Above all the subjects with which the Taoiseach dealt this morning he appeared to express more concern about the ninth round of wage increases than any other matter. The Taoiseach must take his fair share of responsibility, not alone for the ninth round of wage increases but for the impasse which has now arisen in the negotiations. He is responsible for the introduction of the turnover tax which caused prices to increase even, to use his own figure, by three or four per cent up to the beginning of November. I do not know what the Taoiseach's motives were in the past 12 months in appearing to try to fix wages or to determine wage patterns but it seems that all his efforts were blunders from the word "go", from the time he introduced the White Paper Closing the Gap up to the time he sent a directive to the Irish Congress of Trade Unions with regard to the possibility of wage increases.
The Taoiseach's message to the Irish Congress of Trade Unions was described in some newspaper as "giving the green light". The trade unions, the workers generally and especially the Irish Congress of Trade Unions did not need any green light from the Taoiseach. In anticipation of the turnover tax and having regard to other factors they had been preparing wage claims for months before the Taoiseach gave his famous green light. The trade unions are not fooled by him. It is an impertinence on the part of the Taoiseach to try to pretend to the workers and other members that he alone determines when workers should seek an increase in wages or salary.
In November last, the Taoiseach wrote to the Irish Congress of Trade Unions. It is obvious from the second paragraph of his letter that he intended to fix the rate of wage increase at about 7 or 8 per cent. Here is what he says:
In the confident expectation that the country's present rate of economic growth will be maintained, and in conformity with the Government's policy that its benefits should be fairly distributed amongst the whole community, a further upward revision of wages and salaries might now be safely envisaged on a scale which would provide compensation to all wage and salary earners for whatever rise in the general price level may follow on the introduc-of the Turnover Tax, and also to such further extent as would represent their fair share of the estimated expansion of national resources in the coming year.
The Taoiseach confirmed this to me this morning when he stated that the increase should be around 8 per cent. He reckons that the turnover tax in itself would provide for an increase in price to the extent of 3 to 4 per cent and that the anticipated increase in gross national product would be 3 to 4 per cent.
I think the Taoiseach, in this, is committing a very grave blunder because by suggesting that the unions should compensate themselves to the extent of 8 per cent, he hamstrung them immediately before they had entered into negotiations with the employers. We must remember that it was the Taoiseach who encouraged the trade unions and the employers to get together to try to come to some agreement as to what the ninth round of wage and salary increases should be. Here, on 11th November, before they started to discuss increases, he suggested that the increase should be from 7 to 8 per cent. It was a major blunder on his part and to some extent it was an impertinence. The Irish Congress of Trade Unions pointed out to him in very clear language that they resented his interference.
In February last, when discussing the White Paper Closing the Gap, the Taoiseach was told the trade unions would never agree to that sort of interference where it appeared that the Taoiseach or any Minister or the Government as a whole were attempting to determine what wages should be, and so on. It must be remembered as well, that around that time some employers had offered as much as ten per cent in preliminary discussions on wage increases. The Taoiseach—the man who wanted to appear as the one who directed when wage increases be given—wanted to confine it to eight per cent. It appears to me that he has tried to be all things to all men. On the one hand, he tells the workers they can go ahead now and compensate themselves for an increase in the gross national product and in prices, while, on the other hand, he intimates to employers that eight per cent is the figure. I think a seven to eight per cent increase is unrealistic.
Last February, the Taoiseach expressed his opinion as to how wage and salary increases should be calculated. He said workers were entitled to compensate themselves for any increase in production and also that they would be entitled to compensate themselves for price increases. In the past two years, the gross national product has increased and it is two years ago since the eighth round of wage increases was negotiated. It has been suggested that the eighth round was responsible for the gap, the mythical gap, talked about in this White Paper, a gap that it was subsequently admitted, by inference, by the Taoiseach did not exist even at the time he was talking about it. The gross national product increased by 2½ per cent and it is fairly certain that it will have increased by from 4 per cent in 1963. That is a total of 6½ per cent in the two years. Prices since the end of 1961, since the eighth round of wage increases, increased to the tune of some 5½ per cent to six per cent. Therefore on the Taoiseach's formula, wage and salary earners who are now trying to negotiate increases will surely be entitled to at least 12½ per cent.
The Taoiseach seems to have some passion for controlling wages. He did it, and I suppose we must admit successfully in that he had the force of law behind him, with the Wages Standstill order and he attempted it again in 1947 when he had legislation prepared to introduce a wage freeze. The Taoiseach may have tried to be helpful in recent times but he has blundered around and has upset the relationship that I am sure there would have been between workers and employers if he had not attempted to hamstring them by suggesting that seven per cent or eight per cent was a sufficient increase, when one has regard to increases in prices and the increase in gross national product. I am sure the Irish Congress of Trade Unions do not object to his assistance in matters like this but as far as I can see it has not been assistance but an attempt at dictation and the trade unions and the Irish Congress of Trade Unions are certainly not going to stand for that.
The last item I mentioned as being an outstanding event during the year was the publication by the Government of their Second Programme for Economic Expansion. I do not know whether this Programme has been received with a lot of enthusiasm. Certainly I do not know of any sections who have been enthusiastic about it. The first Programme, I suppose, was to some extent an experiment in the idea of having a programme at all. It was not a revolutionary Programme which contained any major changes in behaviour by the Government. Neither did it suggest any new methods but there is this to be said about it, that the forecast that was made, as far as an increase in the gross national product was concerned, was fairly accurate but it was not very difficult to be accurate in regard to that because it was merely the forecast of of any normal economist, having regard to the circumstances not alone in this country but in the world generally. No matter what we say about policies of one side or the other, they are influenced greatly by outside events and they are particularly influenced by the State of the economy in Great Britain. I must say that as far as the Fianna Fáil Party are concerned, when they look back to 1954, 1955, 1956 and 1957 they did not accept, but I am sure they will accept now, that our economy is dependent to a large extent on and influenced by outstanding economic factors, particularly in Britain.
If there had been anything revolutionary in this new Programme, people would have been talking about it, but the Federated Union of Employers, the Federation of Irish Industries, the Irish Congress of Trade Unions, and all major associations including Macra na Feirme and the National Farmers' Association did not seem to be particularly inspired by it. It is not that it was not a good Programme; it was again merely a forecast of what was going to happen. It is a forecast which any economist could make. As far as the Labour Party are concerned, we do not regard it as being too ambitious. It provides for an extra 78,000 jobs by 1970, compared with 1960. This represents an increase of 8,000 new jobs per year. That will not be spectacular progress by 1970 and I wonder why the Government did not set their targets higher.
The provision of an extra 8,000 jobs per year, or 7,800 to be exact, will not provide for the difficulties with regard to unemployment when one remembers not alone the flight from the land but the natural increase in population and our desire to see emigration cut to a minimum. It will mean that by 1970 we will have an unemployment rate of about 3½ per cent. I cannot remember what it is now but I suppose it would be in the region of five per cent or six per cent for the whole year on average and I would not regard it as spectacular progress to say that after ten years our unemployment rate would be cut to 3½ per cent.
In fact, in this Second Programme for Economic Expansion, there are no new policy proposals as such. There are objectives and I suppose we should be grateful for even the expression of objectives. A lot has been said about agricultural policy and the state of agriculture over the years. I do not speak as an expert on agriculture— quite the contrary—but it seems to me that we have had no progress whatever in agriculture when one realises that there were 40 odd years during which an Irish Parliament had responsibility for agricultural affairs. Surely there must be something new and revolutionary that could be done for the agricultural industry to put it on the footing on which people on both sides of the House would like to see it?
As far as industry is concerned, there is no new policy. There is a continuation of encouragement of foreign industrialists, a continuation of the financial incentive by way of grant, loan, tax remission, and so on. That is purely a continuation of things to which all of us subscribed, many of which were formulated, not by a Fianna Fáil Government but by an inter-Party Government.
If we are to make any radical advance or any radical improvement in unemployment and the provision of new jobs, there will have to be, I believe, a different approach to agriculture and to industry. We have often stated from these benches that whilst we believe that, as long as private enterprise can do the job, it should be allowed to do it, nevertheless where private enterprise either refuses to or is unable to do the job, then the State should take a hand. That is being done to some extent by the Fianna Fáil Party. It was done by the inter-Party Government in the limited time during which they were in government.
I do not know whether or not I should say I was impressed when the Taoiseach said about this time last year that the time had come for a move to the left. He just made that statement. There was subsequently no action, but he has shown his "leftishness" on occasions, the "leftishness" of the establishment of many of the State and semi-State companies, semi-State companies that were established under a Cumann na nGaedheal Government as well. In my opinion, these have been successful ventures. There are perhaps some that can be shown to be incapable of paying for themselves, some that can be shown to be a burden on the taxpayers; but, by and large, the major ones of these 57 or 60 odd semi-State industries have been successful.
If we have a situation, therefore, wherein we want more jobs for our people, wherein we want to cut down on unemployment and stop emigration, then surely, if private enterprise cannot do the job, it is legitimate to expect the Government to do it, to expect the Government to take a stronger hand in the promotion of industry. Let me quote once more the example of the Dundalk Engineering Works. On the closure of the Great Northern Railway shops at Dundalk, Dundalk was confronted with a situation in which 1,000 people would be rendered unemployed. The Government took action, but they were somehow ashamed to say it was Government action. They tried to pretend it was private enterprise. But the Government provided all the money. They appointed the directors. Confronted with a situation in which 1,000 people would be unemployed, the Government stepped in and did the job. There are pockets in the country where we have not, perhaps, thousands, but certainly hundreds and I suggest seriously that, because private enterprise does not provide for these people, it is the bounden duty of the State and the moral responsibility of the Government to act.
I do not see in this Second Programme for Economic Expansion any evidence at all of a shift to the left. I do not know whether the Tánaiste would approve of anybody talking about the left but, in any case, the Taoiseach announced recently that the time had come for a shift to the left. There is no evidence of that in this Programme. There is all the encouragement in the world for the Government to go somewhat to the left in the establishment of ways and means to provide employment and to help the economy further. The Programme states that the Government can only assist, guide and persuade.
I freely concede at once that, as far as the previous Government were concerned and as far as this Government are concerned, they have continued and introduced policies of generous assistance to industry, generous assistance to private enterprise but, with all that generous ssistance, we have not got the results we should. They have assisted, but we have not got the results. They can guide and persuade. I do not know how they can persuade. They may guide in their advisory services not alone in relation to industry but in relation to agriculture also, but they seem to be reluctant to persuade.
When we asked what would be done in respect of industry which refuses to face up to the realities of our possible membership of the European Economic Community, we got no satisfaction from the front bench of the Fianna Fáil Party. The Government showed a complete reluctance to do anything. They invoked private enterprise and the rights of private enterprise.
I believe in private enterprise so long as it does the job. I believe more especially in a combination of private enterprise and Government co-operation. Where you cannot get that, surely it is the bounden duty of the Government to ensure that the objectives contained in this Second Programme for Economic Expansion will be achieved. The Programme envisages an increase in the proportion of taxation to national income. We recognise that to do all the things that need to be done, all the things we demand, needs money. We are prepared to face up to the raising of money. We have shown that, as far as the Labour Party are concerned, when we are satisfied that the money which we are expected to vote will be devoted towards the proper objectives. We voted in the Budget for all the money necessary to pay all the increases in social welfare benefits. We refused to vote for the turnover tax because that tax involved what we knew would be a heavy imposition on ordinary people. We thought it was wrong. We thought it was immoral to tax foodstuffs. We refused to believe that the Second Programme for Economic Expansion was dependent upon the exacting of a tax on bread, on butter, on tea and on sugar.
Let me repeat what I said this morning: as far as we are concerned, if taxation is to be raised, if there are to be increases in prices because of taxation on certain items which we regard as non-essential, then the Labour Party will give their support; but we want to ensure, above all, that those who are able to pay most will pay most. We want to ensure that there will be less emphasis in future on indirect taxation and more emphasis on direct taxation.
