a vital part to play.
In addition, we shall possibly have to consider the question of elections to these organisations. They are elected indirectly at the moment, but the question of direct election must arise. They have a very important part to play. I am speaking with some experience and with an amount of encouragement from my own membership of the Mid-Western RDO. I know that in other areas things have not gone so well. One of the reasons may have been that they are not statutory bodies and that they are just regarded as talking shops with no power beyond the power to advise. Perhaps if they were put on a statutory basis and given teeth by being granted powers from the top down, they could prove effective means of development in local areas.
While speaking on this facet of local government, I should like to repeat what I have already mentioned in this House and elsewhere on one or two occasions. The policy outlined in the White Paper issued by the Minister for Local Government which appeared almost two years ago would be disastrous if put into effect. To contemplate the wholesale abolition of small local authorities is a step in the wrong direction. The point has been made—and there is some sense in it—that a number of these small bodies are little better than talking shops. Perhaps they are, but who would say that the Seanad itself is not a talking shop at times, or the Dáil, or, indeed, some of the county councils and city councils? The small urban councils or town commissions cannot be condemned on those grounds.
With all due respects to the Minister, who is young and active and who I believe is ambitious to get on in his job and to do the best for the country in his particular Ministry, I consider he is approaching this from the wrong end. He should not be asking himself: "How many of these small authorities can we abolish and give the county councils or city councils more power"? He should be asking: "How many of them can we retain and give them a useful function in local government, no matter how small it may be"? Whatever way they see it, the best antidote against the continuing, creeping bureaucratic control of this country, and every other country, is the small statutory body composed of men elected directly by people living in their own areas. They represent the grassroots. They may be criticised at times and they may be sneered at by some of the know-alls who never did anything for anybody, and who never tested their popularity with the electorate.
Speaking as one who has been in local government for a long time, I can say that I have the greatest regard and respect for the little council and for the little man who gets there the hard way by going around and looking for votes. He knows what the people at the grassroots want. If you do away with community councils, parish councils, associations and organisations of one kind or another which are all good in their own way, there is no substitute for the statutory body with the freely-elected public representative as a member. It would be a tremendous disservice to the country and to local government generally if the Minister sweeps away all these small bodies.
I am not saying that they should all be retained. Obviously, over the years some of them have ceased to have a reason for living, to put it very crudely and bluntly. On the other hand, urban centres have grown up and expanded where there should be small local authorities and they are not represented at all. There are some town commissioners in places which have far bigger urban centres than, say, urban councils. There are anomalies such as these that have grown up over the years. I submit they should be rectified. There should, however, not be wholesale slaughter across the board of small local authorities; it would be a disastrous step. It would be completely contrary to the set-up of local authorities on the Continent. We have far less local authorities, relatively, than most European countries, such as France and Germany and, indeed, the United States. We ought to learn from these countries where democracy has survived in spite of stresses or strains over hundreds of years.
When we are talking about Europe we should not be concerned only with the social and economic side, both of which are very important, but also with another aspect which everybody would agree on and that is the quality of life —the type of life we will live in the new Europe. Obviously, a man's wellbeing has a great bearing on the type of life he leads. A good job, good wages and good social services are important to a man. Above that, there is the quality of life. A family must know the type of world they are growing up in so that they can reach beyond the material to the spiritual things of life such as tradition, culture, history, paintings, music and ecology. All these factors must be taken into consideration. I hope our representatives in the European Communities will keep these factors before their minds. We have much to gain from Europe, but we also have much to offer. We may be a small country but we are not lacking in ideals or traditions. We should remember that we have thousands of years of history behind us. I hope the ideas of gaining from and contributing to Europe will go hand-in-hand.