Last evening when I was making my opening remarks on the Bill to establish the National Development Corporation I spent some time in developing what I felt to be the background to proposals for such agencies within the context of planning. I have no intention of being repetitious today. Let me summarise by saying that I was developing an analysis of what I felt was the mind of the Right which, imperceptibly, had influenced Irish political and administrative thinking. Let me begin most controversially by saying how worried I am about one extension of this. I welcomed yesterday the support even of those who have reservations. There were many speakers who said that they accept the prinicple of there being an agency which could intrude on the appalling problem of unemployment but who expressed reservations about it.
I have in a sense a reservation that is of a different nature and deeper in turn. It derives from my prefatory remarks yesterday concerning the influence of British Department of Finance thinking on the Irish Department of Finance in the early days of this State. As a defender during all of my political life of the role of the public service there has been an ethos constructed at times within the service which is anti-innovative and not able to bring forward energetic proposals which go beyond the constraints of time. I will be more explicit. I spoke about the diseased economy which can grow from a banking system that has a limited time horizon and a limited asset perception. For example, in the case of the Irish commercial banks, their failure to develop other than a nominal venture capital section has made them the exceptions in the banking system of Europe. By and large Irish banks do not take risks beyond a particular time horizon. Neither are they anxious to accept as collateral the innovative content of a piece of technology or a set of ideas, preferring assets that are realisable.
The story of many family businesses who extended at times when they felt that the market could bear expansion and who are now under pressure from the financial institutions is that they are turning to the banks in desperation, a banking system that is now looking for its security, that is cushioned by high interest rates and is protected in a very interesting way by our present Central Bank Act. When the banking groups approached me concerning the bank levy — I must confess that I have always preferred taxes on banks rather than levies — a point I made to them was, if you have the protection you do enjoy from the Central Bank Act and if you are protected in a rather unique way by not taking long term risks, where is the justification for your being judged in taxation terms in the same as any other business that takes the risks of the market place? These are important issues.
I must confess that I am worried by the time horizon within the public service itself. This was brought rather dramatically to my notice. It has caused me the greatest concern. A former Cabinet Minister speaking in Dáil Éireann on 23 October 1985 stated:
On being made Minister in 1982 I asked for the file on the National Development Corporation. I will not say what the boys in the Department said to me, but I knew by the smiles on their faces that they did not want to bring me an empty file. Finally, they brought a file and I will not attempt to try to describe to the House what the corporation was supposed to mean.
It goes on. That statement is of immense importance. It should be denied by the senior public service unions. If it is true, it represents something that is very dangerous. My source is the Official Report of 23 October 1985, Volume 361, column 345. I believe it to be a dangerous statement. Despite all the arguments — which I made a précis of yesterday — going on about planning since the seventies when we moved on from changing the whole sectoral committee reports we had in the sixties to the great case we made for planning and the 1958 publication of a programme that is not a substitute for a plan, the insinuation was that the National Development Corporation was perceived by senior public servants as something of a daft idea upon which you should not prepare material. This has a terrible consequence because public servants cannot speak in either House to defend themselves. I am worried about this statement. I suspect it is not quite true. I repeat my words very carefully. I suspect it is not quite true.
Let me deal with the hypothesis that if it was true, it means that everything I said about the rolling on of Irish financial and fiscal thinking from the foundation of the State under the wing of the British Treasury has an appalling consequence. Back in the seventies the Economic Research Institute which, acknowledging the population increase and the immense problems of unemployment changed its title to become the Economic and Social Research Institute, had been speaking of the need to take planning seriously. We had begun to set up in the penumbra of the formal public service a number of agencies to deal with sectoral targets, population projections and so on. For example, the National Economic and Social Council, in its commentary on projections proposed by Professor Walsh for the period 1966 to 1971, at paragraph 13 stated:
Professor Walsh projects an increase of 200,000, from 1.1 million to 1.3 million in the number of men and women seeking work over the period from 1971-1986, an annual average increase of 13,000 to 15,000.
Professor Walsh estimated the possible loss in employment. He projected a continued downward trend in the family farm labour force with the share of the total labour force declining from 21 per cent in 1971 to under 11 per cent in 1986. As a result of the assumptions relating to emigration, participation rates and the decline in the numbers in agriculture he projected that the numbers seeking employment outside agriculture would grow by 300,000 from 0.9 million to 1.2 million. In academic circles, people who are far from being left wing and socialist, were saying you must look at the population projections. They were saying this in the seventies, were feeding it into the different new bodies established, and were seeking a response to it. In November 1975 — I am not anxious to give lengthy quotes — the OECD in the introduction of its Report on Ireland stated:
A study of population and employment trends by the National Economic and Social Council suggests that between 1976 and 1981 some 12,000 young persons may enter the job market annually. In addition, the Secretariat estimates that about 8,000 persons may move out of agriculture and 8,000 jobs may be lost in the traditional manufacturing industries. Thus, unless the pattern of migration is reversed a total of around 28,000 new jobs may need to be created each year (over and above the recovery of employment from the present recession), a figure substantially higher than what was achieved in the past when real GNP was rising at an average rate of about 4½ per cent. A similar rise in activity over the medium-term would apparently not be enough to provide sufficient employment opportunities.
The theme that has informed the discussion in this and the other House, from all sides, about the necessity of a body like the NDC has always been this question that we need to do something to address the unemployment problem although that is not the sole justification for the NDC.
Let me summarise much of what I have been saying. From mid-April 1972 to mid-April 1974 the total non-agricultural labour force only grew by 12,000 to 13,000 per annum. The people who have been developing what I referred to yesterday as the climatology argument about economics, must go back and justify their arguments. Are they saying that, in our best times if we could only produce this number of jobs, that logic, that reasoning will be sufficient to make any impact on the unemployment problem. If you think about that kind of question that is put to them, you come to the very simple conclusion, and the cruel assumption that the unemployment problem is not their top political priority, that it is not their top social concern.
It is rather like the sun spot theory, the idea that if you cut back this growth that is called the State the sun will shine on plants that will bloom and produce flowers, never seen before and in time unemployment will come right. This is a harsh, nonsensical, derived, second rate, borrowed doctrine from debunked unrespectable institutes such as the Centre of Economic Policy Planning in London producing selective out-of-date figures which are finding a vogue among all sorts of areas. When I hear the question about rolling back the State the image that occurs to me is rather that of a man or woman who would have been addicted to quack medicines and had a dresser full of bottles: when they need to take medicine to ensure life itself they simply look at their rows of bottles and say not another bottle. That is exactly the quack argument that has come out against the National Development Corporation: not another State agency.
Better people than I have said that this is not an agency to enter into competition with the role of any other existing agency. It is an agency that was construed in Labour Party thinking in the early seventies as a vehicle for innovation and investment; in projects that were beyond the scale of private investment; that were beyond the research and development capacity of private development; that would be large enough to hold their own in the international trading and marketing environment; that would be able to draw on people who would be trained in a sheltered way, perhaps for a longer time scale than conventional Irish industry.
Let the opponents of the NDC say how they will secure their place in international marketing, how they will change something that has never produced jobs, that has never taken the risks and that has never really heavily invested in research and development. Where are they going to get the alternative to this? I will leave this part of my argument by saying that there are probably fewer societies in Europe that have paid a higher price for their ingrained antipathy to the planning process than in Ireland. People lived in fear of debt in the late fifties using words like "programming" because they were within a decade of the clatter of the crozier that had said that planning was interference with the principle of subsidiarity. It was reaching in beyond the family and beyond the market-place. Everything in the ethos of our country had this notion that out of private scratching individualism would come somehow or another the reformed stuff of a modern nation.
Academics who worked with me and who I studied with when I was young wrote glowingly of how the Irish State had continued despite its revolution. They looked at every institution that was in place and said that it revealed more a continuity rather than any principle of innovation. It became then, as it is now in a revised sense, fashionable to speak of stripping everything back that we created ourselves. That is the philosophy of the graveyard and it is the most dangerous, sinister kind of thinking that is taking place at present. In the social sciences we see it every day. The London institute I spoke about have published reports that do not only deal with Ireland. We are faced with a world burdened with debt, where Mexico pays two-thirds of its export earnings in servicing its debt, in which one country after another has to make a choice between child immunisation, food and so on and paying their debt. I am not making the case here — I will make it again — in relation to the arguments that have been put forward for defaulting on payments and so on. But this loss of nerve and this reaching back into the worst period of our own cowardice to produce new Right wing pieces of bigotry against the State is disastrous. That is a summary of what I had to say in my opening remarks.
People in Ireland of the Right, Left and Centre can no longer reject the case for planning. Remember that this is what is happening now. There are people writing every day making suggestions. People on television hold a pound note, they fold it in two and then they fold it in two again and say: "How much of it is your own?" The idea is to let us get the State out of our lives. But the people who argue in favour of getting the State out of our lives are trying to create two nations in this country, a nation of those who will work and a nation of those who are left without work. Will they live with the consequences? I warn them that they will get changes far more radical and different from the ones I am advising in this House. If they want to go back to the supremacy of the market-place, if they want to strip back every institution, if they give a mandate to an alliance politically that will freeze social welfare payments, who will not want the State to be providing general health care and so on, I warn them about the society that will then be created. My advice to the society that would then arise would not be to accept such a situation with docility. In the end when talking about economic planning, in the NDC and everything else, begin with the question as to whether we in this House or our colleagues in the Dáil serve the orthodoxy in economic and financial thinking that is often out-of-date or do we serve the people. We have not accepted the philosophy of planning.
I now come to my practical points about this Bill. I welcome this Bill, although it is much less than I wanted. It is less than what I wanted because some institutional reforms were necessary in advance. I had hoped when we were first debating within the Labour Party in the seventies the form of the corporation, that by now these would have taken place but they have not. First, I had hoped that within the public service itself the central orthodox influence of the Department of Finance would have been shaken. I had hoped that each different Department of State would have had by now over a decade of experience in drawing together, through sub-planning commissions different projects, different targets for achievement in their own areas. May I give a tragic example? Let us think of what has happened in relation to fisheries and mariculture. I remember the first report on the state of the fishing industry nearly two decades ago. One technical report came after another, but what we have had are sectoral committees and development committees succeeded by task forces and so on. Meanwhile Norwegian investment funds became available in Ireland. Their stocks are exhausted, our stocks are available and in many cases are undeveloped. What was needed to establish that industry — and it is one which is singularly appropriate for the NDC — was the need to settle the question of the coastline. There was the need to straighten out the situation where to put a raft into the sea to farm mussels requires dealing with 12 Government Departments.
Note the difference in my criticism. I was in favour of an integration of functions within the public service. I was not talking about the demolition of the public service. That is the distinction between those of us who are progressives in relation to planning and this new Right-wing nonsense that is growing up which says more or less, as the people who broke out after a revolution, "Let us burn everything. Let us roll everything in the State back". I had hoped that those changes would have taken place, that the central harmony of the Department of Finance's orthodoxy would have been substituted by a more concertative process in relation to planning right across every Government Department. That has not taken place.
Within the public service there are the most talented people, many of them who choose consciously to serve the public. I am amazed at the abuse that is piled on them daily by people who should know better. For example, am I to admire a doctor who works in the public service more than someone who chooses exclusively to practice private medicine? I will give you a better example. I was a member of a health board for seven years and we had approval for a position of an orthodontist. At £27,000 a year, plus limited private practice, we could not attract an applicant despite the fact that every unskilled worker who pays tax was subsidising medical education and dental education in this country. I fought in the Seanad for expansion of dental facilities and proper training for medical schools and so forth. But what of the mind, this mind that is glorified now every day, which says you should think about yourself, you should count the money in your own pocket and make sure you give none of it back to the State. That is the thinking that produced the idea and left us with the situation that the children of working people would grow up with their teeth crooked, their lives in ill-health and that the State would have an enormous expense later on in hospitals etc. I make no excuse for it. I have no mandate from the Irish public other than from the graduates of the National University of Ireland to speak for anything other than the philosophy of greed which exists in this country. That private, individual greed is being encouraged now every day. People are being encouraged consciously to hate the State, to not respect its institutions and so forth.
I support everyone who works in the public service, but I am very saddened that so many of their lives have been delivered into a conservative ethos and structure of the public service that has not enabled it to achieve its full fruit. There are a number of important points that will arise in relation to the NDC. That is a defective environment in many ways for it to work. There is so much orthodoxy directed against it. It will be a miracle if it gets past that. I hope it gets moving very quickly and that the people with ideas in all sections of Irish society will come forward and participate in what we are doing. It is a very small step but it is a good step, a step in the right direction.
I hope the people with ideas and all sections of Irish society will come forward and participate in what we are doing. It is a very small step but it is a good step, a step in the right direction. Only the ignorant can say that it is interfering with the other agencies that exist in relation to research, industrial promotion and so on. It has an investment role. It can identify new opportunities externally, as I mentioned yesterday, in relation to the trading sector and services, and internally in relation to forestry. I mentioned mariculture, the loss to value added from the agricultural sector and the difference between an agricultural sector and a food sector. The NDC have drawn a great deal of abuse upon the Labour Party. It has been suggested that our colleagues have been burdened with a piece of unfortunate Labour Party rhetoric.
Recently I had the good fortune to look at the history of Erin Foods and the Irish Sugar Company. Let me place it on the record of this House that the people who are the principal proponents of new right thinking are offering us an example of a person who probably made a major contribution to destroying the capacity for a native Irish food processing industry. I am referring to the restrictions placed on Erin Foods who were refused permission to trade in the Irish domestic market because they would be interfering with the Irish sector. At that time our antipathy to State investment and planning went as far as galvanised buckets. You could not make a bucket if someone else was making a bucket in some corner of the country because you were supposed to be this virile child that would grow up to be the Irishman. Private industry would be affected. A private career of wealth and aggrandisement was built on the selling out of the capacity of Erin Foods to deliver into the multinational market. Exploitation continued in the international markets. I am one of those who criticise that. I have visited many countries and worked in some countries where such would be regarded as a crime.
This was followed on by further Irish entrepreneurial imaginative development and the question of the shell companies. People bought companies that had a few old employees perhaps making textiles or something like that. You threw them out, realised the assets, took your money and invested somewhere else. Then you looked at the balance sheet, off you went again and before you knew where you are you had a bundle of money and you started speculating again. We have been told by the climatologists from the other side who were here the last time to create the climate for all of this. When all the gamblers come home together maybe they will have a whip around for the Irish economy. This is the sick, diseased mind of the Irish speculative part of the private sector. I admire many in the Irish private sector. I am not condemning everybody but I am condemning the mentality that is involved in that kind of capital accumulation. I am saying nothing new. Some people who have heard this from me before are obviously bored. We have now reached a situation where, under pressure of population, declining opportunities in agriculture, declining opportunities in traditional industry and declining market conditions for many of our existing products, we have the choice of falling back on that kind of thinking and letting loose the immense social problem that this vast unemployment will create. It is a very dangerous nonsense and it is one that will bring us nothing but peril.
I said that I hoped the public service would by now have been reformed. I equally had hoped that by now there would have been a public acceptance of the planning process. There is an enormous difference between the word "programming" as it has been used in the first programme, the second programme and the abandoned third programme, and the word "plan". When I speak about planning I believe that I am no further on now than when I started 17 years ago. People then had a fearful image of the State reaching into their lives, taking over personal decisions and saying, you must do this or you must invest in that. There have been 50 economies that have used the word "plan" since then. There are people who revised their thinking about the differences between indicative and directive planning. There has been the whole French experience. There have been all the mistakes and there have been all the advantages that we could have drawn upon.
The one thing I thought was important about planning, and it does affect the NDC is the question of participatory planning. A statement for sectoral aims from an élite group, however talented, is not a substitute for a genuine participatory plan. I believe, for example, that if you wanted to develop mariculture or forestry you must do so by involving at all stages of development the people who are on the ground. It involves not only marine scientists but also marine technologists, the people who will wade into the water and show how a raft is to be anchored. I have seen these in practice but we have had such an antipathy to planning that we have not reached the point where we would have accepted it as a natural part of our lives, where the different participatory mechanisms would now be all in place and we would accept it as natural to say we have limited resources.
We have a youthful population that could be regarded as a great asset. It is only when you have that atmosphere of acceptance of planning and participation that you have a true democracy. It is then that you can debate where you should be spending the money in education or in health. I am not one of those who are in favour of this sort of planning and of State involvement. One is always talking about more and more State investment. I do not accept that. I am not one of the people who say you should never cut expenditure. There is such a thing as wasteful public expenditure as much as there is wasteful private expenditure. But there is a fundamental reality that has to be accepted in this country. I am sorry if I emphasise it because I will not have an opportunity again to return to this theme.
This is the price we pay if we do not accept the normality of the planning process. It has implications for our teaching. For example, when one looks at the person who is watching a television programme and the person moderating the discussion will start by saying, we will first have a view from the economists. He will hear three or four different views and they are nearly always bad. Then you might have another section of the panel who will have a few people with bleeding hearts. They will all say, of course I knew a woman who tried to commit suicide last week because she did not have enough to eat and she was bringing the children to a clinic and so on. People are moved by this. Then he says, now to the politicians. What does that tell you about Ireland? It tells you that economics has been made into a subject which is beyond common understanding. In Third World countries they regard it as the second or third stage of their literacy programme. They will explain the purposes of the plan to the people. People will participate in the economic and social choices facing them. In Ireland that is not so. It has become a reserved kind of skill, a priesthood if you like, a form of theology.
The other one is caring, compassionate and so on but it is supposed to flourish in the sun. People can moan more but sometimes they criticise structures and bring home a liberation theology they had learned abroad. Then you come to the politicians. There is a subversive influence, our problems are not amenable to political solution. Out of that destruction of the faith in the political process comes an ever-growing tendency to the right. Thus today I would be presented as almost demented because as a political scientist I ask the question, if the political mould is being broken in Ireland is it not significant that it is being broken from the right? Here we are with the youngest population in Europe, the highest unemployed, some of the worst social problems and the shattering of the political mould as people go on about it being from the right. This is quoted approvingly, particularly by many people in the media who suggest that what this island full of all these people with all this needed investment requires is a further shift to the right.
What is expected to happen to all of these people? It is suggested that we do something very practical that we should establish a significant margin between the highest rates of social welfare for those people who, in accordance with everything that was thrust upon them, had large families and the wage they would get if they took whatever job was available to them. The climatologists tell us that that will create an incentive to work.
The idea, therefore, is that 250,000 people will be energised and a new Republic will be formed. People will go looking for work but where will they find it? Can they all cook hamburgers and flog them to each other in the streets like a Third World economy? Are we supposed to have the people at home baking and sending the children running on to the streets with pieces of bread and people walking around consuming it? That is the implication of that mad, lunatic thinking which is coming from sections who never knew what is was to be unemployed, who knew little of poverty, who had been the beneficiaries of my taxes and the taxes of many other people who are not as privileged as I am. They took all the taxes. They did not make the trains run yesterday. They paid the extra to sit in a different part of the train. They did not build hospitals. They took the extra money from their pockets and went into a different part of the hospital. In the old days they did not go to the dispensary and they never educated a doctor. They took the benefits of their privilege. They inherited benefits. The investment and the new wealth that will come from the Bill is nonsense. Over three-quarters of all wealth in Ireland is inherited. It is because of these young Turks that people like me will have to leave the country. They are a myth. They are like the five-legged horse. They never existed.
I apologise for straying from the Bill. It is in that atmosphere that the Bill is being opposed. I do not accept the views of people who say that we are all worried about unemployment. We are all concerned that the National Development Corporation is going to be another wasteful State agency. What are the alternatives? The National Development Corporation should have been much stronger. It should have come earlier and in an atmosphere of a greater commitment to planning. Equally it should have come in relation to much more reform as in the case of the public service. I would like to have seen it preceded by a reform of the banking sector. The question has been asked where the money is going to come from.
I can give a practical example which will no doubt set off another flurry of nerves. In 1970 a structure came into existence in Sweden which put together the investment of insurance funds. In about six years it was providing 54 per cent of venture funds for new Swedish industry. In other words, institutional funds which had been lying there were now invested in State-led initiatives.
This led to a situation in Sweden of very successful international trading and competent companies under a major holding company, for example, the selling of services internationally in relation to the establishment of comprehensive forestry programmes and so on. There were campaigns on the streets of Stockholm. People said this was the end of the old Swedish social democracy, that they had gone Marxist. The "well heeled" were never good at marching but they could hire trucks. They went up and down the streets and set up an opposition. There was not an international crisis. The Swedish currency was still traded in. I do not recall any great run of funds in the end. Within a matter of ten years just about half of the new venture funds required were being made available for a body such as this. I would like such a proposal to be made here.
Secondly, I do not agree with the autonomy of the commercial banking sector with regard to the planning process in Ireland. Their time scale of investment is short. Their view about collateral is narrow. They are, in fact, savaging some of their customers at present. Maybe the Minister of State would bring back the idea that there should be a proportion of deposits required. I am sure it would be received with enthusiasm.