Deputy O'Toole was in possession and he has 12 minutes left.
Private Members' Business. - Food Subsidies: Motion (Resumed).
The following motion was moved by Deputy Cluskey on Tuesday, 14 November 1978:
That Dáil Éireann deplores the stated policy of the Government to phase out food subsidies, regards the effects of such a policy on the cost of living generally and in particular on the living standards of the poor, the underprivileged and large families as most retrogressive, and calls on the Government to review its policy intentions on this grave issue of national concern.
Debate resumed on the following amendment:
To delete all words after "Dáil Éireann" and substitute the following:—
"deplores the mismanagement of the economy in the period 1973-1977 which resulted in the need for food subsidies and approves the dynamic programme being implemented by the Government since 1977 to rectify this situation.
—(Minister for Economic Planning and Development).
I rise to speak to the motion and the amendment. The motion, which is in the name of the Labour Party, states that Dáil Éireann deplores the stated policy of the Government to phase out food subsidies. I am not aware where it has been stated that it is the Government's policy to phase out food subsidies. I can only repeat what the Minister for Economic Planning and Development stated here last night, that he can find no statement declaring this. If he cannot find it there is no point in my looking for it. The Labour Party are reacting to headlines that appear from time to time in the newspapers. Newspapers are in the business of selling newspapers and not for creating opposition in the Dáil.
Briefly, there is no stated policy of the Government to phase out these food subsidies. If the Labour Party and Deputy Cluskey are sincere in their expressions of care for the less privileged in our society, the widows, orphans, old age pensioners and the less well off, who are the greatest concern of all of us, then Deputy Cluskey and the Labour Party are at one with all of us in looking forward to the time when we can do even better for those underprivileged sections. I put it to the Labour Party that if they are sincere in what we heard last night from Deputy Cluskey when he cried salt, crocodile tears, as somebody described it, he should join with us in looking at an expenditure in the region of £56 million to £57 million to see that any saving in that huge sum of money—which this House has the responsibility to see spent to the best advantage—is seen to get the best results. That is no more than we on the Govern-ment side are doing. It is clearly stated that the Green Paper is no more than a review of expenditure. Any good business management would demand that from time to time you look at your policies to see if anywhere there may be a going off course which must be corrected and to review the expenditure which has taken place and the results of it.
Subsidies across the board, in this case food subsidies, are non-discriminatory but they benefit the rich more than they benefit the poor, and it is the poor about whom we are all so concerned in this House. If we are true to our principles, then the Labour Party and the Members on the Opposition benches should join with us in that review to see whether we can redirect some of those vast resources into the areas where we would like to see more money spent. The results of Fianna Fáil policy down the years show clearly that we are more concerned than any other political party for the care of the less well off sections. The people in that bracket know that full well, and they have always looked to us to cushion them against any rising cost of living and any hardship that they have to incur. They know that we are there at all times and we have shown this concern time and time again. In this House I have heard the record of the Coalition Government being tossed out. They were the only people to increase social welfare to any great extent, but they increased it at the time when inflation was running at 25 per cent, when the prices spiral had gone mad. The people who voted Fianna Fáil back into Government in 1977 know full well that the increases that we gave them would help them very much more. They knew that the £ in their pocket would buy more because inflation was reduced. They knew that under a Fianna Fáil administration they would be looked after.
Apparently Deputy Cluskey preferred to welcome the amendment of the Minister for Economic Planning and Development. He did so because he could not spell out why he wanted food subsidies retained to help the rich rather than the poor. He preferred to play the old long-playing record of what the National Coalition achieved from 1973 to 1977. He said he welcomed that amendment because he wanted to analyse the record of the present Government in office. He, like everyone else on the Opposition benches, failed to get the real message that the people delivered in 1977, that the Coalition had failed dismally to take this country through rough and difficult times. We do not deny that there was a recession during that period, but it is ironic that for the third time we had crisis after crisis when the National Coalition were in power. This time it was the Arabs who had to carry the can. All through that time we heard repeated, "We can do nothing about this and about that; the oil crisis is responsible for everything and we are unable to steer the ship on a difficult course". The people knew full well that this ship could be steered along a better course, but the men, the leadership and the commitment were not there to see us through difficult times. The people knew full well that the Coalition had failed dismally.
Last night Deputy Cluskey said that the Fianna Fáil manifesto was the most unpatriotic document that he had seen produced by an Irish Government. He failed to get the message of the electorate. He is still living in wonderland. The electorate delivered the message but the Opposition do not want to get it. The message was that the people wanted to return a Government who could restore their self-respect and give them back the confidence to manage their own affairs, and they elected the Government who were prepared to do just that. We set out in that manifesto what our planned programme was. The people knew full well what Fianna Fáil were talking about. They can look at our record since we came into Government. Deputy Cluskey sought to go through that record in an effort to punch selective holes in it. He also tried to criticise their own record, apart from blaming the Arabs for all the problems that were created, yet he turned around and said, "We did a good job after all".
If a good job results in pursuance of the policies which resulted in giving us runaway prices in spirals, inflation that topped 25 per cent, unemployment that reached 128,000—the highest ever recorded in the history of the State—if the Arabs can be blamed for all that, and if that is the record of which they are proud, fair enough. The longer they rely on that record the longer they will stay on the opposite side of the House.
The real problem was that the message was delivered and they were not prepared to listen to it.
There are very few on the other side of the House.
That is one of the reasons. There are very few of them left.
The Deputy on the other side of the House is not here.
No. He had 12 minutes left. I will come in a few minutes to the job that he made of it last night. He did not have so very much to say and the few problems he tried to raise will be answered in due course in the debate.
That is the record that the main Opposition speaker last night tried to defend. He came along to their present record, picking out selective items. He said we should take, for instance, the rates abolition. I will take the rates abolition. The Labour Party produced Opposition speaker after speaker on the abolition of rates. I do not know whether they were for or against it. When a division was challenged they could produce only nine Deputies to vote against the abolition of rates. I doubt the sentiments behind that operation because, if they were sincere in opposing the abolition of rates, they would have been here in numbers for that division.
He then went on to say every county council was short of money, that there was a curtailment of services, and that any Deputy who is a member of a local authority could vouch for what he was saying. I am a member of a local authority and I am a Member of this House. While I cannot speak for every county, I can speak for my own county. There has been an increase in the allocation of money for housing to Longford County Council and there is an embarrassment of money in Longford County Council. Despite the fact that local authority engineers are working to rule, which may curtail some of the expenditure, nevertheless it was most unlikely that we would have been able to spend it all before the end of the year.
The Minister for the Environment stated that £530 million was allocated to local authorities this year which was £100 million more than was allocated in 1977. If that is evidence of a curtailment in services. I cannot follow Deputy Cluskey's logic. I have seen it printed in the national newspapers that in Dublin County Council and Dublin Corporation they had a surplus of cash in the region of £2 or £3 million not very long ago. I do not know where Deputy Cluskey gets his arguments. I deal in facts and they are the facts as I see them. Nobody can deny them here or elsewhere.
Deputy O'Toole referred to chaos in the youth employment scheme. I do not know where he gets his facts. I do not know whether he is living in wonderland or in cuckoo-land. In environmental schemes alone 2,000 jobs were created by 30 September of this year. I referred in a previous debate to the work experience programme initiated by the Department of Labour because I felt young people were crying out for such a programme. We see pages and pages of advertisements for jobs in papers but young people are shot down when they see that experience is necessary. This work experience programme started in the first week of September so far as I remember. Already 947 people have been placed in employment and there are 460 places waiting to be filled. That is a fair record for any Minister for Labour and his Department.
I am told there is a lack of demand for some jobs. It may well be that some young people today are not particularly interested in the jobs available. They are entitled to their views. It is our responsibility to get them employment which will reward them and in which they will be happy. I would say to young people: "Where there is a job, take it. It may not be the job you want, or the job you would like, but take it and move on from there and you will be the better for it." I started to earn my living after the recession in the fifties. I took many jobs. I am in this job now and I intend to stay here for a while. When young people go for interviews they find out very quickly there is more admiration for them if they have a job even if it is far removed from the career they intend to pursue eventually.
The Department of Education produced 1,100 jobs—perhaps short term and temporary—to ensure that the abilities and energies of our young people are not wasted. The young people of Ireland are our best national resource. I heard Deputy Kelly talking about national resources before he left the House. Let us use our young people, their energies and their idealism, and motivate them to earn a living instead of walking around in a carefree fashion until the specific job for which they are looking turns up.
Our youth employment scheme is well on target and we are proud to stand over its record. We are proud to stand over all our records since we took office. We planned our approach and we know where we are going and how we will get there. The people are fully behind us, even more so than when they elected us. Last September or October I read in an opinion poll that the popularity of the Opposition had dropped further than it was after their humiliating defeat in June 1977.
I am surprised that Deputy O'Toole did not use the 12 minutes he had left. I commend him on agreeing with the Minister that food subsidies should not remain a permanent feature of our economy. He questioned when was the right time to start phasing them out. He did not think this was the right time because he considered there is still a lot of poverty around. We all know that. He threw out a figure of somewhere in the region of 500 or 600 medical cards being withdrawn in Mayo. That indicates either one of two things to me. The withdrawal of medical cards is a significant pointer to a rising standard of living. If that number of medical cards were withdrawn, I can only assume the standard of living of these people has risen above the qualifying figure. Was it something more sinister? Maybe they should not have been issued in the first place. Were they part of the price paid to win the Mayo by-election? I do not know. I am sure Deputy O'Toole and other Mayo Deputies will ensure that those medical cards are restored if the people from whom they were withdrawn are justly entitled to them.
The Opposition never got the message. They sat back and let the learned men of the press take up the cudgels for them because they felt it incumbent on them to provide opposition when the Opposition were so lacking in knowledge about how to attack Government policy. Time and time again we have seen a reaction to the headlines in newspapers. Private Members' Motions were put down on the Order Paper. I can only assume that the learned gentlemen of the press feel it their duty to oppose the Government since the Opposition are failing so dismally in their duty.
I want to refer to Deputy Cluskey's unpatriotic comments about our manifesto. It is far more unpatriotic for the Opposition to enjoy the industrial problems which are now starting to loom up on the horizon. I do not think people of Ireland will commend them for that. They seem to enjoy the fact that the Government are facing serious problems here, there and everywhere. I regard that as being totally unpatriotic. Would it not be much more appropriate that they would tell us how they think the country should be run if they do not agree with what we are doing? I would prefer that they would bring their views to bear on those various people who might be described as armchair gentlemen who do nothing but frustrate the problems confronting us. Ireland is at a crossroads and we have the responsibility of sending out loud and clear the message that our country has a great future.
It should be emphasised that there are people here who are working in what they consider to be the best interest of everybody. I have no wish to hear Deputy Cluskey or anybody else quote from tatty newspaper clippings or from various forecasters. It would be better that we would hear about the true position and about where we are going from here. We know what the forecasters have been saying during the past few months about our programme. We know that the ESRI report and also the Central Bank, which is supposed to be the be-all and the end-all so far as forecasting is concerned, disagreed totally with the forecasts of our Minister for Economic Planning and Development. However, we find now that both these institutions are endeavouring to retrace their steps and to produce figures that are a good deal closer to the Minister's figures. It gives me great pleasure to be able to say that the Minister for Economic Planning and Development is the best forecaster not only in this House but in the whole country. He is the only man who has produced the figures that add up at the end of the day. Should his figures prove wrong we would no doubt have much howling for his blood from the people opposite but he cannot be faulted on the planned programme he produced for our further development.
Deputy Cluskey told us last evening that according to the best sources available the forceast in economic growth for next year is 3½ per cent. I wonder if those sources are anything like the ones which three or four months ago produced an economic growth rate of 5½ per cent. But we will leave it to the good sense of the people to decide who to believe at the end of the day. The Minister forecast a 7 per cent growth rate while others put the rate at 5 per cent. Now these other people are talking in terms of 6 per cent and I suppose that within a couple of weeks they will have changed the figure to 7 per cent. Deputy O'Toole in a reference to the creation of 20,000 jobs said last night that we would need to produce 1,500 jobs per week between now and Christmas—a total of 9,000 jobs. Is the Deputy not giving us credit for having created more than 11,000 jobs in the past year? Perhaps he was only trying to boost the morale of his party. Most of the 20,000 jobs have been produced and in this context I have dealt with the question of youth employment.
We promised to reduce inflation to about 7 per cent but we find that the figure is even lower. When we realise that in the previous three to four years the rates in this respect varied between 18 and 25 per cent we appreciate the improvement in this area. It is a policy that has resulted in all these improvements that the Labour Party are endeavouring to tear to pieces. I deal only in facts, not in what other people say. The Labour Party said that because we were responsible for a consumer boom we would have balance of payments problems in a very short time. I would remind them that the balance of payments' situation is also on target. It is time the people opposite got down to the job of being an opposition and formed their own policies instead of relying on forecasters and various other people. It is only natural that people in the newspaper business are interested in selling papers and will produce the sensational story but it is too bad when an Opposition rely for their criticism on newspaper reports. There is no point in recalling again what transpired during the three or four years this party were out of office. The people have no wish to be reminded of those times, as they indicated clearly in the last election.
I never thought that I would hear somebody say in this House that a programme that is proving so successful is unpatriotic and especially after that programme had been endorsed to such an extent by the people. The person who makes that sort of allegation is the one who is unpatriotic and must know that he is being hypocritical.
It is time that the real patriotism was brought out in the Irish people. They displayed their patriotism at the last election when their message was that "we are proud of our nation and are not prepared to tolerate a situation in which we are told that nothing can be done about the various problems that confront us". Our people will live up to their responsibilities if we give the necessary leadership. It is our task to motivate the people. It is time that we stopped looking to the orchestra to call the next tune and that we stopped praising the band without knowing the name of the tune they were playing. What we need is a new release of inspiration and idealism that will motivate our people into building on the solid foundation that we have today. In this way we can build a more prosperous nation in which both we and our children can enjoy a secure standard of living.
I shall conclude with the words of Terence MacSwiney: "How we work today will determine how we live tomorrow."
I must confess to being somewhat speechless in admiration for Deputy Reynolds because there are few new Members of this House who can speak to a motion without referring once to that motion and without, in this case, referring to food subsidies despite the fact that the issue before the House is the question of food subsidies. Fair due to Terence MacSwiney, we can hardly hold him responsible for the introduction or abolition of food subsidies. The Deputy achieved a record: not once was he found out of order. I have the greatest admiration for yourself, a Leas-Cheann Comhairle——
I am afraid, Deputy Desmond, that he was following the lead set last night.
The Deputy was not here.
I was out of the country on official business. Reading last night's debate reminded me of the words used by the late Seán Dunne—"There are more Ministers who talked themselves out of Leinster House than talked themselves into it." I think he was right. I have a premonition that my constituency colleague, the Minister for Economic Planning and Development, is about to join that celebrated band of ex-Ministers if he is not very careful about the vein of his contributions in this House.
One has to make a prediction about the question of food subsidies, that is, that the Minister will not get his way and his approach in the celebrated articles he wrote in Business and Finance before he became a Minister in which he outlined how to cut various aspects of public expenditure will not be followed by the rest of the Cabinet. All the indications are that he will probably be defined as the Minister for Fisheries and Forestry, Deputy Brian Lenihan, defined him: He is a very fine man but he is best kept in another room working out statistics while we get on with the business of the Cabinet.
I predict that food subsidies will not be phased out. This has been an isolated quirk of a reduction of public expenditure thought up by the Minister for Economic Planning and Development and eventually floated into a Green Paper which was treated with scant attention by most members of the Cabinet. They would have had more time for it if it had been a White Paper but since it was only a Green Paper it was obviously off-the-cuff, covering clawbacks, children's allowances, various aspects of higher education grants and food subsidies. Talking to members of the Fianna Fáil Party I find they do not take the Minister for Economic Planning and Development too seriously. Deputy Reynolds is the only glorious exception in the Fianna Fáil backbenches I could find.
This is the reality of the situation. What does one find in relation to food subsidies? The Cabinet are making up their minds what they should do about this proposition which is being floated by the Minister for Economic Planning and Development. This so-called option—a new word used in Irish economics; everything today is an option, there is no such thing as a decision or an idea——
Why is the Deputy so hesitant about using it?
What do we find in relation to this glorious option? We find that the urban and rural representative organisations are totally opposed to such abolition and there is a very substantial body of political opinion opposed to it. I will give some examples. There is not one trade union in the Irish Congress of Trade Unions which would agree for a minute with the Minister on the question of food subsidies. A respected national agricultural organisation, namely the IAOS, in their submis-sion to the Minister on the Green Paper disagreed completely on the question of food subsidies and said they should not be phased out. I am not necessarily a devotee of the IFA nor am I their spokesman, but the IFA and the ICMSA are totally opposed to the abolition of food subsidies.
Is there any comfort to be found anywhere for the Minister in relation to this proposition? One can examine the various comments made by the different political correspondents, always assumed to be on the side of the Opposition, as Deputy Reynolds wrongly assumed. I have not found one political correspondent in favour of the abolition of food subsidies on an objective analysis. I have found only one parliamentary correspondent, Mr. Bruce Arnold of The Irish Times who obliquely favours the line followed by the Minister——
He works for the Irish Independent.
He is the parliamentary correspondent, not the political correspondent. There is a subtle difference in the hierarchy of the NUJ and we have to be very careful about this. I have found only one newspaperman who actually favours the abolition of food subsidies, and for an entirely different reason in that he sees a grand strategy being unfolded by the Minister——
The Deputy will not be seen talking to him.
I have not found in this debate tonight one Fianna Fáil Deputy who favours the course of action being followed by the Minister. Deputy Reynolds spoke eloquently for 30 minutes and I must confess I share a good deal of his views about economic affairs generally but never once did he refer to food subsidies or support the Minister. Could we have from the Minister or any Fianna Fáil backbencher an indication of support for the Minister in regard to this proposition? I am afraid the answer is that there is precisely none.
We will leave the national representative organisations and look at work of a research nature which has been done. I refer to the various reports of the National Prices Commission. In these reports objective rational analyses have been carried out on the question of the nutritional intake of certain sectors of the population, notably elderly people, pensioners and so on. All these reports point out that the elderly and large families proportionately spend a much higher percentage of their income on food such as bread and milk, which are subsidised.
I draw the attention of the House to the fact that there has been no defence by the Minister for Industry, Commerce and Energy of the attitude of the Minister for Economic Planning and Development. They exist in two separate worlds even though the Minister for Industry, Commerce and Energy is responsible for food subsidies. That Minister could be described as "Mitcher O'Malley" because he disappears over the horizon when it comes to food subsidies. He knows that as far as the Cabinet are concerned the Minister for Economic Planning and Development is out on a limb. At the Fianna Fáil parliamentary party meeting last week Deputy Flynn started sawing off that limb, and it will be well and truly hacked off by the time the budget is introduced. The Minister for Economic Planning and Development will be left sitting on that limb without his policy being implemented by the Fianna Fáil Party. That is the reality. If ever there was a political party of reality it is Fianna Fáil. We accept that.
One must use one's political hazel rod in trying to divine the reasons why the Minister for Economic Planning and Development is in favour of such abolition. I refer to the celebrated "recovery" article published in the Sunday Press on 12 November last. The Minister answered a series of questions probably put to him by telephone from Seán Cryan. It is stated: “O'Donoghue Looks for the Middle Class”. He had better not say that too frequently in Foxrock. He was the darling of the middle class in Killiney when he told them about the wealth tax and many Fine Gael people voted for him in the constituency I represent. You should hear what they are saying now about his views on the middle class.
(Interruptions.)
Deputy Desmond does not need any help.
The Minister is quoted in this article as saying: "The objection to the subsidies is that you subsidise food for the rich as much as for the poor. If there is any way of channelling that money more directly to the less well-off this would surely be a desirable improvement."
What does the Deputy think of that?
Last evening we had a further elaboration of that rationale when the Minister asked why this House should subsidise a millionaire's pound of butter to the same degree as a poor man's pound of butter.
Is the Deputy on the side of the capitalist or the worker?
The Minister and the Government were not prepared in their manifesto or in their political decisions in the budget or during the past 12 months to apply that principle in any of the following instances. Was that principle applied to the wealth tax or to car tax? No. If a person had five cars up to 16 horse power, the tax was removed. Was that principle applied to capital gains? No. Was there any relativity of income? None whatsoever. Was that principle applied in the derating of a cottage in Kerry or a millionaire's house in Foxrock? No. Was it applied to the £1,000 grant for first-time buyers of new houses? No. Was it applied to the £600 home improvement grant? No. There is no relativity of income in relation to any of the previous decisions of Fianna Fáil. A person could own ten houses, all of which have now been derated without any reference to income. A person could own 20 personal cars on all of which the tax has been removed. There was no reference to income in regard to capital gains of £10,000.
The criterion of the Minister for Economic Planning and Development must be applied to milk, butter, bread and town gas. Here we have a means test. A sum in the region of £300 million was given out in the relief of wealth tax, car tax, domestic rates and capital gains, in the £1,000 house grant and the £600 reconstruction grant. The criterion did not apply in these cases but must apply to the £10 million subsidy on bread, butter, milk and town gas. There is the republican party; there is the party who are concerned with the middle income group, the lower income group and the poverty section of our community. This criterion is shattering and the Minister and the members of his party who may support his perverse theory will go down in history as the creators of an inverse means test which will apply in relation to food and food subsidies.
The main beneficiaries of the relief of wealth tax are wealthy gentlemen. It is well known that women in this country do not own the bulk of wealth; naturally it resides in the male heirs of property. The bulk of car owners are male and the bulk of rateable house owners are male. The bulk of those who get the £1,000 house grant are male and the same applies to the £600 grant for house repairs. Who are the people who own stocks and shares? Invariably it is the male heads of households. Food is bought by housewives and it is mothers who receive children's allowances. Not only is there an inverse means test in operation but there is virtually a sex differentiated means test which, coming from a political party who profess a special concern for women in society, rings very hollow.
Those who benefit from food subsidies are the large families, the poor and the elderly. Proportionately they spend more of their ordinary income on food than other groups and the Minister proposes to abolish the slender benefit they now have. I use the word "slender" because one would get the impression that there is a massive system of national food subsidies in operation and that the Fianna Fáil economic strategy would fall asunder overnight unless something is done about the cost of food subsidies in 1978. We are talking about £50 million out of a national current budget expenditure of £2,500 million a year. This is a mere 2 per cent of the total national budget. Fianna Fáil are running around like a crowd of ducks caught in last night's wind trying to make up their minds about how to phase out subsidies during the next three years. I find the spectacle unedifying in relation to any Cabinet and ludicrous in terms of the current budget.
Food subsidies are proportionately a very small item in the national budget. It will not break any Minister's calculations to continue them, if necessary, for the next 20 years. I deliberately say 20 years because these subsidies are, of course, a fixed item, an item fixed some years ago, an item which did not proportionately increase for the past two or three years. In other words, they form a relatively small proportion of our national budget as they will again next year. And the following year a relatively still smaller amount will be devoted to food subsidies. The amount of the subsidy is fixed. On the other hand, the price of bread, milk and butter when these subsidies were introduced was very much lower than it is today and so at that time the subsidies were a higher proportion of the actual price of the loaf of bread or the 1 lb. of butter. Today, relatively speaking, the subsidy is a declining element, as it were, of the actual price. Today, Fianna Fáil, in their wisdom, and simply because the Minister for Economic Planning and Development was so bereft of any alternatives designed to curb public expenditure, come forward with this proposition to remove subsidies.
The Minister last night threw a question at Deputy Cluskey, a question we must in all honesty take up. He asked do we in the Labour Party favour a general system of subsidies in the economy as a whole? As Labour Party spokesman for the time being for Industry, Commerce and Energy, I would say we do not. We have a very modest, restricted, tripartite system of food subsidies for a mere three food items—bread, butter and milk. In so far as these are subsidised the subsidies should be retained. We are not for one moment suggesting a subsidy should be introduced on meat or clothes or fruit, or that there should be a general system of subsidisation across the board.
The previous Government selected three staple items of food, items of basic household expenditure, and decided to limit the subsidies to them. That is the answer to the Minister for Economic Planning and Development. Do we want subsidies extended? The fact is the subsidies on the three items I mentioned should be increased in line with inflation. However, for the moment we are strongly and adamantly advocating the retention of the present subsidies in their present form without any emasculation of them by the Government in its coming budget.
I want to stress now that it is not the desire of the Labour Party to upset in any way the prospect of rational and responsible pay negotiations. To many people the question of food subsidies is much more than a mere £50 million. It is much more than a Trinity professor of economics says it is in some article he wrote for Business and Finance before the last election, subsequently incorporated into the Green Paper and foisted on the Irish people. I have not much time really for that kind of academic exercise. Indeed, academics who indulge in that kind of exercise quickly find themselves without their ministerial portfolios. The country really deserves better in the context of trying to convince the ordinary trade unionist that he should act responsibly, sensitively and coherently in regard to future prospects in pay negotiations. If the Government meddles stupidly, and unnecessarily, with food subsidies there will be a negative backlash from the trade union movement and the prospect of achieving a norm—I will not dare use Margaret Thatcher's phrase of an average because that would mean a series of settlements—either in a national pay agree-ment or by way of some responsible alternative will recede. It will recede because the Minister for Economic Planning and Development is going about the whole matter in the most muddleheaded and irresponsible way one could possibly conceive. There is nothing more likely to infuriate the average industrial worker who is currently paying 85 per cent of total income tax receipts than to find that the price he, his wife and his family have to pay every Saturday to the baker for bread and the dairyman for milk, will be substantially increased. We would hope sincerely that the Government collectively would convert the Minister from his unsound approach.
The Minister for Fisheries and Forestry, Deputy Brian Lenihan, jocosely remarked that his colleague, the Minister for Economic Planning and Development, is better off in another room, looking after statistics, away from the heat of the Cabinet table. I do not think it is the Minister for Economic Planning and Development who will decide budget strategy. I have always had a great respect for the Fianna Fáil Party. It is a party which does not create problems and, if you do not create problems, you do not have to have legislation. If you do not have to have legislation, you do not create problems: you do nothing, let the country manage, muddle through. That is the way it operates by and large. That is the way Fianna Fáil have operated since they were returned to power—no legislative programme, no problems. "Let us work away. Jack is a very fine man. We are all happy in Cork and, therefore, we are all happy in Dublin and, therefore, the country is happy and we will have a nice budget in time for the next election". I would recommend that course to Fianna Fáil for one more year. I do not think it should get itself into a knot because of the Minister for Economic Planning and Development.
I believe sanity will prevail in the Cabinet but we are moving this motion as a democratic taking out of a stricture on the Government in the hope that sanity will prevail and in the hope that this proposed cutback in the living standards of the lower income groups will not come about and in the hope that the kind of nonsense perpetrated on this House last night will not recur, a nonsense which is becoming unduly arrogant, if I may say so, on the part of such a new Deputy, the Minister for Economic Planning and Development, who shows an arrogance that bodes ill for his contributions in future and I for one, regret having to say that about a fellow-Deputy in my constituency. But, quite frankly, after about 18 months of it we have just about had enough of it and I think his own Fianna Fáil Cabinet are just about having enough of it as well on this occasion.
I strongly support the case made by the leader of the Labour Party and the Labour Party have no hesitation in supporting this motion.
I can only describe the speech made by Deputy Desmond as a great deal of bluster and bluff. It is noticeable that the Labour Party Coalition partners are absent from the Chamber. Even though Deputy O'Toole reported progress last night and had ten minutes left tonight he obviously did not have the heart to come in into the debate again and so Deputy Desmond's loyal colleagues sent out for reinforcements to the extent of five Labour Deputies to come in and support him.
The people have shown that they are not easily taken in by the Coalition. When I was in Opposition, former Deputy Justin Keating said that we were a rotten Opposition. I agreed that there might have been some merit in what he had said and pointed out that the Coalition were a rotten Government who were far better in Opposition and that in time the people would put them where they belonged, in Opposition, and put us in Government where we belonged. The people did that.
The Government stated in their Green Paper that spending must be reviewed. The Minister for Economic Planning and Development said last night that the Coalition Government introduced food subsidies because of the high rate of inflation coupled with high unemployment. I assure Deputy Desmond that we in Fianna Fáil are very proud of the Minister for Economic Planning and Development who has done an excellent job. That Minister has been far more accurate in his predictions than the Coalition and some outside experts, including the Central Bank, have been. The Central Bank upped their figure for growth only a few short weeks ago when they published their report. We stated at the commencement of the year that we expected a growth of 7 per cent and it was said that this could not be achieved. We stated that the borrowing to prime the economic pump should not exceed 13 per cent of the GNP. We were told that this was impossible. Yet we have shown that it can be done.
I am sure that the Labour Party are not really against the abolition of rates on private dwellings, community halls and so on, although they voted against the Minister's Bill. I am sure they are not against facilitating the hard hit motorist whom Deputy Tully used talk about by removing the tax from cars of under 16 horse power. We fulfilled all these promises. The Labour Party want to have it both ways. They say first of all that we will introduce a tough budget, that we will take back whatever we gave in last year's budget and on the other hand they say if the budget will again increase the standards of living of the less well off, and is not severe, that it is an election budget to gain votes in the local elections and the European elections next year. Depending on what sort of a budget we introduce they can refer to the Official Report and say that they predicted that there would be a hard budget or that it would be an election budget to cull votes.
The people know how they are doing under Fianna Fáil as opposed to how they were doing under the Coalition Government. Never in the history of the State was a Government so totally rejected. I have frequently stated that Governments are not elected but are rejected.
This morning on the Order of Business the leader of the Fine Gael Party, Deputy FitzGerald, gave a very peculiar definition of democracy, because we could use the majority which the people gave us to pass legislation on which we will be judged at the next general election and the one after and so on.
What about food subsidies?
Deputy Desmond said that nobody had referred to food subsidies, and he only just referred to them. We are reviewing food subsidies. We will not phase them out in one go. This was acknowledged even by Deputy Cluskey last night. We will not phase them out in two or three years. We stated categorically in the Green Paper that we were reviewing the trends in spending because of the improvement in the economy. These subsidies were introduced at a time of high inflation and high unemployment. We set out to achieve 20,000 jobs, and we will achieve in excess of that. Our youth employment scheme, which was delayed, is nevertheless on target. By creating jobs and putting money into people's pockets the need for food subsidies has been reduced, so such subsidies will be phased out as we progress. I am optimistic enough to appreciate that we will progress from year to year. I am confident that the Government will not reduce the standard of living in the January budget. I am satisfied that when the budget is introduced the people at the lower end of the scale will be in receipt of increases not just in keeping with the cost of living but in excess of it. It has always been part of our policy to increase the standards of living at the lower end of the scale.
The continous attacks on the Minister for Economic Planning and Development are indicative of his success. When discussing this new Department earlier on it was said that it would take about 18 months to get off the ground. The Minister has this Department working well ahead of that.
I am glad to note that one member of the Fine Gael party has come down. They must have had a loudspeaker on in one of the rooms.
I was going to ask the Deputy if he had mentioned to Deputy Flynn the success of the Minister he is talking about.
If the Deputy wishes to read little gossip columns let him do so. It has been stated time and again that the people who benefit most from food subsidies are the people who have most money to spend. We are talking about a sum of £57 million and it is expected that they will be reduced over a number of years. I do not know what the plan is; I do not know how quickly we will progress but I am optimistic that our growth will continue. It is good news to hear that we are at the top of the EEC league for growth.
I sense a tremendous feeling of frustration, disappointment and a certain amount of bitterness because we have managed the country's affairs so successfully. The Opposition, instead of telling us that we are right and that they will assist us, are trying to sow seeds of dissatisfaction but the general public know the situation. They can remember the hardships they had to endure under the Coalition. We have as our prime target the creation of jobs.
And abolishing food subsidies.
Is it the jobs in Bermingham the Deputy is talking about?
As we increase the number of jobs so the need for food sub-sidies lessens.
Is the Deputy saying that old age pensioners do not need food subsidies?
The Deputy has one minute left and he should be allowed to use it without interruption.
I am confident that the economy will continue to expand. The Opposition can make all the noise they wish but the people know they are better off under Fianna Fáil. We are pleased with the job situation and during next year we will create more jobs. I am certain that we will achieve our job target by 1980. I endorse the Government's dynamic policy and deplore the management of the economy from 1973 to 1977.
There is very little mystery about the reasons which led the Labour Party to table this motion. We believe that the options first discussed in the Green Paper, the policies later confided in cumainn in Clontarf, are mistaken ones. It would be a mistaken policy for the Government to attempt now to pay for its election-inspired largesse of the last budget by the shabby strategy of taxing children's allowances and phasing out food subsidies. I do not lose heart that the Government will abandon these policies and not proceed to implement them in the next budget.
There is no mention in the motion of children's allowances.
It is part of the same family of expenditure-cutting under discussion. The phasing out of food subsidies and taxing of children's allowances are part of the expenditure-cutting programme of the Government forced on them by their earlier largesse. They are anti-family measures proposed by a Government who made a free gift of £2,000 each to the nation's wealthiest citizens when they abolished the wealth tax. If they are looking for the area from which they should collect this revenue I should like to direct their attention to the nation's wealthiest citizens who can well afford to pay.
The economic expert of the Cabinet has already mused in public how his heart is struck by the unfairness that would follow if the subsidies were left in being. In The Sunday Press of 12 November he explained to the nation that the rich benefit as well as the poor from such subsidies. If this is his only worry about the continuation of food subsidies he could make up the revenue and ensure that only the rich would pay by taking back the tax free gift he made to the nation's wealthy people earlier this year. I am not alone in thinking that the Government's policies are mistaken. The trade union movement yesterday thought the same and a casualty for the Government's economic strategy next year is the fact that the trade union movement have decided to abandon talks on a national pay agreement. Even the most faithful of the Government followers will accept that the decision of the trade unions yesterday is not in the best interests of the economy. We regret that such an action was forced on the trade unions by the policies and contemplated actions we are discussing. We believe that wiser counsels will prevail in the Government and that they will look for the revenue lost earlier this year from the wealthy sections of our community.
One could describe the budget strategy of 1978 as an attempt by the Government to spend our way into full employment on the basis of foreign borrowing. We are aware that the employment targets showed that that policy and strategy was ill-conceived and that the economic Minister who is so worried that the food of the rich is subsidised as well as that of the poor, has confessed in public—it is becoming a weekly occurrence to confess his failures in public; an interesting trait and one which he will be forced to indulge in more frequently between now and 1981—that the employment target will not be reached this year.
He did not say that. The Deputy should have read the article in The Sunday Press of 12 November.
I found the Deputy's contribution very interesting, so interesting that I looked back on the record to see that I got each title of his credo as pronounced tonight, if credo is the correct word to use. Before the goodies were handed out the claim was made that no substitute revenue would be necessary to pay for them. In our simplicity at that time we did not know how this could be brought about. We knew that at some stage the bill would have to be paid but we did not know that the areas from which payment would be sought would be children's allowances and food subsidies. The abolition of food subsidies over whatever period will lead to an increase in the cost of living and anybody familiar with the problem will know that such an impact on the cost of living increases the pressure for wage increases. We all look for orderly progression on the incomes front and we believe that if the Government look at the problem they will abandon their policy because they will perceive from yesterday's decision that continuing on their course will lead to a more serious prospect for industrial relations in 1979 than the serious situation we faced in 1978. We are aware that when the figures are counted we will have lost approximately 1 million man days through disputes this year.
We have been told that it is a very fertile area of discontent in our society when a government attempts to encourage divisions. So much of the strategy of the Government is intent on deepening divisions rather than eliminating them in our society. That is true of the gifts given out in the 1978 budget. Now when they are looking for the payment for these promises, for this largesse of theirs, where do they look? They seek to take the money from the average income families. They seek once more to ignore the people who most benefit from their largesse, the people on whom they relied because it will be recalled that their statements earlier this year were that the imposition of the wealth tax and the capital gains tax on the wealthiest in our community was a disincentive to investment. Since the removal of these taxes we have not seen the extraordinary increase in jobs that it was predicted would occur. Instead the admission has been made publicly that the employment targets will not in fact be reached.
I believe that there are many ordinary supporters of the Government party up and down the country who are concerned with the kind of actions foreshadowed in statements such as those of the Minister, Deputy O'Donoghue. We are appealing to that section in the party opposite to speak to their TDs and local representatives, to such Deputies as Deputy Flynn, who according to press reports raised this matter quite appropriately and asked for information on the Government's intentions in relation to the food subsidies and the taxation of children's allowances. Well he might do. Any Deputy who is in touch with his constituents would understand that great importance is attached to the continuation of the food subsidies.
The Deputy will understand that it was also stated quite accurately subsequent to that meeting that Deputy Flynn was quite satisfied with the reply.
Deputy Flynn was in the fortunate situation of hearing some form of reply given at that meeting and I was not. So as I see things as in a glass darkly now the fact of the matter is I must——
(Interruptions.)
The Deputy will be quite gratified later in the year when he gets the full portent of this motion.
That is the purpose of this motion. No Deputy on this side of the House was at the meeting mentioned by Deputy Flynn.
That is why I am anxious that the Deputy should not step too far out of line because he would then have to withdraw what he is saying now.
Deputy O'Leary is in possession. Deputy Flynn will get another opportunity.
I am glad of the encouragement received from the Deputy. The reason the motion is put down by the Labour Party is to get the constructive result of getting this Government to change their minds. If we succeed in that the putting down of this motion will have been quite worth while and we will be quite happy. It is not put down for any other reason. This motion has been put down and has received powerful endorsement as a result of the decision of the trade unions yesterday not to enter into wage talks because the subsidies were introduced initially in 1975 when the Government of the time wished to get from the trade union movement their co-operation for the amendment of the later stages of the national wage agreement of that year. In a June budget we introduced subsidies to keep the cost of living below a certain figure. In return the trade unions responded by so amending the national wage agreement of that year. So there is an intimate connection between the maintenance of the food subsidies in their present form and the continuation of the national wage agreement system of bargaining and it does not surprise me that yesterday such were the worries and concern of the trade union movement that they in fact abandoned for the time being the concept of national wage bargaining as a result of this and other expenditure-cutting decisions of this Government.
Of course the Government must replace revenue lost from other sources. It is very pleasant to think that certain of the problems faced by this country, employment chief amongst them, can be surmounted by such means as were chosen by the Government. It would be a very pleasant state of affairs indeed to think that abolishing rates and tax on cars leads automatically to improvement in the employment situation. It would be a far more pleasant world if these consequences followed. It would be an even more pleasant world if one could do these things without looking for the actual payment afterwards. But of course that was the claim of the Government that such payments, such hand-outs could be made, such things could happen without recourse afterwards to payment. We are now in the dreadful situation in November where all of the generosity of January is giving way to the hair-shirt policies of November. This was predicted by us at the time as an inevitable consequence. We did not, however, then think that such areas as the children's allowances and food subsidies would be so chosen. It is not as if the abolition of the subsidies occurs in a situation where food prices have remained stationary because they have been rising steadily over recent months. We have seen milk, cheese, butter, bread, sugar the staple family food items increasing in price recently. If the Government were to proceed in phasing out the food subsidies, a further twist would occur in the food price spiral. We have already seen the result yesterday in the trade union response to the situation.
We know now what they think of it. Certain estimates have been made of what would be the effect of the removal of the food subsidies. It is reckoned for example that the price of milk would reach 20p depending on the period chosen, whilst butter could well rise to a minimum of £1.05 per pound. It follows also—and this again explains the Labour Party's concern in the matter despite the assurances which Deputy Flynn has received in camera—that part of the concern of the Labour Party is that the removal of the food subsidies would hit average income families most greviously of all. These are the families who have been hit by rising house prices which have risen over the past 18 months by over 50 per cent despite the fact that the Government said that by their policies they would ensure that more people would own homes than at any other period in the history of the State. We are now in a situation where that dream of owning one's own home becomes steadily more unrealisable as a result of the hike in house prices.
But these food prices which we are concerned to keep as low as possible will start going up over a period and that cer-tainly will hit the average income family most grievously of all. These are anti-family measures and will be resisted by us. Whatever the considerations I would hope that this Government would abandon any policies under these heads. There are political reasons why they should so abandon them. I do not appeal to them on compassionate grounds; this possibly would be presumptuous on my part. But certainly I say to them on political ground that contacts with their own grassroots in the constituencies throughout the country would demonstrate to them that expenditure cutting of this kind will not be borne by their supporters however massive and large their majority. They should be aware that their majority is very large but the same drift in the country, the same rejection that met the last Government in conditions of recession may well be their fate in the difficult conditions which face us now. The Deputies opposite should raise this question at every party meeting because many of them will no longer be here if they persist in introducing measures akin to phasing out food subsidies and taxing children's allowances.
Many of the Deputies on the other side of the House will be looking at the deliberations of a future Fianna Fáil Opposition from the Visitor's Gallery if measures like these are carried out.
Amendment put.
The Dáil divided: Tá, 63; Níl, 41.
Tá
- Ahern, Bertie.
- Ahern, Kit.
- Andrews, David.
- Andrews, Niall.
- Barrett, Sylvester.
- Brady, Gerard.
- Brady, Vincent.
- Briscoe, Ben.
- Browne, Seán.
- Burke, Raphael P.
- Callanan, John.
- Calleary, Seán.
- Cogan, Barry.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Gerard.
- Cowen, Bernard.
- Cronin, Jerry.
- Daly, Brendan.
- Davern, Noel.
- de Valera, Síle.
- Doherty, Seán.
- Fahey, Jackie.
- Farrell, Joe.
- Filgate, Eddie.
- Fitzgerald, Gene.
- Fitzsimons, James N.
- Flynn, Pádraig.
- Fox, Christopher J.
- French, Seán.
- Gallagher, Dennis.
- Gallagher, James.
- Geoghegan-Quinn, Maire.
- Gibbons, Jim.
- Hussey, Thomas.
- Keegan, Seán.
- Kenneally, William.
- Killeen, Tim.
- Killilea, Mark.
- Lalor, Patrick J.
- Lawlor, Liam.
- Lemass, Eileen.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leonard, Tom.
- McCreevy, Charlie.
- McEllistrim, Thomas.
- MacSharry, Ray.
- Meaney, Tom.
- Molloy, Robert.
- Moore, Seán.
- Morley, P.J.
- Murphy, Ciarán P.
- Noonan, Michael.
- O'Hanlon, Rory.
- O'Leary, John.
- Reynolds, Albert.
- Smith, Michael.
- Tunney, Jim.
- Walsh, Joe.
- Walsh, Seán.
- Wilson, John P.
- Wyse, Pearse.
Níl
- Barry, Peter.
- Belton, Luke.
- Bermingham, Joseph.
- Boland, John.
- Burke, Joan.
- Clinton, Mark.
- Cluskey, Frank.
- Collins, Edward.
- Conlan, John F.
- Cosgrave, Michael J.
- Creed, Donal.
- Crotty, Kieran.
- D'Arcy, Michael J.
- Deasy, Martin A.
- Desmond, Barry.
- Desmond, Eileen.
- Donnellan, John F.
- Enright, Thomas W.
- Fitzpatrick, Tom (Cavan-Monaghan).
- Flanagan, Oliver J.
- Gilhawley, Eugene.
- Griffin, Brendan.
- Horgan, John.
- Kelly, John.
- Lipper, Mick.
- McMahon, Larry.
- Mitchell, Jim.
- Murphy, Michael P.
- O'Brien, Fergus.
- O'Brien, William.
- O'Connell, John.
- O'Donnell, Tom.
- O'Keeffe, Jim.
- O'Leary, Michael.
- Pattison, Séamus.
- Quinn, Ruairí.
- Ryan, John J.
- Taylor, Frank.
- Timmins, Godfrey.
- Treacy, Seán.
- Tully, James.
Tellers: Tá, Deputies P. Lalor and Briscoe; Níl, Deputies B. Desmond and Creed.
Amendment declared carried.
Motion, as amended, put.
The Dáil divided: Tá, 61; Níl, 41.
Tá
- Ahern, Bertie.
- Ahern, Kit.
- Andrews, David.
- Andrews, Niall.
- Barrett, Sylvester.
- Brady, Gerard.
- Brady, Vincent.
- Briscoe, Ben.
- Browne, Seán.
- Burke, Raphael P.
- Callanan, John.
- Calleary, Seán.
- Cogan, Barry.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Gerard.
- Cowen, Bernard.
- Cronin, Jerry.
- Daly, Brendan.
- Davern, Noel.
- de Valera, Síle.
- Doherty, Seán.
- Fahey, Jackie.
- Farrell, Joe.
- Fitzgerald, Gene.
- Fitzsimons, James N.
- Flynn, Pádraig.
- Fox, Christopher J.
- French, Seán.
- Gallagher, Dennis.
- Gallagher, James.
- Geoghegan-Quinn, Máire.
- Hussey, Thomas.
- Keegan, Seán.
- Kenneally, William.
- Killeen, Tim.
- Killilea, Mark.
- Lalor, Patrick J.
- Lawlor, Liam.
- Lemass, Eileen.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leonard, Tom.
- McCreevy, Charlie.
- McEllistrim, Thomas.
- MacSharry, Ray.
- Meaney, Tom.
- Molloy, Robert.
- Moore, Seán.
- Morley, P. J.
- Murphy, Ciarán P.
- Noonan, Michael.
- O'Hanlon, Rory.
- O'Leary, John.
- Reynolds, Albert.
- Smith, Michael.
- Tunney, Jim.
- Walsh, Joe.
- Walsh, Seán.
- Wilson, John P.
- Wyse, Pearse.
Níl
- Belton, Luke.
- Bermingham, Joseph.
- Boland, John.
- Burke, Joan.
- Clinton, Mark.
- Cluskey, Frank.
- Collins, Edward.
- Conlan, John F.
- Cosgrave, Michael J.
- Creed, Donal.
- Crotty, Kieran.
- D'Arcy, Michael J.
- Deasy, Martin A.
- Desmond, Barry.
- Desmond, Eileen.
- Donnellan, John F.
- Enright, Thomas W.
- Fitzpatrick, Tom (Cavan-Monaghan).
- Flanagan, Oliver J.
- Gilhawley, Eugene.
- Griffin, Brendan.
- Horgan, John.
- Kelly, John.
- Lipper, Mick.
- McMahon, Larry.
- Mitchell, Jim.
- Murphy, Michael P.
- O'Brien, Fergus.
- O'Brien, William.
- O'Connell, John.
- O'Donnell, Tom.
- O'Keeffe, Jim.
- O'Leary, Michael.
- O'Toole, Paddy.
- Pattison, Séamus.
- Quinn, Ruairí.
- Ryan, John J.
- Taylor, Frank.
- Timmins, Godfrey.
- Treacy, Seán.
- Tully, James.
Tellers: Tá: Deputies P. Lalor and Briscoe; Níl, Deputies B. Desmond and Creed.
Question declared carried.
The Dáil adjourned at 8.55 p.m. until 10.30 a.m. on Thursday, 16 November, 1978.