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Dáil Éireann díospóireacht -
Thursday, 18 Dec 1969

Vol. 243 No. 11

Committee on Finance. - Vote 3—Department of the Taoiseach (Resumed).

Debate resumed on the following motion:
That the vote be referred back for reconsideration.
—Deputy Cosgrave.

In the few minutes available to me last night I was seeking to develop the concept of better relations in the industrial field in the years ahead and I pointed out that better control by the responsible leaders of trade unionism was essential to this condition being brought about. I should like to say now that, for my part, in so far as I can facilitate the responsible leadership of trade unionism, I will be only too glad to do it.

We have, as I pointed out, a year behind us with a record of lost mandays which, when published, will be the highest yet. A great part of this deplorable record is due to the unofficial strike. If we can eliminate unofficial strikes we will have gone a long way towards improving the whole position with regard to industrial relations generally. In recent times we have had unofficial strikes in pursuit of claims before existing agreements expired. We have even had a strike recently in pursuit of a claim for pay for a period in which an unofficial strike took place. Such actions do not improve the atmosphere or the outlook with regard to industrial relations. An improvement is essential to the acceleration of the progress which has been made.

I repeat that it can be safely asserted that everybody in this House and outside it is anxious that more rapid progress should be made towards full employment. Whatever else we may have to worry about, all the indicators show that very good progress has been made but it has not been at all as rapid as we would like it to be. There is considerable room for improvement.

When I have been pressed in the House to answer questions with regard to the Educational Company ruling and the promise that was made that legislation would be introduced to rectify the situation, I have pointed out that I was not in any way shirking my responsibility in this respect but that I should like, in consultation with all concerned, to have a serious look at the whole question of strikes and picketing before I would bring in legislation. I have made myself understood to congress, certainly to some members of it, that I should like with them to go into the situation which exists regarding unofficial strikes and picketing generally and with them to agree on strengthening the control of the trade unions generally so that we could look forward to some elimination of the unofficial strike at any rate.

We have come to a stage where the right of workers to withdraw their labour is accepted by everybody. It is hardly necessary to refer to it. The suggestion made occasionally when legislation is proposed that somebody is seeking to deprive the workers of certain rights is native in the extreme and is not genuinely believed. The time is ripe to take into confidence the employers, the trade union leaders, the representatives of the workers, and this House and to have an agreement on the type of reasonable control whereby the responsible trade union leadership would be in absolute control of the workers and capable of negotiating.

I have said nothing about the employers at this stage. I want to come to that later and to say a lot about that also.

In perusing the records I find that there are 740,000 people employed in non-agricultural economic activity at the present time—that is approximately the figure; that there were 320,000 employed in agricultural activities, which would include forestry and fishing. There are 100 trade unions with a membership of 370,000—six general unions representing 310,000 and the ITGWU representing 150,000. Of these, 77 are affiliated to congress, which represents 95 per cent of organised workers. Twenty-six British-based unions represent 50,000 workers. In all, apart from any rationalisation in the trade union movement, there is a very strongly-organised trade union system in this country. I was trying to stress that point in order to show that nobody, I think, need fear any suspicions that may have been entertained in the past regarding any effort to deprive workers of any right for which they have fought and gained. I should like to see a more rational trade union organisation and a more consolidated employers' organisation which could really speak with one voice for the employers. This would be a prerequisite to bringing about any prices and incomes policy. In the 1970s, we should bend our every effort towards bringing about that situation. I can see that the unofficial strike will eventually lead to the complete disruption of organised trade unionism in this country. A great deal of time and effort and hardship have gone into the building up of this organisation to its present state. If responsibility and control do not fully repose in the top leadership of trade unions, we cannot expect to sit down to make the necessary arrangements for better industrial relations. One can visualise the chaos that is likely to exist if this is not brought about. If we could achieve this happy situation in the year ahead it would be a big step forward. Indeed, I have very strong hopes of it. I find trade union leadership very highly responsible and understanding. With better organisation on the employers' side, I think there is much we could get down to doing.

Lightning strikes or the unofficial types of strikes that take place do not in any way advance the human dignity of the worker, about which everyone is so much concerned. These strikes, which occur every so often, throw the whole economy into chaos. We must eliminate this factor in our industrial relations before we can sit down to work out the many things that urgently require to be done. There is a lot of legislation in the pipeline in my Department which will shortly be presented to this House. Much of it has already been sent for consultation with all the parties concerned. It deals with working conditions, due period of notice of termination of employment; hours of employment; safety conditions in employment; the atmosphere in which people have to work; safety from health hazards and accident-free environment. These are most important and are only some of the many factors which should form a proper workers' charter. If we could bring about a sense of reality into the whole method of adjusting incomes and wages, it would be to the benefit of all concerned. We are rather preoccupied with this question of demanding incomes which do not in any way conform to the ability of the concern to pay or to the resources available or to a likely increase in production.

Can the Minister give a single instance of a firm which was put out of existence by reason of a wage increase—a single instance?

I would hope I could not.

I believe there is not.

I said last night we had made very considerable progress in the past year and particularly in recent years in the matter of industrial employment. Much greater progress could be made if we could earn for ourselves the reputation of being reasonably free from industrial strife. We still have unemployment and we still have emigration—both problems we are anxious to eradicate but which still remain to be solved. One of the most essential factors in preparing the ground for a final drive towards full employment is the eradication to the minimum of industrial strife, and, first, the unofficial strike. We must give trade union leadership the necessary power and leadership which they do not seem to have at present. Anything I can do by way of legislation to strengthen their hand in this respect will gladly be done. There is no question of depriving anybody of any powers they hold. Nobody denies the right of the worker to a fair wage. I would be the last person in this House to lend my hand to any type of legislation restricting the worker in his right to seek better conditions and fair wages.

Frequent reference is made to our record for man days lost. It is not a good record. Official strikes have been a big element in that record. The Deputy who asked me if I could give the name of a firm that closed down because of a wage increase is well aware that inordinate claims for wages which have been granted contributed substantially to increased prices which have eroded the value of the increase, anyhow. We have frequently warned that this would impair our competitiveness in the foreign market to such a great extent that it would ultimately lead to a serious situation in which we would have unemployment and all the evils that follow. If we have been accused of crying "wolf" it is because the inflationary trends here and increasing prices have also occurred in other countries in which we have been marketing our goods.

This world inflationary trend has saved us in that respect in the years that have passed but there is no guarantee that this will continue to happen. Some Labour speakers during the debate on my Estimate pointed out, quite rightly, that inordinate wage increases or wage increases of any kind are not the sole contributing factor to increased prices. This I immediately concede. The increased prices of essential imports for the manufacturing industry, for instance, are bound to add to the cost of production here and thereby increase prices. This undoubtedly is one of the factors—and one of the factors over which we have no control—which have contributed to increased prices here, but there is no denying that the most important factor is the increase in incomes which is above the increase in production or not matched by an increase in production or growth in the national income generally.

There is another factor with regard to increased incomes which contributes indirectly but very definitely to increased prices. When wages are increased income goes up all round and the welfare classes are left in the position that the small incomes which they receive from the welfare payments are insufficient to give them the minimum of comfort and it is essential that their benefits be increased proportionately. This has happened several times and it invariably means extra taxation to provide the moneys necessary to bring the welfare classes up to some reasonable standard. These tax increases again are responsible for further increases in prices and the vicious circle goes spiralling on. While the actual impact of wage increases directly affects prices, it also affects them indirectly due to the fact that it makes it necessary to increase taxation in order to meet the welfare claims. This is a very important aspect of the spiralling that has gone on and will continue to go on unless we realise what the position is and all of us agree to have some understanding about it.

I would not contribute in any way to any hard and fast arrangement with regard to incomes and wages because there are always those sections which are not up to the standard one would reasonably expect for them. Certainly, it must be left open so there can be adjustments of that type. I do not think anyone will agree with the system of claims for parity and relativity that are not always justified. Very recently I had experience of a firm in which the general workers claimed and succeeded in getting an increase in conformity with the maintenance craft workers' increase of last spring. Immediately that increase was conceded to them the craft workers came back looking for the differential for no other reason other than to maintain the differential.

These claims, which are based on nothing more than just being that much ahead of someone else, or claims that are pressed just because certain people know they are in a position where they can exercise to a very serious degree very strong pressure that must eventually be yielded to, are the types of claims that we have to face up to and resist if we are to make progress in the years ahead. I should like to make some progress in the very essential field with which my Department are more concerned than anything else, that is, the preparation of workers for the competitive years that lie ahead. This is mainly in the field of training and of technology. We have in our AnCO organisation, the Industrial Training Organisation, already made a very good beginning in that we have got three centres in operation. The last one I opened recently in Galway is a centre for training which I would advise Deputies to visit any time they are in Galway and, indeed, the centres in Waterford and Shannon for that matter, and see for themselves if these are not a very genuine and worthwhile effort to provide workers with the necessary skills that will enable them to develop their aptitudes and enable them to have job satisfaction in the competitive time which lies ahead.

This is a direction in which I should like to see more rapid development. Our national manpower service seeks to identify the areas where there is a shortage of labour, where there is a surplus of labour, where there is emigration, where there will be availability of labour in the years to come, where training of a particular type is needed. The career guidance service comes under the same manpower section. We want to develop our manpower forecasting service and to assist with placement and replacement, which we are now developing. We are seeking the appointment of suitable officers. There is much to be done in this field which is for the greater and ultimately the real benefit of the workers, but I feel this work is being superseded by unnecessary striving towards demanding—often unofficially demanding— increased wages to meet the cost of living, which invariably is followed by the cost of living eroding the increase given and, in the last analysis, bringing the real increase back to a very insignificant figure which, if granted in the first instance, probably would have been accepted.

This is the situation as I see it moving into the seventies. If this message is not got across to all concerned, and particularly to the workers, then we can only hope to continue making the progress we have been making in the past, which to me is not sufficiently rapid. One could say that 4½ per cent is very satisfactory progress but we must think of the progress that could have been made.

Deputy O'Donovan suggested that I could not point out any case where losses in man days caused some concerns to close down. I am more concerned with how this acts as a deterrent to people who might have come here. Indeed, I have evidence——

That is not the question I asked. I asked the Minister did he know of a case where a wage increase caused a firm to close down. That is not the same question.

It is much the same question I am trying to answer. I may not be making myself very clear. I do not think I could name any such firm —and I would not even if I thought I could—but I could give instances of firms which were about to expand or open new branches and did not do so, or opened elsewhere, due to their experience in the industrial field, almost entirely due to our not grappling with the situation of the unofficial strike—for which I am blamed. Frequently I meet people who say: "Look at the unofficial strike which has taken place here, and look at what has happened there, and what is the Minister for Labour doing about it?" The public generally do not yet seem to have grasped that we cannot legislate for industrial peace—it has been said so often before that it seems to be unnecessary repetition—but yet so many people do not seem to have grasped the simple fact that, unless there is acceptance and common agreement with the unions and the employers' representatives, anything we can do by way of legislation goes for nothing.

I agree with the suggestion by Mr. Aubrey Jones, who is in charge of the British prices and incomes policy, that voluntary restraint is very essential if one is to formulate a policy that is likely to work. Voluntary restraint is essential in order to prepare the ground for a policy that would be acceptable. There is no use embarking on a hastily arranged prices and incomes policy which will not work. For that reason it is agreed by all who are in a position to know more about it than I am that voluntary restraints for a time are an essential prerequisite to the introduction of a prices and incomes policy.

Invariably when anybody is talking about this sensitive field of industrial relations he seems afraid to mention one side without mentioning the other. If he refers to chaos in regard to industrial strikes and unofficial strikes he is sure to mention the employers immediately after mentioning the workers in case he may be suspected of taking sides. We will have to be less sensitive about this and talk openly about both sides. There is a lot that can be done and must be done on the employers' side. I am not at all happy that the employers have really good representation to speak for them as a whole. As a matter of fact, the employers' organisations are rather disarrayed at present. However, efforts are being made which I hope will be successful to improve that situation. Until we have some bodies which can sit down with us and discuss the whole situation and really speak with authority for the people they represent there it little hope of achieving the success we would all like. There is one bright spot on the horizon. We seem to be moving, perhaps more rapidly than anybody might think, towards the situation in which on the workers' side we will have trade union representation that will be really capable of speaking for the workers and accepting and honouring any arrangements made, and on the employers' side representatives who will be capable of doing the same.

We are now facing the 1970s and the competition about which we hear so much talk and which the future is bound to hold for us and the record of man days lost is not very encouraging. I have extracted the figures for 1959-1969. In 1960 a total of 8,349 man days were lost which would be the lowest figure in the ten-year period. In 1966, 783,635 were lost which seems an appalling record until we come to 1969 when up to the end of November, without having the official figures, about 800,000 man days were lost, which will be the highest yet. With these figures in mind I think about the great progress that could have been made if we had not lost that huge number of man days; how many more people might be working, how nearer to full employment we might be and how many other things we might be talking about doing for the workers if progress in this field had been made. A great proportion of those 800,000 days was due to unofficial strikes. This is a sphere in which so much could have been done without resorting to a stoppage of employment. We have built up a very good system of negotiating and discussing our troubles when they arise. The Labour Court was considered a very great step forward in the matter of settling disputes but I am not too sure that in recent times it has gained much prestige because of non-acceptance of its recommendations.

The Minister will appreciate that there were other reasons. They pushed the ESB tribunal around, illegally.

I should not like to make a statement here without really being——

It was a matter in which I was personally involved.

The Labour Court is still the most important institution we have——

——in this field. I should not like to say or do anything which would in any way denigrate the prestige, the standing and the importance of the court. In fact, in anything the House might advise me to do I should like it to be towards giving the court greater status.

I did nothing to intrude on them.

I am not suggesting the Deputy did. I am not denying that they may have made mistakes. They are not that long established. In these days it is very popular to think of starting something new, to have committees, commissions and so on, but the institutions we have in this field are quite dependable and sufficiently capable of meeting any situation if they are given the necessary powers and the necessary acceptance which is essential for the working of any institution we may establish.

Shortly I am going to appoint rights commissioners for which the House provided in legislation passed before I became Minister for Labour. We will start off with, perhaps, only two. I am not sure that they will make any great impact in regard to the early detection of trouble and its settlement but it is well worth trying. If we can get the suitable people to take on this task it could be well worthwhile. The idea would be that they would move in early and bring reason to bear, to trace the trouble that is brewing and thereby bring about an early settlement by eliminating the cause. I am not going to prejudge what they should do but that is roughly what the House had in mind when they wrote this provision into the legislation for appointing rights commissioners. I hope to have them early in the new year, and it will be interesting to see if they have any worthwhile effect on the situation. If they have, I shall not hesitate to increase the numbers available for this important work with which they will be entrusted.

Could I ask the Minister if these inspectors will be available on request from union or employer?

They will, like the conciliation officers, be available to either side. Indeed, I should like them not to wait to be asked by anybody, that they should move themselves, where a case is brought to their notice. Naturally, before they do it will be with the joint consent of the people concerned. It is hardly necessary to say that if they moved in without the consent of the people, whether they were invited or not, there would be little hope of bringing about any conciliation. They will not usurp the functions of the conciliation officers or the industrial relations officers, as they are now called. These people have been doing an excellent job and I hope they will continue to do it.

If I have bored the House talking a great deal about industrial relations it is, first of all, because it gives me an opportunity of discussing these matters. It is often said that Ministers make statements outside the House which they should make here. I welcome the opportunity of saying what I have said about these matters and making it known to the House what our hopes are for the future. Irrespective of what accusations are being made regarding the mistakes of the past—and anybody who does anything must make mistakes —to understand the situation is useful and of ultimate benefit to everyone. I am not in the least sensitive about referring to workers' or employers' representatives. We have been much too sensitive about this in the past. One seems to have been afraid to be misinterpreted. I hope to have further discussions with the FUE and the ICTU and I shall be only too glad to do anything that will gain acceptance from them towards putting them in better control of their respective sides on this question of industrial employment and employment generally. We have already a great deal of common understanding and consent in this matter and I believe it can be developed further.

It is most impressive to see the export figures going up. It represents greater activity in the economy and increased employment. We have a lot to do still in this respect, as is pointed out in the Third Programme. There is a very definite falling off in agricultural employment. I was most heartened to learn from the recent report that when industrialisation takes place in the provinces this will automatically benefit the agricultural community over a wide radius from the industrial centres. This is most encouraging to those of us who are particularly concerned about the west.

I do not want to go into a long discussion on the problems of the west, but we can look forward to an intensification of the efforts to put the west on an equal footing with the east coast, which is the area in which most people desire to have all their industrial activities. I do not grudge any development that has taken place on the east coast, but it is evident from the last census and from the recent report published by the social research people that there are counties, particularly those in the west, which are not making the same progress as counties on the eastern seaboard. It is imperative, therefore, that all our efforts in the matter of industrial development should be slanted towards these areas which are not at present securing their due share of development.

While people have been talking about saving the west, the very idea itself has been resented by the people who live there, because the west is quite capable of saving itself, given a fair chance. Sufficient has already happened to prove that there is no doubt about saving the west. What we really mean when we talk about saving the west is providing the necessary opportunities to maintain the population that the west was accustomed to have in the past, when people like the congested districts board set out to remedy the situation by moving people elsewhere and thinning out the population, which to my mind is not the real solution. What is needed is an intensification of all our efforts, sufficient incentives and inducements to greater development and greater activity in the west.

I should like to conclude on a more hopeful note. It is the duty of the Opposition to point out what they consider to be the flaws in the Government policy, but I do not think extreme statements of gloom and doom achieve anything. We must recognise the very great progress we have made. We have had many obstacles to overcome, but I think we can safely say now on the threshold of the Seventies that the breakthrough has come. If we can harness our undoubted patriotism towards working in greater harmony, we can achieve, much more rapidly than we otherwise might, that very much desired goal of full employment.

However, full employment is not the be-all and end-all of what we set out to do. It is only one important step in the development of our society. Having reached that stage we can turn our attention to many other things that desire to be done. We can do so much for the betterment of our society, for maintaining our separate culture in a competitive world in which we shall undoubtedly be more closely integrated in the years ahead. These matters pose a very great challenge to any Government.

I consider it essential to develop our economy to a stage where sufficient opportunities will be available for our people, many of whom at present emigrate either to find better remuneration or because they are unable to find opportunities at home. We are solving the problem gradually but we have to hasten the day when it will be solved completely.

The committee which I set up to look into emigration is giving us constant reports on their progress and I am satisfied they are doing a fairly useful job. I am pleased to note that they confirm the numbers now going abroad have reduced to what can be described as almost a trickle compared with what used to be the case.

Coming from a county which has experienced emigration of a most serious type during the last one hundred years, and particularly in the last 25 years, I can see a change in the pattern of emigration which is creating a much more serious problem. The last stages of our efforts to find a solution to the problem of emigration will be the most difficult because relationships have been established. People at home frequently leave their jobs in order to join their friends and relatives abroad. Rather than buy a ticket for the express bus to Dublin, where they can find work in plenty—particularly in the building industries, and many of these people are labourers—they are prone to buy a ticket for the boat and go across to Birmingham or London. It is simple for people to shuttle back and forward at the present time and if they feel they might get a bit more excitement or a few pounds extra pay they are quite prepared to emigrate. The facility with which people can do this makes solving the emigration problem, if one is to think in terms of completely eradicating it, a rather difficult one and in the last analysis a rather impossible one. I would be happy if we could reach the stage where we could say: "If you want to stay at home there is work for you." When we reach that stage the State will be free from reprobation from anybody.

It has been urged that we should bring in controls on the movement of our young people in order to prevent them emigrating, but we have declined to do so. I think we should, only in the last analysis, introduce controls which would enable us to prevent anyone from emigrating if they want to do so.

Any work which this committee can do to identify areas where something more is required to be done will be very welcome. It must be remembered that the people who most need guidance in the matter of emigration are the people who do not present themselves to agencies. People, who have been the charge of the agencies in the past, will immediately tell you that this is the greatest problem. However, the majority of our people are capable of looking after themselves and this has become increasingly more so as they are better equipped now than they used to be in the past.

Since this committee was set up the question of assisting people to return has been mentioned. Thousands of letters have been received from people anxious to come back. It is noticeable that they are from those who are married and have children who want to bring their families up here. We have a shortage of skilled people and we are now arranging to bring skilled people back. We have compiled a list of vacancies.

The return of many of our emigrants will pose a housing problem. As I have said, most people wanting to return are married with families and they will require housing. The housing problem, which is sometimes thought of as only a Dublin problem, will be. I hope, a greater problem in the west in the years to come. I hope more people who have left there will return to take up opportunities in their own county. I hope the necessary housing accommodation will be made available for them as rapidly as possible.

It is possible under our scheme of retraining and placement to facilitate and meet expenses incurred by people moving from one area to another due to redundancy or because they want a change. I am arranging for this service to be extended to people wishing to come back from England.

As I said last night, there is a shortage of female labour in certain areas. We have not completed any worthwhile manpower service as yet but we hope to make rapid progress in the immediate future. It is apparent in some areas that there is a surplus, but in most areas there is a shortage.

In conclusion, I should say that I have asked the Labour Court under section 24 of the 1946 Act for a recommendation and report on the dispute which has been going on in the ESB for a long time. To use a hackneyed phrase the dispute is "getting nowhere". No progress has been made at conciliation or at the Labour Court. There is a stalemate. There is no obvious sign of any settlement. As this is an area where the economy of the country is at risk, it behoves us to ensure that every facility available for the settlement of a dispute is utilised in order to prevent a crisis. I shall say no more than that, but that is the reason why I have taken what I consider to be the last resort available to me since all other efforts have failed to identify the cause and to resolve it. That is the best one can do.

I hope that 1970 will be a better year for everyone. I hope that we will depart from all the ill-will and intransigence which have characterised some of the efforts in the industrial field in the past and that by the introduction of a greater degree of commonsense and harmony we will come to the Taoiseach's Estimate next year having behind us a year in which there was greater progress, with more people finding remunerative employment in their own country, and general economic conditions showing an even more marked improvement than that which we have been able to report in respect of the year coming to a close.

Recriminations across the floor of this House will not improve any situation. As Minister for Labour, I hope to avoid as far as possible acrimony and the introduction of any unnecessary accusation which might in any way be misinterpreted. To use a nautical term, I hope that in 1970 it will be "Steady as we go"; I hope that we will travel hopefully, not seeking an El Dorado impossible of achievement but seeking that which is realistic and attainable, an Ireland with full employment and all the other advantages which must necessarily accrue from that. I wish a happy Christmas to all.

Speaking immediately after the admirable statement by the Minister for Labour, I am very happy to reciprocate the Minister's good wishes for a happy Christmas. The Minister modestly expressed the fear that he might, perhaps, have bored the House. He need feel no such apprehension. Everyone who listened to the Minister's statement must have, I think, appreciated that it was a model of what a Minister's statement should be. As far as he could, he took the House into his confidence. He dealt with the problems facing his Department and he treated the House with a consideration which will, I believe, be reflected by other speakers here.

I shall not enter into the substance of what he said. Deputy O'Donovan, who will speak latter, is better qualified than I am to do that. I wish I could speak in the same vein, particularly at this season, of the Taoiseach's statement in opening this debate. One would have hoped that he would have favoured the House with a survey of the substance of the serious problems which confronted the country during the past year and would have given some idea of the spirit in which he, as Taoiseach, and his Government were collectively approaching these problems. Had he done that he would, I think, have found a ready response in the House.

I do not wish to prejudge this matter—it is possible that, in his reply, the Taoiseach will give us a more substantive survey—but I do not think such an approach an altogether satisfactory way of proceeding. It would have been helpful to the House if, in the Taoiseach's initial statement, these matters were more fully covered in what one might describe as a more philosophical and generalised way. Instead of that, we had from the Taoiseach a statement which could quite as well have been produced by an automated public address system hitched to a computer. The statement was almost entirely statistical, a rather bald statement, and it was not helpful to the House generally in considering the state of the nation, which is something we should do at this time.

Listening to the Taoiseach, many of us felt, I think, that this was not the statement of a Taoiseach who was giving leadership in the sense in which the President, Mr. de Valera, gave leadership in the past. Whatever opinions there may have been about him, he certainly gave leadership in times of crisis. As opposed to that, the Taoiseach's statement was, perhaps, the statement of a chairman, perhaps, of the rapporteur of a committee, rather than that of someone who is going to give a lead to the country. This corroborated the misgivings many of us have felt about the conduct of the Government during the past year. It was evident to us, and it is right that we should stress this, that there were and are resources of very considerable ability, goodwill and strength available to the present Government, whatever we may think about them generally. It was also apparent that certain Ministers are largely out of control; they do what they like in their own Departments. The conduct of some of them reminded me of a statement made by a Minister of the Interior in a faraway country when he was challenged about some arbitary act he had performed; his reply was: "You have no right to say that. This is a democracy and, as Minister of the Interior, I do what I like". From the utterances and performances of some Ministers—by no means all—I feel their approach to the problems of their Departments and of the country is very similar indeed; they act like feudal barons controlling their own fief, showing respect for no one, even their own Taoiseach. I shall give some reasons for that belief on my part later when I approach what will be the main subject of my contribution, the handling by the Taoiseach and the Government of the important crisis in Northern Ireland which the country, as a whole, traversed this year. That crisis —to which I shall return—clearly demonstrated that some branches of the Government were out of any central control, and most dangerously so.

But there were other examples, in a Government in which the Taoiseach, and it is to his credit, attempts to set a tone of dignity and good manners. We have had a demonstration by one member of the Government of a truculent, overbearing approach, of insults delivered here to citizens of this country who have no means of reply. This Minister responsible for law enforcement, in a letter, the authenticity of which he acknowledged, advised a constituent how the law might be bypassed and advised that same constituent to destroy that letter. In a strange contradiction, he then said that he stood over every line of the letter he had advised the constituent to destroy. When some of us tried to put down questions about that matter —to ask whether the Taoiseach regarded that conduct as compatible with the standards of propriety to be expected from a member of the Government—we were told that since the question contained argument—I presume implicit argument—it could not be asked.

That is why I am obliged to comment on it here and I do so because I think—I do not want to go into detail on this range of matters here; the country is familiar with a number of such cases—that is a case where in a Government under strong democratic leadership and control as Mr. de Valera's Governments were, such a Minister would, at the very least, have been severely admonished and had he persevered in conduct of the character in which he has indulged he would have ceased to be a member of such a Government. If that has not happened we have a right on this Estimate to note the fact as an example of a lack of central direction, of a growing autonomy, an almost anarchic autonomy of certain Ministries, of a certain galloping free enterprise in the conduct of Government. I do not wish to brood on that aspect now. This is not an Estimate, as we have been properly told from the Chair, on which we should go into details on the conduct of Government. We shall have a chance of considering these on other Estimates.

My colleagues have touched and will touch further on a number of aspects coming under the Taoiseach's Estimate. I propose to say something about three of them—the European Economic Community, the housing crisis and the crisis affecting Northern Ireland and our relations with what has happened there. It is into that last subject I propose to go most deeply since it is one to which I have been giving particular attention on behalf of our Party during the year.

In regard to the EEC I should like to support the request by the leader and other members of our Party for a debate on this subject, a debate which I am sure the Minister for External Affairs will be inclined to accord in the same spirit as the Minister for Labour has given us an admirable and instructive survey of the work of his Department. The Minister for External Affairs should also take us into his confidence as far as he can about what is happening in this area because I think the public are somewhat confused about it. The Minister has gone on television and spoken to the public in general about this. None of us wants to discourage that development; it is good that Ministers should go on television as much as possible and take the public at large also into their confidence. That is very welcome but what would not be welcome would be if this method of procedure should become a substitute for taking the House into the confidence of Ministers and telling us here what is happening. I hope we shall have an opportunity of considering this matter in detail with the appropriate information. There seem to be some contradictions or possible contradictions here. The Taoiseach told us not long ago in response to questions from these benches that the Government have no intention of entering NATO or, he added—and it was an important addition, perhaps, not sufficiently noticed at the time— any other kind of military alliance. Yet, the Minister for External Affairs in his television broadcast seemed to imply that there would be military commitments here. We should like to know the outline of what is involved and have an opportunity of discussing it.

Another aspect of that which I should like to hear about and discuss is the whole style and approach within which we hope to operate inside EEC, if we are admitted, because anyone with experience of international organisations or groupings, such as OEEC in the old days, knows that within the membership of such organisations there is room for different kinds of emphasis and different styles of approach. For example, in European groupings generally the approach and emphasis of the Scandinavian countries have been slightly distinct from those of other countries and even a small country within such a grouping has an opportunity to make its character, its geographical position, its tradition and its national outlook generally felt. There has been a fear in some quarters that our Government are approaching this matter in too much of a passive spirit of "we must accept anything in order to get in and we shall do anything we are told when we are in". That may be a distortion of the position. I hope it is, but this is the kind of thing we hope to hear about and debate fully when the Dáil resumes.

When the leader and other members of the Labour Party tried to raise the matter of housing, when we tabled a motion to declare a national housing emergency and were provided with a limited amount of time for discussion, it was very much pooh-poohed. It was treated as a kind of stunt and we had the alarming and deplorable spectacle of a concerted attempt being made to howl down the leader of the Labour Party when he was using the limited time at his disposal to say what we felt was important on this question. That was extremely regrettable and I hope it will never recur. I speak as a Deputy from a part of Dublin where there is a large number of housing estates and also large numbers of extremely badly-housed people.

To speak of a housing crisis in Dublin is by no means a stunt; it is a reference to a fact which every Dublin Deputy knows just as every Dublin Deputy knows that to speak of 15 or 20 unlicensed moneylenders in Dublin city is to be farcically out of touch with reality. The problems are much greater than that. The time every Deputy in Dublin must give to his constituency is taken up to a very large extent, perhaps, as much as 90 per cent, by the pressures of the very real housing crisis which exists and which affects both those with no homes and those who are homeless in that they are extremely and dangerously badly-housed. There is danger to their physical health and psychological welfare. That is one phase of the problem and another is that tenants of corporation houses feel in very large numbers that the present system of differential rents operates inequitably. That feeling is particularly strong—universal—among those on the so-called B scale but it prevails among other tenants also. Here, again, I shall not enter into details on that but I should like to express the hope that the Government will hold an inquiry, with adequate sociological participation, into, in particular, the present operation of this differential rents system. The differential can in itself be defended in principle but I think its present operation comports grave inequalities. That is something which most Dublin Deputies are well aware of and I hope the problem will at least be investigated.

What is most alarming about this housing situation is the extreme complacency of—I will not say the Government because I have already said that there are reasons to believe that units of the Government are functioning with a peculiar autonomy which one, perhaps, would not have expected from what is supposed to be the Government of a single party—but of the responsible Minister in this matter who responded to questions on this subject, first of all, extremely perfunctorily with monosyllabic answers which were often meaningless. The Minister for Local Government showed an extraordinary inability to put his hands on statistics which were asked for except statistics relating to the Tallaght area about which he is singularly well informed. His whole approach to this was summed up in a complacent statement which he made to the House that things had never been so good in housing.

That statement by the Minister for Local Government should be brought to the attention of everyone in Dublin because there are a great number of people in this city who have a very different impression indeed. I hope the Taoiseach in his reply to this debate will not leave out the question of housing altogether as he has done before but will say something about it, show some sign of a realisation that a real crisis exists, a crisis which may erupt in this city. A Dublin Deputy has a right to give warning of that and should give warning that if attention is not given to this in time, if it is treated with this kind of complacency, it may erupt—I will not say into a social crisis; it is already a social crisis —but into that kind of open social crisis which does necessarily attract the attention of government. The Government will then, if that happens, complain about lawlessness and speak about the necessity for strong methods but if that does happen it will be the result of the Government's negligence and complacency as expressed in the extraordinary answering here of the Minister for Local Government on this subject.

The third subject on which I want to speak and on which I should like to develop my thoughts a little is that of the crisis in Northern Ireland and in this country generally which came to a head in the month of August but which still continues and which is likely to affect us again. I want to devote considerable attention to this because I feel that the underlying gravity of the present situation here in relation to this is not sufficiently understood. We have given a lot of thought, and rightly, to the situation in the north itself and, of course, we have debated that. I will not go back to the position before our debates here in October. It would not be proper that I should. But, I do want to look at what has happened since and I want to look in particular at how our Government have treated this matter because I think that with the simmering violence in the north and with the tendencies to a responsive violence on this side of the Border we are facing dangers which, if they are incoherently dealt with, may lead to disaster—I should like to weigh my words here; I do not want to enter into anything in the form of self-fulfilling prophecy as some have done on this subject—but there are serious dangers—we must all hope they will be avoided—which could even lead to the possibility of civil war in this island. That is a reason for looking very attentively at the question of whether this issue is being coherently, competently, responsibly handled by our Government in such a way that we can have full confidence that everything that can be done to avert that danger will be done.

Let us see, then, if that is so. Perhaps, no Government in our history were offered so good an opportunity of uniting the Dáil and the electorate on a great national issue as this Government were offered in the crisis of this summer and autumn. Both Opposition parties scrupulously refrained from embarrassing the Government during the crisis. Both, indeed, supported what they believed to be the essentials of Government policy, at least, the key element of renouncing the use of force as expressed in the Tralee speech which we welcomed and would still welcome to the extent to which it could still reasonably be held to be Government policy—an extent which is I fear very small. The Government had a great opportunity, not certainly of uniting the country in present circumstances— no Government however wise or well led could have that opportunity now— but an opportunity—and this is important too—of uniting the Dáil and the electorate on the basis of a reasonable approach not only to the immediate problems but to the problems that underlie the territorial division of this island. The importance of that does not seem yet to have been sufficiently grasped.

The Government could have begun to lay the foundations for better relations between the major communities of this island, the great religious groups, those better relations without which there is no conceivable hope for eventual unity, once force is ruled out, if force is really ruled out. This Government could have tried, with full support from the Opposition parties in this House—support which would have been generously forthcoming—to quench the fires of sectarian hate and fear which still smoulder so dangerously within that area, with the sparks drifting across the Border. They could have set their faces effectively against adventurism and the mischievous, lightminded bombast that has so long bedevilled this problem. They could have tried to reach the majority in the north with the message that no one of any importance in this part of the country has any intention of trying to coerce them or to trick them into joining with us. The Government could have availed themselves of every opportunity through television and otherwise to reach that population with a message understandable to it and directed to it. Such opportunities have presented themselves. I am sorry to say they were not taken. The Taoiseach could have spoken on Ulster television and did not do it. I do not know why he did not do it. Perhaps, he will tell us some time. The Government could have reinforced that message by, for example, renouncing in clear terms, as they were urged to do, the use of anti-partition propaganda directed to third parties, a form of propaganda which can have no meaning in relation to unification unless the will of the majority in the north is in some way to be circumvented. If it is not to be circumvented, why is one talking to those people out there? What is one asking them to do? Since the will of the majority in the north cannot in the last analysis be circumvented without some form of coercion, whether applied from Dublin, London or elsewhere, and since coercion seemed— seemed—to be ruled out by the Tralee speech, it should have been possible and would have been useful to rule out also anti-partition propaganda directed to third parties. That has not been done. The propaganda has been tuned down in accordance with an orchestration which corresponds to the needs of Twenty-Six County politics and, perhaps, the internal necessities of the Fianna Fáil Party but does not correspond to the needs of the problem itself which require not just a temporary tuning down and tuning up of this kind of propaganda but its complete elimination in a frank and honest manner. More than this, the Government could have ensured that all their utterances on this still explosive subject were responsible, coherent, consistent and visibly animated by the purpose of improving the relations between the major communities—not exacerbating them.

It may be asked, and it would be reasonable to ask, what exactly could have been accomplished if the Government had behaved in that way, a way which would have been supported by this House overwhemingly as a whole. If the Government had acted in that way, would it have ended Partition? Would it have won over, say, Mr. Paisley or Mr. McKeague? Obviously it would not nor would any other policy now accomplish these things. We must not deceive ourselves as to what the bounds of possibility are in this matter. But the kind of approach I describe could have had, and I believe would have had, a calming effect. It could have rendered further violence less likely. It could have made the position of the Catholic minority in the north more secure, especially in Belfast, by reducing the fears which still centre now most acutely on that minority—the fears entertained, quite sincerely, by many Orangemen that the minority is simply a stalking-horse for the ambitions of the Dublin Government.

It is that belief which is in the minds of the tragically-deluded men who go out for the Ulster Volunteer Force and who resemble people who have gone out on similar missions from this side of the Border too. A responsible Government policy could also have helped the moderate elements in the northern majority, the people who would like the Hunt and Cameron reforms to be genuinely worked and who would wish at least for peace to return to their community—and there are a great many of them—and it would have made possible the resumption of a serious dialogue about common problems, a dialogue in which people from this part of the country, representatives of the northern minority and of moderate majority elements in that area could all take part with a view to making peaceful progress more likely and further outbreaks of murder, mayhem and arson less likely.

That is what the kind of policy I have outlined could reasonably be expected to have accomplished, sustained over an adequate period of time, which would not need to have been very prolonged in order to furnish some of the desired results although, of course, it does need to be sustained in a consistent, resolute spirit over a period of years and not departed from under the winds of opportunism or factional difference within a group.

Let us now consider how the Government have actually handled this issue. First of all, they have shown themselves completely indifferent to any national advantages that might be derived from a unified approach by all parties in the Dáil on this issue. The Taoiseach made this absolutely clear in his chilling and perfunctory reply to our debate on 23rd October last when I believe both Opposition parties had gone, with perhaps some generosity, a considerable way to meet him. "Our approach is the right approach," he said, flatly. He concluded: "As far as Fianna Fáil are concerned, we are, as I have said, the party of reunification and so long as the other parties come along with us in that course they are welcome to join us."

We have some small reason to be grateful for that statement. At least it is unambiguous. Fianna Fáil know it all in this matter. They need no advice from anyone else and, though reunification in their hands has made absolutely no progress, as the whole country knows, during the more than 30 years in which they have held office, their leader can still call them complacently "The party of reunification"—no other parties need apply. I believe that a genuine party of reunification would at this time, and for many years—whether we look forward or backwards—be preoccupied mainly with the relations between the major communities, the main religious groupings in this island. The form which history has given to these relations is the root cause of Partition, not the other way round. The Taoiseach would not accept that formulation. His "party of reunification", a party that has not, for many years, given any serious thought to the history of this problem and which I do not believe knows the history of this problem, is committed to the prima facie ridiculous proposition that Partition is the root cause of sectarian hatreds, fears and violence which racked that area for generations before Partition was ever thought of, as Deputy Blaney at least could tell the Taoiseach. Whatever about that, the Taoiseach, or any other rational man, even one who has only looked at the problem in its most recent manifestations and at a superficial level, would have to admit that tension between the major religious groups was the immediate cause at the very least of the most recent violence and that a “party of reunification” would have to give a very high and anxious priority to an effort to reduce such tensions.

The debate to which I refer, the debate entitled "The Situation in the Six Counties", which took place in this House on 22nd and 23rd October last—the only debate on this subject since the events of August and a long-postponed debate it was—provided within itself, by a strange irony, a sorry example of how the "party of reunification" and its leader handle this most delicate matter in actual practice—and, of course, it is practice that counts. It is not lip-service to the idea of tolerance, to the ending of sectarian violence, and so on: that is not what counts. What counts is practice— how this matter is handled in the terms of relations between human beings in this island now.

In that debate, a Fine Gael Deputy from a Border constituency who happens to be a Protestant produced evidence which he held up in this House from the Fine Gael benches over there to show that the local Fianna Fáil organisation in Monaghan exploited sectarian animosity against him as a Protestant in order to defeat him electorally in very much the same way—though of course on a much smaller scale, necessarily—as the Unionist Party has historically exploited this kind of feeling and this kind of fear among Protestants for the benefit of its particular kind of conservatism. That episode in itself might not be important. It might mean no more than that a few local party hacks had misbehaved themselves as perhaps some people do in every group at various times perhaps in the belief that when the party leadership was using— as it was then—a Red scare in the elections, pretending that people they knew not to be Communists were Communists it might be permissible for them, for this little organisation in Monaghan, to use a little Orange scare, pretending that a Fine Gael Deputy who happened to be a Protestant must be a sympathiser with the B Specials, as he was not, and as of course they knew him not to be.

If it had been just a local effort of that type it would be a mistake to take it too seriously I quite agree, but what was significant in relation to this matter, a small thing in appearance but a very significant thing in reality, was the Taoiseach's reaction or lack of reaction. He failed altogether in his reply to that debate to react to Deputy Fox's revelations which appeared to many of us as disquieting. He made no reference to them at all in his speech closing the debate on the "Situation in the Six Counties", which was the official title of that debate, a speech in which he found time to recite a little rhyme about a pussycat and generally to handle the closing in a rather leisurely way. He did not find time to refer to this matter.

The leader of a party of reunification, a party who were in earnest, a party who were truly concerned about the strained relations between the religious groups, the strained relations which as we all know are at the heart of this matter, at least now, would have shown himself, especially in the context of a debate like this, most sensitive and vigilant in relation to the kind of disclosure which was made by Deputy Fox. Such a leader would have realised the implications of the transaction referred to by the Deputy and the way in which they would be interpreted by many north of the Border.

Realising that, he would at the very least have given some indication—it would not have cost him very much— that he would look into the matter and that, if the facts were as represented, he would ensure that nothing like that would ever happen again. That, I think, is the minimum acceptable response from a leader concerned with the importance of this problem to a matter of this kind. But no. The leader of this party of reunification did not think the matter worth referring to at all.

I infer from that—and I infer it with sincere regret—that the Taoiseach and his party are not really interested in the tensions between the major religious groupings or in the need for reducing them. I do not see what else I can infer. I infer from that in turn— and I think this inference is inescapable if we accept the first one—that the leader of the party of reunification is not really interested in reunification. Possibly some members of his party and even of his Cabinet are of the same opinion, though reaching that conclusion by a very different road from mine.

The Minister for Agriculture and Fisheries, for example, is one. I happened to be in Belfast at the time he made his now celebrated Letterkenny speech to the effect that the use of force could not be ruled out in certain circumstances. As it happened the people I was speaking to in Belfast belonged mainly to the minority. I was addressing a gathering organised by the Christian Brothers Past Pupils Union. I did not find anyone in that gathering at that time who seemed to welcome the Minister's offer to rescue them. I did find, in fact, that some of them felt statements of that kind only made the very difficult position of the minority more difficult by making the Unionist hardliners feel that their own siege-mentality was justified.

Of course members of the minority, certainly in Belfast, were acutely conscious of the fact that any attempt to rescue them could only put them in far greater and more instant jeopardy than they are already. They therefore were very conscious—conscious in their persons and conscious in relation to the security of their families and their own lives—of the profound irresponsibility as they saw it, and as I see it, of that statement, This was borne out on the following day when the Belfast Newsletter led off its editorial by announcing that the statement by the Minister proved the necessity for the Ulster Defence Regiment which some have referred to as the continuation of the B Specials under another name though, of course, it does differ in some important respects from the old organisation.

It was certainly in that spirit that the speech was received by the majority in the north, not just the Paisleyites who are not really the majority but by almost all sections of Protestant and Unionist opinion, including the most moderate sections of that spectrum. Quite certainly and quite obviously the Minister does not care about that. Does the Taoiseach care about it? Does he care that another member of his party, Senator McGlinchey, who I believe is quite closely associated with the Minister for Agriculture and Fisheries, advocated in another branch of this Oireachtas the use of foul means or fair, as he did in the Seanad on 4th December? Does he care that the Minister for Local Government once, as Senator McGlinchey implied he did also——

The Chair would like to remind the Deputy that it would be unusual to attack Members of the other House here.

I was not attacking the Senator. I was quoting him. Perhaps it amounts to the same thing.

It has the same effect.

I will not refer to the Senator again.

I wonder is the same ruling given in the Seanad? I would not think so.

It is given but not always obeyed.

In any case, a Leas-Cheann Comhairle, I respect your ruling and will with pleasure refrain from further allusion to the individual in question. Does the Taoiseach care when the Minister for Local Government wants to undo, as he says, the wrongs not merely of 50 years but of 300 years? They want to go back I think it is a little more than 300 years. Whereas the Unionists only want to go back to 1690, apparently some gentlemen over there want to go back to 1641 or perhaps even earlier than that.

1603, I think.

That is probably it. They want to undo the Plantation of Ulster, presumably by uprooting the descendents of the population then planted, that is to say, the Protestant population of the north. I am not suggesting that anyone takes these threats qua threats qua suggestions of actual military intervention very seriously. That is not the point. I think they deserve to be taken seriously to the extent that they affect the position of the majority and the minority in the north. They affect them adversely and they increase tension but I do not think that as actual threats of intervention now they are taken altogether seriously.

The point is that, while gentlemen like this remain in the Cabinet or in the Oireachtas, and while they continue to be vocal on this issue in this way, the Taoiseach's more moderate utterances on this same question—and I am glad to say at least that they are more moderate—are completely discredited. It is of no use for any of us any more to tell people in the north, as some of us were telling them, that the use of force is ruled out by all parties in the Oireachtas. It is of no use to say the Taoiseach has reiterated the non-coercion principle of his Tralee speech, since that is cancelled out by the presence of gentlemen who say something quite different. It is of no use trying by some tortuous process of semantics to pretend to reconcile what the Taoiseach said in Tralee with what the Minister for Agriculture and Fisheries said in Letterkenny. This is not a question of a fitting together of formulae so that some common ground can perhaps be inferred or be patched up in some way. That does not work in such matters, such extremely delicate and explosive matters as we are dealing with here.

The spirit of the two speeches and the emphasis of the two speeches are so far apart that they discredit one another and discredit a Government containing such disparate voices on this absolutely vital subject which affects the future of our whole island and may affect—let us not over-dramatise it— in certain conditions even the lives of ourselves and our families and indeed many people. From this the inference is necessarily drawn—from the presence of these conflicting voices in the Government on this subject—that the Government cannot be taken seriously on this subject.

I suppose all Opposition speakers from time to time like to say the Government cannot or should not be taken seriously, but we find it alarming as citizens when we find that, on a subject like this, this statement is really true, that there is no central animating purpose in this Government, that nobody knows what the Government or parts of the Government will do in some future crisis. When we know that future crises are probably brewing, the implications of this are extremely dangerous.

There is a wing of the Government which holds—and its opinion has been most candidly expressed outside this House I am obliged to say—that force is morally and politically justifiable if it can be applied in such ways as to offer any hopes of success. We know that view exists. Circumstances may well occur in which to minds like these such hopes of success might seem to present themselves. What would happen? Will we be brought to the point, during the early 1970s perhaps, when we have to consider, as people do in some countries whether the Minister for Defence or the Minister for Justice at any given moment belongs or does not belong to the physical force wing of this party of reunification by various incompatible methods?

I will not dwell on that, but the more dangerous it is, the greater the importance that the Government, in whatever crisis may present itself, should be one whose utterances and whose leader's utterances should be credible and command confidence. They should give an effective lead to the overwhelming majority in this part of the country and should be regarded as responsible and reliable indications of intent and settled policy by both the majority and the minority in the north. That notoriously is not the case at the moment and it cannot be as long as the Minister for Agriculture and Fisheries, Deputy Blaney, and the Minister for Local Government, Deputy Boland, remain in the Cabinet. It is extremely dangerous for all of this country, the majority and the minority, north and south, that this should be the case. We believe that while these people remain in these positions, particularly Deputy Blaney, no one having any serious realisation of the problem or who has understood its history and character and present implications can support this Government.

This debate gives us an opportunity, from the economic point of view, to look back and review the developments of the current year and at the same time look forward to next year and try to assess the likely course of developments, try to foresee what problems or difficulties will arise and, if possible, try to propound sensible and wise courses of action. The year 1969 has been a reasonably good year from the point of view of the economy but it has not been as good as it could have been. The volume of total national production has risen by about four per cent which is in line with what we have been achieving over the last three years. The average for the past three years in the growth rate has been 4½ per cent. That is fairly good by world standards but could be a great deal better and it would have been a great deal better if it had not been for some unfortunate occurrences. Industrial output has been particularly buoyant during the year. Production in manufacturing industry in the first quarter was upset by the unfortunate dispute which took place in the early part of the year. However, in the second quarter it registered a rise of 11 per cent and that strong, upward surge is almost certain to have continued during the third and fourth quarters. This was paralleled by a very satisfactory increase in industrial exports which to date have gone up by about 20 per cent.

Total exports went up by £34 million and that despite the fact that cattle exports were sluggish during the year. We can look forward with some confidence to their being better next year. There was also a considerable volume of activity in building and construction. Agricultural production was higher although the extent to which it increased is not yet available. In the year to mid-1969 the number of persons employed in the transportable goods industry was up by about 10,000 and it is likely that the numbers in all other sectors also increased with, of course, the exception of agriculture.

I want to underline as firmly as I can that our economy is basically sound and that it is an expanding economy. As I said, we are achieving a reasonable rate of growth; our external reserves are adequate for our purposes; we are achieving an increasing rate of investment and our exports are steadily increasing. The problems we have stem from growth and from expansion. It is important that we should keep that in mind. We could solve all our economic problems simply by stopping growth, by turning off the tap. That was done before but it is not our way of doing things. To do that means hardship, unemployment, distress and emigration. Our policy is to keep pushing up economic growth to the limit of our resources. That calls for very accurate judgment to determine precisely where that limit is. It would be wrong and unjust to deny our people the highest level of economic growth we can obtain. That would mean denying our people jobs, houses, levels of incomes and standard of living to which they are fully entitled. On the other hand, there is an equally grave responsibility on us to keep the economy sound for our people, to prevent it racing too far ahead of its real potential, because in that way we would also do an injustice to our people by bringing about serious disruption, hardship and unemployment. How are we to achieve this balance? How are we to determine the point when real growth has ceased and something which is——

——froth has taken its place? I suggest we can only do this by sound planning and, perhaps, more important by accepting the discipline of our own economic plans. Our economic planning techniques are reasonably good. Certainly comparing them with other countries in the free world which adopt economic planning. They are reasonably satisfactory. Admittedly, they could be improved and we are seeking at all times to improve them.

We can however make fairly realistic projections as to what is going to happen for at least 12 months ahead, perhaps more, provided, of course, that no serious disruption takes place and nothing happens that would upset our basic assumptions. We were able to forecast fairly accurately what would happen during 1969. Despite the fact that there were a number of disruptive factors, the balance of payments will turn out to be practically as we predicted. It was a fairly good year, though it could have been better. We can, on the basis of certain assumptions, make equally valid projections for 1970. It is already clear at this stage that four principal characters will occupy the centre of the economic stage during 1970: prices, pay, Government expenditure and the balance of payments. We have a great deal of ground to make up during 1970, and I hope to suggest ways and means whereby we can do that.

Perhaps, the most important thing during 1970 is to keep prices under control and to try to restore sanity on the pay front. I think there is a moral obligation on employers and on the unions to try to bring back some semblance of normality into the pay situation. The level of the demands which are being made in different sections today cannot be described as realistic, and it is quite illusory for any group to think that by getting in first they will do better than everybody else. As soon as any one group succeeds in jumping the gun, they are simply giving inflation another push forward. What is needed in everybody's interest is the restoration of order and a complete deflation of the unrealistic expectations which prevail in practically every area.

I have no wish to be partisan on this subject of pay. I can understand the attitude of the ordinary worker in this matter. In an inflationary situation he has a very real fear of being left behind and he seeks in his demands to anticipate further inflation and to anticipate excessive claims by other groups who come after him. In addition, increasing prices push him to seek compensation for the inflation that he sees taking place all round him, and these two pressures on the ordinary working man are very real and very understandable.

The question is, how are we to break out of this straitjacket, because if we do not right the situation by wise and sensible measures, it is certain that the situation will right itself ultimately by its own harsh, inbuilt mechanisms. Is it possible that some re-assurance to the worker, some lessening of the pressures I have mentioned should be the first step? We could make significant progress if the trade union movement could be persuaded that an orderly progression can take place, that real pay increases and national production can march forward together, with price stability and steadily improving standards, which are real and which will be maintained. There are three main parties involved in this: the Government, the trade union movement and the employers. The Government are ready to take part in any discussions with either of the other two parties that would seem to help towards bringing about this situation.

There is an aspect of this inflationary situation to which I should like to direct the attention of the House— the position of the lower paid worker and the weaker sections of the community. In an inflationary situation their position becomes increasingly hazardous. The ICTU and the Government made a determined effort in 1969 to do something about the position of the lower paid worker. I had hopes that 1969 would be the year of the lower paid worker, and the Government are anxious that this development should not be allowed to peter out but rather that it should gain momentum until the time comes when we can finally say that the problem of the lower paid worker and the weaker sections of the community has been solved. Unfortunately, it does not give any appearance at the moment of solution. Indeed, it does not seem to be commanding from the people who should be concerned about it the attention it deserves. It must be an integral part of any attempt at a prices and incomes policy. The Government are ready and anxious to enter into any discussions with the Congress or the employers which might be useful in getting some significant continuing progress.

I said the balance of payments would be one of our main preoccupations during 1970. Perhaps, we should look at exactly what did happen during 1969 on the balance of payments front. However, before doing that I want to make this general comment, that it would be most unfortunate if we were to allow ourselves to drift into a state of hypnosis about the monthly trade figures. The figures in any particular month are of very little importance in themselves. What matters is the underlying trend and that can only be studied over a period of time. Any one month's figures can be subject to a wide range of random influences such as exceptionally heavy purchases of capital equipment, the bunching of shipments of commodities, an industrial dispute and so on. Any of these things can completely distort the picture in any one month. There was a very interesting illustration of that in the last two months, October and November of this year. There was a considerable upsurge in the import excess in October.

As I pointed out at the time, that increase in the import excess was almost entirely due to the importation of capital goods and the raw materials which we need for our industry. Nevertheless, it was a very considerable increase and it had to be taken note of as such.

The November figures have just been published and, in spite of what a lot of people anticipated would happen, the figures for November show a substantial improvement on October. In fact, the import excess for November this year is almost identical with the figure for November of last year. It is clear that one would have been very foolish to have reacted violently, or to have reacted at all, to either of these months' figures by themselves. One might have been tempted to rush into remedial measures as a result of the October figures and likewise one might have been equally tempted to say that the whole balance of payments problem had been solved because the import excess, as illustrated by the November figures, had been arrested.

I want to make the point as clearly as I can that what really matters is the trend, and that can only be identified over reasonably long periods. I believe the balance of payments deficit this year will be in the neighbourhood of the figure of £55 million I suggested at Budget time. For the 11 months to November the import excess increased by £55 million but that disimprovement in the balance of trade will be offset to some extent by higher net receipts from tourism and other invisible items. For the year as a whole the balance of payments deficit is likely to be of the order of £60 million or under. As I have already explained, that is almost identical with the forecast I made at Budget time when one makes allowance for one particular item, namely, the postponement of the sale of aircraft.

When looking at a balance of payments deficit it is important to understand why it came about. The fact is that it is mainly a reflection of the growth and expansion of our economy. In 1969 there has been a very significant increase in fixed investment. The public sector investment has risen and, while the extent to which the private enterprise investment is likely to have risen is not known, certainly it is clear that the total investment in the economy increased very significantly during 1969. Fixed investment as a percentage of national production is likely to have reached the record figure of 22 per cent. It is clear also that the import of capital goods accounted for about 40 per cent of the total increase in imports in the first nine months of this year. It is quite justifiable then to say that the balance of payments deficit which we have, and any problems which arise from it, flow directly from the growth and expansion of the economy and from increasing investment.

We must nevertheless recognise that the balance of payments deficit is a problem which must be tackled. We have been very fortunate this year in that the greater part of the balance of payments deficit has been financed by an in-flow of capital. This can be clearly recognised from the fact that only a very small part of the deficit has been financed by drawing on our external reserves. These reserves at mid-September are only £17½ million below what they were at the same time last year and are adequate by international standards.

What, of course, is significant in this regard is the coming year. We anticipated a balance of payments deficit of the order of £55 million this year. We said it was a large deficit but we were prepared to go along with it in the circumstances of the year. What we have got to decide now is what is going to happen in the coming year. It does seem at this stage that a balance of payments deficit of the order of this year is likely to continue during the coming year. Indeed, the indications are that unless some restraint is exercised on the pay grant it will be considerably larger, and this is the principal problem to which we will have to address ourselves in the coming year.

We have got to increase our competitiveness. We have got to get the economy into the best possible shape so that we can bring this balance of payments deficit under control during the coming year. The Taoiseach yesterday indicated our view as to what should happen with regard to pay during the coming months. This is an attempt by us to lay down a guideline for all concerned. It is an absolute truism that, if the community gives itself or awards itself increases in pay and income that are not justified by the level of national production, those apparent increases very quickly become illusory and are wiped out by the inflation which they necessarily bring in their train. The figure of 7 per cent mentioned by the Taoiseach is, if anything, on the generous side.

It is very early yet to make any prediction about growth during 1970 but it does look as if we can count on a growth rate of somewhere in the region of four per cent. To base income increases generally at 7 per cent in relation to that four per cent is certainly not to be unduly restrictive, to say the least of it. I hope the responsible people who will have to grapple with these problems during the coming months will look on this guideline as an honest attempt by the Government to indicate what is possible. I want to repeat that it is totally illusory for workers to award themselves income increases which are not justified by what they produce. As I said earlier, one cannot expect the worker to exercise restraint in his demands for increased wages if we cannot guarantee him some sort of stability, and the guaranteeing of that stability must be another major preoccupation during the coming year. We shall have to try to halt the spiral and bring about comparative price stability so that workers will be able to get increases in pay which are both realistic and meaningful. That is the overall approach of the Government to this problem and, as I have said, we are both willing and anxious to enter into discussions at any time with any of the other parties to see how and in what way the situation can be improved or what beneficial measures can be taken.

I want to emphasise the importance of what the Taoiseach said about the Minister for Industry and Commerce looking very closely indeed at all applications coming before him for price increases. He will expect that those making applications will have tried to offset by improved productivity and otherwise any increases in costs before coming to him at all. He will also have regard, of course, to the guideline laid down by the Taoiseach in respect of price applications based on increased wage costs. These attempts to bring sanity into the situation are, of course, basically in the interests of the workers, the poor and the weaker sections of the community because, in an inflationary situation, the wealthy can take care of themselves. It is the workers, especially the lower paid workers, who really take the brunt of inflation. I want to remind the House now that in the 12 months to August of this year prices increased by eight per cent. That is a pretty startling figure. It is a figure which must cause us all to devote increasing attention during the coming year to the question of price stability. We cannot possibly afford another year of inflation of that extent.

Government expenditure has a very important part to play in the picture and, from that point of view, 1970 will be a very difficult year. It is, I know, customary for Ministers for Finance, usually after Christmas, in the month of January, to forecast that the coming year will be a very tough year from the point of view of the Budget. I did not do that last year or the year before, but I am afraid I must do it this year. I must warn the House that the situation is such that Government expenditure will have to be kept under rigid control both on the capital and on the current side. Whatever resources we have will have to be very rigidly allocated to productive purposes and many desirable things for which Deputies on both sides will be pressing will simply have to be postponed because, an excessive degree of Government expenditure, would contribute to the inflationary problem we are asking the rest of the community to grapple with. We must play our part and I hope that, when the time comes, we will discuss the Budget in the full realisation of the position. The paramount consideration in 1970 must be to control inflation and we must have regard to the part played by Government expenditure in such a situation.

May I here digress for a moment to deal with two points made by the Leader of the Opposition and the Leader of the Labour Party during the debate? Deputy Cosgrave spoke about a "stop-go" policy. I think he just used that phrase for the sake of using it because it is totally unrealistic to accuse this Government of a "stop-go" policy. We have, in fact, done everything we could to avoid anything in the nature of a "stop-go". Deputies will recall that we resisted the attempts by the Opposition to push us into having a supplementary budget. Deputy Garret FitzGerald in a number of questions tabled to me seemed to be trying to infer that the balance of payments deficit was much worse than I anticipated it would be. He seemed to me to be trying to push us into something premature on the external trade front. Far from having a "stop-go" policy, we have tried to pursue a consistent policy of growth and development, with a minimum of interference, and it is only when the problems associated with growth become menacing that we will take any measures which would interfere with that growth. In so far as this year is concerned, we have been able to avoid any such measures and it is completely unrealistic for Deputy Cosgrave to accuse us of anything in the nature of a "stop-go" policy.

I was particularly interested in what Deputy Corish had to say about the EEC because, like most other Members of this House, I am very interested in the prospects which are opened up for us by membership of the EEC and I am reasonably optimistic about the outcome of the present situation. I was astonished to hear Deputy Corish say he was not too keen on the EEC because it was a "rich man's club" and until such time as he could see that it was prepared to make a contribution to the underdeveloped countries, particularly those in Africa, he would not look on the EEC with a great deal of favour. I do not know where Deputy Corish got his information about the EEC. On that particular aspect, it seems to me, he is totally misinformed.

It was not from Brussels anyway.

No other group of nations is making such a contribution to this dire problem as the EEC countries are. The Treaty of Rome itself provides for the association with the Community of 18 African and Malagasy States. A special fund, the European Development Fund, has been set up to provide finance for measures aimed at promoting the social and economic development of these countries. This fund has been fed with contributions from all the member countries of the EEC. In addition to that, the European Investment Bank, originally intended for investment within the Community only, is now being used to handle projects in these African territories.

The aid by the Community to these associated African nations has been in three stages. The first stage was the five year period from 1957 to 1962; in that period the average aid per year was 116½ million dollars. The second period was from 1964 to 1969 when the average aid per year was 146 million dollars. The third stage is the period 1970 to 1975 and aid will be in the order of 200 million dollars per year on average. That is only the aid given by the Community as such: each individual nation separately makes its own contribution and these contributions have been considerable. Perhaps I should mention at this stage—I am sure Deputies are aware of it—that the figure suggested for aid to underdeveloped countries by the developed world is 1 per cent of national income. In the international table three of the member states of EEC are at the top. France is first with 1.64 per cent of her national income; Germany is next with 1.26 per cent and the Netherlands is third with 1.24 per cent. Belgium comes fifth with 1 per cent.

The record of the EEC countries, both as individual nations and as members of the Community, is very good. Furthermore, during the Community's recent negotiations with GATT it made very valuable concessions to the Third World. I think it has abolished all import duties for its associated nations. Quite recently it has tabled a further offer under the UNCTAD scheme of tariff preferences for further aid for underdeveloped countries.

If Deputy Corish had the true picture and was going to decide this issue solely on the basis of what contributions were being made by EEC to the underdeveloped part of the world, I think he would be into the EEC in the morning.

What has this to do with our problem?

Deputy Corish made quite a point of this.

He made a point of our problem. The Minister is sidetracking the problem.

I am not. I am dealing with a specific point made by the leader of the Deputy's party in the debate yesterday——

He said they were a rich club and so they are.

He said specifically that he wanted to know what they were doing for the African nations. When I am giving the learned doctor this information he seems not to want to hear it.

Make a long sermon about it; go ahead.

I am not at all surprised, because there are so many different viewpoints on those benches, at this attempt by Deputy Dr. O'Donovan once again to sabotage his leader.

On the contrary, we have the strongest unanimous views on this subject. We were right before in 1961-62.

No man in this country has been so consistently wrong in economic judgment as the Deputy, and well he knows it. He was economic adviser to the Government that brought about the greatest economic catastrophe the country ever suffered.

(Interruptions.)

The Minister remembers what I said about it. I got three leaders from his newspaper in one week.

Dr. O'Donovan will get an opportunity of speaking.

I shall reply to it.

I have no newspaper and our party have no newspaper but if the Deputy is not careful we might get out one, one of these days.

I have little to add except to say that the Government, whether pushing on with economic development or taking measures to protect the economy, have one overall objective and that is to protect the jobs and livelihoods of our people and try to increase their standards.

Hear, hear.

That is the Fianna Fáil philosophy, our motivation and our belief. That is the objective we shall set ourselves for the coming year. To us, economic policy has one simple objective—to improve the lot of the broad mass of the people—and any measures we take in the coming year will be designed for that purpose.

I was disappointed with the Taoiseach's speech. He gave us a statistical analysis of the situation but he did not touch on a wide area of Government policy. In fact, when one recalls what he said the only thing that is worth recalling in his entire speech is his prediction of economic growth to the effect that in 1970 production will rise, perhaps, more than 4 per cent and that, therefore, a 7 per cent overall income increase would be tolerable to the economy. That would be roughly a 30/- increase for an adult male. These are the same figures on which the Minister for Finance dwelt just now and he seemed to think that even these figures were over-generous. I do not agree with the Minister in the apparent lightness with which he dealt with our trade figures. They are not good and, while he properly says one cannot judge trade figures by looking at one month's return and that you must take the picture over a period, the trade figures we have had up to date for the past 11 months are by no means satisfactory. He just countered by saying that some of our imports are largely for productive purposes and that there was not an undue percentage of consumer goods.

Perhaps I am old-fashioned but I believe in the simple trading concept that your imports and exports must have some kind of reasonable balance. There was a time when people in this House became alarmed when our trade imbalance was around £100 million. That was regarded as a ceiling which frightened everybody. Now, when the imbalance is rocking over £200 million the Minister for Finance seems not to worry too much about it. On other occasions when our trade figures were a little out of tune the Minister would come in and say that he was not worried because our external reserves were improving and so long as we had money in the bank, even if our business was going down, we had this bank balance to fall back on. Now our external reserves have dropped to the small amount of, perhaps, £17 million which he mentioned.

Dropped very much in real terms.

It is significant that our external reserves have gone down at the same time as our trade figures have shown a very serious imbalance. However, I will come back to that later. Before I forget it, I may mention here that when the Minister for Finance, who would be a kind of key figure in this matter, was saying what we should do to get our economy right he, very significantly, referred to the question of pay restraint. In not one instance did he dwell upon the notion of incomes restraint generally. It was entirely a question of pay restraint. That approach will not be acceptable in our society. I do not think it is a good approach or that it is one that is calculated to get the fullest degree of co-operation from what might be called the ordinary employee or worker in our community. It departs from the notion of prices and incomes control or a prices and incomes policy. There was excessive emphasis on wage control. The Minister did make passing reference to price control but we know that in our society there has not been price control; it has been a completely phoney concept.

The Minister for Industry and Commerce, who is the responsible Minister, has a section in his Department to deal with price control. Yet, if one asks any housewife or any man in the street how prices are going, they will say that every day prices are mounting considerably. There does not seem to be any worthwhile measure of price control. Even similar commodities, proprietary preparations from similar firms, will command different prices in different shops. In that atmosphere it is very difficult to accept the notion that there has been any effective effort made to control prices. One cannot but feel that price control is non-existent here and that prices have simply got out of hand.

I was interested in the contribution made by the Minister for Labour who, apart from the Minister for Finance, would, in our economic circumstances, occupy a very important position now and particularly in the future. I agree with him entirely on the question of unofficial strikes. There is hardly a right-thinking person in our community who would not condemn unofficial strikes. They are childish. They are largely ineffective. Nobody benefits from them. They cause considerable upset to the economy. I was rather confused by the Minister's later statement in which, I gather, he mentioned, in passing, that trade union rationalisation is an essential prerequisite to a prices and incomes policy. I do not know which comes first, the hen or the egg. If the Minister is going to say that he cannot proceed with any question of a prices and incomes policy, if the Government cannot even consider the question, until the trade unions put their house in order, that seems to me to be merely passing the buck, merely trying to by-pass the situation. It is the same mentality as the Minister for Agriculture and Fishery uses—he cannot meet the farmers until the Creamery Milk Suppliers Association and the NFA reconcile their difficulties. This is a not-too-honest approach. I think the Government are merely sidestepping their responsibilities in this matter and trying to throw blame back on the trade unions and saying that they cannot proceed with the matter until the trade unions rationalise the trade union position and put their house in order.

The whole question of trade union rationalisation, desirable as it is, would be helped considerably if it were felt in that quarter that the Government really and seriously intended to introduce some measure of a prices and incomes policy. If the Government showed any sincerity in that direction, it would considerably improve the industrial climate in our community.

I was completely baffled by the statement by the Minister for Finance that the position of the lower paid worker must be an integral part of any prices and incomes policy. I do not know what exactly he means by that, whether the lower paid workers' salaries and wages must be put right before he will embark on a prices and incomes policy. That was a statement which I could not follow.

The Minister for Labour mentioned that world inflation had saved us in the past. That is very true, and particularly inflation in Great Britain. Had Britain not inflated her economy, if inflation had not taken place there to the extent it did, we would be in a very difficult economic position because our trading position vis-á-vis Britain would have run very much against us.

Here again, there is an evidence of failure on the part of the Government to face up to the realities of a difficult situation. When the Minister for Labour says that he cannot legislate for industrial peace, let me say, nobody has ever said one can; but surely one can legislate towards industrial peace; one can do something. Apart from the setting up of a Labour Court some years ago, nothing further has been done that would be conducive to industrial peace. This is a most important matter. There has been no real worthwhile effort and worthwhile thinking coming from our Government on this question of industrial peace.

When we speak of inflation, to ask for voluntary restraint is quite ridiculous. People will spend money as long as they can get it. Yesterday Deputy Fahey said that the people would follow the advice of a responsible Government and responsible Ministers and would exercise restraint. Poor Deputy Fahey wears a pioneer pin. He has never been inside a pub. If he goes to any of the singing pubs all over the country he will realise what voluntary restraint is and what spending is. People will spend money as long as they can get their hands on it, whether it is in a pub or on holidays or anything else. Voluntary restraint is a counsel of perfection. I do not see it operating in this society or in any other society.

I was interested to hear the Minister for Labour expounding his philosophy about western depopulation. He is apparently wedded to the notion that we must prevent rural depopulation on the western seaboard. Coming from a place where emigration has been very high I quite understand that that would be his approach. At the same time we have not heard any pronouncement from the Government on the important question of Buchananism—the Buchanan Report. They have been strangely silent. Apart from individual Deputies who happen to be in areas affected by emigration, particularly those from the west, we have had no official Government pronouncement on this entire question of industrial centralisation. Of course, we have seen industrial centres established in Galway, Waterford, Limerick. On the question of what to do with our population—whether we accept this or whether we will resist and try to prevent, if possible, depopulation of the rural areas—we should like to hear some official comment. The Taoiseach in his speech carefully avoided any reference to that particular aspect of the situation.

I feel our economy is in danger of moving into a serious recession. We have been through all this before. The Minister for Finance, Deputy Haughey, thinks we have been hypercritical, that we have been unnecessarily accusing the Government of pursuing a stop-go policy. I do not think the Government have deliberately pursued a stop-go policy. I think it has been, so to speak, forced upon them by political circumstances. I believe we would have a smoother expansion of the economy if, for example, we had no such thing as elections. I believe political pressures of elections have affected the smooth growth of our economy. We are now passing. I think, through a period which we experienced before. Last March, a warning was issued by the Minister for Finance, Deputy Haughey, about our economy being under strain. He betook himself to Telefís Éireann to make a general pronouncement on the matter. Subsequently, he introduced a Budget which was a nice Budget. It did not suggest that the economy was under strain. It was a Budget, of course, which preceded a general election. Then, during the autumn, during the months of September and October, there were general rumours that we would have a mini-Budget. The economy was very buoyant, has remained very buoyant, but our trade figures were becoming unsatisfactory. Now we have the position where we are, I believe, passing into a recession and where restrictive measures will probably have to be imposed.

I can recall that some few years ago, a somewhat similar set of circumstances arose. Again, political considerations were paramount to subsequent economic developments: I think it was in 1963. Mr. Seán Lemass was then Taoiseach. He submitted a White Paper entitled Closing the Gap. At that time, the very self-same economic arguments were advanced as were advanced today by the Minister for Finance, namely, that expenditure was outrunning production; that we were living beyond our means and that we would have to tighten our belt; we were faced with a balance of payments difficulty and we would have to close the gap between consumption and production. That was in the Spring of 1963. Subsequently, the turnover tax was introduced. A by-election took place in Dublin North-East and, under the agitation surrounding this turnover tax, there was a considerable drop in the Government's vote. At that time, there were two important impending by-elections. Suddenly our economy that had been passing through dangerous circumstances in the spring suddenly, a few months later, was so good that, pending these vital by-elections, it improved to such an extent that the then Taoiseach gave what we termed at that time the “green light” and told, by letter, the ICTU and the FUE and the public in general that the time was ripe for a wage increase to all workers and employees in the community. The FUE and the ICTU met and disagreed. Mr. Lemass got them to meet again and they disagreed again. He got them to meet a third time and a 12 per cent wage increase was agreed to although, at that time, his economic advisers had told him that the economy could not stand that measure of wage increase. But the ICTU had Mr. Seán Lemass across the barrel because he was fighting two vital by-elections which, if he lost, would have meant a change of Government.

Because Fianna Fáil was faced with the threat of being put out of power, the economy—which was "in the red" in the spring—was in perfect condition in the following autumn, so good indeed that we all could go on a spending spree. Of course, we paid the penalty. The credit squeeze of June, 1965, was the answer to the extraordinary non-national behaviour of the then Taoiseach. In June, 1965, the present Taoiseach asked "What happened to my March Budget?" We had a credit squeeze. Our economy was damped down. The general economic advance which we could have expected and which we would have enjoyed had we an ordered forward march in our economy, did not take place. When the Minister for Finance, Deputy Haughey, now says that we are unnecessarily and very improperly accusing him and the Government of which he is a member of pursuing a stop-go policy. I say that we are perfectly entitled to say that the Government have deliberately and for very unworthy reasons pursued in the past a stop-go policy and not only in the past, but at present also. I believe if the occasion arose tomorrow morning they would do exactly the same thing. I know all Governments do that. I suppose they tend to do it. All Government parties when they are speaking from that side of the House will wear rosy spectacles and say the economy is better than it is. We on this side will probably go the other way and say it is even worse than it is. That is the tendency in parliamentary practice, I suppose, in most democracies.

It is quite proper for the Minister for Finance to look around with an innocent expression and say: "We never did anything like that. Do not accuse us of ever pursuing a stop-go policy." A stop-go policy is the bane of economic development in every country in the world. I do not know if there has ever been a case of a Prime Minister more deliberately, more wantonly and more brutally moving into a Parliament to put the whole economy of the country in pawn to preserve power for himself and his party.

When I say that we are on the verge of recession at present I am speaking in good company. The last report from the Central Bank gave ample warning. The report of the Economic and Social Research Institute of September, 1969, states on page 1:

Allowing present trends to continue means running the economy with no safety margin. On the other hand, further restrictive action on top of the monetary tightening already undertaken would inevitably carry the risk of damaging confidence and reducing the rate of investment. The authorities would be helped in their choice if there were to be any genuine evidence of restraint by the community at large in claims for pay increases, higher guaranteed prices for agricultural products, or wider profit margins.

That suggests restraint in a much broader concept than the restraint suggested by the Minister for Finance when he spoke here today and dealt solely with the question of wages. That is practically suggesting a prices and incomes policy. A prices and incomes policy is part of the policy of the Fine Gael Party and was first promulgated some few years ago. I admit a prices and incomes policy has had a difficult "go" in Britain and I admit it is not an easy matter to put into operation. It is a more correct approach than a mere question of wage restraint which seems to be the sole notion in the mind of the Minister for Finance.

Again to emphasise the fact that all is not well at present in our economy, I want to quote from page 18 of the same publication:

As discussed in previous issues of OEC, we feel that the short-term damage to the balance of payments of rapidly increasing earnings and domestic prices have frequently been exaggerated. However, there can be little doubt that a prolonged continuation of cost and price increases which are faster than those in other countries must ultimately have an adverse effect on exports, leading to a situation in which the apparent real standard of living must be reduced, either through devaluation or a period of severe deflation. Tolerance of rising prices and large deficits for a number of successive years makes such a situation both more likely, and, when it comes, more painful. Rising pay and prices tend to lead to the creation of an inflationary psychology, in which the general expectation of increases becomes a self-fulfilling prophesy as the process accelerates. External deficits imply that the society is living, and the economy expanding, at a rate in excess of that supported by the economy's own resources. Once this excessive level has become accepted as normal, the adjustment back to a supportable level can be both psychologically and politically difficult, as recent experience in the United Kingdom has demonstrated.

That paragraph is basically sound. It emphasises one aspect of inflation which has been largely overlooked, the psychological aspect, the fact that when prices become excessive, when there is a lot of money in circulation, and people feel the value of that money is falling month by month, there is an inevitable tendency to excessive consumer spending. If that is not met by a corresponding production, first our exports fall and then the economy goes haywire. We are tending in that direction at present. It is not to be forgotten that, while we had a 4 per cent growth rate in the past year, and it is projected that we will have a 4 per cent increase in the coming year, after the 1965 recession, for which we have ourselves to blame and not an outside influence, our growth rate sank for two or three years down to 1 per cent.

The Taoiseach mentioned the rising cost of living and the consumer price index increase of 8½ per cent. I believe the pressure exerted on the ordinary person in society is probably in excess of what is revealed by this figure, this calculated figure.

Hear, hear.

If you examined that figure and turned over in your mind how it was arrived at, you would come to the conclusion that in such a society as we live in here, it understates rather than overstates the rise in the cost of living.

As I said, I was disappointed at the Taoiseach's speech. One would have thought that he would have approached the state of the nation in a broader fashion than he did. It seems to be becoming the fashion that the Taoiseach comes in and says the least possible, awaits the comments of the Deputies and then chooses what he will say in his winding-up speech. It would lead to a far better discussion if the Minister for Finance had touched on the broader aspects of our political and economic life rather than to have given a few figures that he had culled from or which had been handed to him by the Central Statistics Office.

We are expected to become members of the EEC by 1972, according to recent pronouncements of the Minister for External Affairs, but most of us have only vague notions as to what this development will mean. There is a general idea that it will help the farmers but that it will be tough enough on some of our industrialists. For some years we have been providing adaptation grants to allow industries to equip themselves for this contingency. Some articles on the subject have appeared from economists like Deputy Garret FitzGerald and others but I am not aware of any comprehensive publication from the Government in regard to what the realities are likely to be when we enter the Common Market. Deputy Corish suggested that the Government —I presume they have the necessary information at their disposal—should issue a White Paper or some other document to tell us what we are likely to meet and what the difficulties are likely to be, as well as the opportunities when we enter the Common Market.

We will be one of ten nations and we will be one of the smallest nations and we are facing the situation as the weak man of Europe. I already mentioned the consumer price index. Prices here have advanced more rapidly since 1960 than they have in any other of the ten countries which we propose to join. Our gross national product in real terms has expanded more slowly than any of these ten countries. Our personal income is lower than in any of these ten countries and, finally, our housing unit production per 1,000 population is lower than in any of these countries. In those circumstances it is desirable that the Government should issue a comprehensive study about the difficulties which are likely to face us when in 1972 we find ourselves members of a very large, highly-industrialised economic community which Deputy Corish chose to call a rich man's club. If it is a rich man's club, are we to be the poor relations?

It is regrettable that in this annual stocktaking the Taoiseach had not one word to say about the Common Market although during the last 12 months he has been deluged with questions on the Order Paper. Neither did he mention the word "Buchanan" nor the word "Mansholt" nor did he mention the Devlin Report which was one of the most expensive reports ever produced. I understand that all they have done with the Devlin Report is to fire it back to the various Departments for their comments. Even the question of parliamentary reform, which would naturally follow up in the context of closer thinking on the Devlin Report, was not dealt with by the Taoiseach. We have a considerable amount of public expenditure on semi-State bodies and the degree of public accountability of these bodies has come in for comment in this House and has been adverted to by the Committee of Public Accounts on many occasions. This was a matter on which the Taoiseach or the Minister for Finance might have been expected to say something but that subject too was by-passed.

In regard to housing all that was said from the Government benches was that we sold more cement. Everybody is aware of the difficult housing situation in Dublin and it is only right to point out that, despite all the Government's claims to be making an extra effort towards the house-building programme, the tendency in recent years has been —while there may be something to be said for it from one point of view, it is questionable from a social point of view—to rely more and more on building houses through the mechanism of grants and aids. The percentage of State money being allocated to local authority housing has not kept pace. I know it is tempting for any Government to provide money in the form of grants to somebody who will get the major part of the cost of the house through a building society, a bank or an insurance company, and then take credit for having built the house. Financially it is a far more difficult problem for a Government to provide a bigger percentage of the money which necessarily they must do when it is a local authority house that is in question.

The tendency in our financing of housing has been to switch from local authority housing to grant-aided housing, which means we help more and more the middle-class and perhaps the upper middle-class, and those who are absolutely unable by their own resources to provide a house are being neglected. This is a trend which is socially undesirable, but it is the present thinking of the Government and the Minister for Local Government.

It is not, as the Deputy well knows.

In your own publication, Housing in the 70's, it is specifically stated, that the Government are coming to rely more and more upon private agencies and private building to provide houses.

The NBA are building a very large number of houses for local authorities in Limerick and Cork.

The NBA have not made a great impact on building as yet. In many cases the NBA are building houses to be rented at economic rents. I am speaking about local authority houses which are subsidised.

The National Building Agency built 700 houses for Limerick Corporation and over 1,000 for Cork Corporation, which the corporations are renting under their differential rents scheme.

They built Ballymun, too.

The returns for the country as a whole show the emphasis has been on grant houses and that local authority housing is being pushed aside. This enables the Government to produce favourable statistics and to say that they participated in the building of so many houses. It must be remembered that in the First or Second Programme housing was described as a social expenditure. In my own constituency in South Tipperary in one year——

The Chair would point out to the Deputy that details which would be relevant to other Estimates are not appropriate to the Taoiseach's Estimate.

Coming back again to the question of inflation, about which the Minister for Finance, Deputy Haughey, was so concerned, I think the Government are not completely relieved of responsibility in this matter. Government expenditure itself has contributed in large measure to inflation. I do not know what inflation means to the average citizen. To the average housewife, if she thinks of it at all, I suppose it means more for her groceries. I do not know what it means to the economist, probably something more sophisticated. As good a definition as any is too much money chasing too few goods and services.

That is a journalist's definition, not an economist's.

I presume it will do for most Members of the House.

It will not do for me at all. I have another definition.

I cannot devise a definition to suit everybody.

The Chair would be willing to listen to various definitions at the appropriate time.

Ask the housewife in Dublin. She will give you the answer straightaway.

I think this is as good a notion as any other, that we have inflation when production remains static——

Prices are going up.

——and there is too much money in circulation. The average person thinks that money is the kind of stuff you jingle in your pocket. That is only a fraction of what money is. We have only £130 million worth of that. Money is really what is entered into a ledger in the Central Bank and in our commercial banks, and it is nine or ten times that amount.

Something produced by the printing press.

Money is nothing more than Exchequer bills, bank credit and even the guarantees we pass here in our legislation raising the limit to which semi-State bodies can borrow from £5 million to £10 million.

That is finance.

That is more effectively money, because it is big money, than the pounds, shillings and pence we carry around in our pockets. This is something over which we have no control. The Fine Gael Party emphasised the importance of Central Bank control of the issue of credit. The Central Bank has not yet devised a system whereby they can control the commercial banks. In the last year the credit issue exceeded the recommendations of the Central Bank. Not alone did our ordinary commercial banks disobey but our Government disobeyed. There is the question of control of the commercial banks, not to speak of the moneylenders, whom I suppose we may hardly mention in this House as the matter is sub judice.

The danger of inflation in any society is that it induces a sense of euphoria. You sense that euphoria emanating now from the far benches. Various people appear here who are certainly euphoric. When Deputy Fahey was talking the other night he was suffering from a euphoria of inflation. He was under the impression that we had never had it so good and that all this wellbeing emanated from and was due to Fianna Fáil.

Inflation is the economic sore of every society in the world. We have had two or three doses of it here and we are facing another dose now. It has serious and detrimental internal and external effects. Internally, it induces speculation. The chap who has got money and who is a member of Taca may be in a position to get good advice in this respect.

I should like to point out to the Deputy that Taca no longer exists. It is now the Fianna Fáil Fund Raising Organisation. It is a legitimate political fund raising organisation.

I am delighted to hear about the demise of Taca.

I was dealing with the effects on an economy of uncontrolled inflation. First of all, I said it led to undesirable speculation. Those in well-organised trade unions can agitate and keep up with the increased prices attending inflation but the pitiful fact, as the then Deputy Dillon frequently used say, is that the rich get richer and the poor get poorer. The sufferers of inflation are those who retired on small incomes feeling they could spend the rest of their days in comfort. These people are virtually robbed by a Government which allow inflation to go on uncontrolled and in the end they have to go to the home assistance officer for help. All too often these people find the value of money melting in front of their eyes. The curse of inflation is that we are killing the weaker sections of our community who are unable to protect themselves.

I recognise that every Government, every insurance company and every bank have a vested interest in inflation. It suits those concerns. It is because of inflation that we have these large buildings belonging to banks and insurance companies on every street corner. They have been built on inflation.

There are also external dangers from uncontrolled inflation. Our prices go too high because our production costs are too high and the result is that we cease to be able to export in a competitive fashion. In an open economy, such as ours, the next thing that happens is that our external reserves are called upon to balance our falling commercial trade. This is a natural corollary. Despite what we may hope to gain from invisible exports, tourist remittances and capital inflow, the time will come when our external reserves will be exhausted and we will have balance of payments difficulties.

These are the serious internal and external matters which arise from uncontrolled inflation. On occasion we have deliberately induced inflation for base purposes. It is because of that that I take strong issue with the innocent approach of the Minister for Finance, Deputy Haughey, in trying to disclaim all notions that his Government have ever followed a "stop-go" policy or would ever hear of such a thing.

Failure to deflate in an inflated economy can mean the possibility of devaluation. As far as I can judge we have a peculiar system here. We have managed to preserve the value of our £ vis-à-vis the £ sterling by keeping a certain amount of money abroad to act as a guarantee. On the other hand, we have allowed the value of our £ in our internal economy to be steadily eroded. I imagine this is less likely to happen in other economies because the internal and external value of money rises and falls together. If there is inflation in America the dollar moves with that inflation and the same position is true with other currencies. I am not an economist, and I have never had any economist clarify this for me. Perhaps Deputy Dr. O'Donovan, when he speaks, will throw some light on this.

We have preserved the value of our £ vis-à-vis the £ sterling by maintaining our external reserves, but we have allowed it to be eroded as regards the purchasing power within our own 26 counties. The brake which other countries have by moving simultaneously inside and outside their frontiers does not seem to apply here. We have been able to play willy-nilly with the value of the £ here.

One of the reasons is that we are a relatively small country.

Perhaps that is a factor. The reason that this inflation has not hurt us more economically is because Britain has, over the years, inflated almost parallel to us. As she is our major trading country we have not felt that impact, but will that situation continue in the context of the Common Market?

Will a situation ever arise in which society as a whole will demand honesty from Government and say to Government: "We want you to do your duty and preserve the purchasing power of our money when we get older and retire". So far no Government have listened to that cry because the numbers affected for ill are less vocal than the organised young who can make their presence felt and agitate for increased wages to protect them against inflation. Similarly, the well-advised professional man, the financier and the business man can protect themselves against the falling value of money by buying real estate or investing in other types of property.

There is a failure by the Government as a Government to present to the nation and to the outside world a proper picture of collective responsibility. This has been dealt with at length by Deputy Conor Cruise-O'Brien, particularly in respect of the situation in Northern Ireland. We had a long debate on this, in which I did not personally participate, but I read the Taoiseach's now famous speech. I also read some of the extraordinary vapourings of the Minister for Agriculture and Fisheries. There is grave risk of our position here vis-à-vis Northern Ireland being worsened and bedevilled by intemperate and ill-considered statements, particularly by Deputies of the Fianna Fáil Party who hold ministerial rank and whose utterances, therefore, tend to command perhaps more attention than do those of an ordinary Deputy. Here is one field in which there should be unmistakable evidence of unity of thinking and collective responsibility. These have been lamentably absent.

Fianna Fáil calls itself the party of reunification. I have never accepted that they are. I believe they are quite happy with a partitioned Ireland. They are in government. They believe they will be in government for the next 20 or 30 years. They have been there for a long time already. Why should they rock the boat? They are as comfortable here in government as the Unionists were in the north until the Civil Rights Movement started. Had there been real sincerity of purpose surely they would, down through the years, have done something of a practical nature to preserve the picture their former leader described as an essential prerequisite to a better understanding between north and south and ultimate unity, namely, a unity of hearts.

On the contrary, we have been moving away steadily. First, we put up an economic wall. Then we put up a cultural wall, and then we put up a legal wall. I do not know how many walls we built. An inward-looking 26 counties forgot our flag was green, white and orange and thought it was only green.

It was the other fellow's fault.

That is the typical approach. It is always the other fellow's fault. The other fellow must come in under our conditions; he must do like us; he must think like us. I believe the Fianna Fáil Party is the party of Partition just as much as the Unionist Party is the party of Partition in the north. There are powerful political and vested interests north and south of the Border who want to preserve Partition.

It was the Deputy's party engineered Partition.

Our party produced a ten-point plan. It was the first party to come out openly and honestly. Fianna Fáil are trying to dig with two feet; there is nothing more dishonest. The party is trying to ride two horses in different directions simultaneously.

It was the Treaty started it.

This House decided unanimously that the question of using force vis-à-vis the north was out. Yet the Minister for Agriculture and Fisheries in the Fianna Fáil Government is running around the country advocating force under certain circumstances. There are cartoons in our national newspapers portraying the Minister trotting across London with a gun sticking out of his pocket.

That was Deputy Donegan.

I recognise that these cartoons are for home consumption. Fianna Fáil describe themselves as Fianna Fáil, the Republican Party in brackets. This is a hangover from "Up the Republic". It is meant for home consumption, but it is damaging. It is open to misinterpretation north of the Border. It is high time this irresponsible behaviour on the part of the Minister for Agriculture and Fisheries should cease. Now that he has finished his fight with the farmers he is taking on the B Specials, or whatever crowd it is in the north is upsetting him. He is behaving in a most irresponsible fashion. It is time that the ordinary members of the Fianna Fáil Party used some common sense. It is time they tried to put some common sense into the head of the Minister for Agriculture and Fisheries.

The Minister for Finance said today that our trade figures were of relatively little importance. In 1968 our exports amounted to £329.3 million and our imports amounted to £484.4 million. That gives an import excess of £155.1 million.

Progress reported; Committee to sit again.
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