Dáil Éireann díospóireacht -
Friday, 13 Dec 1974

Vol. 276 No. 11

Vote 41: Industry and Commerce.

Minister for Industry and Commerce (Mr. Keating)

I move:

That a sum not exceeding £27,989,000 be granted to defray the charge which will come in course of payment during the period commencing on the 1st day of April, 1974, and ending on the 31st day of December, 1974, for the salaries and expenses of the Office of the Minister for Industry and Commerce including certain services administered by that Office, and for payment of sundry grants-in-aid.

In the Book of Estimates the net Estimate of £27,989,000 for the nine-month period to the 31st December, 1974, which represents the apportionment of a full-year grant of £40,038,000, compares with a sum of £34,978,010 granted in 1973-74, including a token Supplementary Estimate of £10.

In round figures the principal increases arising in the current period, but when related to the full year's allocation, will represent an increase of £294,000 for the Institute for Industrial Research and Standards, an additional £370,000 for administration and other expenses of the Industrial Development Authority, £165,000 for Córas Tráchtála and £80,000 for the Shannon Free Airport Development Company for administration costs. There is an increase, on an annual basis, of £584,000 in the provision for salaries and wages of the staff of my Department, including technical advisers and the National Prices Commission. There is also an increase of £4,190,000, on a twelve-month basis, for capital expenditure by the Industrial Development Authority.

A couple of minor decreases and an increase at a full-year rate of £84,000 in Appropriations-in-Aid would result in the net increase of £5,060,000 on a full year expenditure basis.

The role of my Department in the sphere of Government and the functions and activities of the bodies under its aegis are already well known. I do not propose to deal with all these or to recount what has already been done. It would, I think, be more appropriate to concentrate on the more important elements of the work. The principal areas of concern to me at present are industrial policy and employment, export promotion, natural resources and prices. It is to these questions I shall devote my speech today. Indeed, a good deal of attention has been given to some of these matters in debate in the House recently so I may be forgiven if there should appear to be an element of repetition of what has been said before on certain aspects.

In dealing initially with the industrial sector it is true to say that it had been recognised that the movement of free trade on its own would create problems for Irish industry. Over the past ten years or more surveys have been carried out and reports published to assess the situation for the different sectors of manufacturing industry and to inform and guide firms as to their prospects and the measures they should take to prepare themselves for free trade. Various aids and incentives were provided to help firms to adapt themselves to the new situation.

The policy has been to encourage the adaptation of existing industry and to promote vigorously through the IDA the establishment of new industry to provide increasing new employment opportunities in addition to filling any gaps which emerged as a result of the close down of firms which in the event might prove not to be viable. Good progress was being made in this regard both in respect to adaptation and the promotion of new industry.

The current economic blizzard came at a critical stage in the process I have referred to and as a result the orderly progress towards strengthening the weaker sectors of our community to face free trade has been thrown off course. A number of adverse factors have come together. These factors are mainly:

(i) sharply rising production costs due to energy and raw material price increases;

(ii) a downturn in domestic demand due to the effect of inflation and a reduction in agricultural incomes;

(iii) a down turn in export markets due to the economic situation abroad; and

(iv) pressure on the home markets from imports.

Some closures have occurred and short-time working is widespread. The level of unemployment and shorttime working is, of course, a matter of grave concern to the Government. Some sectors are more seriously affected than others, especially in the matter of the growth of imports, and urgent discussions have taken place with the EEC Commission to establish what measures can be taken, within our Treaty obligations, to provide a remedy. I have dealt with these matters in two debates in Private Members' time over the last few weeks in the Dáil, the first being the 6th November on a general motion on employment policy and the second on the 4th December on a motion dealing with the footwear industry. I also spoke on the 23rd October on broader aspects of the economic situation on a motion of confidence in the Government. I do not propose to go over all these matters again but on the 4th December I spelled out the position particularly in regard to our international obligations. If there are constructive suggestions for other courses of remedial action to deal with the problems of the sectors of industry most seriously affected by events which are outside our control, I would be glad to know of them. It is not sufficient to urge us to ignore the Treaty obligations—which were negotiated by the present Opposition —without any regard to the serious consequences of breaking those obligations. I am not without hope that the EEC Commission may be able to propose temporary measures to alleviate the present very difficult situation in which not only could nonviable firms be pushed out of business sooner than might have been expected, but even potentially viable firms might also be forced to close down.

We should not, of course, delude ourselves by attributing all the blame for the current adverse market conditions to external factors such as low cost imports. We should be realistic enough to recognise that non-competitiveness, product obsolescence, poor marketing and other weaknesses are to be found in Irish industry and that free trade was bound to show up these weaknesses. The trouble is that the consequences of these deficiencies become more serious in the severely adverse economic circumstances which we are now experiencing. When times are reasonably good firms tend to move with the rising tide, but when events turn against them they expect miracles to be worked at Government level on their behalf. This emphasises more and more the need for firms to give more urgent attention to adaptation and rationalisation than many of them have done over the past decade. Failures in business have always happened and will always continue to happen. The worry now is that unnecessary failures may occur. If any temporary arrangements can be made by or through the EEC—and this can only be over a narrow range—then industry would have to grasp the opportunity to adapt itself, recognising the inevitability of free trade.

Despite the economic difficulties, the IDA have been able to maintain this year the level of job approvals achieved in 1973 i.e. 23,000 jobs and they expect also to be able to maintain this level of approvals over the next few years. They are being provided with additional resources to enable this to be done. Despite the unexpectedly high level of redundancy, it is likely that the number of jobs actually created this year will compensate for the number of redundancies occurring.

Other countries have also been seriously affected by the present economic situation and I dealt with this in my speech on 6th November. We are, therefore, not the only country in difficulties and the causes of the present situation are, as I suggested earlier, largely outside our control. We are, perhaps, somewhat more vulnerable than others in that we are such a small open economy. In a turbulent sea a small boat is likely to be rocked more than a bigger one. Nevertheless, as I said on 6th November, there are statistics to show that the rate of increase in unemployment in at least two other EEC countries, Germany and Denmark has been much higher than here. And, as said in the recent White Paper, the indications are unemployment generally in the EEC countries will deteriorate further in the coming months.

The integration of our industrial structure with that of the EEC and the adjustments which will be necessary as this process proceeds would not have been easy even if the present extraordinary economic upset had not happened. All concerned with industry —management and its organisations, workers and their organisations, my Department and the various State agencies—will need to give even greater attention to the ways and means by which obstacles to, and opportunities for, growth in industrial employment and output can be identified and these growth opportunities exploited to the maximum advantage. This is a formidable task. The administrative problem alone at official and industrial level of ensuring that the interests of Irish industry are adequately represented at Brussels is a complex and difficult one which is making heavy demands on staff resources. In this new situation, consultation between my Department and industry needs to be developed to a degree which may not have been necessary or appropriate in the past. This is being done to the limit of our resources.

In the field of export promotion it is heartening to be able to report a favourable situation—one that we now almost take for granted. Despite economic difficulties being experienced by our major markets, the trend of annual export expansion still continues. The record amount of £869 million for exports achieved in 1973 represented an increase of 34 per cent over the previous year. Industrial exports accounted for about £552 million of the total value, the principal contributors being engineering and metal products, metals and metal manufacturers, textiles and apparel, chemicals and pharmaceuticals, machinery and transport equipment, plastic and wood products. During July, 1974, the figure of £1,000 million in exports for a 12-month period was passed for the first time. The latest provisional figures available to date indicate that the export drive is maintaining its momentum in 1974, their value for the year ended October, 1974, at £1,075 million, showing an increase of nearly one-third over the figure for the previous corresponding 12 months.

A significant feature of our exports last year was the increase of over two-thirds in their value to the EEC, excluding Britain and Northern Ireland, while exports to the EFTA countries increased by 80 per cent in value. This trend towards diversification is being developed as far as possible. While exports to our major traditional markets, UK, Western Europe and North America, continue to expand, export promotional endeavour is increasingly aimed at the cultivation of new and so far relatively untapped markets.

I cannot over-emphasise the importance of exports to the economy at a time when like so many countries we are experiencing balance of payments problems. The further development of exports, essential to offset the adverse effects of increasing imports, is reflected in the plans of Córas Tráchtála to diversify future export growth to the maximum degree possible.

Córas Tráchtála provide a wide range of services and incentives to exporters and are fully aware of the problems created by the economic difficulties besetting our major traditional markets. While continuing to seek to exploit existing markets still further, Córas Tráchtála are also endeavouring to secure as wide a geographical spread of our exports as possible.

In the present age no policy for industrial development could be complete without a policy for science and technology. The correlation between scientific and technological advances and economic and social development is too obvious to need stating. Anyone can see that the countries which are in the forefront in scientific advances are those with the highest standards of living and with the greatest possibilities of providing for the social and economc needs of all their peoples. We in this country must see to it that we organise our national effort in science and technology so as to obtain from it the greatest possible contribution to the economic and social well-being of Ireland. We must decide on the policies, and we must create the institutions for implementing those policies.

Given our small size, and given our particular history, we have made in the past a contribution to science of which we need not feel ashamed. We have in this country today individuals and institutions who maintain the highest scientific standards. While we may say these things with some pride, however, it is all too obvious that as a nation we are not making the concerted input into science which could be expected to make a real impact on our way of life and our standard of living.

It was with this in mind that the National Science Council was set up some years ago. Their primary task was to prepare the way for a national science policy which could be adopted by the Government and by the various institutions or bodies which would be invited to collaborate in it. A national science policy would not exist in a vacuum but would draw from, and contribute to, overall policy for national development. It would, in particular, attempt to secure the most worthwhile contribution from scientific and technological activities in the public sector; it would seek to identify priority areas for such activities; it would indicate where there are gaps to be filled in such activities in that sector; it would suggest how to secure a uniform and evenly timed advance across the whole spectrum of activity in the public sector; and it would recommend where incentives and other stimuli might be applied so that the private sector could also make an enhanced contribution.

I have announced recently that the National Science Council in accordance with its own recommendation, is to be replaced by a statutory body with expanded powers. I would like, at this stage, to pay a very sincere tribute to the members of the Council who have, since its establishment in January, 1968, given freely of their abilities in its service to help create in this country, which has been too little conscious of the value of science and technology, a consciousness of that value, and to prepare the ground work for a national science policy. I know that over the seven years in which these members have served they have at times felt some frustration at this low pace of progress, but I feel they can look with a sense of satisfaction inasmuch as the gospel which they have been preaching has now reached so many more ears, and their proposals for a National Board for Science and Technology have been accepted by the Government and are being embodied in legislation which I am preparing.

This new body, the National Board for Science and Technology, will have responsibility to secure from the national effort in pure and applied science and in technology the most effective contribution towards economic and social development. It will do this by, inter alia, providing, or promoting the provision of, the necessary mechanisms to achieve the various objectives of a comprehensive and fully-integrated policy for science and technology.

As Minister for Industry and Commerce I have naturally a particular concern with natural resources and industrial development and, consequently, also in the contribution which science and technology can make in these areas. I must emphasise, however, that as Minister responsible for national policy in science and technology, all science and technology and all scientific and technological activities will be my concern. It is my intention that science shall come to play a greater part in the life of the nation than it has in the past and not merely in the field of industrial development. I believe I know our scientific community well enough to feel confident that I shall have their whole hearted co-operation in this, and I look forward to a period of collaboration in which science will become to a greater extent than ever before the servant of the nation.

Turning from the industrial sector to natural resources I can report that a significant increase in receipts in respect of royalties under the Minerals Development Acts is expected for 1974. This is due mainly to increased royalties arising from the buoyancy maintained by metal prices up to recently. These prices are however, at present showing a downward trend.

The necessary legislation was enacted this year withdrawing the tax exemption from base metal mining enterprises and replacing it by an alternative system of taxation allowances specially tailored to meet the needs of the Irish mining industry. This was the first step taken by the Government to redress the imbalance which hitherto existed between the State and the mining companies. The legislation includes special provision for tax relief in the case of marginal mines.

Legislation was also enacted providing for tax relief for coal mines which are experiencing hardship. As the House is aware many of our coal mines have experienced financial difficulties over the years.

The Supreme Court has upheld the decision of the High Court declaring invalid the acquisition order made under the Minerals Development Act, 1940, by my predecessor in respect of minerals in the Nevinstown area. This raised legal problems of a constitutional nature and it may be necessary to introduce new legislation to deal with the situation. Any such proposals should, however, be the subject of free and open public debate in view of the importance of the issues involved.

Mr. Brennan

Hear, hear.

Mr. Keating

As the House is aware the State is involved in other legal proceedings which have recently been instituted against us, and it would not, I believe be possible to have a meaningful debate until these proceedings have been disposed of.

At this stage I would, however, like to point out that the legal situation for mining companies arising out of the Supreme Court decision is not as bleak as some people believe, as it is estimated that some 80 per cent of the minerals in the country are Stateowned and there is no problem about these. So far as the privately owned minerals are concerned, the basic theme should be that where it is possible to do so acquisition by the mining companies should be on a voluntary basis. Speaking as a farmer as well as Minister for Industry and Commerce we should, I believe, be careful not to be stampeded into a situation where farmers who own the minerals under their land are subjected to any compulsory procedures which have as their object the transfer of ownership to other private interests, whether the latter be foreign or Irish controlled.

The House will appreciate that in the light of the legal situation it would not be appropriate for me to make a detailed statement on the discussions with Tara concerning their application for a lease in respect of the Navan minerals.

As the Deputies are aware, an agreement in principle has been reached with Bula regarding the minerals now owned by that company in Nevinstown. I am satisfied that the voluntary agreement concluded with Bula by way of fair and reasonable negotiations secures for the State an adequate degree of control over the minerals and a satisfactory return from their development. The final details of this arrangement have yet to be worked out. I think it only right to add that, in common with so many others who have studied this matter, I have always been convinced that the best way to develop this ore body is as a single entity and whether there are two companies or one involved it is my hope that sensible and business-like arrangements for optimum development will be agreed upon by the interests concerned.

I think Deputies will be aware by now that the policy of the present Government is to secure a fair share of the profits of our mineral resources for the nation and to provide an adequate degree of public control to ensure that the fruits of exploiting our resources are applied to the maximum extent for the economic and social development of the country. There may be some differences of opinion as to how this broad objective may best be achieved, but I believe the objective itself is shared by the vast majority of the public irrespective of political persuasions. It is not enough that the mining companies should give jobs or purchase local services; their activities must be subject to a measure of public control so that the maximum public benfit can be derived from these resources.

Since the bulk of our minerals is already owned by the State, the argument about nationalisation has little relevance. Moreover we must recognise that, at this stage of our development, our stock of technology and capital is relatively limited when set against the resources that would be required for the thorough and efficient development of our minerals.

For the present at any rate, I consider that our objective can best be achieved by way of a balanced mixture of private enterprise and State participation. In addition to increasing the State's return, the form of State participation I have in mind will enable the State to exercise a measure of control over the development, working, processing and utilisation of our mineral resources. We will make our judgments about the equitable division of profits and the right balance between the private and public sectors by taking into account the full circumstances of each project, including its projected profitability, and will be happy to allow a generous return to the private interests on their exploration and production investment. In this way we can differentiate between the exceptionally profitable enterprises and the moderately profitable ones.

One of our great problems up to now in considering what to do with our mineral resources has been the serious lack of technical personnel in the public services. This situation had, I think, its roots in the laissez faire policy heretofore prevailing, which was largely based on the assumption that private enterprise could be relied on to bring about the optimum development of our minerals. I do not believe that assumption is well founded and I am satisfied that we must be in a better position to know with more precision what resources we have got and how best to exploit them.

This cannot be done with the present staffing situation which leaves us largely at the mercy of the mining companies. This kind of thing would not be tolerated in any well run business and I do not think it should be tolerated in the public service. For that reason I have been endeavouring to recruit additional professional people for this work. They are not easy to get, and they cost money, but this I am sure is something that we must do.

I am also considering the resucitation of Mianraí Teoranta which have been moribund now for many years. This would, I think, be a suitable agency to look after any mineral participation rights which we may acquire and it could also be a useful source of expert advice to the Government on mining matters.

I wish to make it clear that there is no intention of discouraging private prospectors. I recognise the contribution they have made in the development of our minerals and I believe that they will continue to play an important role in partnership with the State in future. Prospectors discovering commercial deposits can rest assured that they will receive leases on terms which will be fair and reasonable. I would rather dispel than add to the euphoria which exists in certain quarters regarding our mining prospects but I think I can say that from the geological and economic points of view the future is distinctly promising.

Petroleum exploration has been very much in the news in recent times. Exploration is, however, as yet in its initial stages and very extensive prospecting and drilling is necessary before the presence of oil or gas in commercial quantities can be established. It takes at least three to four years to develop a commercial discovery. The Kinsale Head gasfield discovered by Marathon is regarded as small by North Sea standards but its development, which is subject to satisfactory conclusion of price negotiations at present taking place, should help in easing our energy supply situation as well as providing a valuable feedstock for the fertiliser industry.

In recent months shows of oil and gas were reported from two wells drilled by Esso Exploration Inc., in an area farmed out to them by Marathon. The latter have just now released information about a further well which they have drilled in the Celtic Sea. The data which have so far become available in respect of these three works must, I think, be described as encouraging.

I am at present engaged in the formulation of policy for the grant of exclusive exploration facilities outside the Marathon area. You are probably all aware that the Marathon concession was granted under an agreement entered into in 1959 when the prospects of finding petroleum in Ireland were considered very poor and there was no offshore exploration in European waters. The provisions of the agreement, which are sufficiently well-known not to require detailed treatment by me now, must be viewed against that background and the situation then obtaining in the international petroleum industry.

The position has changed completely since then and I should like to make it clear that our future policy will be formulated on very different lines. Our objective will be to secure the thorough and efficient exploration of our Continental Shelf and to ensure that any petroleum discovered will be developed to the maximum benefit of the Irish people and the Irish economy.

As announced recently, the right of the State to participate in the development of a petroleum find will be an essential feature of each exploration licence, and we will have to devise arrangements to ensure that the State gets the most out of these participation rights. My Department are finalising the terms and conditions for the grant of exclusive licences and I expect to be able to announce these shortly.

I know that a number of Irish interests have been hoping to get involved in some aspects of activity on our Continental Shelf and that consortia who will be applying for off-shore licences have been considering whether they should have Irish participation within their groupings.

Early last month I found it necessary to try to clear the air on one particular issue relevant to this. I issued a statement to the effect that there would, in no circumstances, be any adjustment of the State's right to participate in a commercial discovery of petroleum to take account of any other participating Irish interest, whether this was a private sector interest or an existing State-sponsored body. In my statement I gave the compelling reasons which I saw for this and it is, indeed, evidence of the convincing nature of these arguments that I have not heard from anyone who substantially disagrees with them.

At the same time, I made it clear that I was anxious to see appropriate involvement in off-shore activity by Irish industrial and commercial sectors —and I mean involvement of a kind which would be of real and continuing economic benefit. I elaborated on this subsequently in reply to a question in the Dáil and I hope no one has any doubts about my views on this. However, it might be as well if I were to say something now on this subject.

There are, I think, two fairly obvious reasons why prospective applicants for off-shore licences might wish to have an Irish participant, while accepting that this would not result in any dilution of the State's right to participate. First, and this is, I believe, the better reason, an Irish participating interest could make a contribution in its own right. This could be commercial or industrial, or a bit of both, but it could also give the group access to local knowledge and services of various kinds which could prove very valuable.

It is also likely that an applicant consortium would ask the question whether the right kind of Irish associate—right, that is, in the sense I have just mentioned—could give them an inside track where there might be concentration of interest on some particularly attractive off-shore blocks. I think my answer to that question would be a qualified "yes". First, let me explain the qualifications.

The exploration of an off-shore area at the pace and with the effectiveness which our economic circumstances require, and the development of any resources found to the production stage, is a complex business involving financial, technical and managerial reserves on a very substantial scale. We should not by any means be scared or over-awed by all that we hear or read about this, but what I have just said is simply the factual position.

It stands to reason, therefore, that the first test which I will apply to all applicants, of whatever nationality or character, is whether they have the financial and technical competence to operate successfully in this exacting environment. It follows that no form of Irish participation, however attractive or otherwise, could be regarded as compensating for a deficiency in this respect. On the other hand, if there are a number of applicants competing for the one area and there is no material difference between them on grounds of financial and technical competence, then the presence of a significant Irish participation in one of them could be taken into account. I deliberately use the word "could" rather than "would" because one must always envisage that, in the circumstances I have instanced, a suitable applicant—but one with no Irish involvement—might have some attractive feature, for example, involving the provision of a substantial industrial project, which I would have to view with special interest.

While I have tried to outline my views on this complex question, I readily admit that there remains a substantial grey area. This must be accepted as inevitable by all concerned. No black and white answers can be provided to this question. We are talking about a situation which will not become a reality until the applications have been received and the envelopes opened.

Whether Irish interests are successful or not in procuring licences, I can assure the House that the Irish business community will stand to benefit in other ways from off-shore oil developments. All concessionaires will be required to operate from bases in Ireland and they will also be obliged to give a fair deal to suppliers of Irish goods and services. Needless to mention in the disposal of any hydrocarbons produced in Irish waters, the requirements of the Irish economy must come first.

I have spoken about the difficulties of operating in our off-shore areas. These difficulties are such that in many cases the licencees will be working at the limit of the available technology and this of course entails certain danger to the personnel working on the rigs, platforms and vessels. We will have to oversee these activities as closely as possible to ensure that the health, safety and welfare of the employees involved is adequately provided for. Secondly, there is the danger of blow-outs and similar accidents with their fearful pollution possibilities. If we needed any reminder of the havoc that these mishaps can cause, we got it resoundingly not long ago in Bantry Bay. That particular event convinced me more than ever that our licensing conditions must take account of these possibilities. Apart altogether from the important question of picking our concessionaires with the greatest care, we must have the right to insist on effective controls and we must procure from them adequate financial guarantees to indemnify us against all hazards. Here, again, the question of qualified supervisory staff arises and it is my intention to ensure that the public service is adequately equipped to deal with the situation.

I think it is only right to say that quite an unusual interest has been expressed by the international oil industry in our off-shore areas and since it is unlikely that this interest is merely academic, it must be assumed that there are reasonable prospects of finding profitable reservoirs of hydrocarbons in that area. If there are petroleum discoveries of any substantial dimensions, and they do not have to be great by world standards, they could have a tremendous impact upon the Irish economy. It is important, therefore, that we should ensure that our handling of these resources is sensible and realistic and aimed primarily at producing the maximum benefit to this country. If such deposits do, in fact, exist it will be the first opportunity which we have had since the establishment of this State to make any significant bid for economic independence.

I will not weary you with the changes of economic policy with which we have struggled since 1922 and with the results which have been achieved with those policies. It is enough to point to the fact that the degree of foreign penetration of our economy has increased as the years have gone by. The exploitation of substantial petroleum resources to our own best advantage could change this trend. I am determined to ensure that the mistakes which we have already made in this country in regard to our natural resources, and similar mistakes made by other countries who were merely exploited for the benefit of others will not be repeated by me in the issue of exclusive licences which is now contemplated. It is for this reason that I am taking such care in the preparation of the necessary documents.

When the Government took up office early in 1973, they found an economy suffering from inflation and one of our first priorities was to tackle this situation.

The published indices show that some progress was made. The rate of inflation, which in February, 1973, had been 4 per cent over the preceding quarter, came down to 3 per cent in May, 1973, and to 2.3 per cent in the following quarter, as shown by the figures published by the Central Statistics Office.

Unfortunately, the economies of the world then ran into trouble. Within a short few months, serious increases in commodity prices, caused by shortages, by the activities of speculators and by the war in the Middle East, had driven the index up and the whole situation was seriously worsened by the oil crisis and the enormous increase in the cost of energy which followed.

The present wave of inflation must be seen not merely as the social evil it is in itself but as a major obstacle to our efforts for the development of industry and trade and the promotion of employment.

This inflation is, as Deputies well know, not confined to Ireland. It is universal. In fact, to a large extent the inflation in Ireland is caused by events in other countries completely outside our control and is imported into Ireland. Let me be quite clear. There is no way in which we can avoid imported inflation. We must import raw materials for our factories and machinery for new factories and to modernise existing ones. We must sell our surplus products abroad, whether they are agricultural or industrial, at the prices ruling in international markets.

But, if we cannot avoid imported inflation, we can by our own efforts try to stave off its worst effects and we can also try not to add to it ourselves. The price control mechanisms operated by the National Prices Commission and by my Department have been devised for this purpose and are proving extremely valuable. They cannot prevent price increases altogether but they can and do moderate them. These mechanisms alone cannot do all that is necessary. The people of this country must all take a part—but I will return to this point later on.

The social evils that come from inflation are a source of great concern to me as to every other member of this Government. The main steps being taken to protect the weaker sections of the community from these evils are not for me as Minister for Industry and Commerce to discuss. My part is to see that every price increase is fully justified by increased costs, whether these costs are for materials, for necessary capital expenditure, or for wages and salaries. Deputies will be aware that manufacturers' claims to increase prices are closely scrutinised by the National Prices Commission who, when making their recommendations to me, disallow claimed cost increases which are not fully justified.

The value of their work is shown in their report for October, 1974. In the period from June, 1973 to 22nd October, 1974, the Commission examined 1,634 applications. In their recommendations the increased costs they were prepared to allow were about £33 million below what was claimed. Allowing for the mark-up by retailers, this means that the work of the Commission in the period I mentioned produced an annual saving to consumers of about £40 millions or £1 a week for the average family.

The second responsibility I have is to see that no one takes advantage of the present state of inflation to overcharge for any goods. For this purpose, I have made orders controlling the maximum retail prices of a range of important products, for example, bread, flour, butter, sugar, frozen and tinned vegetables, coal, peat briquettes, cigarettes, petrol, and so on. Consumers who are overcharged can complain to my Department's offices and their complaints will be investigated rapidly. For this purpose, I have established offices outside Dublin in several centres, Cork, Limerick, Athlone and Sligo, to make it easy for consumers to lodge their complaints and to make it possible for my inspectors to investigate them immediately. Complaints need not be confined to overcharging for goods which are governed by statutory orders. If any customer has good reason to think that she, or he for that matter, has been charged an excessive price, my inspectors will look into the matter.

An indication of the extent of this work is given in the report of the Prices Commission for August-September, 1974. In a four-month period, the inspectors dealt with 2,428 complaints and 836 inquiries. In many cases, they were able to have price increases reversed and to obtain refunds for customers. In others, evidence was secured to support legal proceedings for overcharging.

If I have a complaint, it is that we do not get enough complaints. I would like to see every instance of overcharging reported to my Department and I hope that Deputies will encourage their constitutents to do this. Every complaint will be followed up.

I have spoken only briefly of some of the measures taken to protect the consumer. There are others, including mandatory display of prices, and the use of tax-inclusive prices.

An important effect of the present inflation is that it makes much more difficult our task of increasing industrial production, industrial exports, creating new jobs and saving jobs that are threatened. The industrialist finds that rising prices make it harder for him to sell his goods either at home, against the competition of imports, or abroad in markets that are already depressed. He needs greater cash resources to finance his operations because every cost has gone up, and the capital need for new investment is multiplied. We must emphasise, however, that we cannot reduce world prices of materials or capital goods. We cannot reduce wages, even if we wanted to, which we do not.

Some increase in manufacturers' costs cannot be avoided. Our business, the business of the Government, of the Opposition, of the manufacturer, of the importer, of the worker, of professional men, in fact of the whole community, is to see that those increased costs are kept to the minimum.

In saying this, I am not speaking for the sake of the manufacturer, but for the sake of all the people of Ireland. It is impossible to avoid the commonplace when this subject comes up, but the commonplace is true. We are all dependent on one another. What injures you, injures me. If I could find a new way of saying it, I would use it, to try to bring home to everybody that every individual to benefit himself must first seek the common good.

Anyone who seeks his own advantage above his fellow Irishmen is not merely betraying his countrymen, he is betraying himself.

This is what is meant by "A National Partnership," used as a title for the recent White Paper on the economy. Understanding of this message is, I believe, the key to the future of Ireland. If we grasp it, there is nothing that can stop our growth. We must not fail, and it is the responsibility of every Member of this House to see that we do not, as much as it is the responsibility of the Government.

I have tried to deal as fully as possible with those areas that seem to me as Minister for Industry and Commerce to call for special attention but if Deputies wish to have information on some particular aspects which I have not referred to, or on any other matters of particular interest to them, I shall do my best to provide the information in my reply to the debate.

It will be seen from the Order Paper that I am also asking for a Supplementary Estimate for certain services administered by my Department to which I will refer when moving that Supplementary.

I commend this Estimate to the House.

Mr. Brennan

We are coming to the end of another year, both in the political and financial sense, and at this time it is usual to have an Adjournment Debate which gives the House an opportunity of discussing the working of the Government and the economy generally throughout the previous year. For some reason we are not permitted that debate this year, perhaps because a number of hours have been allocated to the Opposition recently to discuss matters of urgent public importance and also because the budget will be announced early in January when there will be an opportunity to discuss all relevant matters.

Public attention is focused on the Department of Industry and Commerce in the present serious situation. People are facing the Christmas period with a feeling of despair. They are genuinely worried and definitely all of them are disillusioned. The statement of the Minister for Industry and Commerce, despite a considerable amount of platitudes, will do nothing to allay the anxiety felt throughout the country.

Whether it is right or wrong, people blame the Government when things are not going well. Perhaps that is understandable because when things are going well the Government take credit for that fact. If a Government are prepared to take credit in such a case they must also take the knocks when things go badly. It is only too obvious that all is not well at present.

We are suffering from the serious effects of inflation and nobody has attempted to forecast how long we will be under the burden of inflation. The Government over the past year have viewed the situation in different ways. In my opinion the 12 months have shown three phases of Government inactivity. First, we had the Government admitting there was inflation, inherited from a bad Fianna Fáil Government. They kept on telling the people that everything would be all right. The main role of the Minister for Industry and Commerce was to show that we were moving down in the European inflation league. Nobody, of course, ever attempted to show that anything was being done to bring this about. It was just happening because the Government had changed. This was the laissez-faire period. We were told that other countries were worse than we were and that everything would be all right. The people did not know where they stood and the economists were scratching their heads.

Then we reached the stage where it was admitted there was a blizzard and the Minister for Finance gave orders to batten down the hatches and lie low until the blizzard was over. The Minister for Industry and Commerce went into his foxhole and said: "It is serious now but just lie low and everything will be all right." Weighty speeches were made telling of the serious storm that was raging but that it would pass and then we could emerge from our shelters.

Then we reached the third stage— the White Paper stage. The storm was not passing. Our place in the league was not improving, the laissezfaire policy was not proving to be acceptable to the people and the warnings given to the main sectors of the economy when they were asked to batten down the hatches was having no effect. We had the White Paper calling on the people to help. There was an exhortation to everybody—we are all in this together and you must help. Muna dtuga Dia a lámh dúinn, is fearr dúinn guí. If God does not help us we will sink.

That is the feeling I expected the Minister to dispel today. He said the Government are blamed by the people when things go wrong and the Government take credit for anything that goes right. What can the Government do about inflation? What are they doing? What should they have done? The theme of this speech by the Minister, which is not even numbered, and of all speeches from the Government side of the House is that inflation is imported and there is nothing we can do about it. One day we must get up and speak honestly and admit that this is not correct. We must admit and it is universally accepted that the major portion of inflation is due to causes which we can remedy ourselves. This is commonly referred to as domestic inflation. It is true that we must pay for imports of raw material but perhaps we are importing many things which we need not import. I do not accept that we can do nothing. We had an exercise in the House the other day which we were told was to prevent us from using too much fuel.

The Minister, who has found no remedy for anything, said that an effort should be made to transform social habits and make people walk for the good of their health. I never heard such a ridiculous statement in my life. If we can sell something we produce here for £X abroad we naturally charge the same price on the home market but there is something we can do about that too. The major portion of our inflation is due, and this is admitted even in the White Paper, to domestic circumstances which can be controlled by monetary or fiscal measures, by the control of credit, by the manipulation of the Government's expansionary or other policy. This we cannot deny. One of these days when we get talking to the social partners, as we now refer to the workers and the employers, about the grave need to exercise restraint in the matter of income demands we will have to admit that the greater part of our inflationary trouble is generated by ourselves. It will have to be explained to them that inflation contributes in the end to the downfall of the weaker sections and brings to the wall those who are least able to meet the position. A pay increase of 10 per cent for 400,000 workers is the logical outcome of one of the clauses in the national wage agreement pressed up by the increase in the cost of living index. How many firms are capable of meeting that with the receiver already on the doorstep?

We wanted from the Minister today some positive statements as to what he proposes doing to save people from the wave of unemployment predicted by all the experts, and by those who claim to be experts, forecasting the future, or even something that would dispel some of the gloom hanging over the people on the eve of Christmas. Will the Minister adjust VAT in relation to those industries which are finding it difficult to survive? Will he make tax adjustments to enable them to carry on in this period in which they have liquidity problems they cannot overcome? Will he sit down with the Central Bank and ask them to ensure that credit is not withdrawn from people who have learned to depend on credit in the production of commodities and in the various services over the last few years during which, in order to drive on as rapidly as possible with economic expansion, credit was made available to encourage industry and commerce to expand?

What will be done to ensure that these people, from under whom the rug is being pulled at the moment, can maintain all the people they have employed in employment, the firms who have put their employees on three days a week, the firms that are faced with closing down and those in which the receiver is coming in? It is not sufficient for the Minister simply to state that free trade has found deficiencies in cases in which the enterprises concerned did not take full advantage of better management and technology.

The most serious problem in 99 per cent of those firms in difficulty today is the liquidity problem. The cash flow has ceased. All the economic signals are pointing in the wrong direction. The red light is on. We have long since moved away from the amber. Unemployment figures are mounting towards the 100,000 mark; inflation is running at 20 per cent; the rise in the cost of living necessitates a 10 per cent pay increase which must take place 13 weeks before the second phase of the national agreement to be paid by firms already looking around to see if they will be able to exist at all.

What will we do for them? Perhaps the Minister, in his reply, will announce something worthwhile. We are sick and tired of platitudes and politically calculated statements designed for no other purpose than to please someone who would otherwise not be prepared to accept much longer what is going on. I should like to hear the Minister say that he will take some positive steps to save industry where there is proven viability, to save those industries capable of producing the goods and competent to sell them but which are finding difficulty, particularly in the home market, where consumer spending is beginning to change and where the Government does nothing to help.

Inflation is self-generating. It brings its own remedy when it reaches the point of consumer resistance because the weekly pay packet is no longer capable of supporting the household and people find they have to go without certain commodities. It is not much use at that stage telling the man-in-the-street that there must be a curb on spending or telling him about modern economic devices to monitor the situation. Havoc has already been wrought before anybody has got round to finding some means of doing something about the situation.

I agree with the economists, so plentiful on the ground these days, that inflation in itself is not a thing we worry about; it is the bad effects of inflation that cause anxiety. It is the effects that make one realise how serious inflation is. But inflation can do much good. It very often puts money in pockets and gives people a better standard of living. It is only when it gets out of control and causes unemployment that we become seriously worried about it. That stage has long since been reached. It is not possible to take drastic action because drastic action can make the cure worse than the disease. Inflation has to be handled very carefully all the way through by ensuring that production continues, that output is good, that competitiveness is not eroded and that it is possible for producers to sell their goods. Inflation can be handled carefully if there is the will to do that. There are reasons why that was not done over the past 12 months. I shall come back to that later.

The deficit in our balance of payments is moving towards the £300 million mark. That is serious. Speaking on the motion about petrol the other day I pointed out that not all the top advisers available to the Minister are agreed in this matter, although his colleague, the Minister for Finance, made it an excuse for getting £30 million revenue from petrol. It is not the advice which the Economic and Social Research Unit tendered to the Government, and to the public for that matter.

The Central Bank never fail to emphasise the seriousness of the balance of payments deficit. In reports, and particularly in the report at the end of October, they quite explicitly pointed out that, so long as our external reserves are in a healthy condition, we need not worry about the balance of payments. This is elementary economics, known to those of us who are not overloaded with textbook theories. Our external reserves improved to the extent of £45 million in the first nine months of this year. What we should really be worrying about is the unemployment problem rather than the balance of payments. In the last analysis this must be tackled. It is the end result of unbridled inflation. We had inflation for many years running at a moderate rate.

I would remind the Minister that if at times we were not first in the league that was because others were better and were working from a different basis. Unemployment in the Republic of West Germany is not an economic disaster. It has completely different connotations from the connotations it has here. If we are really serious about doing something to keep the economy from falling into that dismal state where confidence is lost and people despair we must act. Remember that when this happened in 1957 the labour market abroad was much more lively than it is now. Between 50,000 and 60,000 people went over to Birmingham and London to find work. That will not be so easy now.

Let us adjust the huge amount of tax we are taking from some of our people who are generating wealth. Let us get away from the "to hell with the rich" mentality of the Minister for Local Government. Let us realise that some people must produce so that others who cannot produce will get a living too. Let us at least recognise that they generate wealth and make a contribution to the economy on which we depend. The amount we can rake off from them to redistribute to the weaker sections depends on the chance we give them to produce wealth. It is about time somebody said that as loudly as possible.

We are dealing with a mix, a mixture of socialism and conservatism which will be the downfall and ruination of the country and the economy. This happened on two occasions before. This is where the conflict of ideology arises which causes dithering and indecision. No positive action is being taken because what suits one section is diametrically opposed to what the other section want to please their supporters. They are playing a political game with the economy as they are playing it with our mineral resources. This is where the trouble stems from and it is becoming patently obvious to everyone.

The present Minister—and I hope I will not be taken as being personal— adopts the attitude of trying to expose the Opposition as not being responsible. He makes political statements and says we try to play politics instead of taking a serious view of the situation and co-operating with the Government to do a good job. I reject the suggestion that we talk here for the sake of playing politics. The Opposition have to expose every weakness they see.

I wonder does the Minister remember when he used to sit over here as an Opposition Deputy? I was sitting over there and I listened to his long diatribes on socialism. He condemned foreigners coming here to start industries and said we were handing over the country to non-nationals. Will he admit, when he gives lectures about responsibility to this side of the House —and he does it in a rather subtle way—that he has learned a great deal since he moved over there? Will he turn over some of the volumes I have here with me and read one or two of the speeches he made in those days? What has converted him to the policy of reaching for any straw when the economy is in danger—I do not blame him for it—when he used to condemn us for the over-generous grants we gave to non-nationals to come here and start industries? At present he would be delighted to take anything the IDA came up with. God knows it would be very welcome.

If we are to be accused of not adopting a responsible stance on the serious difficulties in which the Government find themselves, he should cast his mind back to the co-operation—in inverted commas—he gave us when he made some of the statements I as Minister had to listen to when he was in Opposition. But raking up these things from the past would not be a panacea for the ills from which we are suffering at present.

One of the things we all waited for in the Minister's speech today was a statement of policy on our mineral resources. I think he is on record as having given an undertaking that before Christmas he would spell out the conditions under which exclusive licences would be granted for off-shore exploration. Everybody is waiting for that and the country was never more in need of some such shot in the arm as it is now.

The member of the Irish petroleum exploration group, whose opinion I respect highly, wrote an article on this question of indecision in the November issue of Management. In this article he referred to the Minister's repeated statements and political platitudes to the effect that he was going to ensure that the State got its just share of anything derived from mineral resources, that he was going to ensure that foreigners were not going to take from this country what is the right of the Irish people. We have heard such statements very often and they were repeated on at least ten occasions by the Minister in the course of his statement to this House.

Nobody has any intention of seeing our resources used for anything except the maximum advantage of the Irish people but there is a limit to the advantage we may derive from them. I should like to quote some passages from the article I have referred to which appears on page 43 of this magazine:

The Minister has said nothing new! Everyone expected State participation in our oil and gas developments, he has confirmed it. But he still gives no details, for example, the size of the "maximum State participation", royalties, whether each deal will be negotiated separately.

It was, however, the way he said it which could give grave concern to Irish industry. As the Minister for Industry and Commerce, he used only 40 words out of his 2,000, or two per cent, to say anything positive about Irish industrial participation in offshore oil developments when he said:—

There is no debate about the right of Irish private enterprise to become involved in the development of our offshore resources. The Minister has, in fact, encouraged private enterprise involvement provided that it is meaningful in industrial terms and not mere financial speculation.

He spent most of his time extolling the virtue and the method of State participation, which he made clear, will only take place after the oil groups, foreign and Irish, have spent their money in finding the oil and gas. No loss to the State if they do not find it.

In my view, one addition would have turned this statement from a purely political comment into a constructive industrial policy on oil and gas, something like: "the only way for Irish industry and commerce to get into the oil business is to join in ventures with experienced companies, to explore and develop our oil resources, and in so doing, become themselves part of the international oil business with its attendant industrial activities in oil processing, by-products and servicing. Irish industry and commerce should be encouraged to take up this challenge." Is this not part of the current policy of the IDA on new investments in Ireland?

We can keep on making statements, and we will agree with the Minister every time he makes them, that in the development of our resources we should ensure that we get the maximum benefit for the State.

Nationalisation does not arise because minerals are already the property of the State. The Minister will not get over his nationalisation promise in that way. Even though minerals are the property of the State they still may, or may not, be nationalised. It is the development of them, and the production of them, that really counts. Our peat resources belong to the State and we have developed them by nationalising them. We have harnessed our water power and those resources belong to the State. This could have been left to private enterprise but it was decided that nationalisation was necessary. There are other examples.

The Minister cannot slide out of this question of nationalisation by saying that the question does not arise since minerals are already the property of the State. It is the question of their development, the method of operation and exploration that arises. Is this to be nationalised or not? What does the Minister mean by State participation? How long will the Minister keep making statements to the effect that he will be the watchdog to ensure that the maximum benefit goes to the State in the development of any resources we have? When will the Minister arrive at a fixed policy which will lead people to understand whether it is worth their while to carry out exploration?

The Minister admits that we have not the expertise, the capital or the equipment, but I cannot fully follow his reasoning about the measure of privilege that might be written into any agreement where there is Irish participation. I do not think it merited the pages he devoted to waffling about Irish participation in our mineral resources. There is a big element of risk in exploration. It is a costly venture which may or may not produce results and nobody is going to participate in exploration unless he has some definite understanding as to what return he will get for his investment if any appreciable, workable deposit is found.

We can talk about the benefit of our mineral resources to the nation and about the measure of independence this could bring about, but as long as they are in the ground, and as long as nothing is being done about them, they are worth nothing to us except political propaganda. Royalties are adjustable on any occasion to procure any amount we wish to rake off the profits of any mine. I predict that royalties will be the Minister's main source of a rake off for the State when he comes to make an arrangement for the granting of any licence, exclusive or otherwise, in relation to mineral deposits or off shore oil or gas finds.

The Minister has used a sub judice argument so as not to have to spell out the arrangements he has made with Bula. I suspect he has acted with undue haste in arriving at an arrangement there, which would have been justified and which we all would have applauded if Bula had gone into operation the next day, next week, next month or next year. But why the precipitate action when it did not get any operation going? The Minister implied today that Bula and Tara should get together and operate as one entity with the utmost cooperation. But the Minister makes an agreement with Bula, about which he cannot tell us, because, he says, the details are not worked out.

Surely at a time when the economy is literally in the mire, a Minister for Finance could burn a few midnight candles to work out a solution with regard to our resources programme that would get some worthwhile operation going and restore some of the confidence so sadly lacking at present. If ever there was need to take positive and definite action it is now. Never was there a time when it was more necessary that a Minister should move, and move rapidly. Nobody will risk any capital, or even apply for an exclusive licence, unless he has spelled out clearly to him on what terms such a licence is being granted. It is as simple as that.

When we speak about getting the maximum benefit from our mineral resources for the State we must decide what degree of participation we will have. If we are going to have an Irish company like Mianraí Teoranta doing exploration, we have to decide where the finance will be found. If we borrow the money abroad—from the Arabs—at a very high interest rate, then I do not see much difference between that arrangement and asking a foreign company to operate our minerals. If we cannot ourselves provide the resources and capital to carry out exploration we have got to be rather circumspect about the degree of participation to which we are entitled.

If we have not got the expertise or equipment, we cannot dictate terms very readily to anybody else who is prepared to come here with those three essentials—capital, expertise and equipment. Are we going to continue to make statements about State participation and the benefit we will derive from our minerals while our people remain unemployed, are emigrating and nothing is being done to prevent it? We want a statement from the Minister spelling out the conditions under which licences will be granted that will give sufficient incentive to exploration and to the operation of any finds discovered as a result of that exploration. It is the least the Minister could do at a time like this.

I do not fully understand the significance of what the Minister said about science and technology. To my mind he appeared to be saying: "Hands off; the Minister for Industry and Commerce, and he only, will deal with that." I think the Minister for Industry and Commerce was afraid the Minister for Foreign Affairs would step in there and take some of the light. But I do not think the Minister for Foreign Affairs is the person of whom the Minister for Industry and Commerce should be afraid with regard to stealing his thunder in the matter of science and technology. My pages are not numbered and, therefore, my markings are difficult to relate. But he said that he, and he alone, would be the custodian of that policy. I do not know what significance that had. Under the heading "for Science and Technology" it is typical of the present incumbent of the office of the Minister for Industry and Commerce to say:

We must decide on the policies, and we must create the institutions for implementing those policies.

We must do everything; there is nothing we must not do. Why do we not do something, announce it, spell it out to the people at some stage and not keeping saying: "We will do this; I am aware that this is important" and so on? We have been listening to these neat little statements from that same Minister now for the past two years—"I will put a net on to the economy; I will have a proper mix". Those little platitudes get us nowhere. We are looking for action and the people are about to demand it now. God knows they have been very patient but they are disillusioned.

I should like to deal with many other aspects of the Minister's Department but there will be other speakers who will do so. Anything I may say about the National Prices Commission is not by way of criticism of that body. We brought the National Prices Commission into being, much criticised by the Opposition at the time including, particularly, the present Minister for Industry and Commerce. It was a good move. It was an experiment. It was not the be-all and end-all of what might be done in relation to prices. Nor do I think the commission regard what they are doing at present as the only thing that should be done.

They would be the first to admit that some revision of the approach to price control and price monitoring should have been undertaken before now. In their June report they announced that they had circularised a number of organisations dealing with consumer goods, with the retail trade and with business generally, for their opinions on alternatives to the present system of price control. Their October issue contains a large number of such alternatives which are of particular interest. Perhaps the Minister has made a study of those alternatives and of the suggestions made by the NPC themselves.

But it is enough to indicate that they are not satisfied that what they can do about prices in the present inflationary spiral is sufficient to deal with the problem. The question of the fixing of maximum prices is discussed in great detail. It is admitted by anybody who has read the report carefully that healthy competition is still the best means of controlling prices. However it is not easy to have competition in retail business. At present competition is confined almost to efforts at grab the market rather than to undersell competitors. The NPC are aware of this situation and of the need for the regular publication of price lists so that consumers will be aware of the almost day-to-day changes that are taking place in prices. In that way they will know where the best value is obtainable.

These are details one could discuss for hours. I mention them to point out that the NPC, which were brought into being by Fianna Fáil, remain the only instrument at the Government's disposal for monitoring or controlling prices. Because of the great upsurge in prices and in inflattion, too, since this Government came to office, every alternative should be explored in efforts to rectify the situation. In this context I doubt if anybody is happy with the efforts that have been made so far by the Government to get to the root of the whole prices problem.

I am disappointed with the Minister's statement. We had expected him to tell us, even at this late stage, that some steps were being taken to control inflation generated domestically. There is no point in continuing to say that inflation is due to factors outside our control when we all know that one of these days, when there is the question of moderation in incomes, we shall have to spell out clearly that the major factor contributing to inflation is on our own doorstep. This problem is controllable if there is the will to control it. Steps to deal with this situation must be taken regardless of how unpopular politically they may be.

We had expected the Minister to tell us that some positive measures were being taken on fiscal and monetary policy and also on the availability of credit. The other subject on which everybody was awaiting a statement was positive policy on our mineral resources. All we got were nice promises to the effect that we will not allow our natural resources to be wrecked and that they will be developed to the benefit of the people. There was no indication of any progress in this direction.

One can understand why the people are blaming the Government for the situation in which we find ourselves. Since this debate is confined to the Estimate for the Department of Industry and Commerce it does not afford us an opportunity such as we would have on an adjournment debate, when we could discuss such matters as the security position, our policy towards Partition, to various aspects of the EEC and of our agriculture policy. One can hardly expect the indulgence of the Chair to extend on this occasion to all those matters. However, the Estimate concerns the Department on which most attention is focussed at present in relation to the many ills in our economy.

It is not sufficient for the Government to say merely that the situation is due to matters outside our control. In judging the performance of the Coalition the people are entitled to take into account what the situation has been during the past 12 months. In the first place there were the Government's contractual obligations, the conditions on which they sold themselves to the people in February, 1973. I refer to their 14-point plan.

Regarding our performance as an Opposition, I can only ask the Government to read the speeches they made during their time in opposition on adjournment debates and on Estimates for the Department of Industry and Commerce. I refer particularly to the speeches made by the present Minister when he was in opposition and when he condemned the setting up here of foreign enterprises and accused us of selling out the country, so to speak.

This Government seemed to have a claim to some sort of exceptional ability. I do not know whether they were guilty of attributing such claim to themselves in the first instance but they were reluctant enough to take any steps to contradict it. On the basis of their contractual obligations to the people they stand not only discredited but dishonoured. Their performance on those undertakings justifies what some people say: that politics is a dirty game. You can say anything and do the other, with no intention of performing in accordance with what you offer to the people. If they are gullible enough to accept it, that is all right.

I was at a meeting recently attended also by a budding politician, who whenever he was caught up in doing anything wrong justified it by saying: "That is what politics is all about." Those engaged in politics should have a high standard. The country must have a Government, and I am not one of those who believe that you take any man out of society, elect him to the Dáil and the next day as a politician he becomes a dishonest man. I do not believe that. However, we sometimes tend to do things which give justification to those who, for reasons of their own, accuse politicians of not having high standards.

The performance of the Government against the pledge they gave to the people during the last election is one of the things which tends to justify the nasty accusation that politicians have no standards. At election time we should endeavour to put before the people only the things we think are capable of being accomplished. Otherwise our credibility must go out the window.

That is one of the criteria by which the people must judge the Government. Then there is the criterion for judging the Opposition, the things they advocate. Then there is the third criterion of a better quality of personnel. In the first Coalition Government the then Deputy Dillon used to give a glowing account of the new Government. He described it as the choice of brains from four parties, all the top talent that the country was capable of producing. I think he nearly believed it himself, as did other people. It was a dangerous claim to make.

A member of a Government requires common sense, integrity and a certain amount of foresight. These go far. He can get all the expert advice he wants from the excellent Civil Service if he is capable of assimilating it and making his own assessments. But when a Government set themselves up as being exceptional in ability and mislead the people into believing that they will not get remedies and performance in accordance with that fictitious build-up, then the people become more seriously disillusioned and credibility is rapidly eroded, and you have a discontented people.

The test of any Government is to be able to act in times of crisis and difficulty. We have a high rate of inflation which is unbridled and is now wreaking disaster. It would certainly be an opportunity for any Government to use their ability to do something worthwhile and to be seen to be doing it. I am afraid that if we took this as one of the criteria on which to judge the Government, it would fall flat. I do not think we ever had a more disillusioned people than we have at present.

However, I would like to say something on a brighter note. I remember Christmas, 1957, when Deputies went home from this House hopeful that we were on the way back out of serious trouble which they foresaw the previous Christmas. They felt that all was not lost, that the despair and gloom which had pervaded the atmosphere for a couple of years at that time was being dispelled. What prevents people from despairing and, indeed, emigrating is the knowledge that there is an alternative to this Government, and the hope that that alternative Government will be back as soon as possible. Goodness knows it will be a tough job for somebody, but it will be done.

What is the reason the Government have done nothing about the serious state of the economy? Why has the Minister announced nothing in his speech today? Is it not due to the ideological clash between two diametrically opposed factions that comprise the Government, as a result of which they could not present a positive policy for the advancement and betterment of the economy? Whatever excuses may be made, whatever statements may be made for propaganda purposes, the basic fact is that the two elements do not operate to give the best results. At worst we have a dangerous situation and at best a temporary mix which is trying to carry on in the hope that they will eke out as long in power as possible in order to show there was an alternative to Fianna Fáil.

I would not be in too much of a hurry to move in and replace the Coalition at present. If Fine Gael were on their own—and they will probably go to the country in the next election as a single party—they would do a better job. If Labour were on their own and allowed the old blue book to be brought into being, the people would know what they were about and they, too, would have a distinct policy. At the moment, we have the worst of the two; the mix has a bad flavour. It will not last too long. I would tell the people to have patience; there is an alternative. With that in mind, they may have a happy Christmas.

Minister for Foreign Affairs (Dr. Garret FitzGerald)

I thought I detected in Deputy Brennan's concluding remarks a certain political note, a certain lack of detachment. In his earlier remarks he commented on various aspects of industrial policy and on various parts of the Minister's speech.

I would like to deal with four main themes: the maintenance of industrial activity, economic growth based on industry, including exports, prices and mineral policy. These appear to me to be the main themes likely to emerge in this debate. On the question of industrial activity our problems, opportunities and possibilities must be seen against a background of the world economic situation and its impact on us. The gravity of the situation is still not sufficiently understood, not merely here in Ireland but, indeed, in other countries.

At the recent summit in Paris, which I had the honour to attend with the Taoiseach, the very deep concern of the heads of Government with the economic situation facing their countries, facing Europe and the world as a whole, was very evident. They were also concerned that in none of their countries did the reality and gravity of the situation appear yet to have struck home. The fact that there was this universal acceptance of how grave the crisis is, is, perhaps, the most important aspect of this summit from our point of view. We are concerned to maintain industrial activity and employment. We are an open economy, one of the most open in Europe. Being a small country, we live on trade. The equivalent of half our national output is accounted for by imports.

In these circumstances, our ability to survive and expand depends on our ability to sell abroad exports of goods and services which in their total amount represent about 45 per cent of our national output. There is no possibility of maintaining economic growth in Ireland unless these exports are maintained and expanded. We are too small a country. We are only a fraction of the necessary size of a country we would have to be in order to sustain economic activity, our own domestic efforts within our boundaries. More than any other member of the Community, except, perhaps, Luxembourg, we depend on what is happening elsewhere for activities we maintain here. The most important thing we can do, although our influence is necessarily small, is to exert the influence we have in international circles and try to reinforce the understanding of the gravity of the world's economic situation and try to press those countries, large enough to be able to make an impact on the economic scene, to take the necessary action.

For the first time in 14 months I had a feeling at the Paris Summit that there was a hope of the present world crisis being resolved. During that time the different approaches, divergences of view and attitudes amongst world leaders to this problem, their varying perceptions of its gravities and reality, made it very unlikely that anything would be done to put things right before the crisis became irretrievable. Fourteen months have been lost. At last, at least in Europe, there is a recognition that we are at the 11th hour. There may just be time, by massive concerted action, by member countries of the Community with other countries, such as the United States if they can be persuaded to move in this direction and recognise how grave the situation is, to avoid the kind of disaster which struck the world in the late 1920s and early 1930s. Until the summit I did not see very much prospect of that but I can see now that there is a hope.

It is quite unrealistic to talk of our industrial situation at home except in this wider context. Unless we see that the cruicial thing for us is to maintain demand for our goods elsewhere, to keep markets open elsewhere, to ensure that we can sell freely elsewhere, we are in danger, through short-sightedness of moving towards policies that would be counter-productive and disastrous at home. A country which must sell 45 per cent of its national output abroad is very vulnerable to any adverse trends in the world trade situation. Above all, it is vulnerable to anything that might happen to prevent access for our exports to other countries.

I am not sure if Members of this House are sufficiently clear on the dangers here. We know what happened in 1929-1932. The reasons for that crisis were very different from the reasons this time. When each country faced a serious economic crisis they reacted by closing off their frontiers and trying to save their own situation at the expense of others. The chain reaction effect of this destroyed the world economy and led to unemployment rates of 30 per cent in many countries. For 50 years since that happened Governments and economists have been quite clear in their own minds that this must never be allowed to happen again. The whole body of world economic organisations in the international sphere was built up to try to prevent this happening again, to create a sense of international solidarity of enlightened self-interest that would transcend the short-term interest of countries facing immediate economic difficulties and that would prevent a breakdown of world trade again, as happened at that time, a breakdown deriving from the very short-term self-interested approach of looking inside their own country at the problems and seeking to solve them without thinking of their impact on others.

There is a grave danger that some country will be tempted to start imposing restrictions to protect its own economy. The effects of that on its neighbours will be such as to force them to act in a similar way. There will then be a breakdown of the open trading situation which we enjoy. A spark could set it off. If that happened we would suffer almost more than anybody else. There is one thing which would protect us and that is that we export a good deal of agricultural produce. The basis of trade for this is different. There are favourable indications for agricultural trade and exports in the period immediately ahead. That would safeguard us from the worst effects, although the effects would be very bad, indeed, because employment is concentrated not in agriculture but in industry.

In the 1930s half our people were employed in agriculture. Although agriculture suffered at that time, more because of the unfortunate economic war than the world economic situation, it was not as badly hit as industry. Today the proportion employed in agriculture is much smaller, less than a quarter. The numbers engaged in industry are many times greater than in the early 1930s. Therefore, the vulnerability of our industry to any impediment to free trade is very great. The share of employment in Ireland could be effected if any other country were tempted to introduce protective measures.

The supreme aim of Irish policy must be the extent to which we can exercise any influence in the council of the nations. Thank God, we do have some measure of influence, small though it is, in the councils of a very important group of nations, the European Economic Community. No country in Europe, except perhaps Luxembourg, has a greater stake or interest in the preservation of free trade than we have today. That is the truth of the situation and that must be the supreme aim of our policy.

When we come to look at industrial activity, it is astonishing the progress we have made in the creation of new employment. Given the small size of our industrial sector—it is many times larger than it was but still small by international standards—given the small size of our economy in a country in which barely one million people are employed, to reach the point where the flow of approvals and grants for new industrial investment relates to a figure as high as 23,000 jobs a year is a phenomenal achievement. This is an achievement in which the credit must be widely shared, the immensely valuable efforts of the Industrial Development Authority, which spearheaded this movement and the policies adopted by past Governments, going right back to the mid1950s, with the introduction of the export tax relief, and before that even to the establishment of the IDA and policy changes effected during the long period of Fianna Fáil rule and the intensive efforts that are being made by this Government since we came into power.

The credit for this goes a long way back, is widely spread and does not all go to one Government—far from it. Fianna Fáil made their contribution in the period they were in power but the net effect of all this, the changes in policy which began in 1949, with the establishment of the IDA, and which began to take a new and really vital turn with the export tax relief introduction in 1956, the cumulative effect of this long process over a period over a quarter of a century, has been to transform our economy by giving it a new dynamic element which it did not have before. The test of its success lies in the fact that although in the present economic difficulties there may well be some recurrence for several years past there has not been any statistical evidence of net emigration. Of course, many people continue to seek work abroad for a period, some, perhaps, permanently, but that flow has been counter-balanced by an equal in-flow so that there has not been any net loss of population to emigration over the last couple of years.

I am not suggesting that situation can be fully maintained in the present economic crisis. There may well be some recurrence of net emigration but it is a measure of the extraordinary success of industrial policy that the point was reached where under favourable economic circumstances of a year or two of rapid growth we were able to achieve that stability and net emigration ceased to be a significant factor. Indeed, we reached a point where, if statistics are right, and they are not particularly reliable statistics, there appears even to have been some slight net immigration for a couple of years. The biggest single factor in that has been the creation of new industrial employment through the activities of the IDA, using the incentives, made available by the work and policy decisions of successive Governments. That, plus the new dynamism of our long established industries many of which responded very energetically and very effectively to the opportunities provided by the freeing of trade and to the spur of the freeing of trade—not all of them responded effectively— and I will come back to that point— many of them did and they, too, are contributing to the growth we have had in employment.

The result is that, although we face today a very disturbing rate of redundancy in industry and although unemployment is rising, it is not rising as rapidly as in most of the neighbouring countries. But then it started here at a higher level to begin with so there is not that much comfort to be taken from the fact that the gross rate of unemployment has been a good deal lower here. Although we have had this increase in redundancy and unemployment, at least it is being offset by the comparable number of jobs becoming available. While, now and for some time to come, we cannot expect to get the significant growth in total employment, which was beginning to be an important factor, certainly a significant growth in industrial employment, we, nevertheless, are in a position where, despite a very serious economic and industrial crisis, depite the redundancy and the unemployment situation, the level of employment in industry is being more or less maintained because of the massive increase in new industrial activity.

We would be in a very serious situation today without that. The fact that unemployment here is rising slower than elsewhere, from what was still a too high level to start with, reflects the results of this industrial policy. That is not always a comfort to the man who loses his job, especially if, as so often happens, he is in an older age group and cannot easily be retrained or, even in a younger age group is in a town or village where there is no alternative employment. It is not always easy to ensure, especially in a period of rapid industrial change, growth and decline, simultaneously occurring as at present, that the new jobs occur in the places where redundancy occurs.

I believe one can do a certain amount in this direction. Indeed, one of the things I sought to achieve as a member of the CIO ten years ago, which I failed to achieve, was to persuade the Government at that time to prepare very detailed plans based on the study of industries by the CIO, in which the confidential reports on individual firms, which were not made available to the committee but only to the individual civil servants and economists studying each industry, would be, within the civil service machinery, put together and matched on a geographical basis so that in the Department of Industry and Commerce there would be a master plan showing where redundancies would occur, when a combination of free trade and an adverse economic situation created the problem. My hope then was to persuade those concerned to have such a master plan and to integrate this so closely with the IDA that their activities would be directed particularly towards those towns likely to suffer.

I know there are difficulties and that any kind of economic forecasting is difficult and the decisions that the teams of the CIO had to make in relation to individual firms had to be, to a large measure, subjective and quite possibly in many individual instances they might be wrong. I still thought it should be possible, on the basis of confidential reports at that time, to get a picture of where the geographical instances of redundancies or unemployment would fall and to direct the IDA policy in that way.

This is a long-term plan and needed to be prepared long in advance. I am afraid, for reasons I never fully understood, the job was not done and to some extent today, the fact that there is not the fullest integration of the IDA activities with the redundancy situation is because that was not done then. It is not a thing you can do quickly. The Government cannot in 18 months or two years resolve that problem but if the plan were made at that time we would be in a better position today to minimise the human damage done by redundancy when it occurs in areas where, at that particular time and for a year or two afterwards, there is not alternative employment created.

I said many of our established firms are making a major contribution to the maintenance of economic growth at this time—not all of them. My own experience in working in the CIO, and I was actively involved throughout that exercise and subsequently acted as chairman for a number of adaptation councils, was of industry's unwillingness to face the reality of the problems to come. I know there are many difficulties. When I, as chairman, was faced with the question of whether I could make proposals as regards rationalisation, which firm should merge with which, how many firms ultimately would be the appropriate number for a particular industry, I found it an impossible decision to make.

I do not think it is easy to plan rationalisation from above or from outside. Perhaps we attempted too much and I am not surprised we did not succeed fully. It is surprisingly disturbing that industry, faced with the realities shown up by these reports, was not more energetic in rationalising itself. Although it was not easy for a chairman of an adaptation council or the Department of Industry and Commerce to propose and dispose of firms and their employees and decide who should stay and who should go it is possible for industry itself, sensitive to its own problems, to see where a merger might be useful to the firm in question and where a re-organisation of the industry could be beneficial. In many industries, I fear the work of CIO was not taken full advantage of. Much of it was wasted because the firms concerned, in a period of relatively rapid economic growth when things seemed to be going well, were not willing to face up to the reality of what might happen.

One problem here is that redundancy comes about not simply because of the removal of protection; perhaps not even primarily because of that and certainly not immediately because of it. It is very frightening to see the pattern of redundancy in recent years. You had relatively high redundancy rates in 1970 and 1971 when free trade had not yet fully struck home. Then at the point when the removal of the tariffs reached the critical stage when there should have been acute redundancy, redundancy fell sharply. Why? Because the economic situation recovered. The short term economic cycle affects to an extraordinary degree the timing of redundancy under free trade conditions. I fear the industry was misled at the time into thinking that because there was a boom and they were doing well that this was a fundamental sign of the strength of the industry, but it was in fact, the point where the need to rationalise became critical. At that period we went into an economic boom in which firms were blinded to the reality of the situation and now the process of free trade has been almost completed. The Anglo-Irish Free Trade Area Agreement, negotiated by the previous Government is almost fully effective now; the EEC effects for what they are worth, which will not be very much because it affects only a minority of our trade with the Continent, have not really come. The Anglo-Irish Free Trade Area Agreement arrangements, which have the real effect on redundancy, have now advanced to the stage where the tariff is only 10 per cent of what it was. Many industries which could survive in a boom now find themselves in a difficult economic situation from the combination of the economic crises with exports dropping and a fall in domestic demand coming at a point when they have not rationalised as they should have done in the face of the gradual removal of protection. All this, coming together, is creating grave problems which, in part at least, would have been avoided had firms reacted sooner and had they not in many instances been blinded by the fortuitous, rapid economic growth of 1972 and 1973 into thinking they should ignore the problems they faced.

For us, the maintenance of economic growth abroad and at home is vital. In this year, fortunately for the economy, the Government in their budgetary policy early in the year took an expansionist line. It can be argued that in the light of the rapid slowing down of the economy during the year we should have been more expansionist, but nobody on the opposite benches made that comment. On the contrary, in the case of the last budget and the previous one, budgets introduced when economic growth was beginning to slow down, expansionist budgets designed to maintain economic growth as far as possible, these were and are still being criticised by the Opposition as being too expansionist. I am certainly glad that, with that level of economic competence and analysis on those benches, they are on those benches and not on these.

Think what the situation would be today if in the budget of 1973 when we now know—and as at that time we guessed—that the enormously rapid growth of 1972 and 1973 was beginning to decline, if then we had not had an expansionary budget. The deceleration of growth would have been very rapid and this year, facing a situation where growth was already, and had been for some time declining, if we had not had an expansionist budget we would now have massive unemployment and redundancy. Yet, Deputy Colley—and Deputy Lynch in a recent broadcast—still criticise us for having expanded the economy too much, for having tried to maintain growth.

This is hardly believable. I can understand the Opposition making a mistake. I can understand their judgment being defective last year in criticising the budget. It is even under-standable—though hard to understand —that this year, after a year of decelerating growth, they could have taken this line. But it is unbelievable that they should be so politically stupid as to go on reminding people that this is their line. If I were in that position of having made that blunder I would shut up about it and hope that nobody would remember. But no; such is their lack of understanding of what is happening that Deputy Colley and Deputy Lynch are still criticising us for expansionist budgets when the right criticism that could be made is that we did not adequately foresee how deep the recession would be and that we should have expanded the economy more at that time. That would be a fair criticism in hindsight. I do not think we could have foreseen it but at least in retrospect it would be a correct criticism. That is not the criticism we are getting. Personally, I hope Fianna Fáil continue reminding the people of the incompetence of their economic judgment and ensuring that people will not put them back into office to aggravate unemployment further as they would have done by their policies in that period.

I say that with some heat—and I know it is a political comment—because I think it is not only politically irresponsible for Fianna Fáil from their own point of view but nationally irresponsible to talk in those terms. It may suit the Government that the Opposition are so incompetent that they are making the wrong criticism and reminding people that they are making it, but it is worrying that there should be such a lack of understanding of the situation we are in that these comments should be made.

As we see it now, the deceleration in economic growth is such that this year the growth of the economy will be much less than we had hoped it would be. The impact of world prices has been more severe than we foresaw. When the figures are finally published the rate of economic growth in 1974 will be seen to be very much less, perhaps no more than a fraction of what had originally been hoped for. The prospects for next year are not for very rapid growth either unless we can encourage our partners in Europe and the United States to reflate world demand very rapidly and unless we can be extremely skilful in our domestic policies.

I want to remark on how well our exports have been maintained—not completely—there has been a deceleration but there is still remarkable growth rate. In the first five months, the only period for which we have price data and therefore volume data, the volume of our exports rose by 13½ per cent compared with the same five months of the previous year. The total increase in value was 33 per cent and there was a price increase of something about 20 per cent. To have achieved in the conditions of the first half of 1974 a 13½ per cent increase in exports must be rare. I doubt if many other countries achieved that. We have no comparable data yet and I am just speculating in saying that. That is the normal pattern. There is evidence in the value figures for the following five months to October of some deceleration and, since the price pattern was probably similar, that would suggest some slowing down in the growth of exports. Nonetheless, our exports are still growing significantly up to the present; and that in the face of a situation where, for special reasons connected with agriculture, agricultural exports were not buoyant, is a remarkable testimony to the vitality of the industrial sector and tells us something of how much we owe to it.

I want to turn now to the matter of prices. I listened to what Deputy Brennan was saying and during the bye-election I listened to the speeches of my opponents and I have also read them on the subject of prices. If I were in Opposition I, too, would stress the prices issue. It is one to which people are highly sensitive. Understandably, public opinion tends to blame whoever is in office whether or not the matter is one for which the Government are blameworthy. If people's lives are adversely affected, they are more likely to blame the Government than the Opposition, which is understandable. What has been so significant, however, in the speeches of the Opposition, as I have heard them and read them, is that in no instance at any stage can I recall any suggestion being made as to what precisely it is that the Government should be doing and are not doing.

They are content to criticise, to emphasise, how rapidly prices are rising. They are prepared to say the Government should do something. They speak about Government promises. The Government promised to do something in the document on which they founded their election campaign. They said their aim was to control prices tightly. This has been done. So tightly are they controlled that one of the most striking features of the economic scene in Ireland, and one which must disturb us, is the rapid decline in profits out of which alone industry can keep going, reinvest and maintain employment.

A criticism which perhaps the Opposition could make economically is that price control is so strict that at this stage it should be eased in order to maintain industrial growth. That would be a point one would have to look at seriously. It is a view the Opposition never put forward. If they had, the Government would have considered it very seriously. Nothing has been suggested very seriously by the Opposition. I hope, on behalf of my colleague, the Minister for Industry and Commerce, that somebody, somewhere in the Opposition will say something constructive so that the Minister can either say "yes" to it or say "I will consider it" or give some reason for not doing so. I am afraid the Minister for Industry and Commerce will end up this debate by having to say that there has not been a single relevant comment from the other side.

Mr. Tunney

The Minister wants Government by Opposition, then.

Dr. FitzGerald

We are quite happy to govern by Government. I am just pointing out the total bankruptcy of the Opposition on this point. The prices situation is a grave one—it has never been graver—but that the Opposition should be content to get away with nothing but destructive criticism, without any constructive suggestion whatever, is chancing their arm more than I would if I were in Opposition——

Mr. Tunney

The Minister has not been here to hear what has been said. He is just back on one of his monthly visits.

Dr. FitzGerald

That is a remark out of the 1940s or the 1950s.

Mr. Tunney

It is a true remark.

Dr. FitzGerald

It represents truly the spirit and the quality of the Fianna Fáil Opposition.

Mr. Tunney

Supposing the Minister were over here——

Dr. FitzGerald

I am making my speech.

Mr. Tunney

The Minister is inviting——

Dr. FitzGerald

I am inviting Deputies to say something constructive and useful on the subject of prices. I have been pointing out to the public that they have not yet heard anything constructive or relevant from the Opposition on that subject.

Mr. Tunney

That is not true.

Dr. FitzGerald

Let us consider what the Opposition might have said but obviously did not say for very careful reasons. They might have pointed out some of the components of prices. Basically, agricultural prices are not based on the short term cost considerations. They are governed primarily by the external pattern of how agricultural prices go through a common agricultural policy and so on. Agricultural prices must be taken on their own. Separate from that, there are the prices for goods and services generally other than agriculture. The basic components of them are, of course, import prices—materials coming in—and there is the value added here which consists of wages and salaries, profits and depreciation. I should like to analyse these.

Mr. Tunney

All those factors existed when you said you would stabilise prices.

An Leas-Cheann Comhairle

The Deputy must not continue to interrupt.

Dr. FitzGerald

We said we would control prices tightly. That was then very necessary because at that time the level of profits in industry in a number of cases was excessive and the buoyancy of demand and the lack of competition were such that the problem of profit components had to be controlled tightly. Let us look at these items one by one.

Mr. Tunney

What about the tax component? The Minister has not mentioned it.

An Leas-Cheann Chomhairle

There is a time limit for Deputies. Would the Deputy permit the Ministr to continue?

Mr. Tunney

The Minister said he was lonely without opposition.

Dr. FitzGerald

The Deputy will have to listen because there is a time problem. On agricultural prices, I have not heard Fianna Fáil advocate lower prices for farmers. If that is what they have in mind they have been slow to say it. We do not advocate it. In a country from which six out of seven or eight cattle are exported, it must be to the benefit of the country to pay more for the one we eat at home if we can get that much more for the other six or seven we export. Of course our efforts to maintain and increase the price of farm produce have repercussions for the consumer here. But there is no country in the world in which it is so much to the national benefit that the consumer should in that respect have to pay more because of the benefits accruing to the whole economy through the massive industrial exports. The Irish consuming tail, if you like, cannot wag the export dog. I do not think that is advocated by Fianna Fáil. I hope not. Obviously in the agricultural price area sui generis our job is to ensure good prices for farmers even if this means, as in some instances it does, that consumer prices at home must rise and I think nobody on the opposite benches will contest that.

Mr. Tunney

The Minister cannot leave out the meat factories.

Dr. FitzGerald

Therefore, we can leave out the agricultural prices component. One of the other components is wages and salaries. This is on the agricultural side. As Deputy Tunney has said, industrial processing is being carried on and that must be included. Some of the components are wages, salaries, profits and depreciation, as well as import prices. I will take these one by one. I will come to taxation at the end. On wages and salaries, are the Opposition saying we should control them? I do not think so. Is it profits? Of course the price control system has worked very tightly to control profits. The Minister in his opening speech pointed out the net effect of the NPC report has been to rule out price increases of the order of £33 million which in their retail application would have been of the order of £40 million. The operation of the NPC, established by Fianna Fáil, has been to squeeze profits and depreciation margins by £40 million. It was very desirable this should be done because when we came into office there was considerable exploitation in the semi-monopoly position of high demand and boom.

I wonder whether the Opposition are saying that the level of profits in industry and trade today is so buoyant that they must be much more sharpely squeezed. If so, I hope they will say so, in order that traders and industrialists will know where they would stand if Fianna Fáil were in office. It would be just as useful for the workers to know if Fianna Fáil were advocating control of wages and for the farmers to know that they want to control farm prices. I am going through all the possible things that Fianna Fáil could mean and I should like them to tell us at the end which of them they mean. I think they are pulling a three card trick with six cards. Under which of these cards do Fianna Fáil think the key to the prices problem lies? When you lift up each one, the Fianna Fáil answer is not there.

All the evidence is that profits are declining very sharply and alarmingly. The British Socialist Government, which are not being the most friendly Government to industry in western Europe, found it necessary to plough back £1,500 million into industry and to remove price control because they were so persuaded of the dangerous effects of profit decline. There is no evidence that our situation is any different from the point of view of profits declining.

I do not think Fianna Fáil really mean that price controls should be tightened so as to squeeze profit margins so much that more firms would be put out of business, more people out of work. Is that what they advocate? If so, no doubt in the speeches to follow they will say so.

What is the next component? It is import taxes and this, of course, is where they key to the problem lies. This is the source of the evil that has hit us because we live in a period of massive increases in import prices. How massive they are is still not generally appreciated.

If we take, for example, the most recent statistics we have for import prices, they run up to May. In January, the import price increase was about 35 per cent; in February, nearly 40 per cent; in March, 40 per cent; in April, 42 per cent; in May, 44 per cent. Those are the import price increases calculated roughly from the figures—I am quoting from Economic Series, 1972-74, Item No. 6, Import Unit Values and Numbers. It is that massive and constantly rising increase in import prices that is the source of our inflation. It is something that we would love to be able to control. It is something which, if we could control it, it would be the first thing we would tackle. But we cannot control it any more than a Fianna Fáil Government could control it or any more than the United States or Britain, Germany, France or Japan could control it because its causes are outside the control of these countries and outside our control.

Fianna Fáil presumably are not suggesting that we can control these import prices. Where then is the action which Fianna Fáil think we should take? After all, we have had a budget this year which did not impose additional taxation at that time and we were criticised for it. Fianna Fáil said there should not have been such an expansionist budget. The deficit was too big, Deputy Colley told us, and Deputy Lynch repeated this on radio recently. The deficit should have been cut by increasing taxation, they told us. We did not increase taxation. We were right to try to keep the economy moving. Certainly, the final element of tax component in increasing costs is something which we cannot be accused of being responsible for because we did not increase taxation in the budget.

Mr. Dowling

Which budget? The Minister was not here to know.

Dr. FitzGerald

I am talking of the 1973 budget and I am talking of price increases up to and including the middle of November index just published today.

(Interruptions.)

An Leas-Cheann Comhairle

There is one hour for each speaker.

Dr. FitzGerald

I am saying that that index includes no element of tax increase by this Government in this year and Deputies know that and they are not going to persuade the people otherwise. The people know that what the Deputies advocated is that there should not have been such a big budget deficit, that we should have cut back on expansion and should have increased taxation. We rejected that advice which they are still, foolishly from their point of view, talking about. Having gone over the field and established that we did not increase taxation despite Fianna Fáil advocacy of that, therefore that cannot be what they mean when they say we should take more action about prices.

(Interruptions.)

An Leas-Cheann Comhairle

Deputies must allow the person in possession to speak.

Dr. FitzGerald

I am talking of the statistics just published for midNovember.

(Interruptions.)

An Leas-Cheann Comhairle

The Minister will have to get extra time if he is interrupted in this way. There is a fixed time of one hour for any speaker.

Dr. FitzGerald

Thank you very much, a Leas-Cheann Comhairle.

Mr. Dowling

That will apply all round, a Leas-Cheann Comhairle?

An Leas-Cheann Comhairle

Yes.

Dr. FitzGerald

It is an all round debate. Having established, therefore, that the price increases recorded in the consumer price index contain no element due to increases in taxation and that clearly we cannot control import prices, I am asking Fianna Fáil which of the other three possible things are they asking us to do—cut profits further by tighter control of margins, control wages and salaries or cut back farmers' prices? Or, if the Deputies opposite know of some other component which I have in some way omitted in the structure of prices no doubt they will tell us in the process of the economic analysis which they will be delighting this House with during the course of this debate. I would suggest to the public and to the House that if in fact Fianna Fáil at the end of the debate have not answered my points by either revealing another component which I have not mentioned or by making any suggestion under any of the headings I have mentioned then the House and the people need not pay too much attention to the Fianna Fáil criticisms in this area.

The fact is that we are going through a period of inflation far worse than anything that has ever been suffered before for reasons which Deputies know are outside the control of all the industrialised countries put together, never mind being outside our control here. We have to face this and the effects and problems of it.

The impact of inflation is enormous but the impact of unemployment is even more enormous. It was very interesting indeed, if I may come back at this point to what I said at the outset about the summit, to see at that meeting of heads of Governments that there was no head of Government who did not put the control of unemployment and the maintenance of employment before even the getting down of prices. Even the most inflation-conscious person present—and the House will have no difficulty in guessing who that was —was quite clear in his mind and said so very firmly and forcibly that the primary duty of Governments today is to maintain employment, maintain economic demand, prevent a world slump, that in doing this they must avoid aggravating inflation but that the most serious issue is to keep jobs and that must take priority and must be tackled in a way that does not make the price situation even worse.

That is the situation which we face and I can say our voice was raised in that sense; indeed even before the heads of Government met, when the Council of Ministers came to discuss the preparatory documents our voice was raised with that of Britain and other countries in favour of reorientation of the original proposals put to us which were somewhat deflationary in tone. We pressed strongly and successfully for a revision of that approach which found its culmination in the summit in the attitude of heads of Government there which, for the first time in 14 months, has given me heart and hope.

I want to turn to one other issue, that is, the question of mineral and oil exploration. If you try to add up the mess we were left with by the previous Government, it is unbelievable. They gave away the rights to the greater part of the Celtic Sea for £500 down. The Minister's opening speech was undeservedly charitable in suggesting that this was done because nobody knew that there was oil there. Maybe they did not but, even if nobody knew there was oil there, there was enough possibility that there might be oil there if these people were going to look for it, to charge more than £500 for the whole Celtic Sea. You would not need to be very clever to realise that if a gentleman comes along and wants the oil exploration rights for the whole sea south of Ireland and shows such strong interest that he is prepared to spend money exploring there, he must at least think there is something there and that it is worth charging a little over £500 for the privilege. It does not seem credible that any Government anywhere could give away the national resources for £500. For us to sort that out is very difficult. The deed was done and when deeds like that are done they cannot be undone.

Mr. Dowling

It was not done by secret agreement.

An Ceann Comhairle

Deputy Dowling will have an opportunity and, I should imagine, pretty soon.

Dr. FitzGerald

If Deputy Dowling wants to defend the £500 deal I trust he will tell us long and seriously what a good sum it was and how the Government might have looked for only £250 but got £500 for the Celtic Sea. Deputy Dowling on this subject would be most entertaining and very convincing. When he comes to speak this will no doubt be the main theme of his speech.

Not only did they do that but they gave away Bantry Bay with a guarantee that there would not be any port dues unless another industry established itself there. That did not have to be done with people who were going to invest in 200,000 ton or 300,000 ton tankers and who were going to move oil in millions of tons. They were people who could afford to pay a few "quid" for using the harbour but they were not asked. Oh, no. There was a guarantee that that would not be done to them.

Then there was the defective arrangement with Bula which was found defective by the courts because of the incompetence of the Minister who at the time——

Mr. Tunney

There was no arrangement with Bula.

An Ceann Comhairle

Order, please.

Mr. Tunney

On a point of correction, is it in order for the Minister to say that there was an arrangement which I know did not exist?

An Ceann Comhairle

It is unfair to utilise the limited time available to the Minister by intervention of this kind.

Dr. FitzGerald

My terminology may be inexact. Let me make it exact—a minerals acquisition order in relation to the lands of Bula. The preposition I used may not have been the most happy one.

Mr. Tunney

That is O.K.

Dr. FitzGerald

That minerals acquisition order was so incompetently drawn up by the Minister that it was found defective by the courts, which left us in the position we are in with regard to those particular rights.

Then there was the 20-year tax relief given for mining to people who hoped to get five and thought they might start by looking for ten and were offered 20 before they even opened their mouths. The giving away of that was another act of incredible incompetence.

It was so incredible that one cannot but wonder what lay behind it. How could a Government offer such an immense bonus to people beyond what they were looking for? I met several senior members of the management of one of the leading mineral companies in the world—I shall not name it—who were here some years ago after that. To be quite specific, we had lunch in the Shelbourne Grill. One of them said to me that they could not believe any country would behave in such a manner. Five years would have been considered reasonable and they might have looked for more, but to be given 20 was quite incredible. They were bemused by the attitude of the Government. At the end of it all Fianna Fáil had taken no steps to acquire expertise on these matters so that when we came into office the experts were not there with the knowledge—knowledge that can only be acquired in the international forum—to advise the Government on details of policy.

In this respect Deputy Brennan's speech was amusing and I took a note of what he said. He said: "The Government have all the expert advise they want". Unfortunately for him 45 minutes earlier he had said: "We have to be circumspect: we have not got the expertise". I think those are two exact quotations from his remarks. I do not know what is Deputy Brennan's final, authoritative position on expertise. Perhaps he was talking about different kinds of expertise, but if so he failed to make it clear.

The fact is that the kind of expertise we needed was not there and we had to start from scratch to unscramble the biggest set of incompetent decisions any Government anywhere had ever taken in regard to a matter of national interest. We had to do that without any expertise, we had to go and find it elsewhere, and we had to wait until we got expert advice before taking policy decisions. The problem facing the Minister, of unscrambling the mess and trying to get the right answer as rapidly as possible, is an enormous one. It was created by Fianna Fáil by their utter incompetence in this area and it is a national disgrace. If the Irish people have any gumption they will never let into office again the people who behaved so badly in this matter. Fianna Fáil did much to their credit in the past but if they had gone out of office before they dealt with this matter the country would be much better off. At the end of their term of office they had descended to depths to which no group of men charged with executive authority should descend.

The danger at the moment is that because of the very natural and understandable pressure for results, because of the powerful propaganda of the interests concerned, people, including Deputies opposite, could be brainwashed into putting pressure on the Government to give in easily, to hand over our resources at a cheaper price than they should command. The effect of this propaganda is evident in the speeches from the opposite side. I would tell those Deputies that a party that in the past always had the national interest at heart should be careful about echoing the words and thoughts of international groups who are anxious to pursue their interests at the expense of the Irish nation.

We must not be rushed into taking wrong decisions. The people, whether workers or businessmen, who are being brainwashed into supporting this campaign should be aware of what lies behind it. It is vital that we take the right decisions here. It will be several years after the decisions are taken before we experience the effect on employment. Whether we take the decisions now or in a couple of months' time will not affect significantly employment in the present economic crisis, but it will affect the future of the country for decades to come.

The decision the Minister will recommend to the Government will be a difficult one, because it is true we could look for too much, that the pace of exploration and exploitation activity might not be fast enough. It is also true that if we look for too little we will be giving away the resources of our country that we will need in order to benefit the economy and to solve our economic problems. In order to get the right decision we must take time. When we consider that we had not the necessary expertise and had to unscramble the mess left by Fianna Fáil, we know it will take time.

The position is made worse when in one instance the Government are in the situation that negotiation is rendered impossible by the fact that the group concerned are unwilling to put counter-proposals and, secondly, that they are suing the Government. If the Government are sued by a group who are trying to get hold of the national resources for their benefit and not for the nation, it is the job of the Government to defend that case in the interests of the people. If the people concerned decide to adopt a different tactic and to negotiate, if they put forward counter-proposals instead of suing the Government, I am sure there would be no difficulty in getting into negotiation again. However we will not be bludgeoned by anybody attempting to get hold of the resources of the nation by browbeating the Government.

I wanted to say those things because they are matters about which I feel very strongly, both about the incompetence of the former Government and the duty of this Government. I am glad of the opportunity to contribute to the debate. I hope in the concluding speeches we will have more specific views from Fianna Fáil as to how they in Government would tackle the price problem and which of the components in prices that I have mentioned they would wish to tackle. I am not guaranteeing we will take their advice. I am not guaranteeing that, if Fianna Fáil tell us they want to cut farm prices, to control wages or to squeeze profits further, we will do it. But I would be interested to know what they are proposing. If they are proposing none of these measures, perhaps they will not make so many foolish speeches on the subject in future.

Mr. Dowling

It is sad that we have a Minister for Foreign Affairs who is so out of touch with present-day developments of the country and the Government. He seems to be completely out of touch with the events of the last few weeks. He has given us a lecture about the lack of taxation and the fact that taxation was not imposed in the budget. However he did not mention the number of budgets we have had recently—the budget on petrol, the budget on butter and yesterday the Minister for Finance announced that additional revenue would be obtained by way of increased dog licence fees. Attack as the best means of defence seems to be the policy of the Minister. He is not going to tell me what to say; I will make my own speech. The Minister will not divert me into any alleys——

Dr. FitzGerald

I did not think the Deputy would be diverted.

Mr. Dowling

I will say what I believe. I hope that in the next few days the Minister will be updated on the events of the last few weeks so that he may appreciate the tremendous problems thrust on the nation as a result of the Government's actions.

I listened to the Minister's narrowranging speech and it was clear that the number of items dealt with was minimal. It is a question of history repeating itself. There was no hope given to the unemployed workers and to those on the verge of unemployment. We have been told by Ministers that positive policy has not been developed because they have not yet accumulated all the facts. This has been the theme in the recent debate on employment and in other debates also.

Fianna Fáil realise that the Government have no positive policy. It may be that the entire Government have become contaminated with the views expressed on a previous occasion by a former Minister for Industry and Commerce, namely, that it is not the duty of the Government to provide work for the people. I had hoped that we would get from a socialist Minister some ray of hope for the future but it may be that he has become contaminated by some of his colleagues. It was said before that people died on the side of the road through starvation, and this may happen again.

Those were the words of another Minister for Industry and Commerce, not of a Fianna Fáil Government. It would appear to me that it is history repeating itself. We see the destruction of the building trade and the ever-increasing number of unemployed. The same pattern is evolving that we had under other coalition governments. Apparently the socialism of some members had to be buried when they entered the Cabinet. That was the price they were prepared to pay.

At the moment the number of unemployed is in the region of 90,000. We are told the position will get much worse. In October, 1973, there were 60,910 people unemployed. The statistics coming at present from the Central Statistics Office do not give the full picture. They do not include professional or semi-professional people or the self-employed. They do not include lumpers in the building trade or redundant people who are retraining. This figure falls far short of the actual number. It relates only to people on social welfare benefits. We are in a really serious situation. If one wants to compare it with the situation when Fianna Fáil left office, one must take into account the lowering of the age for old age pension from 70 to 68 years. That, in itself, was a very good thing but as a result of it we can probably add another 25,000 to the number of unemployed. There is not a ray of hope from the Minister for the future of the people who are now forming the dole queues. In addition, there are the people who became unemployed and left the country. The figure is far in excess of the 90,000 I have mentioned.

The Minister for Foreign Affairs referred to the consumer price index. There has been an increase of 20 per cent in the index. The main price increases are on the necessaries of life. We hear about the application of taxation to non-essential items. According to the consumer price index the price of foodstuffs increased by 20.2 per cent, clothing by 21.4 per cent, fuel and light by 57.5 per cent. Many of our problems were created by the alteration of VAT when the necessaries of life were further taxed by the Minister for Finance. It would appear the Government are unaware that clothing is one of the necessaries of life. Recently there was a question on the Order Paper about the various price increases and decreases that had taken place in the previous 12 months. There were very few decreases but one I did notice and I read the relevant issue of the Official Report extensively during the Cork by-election campaign. The price of Andrews Liver Salt decreased by .01 per cent as if that would make any difference to the housewife and families of the country.

It was on the basis of a stabilisation of prices and a reduction in food prices that the present Government came to power. They have failed miserably in relation to both. One would like to hear from the Minister what happened the promises made in the famous 14-point plan. It has now been forsaken and the Minister hides behind the idea that the problems are outside our control and are not of our making. It takes a change of Government to make politicians aware that there are problems other than domestic ones. From the way in which the members of the present Government presented their case to the public during the last general election campaign one would think that all the ills and problems of the Irish nation were of the making of the Fianna Fáil Government and that outside factors were of no concern, that if they were returned they would reduce food prices overnight by the elimination of VAT, that the people would have plentiful employment and food for little or nothing. The people know now what the situation is. They know how incompetent the people on the Government benches are. There were positive undertakings given to the people of this nation. Human misery and suffering have been created as a result of the acceptance of those promises by the people and the placing of the present Government in command of our affairs. I am positive that if Fianna Fáil had been returned there would not be the same volume of misery and suffering, the same number of people on the dole queues. Proper action would have been taken to ensure that the effects of outside pressures would have been minimal.

The housewife is no longer mentioned by members of the Government. They are no longer concerned about the housewife or the large family. We had the recent mini-budget which dealt this vicious blow to the housewife where butter is concerned. When the Minister for Agriculture and Fisheries was replying to the debate the other night he said it was in the interests of the people to eat less butter. Is it Government policy to discourage people from eating butter? On television An Bord Bainne continue advertising this commodity. They are endeavouring to create a bigger market for it. We would like to know how a decrease in butter consumption will affect the farming community and the economy generally. Perhaps the Minister for Industry and Commerce will tell us if, in fact, this is Government policy or was the Minister for Agriculture and Fisheries making one of his off-the-cuff statements which will be later contradicted by some official statement, or by some unofficial source, or whatever type of source there is for the purpose of repudiating statements made by individual Ministers from time to time? Apparently, in the GIS they have one group for producing statements and another group for repudiating statements by Ministers— Government sources, sources close to the Government, unofficial sources. We can understand why there are all these sources because the statements depend on the audience to which the Minister is speaking, the audience to which a particular statement is directed or the condition of people in regard to a particular problem at a particular time. All too often we have had the experience of the statements of responsible Ministers being repudiated by other Ministers or by sources close to the Government. This is a regrettable situation. Where butter is concerned I hope that before this debate concludes the Minister will make a clear statement as to what Government policy is and indicate whether An Bord Bainne have been instructed to discontinue their television programme. Television advertising must cost a pretty penny.

An Ceann Comhairle

The Minister for Industry and Commerce has no responsibility for An Bord Bainne.

Mr. Dowling

But he is part of a Government, a Government who act with collective responsibility, we hope, though all too often we know there is a gross failure of collective responsibility. Ministers make personal statements and it is difficult for the public to know whether a statement made by a Minister is a personal statement or whether it represents Government policy. These are matters we should like to have cleared up because at the moment it looks as if each Minister is a law unto himself. He can make a personal statement and, when challenged he can claim that it is a personal statement and does not represent Government policy. That has happened. We would like to know if the cloak of collective responsibility falls upon the Government or are Ministers speaking with many different tongues?

Butter is an essential commodity. It has been taxed substantially now and it is actually being taken forcibly from the housewife by this Government through increased taxation. What have workers to look forward to now? I am quite sure that today workers on the factory floor, collecting their pay packets, will be examining them to see if the packets contain their notice, if they have got their cards, because this is the problem facing workers every Friday now. This situation is brought about by the failure of the Government to produce a policy and the failure of the Minister for Industry and Commerce to indicate some hope for the future. Unfortunately, the workers are now doubtful about the word of any Minister because of the way in which they have been misled but, nevertheless, we hope that even at this late hour some message will go out from the Government telling the workers that, from now on, the Government want the workers to accept their word, that there will be no further changing of attitudes, no further contradicion of statements, that they propose to do certain things. If that is done then possibly the people will in time again accept the word of Ministers.

But the workers need some encouragement. Depression is setting in where wives are concerned because workers are uncertain as to whether or not their cards will be waiting for them on the next pay day. One wonders how many workers are being kept on in employment for the Christmas period. Immediately after Christmas employers will take another look at the situation. Workers and trade unionists from factories and industries in my own constituency and from far away areas in the country have come here to present their cases to me and the other members of my party. The tragic situation is that there is no hope from management, no hope from the Minister and no hope from the Government. It is promises, promises, promises. Now the workers fear the stage has come when their employment will be terminated. Had we had an adjournment debate these matters could have been raised in that debate. However, we have the Minister for Industry and Commerce here and I hope that some ray of light will be directed towards the workers indicating that action will be taken, that the Government are concerned and will develop a positive policy, that they will not wait until they have all the information, as was suggested by one Minister quite recently. There is enough information available to justify the development of a policy. The policy may have to be amended before it is fully implemented, but let us at least have a policy. The one demand we make is that people be put back to work at the earliest possible moment. It is only by putting the people back to work that we can hope to have a developing economy. We must alleviate some of the distress which could be eliminated if the Government had a positive policy. Get the people back to work as soon as possible.

The Minister for Foreign Affairs wanted suggestions as to what could be done. One industry is going through a very depressed period, with large-scale unemployment which has been denied by the Minister for Local Government, that is, the building industry. The building industry has been a motivating force. It has spread far beyond the building of houses into the factories and workshops, into manufacturing concerns for component parts and fittings. The Minister should be aware that when this country was deserted by the Coalition Government on a previous occasion, 100,000 people were unemployed and the building industry was wrecked. Our first effort was to get the people back to work, and a Fianna Fáil Government got them back to work. This motivating force percolates right through the economy, as Dublin Deputies know all too well. Unemployment in the building trade is most vicious and most severe in Dublin.

Even if Ministers have to retract previous statements or change their outlook, money should be made available and this industry should be maintained at the highest possible level to create greater spending power and demand for commodities. The building industry was disregarded by the last Coalition Government and this brought about their downfall and the downfall of the economy. The Minister should ensure that there is not a complete collapse of the industry before he leaves office. The wives and families of the building workers—workers who in the dark days in all types of weather made a large contribution to the building up of the nation and to the building of houses and factories and workshops— deserve much better than they are getting at the moment.

Labour members of the Government have suggested that our problems are the result of our entry into the EEC. The Minister for Industry and Commerce has implied this on many occasions in the course of debate. Today the Minister said:

A significant feature of our exports last year was the increase of over two-thirds in their value to the EEC, excluding Britain and Northern Ireland...

He went on to say that despite the economic difficulties being experienced by our major markets the trend of the annual exports should be continued and the record amount of £869 million for exports achieved in 1973 represented an increase of 34 per cent over the previous year.

This indicates that the situation with regard to the EEC is not as bad as the Minister tries to paint it on occasion. The value of our exports to the EEC has increased by over two-thirds. What would the situation be if we had not entered the EEC?

Minister for Industry and Commerce (Mr. Keating)

What is the figure of EFTA? It is in the speech.

Mr. Dowling

Our exports to the EFTA countries have increased by 80 per cent in value.

Mr. Keating

Four-fifths. They both refer to value.

Mr. Dowling

But 80 per cent in value can mean an increase of £2 whereas if one deals in volume it can be very much greater.

Mr. Keating

They are both in value.

Mr. Dowling

If the Minister gave a complete breakdown one would be able to assess the situation to a greater degree. The Minister admits that there is an increase of over two-thirds in the value of our exports to the EEC. If we could compare figure with figure and like with like we could get at the root of the problem. It has been suggested that all our problems are the result of our entry into the EEC. This is a substantial outlet and I wonder what the alternative would be if we were not a member of the EEC.

The Minister probably used selected statistics in his speech. He said:

Nevertheless, as I said on 6th November, there are statistics to show that the rate of increase in unemployment in at least two other EEC countries, Germany and Denmark, has been much higher than here.

He did not compare unemployment with other problems, such as inflation, where we are second in the EEC. Italy is the only country with a higher rate of inflation than we have here. We can be very selective in our statistics and use them to bolster up a particular argument. We must look at the broad situation if we are to use statistics and get a fairly factual picture of the entire problem rather than a lopsided version of one aspect.

To indicate that we are not too badly off we have been told that there is a higher rate of unemployment in Germany and Denmark but I should like to point out that the rate of inflation in Germany is only 7 per cent, the lowest in Europe, while the rate of inflation in Ireland is the second highest. If one is to equate the question of unemployment, purchasing power and benefits that can be obtained one can see that the people who are unemployed in Germany are in a much better position than those unemployed here. While statistics can be used selectively, as the Minister has done——

Mr. Keating

The Deputy was selective when he wanted to leave out EFTA and put in the EEC but in doing so the Deputy made a bad mistake.

Mr. Dowling

The Minister, when it comes to presenting a case, can be quite convincing to some people for a time, but time is running out. I hope there will not be a further reference to the fact that Fianna Fáil negotiated this country's entry into the EEC. Another party came out in favour of our entry into the EEC.

Mr. Keating

They were not involved in the negotiations.

Mr. Dowling

Members of the Labour Party who now hold ministerial rank were in sympathy with our entry into the EEC and expressed that view at the time. In my view it is a bit hypocritical to carry on that argument.

An Ceann Comhairle

Matters appertaining to the EEC would be more appropriate to the debate which is going on in this House on the objectives of European integration in the economic, social and political spheres. That motion was discussed this morning.

Mr. Dowling

The Minister referred to it.

An Ceann Comhairle

There is a specific motion before the House on the matter.

Mr. Dowling

The Minister made reference to unemployment in the EEC and the volume of exports to the EEC. The Minister for Foreign Affairs dealt at some length with various aspects of the EEC. In my view it is only fair that other Deputies be given the opportunity of commenting.

I should like the Minister for Industry and Commerce to give an undertaking about the commodities over which we have control such as farm produce. A substantial increase has taken place in the cost of these items while the farmer has reaped little benefit. The farmers experience great difficulty in producing their crop while the middleman, sitting in his carpeted office, reaps all the profits. A sack of potatoes moved 100 yards doubles in price and the middleman gets as much, in cases a little more, as the man who grows them.

I hope efforts will be made to ensure that the commodities produced by farmers are marketed at a more reasonable price. If that happened we could return to the day of using fresh vegetables in our homes rather than the tins of imported vegetables. The housewife should be given a better deal in this regard also. We have heard a lot of nonsense about price control. I accept that the Prices Commission are doing a reasonable job but they are expected to act as watch dogs and ensure that excessive prices are not charged for items.

There is a great difference in the price paid to farmers for their produce and that which the housewife must pay at supermarkets. I am in favour of the farmer getting a good deal but the housewife should also be considered. If there are rings here in relation to these commodities they should be broken so as to ensure that the people get them at a reasonable price without any fear of scarcity. The Ministers for Industry and Commerce and Agriculture and Fisheries should see if anything further can be done in this regard. The housewife is being asked to pay an excessive price for potatoes simply because they are washed and packed in plastic bags. We hear about "Golden Wonders" but to some people potatoes are like golden nuggets because they cannot afford to pay the supermarket prices for them. People find it difficult to understand how our own farm produce is so expensive.

The increase in the price of petrol which has affected so many people will mean that foodstuffs will be dearer in future. It has also meant the death sentence to the car industry. A number of men involved in this industry to whom I spoke said this was the last act of sabotage they had expected from the Government. While they accepted this was not aimed directly against them, they felt the Government should have been conscious of their problems. In their view the increase in the price of petrol means a complete breakdown of the car industry resulting in a greater number joining the queues at employment exchanges.

An Ceann Comhairle

The Deputy will appreciate that the increase in the price of oil was the subject of a special debate in this House. Therefore it would not be in order to have a further debate on the subject at such an early stage. However a fleeting reference to the matter would be in order.

Mr. Dowling

I appreciate that. I was merely pointing out the serious effect it has on employment and on the commodities, such as foodstuffs, necessary for people's sustenance and maintenance.

At the same time as the Government have called for wage restraint we see them taking action which is the cause of major increases, bringing about a reduction of the pay packet and in the purchasing power of the less-well-off sections of the community. This is a matter which must be brought to the attention of the Minister. Whatever action the Government take in an endeavour to extract additional moneys it should be directed to the people who can afford to pay and towards ensuring that the proper distribution of wealth will take place—that is if the Government are really concerned about this aspect. But I believe it was a panic decision, a panic effort, in order to extract as much as possible in the shortest time possible. That action could well lead to some industrial disputes because of the threat to employment in some sectors. In the new wage demands coming forward the Government and the Minister will be urging people to reduce their purchasing power for the national good. But if the Government continue to operate on the basis they have been doing I am quite certain workers will not be too happy making sacrifices at the expense of others. I hope there will be some way out of this difficulty. I hope the Minister will give special attention to a problem that has affected one section of the community to a far greater degree than, possibly any other—those people employed in the car industry.

Many speakers recently have expressed the hope that there will be a continuation of the demand for Irish made products. Like others, I should like to add my voice to this sentiment. The necessity and desirability of buying Irish at present is most important. For example, one can walk one's way into the employment exchange if one purchases foreign footwear. In relation to other commodities there is the absolute necessity, for the nation's good, to ensure that we purchase, as far as possible, those made here. Our tradesmen and factory workers are just as successful and efficient as any anywhere else. When one notes in the Minister's speech that there has been a substantial increase in exports of our products to EEC countries and other countries, this, too, is an endorsement of the demand existing for our products abroad.

But our people seem to be unaware of their effectiveness, or is there another reason why people purchase foreign goods? We note that the major markets throughout the world continue to accept the variety of goods manufactured here. There probably were problems in the early stages of development of our industries which may have turned away some people. No doubt some Irish manufacturers produced shoddy goods, and probably some continue to do so, but those who do will find themselves out of production in a very short time. Recently, due to the competitiveness of industries in the various sectors, we can produce the best possible type of goods at a particular price. Some people may feel there is a status symbol attached to the purchase of commodities produced abroad, but some of them do not measure up to the standard of our own. One sometimes hears views put forward about design, packaging and so on. I am sure the Minister has these matter under consideration and is playing his part. I should add that, while much remains to be done, the Minister has made a substantial contribution and in this respect we are happy to congratulate him. We need ever-changing ideas to cope with everchanging problems. Unlike the Minister for Foreign Affairs, who spoke about what Fianna Fáil did 15 or 20 years ago, one has to relate the circumstances of a given time, or event, to the problems and pressures of that period. The Minister for Industry and Commerce is facing a new situation in which there are to be found new demands, new pressures, more forces available in relation to technical knowhow and more up-to-date methods. It is against the background of those forces the Minister has to make up his mind about the future of our industries, of our mineral resources and the availability of the other raw materials we possess.

In many respects the Minister has done good in his Department. But there were the matters to which I referred—the conning of the housewives during the election campaign. The Minister was no saint during that period, but probably that is politics. Some people at least fell for some of the statements made, but it probably helped to have an opportunity of rectifying some of the wrongs done at an early stage.

I should like to pay a compliment to the Industrial Development Authority. On a previous occasion on this Estimate I made some reference to job opportunities. The Minister, speaking after me, inferred that I was attacking the IDA. I am fully conscious of the wonderful work they do, of the efforts they have made and of the great results they have achieved. They are a very valuable group of people who have made and continue to make, substantial efforts to ensure that there are greater job opportunities to offset the problems we are encountering at present in relation to redundancies and lay-offs.

Before concluding I want to refer again to the scarcities which occurred in relation to tea, sugar and butter. Recently butter disappeared from the shelves of the shops. In many cases this occurred on a Monday, when the suppliers, and indeed the shopkeepers, became aware of the pending price increase. In some areas where there seemed to have been widespread knowledge of the pending increase it was almost impossible for housewives to obtain any butter in the days prior to the order being made.

Similar situations have arisen in the past. When the Minister for Finance increased the price of petrol last week we were told that the increase should apply only to the stocks that would be obtained from bond and that the stocks then remaining in the tanks would be sold at the old price. However we know of some cases of the pumps being regulated within a very short time of the Minister's announcement, but I understand that many of these cases have been reported to the Department. In future there should be some coordination of effort to ensure, first, that there would not be a shortage of supply of any commodity in the days prior to an increase in price being announced and, secondly, that there would be no lining of pockets as a result of shopkeepers or anybody else applying the new prices to stocks already on hand.

Our main problem now is to get our people back to work in the quickest time possible. We must give them some indication of there being a positive policy so that there will be some ray of hope for them, especially for those in the motor trade who are of the opinion that that trade is doomed. If the manufacturers could be assured that, at the earliest opportunity possible, an investigation into the trade would be undertaken, they might be inclined to retain their workers at least until such time as they have been able to assess what will be the effect on the trade of the recent petrol price increase.

Some effort must be made, too, to ensure that middlemen—or "fiddlemen", as we may call them—will not interfere with the free flow of goods to the housewife in a way that results in substantial price increases, which, in turn, benefit those people who work from their offices and who make no contribution to the production of the commodities concerned. I trust that this question will be examined at an early stage so that housewives may obtain farm produce at reasonable cost.

Dr. O'Connell

I am glad to have the opportunity of speaking on this Estimate. Perhaps it is one of the most important matters that could come before us at this very difficult time. It gives us the opportunity to express our views and the views of our constituents who are experiencing much anxiety and worry about the whole future of our country. Prices continue to increase and there is growing unemployment. In this depressing atmosphere it is importtant that we would speak out so that our Ministers might harken to our words and take positive action.

The Minister has said that the topics on which he proposes to speak are our industrial policy, employment, natural resources and prices. Perhaps we should take industrial policy and employment together since they are interwoven and, consequently, neither can be discussed in isolation.

The massive importation of goods from low-cost countries to the Irish market is having disastrous effects on our economy. The Minister may throw up his hands in despair and say that this is something over which he has no control, that it is an EEC matter. To say that is to adopt an attitude of despair and would indicate to us that we have lost not only our sovereignty but our right to make decisions as a nation. This is happening now. We cannot go on as we are. There is no point in saying that we can only wait and hope the EEC may do something for us. It is intolerable to allow such a situation to develop. We know that both the Italians and the French moved quickly and applied restrictions, thereby breaking the terms of the EEC Treaty. They acted first and then awaited a decision of approval or otherwise by the EEC. If we are to do the opposite and wait to obtain a decision before taking action we may find our country facing total economic disaster. As it is the unemployment situation is deteriorating day by day. I could never support any Government that would be inactive in such a situation. I would not like to think that our Ministers were being muzzled and that they do not find it possible to take positive action to deal with our problems. There must be determination on the part of the Government so that they will act first and then wait for the consequences. Our obligation in the first place is not to the EEC but to our own workers, especially to those who are now unemployed. Having said that, if the Government find that they cannot impose duties or restrictions on imports, they must seek other ways of protecting Irish industry and Irish jobs. One alternative would be the abolition of VAT on Irish-made goods. This is something that could be put into operation immediately and it would be a great incentive for people to purchase the home-produced goods. Also, it would stimulate the economy so that more jobs would be created. Consequently, it would offset any loss of revenue as a result of the removal of VAT in this area. There would be administrative difficulties involved but we had to overcome administrative difficulties when VAT was imposed in the first instance. We have an emergency on our hands. Therefore we must be prepared to take emergency measures to deal with the situation. The Minister for Foreign Affairs has said that any action we may take will have longterm effects and will be slow in producing results, but that is all the more reason why we should act immediately and not wait until next year when, if nothing is done, the economy will be such that it will not be possible to take action of any kind.

I appeal to the Minister to use his good offices with the Government to have some action taken immediately —either to apply restrictions on goods imported from low-cost countries or to remove VAT from the home-produced goods. I might add that the workers in the low-cost countries from which we are receiving massive imports are not paid properly. Therefore by buying these goods we are encouraging the exploitation of those workers. Either we must stop the goods coming in or we will have people picketing the boats to prevent them coming in and if they take such action there will be a breakdown of law and order.

What I should like to see is real Government leadership. I feel obliged to say that rather than sit here mildly, suffering the consequences the people have to suffer, the people in my area and throughout the country who are depressed and full of anxiety. The great problem is not worldwide. It is that action is not being seen to be taken by the Government.

I realise that the question of prices is a difficult problem and that the Minister for Industry and Commerce is in the most difficult Department. He has to bear the brunt of the people's displeasure. I accept his difficulties in controlling prices. I have tried to explain to people that if there was strict price control businesses would shut down. What I consider to be wrong is that there has not been a proper attempt by the Government to explain this to the people who consequently feel that the Government are not sufficiently concerned. If they felt that the Government were anxious to do something they would accept it. Instead of Ministers making speeches to the Institute of Bankers or the insurance brokers, they should meet the people who are most affected. They would find such people would be much more appreciative. It is the people who are most disheartened, the lower income people, who need to be told about the situation.

I realise that a price freeze could be disastrous. At one time the Minister suggested we should have one. I have given a lot of thought to it but I do not think it would work because 50 per cent of price increases are imported.

One solution might be subsidies. The Minister may say that would be contrary to EEC policy. Britain does not worry whether it is or not; she has applied subsidies. I do not see why we should not follow her example. The Minister will probably say subsidies are not the answer because all the people will be paying for them and all the people will be benefiting. However, we could have what might be termed selective subsidies where there would be a survey of incomes and those below a minimum would be subsidised from the point of view of food prices.

I was appalled at the price increase in regard to butter and at the way it took place. I do not accept the explanation given because everyone appreciates that bread and butter form the staple diet of a large percentage of the population. We never should have taken off the £2 million on butter.

Still on the matter of prices, it is not enough to have a commission examining the problem of profits and of price increase applications. It is a waste of time to have a commission examining the problem of poverty. Poverty is obvious to everybody. I would be prepared to make a submission to that commission and I could very quickly tell them what the situation is. We have far too many commissions and review bodies. What we should be talking about is the economic chaos that confronts the community today.

The petrol price increase was alarming and unjustified. One of the reasons given for it was that it would stop people coming across the Border. If that is so in the case of petrol, why cannot the reverse be the case—why cannot we reduce the price of butter to stop trafficking?

We cannot fool the people by talk like that when increases are taking place daily. It is not enough to say that the NPC are doing everything. They are just a processing body— they process claims for price increases. We should not be deluded by the idea that they are doing everything to stop price increases. We must not overestimate their powers. They are merely window dressing. They are powerless to deal with the main problem.

I am very irritated by statements like: "Petrol is going up. If anyone raises charges in the meantime, please report it." Who are we fooling? Who is applying the increase? The retailer charging 4p more or the massive increase which brings in £35 million? I do not like this hypocritical approach, because it is wrong. The Government are increasing the price of petrol and telling the people that they should not pay the garages extra. This is foolish and hypocritical. The public have more sense and are more sophisticated than to accept that type of nonsense.

We have had many mini-budgets, justified no doubt by the deteriorating economy. We should be doing something about the economy and communicating with the public. It would be a serious matter if the country lost confidence in the Government. We are going through a serious time with the Northern problem and the economic crisis. There is need to try to restore confidence among our people. The Minister is only one member of the Government. I know his ability and what he is doing, because I know the man. He is trying very hard to cope. Many people do not realise just how much work he has done. I would like to see every member of the Government approach these problems with the same determination as the Minister, and try to restore confidence.

I would like him to encourage the establishment of more local consumer protection councils run by the communities. Every local community should try to establish such a council with the help of the Department. They could overlook prices, quality of goods, standards and the guarantees that go with goods. These areas should be tackled by the Department. I bought a product recently which was manufactured abroad and guaranteed for five years. There was no name of the manufacturer on the commodity or on the guarantee. To whom would I send the guarantee? People are fooled by this type of thing. This is where the Department should act in the interests of the public. We should fight this planned obsolescence. When people buy goods which have been manufactured abroad, in two years time spare parts are needed but they are not available. We should not tolerate this injustice. The people do not know their rights.

We are living in the age of supermarkets. There is great competition between them and the man in the small huckster shop. He cannot but charge 1p or 2p more. The amount he would make by overcharging could possibly come to £1 in a week. He cannot hope to compete with the giant supermarkets. The public realise that he will be adding 1p or 2p more for the facility he offers by opening late at night. If he charges an extra 1p for an apple he will probably sell 12 in a week and make 12p. I would hate to see these poor people being hounded. It would be a great pity if the Department were bogged down looking at these minor problems while overlooking the major ones. It is the supermarkets we must watch. The Department should examine this closely. Proper standards should be guaranteed by the Department. The public are being exploited in this area.

We have massive unemployment at the moment. There is no sign of the situation improving. It will get worse. The building industry is in a very bad way. This is a very sensitive industry and is an indication of how the economy as a whole is going. We must look at this and see what can be done. We must adopt a positive approach. We cannot keep blaming world inflation. We cannot hibernate. This is the wrong attitude. Let us mortgage our future. We have massive natural resources, mines, offshore oil, and our external reserves are not too bad. We should borrow abroad, not on the commercial market at very high interest rates, but directly from the Arabs. We could then start a national public building programme. By building highways we could make the west, south and the north more easily accessible. We could invest in hospital building programmes and start a real housing drive. We should start solving our problems now and this is how we could do it. I am trying to be constructive about this.

In 1932 President Roosevelt was faced with the problems of national depression and depression-cum-suicide. There was worldwide depression then. Somebody was needed to give the people hope. When things were at their worst he said: "We are going to rebuild this country. We have nothing to fear but fear itself". I am afraid that this is the situation we are facing at the moment, there is fear in the country. If the Minister said: "It does not matter how bad the problem is, we will solve it. We will start a massive public works programme and our people will be employed again. We will restore hope and confidence in our Government. We want your help, enthusiasm and dedication for a new crusade," the country would respond without hesitation. We need a united drive to rescue the country. We need Ministers speaking out to the people. We do not want their statements so disguised that nobody knows what they mean. We have heard in many speeches hints about things going wrong. We might have a situation, which we do not want, where somebody is fiddling while Rome is burning. We want new hope in our country because we all love it.

We should take an initiative on the North but we are not. We are doing nothing about it. It is our country just as much as the south is and we want to do something about it. It is not good enough having our Ministers attending social functions, opening up garages and other things. I was very impressed when I read about Mr. Ryder in Britain who arrived at his office at 7 a.m. because that is the kind of dedication and enthusiasm which we want. It stirs a country into action.

We should restore confidence in our country so that people will say that this is a new type of patriotism. This is something which is infectious. The way to love one's country is to do what one can to help it survive. This country is going downhill no matter what we say. We should give our workers, industrialists and all our people confidence. We should rescue the people in poverty and move in fast with action.

We will have so many Estimates next week we will not be able to count them fast enough. We should sit here until Christmas Eve and come back on the 1st January. We would then have the people saying that the legislators are doing something for the country and they would follow suit. If we take long summer holidays and do nothing during them, and then are no sooner back than we go off on Christmas holidays this does not set any example for the country. I appeal to the Minister for Industry and Commerce to say at Cabinet meetings: "Let us come back early in January. Let us get to work. Let it not be seen that the legislators do not care." The impression throughout the country is that the legislators do not give a damn and that they are only interested in their own welfare. That impression has created a terrible state of unconcern. If the public lose respect for this House, they will turn to others who will replace us.

I should like to see a transformation of the work of this House. Let us work in committee. Let us not bark at each other all the time but work for the interests of the country. I should like to see the Government coming back very early in the New Year with new ideas, sitting down and working in committee. We would then get the work done. It galls me to think that next Wednesday we will pass about 50 Estimates and not a word will be said on them.

I am sorry to get so worked up about this but it is not often I get an opportunity to say how I feel about the country. I should like to see our Ministers take an initiative on the North. They condemn but nothing is done. They should talk to those in the North and see what they can do. There is no use standing on the sideline. As long as the politicians are in the wings the bombers control the stage. I hope what I am saying now will go out to the politicians who can play a part in the North. It is a terrible tragedy that we are again throwing up our hands in despair and doing nothing. Tourism and the economy are suffering because of this. People are slow to invest when they see the country torn apart. Initiative must be taken by the Government in every sphere and they must give the leadership. I do not see anything like that happening. Why not let us have a national fishing industry with canning factories along the coast. We have enough fish off our shores but we go into supermarkets and buy cans of foreign fish. This is what I feel should be done.

Ruairí Brugha

First of all, I commend what Deputy O'Connell said about the Government in relation to the economy and the Northern situation. I find the Minister's speech contains many hopeful platitudes but does not seem to contain anything really solid which would demonstrate that we have a Government in office or in command of the situation.

On the other hand, I agree with what the Minister said to all of us at the latter end of his speech when he said:

Our business, the business of the Government, of the Opposition, of the manufacturer, of the importer, of the worker, of professional men, in fact of the whole community is to see that those increases are kept to the minimum... We are all dependent on one another. What injures you, injures me.

It is up to the Government to give the lead first of all. I am glad the Minister for Foreign Affairs mentioned the contribution of the Industrial Development Authority and referred to the history of that authority and their ongoing situation under both Administrations.

The first and fundamental question for the public in relation to the current situation follows from what the Minister said. He stated that the first problem which lies with the public is that of prices and keeping up the export programme. The success of that programme depends on export prices which are largely determined by the attitude of the public and by a realisation on their part of the consequences of all increases in prices. These go back to the manufacturers and to wages. Those experienced in economics appreciate the significance of our inflation to the inflationary rate in the countries to which we are exporting and it is there I sense the main danger. We are considerably ahead of many other countries in our inflationary situation; we are about second in the league at present.

Regarding the Industrial Development Authority's success, Irish industry has had an excellent record over the past 15 years. Naturally, there have been some failures but not many; and industry to a considerable extent has substantially, if not entirely, adapted to the free trade situation. I am sure the Minister will agree that the present Administration were very fortunate last year to have in the pipeline, through the efforts of the IDA, supported by the previous Administration, the great advantage to the economy of 23,000 additional jobs in 1973. One wonders if it were not for that ongoing policy what our situation would now be or what would be our situation if we did not have continuing industrial development by the IDA.

In recent months we have heard more about the pressure, to which the Minister has referred, on home markets from imports. Here there has been failure on the part of the Government to act in time. I know that we have to be reasonably scrupulous in adhering to EEC regulations, but I do not think that we can be expected to be fanatical in that regard or that the EEC itself wants to see serious disemployment in any member state. I am sure that, particularly in regard to dumping of goods from low-wage areas outside the EEC, dealing in advance with such a situation can hardly be regarded as a very grave sin rather than waiting until damage has been done and goods provided at what, in our terms, amount to slave wages, are on the market doing serious damage to Irish employment and putting Irish factories on a three-day week. If the Minister or his colleagues in the Government took up this matter I believe the philosophy of the EEC would be that people and their jobs are more important than legislation on dumping. I do not suggest that the Minister should break all the rules but that he should move a little more quickly. He will not find the Opposition letting him down should he run into a little trouble with the EEC in a good cause such as we debated here last week.

I do not know why the Minister referred to the rate of increasing unemployment in Germany and Denmark as being greater than here because, automatically, it inspires me to make comparisons between the German and the Irish growth rates and between the German rate of inflation —something over 7 per cent at present —and a 20-plus figure here.

I do not agree with the Minister's remarks on inflation here when he says that the rate of inflation, which in February, 1973, was 4 per cent over the previous year, came down in May and the following quarter. These are monthly figures. My figures for the rate of inflation in previous years are: 1971, 8 per cent; 1972, 9.3 per cent and 1973, 10 per cent.

Mr. Keating

The figures I gave were for the previous quarter.

Ruairí Brugha

I appreciate that but it is the annual situation that counts in the long run.

Mr. Keating

The direction of movement at any given time is also relevant.

Ruairí Brugha

The growth rate in our economy in 1971 was 2.9 per cent; in 1972, 4.2 per cent and in 1973, 7 per cent. In the 1974 budget statement it was suggested by the Minister for Finance that it would be around 3½ per cent; more recently, I think he has referred to 2 per cent or a little more and I suspect it will be nearer 1 per cent.

It does not give me any satisfaction to see that, despite the warnings we gave, economic difficulties have arisen only 20 months since the last election. Last year we said that increased inflation would arise from the 1973 budget and I believe it did, even before the oil crisis developed last October. In this year's budget debate we warned of its increased inflationary effect on the economy and of the danger of a serious trade deficit.

Mr. Keating

Might I interject to ask the Deputy if the inference from his comments on those two budgets is that it is his belief that they should have been more deflationary than they were? Is that a fair inference if he complains about their being inflationary?

Ruairí Brugha

I am not in Government, but I think it depends on how one spends the money. That is a decision for the Government, not for the Opposition.

Mr. T.J. Fitzpatrick

(Dublin Central): It certainly did not produce the buoyancy that was hoped for.

Mr. Keating

Then it should have been more inflationary.

Mr. T.J. Fitzpatrick

(Dublin Central): I do not know where it is, but it is not in the economy anyway.

Ruairí Brugha

In this year's budget speech the Minister for Finance referred to a possible trade deficit of £150 million. I am merely pointing to this sort of information as indicating that he did not know what was happening, because we believe now the trade deficit will be in excess of £300 million. The responsibility lay and does lie on the Government to take adequate and timely steps to protect the economy. I think it is fair to say that when Fianna Fáil were in office—and I was not a member of the Fianna Fáil Administration—they could never be accused of failing to heed economic warnings and take steps, sometimes unpopular, to protect people from hardship. Therefore, the Government must ultimately answer for problems which I believe arose out of their irresponsible financial policy when they first took office and then for failing to heed the warnings and, a matter of personal opinion, for failing competently to manage our economic affairs.

Countries and economies are not very different. You cannot spend more than you earn and get away with it indefinitely. It must come home to roost eventually. For example, when the oil crisis developed the Government proved themselves unable to deal with the problem because— and this is what I was referring to—they had embarked on a risky policy of spending money in the wrong way.

Mr. Keating

Would the Deputy indicate what wrong expenditures there were and how the money could better have been spent?

Ruairí Brugha

If the Minister would come over here and allow us over there, we would take responsibility.

Mr. Keating

I was asking the Deputy to amplify the criticism.

Ruairí Brugha

I simply believe that the manner of expenditure increased a tendency towards inflation. I believe that tendency was there arising out of the Government's policy independently from the unfortunate situation created by the increase in oil prices. The Government did not wake up to the serious economic situation that was developing until September last, and even now they do not know what to do about it.

On the question of an energy policy the only practical solution put forward so far was the tax on petrol last week. I do not regard that as an energy policy so much as a revenue earner for the Government to cope with whatever difficulty the Government may be in. It is the only energy policy that has so far been referred to, other than that being introduced and in operation by some elements of private industry and, of course, by many of us who just cannot afford the increased price and have to cut down on petrol.

Probably the most serious effect of the tax on petrol would be that on employment in the rural areas. While the Minister for Finance talked about the use of public transport, I do not know what the percentage of people depending on private cars, as compared with public transport, is outside the city of Dublin. From my own journeys down the country I can say it is very considerable and is bound to have a further inflationary effect, with the possibility of demands by these people, who are travelling 20 to 30 miles to work, on their employers to make up the difference.

The most serious aspect of this question is the Government borrowing from abroad, thereby involving us perhaps in a more dangerous situation. The Minister for Finance is now in the position where the capital budget commitments cannot be fulfilled at all from our own resources, and that up to date since April something in the region of £138 million has been borrowed for capital budget purposes from abroad. I regard this as very serious because I am quite sure that, apart from the danger of putting ourselves in "hock" to foreign financial interests, there is the greater danger that we shall run out of lenders. This kind of thing cannot go on indefinitely.

The Government are very fortunate in that the level of the export increase for 1973 was 34 per cent up, that the industrial export level for that year was very much up, and that the total exports up to October this year have reached £1,075 million. It is good that the Minister mentioned the increase in exports to the European Community. One has heard many criticisms during recent economic difficulties here and more so in Britain, attributing all the difficulties to the European Community. I would say our situation is in reverse. I doubt if this improvement of a two-thirds increase in exports to the EEC could possible have taken place, and at least that is something on the plus side in relation to the EEC.

The Government must take steps to control domestic inflation or the economy will get more out of control. The economy is moving into a grave emergency. As a community many of us are living beyond our ability to pay. As a community we are spending too much abroad and at home. The Government should think up something better than a tax on petrol.

All the talk about the intellectual geniuses and economists who are supposed to be in the Coalition front bench cannot make up for ordinary common sense, experience and competence in the management of our economy.

Government is not an exercise in public relations, which is merely a professional job in which, I must confess, the present Government excel. Government is hard work and leadership, as demonstrated by the late Seán Lemass over a considerable period of the life of the previous Administration. It is common sense and there must be a policy based on realistic concern for the welfare of people and the maintenance of jobs and for the future prosperity of the economy.

Mr. T.J. Fitzpatrick

(Dublin Central): We are discussing here this evening one of the most important Estimates that will come before the House. That must be the case having regard to the situation in which we find ourselves.

The Minister for Industry and Commerce is charged with very heavy responsibility. Without a sound economy there is no hope of the country having a good social programme. Thirty or 40 years ago agriculture was our major industry on which we depended almost entirely for exports. It became obvious that an industrial arm must be developed. That was done down through the years going back to the establishment of the IDA. Particular credit must be given to a former Taoiseach, Seán Lemass. It was during his period of office that real development and expansion took place. Seán Lemass was a realist.

Mr. Keating

He was about the Continental Shelf—£500.

Mr. T.J. Fitzpatrick

(Dublin Central): He took a pragmatic approach to industrial expansion. I am not saying that other Governments have not played their part but Seán Lemass comes to mind especially as the man who played an important part in our industrial development. Obviously, we can no longer depend on agriculture for our main exports. Credit is due to successive Governments for the fact that we have reached the stage where industrial development has outstripped agricultural production. It is important that this expansion be maintained. This is not a simple matter in these difficult times.

Programmes of expansion and economic development were produced. Under the Second Programme for Economic Development there was an increase in the GNP of 3 per cent, 4 per cent and at one time about 6 per cent. This inspired confidence in our economy. There has been a decline in the past few years. I am not saying that we are not doing quite well when we have regard to the Minister's statement but if present trends continue the position may be adversely affected.

Regard must be had to the rate of inflation and to unit costs. This country had certain advantages six or seven years ago in the matter of unit costs in exporting to European countries and to the United Kingdom but these advantages are being eroded gradually. Unless we can maintain the advantage it is doubtful that we will be able to continue to expand.

The Minister referred to the number of factories established in the last 12 months. I hope each of these factories will reach its full potential. I would never for any political motive try to undermine industrial development.

The most important factor is the number of persons who can get a reasonable living in industry. It is only in industry that we can hope to achieve full employment. It became obvious over the past number of years that there would be a decline in the number employed in agriculture. This decline has been taking place at a rate of 5 to 6 per cent a year and it will continue. In these circumstances industry becomes even more important and unless there is further industrial expansion there will be unemployment.

Full credit is due to the agencies established by the previous Government such as the IDA, Córas Tráchtála, the ICC, all of which have played a considerable part. The members of these authorities should be given credit for the advice they have offered. The encouragement given by the IDA has played a major part in attracting new industries. These agencies are criticised occasionally. There is no justification for this criticism. In my experience they have never abused their authority. They have never given grants where they should not be given. The IDA has been very successful.

There is one aspect of IDA grants which has often puzzled me. I am not making my comments merely to be critical. I am referring to adaptation grants. We have always encouraged factories to seek those grants and to modernise in order to be competitive and I am in agreement with this policy. However, frequently the money given by the IDA to reequip a factory leads to a reduction in employment. I have in mind a big industry in the city where approximately £4 million has been approved over the next ten years. About three-quarters of this amount has been paid but I am afraid that when the full grant is paid the numbers employed there will be cut.

I am not convinced that this kind of money is spent wisely. If money is spent on factories it should be for the purpose of retaining the present labour force while expanding the business. We should not consider only increasing the profitability of the company. I am convinced that when the grants are paid in full the work force will be reduced. The company concerned may make the case that they cannot remain viable unless they get this type of grant but I question that argument. Firm guidelines should be laid down for the company to ensure that public money is not spent for the purpose of increasing their profitability while reducing the work force. Possibly I may be picking out one or two items in the IDA report but firms should be made aware of the Government's attitude on this matter. I agree that exports are important and that some companies require the grants but, equally, the number of people employed is just as important so far as our economy and society are concerned. We must make sure there is not a reduction in employment when firms have been modernised with the help of public money.

By and large the performance of industry has been satisfactory. In fairness to the Confederation of Irish Industry and the Irish Congress of Trade Unions we must say that. Four or five years ago we went through a difficult time when there was a succession of strikes and we headed the league in western countries in the number of days lost due to strikes. I do not intend to discuss the Department of Labour but they have an important function in the matter. Common sense prevailed with the ICTU and the CFI and eventually we were able to move away from the attitude of employer fighting employee. If we are to have a sound economic policy, worker and employer must work together.

When we consider the events of the last three or four years, credit is due to both organisations for having hammered out the national wage agreements and I hope this arrangement will continue. The economy now could not stand the abuse it sustained during the years of industrial unrest. Now that we have moved away from that situation we must face a new challenge, one that is just as serious, if not more so. We are in an inflationary spiral and it may not be as simple to remedy that matter as settling the problem of our industrial unrest. This is where strong Government action and guidelines, irrespective of whom they affect, will be necessary.

We must protect our economic structure. If we allow an increase in the cost of living on the one hand and, on the other, allow unit costs to increase out of all proportion it is obvious we will have mass unemployment. The Government, trade unionists and employers must get together in a realistic way and ensure that such a situation is avoided. We read last night that there was an increase of 20 per cent in the cost of living index which will automatically mean an increase of 10 per cent in wages. Anyone who studies the National Economic and Social Council document can see their forecast for 1975. They have based their assumption on the proposition that there will not be a wage increase next year and, yet, their forecast is dismal. I doubt if they took the figures of 20 per cent in the cost of living and 10 per cent in wages into account when making the forecast. We must be realistic about prospects for 1975.

What policy have the Government to try to counteract the terrible situation that exists? What plans have they with regard to small industries? These businesses are starved of liquid cash and many will not be able to keep going. Have the Government made any plans in the event of an emergency in the next eight or ten weeks when firms are faced with wage demands of another 10 per cent? Have the Government made any plans whereby the associated banks would be encouraged to give financial help? The Central Bank may have laid down certain guidelines, they may have said they over-reacted to the credit squeeze, but the associated banks are cautious about lending money.

The bigger companies may find it possible to receive financial aid to tide them over this difficult time. It is the old story where inflation is concerned that the weak get weaker and the strong get stronger. This is what will happen in the first six months of 1975. Unless the Government come to the assistance of the weak in some way or encourage the associated banks to do something about their liquid cash problem they will be faced with a serious situation. This section of the community employ in the region of 60,000 people. They are of vital importance to the whole economic structure. I doubt if the associated banks will give them a liberal concession and even if they do I doubt if it will get them out of this situation because of their unit costs which are spiralling all the time. There are wages, fuel costs and so many different overheads forcing such people out of business. The agricultural sectors are being helped out to some degree by interest-free loans.

The Minister for Industry and Commerce should consider very seriously how we can help small industries over the next six months. Can we provide interest-free loans to keep them viable and to keep workers in their jobs? This is a real and serious problem. I have met a few small industrialists who have informed me that this will be a real issue in the early part of 1975. I am in business myself. I know the pressures on all sides. I know that overheads are like. I know how the profit margin has narrowed down through the years. I am not in manufacturing business but I know the real trouble in which manufacturers now find themselves. Unless the Minister can do something very positive early in the new year small industries will find themselves in an impossible situation.

There is another way in which small firms are at a disadvantage. The Minister for Industry and Commerce was asked a question last week, which he did not consider relevant, in relation to the extension of VAT from two months to three months for certain firms. The bigger companies can dictate their credit terms to the small manufacturer. There are big combines today which may take in the region of 50 per cent of a small manufacturers goods. His credit arrangements are not for 30 days or 60 days. He is able to manipulate his cash flow knowing the cost of overdraft to his business to ensure that the credit he gets from small manufacturing companies is extended beyond the 60 days. The manufacturer is able to dictate his terms of credit to the small retail outlet. He will certainly have to pay by the 30th day of the second month. The manufacturer can tell him he will not supply him unless he pays within a limited time. We have the large retail outlets dictating terms to the detriment of the smaller man. The small manufacturer must return his VAT within the two months while 50 per cent of his sales may not be paid for for three months. This may not be a major factor but it is one of the many problems to be faced.

The Minister is the person charged with the responsibility. Unless he does something the weaker sections of our industrial arm will find themselves in an impossible situation. Some directive will have to be given to the associated banks to ensure that a cash flow is available to them or else there will have to be some type of interest-free loan provided. People may say they can invoke the cost of living clause of the national wage agreement and go to the Labour Court. The firm that has to invoke that clause will find itself in industrial trouble. It will undermine the confidence of the workers in that company. If the Labour Court uphold the company and rule in favour of it production will drop drastically. That is human nature. Workers employed in such a company will see those in the public service and those in strong industrial employment being paid the 10 per cent while the cost of living is the same for everybody.

Debate adjourned.

The Dáil adjourned at 5 p.m. until 3 p.m. on Tuesday 17th December, 1974.