Does the Minister think that there will be a serious shortage of solid fuel during the coming winter?
Adjournment of Dáil: Motion (Resumed).
Debate resumed on the following motion:
That Dáil Éireann approves the targets for economic and social development and the supporting policies set out in the Government's White Paper: Programme for National Development 1978-1981.
—(The Taoiseach.)
I set out the position as factually as I could. The turf situation was unsatisfactory up to a few weeks ago. It has improved greatly and the prospects are, although one cannot guarantee it, that Bord na Móna's targets will be met. Even if they are met they will not be sufficient to meet the demand for briquettes which as the Deputy knows, have been rationed for some years.
The coal importers have placed increased orders with the Polish authorities.
Will they get extra coal from Poland?
It is our strong wish that they will. In addition to Poland, which is our main source of supply, they are beginning to look to some other countries for supplies. We have conveyed to the Polish authorities our anxiety that they would be able to meet the increased orders.
I am in a magnanimous mood today and will be pleasant, which is a change, as I can be abrasive on fisheries and other subjects.
I have a certain amount of admiration for the Minister for Industry, Commerce and Energy, much more than for the majority of his colleagues. I find his contributions and his answers at Question Time to be forthright and honest. He is very willing to give whatever information he has at his disposal. It is a wonderful change to see a Minister in such a light especially when we have seen such a pompous ass as the Minister for Economic Planning and Development——
That remark should be withdrawn. The Deputy should not use that sort of personal language about anybody in this House. It is not right.
I withdraw it. The Minister for Industry, Commerce and Energy made a very detailed, very relevant contribution today. I am not in a position to contradict some of the figures given and some of the statements made. Many of them seem to be reasonable and make good sense. No doubt some of the party spokesmen on my side of the House will contradict certain parts of the speech.
I would join with the Minister in complimenting the officers and personnel of the IDA throughout the country. As he stated, they are probably the most outstanding agency not alone in Europe but in the world when it comes to attracting industry. It is a highly professional outfit and we should give them every encouragement irrespective of party affiliation.
The Minister blamed several factors for our present industrial problems and for our energy problems. He is quite correct in saying that there are external obstacles. We know that the cut-back in oil supplies, from the Middle East in particular, has affected industry and commerce here. He also referred to internal obstacles. I would point out that when it comes to internal obstacles it is the Government's job to see that these are overcome. The Minister made an impassioned plea at the end of his speech about disputes primarily within companies such as the ESB. My answer is that, as in all business, the buck stops somewhere at the top and the buck in this case stops at the front bench of the Government, the Cabinet. It is their job to see that these internal obstacles are overcome. They have got the power to legislate if necessary to see that those internal obstacles are overcome.
The Minister stated that the nation should unite to achieve industrial prosperity and national prosperity. Of course it should, but it is our duty to point out the shortcomings and the failures of the Government and their policies. While we wish the Government well—and we would be poor Irishmen if we did otherwise—we say it is their job with a 20-seat majority to see that those obstacles are overcome. There is not a lot that we can do other than give moral support. We are not here to be destructive in our criticism but to point out where the responsibility lies. Maybe the Minister should have made the speech he has made here today inside at a Cabinet meeting. Maybe he should have spoken to the Taoiseach and the Minister for Labour and the Minister for Finance and in particular to the Minister for Economic Planning and Development. I do not see the relevance of his speech in terms of the general public unless the Government themselves are prepared to take action. It is not good blaming inter-union squabbles unless legislation is introduced or unless the Minister for Labour intervenes to see that such squabbles and such pettiness do not ruin the economy which, as the Minister pointed out is the fastest growing in Europe. It should be, because we are the most underdeveloped nation in Europe. It is not any great boast to say that we are the fastest growing economy; we expected to be the fastest growing economy.
I was perturbed that the Minister told us here today that there is likely to be a crisis in regard to supplies of solid fuels in the coming winter because we had all assumed that the obvious alternative to the cut-back in fuel supplies from the Middle East, supplies of oil and petroleum, was solid fuel and various Ministers in recent weeks have announced a major scheme of grants for conversion from oil-fired systems to solid fuel heating systems. We assumed that there was a never-ending supply of such fuel from Britain, the Continent and the United States. The Minister's statement here today that these supplies are not unlimited and may not be as great as we have anticipated must give rise to concern. The schemes which have been announced for conversion are welcome and are an obvious solution. If we are not going to get oil we will have to find this solid fuel alternative.
It is a grave matter of concern that we have power failures, even in the middle of a heat wave, as the Minister described it. The fact that there is non-stop industrial unrest here is of major concern to every citizen. We have had a series of strikes, particularly in the past six months, which have crippled industry. They have crippled the country and have done untold damage to commerce and to our tourist industry and now we are faced with more ESB dispues. As the Minister rightly stated, we cannot expect progress and we cannot expect the rate of growth which we anticipated unless something is done. Again I say it is back to the Minister and back to the Cabinet. It is their problem. Let us see them doing something about it. That is what the people of this country voted them in for in 1977. They came in on a wave of euphoria with an overwhelming vote of confidence by the people. Now they are half-way through their term of office and the public have shown their discontent by the massive anti-Government vote in the recent European and local elections. Surely the message must get home that the public out there in the streets and in the countryside are not satisfied? They elected the Government to do a job and they have not done it. They have two years left and they are now expected to see that what has not been done in the past two years will be done before the next general election is held, probably in 1981. The message has not only seeped through, it has flooded through and we have seen the Parliamentary meetings of Fianna Fáil, official and unofficial, going on in recent weeks, holding inquests, blaming individuals for the hostile reception that the party workers got during those recent elections. I have no doubt that that message came across.
I hope that the Taoiseach and the other leaders of the Government will listen to the message and that they will act accordingly. We saw a little bit of activity on the part of the Minister for Labour at the weekend. As Deputy Tully stated, the man who was so militant, so aggressive during his time in opposition should be dealing with the type of disputes referred to by Deputy O'Malley but up to now one would hardly know that there was a Minister for Labour in the country. Far too often small militant groups in key services such as the ESB are holding this country up to ransom. That situation cannot be allowed to continue.
The public expect leadership and direction. Instead the Government are giving the impression of helplessness and hopelessness and appealing to the Opposition to help them out, blaming us for sabotaging certain aspects of their policy. We are not here to sabotage: our criticism is constructive. If we had a majority such as the Government have I have no doubt we would be taking strong action at present. I cannot see why the Minister has to appeal to us to do what is the Government's duty.
The most alarming aspect of the situation is that I do not foresee any imporvement in the immediate future or for several years to come. There is an imbalance between the private and public sectors. The prosperity of the 1960s and the 1970s meant that people in private enterprise, whether self-employed or in private industry reaped more rewards and gains than those in the public sectors. The natural reaction of those in the public sector is one of discontent; one could call it jealousy or greed but it is only natural, if we see somebody doing the same job over the same hours being paid considerably more, to feel a sense of injustice. Probably it is not sinful to feel as they do because they feel underprivileged and they are beginning to kick.
This is the root cause of our present industrial unrest. It is coming primarily—not totally—from the public sector. Well-educated people are being paid less than those with inferior qualifications. It is quite common to see a young fellow who has left school without even passing the intermediate certificate examination five or six years ago now driving around as a company representative in a Mercedes or company car with all expenses paid and earning considerably more than a qualified engineer or other university graduate who is tied to a civil service or local government salary. I see no overnight solution for that problem. The discontent that type of situation evokes —perhaps I am extreme in my example—is fairly widespread and something will have to be done.
I have advocated that we should move more away from the public, nationalised industry type of society which we had been building over the years and turn back towards private enterprise in a bid to make ourselves more competitive so that people who are now tied down without opportunities of promotion or of earning more will have an opportunity to make the same progress as those in the private sector. That will not be easy. Recently I have come across an everincreasing demand when an industry gets into financial difficulties that it should be nationalised—everything should be nationalised. I think this very idea is retrograde. We should be attempting to denationalise many of the State-sponsored bodies we have. We live in a world of free enterprise and growth and progress will be stultified if there are too many national corporations where initiative is stifled and the level of income not on a par with private enterprise. I should like to see Members of the Government adopting that theme or even discussing it, because at present we seem to be rather at a dead end. Discontent in the public sector seems to be growing and as a result the number of strikes is daily increasing. Their effect on the economy is absolutely crippling.
As spokesman for transport, telecommunications and technology I have an interest in such semi-State bodies. I often refer to them as nationalised bodies because I do not see the difference between nationalised and semi-State, which may be a nice way of saying the same thing. I have only had that portfolio, so to speak, for a few weeks and it will take me some time to look into the workings of the bodies concerned. Some of the bodies involved are Aer Lingus and Aerlínte, the B & I, Irish Shipping and CIE, which is probably the largest. Last evening I advocated that in the case of a company like B & I which cannot make sufficient profit, in what seems to be a very lucrative trade—the cross-Channel car ferry business and the passenger business—to provide for its own capital needs, the Minister should give serious consideration to handing over such a company to private enterprise or else amalgamating it with a shipping company which can make a profit.
Last week I advocated that in the case of CIE, instead of cutting back services and creating thousands of redundancies, which is what CIE have been doing for the past 12 or 15 years and losing considerably more money—losses this year we are told will be about £50 million which will have to be provided by the taxpayers—instead of allowing that to happen and have the loss increasing from year to year, we should consider hiving off sections of CIE operations to private enterprise which has shown that it can make a handsome profit out of the less lucrative bus runs or freight runs. That should be our future objective.
There are many other State companies either losing money or not making the money they could make if properly managed and if a proper spirit of co-operation was engendered in the work force. That is the type of spirit and national pride the Minister for Industry, Commerce and Energy spoke about here today. The best way to get that spirit is to hand as many as possible of these semi-State projects back to private enterprise and get a good working relationship between employers and employees. The greatest failing at present in the public sector seems to be in industrial relations. The last postal strike and the previous strike in the Post Office engineering section were totally unnecessary and could obviously have been settled in a matter of weeks if there was a proper public relations setup in the civil service section concerned. I hope to see a move in that direction. There may be resistance from the unions but it is in the interest of the employees to see that they get the best possible conditions of work and staff relationship.
In my view that type of staff relationship can best be provided through the aegis of the private sector. As spokesman on telecommunications, I give a guarded welcome to the report adopted by the Government two weeks ago whereby the telecommunications sector would become a semi-State enterprise involving private investment potential. That is a move in the right direction. Whether it is sufficiently away from State involvement to private involvement I do not know. I will get expert advice and do intense study on that matter. The telecommunications and postal service should be taken out of the hands of the Civil Service. There was the alarming fact that the Minister had not consulted with the unions on the matter as promised 15 months ago. In answer to a question last week he said he hoped to redress that failure.
The Minister spoke at length about the employment prospects and maintained that the Government had a wonderful record of increased employment since attaining office. I wonder. One can make statistics lie or one can twist them to suit one's own argument all the time. The statistics that are put forward, which have been contradicted by this party, are not really correct. I regard any employment as productive. A lot of employment given in the last two years has not been creative. Much of it has been schemes such as the youth employment scheme which is very temporary and has no lasting effect. It is a glorified way of giving people on the dole more money. They do a certain amount of work but it is not productive or lasting. I fail to see how it can be termed as a reduction in the unemployment figures. A lot of new employment is being created in the public sector. That is non-productive. We cannot clap ourselves on the back for increasing employment in such a manner.
The Minister referred to job losses. Unfortunately there has been a lot of those. Overall the genuine creative employment content in recent years must be extremely small if we remove the type of public sector and temporary employment schemes to which I referred. They have been offset by many job losses such as those in the Minister's own constituency due to Ferenka and other such closures.
In the Fianna Fáil manifesto great play is made of the fact that, if returned to office, they would see that vast employment would be created from the development of natural resources. Employment from such development is a minus quantity. In answer to questions last week the Minister, who had been so vociferous in Opposition about the setting up of a zinc smelter and the amount of employment it would generate, admitted he had grave doubts as to whether the zinc smelter would ever be set up due to the fuel crisis. It is one of the resources we were promised so much about which did not materialise.
In my constituency and in neighbouring ones we have the near collapse of the leather industry which is based on native raw materials. We have seen the closure of two of the only four timber processing plants in the country which used a vast amount of the output of State forests. Instead of expansion we are going in the reverse direction and have closures. There are opportunities for tens of thousands of extra jobs in this sector of the timber industry.
As regards meat processing, which is referred to in the Fianna Fáil manifesto, meat processing factories are in dire straits and have been for some time. A large part of the responsibility is due to the idiotic idea of introducing a 2 per cent levy on all major farm products. That has meant a serious cutback. We have seen closures in Dublin as late as last week. The development of native resources with a view to increased employment has been a colossal failure.
I have been trying for the last three months to raise the question of the restrictions put on legalised salmon fishermen by the Minister for Fisheries. He has evaded the issue on every occasion. He promised me three months ago that he would introduce the Inland Fisheries Bill. As yet he has not done so. There has been a serious cutback in the incomes of legitimate salmon fishermen who number some 3,000 people. They have been coming to me looking for medical cards for supplementary welfare allowances because they cannot make ends meet. The Minister and the Government promised them before the last election that if they got back into power they would increase their catching power by allowing them to fish a deeper net. What has happened is that they have reduced the size of the nets the fishermen have been using. They reduced the length of the season and the length of the fishing week from five days to four days.
They have put good hard-working people into a poverty-stricken situation. It reminds one of west-British landlordism at its worst. No excuse has been given nor has any attempt been made to compromise or consult with the fishermen concerned. It is about time the Minister went out and met them. One cannot take away people's livelihoods overnight with a wave of the hand and say the situation will be reviewed next year. A lot of these people will have to go out of business. No attempt has been made to compensate them for their losses. The Minister has tolerated illegal fishing by unlicensed fishermen on a large scale on the west, south-west and north-west coasts. He has refused to review the system of allocating licences which would legalise the operations of a lot of the men presently being prosecuted for unlicensed fishing.
There are a great number of anomalies in the present inland fisheries system particularly in the issue of licences to drift net fishermen. The Minister should have brought in the Bill three months ago as promised so that we could discuss these anomalies and rectify the wrongs being perpetrated at present.
This is a stocktaking time, particularly on the backbencher and Opposition side, when we look at the performance of the Cabinet and the Government. On a positive note, three major documents have come forward during this Dáil session. Those documents were not debated in any detail here or outside. I am referring to the recent review of the Department of Posts and Telegraphs, the IDA's plan for 1978-82 and the road development plan for the 1980s. There will be many major consequences of the implementation or otherwise of those documents.
The cost of implementing the IDA plan will involve total investment of fixed assets of £1,800 million. For that investment it is proposed that we will receive 75,000 new jobs—not approved jobs— by the end of 1982. That is an enormous investment in job creation. The IDA highlight a number of areas which will have to be tackled as they progress through the plan. The main areas concerned are infrastructure, telecommunications and co-operation. They state that there will have to be willingness to eliminate red tape and bottlenecks where they exist, in the interests of job creation.
The report on the Department of Posts and Telegraphs was referred to by Mr. W.A. Lynch in the course of a radio programme when he spoke on behalf of what I assume to be the administrative section of the Department. He felt his members would not cooperate with the implementation of the report on the basis that it would have certain upsetting effects. Having read the report and considered its implications it is my belief that the staff of the Department, for the first time in many years, will have a wonderful opportunity for advancement if the proposed semi-State bodies are established. Effort will be rewarded and progressive members of the staff will gain promotion. They will all be part of a new and exciting development. It is important that the staff should study the report in detail before making rash judgments. I understand that the union official I mentioned on that occasion had not studied the report in detail but he was anxious to outline what he felt were major barriers to success.
I should like to compliment the review group and the Cabinet on the speed with which they accepted the recommendation put forward by the Minister. Hopefully, this will result in a major improvement in the telecommunications area. However, that improvement will need a lot of commitment from staff at all levels but it is of such crucial importance that its implementation should be carried out in the shortest possible time. The implementation of the report will involve a topping-up of one of the first actions of the Government in voting £350 million to the telephone capital bill. The amount of £650 million, as recommended by the review group represents a major commitment by the Government in a key area which will have significant spin-off benefits for the community.
The third report I referred to deals with road development. We all agree that there is a great need for major investment in infrastructure. Last May the Minister laid this document before the House. In introducing the report the Minister mentioned that it may not be possible to achieve the suggested infrastructural requirements. He expects problems to arise in relation to planning and land acquisition, two areas which are completely wrapped up in that road plan. I urge the Minister to acquire the necessary powers to implement this plan. It is inevitable that some individuals will be offended by such a plan. In many cases it appears that the rights of individuals take precedence over the general benefits which will accrue to the community. In a political sense it is not always desirable that politicians say what should be said, because it may upset certain sections of the community or areas within their constituency. I represent a constituency acknowledged to be the most rapidly developing area of the country. At present it is being choked to death by the three main motorways which pass through it, the western road, the Navan Road and the Naas Road. The report acknowledges the need for investment to improve the infrastructure through that constituency. I do not think there will be successful implementation of that plan unless the Minister is willing to acquire additional powers to assist him in the task.
The Minister should set up a national organisation charged with the responsibility of giving the country the infrastructure it needs so that development may follow. We must remember that the targets of the IDA are on the basis that the bottlenecks and red tape they referred to are removed.
The main platform of this Government during this term is that of job creation. This is the correct policy and we on this side of the House fully support every word of that policy. However, if there are certain aspects of legislation which do not allow us to press on with that policy, we must modify or rectify where necessary. All of these documents are interlinked and are of vital importance. I should like to see a co-operative approach being adopted in the implementation of these three reports. They will have major medium and long-term effects on the country and will affect very much the success of the IDA report. Unless we can implement with all due haste the report of the Posts and Telegraphs Review Group and the Road Development Plan for the 1980s, then the third plan cannot be totally successful.
In the development of an infrastructure it must be recognised that from county to county and even within certain counties, such as Dublin, there are two local authorities to be dealt with. Local authorities must be depended on to implement a national plan right across the country. Very often those local authorities have many other major commitments, water schemes, housing and so on. Therefore I urge the Minister for the Environment to consider very carefully how he can further guarantee the implementation of the plan he has laid before the House this session. Indeed, the role of the Minister highlights areas warranting review and in respect of which I should like to see some action taken. If I might quote from the Road Development Plan for the 1980s, under the heading "The Role of the Minister for the Environment" it states:
The Minister for the Environment is the Minister of Government in whom is vested responsibility for national policy, legislation and financial arrangements in relation to roads and road traffic. Existing road legislation is notable for the fact that it vests few specific powers or functions in relation to the road system in the Minister. Nevertheless, it follows from the nature of the local government system and from the general code of local government law that road authorities operate under the general direction, control and supervision of the Minister. Although each road authority has specific statutory responsibilities, the need for co-ordination of the activities of road authorities on a national basis has grown over the years and the tendency is a continuing one. For this reason and arising from the system of road grants the Minister for the Environment has an important practical role in relation to the public road system. The Minister has, of course, quite specific and wide powers, including the power of direction, under the Local Government (Roads and Motorways) Act, 1974, in relation to national roads and motorways.
The Minister certainly has a major role to play and has wide powers vested in him. He is also qualifying the fact that he is not the final decision-maker in respect of the many urgent decisions that have to be taken. In regard to that aspect of Government policy I would advocate some form of co-ordination and that some central power be delegated to the Minister to guarantee its implementation.
In a debate of this type it is appropriate to look at leadership and the many calls there are for positive leadership. During this Dáil session there have been many areas in which leadership has been subject to scrutiny, at the political, farming and union levels, indeed all the major sectors that go to make up the economy.
I should like to deal briefly with the subject of farm leadership. During the session just ending a tremendous amount of time has been devoted to the farming community, with questions being asked and answers being given about them, their future, their prospects for investment, or lack of such. The 2 per cent levy has been bandied about in all sorts of areas. It has been put forward as a disincentive, as constituting a very modern method of tax collection and so on. I should point out, however, that the people elected by the farming community to represent them, in negotiations with the Government, to a certain extent have been unable to deliver, have been unable to fulfil the mandate given them.
A system of proposed taxation was submitted to the farming community emanating from discussions with the Government which was, as far as I am aware, acceptable to the farm leaders in the main. Then differences of opinion arose about the type of farming. Certain sectors, whether it was the dairy farmer, or beef-producing farmer, had differences of opinion on agreeable arrangements for that sector contributing their fair share to the Exchequer. The farming community, to use their own words, were agreeable to paying their fair share of taxation. I call on the farming leaders to be positive and forthright with their members in recommending publicly the system they believe to be fair and equitable. They were afforded such opportunity during this financial year. It was not availed of. The problem will not disappear. We shall have to deal with it next year and, above all, we must ensure that agriculture is developed to its maximum potential. It is a crucial area of our economy, constitutes our best source of foreign earnings, the life-blood of the country's finances, in respect of which there is no necessity for a lot of imported inputs in order to achieve the maximum export goal.
Like everybody in this House, I am very conscious of the role played by our farmers. However, as we progress as a nation, the farmer has a lot to contribute by way of implementing improvements in their living standards, a lot to contribute at national level by way of exports and also by way of their form of taxation. I would urge the leaders of the farming community to be forthright and positive, accepting a fair system of taxation which we are all very anxious to see implemented, to be blunt with a certain sector of the farming community who do not appear to want such a fair system of taxation introduced because they contend it may bear more heavily on them. They can afford to carry that liability. That is what leadership is all about.
In any democracy the elected government can show leadership to a limited degree. Nowadays it is a complex business in a democracy to ensure that other democratically-elected leaders, representing certain sectors of the community, bear their fair burden of responsibility when they seek and accept such offices. They must expect also possible critism from within their organisations and must be seen to be implementing a reasonable national commitment.
One must progress then automatically to union leadership. Looking at union leadership since the commencement of 1979 one could be excused for being somewhat confused. We commenced with the negotiations for a national understanding. We had the president of the largest trade union in the country, a party to the committee negotiating, following many years of demands, contending that unions had a key role to play at top level in the community. This Government, for the first time, recognised that, brought in the union leadership, brought in the employers. Indeed, one might recall that, at that stage, the farming leaders were upset because they were not included in the discussions.
I want to deal with the trade union aspect of the national understanding. The elected leaders of the trade union movement, the ICTU, sat down at the table with the employers and the Government. A certain national understanding was agreed in our parliamentary party rooms, a press conference was called and the details of that understanding were released to the nation. The president of the largest trade union should have had communication all along in the discussions with his vice-president, his general secretary and his executives. However, that did not seem to be the case. The union rejected the national understanding. At their annual conference the president said that it could be resurrected, the vice-president said it could not be resurrected and the general secretary, devoting his address to many important aspects of everyday policy, broadened his contribution to embrace many national political matters including the North of Ireland. He was quite entitled to do so, but all along the three elected key men of the largest trade union in this country were speaking from different angles with regard to what was satisfactory for the members of that trade union. Peculiar as it may seem, what was rejected totally before the recent election seemed quite acceptable after the election with a few modifications and very insignificant percentages. Without reading too much into the political implications, one hopes that the recommendations of the executive of the ITGWU, representing such a large sector of employees will be acceptable.
A major responsibility on the democratically elected leaders of the trade union movement is to be forthright and positive in their decision-making. We as a Government recognise their importance and that is why we brought them into the discussions on the national understanding. In dealing with the trade union movement the Minister for Industry, Commerce and Energy has highlighted the ridiculousness of some of the situations that exist at present. One big dispute which overshadowed this Dáil term was the strike in the Department of Posts and Telegraphs. Perhaps money was not the cause of that strike. Initially the executive of the union concerned decided to have one-day strikes and then, because of certain internal developments, we ended up with a ridiculously long strike. All the efforts, moves, quiet diplomacy and hard-working efficiency of the Minister and this side of the House to resolve this dispute were fruitless for a long time. The backbenchers on this side of the House urged the Minister to go on television and tell the nation the causes of the strike. The Minister at all times shunned publicity on the basis of trying to claim benefit out of what might arise. He continued to support the ICTU officials who gave many hours in an effort to solve this dispute.
Until individual trade union members realise that a union card is no longer a licence to work but is very rapidly developing as a licence to stay in work, we will have the complications which we see at present. Until the average individual who has played no real part in the workings of the union decides to turn up to his meetings, to express his viewpoint and to be involved in decision-making, we will have continually these petty problems which blow up into national crises and the spectacle of the nation being cut off from power, not because of money but because of internal infighting between trade unions looking for subscriptions. We are back to power struggles within the trade union movement.
It is very easy for people outside to ask what the Government, with their 20-seat majority, are doing about it. A majority of one would allow the Government to function. We are in a democracy. We want everybody to have a fair and reasonable involvement in decision-making but, as the Minister for Industry, Commerce and Energy points out, we may have to take some action which we would rather not take. We would rather see a strong democratically elected trade union movement working efficiently on behalf of their members. However, if in the national interest the trade union movement are not capable of a co-ordinated strong programme of policy, then it is the duty of the Government to take some very distasteful decisions in trying to solve these problems. Deputy FitzGerald said that he hoped to hear contributions from the backbenchers of the Fianna Fáil Party and we have had references to the many meetings that we as a parliamentary party have had. One of the major issues discussed and reported widely was that we would deal with labour relations. I urge caution in this field. I urge that membership of the ICTU would have a meaning. I urge union leaders to treble the contributions which their members are making and to pay their officials better. I urge Ministers to make the necessary funds available. Why have we not educational and training facilities for unions similar to those for management? Do we give union organisations adequate funds for training? Union members do not contribute a quarter of what they should to their unions. Union officials are not paid anything like what they should be paid for the commitment they have to their full-time role as union officials.
There are power struggles when small unions try to become big unions. The only way they can become big unions is to get more members. The only way they see themselves getting more members is by becoming aggresive and promising improvement in incomes or conditions, and they become militant. My constituency has seen the Roadstone strike and a number of other disputes. Very often in these cases the trouble has nothing to do with staff incomes. It arises because the unions want to increase membership and get more subscriptions so they can expand. The Minister for Labour has set up a commission to inquire into this and if they do not report after two years we, the elected Government, will have to make some decision. We wanted to compromise and to bring in the people who are elected and responsible for representing people. They have not come up with proposals. If we are not going to solve our industrial relations problems in that way we will have to think about it again. It has been a dominant factor in this Dáil term and may continue to be so for the remainder of the term of this Government. I hope that the various trade unions, the employers and the Government can solve this problem. Unless the trade unions are capable of bringing forward a co-ordinated responsible approach, it will be our duty on this side of the House to make decisions.
Deputy Horgan has five minutes.
From the clock I would have hoped that I had six, but I will accept your ruling, Sir, when the time comes. In the very brief time at my disposal I cannot go into details of the Government's performance over the past year as closely as I would have wished. In any case many of the criticisms that I would have made have been uttered before and to repeat them would not add a great deal to public wisdom about these events.
It is important to situate this debate in an overall context on national and international levels in order that some of the real, long-term choices facing the people of this country can be assessed and stated clearly. I was sitting in these benches on 26 June when I heard the Taoiseach say in his statement on returning from the European Council that there had been at that Council "strong emphasis on the need for intellectual honesty". With all due respect, the call to intellectual honesty on that occasion, coming from that side of the House, is worthy of derision. Where was the intellectual honesty in 1974 and 1975 when there was an oil crisis which makes this present one pale into insignificance and when the then Government were berated from those benches as being the sole cause and arbiter of all our misfortunes? Where was the intellectual honesty of the Fianna Fáil manifesto? Now that the people have begun to realise that they made a wrong decision and they come back to Fianna Fáil, and ask them about this, that and the other, they are told to go away and read the small print, to digest and find out what was the exact nature and implications of all the famous mental reservations and the contorted phraseology that was designed to give the electorate the appearance of commitment while withholding the reality of such a commitment. There has been a low quantity of intellectual honesty from that party in Government and beforehand in Opposition.
We must accept that the Government are not solely responsible for all our ills. That is my contribution to intellectual honesty in this debate. It is becoming increasingly obvious that the degree of control that the Government can exercise over our national affairs and over the impact of international affairs on our economy and on our social life generally is very much smaller than they would like it to be and perhaps than the people of Ireland would like it to be. The question we have to ask, based on that, is what form of political organisation is one which is calculated to give us the greatest possible degree of control over national, economic and social factors and international economic and social factors? The Government have gone wrong, are going wrong and will continue to go wrong in their unshakeable belief that the capitalist organisation of society is the one which will guarantee us the maximum degree of control.
The Labour Party believe that the capitalist organisation of society will never provide us, nationally or internationally, with the required degree of control over our destiny. It is sad to see the Taoiseach placing so much faith in his various remarks on such a weak system and one which has manifestly failed to deliver on its promises in the past. In opening this debate he spoke of the maintenance here of a favourable environment for enterprise. There is a belief that would be touching if it were not so pathetic, in the ability of private enterprise to solve our problems. Of course, making a favourable climate available for enterprise here will create jobs but it will not create anything like the number of jobs the Taoiseach hopes it will create. It will not create anything like the number of jobs that would be created in a society in which the wilder excesses of the capitalist organisation of society give way to a socially responsible method of control and organisation.
The Taoiseach spoke on several occasions about the need to moderate incomes. This is a classic catch phrase of this particular kind of society. He also talked in this debate about a situation where groups use their key positions to make a naked grab for substantial increases. When Government Ministers talk about incomes they are talking about wages. What about the groups who own capital in our society? If we look at the Sunday Independent for last Sunday we will see that the average increase in dividends last year was 31 per cent. Who are the groups there and what is the naked power on which they are basing their unreasonable demands in our society?
We should not be talking here today just about changing leaders. Somebody once said after a battle: "Change generals and we will fight you all over again". We should not be talking just about swopping tweedledum for tweedledee. If we are to have a radical analysis in our society, if we are to challenge the political and moral bankruptcy in which the Government by their blind commitment to private enterprise have led us we must not be talking just about changing the Government but about changing the whole economic and social system under which we labour at present.
It seems to me that only occasionally has this adjournment debate got to grips with the fundamental issues which face the country now. The basic issue, as the Labour Party see it, is that the Government have, by and large, failed to deliver almost every one of their chief economic targets. They have failed not because of the oil situation, not because of strikes but because, basically, they created a totally false climate of economic and social expectations in the past two or three years. It is hard to believe that on 31 January, only six months ago, the Taoiseach said in this House that the Government targets are for increases of 25,000 a year on average in the numbers at work, for a reduction in the rate of inflation to 5 per cent at the end of 1979, for increases in national output of 6 per cent a year over the three-year period, 1978-81, and for a gradual reduction in the Government's borrowing requirement to a level of 8 per cent of GNP by 1981. Last Friday in the House the Taoiseach ignominiously jettisoned all of those targets. His whole approach now points to the fact that the country urgently needs a sustained period of real political and social leadership. We need, more than anything else at this point of our economic and social development, an honesty of purpose in our leadership of the electorate. This is now sadly lacking from the Government side in particular.
Real political leadership is called for to cope with the recession as we enter it and to explain with conviction to the people the very unpopular decisions we must now all face as a direct consequence of successive Fianna Fáil policies since the notorious 1977 manifesto. The Government's very expensive honeymoon with the electorate is now well and truly over and, irrespective of the views one takes of the ESRI prognostications, nevertheless their forecast is a 2 per cent growth, a 13 per cent inflation and a £500 million deficit in our balance of payments.
Even if one accepts that over the past two or three years the ESRI forecasts have tended to be somewhat on the pessimistic side and if there is a 50 per cent error on their part, even if one feels that the growth rate could be 3 per cent, 3½ per cent or even touch 4 per cent next year, even if one accepts that the Post Office dispute has knocked 1 per cent off the growth for this year, that the petrol situation and the loss of tourist revenue has knocked off another ½ per cent, and that we are right down to 2½ per cent or 3 per cent at the most, accepting all those qualifications and putting the best side on it, as the Minister for Economic Planning and Development attempted to do this morning, we cannot deny that the future looks grim indeed.
I do not agree with much that the Minister for Economic Planning and Development says but I agree with one of his views: that we should always set ourselves the most ambitious targets in respect of inflation, employment and growth. I agree that we should not be in any way defeatist in our ambitions but it must be stressed that ambitions in the absence of the steps necessary to achieve them, are not worth the paper they are written on. Therefore, we need real political leadership and not a philosophy of a manifesto which merely pandered to every known human electoral soft option and which was designed by Fianna Fáil for a return to power at any cost. The nation is now counting that heavy cost and as Ministers prepare their estimates for 1980 and as the Minister for Finance endeavours to assess what money will be available in 1980 to meet these estimates, we know that the cost is already very heavy and burdensome as we enter the second half of 1979.
Unfortunately the Fianna Fáil manifesto brought party political programmes into disrepute. The electorate have a right to know where each party stand in terms of our economic and social future. The manifesto was all the more regrettable in that down through the decades electioneering in general elections was conducted on the past records of successive Governments. The elections were fought almost exclusively on past records.
We all recall that the only promise ever made by the late Mr. de Valera and the late Mr. Lemass at election time was to promise the people stable and sound government for a return to power. The inter-party Governments were not entirely different and fought elections largely on the records of their achievements in government. In 1973, however, there was a break with that tradition and the prospective National Coalition published what was admittedly a terse and very general 14-point programme, but that programme, together with the more important ground work it laid for an alternative administration after 16 years of Fianna Fáil rule, resulted in putting Fianna Fáil into bemused opposition.
Then the 1977 manifesto was born. We had the removal of rates and of car tax and the abolition of the wealth taxes. Millions of pounds of taxpayers' money was given away to the Irish Trust Bank on foot of an indiscreet promise made in the election campaign by the now Minister for Finance. Every speculative builder was given in effect the benefit of a £1,000 new house grant and in relation to income tax Fianna Fáil were not to be outdone. There was a doubling of the personal allowances. The impression was given during the campaign that there was money to be burned. I recall a television programme which showed an election press briefing and when some ignoramus of a political correspondent dared to ask from where would come the £260 million to finance the Fianna Fáil wheel of fortune, he was asked by Professor O'Donoghue who looked coldly at him down the table whether he had ever heard of buoyancy of growth and was told that the Fianna Fáil programme would be self-financing with a 7 per cent growth in GNP during a five-year period. Professor O'Donoghue went on to say that the money was available, that there was no reason for inflation not being reduced to 6 per cent and that workers would be happy with increases in incomes in the region of 5 per cent.
It is hard to believe that the Minister spoke in that fashion only in May and June of 1977. He concluded that press briefing by looking straight at the political correspondents and saying that this is what happens when there is real confidence in a country. We know that the reality is totally different. Is it any wonder, then, that some of the Fianna Fáil backbenchers had almost to be restrained from burning a copy of the said manifesto during their day-long European and local elections wake on Wednesday last? I recall the blinding certitude especially on the part of the now Ministers for Finance and Economic Planning and Development with which that manifesto was peddled. Those of us who, from somewhat bitter but crystal-clear personal experience half way up those benches in government, predicted that the political chickens would come home to roost with a vengeance were treated at the time by the then Deputy Colley, to use a Cork expression, as a crowd of uninformed cábógs and we all know the meaning of a cábóg in Cork.
It is not confined to Cork.
The expression is used with a particular inflection in Cork. Those of us who were aghast that the limited and scarce financial resources of the State should be frittered away in the way being proposed by Fianna Fáil were treated as defeatist Jeremiahs peddling perpetual doom. With that philosophy there took off the famous rocket of the Tánaiste but like Skylab that rocket has now come down slap bang in the middle of the Department of Finance.
I make these comments briefly to expose the duplicity of that manifesto, not because I am in any way opposed to the idea of pre-election manifestos or to the idea of economic and social programmes or to the idea of democratic discussions on economic and social strategy. I am all in favour of such programmes but unfortunately we have not had enough of that type of planning down through the years and, regrettably for the next general election at any rate that approach is somewhat discredited.
Therefore, we need a new programme for economic and social development. I would urge the Government above all that that programme be totally honest and objective in its content. It should be based on the stringencies of economic facts and not on the type of wishful analysis for popular consumption that we have had from the Government in the past two years. The Minister knows that even now, half way through 1979, our current budget situation is critical with a loss of vital State revenue because of the postal dispute and with the serious downturn in tourism as well as with the impact of oil price increases and the massive public service pay increases now in the pipeline. To mention merely the national understanding aspects of public sector pay increases, the amount involved will be an additional £55 million in the current year, as the Minister told me in a written reply yesterday, not to mention the impact on other sectors. The Minister should tell the story as he really knows it. He will not be thanked by his party, or by the electorate, for leading us further along the path of economic and social illusion.
I have always belonged to the school of political thought which holds that, by and large, the only worthwhile options in economic policy are the ones we like least. That is not a very optimistic frame of mind in approaching economic policy but it is true. In America, or here, or in any other country, the real economic options facing people are the ones which are most unpopular. Arising from the Government's strategy, I foresee that the budgets in the next two or three years will prove to be some of the most harsh in our history. In this year's budget the Government deliberately made a highly optimistic revenue estimate of £2,467 million. I asked the Minister many questions as to what it was based on. He got himself into a ferocious tangle with Deputy FitzGerald on that issue. It was based on a 6½ per cent growth rate for this year, a growth rate target which was felt by the Central Bank and the ESRI to be unattainable. The Central Bank are very conservative admittedly and the ESRI tend to be cautious. The Minister will admit that the highly optimistic revenue estimate for this year is not likely to be achieved.
The debate boils down to who should pay, who should contribute, to keep the country solvent. The issue is one of economic solvency. The take—and it will be a take from people to keep the country solvent—must not be only from the very wealthy supporters of the Fianna Fáil Party, but also the moderatly wealthy friendly sons of the Fianna Fáil Party. The Minister will have to face that fact if we are to have additional revenue. The take will have to be from many more farmers whether we like it or not, if we are to stay out of the European bankruptcy courts. The take will have to be from many more self-employed people, and it may well be that the take will have to be from some of our better off wage and salary earners. As I see our budget deficits unfold in the next two or three years, the lesson is a bitter and a grim one. There is no alternative if we are to keep the country solvent. Only through this harsh course of action is there any prospect of maintaining and substantially developing our health services, our educational services, and our social services.
Messing has gone on at Government level, notoriously over the back boiler grant system. One day the Department of the Environment unleashed a proposal and the next day it was countermanded, and we still have not got the new regulations. In relation to housing something is quite obvious from the Government's attitude to certain building societies. In relation to education something is quite obvious even if you just take the minor aspect of the remedial teachers expenditure. In those areas it is quite obvious that the Government are contemplating some form of cutback on public expenditure.
I want to put it on record that the Labour Party are utterly opposed to any question of a cutback in essential public services. That is where the Government run to every time revenue receipts are substantially diminished. I totally reject the kind of approach proposed by the Director General of the Construction Industry Federation—and some of his solutions have been simplistic enough—that we should cut back on public service employment. If State revenue declines dramatically in 1979, those in the community who can well afford to pay must pay. The best course of action open to us if we are to salvage the economy—and we are in a salvage operation now to save the economy from the blatant, irresponsible and profligate approach of the Fianna Fáil Government in the past two years—is a succession of very tough budgets. If we are really honest, they will contain radical measures which will bite hard on those with most income, keep our social services above water, and keep the country out of the bankruptcy courts.
The moneys which I advocate we should seek must be devoted above all to maintaining the incomes of the lower income groups, to job creation, to job maintenance, to employment subsidies in areas which are badly hit by our EMS entry. They must be devoted to assisting industries which are badly hit by increased energy costs and by imported inflation. That is where the money should be put and not given in Flash Harry handouts to the electorate, such as we had in the manifesto. The alternative is more unemployment, more dole and more social stagnation.
Some of the moneys the Government get in the next budget, which obviously they will be thinking about during the summer recess, may be needed to finance a level of domestic and international borrowing which might well be higher than we would tolerate normally. There is not a hope in hell of having borrowing down to 8 per cent of GNP by 1981. That is gone out the door. This year it will be above the 10 per cent general target. We may have to cut back on current consumption and bring ourselves up to perhaps a 12 per cent level in international borrowing to keep the country above water, as we did in 1973/74 when we faced not just a 40 per cent increase but a quadruple increase in oil prices. We did that by keeping a high level of international borrowing, cutting back on domestic consumption, and ensuring that we were in a position to finance our foreign borrowing without destroying our external reserves.
It may well be that there will have to be a cut back in current consumption to maintain our social, economic and employment services. It is a bitter pill for me to have to say that as an opposition Deputy but the alternative is stagnation and the kind of mystical Keynesian nonsense we heard from the Minister for Economic Planning and Development over the past six months about the kind of market economy which went out the door in the fifties. We heard all this from the Minister as he carried the Cabinet around on his economic yo-yo over the past six months.
To go back to my central point, I want to stress that nothing of what I have advocated can be done unless the burden of cost is fairly spread across the board. The Government have failed to practise that concept. The Minister for Finance, Deputy Colley, drove every married and single woman earning a livelihood on a wage-and-salary basis into total exasperation with his throwaway comments in the early part of the year. The PAYE sector was provoked; those depending on the health services were provoked; the farming community was provoked by the bungling of the tax issue. Across the board there is hostility and suspicion and cynicism among the electorate towards the idea that Fianna Fáil will treat people on a fair and equitable basis. As a result, the climate in the community is such that no one is prepared to pay anything towards any other person's plight, no matter how bad the situation is, even if the same person will be in the same plight the following morning. That is the kind of social and economic climate created by the Government's manifesto throw-aways. We have to lift the people into a sense of social commitment, a sense of community responsibility. The way to do that is by the Minister for Finance proving that the cost of keeping the economy going, of expanding job creation and social services, will be spread equitably across the board.
The Labour Party's dispute with the Government is about the manner in which the weight of taxation is distributed in our society. The Minister may be assured that the Labour Party will always defend the need for taxation to meet the substantial cost of public services. Therefore, we need real leadership on the fundamental issue of an equitable taxation system instead of the bungling of successive Ministers. We need a clear system of taxation of all farmers based on farm accounts to be kept by all farmers. We also need, and I agree with the idea, a basic land resource tax on those who do not work the land. The double solution would be fair to those who work their land and fair to those who simply sit down and admire their holdings. That solution has been self-evident since 1970. However, moral cowardice and fumbled efforts and compromise such as the famous and notorious notional system of taxation, the notorious multiplier system and the hilarious levy system of the Minister for Finance, have not cleared the air on this basic issue. Town was set against country on that kind of issue.
I am in favour of a land resource tax because one of our main prospects for economic development lies in the full productive utilisation of every arable acre of agricultural land, particularly for cattle and for processed beef exports. Any land owner with minimal profits with no tax to pay from under-utilised land should be faced with an annual land resource tax. Vast speculative profits were made in recent years from the sale of farm land, from the sale of house building sites and from the sale of industrial construction sites. I say that as Vice-Chairman of Dublin County Council with daily knowledge of planning applications and of auctions throughout the greater Dublin area.
The Government have failed to deal with the situation, so much so that on a national basis the price of a new house is £21,000. With mortgage interest rates at 14½ per cent, one would be damned lucky to get a house at £21,000. In the greater urban areas the price of a new house could be as high as £30,000. Engaged couples and young married couples who are trying to buy new houses want something more from Fianna Fáil than a couple of T-shirts. They want something more than a Cathal Dunne pop song. They want action from the Government to curb the vast profits being made on the sale of building sites.
We need real leadership to eliminate poverty. It is now so unfashionable that we cannot even talk about poverty. We leave it to the annual statements of the bishops or the Society of St. Vincent de Paul. With persistently high unemployment, with 13 per cent inflation staring us in the face this year, with a lower than projected rate of growth of 2 or 3 per cent for 1979, with a rising proportion of our population either very young or very old, we must realise that the levels of poverty are being reinforced in our community. I hold that the January increase in the budget of a basic 12 per cent on the short-term benefits given has now been wiped out in real terms, especially since the cash increases are only now being paid out as a result of the postal dispute.
I believe that this Government—and Deputy FitzGerald made the point in his speech in relation to Deputy Haughey—will go down in history as the Government of the total status quo in relation to social policy. Nothing has happened in the past two years to alleviate basic poverty in our community. Our Minister for Social Welfare is as bland as ever. He goes around announcing waiting rooms in hospitals. Money earmarked 18 months ago by the health boards is re-announced and recycled, particularly by the medical correspondent of the Irish Independent who seems to have a capacity for supporting the Minister for Social Welfare. We know that the exercise is purely cosmetic because Deputy Haughey is waiting for the Taoiseach to retire to Roaring Water Bay so that he can form a truly republican, truly Fianna Fáil, truly national government of his backbenchers. He already claims to have 53 members lined up. Deputy Colley has 23. That prospect would be a most dangerous one for the future of the country.
Meanwhile, in relation to the portfolio of Deputy Haughey, with the cost of living gone up by 13 per cent for the calendar year 1979 and with the short-term social welfare benefits being a mere 12 per cent of the last budget, the burden of this recession is now being borne by the unemployed, the elderly, the retired, by those on disability benefit, by those with large families. The disgraceful abolition of food subsidies by the Minister for Finance hit the lower income groups most. It is disgraceful that as we go into the summer recess we have a situation where a miserable, lousy £17 per week is all that a widow gets on a contributory widows pension and that an old age pensioner on the best personal rate on 5 April last, which some of them have not yet got because of the postal dispute, gets a miserable £18.60. Members would spend it in one night in the bar of Leinster House enjoying a pre-recession drink. It is clear that since Fianna Fáil returned to office the position of social welfare recipients and those on low incomes has deteriorated and that there is no indication that the Government intend to reverse this trend.
I spoke of leadership. This country also needs real trade union leadership. I speak as a member of a trade union. We do not want the kind of trade union leadership which flashes in claims of 30 per cent and when they are asked what the basis of the claim is they say that it is 20 per cent for the cost of living and 10 per cent for relativity and that they want the 15 per cent of the proposed national understanding on top of that and that that is their claim. Very often it is barely put down in writing. As a trade union member for the past 23 years and as one whose family has a history of trade union membership stretching into almost a century at this stage, I demand better trade union leadership than that. This country needs real trade union leadership and one of the things we can do even now in terms of leadership is to give a firm recommendation to all trade unions to vote in favour of the revised national understanding in the national interest.
The workers of this country owe damn little at this stage to the Fianna Fáil economic strategy but our economy, our exports, our industrial development urgently need a sustained period of industrial stability. A free-for-all here with no export orders abroad means no jobs, no growth, no wages in the short and the long run.
It is my considered opinion that that national understanding should be fully supported and enacted without further delay. We need a trade union leadership which, above all, would stress—and this may sound rather old fashioned—the solidarity of one group of workers towards other groups of workers in society. That solidarity should mean that one group of workers should not and must not blackmail the jobs and the families of other groups in society simply to gain in the short-term at their brothers' expense. It means above all that the power of disputes and of serving strike notice should be exercised with due consideration for the rights of others in our community. Otherwise we shall live in a society where dog eats dog and that is not what trade unionism is about in its best and most democratic sense here.
In addition, this country needs leadership from the Opposition parties. The leadership on this side of the House must encompass a genuine desire and a commitment to form an alternative political administration here. I am convinced that it is within the competence and the capacities of those who are in the Opposition parties, and of those who will undoubtedly join these parties after the next general election, to form a competent, socially just and progressive alternative Government. If we waste the next two years simply denouncing the arrant stupidities of Fianna Fáil, then when we are given office by the people we too will be in real danger of simply sitting in the back of a Mercedes every morning wondering in what direction we are going to face from day to day, as is quite obviously happening in the present régime. Therefore, there is an obligation on the parties in Opposition to continue to put forward, as we have been doing, alternative social and economic policies. These have found a new respect among the electorate as is evidenced in the local elections and in the European elections.
This party will contest the next general election on the basis of a sensible programme, a realistic programme, a social democratic programme of economic and social reform which will not include lavish promises to delude the people into believing that the road to economic recovery and social development will be an easy journey or will be the cheap journey of the 1977 manifesto. We will put forward detailed alternative policies. I have no doubt that in Fine Gael that approach will come about also and is, in fact, very much in train. I have no doubt that there will be sufficient common, progressive elements within the different approaches of the two parties which will contest the elections with their individual approaches. I have no doubt that there will be sufficient commonality to enable an alternative administration to be formed. We will put forward measures to restore the rate of economic growth, to bring it up to the best at the top of the European league; we will introduce measures to ensure full economic recovery here; we will introduce measures to reduce unemployment and to raise living standards. I have no doubt that Dáil Éireann can speed this day. Many of the electorate wish that it was not two years away. But I have no doubt that in the national interest Dáil Éireann will so ensure in the not too distant future.
There has been a vast difference between two speeches here to-day, the one just heard from Deputy Desmond and the first one we heard this morning at 10.30 from the Minister for Economic Planning and Development. Deputy Desmond's contribution was a rather low key, thoughtful and constructive approach to the problems facing us and his assurance that, as far as his party is concerned, that approach will be continued to and through and beyond the next general election is very welcome to us in Fine Gael and is in stark contrast to what the Minister for Economic Planning and Development, Professor Martin O'Donoghue, said here this morning. I was very sorry to hear such a contribution from a man of his very obvious ability who has so much to contribute to public life here and is the type of person of whom I would like to see many more coming into public life and taking part in the rough and tumble and the hurly-burly of party politics. I was very pleased when he joined Fianna Fáil and took his part in public life. It is a pity that he should do as he did this morning by devoting half an hour, in an important debate at a crucial time in the development of this country and speaking as a Minister in charge of a Department which would have the number one spot in the formulation of policies to assist the economy and to overcome the very evident problems that are there, to an abuse of members of Labour and Fine Gael and a defence of his attack on statistics, because that is what it amounted to.
The Minister said, rightly, that we cannot always depend on figures nor do they work out sometimes as even the best economists would wish. The real point is not whether they work out to the decimal place forecast but whether the indications of movement of growth in the economy are in the right direction, if inflation is being contained at about the level forecast, if growth is as storng as is necessary to carry the burden of borrowing and the increase in employment necessary to advance the economy is taking place. The important thing is whether these trends are moving in the right direction not whether they balance out precisely. Whether the ESRI have been historically pessimistic in their forecasts about the performance of the economy is not really important. If they say the growth will increase by 6 per cent when in fact it increases by 6½ per cent that is not important. They are now saying that, in fact, the Government are wrong. But whether the 7 per cent of last December would down to 6½ per cent in January, to 5 per cent with the Taoiseach last Friday and to somewhat in excess of 4 per cent by the Minister for Economic Planning and Development last Monday and whether the ESRI prophecy of 2 per cent is correct, whether the movement of the economy is in that direction, is the important thing. The Government try to gloss over that and confuse the House and the electorate by saying that there is no problem, that the country is on course as they predicted and that the 25,000 jobs target will not only be achieved but exceeded. If this is correct I hope the Táiniste will give us the basis on which the Government decided that this is the true position and do so in a less hysterical vein than that of the Minister for Economic Planning and Development.
It is not only the Government's reputation that is at stake here now as to whether they were right or wrong in what they said. The important thing since we joined the EMS is the assessment made by people outside the country of all the institutions of this State, the Government, the Opposition, the economic forecasters and the general attitude and accuracy of predictions and of our determination to achieve the benefits that were obviously achievable last December when the decision was taken—rightly I think—to join the EMS.
We must take note of three things in 1979, in the last six months, as regards our future. One was entry to the EMS. Another is the effect on our economy of the increase in the cost of energy. To write that off, as the Minister for Economic Planning and Development said as being on a par with what happened in 1973-74 when the cost went up by 400 per cent is not acceptable. The Minister's answer was that it was only 8 dollars at that stage and it has now gone up by 8 dollars again. This is not inaccurate but the attempt to cloud issues is what the people, and I particularly, find so distasteful about the Government.
Joining the EMS, as was recognised I think at the time, gave us the possible benefits of lower inflation and lower interest rates. The Taoiseach speaking on 17 October, as reported at column 418, volume 308, of the Official Report said:
The Government will have to operate fiscal and monetary policies which will sustain growth, encourage employment and keep down costs.
In that connection he also said, speaking of the level of pay and costs:
Expectations must be rapidly adjusted to the sharply lower rate of inflation that may be expected to rule in the EMS.... Failure to observe the disciplines inherent in the system will result inevitably in lower growth and less jobs.
The Government, since they came into office have continually been stressing—and rightly—the necessity to maintain wage rates that are not excessive and that will not interfere with our competitive position abroad. The difficulties in this were recognised when we joined the EMS at the end of last year. Yet, on the first day that the EMS was officially supposed to operate and while the Government were negotiating for a wage settlement they removed the food subsidies which added to the level of inflation, added to the cost of goods for the housewife and added to the expectations of workers in regard to the wages they should get. The Government followed that with a budget this year which, even though there was an increase in the level of tax allowances, was again seen by the ordinary PAYE workers who are, by and large, the trade unionists seeking wage increases, as an attack on their standard of living.
Two weeks later there was a massive protest march by PAYE workers. The question of the credibility of the Government as regards wage negotiations and levels of pay goes back long before this. I have asked the Tánaiste many times in this House what he or the Government meant when he said in the budget debate of 1978 referring to the 5 per cent which Deputy Desmond mentioned in connection with the Fianna Fáil manifesto, that this was a most important strut to hold up the Fianna Fáil manifesto for our economic future. I do not know if what Deputy Desmond said is true about an effort being made to burn that manifesto at the Fianna Fáil party meeting last week but I am certain, if it is not true that it was in many people's minds.
The manifesto was a serious effort to guide the country into the eighties but it could have been drawn up an intermediate certificate student. People claimed they were stuck in smoke-filled rooms at Fianna Fáil headquarters producing a document which any 15-year-old schoolboy could have produced in half an hour. It rested on two things outside of the 5 per cent wage increase, the abolition of rates and car tax. That is what the Fianna Fáil manifesto was. Any schoolboy will tell you people prefer to pay £1 per week every week for something rather than £40 a year. If one knocks at ten doors and asks the people what they object to paying most they will say they object to paying out lump sums. They do not mind paying out over a period. The two big payments most people had in a year were rates and car tax. So the Government decided to do away with them. This was then economic strategy. We were told that the economy would grow as a result of this priming of the economy.
An important part of all this was the 5 per cent restraint in the growth of wages. This figure was referred to frequently. On 1 February, 1978 speaking on the budget at column 357, volume 303, of the Official Report the Minister for Finance said:
I should like to clarify aspects of the pay target proposed by the Government. The target was formulated only after careful and detailed examinations of the requirements of the economy in both the short- and medium-term. Demands for flexibility and for adjustments in line with inflation have to accommodate themselves to the need for pay moderation. The Government's commitment is unequivocal and, if agreement to such moderation cannot be achieved, we shall have to take the necessary measures to ensure that excessive increases, if any, are recovered from those who secure them. The Government would be failing the community if they did not take such steps.
What was meant by that? Was it just 50 or 60 words put into the middle of a budget speech? Did the Government have any commitment? The Minister for Finance will say that these were hanging over since the days of the Coalition Government. We had put a restraint on special pay in the public sector. That is true. We did not make ourselves popular by doing so nor did we make ourselves popular by saying that the size of the public service was big enough and that we would not recruit any more people. We thought it was the correct thing to do. It was not popular but it was in the national interest. The Minister for Finance will say that many of the claims lodged had not been met. That was known and was endlessly teased out in question and answer sessions before Fianna Fáil came to office. Yet they still say the 5 per cent was an important part of their economic policy. I have asked the Minister for Finance in every financial debate we have had what was meant by that. Did it mean anything or was it so many words that could be shoved aside?
Do the Government really think that excessive wage demands are damaging the economy? Do they think that anything over 5 per cent, as laid down last year, would damage the economy? I warned them at the time that the amounts being awarded in the private sector were far in excess of that, that they would spill over into the public sector and cause endless damage to the economy. It is the comparison that is done outside this country that is the real tragedy. On account of our joining the EMS and breaking the link with sterling all the actions of the Government will be put under a microscope and examined. It is the yawning gap between statements like that by the Minister for Finance and actions by the Government of which he is a member that will damage the economy.
Nothing has been done by the Minister to follow up his implicit threat if he believes the wages being paid are damaging the economy or to explain exactly what he meant if there was not a threat implicit in what he said. He said that he would come back to the Dáil and introduce measures. It is because of this gap that we have articles such as that which appeared in the Financial Times of 10 July which states:
Until now, Mr. Colley and his colleagues seem to have been living in one of the heroic myths of Irish history.
The heading on the article is "Cold dawn in Ireland". That might be funny and might not be damaging to the economy if it was written six or 12 months ago. It is tragic that this is the view in a responsible paper. This is not any yellow press journal produced on a Saturday night. It is a responsible paper read by investors. We are constantly told of the importance of investment to the future of the country. It is read every day by people with investments to make in this country. The Government will have to put their cards on the table. They will have to be honest with people because they elected them, with this House because we are all elected and, for their own sake, with their own backbenchers.
Earlier on in the debate to which I referred Deputy O'Leary asked the Minister if he thought it was possible that there could be a revaluation of the IR£ and that it could become more valuable than sterling. Deputy O'Leary asked if the Minister would agree that that was a remote possibility and the Minister said he would not. I do not want to dwell on what has happened to the relationship between the £ sterling and the IR£ in the last six months. It was unfortunate for the country and the Government that in that period, because of the energy crisis and, perhaps, because of the hope and realisation by high financiers of a change of Government in the United Kingdom, that sterling became so strong. From what I heard on the news at lunchtime the punt slipped further against sterling today. As was stated previously, it is not a question of the punt slipping against sterling but one of sterling increasing against the punt. There is a difference but this scenario evidently was never visualised by the Government who did not have any contingency plans to deal with a situation if sterling increased in value over a period of time.
We have been told that this situation is of value to exporters because it makes it easier for them to sell into the sterling area. That is true. Later I hope to deal with the situation in relation to tourism because this seems to give us a good opportunity to redress some of the damage done to this industry in recent times. However, this can be damaging to the economy in the long-term because 70 per cent of our imports come from the United Kingdom. It is no harm if it makes the consumer proportion of our imports less competitive at home but if it makes the raw materials and machinery for further manufacture more expensive then it will increase our costs and, in turn, make the goods which we hope to exports less competitive abroad. For that reason this is a worrying situation and I hope that the Tánaiste will be able to reassure people in that regard. I understand that in a speech recently—I did not see the text of the speech and therefore I cannot be categorical about this—he said that he expected the parity to be restored sometime in the autumn.
I did not say that.
It is important that the Tánaiste should try to reassure those who are importing capital goods or raw materials from the sterling area for reprocessing here for export.
Another matter which is having a downward effect on the economy is the cost of energy. The OECD reckon that for every 10 per cent increase in oil prices there is a ½ per cent increase in inflation, that is if a Government are willing to take steps to avoid that 10 per cent increase in the price of oil getting into a prices-wages spiral. If the latter occurs—my guess is that it will happen here—then the increase in inflation is 1 per cent. If one takes a 40 per cent increase in the price of oil—a figure used by the Taoiseach last week—or a 60 per cent increase, as announced by the Minister for Economic Planning and Development this morning, the effect of the oil price increases this year will be an increase on the inflation rate of between 4 and 6 per cent. If no corrective action is taken this will certainly affect our competitiveness and ability to export. It will certainly affect our wage rates. I should like to join with Deputy Desmond, as we have done before on this side of the House, in urging that the national understanding as now proposed be signed. I do not think there is any justification for some of the wage demands that are being lodged at present in the private and public sectors. I reckon that the national understanding is generous and as the Government, as their part of the bargain, have agreed to meet job-creation targets by the end of the year and a rebate of tax totalling £39 million, I urge that the national understanding be signed.
If the energy costs find their way into the wages spiral and on to inflation they will have an effect on our competitiveness. Such a situation will also affect our investment, an area to which we must now look. The ESRI, and the Minister this morning, say that investment looks like being up this year. I believe that is correct. But investment this year was not decided on or planned this year; it was decided 12 months or two years ago in different circumstances. We should be concerned about the investment we want to entice here in 1980 or 1981. We must ensure that the way we handle our affairs does not turn away that investment. In this regard the attitude of the Minister for Industry, Commerce and Energy is not an enticement for people to invest here and he deserved the rap on the knuckles the Taoiseach gave him last Friday for his attitude towards the major oil companies.
There is no doubt that the major oil companies are, to put it as politely as possible, extremely profit-conscious. However, by and large 95 per cent of the personnel making decisions here for the major oil companies are Irishmen. Most of them were born and educated here and they are just as concerned about the advancement and expansion of our economy as the Tánaiste, the Minister for Industry, Commerce and Energy or myself. To treat them as Deputy O'Malley did and be so rude to them as to provoke one of the heads of those companies to walk out of a meeting with the Minister is not, when reported back to the head office of those companies, going to encourage investment here. I am aware that at least one of the firms involved sent senior personnel from the United States to see the Taoiseach after that encounter to inform him that he should instruct his Minister in the economic facts of life. The Minister engaged in a shouting match with the people concerned.
I have no doubt that the head offices of the oil companies were pushing the companies here to get a higher price for their product and I have no doubt that the top personnel of the oil companies here were equally concerned to present a good balance sheet to head office. To say, as Deputy O'Malley did at one stage, that if he granted a price increase there would be plenty of oil, showed an extraordinary ignorance of the situation regarding energy in the world at present and over the last ten years. That makes me feel that he is not fit to have the job of Minister for Industry, Commerce and Energy.
Energy did not become scarce in March 1979. For more than ten years we have listened to prophesies by OPEC that unless the western world, who refused to listen, cut down on their use of energy there would be a scarcity at the end of this century. Instead of listening, adopting policies of conservation or making investment in alternative sources of energy all western countries went on their merry way but none to the same extent as the United States of America.
If one discusses energy and its future in the world today one must talk about two countries above all others, one a producer and one a consumer —America as the consumer and Saudi Arabia as the producer. I believe that if President Carter's energy package is taken seriously in the United States, if there is a genuine effort made there to conserve energy, to cut back on usage, and waste—it is waste about which we are talking really when we speak of conservation, and that applies to this country as well as to America—and if the Saudi Arabian Government increase their production by a significant amount for a considerable period of time then we could get over this hump next winter. Because we may get through next winter we should not fall into the same trap in 1980 that all the world fell into in 1974 when, once the immediate scarcity ceased, we reverted to our old, wasteful ways. There is an energy shortage, at least oil-generated energy will be a scarce resource until an alternative is found. At present we are told there are two alternatives only in that regard, coal and nuclear energy. That is true at present.
When we were in Government the same situation arose. That must be rather terrifying for members of the present Government to see the same problems coming around again, like the hobby horse on the merry-go-round, demanding the same type of action as in 1973 after the oil crisis. At that stage we as a Government decided unanimously that we had to go ahead and plan for nuclear energy. We did this because, if alternative sources of energy production had not been found, say, in ten years —and at that stage it looked like ten years as well—then we could not be in a strong position as a Government, and the same applies to this Government or whoever succeeds them.
One of the big faults with the present Government's attitude towards nuclear energy was that they were pushed into holding a public inquiry. They have discarded whatever findings may emerge from that public inquiry before it has been held at all because of the statement by the Minister saying that they will be going ahead anyway—that is what I think he said—no matter what the public inquiry finds.
It may well be that a nuclear energy station will have to be commissioned here in ten year's time. At present alternative sources of energy do not appear to be available. But the Government must have such a nuclear station ready in case, at that stage, nothing is found. I would advocate that whatever its cost it should, if necessary, be written off.
It must be brought home to the people between now and then that the choice for all of us could very well be a lower standard of living without nuclear energy or a maintenance of our current standard, plus jobs for our children in the future, with nuclear energy. I hope it never comes to that. But that may be the choice facing our people in ten years time. It is not easy for a Government. There are horrible alternatives to think about, but they must plan on the basis that there may be no other choice available to our people at that stage. A lower standard of living may be the price we as a people will have to pay if we will not accept nuclear energy, unless there are alternative sources of energy found in the meantime. It is a paradox but in that regard the high price of oil suits this country at present. The higher the level of prices for oil the more there is going into research into alternative sources, the more attractive the drilling becomes off our coast, with the chances of providing either some more oil from our own resources or of having wind, solar, wave, biomass or fusion—commonly held to be the most likely sources of replacement of oil-produced energy.
I started off on this train when talking about the importance of energy for the economy and the amount of serious thought a Government must give it at present, indeed must give it in conjunction with our partners in Europe and in the western world. That is why we thought it so necessary when we were in Government to join the International Energy Agency. We considered it afforded a platform, a source of research and development, the results of which might become available to us if any progress was made in that field. That is why it is important that there be in charge of that Department a Minister sensitive to the worldwide web of constraints and demands of the oil industry. That is why the present Minister in his attitude before Easter of this year may have potentially harmed the economy so much.
We must remember that people who make decisions about investment here read everything about this country and are provided with portfolios containing the attitudes of all Government Ministers. The attitude of that Government Minister, together with his attitude in refusing in a very petty way the payment of a dividend by the Dublin Gas Company, because he said they were being subsidised by the taxpayer, to my mind displayed ignorance on his part of the nature of the subsidy. It was not to the Gas Company, it was to the consumers of the gas. That attitude emanating from a party supposed to have a great rapport with the business community possibly is something else that has done great damage to this country. These attitudes are now becoming very much more important since we joined the EMS. On top of that there is the potential damage done to what is our No. 2 industry by the handling of the energy crisis and the postal dispute, something about which I am sure the tourist industry would prefer to forget. Unfortunately, they will not be allowed forget about it because of the high interest rates they are paying now, their low level of cash flow and because of the damage caused, which is something it may not be possible to redress for next year.
The tourism industry for two reasons has had a very tough year. The postal dispute went on far too long. It continued all through the period when the tourist industry was endeavouring to negotiate bookings and encourage people to come here. It has been damaged as well by the energy crisis and by what has been reported as a shortage of petrol in the Republic. It appears that the Minister for Industry, Commerce and Energy did not appreciate the importance to this country of the mobile tourist who comes here and drives his car. When that Minister was persuaded eventually that special facilities were needed for tourism it seems that the scheme was not thought out and coupons for tourist petrol are not widely enough available. I am certain that Bord Fáilte had made these points to the Department of Tourism and Transport, and there was no reason for the Minister for Tourism and Transport to come in here and shout across the floor of the House that we are in some way being unpatriotic when we draw to his attention the shortcomings in this scheme. We are at least as concerned about tourism in this country as are the members of the Government. Unfortunately, this scheme is not working, and that is regrettable. It can be corrected, and it is urgent that it should be and thus we can undo at least some of the harm that has been done.
Bord Fáilte, the Department of Tourism and Transport and the Minister for Tourism and Transport are getting no sympathy and scant attention from the Department of Industry, Commerce and Energy, and that is the problem. The Taoiseach, the Tánaiste or whoever is in charge now should tell the Minister for Industry, Commerce and Energy that it does not matter if the scheme is abused in some small way in some part of Ireland. The important thing is to ensure that tourists coming in here can get petrol in every part of Ireland for the rest of this summer. Last Friday night I heard on the BBC 6 p.m. news that petrol queues were growing again in Ireland. I do not know if the damage that that kind of thing does to this country can be assessed. I congratulate whoever corrected the misleading impression given about this country on the BBC a month ago on the Tonight programme. It was corrected about a week later, and I hope that what I heard last Friday night will be corrected also.
This needs fire brigade action. I am glad that the Minister went out of the country and endeavoured to bring home to people the facts that in this country there is not a scarcity of petrol, that the Government will look after the petrol coupon scheme for tourists and that the postal strike is over. It is right that he should have done that in the major centres like London, Bonn and Frankfurt.
The tourist industry is important for the money it earns, for the fact that it benefits the more remote areas and also for the morale of the business community. The Minister for Finance is the correct person to whom to address these remarks. An immediate grant of money should be made available to Bord Fáilte to allow them to amount a huge campaign in the UK to encourage people to come here in the August-September-October shoulder of the year. That can be done and it will be sufficiently successful to offset to a large extent the damage done in the early part of the year. However, money is needed immediately from the Government to Bord Fáilte in order to do it. I urge the Minister, as a last plea in the last speech that I make from these benches before the Dáil adjourns for the summer, to do something urgently to bring back growth in tourist revenue in this country before the end of 1979.
Debate adjourned.