Last night I was endeavouring in reply to a request from the Government benches to indicate methods, other than the methods advocated in the Bill under discussion, for controlling inflation. One of the central points of all methods is the matter of increasing production and productivity. As Deputy Dr. FitzGerald and others have pointed out in this debate, we have formed the habit in this country of making comparisons between our standard of living and that of other countries, and the rate of increase in the living standards. From the point of view of the Government in avoiding repeated crises of the sort that now face us, it may be fortunate that we found ourselves in the shadow of the most sluggish and slow-growing economy in Europe. Had we been able, by reasons of proximity and shared language, to make comparisons with some of the more dynamic economies our problem would have been greater.
People all over the world have the expectations of rising standards of living. If there is rising production and productivity these expectations can be met without inflationary pressures arising. If on the one side there are increased expectations, proper and valid in the context of the modern world, and on the other hand a stagnant economy or a slow-growing one, then there is basic disequilibrium between the expectations and the possibility of satisfying them. This gives rise to inflationary pressures. Therefore, the question of increasing production and productivity is a central one in the management of a potentially inflationary, or an actually inflationary, situation. It is in that context that one comes back to the question as to how, in the circumstances of Ireland, one should set about increasing production.
The policy adopted by the Government which I discussed last night has been the policy of opening up the economy to foreign investment. Of course, this is an effective mechanism for a certain time and in certain areas of the economy. These foreign companies are only interested in very specific areas. In those areas we have seen productivity gains and production gains though at a cost in sovereignty and in the ownership of our resources and in the acceptance of very great dangers in times of recession which I consider too high and which I believe events will prove to be too high over the next year.
This is not the whole economy. There is a very significant service section, an indigenous section of industry and the whole of agriculture. In all of these areas efforts to ensure steadily rising production and productivity have been very seriously inadequate. The problem of alternatives which might improve that situation is not too difficult of solution. We have the over-shadowing circumstances, to which I referred last night, of relative capital starvation in Ireland and of quite a drastic and continuing outflow of capital. In the end productivity depends on a number of things and to a great extent on how much one can invest per man. Where we have circumstances of unchecked capital outflow, as we have at present, and where we have circumstances of competition for available investment capital by foreign firms who are given conditions under which they do not have to bring their own investment capital with them but can raise it here, then agriculture, the service industries and indigenous industries are faced with capital starvation.
They are faced with growing difficulties of re-investment, of moderisation and consequently with a continuous falling behind their competitors on the international scene, a continued diminution in profits and a vicious circle where the profits are low, capital scarce and the cost of borrowing high, and they cannot re-invest in a way which would increase their production and productivity. It is a vicious circle which has existed in the Irish economy due to the fact that it was opened up to foreign investment in this uncontrolled way for a long time.
One major check to inflation—be it a long-term one—must be the abandonment of the free opening of the economy to any other forces, or to any other economies or companies which choose to try to mop us up as a rather weak and semi-independent economy. We have to reverse the existing Government policy. We have to build in a whole lot of protections if we are to get the capital accumulation and the investment here which is essential to raise the level of production all across the board. I shall be referring later to this problem as it exists in agriculture.
I want to turn now to the current world inflationary situation which is a new one and which makes it particularly alarming. In the past, there has been rapid inflation in certain economies and a relative price stability in others. In the current situation, the islands of price stability in the economy of the western world have disappeared under the rising flood of price inflation.
If one takes the period 1963-69 as a whole, our position in the league table of rate of inflation—a table which includes the United States, Japan and the United Kingdom as well as the major countries of the EEC—was third. We were inflating over those seven years at the rate of 5 per cent per annum. The rate, that time, in the United States was only 3 per cent per annum. In some of the countries of the EEC the rate was —Belgium 3½ per cent; Germany, the greatest economy in the EEC, over the lengthy period of seven years, was inflating at a rate of only 2½ per cent per year. That was the situation in the world at a time when we had a minor crisis in the 1966-67 period of the sort that is now on us in a much more general way to a much greater degree. We had a warning then at a time when the world scene was much more advantageous and propitions for us.
If we turn to the situation in 1969— this is not an average for the seven years up to 1969; it is the figure for 1969 alone—we find that the most rapidly inflating country in that period of 1969 according to the table I have listed—including north American countries, the EEC countries, Japan, the United Kingdom and ourselves—was one inside the EEC, the Netherlands, at 7½ per cent. We were second in the table last year at 7.3 per cent. The relatively stable United States—stable over the seven years when they are averaged—inflated at 5½ per cent in 1969 and that inflation has grown more rapid in the United States. In 1969, Germany was still holding quite extraordinarily steady at 2.7 per cent but that situation in Germany has come to a spectacular and sudden end.
If we go on to the first half of 1970, we are again second in the league table—and this is a half-yearly period but it is an annual rate of inflation— 8.5 per cent for us which is, again, second in the league table of all of this group with the United States at 6.1 per cent. Japan, which was rather stable, has gone up to 8 per cent— almost as high as ourselves. Sweden has gone up to over 9 per cent. Germany, which was previously so steady, has gone up to almost 6 per cent.
The point here is that the islands of stability are disappearing and we are faced with an intense inflationary situation all over the capitalist world. We are faced with the situation where major economic spokesmen of responsibility and senior position have talked about the possibilities in Britain either of devaluation or of such a serious deflation as would lead to massive unemployment there. When we are faced with the Budget that we got last April and the subsidiary Budget that we have just now and when we are faced with the general recognition, not by economic experts who have access to the latest confidential information but by public and politicians at large, that there is an inflationary crunch all over the world, we must try to look at the strategy behind the Government's introduction of this Bill after the two Budgets which we have had this year.
It is, of course, a possible explanation that they have abandoned responsibility entirely and are leaving it to other people. It is a continuing possible explanation that they are very foolish and very incompetent. These are things that occur to one immediately. But there is another possible explanation in that it is a deliberate strategy; that, just as in the Budget of April last, the Government had vested interest in inflation and indeed in pushing along that inflation by an increase in turnover tax, apparently on the grounds that there was inflation everywhere else also. Have they now a vested interest in creating a situation of anarchy in our industrial trade union relationships and in the whole business of bargaining about wages, all of collective bargaining and, indeed, all of the moderated tug-of-war that exists between capital and labour? Are they concerned now to disrupt completely all the mechanisms so patiently and so lengthily evolved for moderating that tug-of-war between capital and labour? Are they aiming to do this in order to validate their own legal imposition of a freeze on the basis of the anarchy that exists inside the labour movement?
The introduction of a freeze of this sort has been shown all over the world to be incapable of ending what I called last night wage creep in particular industries where particular skills of a very special sort can be bid for in a quite informal and circuituous way so that it does not show up formally in the pay packet and so that it does not formally break the rules of a pay freeze. You can pass on benefits in all sorts of ways, even by fiddling productivity agreements, on both the capital and labour sides agreeing that the productivity agreement would be fiddled so that the workers got more in their pay packets but once there was agreement from both sides about the fiddling of the productivity agreement then more money would show up without its being illegal under the terms of the Bill. That mechanism of wage creep is, apparently, by any existing legislation that has been devised in any country invincible.
You are therefore generating a situation where tiny numbers of workers in certain very key areas in a highly-integrated industry can exercise extraordinary leverage. You thereby smash up the standing of trade union leadership and all the chains of delegation of authority that exist in the trade union movement, whereby leaders can negotiate and have the results of their negotiations accepted by the rank and file even if it is not all that the rank and file want. In fact, the effects of this Bill on an already delicate situation are to break up the mechanisms of trust, of confidence, of established leadership which have been so slowly and so painfully evolved. I will have to talk about this later when I come to look at the report of the NIEC.
It may be that we are facing a strategy here involving the hope of seeing irresponsible actions on the part of sections of the trade unions. These actions have been castigated in the Minister's speech although they have not occurred—there was the reference to a demand for a 50 per cent increase, a figment of the Minister's imagination. It may be the Minister has a vested interest in this happening. He has said in effect: "The only way you can do it is by law". The unions have enough sense to regulate their internal arrangements, but it may be that after 13 months, when the intentions in this Bill are seen to have failed, immediately there will be an effort to extend the period of its operation. Then the Minister will need to elaborate his case for so doing and, of course, he will want to be able to attribute the unworkability of the legislation to intransigence on the part of the labour element in the negotiating machinery.
Therefore, the Minister has a vested interest in the disruption of confidence and of trust. This may be an unduly pessimistic and cynical interpretation. The Minister's action may be due to plain stupidity or plain incompetence or plain indifference, but it may be also that somebody is using his head inside the Fianna Fáil Cabinet in a scandalous and a disgraceful way which will compound gravely the nation's problems.
I propose to talk at some length on the NIEC report about an incomes policy and about the necessary base lines in regard to this. I propose to deal with the report's reference that this must be based on trust and confidence and on the possibility of negotiating in belief and trust in the other side's honour. As I have said, we may be seeing a deliberate drive towards a situation of anarchy on the basis that the worse it gets for the country the better it gets for the people who want authoritarian solutions such as wage freezes imposed by law.
If one reverts to the matter of gaining higher productivity, higher production, which would enable higher wages to be paid without inflationary trends, then one has to look at agriculture. According to the NIEC, if we are discussing the matter of an incomes freeze we must not think in terms of a freeze in wages alone—what we are getting here is a wages freeze, not an incomes freeze —and we have to look at the agricultural sector as well. Total incomes going to farmers are 15 per cent of the national total, not much less than the total from profits, rents, et cetera, going to self-employed people. We have circumstances in which during a long period very large amounts of public money have been spent by way of agricultural supports, but at no stage has this expenditure been used to produce rationalisation of purchase. I will come to the matter of real competition later and of rationalisation at the input stage, and the effect of these as an anti-inflationary measure.
At no time has this enormous expenditure of public money by way of agricultural supports been used to produce rationalisation of purchase and, therefore, a more intensely competitive situation. These enormous sums have not been used at the point of production. If you could get rationalisation at the point of production you could get higher output per man and therefore you could get a much better standard of living because more would be put out without a change in price. The only real base for a higher standard of living in the countryside is higher production.
From another point of view, this immense expenditure could have been used in the area of marketing farmers' produce. In relation to the producing of an efficient, financially competitive export situation, the way in which the Government have opted out of the food industry is scandalous. We could have had production, exports, and consequently revenue, if our food industry had been rationalised as a result of leverage by a forward-looking Government. If we had such a situation, if we had a food industry which was efficient, highly productive, aggressive in the matter of market developments, we would be now in a vastly more advantageous general economic situation—we would be able to give more goods to purchasers of foodstuffs at the same price and we would have a higher standard of living among the farming community because we would have enabled them to lift themselves above the inevitable increase in the price of foodstuffs.
This is impossible at the moment because we cannot control the price of the farmers' inputs because so many of them come from outside the area of our economic jurisdiction. This, during a protracted period, has resulted in a continuous draw on the people's resources in respect of a section of the community. Therefore, this enormous expenditure by the State at a time when State expenditure in general is inflationary, gives further encouragement to the inflationary spiral. This policy of the Government during the past 50 years—I am not confining my remarks to Fianna Fáil Governments—is a great source of our relative defencelessness now. A vastly more rationalised agriculture would have been a great source of economic strength to us.
Because of our failure to rationalise agriculture during half a century, what could have been done economically then may now have to be done in a ruthless way at a time when we might otherwise have an opportunity to cushion that section of the community against serious, sudden shocks. Our attitude seems to be to look for short-term, instant measures to combat a chronic situation. The present crisis arises from reasons outside our control but, of course, the response we got from the Government has been so ill-judged and so foolish and so inadequate as to make the problem much worse than it need have been.
I want to turn to the matter of what one does about a prices and incomes policy. We had a document in April of this year from the NIEC. If we are accused on our side of the House, in our party, of being intransigent on the matter of an incomes policy, we simply refer people to the NIEC report of April of this year, Report on Incomes and Prices Policy, which bears the signature of such people as Denis Larkin, an erstwhile Labour Deputy in this House and leader of the Workers Union of Ireland, an honoured and respected name in the annals of the Labour Party, and the trade union movement in Ireland—he could sign this without any feeling that there were improper things in it—Fintan Kennedy of the Irish Transport and General Workers Union, Donal Nevin and other such people from the trade union side.
There was no setting of the faces of the trade union side of the NIEC totally against such a policy. Far from it. They have been loud in their advocacy of the need for such a policy as long ago as what I believe was the 11th report. In Document No. 11 on the economic situation in 1965, half a decade ago now, the trade union side recognised the need for an incomes policy and advocated that one should be established. In the light of the NIEC report of April of this year, the action of the Government in introducing this Bill is to me all the more appalling as, indeed, was the action of the Government in introducing the Budget they introduced in the same month as this report appeared.
On page 11 of that report—and it was an agreed report between the management side, the labour side and others who were on nobody's side— speaking from all points of view, quite unequivocally, in rather strong language, one would have thought for a semi-official body, they say:
If the current rate of domestic inflation...is not curbed, it is our unanimous view that event the existing level of employment cannot be maintained and that it is utterly unrealistic for the Irish community to aspire towards full employment for its potential labour force.
The reason for talking about the composition of the NIEC and for reading out that sentence is to hammer home the word "unanimous". That was a unanimous warning, a long time ago relatively speaking. It was totally unheeded. They said:
In addition, we will be faced with serious tension and unrest.
That was a unanimous warning from both sides of our society of serious social tension and unrest. What the Government now do, having ignored those warnings for half a year—a precious half-year which we will never be able to recover—is to take precisely the step in a statutory action which forces a freeze on a section of the community in an unbalanced way. This brings nearer the day when the serious social tension and unrest about which they were warned will come to a head. That is why I ask whether there is, in fact, a vested interest in anarchy. Is this a deliberate though scandalous manoeuvre to disrupt the whole of the social relationships which have evolved lengthily and with great difficulty?
They also say:
Inflation frequently brings unmerited gains to some individuals while bearing particularly heavily on those on fixed or low incomes.
That is an obvious truism but it is nice to have it said unanimously at this time and the response is increased indirect taxation and increased turnover tax which bear most heavily on those who are already recognised as the ones who are losers in inflation anyway.
These warnings were explicitly spelled out and it is very hard to understand why the Government ignored them. A suggestion is made, which I think is unanswerably true, later on in the report on page 25 that if a successful incomes policy is to work there are certain requirements. They say:
The first requirement is the promotion of a general understanding of the national need for a closer and more orderly relationship between incomes and output.
This is the first requirement—understanding. Socialists have always accepted the need for a more orderly relationship between incomes and output. It seems to me that laissez faire capitalism, the law of the market place, is the opposite to orderly. Orderly relationship is order in social relationship, economic relationship and the substitution of a humane order in which human need is dominant to the law of the market place which is essentially anarchic. I will not insult the jungle by calling it jungle law but it is a totally disorderly and anarchic way of running an economy.
We have always accepted the need for a more orderly relationship between incomes and output. Of course, we have to have the promotion of general understanding of that national need but what sort of sense does the speech on the April Budget make against that stated requirement for a general understanding of the national need? What sort of sense does the Minister's speech, which I analysed yesterday when he was introducing this Bill, make in that context? I am trying now, in face of what I believe to be a desperately serious situation, not to speak from the particular political and class point of view which I hold and from which I habitually think and act.
The value of these NIEC recommendations is that they came from all across the board, from all sections of the community. They said the first requirement was understanding of the national need. In the face of that we have had lighthearted trampling by an incompetent Government on all informed economic opinion. We have heard people from the responsible seat of a Minister in the National Parliament mocking economic experts, mocking experts of all kinds and mocking the possibility even of analysing an economy in a rational way, a sort of know nothing attitude.
The NIEC report said:
The second requirement is an explicit commitment by the Government, the Irish Employers' Confederation (IEC) and the ICTU to exercise their particular responsibilities fully towards creating the general understanding referred to above and the environment in which an incomes and prices policy, based on this understanding, would have reasonable prospects of success.
First you have to have understanding and, secondly, you have to have a commitment to it by the participating parties. Traditionally, of course, we have always seen crises of this sort solved at the expense of the weakest, the poorest and the most oppressed section of the community. Those who provided the wealth to carry the rest of society on their backs, at the moment when their masters made messes of things, historically were required always to carry the can. This is the tradition and the history that the trade union movement, the socialist movement, inherits. This is what we have always known so it is particularly difficult for us to say to our members: "This is a crisis; row in with everybody else" because they have always seen that those who could escape the crunch did so and those who could not were left to carry the can—and they were always the working class.
We have been trying to accept our responsibility. We have been trying to declare our commitment to an orderly incomes policy. We have been trying to urge on our members—they are, understandably, sceptical, cynical, distrustful, believing this is just a stunt to offload the crisis on to our backs—the need for participation, the need to run risks, the need to think as widely as possible of the total national responsibility. Then we get a piece of legislation introduced in a hurry, after what seems to me the cynical disruption of negotiating machinery, something which completely breaks up existing structures of negotiation, which undermines the position of leadership on the trade union side and which, whether through stupidity or incompetence or villainy, has a vested interest in creating anarchy in the organisation of the working class, in the activities of wage negotiations and in the whole matter of collective bargaining.
This is the commitment. When the Government say "We do not propose to control profits because we do not think it is possible. Maybe we will control dividends, but you can retain the profits and pay them next year or get your money by an appreciation in the value of your shares" it is easy for employers to say: "This is fine; we approve of the idea." It is much more difficult for us. We are taking the risk. The Government, who of all three participants have the greatest responsibility in this, set about disrupting the possibility of a freely negotiated incomes policy. Therefore, while we will urge on the labour movement, on the trade union movement, restraint, commitment to the solution of problems in a national way, care at all times for the weakest sections of the community, for the pensioners, for the unorganised workers, for the unskilled, we would be leading people against their own interests if we said to them "You must carry the can. This is a mess you did not make, but you must solve it." We would be betraying any trust they might have in us if we acted in this way.
We are entitled to expect from the other two participants in what must be a three-sided discussion—from the employers' side and from the Government side—at least as much responsibility, at least as much commitment to the national weal as distinct from sectional welfare. We have not got that. We have not got it from the Government. We have got the opposite. We have got the pushing away of the possibility of a negotiated and accepted incomes policy. We will not have any other sort. We will not have an imposed incomes policy. If the Government want a confrontation and want to try out who is the stronger in that sort of confrontation, then we will not shirk it. We will not seek it; we do not seek it; we think it is a mistake, but we could not lead our membership, those who support us, those who look to us, to refuse such a confrontation if the Government insisted on it. We prefer negotiation. We believe in negotiation. We do not believe in the big stick of a statutory wage freeze. We do not seek a head-on collision but neither can we tell our side, if that head-on collision is generated by others, that they must submit, that they must acquiesce, that they must run away. That we will not ever do. It is well that the Government should be clear about that.
The NIEC goes on to discuss an independent prices and incomes board, to discuss its functions, to discuss the requirements that would have to exist if it were to do its job effectively. I argued last night, and I do not propose to repeat myself, that the setting-up of an independent prices and incomes board which really worked was very difficult. I do not say impossible. I do not know whether it is impossible or just very difficult. I am prepared at this stage to keep an open mind. It may be one; it may be the other. What we can be sure about is that it is not easy. Efforts have been made all over the world to do this and it has always proved to be very difficult. It will have to have sources of information and sources of power, real teeth, vastly more than anything proposed in this Bill.
We are asked to accept a freeze on wages on the condition that all other incomes—prices, profits, professional fees—would be frozen too. We have made the point that it is very easy to freeze certain sorts of wages, much more difficult to freeze other sorts, more difficult still to freeze prices, nigh on impossible to freeze professional fees and, as our society is currently structured, totally impossible to freeze profits. There is an ascending order of difficulty from the freeze which bears on the section of the community which we represent to the freeze which bears on the section of the community which the Minister for Finance represents. I am here making a distinction between those who vote for him, in my view misguidedly, and those whom he actually represents, whose interests he represents, because he is in this Bill— as indeed in all the other activities of his that I have seen during my period in this House—acting in the interests of the biggest money, of the biggest economic power, the foreign economic power which dominates this country. That is the section in whose interest he is objectively acting, regardless of the republican, patriotic noises with which he chooses to cloak his actions. I am quoting again not a partisan opinion, not a Labour opinion, but the unanimous NIEC opinion about an independent prices and incomes board. It says:
there would have to be sufficient information available about all significant price or income developments;
This means a level of divulging of information greater than anything that currently exists and difficult to structure quickly—not impossible—but we are talking about structuring it in reference to a Bill which the Government hopes will come into operation immediately and will last only 13 months anyway. We are asked to believe that this mechanism can be structured as quickly as that to work equitably so that people from different sides, different interests, could have confidence in it. The report says:
the staff of the board would have to be sufficient in number and expertise to enable it to report on most cases in not more than three months;
This is a high-minded aspiration. They are talking in terms of three months. The reality would be at least half a year. There is no possibility of this mechanism being got off the ground and being effective, even with the best will in the world, even believing in its possibilities of which I am sceptical, there is no possibility of its being got off the ground at the sort of speed that would be needed for it to be effective. However, the freeze in wages would be effective the moment the Bill became law. To a considerable extent it is effective already. How then can we believe the suggestions that efforts at controlling prices are real and will compensate us if we accept the control of wages when there is no mechanism here envisaged by which it can be made to work on a time scale that would be of any value? This is why it is depressing trying to enter into any sort of negotiations with the Government. This is why it is discouraging to urge voluntary mechanisms on the section of the community for which we speak because we simply cannot trust the Government in this or in other matters.
We have all grown so wearily accustomed to lengthy, concentrated, deliberate and specific lies about almost everything that when they make promises and utter thoughts of this sort, we do not believe them. It is one of the very serious elements in the situation that has not always obtained. In the past they were trustworthy enough for it to be at least possible to enter negotiations in the hope that one would not be betrayed when one tried to persuade his supporters to accept the result of such negotiations. However, we now have an utterly depressing situation. We do not know but that we will be betrayed at any moment because all the signs are there. There is a vast conflict between party interest and national interest and the determination is to solve that conflict on the basis of party interest. Such a conflict does not always have to exist but it exists now in the ranks of the Government.
Therefore, anybody coming to the negotiating table on an issue of this kind is put in a very difficult position. He is left with the question of whether there might be a trick or a stunt or whether there will be some betrayal. As the question of confidence is extraordinarily important in the control of inflation, it is equally as important in any sort of set-up of a voluntary incomes policy but at the moment confidence at the simple level of believing what is said is non-existent. This is a very depressing situation. It is depressing to have to express oneself in these crude terms in the national Parliament but such is the situation. We do not know whom to believe. It is not a matter of believing one or the other. There is the suspicion that we cannot believe any of them about anything. There is no limit to what they will say in defence of their own interests; there is no limit to the extent to which they would depart from the truth at this time in the defence of their own interests.
Finally, in relation to my observations on the NIEC report I turn to the conclusions of those who compiled that report. Those people were from the business side, from official circles and from the trade union side. In relation to the institutional arrangements for the solving of the problem of inflation, they say and I quote from page 46 of the report:
The inescapable requirement for their success is the application of the fiscal and monetary measures which can more effectively contain inflation in the short and medium run.
There is no use talking about measures of income control. These people say unanimously that there must also be fiscal and monetary measures to control inflation in the short and medium run. Yet, what has been done is the direct opposite—a Budget has been introduced and this Budget increases inflation. Further on in the report it is said:
...success of the new arrangements requires an explicit recognition of the need for an incomes and prices policy by Government, the IEC and the ICTU....
This commitment, they say, is crucial. We are now pilloried as the people who are being difficult and intransigent but we have seen the Government indicate that they want us to commit ourselves to such a policy while they are not prepared to commit themselves to it. In this instance there are three sides to a bargain. Of course, the IEC would accept it and with great difficulties and reservations we may accept it but the condition of our acceptance would be some sort of responsible action from the Government side. In a Bill which, by law, beats us over the head because we do not accept the situation of a kick in the face and a fair fight afterwards, there must be Government commitment and the Government, as usual, are facing in two directions and speaking with two voices.
In relation to the control of prices I shall be interested to hear from the Minister whether any promises have been made to some of the large foreign companies who have set up factories here—companies who come from societies in which profit is their god and who are traditionally hostile both to the trade union movement and to the ideas of price control. It seems to me to be likely that some large American companies that have now set up here would have sought promises to the effect that no efforts would be made by the Government to fix their prices. It is not impossible that the Government would have given such promises, so anxious are they to sell Irish assets. It might have been a condition that a large American company said "We will not come in until you promise us that we will not be subjected to price control". Have any such promises been given? What we are seeing in regard to price fixing is the sort of advantage being given to the foreign companies in the way I am about to explain.
If a price is fixed for a product made by a number of manufacturers, some of whom are large and highly capitalised and some of whom are small, indigenous and under-capitalised, and if both sell the product at the same price the rate of profit will be very different for the two undertakings. It will be much less for the small, indigenous company. When a price is fixed, a big international company with great financial resources can soak up the diminution in its profit margins since their profits were already high. Further, they have the financial strength to withstand the period when no profit whatsoever is made whereas the indigenous company will pass much more quickly into a position of loss at a fixed price because their profit was much smaller originally and also because they have not the deep financial resources on which to draw during a period of low-rate profit. The net outcome of such price fixing where competition exists between foreign and indigenous firms is to strengthen the domination of the foreign firms and to enable them to bankrupt their Irish competitors or to buy them up. I trust we shall hear from the Minister whether any promises have been made in regard to price control at times when we were endeavouring to tempt foreign firms to come here. Such firms may have made such promises a condition of their investment. It is fair that we should know about this.
We are faced with a situation where we are urged to pass on to the labour and trade union movement the Government's exhortation in regard to the ready acceptance of a wage freeze. We have indicated that we can visualise conditions in which we would be quite happy to pass on this exhortation, to endorse it with whatever authority and respect we may possess. However, it is worth spending a little time, if we are seeking voluntary solutions, considering the state of mind of people who come from a long line of wage earners.
It seems to me that people in the Government benches, although they have their tamed trade unionists, and the people who frame Bills on the Government side often forget what it feels like to be a wage earner. I say this as somebody who, to an extent, is on the outside looking in but who is continually trying to make the effort of understanding and appreciating a point of view. There are people who remember the terrible exploitation, degradation and lack of security of the distant and recent past. It is easy to feel secure as the result of a long period of security but it is very hard to persuade people who have the opposite history that they should accept promises from people who will not have to face the hardships themselves if things go wrong.
We are told we must concern ourselves with the interest of the whole community. We accept this. But it is necessary to understand the psychology of people who, historically speaking in the trade union movement, only got what they struggled for. They were not given higher wages because they needed them. They were not even given the right to organise trade unions because they needed that as a necessary adjunct to human dignity. They had to fight for the right to organise. They had to fight for the right to decent wages and decent conditions, in so far as those things now exist. In fact, they got nothing without a struggle.
This is the history of the labour movement all over the world. Once they have obtained those rights the sociologists are prepared to write books saying they were entitled to them all along; and the employers are entitled, as they do, to claim credit for what they present as concessions but which were wrung from them with great difficulty. Once the workers have won those rights everybody admits they are correct. Nobody admits they are correct beforehand and nobody gives them those rights without a struggle. Therefore, if there is ever to be in this country—I am willing to take the risk of saying I hope there will be—a rational incomes policy, it has to be based on understanding of the point of view of people who have been betrayed over and over again through the whole history of the trade union and labour movement, who have been expected over and over again to clear up the mess other people made, who have been expected, poor though they were, to endure cuts in their standard of living, while those who were already very well off did not have to suffer any cut.
This is the background which must be understood if anybody is talking about a voluntary incomes policy— even if we concede the possibility that such a policy may work. Therefore, anything which heightens the sense of distrust on the part of the Labour movement is counter productive if you are trying to get the Labour movement to participate in a voluntary agreement about incomes.
We have seen every Government action—it has been certainly so in my period in the Dáil, when I have been in a position to look closely at things, but also for a very much longer time— sowing distrust, fostering the conviction that, from the point of view of the trade union movement, you only got what you fought for and nobody gave you anything. It will take a great deal of promise keeping to remove that distrust, if it can ever be removed.
This is why it is so depressing to have listened to a debate on this subject. We are all agreed it is serious, but because it is so we have to stop making trivial debating points and obscuring serious issues. The more serious it is the more it is incumbent on this House to debate it. This is where the fundamental hypocrisy of the Fianna Fáil Party emerges, as it emerges over and over again in everything. I do not think it is a fundamental hypocrisy which arises just from human wickedness. I do not think that the members of that party are essentially more wicked than anybody else. They certainly do not believe themselves to be so. They certainly retain their own good impression of themselves and their own good opinion of themselves. However, with the evolution of the years, with the evolution of the party and with the extraordinary highly developed uncritical attachment to the party they find themselves manoeuvred unintentionally into positions which are hypocritical. That is the way it ends up.
The basis of that hypocrisy which makes the Fianna Fáil Party try to reduce political debate to political abuse is that the party have changed fundamentally, but they have got to deny this in order to retain electoral support. This is the basis, much more than the north of Ireland or things like that, of the fundamental hypocrisy which strives to make what ought to be a debate on principles between right and left as to how national problems can be solved into the sort of deliberately muddied political abuse which strives to obscure the real issues.
This is the reason why it is so difficult in Ireland to have a serious debate about anything. The Fianna Fáil Party have changed from one which at its inception expressed the interests of the workers and the small farmers to one which now expresses the interests of the biggest of big business—most of which is foreign based—but in order to keep electoral support it is necessary to go on speaking with many voices at the same time. There is the voice of the Fianna Fáil trade unionist. This is the voice of those branches of the Irish Transport and General Workers Union which are predominantly Fianna Fáil. We all know the ringing tones of the Fianna Fáil trade unionist in his concern with the trade union movement and with working class issues. There is the voice of the Fianna Fáil small farmer at the same time that we can have uncritical endorsement of Mansholt without even explaining what Mansholt means. There is the voice of the Fianna Fáil small shopkeeper at the same time as big international supermarkets who are rapidly cutting his throat are being welcomed. There is the voice, the real voice of the Fianna Fáil banker, the Fianna Fáil globe trotters who peddle the assets of Ireland to Japanese and Americans or anybody else as a place where there is cheap labour and a tax holiday.
All of those are different voices, and they are incompatible voices. When all these voices are used simultaneously they must obscure real divisions, and each in the end must be hypocritical. That is why in dealing with legislation of this sort it is very difficult to get a frank exposition from a Minister or from the Government of the real political issues and the proper method of solving the problems at hand.
It may be in the future that there will be a coalition government in Ireland, but it will explicitly be, publicly, overtly a coalition of different parties with different outlooks retaining their differences and agreeing about certain limited, overlapping areas. That is something you can honourably do. When you have a coalition of a whole series of interests which denies that any coalition exist and which pretends to be completely unified then you get hypocrisy. What we have is a coalition not just of two sorts of republicans, both of which from my point of view are pseudo republicans but of people who speak at the same time for Irish workers and foreign bankers. Inevitably you end in the sort of moral filth which produces not only the trooping up those steps of some gentlemen who had some critical things to say about the Government a few days before but also the pretence that legislation like this should be accepted by the trade union movement as being in their interest because really Fianna Fáil speaks for everybody.
You get that sort of lying and then you get the necessity to debase the argument from what it ought to be about. What the argument ought to be about is: how do you solve an inflationary crisis? Or to put it another way: for whom do you solve it? Because you cannot solve an inflationary crisis for everybody. You can do it at the expense of the working class movement. You can do it at the expense of some section of the community, but somebody has to carry the can or else the burden has to be spread. The pretence here is that it is being spread when, in fact, it is being offloaded on to the working class and on to the trade union movement.
That is why we get this level of debate that is represented by the interjections of Deputy Joseph Lenehan, this negation of debate, this negation of argument, when we would wish seriously to be debating from different social, political and economic outlooks, the ways in which the nation's economy might be protected and the ways in which people might be advanced to a higher standard of living, culture and education.
Right through all the Fianna Fáil contributions to this Bill, starting with the Minister's speech—which I analysed yesterday and to which I do not propose to revert now—this basic hypocrisy has existed, this facing two directions by this party that is all things to all men, which has now reduced us nationally to this terrifying sense of insecurity. As I said yesterday, one of the constituents in inflation is a sense of insecurity, a lack of confidence in any reasonable stability. Then you say, if you are an individual consumer: "Let us spend now, because goodness knows what the situation will be in a year", or, if you are an industrialist: "Let us invest now because goodness knows what the prices will be in a year". This sense of national shame we now have is a profound contribution to inflation and makes it specially difficult to solve.
In working any system of prices and incomes restraint it is necessary to have a modernisation of the trade union movement. I think everybody on our side of the House recognises that something which grew up in a scattered way at a number of points in the course of a very sharp struggle needs modernisation, needs rationalisation, very often needs amalgamation. The places in the world where the trade union movement best defends the interests of its members are precisely the places where old conflicts have been eliminated, where old differences between craft unions and general unions have become less and less important. It is obviously in the interests of everybody in our society to minimise the disruptive tendencies which perpetuate old divisions. It is obvious we need in the trade union movement, not just for the sake of the trade union movement but for the sake of the whole nation, to have this modernisation, to speak with one voice.
If such legislation as this is enacted —and by means of the rubber stamp it will be enacted—it is giving a mandate to any militant on any shop floor on any day to disregard the discipline of the whole working-class movement and to overturn the existing structure. That is the opposite to the achievement of the harmonious trade union interrelationships and the progressive trade union reform which everybody agrees are necessary.
NIEC made reference to the need to have a prices and incomes board with personnel of high calibre. It is a very difficult and a delicate task. Over and over again we have seen the sordid spectacle at times of difficulty—and this is certainly a time of difficulty— when Fianna Fáil Governments have preferred the reliable hack to the independent person of high ability. I had bitter personal experience of this when I worked with the television authority and I have seen it over and over again.
This is a time of crisis. There are people in the State with a sense of independence and justice, and the basic intelligence, as well as professional training, which might make them capable of serving effectively if they were given a chance to do so. All our experience induces us to think that at moments like this the persons chosen will be the reliable hacks who, when there is a conflict between party and national interests, will side with the party. This is another aspect of the crisis of confidence, the crisis of trust, and at a more fundamental level the crisis of honesty in Irish public life which has coincided with an economic crisis.
We are told that the virtue of loyalty to a party is a very important one. As a member of the Labour Party, a working class movement, I accept the importance of loyalty. Surely the loyalty must be to principles before it is to organisations? Surely we admit that a time can come when organisations, and I am not specifically referring to the Fianna Fáil Party, may betray their principles or change? Surely we do not deny the possibility that a conflict can exist between organisations and principles? Surely we have the duty either in public life or private life to give our own verdict by our actions against the organisation, however precious and however much it is involved with our lives, for those principles?
The situation exists now where, not in the eyes of the Government but in the eyes of almost everybody else in the country, a conflict does exist between national interests and party interests. What is curious and depressing is that at all times loyalty to an organisation has been able to override loyalty to principles. This is very depressing for the whole future of this country as a separate, valid, independent entity having any belief in its own future.
Every specialist on inflation agrees that free competition is vastly important in regulating prices downwards in the interests of the consumer. We need to examine this if we are to try to answer the questions put to us by the Government about what we would do. One answer would be to look at the matter of competition and monopoly inside our society. Ours is a small economy and a vast amount of the things purchased by consumers are supplied by small local subsidiaries of large supra-national companies. I was criticised for using the word "peripheral" during my speech last night but one would have to think of a paraphrase in reference to the fact that we are after all a very small and open economy, on the edge of huge industrial powers. That is what I mean by "peripheral".
Notice taken that 20 Members were not present; House counted, and 20 Members being present,
