asked the Minister for Finance if, following his recent speeches on the trade unions' role in industrial relations, he is of the opinion that wage agreements in our industrial relations code need to be legally binding.
12.
Ceisteanna—Questions. Oral Answers. - Trade Unions.
11.
asked the Minister for Finance if his encouragement in recent speeches to Irish trade unions to follow the German example relates to the investment policies of German trade unions, or to their wage bargaining methods; and if he will make a statement on the matter.
Minister for Economic Planning and Development (Professor O'Donoghue) (for the Minister for Finance)
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 11 and 12 together.
In a recent speech I said that the investment policies of the German trade unions should be worthy of the attention of Irish trade union leaders and trade union members. I pointed to the powerful role played by the trade unions in the German economy. The West German trade unions own the largest conglomerate in the Federal Republic of Germany; they have dominant stakes in one of West Germany's biggest banks; and they are heavily involved in other commercial and building activity. The trade union conglomerate and its subsidiaries employ over 40,000 people. I understand that the trade unions' primary purpose in this development was not to make money but to get into important areas of the economy so that they were able to influence to some extent the prices charged to the consumer. Moreover, if they were able to compete and to provide goods and services at a reasonable price, then everybody competing with them had to do so also.
I have made this point on the possibilities of trade union investment on a number of occasions. In February 1978 I said that I would be genuinely and sympathetically interested in seeing the trade union movement here establishing industrial projects which could become pilot schemes for a more enlightened and sensible pattern in industrial relations, and I assured those who initiate such projects of a warm welcome at Government level. In April last I drew attention to a paper published by the ESRI and delivered at an ICTU summer course in July 1977. This paper pointed out that trade unions in Israel had developed large industrial enterprises embracing such industries as metals, chemicals, electronics and construction. I believe that the activities of the trade unions in Germany and Israel deserve examination by the Irish trade union movement.
My remarks were made primarily in the context of job creation and the need for all sections of the community to play their part in tackling this major national problem. I was not suggesting that Irish trade unions should slavishly copy what is done in other countries. On the contrary, I suggested that they should examine the best features of trade union activity in a number of other countries with a view to evolving a system which would be more suited to Irish conditions.
The Deputy also refers to the wage bargaining methods of German trade unions. German trade unions have been prepared to agree to moderate rises in nominal incomes in the recognition that the consequential slow rate of inflation will retain the real value of these increases for their members. This attitude has been an important factor in securing German post-war economic growth. The recognition by the German unions of the connection between moderate incomes increases, low inflation and substantial economic growth should, I think, be of interest to Irish trade union leaders and members.
In my recent speeches I made no reference to the question of whether wage agreements should be legally binding. If this matter is dealt with in the report of the Commission of Inquiry on Industrial Relations, the Government will consider on their merits any proposals the commission may put forward.
I am sorry to interrupt the Minister and Deputy O'Leary, but I want to make it clear that any remark I made at the end of the last question and answer was directed purely at the Minister and did not in any way refer to the Chair.
Thank you, Deputy. I thought it was to the Chair.
Is the Minister aware that the German trade union movement has been in the happy position of, as he puts it, accepting moderate increases over the last number of years because their members and members' families have the basic assurance that the welfare system in Germany prevents them having very poor conditions at home, that poverty is largely outlawed in the country, and that this more than any negotiating technique of the German trade union movement is responsible for the basic sanity of their industrial relations code?
I take the point about the more comprehensive nature of the understanding that exists, but I do not see how poverty could have been abolished at the time that this type of approach was adopted. I understand that it was adopted in the fairly early years of German recovery and reconstruction after the war when there would have been relatively low levels of income and significant degrees of hardship in a number of areas. As a consequence of sufficient commitment to and support for a particular policy approach there was a very sustained period of rapid growth, which of course meant a very sustained period of rapid improvement in the living standards of German workers. I recognise the relevance of that.
I understand that the Second World War inflicted damage on Germany and its economic infrastructure but over a long period in Germany a very comprehensive welfare system has been developed under the Social Democratic Government.
We are not having a seminar, Deputy.
Would the Minister agree that this is the basic input if one is to presume to adopt some of the better features of their industrial relations code?
Yes. That is why the Taoiseach and other members of the Government, including myself, have sought to encourage more comprehensive types of agreement or understanding with the trade union movement. We feel that income developments should be seen in the context of a wider set of policies, including policies relating to the development of the social services.
Will the Minister agree that, if there is a desire on the part of the Government that trade unions in Ireland should make industrial investment needed to expand employment—I am not sure if there is any inclination on the part of trade unions to adopt such a course since they consider that the question of wage bargaining for their members is a full-time occupation—and if their interest in investment is to be encouraged, any legal disability standing in the way of it should be removed and that there are such at present? Has any attention been directed to that?
The Government are not aware of any such restrictions as such, but to the extent that any such obstacles are identifiable certainly the Government would desire to have them removed at the earliest possible date.